1.1 	A bill for an act
1.2 	relating to retirement; extending the deadline for
1.3 	full funding for the Bloomington Fire Department
1.4 	Relief Association; increasing interest rate
1.5 	assumption; amending Minnesota Statutes 2004, sections
1.6 	69.77, subdivision 4; 356.215, subdivision 8; 356.216.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. Minnesota Statutes 2004, section 69.77,
1.9 	subdivision 4, is amended to read:
1.10 		Subd. 4.Relief association financial requirements;
1.11 	minimum municipal obligation.  (a) The officers of the relief
1.12 	association shall determine the financial requirements of the
1.13 	relief association and minimum obligation of the municipality
1.14 	for the following calendar year in accordance with the
1.15 	requirements of this subdivision.  The financial requirements of
1.16 	the relief association and the minimum obligation of the
1.17 	municipality must be determined on or before the submission date
1.18 	established by the municipality under subdivision 5.
1.19 	(b) The financial requirements of the relief association
1.20 	for the following calendar year must be based on the most recent
1.21 	actuarial valuation or survey of the special fund of the
1.22 	association if more than one fund is maintained by the
1.23 	association, or of the association, if only one fund is
1.24 	maintained, prepared in accordance with sections 356.215,
1.25 	subdivisions 4 to 15, and 356.216, as required under subdivision
1.26 	10.  If an actuarial estimate is prepared by the actuary of the
2.1 	relief association as part of obtaining a modification of the
2.2 	benefit plan of the relief association and the modification is
2.3 	implemented, the actuarial estimate must be used in calculating
2.4 	the subsequent financial requirements of the relief association.
2.5 	(c) If the relief association has an unfunded actuarial
2.6 	accrued liability as reported in the most recent actuarial
2.7 	valuation or survey, the total of the amounts calculated under
2.8 	clauses (1), (2), and (3), constitute the financial requirements
2.9 	of the relief association for the following year.  If the relief
2.10 	association does not have an unfunded actuarial accrued
2.11 	liability as reported in the most recent actuarial valuation or
2.12 	survey, the amount calculated under clauses (1) and (2)
2.13 	constitute the financial requirements of the relief association
2.14 	for the following year.  The financial requirement elements are:
2.15 	(1) the normal level cost requirement for the following
2.16 	year, expressed as a dollar amount, which must be determined by
2.17 	applying the normal level cost of the relief association as
2.18 	reported in the actuarial valuation or survey and expressed as a
2.19 	percentage of covered payroll to the estimated covered payroll
2.20 	of the active membership of the relief association, including
2.21 	any projected change in the active membership, for the following
2.22 	year;
2.23 	(2) for the Bloomington Fire Department Relief Association,
2.24 	the Fairmont Police Relief Association, and the Virginia Fire
2.25 	Department Relief Association, to the dollar amount of normal
2.26 	cost determined under clause (1) must be added an amount equal
2.27 	to the dollar amount of the administrative expenses of the
2.28 	special fund of the association if more than one fund is
2.29 	maintained by the association, or of the association if only one
2.30 	fund is maintained, for the most recent year, multiplied by the
2.31 	factor of 1.035.  The administrative expenses are those
2.32 	authorized under section 69.80.  No amount of administrative
2.33 	expenses under this clause are to be included in the financial
2.34 	requirements of the Minneapolis Firefighters Relief Association
2.35 	or the Minneapolis Police Relief Association; and
2.36 	(3) to the dollar amount of normal cost and expenses
3.1 	determined under clauses (1) and (2) must be added an amount
3.2 	equal to the level annual dollar amount which is sufficient to
3.3 	amortize the unfunded actuarial accrued liability by December
3.4 	31, 2010, for the Fairmont Police Relief Association, the
3.5 	Minneapolis Firefighters Relief Association, the Minneapolis
3.6 	Police Relief Association, and the Virginia Fire Department
3.7 	Relief Association, and by December 31, 2031, for the
3.8 	Bloomington Fire Department Relief Association,as determined
3.9 	from the actuarial valuation or survey of the fund, using an
3.10 	interest assumption set at the applicable rate specified in
3.11 	section 356.215, subdivision 8.  The amortization date specified
3.12 	in this clause applies to all local police or salaried
3.13 	firefighters' relief associations and that date supersedes any
3.14 	amortization date specified in any applicable special law.
3.15 	(d) The minimum obligation of the municipality is an amount
3.16 	equal to the financial requirements of the relief association
3.17 	reduced by the estimated amount of member contributions from
3.18 	covered salary anticipated for the following calendar year and
3.19 	the estimated amounts anticipated for the following calendar
3.20 	year from the applicable state aid program established under
3.21 	sections 69.011 to 69.051 receivable by the relief association
3.22 	after any allocation made under section 69.031, subdivision 5,
3.23 	paragraph (b), clause (2), or 423A.01, subdivision 2, clause
3.24 	(6), from the local police and salaried firefighters' relief
3.25 	association amortization aid program established under section
3.26 	423A.02, subdivision 1, from the supplementary amortization
3.27 	state-aid program established under section 423A.02, subdivision
3.28 	1a, and from the additional amortization state aid under section
3.29 	423A.02, subdivision 1b.

3.30 	Sec. 2. Minnesota Statutes 2004, section 356.215,
3.31 	subdivision 8, is amended to read:
3.32 		Subd. 8.Interest and salary assumptions.  (a) The
3.33 	actuarial valuation must use the applicable following
3.34 	preretirement interest assumption and the applicable following
3.35 	postretirement interest assumption:
3.36 	preretirement  postretirement
4.1 	                                   interest rate  interest rate
4.2 	            plan                      assumption     assumption
4.3 	     general state employees
4.4 	         retirement plan                  8.5%          6.0%
4.5 	     correctional state employees
4.6 	         retirement plan                  8.5           6.0
4.7 	     State Patrol retirement plan         8.5           6.0
4.8 	     legislators retirement plan          8.5           6.0
4.9 	     elective state officers
4.10 	         retirement plan                  8.5           6.0
4.11 	     judges retirement plan               8.5           6.0
4.12 	     general public employees
4.13 	         retirement plan                  8.5           6.0
4.14 	     public employees police and fire
4.15 	         retirement plan                  8.5           6.0
4.16 	     local government correctional
4.17 	         service retirement plan          8.5           6.0
4.18 	     teachers retirement plan             8.5           6.0
4.19 	     Minneapolis employees
4.20 	         retirement plan                  6.0           5.0
4.21 	     Duluth teachers retirement plan      8.5           8.5
4.22 	     Minneapolis teachers retirement
4.23 	         plan                             8.5           8.5
4.24 	     St. Paul teachers retirement
4.25 	         plan                             8.5           8.5
4.26 	     Minneapolis Police Relief
4.27 	         Association                      6.0           6.0
4.28 	     Fairmont Police Relief
4.29 	         Association                      5.0           5.0
4.30 	     Minneapolis Fire Department
4.31 	         Relief Association               6.0           6.0
4.32 	     Virginia Fire Department
4.33 	         Relief Association               5.0           5.0
4.34 	Bloomington Fire Department
4.35 	         Relief Association 6.0 6.0 
4.36 	     local monthly benefit volunteer
4.37 	         firefighters relief associations 5.0           5.0
4.38 	(b) The actuarial valuation must use the applicable
4.39 	following single rate future salary increase assumption, the
4.40 	applicable following modified single rate future salary increase
4.41 	assumption, or the applicable following graded rate future
4.42 	salary increase assumption:
4.43 	(1) single rate future salary increase assumption
4.44 	future salary
4.45 	            plan                          increase assumption
4.46 	     legislators retirement plan                  5.0%
4.47 	     elective state officers retirement
4.48 	         plan                                     5.0
4.49 	     judges retirement plan                       5.0
4.50 	     Minneapolis Police Relief Association        4.0
4.51 	     Fairmont Police Relief
4.52 	         Association                              3.5
4.53 	     Minneapolis Fire Department Relief
4.54 	         Association                              4.0
4.55 	     Virginia Fire Department
4.56 	         Relief Association                       3.5
4.57 	(2) modified single rate future salary increase assumption
4.58 	future salary
4.59 	               plan                       increase assumption
4.60 	         Minneapolis employees        the prior calendar year
4.61 	           retirement plan            amount increased first by
4.62 	1.0198 percent to prior
5.1 	                                      fiscal year date and
5.2 	                                      then increased by 4.0
5.3 	                                      percent annually for
5.4 	                                      each future year
5.5 	(3) select and ultimate future salary increase assumption
5.6 	or graded rate future salary increase assumption
5.7 	future salary
5.8 	               plan                       increase assumption
5.9 	     general state employees             select calculation and
5.10 	         retirement plan                      assumption A
5.11 	     correctional state employees
5.12 	         retirement plan                      assumption H
5.13 	     State Patrol retirement plan             assumption H
5.14 	     general public employees            select calculation and
5.15 	         retirement plan                      assumption B
5.16 	     public employees police and fire
5.17 	         fund retirement plan                 assumption C
5.18 	     local government correctional service
5.19 	         retirement plan                      assumption H
5.20 	     teachers retirement plan                 assumption D
5.21 	     Duluth teachers retirement plan          assumption E
5.22 	     Minneapolis teachers retirement plan     assumption F
5.23 	     St. Paul teachers retirement plan        assumption G
5.24 	
5.25 	     The select calculation is:
5.26 	     during the ten-year select period, a designated percent
5.27 	     is multiplied by the result of ten minus T, where T is
5.28 	     the number of completed years of service, and is added
5.29 	     to the applicable future salary increase assumption.  The
5.30 	     designated percent is 0.2 percent for the correctional state
5.31 	     employees retirement plan, the State Patrol retirement
5.32 	     plan, the public employees police and fire plan, and the
5.33 	     local government correctional service plan; 0.3 percent
5.34 	     for the general state employees retirement plan, the
5.35 	     general public employees retirement plan, the teachers
5.36 	     retirement plan, the Duluth Teachers Retirement Fund
5.37 	     Association, and the St. Paul Teachers Retirement Fund
5.38 	     Association; and 0.4 percent for the Minneapolis Teachers
5.39 	     Retirement Fund Association.
5.40 	
5.41 	          The ultimate future salary increase assumption is:
5.42 	
5.43 	     age  A     B      C     D     E     F     G      H
5.44 	     16  6.95% 6.95% 11.50% 8.20% 8.00% 6.50% 6.90% 7.7500
5.45 	     17  6.906.9011.508.158.006.506.90  7.7500
5.46 	     18  6.856.8511.508.108.006.506.90  7.7500
5.47 	     19  6.806.8011.508.058.006.506.90  7.7500
5.48 	     20  6.756.4011.506.006.906.506.90  7.7500
5.49 	     21  6.756.4011.506.006.906.506.90  7.1454
5.50 	     22  6.756.4011.006.006.906.506.90  7.0725
5.51 	     23  6.756.4010.506.006.856.506.85  7.0544
5.52 	     24  6.756.4010.006.006.806.506.80  7.0363
5.53 	     25  6.756.409.506.006.756.506.75  7.0000
5.54 	     26  6.756.369.206.006.706.506.70  7.0000
5.55 	     27  6.756.328.906.006.656.506.65  7.0000
5.56 	     28  6.756.288.606.006.606.506.60  7.0000
5.57 	     29  6.756.248.306.006.556.506.55  7.0000
5.58 	     30  6.756.208.006.006.506.506.50  7.0000
5.59 	     31  6.756.167.806.006.456.506.45  7.0000
5.60 	     32  6.756.127.606.006.406.506.40  7.0000
5.61 	     33  6.756.087.406.006.356.506.35  7.0000
5.62 	     34  6.756.047.206.006.306.506.30  7.0000
5.63 	     35  6.756.007.006.006.256.506.25  7.0000
5.64 	     36  6.755.966.806.006.206.506.20  6.9019
5.65 	     37  6.755.926.606.006.156.506.15  6.8074
5.66 	     38  6.755.886.405.906.106.506.10  6.7125
5.67 	     39  6.755.846.205.806.056.506.05  6.6054
5.68 	     40  6.755.806.005.706.006.506.00  6.5000
6.1 	     41  6.755.765.905.605.906.505.95  6.3540
6.2 	     42  6.755.725.805.505.806.505.90  6.2087
6.3 	     43  6.655.685.705.405.706.505.85  6.0622
6.4 	     44  6.555.645.605.305.606.505.80  5.9048
6.5 	     45  6.455.605.505.205.506.505.75  5.7500
6.6 	     46  6.355.565.455.105.406.405.70  5.6940
6.7 	     47  6.255.525.405.005.306.305.65  5.6375
6.8 	     48  6.155.485.355.005.206.205.60  5.5822
6.9 	     49  6.055.445.305.005.106.105.55  5.5404
6.10 	     50  5.955.405.255.005.006.005.50  5.5000
6.11 	     51  5.855.365.255.005.005.905.45  5.4384
6.12 	     52  5.755.325.255.005.005.805.40  5.3776
6.13 	     53  5.655.285.255.005.005.705.35  5.3167
6.14 	     54  5.555.245.255.005.005.605.30  5.2826
6.15 	     55  5.455.205.255.005.005.505.25  5.2500
6.16 	     56  5.355.165.255.005.005.405.20  5.2500
6.17 	     57  5.255.125.255.005.005.305.15  5.2500
6.18 	     58  5.255.085.255.105.005.205.10  5.2500
6.19 	     59  5.255.045.255.205.005.105.05  5.2500
6.20 	     60  5.255.005.255.305.005.005.00  5.2500
6.21 	     61  5.255.005.255.405.005.005.00  5.2500
6.22 	     62  5.255.005.255.505.005.005.00  5.2500
6.23 	     63  5.255.005.255.605.005.005.00  5.2500
6.24 	     64  5.255.005.255.705.005.005.00  5.2500
6.25 	     65  5.255.005.255.705.005.005.00  5.2500
6.26 	     66  5.255.005.255.705.005.005.00  5.2500
6.27 	     67  5.255.005.255.705.005.005.00  5.2500
6.28 	     68  5.255.005.255.705.005.005.00  5.2500
6.29 	     69  5.255.005.255.705.005.005.00  5.2500
6.30 	     70  5.255.005.255.705.005.005.00  5.2500
6.31 	     71  5.255.00         5.70
6.32 	(c) The actuarial valuation must use the applicable
6.33 	following payroll growth assumption for calculating the
6.34 	amortization requirement for the unfunded actuarial accrued
6.35 	liability where the amortization retirement is calculated as a
6.36 	level percentage of an increasing payroll:
6.37 	payroll growth
6.38 	                  plan                             assumption
6.39 	     general state employees retirement plan          5.00%
6.40 	     correctional state employees retirement plan     5.00
6.41 	     State Patrol retirement plan                     5.00
6.42 	     legislators retirement plan                      5.00
6.43 	     elective state officers retirement plan          5.00
6.44 	     judges retirement plan                           5.00
6.45 	     general public employees retirement plan         6.00
6.46 	     public employees police and fire
6.47 	         retirement plan                              6.00
6.48 	     local government correctional service
6.49 	         retirement plan                              6.00
6.50 	     teachers retirement plan                         5.00
6.51 	     Duluth teachers retirement plan                  5.00
6.52 	     Minneapolis teachers retirement plan             5.00
6.53 	     St. Paul teachers retirement plan                5.00

6.54 	Sec. 3. Minnesota Statutes 2004, section 356.216, is
6.55 	amended to read:
6.56 	356.216 CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL POLICE
6.57 	AND FIRE FUNDS.
6.58 	(a) The provisions of section 356.215 that govern the
6.59 	contents of actuarial valuations must apply to any local police
7.1 	or fire pension fund or relief association required to make an
7.2 	actuarial report under this section, except as follows:
7.3 	(1) in calculating normal cost and other requirements, if
7.4 	required to be expressed as a level percentage of covered
7.5 	payroll, the salaries used in computing covered payroll must be
7.6 	the maximum rate of salary on which retirement and survivorship
7.7 	credits and amounts of benefits are determined and from which
7.8 	any member contributions are calculated and deducted;
7.9 	(2) in lieu of the amortization date specified in section
7.10 	356.215, subdivision 11, the appropriate amortization target
7.11 	date specified in section 69.77, subdivision 4, or 69.773,
7.12 	subdivision 4, clause (c), must be used in calculating any
7.13 	required amortization contribution, except that the amortization
7.14 	date for the Bloomington Fire Department Relief Association is
7.15 	December 31, 2031, and this date shall automatically be extended
7.16 	to match the date for full funding required for the Public
7.17 	Employees Retirement Association under section 356.215,
7.18 	subdivision 11, paragraph (e);
7.19 	(3) in addition to the tabulation of active members and
7.20 	annuitants provided for in section 356.215, subdivision 13, the
7.21 	member contributions for active members for the calendar year
7.22 	and the prospective annual retirement annuities under the
7.23 	benefit plan for active members must be reported;
7.24 	(4) actuarial valuations required under section 69.773,
7.25 	subdivision 2, must be made at least every four years and
7.26 	actuarial valuations required under section 69.77 shall be made
7.27 	annually;
7.28 	(5) the actuarial balance sheet showing accrued assets
7.29 	valued at market value if the actuarial valuation is required to
7.30 	be prepared at least every four years or valued as current
7.31 	assets under section 356.215, subdivision 1, clause (6), or
7.32 	paragraph (b), whichever applies, if the actuarial valuation is
7.33 	required to be prepared annually, actuarial accrued liabilities,
7.34 	and the unfunded actuarial accrued liability must include the
7.35 	following required reserves:
7.36 	(i) For active members
8.1 	      1.  Retirement benefits
8.2 	      2.  Disability benefits
8.3 	      3.  Refund liability due to death or withdrawal
8.4 	      4.  Survivors' benefits
8.5 	         (ii) For deferred annuitants' benefits
8.6 	         (iii) For former members without vested rights
8.7 	         (iv) For annuitants
8.8 	      1.  Retirement annuities
8.9 	      2.  Disability annuities
8.10 	      3.  Surviving spouses' annuities
8.11 	      4.  Surviving children's annuities
8.12 	In addition to those required reserves, separate items must
8.13 	be shown for additional benefits, if any, which may not be
8.14 	appropriately included in the reserves listed above; and
8.15 	(6) actuarial valuations are due by the first day of the
8.16 	seventh month after the end of the fiscal year which the
8.17 	actuarial valuation covers.
8.18 	(b) For the Minneapolis Firefighters Relief Association or
8.19 	the Minneapolis Police Relief Association, the following
8.20 	provisions additionally apply:
8.21 	(1) in calculating the actuarial balance sheet, unfunded
8.22 	actuarial accrued liability, and amortization contribution of
8.23 	the relief association, "current assets" means the value of all
8.24 	assets at cost, including realized capital gains and losses,
8.25 	plus or minus, whichever applies, the average value of total
8.26 	unrealized capital gains or losses for the most recent
8.27 	three-year period ending with the end of the plan year
8.28 	immediately preceding the actuarial valuation report
8.29 	transmission date; and
8.30 	(2) in calculating the applicable portions of the actuarial
8.31 	valuation, an annual preretirement interest assumption of six
8.32 	percent, an annual postretirement interest assumption of six
8.33 	percent, and an annual salary increase assumption of four
8.34 	percent must be used.
8.35 	(c) For the Bloomington Fire Department Relief Association,
8.36 	the following provision additionally applies:  in calculating
9.1 	the actuarial balance sheet, unfunded actuarial accrued
9.2 	liability, and amortization contribution of the relief
9.3 	association, "current assets" means the value of all assets at
9.4 	cost, including realized capital gains and losses, plus or
9.5 	minus, whichever applies, the average value of total unrealized
9.6 	capital gains or losses for the most recent five-year period
9.7 	ending with the end of the plan year immediately preceding the
9.8 	actuarial valuation report transmission date.

9.9 	Sec. 4. LOCAL APPROVAL; NONSEVERABILITY.
 9.10 	Sections 1 to 4 are not severable and are effective the day
9.11 	after the date of the approval by the city council of the city
9.12 	of Bloomington and upon timely completion by the chief clerical
9.13 	officer of the city of Bloomington of compliance with Minnesota
9.14 	Statutes, section 645.021, subdivisions 2 and 3.