1.1 	A bill for an act
1.2 	relating to retirement; various retirement plans; making various statutory changes 
1.3 	needed to accommodate the dissolution of the Minnesota Post Retirement 
1.4 	Investment Fund; redefining the value of pension plan assets for actuarial 
1.5 	reporting purposes; revising various disability benefit provisions of the general 
1.6 	state employees retirement plan, the correctional state employees retirement 
1.7 	plan, and the State Patrol retirement plan; making various administrative 
1.8 	provision changes; establishing a voluntary statewide lump-sum volunteer 
1.9 	firefighter retirement plan administered by the Public Employees Retirement 
1.10 	Association; revising various volunteer firefighters' relief association provisions; 
1.11 	correcting 2008 drafting errors related to the Minneapolis Employees Retirement 
1.12 	Fund and other drafting errors; granting special retirement benefit authority 
1.13 	in certain cases; revising the special transportation pilots retirement plan of 
1.14 	the Minnesota State Retirement System; expanding the membership of the 
1.15 	state correctional employees retirement plan; extending the amortization target 
1.16 	date for the Fairmont Police Relief Association; modifying the number of 
1.17 	board of trustees members of the Minneapolis Firefighters Relief Association; 
1.18 	increasing state education aid to offset teacher retirement plan employer 
1.19 	contribution increases; increasing teacher retirement plan member and employer 
1.20 	contributions; revising the normal retirement age and providing prospective 
1.21 	benefit accrual rate increases for teacher retirement plans; permitting the Brimson 
1.22 	Volunteer Firefighters' Relief Association to implement a different board of 
1.23 	trustees composition; permitting employees of the Minneapolis Firefighters 
1.24 	Relief Association and the Minneapolis Police Relief Association to become 
1.25 	members of the general employee retirement plan of the Public Employees 
1.26 	Retirement Association; creating a two-year demonstration postretirement 
1.27 	adjustment mechanism for the St. Paul Teachers Retirement Fund Association; 
1.28 	creating a temporary postretirement option program for employees covered 
1.29 	by the general employee retirement plan of the Public Employees Retirement 
1.30 	Association; setting a statute of limitations for erroneous receipts of the general 
1.31 	employee retirement plan of the Public Employees Retirement Association; 
1.32 	permitting the Minnesota State Colleges and Universities System board to 
1.33 	create an early separation incentive program; permitting certain Minnesota 
1.34 	State Colleges and Universities System faculty members to make a second 
1.35 	chance retirement coverage election upon achieving tenure; including the Weiner 
1.36 	Memorial Medical Center, Inc., in the Public Employees Retirement Association 
1.37 	privatization law; extending the approval deadline date for the inclusion of the 
1.38 	Clearwater County Hospital in the Public Employees Retirement Association 
1.39 	privatization law; appropriating money; amending Minnesota Statutes 2008, 
2.1 	sections 3A.02, subdivision 3, by adding a subdivision; 3A.03, by adding a 
2.2 	subdivision; 3A.04, by adding a subdivision; 3A.115; 11A.08, subdivision 1; 
2.3 	11A.17, subdivisions 1, 2; 11A.23, subdivisions 1, 2; 43A.34, subdivision 4; 
2.4 	43A.346, subdivisions 2, 6; 69.011, subdivisions 1, 2, 4; 69.021, subdivisions 7, 
2.5 	9; 69.031, subdivisions 1, 5; 69.77, subdivision 4; 69.771, subdivision 3; 69.772, 
2.6 	subdivisions 4, 6; 69.773, subdivision 6; 127A.50, subdivision 1; 299A.465, 
2.7 	subdivision 1; 352.01, subdivision 2b, by adding subdivisions; 352.021, by 
2.8 	adding a subdivision; 352.04, subdivisions 1, 12; 352.061; 352.113, subdivision 
2.9 	4, by adding a subdivision; 352.115, by adding a subdivision; 352.12, by adding 
2.10 	a subdivision; 352.75, subdivisions 3, 4; 352.86, subdivisions 1, 1a, 2; 352.91, 
2.11 	subdivision 3d; 352.911, subdivisions 3, 5; 352.93, by adding a subdivision; 
2.12 	352.931, by adding a subdivision; 352.95, subdivisions 1, 2, 3, 4, 5, by adding 
2.13 	a subdivision; 352B.02, subdivisions 1, 1a, 1c, 1d; 352B.08, by adding a 
2.14 	subdivision; 352B.10, subdivisions 1, 2, 5, by adding subdivisions; 352B.11, 
2.15 	subdivision 2, by adding a subdivision; 352C.10; 352D.06, subdivision 1; 
2.16 	352D.065, by adding a subdivision; 352D.075, by adding a subdivision; 353.01, 
2.17 	subdivisions 2, 2a, 6, 11b, 16, 16b; 353.0161, subdivision 1; 353.03, subdivision 
2.18 	3a; 353.06; 353.27, subdivisions 1, 2, 3, 7, 7b; 353.29, by adding a subdivision; 
2.19 	353.31, subdivision 1b, by adding a subdivision; 353.33, subdivisions 1, 3b, 7, 
2.20 	11, 12, by adding subdivisions; 353.65, subdivisions 2, 3; 353.651, by adding 
2.21 	a subdivision; 353.656, subdivision 5a, by adding a subdivision; 353.657, 
2.22 	subdivision 3a, by adding a subdivision; 353.665, subdivision 3; 353A.02, 
2.23 	subdivisions 14, 23; 353A.05, subdivisions 1, 2; 353A.08, subdivisions 1, 3, 6a; 
2.24 	353A.081, subdivision 2; 353A.09, subdivision 1; 353A.10, subdivisions 2, 
2.25 	3; 353E.01, subdivisions 3, 5; 353E.04, by adding a subdivision; 353E.06, by 
2.26 	adding a subdivision; 353E.07, by adding a subdivision; 353F.02, subdivision 4; 
2.27 	354.05, subdivision 38, by adding a subdivision; 354.07, subdivision 4; 354.33, 
2.28 	subdivision 5; 354.35, by adding a subdivision; 354.42, subdivisions 1a, 2, 3, 
2.29 	by adding subdivisions; 354.44, subdivisions 4, 5, 6, by adding a subdivision; 
2.30 	354.46, by adding a subdivision; 354.47, subdivision 1; 354.48, subdivisions 
2.31 	4, 6, by adding a subdivision; 354.49, subdivision 2; 354.52, subdivisions 2a, 
2.32 	4b; 354.55, subdivisions 11, 13; 354.66, subdivision 6; 354.70, subdivisions 
2.33 	5, 6; 354A.011, subdivision 15a; 354A.096; 354A.12, subdivisions 1, 2a, by 
2.34 	adding subdivisions; 354A.29, subdivision 3; 354A.31, subdivisions 4, 4a, 7; 
2.35 	354A.36, subdivision 6; 354B.21, subdivision 2; 356.20, subdivision 2; 356.215, 
2.36 	subdivisions 1, 11; 356.219, subdivision 3; 356.315, by adding a subdivision; 
2.37 	356.32, subdivision 2; 356.351, subdivision 2; 356.401, subdivisions 2, 3; 
2.38 	356.465, subdivision 1, by adding a subdivision; 356.611, subdivisions 3, 4; 
2.39 	356.635, subdivisions 6, 7; 356.96, subdivisions 1, 5; 422A.06, subdivision 8; 
2.40 	422A.08, subdivision 5; 423C.03, subdivision 1; 424A.001, subdivisions 1, 1a, 
2.41 	2, 3, 4, 5, 6, 8, 9, 10, by adding subdivisions; 424A.01; 424A.02, subdivisions 
2.42 	1, 2, 3, 3a, 7, 8, 9, 9a, 9b, 10, 12, 13; 424A.021; 424A.03; 424A.04; 424A.05, 
2.43 	subdivisions 1, 2, 3, 4; 424A.06; 424A.07; 424A.08; 424A.10, subdivisions 1, 
2.44 	2, 3, 4, 5; 424B.10, subdivision 2, by adding subdivisions; 424B.21; 490.123, 
2.45 	subdivisions 1, 3; 490.124, by adding a subdivision; Laws 1989, chapter 319, 
2.46 	article 11, section 13; Laws 2006, chapter 271, article 5, section 5, as amended; 
2.47 	Laws 2008, chapter 349, article 14, section 13; proposing coding for new law 
2.48 	in Minnesota Statutes, chapters 136F; 352B; 353; 354; 356; 420; 424A; 424B; 
2.49 	proposing coding for new law as Minnesota Statutes, chapter 353G; repealing 
2.50 	Minnesota Statutes 2008, sections 11A.041; 11A.18; 11A.181; 352.119, 
2.51 	subdivisions 2, 3, 4; 352.86, subdivision 3; 352B.01, subdivisions 1, 2, 3, 3b, 
2.52 	4, 6, 7, 9, 10, 11; 352B.26, subdivisions 1, 3; 353.271; 353A.02, subdivision 
2.53 	20; 353A.09, subdivisions 2, 3; 354.05, subdivision 26; 354.06, subdivision 
2.54 	6; 354.55, subdivision 14; 354.63; 354A.29, subdivisions 2, 4, 5; 356.2165; 
2.55 	356.41; 356.431, subdivision 2; 422A.01, subdivision 13; 422A.06, subdivision 
2.56 	4; 422A.08, subdivision 5a; 424A.001, subdivision 7; 424A.02, subdivisions 4, 
2.57 	6, 8a, 8b, 9b; 424A.09; 424B.10, subdivision 1; 490.123, subdivisions 1c, 1e.
3.1 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

3.2 	ARTICLE 1
3.3 	MINNESOTA POST RETIREMENT
3.4 	INVESTMENT FUND DISSOLUTION ACCOMMODATION

3.5 	Section 1. Minnesota Statutes 2008, section 3A.02, subdivision 3, is amended to read:
3.6 		Subd. 3.Appropriation.  The amounts required for payment of retirement 
3.7 	allowances provided by this section are appropriated annually to the director from the 
3.8 	participation of the legislators retirement plan in the Minnesota postretirement investment
3.9 	fund or from the general fund as provided in section 3A.115. The retirement allowance 
3.10 	must be paid is payable monthly to the recipients entitled to those retirement allowances.

3.11 	Sec. 2. Minnesota Statutes 2008, section 3A.02, is amended by adding a subdivision to 
3.12 	read:
3.13 		Subd. 6.Postretirement adjustment eligibility. A retirement allowance under this 
3.14 	section is eligible for postretirement adjustments under section 356.415.

3.15 	Sec. 3. Minnesota Statutes 2008, section 3A.03, is amended by adding a subdivision to 
3.16 	read:
3.17 		Subd. 3.Legislators retirement fund. (a) The legislators retirement fund, a special 
3.18 	retirement fund, is created within the state treasury and must be credited with assets equal 
3.19 	to the participation of the legislators retirement plan in the Minnesota postretirement 
3.20 	investment fund as of June 30, 2009, and any investment proceeds on those assets.
3.21 	(b) The payment of annuities under section 3A.115, paragraph (b), is appropriated 
3.22 	from the legislators retirement fund.

3.23 	Sec. 4. Minnesota Statutes 2008, section 3A.04, is amended by adding a subdivision to 
3.24 	read:
3.25 		Subd. 2a.Postretirement adjustment eligibility. A survivor benefit under this 
3.26 	section is eligible for postretirement adjustments under section 356.415.

3.27 	Sec. 5. Minnesota Statutes 2008, section 3A.115, is amended to read:
3.28 	3A.115 RETIREMENT ALLOWANCE APPROPRIATION; 
3.29 	POSTRETIREMENT ADJUSTMENT.
4.1 	(a) The amount necessary to fund the retirement allowance granted under this 
4.2 	chapter to a former legislator upon retirementretiring after June 30, 2003, is appropriated 
4.3 	from the general fund to the director to pay pension obligations due to the retiree.
4.4 	(b) The amount necessary to fund the retirement allowance granted under this 
4.5 	chapter to a former legislator retiring before July 1, 2003, must be paid from the legislators 
4.6 	retirement fund created under section 3A.03, subdivision 3, until the assets of the fund 
4.7 	are exhausted and at that time, the amount necessary to fund the retirement allowances 
4.8 	under this paragraph is appropriated from the general fund to the director to pay pension 
4.9 	obligations to the retiree.
4.10 	(c) Retirement allowances payable to retired legislators and their survivors under 
4.11 	this chapter must be adjusted in the same manner, at the same times, and in the same 
4.12 	amounts as are benefits payable from the Minnesota postretirement investment fund to 
4.13 	retirees of a participating public pension fund as provided in sections 3A.02, subdivision 
4.14 	6, and 356.415.

4.15 	Sec. 6. Minnesota Statutes 2008, section 11A.08, subdivision 1, is amended to read:
4.16 		Subdivision 1.Membership. There is created an Investment Advisory Council 
4.17 	consisting of 17 members. Ten of these members shallmust be experienced in general 
4.18 	investment matters. They shall be appointed by the state board The state board must 
4.19 	appoint the ten members. The other seven members shall be are: the commissioner of 
4.20 	finance; the executive director of the Minnesota State Retirement System; the executive 
4.21 	director of the Public Employees Retirement Association; the executive director of 
4.22 	the Teachers Retirement Association; a retiree currently receiving benefits from the 
4.23 	postretirement investment fund a statewide retirement plan; and two public employees 
4.24 	who are active members of funds whose assets are invested by the state board. The 
4.25 	governor must appoint the retiree and the public employees shall be appointed by the 
4.26 	governor for four-year terms.

4.27 	Sec. 7. Minnesota Statutes 2008, section 11A.23, subdivision 1, is amended to read:
4.28 		Subdivision 1.Certification of assets not needed for immediate use. Each 
4.29 	executive director administering a retirement fund or plan enumerated in subdivision 4 
4.30 	shall, from time to time, certify to the state board for investment those portions of the 
4.31 	assets of the retirement fund or plan which in the judgment of the executive director are 
4.32 	not required for immediate use. Assets of the fund or plan required for participation in 
4.33 	the Minnesota postretirement adjustment fund, the combined investment fund, or the 
5.1 	supplemental investment fund shall be transferred to those funds as provided by sections 
5.2 	11A.01 to 11A.25.

5.3 	Sec. 8. Minnesota Statutes 2008, section 11A.23, subdivision 2, is amended to read:
5.4 		Subd. 2.Investment. Retirement fund assets certified to the state board pursuant to 
5.5 	subdivision 1 shall must be invested by the state board subject to the provisions of section 
5.6 	11A.24. Retirement fund assets transferred to the Minnesota postretirement investment 
5.7 	fund, the combined investment fund or the supplemental investment fund shall must be 
5.8 	invested by the state board as part of those funds.  

5.9 	Sec. 9. Minnesota Statutes 2008, section 352.021, is amended by adding a subdivision 
5.10 	to read:
5.11 		Subd. 5.Determining applicable law. An annuity under this chapter must be 
5.12 	computed under the law in effect as of the last day for which the employee receives pay, 
5.13 	or if on medical leave, the day that the leave terminates. However, if the employee has 
5.14 	returned to covered employment following a termination, the employee must have earned 
5.15 	at least six months of allowable service following their return in order to qualify for 
5.16 	improved benefits resulting from any law change enacted subsequent to that termination.

5.17 	Sec. 10. Minnesota Statutes 2008, section 352.04, subdivision 1, is amended to read:
5.18 		Subdivision 1.Fund created. (a) There is created a special fund to be known as the 
5.19 	general state employees retirement fund. In that fund, employee contributions, employer 
5.20 	contributions, and other amounts authorized by law must be deposited.
5.21 	(b) The general state employees retirement plan of the Minnesota State Retirement 
5.22 	System must participate in the Minnesota postretirement investment fund. The amounts 
5.23 	provided in section 352.119 must be deposited in the Minnesota postretirement investment 
5.24 	fund.

5.25 	Sec. 11. Minnesota Statutes 2008, section 352.04, subdivision 12, is amended to read:
5.26 		Subd. 12.Fund disbursement restricted. The general state employees retirement 
5.27 	fund and the participation in the Minnesota postretirement investment fund must be 
5.28 	disbursed only for the purposes provided by law. The expenses of the system and any 
5.29 	benefits provided by law, other than benefits payable from the Minnesota postretirement 
5.30 	investment fund, must be paid from the general state employees retirement fund. The 
5.31 	retirement allowances, retirement annuities, and disability benefits, as well as refunds of 
5.32 	any sum remaining to the credit of a deceased retired employee or a disabled employee 
6.1 	must be paid only from the general state employees retirement fund after the needs 
6.2 	have been certified and the amounts withdrawn from the participation in the Minnesota 
6.3 	postretirement investment fund under section 11A.18. The amounts necessary to make the 
6.4 	payments from the general state employees retirement fund and the participation in the 
6.5 	Minnesota postretirement investment fund are annually appropriated from these funds
6.6 	that fund for those purposes.

6.7 	Sec. 12. Minnesota Statutes 2008, section 352.061, is amended to read:
6.8 	352.061 INVESTMENT BOARD TO INVEST FUNDS.
6.9 	The director shall, from time to time, certify to the State Board of Investment any 
6.10 	portions of the state employees retirement fund that in the judgment of the director are 
6.11 	not required for immediate use. Assets from the state employees retirement fund must 
6.12 	be transferred to the Minnesota postretirement investment fund as provided in section 
6.13 	11A.18. The State Board of Investment shall invest and reinvest sums so transferred, or
6.14 	certified, in securities that are duly authorized legal investments under section 11A.24.  

6.15 	Sec. 13. Minnesota Statutes 2008, section 352.113, is amended by adding a subdivision 
6.16 	to read:
6.17 		Subd. 13.Postretirement adjustment eligibility. A disability benefit under this 
6.18 	section is eligible for postretirement adjustments under section 356.415.

6.19 	Sec. 14. Minnesota Statutes 2008, section 352.115, is amended by adding a subdivision 
6.20 	to read:
6.21 		Subd. 14.Postretirement adjustment eligibility. A retirement annuity under 
6.22 	this section and section 352.116 is eligible for postretirement adjustments under section 
6.23 	356.415.

6.24 	Sec. 15. Minnesota Statutes 2008, section 352.12, is amended by adding a subdivision 
6.25 	to read:
6.26 		Subd. 2c.Postretirement adjustment eligibility. A survivor benefit under 
6.27 	subdivision 2, 2a, or 2b is eligible for postretirement adjustments under section 356.415.

6.28 	Sec. 16. Minnesota Statutes 2008, section 352.75, subdivision 3, is amended to read:
6.29 		Subd. 3.Existing retired members and benefit recipients. As of July 1, 1978, 
6.30 	the liability for all retirement annuities, disability benefits, survivorship annuities, and 
6.31 	survivor of deceased active employee benefits paid or payable by the former Metropolitan 
7.1 	Transit Commission-Transit Operating Division employees retirement fund is transferred 
7.2 	to the Minnesota State Retirement System, and is no longer the liability of the former 
7.3 	Metropolitan Transit Commission-Transit Operating Division employees retirement 
7.4 	fund. The required reserves for retirement annuities, disability benefits, and optional 
7.5 	joint and survivor annuities in effect on June 30, 1978, and the required reserves for the 
7.6 	increase in annuities and benefits provided under subdivision 6 must be determined using 
7.7 	a five percent interest assumption and the applicable Minnesota State Retirement System 
7.8 	mortality table and shall be transferred by the Minnesota State Retirement System to 
7.9 	the Minnesota postretirement investment fund on July 1, 1978, but shall be considered 
7.10 	transferred as of June 30, 1978. The annuity or benefit amount in effect on July 1, 1978, 
7.11 	including the increase granted under subdivision 6, must be used for adjustments made 
7.12 	under section 11A.18. For persons receiving benefits as survivors of deceased former 
7.13 	retirement annuitants, the benefits must be considered as having commenced on the date 
7.14 	on which the retirement annuitant began receiving the retirement annuity.  

7.15 	Sec. 17. Minnesota Statutes 2008, section 352.75, subdivision 4, is amended to read:
7.16 		Subd. 4.Existing deferred retirees. Any former member of the former 
7.17 	Metropolitan Transit Commission-Transit Operating Division employees retirement 
7.18 	fund is entitled to a retirement annuity from the Minnesota State Retirement System if 
7.19 	the employee:
7.20 	(1) is not an active employee of the Transit Operating Division of the former 
7.21 	Metropolitan Transit Commission on July 1, 1978; (2) has at least ten years of active 
7.22 	continuous service with the Transit Operating Division of the former Metropolitan 
7.23 	Transit Commission as defined by the former Metropolitan Transit Commission-Transit 
7.24 	Operating Division employees retirement plan document in effect on December 31, 1977; 
7.25 	(3) has not received a refund of contributions; (4) has not retired or begun receiving an 
7.26 	annuity or benefit from the former Metropolitan Transit Commission-Transit Operating 
7.27 	Division employees retirement fund; (5) is at least 55 years old; and (6) submits a valid 
7.28 	application for a retirement annuity to the executive director of the Minnesota State 
7.29 	Retirement System.
7.30 	The person is entitled to a retirement annuity in an amount equal to the normal 
7.31 	old age retirement allowance calculated under the former Metropolitan Transit 
7.32 	Commission-Transit Operating Division employees retirement fund plan document in 
7.33 	effect on December 31, 1977, subject to an early retirement reduction or adjustment in 
7.34 	amount on account of retirement before the normal retirement age specified in that former 
8.1 	Metropolitan Transit Commission-Transit Operating Division employees retirement fund 
8.2 	plan document.
8.3 	The deferred retirement annuity of any person to whom this subdivision applies 
8.4 	must be augmented. The required reserves applicable to the deferred retirement annuity, 
8.5 	determined as of the date the allowance begins to accrue using an appropriate mortality 
8.6 	table and an interest assumption of five percent, must be augmented by interest at the rate 
8.7 	of five percent per year compounded annually from January 1, 1978, to January 1, 1981, 
8.8 	and three percent per year compounded annually from January 1, 1981, to the first day 
8.9 	of the month in which the annuity begins to accrue. UponAfter the commencement of 
8.10 	the retirement annuity, the required reserves for the annuity must be transferred to the 
8.11 	Minnesota postretirement investment fund in accordance with subdivision 2 and section 
8.12 	352.119 is entitled to postretirement adjustments under section 356.415. On applying for 
8.13 	a retirement annuity under this subdivision, the person is entitled to elect a joint and 
8.14 	survivor optional annuity under section 352.116, subdivision 3.  

8.15 	Sec. 18. Minnesota Statutes 2008, section 352.911, subdivision 3, is amended to read:
8.16 		Subd. 3.Investment. The correctional employees retirement fund shall participate 
8.17 	in the Minnesota postretirement investment fund and in that fund there shall be deposited 
8.18 	the amounts provided in section 352.119. The balance of any assets of the fund shall
8.19 	must be deposited in the Minnesota combined investment funds as provided in section 
8.20 	11A.14, if applicable, or otherwise under section 11A.23.  

8.21 	Sec. 19. Minnesota Statutes 2008, section 352.911, subdivision 5, is amended to read:
8.22 		Subd. 5.Fund disbursement restricted. The correctional employees retirement 
8.23 	fund and its share of participation in the Minnesota postretirement investment fund shall
8.24 	must be disbursed only for the purposes provided for in the applicable provisions in this 
8.25 	chapter. The proportional share of the expenses of the system and any benefits provided 
8.26 	in sections section352.90to 352.951, other than benefits payable from the Minnesota 
8.27 	postretirement investment fund, shallmust be paid from the correctional employees 
8.28 	retirement fund. The retirement allowances, retirement annuities, the disability benefits, 
8.29 	the survivorship benefits, and any refunds of accumulated deductions shall must be paid 
8.30 	only from the correctional employees retirement fund after those needs have been certified 
8.31 	by the executive director and the amounts withdrawn from the share of participation in the 
8.32 	Minnesota postretirement fund under section 11A.18. The amounts necessary to make the 
8.33 	payments from the correctional employees retirement fund and the participation in the 
9.1 	Minnesota postretirement investment fund are annually appropriated from those funds
9.2 	that fund for those purposes.  

9.3 	Sec. 20. Minnesota Statutes 2008, section 352.93, is amended by adding a subdivision 
9.4 	to read:
9.5 		Subd. 7.Postretirement adjustment eligibility. A retirement annuity under this 
9.6 	section is eligible for postretirement adjustments under section 356.415.

9.7 	Sec. 21. Minnesota Statutes 2008, section 352.931, is amended by adding a subdivision 
9.8 	to read:
9.9 		Subd. 6.Postretirement adjustment eligibility. A survivor benefit under this 
9.10 	section is eligible for postretirement adjustments under section 356.415.

9.11 	Sec. 22. Minnesota Statutes 2008, section 352.95, is amended by adding a subdivision 
9.12 	to read:
9.13 		Subd. 8.Postretirement adjustment eligibility. A disability benefit under this 
9.14 	section is eligible for postretirement adjustments under section 356.415.

9.15 	Sec. 23. Minnesota Statutes 2008, section 352B.02, subdivision 1d, is amended to read:
9.16 		Subd. 1d.Fund revenue and expenses. The amounts provided for in this section 
9.17 	must be credited to the State Patrol retirement fund. All money received must be deposited 
9.18 	by the commissioner of finance in the State Patrol retirement fund. The fund must be used 
9.19 	to pay the administrative expenses of the retirement fund, and the benefits and annuities 
9.20 	provided in this chapter. Appropriate amounts shall be transferred to or withdrawn from 
9.21 	the Minnesota postretirement investment fund as provided in section 352B.26.

9.22 	Sec. 24. Minnesota Statutes 2008, section 352B.08, is amended by adding a 
9.23 	subdivision to read:
9.24 		Subd. 4.Postretirement adjustment eligibility. A retirement annuity under this 
9.25 	section is eligible for postretirement adjustments under section 356.415.

9.26 	Sec. 25. Minnesota Statutes 2008, section 352B.10, is amended by adding a 
9.27 	subdivision to read:
9.28 		Subd. 6.Postretirement adjustment eligibility. A disability benefit under this 
9.29 	section is eligible for postretirement adjustments under section 356.415.

10.1 	Sec. 26. Minnesota Statutes 2008, section 352B.11, is amended by adding a subdivision 
10.2 	to read:
10.3 		Subd. 2e.Postretirement adjustment eligibility. A survivor benefit under 
10.4 	subdivision 2, 2b, or 2c is eligible for postretirement adjustments under section 356.415.

10.5 	Sec. 27. Minnesota Statutes 2008, section 352C.10, is amended to read:
10.6 	352C.10 BENEFIT ADJUSTMENTS.
10.7 	Retirement allowances payable to retired constitutional officers and surviving spouse 
10.8 	benefits payable must be adjusted in the same manner, at the same times and in the same 
10.9 	amounts as are benefits payable from the Minnesota postretirement investment fund to 
10.10 	retirees of a participating public pension fund under section 356.415.

10.11 	Sec. 28. Minnesota Statutes 2008, section 352D.06, subdivision 1, is amended to read:
10.12 		Subdivision 1.Annuity; reserves. When a participant attains at least age 55, 
10.13 	terminates from covered service, and applies for a retirement annuity, the cash value of the 
10.14 	participant's shares shallmust be transferred to the Minnesota postretirement investment
10.15 	general state employees retirement fund and must be used to provide an annuity for the 
10.16 	retired employee based upon the participant's age when the benefit begins to accrue 
10.17 	according to the reserve basis used by the general state employees retirement plan in 
10.18 	determining pensions and reserves. The annuity under this subdivision is eligible for 
10.19 	postretirement adjustments under section 356.415.

10.20 	Sec. 29. Minnesota Statutes 2008, section 352D.065, is amended by adding a 
10.21 	subdivision to read:
10.22 		Subd. 3a.Postretirement adjustment eligibility. A disability benefit under this 
10.23 	section is eligible for postretirement adjustments under section 356.415.

10.24 	Sec. 30. Minnesota Statutes 2008, section 352D.075, is amended by adding a 
10.25 	subdivision to read:
10.26 		Subd. 2b.Postretirement adjustment eligibility. A survivor benefit under this 
10.27 	section is eligible for postretirement adjustments under section 356.415.

10.28 	Sec. 31. Minnesota Statutes 2008, section 353.06, is amended to read:
10.29 	353.06 STATE BOARD OF INVESTMENT TO INVEST FUNDS.
10.30 	The executive director shall from time to time certify to the State Board of 
10.31 	Investment for investment such portions of the retirement fund as in its judgment may not 
11.1 	be required for immediate use. Assets from the public employees retirement fund shall 
11.2 	be transferred to the Minnesota postretirement investment fund as provided in section 
11.3 	11A.18. The State Board of Investment shall thereupon invest and reinvest the sum so 
11.4 	certified, or transferred, in such securities as are duly authorized as legal investments for 
11.5 	state employees retirement fund and shall have authority to sell, convey, and exchange 
11.6 	such securities and invest and reinvest the securities when it deems it desirable to do so 
11.7 	and shall sell securities upon request of the board of trustees when such funds are needed 
11.8 	for its purposes. All of the provisions regarding accounting procedures and restrictions 
11.9 	and conditions for the purchase and sale of securities for the state employees retirement 
11.10 	fund shallunder chapter 11A must apply to the accounting, purchase and sale of securities 
11.11 	for the public employees retirement fund.  

11.12 	Sec. 32. Minnesota Statutes 2008, section 353.27, subdivision 1, is amended to read:
11.13 		Subdivision 1.Income; disbursements. There is a special fund known as the 
11.14 	"public employees retirement fund," the "retirement fund," or the "fund," which shall
11.15 	must include all the assets of the association. This fund shall must be credited with all 
11.16 	contributions, all interest and all other income authorized by law. From this fund there 
11.17 	is appropriated the payments authorized by this chapter in the amounts and at such time 
11.18 	provided herein, including the expenses of administering the fund, and including the 
11.19 	proper share of the Minnesota postretirement investment fund.

11.20 	Sec. 33. Minnesota Statutes 2008, section 353.29, is amended by adding a subdivision 
11.21 	to read:
11.22 		Subd. 9.Postretirement adjustment eligibility. An annuity under this section or 
11.23 	section 353.30 is eligible for postretirement adjustments under section 356.415.

11.24 	Sec. 34. Minnesota Statutes 2008, section 353.31, subdivision 1b, is amended to read:
11.25 		Subd. 1b.Joint and survivor option. (a) Prior to payment of a surviving spouse 
11.26 	benefit under subdivision 1, the surviving spouse may elect to receive the 100 percent 
11.27 	joint and survivor optional annuity under section  353.32, subdivision 1a, rather than a 
11.28 	surviving spouse benefit. 
11.29 	(b) If there is a dependent child or children, and the 100 percent joint and survivor 
11.30 	optional annuity for the surviving spouse, when added to the dependent children's benefit 
11.31 	under subdivisions 1 and 1a, exceeds an amount equal to 70 percent of the member's 
11.32 	specified average monthly salary, the 100 percent joint and survivor annuity under section  
11.33 	353.32, subdivision 1a, must be reduced by the amount necessary so that the total family 
12.1 	benefit does not exceed the 70 percent maximum family benefit amount under subdivision 
12.2 	1a. 
12.3 	(c) The 100 percent joint and survivor optional annuity must be restored to the 
12.4 	surviving spouse, plus applicable postretirement fund adjustments under Minnesota 
12.5 	Statutes 2008, section  356.41, through January 1, 2009, and thereafter under section 
12.6 	356.415, as the dependent child or children become no longer dependent under section  
12.7 	353.01, subdivision 15. 

12.8 	Sec. 35. Minnesota Statutes 2008, section 353.31, is amended by adding a subdivision 
12.9 	to read:
12.10 		Subd. 12.Postretirement adjustment eligibility. A survivor benefit under 
12.11 	subdivision 1 or 1b or section 353.32, subdivision 1a, 1b, or 1c is eligible for 
12.12 	postretirement adjustments under section 356.415.

12.13 	Sec. 36. Minnesota Statutes 2008, section 353.33, subdivision 3b, is amended to read:
12.14 		Subd. 3b.Optional annuity election. A disabled member may elect to receive the 
12.15 	normal disability benefit or an optional annuity under section 353.30, subdivision 3. The 
12.16 	election of an optional annuity must be made prior to the commencement of payment of 
12.17 	the disability benefit. The optional annuity must begin to accrue on the same date as 
12.18 	provided for the disability benefit. 
12.19 	(1) If a person who is not the spouse of a member is named as beneficiary of the 
12.20 	joint and survivor optional annuity, the person is eligible to receive the annuity only 
12.21 	if the spouse, on the disability application form prescribed by the executive director, 
12.22 	permanently waives the surviving spouse benefits under sections 353.31, subdivision 1, 
12.23 	and 353.32, subdivision 1a. If the spouse of the member refuses to permanently waive 
12.24 	the surviving spouse coverage, the selection of a person other than the spouse of the 
12.25 	member as a joint annuitant is invalid. 
12.26 	(2) If the spouse of the member permanently waives survivor coverage, the 
12.27 	dependent children, if any, continue to be eligible for survivor benefits under section 
12.28 	353.31, subdivision 1, including the minimum benefit in section 353.31, subdivision 1a. 
12.29 	The designated optional annuity beneficiary may draw the monthly benefit; however, the 
12.30 	amount payable to the dependent child or children and joint annuitant must not exceed 
12.31 	the 70 percent maximum family benefit under section 353.31, subdivision 1a. If the 
12.32 	maximum is exceeded, the benefit of the joint annuitant must be reduced to the amount 
12.33 	necessary so that the total family benefit does not exceed the 70 percent maximum family 
12.34 	benefit amount. 
13.1 	(3) If the spouse is named as the beneficiary of the joint and survivor optional 
13.2 	annuity, the spouse may draw the monthly benefits; however, the amount payable to 
13.3 	the dependent child or children and the joint annuitant must not exceed the 70 percent 
13.4 	maximum family benefit under section 353.31, subdivision 1a. If the maximum is 
13.5 	exceeded, each dependent child will receive ten percent of the member's specified 
13.6 	average monthly salary, and the benefit to the joint annuitant must be reduced to the 
13.7 	amount necessary so that the total family benefit does not exceed the 70 percent maximum 
13.8 	family benefit amount. The joint and survivor optional annuity must be restored to the 
13.9 	surviving spouse, plus applicable postretirement adjustments under Minnesota Statutes 
13.10 	2008, section 356.41 or section 356.415, as the dependent child or children become no 
13.11 	longer dependent under section 353.01, subdivision 15. 

13.12 	Sec. 37. Minnesota Statutes 2008, section 353.33, subdivision 7, is amended to read:
13.13 		Subd. 7.Partial reemployment. If, following a work or non-work-related injury 
13.14 	or illness, a disabled person who remains totally and permanently disabled as defined 
13.15 	in section 353.01, subdivision 19, has income from employment that is not substantial 
13.16 	gainful activity and the rate of earnings from that employment are less than the salary 
13.17 	rate at the date of disability or the salary rate currently paid for positions similar to the 
13.18 	employment position held by the disabled person immediately before becoming disabled, 
13.19 	whichever is greater, the executive director shall continue the disability benefit in an 
13.20 	amount that, when added to the earnings and any workers' compensation benefit, does not 
13.21 	exceed the salary rate at the date of disability or the salary currently paid for positions 
13.22 	similar to the employment position held by the disabled person immediately before 
13.23 	becoming disabled, whichever is higher. The disability benefit under this subdivision may 
13.24 	not exceed the disability benefit originally allowed, plus any postretirement adjustments 
13.25 	payable after December 31, 1988, in accordance with Minnesota Statutes 2008, section 
13.26 	11A.18, subdivision 10, or Minnesota Statutes 2008, section 356.41, through January 1, 
13.27 	2009, and thereafter as provided in section 356.415. No deductions for the retirement fund 
13.28 	may be taken from the salary of a disabled person who is receiving a disability benefit 
13.29 	as provided in this subdivision. 

13.30 	Sec. 38. Minnesota Statutes 2008, section 353.33, is amended by adding a subdivision 
13.31 	to read:
13.32 		Subd. 13.Postretirement adjustment eligibility. A disability benefit under this 
13.33 	section is eligible for postretirement adjustments under section 356.415.

14.1 	Sec. 39. Minnesota Statutes 2008, section 353.651, is amended by adding a subdivision 
14.2 	to read:
14.3 		Subd. 5.Postretirement adjustment eligibility. An annuity under this section is 
14.4 	eligible for postretirement adjustments under section 356.415.

14.5 	Sec. 40. Minnesota Statutes 2008, section 353.656, subdivision 5a, is amended to read:
14.6 		Subd. 5a.Cessation of disability benefit. (a) The association shall cease the 
14.7 	payment of any disability benefit the first of the month following the reinstatement of a 
14.8 	member to full time or less than full-time service in a position covered by the police 
14.9 	and fire fund.
14.10 	(b) A disability benefit paid to a disabled member of the police and fire plan, that 
14.11 	was granted under laws in effect after June 30, 2007, terminates at the end of the month in 
14.12 	which the member:
14.13 	(1) reaches normal retirement age; 
14.14 	(2) if the disability benefit is payable for a 60-month period as determined under 
14.15 	subdivisions 1 and 3, as applicable, the first of the month following the expiration of 
14.16 	the 60-month period; or
14.17 	(3) if the disabled member so chooses, the end of the month in which the member 
14.18 	has elected to convert to an early retirement annuity under section 353.651, subdivision 4.
14.19 	(c) If the police and fire plan member continues to be disabled when the disability 
14.20 	benefit terminates under this subdivision, the member is deemed to be retired. The 
14.21 	individual is entitled to receive a normal retirement annuity or an early retirement annuity 
14.22 	under section 353.651, whichever is applicable, as further specified in paragraph (d) 
14.23 	or (e). If the individual did not previously elect an optional annuity under subdivision 
14.24 	1a, paragraph (a), the individual may elect an optional annuity under subdivision 1a, 
14.25 	paragraph (b).
14.26 	(d) A member of the police and fire plan who is receiving a disability benefit under 
14.27 	this section may, upon application, elect to receive an early retirement annuity under 
14.28 	section 353.651, subdivision 4, at any time after attaining age 50, but must convert to a 
14.29 	retirement annuity no later than the end of the month in which the disabled member attains 
14.30 	normal retirement age. An early retirement annuity elected under this subdivision must be 
14.31 	calculated on the disabled member's accrued years of service and average salary as defined 
14.32 	in section 353.01, subdivision 17a, and when elected, the member is deemed to be retired.
14.33 	(e) When an individual's benefit is recalculated as a retirement annuity under this 
14.34 	section, the annuity must be based on clause (1) or clause (2), whichever provides the 
14.35 	greater amount:
15.1 	(1) the benefit amount at the time of reclassification, including all prior adjustments 
15.2 	provided under Minnesota Statutes 2008, section 11A.18, through January 1, 2009, and 
15.3 	thereafter as provided in section 356.415; or
15.4 	(2) a benefit amount computed on the member's actual years of accrued allowable 
15.5 	service credit and the law in effect at the time the disability benefit first accrued, plus any 
15.6 	increases that would have applied since that date under section Minnesota Statutes 2008, 
15.7 	11A.18, through January 1, 2009, and thereafter as provided in section 356.415.

15.8 	Sec. 41. Minnesota Statutes 2008, section 353.656, is amended by adding a subdivision 
15.9 	to read:
15.10 		Subd. 14.Postretirement adjustment eligibility. A disability benefit under this 
15.11 	section is eligible for postretirement adjustments under section 356.415.

15.12 	Sec. 42. Minnesota Statutes 2008, section 353.657, subdivision 3a, is amended to read:
15.13 		Subd. 3a.Maximum and minimum family benefits. (a) The maximum monthly 
15.14 	benefit per family must not exceed the following percentages of the member's average 
15.15 	monthly salary as specified in subdivision 3:
15.16 	(1) 80 percent, if the member's death was a line of duty death; or
15.17 	(2) 70 percent, if the member's death was not a line of duty death or occurred while 
15.18 	the member was receiving a disability benefit that accrued before July 1, 2007.
15.19 	(b) The minimum monthly benefit per family, including the joint and survivor 
15.20 	optional annuity under subdivision 2a, and section 353.656, subdivision 1a, must not be 
15.21 	less than the following percentage of the member's average monthly salary as specified in 
15.22 	subdivision 3:
15.23 	(1) 60 percent, if the death was a line of duty death; or 
15.24 	(2) 50 percent, if the death was not a line of duty death or occurred while the member 
15.25 	was receiving a disability benefit that accrued before July 1, 2007.
15.26 	(c) If the maximum under paragraph (a) is exceeded, the monthly benefit of the 
15.27 	joint annuitant must be reduced to the amount necessary so that the total family benefit 
15.28 	does not exceed the applicable maximum. The joint and survivor optional annuity must 
15.29 	be restored, plus applicable postretirement adjustments under Minnesota Statutes 2008, 
15.30 	section 356.41 or section 356.415, as the dependent child or children become no longer 
15.31 	dependent under section 353.01, subdivision 15.

15.32 	Sec. 43. Minnesota Statutes 2008, section 353.657, is amended by adding a subdivision 
15.33 	to read:
16.1 		Subd. 5.Postretirement adjustment eligibility. A survivor benefit under this 
16.2 	section is eligible for postretirement adjustments under section 356.415.

16.3 	Sec. 44. Minnesota Statutes 2008, section 353.665, subdivision 3, is amended to read:
16.4 		Subd. 3.Transfer of assets. Unless the municipality has elected to retain the 
16.5 	consolidation account under subdivision 1, paragraph (b), the assets of the former local 
16.6 	police or fire consolidation account must be transferred and upon transfer, the actuarial 
16.7 	value of the assets of a former local police or fire consolidation account less an amount 
16.8 	equal to the residual assets as determined under subdivision 7, paragraph (f), are the 
16.9 	assets of the public employees police and fire fund as of July 1, 1999. The participation 
16.10 	of a consolidation account in the Minnesota postretirement investment fund becomes 
16.11 	part of the participation of the public employees police and fire fund in the Minnesota 
16.12 	postretirement investment fund. The remaining assets, excluding the amounts for 
16.13 	distribution under subdivision 7, paragraph (f), become an asset of the public employees 
16.14 	police and fire fund. The public employees police and fire fund also must be credited as an 
16.15 	asset with the amount of receivable assets under subdivision 7, paragraph (e).

16.16 	Sec. 45. Minnesota Statutes 2008, section 353A.02, subdivision 14, is amended to read:
16.17 		Subd. 14.Ineligible investments. "Ineligible investments" means any investment 
16.18 	security or other asset held by the relief association at or after the initiation of the 
16.19 	consolidation procedure which does not comply with the applicable requirements or 
16.20 	limitations of sections 11A.09, 11A.18,11A.23, and 11A.24. 

16.21 	Sec. 46. Minnesota Statutes 2008, section 353A.02, subdivision 23, is amended to read:
16.22 		Subd. 23.Postretirement adjustment. "Postretirement adjustment" means any 
16.23 	periodic or regular procedure for modifying the amount of a retirement annuity, service 
16.24 	pension, disability benefit, or survivor benefit after the start of that annuity, pension, 
16.25 	or benefit, including but not limited to modifications of amounts from the Minnesota 
16.26 	postretirement investment fund under section 11A.18, subdivision 9 356.415, or any 
16.27 	benefit escalation or benefit amount modification based on changes in the salaries payable 
16.28 	to active police officers or salaried firefighters or changes in a cost-of-living index as 
16.29 	provided for in the existing relief association benefit plan. 

16.30 	Sec. 47. Minnesota Statutes 2008, section 353A.05, subdivision 1, is amended to read:
16.31 		Subdivision 1.Commission actions. (a) Upon initiation of consolidation as 
16.32 	provided in section 353A.04, the executive director of the commission shall direct the 
17.1 	actuary retained under section 356.214 to undertake the preparation of the actuarial 
17.2 	calculations necessary to complete the consolidation. 
17.3 	(b) These actuarial calculations shall include for each active member, each deferred 
17.4 	former member, each retired member, and each current beneficiary the computation of the 
17.5 	present value of future benefits, the future normal costs, if any, and the actuarial accrued 
17.6 	liability on the basis of the existing relief association benefit plan and on the basis of the 
17.7 	public employees police and fire fund benefit plan. These actuarial calculations shall also 
17.8 	include for the total active, deferred, retired, and benefit recipient membership the sum 
17.9 	of the present value of future benefits, the future normal costs, if any, and the actuarial 
17.10 	accrued liability on the basis of the existing relief association benefit plan, on the basis of 
17.11 	the public employees police and fire fund benefit plan, and on the basis of the benefit plan 
17.12 	which produced the largest present value of future benefits for each person. The actuarial 
17.13 	calculations shall be prepared using the entry age actuarial cost method for all components 
17.14 	of the benefit plan and using the actuarial assumptions applicable to the fund for the 
17.15 	most recent actuarial valuation prepared under section 356.215, except that the actuarial 
17.16 	calculations on the basis of the existing relief association benefit plan shall be prepared 
17.17 	using an interest rate actuarial assumption during the postretirement period which is in 
17.18 	the same amount as the interest rate actuarial assumption applicable to the preretirement 
17.19 	period. The actuarial calculations shall include the computation of the present value of the 
17.20 	initial postretirement adjustment anticipated by the executive director of the state board as 
17.21 	payable after the effective date of the consolidation from the Minnesota postretirement 
17.22 	investment fund under section 11A.18 356.415. 
17.23 	(c) The chief administrative officer of the relief association shall, upon request, 
17.24 	provide in a timely manner to the executive director of the commission and to the actuary 
17.25 	retained under section 356.214 the most current available information or documents, 
17.26 	whichever applies, regarding the demographics of the active, deferred, retired, and 
17.27 	benefit recipient membership of the relief association, the financial condition of the relief 
17.28 	association, and the existing benefit plan of the relief association.
17.29 	(d) Upon completion of the actuarial calculations required by this subdivision, the 
17.30 	actuary retained under section 356.214 shall issue a report in the form of an appropriate 
17.31 	summary of the actuarial calculations and shall provide a copy of that report to the 
17.32 	executive director of the commission, the executive director of the Public Employees 
17.33 	Retirement Association, the chief administrative officer of the relief association, the chief 
17.34 	administrative officer of the municipality in which the relief association is located, and 
17.35 	the state auditor.

18.1 	Sec. 48. Minnesota Statutes 2008, section 353A.05, subdivision 2, is amended to read:
18.2 		Subd. 2.State board actions. (a) Upon approval of consolidation by the 
18.3 	membership as provided in section 353A.04, the executive director of the state board 
18.4 	shall review the existing investment portfolio of the relief association for compliance 
18.5 	with the requirements and limitations set forth in sections 11A.09, 11A.14, 11A.18,
18.6 	11A.23, and 11A.24 and for appropriateness for retention in the light of the established 
18.7 	investment objectives of the state board. The executive director of the state board, using 
18.8 	any reporting service retained by the state board, shall determine the approximate market 
18.9 	value of the existing assets of the relief association upon the effective date of consolidation 
18.10 	and the transfer of assets from the relief association to the individual relief association 
18.11 	consolidation accounts at market value. 
18.12 	(b) The state board may require that the relief association liquidate any investment 
18.13 	security or other item of value which is determined to be ineligible or inappropriate for 
18.14 	retention by the state board. The liquidation shall occur before the effective date of 
18.15 	consolidation and transfer of assets.
18.16 	(c) If requested to do so by the chief administrative officer of the relief association 
18.17 	or of the municipality, the state board shall provide advice on the means and procedures 
18.18 	available to liquidate investment securities and other assets determined to be ineligible or 
18.19 	inappropriate.

18.20 	Sec. 49. Minnesota Statutes 2008, section 353A.08, subdivision 1, is amended to read:
18.21 		Subdivision 1.Election of coverage by current retirees. (a) A person who is 
18.22 	receiving a service pension, disability benefit, or survivor benefit is eligible to elect benefit 
18.23 	coverage provided under the relevant provisions of the public employees police and fire 
18.24 	fund benefit plan or to retain benefit coverage provided under the relief association benefit 
18.25 	plan in effect on the effective date of the consolidation. The relevant provisions of the 
18.26 	public employees police and fire fund benefit plan for the person electing that benefit 
18.27 	coverage are limited to participation in the Minnesota postretirement investment fund for
18.28 	any future postretirement adjustments under section 356.415 based on the amount of 
18.29 	the benefit or pension payable on December 31, if December 31 is the effective date of 
18.30 	consolidation, or on the December 1 following the effective date of the consolidation, if 
18.31 	other than December 31. The survivor benefit payable on behalf of any service pension 
18.32 	or disability benefit recipient who elects benefit coverage under the public employees 
18.33 	police and fire fund benefit plan must be calculated under the relief association benefit 
18.34 	plan and is subject to participation in the Minnesota postretirement investment fund for 
19.1 	any future postretirement adjustments under section 356.415 based on the amount of the 
19.2 	survivor benefit payable.
19.3 	(b) A survivor benefit calculated under the relief association benefit plan which is first 
19.4 	payable after June 30, 1997, to the surviving spouse of a retired member of a consolidation 
19.5 	account who, before July 1, 1997, chose to participate in the Minnesota postretirement 
19.6 	investment fundadjustments as provided under this subdivisionsection 356.415 must be 
19.7 	increased on the effective date of the survivor benefit on an actuarial equivalent basis to 
19.8 	reflect the change in the postretirement interest rate actuarial assumption under section 
19.9 	356.215, subdivision 8, from five percent to six percent under a calculation procedure and 
19.10 	tables adopted by the board and approved by the actuary retained under section 356.214. 
19.11 	(c) By electing the public employees police and fire fund benefit plan, a current 
19.12 	service pension or disability benefit recipient who, as of the first January 1 occurring after 
19.13 	the effective date of consolidation, has been receiving the pension or benefit for at least 
19.14 	seven months, or any survivor benefit recipient who, as of the first January 1 occurring 
19.15 	after the effective date of consolidation, has been receiving the benefit on the person's own 
19.16 	behalf or in combination with a prior applicable service pension or disability benefit for at 
19.17 	least seven months is eligible to receive a partial adjustment payable from the Minnesota 
19.18 	postretirement investment fund under section 11A.18, subdivision 9 356.415. 
19.19 	(d) The election by any pension or benefit recipient must be made on or before 
19.20 	the deadline established by the board of the Public Employees Retirement Association 
19.21 	in a manner that recognizes the number of persons eligible to make the election and the 
19.22 	anticipated time required to conduct any required benefit counseling.

19.23 	Sec. 50. Minnesota Statutes 2008, section 353A.08, subdivision 3, is amended to read:
19.24 		Subd. 3.Election of coverage by active members. (a) A person who is an active 
19.25 	member of a police or fire relief association, other than a volunteer firefighter, has the 
19.26 	option to elect benefit coverage under the relevant provisions of the public employees 
19.27 	police and fire fund or to retain benefit coverage provided by the relief association benefit 
19.28 	plan in effect on the effective date of consolidation. The relevant provisions of the public 
19.29 	employee police and fire fund benefit plan for the person electing that benefit coverage 
19.30 	are the relevant provisions of the public employee police and fire fund benefit plan 
19.31 	applicable to retirement annuities, disability benefits, and survivor benefits, including 
19.32 	participation in the Minnesota postretirement investment fund adjustments under section 
19.33 	356.415, but excluding any provisions governing the purchase of credit for prior service 
19.34 	or making payments in lieu of member contribution deductions applicable to any period 
19.35 	which occurred before the effective date of consolidation.
20.1 	(b) An active member is eligible to make an election at one of the following times:
20.2 	(1) within six months of the effective date of consolidation;
20.3 	(2) between the date on which the active member attains the age of 49 years and six 
20.4 	months and the date on which the active member attains the age of 50 years; or
20.5 	(3) on the date on which the active member terminates active employment for 
20.6 	purposes of receiving a service pension or disability benefits, or within 90 days of the 
20.7 	date the member terminates active employment and defers receipt of a service pension, 
20.8 	whichever applies.

20.9 	Sec. 51. Minnesota Statutes 2008, section 353A.081, subdivision 2, is amended to read:
20.10 		Subd. 2.Election of coverage. (a) Individuals eligible under subdivision 1 may 
20.11 	elect, on a form prescribed by the executive director of the Public Employees Retirement 
20.12 	Association, to have survivor benefits calculated under the relevant provisions of the 
20.13 	public employees police and fire fund benefit plan or to have survivor benefits calculated 
20.14 	under the relief association benefit plan. The relevant provisions of the public employee 
20.15 	police and fire fund benefit plan for the person electing that benefit coverage are the 
20.16 	relevant provisions of the public employee police and fire fund benefit plan applicable 
20.17 	to survivor benefits, including participation in the Minnesota postretirement investment 
20.18 	fund adjustments under section 356.415.
20.19 	(b) If the election results in an increased benefit amount to the surviving spouse 
20.20 	eligible under subdivision 1, or to eligible children if there is no surviving spouse, the 
20.21 	increased benefit accrues as of the date on which the survivor benefits payable to the 
20.22 	survivors from the consolidation account were first paid. The back payment of any 
20.23 	increase in prior benefit amounts, plus any postretirement adjustments payable under 
20.24 	section 356.41 356.415, or any increase payable under the local relief association bylaws 
20.25 	is payable as soon as practicable after the effective date of the election. 

20.26 	Sec. 52. Minnesota Statutes 2008, section 353A.09, subdivision 1, is amended to read:
20.27 		Subdivision 1.Establishment of consolidation accounts. (a) The board of trustees 
20.28 	of the Public Employees Retirement Association shall establish a separate consolidation 
20.29 	account for each local relief association of a municipality that consolidates with the Public 
20.30 	Employees Retirement Association. The association shall credit to the consolidation 
20.31 	account the assets of the individual consolidating local relief association upon transfer, 
20.32 	member contributions received after consolidation under subdivision 4, municipal 
20.33 	contributions received after consolidation under subdivision 5, and a proportionate share 
20.34 	of any investment income earned after consolidation. From the consolidation account, 
21.1 	the association shall pay for the transfer of any required reserves to the Minnesota 
21.2 	postretirement investment fund on account of persons electing the type of benefit coverage 
21.3 	provided by the public employees police and fire fund under subdivisions 2 and 3 and 
21.4 	section 353.271, subdivision 2, the pension and benefit amounts on account of persons 
21.5 	electing coverage by the relief association benefit plan under section 353A.08, the benefit 
21.6 	amounts not payable from the Minnesota postretirement investment fund on account of 
21.7 	persons electing the type of benefit coverage provided by the public employees police and 
21.8 	fire fund under section 353A.08, and any direct administrative expenses related to the 
21.9 	consolidation account, and the proportional share of the general administrative expenses 
21.10 	of the association. 
21.11 	(b) Except as otherwise provided for in this section, the liabilities and the assets 
21.12 	of a consolidation account must be considered for all purposes to be separate from the 
21.13 	balance of the public employees police and fire fund. The consolidation account must be 
21.14 	subject to separate accounting, a separate actuarial valuation, and must be reported as a 
21.15 	separate exhibit in any annual financial report or actuarial valuation report of the public 
21.16 	employees police and fire consolidation fund, whichever applies. The executive director 
21.17 	of the public employees retirement association shall maintain separate accounting records 
21.18 	and balances for each consolidation account.

21.19 	Sec. 53. Minnesota Statutes 2008, section 353A.10, subdivision 2, is amended to read:
21.20 		Subd. 2.Collection of late contributions. In the event of a refusal by a 
21.21 	municipality in which was located a local police or firefighters relief association which 
21.22 	has consolidated with the fund to pay to the fund any amount or amounts due under 
21.23 	section 353A.09, subdivisions 2 4 to 6, the executive director of the public employees 
21.24 	retirement association may notify the Department of Revenue, the Department of Finance, 
21.25 	and the state auditor of the refusal and commence the necessary procedure to collect the 
21.26 	amount or amounts due from the amount of any state aid under sections 69.011 to 69.051, 
21.27 	amortization state aid under section 423A.02, or supplemental amortization state aid under 
21.28 	Laws 1984, chapter 564, section 48, as amended by Laws 1986, chapter 359, section 20, 
21.29 	which is payable to the municipality or to certify the amount or amounts due to the county 
21.30 	auditor for inclusion in the next tax levy of the municipality or for collection from other 
21.31 	revenue available to the municipality, or both. 

21.32 	Sec. 54. Minnesota Statutes 2008, section 353A.10, subdivision 3, is amended to read:
21.33 		Subd. 3.Levy and bonding authority. A municipality in which was located a local 
21.34 	police or firefighters relief association that has consolidated with the fund may issue 
22.1 	general obligation bonds of the municipality to defray all or a portion of the principal 
22.2 	amounts specified in section 353A.09, subdivisions 2 4 to 6, or certify to the county 
22.3 	auditor a levy in the amount necessary to defray all or a portion of the principal amount 
22.4 	specified in section 353A.09, subdivisions 2 4 to 6, or the annual amount specified in 
22.5 	section 353A.09, subdivisions 2 4 to 6. The municipality may pledge the full faith, credit, 
22.6 	and taxing power of the municipality for the payment of the principal of and interest on the 
22.7 	general obligation bonds. Any municipal bond may be issued without an election under 
22.8 	section 475.58 and may not be included in the net debt of the municipality for purposes of 
22.9 	any charter or statutory debt limitation, nor may any tax levy for the payment of bond 
22.10 	principal or interest be subject to any limitation concerning rate or amount established 
22.11 	by charter or law. 

22.12 	Sec. 55. Minnesota Statutes 2008, section 353E.01, subdivision 3, is amended to read:
22.13 		Subd. 3.Investment. (a) The public employees local government correctional 
22.14 	service retirement fund participates in the Minnesota postretirement investment fund.
22.15 	(b) The amounts provided in section 353.271 must be deposited in that fund.  
22.16 	(c) The balance of any Assets of the public employees local government correctional 
22.17 	service retirement fund must be deposited in the Minnesota combined investment fund as 
22.18 	provided in section 11A.14, if applicable, or otherwise invested under section 11A.23.  

22.19 	Sec. 56. Minnesota Statutes 2008, section 353E.01, subdivision 5, is amended to read:
22.20 		Subd. 5.Fund disbursement restricted. (a) The public employees local 
22.21 	government correctional service retirement fund and its share of participation in the 
22.22 	Minnesota postretirement investment fund may be disbursed only for the purposes 
22.23 	provided for in this chapter.
22.24 	(b) The proportional share of the necessary and reasonable administrative expenses 
22.25 	of the association and any benefits provided in this chapter, other than benefits payable 
22.26 	from the Minnesota postretirement investment fund, must be paid from the public 
22.27 	employees local government correctional service retirement fund. Retirement annuities, 
22.28 	disability benefits, survivorship benefits, and any refunds of accumulated deductions may 
22.29 	be paid only from the correctional service retirement fund after those needs have been 
22.30 	certified by the executive director and any applicable amounts withdrawn from the share 
22.31 	of participation in the Minnesota postretirement fund under section 11A.18.  
22.32 	(c) The amounts necessary to make the payments from the public employees local 
22.33 	government correctional service retirement fund and its participation in the Minnesota 
23.1 	postretirement investment fund are annually appropriated from those funds for those 
23.2 	purposes.

23.3 	Sec. 57. Minnesota Statutes 2008, section 353E.04, is amended by adding a subdivision 
23.4 	to read:
23.5 		Subd. 7.Postretirement adjustment eligibility. An annuity under this section is 
23.6 	eligible for postretirement adjustments under section 356.415.

23.7 	Sec. 58. Minnesota Statutes 2008, section 353E.06, is amended by adding a subdivision 
23.8 	to read:
23.9 		Subd. 9.Postretirement adjustment eligibility. A disability benefit under this 
23.10 	section is eligible for postretirement adjustments under section 356.415.

23.11 	Sec. 59. Minnesota Statutes 2008, section 353E.07, is amended by adding a subdivision 
23.12 	to read:
23.13 		Subd. 8.Postretirement adjustment eligibility. A survivor benefit under this 
23.14 	section is eligible for postretirement adjustments under section 356.415.

23.15 	Sec. 60. Minnesota Statutes 2008, section 354.07, subdivision 4, is amended to read:
23.16 		Subd. 4.Certification of funds to State Board of Investment. It shall be is
23.17 	the duty of the board from time to time to certify to the State Board of Investment for 
23.18 	investment as much of the funds in its hands as shall not be needed for current purposes. 
23.19 	Such funds that are certified as to investment in the postretirement investment fund shall 
23.20 	include the amount as required for the total reserves needed for the purposes described 
23.21 	in section 354.63. The State Board of Investment shall thereupon transfer such assets 
23.22 	to the appropriate fund provided herein, in accordance with the procedure set forth in 
23.23 	section 354.63, or invest and reinvest an amount equal to the sum so certified in such 
23.24 	securities as are now or may hereafter be duly authorized legal investments for state 
23.25 	employees retirement fund and all such securities so transferred or purchased shall must
23.26 	be deposited with the commissioner of finance. All interest from these investments shall
23.27 	must be credited to the appropriate fundsteachers retirement fund and used for current 
23.28 	purposes or investments, except as hereinafter provided. The State Board of Investment 
23.29 	shall have has authority to sell, convey, and exchange such securities and invest and 
23.30 	reinvest the funds when it deems it desirable to do so, and shall must sell securities upon 
23.31 	request of the officers of the association when such officers determine funds are needed 
23.32 	for its purposes. All of the provisions regarding accounting procedures and restrictions 
24.1 	and conditions for the purchase and sale of securities for the state employees retirement 
24.2 	fund shallunder chapter 11A must apply to the accounting, purchase and sale of securities 
24.3 	for the Teachers' Retirement Association. 

24.4 	Sec. 61. Minnesota Statutes 2008, section 354.33, subdivision 5, is amended to read:
24.5 		Subd. 5.Retirees not eligible for federal benefits. When any person retires after 
24.6 	July 1, 1973, who (1) has ten or more years of allowable service, and (2) does not have any 
24.7 	retroactive Social Security coverage by reason of the person's position in the retirement 
24.8 	system, and (3) does not qualify for federal old age and survivor primary benefits at the 
24.9 	time of retirement, the annuity must be computed under section 354.44, subdivision 2, of 
24.10 	the law in effect on June 30, 1969, except that accumulations after June 30, 1957, must be 
24.11 	calculated using the samemost recent mortality table approved under section 356.215, 
24.12 	subdivision 18, and interest assumption as are used to transfer the required reserves to the 
24.13 	Minnesota postretirement investment fund using the applicable postretirement interest rate 
24.14 	assumption specified in section 356.215, subdivision 8.

24.15 	Sec. 62. Minnesota Statutes 2008, section 354.35, is amended by adding a subdivision 
24.16 	to read:
24.17 		Subd. 3.Postretirement adjustment eligibility. An annuity under this section is 
24.18 	eligible for postretirement adjustments under section 356.415.

24.19 	Sec. 63. Minnesota Statutes 2008, section 354.42, subdivision 1a, is amended to read:
24.20 		Subd. 1a.Teachers retirement fund. (a) Within the Teachers Retirement 
24.21 	Association and the state treasury is created a special retirement fund, which must include 
24.22 	all the assets of the Teachers Retirement Association and all revenue of the association. 
24.23 	The fund is the continuation of the fund established under Laws 1931, chapter 406, section 
24.24 	2, notwithstanding the repeal of Minnesota Statutes 1973, section 354.42, subdivision 1, 
24.25 	by Laws 1974, chapter 289, section 59.
24.26 	(b) The teachers retirement fund must be credited with all employee and employer 
24.27 	contributions, all investment revenue and gains, and all other income authorized by law.
24.28 	(c) From the teachers retirement fund is appropriated the payments of annuities 
24.29 	and benefits authorized by this chapter, the transfers to the Minnesota postretirement 
24.30 	investment fund, and the reasonable and necessary expenses of administering the fund 
24.31 	and the association.

25.1 	Sec. 64. Minnesota Statutes 2008, section 354.44, is amended by adding a subdivision 
25.2 	to read:
25.3 		Subd. 7a.Postretirement adjustment eligibility. (a) A retirement annuity under 
25.4 	subdivision 2 or 6 is eligible for postretirement adjustments under section 356.415.
25.5 	(b) Retirement annuities payable from the teachers retirement plan must not be in 
25.6 	an amount less than the amount originally determined on the date of retirement and as 
25.7 	adjusted on each succeeding January 1 under Minnesota Statutes 2008, section 11A.18, 
25.8 	before January 1, 2010, and under section 356.415 after December 31, 2009.

25.9 	Sec. 65. Minnesota Statutes 2008, section 354.46, is amended by adding a subdivision 
25.10 	to read:
25.11 		Subd. 7.Postretirement adjustment eligibility. A survivor benefit under 
25.12 	subdivision 1, 2, 2a, or 2b, is eligible for postretirement adjustments under section 356.415.

25.13 	Sec. 66. Minnesota Statutes 2008, section 354.48, is amended by adding a subdivision 
25.14 	to read:
25.15 		Subd. 11.Postretirement adjustment eligibility. A disability benefit under this 
25.16 	section is eligible for postretirement adjustments under section 356.415.

25.17 	Sec. 67. Minnesota Statutes 2008, section 354.55, subdivision 13, is amended to read:
25.18 		Subd. 13.Pre-1969 law retirements. Any person who ceased teaching service 
25.19 	prior to July 1, 1968, who has ten years or more of allowable service and left accumulated 
25.20 	deductions in the fund for the purpose of receiving when eligible a retirement annuity, 
25.21 	and retires shall must have the annuity computed in accordance with the law in effect on 
25.22 	June 30, 1969, except that the portion of the annuity based on accumulations after June 30, 
25.23 	1957, under Minnesota Statutes 1967, section 354.44, subdivision 2, and accumulations 
25.24 	under Minnesota Statutes 1967, section 354.33, subdivision 1, shallmust be calculated 
25.25 	using the mortality table established by the board under section 354.07, subdivision 1, 
25.26 	and approved under section 356.215, subdivision 18, and the postretirement interest rate 
25.27 	assumption specified in section 356.215, to transfer the required reserves to the Minnesota 
25.28 	postretirement investment fund subdivision 8. 

25.29 	Sec. 68. Minnesota Statutes 2008, section 354.70, subdivision 5, is amended to read:
25.30 		Subd. 5.Transfer of assets. (a) On or before June 30, 2006, the chief administrative 
25.31 	officer of the Minneapolis Teachers Retirement Fund Association shall transfer to the 
25.32 	Teachers Retirement Association the entire assets of the special retirement fund of the 
26.1 	Minneapolis Teachers Retirement Fund Association. The transfer of the assets of the 
26.2 	Minneapolis Teachers Retirement Fund Association special retirement fund must include 
26.3 	any accounts receivable that are determined by the executive director of the State Board of 
26.4 	Investment as reasonably capable of being collected. Legal title to account receivables that 
26.5 	are determined by the executive director of the State Board of Investment as not reasonably 
26.6 	capable of being collected transfers to Special School District No. 1, Minneapolis, as of 
26.7 	the date of the determination of the executive director of the State Board of Investment. 
26.8 	If the account receivables transferred to Special School District No. 1, Minneapolis, 
26.9 	are subsequently recovered by the school district, the superintendent of Special School 
26.10 	District No. 1, Minneapolis, shall transfer the recovered amount to the executive director 
26.11 	of the Teachers Retirement Association, in cash, for deposit in the teachers retirement 
26.12 	fund, less the reasonable expenses of the school district related to the recovery.
26.13 	(b) As of June 30, 2006, assets of the special retirement fund of the Minneapolis 
26.14 	Teachers Retirement Fund Association are assets of the Teachers Retirement Association 
26.15 	to be invested by the State Board of Investment pursuant to the provisions of section 
26.16 	354.07, subdivision 4. The Teachers Retirement Association is the successor in interest to 
26.17 	all claims which the Minneapolis Teachers Retirement Fund Association may have or may 
26.18 	assert against any person and is the successor in interest to all claims which could have 
26.19 	been asserted against the former Minneapolis Teachers Retirement Fund Association, 
26.20 	subject to the following exceptions and qualifications: 
26.21 	(1) the Teachers Retirement Association is not liable for any claim against the 
26.22 	Minneapolis Teachers Retirement Fund Association, its former board or board members, 
26.23 	which is founded upon a claim of breach of fiduciary duty, where the act or acts 
26.24 	constituting the claimed breach were not done in good faith;
26.25 	 (2) the Teachers Retirement Association may assert any applicable defense to any 
26.26 	claim in any judicial or administrative proceeding that the former Minneapolis Teachers 
26.27 	Retirement Fund Association or its board would otherwise have been entitled to assert; 
26.28 	(3) the Teachers Retirement Association may assert any applicable defense that the 
26.29 	Teachers Retirement Association may assert in its capacity as a statewide agency; and 
26.30 	(4) the Teachers Retirement Association shall indemnify any former fiduciary of the 
26.31 	Minneapolis Teachers Retirement Fund Association consistent with the provisions of the 
26.32 	Public Pension Fiduciary Responsibility Act, in section 356A.11.
26.33 	(c) From the assets of the former Minneapolis Teachers Retirement Fund Association 
26.34 	transferred to the Teachers Retirement Association, an amount equal to the percentage 
26.35 	figure that represents the ratio between the market value of the Minnesota postretirement 
26.36 	investment fund as of June 30, 2006, and the required reserves of the Minnesota 
27.1 	postretirement investment fund as of June 30, 2006, applied to the present value of 
27.2 	future benefits payable to annuitants of the former Minneapolis Teachers Retirement 
27.3 	Fund Association as of June 30, 2006, including any postretirement adjustment from the 
27.4 	Minnesota postretirement investment fund expected to be payable on January 1, 2007, 
27.5 	must be transferred to the Minnesota postretirement investment fund. The executive 
27.6 	director of the State Board of Investment shall estimate this ratio at the time of the 
27.7 	transfer. By January 1, 2007, after all necessary financial information becomes available 
27.8 	to determine the actual funded ratio of the Minnesota postretirement investment fund, the 
27.9 	postretirement investment fund must refund to the Teachers Retirement Association any 
27.10 	excess assets or the Teachers Retirement Association must contribute any deficiency to 
27.11 	the Minnesota postretirement investment fund with interest under Minnesota Statutes 
27.12 	2008, section 11A.18, subdivision 6. The balance of the assets of the former Minneapolis 
27.13 	Teachers Retirement Fund Association after the transfer to the Minnesota postretirement 
27.14 	investment fund must be credited to the Teachers Retirement Association.
27.15 	(d) If the assets transferred by the Minneapolis Teachers Retirement Fund 
27.16 	Association to the Teachers Retirement Association are insufficient to meet its obligation 
27.17 	to the Minnesota postretirement investment fund, additional assets must be transferred by 
27.18 	the executive director of the Teachers Retirement Association to meet the amount required.

27.19 	Sec. 69. Minnesota Statutes 2008, section 354.70, subdivision 6, is amended to read:
27.20 		Subd. 6.Benefit calculation. (a) For every deferred, inactive, disabled, and retired 
27.21 	member of the Minneapolis Teachers Retirement Fund Association transferred under 
27.22 	subdivision 1, and the survivors of these members, annuities or benefits earned before 
27.23 	the date of the transfer, other than future postretirement adjustments, must be calculated 
27.24 	and paid by the Teachers Retirement Association under the laws, articles of incorporation, 
27.25 	and bylaws of the former Minneapolis Teachers Retirement Fund Association that were 
27.26 	in effect relative to the person on the date of the person's termination of active service 
27.27 	covered by the former Minneapolis Teachers Retirement Fund Association.
27.28 	(b) Former Minneapolis Teachers Retirement Fund Association members who 
27.29 	retired before July 1, 2006, must receive postretirement adjustments after December 31, 
27.30 	2006, only as provided in Minnesota Statutes 2008, section 11A.18 or section 356.415. All 
27.31 	other benefit recipients of the former Minneapolis Teachers Retirement Fund Association 
27.32 	must receive postretirement adjustments after December 31, 2006, only as provided in 
27.33 	section 356.41 356.415.
27.34 	(c) This consolidation does not impair or diminish benefits for an active, deferred, 
27.35 	or retired member or a survivor of an active, deferred, or retired member under the 
28.1 	former Minneapolis Teachers Retirement Fund Association in existence at the time of the 
28.2 	consolidation, except that any future guaranteed or investment-related postretirement 
28.3 	adjustments must be paid after July 1, 2006, in accordance with paragraph (b), and all 
28.4 	benefits based on service on or after July 1, 2006, must be determined only by laws 
28.5 	governing the Teachers Retirement Association.

28.6 	Sec. 70. Minnesota Statutes 2008, section 356.215, subdivision 1, is amended to read:
28.7 		Subdivision 1.Definitions. (a) For the purposes of sections 3.85 and 356.20 to 
28.8 	356.23, each of the terms in the following paragraphs has the meaning given. 
28.9 	(b) "Actuarial valuation" means a set of calculations prepared by an actuary retained 
28.10 	under section 356.214 if so required under section 3.85, or otherwise, by an approved 
28.11 	actuary, to determine the normal cost and the accrued actuarial liabilities of a benefit 
28.12 	plan, according to the entry age actuarial cost method and based upon stated assumptions 
28.13 	including, but not limited to rates of interest, mortality, salary increase, disability, 
28.14 	withdrawal, and retirement and to determine the payment necessary to amortize over a 
28.15 	stated period any unfunded accrued actuarial liability disclosed as a result of the actuarial 
28.16 	valuation of the benefit plan. 
28.17 	(c) "Approved actuary" means a person who is regularly engaged in the business of 
28.18 	providing actuarial services and who is a fellow in the Society of Actuaries.
28.19 	(d) "Entry age actuarial cost method" means an actuarial cost method under which 
28.20 	the actuarial present value of the projected benefits of each individual currently covered 
28.21 	by the benefit plan and included in the actuarial valuation is allocated on a level basis over 
28.22 	the service of the individual, if the benefit plan is governed by section 69.773, or over the 
28.23 	earnings of the individual, if the benefit plan is governed by any other law, between the 
28.24 	entry age and the assumed exit age, with the portion of the actuarial present value which is 
28.25 	allocated to the valuation year to be the normal cost and the portion of the actuarial present 
28.26 	value not provided for at the valuation date by the actuarial present value of future normal 
28.27 	costs to be the actuarial accrued liability, with aggregation in the calculation process to be 
28.28 	the sum of the calculated result for each covered individual and with recognition given to 
28.29 	any different benefit formulas which may apply to various periods of service.
28.30 	(e) "Experience study" means a report providing experience data and an actuarial 
28.31 	analysis of the adequacy of the actuarial assumptions on which actuarial valuations are 
28.32 	based.
28.33 	(f) "Actuarial value of assets" means:
28.34 	(1) For the July 1, 2009, actuarial valuation, the market value of all assets as of 
28.35 	the preceding June 30, 2009, reduced by:
29.1 	(1)(i) 20 percent of the difference between the actual net change in the market value 
29.2 	of assets other than the Minnesota postretirement investment fund between the June 30 
29.3 	that occurred three years earlier, 2006, and the June 30 that occurred four years earlier, 
29.4 	2005, and the computed increase in the market value of assets other than the Minnesota 
29.5 	postretirement investment fund over that fiscal year period if the assets had increased at 
29.6 	the percentage preretirement interest rate assumption used in the actuarial valuation for 
29.7 	the July 1 that occurred four years earlier earned a rate of return on assets equal to the 
29.8 	annual percentage preretirement interest rate assumption used in the actuarial valuation 
29.9 	for July 1, 2005;
29.10 	(2) (ii) 40 percent of the difference between the actual net change in the market 
29.11 	value of assets other than the Minnesota postretirement investment fund between the
29.12 	June 30 that occurred two years earlier, 2007, and the June 30 that occurred three years 
29.13 	earlier, 2006, and the computed increase in the market value of assets other than the 
29.14 	Minnesota postretirement investment fund over that fiscal year period if the assets had 
29.15 	increased at the percentage preretirement interest rate assumption used in the actuarial 
29.16 	valuation for the July 1 that occurred three years earlier earned a rate of return on assets 
29.17 	equal to the annual percentage preretirement interest rate assumption used in the actuarial 
29.18 	valuation for July 1, 2006;
29.19 	(3) (iii) 60 percent of the difference between the actual net change in the market 
29.20 	value of assets other than the Minnesota postretirement investment fund between the
29.21 	June 30 that occurred one year earlier, 2008, and the June 30 that occurred two years 
29.22 	earlier, 2007, and the computed increase in the market value of assets other than the 
29.23 	Minnesota postretirement investment fund over that fiscal year period if the assets had 
29.24 	increased at the percentage preretirement interest rate assumption used in the actuarial 
29.25 	valuation for the July 1 that occurred two years earlier earned a rate of return on assets 
29.26 	equal to the annual percentage preretirement interest rate assumption used in the actuarial 
29.27 	valuation for July 1, 2007; and
29.28 	(4) (iv) 80 percent of the difference between the actual net change in the market 
29.29 	value of assets other than the Minnesota postretirement investment fund between the 
29.30 	immediately prior June 30, 2009, and the June 30 that occurred one year earlier, 2008,
29.31 	and the computed increase in the market value of assets other than the Minnesota 
29.32 	postretirement investment fund over that fiscal year period if the assets had increased at 
29.33 	the percentage preretirement interest rate assumption used in the actuarial valuation for 
29.34 	the July 1 that occurred one year earlier. earned a rate of return on assets equal to the 
29.35 	annual percentage preretirement interest rate assumption used in the actuarial valuation 
29.36 	for July 1, 2008; and
30.1 	(v) if applicable, 80 percent of the difference between the actual net change in the 
30.2 	market value of the Minnesota postretirement investment fund between June 30, 2009, 
30.3 	and June 30, 2008, and the computed increase in the market value of assets over that fiscal 
30.4 	year period if the assets had increased at 8.5 percent annually.
30.5 	(2) For the July 1, 2010, actuarial valuation, the market value of all assets as of 
30.6 	June 30, 2010, reduced by: 
30.7 	(i) 20 percent of the difference between the actual net change in the market value of 
30.8 	assets other than the Minnesota postretirement investment fund between June 30, 2007, 
30.9 	and June 30, 2006, and the computed increase in the market value of assets other than the 
30.10 	Minnesota postretirement investment fund over that fiscal year period if the assets had 
30.11 	earned a rate of return on assets equal to the annual percentage preretirement interest rate 
30.12 	assumption used in the actuarial valuation for July 1, 2006;
30.13 	(ii) 40 percent of the difference between the actual net change in the market value of 
30.14 	assets other than the Minnesota postretirement investment fund between June 30, 2008, 
30.15 	and June 30, 2007, and the computed increase in the market value of assets other than the 
30.16 	Minnesota postretirement investment fund over that fiscal year period if the assets had 
30.17 	earned a rate of return on assets equal to the annual percentage preretirement interest rate 
30.18 	assumption used in the actuarial valuation for July 1, 2007;
30.19 	(iii) 60 percent of the difference between the actual net change in the market value 
30.20 	of assets other than the Minnesota postretirement investment fund between June 30, 2009, 
30.21 	and June 30, 2008, and the computed increase in the market value of assets other than the 
30.22 	Minnesota postretirement investment fund over that fiscal year period if the assets had 
30.23 	earned a rate of return on assets equal to the annual percentage preretirement interest rate 
30.24 	assumption used in the actuarial valuation for July 1, 2008; 
30.25 	(iv) 80 percent of the difference between the actual net change in the market value of 
30.26 	total assets between June 30, 2010, and June 30, 2009, and the computed increase in the 
30.27 	market value of total assets over that fiscal year period if the assets had earned a rate of 
30.28 	return on assets equal to the annual percentage preretirement interest rate assumption used 
30.29 	in the actuarial valuation for July 1, 2009; and
30.30 	(v) if applicable, 60 percent of the difference between the actual net change in the 
30.31 	market value of the Minnesota postretirement investment fund between June 30, 2009, 
30.32 	and June 30, 2008, and the computed increase in the market value of assets over that fiscal 
30.33 	year period if the assets had increased at 8.5 percent annually.
30.34 	(3) For the July 1, 2011, actuarial valuation, the market value of all assets as of 
30.35 	June 30, 2011, reduced by:
31.1 	(i) 20 percent of the difference between the actual net change in the market value of 
31.2 	assets other than the Minnesota postretirement investment fund between June 30, 2008, 
31.3 	and June 30, 2007, and the computed increase in the market value of assets other than the 
31.4 	Minnesota postretirement investment fund over that fiscal year period if the assets had 
31.5 	earned a rate of return on assets equal to the annual percentage preretirement interest rate 
31.6 	assumption used in the actuarial valuation for July 1, 2007;
31.7 	(ii) 40 percent of the difference between the actual net change in the market value of 
31.8 	assets other than the Minnesota postretirement investment fund between June 30, 2009, 
31.9 	and June 30, 2008, and the computed increase in the market value of assets other than the 
31.10 	Minnesota postretirement investment fund over that fiscal year period if the assets had 
31.11 	earned a rate of return on assets equal to the annual percentage preretirement interest rate 
31.12 	assumption used in the actuarial valuation for July 1, 2008;
31.13 	(iii) 60 percent of the difference between the actual net change in the market value 
31.14 	of the total assets between June 30, 2010, and June 30, 2009, and the computed increase in 
31.15 	the market value of the total assets over that fiscal year period if the assets had earned 
31.16 	a rate of return on assets equal to the annual percentage preretirement interest rate 
31.17 	assumption used in the actuarial valuation for July 1, 2009;
31.18 	(iv) 80 percent of the difference between the actual net change in the market value of 
31.19 	total assets between June 30, 2011, and June 30, 2010, and the computed increase in the 
31.20 	market value of total assets over that fiscal year period if the assets had earned a rate of 
31.21 	return on assets equal to the annual percentage preretirement interest rate assumption used 
31.22 	in the actuarial valuation for July 1, 2010; and
31.23 	(v) if applicable, 40 percent of the difference between the actual net change in the 
31.24 	market value of the Minnesota postretirement investment fund between June 30, 2009, 
31.25 	and June 30, 2008, and the computed increase in the market value of assets over that fiscal 
31.26 	year period if the assets had increased at 8.5 percent annually.
31.27 	(4) For the July 1, 2012, actuarial valuation, the market value of all assets as of 
31.28 	June 30, 2012, reduced by:
31.29 	(i) 20 percent of the difference between the actual net change in the market value of 
31.30 	assets other than the Minnesota postretirement investment fund between June 30, 2009, 
31.31 	and June 30, 2008, and the computed increase in the market value of assets other than the 
31.32 	Minnesota postretirement investment fund over that fiscal year period if the assets had 
31.33 	earned a rate of return on assets equal to the annual percentage preretirement interest rate 
31.34 	assumption used in the actuarial valuation for July 1, 2008;
31.35 	(ii) 40 percent of the difference between the actual net change in the market value of 
31.36 	total assets between June 30, 2010, and June 30, 2009, and the computed increase in the 
32.1 	market value of total assets over that fiscal year period if the assets had earned a rate of 
32.2 	return on assets equal to the annual percentage preretirement interest rate assumption used 
32.3 	in the actuarial valuation for July 1, 2009;
32.4 	(iii) 60 percent of the difference between the actual net change in the market value 
32.5 	of total assets between June 30, 2011, and June 30, 2010, and the computed increase in the 
32.6 	market value of total assets over that fiscal year period if the assets had earned a rate of 
32.7 	return on assets equal to the annual percentage preretirement interest rate assumption used 
32.8 	in the actuarial valuation for July 1, 2010;
32.9 	(iv) 80 percent of the difference between the actual net change in the market value of 
32.10 	total assets between June 30, 2012, and June 30, 2011, and the computed increase in the 
32.11 	market value of total assets over that fiscal year period if the assets had earned a rate of 
32.12 	return on assets equal to the annual percentage preretirement interest rate assumption used 
32.13 	in the actuarial valuation for July 1, 2011; and
32.14 	(v) if applicable, 20 percent of the difference between the actual net change in the 
32.15 	market value of the Minnesota postretirement investment fund between June 30, 2009, 
32.16 	and June 30, 2008, and the computed increase in the market value of assets over that fiscal 
32.17 	year period if the assets had increased at 8.5 percent annually.
32.18 	(5) For the July 1, 2013, and following actuarial valuations, the market value of all 
32.19 	assets as of the preceding June 30, reduced by:
32.20 	(i) 20 percent of the difference between the actual net change in the market value 
32.21 	of total assets between the June 30 that occurred three years earlier and the June 30 that 
32.22 	occurred four years earlier and the computed increase in the market value of total assets 
32.23 	over that fiscal year period if the assets had earned a rate of return on assets equal to the 
32.24 	annual percentage preretirement interest rate assumption used in the actuarial valuation 
32.25 	for the July 1 that occurred four years earlier;
32.26 	(ii) 40 percent of the difference between the actual net change in the market value 
32.27 	of total assets between the June 30 that occurred two years earlier and the June 30 that 
32.28 	occurred three years earlier and the computed increase in the market value of total assets 
32.29 	over that fiscal year period if the assets had earned a rate of return on assets equal to the 
32.30 	annual percentage preretirement interest rate assumption used in the actuarial valuation 
32.31 	for the July 1 that occurred three years earlier;
32.32 	(iii) 60 percent of the difference between the actual net change in the market value 
32.33 	of total assets between the June 30 that occurred one year earlier and the June 30 that 
32.34 	occurred two years earlier and the computed increase in the market value of total assets 
32.35 	over that fiscal year period if the assets had earned a rate of return on assets equal to the 
33.1 	annual percentage preretirement interest rate assumption used in the actuarial valuation 
33.2 	for the July 1 that occurred two years earlier; and
33.3 	(iv) 80 percent of the difference between the actual net change in the market value 
33.4 	of total assets between the most recent June 30 and the June 30 that occurred one year 
33.5 	earlier and the computed increase in the market value of total assets over that fiscal year 
33.6 	period if the assets had earned a rate of return on assets equal to the annual percentage 
33.7 	preretirement interest rate assumption used in the actuarial valuation for the July 1 that 
33.8 	occurred one year earlier.
33.9 	(g) "Unfunded actuarial accrued liability" means the total current and expected 
33.10 	future benefit obligations, reduced by the sum of the actuarial value of assets and the 
33.11 	present value of future normal costs.
33.12 	(h) "Pension benefit obligation" means the actuarial present value of credited 
33.13 	projected benefits, determined as the actuarial present value of benefits estimated to be 
33.14 	payable in the future as a result of employee service attributing an equal benefit amount, 
33.15 	including the effect of projected salary increases and any step rate benefit accrual rate 
33.16 	differences, to each year of credited and expected future employee service.

33.17 	Sec. 71. Minnesota Statutes 2008, section 356.215, subdivision 11, is amended to read:
33.18 		Subd. 11.Amortization contributions. (a) In addition to the exhibit indicating 
33.19 	the level normal cost, the actuarial valuation of the retirement plan must contain an 
33.20 	exhibit for financial reporting purposes indicating the additional annual contribution 
33.21 	sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit 
33.22 	for contribution determination purposes indicating the additional contribution sufficient 
33.23 	to amortize the unfunded actuarial accrued liability. For the retirement plans listed in 
33.24 	subdivision 8, paragraph (c), the additional contribution must be calculated on a level 
33.25 	percentage of covered payroll basis by the established date for full funding in effect when 
33.26 	the valuation is prepared, assuming annual payroll growth at the applicable percentage 
33.27 	rate set forth in subdivision 8, paragraph (c). For all other retirement plans, the additional 
33.28 	annual contribution must be calculated on a level annual dollar amount basis. 
33.29 	(b) For any retirement plan other than the Minneapolis Employees Retirement Fund, 
33.30 	the general employees retirement plan of the Public Employees Retirement Association, 
33.31 	and the St. Paul Teachers Retirement Fund Association, if there has not been a change in 
33.32 	the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a 
33.33 	change in the benefit plan governing annuities and benefits payable from the fund, a 
33.34 	change in the actuarial cost method used in calculating the actuarial accrued liability of all 
33.35 	or a portion of the fund, or a combination of the three, which change or changes by itself 
34.1 	or by themselves without inclusion of any other items of increase or decrease produce a 
34.2 	net increase in the unfunded actuarial accrued liability of the fund, the established date for 
34.3 	full funding is the first actuarial valuation date occurring after June 1, 2020.
34.4 	(c) For any retirement plan other than the Minneapolis Employees Retirement 
34.5 	Fund and the general employees retirement plan of the Public Employees Retirement 
34.6 	Association, if there has been a change in any or all of the actuarial assumptions used 
34.7 	for calculating the actuarial accrued liability of the fund, a change in the benefit plan 
34.8 	governing annuities and benefits payable from the fund, a change in the actuarial cost 
34.9 	method used in calculating the actuarial accrued liability of all or a portion of the fund, 
34.10 	or a combination of the three, and the change or changes, by itself or by themselves and 
34.11 	without inclusion of any other items of increase or decrease, produce a net increase in the 
34.12 	unfunded actuarial accrued liability in the fund, the established date for full funding must 
34.13 	be determined using the following procedure:
34.14 	(i) the unfunded actuarial accrued liability of the fund must be determined in 
34.15 	accordance with the plan provisions governing annuities and retirement benefits and the 
34.16 	actuarial assumptions in effect before an applicable change;
34.17 	(ii) the level annual dollar contribution or level percentage, whichever is applicable, 
34.18 	needed to amortize the unfunded actuarial accrued liability amount determined under item 
34.19 	(i) by the established date for full funding in effect before the change must be calculated 
34.20 	using the interest assumption specified in subdivision 8 in effect before the change;
34.21 	(iii) the unfunded actuarial accrued liability of the fund must be determined in 
34.22 	accordance with any new plan provisions governing annuities and benefits payable from 
34.23 	the fund and any new actuarial assumptions and the remaining plan provisions governing 
34.24 	annuities and benefits payable from the fund and actuarial assumptions in effect before 
34.25 	the change;
34.26 	(iv) the level annual dollar contribution or level percentage, whichever is applicable, 
34.27 	needed to amortize the difference between the unfunded actuarial accrued liability amount 
34.28 	calculated under item (i) and the unfunded actuarial accrued liability amount calculated 
34.29 	under item (iii) over a period of 30 years from the end of the plan year in which the 
34.30 	applicable change is effective must be calculated using the applicable interest assumption 
34.31 	specified in subdivision 8 in effect after any applicable change;
34.32 	(v) the level annual dollar or level percentage amortization contribution under item 
34.33 	(iv) must be added to the level annual dollar amortization contribution or level percentage 
34.34 	calculated under item (ii);
34.35 	(vi) the period in which the unfunded actuarial accrued liability amount determined 
34.36 	in item (iii) is amortized by the total level annual dollar or level percentage amortization 
35.1 	contribution computed under item (v) must be calculated using the interest assumption 
35.2 	specified in subdivision 8 in effect after any applicable change, rounded to the nearest 
35.3 	integral number of years, but not to exceed 30 years from the end of the plan year in 
35.4 	which the determination of the established date for full funding using the procedure set 
35.5 	forth in this clause is made and not to be less than the period of years beginning in the 
35.6 	plan year in which the determination of the established date for full funding using the 
35.7 	procedure set forth in this clause is made and ending by the date for full funding in effect 
35.8 	before the change; and
35.9 	(vii) the period determined under item (vi) must be added to the date as of which 
35.10 	the actuarial valuation was prepared and the date obtained is the new established date 
35.11 	for full funding.
35.12 	(d) For the Minneapolis Employees Retirement Fund, the established date for full 
35.13 	funding is June 30, 2020.
35.14 	(e) For the general employees retirement plan of the Public Employees Retirement 
35.15 	Association, the established date for full funding is June 30, 2031.
35.16 	(f) For the Teachers Retirement Association, the established date for full funding is 
35.17 	June 30, 2037.
35.18 	(g) For the correctional state employees retirement plan of the Minnesota State 
35.19 	Retirement System, the established date for full funding is June 30, 2038.
35.20 	(h) For the judges retirement plan, the established date for full funding is June 
35.21 	30, 2038.
35.22 	(i) For the public employees police and fire retirement plan, the established date 
35.23 	for full funding is June 30, 2038.
35.24 	(j) For the St. Paul Teachers Retirement Fund Association, the established date for 
35.25 	full funding is June 30 of the 25th year from the valuation date. In addition to other 
35.26 	requirements of this chapter, the annual actuarial valuation shall contain an exhibit 
35.27 	indicating the funded ratio and the deficiency or sufficiency in annual contributions when 
35.28 	comparing liabilities to the market value of the assets of the fund as of the close of the 
35.29 	most recent fiscal year.
35.30 	(k) For the retirement plans for which the annual actuarial valuation indicates an 
35.31 	excess of valuation assets over the actuarial accrued liability, the valuation assets in 
35.32 	excess of the actuarial accrued liability must be recognized as a reduction in the current 
35.33 	contribution requirements by an amount equal to the amortization of the excess expressed 
35.34 	as a level percentage of pay over a 30-year period beginning anew with each annual 
35.35 	actuarial valuation of the plan.
36.1 	(l) In addition to calculating the unfunded actuarial accrued liability of the retirement 
36.2 	plan for financial reporting purposes under paragraphs (a) to (j), the actuarial valuation 
36.3 	of the retirement plan must also include a calculation of the unfunded actuarial accrued 
36.4 	liability of the retirement plan for purposes of determining the amortization contribution 
36.5 	sufficient to amortize the unfunded actuarial liability of the Minnesota Post Retirement 
36.6 	Investment Fund. For this exhibit, the calculation must be the unfunded actuarial accrued 
36.7 	liability net of the postretirement adjustment liability funded from the investment 
36.8 	performance of the Minnesota Post Retirement Investment Fund or the retirement benefit 
36.9 	fund.

36.10 	Sec. 72. Minnesota Statutes 2008, section 356.351, subdivision 2, is amended to read:
36.11 		Subd. 2.Incentive. (a) For an employee eligible under subdivision 1, if approved 
36.12 	under paragraph (b), the employer may provide an amount up to $17,000, to an employee 
36.13 	who terminates service, to be used: 
36.14 	(1) unless the appointing authority has designated the use under clause (2) or the use 
36.15 	under clause (3) for the initial retirement incentive applicable to that employing entity 
36.16 	under Laws 2007, chapter 134, after May 26, 2007, for deposit in the employee's account 
36.17 	in the health care savings plan established by section 352.98; 
36.18 	(2) notwithstanding section 352.01, subdivision 11, or 354.05, subdivision 13, 
36.19 	whichever applies, if the appointing authority has designated the use under this clause 
36.20 	for the initial retirement incentive applicable to that employing entity under Laws 2007, 
36.21 	chapter 134, after May 26, 2007, for purchase of service credit for unperformed service 
36.22 	sufficient to enable the employee to retire under section 352.116, subdivision 1, paragraph 
36.23 	(b); 353.30; 354.44, subdivision 6, paragraph (b), or 354A.31, subdivision 6, paragraph 
36.24 	(b), whichever applies; or 
36.25 	(3) if the appointing authority has designated the use under this clause for the initial 
36.26 	retirement incentive applicable to the employing entity under Laws 2007, chapter 134, 
36.27 	after May 26, 2007, for purchase of a lifetime annuity or an annuity for a specific number 
36.28 	of years from the applicable retirement plan to provide additional benefits, as provided in 
36.29 	paragraph (d). 
36.30 	(b) Approval to provide the incentive must be obtained from the commissioner 
36.31 	of finance if the eligible employee is a state employee and must be obtained from the 
36.32 	applicable governing board with respect to any other employing entity. An employee is 
36.33 	eligible for the payment under paragraph (a), clause (2), if the employee uses money from 
36.34 	a deferred compensation account that, combined with the payment under paragraph (a), 
36.35 	clause (2), would be sufficient to purchase enough service credit to qualify for retirement 
37.1 	under section 352.116, subdivision 1, paragraph (b); 353.30, subdivision 1a; 354.44, 
37.2 	subdivision 6, paragraph (b), or 354A.31, subdivision 6, paragraph (b), whichever applies. 
37.3 	(c) The cost to purchase service credit under paragraph (a), clause (2), must be 
37.4 	made in accordance with section 356.551.
37.5 	(d) The annuity purchase under paragraph (a), clause (3), must be made using 
37.6 	annuity factors, as determined by the actuary retained under section 356.214, derived from 
37.7 	the applicable factors used by the applicable retirement plan to transfer amounts to the 
37.8 	Minnesota postretirement investment fund and to calculate optional annuity forms. The 
37.9 	purchased annuity must be the actuarial equivalent of the incentive amount.

37.10 	Sec. 73. [356.415] POSTRETIREMENT ADJUSTMENTS; STATEWIDE 
37.11 	RETIREMENT PLANS.
37.12 		Subdivision 1.Annual postretirement adjustments. (a) Retirement annuity, 
37.13 	disability benefit, or survivor benefit recipients of a covered retirement plan are entitled to 
37.14 	a postretirement adjustment annually on January 1, as follows:
37.15 	(1) a postretirement increase of 2.5 percent must be applied each year, effective 
37.16 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has 
37.17 	been receiving an annuity or a benefit for at least 12 full months prior to the January 1 
37.18 	increase; and
37.19 	(2) for each annuitant or benefit recipient who has been receiving an annuity or a 
37.20 	benefit for at least one full month, an annual postretirement increase of 1/12 of 2.5 percent 
37.21 	for each month the person has been receiving an annuity or benefit must be applied, 
37.22 	effective January 1 following the year in which the person has been retired for less than 
37.23 	12 months.
37.24 	(b) The increases provided by this section commence on January 1, 2010.
37.25 	(c) An increase in annuity or benefit payments under this section must be made 
37.26 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
37.27 	executive director of the covered retirement plan requesting that the increase not be made.
37.28 	(d) The retirement annuity payable to a person who retires before becoming eligible 
37.29 	for Social Security benefits and who has elected the optional payment as provided in 
37.30 	section 353.29, subdivision 6, or 354.35 must be treated as the sum of a period certain 
37.31 	retirement annuity and a life retirement annuity for the purposes of any postretirement 
37.32 	adjustment. The period certain retirement annuity plus the life retirement annuity must be 
37.33 	the annuity amount payable until age 62 for section 353.29, subdivision 6, or age 62, 65, 
37.34 	or normal retirement age, as selected by the member at retirement, for an annuity amount 
38.1 	payable under section 354.35. A postretirement adjustment granted on the period certain 
38.2 	retirement annuity must terminate when the period certain retirement annuity terminates.
38.3 		Subd. 2.Covered retirement plans. The provisions of this section apply to the 
38.4 	following retirement plans:
38.5 	(1) the legislators retirement plan established under chapter 3A;
38.6 	(2) the correctional state employees retirement plan of the Minnesota State 
38.7 	Retirement System established under chapter 352;
38.8 	(3) the general state employees retirement plan of the Minnesota State Retirement 
38.9 	System established under chapter 352;
38.10 	(4) the State Patrol retirement plan established under chapter 352B;
38.11 	(5) the elective state officers retirement plan established under chapter 352C;
38.12 	(6) the general employees retirement plan of the Public Employees Retirement 
38.13 	Association established under chapter 353;
38.14 	(7) the public employees police and fire retirement plan of the Public Employees 
38.15 	Retirement Association established under chapter 353;
38.16 	(8) the local government correctional employees retirement plan of the Public 
38.17 	Employees Retirement Association established under chapter 353E;
38.18 	(9) the teachers retirement plan established under chapter 354; and
38.19 	(10) the judges retirement plan established under chapter 490.

38.20 	Sec. 74. Minnesota Statutes 2008, section 490.123, subdivision 1, is amended to read:
38.21 		Subdivision 1.Fund creation; revenue and authorized disbursements. (a) There 
38.22 	is created a special fund to be known as the "judges' retirement fund."
38.23 	(b) The judges' retirement fund must be credited with all contributions; all interest, 
38.24 	dividends, and other investment proceeds; and all other income authorized by this chapter 
38.25 	or other applicable law.
38.26 	(c) From this fund there are appropriated the payments authorized by this chapter, in 
38.27 	the amounts and at the times provided, including the necessary and reasonable expenses of 
38.28 	the Minnesota State Retirement System in administering the fund and the transfers to the 
38.29 	Minnesota postretirement investment fund.

38.30 	Sec. 75. Minnesota Statutes 2008, section 490.123, subdivision 3, is amended to read:
38.31 		Subd. 3.Investment. (a) The executive director of the Minnesota State Retirement 
38.32 	System shall, from time to time, certify to the State Board of Investment such portions 
38.33 	of the judges' retirement fund as in the director's judgment may not be required for 
38.34 	immediate use.
39.1 	(b) Assets from the judges' retirement fund must be transferred to the Minnesota 
39.2 	postretirement investment fund for retirement and disability benefits as provided in 
39.3 	sections 11A.18 and 352.119.
39.4 	(c)(b) The State Board of Investment shall thereupon invest and reinvest sums so 
39.5 	transferred, or certified, in such securities as are duly authorized legal investments for such 
39.6 	purposes under section 11A.24 in compliance with sections 356A.04 and 356A.06.

39.7 	Sec. 76. Minnesota Statutes 2008, section 490.124, is amended by adding a subdivision 
39.8 	to read:
39.9 		Subd. 14.Postretirement adjustment eligibility. A retirement annuity under 
39.10 	subdivision 1, 3, or 5, a disability benefit under subdivision 4, and a survivor's annuity 
39.11 	under subdivision 9 or 11 are eligible for postretirement adjustments under section 
39.12 	356.415.

39.13 	Sec. 77.  REPEALER.
 39.14 	Minnesota Statutes 2008, sections 11A.041; 11A.18; 11A.181; 352.119, subdivisions 
39.15 	2, 3, and 4; 352B.26, subdivisions 1 and 3; 353.271; 353A.02, subdivision 20; 353A.09, 
39.16 	subdivisions 2 and 3; 354.05, subdivision 26; 354.55, subdivision 14; 354.63; 356.41; 
39.17 	356.431, subdivision 2; 422A.01, subdivision 13; 422A.06, subdivision 4; and 490.123, 
39.18 	subdivisions 1c and 1e, are repealed.

39.19 	Sec. 78. EFFECTIVE DATE.
 39.20 	Sections 1 to 77 are effective July 1, 2009.

39.21 	ARTICLE 2
39.22 	DISABILITY BENEFIT PROVISION CHANGES

39.23 	Section 1. Minnesota Statutes 2008, section 43A.34, subdivision 4, is amended to read:
39.24 		Subd. 4.Officers exempted. Notwithstanding any provision to the contrary, (a) 
39.25 	conservation officers and crime bureau officers who were first employed on or after July 
39.26 	1, 1973, and who are members of the State Patrol retirement fund by reason of their 
39.27 	employment, and members of the Minnesota State Patrol Division and Alcohol and 
39.28 	Gambling Enforcement Division of the Department of Public Safety who are members 
39.29 	of the State Patrol Retirement Association by reason of their employment, shall may not 
39.30 	continue employment after attaining the age of 60 years, except for a fractional portion 
39.31 	of one year that will enable the employee to complete the employee's next full year of 
39.32 	allowable service as defined pursuant to section 352B.01 352B.011, subdivision 3; and (b) 
40.1 	conservation officers and crime bureau officers who were first employed and are members 
40.2 	of the State Patrol retirement fund by reason of their employment before July 1, 1973, 
40.3 	shall may not continue employment after attaining the age of 70 years.  

40.4 	EFFECTIVE DATE. This section is effective July 1, 2009.

40.5 	Sec. 2. Minnesota Statutes 2008, section 299A.465, subdivision 1, is amended to read:
40.6 		Subdivision 1.Officer or firefighter disabled in line of duty. (a) This subdivision 
40.7 	applies to any peace officer or firefighter:
40.8 	(1) who the Public Employees Retirement Association or the Minnesota State 
40.9 	Retirement System determines is eligible to receive a duty disability benefit pursuant to 
40.10 	section 353.656 or 352B.10, subdivision 1, respectively; or
40.11 	(2) who (i) does not qualify to receive disability benefits by operation of the 
40.12 	eligibility requirements set forth in section 353.656, subdivision 1, paragraph (b), (ii) 
40.13 	retires pursuant to section 353.651, subdivision 4, or (iii) is a member of a local police or 
40.14 	salaried firefighters relief association and qualifies for a duty disability benefit under the 
40.15 	terms of plans of the relief associations, and the peace officer or firefighter described in 
40.16 	item (i), (ii), or (iii) has discontinued public service as a peace officer or firefighter as a 
40.17 	result of a disabling injury and has been determined, by the Public Employees Retirement 
40.18 	Association, to have otherwise met the duty disability criteria set forth in section 353.01, 
40.19 	subdivision 41.
40.20 	(b) A determination made on behalf of a peace officer or firefighter described in 
40.21 	paragraph (a), clause (2), must be at the request of the peace officer or firefighter made for 
40.22 	the purposes of this section. Determinations made in accordance with paragraph (a) are 
40.23 	binding on the peace officer or firefighter, employer, and state. The determination must 
40.24 	be made by the executive director of the Public Employees Retirement Association or 
40.25 	by the executive director of the Minnesota State Retirement System, whichever applies,
40.26 	and is not subject to section 356.96, subdivision 2. Upon making a determination, the 
40.27 	executive director shall provide written notice to the peace officer or firefighter and the 
40.28 	employer. This notice must include:
40.29 	(1) a written statement of the reasons for the determination;
40.30 	(2) a notice that the person may petition for a review of the determination by 
40.31 	requesting that a contested case be initiated before the Office of Administrative Hearings, 
40.32 	the cost of which must be borne by the peace officer or firefighter and the employer; and
40.33 	(3) a statement that any person who does not petition for a review within 60 days 
40.34 	is precluded from contesting issues determined by the executive director in any other 
40.35 	administrative review or court procedure.
41.1 	If, prior to the contested case hearing, additional information is provided to support the 
41.2 	claim for duty disability as defined in section 353.01, subdivision 41, or 352B.011, 
41.3 	subdivision 7, whichever applies, the executive director may reverse the determination 
41.4 	without the requested hearing. If a hearing is held before the Office of Administrative 
41.5 	Hearings, the determination rendered by the judge conducting the fact-finding hearing 
41.6 	is a final decision and order under section 14.62, subdivision 2a, and is binding on the 
41.7 	applicable executive director, the peace officer or firefighter, employer, and state. Review 
41.8 	of a final determination made by the Office of Administrative Hearings under this section 
41.9 	may only be obtained by writ of certiorari to the Minnesota Court of Appeals under 
41.10 	sections 14.63 to 14.68. Only the peace officer or firefighter, employer, and state have 
41.11 	standing to participate in a judicial review of the decision of the Office of Administrative 
41.12 	Hearings.
41.13 	(c) The officer's or firefighter's employer shall continue to provide health coverage 
41.14 	for:
41.15 	(1) the officer or firefighter; and
41.16 	(2) the officer's or firefighter's dependents if the officer or firefighter was receiving 
41.17 	dependent coverage at the time of the injury under the employer's group health plan.
41.18 	(d) The employer is responsible for the continued payment of the employer's 
41.19 	contribution for coverage of the officer or firefighter and, if applicable, the officer's 
41.20 	or firefighter's dependents. Coverage must continue for the officer or firefighter and, if 
41.21 	applicable, the officer's or firefighter's dependents until the officer or firefighter reaches or, 
41.22 	if deceased, would have reached the age of 65. However, coverage for dependents does 
41.23 	not have to be continued after the person is no longer a dependent.

41.24 	EFFECTIVE DATE. This section is effective the day following final enactment 
41.25 	and also applies to any member of the State Patrol retirement plan who was awarded a 
41.26 	duty disability benefit on or after July 1, 2008.

41.27 	Sec. 3. Minnesota Statutes 2008, section 352.01, subdivision 2b, is amended to read:
41.28 		Subd. 2b. Excluded employees. "State employee" does not include: 
41.29 	(1) students employed by the University of Minnesota, or the state colleges and 
41.30 	universities, unless approved for coverage by the Board of Regents of the University of 
41.31 	Minnesota or the Board of Trustees of the Minnesota State Colleges and Universities, 
41.32 	whichever is applicable; 
41.33 	(2) employees who are eligible for membership in the state Teachers Retirement 
41.34 	Association, except employees of the Department of Education who have chosen or may 
42.1 	choose to be covered by the general state employees retirement plan of the Minnesota 
42.2 	State Retirement System instead of the Teachers Retirement Association; 
42.3 	(3) employees of the University of Minnesota who are excluded from coverage by 
42.4 	action of the Board of Regents; 
42.5 	(4) officers and enlisted personnel in the National Guard and the naval militia who 
42.6 	are assigned to permanent peacetime duty and who under federal law are or are required to 
42.7 	be members of a federal retirement system; 
42.8 	(5) election officers; 
42.9 	(6) persons who are engaged in public work for the state but who are employed 
42.10 	by contractors when the performance of the contract is authorized by the legislature or 
42.11 	other competent authority; 
42.12 	(7) officers and employees of the senate, or of the house of representatives, or of a 
42.13 	legislative committee or commission who are temporarily employed; 
42.14 	(8) receivers, jurors, notaries public, and court employees who are not in the judicial 
42.15 	branch as defined in section 43A.02, subdivision 25, except referees and adjusters 
42.16 	employed by the Department of Labor and Industry; 
42.17 	(9) patient and inmate help in state charitable, penal, and correctional institutions 
42.18 	including the Minnesota Veterans Home; 
42.19 	(10) persons who are employed for professional services where the service is 
42.20 	incidental to their regular professional duties and whose compensation is paid on a per 
42.21 	diem basis; 
42.22 	(11) employees of the Sibley House Association; 
42.23 	(12) the members of any state board or commission who serve the state intermittently 
42.24 	and are paid on a per diem basis; the secretary, secretary-treasurer, and treasurer of those 
42.25 	boards if their compensation is $5,000 or less per year, or, if they are legally prohibited 
42.26 	from serving more than three years; and the board of managers of the State Agricultural 
42.27 	Society and its treasurer unless the treasurer is also its full-time secretary; 
42.28 	(13) state troopers and persons who are described in section 352B.01, subdivision 2
42.29 	352B.011, subdivision 10, clauses (2) to (6)(8); 
42.30 	(14) temporary employees of the Minnesota State Fair who are employed on or 
42.31 	after July 1 for a period not to extend beyond October 15 of that year; and persons who 
42.32 	are employed at any time by the state fair administration for special events held on the 
42.33 	fairgrounds; 
42.34 	(15) emergency employees who are in the classified service; except that if an 
42.35 	emergency employee, within the same pay period, becomes a provisional or probationary 
43.1 	employee on other than a temporary basis, the employee shall must be considered a "state 
43.2 	employee" retroactively to the beginning of the pay period; 
43.3 	(16) temporary employees in the classified service, and temporary employees in the 
43.4 	unclassified service who are appointed for a definite period of not more than six months 
43.5 	and who are employed less than six months in any one-year period; 
43.6 	(17) interns hired for six months or less and trainee employees, except those listed in 
43.7 	subdivision 2a, clause (8); 
43.8 	(18) persons whose compensation is paid on a fee basis or as an independent 
43.9 	contractor; 
43.10 	(19) state employees who are employed by the Board of Trustees of the Minnesota 
43.11 	State Colleges and Universities in unclassified positions enumerated in section 43A.08, 
43.12 	subdivision 1, clause (9); 
43.13 	(20) state employees who in any year have credit for 12 months service as teachers 
43.14 	in the public schools of the state and as teachers are members of the Teachers Retirement 
43.15 	Association or a retirement system in St. Paul, Minneapolis, or Duluth, except for 
43.16 	incidental employment as a state employee that is not covered by one of the teacher 
43.17 	retirement associations or systems; 
43.18 	(21) employees of the adjutant general who are employed on an unlimited 
43.19 	intermittent or temporary basis in the classified or unclassified service for the support of 
43.20 	Army and Air National Guard training facilities; 
43.21 	(22) chaplains and nuns who are excluded from coverage under the federal Old 
43.22 	Age, Survivors, Disability, and Health Insurance Program for the performance of service 
43.23 	as specified in United States Code, title 42, section 410(a)(8)(A), as amended, if no 
43.24 	irrevocable election of coverage has been made under section 3121(r) of the Internal 
43.25 	Revenue Code of 1986, as amended through December 31, 1992; 
43.26 	(23) examination monitors who are employed by departments, agencies, 
43.27 	commissions, and boards to conduct examinations required by law; 
43.28 	(24) persons who are appointed to serve as members of fact-finding commissions or 
43.29 	adjustment panels, arbitrators, or labor referees under chapter 179; 
43.30 	(25) temporary employees who are employed for limited periods under any state or 
43.31 	federal program for training or rehabilitation, including persons who are employed for 
43.32 	limited periods from areas of economic distress, but not including skilled and supervisory 
43.33 	personnel and persons having civil service status covered by the system; 
43.34 	(26) full-time students who are employed by the Minnesota Historical Society 
43.35 	intermittently during part of the year and full-time during the summer months; 
44.1 	(27) temporary employees who are appointed for not more than six months, of 
44.2 	the Metropolitan Council and of any of its statutory boards, if the board members are 
44.3 	appointed by the Metropolitan Council; 
44.4 	(28) persons who are employed in positions designated by the Department of 
44.5 	Finance as student workers; 
44.6 	(29) members of trades who are employed by the successor to the Metropolitan 
44.7 	Waste Control Commission, who have trade union pension plan coverage under a 
44.8 	collective bargaining agreement, and who are first employed after June 1, 1977; 
44.9 	(30) off-duty peace officers while employed by the Metropolitan Council; 
44.10 	(31) persons who are employed as full-time police officers by the Metropolitan 
44.11 	Council and as police officers are members of the public employees police and fire fund; 
44.12 	(32) persons who are employed as full-time firefighters by the Department of Military 
44.13 	Affairs and as firefighters are members of the public employees police and fire fund; 
44.14 	(33) foreign citizens with a work permit of less than three years, or an H-1b/JV visa 
44.15 	valid for less than three years of employment, unless notice of extension is supplied which 
44.16 	allows them to work for three or more years as of the date the extension is granted, in 
44.17 	which case they are eligible for coverage from the date extended; and 
44.18 	(34) persons who are employed by the Board of Trustees of the Minnesota State 
44.19 	Colleges and Universities and who elected to remain members of the Public Employees 
44.20 	Retirement Association or the Minneapolis Employees Retirement Fund, whichever 
44.21 	applies, under Minnesota Statutes 1994, section 136C.75. 

44.22 	EFFECTIVE DATE. This section is effective July 1, 2009.

44.23 	Sec. 4. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision 
44.24 	to read:
44.25 		Subd. 17a.Occupational disability. "Occupational disability," for purposes of 
44.26 	determining eligibility for disability benefits for a correctional employee, means a 
44.27 	disabling condition that is expected to prevent the correctional employee, for a period of 
44.28 	not less than 12 months, from performing the normal duties of the position held by the 
44.29 	correctional employee.

44.30 	EFFECTIVE DATE. This section is effective July 1, 2009.

44.31 	Sec. 5. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision 
44.32 	to read:
45.1 		Subd. 17b.Duty disability, physical or psychological. "Duty disability, physical 
45.2 	or psychological," for a correctional employee, means an occupational disability that is the 
45.3 	direct result of an injury incurred during, or a disease arising out of, the performance of 
45.4 	normal duties or the performance of less frequent duties either of which are specific to 
45.5 	the correctional employee.

45.6 	EFFECTIVE DATE. This section is effective July 1, 2009.

45.7 	Sec. 6. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision 
45.8 	to read:
45.9 		Subd. 17c.Regular disability, physical or psychological. "Regular disability, 
45.10 	physical or psychological," for a correctional employee, means an occupational disability 
45.11 	resulting from a disease or an injury that arises from any activities while not at work or 
45.12 	from activities while at work performing normal or less frequent duties that do not present 
45.13 	inherent dangers specific to covered correctional positions.

45.14 	EFFECTIVE DATE. This section is effective July 1, 2009.

45.15 	Sec. 7. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision 
45.16 	to read:
45.17 		Subd. 17d.Normal duties. "Normal duties" means specific tasks designated in the 
45.18 	applicant's job description and which the applicant performs on a day-to-day basis, but 
45.19 	do not include less frequent duties which may be requested to be done by the employer 
45.20 	from time to time.

45.21 	EFFECTIVE DATE. This section is effective July 1, 2009.

45.22 	Sec. 8. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision 
45.23 	to read:
45.24 		Subd. 17e.Less frequent duties. "Less frequent duties" means tasks designated 
45.25 	in the applicant's job description as either required from time to time or as assigned, but 
45.26 	which are not carried out as part of the normal routine of the applicant's job.

45.27 	EFFECTIVE DATE. This section is effective July 1, 2009.

45.28 	Sec. 9. Minnesota Statutes 2008, section 352.113, subdivision 4, is amended to read:
46.1 		Subd. 4.Medical or psychological examinations; authorization for payment of 
46.2 	benefit. (a) An applicant shall provide medical, chiropractic, or psychological evidence to 
46.3 	support an application for total and permanent disability.
46.4 	(b) The director shall have the employee examined by at least one additional 
46.5 	licensed chiropractor, physician, or psychologist designated by the medical adviser. The 
46.6 	chiropractors, physicians, or psychologists shall make written reports to the director 
46.7 	concerning the employee's disability including expert opinions as to whether the employee 
46.8 	is permanently and totally disabled within the meaning of section 352.01, subdivision 17. 
46.9 	(c) The director shall also obtain written certification from the employer stating 
46.10 	whether the employment has ceased or whether the employee is on sick leave of 
46.11 	absence because of a disability that will prevent further service to the employer and as a 
46.12 	consequence the employee is not entitled to compensation from the employer.
46.13 	(d) The medical adviser shall consider the reports of the physicians, psychologists, 
46.14 	and chiropractors and any other evidence supplied by the employee or other interested 
46.15 	parties. If the medical adviser finds the employee totally and permanently disabled, the 
46.16 	adviser shall make appropriate recommendation to the director in writing together with the 
46.17 	date from which the employee has been totally disabled. The director shall then determine 
46.18 	if the disability occurred within 180 days 18 months of filing the application, while still 
46.19 	in the employment of the state, and the propriety of authorizing payment of a disability 
46.20 	benefit as provided in this section.
46.21 	(e) A terminated employee may apply for a disability benefit within 180 days 18 
46.22 	months of termination as long as the disability occurred while in the employment of the 
46.23 	state. The fact that an employee is placed on leave of absence without compensation 
46.24 	because of disability does not bar that employee from receiving a disability benefit.
46.25 	(f) Unless the payment of a disability benefit has terminated because the employee is 
46.26 	no longer totally disabled, or because the employee has reached normal retirement age as 
46.27 	provided in this section, the disability benefit must cease with the last payment received 
46.28 	by the disabled employee or which had accrued during the lifetime of the employee unless 
46.29 	there is a spouse surviving. In that event, the surviving spouse is entitled to the disability 
46.30 	benefit for the calendar month in which the disabled employee died.

46.31 	EFFECTIVE DATE. This section is effective July 1, 2009, and applies to disability 
46.32 	benefit applicants whose last day of public employment was after June 30, 2009.

46.33 	Sec. 10. Minnesota Statutes 2008, section 352.95, subdivision 1, is amended to read:
46.34 		Subdivision 1.Job-related disability Duty disability; computation of benefit.
 46.35 	A covered correctional employee who becomes disabled and who is expected to be 
47.1 	physically or mentally unfit to perform the duties of the position for at least one year as a 
47.2 	direct result of an injury, sickness, or other disability that incurred in or arose out of any 
47.3 	act of duty that makes the employee physically or mentally unable to perform the duties is 
47.4 	determined to have a duty disability, physical or psychological, as defined under section 
47.5 	352.01, subdivision 17b, is entitled to a duty disability benefit. The duty disability benefit 
47.6 	may must be based on covered correctional service only. The duty disability benefit 
47.7 	amount is 50 percent of the average salary defined in section 352.93, plus an additional 
47.8 	percent equal to that specified in section 356.315, subdivision 5, for each year of covered 
47.9 	correctional service in excess of 20 years, ten months, prorated for completed months.

47.10 	EFFECTIVE DATE. This section is effective July 1, 2009.

47.11 	Sec. 11. Minnesota Statutes 2008, section 352.95, subdivision 2, is amended to read:
47.12 		Subd. 2.Non-job-related Regular disability; computation of benefit. A covered 
47.13 	correctional employee who was hired before July 1, 2009, after rendering at least one year 
47.14 	of covered correctional service, or a covered correctional employee who was first hired 
47.15 	after June 30, 2009, after rendering at least three years of covered correctional plan service, 
47.16 	becomes disabled and who is expected to be physically or mentally unfit to perform the 
47.17 	duties of the position for at least one year because of sickness or injury that occurred while 
47.18 	not engaged in covered employment and who is determined to have a regular disability, 
47.19 	physical or psychological, as defined under section 352.01, subdivision 17c, is entitled 
47.20 	to a regular disability benefit. The regular disability benefit must be  based on covered 
47.21 	correctional service only. The regular disability benefit must be computed as provided 
47.22 	in section 352.93, subdivisions 1 and 2, and. The regular disability benefit of a covered 
47.23 	correctional employee who was first hired before July 1, 2009, and who is determined 
47.24 	to have a regular disability, physical or psychological, under this subdivision must be 
47.25 	computed as though the employee had at least 15 years of covered correctional service.

47.26 	EFFECTIVE DATE. This section is effective July 1, 2009.

47.27 	Sec. 12. Minnesota Statutes 2008, section 352.95, subdivision 3, is amended to read:
47.28 		Subd. 3.Applying for benefits; accrual. No application for disability benefits 
47.29 	shall may be made until after the last day physically on the job. The disability benefit 
47.30 	shall begin begins to accrue the day following the last day for which the employee is paid 
47.31 	sick leave or annual leave, but not earlier than 180 days before the date the application 
47.32 	is filed. A terminated employee must file a written application within the time frame 
47.33 	specified under section 352.113, subdivision 4, paragraph (e).

48.1 	EFFECTIVE DATE. This section is effective July 1, 2009, and applies to disability 
48.2 	benefit applicants whose last day of public employment was after June 30, 2009.

48.3 	Sec. 13. Minnesota Statutes 2008, section 352.95, subdivision 4, is amended to read:
48.4 		Subd. 4.Medical or psychological evidence. (a) An applicant shall provide 
48.5 	medical, chiropractic, or psychological evidence to support an application for disability 
48.6 	benefits. The director shall have the employee examined by at least one additional 
48.7 	licensed physician, chiropractor, or psychologist who is designated by the medical adviser. 
48.8 	The physicians, chiropractors, or psychologists with respect to a mental impairment, 
48.9 	shall make written reports to the director concerning the question of the employee's 
48.10 	disability, including their expert opinions as to whether the employee is disabledhas an 
48.11 	occupational disability within the meaning of this section 352.01, subdivision 17a, and 
48.12 	whether the employee has a duty disability, physical or psychological, under section 
48.13 	352.01, subdivision 17b, or has a regular disability, physical or psychological, under 
48.14 	section 352.01, subdivision 17c. The director shall also obtain written certification from 
48.15 	the employer stating whether or not the employee is on sick leave of absence because of a 
48.16 	disability that will prevent further service to the employer performing normal duties as 
48.17 	defined in section 352.01, subdivision 17d, or performing less frequent duties as defined in 
48.18 	section 352.01, subdivision 17e, and as a consequence, the employee is not entitled to 
48.19 	compensation from the employer.
48.20 	(b) If, on considering the reports by the physicians, chiropractors, or psychologists 
48.21 	and any other evidence supplied by the employee or others, the medical adviser finds that 
48.22 	the employee disabledhas an occupational disability within the meaning of this section
48.23 	352.01, subdivision 17a, the advisor shall make the appropriate recommendation to the 
48.24 	director, in writing, together with the date from which the employee has been disabled. 
48.25 	The director shall then determine the propriety of authorizing payment of a duty disability 
48.26 	benefit or a regular disability benefit as provided in this section.
48.27 	(c) Unless the payment of a disability benefit has terminated because the employee 
48.28 	is no longer disabled has an occupational disability, or because the employee has reached 
48.29 	either age 6555 or the five-year anniversary of the effective date of the disability benefit, 
48.30 	whichever is later, the disability benefit must cease with the last payment which was 
48.31 	received by the disabled employee or which had accrued during the employee's lifetime. 
48.32 	While disability benefits are paid, the director has the right, at reasonable times, to 
48.33 	require the disabled employee to submit proof of the continuance of thean occupational 
48.34 	disability claimed. If any examination indicates to the medical adviser that the employee 
48.35 	is no longer disabled has an occupational disability, the disability payment must be 
49.1 	discontinued upon the person's reinstatement to state service or within 60 days of the 
49.2 	finding, whichever is sooner.

49.3 	EFFECTIVE DATE. This section is effective July 1, 2009, and applies to disability 
49.4 	benefit applicants whose last day of public employment was after June 30, 2009.

49.5 	Sec. 14. Minnesota Statutes 2008, section 352.95, subdivision 5, is amended to read:
49.6 		Subd. 5.Retirement status at normal retirement age. The disability benefit paid 
49.7 	to a disabled correctional employee under this section shall terminate terminates at the end 
49.8 	of the month in which the employee reaches age 65 55, or the five-year anniversary of 
49.9 	the effective date of the disability benefit, whichever is later. If the disabled correctional 
49.10 	employee is still disabled when the employee reaches age 65 55, or the five-year 
49.11 	anniversary of the effective date of the disability benefit, whichever is later, the employee 
49.12 	shall must be deemed to be a retired employee. If the employee had elected an optional 
49.13 	annuity under subdivision 1a, the employee shall receive an annuity in accordance with 
49.14 	the terms of the optional annuity previously elected. If the employee had not elected an 
49.15 	optional annuity under subdivision 1a, the employee may within 90 days of attaining age 
49.16 	65 55 or reaching the five-year anniversary of the effective date of the disability benefit, 
49.17 	whichever is later, either elect to receive a normal retirement annuity computed in the 
49.18 	manner provided in section 352.93 or elect to receive an optional annuity as provided 
49.19 	in section 352.116, subdivision 3, based on the same length of service as used in the 
49.20 	calculation of the disability benefit. Election of an optional annuity must be made within 
49.21 	90 days before attaining age 65 55 or reaching the five-year anniversary of the effective 
49.22 	date of the disability benefit, whichever is later. If an optional annuity is elected, the 
49.23 	optional annuity shall begin begins to accrue on the first of the month following the month 
49.24 	in which the employee reaches age 65 55 or the five-year anniversary of the effective date 
49.25 	of the disability benefit, whichever is later. 

49.26 	EFFECTIVE DATE. This section is effective July 1, 2009, and applies to disability 
49.27 	benefit applicants whose last day of public employment was after June 30, 2009.

49.28 	Sec. 15. [352B.011] DEFINITIONS.
49.29 		Subdivision 1.Scope. For the purposes of this chapter, the terms defined in this 
49.30 	section have the meanings given them.
49.31 		Subd. 2.Accumulated deductions. "Accumulated deductions" means the total 
49.32 	sums deducted from the salary of a member and the total amount of assessments paid by 
50.1 	a member in place of deductions and credited to the member's individual account as 
50.2 	permitted by law without interest.
50.3 		Subd. 3.Allowable service. (a) "Allowable service" means:
50.4 	(1) service in a month during which a member is paid a salary from which a member 
50.5 	contribution is deducted, deposited, and credited in the State Patrol retirement fund;
50.6 	(2) for members defined in subdivision 10, clause (1), service in any month for 
50.7 	which payments have been made to the State Patrol retirement fund under law; and
50.8 	(3) for members defined in subdivision 10, clauses (2) and (3), service for which 
50.9 	payments have been made to the State Patrol retirement fund under law, service for which 
50.10 	payments were made to the State Police officers retirement fund under law after June 
50.11 	30, 1961, and all prior service which was credited to a member for service on or before 
50.12 	June 30, 1961.
50.13 	(b) Allowable service also includes any period of absence from duty by a member 
50.14 	who, by reason of injury incurred in the performance of duty, is temporarily disabled and 
50.15 	for which disability the state is liable under the workers' compensation law, until the date 
50.16 	authorized by the executive director for commencement of payment of a disability benefit 
50.17 	or until the date of a return to employment.
50.18 		Subd. 4.Average monthly salary. (a) Subject to the limitations of section 356.611, 
50.19 	"average monthly salary" means the average of the highest monthly salaries for five 
50.20 	years of service as a member upon which contributions were deducted from pay under 
50.21 	section 352B.02, or upon which appropriate contributions or payments were made to 
50.22 	the fund to receive allowable service and salary credit as specified under the applicable 
50.23 	law. Average monthly salary must be based upon all allowable service if this service is 
50.24 	less than five years.
50.25 	(b) The salary used for the calculation of "average monthly salary" means the 
50.26 	salary of the member as defined in section 352.01, subdivision 13. The salary used for 
50.27 	the calculation of "average monthly salary" does not include any lump-sum annual leave 
50.28 	payments and overtime payments made at the time of separation from state service, any 
50.29 	amounts of severance pay, or any reduced salary paid during the period the person is 
50.30 	entitled to workers' compensation benefit payments for temporary disability.
50.31 		Subd. 5.Department head. "Department head" means the head of any department, 
50.32 	institution, or branch of the state service that directly pays salaries from state funds 
50.33 	to a member who prepares, approves, and submits salary abstracts of employees to the 
50.34 	commissioner of Minnesota Management and Budget.
51.1 		Subd. 6.Dependent child. "Dependent child" means a natural or adopted unmarried 
51.2 	child of a deceased member under the age of 18 years, including any child of the member 
51.3 	conceived during the lifetime of the member and born after the death of the member.
51.4 		Subd. 7.Duty disability. "Duty disability" means a physical or psychological 
51.5 	condition that is expected to prevent a member, for a period of not less than 12 months, 
51.6 	from performing the normal duties of the position held by the person as a member of the 
51.7 	State Patrol retirement fund, and that is the direct result of any injury incurred during, or a 
51.8 	disease arising out of, the performance of normal duties or the actual performance of less 
51.9 	frequent duties, either of which are specific to protecting the property and personal safety 
51.10 	of others and that present inherent dangers that are specific to the positions covered by 
51.11 	the State Patrol retirement fund.
51.12 		Subd. 8Fund. "Fund" means the State Patrol retirement fund.
51.13 		Subd. 9.Less frequent duties. "Less frequent duties" means tasks which are 
51.14 	designated in the member's job description as either required from time to time or as 
51.15 	assigned, but which are not carried out as part of the normal routine of the member's 
51.16 	position.
51.17 		Subd. 10.Member. "Member" means:
51.18 	(1) a State Patrol member currently employed under section 299D.03 by the state, 
51.19 	who is a peace officer under section 626.84, and whose salary or compensation is paid 
51.20 	out of state funds;
51.21 	(2) a conservation officer employed under section 97A.201, currently employed by 
51.22 	the state, whose salary or compensation is paid out of state funds;
51.23 	(3) a crime bureau officer who was employed by the crime bureau and was a member 
51.24 	of the Highway Patrolmen's retirement fund on July 1, 1978, whether or not that person 
51.25 	has the power of arrest by warrant after that date, or who is employed as police personnel, 
51.26 	with powers of arrest by warrant under section 299C.04, and who is currently employed 
51.27 	by the state, and whose salary or compensation is paid out of state funds;
51.28 	(4) a person who is employed by the state in the Department of Public Safety in a 
51.29 	data processing management position with salary or compensation paid from state funds, 
51.30 	who was a crime bureau officer covered by the State Patrol retirement plan on August 
51.31 	15, 1987, and who was initially hired in the data processing management position within 
51.32 	the department during September 1987, or January 1988, with membership continuing 
51.33 	for the duration of the person's employment in that position, whether or not the person 
51.34 	has the power of arrest by warrant after August 15, 1987;
52.1 	(5) a public safety employee who is a peace officer under section 626.84, subdivision 
52.2 	1, paragraph (c), and who is employed by the Division of Alcohol and Gambling 
52.3 	Enforcement under section 299L.01;
52.4 	(6) a Fugitive Apprehension Unit officer after October 31, 2000, who is employed 
52.5 	by the Office of Special Investigations of the Department of Corrections and who is a 
52.6 	peace officer under section 626.84;
52.7 	(7) an employee of the Department of Commerce defined as a peace officer in section 
52.8 	626.84, subdivision 1, paragraph (c), who is employed by the Division of Insurance Fraud 
52.9 	Prevention under section 45.0135 after January 1, 2005, and who has not attained the 
52.10 	mandatory retirement age specified in section 43A.34, subdivision 4; and
52.11 	(8) an employee of the Department of Public Safety, who is a licensed peace officer 
52.12 	under section 626.84, subdivision 1, paragraph (c), and is employed as the statewide 
52.13 	coordinator of the Gang and Drug Oversight Council.
52.14 		Subd. 11.Normal duties. "Normal duties" means specific tasks which are 
52.15 	designated in the member's job description and which the applicant performs on a 
52.16 	day-to-day basis, but do not include less frequent duties which may be requested to be 
52.17 	done by the employer from time to time.
52.18 		Subd. 12.Regular disability. "Regular disability" means a physical or 
52.19 	psychological condition that is expected to prevent a member, for a period of not less than 
52.20 	12 months, from performing the normal duties of the position held by a person who is a 
52.21 	member of the State Patrol retirement plan, and which results from a disease or an injury 
52.22 	that arises from any activities while not at work, or while at work and performing those 
52.23 	normal or less frequent duties that do not present inherent dangers that are specific to the 
52.24 	occupations covered by the State Patrol retirement plan.
52.25 		Subd. 13.Surviving spouse. "Surviving spouse" means a member's or former 
52.26 	member's legally married spouse who resided with the member or former member at the 
52.27 	time of death and was married to the member or former member, for a period of at least 
52.28 	one year, during or before the time of membership.

52.29 	EFFECTIVE DATE. (a) Except as provided in paragraph (b), this section is 
52.30 	effective July 1, 2009.
52.31 	(b) Subdivision 3, paragraph (a), clause (1), is effective retroactively from July 
52.32 	1, 1969, and allowable service on the records of the State Patrol retirement plan credit 
52.33 	consistent with that provision is validated.

52.34 	Sec. 16. Minnesota Statutes 2008, section 352B.02, subdivision 1, is amended to read:
53.1 		Subdivision 1.Fund created; membership. A State Patrol retirement fund is 
53.2 	established. Its membership consists of all persons defined in section 352B.01, subdivision 
53.3 	2 352B.011, subdivision 10. 

53.4 	EFFECTIVE DATE. This section is effective July 1, 2009.

53.5 	Sec. 17. [352B.085] SERVICE CREDIT FOR CERTAIN DISABILITY LEAVES 
53.6 	OF ABSENCE.
53.7 	A member on leave of absence receiving temporary workers' compensation 
53.8 	payments and a reduced salary or no salary from the employer who is entitled to allowable 
53.9 	service credit for the period of absence under section 352B.011, subdivision 3, paragraph 
53.10 	(b), may make payment to the fund for the difference between salary received, if any, 
53.11 	and the salary that the member would normally receive if the member was not on leave 
53.12 	of absence during the period. The member shall pay an amount equal to the member 
53.13 	and employer contribution rate under section 352B.02, subdivisions 1b and 1c, on 
53.14 	the differential salary amount for the period of the leave of absence. The employing 
53.15 	department, at its option, may pay the employer amount on behalf of the member. Payment 
53.16 	made under this subdivision must include interest at the rate of 8.5 percent per year, and 
53.17 	must be completed within one year of the member's return from the leave of absence.

53.18 	EFFECTIVE DATE. This section is effective July 1, 2009.

53.19 	Sec. 18. [352B.086] SERVICE CREDIT FOR UNIFORMED SERVICE.
53.20 	(a) A member who is absent from employment by reason of service in the uniformed 
53.21 	services, as defined in United States Code, title 38, section 4303(13), and who returns to 
53.22 	state employment in a position covered by the plan upon discharge from service in the 
53.23 	uniformed services within the time frame required in United States Code, title 38, section 
53.24 	4312(e), may obtain service credit for the period of the uniformed service, provided that 
53.25 	the member did not separate from uniformed service with a dishonorable or bad conduct 
53.26 	discharge or under other than honorable conditions.
53.27 	(b) The member may obtain credit by paying into the fund an equivalent member 
53.28 	contribution based on the member contribution rate or rates in effect at the time that 
53.29 	the uniformed service was performed multiplied by the full and fractional years being 
53.30 	purchased and applied to the annual salary rate. The annual salary rate is the average 
53.31 	annual salary during the purchase period that the member would have received if the 
53.32 	member had continued to provide employment services to the state rather than to provide 
53.33 	uniformed service, or if the determination of that rate is not reasonably certain, the annual 
54.1 	salary rate is the member's average salary rate during the 12-month period of covered 
54.2 	employment rendered immediately preceding the purchase period.
54.3 	(c) The equivalent employer contribution and, if applicable, the equivalent employer 
54.4 	additional contribution, must be paid by the employing unit, using the employer and 
54.5 	employer additional contribution rate or rates in effect at the time that the uniformed 
54.6 	service was performed, applied to the same annual salary rate or rates used to compute the 
54.7 	equivalent member contribution.
54.8 	(d) If the member equivalent contributions provided for in this subdivision are not 
54.9 	paid in full, the member's allowable service credit must be prorated by multiplying the 
54.10 	full and fractional number of years of uniformed service eligible for purchase by the 
54.11 	ratio obtained by dividing the total member contributions received by the total member 
54.12 	contributions otherwise required under this subdivision.
54.13 	(e) To receive allowable service credit under this subdivision, the contributions 
54.14 	specified in this section must be transmitted to the fund during the period which begins 
54.15 	with the date on which the individual returns to state employment covered by the plan and 
54.16 	which has a duration of three times the length of the uniformed service period, but not 
54.17 	to exceed five years. If the determined payment period is calculated to be less than one 
54.18 	year, the contributions required under this subdivision to receive service credit may be 
54.19 	within one year from the discharge date.
54.20 	(f) The amount of allowable service credit obtainable under this section may not 
54.21 	exceed five years, unless a longer purchase period is required under United States Code, 
54.22 	title 38, section 4312.
54.23 	(g) The employing unit shall pay interest on all equivalent member and employer 
54.24 	contribution amounts payable under this section. Interest must be computed at a rate of 
54.25 	8.5 percent compounded annually from the end of each fiscal year of the leave or break in 
54.26 	service to the end of the month in which payment is received.

54.27 	EFFECTIVE DATE. This section is effective July 1, 2009.

54.28 	Sec. 19. Minnesota Statutes 2008, section 352B.10, subdivision 1, is amended to read:
54.29 		Subdivision 1.Injuries; payment amounts Duty disability. A member who 
54.30 	becomes disabled and who is expected to be physically or mentally unfit to perform duties 
54.31 	for at least one year as a direct result of an injury, sickness, or other disability that incurred 
54.32 	in or arose out of any act of duty is determined to qualify for duty disability as defined in 
54.33 	section 352B.011, subdivision 7, is entitled to receive a duty disability benefitsbenefit
54.34 	while disabled. The benefits must be paid in monthly installments. The duty disability
54.35 	benefit is an amount equal to the member's average monthly salary multiplied by 60 
55.1 	percent, plus an additional percent equal to that specified in section 356.315, subdivision 
55.2 	6, for each year and pro rata for completed months of service in excess of 20 years, if any.  

55.3 	EFFECTIVE DATE. This section is effective July 1, 2009.

55.4 	Sec. 20. Minnesota Statutes 2008, section 352B.10, subdivision 2, is amended to read:
55.5 		Subd. 2.Disabled while not on duty Regular disability benefit. If A member with 
55.6 	at least one year of service becomes disabled and is expected to be physically or mentally 
55.7 	unfit to perform the duties of the position for at least one year because of sickness or injury 
55.8 	that occurred while not engaged in covered employment, the individual who qualifies for 
55.9 	a regular disability benefit as defined in section 352B.011, subdivision 12, is entitled to 
55.10 	a regular disability benefitsbenefit. The regular disability benefit must be computed as if 
55.11 	the individual were 55 years old at the date of disability and as if the annuity was payable 
55.12 	under section 352B.08. If a regular disability under this subdivision occurs after one year 
55.13 	of service but before 15 years of service, the regular disability benefit must be computed 
55.14 	as though the individual had credit for 15 years of service.  

55.15 	EFFECTIVE DATE. This section is effective July 1, 2009.

55.16 	Sec. 21. Minnesota Statutes 2008, section 352B.10, is amended by adding a 
55.17 	subdivision to read:
55.18 		Subd. 2a.Applying for benefits; accrual. No application for disability benefits 
55.19 	shall be made until after the last day physically on the job. The disability benefit begins to 
55.20 	accrue the day following the last day for which the employee is paid sick leave or annual 
55.21 	leave but not earlier than 180 days before the date the application is filed. A member 
55.22 	who is terminated must file a written application within the time frame specified under 
55.23 	section 352.113, subdivision 4, paragraph (e).

55.24 	EFFECTIVE DATE. This section is effective July 1, 2009, and applies to disability 
55.25 	benefit applicants whose last day of public employment was after June 30, 2009.

55.26 	Sec. 22. Minnesota Statutes 2008, section 352B.10, subdivision 5, is amended to read:
55.27 		Subd. 5.Optional annuity. A disabilitant may elect, in lieu of spousal survivorship 
55.28 	coverage under section 352B.11, subdivisions 2b and 2c, the normal disability benefit or 
55.29 	an optional annuity as provided in section 352B.08, subdivision 3. The choice of an 
55.30 	optional annuity must be made in writing, on a form prescribed by the executive director, 
55.31 	and must be made before the commencement of the payment of the disability benefit, or 
55.32 	within 90 days before reaching age 65 55 or before reaching the five-year anniversary 
56.1 	of the effective date of the disability benefit, whichever is later. The optional annuity 
56.2 	is effective on the date on which the disability benefit begins to accrue, or the month 
56.3 	following the attainment of age 65 55 or following the five-year anniversary of the 
56.4 	effective date of the disability benefit, whichever is later. 

56.5 	EFFECTIVE DATE. This section is effective July 1, 2009, and applies to disability 
56.6 	benefit applicants whose last day of public employment was after June 30, 2009.

56.7 	Sec. 23. Minnesota Statutes 2008, section 352B.11, subdivision 2, is amended to read:
56.8 		Subd. 2.Death; payment to dependent children; family maximums. (a) Each 
56.9 	dependent child, as defined in section 352B.01, subdivision 10 352B.011, subdivision 6, is 
56.10 	entitled to receive a monthly annuity equal to ten percent of the average monthly salary 
56.11 	of the deceased member.
56.12 	(b) A dependent child over 18 and under 23 years of age also may receive the 
56.13 	monthly benefit provided in this section if the child is continuously attending an accredited 
56.14 	school as a full-time student during the normal school year as determined by the director. 
56.15 	If the child does not continuously attend school, but separates from full-time attendance 
56.16 	during any part of a school year, the annuity must cease at the end of the month of 
56.17 	separation.
56.18 	(c) In addition, a payment of $20 per month must be prorated equally to the 
56.19 	surviving dependent children when the former member is survived by more than one 
56.20 	dependent child.
56.21 	(d) Payments for the benefit of any dependent child must be made to the surviving 
56.22 	spouse, or if there is none, to the legal guardian of the child.
56.23 	(e) The monthly benefit for any one family, including a surviving spouse benefit, if 
56.24 	applicable, must not be less than 50 percent nor exceed 70 percent of the average monthly 
56.25 	salary of the deceased member.  

56.26 	EFFECTIVE DATE. This section is effective July 1, 2009.

56.27 	Sec. 24.  REPEALER.
 56.28 	Minnesota Statutes 2008, section 352B.01, subdivisions 1, 2, 3, 3b, 4, 6, 7, 9, 10, 
56.29 	and 11, are repealed.

56.30 	EFFECTIVE DATE. This section is effective July 1, 2009.

57.1 	ARTICLE 3
57.2 	STATE CORRECTIONAL RETIREMENT PLAN
57.3 	 MEMBERSHIP CHANGES

57.4 	Section 1. Minnesota Statutes 2008, section 352.91, subdivision 3d, is amended to read:
57.5 		Subd. 3d.Other correctional personnel. (a) "Covered correctional service" means 
57.6 	service by a state employee in one of the employment positions at a correctional facility or 
57.7 	at the Minnesota Security Hospital specified in paragraph (b) if at least 75 percent of the 
57.8 	employee's working time is spent in direct contact with inmates or patients and the fact of 
57.9 	this direct contact is certified to the executive director by the appropriate commissioner.
57.10 	(b) The employment positions are:
57.11 	(1) automotive mechanic;
57.12 	(2) baker;
57.13 	(2)(3) central services administrative specialist, intermediate;
57.14 	(3)(4) central services administrative specialist, principal;
57.15 	(4)(5) chaplain;
57.16 	(5)(6) chief cook;
57.17 	(6)(7) cook;
57.18 	(7)(8) cook coordinator;
57.19 	(8)(9) corrections program therapist 1;
57.20 	(9)(10) corrections program therapist 2;
57.21 	(10)(11) corrections program therapist 3;
57.22 	(11)(12) corrections program therapist 4;
57.23 	(12)(13) corrections inmate program coordinator;
57.24 	(13)(14) corrections transitions program coordinator;
57.25 	(14)(15) corrections security caseworker;
57.26 	(15)(16) corrections security caseworker career;
57.27 	(16)(17) corrections teaching assistant;
57.28 	(17)(18) delivery van driver;
57.29 	(18)(19) dentist;
57.30 	(19)(20) electrician supervisor;
57.31 	(20)(21) general maintenance worker lead;
57.32 	(21)(22) general repair worker;
57.33 	(22)(23) library/information research services specialist;
57.34 	(23)(24) library/information research services specialist senior;
57.35 	(24)(25) library technician;
58.1 	(25)(26) painter lead;
58.2 	(26)(27) plant maintenance engineer lead;
58.3 	(27)(28) plumber supervisor;
58.4 	(28)(29) psychologist 1;
58.5 	(29)(30) psychologist 3;
58.6 	(30)(31) recreation therapist;
58.7 	(31)(32) recreation therapist coordinator;
58.8 	(32)(33) recreation program assistant;
58.9 	(33)(34) recreation therapist senior;
58.10 	(34)(35) sports medicine specialist;
58.11 	(35)(36) work therapy assistant;
58.12 	(36)(37) work therapy program coordinator; and
58.13 	(37)(38) work therapy technician.

58.14 	EFFECTIVE DATE. This section is effective retroactively from May 29, 2007.

58.15 	Sec. 2. MSRS-CORRECTIONAL; ELIMINATION OF CERTAIN POSITION 
58.16 	FROM COVERAGE.
 58.17 	Notwithstanding any provision of Minnesota Statutes, section 352.91, to the contrary, 
58.18 	including Minnesota Statutes, section 352.91, subdivision 2, "covered correctional service" 
58.19 	does not mean service rendered by a state employee as an automotive mechanic lead.

58.20 	EFFECTIVE DATE. This section is effective the day following final enactment.

58.21 	ARTICLE 4
58.22 	ADMINISTRATIVE PROVISIONS

58.23 	Section 1. Minnesota Statutes 2008, section 43A.346, subdivision 2, is amended to 
58.24 	read:
58.25 		Subd. 2.Eligibility. (a) This section applies to a terminated state employee who:
58.26 	(1) for at least the five years immediately preceding separation under clause (2), 
58.27 	was regularly scheduled to work 1,044 or more hours per year in a position covered by 
58.28 	a pension plan administered by the Minnesota State Retirement System or the Public 
58.29 	Employees Retirement Association;
58.30 	(2) terminated state or Metropolitan Council employment;
58.31 	(3) at the time of termination under clause (2), met the age and service requirements 
58.32 	necessary to receive an unreduced retirement annuity from the plan and satisfied 
58.33 	requirements for the commencement of the retirement annuity or, for a terminated 
59.1 	employee under the unclassified employees retirement plan, met the age and service 
59.2 	requirements necessary to receive an unreduced retirement annuity from the plan and 
59.3 	satisfied requirements for the commencement of the retirement annuity or elected a 
59.4 	lump-sum payment; and
59.5 	(4) agrees to accept a postretirement option position with the same or a different 
59.6 	appointing authority, working a reduced schedule that is both (i) a reduction of at least 25 
59.7 	percent from the employee's number of previously regularly scheduled work hours; and 
59.8 	(ii) 1,044 hours or less in state or Metropolitan Council service.
59.9 	(b) For purposes of this section, an unreduced retirement annuity includes a 
59.10 	retirement annuity computed under a provision of law which permits retirement, without 
59.11 	application of an earlier retirement reduction factor, whenever age plus years of allowable 
59.12 	service total at least 90.
59.13 	(c) For purposes of this section, as it applies to staffstate employees who are 
59.14 	members of the Public Employees Retirement Association who are at least age 62, the 
59.15 	length of separation requirement and termination of service requirement prohibiting return 
59.16 	to work agreements under section 353.01, subdivisions 11a and 28, are not applicable.

59.17 	EFFECTIVE DATE. This section is effective the day following final enactment.

59.18 	Sec. 2. Minnesota Statutes 2008, section 43A.346, subdivision 6, is amended to read:
59.19 		Subd. 6.Duration. Postretirement option employment shall be is for an initial 
59.20 	period not to exceed one year. During that period, the appointing authority may not 
59.21 	modify the conditions specified in the written offer without the person's consent, except as 
59.22 	required by law or by the collective bargaining agreement or compensation plan applicable 
59.23 	to the person. At the end of the initial period, the appointing authority has sole discretion 
59.24 	to determine if the offer of a postretirement option position will be renewed, renewed 
59.25 	with modifications, or terminated. If the person is under age 62, an offer of renewal 
59.26 	and any related verbal offer or agreement must not be made until at least 30 days after 
59.27 	termination of the person's previous postretirement option employment. Postretirement 
59.28 	option employment may be renewed for periods of up to one year, not to exceed a total 
59.29 	duration of five years. No person shall may be employed in one or a combination of 
59.30 	postretirement option positions under this section for a total of more than five years.

59.31 	EFFECTIVE DATE. This section is effective the day following final enactment.

59.32 	Sec. 3. Minnesota Statutes 2008, section 352B.02, subdivision 1a, is amended to read:
60.1 		Subd. 1a.Member contributions. (a) EachThe member shall pay a sum equal to 
60.2 	the followingcontribution is 10.40 percent of the member's salary, which constitutes the 
60.3 	member contribution to the fund:.

60.4		before July 1, 2007
	8.40
	
60.5		from July 1, 2007, to June 30, 2008
	9.10
	
60.6		from July 1, 2008, to June 30, 2009
	9.80
	
60.7		from July 1, 2009, and thereafter
	10.40.
	
60.8 	(b) These contributions must be made by deduction from salary as provided in 
60.9 	section 352.04, subdivision 4.

60.10 	EFFECTIVE DATE. This section is effective July 1, 2009.

60.11 	Sec. 4. Minnesota Statutes 2008, section 352B.02, subdivision 1c, is amended to read:
60.12 		Subd. 1c.Employer contributions. (a) In addition to member contributions, 
60.13 	department heads shall pay a sum equal to the following15.60 percent of the salary upon 
60.14 	which deductions were made, which shall constitute constitutes the employer contribution 
60.15 	to the fund:.

60.16		before July 1, 2007
	12.60
	
60.17		from July 1, 2007, to June 30, 2008
	13.60
	
60.18		from July 1, 2008, to June 30, 2009
	14.60
	
60.19		from July 1, 2009, and thereafter
	15.60.
	
60.20 	(b) Department contributions must be paid out of money appropriated to departments 
60.21 	for this purpose.

60.22 	EFFECTIVE DATE. This section is effective July 1, 2009.

60.23 	Sec. 5. Minnesota Statutes 2008, section 353.01, subdivision 16, is amended to read:
60.24 		Subd. 16.Allowable service; limits and computation. (a) "Allowable service" 
60.25 	means:
60.26 	(1) service during years of actual membership in the course of which employee 
60.27 	deductions were withheld from salary and contributions were made, at the applicable rates 
60.28 	under section 353.27, 353.65, or 353E.03;
60.29 	(2) periods of service covered by payments in lieu of salary deductions under section
60.30 	sections 353.27, subdivision 12, and353.35; 
60.31 	(2)(3) service in years during which the public employee was not a member but for 
60.32 	which the member later elected, while a member, to obtain credit by making payments to 
60.33 	the fund as permitted by any law then in effect;
61.1 	(3)(4) a period of authorized leave of absence with pay from which deductions for 
61.2 	employee contributions are made, deposited, and credited to the fund;
61.3 	(4)(5) a period of authorized personal, parental, or medical leave of absence without 
61.4 	pay, including a leave of absence covered under the federal Family Medical Leave Act, 
61.5 	that does not exceed one year, and for which a member obtained service credit for each 
61.6 	month in the leave period by payment under section 353.0161 to the fund made in place of 
61.7 	salary deductions. An employee must return to public service and render a minimum of 
61.8 	three months of allowable service in order to be eligible to make payment under section 
61.9 	353.0161 for a subsequent authorized leave of absence without pay. Upon payment, the 
61.10 	employee must be granted allowable service credit for the purchased period; 
61.11 	(5)(6) a periodic, repetitive leave that is offered to all employees of a governmental 
61.12 	subdivision. The leave program may not exceed 208 hours per annual normal work 
61.13 	cycle as certified to the association by the employer. A participating member obtains 
61.14 	service credit by making employee contributions in an amount or amounts based on the 
61.15 	member's average salary that would have been paid if the leave had not been taken. The 
61.16 	employer shall pay the employer and additional employer contributions on behalf of the 
61.17 	participating member. The employee and the employer are responsible to pay interest on 
61.18 	their respective shares at the rate of 8.5 percent a year, compounded annually, from the 
61.19 	end of the normal cycle until full payment is made. An employer shall also make the 
61.20 	employer and additional employer contributions, plus 8.5 percent interest, compounded 
61.21 	annually, on behalf of an employee who makes employee contributions but terminates 
61.22 	public service. The employee contributions must be made within one year after the end of 
61.23 	the annual normal working cycle or within 2030 days after termination of public service, 
61.24 	whichever is sooner. The executive director shall prescribe the manner and forms to be 
61.25 	used by a governmental subdivision in administering a periodic, repetitive leave. Upon 
61.26 	payment, the member must be granted allowable service credit for the purchased period;
61.27 	(6)(7) an authorized temporary or seasonal layoff under subdivision 12, limited 
61.28 	to three months allowable service per authorized temporary or seasonal layoff in one 
61.29 	calendar year. An employee who has received the maximum service credit allowed for an 
61.30 	authorized temporary or seasonal layoff must return to public service and must obtain a 
61.31 	minimum of three months of allowable service subsequent to the layoff in order to receive 
61.32 	allowable service for a subsequent authorized temporary or seasonal layoff; or
61.33 	(7)(8) a period during which a member is absent from employment by a 
61.34 	governmental subdivision by reason of service in the uniformed services, as defined in 
61.35 	United States Code, title 38, section 4303(13), if the member returns to public service with 
61.36 	the same governmental subdivision upon discharge from service in the uniformed service 
62.1 	within the time frames required under United States Code, title 38, section 4312(e), 
62.2 	provided that the member did not separate from uniformed service with a dishonorable or 
62.3 	bad conduct discharge or under other than honorable conditions. The service is credited 
62.4 	if the member pays into the fund equivalent employee contributions based upon the 
62.5 	contribution rate or rates in effect at the time that the uniformed service was performed 
62.6 	multiplied by the full and fractional years being purchased and applied to the annual salary 
62.7 	rate. The annual salary rate is the average annual salary during the purchase period that 
62.8 	the member would have received if the member had continued to be employed in covered 
62.9 	employment rather than to provide uniformed service, or, if the determination of that 
62.10 	rate is not reasonably certain, the annual salary rate is the member's average salary rate 
62.11 	during the 12-month period of covered employment rendered immediately preceding the 
62.12 	period of the uniformed service. Payment of the member equivalent contributions must 
62.13 	be made during a period that begins with the date on which the individual returns to 
62.14 	public employment and that is three times the length of the military leave period, or 
62.15 	within five years of the date of discharge from the military service, whichever is less. If 
62.16 	the determined payment period is less than one year, the contributions required under 
62.17 	this clause to receive service credit may be made within one year of the discharge date. 
62.18 	Payment may not be accepted following 2030 days after termination of public service 
62.19 	under subdivision 11a. If the member equivalent contributions provided for in this clause 
62.20 	are not paid in full, the member's allowable service credit must be prorated by multiplying 
62.21 	the full and fractional number of years of uniformed service eligible for purchase by the 
62.22 	ratio obtained by dividing the total member contributions received by the total member 
62.23 	contributions otherwise required under this clause. The equivalent employer contribution, 
62.24 	and, if applicable, the equivalent additional employer contribution must be paid by the 
62.25 	governmental subdivision employing the member if the member makes the equivalent 
62.26 	employee contributions. The employer payments must be made from funds available to 
62.27 	the employing unit, using the employer and additional employer contribution rate or 
62.28 	rates in effect at the time that the uniformed service was performed, applied to the same 
62.29 	annual salary rate or rates used to compute the equivalent member contribution. The 
62.30 	governmental subdivision involved may appropriate money for those payments. The 
62.31 	amount of service credit obtainable under this section may not exceed five years unless a 
62.32 	longer purchase period is required under United States Code, title 38, section 4312. The 
62.33 	employing unit shall pay interest on all equivalent member and employer contribution 
62.34 	amounts payable under this clause. Interest must be computed at a rate of 8.5 percent 
62.35 	compounded annually from the end of each fiscal year of the leave or the break in service 
63.1 	to the end of the month in which the payment is received. Upon payment, the employee 
63.2 	must be granted allowable service credit for the purchased period.; or
63.3 	(9) a period specified under subdivision 40.
63.4 	(b) For calculating benefits under sections 353.30, 353.31, 353.32, and 353.33 for 
63.5 	state officers and employees displaced by the Community Corrections Act, chapter 401, 
63.6 	and transferred into county service under section 401.04, "allowable service" means the 
63.7 	combined years of allowable service as defined in paragraph (a), clauses (1) to (6), and 
63.8 	section 352.01, subdivision 11. 
63.9 	(c) For a public employee who has prior service covered by a local police or 
63.10 	firefighters relief association that has consolidated with the Public Employees Retirement 
63.11 	Association or to which section 353.665 applies, and who has elected the type of benefit 
63.12 	coverage provided by the public employees police and fire fund either under section 
63.13 	353A.08 following the consolidation or under section 353.665, subdivision 4, "applicable 
63.14 	service" is a period of service credited by the local police or firefighters relief association 
63.15 	as of the effective date of the consolidation based on law and on bylaw provisions 
63.16 	governing the relief association on the date of the initiation of the consolidation procedure. 
63.17 	(d) No member may receive more than 12 months of allowable service credit in a 
63.18 	year either for vesting purposes or for benefit calculation purposes.
63.19 	(e) MS 2002 [Expired]

63.20 	EFFECTIVE DATE. This section is effective the day following final enactment.

63.21 	Sec. 6. Minnesota Statutes 2008, section 353.01, subdivision 16b, is amended to read:
63.22 		Subd. 16b.Uncredited military service credit purchase. (a) A public employee 
63.23 	who has at least three years of allowable service with the Public Employees Retirement 
63.24 	Association or the public employees police and fire plan and who performed service in the 
63.25 	United States armed forces before becoming a public employee, or who failed to obtain 
63.26 	service credit for a military leave of absence under subdivision 16, paragraph (h) (a), 
63.27 	clause 7, is entitled to purchase allowable service credit for the initial period of enlistment, 
63.28 	induction, or call to active duty without any voluntary extension by making payment under 
63.29 	section 356.551. This authority is voided if the public employee has not purchased service 
63.30 	credit from any other Minnesota defined benefit public employee pension plan, other than 
63.31 	a volunteer fire plan, for the same period of service, or if the separation from the United 
63.32 	States armed forces was under less than honorable conditions.
63.33 	(b) A public employee who desires to purchase service credit under paragraph 
63.34 	(a) must apply with the executive director to make the purchase. The application must 
63.35 	include all necessary documentation of the public employee's qualifications to make the 
64.1 	purchase, signed written permission to allow the executive director to request and receive 
64.2 	necessary verification of applicable facts and eligibility requirements, and any other 
64.3 	relevant information that the executive director may require.
64.4 	(c) Allowable service credit for the purchase period must be granted by the 
64.5 	Public Employees Retirement Association or the public employees police and fire plan, 
64.6 	whichever applies, to the purchasing public employee upon receipt of the purchase 
64.7 	payment amount. Payment must be made before the effective date of retirement of the
64.8 	public employee employee's termination of public service or termination of membership, 
64.9 	whichever is earlier.
64.10 	(d) This subdivision is repealed July 1, 2013.

64.11 	EFFECTIVE DATE. This section is effective the day after final enactment.

64.12 	Sec. 7. Minnesota Statutes 2008, section 353.0161, subdivision 1, is amended to read:
64.13 		Subdivision 1.Application. This section applies to employees covered by any plan 
64.14 	specified in this chapter or chapter 353E for any period of authorized leave of absence 
64.15 	specified in section 353.01, subdivision 16, paragraph (a), clause (4) (5), for which the 
64.16 	employee obtains credit for allowable service by making payment as specified in this 
64.17 	section to the applicable fund.

64.18 	EFFECTIVE DATE. This section is effective the day following final enactment.

64.19 	Sec. 8. Minnesota Statutes 2008, section 353.03, subdivision 3a, is amended to read:
64.20 		Subd. 3a.Executive director. (a) Appointment. The board shall appoint an 
64.21 	executive director on the basis of education, experience in the retirement field, and 
64.22 	leadership ability. The executive director must have had at least five years' experience in 
64.23 	an executive level management position, which has included responsibility for pensions, 
64.24 	deferred compensation, or employee benefits. The executive director serves at the pleasure 
64.25 	of the board. The salary of the executive director is as provided by section 15A.0815. 
64.26 	(b)  Duties. The management of the association is vested in the executive director 
64.27 	who shall be the executive and administrative head of the association. The executive 
64.28 	director shall act as adviser to the board on all matters pertaining to the association and 
64.29 	shall also act as the secretary of the board. The executive director shall: 
64.30 	(1) attend all meetings of the board;
64.31 	(2) prepare and recommend to the board appropriate rules to carry out the provisions 
64.32 	of this chapter;
65.1 	(3) establish and maintain an adequate system of records and accounts following 
65.2 	recognized accounting principles and controls;
65.3 	(4) designate, with the approval of the board, up to two persons who may serve in 
65.4 	the unclassified service and whose salaries are set in accordance with section 43A.18, 
65.5 	subdivision 3, appoint a confidential secretary in the unclassified service, and appoint 
65.6 	employees to carry out this chapter, who are subject to chapters 43A and 179A in the same 
65.7 	manner as are executive branch employees; 
65.8 	(5) organize the work of the association as the director deems necessary to fulfill 
65.9 	the functions of the association, and define the duties of its employees and delegate to 
65.10 	them any powers or duties, subject to the control of, and under such conditions as, the 
65.11 	executive director may prescribe;
65.12 	(6) with the approval of the board, contract for the services of an approved actuary, 
65.13 	professional management services, and any other consulting services as necessary to fulfill 
65.14 	the purposes of this chapter. All contracts are subject to chapter 16C. The commissioner 
65.15 	of administration shall not approve, and the association shall not enter into, any contract 
65.16 	to provide lobbying services or legislative advocacy of any kind. Any approved actuary 
65.17 	retained by the executive director shall function as the actuarial advisor of the board and 
65.18 	the executive director and may perform actuarial valuations and experience studies to 
65.19 	supplement those performed by the actuary retained . In addition to filing requirements 
65.20 	under section 356.214., any supplemental actuarial valuations or experience studies shall 
65.21 	be filed with the executive director of the Legislative Commission on Pensions and 
65.22 	Retirement. Copies of professional management survey reports shall be transmitted to the 
65.23 	secretary of the senate, the chief clerk of the house of representatives, and the Legislative 
65.24 	Reference Library as provided by section 3.195, and to the executive director of the 
65.25 	commission at the same time as reports are furnished to the board. Only management 
65.26 	firms experienced in conducting management surveys of federal, state, or local public 
65.27 	retirement systems shall be qualified to contract with the director hereunder; 
65.28 	(7) with the approval of the board provide in-service training for the employees 
65.29 	of the association;
65.30 	(8) make refunds of accumulated contributions to former members and to the 
65.31 	designated beneficiary, surviving spouse, legal representative or next of kin of deceased 
65.32 	members or deceased former members, as provided in this chapter;
65.33 	(9) determine the amount of the annuities and disability benefits of members covered 
65.34 	by the association and authorize payment of the annuities and benefits beginning as of 
65.35 	the dates on which the annuities and benefits begin to accrue, in accordance with the 
65.36 	provisions of this chapter;
66.1 	(10) pay annuities, refunds, survivor benefits, salaries, and necessary operating 
66.2 	expenses of the association;
66.3 	(11) prepare and submit to the board and the legislature an annual financial report 
66.4 	covering the operation of the association, as required by section 356.20; 
66.5 	(12) prepare and submit biennial and annual budgets to the board for its approval 
66.6 	and submit the approved budgets to the Department of Finance for approval by the 
66.7 	commissioner;
66.8 	(13) reduce all or part of the accrued interest payable under section 353.27, 
66.9 	subdivisions 12, 12a, and 12b, or 353.28, subdivision 5, upon receipt of proof by the 
66.10 	association of an unreasonable processing delay or other extenuating circumstances of 
66.11 	the employing unit; and notwithstanding section 353.27, subdivision 7, may authorize 
66.12 	that accrued interest of $10 or less is not payable to the member when a credit has been 
66.13 	taken by the employer to correct an employee deduction taken in error. The executive 
66.14 	director shall prescribe and submit for approval by the board the conditions under which 
66.15 	such interest may be reduced; and 
66.16 	(14) with the approval of the board, perform such other duties as may be required for 
66.17 	the administration of the association and the other provisions of this chapter and for the 
66.18 	transaction of its business.

66.19 	EFFECTIVE DATE. This section is effective the day after final enactment.

66.20 	Sec. 9. Minnesota Statutes 2008, section 353.27, subdivision 2, is amended to read:
66.21 		Subd. 2.Employee contribution. (a) For a basic member, the employee 
66.22 	contribution is the following applicable percentage of the total9.10 percent of salary
66.23 	amount for a "basic member" and. For a "coordinated member": coordinated member, 
66.24 	the employee contribution is six percent of salary plus any contribution rate adjustment 
66.25 	under subdivision 3b.

66.26			Basic Program
		Coordinated Program
	
66.27	Effective before January 1, 2006
		9.10
		5.10
	
66.28	Effective January 1, 2006
		9.10
		5.50
	
66.29	Effective January 1, 2007
		9.10
		5.75
	
66.30
66.31
66.32	Effective January 1, 2008
		9.10
		6.00 plus any contribution 
rate adjustment under 
subdivision 3b
	
66.33 	(b) These contributions must be made by deduction from salary as defined in section 
66.34 	353.01, subdivision 10, in the manner provided in subdivision 4. If any portion of a 
66.35 	member's salary is paid from other than public funds, the member's employee contribution 
66.36 	must be based on the total salary received by the member from all sources.

67.1 	EFFECTIVE DATE. This section is effective the day following final enactment.

67.2 	Sec. 10. Minnesota Statutes 2008, section 353.27, subdivision 3, is amended to read:
67.3 		Subd. 3.Employer contribution. (a) For a basic member, the employer 
67.4 	contribution is the following applicable percentage of the total9.10 percent of salary 
67.5 	amount for "basic members" and. For "coordinated members": a coordinated member, 
67.6 	the employer contribution is six percent of salary plus any contribution rate adjustment 
67.7 	under subdivision 3b.

67.8			Basic Program
		Coordinated Program
	
67.9	Effective before January 1, 2006
		9.10
		5.10
	
67.10	Effective January 1, 2006
		9.10
		5.50
	
67.11	Effective January 1, 2007
		9.10
		5.75
	
67.12
67.13
67.14	Effective January 1, 2008
		9.10
		6.00 plus any contribution 
rate adjustment under 
subdivision 3b
	
67.15 	(b) This contribution must be made from funds available to the employing 
67.16 	subdivision by the means and in the manner provided in section 353.28.

67.17 	EFFECTIVE DATE. This section is effective the day following final enactment.

67.18 	Sec. 11. Minnesota Statutes 2008, section 353.27, subdivision 7, is amended to read:
67.19 		Subd. 7.Adjustment for erroneous receipts or disbursements. (a) Except 
67.20 	as provided in paragraph (b), erroneous employee deductions and erroneous employer 
67.21 	contributions and additional employer contributions for a person, who otherwise does not 
67.22 	qualify for membership under this chapter, are considered:
67.23 	(1) valid if the initial erroneous deduction began before January 1, 1990. Upon 
67.24 	determination of the error by the association, the person may continue membership in the 
67.25 	association while employed in the same position for which erroneous deductions were 
67.26 	taken, or file a written election to terminate membership and apply for a refund upon 
67.27 	termination of public service or defer an annuity under section 353.34; or 
67.28 	(2) invalid, if the initial erroneous employee deduction began on or after January 1, 
67.29 	1990. Upon determination of the error, the association shall refund all erroneous employee 
67.30 	deductions and all erroneous employer contributions as specified in paragraph (d) (e). No 
67.31 	person may claim a right to continued or past membership in the association based on 
67.32 	erroneous deductions which began on or after January 1, 1990. 
67.33 	(b) Erroneous deductions taken from the salary of a person who did not qualify 
67.34 	for membership in the association by virtue of concurrent employment before July 1, 
67.35 	1978, which required contributions to another retirement fund or relief association 
68.1 	established for the benefit of officers and employees of a governmental subdivision, are 
68.2 	invalid. Upon discovery of the error, the association shall remove all invalid service and, 
68.3 	upon termination of public service, the association shall refund all erroneous employee 
68.4 	deductions to the person, with interest as determined under section 353.34, subdivision 2, 
68.5 	and all erroneous employer contributions without interest to the employer. This paragraph 
68.6 	has both retroactive and prospective application. 
68.7 	(c) Adjustments to correct employer contributions and employee deductions taken in 
68.8 	error from amounts which are not salary under section 353.01, subdivision 10, are invalid 
68.9 	upon discovery by the association and must be refundedmade as specified in paragraph 
68.10 	(d) (e). The period of adjustment must be limited to the fiscal year in which the error is 
68.11 	discovered by the association and the immediate two preceding fiscal years. 
68.12 	(d) If there is evidence of fraud or other misconduct on the part of the employee or 
68.13 	the employer, the board of trustees may authorize adjustments to the account of a member 
68.14 	or former member to correct erroneous employee deductions and employer contributions 
68.15 	on invalid salary and the recovery of any overpayments for a period longer than provided 
68.16 	for under paragraph (c).
68.17 	(d)(e) Upon discovery of the receipt of erroneous employee deductions and 
68.18 	employer contributions under paragraph (a), clause (2), or paragraph (c), the association 
68.19 	must require the employer to discontinue the erroneous employee deductions and 
68.20 	erroneous employer contributions reported on behalf of a member. Upon discontinuation, 
68.21 	the association either must refund :
68.22 	(1) for a member, provide a refund or credit to the employer in the amount of the 
68.23 	invalid employee deductions to the person without interest and with interest on the invalid 
68.24 	employee deductions at the rate specified under section 353.34, subdivision 2, from the 
68.25 	received date of each invalid salary transaction through the date the credit or refund is 
68.26 	made; and the employer must pay the refunded employee deductions plus interest to the 
68.27 	member;
68.28 	(2) for a former member who:
68.29 	(i) is not receiving a retirement annuity or benefit, return the erroneous employee 
68.30 	deductions to the former member through a refund with interest at the rate specified under 
68.31 	section 353.34, subdivision 2, from the received date of each invalid salary transaction 
68.32 	through the date the credit or refund is made; or
68.33 	(ii) is receiving a retirement annuity or disability benefit, or a person who is 
68.34 	receiving an optional annuity or survivor benefit, for whom it has been determined an 
68.35 	overpayment must be recovered, adjust the payment amount and recover the overpayments 
68.36 	as provided under this section; and
69.1 	(3) return  the invalid employer contributions reported on behalf of a member 
69.2 	or former member to the employer or provideby providing a credit against future 
69.3 	contributions payable by the employer for the amount of all erroneous deductions and 
69.4 	contributions. If the employing unit receives a credit under this paragraph, the employing 
69.5 	unit is responsible for refunding to the applicable employee any amount that had been 
69.6 	erroneously deducted from the person's salary. In the event that a retirement annuity or 
69.7 	disability benefit has been computed using invalid service or salary, the association must 
69.8 	adjust the annuity or benefit and recover any overpayment under subdivision 7b.
69.9 	(e)(f) In the event that a salary warrant or check from which a deduction for the 
69.10 	retirement fund was taken has been canceled or the amount of the warrant or check 
69.11 	returned to the funds of the department making the payment, a refund of the sum 
69.12 	deducted, or any portion of it that is required to adjust the deductions, must be made 
69.13 	to the department or institution.
69.14 	(f) Any refund to a member under this subdivision that is reasonably determined 
69.15 	to cause the plan to fail to be a qualified plan under section 401(a) of the federal 
69.16 	Internal Revenue Code, as amended, may not be refunded and instead must be credited 
69.17 	against future contributions payable by the employer. The employer receiving the 
69.18 	credit is responsible for refunding to the applicable employee any amount that had been 
69.19 	erroneously deducted from the person's salary.
69.20 	(g) If the accrual date of any retirement annuity, survivor benefit, or disability benefit 
69.21 	is within the limitation period specified in paragraph (c), and an overpayment has resulted 
69.22 	by using invalid service or salary, or due to any erroneous calculation procedure, the 
69.23 	association must recalculate the annuity or benefit payable and recover any overpayment 
69.24 	as provided under subdivision 7b.
69.25 	(h) Notwithstanding the provisions of this subdivision, the association may apply 
69.26 	the Revenue Procedures defined in the federal Internal Revenue Service Employee Plans 
69.27 	Compliance Resolution System and not issue a refund of erroneous employee deductions 
69.28 	and employer contributions or not recover a small overpayment of benefits if the cost to 
69.29 	correct the error would exceed the amount of the member refund or overpayment.
69.30 	(i) Any fees or penalties assessed by the federal Internal Revenue Service for any 
69.31 	failure by an employer to follow the statutory requirements for reporting eligible members 
69.32 	and salary must be paid by the employer.

69.33 	EFFECTIVE DATE. (a) This section is effective the day following enactment. 
69.34 	(b) The interest required on deductions in error as provided in paragraph (e) must 
69.35 	be applied to any refunds paid on or after June 1, 2009.

70.1 	Sec. 12. Minnesota Statutes 2008, section 353.27, subdivision 7b, is amended to read:
70.2 		Subd. 7b.Recovery of overpayments to members. (a) In the event of an 
70.3 	overpayment to a member, retiree, beneficiary, or other person, the executive director shall 
70.4 	recover the overpayment by suspending or reducing the payment of a retirement annuity, 
70.5 	refund, disability benefit, survivor benefit, or optional annuity payable to the applicable 
70.6 	person or the person's estate, whichever applies, under this chapter until all outstanding 
70.7 	money has been recovered determines that an overpaid annuity or benefit that is the result 
70.8 	of invalid salary included in the average salary used to calculate the payment amount must 
70.9 	be recovered, the association must determine the amount of the employee deductions 
70.10 	taken in error on the invalid salary, with interest determined in the manner provided for a 
70.11 	former member under subdivision 7, paragraph (e), clause (2), item (i), and must subtract 
70.12 	that amount from the total annuity or benefit overpayment, and the remaining balance of 
70.13 	the overpaid annuity or benefit, if any, must be recovered.
70.14 	(b) If the invalid employee deductions plus interest exceed the amount of the 
70.15 	overpaid benefits, the balance must be refunded to the person to whom the benefit or 
70.16 	annuity is being paid.
70.17 	(c) Any invalid employer contributions reported on the invalid salary must be 
70.18 	credited to the employer as provided in subdivision 7, paragraph (e).
70.19 	(d) If a member or former member, who is receiving a retirement annuity or 
70.20 	disability benefit for which an overpayment is being recovered, dies before recovery of 
70.21 	the overpayment is completed and a joint and survivor optional annuity is payable, the 
70.22 	remaining balance of the overpaid annuity or benefit must continue to be recovered from 
70.23 	the payment to the optional annuity beneficiary.
70.24 	(e) If the association finds that a refund has been overpaid to a former member, 
70.25 	beneficiary or other person, the amount of the overpayment must be recovered.
70.26 	(f) The board of trustees shall adopt policies directing the period of time and manner 
70.27 	for the collection of any overpaid retirement or optional annuity, and survivor or disability 
70.28 	benefit, or a refund that the executive director determines must be recovered as provided 
70.29 	under this section.

70.30 	EFFECTIVE DATE. This section is effective the day following final enactment.

70.31 	Sec. 13. Minnesota Statutes 2008, section 353.33, subdivision 1, is amended to read:
70.32 		Subdivision 1.Age, service, and salary requirements. A coordinated or basic 
70.33 	member who has at least three years of allowable service and becomes totally and 
70.34 	permanently disabled before normal retirement age, and a basic member who has at least 
70.35 	three years of allowable service and who becomes totally and permanently disabled, upon 
71.1 	application as defined under section 353.031, is entitled to a disability benefit in an amount 
71.2 	determined under subdivision 3. If the disabled person's public service has terminated 
71.3 	at any time, at least two of the required three years of allowable service must have been 
71.4 	rendered after last becoming an active member. 

71.5 	EFFECTIVE DATE. This section is effective the day following final enactment.

71.6 	Sec. 14. Minnesota Statutes 2008, section 353.33, is amended by adding a subdivision 
71.7 	to read:
71.8 		Subd. 1a.Benefit restriction. No person is entitled to receive disability benefits 
71.9 	and a retirement annuity at the same time.

71.10 	EFFECTIVE DATE. This section is effective the day following final enactment.

71.11 	Sec. 15. Minnesota Statutes 2008, section 353.33, subdivision 11, is amended to read:
71.12 		Subd. 11.Coordinated member disabilitant transfer to retirement status. No 
71.13 	person is entitled to receive disability benefits and a retirement annuity at the same time.
71.14 	The disability benefits paid to a coordinated member must terminate when the person 
71.15 	reaches normal retirement age. If the coordinated member is still totally and permanently 
71.16 	disabled upon attaining normal retirement age, the coordinated member is deemed to be on 
71.17 	retirement status. If an optional annuity is elected under subdivision 3a, the coordinated 
71.18 	member shall receive an annuity under the terms of the optional annuity previously 
71.19 	elected, or, if an optional annuity is not elected under subdivision 3a, the coordinated 
71.20 	member may elect to receive a normal retirement annuity under section 353.29 or an 
71.21 	annuity equal to the disability benefit paid before the coordinated member reaches normal 
71.22 	retirement age, whichever amount is greater, or elect to receive an optional annuity 
71.23 	under section 353.30, subdivision 3. The annuity of a disabled coordinated member who 
71.24 	attains normal retirement age must be computed under the law in effect upon attainment 
71.25 	of normal retirement age. Election of an optional annuity must be made before the 
71.26 	coordinated member attains normal retirement age. If an optional annuity is elected, the 
71.27 	election is effective on the date on which the person attains normal retirement age and 
71.28 	the optional annuity begins to accrue on the first day of the month next following the 
71.29 	month in which the person attains that age. 

71.30 	EFFECTIVE DATE. This section is effective the day following final enactment.

71.31 	Sec. 16. Minnesota Statutes 2008, section 353.33, subdivision 12, is amended to read:
72.1 		Subd. 12.Basic disabilitydisabilitant transfer to retirement status; survivor 
72.2 	benefits. (a) If a basic member who is receiving a disability benefit under subdivision 3:
72.3 	(1) dies before attaining age 65 or within five years of the effective date of the 
72.4 	disability, whichever is later, the surviving spouse is entitled to receive a survivor 
72.5 	benefit under section 353.31, unlessand any dependent child or children are entitled to 
72.6 	dependent child benefits under section 353.31, subdivision 1b, paragraph (b). If there are 
72.7 	no dependent children, in lieu of the survivor benefit specified under section 353.31, the 
72.8 	surviving spouse electedmay elect to receive a refund under section 353.32, subdivision 1;.
72.9 	(2)(b) If a basic member who is receiving a disability benefit under subdivision 3 is 
72.10 	living at age 65 or five years after the effective date of the disability, whichever is later, the 
72.11 	basic member may continue to receive a normal retirement annuity equal to the disability 
72.12 	benefit previously received, adjusted for the amount no longer payable under subdivision 
72.13 	3, paragraph (b), or the person may elect a joint and survivor optional annuity under 
72.14 	section 353.31, subdivision 1b. The election of the joint and survivor optional annuity 
72.15 	must occur within 90 days of attaining age 65 or of reaching the five-year anniversary 
72.16 	of the effective date of the disability benefit, whichever is later. The optional annuity 
72.17 	takes effect on the first day of the month following the month in which the person attains 
72.18 	age 65 or reaches the five-year anniversary of the effective date of the disability benefit, 
72.19 	whichever is later; or.
72.20 	(3) if there is a dependent child or children under clause (1) or (2), the dependent 
72.21 	child is entitled to a dependent child benefit under section 353.31, subdivision 1b, 
72.22 	paragraph (b).

72.23 	EFFECTIVE DATE. This section is effective the day following final enactment.

72.24 	Sec. 17. Minnesota Statutes 2008, section 353.65, subdivision 2, is amended to read:
72.25 		Subd. 2.Employee contribution rate. (a) The employee contribution is an amount 
72.26 	equal to the9.4 percent of the total salary of the member specified in paragraph (b). This 
72.27 	contribution must be made by deduction from salary in the manner provided in subdivision 
72.28 	4. Where any portion of a member's salary is paid from other than public funds, the 
72.29 	member's employee contribution is based on the total salary received from all sources.
72.30 	(b) For calendar year 2006, the employee contribution rate is 7.0 percent. For 
72.31 	calendar year 2007, the employee contribution rate is 7.8 percent. For calendar year 2008, 
72.32 	the employee contribution rate is 8.6 percent. For calendar year 2009 and thereafter, the 
72.33 	employee contribution rate is 9.4 percent.

72.34 	EFFECTIVE DATE. This section is effective the day following final enactment.

73.1 	Sec. 18. Minnesota Statutes 2008, section 353.65, subdivision 3, is amended to read:
73.2 		Subd. 3.Employer contribution rate. (a) The employer contribution shall be an 
73.3 	amount equal to theis 14.1 percent of the total salary of everythe member as specified in 
73.4 	paragraph (b). This contribution shallmust be made from funds available to the employing 
73.5 	subdivision by the means and in the manner provided in section 353.28.
73.6 	(b) For calendar year 2006, the employer contribution rate is 10.5 percent. For 
73.7 	calendar year 2007, the employer contribution rate is 11.7 percent. For calendar year 2008, 
73.8 	the employer contribution rate is 12.9 percent. For calendar year 2009 and thereafter, the 
73.9 	employer contribution rate is 14.1 percent.

73.10 	EFFECTIVE DATE. This section is effective the day following final enactment.

73.11 	Sec. 19. Minnesota Statutes 2008, section 353A.08, subdivision 6a, is amended to read:
73.12 		Subd. 6a.Military service contribution and refund. A person who was an active 
73.13 	member of a local police or firefighters relief association upon its consolidation with the 
73.14 	public employees retirement association, and who was otherwise eligible for automatic 
73.15 	service credit for military service under Minnesota Statutes 2000, section 423.57, and 
73.16 	who has not elected the type of benefit coverage provided by the public employees 
73.17 	police and fire fund at the time of consolidation, must make employee contributions 
73.18 	under section 353.01, subdivision 16, paragraph (h) (a), clause (8), to receive allowable 
73.19 	service credit from the association for a military service leave after the effective date of the 
73.20 	consolidation. A person who later elects, under subdivision 3, to retain benefit coverage 
73.21 	under the bylaws of the local relief association is eligible for a refund from the association 
73.22 	at the time of retirement. The association shall refund the employee contributions 
73.23 	plus interest at the rate of six percent, compounded quarterly, from the date on which 
73.24 	contributions were made until the first day of the month in which the refund is paid. The 
73.25 	employer shall receive a refund of the employer contributions. The association shall not 
73.26 	pay a refund to a person who later elects, under subdivision 3, the type of benefit coverage 
73.27 	provided by the public employees police and fire fund or to the person's employer. 

73.28 	EFFECTIVE DATE. This section is effective the day following final enactment.

73.29 	Sec. 20. Minnesota Statutes 2008, section 353F.02, subdivision 4, is amended to read:
73.30 		Subd. 4.Medical facility. "Medical facility" means:
73.31 	(1) Bridges Medical Services;
73.32 	(2) the City of Cannon Falls Hospital;
74.1 	(3) Clearwater County Memorial Hospital doing business as Clearwater Health 
74.2 	Services in Bagley;
74.3 	(4) the Dassel Lakeside Community Home;
74.4 	(5) the Fair Oaks Lodge, Wadena;
74.5 	(6) the Glencoe Area Health Center;
74.6 	(7) Hutchinson Area Health Care;
74.7 	(8) the Lakefield Nursing Home;
74.8 	(9) the Lakeview Nursing Home in Gaylord;
74.9 	(10) the Luverne Public Hospital;
74.10 	(11) the Oakland Park Nursing Home;
74.11 	(12) the RenVilla Nursing Home;
74.12 	(13) the Rice Memorial Hospital in Willmar, with respect to the Department of 
74.13 	Radiology and the Department of Radiation/Oncology;
74.14 	(14) the St. Peter Community Health Care Center;
74.15 	(15) the Waconia-Ridgeview Medical Center; and
74.16 	(16) the Weiner Memorial Medical Center, Inc.; and
74.17 	(17) the Worthington Regional Hospital.

74.18 	EFFECTIVE DATE. This section is effective upon compliance with Minnesota 
74.19 	Statutes, section 353F.02, subdivision 3.

74.20 	Sec. 21. Minnesota Statutes 2008, section 354.05, is amended by adding a subdivision 
74.21 	to read:
74.22 		Subd. 42.Fiscal year. The fiscal year of the association begins on July 1 of each 
74.23 	calendar year and ends on June 30 of the following calendar year.

74.24 	EFFECTIVE DATE. This section is effective the day following final enactment.

74.25 	Sec. 22. Minnesota Statutes 2008, section 354.42, subdivision 2, is amended to read:
74.26 		Subd. 2.Employee contribution. (a) For a basic member, the employee 
74.27 	contribution to the fund is an amount equal to the following percentage9.0 percent of the 
74.28 	member's salary of a member:. For a coordinated member, the employee contribution is 
74.29 	5.5 percent of the member's salary.
74.30 	(1) after July 1, 2006, for a teacher employed by Special School District No. 1, 
74.31 	Minneapolis, 5.5 percent if the teacher is a coordinated member, and 9.0 percent if the 
74.32 	teacher is a basic member;
75.1 	(2) for every other teacher, after July 1, 2006, 5.5 percent if the teacher is a 
75.2 	coordinated member and 9.0 percent if the teacher is a basic member.
75.3 	(b) This contribution must be made by deduction from salary. Where any portion 
75.4 	of a member's salary is paid from other than public funds, the member's employee 
75.5 	contribution must be based on the entire salary received.

75.6 	EFFECTIVE DATE. This section is effective the day following final enactment.

75.7 	Sec. 23. Minnesota Statutes 2008, section 354.44, subdivision 4, is amended to read:
75.8 		Subd. 4.Retirement annuity accrual date. (a) An annuity payment begins to 
75.9 	accrue, provided that the age and service requirements under subdivision 1 are satisfied, 
75.10 	after the termination of teaching service, or after the application for retirement has been 
75.11 	filed with the board, whichever is later executive director, as follows:
75.12 	(1) on the 16th day ofafter the month of termination or filing if the termination or 
75.13 	filing occurs on or before the 15th day of the month of teaching service;
75.14 	(2) on the first day of the month following the month of termination or filing if 
75.15 	the termination or filing occurs on or after the 16th day of the month day of receipt of 
75.16 	application if the application is filed with the executive director after the six-month period 
75.17 	that occurs immediately following the termination of teaching service;
75.18 	(3) on July 1 for all school principals and other administrators who receive a full 
75.19 	annual contract salary during the fiscal year for performance of a full year's contract 
75.20 	duties; or
75.21 	(4) a later date to be either the first or the 16th day of a month occurring within the 
75.22 	six-month period immediately following the termination of teaching service as specified 
75.23 	under paragraph (b) by the member.
75.24 	(b)(4) if an application for retirement is filed with the boardexecutive director 
75.25 	during the six-month period that occurs immediately following the termination of teaching 
75.26 	service, the annuity may begin to accrue as if the application for retirement had been filed 
75.27 	with the board on the date teaching service terminated or a later date under paragraph 
75.28 	(a), clause (4).
75.29 	(b) A member, or a person authorized to act on behalf of the member, may specify a 
75.30 	different date of retirement from that determined in paragraph (a), as follows:
75.31 	(1) if the application is filed on or before the date of termination of teaching service, 
75.32 	the accrual date may be a date no earlier than the day after the termination of teaching 
75.33 	service and no later than six months after the termination date; or
75.34 	(2) if the application is filed during the six-month period that occurs immediately 
75.35 	following the termination of teaching service, the accrual date may begin to accrue 
76.1 	retroactively, but no earlier than the day after teaching service terminated and no later 
76.2 	than six months after the termination date.

76.3 	EFFECTIVE DATE. This section is effective January 1, 2010.

76.4 	Sec. 24. Minnesota Statutes 2008, section 354.44, subdivision 5, is amended to read:
76.5 		Subd. 5.Resumption of teaching service after retirement. (a) Any person who 
76.6 	retired under the provisions of this chapter and has thereafter resumed teaching in any 
76.7 	employer unit to which this chapter applies is eligible to continue to receive payments in 
76.8 	accordance with the annuity except that all or a portion of the annuity payments must be 
76.9 	deferred during the calendar year immediately following any calendarthe fiscal year in 
76.10 	which the person's salary from the teaching service is in an amount greater than $46,000. 
76.11 	The amount of the annuity deferral is one-half of the salary amount in excess of $46,000 
76.12 	and must be deducted from the annuity payable for the calendar year immediately 
76.13 	following the calendarfiscal year in which the excess amount was earned. 
76.14 	(b) If the person is retired for only a fractional part of the calendarfiscal year during 
76.15 	the initial year of retirement, the maximum reemployment salary exempt from triggering a 
76.16 	deferral as specified in this subdivision must be prorated for that calendarfiscal year.
76.17 	(c) After a person has reached the Social Security normal retirement age, no deferral 
76.18 	requirement is applicable regardless of the amount of salary.
76.19 	(d) The amount of the retirement annuity deferral must be handled or disposed 
76.20 	of as provided in section 356.47. 
76.21 	(e) For the purpose of this subdivision, salary from teaching service includes, but is 
76.22 	not limited to:
76.23 	(1) all income for services performed as a consultant or an independent contractor 
76.24 	for an employer unit covered by the provisions of this chapter; and
76.25 	(2) the greater of either the income received or an amount based on the rate paid 
76.26 	with respect to an administrative position, consultant, or independent contractor in an 
76.27 	employer unit with approximately the same number of pupils and at the same level as the 
76.28 	position occupied by the person who resumes teaching service.

76.29 	EFFECTIVE DATE. This section is effective January 1, 2010.

76.30 	Sec. 25. Minnesota Statutes 2008, section 354.47, subdivision 1, is amended to read:
76.31 		Subdivision 1.Death before retirement. (a) If a member dies before retirement 
76.32 	and is covered under section 354.44, subdivision 2, and neither an optional annuity, nor a 
76.33 	reversionary annuity, nor a benefit under section 354.46, subdivision 1, is payable to the 
77.1 	survivors if the member was a basic member, then the surviving spouse, or if there is no 
77.2 	surviving spouse, the designated beneficiary is entitled to an amount equal to the member's 
77.3 	accumulated deductions with interest credited to the account of the member to the date of 
77.4 	death of the member. If the designated beneficiary is a minor, interest must be credited to 
77.5 	the date the beneficiary reaches legal age, or the date of receipt, whichever is earlier.  
77.6 	(b) If a member dies before retirement and is covered under section 354.44, 
77.7 	subdivision 6, and neither an optional annuity, nor reversionary annuity, nor the benefit 
77.8 	described in section 354.46, subdivision 1, is payable to the survivors if the member 
77.9 	was a basic member, then the surviving spouse, or if there is no surviving spouse, 
77.10 	the designated beneficiary is entitled to an amount equal to the member's accumulated 
77.11 	deductions credited to the account of the member as of June 30, 1957, and from July 1, 
77.12 	1957, to the date of death of the member, the member's accumulated deductions plus 
77.13 	six percent interest compounded annually.  
77.14 	(c) If the designated beneficiary under paragraph (b) is a minor, any interest credited 
77.15 	under that paragraph must be credited to the date the beneficiary reaches legal age, or 
77.16 	the date of receipt, whichever is earlier.
77.17 	(d) The amount of any refund payable under this subdivision must be reduced by 
77.18 	any permanent disability payment under section 354.48 received by the member.

77.19 	EFFECTIVE DATE. This section is effective the day following final enactment.

77.20 	Sec. 26. Minnesota Statutes 2008, section 354.48, subdivision 4, is amended to read:
77.21 		Subd. 4.Determination by executive director. (a) The executive director shall 
77.22 	have the member examined by at least two licensed physicians, licensed chiropractors, 
77.23 	or licensed psychologists selected by the medical adviser.
77.24 	(b) These physicians, chiropractors, or psychologists with respect to a mental 
77.25 	impairment, shall make written reports to the executive director concerning the member's 
77.26 	disability, including expert opinions as to whether or not the member is permanently and 
77.27 	totally disabled within the meaning of section 354.05, subdivision 14. 
77.28 	(c) The executive director shall also obtain written certification from the last 
77.29 	employer stating whether or not the member was separated from service because of 
77.30 	a disability which would reasonably prevent further service to the employer and as a 
77.31 	consequence the member is not entitled to compensation from the employer.
77.32 	(d) If, upon the consideration of the reports of the physicians, chiropractors, or 
77.33 	psychologists and any other evidence presented by the member or by others interested 
77.34 	therein, the executive director finds that the member is totally and permanently disabled, 
77.35 	the executive director shall grant the member a disability benefit.
78.1 	(e) An employee who is placed on leave of absence without compensation because 
78.2 	of disability is not barred from receiving a disability benefit.

78.3 	EFFECTIVE DATE. This section is effective the day following final enactment.

78.4 	Sec. 27. Minnesota Statutes 2008, section 354.48, subdivision 6, is amended to read:
78.5 		Subd. 6.Regular physical examinations. At least once each year during the first 
78.6 	five years following the allowance of a disability benefit to any member, and at least once 
78.7 	in every three-year period thereafter, the executive director shallmay require the disability 
78.8 	beneficiaryrecipient to undergo an expert examination by a physician or physicians, 
78.9 	by a chiropractor or chiropractors, or by one or more psychologists with respect to a 
78.10 	mental impairment, engaged by the executive director. If an examination indicates that the 
78.11 	member is no longer permanently and totally disabled or that the member is engaged or is 
78.12 	able to engage in a substantial gainful occupation, payments of the disability benefit by 
78.13 	the association must be discontinued. The payments must be discontinued as soon as the 
78.14 	member is reinstated to the payroll following sick leave, but payment may not be made for 
78.15 	more than 60 days after the physicians, the chiropractors, or the psychologists engaged by 
78.16 	the executive director find that the person is no longer permanently and totally disabled.

78.17 	EFFECTIVE DATE. This section is effective the day following final enactment.

78.18 	Sec. 28. Minnesota Statutes 2008, section 354.49, subdivision 2, is amended to read:
78.19 		Subd. 2.Calculation. (a) Except as provided in section 354.44, subdivision 1, any 
78.20 	person who ceases to be a member by reason of termination of teaching service, shall is 
78.21 	entitled to receive a refund in an amount equal to the accumulated deductions credited to 
78.22 	the account as of June 30, 1957, and after July 1, 1957, the accumulated deductions with 
78.23 	interest at the rate of six percent per annum compounded annually. For the purpose of this 
78.24 	subdivision, interest shall must be computed on fiscal year end balances to the first day of 
78.25 	the month in which the refund is issued.  
78.26 	(b) If the person has received permanent disability payments under section 354.48, 
78.27 	the refund amount must be reduced by the amount of those payments.

78.28 	EFFECTIVE DATE. This section is effective the day following final enactment.

78.29 	Sec. 29. Minnesota Statutes 2008, section 354.52, subdivision 2a, is amended to read:
78.30 		Subd. 2a.Annual Postretirement income reports reporting. On or before each 
78.31 	February 15, a representative authorized by anEach employing unit must report to the 
78.32 	executive director the amount of income earned during the previous calendarfiscal year 
79.1 	by each retiree for teaching service performed after retirement. This annual report must be
79.2 	shall be done through the payroll reporting system and is based on reemployment income 
79.3 	as defined in section 354.44, subdivision 5, and it must be made on a form provided by the 
79.4 	executive director. SigningSubmitting the reportsalary data through payroll reporting 
79.5 	has the force and effect of an oath as to the correctness of the amount of postretirement 
79.6 	reemployment income earned.  

79.7 	EFFECTIVE DATE. This section is effective January 1, 2010.

79.8 	Sec. 30. Minnesota Statutes 2008, section 354.52, subdivision 4b, is amended to read:
79.9 		Subd. 4b.Payroll cycle reporting requirements. An employing unit shall provide 
79.10 	the following data to the association for payroll warrants on an ongoing basis within 14 
79.11 	calendar days after the date of the payroll warrant in a format prescribed by the executive 
79.12 	director:
79.13 	(1) association member number;
79.14 	(2) employer-assigned employee number;
79.15 	(3) Social Security number;
79.16 	(4) amount of each salary deduction;
79.17 	(5) amount of salary as defined in section 354.05, subdivision 35, from which each 
79.18 	deduction was made;  
79.19 	(6) reason for payment;
79.20 	(7) service credit;
79.21 	(8) the beginning and ending dates of the payroll period covered and the date 
79.22 	of actual payment;
79.23 	(9) fiscal year of salary earnings;
79.24 	(10) total remittance amount including employee, employer, and additional employer 
79.25 	contributions; and
79.26 	(11) reemployed annuitant salary under section 354.44, subdivision 5; and
79.27 	(11)(12)  other information as may be required by the executive director.

79.28 	EFFECTIVE DATE. This section is effective January 1, 2010.

79.29 	Sec. 31. [354.543] PRIOR OR UNCREDITED MILITARY SERVICE CREDIT 
79.30 	PURCHASE.
79.31 		Subdivision 1.Service credit purchase authorized. (a) If paragraph (b) does not 
79.32 	apply, a teacher who has at least three years  of allowable service credit with the Teachers 
79.33 	Retirement Association and who performed service in the United States armed forces 
80.1 	before becoming a teacher as defined in section 354.05, subdivision 2, or who failed 
80.2 	to obtain service credit for a military leave of absence under the provisions of section 
80.3 	354.53, is entitled to purchase allowable and formula service credit for the initial period of 
80.4 	enlistment, induction, or call to active duty without any voluntary extension by making 
80.5 	payment under section 356.551.
80.6 	(b) A service credit purchase is prohibited if:
80.7 	(1) the teacher separated from service with the United States armed forces with a 
80.8 	dishonorable or bad conduct discharge or under other than honorable conditions; or
80.9 	(2) the teacher has purchased or otherwise received service credit from any 
80.10 	Minnesota defined benefit public employee pension plan, other than a volunteer fire plan, 
80.11 	for the same period of service.
80.12 		Subd. 2.Application and documentation. A teacher who desires to purchase 
80.13 	service credit  under subdivision 1 must apply with the executive director to make the 
80.14 	purchase. The application must include all necessary documentation of the teacher's 
80.15 	qualifications to make the purchase, signed written permission to allow the executive 
80.16 	director to request and receive necessary verification of applicable facts and eligibility 
80.17 	requirements, and any other relevant information that the executive director may require.
80.18 		Subd. 3.Service credit grant. Allowable and formula service credit for the 
80.19 	purchase period  must be granted by the Teachers Retirement Association to the purchasing 
80.20 	teacher upon receipt of the purchase payment amount. Payment must be made before the 
80.21 	teacher's termination of teaching service.

80.22 	EFFECTIVE DATE. This section is effective the day following final enactment.

80.23 	Sec. 32. Minnesota Statutes 2008, section 354.55, subdivision 11, is amended to read:
80.24 		Subd. 11.Deferred annuity; augmentation. (a) Any person covered under section 
80.25 	354.44, subdivision 6, who ceases to render teaching service, may leave the person's 
80.26 	accumulated deductions in the fund for the purpose of receiving a deferred annuity at 
80.27 	retirement. Eligibility for an annuity under this subdivision is governed pursuant to 
80.28 	section 354.44, subdivision 1, or 354.60.
80.29 	(b) The amount of the deferred retirement annuity is determined by section 354.44, 
80.30 	subdivision 6, and augmented as provided in this subdivision. The required reserves 
80.31 	related to that portion offor the annuity which had accrued when the member ceased to 
80.32 	render teaching service must be augmented, as further specified in this subdivision, by 
80.33 	interest compounded annually from the first day of the month following the month during 
80.34 	which the member ceased to render teaching service to the effective date of retirement.
81.1 	(c)There shall be No augmentation is not creditable if thisthe deferral period is less 
81.2 	than three months or if this period commences prior todeferral commenced before July 1, 
81.3 	1971. The rates of interest used for this purpose must be five percent compounded annually 
81.4 	commencing July 1, 1971, until January 1, 1981, and three percent compounded annually 
81.5 	thereafter until January 1 of the year following the year in which the former member 
81.6 	attains age 55 and from that date to the effective date of retirement, the rate is five percent 
81.7 	compounded annually if the employee became an employee before July 1, 2006, and at 2.5 
81.8 	percent compounded annually if the employee becomes an employee after June 30, 2006.
81.9 	(d) For persons who became covered employees before July 1, 2006, with a deferral 
81.10 	period commencing after June 30, 1971, the annuity must be augmented using five 
81.11 	percent interest compounded annually until January 1, 1981, and three percent interest 
81.12 	compounded annually thereafter until January 1 of the year following the year in which 
81.13 	the deferred annuitant attains age 55. From that date to the effective date of retirement, the 
81.14 	rate is five percent compounded annually.
81.15 	(e) For persons who become covered employees after June 30, 2006, the interest rate 
81.16 	used to augment the deferred annuity is 2.5 percent interest compounded annually.
81.17 	(f) If a person has more than one period of uninterrupted service, a separate average 
81.18 	salary determined under section 354.44, subdivision 6, must be used for each period and 
81.19 	the required reserves related to each period must be augmented by interest pursuant toas 
81.20 	specified in this subdivision. The sum of the augmented required reserves so determined 
81.21 	shall be the basis for purchasingis the present value of the deferred annuity. For the 
81.22 	purposes of this subdivision, "period of uninterrupted service" means a period of covered 
81.23 	teaching service during which the member has not been separated from active service for 
81.24 	more than one fiscal year.
81.25 	(g) If a person repays a refund, the service restored by the repayment must be 
81.26 	considered as continuous with the next period of service for which the person has 
81.27 	allowable service credit with this fund in the Teachers Retirement Association.
81.28 	(h) If a person does not render teaching service in any one fiscal year or more 
81.29 	consecutive fiscal years and then resumes teaching service, the formula percentages used 
81.30 	from the date of the resumption of teaching service must be those applicable to new 
81.31 	members.
81.32 	(i) The mortality table and interest assumption used to compute the annuity must be 
81.33 	the applicable mortality table established by the board under section 354.07, subdivision 
81.34 	1, and the interest rate assumption under section 356.215 in effect when the member 
81.35 	retires. A period of uninterrupted service for the purposes of this subdivision means a 
82.1 	period of covered teaching service during which the member has not been separated from 
82.2 	active service for more than one fiscal year.
82.3 	(c)(j) In no case shall may the annuity payable under this subdivision be less than 
82.4 	the amount of annuity payable pursuant tounder section 354.44, subdivision 6. 
82.5 	(d)(k) The requirements and provisions for retirement before normal retirement 
82.6 	age contained in section 354.44, subdivision 6, clause (3) or (5),shall also apply to an 
82.7 	employee fulfilling the requirements with a combination of service as provided in section 
82.8 	354.60. 
82.9 	(e)(l) The augmentation provided by this subdivision applies to the benefit provided 
82.10 	in section 354.46, subdivision 2. 
82.11 	(f)(m) The augmentation provided by this subdivision shall does not apply to any 
82.12 	period in which a person is on an approved leave of absence from an employer unit 
82.13 	covered by the provisions of this chapter.
82.14 	(g)(n) The retirement annuity or disability benefit of, or the survivor benefit payable 
82.15 	on behalf of, a former teacher who terminated service before July 1, 1997, which is not 
82.16 	first payable until after June 30, 1997, must be increased on an actuarial equivalent basis 
82.17 	to reflect the change in the postretirement interest rate actuarial assumption under section 
82.18 	356.215, subdivision 8, from five percent to six percent under a calculation procedure and 
82.19 	tables adopted by the board as recommended by an approved actuary and approved by the 
82.20 	actuary retained under section 356.214.

82.21 	EFFECTIVE DATE. This section is effective the day following final enactment.

82.22 	Sec. 33. Minnesota Statutes 2008, section 354A.096, is amended to read:
82.23 	354A.096 MEDICAL LEAVE.
82.24 	Any teacher in the coordinated program of the St. Paul Teachers Retirement Fund 
82.25 	Association or the new law coordinated program of the Duluth Teachers Retirement Fund 
82.26 	Association who is on an authorized medical leave of absence and subsequently returns 
82.27 	to teaching service is entitled to receive allowable service credit, not to exceed one year, 
82.28 	for the period of leave, upon making the prescribed payment to the fund. This payment 
82.29 	must include the required employee and employer contributions at the rates specified in 
82.30 	section 354A.12, subdivisions 1 and 2 2a, as applied to the member's average full-time 
82.31 	monthly salary rate on the date the leave of absence commenced plus annual interest at 
82.32 	the rate of 8.5 percent per year from the end of the fiscal year during which the leave 
82.33 	terminates to the end of the month during which payment is made. The member must pay 
82.34 	the total amount required unless the employing unit, at its option, pays the employer 
83.1 	contributions. The total amount required must be paid by the end of the fiscal year 
83.2 	following the fiscal year in which the leave of absence terminated or before the member 
83.3 	retires, whichever is earlier. Payment must be accompanied by a copy of the resolution or 
83.4 	action of the employing authority granting the leave and the employing authority, upon 
83.5 	granting the leave, must certify the leave to the association in a manner specified by the 
83.6 	executive director. A member may not receive more than one year of allowable service 
83.7 	credit during any fiscal year by making payment under this section. A member may not 
83.8 	receive disability benefits under section 354A.36 and receive allowable service credit 
83.9 	under this section for the same period of time. 

83.10 	EFFECTIVE DATE. This section is effective the day following final enactment.

83.11 	Sec. 34. Minnesota Statutes 2008, section 354A.12, subdivision 2a, is amended to read:
83.12 		Subd. 2a. Employer regular and additional contribution rates contributions.
 83.13 	(a) The employing units shall make the following employer contributions to teachers 
83.14 	retirement fund associations: 
83.15 	(1) for any coordinated member of a teachers retirement fund association in a city of 
83.16 	the first class, the employing unit shall pay the employer Social Security taxes;
83.17 	(2) for any coordinated member of one of the following teachers retirement fund 
83.18 	associations in a city of the first class, the employing unit shall make a regular employer 
83.19 	contribution to the respective retirement fund association in an amount equal to the 
83.20 	designated percentage of the salary of the coordinated member as provided below: 

83.21
83.22		Duluth Teachers Retirement 
Fund Association 
		4.50 percent
	
83.23
83.24		St. Paul Teachers Retirement 
Fund Association
		4.50 percent
	
83.25 	(3)(2) for any basic member of the St. Paul Teachers Retirement Fund Association, 
83.26 	the employing unit shall make a regular employer contribution to the respective retirement 
83.27 	fund in an amount equal to 8.00 percent of the salary of the basic member;
83.28 	(4)(3) for a basic member of the St. Paul Teachers Retirement Fund Association, the 
83.29 	employing unit shall make an additional employer contribution to the respective fund in 
83.30 	an amount equal to 3.64 percent of the salary of the basic member;
83.31 	(5)(4) for a coordinated member of a teachers retirement fund association in a city 
83.32 	of the first class, the employing unit shall make an additional employer contribution to 
83.33 	the respective fund in an amount equal to the applicable percentage of the coordinated 
83.34 	member's salary, as provided below:

84.1
84.2		Duluth Teachers Retirement 
Fund Association
		1.29 percent
	
84.3
84.4		St. Paul Teachers Retirement 
Fund Association
		3.84 percent
	
84.5		July 1, 1993 - June 30, 1994
		0.50 percent
	
84.6		July 1, 1994 - June 30, 1995
		1.50 percent
	
84.7		July 1, 1997, and thereafter
		3.84 percent
	
84.8 	(b) The regular and additional employer contributions must be remitted directly to 
84.9 	the respective teachers retirement fund association at least once each month. Delinquent 
84.10 	amounts are payable with interest under the procedure in subdivision 1a.
84.11 	(c) Payments of regular and additional employer contributions for school district 
84.12 	or technical college employees who are paid from normal operating funds must be made 
84.13 	from the appropriate fund of the district or technical college. 

84.14 	EFFECTIVE DATE. This section is effective the day following final enactment.

84.15 	Sec. 35. Minnesota Statutes 2008, section 354A.12, is amended by adding a 
84.16 	subdivision to read:
84.17 		Subd. 6.Adjustment for erroneous receipts. (a) Adjustments to correct employer 
84.18 	contributions and employee deductions taken in error from amounts which are not salary 
84.19 	under section 354A.011, subdivision 24, must be made as specified in this section.
84.20 	(b) Upon discovery of the receipt of erroneous employee deductions and employer 
84.21 	contributions under paragraph (a), the executive director must require the employer to 
84.22 	discontinue the erroneous employee deductions and erroneous employer contributions 
84.23 	reported on behalf of an active member. Upon discontinuation, the executive director 
84.24 	must provide for a refund or credit to the employer in the amount of the invalid employee 
84.25 	deductions with interest on the employee deductions at the rate specified in section 
84.26 	354A.37, subdivision 3, from the received date of each invalid salary transaction to the 
84.27 	first day of the month in which the credit or refund is made. The employer must pay the 
84.28 	refunded employee deductions plus interest to the active member.
84.29 	(c) If the individual is a former member who is not receiving a retirement annuity or 
84.30 	benefit and has not received a refund under section 354A.37, subdivision 3, related to the 
84.31 	applicable service, the executive director must return the erroneous employee deductions 
84.32 	to the former member through a refund within interest at the rate specified in section 
84.33 	354A.37, subdivision 3, from the received date of each invalid salary transaction to the 
84.34 	first day of the month in which the credit or refund is made.
85.1 	(d) The executive director must return the invalid employer contributions reported 
85.2 	on behalf of a member or former member to the employer by providing a credit against 
85.3 	future contributions payable by the employer.

85.4 	EFFECTIVE DATE. This section is effective the day after final enactment.

85.5 	Sec. 36. Minnesota Statutes 2008, section 354A.12, is amended by adding a 
85.6 	subdivision to read:
85.7 		Subd. 7.Recovery of benefit overpayments. (a) If the executive director discovers, 
85.8 	within the time period specified in subdivision 8 following the payment of a refund or 
85.9 	the accrual date of any retirement annuity, survivor benefit, or disability benefit, that 
85.10 	benefit overpayment has occurred due to using invalid service or salary, or due to any 
85.11 	erroneous calculation procedure, the executive director must recalculate the annuity or 
85.12 	benefit payable and recover any overpayment. The executive director shall recover the 
85.13 	overpayment by requiring direct repayment or by suspending or reducing the payment of a 
85.14 	retirement annuity or other benefit payable under this chapter to the applicable person or 
85.15 	the person's estate, whichever applies, until all outstanding amounts have been recovered.
85.16 	(b) In the event the executive director determines that an overpaid annuity or benefit 
85.17 	that is the result of invalid salary included in the average salary used to calculate the 
85.18 	payment amount must be recovered, the executive director must determine the amount of 
85.19 	the employee deductions taken in error on the invalid salary, with interest as determined 
85.20 	under 354A.37, subdivision 3, and must subtract that amount from the total annuity or 
85.21 	benefit overpayment, and the remaining balance of the overpaid annuity or benefit, if 
85.22 	any, must be recovered.
85.23 	(c) If the invalid employee deductions plus interest exceed the amount of the 
85.24 	overpaid benefits, the balance must be refunded to the person to whom the benefit or 
85.25 	annuity is being paid.
85.26 	(d) Any invalid employer contributions reported on the invalid salary must be 
85.27 	credited against future contributions payable by the employer.
85.28 	(e) If a member or former member, who is receiving a retirement annuity or 
85.29 	disability benefit for which an overpayment is being recovered, dies before recovery of the 
85.30 	overpayment is completed and an optional annuity or refund is payable, the remaining 
85.31 	balance of the overpaid annuity or benefit must continue to be recovered from the payment 
85.32 	to the optional annuity beneficiary or refund recipient.
85.33 	(f) The board of trustees shall adopt policies directing the period of time and manner 
85.34 	for the collection of any overpaid retirement or optional annuity, and survivor or disability 
86.1 	benefit, or a refund that the executive director determines must be recovered as provided 
86.2 	under this section.

86.3 	EFFECTIVE DATE. This section is effective the day after final enactment.

86.4 	Sec. 37. Minnesota Statutes 2008, section 354A.12, is amended by adding a 
86.5 	subdivision to read:
86.6 		Subd. 8.Additional procedures. (a) If paragraph (b) does not apply, the period of 
86.7 	adjustment under subdivisions 6 and 7 is limited to the fiscal year in which the error is 
86.8 	discovered by the executive director and the immediate two preceding fiscal years. 
86.9 	(b) If there is evidence of fraud or other misconduct on the part of the employee or 
86.10 	the employer, the board of trustees may authorize adjustments to the account of a member 
86.11 	or former member to correct erroneous employee deductions and employer contributions 
86.12 	on invalid salary and the recovery of any overpayments for a period longer than specified 
86.13 	under paragraph (a).
86.14 	(c) Notwithstanding other provisions of this section, the executive director may 
86.15 	apply the Revenue Procedures defined in the Internal Revenue Service Employee Plans 
86.16 	Compliance Resolution System and not issue a refund of erroneous employee deductions 
86.17 	and employer contributions or not recover a small overpayment of benefits if the cost to 
86.18 	correct the error would exceed the amount of the refund or overpayment.
86.19 	(d) Notwithstanding other provisions of this section, interest of $10 or less shall not 
86.20 	be payable to a member or former member.

86.21 	EFFECTIVE DATE. This section is effective the day after final enactment.

86.22 	Sec. 38. Minnesota Statutes 2008, section 354A.12, is amended by adding a 
86.23 	subdivision to read:
86.24 		Subd. 9.Employer responsibility for fees, penalties. Any fees or penalties 
86.25 	assessed by the Internal Revenue Service for any failure by an employer to follow the 
86.26 	statutory requirements for reporting eligible members and salary must be paid by the 
86.27 	employer.

86.28 	EFFECTIVE DATE. This section is effective the day after final enactment.

86.29 	Sec. 39. Minnesota Statutes 2008, section 354A.36, subdivision 6, is amended to read:
86.30 		Subd. 6.Requirement for regular physical examinations. At least once each year 
86.31 	during the first five years following the granting of a disability benefit to a coordinated 
86.32 	member by the board and at least once in every three year period thereafter, the board shall
87.1 	may require the disability benefit recipient to undergo an expert examination as a condition 
87.2 	for continued entitlement of the benefit recipient to receive a disability benefit. If the board 
87.3 	requires an examination, the expert examination must be made at the place of residence of 
87.4 	the disability benefit recipient or at any other place mutually agreeable to the disability 
87.5 	benefit recipient and the board. The expert examination must be made by a physician or 
87.6 	physicians, by a chiropractor or chiropractors, or by one or more psychologists engaged 
87.7 	by the board. The physician or physicians, the chiropractor or chiropractors, or the 
87.8 	psychologist or psychologists with respect to a mental impairment, conducting the expert 
87.9 	examination shall make a written report to the board concerning the disability benefit 
87.10 	recipient and the recipient's disability, including a statement of the expert opinion of 
87.11 	the physician, chiropractor, or psychologist as to whether or not the member remains 
87.12 	permanently and totally disabled within the meaning of section 354A.011, subdivision 
87.13 	14. If the board determines from consideration of the written expert examination report 
87.14 	of the physician, of the chiropractor, or of the psychologist, with respect to a mental 
87.15 	impairment, that the disability benefit recipient is no longer permanently and totally 
87.16 	disabled or if the board determines that the benefit recipient is engaged or is able to 
87.17 	engage in a gainful occupation, unless the disability benefit recipient is partially employed 
87.18 	under subdivision 7, then further disability benefit payments from the fund must be 
87.19 	discontinued. The discontinuation of disability benefits must occur immediately if the 
87.20 	disability recipient is reinstated to the district payroll following sick leave and within 60 
87.21 	days of the determination by the board following the expert examination and report of the 
87.22 	physician or physicians, chiropractor or chiropractors, or psychologist or psychologists 
87.23 	engaged by the board that the disability benefit recipient is no longer permanently and 
87.24 	totally disabled within the meaning of section 354A.011, subdivision 14.  

87.25 	EFFECTIVE DATE. This section is effective the day following final enactment.

87.26 	Sec. 40. Minnesota Statutes 2008, section 356.401, subdivision 2, is amended to read:
87.27 		Subd. 2.Automatic deposits. (a) The chief administrative officer of a covered 
87.28 	retirement plan may remit, through an automatic deposit system, annuity, benefit, or 
87.29 	refund payments only to a financial institution associated with the National Automated 
87.30 	Clearinghouse Association or a comparable successor organization that is trustee for a 
87.31 	person who is eligible to receive the annuity, benefit, or refund.
87.32 	(b) Upon the request of a retiree, disabilitant, survivor, or former member, the chief 
87.33 	administrative officer of a covered retirement plan may remit the annuity, benefit, or 
87.34 	refund checkpayment to the applicable financial institution for deposit in the person's 
87.35 	individual account or the person's joint account. If an overpayment of benefits is paid 
88.1 	after the death of the annuitant or benefit recipient, the chief administrative officer of 
88.2 	the pension plan is authorized to issue an administrative subpoena consistent with the 
88.3 	requirements of section 13A.02, requiring the applicable financial institution to disclose 
88.4 	the names of all joint and co-owners of the account and a description of all deposits to, 
88.5 	and withdrawals from, the account which take place on or after the death of the annuitant 
88.6 	or benefit recipient. An overpayment to a joint account after the death of the annuitant or 
88.7 	benefit recipient must be repaid to the fund of the applicable covered retirement plan by 
88.8 	the joint tenant if the overpayment is not repaid to that fund by the financial institution 
88.9 	associated with the National Automated Clearinghouse Association or its successor. The 
88.10 	governing board of the covered retirement plan may prescribe the conditions under which 
88.11 	these payments may be made.

88.12 	EFFECTIVE DATE. This section is effective the day following final enactment.

88.13 	Sec. 41. Minnesota Statutes 2008, section 356.465, subdivision 1, is amended to read:
88.14 		Subdivision 1.Inclusion as recipient. Notwithstanding any provision to the 
88.15 	contrary of the laws, articles of incorporation, or bylaws governing a covered retirement 
88.16 	plan specified in subdivision 3, A retiring member may designate a qualified supplemental 
88.17 	needs trust under subdivision 2 as the remainder recipient on an optional retirement 
88.18 	annuity form for a period not to exceed the lifetime of the beneficiary of the supplemental 
88.19 	needs trust.

88.20 	EFFECTIVE DATE. This section is effective the day following final enactment.

88.21 	Sec. 42. Minnesota Statutes 2008, section 356.465, is amended by adding a subdivision 
88.22 	to read:
88.23 		Subd. 4.Expanded eligibility. (a) Notwithstanding subdivision 1, for a retirement 
88.24 	plan specified in paragraph (b), a designation under subdivision 1 may be made by an 
88.25 	active, disabled, deferred, or retiring member.
88.26 	(b) The applicable plan is the Teachers Retirement Association established under 
88.27 	chapter 354.

88.28 	EFFECTIVE DATE. This section is effective the day following final enactment.

88.29 	Sec. 43. Minnesota Statutes 2008, section 356.611, subdivision 3, is amended to read:
88.30 		Subd. 3.Maximum benefit limitations. A member's annual benefit, if necessary, 
88.31 	must be reduced to the extent required by section 415(b) of the federal Internal Revenue 
88.32 	Code, as adjusted by the United States secretary of the treasury under section 415(d) of the 
89.1 	Internal Revenue Code for any applicable increases in the cost of living after the member's 
89.2 	termination of employment. For purposes of section 415 of the federal Internal Revenue 
89.3 	Code, the limitation year of a pension plan covered by this section must be the fiscal year 
89.4 	or calendar year of that plan, whichever is applicable. The accrued benefit limitation 
89.5 	described in section 415(e) of the Internal Revenue Code must cease to be effective for 
89.6 	limitation years beginning after December 31, 1999.

89.7 	EFFECTIVE DATE. This section is effective July 1, 2009.

89.8 	Sec. 44. Minnesota Statutes 2008, section 356.611, subdivision 4, is amended to read:
89.9 		Subd. 4.Compensation. (a) For purposes of this section, compensation means 
89.10 	a member's compensation actually paid or made available for any limitation year 
89.11 	determined as provided byincluding items described in federal treasury regulation section 
89.12 	1.415-2(d)(10) 1.415(c)-2(b) and excluding items described in federal treasury regulation 
89.13 	section 1.415(c)-2(c).
89.14 	(b) Compensation for any period includes:
89.15 	(1) any elective deferral as defined in section 402(g)(3) of the federal Internal 
89.16 	Revenue Code;
89.17 	(2) any elective amounts that are not includable in a member's gross income by 
89.18 	reason of sections 125 or 457 of the federal Internal Revenue Code; and
89.19 	(3) any elective amounts that are not includable in a member's gross income by 
89.20 	reason of section 132(f)(4) of the federal Internal Revenue Code.

89.21 	EFFECTIVE DATE. This section is effective July 1, 2009.

89.22 	Sec. 45. Minnesota Statutes 2008, section 356.635, subdivision 6, is amended to read:
89.23 		Subd. 6.Eligible retirement plan. (a) An "eligible retirement plan" is:
89.24 	(1) an individual retirement account under section 408(a) of the federal Internal 
89.25 	Revenue Code;
89.26 	(2) an individual retirement annuity plan under section 408(b) of the federal Internal 
89.27 	Revenue Code;
89.28 	(3) an annuity plan under section 403(a) of the federal Internal Revenue Code;
89.29 	(4) a qualified trust plan under section 401(a) of the federal Internal Revenue Code 
89.30 	that accepts the distributee's eligible rollover distribution;
89.31 	(5) an annuity contract under section 403(b) of the federal Internal Revenue Code; or
90.1 	(6) an eligible deferred compensation plan under section 457(b) of the federal
90.2 	Internal Revenue Code, which is maintained by a state or local government and which 
90.3 	agrees to separately account for the amounts transferred into the plan; or
90.4 	(7) in the case of an eligible rollover distribution to a nonspousal beneficiary, an 
90.5 	individual account or annuity treated as an inherited individual retirement account under 
90.6 	section 402(c)(11) of the federal Internal Revenue Code.
90.7 	(b) For distributions of after-tax contributions which are not includable in gross 
90.8 	income, the after-tax portion may be transferred only to an individual retirement account 
90.9 	or annuity described in section 408(a) or (b) of the federal Internal Revenue Code, or 
90.10 	to a qualified defined contribution plan described in either section 401(a) or 403(a) of 
90.11 	the federal Internal Revenue Code, that agrees to separately account for the amounts 
90.12 	transferred, including separately accounting for the portion of the distribution which is 
90.13 	includable in gross income and the portion of the distribution which is not includable.

90.14 	EFFECTIVE DATE. This section is effective July 1, 2009.

90.15 	Sec. 46. Minnesota Statutes 2008, section 356.635, subdivision 7, is amended to read:
90.16 		Subd. 7.Distributee. A "distributee" is:
90.17 	(1) an employee or a former employee;
90.18 	(2) the surviving spouse of an employee or former employee; or
90.19 	(3) the former spouse of the employee or former employee who is the alternate 
90.20 	payee under a qualified domestic relations order as defined in section 414(p) of the federal
90.21 	Internal Revenue Code, or who is a recipient of a court-ordered equitable distribution of 
90.22 	marital property, as provided in section 518.58.; or
90.23 	(4) a nonspousal beneficiary of an employee or former employee who qualifies 
90.24 	for a distribution under the plan and is a designated beneficiary as defined in section 
90.25 	401(a)(9)(E) of the federal Internal Revenue Code.

90.26 	EFFECTIVE DATE. This section is effective July 1, 2009.

90.27 	Sec. 47. Minnesota Statutes 2008, section 356.96, subdivision 5, is amended to read:
90.28 		Subd. 5.Petition for review. (a) A person who claims a right under subdivision 2 
90.29 	may petition for a review of that decision by the governing board of the covered pension 
90.30 	plan.
90.31 	(b) A petition under this section must be sent to the chief administrative officer 
90.32 	by mail and must be postmarked no later than 60 days after the person received the 
90.33 	notice required by subdivision 3. The petition must include the person's statement of 
91.1 	the reason or reasons that the person believes the decision of the chief administrative 
91.2 	officer should be reversed or modified. The petition may include all documentation and 
91.3 	written materials that the petitioner deems to be relevant. In developing a record for 
91.4 	review by the board when a decision is appealed, the executive director may direct that the 
91.5 	applicant participate in a fact-finding session conducted by an administrative law judge 
91.6 	assigned by the Office of Administrative Hearings and, as applicable, participate in a 
91.7 	vocational assessment conducted by a qualified rehabilitation counselor on contract with 
91.8 	the applicable retirement system.

91.9 	EFFECTIVE DATE. This section is effective the day following final enactment.

91.10 	Sec. 48. Laws 2006, chapter 271, article 5, section 5, as amended by Laws 2008, 
91.11 	chapter 349, article 5, section 36, is amended to read:
91.12 	Sec. 5. EFFECTIVE DATE.
 91.13 	(a) Sections 1, 3, and 4 are effective the day following final enactment and section 3 
91.14 	has effect retroactively from July 25, 2005. 
91.15 	(b) Section 2 with respect to the Cannon Falls Hospital District is effective upon the 
91.16 	latter of: 
91.17 	(1) the day after the governing body of the Cannon Falls Hospital District and its 
91.18 	chief clerical officer meet the requirements under Minnesota Statutes, section 645.021, 
91.19 	subdivisions 2 and 3; and 
91.20 	(2) the first day of the month following certification to the Cannon Falls Hospital 
91.21 	District by the executive director of the Public Employees Retirement Association that the 
91.22 	actuarial accrued liability of the special benefit coverage proposed for extension to the 
91.23 	privatized City of Cannon Falls Hospital employees under section 1 does not exceed the 
91.24 	actuarial gain otherwise to be accrued by the Public Employees Retirement Association, as 
91.25 	calculated by the consulting actuary retained under Minnesota Statutes, section 356.214. 
91.26 	The cost of the actuarial calculations must be borne by the current employer or by the 
91.27 	entity which is the employer following the privatization. 
91.28 	(c) Section 2, with respect to Clearwater County Memorial Hospital, is effective 
91.29 	upon the latter of: 
91.30 	(1) the day after the governing body of Clearwater County and its chief clerical 
91.31 	officer meet the requirements under Minnesota Statutes, section 645.021, subdivisions 2
91.32 	and 3, except that the certificate of approval must be filed before January 1, 2009 2010; and 
91.33 	(2) the first day of the month following certification to Clearwater County by the 
91.34 	executive director of the Public Employees Retirement Association that the actuarial 
91.35 	accrued liability of the special benefit coverage proposed for extension to the privatized 
92.1 	Clearwater Health Services employees under section 2 does not exceed the actuarial gain 
92.2 	otherwise to be accrued by the Public Employees Retirement Association, as calculated by 
92.3 	the consulting actuary retained under Minnesota Statutes, section 356.214. The cost of 
92.4 	the actuarial calculations must be borne by the current employer or by the entity which is 
92.5 	the employer following the privatization. 
92.6 	(d) Section 2 with respect to the Dassel Lakeside Community Home is effective 
92.7 	upon the latter of: 
92.8 	(1) the day after the governing body of the city of Dassel and its chief clerical officer 
92.9 	timely complete compliance with Minnesota Statutes, section 645.021, subdivisions 2
92.10 	and 3; and 
92.11 	(2) the first day of the month next following certification to the Dassel City 
92.12 	Council by the executive director of the Public Employees Retirement Association that 
92.13 	the actuarial accrued liability of the special benefit coverage proposed for extension to 
92.14 	the privatized Dassel Lakeside Community Home employees under section 2 does not 
92.15 	exceed the actuarial gain otherwise to be accrued by the Public Employees Retirement 
92.16 	Association, as calculated by the consulting actuary retained under Minnesota Statutes, 
92.17 	section 356.214. The cost of the actuarial calculations must be borne by the city of Dassel 
92.18 	or by the entity which is the employer following the privatization.

92.19 	EFFECTIVE DATE. This section is effective the day following final enactment.

92.20 	Sec. 49. CITY OF DULUTH AND DULUTH AIRPORT AUTHORITY; 
92.21 	CORRECTING ERRONEOUS EMPLOYEE DEDUCTIONS, EMPLOYER 
92.22 	CONTRIBUTIONS AND ADJUSTING OVERPAID BENEFITS.
 92.23 		Subdivision 1.Application. Notwithstanding any provisions of sections 10 and 11, 
92.24 	or Minnesota Statutes 2008, chapters 353 and 356, to the contrary, this section establishes 
92.25 	the procedures by which the executive director of the Public Employees Retirement 
92.26 	Association shall adjust erroneous employee deductions and employer contributions 
92.27 	paid on behalf of active employees and former members by the city of Duluth and by 
92.28 	the Duluth Airport Authority on amounts determined by the executive director to be 
92.29 	invalid salary under Minnesota Statutes, section 353.01, subdivision 10, reported between 
92.30 	January 1, 1997, and October 23, 2008, and for adjusting benefits that were paid to former 
92.31 	members and their beneficiaries based upon invalid salary amounts.
92.32 		Subd. 2.Refunds of employee deductions. (a) The executive director shall refund 
92.33 	to active employees or former members who are not receiving retirement annuities or 
92.34 	benefits all erroneous employee deductions identified by the city of Duluth or by the 
92.35 	Duluth Airport Authority as deductions taken from amounts determined to be invalid 
93.1 	salary. The refunds must include interest at the rate specified in Minnesota Statutes, 
93.2 	section 353.34, subdivision 2, from the date each invalid employee deduction was received 
93.3 	through the date each refund is paid.
93.4 	(b) The refund payment for active employees must be sent to the applicable 
93.5 	governmental subdivision which must pay the refunded employee deductions plus interest 
93.6 	to the active members who are employees of the city of Duluth or who are employees of 
93.7 	the Duluth Airport Authority, as applicable.
93.8 	(c) Refunds to former members must be mailed by the executive director of the 
93.9 	Public Employees Retirement Association to the former member's last known address.
93.10 		Subd. 3.Benefit adjustments. (a) For a former member who is receiving a 
93.11 	retirement annuity or disability benefit, or for a person receiving an optional annuity or 
93.12 	survivor benefit, the executive director must:
93.13 	(1) adjust the annuity or benefit payment to the correct monthly benefit amount 
93.14 	payable by reducing the average salary under Minnesota Statutes, section 353.01, 
93.15 	subdivision 17a, by the invalid salary amounts;
93.16 	(2) determine the amount of the overpaid benefits paid from the effective date of 
93.17 	the annuity or benefit payment to the first of the month in which the monthly benefit 
93.18 	amount is corrected;
93.19 	(3) calculate the amount of employee deductions taken in error on invalid salary, 
93.20 	including interest at the rate specified in Minnesota Statutes, section 353.34, subdivision 2, 
93.21 	from the date each invalid employee deduction was received through the date the annuity 
93.22 	or benefit is adjusted as provided under clause (1); and
93.23 	(4) determine the net amount of overpaid benefits by reducing the amount of the 
93.24 	overpaid annuity or benefit as determined in clause (2) by the amount of the erroneous 
93.25 	employee deductions with interest determined in clause (3).
93.26 	(b) If a former member's erroneous employee deductions plus interest determined 
93.27 	under this section exceeds the amount of the person's overpaid benefits, the balance must 
93.28 	be refunded to the person to whom the annuity or benefit is being paid.
93.29 	(c) The executive director shall recover the net amount of all overpaid annuities or 
93.30 	benefits as provided under subdivision 4.
93.31 		Subd. 4.Employer credits and obligations. (a) The executive director shall 
93.32 	provide a credit without interest to the city of Duluth and to the Duluth Airport Authority 
93.33 	for the amount of that governmental subdivision's erroneous employer contributions. The 
93.34 	credit must first be used to offset the net amount of the overpaid retirement annuities and 
93.35 	the disability and survivor benefits that remains after applying the amount of erroneous 
93.36 	employee deductions with interest as provided under subdivision 3, clause (4). The 
94.1 	remaining erroneous employer contributions, if any, must be credited against future 
94.2 	employer contributions required to be paid by the applicable governmental subdivision. If 
94.3 	the overpaid benefits exceed the employer contribution credit, the balance of the overpaid 
94.4 	benefits is the obligation of the city of Duluth or the Duluth Airport Authority, whichever 
94.5 	is applicable.
94.6 	(b) The Public Employees Retirement Association board of trustees shall determine 
94.7 	the period of time and manner for the collection of overpaid retirement annuities and 
94.8 	benefits, if any, from the city of Duluth and the Duluth Airport Authority.

94.9 	EFFECTIVE DATE. (a) This section is effective for the city of Duluth the day after 
94.10 	the Duluth city council and the chief clerical officer of the city of Duluth timely complete 
94.11 	their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, for 
94.12 	members who are, and former members who were, employees of the city of Duluth.
94.13 	(b) This section is effective for the Duluth Airport Authority the day after the Duluth 
94.14 	Airport Authority and the chief clerical officer of the Duluth Airport Authority timely 
94.15 	complete their compliance with Minnesota Statutes, section 645.021, subdivisions 2 
94.16 	and 3, for members who are, and former members who were, employees of the Duluth 
94.17 	Airport Authority.

94.18 	Sec. 50. APPLICATION OF PUBLIC EMPLOYEES RETIREMENT 
94.19 	ASSOCIATION ERRONEOUS RECEIPTS AND DISBURSEMENTS PROVISION; 
94.20 	ELECTION.
 94.21 	(a) If adjustments under section 10 due to invalid salary amounts are in process as of 
94.22 	the effective date of this section for employees or former employees of a governmental 
94.23 	subdivision, the governing body of the governmental subdivision may elect to have the 
94.24 	statute of limitations under section 10, paragraphs (c) and (g), apply to adjustments 
94.25 	or corrections in process as of the effective date of section 10, by a resolution of the 
94.26 	governing body transmitted to the Public Employees Retirement Association executive 
94.27 	director within 90 days after the effective date of this section.
94.28 	(b) If the governing body of the governmental subdivision declines the treatment 
94.29 	permitted under paragraph (a) or fails to submit a resolution in a timely manner, the statute 
94.30 	of limitations does not apply to adjustments or corrections in process as of the effective 
94.31 	date.

94.32 	EFFECTIVE DATE. This section is effective the day after final enactment.

94.33 	Sec. 51.  REPEALER.
 95.1 	Minnesota Statutes 2008, sections 354.06, subdivision 6; and 354.55, subdivision 
95.2 	14, are repealed.

95.3 	EFFECTIVE DATE. This section is effective the day following final enactment.

95.4 	ARTICLE 5
95.5 	LOCAL GOVERNMENT POST RETIREMENT OPTION PROGRAM

95.6 	Section 1. Minnesota Statutes 2008, section 353.01, subdivision 11b, is amended to 
95.7 	read:
95.8 		Subd. 11b.Termination of membership. (a) "Termination of membership" means 
95.9 	the conclusion of membership in the association for a person who has not terminated 
95.10 	public service under subdivision 11a and occurs:
95.11 	(1) when a person files a written election with the association to discontinue 
95.12 	employee deductions under section 353.27, subdivision 7, paragraph (a), clause (1);
95.13 	(2) when a city manager files a written election with the association to discontinue 
95.14 	employee deductions under section 353.028, subdivision 2; or
95.15 	(3) when a member transfers to a temporary position and becomes excluded from 
95.16 	membership under subdivision 2b, clause (4).; or
95.17 	(4) when a member is approved to participate in the postretirement option authorized 
95.18 	under section 353.371.
95.19 	(b) The termination of membership under clauseclauses (3) and (4) must be reported 
95.20 	to the association by the governmental subdivision.

95.21 	EFFECTIVE DATE. This section is effective the day following final enactment.

95.22 	Sec. 2. [353.371] POSTRETIREMENT OPTION.
95.23 		Subdivision 1.Eligibility. (a) This section applies to a basic or coordinated member 
95.24 	of the general employees retirement plan of the Public Employees Retirement Association 
95.25 	who:
95.26 	(1) for at least the five years immediately preceding separation under clause (2), was 
95.27 	regularly scheduled to work 1,044 or more hours per year in a position covered by the 
95.28 	general employees retirement plan of the Public Employees Retirement Association;
95.29 	(2) terminates membership as defined under section 353.01, subdivision 11b; 
95.30 	(3) at the time of termination under clause (2), was at least age 62 and met the age 
95.31 	and service requirements necessary to receive a retirement annuity from the plan and 
95.32 	satisfied requirements for the commencement of the retirement annuity;
96.1 	(4) agrees to accept a postretirement option position with the same or a different 
96.2 	governmental subdivision, working a reduced schedule that is both:
96.3 	(i) a reduction of at least 25 percent from the employee's number of previously 
96.4 	regularly scheduled work hours; and 
96.5 	(ii) 1,044 hours or less in public; and
96.6 	(5) is not eligible for participation in the state employee postretirement option 
96.7 	program under section 43A.346.
96.8 	(b) For purposes of this section, the length of separation requirement and termination 
96.9 	of service requirement prohibiting return to work agreements under section 353.01, 
96.10 	subdivisions 11a and 28, are not applicable.
96.11 		Subd. 2.Annuity reduction not applicable. Notwithstanding any law to the 
96.12 	contrary, the provisions of section 353.37 governing annuities of reemployed annuitants 
96.13 	do not apply for the duration of a terminated member's employment in a postretirement 
96.14 	option position.
96.15 		Subd. 3.Governing body discretion. The governing body of the governmental 
96.16 	subdivision has sole discretion to determine if and the extent to which a postretirement 
96.17 	option position under this section is available to a terminated member. Any offer of such 
96.18 	a position must be made in writing to the person by the governing body's designee in a 
96.19 	manner prescribed by the executive director.
96.20 		Subd. 4.Duration. Postretirement option employment shall be for an initial period 
96.21 	not to exceed one year. At the end of the initial period, the governing body has sole 
96.22 	discretion to determine if the offer of a postretirement option position will be renewed, 
96.23 	renewed with modifications, or terminated. Postretirement option employment may be 
96.24 	renewed annually, but may not be renewed after the individual attains retirement age as 
96.25 	defined in United States Code, title 42, section 416(l). 
96.26 		Subd. 5.Copy to fund. The appointing authority shall provide the Public 
96.27 	Employees Retirement Association with documentation, as prescribed by the executive 
96.28 	director, of the terms of any agreement entered into with a member who accepts continuing 
96.29 	employment with the appointing authority under the terms of this section, and any 
96.30 	subsequent renewal agreement.
96.31 		Subd. 6.No service credit. Notwithstanding any law to the contrary, a person 
96.32 	may not earn service credit in the general employees retirement plan of the Public 
96.33 	Employees Retirement Association for employment covered under this section, and 
96.34 	employer contributions and payroll deductions for the retirement fund must not be made 
96.35 	based on earnings of a person working under an agreement covered by this section. No 
97.1 	change may be made to a monthly annuity or retirement allowance based on employment 
97.2 	under this section.
97.3 		Subd. 7.Subsequent employment. If a person has been in a postretirement option 
97.4 	position and accepts any other position in public service beyond the period of time for 
97.5 	which the person participated in the postretirement option provided under this section, the 
97.6 	person may not earn service credit in the general employees retirement plan of the Public 
97.7 	Employees Retirement Association, no employer contributions or payroll deductions for 
97.8 	the retirement fund may be made, and the provisions of section 353.37 apply.

97.9 	EFFECTIVE DATE. This section is effective the day following final enactment 
97.10 	and expires on June 30, 2011. Individuals must not be appointed to a postretirement option 
97.11 	position after that date.

97.12 	ARTICLE 6
97.13 	TEACHER RETIREMENT BENEFIT AND FUNDING CHANGES

97.14 	Section 1. Minnesota Statutes 2008, section 127A.50, subdivision 1, is amended to 
97.15 	read:
97.16 		Subdivision 1.Aid adjustment. Beginning in fiscal year 1998 and each year 
97.17 	thereafter, the commissioner of education shall adjust state aid payments to school 
97.18 	operating funds for Independent School District No. 625 and Independent School District 
97.19 	No. 709 by the net amount of clauses (1) and, (2), and (5), for Special School District 
97.20 	No. 1 by the net amount of clauses (1), (2), and (4), and (5), and for all other districts, 
97.21 	including charter schools, but excluding any education organizations that are prohibited 
97.22 	from receiving direct state aids under section 123A.26 or 125A.75, subdivision 7, by the 
97.23 	net amount of clauses (1), (2), (3), and (4), and (5): 
97.24 	(1) a decrease equal to each district's share of the fiscal year 1997 adjustment 
97.25 	effected under Minnesota Statutes 1996, section 124.2139; 
97.26 	(2) an increase equal to one percent of the salaries paid to members of the general 
97.27 	plan of the Public Employees Retirement Association in fiscal year 1997, multiplied by 
97.28 	0.35 for fiscal year 1998 and 0.70 each year thereafter;
97.29 	(3) a decrease equal to 2.34 percent of the salaries paid to members of the Teachers 
97.30 	Retirement Association in fiscal year 1997; and
97.31 	(4) an increase equal to 0.5 percent of the salaries paid to members of the Teachers 
97.32 	Retirement Association in fiscal year 2007.; and
98.1 	(5) an increase equal to the specified percentage of the salaries paid to members of 
98.2 	the Teachers Retirement Association, the St. Paul Teachers Retirement Fund Association, 
98.3 	and the Duluth Teachers Retirement Fund Association in fiscal year 2012 as follows:

98.4	fiscal year 2012
	0.5 percent
	
98.5	fiscal year 2013
	0.5 percent
	
98.6	fiscal year 2014
	0.5 percent
	
98.7	fiscal year 2015
	0.5 percent

98.8 	EFFECTIVE DATE. This section is effective July 1, 2011.

98.9 	Sec. 2. Minnesota Statutes 2008, section 354.05, subdivision 38, is amended to read:
98.10 		Subd. 38.Normal retirement age. "Normal retirement age" means age 65 for a 
98.11 	person who first became a member of the association or a member of a pension fund listed 
98.12 	in section 356.30, subdivision 3, before July 1, 1989. For a person who first becomes a 
98.13 	member of the association after June 30, 1989, normal retirement age means the higher 
98.14 	of age 65 or "retirement age," as defined in United States Code, title 42, section 416(l), 
98.15 	as amended, but not to exceed age 66. For a person with 30 years of service, normal 
98.16 	retirement age means age 62. 

98.17 	EFFECTIVE DATE. This section is effective July 1, 2011.

98.18 	Sec. 3. Minnesota Statutes 2008, section 354.42, subdivision 2, is amended to read:
98.19 		Subd. 2.Employee. (a) The employee contribution to the fund is an amount equal 
98.20 	to the following percentage of the salary of a member:
98.21 	(1) after July 1, 2006, for a teacher employed by Special School District No. 1, 
98.22 	Minneapolis, 5.5 percent if the teacher is a coordinated member, and 9.0 percent if the 
98.23 	teacher is a basic member;
98.24 	(2) for every other teacher, after July 1, 2006, 5.5 percent if the teacher is a 
98.25 	coordinated member and 9.0 percent if the teacher is a basic member.

98.26	Period
	Coordinated Member
	Basic Member
	
98.27	(1) before July 1, 2011
	5.5 percent
	9 percent
	
98.28
98.29	(2) after June 30, 2011, and before July 
1, 2012
	6 percent
	9 percent
	
98.30
98.31	(3) after June 30, 2012, and before July 
1, 2013
	6.5 percent
	9 percent
	
98.32
98.33	(4) unless paragraph (c) applies, after 
June 30, 2013, and before July 1, 2014
	7 percent
	9 percent
	
98.34
98.35	(5) unless paragraph (c) applies, after 
June 30, 2014
	7.5 percent
	9 percent
	
99.1 	(b) When an employee contribution rate changes for a fiscal year, the new 
99.2 	contribution rate is effective for the entire salary paid for each employer unit with the 
99.3 	first payroll cycle reported.
99.4 	(c) After July 1, 2012, a scheduled contribution increase under paragraph (a), 
99.5 	clause (4) or (5), is suspended if the most recent actuarial valuation prepared under 
99.6 	section 356.215 indicates that there is no contribution deficiency when the total employee 
99.7 	contributions, employer contributions under subdivision 3, and direct state aid under 
99.8 	section 354A.12 and chapter 422A are compared to the actuarial required contributions of 
99.9 	the retirement plan.
99.10 	(b) (d) This contribution must be made by deduction from salary. Where any 
99.11 	portion of a member's salary is paid from other than public funds, the member's employee 
99.12 	contribution must be based on the entire salary received.

99.13 	EFFECTIVE DATE. This section is effective July 1, 2011.

99.14 	Sec. 4. Minnesota Statutes 2008, section 354.42, subdivision 3, is amended to read:
99.15 		Subd. 3.Employer. (a) The regular employer contribution to the fund by Special 
99.16 	School District No. 1, Minneapolis, after July 1, 2006, and before July 1, 2007, is an 
99.17 	amount equal to 5.0 percent of the salary of each of its teachers who is a coordinated 
99.18 	member and 9.0 percent of the salary of each of its teachers who is a basic member. After 
99.19 	July 1, 2007, and before July 1, 2011, the regular employer contribution to the fund by 
99.20 	Special School District No. 1, Minneapolis, is an amount equal to 5.5 percent of salary of 
99.21 	each coordinated member and 9.5 percent of salary of each basic member. The additional 
99.22 	employer contribution to the fund by Special School District No. 1, Minneapolis, after 
99.23 	July 1, 2006, is an amount equal to 3.64 percent of the salary of each teacher who is a 
99.24 	coordinated member or is a basic member. The regular employer contribution to the 
99.25 	fund by Special School District No. 1, Minneapolis, is an amount equal to the following 
99.26 	percentage of the salary of each teacher:

99.27	Period
	Coordinated Member
	Basic Member
	
99.28	(1) before July 1, 2011
	5.5 percent
	9.5 percent
	
99.29
99.30	(2) after June 30, 2011, and before July 
1, 2012
	6 percent
	9.5 percent
	
99.31
99.32	(3) after June 30, 2012, and before July 
1, 2013
	6.5 percent
	9.5 percent
	
99.33
99.34	(4) unless paragraph (d) applies, after 
June 30, 2013, and before July 1, 2014
	7 percent
	9.5 percent
	
99.35
99.36	(5) unless paragraph (d) applies, after 
June 30, 2014
	7.5 percent
	9.5 percent
	
100.1 	(b) When an employer contribution rate changes for a fiscal year, the new 
100.2 	contribution rate is effective for the entire salary paid for each employer unit with the 
100.3 	first payroll cycle reported.
100.4 	(b) (c) The employer contribution to the fund for every other employer is an amount 
100.5 	equal to 5.0 percent of the salary of each coordinated member and 9.0 percent of the salary 
100.6 	of each basic member before July 1, 2007, and 5.5 percent of the salary of each coordinated 
100.7 	member and 9.5 percent of the salary of each basic member after June 30, 2007., and 
100.8 	before July 1, 2011. The regular employer contribution to the fund by every other 
100.9 	employer is an amount equal to the following percentage of the salary of each teacher:

100.10	Period
	Coordinated Member
	Basic Member
	
100.11
100.12	(1) after June 30, 2011, and before July 
1, 2012
	6 percent
	9.5 percent
	
100.13
100.14	(2) after June 30, 2012, and before July 
1, 2013
	6.5 percent
	9.5 percent
	
100.15
100.16	(3) unless paragraph (d) applies, after 
June 30, 2013, and before July 1, 2014
	7 percent
	9.5 percent
	
100.17
100.18	(4) unless paragraph (d) applies, after 
June 30, 2014
	7.5 percent
	9.5 percent
	
100.19 	(d) After July 1, 2012, a scheduled contribution increase under paragraph (a), clause 
100.20 	(4) or (5), and paragraph (c), clause (3) or (4), is suspended if the most recent actuarial 
100.21 	valuation prepared under section 356.215 indicates that there is no contribution deficiency 
100.22 	when the total employee contributions, employer contributions under subdivision 3, and 
100.23 	direct state aid under section 354A.12 and chapter 422A are compared to the actuarial 
100.24 	required contributions of the retirement plan.

100.25 	EFFECTIVE DATE. This section is effective July 1, 2011.

100.26 	Sec. 5. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision 
100.27 	to read:
100.28 		Subd. 4b.Determination. (a) For purposes of this section, a contribution 
100.29 	sufficiency exists if, for purposes of the applicable plan, the total of the employee 
100.30 	contributions, the employer contributions, and any additional employer contributions, if 
100.31 	applicable, exceeds the total of the normal cost, the administrative expenses, and the 
100.32 	amortization contribution of the retirement plan as reported in the most recent actuarial 
100.33 	valuation of the retirement plan prepared by the actuary retained under section 356.214 
100.34 	and prepared under section 356.215 and the standards for actuarial work of the Legislative 
100.35 	Commission on Pensions and Retirement.
100.36 	(b) For purposes of this section, a contribution deficiency exists if, for the applicable 
100.37 	plan, the total employee contributions, the employer contributions, and any additional 
101.1 	employer contributions are less than the total of the normal cost, the administrative 
101.2 	expenses, and the amortization contribution of the retirement plan as reported in the most 
101.3 	recent actuarial valuation of the retirement plan prepared by the actuary retained under 
101.4 	section 356.214 and prepared under section 356.215 and the standards for actuarial work 
101.5 	of the Legislative Commission on Pensions and Retirement.

101.6 	Sec. 6. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision 
101.7 	to read:
101.8 		Subd. 4c.Contribution rate revision. Notwithstanding the contribution rate 
101.9 	provisions stated in plan law, the employee and employer contribution rates must be 
101.10 	adjusted:
101.11 	(1) if after July 1, 2014, the regular actuarial valuations of the applicable plan under 
101.12 	section 356.215 indicate that there is a contribution sufficiency under subdivision 2 equal 
101.13 	to or greater than 0.5 percent of covered payroll for two consecutive years, the employee 
101.14 	and employer contribution rates for the applicable plan must be decreased as determined 
101.15 	under subdivision 4 to a level such that the sufficiency equals no more than 0.25 percent of 
101.16 	covered payroll based on the most recent actuarial valuation; or
101.17 	(2) if after July 1, 2014, the regular actuarial valuations of the applicable plan under 
101.18 	section 356.215 indicate that there is a deficiency equal to or greater than 0.5 percent of 
101.19 	covered payroll for two consecutive years, the employee and employer contribution rates 
101.20 	for the applicable plan must be increased as determined under subdivision 4 to a level such 
101.21 	that no deficiency exists based on the most recent actuarial valuation.

101.22 	Sec. 7. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision 
101.23 	to read:
101.24 		Subd. 4d.Reporting, commission review. (a) The contribution rate increase 
101.25 	or decrease must be determined by the executive director of the Teachers Retirement 
101.26 	Association, must be reported to the chair and the executive director of the Legislative 
101.27 	Commission on Pensions and Retirement on or before the next February 1, and, if the 
101.28 	Legislative Commission on Pensions and Retirement does not recommend against the 
101.29 	rate change or does not recommend a modification in the rate change, is effective on the 
101.30 	next July 1 following the determination by the executive director that a contribution 
101.31 	deficiency or sufficiency has existed for two consecutive fiscal years based on the most 
101.32 	recent actuarial valuations under section 356.215. If the actuarially required contribution 
101.33 	exceeds or is less than the total support provided by the combined employee and employer 
101.34 	contribution rates for the applicable plan by more than 0.5 percent of covered payroll, the 
102.1 	applicable plan employee and employer contribution rates must be adjusted incrementally 
102.2 	over one or more years to a level such that there remains a contribution sufficiency of no 
102.3 	more than 0.25 percent of covered payroll.
102.4 	(b) No incremental adjustment may exceed 0.25 percent of payroll for either the 
102.5 	employee or employer contribution rates per year in which any adjustment is implemented. 
102.6 	For an applicable plan, a contribution rate adjustment under this section must not be 
102.7 	made until at least two years have passed since fully implementing a previous adjustment 
102.8 	under this section.

102.9 	EFFECTIVE DATE. This section is effective July 1, 2011.

102.10 	Sec. 8. Minnesota Statutes 2008, section 354.44, subdivision 6, is amended to read:
102.11 		Subd. 6.Computation of formula program retirement annuity. (a) The formula 
102.12 	retirement annuity must be computed in accordance with the applicable provisions of the 
102.13 	formulas stated in paragraph (b) or (d) on the basis of each member's average salary under 
102.14 	section 354.05, subdivision 13a, for the period of the member's formula service credit.
102.15 	(b) This paragraph, in conjunction with paragraph (c), applies to a person who first 
102.16 	became a member of the association or a member of a pension fund listed in section 
102.17 	356.30, subdivision 3, before July 1, 1989, unless paragraph (d), in conjunction with 
102.18 	paragraph (e), produces a higher annuity amount, in which case paragraph (d) applies. The 
102.19 	average salary as defined in section 354.05, subdivision 13a, multiplied by the following 
102.20 	percentages per year of formula service credit shall determine determines the amount 
102.21 	of the annuity to which the member qualifying therefor is entitled for service rendered 
102.22 	before July 1, 2006:

102.23				Coordinated Member
		Basic Member
	
102.24
102.25
102.26		Each year of service during 
first ten
		the percent specified 
in section 356.315, 
subdivision 1, per year
		the percent specified 
in section 356.315, 
subdivision 3, per year
	
102.27
102.28
102.29		Each year of service 
thereafter
		the percent specified 
in section 356.315, 
subdivision 2, per year
		the percent specified 
in section 356.315, 
subdivision 4, per year
	
102.30 	For service rendered on or after July 1, 2006, the average salary as defined in section 
102.31 	354.05, subdivision 13a, multiplied by the following percentages per year of service credit, 
102.32 	determines the amount the annuity to which the member qualifying therefor is entitled:

103.1				Coordinated Member
		Basic Member
	
103.2
103.3
103.4		Each year of service during 
first ten
		the percent specified 
in section 356.315, 
subdivision 1a, per year
		the percent specified 
in section 356.315, 
subdivision 3, per year
	
103.5
103.6
103.7		Each year of service after 
ten years of service
		the percent specified 
in section 356.315, 
subdivision 2b, per year
		the percent specified 
in section 356.315, 
subdivision 4, per year
	
103.8 	(c)(i) This paragraph applies only to a person who first became a member of the 
103.9 	association or a member of a pension fund listed in section 356.30, subdivision 3, before 
103.10 	July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in 
103.11 	conjunction with this paragraph than when calculated under paragraph (d), in conjunction 
103.12 	with paragraph (e).
103.13 	(ii) Where any member retires prior to normal retirement age under a formula 
103.14 	annuity, the member shall must be paid a retirement annuity in an amount equal to the 
103.15 	normal annuity provided in paragraph (b) reduced by one-quarter of one percent for each 
103.16 	month that the member is under normal retirement age at the time of retirement except 
103.17 	that for any member who has 30 or more years of allowable service credit, the reduction 
103.18 	shall must be applied only for each month that the member is under age 62.
103.19 	(iii) Any member whose attained age plus credited allowable service totals 90 years 
103.20 	is entitled, upon application, to a retirement annuity in an amount equal to the normal 
103.21 	annuity provided in paragraph (b), without any reduction by reason of early retirement.
103.22 	(d) This paragraph applies to a member who has become at least 55 years old and 
103.23 	first became a member of the association after June 30, 1989, and to any other member 
103.24 	who has become at least 55 years old and whose annuity amount when calculated under 
103.25 	this paragraph and in conjunction with paragraph (e), is higher than it is when calculated 
103.26 	under paragraph (b), in conjunction with paragraph (c). For a basic member, the average 
103.27 	salary, as defined in section 354.05, subdivision 13a, multiplied by the percent specified 
103.28 	by section 356.315, subdivision 4, for each year of service for a basic member shall
103.29 	determine determines the amount of the retirement annuity to which the basic member is 
103.30 	entitled. The annuity of a basic member who was a member of the former Minneapolis 
103.31 	Teachers Retirement Fund Association as of June 30, 2006, must be determined according 
103.32 	to the annuity formula under the articles of incorporation of the former Minneapolis 
103.33 	Teachers Retirement Fund Association in effect as of that date. For a coordinated member, 
103.34 	the average salary, as defined in section 354.05, subdivision 13a, multiplied by the percent 
103.35 	specified in section 356.315, subdivision 2, for each year of service rendered before July 
103.36 	1, 2006, and by the percent specified in section 356.315, subdivision 2b, for each year 
103.37 	of service rendered on or after July 1, 2006, and before July 1, 2011, and by the percent 
103.38 	specified in section 356.315, subdivision 2c, for each year of service rendered after June 
104.1 	30, 2011, determines the amount of the retirement annuity to which the coordinated 
104.2 	member is entitled. For a member who has 30 or more years of allowable service credit, 
104.3 	the person's normal retirement age is age 62 and the age 55 minimum early reduced benefit 
104.4 	retirement age does not apply to the person.
104.5 	(e) This paragraph applies to a person who has become at least 55 years old and first 
104.6 	becomes a member of the association after June 30, 1989, and to any other member who 
104.7 	has become at least 55 years old and whose annuity is higher when calculated under 
104.8 	paragraph (d) in conjunction with this paragraph than when calculated under paragraph 
104.9 	(b), in conjunction with paragraph (c). An employee who retires under the formula annuity 
104.10 	before the normal retirement age as defined by section 354.05, subdivision 38, shall must
104.11 	be paid the normal annuity provided in paragraph (d) reduced so that the reduced annuity 
104.12 	is the actuarial equivalent of the annuity that would be payable to the employee if the 
104.13 	employee deferred receipt of the annuity and the annuity amount were augmented at an 
104.14 	annual rate of three percent compounded annually from the day the annuity begins to 
104.15 	accrue until the normal retirement age if the employee became an employee before July 1, 
104.16 	2006, and at 2.5 percent compounded annually if the employee becomes an employee after 
104.17 	June 30, 2006. For a member who has 30 or more years of allowable service credit, the 
104.18 	person's normal retirement age is age 62 and the age 55 minimum early reduced benefit 
104.19 	retirement age does not apply to the person.
104.20 	(f) No retirement annuity is payable to a former employee with a salary that exceeds 
104.21 	95 percent of the governor's salary unless and until the salary figures used in computing 
104.22 	the highest five successive years average salary under paragraph (a) have been audited by 
104.23 	the Teachers Retirement Association and determined by the executive director to comply 
104.24 	with the requirements and limitations of section 354.05, subdivisions 35 and 35a.

104.25 	EFFECTIVE DATE. This section is effective July 1, 2011.

104.26 	Sec. 9. Minnesota Statutes 2008, section 354A.011, subdivision 15a, is amended to 
104.27 	read:
104.28 		Subd. 15a.Normal retirement age. "Normal retirement age" means age 65 for a 
104.29 	person who first became a member of the coordinated program of the St. Paul Teachers 
104.30 	Retirement Fund Association or the new law coordinated program of the Duluth Teachers 
104.31 	Retirement Fund Association or a member of a pension fund listed in section 356.30, 
104.32 	subdivision 3, before July 1, 1989. For a person who first became a member of the 
104.33 	coordinated program of the St. Paul Teachers Retirement Fund Association or the new law 
104.34 	coordinated program of the Duluth Teachers Retirement Fund Association after June 30, 
104.35 	1989, normal retirement age means the higher of age 65 or retirement age, as defined in 
105.1 	United States Code, title 42, section 416(l), as amended, but not to exceed age 66. For a 
105.2 	person with 30 years of service, normal retirement age means age 62. For a person who is 
105.3 	a member of the basic program of the St. Paul Teachers Retirement Fund Association or 
105.4 	the old law coordinated program of the Duluth Teachers Retirement Fund Association, 
105.5 	normal retirement age means the age at which a teacher becomes eligible for a normal 
105.6 	retirement annuity computed upon meeting the age and service requirements specified 
105.7 	in the applicable provisions of the articles of incorporation or bylaws of the respective 
105.8 	teachers retirement fund association. 

105.9 	EFFECTIVE DATE. This section is effective July 1, 2011.

105.10 	Sec. 10. Minnesota Statutes 2008, section 354A.12, subdivision 1, is amended to read:
105.11 		Subdivision 1. Employee contributions. (a) The contribution required to be paid 
105.12 	by each member of a teachers retirement fund association shall must not be less than the 
105.13 	percentage of total salary specified below for the applicable association and program: 

105.14		Association and Program
	Percentage of Total Salary
	
105.15	Duluth Teachers Retirement Fund Association
		
105.16		old law and new law
		
105.17		coordinated programs
	5.5 percent
	
105.18		(1) before July 1, 2011
	5.5 percent
	
105.19		(2) after June 30, 2011, and before July 1, 2012
	6 percent
	
105.20		(3) after June 30, 2012, and before July 1, 2013
	6.5 percent
	
105.21
105.22		(4) unless paragraph (b) applies, after June 30, 
2013, and before July 1, 2014
	7 percent
	
105.23
105.24		(5) unless paragraph (b) applies, after June 30, 
2014
	7.5 percent
	
105.25	St. Paul Teachers Retirement Fund Association
		
105.26		basic program
	8 percent
	
105.27		coordinated program
	5.5 percent
	
105.28		(6) before July 1, 2011
	5.5 percent
	
105.29		(7) after June 30, 2011, and before July 1, 2012
	6 percent
	
105.30		(8) after June 30, 2012, and before July 1, 2013
	6.5 percent
	
105.31
105.32		(9) unless paragraph (b) applies, after June 30, 
2013, and before July 1, 2014
	7 percent
	
105.33
105.34		(10) unless paragraph (b) applies, after June 30, 
2014
	7.5 percent
	
105.35 	(b) When an employee contribution rate changes for a fiscal year, the new 
105.36 	contribution rate is effective for the entire salary paid for each employer unit with the 
105.37 	first payroll cycle reported.
105.38 	(c) After July 1, 2012, a scheduled contribution increase under paragraph (a), 
105.39 	clause (4), (5), (9), or (10), is suspended if the most recent actuarial valuation prepared 
106.1 	under section 356.215 indicates that there is no contribution deficiency when the total 
106.2 	employee contributions, employer contributions under subdivision 3, and direct state aid 
106.3 	are compared to the actuarial required contributions of the retirement plan.
106.4 	(d) Contributions shall must be made by deduction from salary and must be remitted 
106.5 	directly to the respective teachers retirement fund association at least once each month. 

106.6 	EFFECTIVE DATE. This section is effective July 1, 2011.

106.7 	Sec. 11. Minnesota Statutes 2008, section 354A.12, subdivision 2a, is amended to read:
106.8 		Subd. 2a. Employer regular and additional contribution rates. (a) The 
106.9 	employing units shall make the following employer contributions to teachers retirement 
106.10 	fund associations: 
106.11 	(1) for any coordinated member of a teachers retirement fund association in a city of 
106.12 	the first class, the employing unit shall pay the employer Social Security taxes; 
106.13 	(2) for any coordinated member of one of the following teachers retirement fund 
106.14 	associations in a city of the first class, the employing unit shall make a regular employer 
106.15 	contribution to the respective retirement fund association in an amount equal to the 
106.16 	designated percentage of the salary of the coordinated member as provided below: 

106.17
106.18		Duluth Teachers Retirement 
Fund Association 
		4.50 percent
	
106.19		(A) before July 1, 2011
		4.5 percent
	
106.20
106.21		(B) after June 30, 2011, and 
before July 1, 2012
		5 percent
	
106.22
106.23		(C) after June 30, 2012, and 
before July 1, 2013
		5.5 percent
	
106.24
106.25
106.26		(D) unless clause (3) applies, 
after June 30, 2013, and before 
July 1, 2014
		6 percent
	
106.27
106.28		(E) unless clause (3) applies, 
after June 30, 2014
		6.5 percent
	
106.29
106.30		St. Paul Teachers Retirement 
Fund Association
		4.50 percent
	
106.31		(F) before July 1, 2011
		4.5 percent
	
106.32
106.33		(G) after June 30, 2011, and 
before July 1, 2012
		5 percent
	
106.34
106.35		(H) after June 30, 2012, and 
before July 1, 2013
		5.5 percent
	
106.36
106.37
106.38		(I) unless clause (3) applies, 
after June 30, 2013, and before 
July 1, 2014
		6 percent
	
106.39
106.40		(J) unless clause (3) applies, 
after June 30, 2014
		6.5 percent
	
107.1 	(3) After July 1, 2012, a scheduled contribution increase under paragraph (a), clause 
107.2 	(2), item (D), (E), (I), or (J), is suspended if the most recent actuarial valuation prepared 
107.3 	under section 356.215 indicates that there is no contribution deficiency when the total 
107.4 	employee contributions, employer contributions under subdivision 3, and direct state aid 
107.5 	are compared to the actuarial required contributions of the retirement plan;
107.6 	(4) for any basic member of the St. Paul Teachers Retirement Fund Association, the 
107.7 	employing unit shall make a regular employer contribution to the respective retirement 
107.8 	fund in an amount equal to 8.00 percent of the salary of the basic member;
107.9 	(4) (5) for a basic member of the St. Paul Teachers Retirement Fund Association, the 
107.10 	employing unit shall make an additional employer contribution to the respective fund in 
107.11 	an amount equal to 3.64 percent of the salary of the basic member;
107.12 	(5) (6) for a coordinated member of a teachers retirement fund association in a city 
107.13 	of the first class, the employing unit shall make an additional employer contribution to 
107.14 	the respective fund in an amount equal to the applicable percentage of the coordinated 
107.15 	member's salary, as provided below:

107.16
107.17		Duluth Teachers Retirement 
Fund Association
		1.29 percent
	
107.18
107.19		St. Paul Teachers Retirement 
Fund Association
			
107.20		July 1, 1993 - June 30, 1994
		0.50 percent
	
107.21		July 1, 1994 - June 30, 1995
		1.50 percent
	
107.22		July 1, 1997, and thereafter
		3.84 percent
	
107.23 	(b) When an employer contribution rate changes for a fiscal year, the new 
107.24 	contribution rate is effective for the entire salary paid for each employer unit with the 
107.25 	first payroll cycle reported.
107.26 	(c) The regular and additional employer contributions must be remitted directly to 
107.27 	the respective teachers retirement fund association at least once each month. Delinquent 
107.28 	amounts are payable with interest under the procedure in subdivision 1a.
107.29 	(c) (d) Payments of regular and additional employer contributions for school district 
107.30 	or technical college employees who are paid from normal operating funds must be made 
107.31 	from the appropriate fund of the district or technical college. 

107.32 	EFFECTIVE DATE. This section is effective July 1, 2011.

107.33 	Sec. 12. Minnesota Statutes 2008, section 354A.12, is amended by adding a 
107.34 	subdivision to read:
107.35 		Subd. 4a.Determination. (a) For purposes of this section, a contribution sufficiency 
107.36 	exists if, for purposes of the applicable plan, the total of the employee contributions, 
108.1 	the employer contributions, and any additional employer contributions, if applicable, 
108.2 	exceeds the total of the normal cost, the administrative expenses, and the amortization 
108.3 	contribution of the retirement plan as reported in the most recent actuarial valuation of the 
108.4 	retirement plan prepared by the actuary retained under section 356.214 and prepared under 
108.5 	section 356.215 and the standards for actuarial work of the Legislative Commission on 
108.6 	Pensions and Retirement.
108.7 	(b) For purposes of this section, a contribution deficiency exists if, for the applicable 
108.8 	plan, the total employee contributions, employer contributions, and any additional 
108.9 	employer contributions are less than the total of the normal cost, the administrative 
108.10 	expenses, and the amortization contribution of the retirement plan as reported in the most 
108.11 	recent actuarial valuation of the retirement plan prepared by the actuary retained under 
108.12 	section 356.214 and prepared under section 356.215 and the standards for actuarial work 
108.13 	of the Legislative Commission on Pensions and Retirement.

108.14 	Sec. 13. Minnesota Statutes 2008, section 354A.12, is amended by adding a 
108.15 	subdivision to read:
108.16 		Subd. 4b.Contribution rate revision. Notwithstanding the contribution rate 
108.17 	provisions stated in plan law, the employee and employer contribution rates must be 
108.18 	adjusted:
108.19 	(1) if after July 1, 2014, the regular actuarial valuations of the applicable plan under 
108.20 	section 356.215 indicate that there is a contribution sufficiency under subdivision 2 equal 
108.21 	to or greater than 0.5 percent of covered payroll for two consecutive years, the employee 
108.22 	and employer contribution rates for the applicable plan must be decreased as determined 
108.23 	under subdivision 4 to a level such that the sufficiency equals no more than 0.25 percent of 
108.24 	covered payroll based on the most recent actuarial valuation; or
108.25 	(2) if after July 1, 2014, the regular actuarial valuations of the applicable plan under 
108.26 	section 356.215 indicate that there is a deficiency equal to or greater than 0.5 percent of 
108.27 	covered payroll for two consecutive years, the employee and employer contribution rates 
108.28 	for the applicable plan must be increased as determined under subdivision 4 to a level such 
108.29 	that no deficiency exists based on the most recent actuarial valuation.

108.30 	Sec. 14. Minnesota Statutes 2008, section 354A.12, is amended by adding a 
108.31 	subdivision to read:
108.32 		Subd. 4c.Reporting, commission review. (a) The contribution rate increase or 
108.33 	decrease must be determined by the executive director of the Duluth Teachers Retirement 
108.34 	Fund Association or the St. Paul Teachers Retirement Fund Association, and must be 
109.1 	reported to the chair and the executive director of the Legislative Commission on Pensions 
109.2 	and Retirement on or before the next February 1, and, if the Legislative Commission 
109.3 	on Pensions and Retirement does not recommend against the rate change or does not 
109.4 	recommend a modification in the rate change, is effective on the next July 1 following 
109.5 	the determination by the executive director that a contribution deficiency or sufficiency 
109.6 	has existed for two consecutive fiscal years based on the most recent actuarial valuations 
109.7 	under section 356.215. If the actuarially required contribution exceeds or is less than 
109.8 	the total support provided by the combined employee and employer contribution rates 
109.9 	for the applicable plan by more than 0.5 percent of covered payroll, the applicable plan 
109.10 	employee and employer contribution rates must be adjusted incrementally over one or 
109.11 	more years to a level such that there remains a contribution sufficiency of no more than 
109.12 	0.25 percent of covered payroll.
109.13 	(b) No incremental adjustment may exceed 0.25 percent of payroll for either the 
109.14 	employee or employer contribution rates per year in which any adjustment is implemented. 
109.15 	For an applicable plan, a contribution rate adjustment under this section must not be 
109.16 	made until at least two years have passed since fully implementing a previous adjustment 
109.17 	under this section.

109.18 	EFFECTIVE DATE. This section is effective July 1, 2011.

109.19 	Sec. 15. Minnesota Statutes 2008, section 354A.31, subdivision 4, is amended to read:
109.20 		Subd. 4.Computation of normal coordinated retirement annuity; St. Paul 
109.21 	fund. (a) This subdivision applies to the coordinated program of the St. Paul Teachers 
109.22 	Retirement Fund Association.
109.23 	(b) The normal coordinated retirement annuity is an amount equal to a retiring 
109.24 	coordinated member's average salary under section 354A.011, subdivision 7a, multiplied 
109.25 	by the retirement annuity formula percentage.
109.26 	(c) This paragraph, in conjunction with subdivision 6, applies to a person who first 
109.27 	became a member or a member in a pension fund listed in section 356.30, subdivision 3, 
109.28 	before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a 
109.29 	higher annuity amount, in which case paragraph (d) will apply. The retirement annuity 
109.30 	formula percentage for purposes of this paragraph is the percent specified in section 
109.31 	356.315, subdivision 1, per year for each year of coordinated service for the first ten years 
109.32 	and the percent specified in section 356.315, subdivision 2, for each year of coordinated 
109.33 	service thereafter. The average salary multiplied by the following retirement annuity 
109.34 	formula percentage per year of allowable service determines the amount of the annuity to 
109.35 	which the member qualifying therefor is entitled for service rendered before July 1, 2011:

110.1
110.2	Each year of service during first ten years
	the percent specified in section 356.315, 
subdivision 1, per year
	
110.3
110.4	Each year of service thereafter
	the percent specified in section 356.315, 
subdivision 2, per year
	
110.5 	For service rendered on or after July 1, 2011, the average salary multiplied by the 
110.6 	following retirement annuity formula percentage per year of allowable service determines 
110.7 	the amount of the annuity to which the member qualifying therefor is entitled:

110.8
110.9	Each year of service during first ten years
	the percent specified in section 356.315, 
subdivision 1a, per year
	
110.10
110.11	Each year of service thereafter
	the percent specified in section 356.315, 
subdivision 2b, per year
	
110.12 	(d) This paragraph applies to a person who has become at least 55 years old and who 
110.13 	first becomes a member after June 30, 1989, and to any other member who has become 
110.14 	at least 55 years old and whose annuity amount, when calculated under this paragraph 
110.15 	and in conjunction with subdivision 7 is higher than it is when calculated under paragraph 
110.16 	(c), in conjunction with the provisions of subdivision 6. The retirement annuity formula 
110.17 	percentage for purposes of this paragraph is the percent specified in section 356.315, 
110.18 	subdivision 2, for each year of coordinated service before July 1, 2011, and by the percent 
110.19 	specified in section 356.315, subdivision 2c, for each year of service rendered after June 
110.20 	30, 2011. For a member who has 30 or more years of allowable service credit, the person's 
110.21 	normal retirement age is age 62 and the age 55 minimum early reduced benefit retirement 
110.22 	age does not apply to the person.

110.23 	EFFECTIVE DATE. This section is effective July 1, 2011.

110.24 	Sec. 16. Minnesota Statutes 2008, section 354A.31, subdivision 4a, is amended to read:
110.25 		Subd. 4a.Computation of normal coordinated retirement annuity; Duluth 
110.26 	fund. (a) This subdivision applies to the new law coordinated program of the Duluth 
110.27 	Teachers Retirement Fund Association.
110.28 	(b) The normal coordinated retirement annuity is an amount equal to a retiring 
110.29 	coordinated member's average salary under section 354A.011, subdivision 7a, multiplied 
110.30 	by the retirement annuity formula percentage.
110.31 	(c) This paragraph, in conjunction with subdivision 6, applies to a person who first 
110.32 	became a member or a member in a pension fund listed in section 356.30, subdivision 3, 
110.33 	before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a 
110.34 	higher annuity amount, in which case paragraph (d) applies. The retirement annuity 
110.35 	formula percentage for purposes of this paragraph is the percent specified in section 
110.36 	356.315, subdivision 1, per year for each year of coordinated service for the first ten years 
111.1 	and the percent specified in section 356.315, subdivision 2, for each subsequent year of 
111.2 	coordinated service. The average salary multiplied by the following retirement annuity 
111.3 	formula percentage per year of allowable service determines the amount of the annuity to 
111.4 	which the member qualifying therefor is entitled for service rendered before July 1, 2011:

111.5
111.6	Each year of service during first ten years
	the percent specified in section 356.315, 
subdivision 1, per year
	
111.7
111.8	Each year of service thereafter
	the percent specified in section 356.315, 
subdivision 2, per year
	
111.9 	For service rendered on or after July 1, 2011, the average salary multiplied by the 
111.10 	following retirement annuity formula percentage per year of allowable service determines 
111.11 	the amount of the annuity to which the member qualifying therefor is entitled:

111.12
111.13	Each year of service during first ten years
	the percent specified in section 356.315, 
subdivision 1a, per year
	
111.14
111.15	Each year of service thereafter
	the percent specified in section 356.315, 
subdivision 2b, per year
	
111.16 	(d) This paragraph applies to a person who is at least 55 years old and who first 
111.17 	becomes a member after June 30, 1989, and to any other member who is at least 55 years 
111.18 	old and whose annuity amount, when calculated under this paragraph and in conjunction 
111.19 	with subdivision 7, is higher than it is when calculated under paragraph (c) in conjunction 
111.20 	with subdivision 6. The retirement annuity formula percentage for purposes of this 
111.21 	paragraph is the percent specified in section 356.315, subdivision 2, for each year of 
111.22 	coordinated service before July 1, 2011, and by the percent specified in section 356.315, 
111.23 	subdivision 2c, for each year of service rendered after June 30, 2011. For a member who 
111.24 	has 30 or more years of allowable service credit, the person's normal retirement age is 
111.25 	age 62 and the age 55 minimum early reduced benefit retirement age does not apply 
111.26 	to the person.

111.27 	EFFECTIVE DATE. This section is effective July 1, 2011.

111.28 	Sec. 17. Minnesota Statutes 2008, section 354A.31, subdivision 7, is amended to read:
111.29 		Subd. 7.Actuarial reduction for early retirement. This subdivision applies to 
111.30 	a person who has become at least 55 years old and first becomes a coordinated member 
111.31 	after June 30, 1989, and to any other coordinated member who has become at least 55 
111.32 	years old and whose annuity is higher when calculated using the retirement annuity 
111.33 	formula percentage in subdivision 4, paragraph (d), and subdivision 4a, paragraph (d), in 
111.34 	conjunction with this subdivision than when calculated under subdivision 4, paragraph 
111.35 	(c), or subdivision 4a, paragraph (c), in conjunction with subdivision 6. A coordinated 
111.36 	member who retires before the full benefit age shall as defined by section 354A.011, 
112.1 	subdivision 15a, must be paid the retirement annuity calculated using the retirement 
112.2 	annuity formula percentage in subdivision 4, paragraph (d), or subdivision 4a, paragraph 
112.3 	(d), reduced so that the reduced annuity is the actuarial equivalent of the annuity that 
112.4 	would be payable to the member if the member deferred receipt of the annuity and the 
112.5 	annuity amount were augmented at an annual rate of three percent compounded annually 
112.6 	from the day the annuity begins to accrue until the normal retirement age if the employee 
112.7 	became an employee before July 1, 2006, and at 2.5 percent compounded annually 
112.8 	from the day the annuity begins to accrue until the normal retirement age if the person 
112.9 	initially becomes a teacher after June 30, 2006. For a member who has 30 or more years 
112.10 	of allowable service credit, the person's normal retirement age is age 62 and the age 55 
112.11 	minimum early reduced benefit retirement age does not apply to the person.

112.12 	EFFECTIVE DATE. This section is effective July 1, 2011.

112.13 	Sec. 18. Minnesota Statutes 2008, section 356.315, is amended by adding a subdivision 
112.14 	to read:
112.15 		Subd. 2c.Certain coordinated members. The applicable benefit accrual rate 
112.16 	is 2.1 percent.

112.17 	EFFECTIVE DATE. This section is effective July 1, 2011.

112.18 	ARTICLE 7
112.19 	MNSCU RELATED RETIREMENT PROVISIONS

112.20 	Section 1. [136F.481] EARLY SEPARATION INCENTIVE PROGRAM.
112.21 	(a) Notwithstanding any provision of law to the contrary, the Board of Trustees 
112.22 	of the Minnesota State Colleges and Universities may offer a targeted early separation 
112.23 	incentive program for its employees.
112.24 	(b) The early separation incentive program may include one or both of the following:
112.25 	(1) cash incentives, not to exceed one year of base salary; or 
112.26 	(2) employer contributions to the postretirement healthcare savings plan established 
112.27 	under section 352.98.
112.28 	(c) To be eligible to receive an incentive, an employee must be at least age 55 
112.29 	and must have at least five years of employment by the Minnesota State Colleges and 
112.30 	Universities System. The board of trustees shall establish the eligibility requirements 
112.31 	for system employees to receive an incentive. The board of trustees shall file a copy 
112.32 	of its proposed eligibility requirements with the chairs and ranking members of the 
112.33 	Senate Committee on Higher Education and the Higher Education Budget and Policy 
113.1 	Division of the Senate Committee on Finance and with the chair and ranking members of 
113.2 	the Higher Education and Workforce Development Finance and Policy Division of the 
113.3 	Finance Committee of the House of Representatives at least 30 days before their final 
113.4 	adoption by the board of trustees, shall post the same document on the system website at 
113.5 	the same time, and shall hold a public hearing on the proposed eligibility requirements. 
113.6 	The type and any additional amount of the incentive to be offered may vary by employee 
113.7 	classification, as specified by the board.
113.8 	(d) The president of a college or university, consistent with paragraphs (b) and 
113.9 	(c), may designate: 
113.10 	(1) specific departments or programs at the college or university whose employees 
113.11 	are eligible to be offered the incentive program; or
113.12 	(2) positions at the college or university eligible to be offered the incentive program.
113.13 	(e) The chancellor, consistent with paragraphs (b) and (c), may designate:
113.14 	(1) system office divisions whose employees are eligible to be offered the incentive 
113.15 	program; or
113.16 	(2) positions at the system office eligible to be offered the incentive program.
113.17 	(f) Acceptance of the offered incentive must be voluntary on the part of the employee 
113.18 	and must be in writing. The incentive may only be offered at the sole discretion of the 
113.19 	president of the applicable college or university.
113.20 	(g) A decision by the president of a college or university or by the chancellor not to 
113.21 	offer an incentive may not be challenged.
113.22 	(h) The cost of the incentive is payable by the college or university on whose behalf 
113.23 	the president offered the incentive or from the system office budget if the chancellor 
113.24 	offered the incentive. If a college or university is merged, the remaining cost of any 
113.25 	early separation incentive must be borne by the successor institution. If a college or 
113.26 	university is closed, the remaining cost of any early separation incentive must be borne 
113.27 	by the board of trustees.
113.28 	(i) Annually, the chancellor and the president of each college or university must 
113.29 	report on the number and types of early separation incentives which were offered and 
113.30 	utilized under this section. The report must be filed annually with the board of trustees and 
113.31 	with the Legislative Reference Library on or before September 1.

113.32 	EFFECTIVE DATE; SUNSET. This section is effective the day following final 
113.33 	enactment and expires June 30, 2014.

113.34 	Sec. 2. [136F.482] APPLICATION OF OTHER LAWS.
114.1 	Unilateral implementation of section 136F.481 by the Board of Trustees of the 
114.2 	Minnesota State Colleges and Universities, by the chancellor, or by a president of a college 
114.3 	or university is not an unfair labor practice under chapter 179A.

114.4 	EFFECTIVE DATE; SUNSET. This section is effective the day following final 
114.5 	enactment and expires June 30, 2014.

114.6 	Sec. 3. Minnesota Statutes 2008, section 354B.21, subdivision 2, is amended to read:
114.7 		Subd. 2.Coverage; election. (a) For Eligible persons who were employed by 
114.8 	the former state university system or the former community college system before May 
114.9 	1, 1995, the person has the retirement coverage that the person had for employment 
114.10 	immediately before May 1, 1995.
114.11 	(b) For all other eligible persons (a) Eligible persons who were employed by 
114.12 	the Minnesota State Colleges and Universities System on or after June 30, 2009, 
114.13 	unless otherwise specified in this section, the eligible person isare authorized to elect 
114.14 	prospective Teachers Retirement Association plan coverage rather than coverage by 
114.15 	the plan established by this chapter. The election of prospective Teachers Retirement 
114.16 	Association plan coverage shallmust be made within one year of commencing eligible 
114.17 	Minnesota State Colleges and Universities system employment. If an election is not made 
114.18 	within the specified election period due to a termination of Minnesota State Colleges and 
114.19 	Universities system employment, an election may be made within 90 days of returning to 
114.20 	eligible Minnesota State Colleges and Universities system employment. All elections are 
114.21 	irrevocable. Prior toBefore making an election, the eligible person shall beis covered by 
114.22 	the plan indicated as default coverage under subdivision 3.
114.23 	(b) Except as provided in paragraph (c), a purchase of service credit in the Teachers 
114.24 	Retirement Association plan for any period or periods of Minnesota State Colleges and 
114.25 	Universities system employment occurring prior tobefore the election under paragraph 
114.26 	(b)(a) is prohibited.
114.27 	(c) Notwithstanding paragraphs (a) and (b), a faculty member who is a member of 
114.28 	the individual retirement account plan who first achieves tenure or its equivalent at a 
114.29 	Minnesota state college or university after June 30, 2009, may elect to transfer retirement 
114.30 	coverage under the teachers retirement plan within one year of the faculty member 
114.31 	achieving tenure or its equivalent at a Minnesota state college or university. The faculty 
114.32 	member electing Teachers Retirement Association coverage under this paragraph must 
114.33 	purchase service credit in the Teachers Retirement Association for the entire period of 
114.34 	time covered under the individual retirement account plan and the purchase payment 
114.35 	amount must be determined under section 356.551. The Teachers Retirement Association 
115.1 	may charge a faculty member transferring coverage a reasonable fee to cover the costs 
115.2 	associated with computing the actuarial cost of purchasing service credit and making the 
115.3 	transfer. A faculty member transferring from the individual retirement account plan to the 
115.4 	Teachers Retirement Association may use any balances to the credit of the faculty member 
115.5 	in the individual retirement account plan, any balances to the credit of the faculty member 
115.6 	in the higher education supplemental retirement plan established under chapter 354C, or 
115.7 	any source specified in section 356.441, subdivision 1, to purchase the service credit in the 
115.8 	Teachers Retirement Association. If the total amount of payments under this paragraph are 
115.9 	less than the total purchase payment amount under section 356.551, the payment amounts 
115.10 	must be refunded to the applicable source. The retirement coverage transfer and service 
115.11 	credit purchase authority under this paragraph expires with respect to any Minnesota State 
115.12 	Colleges and Universities System faculty initially hired after June 30, 2014.

115.13 	EFFECTIVE DATE. This section is effective July 1, 2009.

115.14 	ARTICLE 8
115.15 	ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION 
115.16 	POSTRETIREMENT ADJUSTMENTS

115.17 	Section 1. Minnesota Statutes 2008, section 354A.29, subdivision 3, is amended to 
115.18 	read:
115.19 		Subd. 3.Postretirement adjustment. (a) The postretirement adjustment described 
115.20 	in the articles and bylaws of the St. Paul Teachers Retirement Fund Associationthis 
115.21 	section  must be determined by the executive director of the St. Paul Teachers Retirement 
115.22 	Fund Association and approved by the board annually after June 30using the procedures 
115.23 	under this section.
115.24 	(b)  On January 1,each eligible person who has been receiving an annuity or benefit 
115.25 	under the articles of incorporation, the bylaws, or this chapter for at least 12three calendar 
115.26 	months as of the end of the fiscallast day of the previous calendar year is eligible to 
115.27 	receive a postretirement adjustment of 2.0 percent that is payable each January 1 increase 
115.28 	as further specified in this subdivision.
115.29 	(c) A percentage adjustment must be computed and paid under this subdivision to 
115.30 	eligible persons under paragraph (b). This adjustment is determined by reference to the 
115.31 	Consumer Price Index for urban wage earners and clerical workers all items index as 
115.32 	reported by the Bureau of Labor Statistics within the United States Department of Labor 
115.33 	each year as part of the determination of annual cost-of-living adjustments to recipients of 
115.34 	federal old-age, survivors, and disability insurance. For calculations of the cost-of-living 
116.1 	adjustment under paragraph (d), the term "average third quarter Consumer Price Index 
116.2 	value" means the sum of the monthly index values as initially reported by the Bureau of 
116.3 	Labor Statistics for the months of July, August, and September, divided by 3.
116.4 	(d) Before January 1 of each year, the executive director must calculate the amount 
116.5 	of the cost-of-living adjustment by dividing the most recent average third quarter index 
116.6 	value by the same average third quarter index value from the previous year, subtract one 
116.7 	from the resulting quotient, and express the result as a percentage amount, which must be 
116.8 	rounded to the nearest one-tenth of one percent.
116.9 	(e) The amount calculated under paragraph (d) is the full cost-of-living adjustment 
116.10 	to be applied as a permanent increase to the regular payment of each eligible member 
116.11 	on January 1 of the next calendar year. For any eligible member whose effective date 
116.12 	of benefit commencement occurred during the calendar year before the cost-of-living 
116.13 	adjustment is applied, the full increase amount must be prorated on the basis of whole 
116.14 	calendar quarters in benefit payment status in the calendar year prior to the January 1 on 
116.15 	which the cost-of-living adjustment is applied, calculated to the third decimal place.
116.16 	(f) The adjustment may not be less than zero, nor greater than five percent. 

116.17 	Sec. 2. BYLAW REVISION AUTHORIZATION.
 116.18 	Consistent with Minnesota Statutes, section 354A.12, subdivision 4, the board of 
116.19 	the St. Paul Teachers Retirement Fund Association shall revise the bylaws or articles of 
116.20 	incorporation of the teachers retirement fund association to conform with section 1.

116.21 	Sec. 3.  REPEALER.
 116.22 	Minnesota Statutes 2008, section 354A.29, subdivisions 2, 4, and 5, are repealed.

116.23 	Sec. 4. EFFECTIVE DATE.
 116.24 	Sections 1 to 3 are effective January 1, 2010, and expire June 30, 2011.

116.25 	ARTICLE 9
116.26 	LOCAL POLICE AND PAID FIRE
116.27 	RELIEF ASSOCIATION CHANGES

116.28 	Section 1. Minnesota Statutes 2008, section 69.77, subdivision 4, is amended to read:
116.29 		Subd. 4.Relief association financial requirements; minimum municipal 
116.30 	obligation. (a) The officers of the relief association shall determine the financial 
116.31 	requirements of the relief association and minimum obligation of the municipality for 
116.32 	the following calendar year in accordance with the requirements of this subdivision. 
117.1 	The financial requirements of the relief association and the minimum obligation of the 
117.2 	municipality must be determined on or before the submission date established by the 
117.3 	municipality under subdivision 5.
117.4 	(b) The financial requirements of the relief association for the following calendar 
117.5 	year must be based on the most recent actuarial valuation or survey of the special fund of 
117.6 	the association if more than one fund is maintained by the association, or of the association, 
117.7 	if only one fund is maintained, prepared in accordance with sections 356.215, subdivisions 
117.8 	4 to 15, and 356.216, as required under subdivision 10. If an actuarial estimate is prepared 
117.9 	by the actuary of the relief association as part of obtaining a modification of the benefit 
117.10 	plan of the relief association and the modification is implemented, the actuarial estimate 
117.11 	must be used in calculating the subsequent financial requirements of the relief association.
117.12 	(c) If the relief association has an unfunded actuarial accrued liability as reported in 
117.13 	the most recent actuarial valuation or survey, the total of the amounts calculated under 
117.14 	clauses (1), (2), and (3), constitute the financial requirements of the relief association for 
117.15 	the following year. If the relief association does not have an unfunded actuarial accrued 
117.16 	liability as reported in the most recent actuarial valuation or survey, the amount calculated 
117.17 	under clauses (1) and (2) constitute the financial requirements of the relief association for 
117.18 	the following year. The financial requirement elements are:
117.19 	(1) the normal level cost requirement for the following year, expressed as a dollar 
117.20 	amount, which must be determined by applying the normal level cost of the relief 
117.21 	association as reported in the actuarial valuation or survey and expressed as a percentage 
117.22 	of covered payroll to the estimated covered payroll of the active membership of the relief 
117.23 	association, including any projected change in the active membership, for the following 
117.24 	year;
117.25 	(2) for the Bloomington Fire Department Relief Association, the Fairmont Police 
117.26 	Relief Association, and the Virginia Fire Department Relief Association, to the dollar 
117.27 	amount of normal cost determined under clause (1) must be added an amount equal to the 
117.28 	dollar amount of the administrative expenses of the special fund of the association if more 
117.29 	than one fund is maintained by the association, or of the association if only one fund is 
117.30 	maintained, for the most recent year, multiplied by the factor of 1.035. The administrative 
117.31 	expenses are those authorized under section 69.80. No amount of administrative expenses 
117.32 	under this clause are to be included in the financial requirements of the Minneapolis 
117.33 	Firefighters Relief Association or the Minneapolis Police Relief Association; and
117.34 	(3) to the dollar amount of normal cost and expenses determined under clauses 
117.35 	(1) and (2) must be added an amount equal to the level annual dollar amount which is 
117.36 	sufficient to amortize the unfunded actuarial accrued liability by December 31, 2010, the 
118.1 	Fairmont Police Relief Association, the Minneapolis Firefighters Relief Association, 
118.2 	and the Virginia Fire Department Relief Association, by the date determined under 
118.3 	section 356.216, paragraph (a), clause (2), for the Bloomington Fire Department Relief 
118.4 	Association, and by December 31, 2020, for the Minneapolis Police Relief Association, as 
118.5 	determined from the actuarial valuation or survey of the fund, using an interest assumption 
118.6 	set at the applicable rate specified in section 356.215, subdivision 8. The, by that 
118.7 	fund's amortization date as specified in this clause applies to all local police or salaried 
118.8 	firefighters' relief associations and that date supersedes any amortization date specified in 
118.9 	any applicable special law paragraph (d).
118.10 	(d) The Minneapolis Firefighters Relief Association special fund amortization date 
118.11 	is determined under section 423C.15, subdivisions 3 and 4. The Virginia Fire Department 
118.12 	Relief Association special fund amortization date is December 31, 2010. The Minneapolis 
118.13 	Police Relief Association special fund and the Fairmont Police Relief Association 
118.14 	special fund amortization date is December 31, 2020. The Bloomington Fire Department 
118.15 	Relief Association special fund amortization date is determined under section 356.216, 
118.16 	paragraph (a), clause (2). The amortization date specified in this paragraph supersedes any 
118.17 	amortization date specified in any applicable special law.
118.18 	(d) (e) The minimum obligation of the municipality is an amount equal to the 
118.19 	financial requirements of the relief association reduced by the estimated amount of 
118.20 	member contributions from covered salary anticipated for the following calendar year and 
118.21 	the estimated amounts anticipated for the following calendar year from the applicable 
118.22 	state aid program established under sections 69.011 to 69.051 receivable by the relief 
118.23 	association after any allocation made under section 69.031, subdivision 5, paragraph (b), 
118.24 	clause (2), or 423A.01, subdivision 2, paragraph (a), clause (6), from the local police 
118.25 	and salaried firefighters' relief association amortization aid program established under 
118.26 	section 423A.02, subdivision 1, from the supplementary amortization state-aid program 
118.27 	established under section 423A.02, subdivision 1a, and from the additional amortization 
118.28 	state aid under section 423A.02, subdivision 1b.

118.29 	EFFECTIVE DATE; LOCAL APPROVAL. This section is effective the day after 
118.30 	the Fairmont City Council and the chief clerical officer of the city of Fairmont timely 
118.31 	complete their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

118.32 	Sec. 2. Minnesota Statutes 2008, section 423C.03, subdivision 1, is amended to read:
118.33 		Subdivision 1.Board composition and elections. The board shall consist of 
118.34 	two persons appointed by the city and tenthe number of other members specified in 
118.35 	the association bylaws, but not to exceed ten, who must be selected by the members. 
119.1 	Elections for active and retired positions on the board shall be conducted pursuant to 
119.2 	the association's bylaws.

119.3 	EFFECTIVE DATE. This section is effective the day following final enactment.

119.4 	ARTICLE 10
119.5 	VOLUNTARY STATEWIDE LUMP SUM
119.6 	VOLUNTEER FIREFIGHTER RETIREMENT PLAN

119.7 	Section 1. Minnesota Statutes 2008, section 11A.17, subdivision 1, is amended to read:
119.8 		Subdivision 1.Purpose; accounts; continuation. (a) The purpose of the 
119.9 	supplemental investment fund is to provide an investment vehicle for the assets of various 
119.10 	public retirement plans and funds.
119.11 	(b) The fund consists of seveneight investment accounts: an income share account, 
119.12 	a growth share account, an international share account, a money market account, a fixed 
119.13 	interest account, a bond market account, and a common stock index account, and a 
119.14 	volunteer firefighter account.
119.15 	(c) The supplemental investment fund is a continuation of the supplemental 
119.16 	retirement fund in existence on January 1, 1980.

119.17 	Sec. 2. Minnesota Statutes 2008, section 11A.17, subdivision 2, is amended to read:
119.18 		Subd. 2.Assets. (a) The assets of the supplemental investment fund shall consist 
119.19 	of the money certified and transmitted to the state board from the participating public 
119.20 	retirement plans and funds orfrom the board of the Minnesota State Colleges and
119.21 	Universities under section 136F.45 and from the voluntary statewide lump-sum volunteer 
119.22 	firefighter retirement plan under section 353G.08.
119.23 	(b) With the exception of the assets of the voluntary statewide lump-sum volunteer 
119.24 	firefighter retirement fund, the assets must be used to purchase investment shares in 
119.25 	the investment accounts as specified by the plan or fund. The assets of the voluntary 
119.26 	statewide lump-sum volunteer firefighter retirement fund must be invested in the volunteer 
119.27 	firefighter account.
119.28 	(c) These accounts must be valued at least on a monthly basis but may be valued 
119.29 	more frequently as determined by the State Board of Investment.  

119.30 	Sec. 3. Minnesota Statutes 2008, section 69.011, subdivision 1, is amended to read:
120.1 		Subdivision 1.Definitions. Unless the language or context clearly indicates that a 
120.2 	different meaning is intended, the following words and terms shall, for the purposes of this 
120.3 	chapter and chapters 423, 423A, 424 and 424A, have the meanings ascribed to them:
120.4 	(a) "Commissioner" means the commissioner of revenue.
120.5 	(b) "Municipality" means:
120.6 	(1) a home rule charter or statutory city;
120.7 	(2) an organized town;
120.8 	(3) a park district subject to chapter 398;
120.9 	(4) the University of Minnesota;
120.10 	(5) for purposes of the fire state aid program only, an American Indian tribal 
120.11 	government entity located within a federally recognized American Indian reservation;
120.12 	(6) for purposes of the police state aid program only, an American Indian tribal 
120.13 	government with a tribal police department which exercises state arrest powers under 
120.14 	section 626.90, 626.91, 626.92, or 626.93; 
120.15 	(7) for purposes of the police state aid program only, the Metropolitan Airports 
120.16 	Commission with respect to peace officers covered under chapter 422A; and
120.17 	(8) for purposes of the police state aid program only, the Department of Natural 
120.18 	Resources and the Department of Public Safety with respect to peace officers covered 
120.19 	under chapter 352B.
120.20 	(c) "Minnesota Firetown Premium Report" means a form prescribed by the 
120.21 	commissioner containing space for reporting by insurers of fire, lightning, sprinkler 
120.22 	leakage and extended coverage premiums received upon risks located or to be performed 
120.23 	in this state less return premiums and dividends.
120.24 	(d) "Firetown" means the area serviced by any municipality having a qualified fire 
120.25 	department or a qualified incorporated fire department having a subsidiary volunteer 
120.26 	firefighters' relief association.
120.27 	(e) "Market value" means latest available market value of all property in a taxing 
120.28 	jurisdiction, whether the property is subject to taxation, or exempt from ad valorem 
120.29 	taxation obtained from information which appears on abstracts filed with the commissioner 
120.30 	of revenue or equalized by the State Board of Equalization.
120.31 	(f) "Minnesota Aid to Police Premium Report" means a form prescribed by the 
120.32 	commissioner for reporting by each fire and casualty insurer of all premiums received 
120.33 	upon direct business received by it in this state, or by its agents for it, in cash or otherwise, 
120.34 	during the preceding calendar year, with reference to insurance written for insuring against 
120.35 	the perils contained in auto insurance coverages as reported in the Minnesota business 
120.36 	schedule of the annual financial statement which each insurer is required to file with 
121.1 	the commissioner in accordance with the governing laws or rules less return premiums 
121.2 	and dividends.
121.3 	(g) "Peace officer" means any person:
121.4 	(1) whose primary source of income derived from wages is from direct employment 
121.5 	by a municipality or county as a law enforcement officer on a full-time basis of not less 
121.6 	than 30 hours per week;
121.7 	(2) who has been employed for a minimum of six months prior to December 31 
121.8 	preceding the date of the current year's certification under subdivision 2, clause (b);
121.9 	(3) who is sworn to enforce the general criminal laws of the state and local 
121.10 	ordinances;
121.11 	(4) who is licensed by the Peace Officers Standards and Training Board and is 
121.12 	authorized to arrest with a warrant; and
121.13 	(5) who is a member of a local police relief association to which section 69.77 
121.14 	applies, the State Patrol retirement plan, the public employees police and fire fund, or the 
121.15 	Minneapolis Employees Retirement Fund. 
121.16 	(h) "Full-time equivalent number of peace officers providing contract service" means 
121.17 	the integral or fractional number of peace officers which would be necessary to provide 
121.18 	the contract service if all peace officers providing service were employed on a full-time 
121.19 	basis as defined by the employing unit and the municipality receiving the contract service.
121.20 	(i) "Retirement benefits other than a service pension" means any disbursement 
121.21 	authorized under section 424A.05, subdivision 3, clauses (2) and (3). 
121.22 	(j) "Municipal clerk, municipal clerk-treasurer, or county auditor" means the person 
121.23 	who was elected or appointed to the specified position or, in the absence of the person, 
121.24 	another person who is designated by the applicable governing body. In a park district, 
121.25 	the clerk is the secretary of the board of park district commissioners. In the case of the 
121.26 	University of Minnesota, the clerk is that official designated by the Board of Regents. 
121.27 	For the Metropolitan Airports Commission, the clerk is the person designated by the 
121.28 	commission. For the Department of Natural Resources or the Department of Public Safety, 
121.29 	the clerk is the respective commissioner. For a tribal police department which exercises 
121.30 	state arrest powers under section 626.90, 626.91, 626.92, or 626.93, the clerk is the person 
121.31 	designated by the applicable American Indian tribal government. 
121.32 	(k) "Voluntary statewide lump-sum volunteer firefighter retirement plan" means the 
121.33 	retirement plan established by chapter 353G.

121.34 	Sec. 4. Minnesota Statutes 2008, section 69.011, subdivision 2, is amended to read:
122.1 		Subd. 2.Qualification for fire or police state aid. (a) Unless retirement coverage 
122.2 	is provided by the voluntary statewide lump-sum volunteer firefighter retirement plan, in 
122.3 	order to qualify to receive fire state aid, on or before March 15 annually, in conjunction 
122.4 	with the financial report required pursuant to section 69.051, the clerk of each municipality 
122.5 	having a duly organized fire department as provided in subdivision 4, or the secretary of 
122.6 	each independent nonprofit firefighting corporation having a subsidiary incorporated 
122.7 	firefighters' relief association whichever is applicable, and the fire chief, shall jointly 
122.8 	certify the existence of the municipal fire department or of the independent nonprofit 
122.9 	firefighting corporation, whichever is applicable, which meets the minimum qualification 
122.10 	requirements set forth in this subdivision, and the fire personnel and equipment of the 
122.11 	municipal fire department or the independent nonprofit firefighting corporation as of the 
122.12 	preceding December 31. 
122.13 	(b) Where retirement coverage is provided by the voluntary statewide lump-sum 
122.14 	volunteer firefighter retirement plan, the executive director of the Public Employees 
122.15 	Retirement Association shall certify the existence of that coverage for each municipality 
122.16 	and the municipal clerk or independent nonprofit firefighting corporation secretary, 
122.17 	whichever applies, and the applicable fire chief shall certify the fire personnel and fire 
122.18 	department equipment as of the preceding December 31. 
122.19 	(c) Certification shallmust be made to the commissioner on a form prescribed 
122.20 	by the commissioner and shall include any other facts the commissioner may require. 
122.21 	The certification shallmust be made to the commissioner in duplicate. Each copy of the 
122.22 	certificate shallmust be duly executed and is deemed to be an original. The commissioner 
122.23 	shall forward one copy to the auditor of the county wherein the fire department is located 
122.24 	and shall retain one copy.  
122.25 	(b) (d) On or before March 15 annually the clerk of each municipality having a duly 
122.26 	organized police department and having a duly incorporated relief association shall certify 
122.27 	that fact to the county auditor of the county where the police department is located and to 
122.28 	the commissioner on a form prescribed by the commissioner together with the other facts 
122.29 	the commissioner or auditor may require.
122.30 	(e) Except as provided in subdivision 2b, on or before March 15 annually, the clerk 
122.31 	of each municipality and the auditor of each county employing one or more peace officers 
122.32 	as defined in subdivision 1, clause (g), shall certify the number of such peace officers to 
122.33 	the commissioner on forms prescribed by the commissioner. Credit for officers employed 
122.34 	less than a full year shallmust be apportioned. Each full month of employment of a 
122.35 	qualifying officer during the calendar year shall entitleentitles the employing municipality 
122.36 	or county to credit for 1/12 of the payment for employment of a peace officer for the entire 
123.1 	year. For purposes of sections 69.011 to 69.051, employment of a peace officer shall 
123.2 	commencecommences when the peace officer is entered on the payroll of the respective 
123.3 	municipal police department or county sheriff's department. No peace officer shallmay be 
123.4 	included in the certification of the number of peace officers by more than one municipality 
123.5 	or county for the same month.  

123.6 	Sec. 5. Minnesota Statutes 2008, section 69.011, subdivision 4, is amended to read:
123.7 		Subd. 4.Qualification for state aid. Any municipality in this state having for more 
123.8 	than one year an organized fire department and officially established by the governing 
123.9 	body of the municipality or an independent nonprofit fire fighting corporation created 
123.10 	under the nonprofit corporation act of this state and operating exclusively for fire fighting 
123.11 	purposes and providing retirement and relief benefits to its members or, having a separate 
123.12 	subsidiary incorporated firefighter's relief and pension association providing retirement and 
123.13 	relief benefits, or participating in the voluntary statewide lump-sum volunteer firefighter 
123.14 	retirement plan, may qualify to receive state aid if it meets the following minimum 
123.15 	requirements or equivalent as determined by the state fire marshal by July 1, 1972:
123.16 	(a) ten paid or volunteer firefighters including a fire chief and assistant fire chief, and
123.17 	(b) regular scheduled meetings and frequent drills including instructions in fire 
123.18 	fighting tactics and in the use, care, and operation of all fire apparatus and equipment, and
123.19 	(c) a motorized fire truck equipped with a motorized pump, 250 gallon or larger 
123.20 	water tank, 300 feet of one inch or larger fire hose in two lines with combination spray 
123.21 	and straight stream nozzles, five-gallon hand pumps--tank extinguisher or equivalent, dry 
123.22 	chemical extinguisher or equivalent, ladders, extension ladders, pike poles, crow bars, 
123.23 	axes, lanterns, fire coats, helmets, boots, and
123.24 	(d) apparatus suitably housed in a building of good construction with facilities for 
123.25 	care of hose and equipment, and
123.26 	(e) a reliable and adequate method of receiving fire alarms by telephone or with 
123.27 	electric siren and suitable means of sounding an alarm, and
123.28 	(f) if response is to be provided outside the corporate limits of the municipality 
123.29 	wherein the fire department is located, the municipality has another piece of motorized 
123.30 	apparatus to make the response, and
123.31 	(g) other requirements the commissioner establishes by rule.

123.32 	Sec. 6. Minnesota Statutes 2008, section 69.021, subdivision 7, is amended to read:
123.33 		Subd. 7.Apportionment of fire state aid to municipalities and relief associations.
 123.34 	(a) The commissioner shall apportion the fire state aid relative to the premiums reported 
124.1 	on the Minnesota Firetown Premium Reports filed under this chapter to each municipality 
124.2 	and/or firefighters relief association.
124.3 	(b) The commissioner shall calculate an initial fire state aid allocation amount for 
124.4 	each municipality or fire department under paragraph (c) and a minimum fire state aid 
124.5 	allocation amount for each municipality or fire department under paragraph (d). The 
124.6 	municipality or fire department must receive the larger fire state aid amount.
124.7 	(c) The initial fire state aid allocation amount is the amount available for 
124.8 	apportionment as fire state aid under subdivision 5, without inclusion of any additional 
124.9 	funding amount to support a minimum fire state aid amount under section 423A.02, 
124.10 	subdivision 3, allocated one-half in proportion to the population as shown in the last 
124.11 	official statewide federal census for each fire town and one-half in proportion to the market 
124.12 	value of each fire town, including (1) the market value of tax exempt property and (2) the 
124.13 	market value of natural resources lands receiving in lieu payments under sections 477A.11
124.14 	to 477A.14, but excluding the market value of minerals. In the case of incorporated or 
124.15 	municipal fire departments furnishing fire protection to other cities, towns, or townships 
124.16 	as evidenced by valid fire service contracts filed with the commissioner, the distribution 
124.17 	must be adjusted proportionately to take into consideration the crossover fire protection 
124.18 	service. Necessary adjustments shallmust be made to subsequent apportionments. In 
124.19 	the case of municipalities or independent fire departments qualifying for the aid, the 
124.20 	commissioner shall calculate the state aid for the municipality or relief association on the 
124.21 	basis of the population and the market value of the area furnished fire protection service 
124.22 	by the fire department as evidenced by duly executed and valid fire service agreements 
124.23 	filed with the commissioner. If one or more fire departments are furnishing contracted 
124.24 	fire service to a city, town, or township, only the population and market value of the 
124.25 	area served by each fire department may be considered in calculating the state aid and 
124.26 	the fire departments furnishing service shall enter into an agreement apportioning among 
124.27 	themselves the percent of the population and the market value of each service area. The 
124.28 	agreement must be in writing and must be filed with the commissioner. 
124.29 	(d)  The minimum fire state aid allocation amount is the amount in addition to the 
124.30 	initial fire state allocation amount that is derived from any additional funding amount 
124.31 	to support a minimum fire state aid amount under section 423A.02, subdivision 3, and 
124.32 	allocated to municipalities with volunteer firefighters relief associations or covered by the 
124.33 	voluntary statewide lump-sum volunteer firefighter retirement plan based on the number 
124.34 	of active volunteer firefighters who are members of the relief association as reported 
124.35 	in the annual financial reporting for the calendar year 1993 to the Office of the State 
124.36 	Auditor, but not to exceed 30 active volunteer firefighters, so that all municipalities or 
125.1 	fire departments with volunteer firefighters relief associations receive in total at least a 
125.2 	minimum fire state aid amount per 1993 active volunteer firefighter to a maximum of 
125.3 	30 firefighters. If a relief association is established after calendar year 1993 and before 
125.4 	calendar year 2000, the number of active volunteer firefighters who are members of the 
125.5 	relief association as reported in the annual financial reporting for calendar year 1998 
125.6 	to the Office of the State Auditor, but not to exceed 30 active volunteer firefighters, 
125.7 	shall be used in this determination. If a relief association is established after calendar 
125.8 	year 1999, the number of active volunteer firefighters who are members of the relief 
125.9 	association as reported in the first annual financial reporting submitted to the Office of 
125.10 	the State Auditor, but not to exceed 20 active volunteer firefighters, must be used in this 
125.11 	determination. If a relief association is terminated as a result of providing retirement 
125.12 	coverage for volunteer firefighters by the voluntary statewide lump-sum volunteer 
125.13 	firefighter retirement plan under chapter 353G, the number of active volunteer firefighters 
125.14 	of the municipality covered by the statewide plan as certified by the executive director of 
125.15 	the Public Employees Retirement Association to the commissioner and the state auditor, 
125.16 	but not to exceed 30 active firefighters, must be used in this determination.
125.17 	(e) Unless the firefighters of the applicable fire department are members of the 
125.18 	voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid must 
125.19 	be paid to the treasurer of the municipality where the fire department is located and the 
125.20 	treasurer of the municipality shall, within 30 days of receipt of the fire state aid, transmit 
125.21 	the aid to the relief association if the relief association has filed a financial report with the 
125.22 	treasurer of the municipality and has met all other statutory provisions pertaining to the 
125.23 	aid apportionment. If the firefighters of the applicable fire department are members of 
125.24 	the voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid 
125.25 	must be paid to the executive director of the Public Employees Retirement Association 
125.26 	and deposited in the voluntary statewide lump-sum volunteer firefighter retirement fund.
125.27 	(f) The commissioner may make rules to permit the administration of the provisions 
125.28 	of this section.
125.29 	(g) Any adjustments needed to correct prior misallocations must be made to 
125.30 	subsequent apportionments.

125.31 	Sec. 7. Minnesota Statutes 2008, section 69.021, subdivision 9, is amended to read:
125.32 		Subd. 9.Appeal. In the event that anya municipality, a county, a fire relief 
125.33 	association, ora police relief association, or the voluntary statewide lump-sum volunteer 
125.34 	firefighter retirement plan, feels itself to be aggrieved, it may request the commissioner to 
125.35 	review and adjust the apportionment of funds within the county in the case of police state 
126.1 	aid, or within the state in the case of fire state aid. The decision of the commissioner is 
126.2 	subject to appeal, review, and adjustment by the district court in the county in which the 
126.3 	applicable municipality, fire department, or police department is located.

126.4 	Sec. 8. Minnesota Statutes 2008, section 69.031, subdivision 1, is amended to read:
126.5 		Subdivision 1.Commissioner of finance's warrant. (a) The commissioner of 
126.6 	finance shall issue to the Public Employees Retirement Association on behalf of a 
126.7 	municipality or independent nonprofit firefighting corporation that is a member of the 
126.8 	voluntary statewide lump-sum volunteer firefighter retirement plan under chapter 353G or 
126.9 	to the county, municipality, or independent nonprofit firefighting corporation certified to 
126.10 	the commissioner of finance by the commissioner a warrant for an amount equal to the 
126.11 	amount of fire state aid or police state aid, whichever applies, certified for the applicable 
126.12 	state aid recipient by the commissioner under section 69.021.
126.13 	(b) The amount of state aid due and not paid by October 1 accrues interest at the rate 
126.14 	of one percent for each month or part of a month the amount remains unpaid, beginning 
126.15 	the preceding July 1.  

126.16 	Sec. 9. Minnesota Statutes 2008, section 69.031, subdivision 5, is amended to read:
126.17 		Subd. 5.Deposit of state aid. (a) If the municipality or the independent nonprofit 
126.18 	firefighting corporation is covered by the voluntary statewide lump-sum volunteer 
126.19 	firefighter retirement plan under chapter 353G, the executive director shall credit the 
126.20 	fire state aid against future municipal contribution requirements under section 353G.08 
126.21 	and shall notify the municipality or independent nonprofit firefighting corporation of 
126.22 	the fire state aid so credited at least annually. If the municipality or the independent 
126.23 	nonprofit firefighting corporation is not covered by the voluntary statewide lump-sum 
126.24 	volunteer firefighter retirement plan, the municipal treasurer shall, within 30 days after 
126.25 	receipt, transmit the fire state aid to the treasurer of the duly incorporated firefighters' 
126.26 	relief association if there is one organized and the association has filed a financial report 
126.27 	with the municipality. If the relief association has not filed a financial report with the 
126.28 	municipality, the municipal treasurer shall delay transmission of the fire state aid to 
126.29 	the relief association until the complete financial report is filed. If the municipality or 
126.30 	independent nonprofit firefighting corporation is not covered by the voluntary statewide 
126.31 	lump-sum volunteer firefighter retirement plan, if there is no relief association organized, 
126.32 	or if the association has dissolved, or has been removed as trustees of state aid, then the 
126.33 	treasurer of the municipality shall deposit the money in the municipal treasury as provided 
127.1 	for in section 424A.08 and the money may be disbursed only for the purposes and in the 
127.2 	manner set forth in that section.  
127.3 	(b) The municipal treasurer, upon receipt of the police state aid, shall disburse the 
127.4 	police state aid in the following manner:
127.5 	(1) For a municipality in which a local police relief association exists and all peace 
127.6 	officers are members of the association, the total state aid must be transmitted to the 
127.7 	treasurer of the relief association within 30 days of the date of receipt, and the treasurer 
127.8 	of the relief association shall immediately deposit the total state aid in the special fund 
127.9 	of the relief association;
127.10 	(2) For a municipality in which police retirement coverage is provided by the public 
127.11 	employees police and fire fund and all peace officers are members of the fund, including 
127.12 	municipalities covered by section 353.665, the total state aid must be applied toward the 
127.13 	municipality's employer contribution to the public employees police and fire fund under 
127.14 	sections 353.65, subdivision 3, and 353.665, subdivision 8, paragraph (b), if applicable; or  
127.15 	(3) For a municipality other than a city of the first class with a population of more 
127.16 	than 300,000 in which both a police relief association exists and police retirement 
127.17 	coverage is provided in part by the public employees police and fire fund, the municipality 
127.18 	may elect at its option to transmit the total state aid to the treasurer of the relief association 
127.19 	as provided in clause (1), to use the total state aid to apply toward the municipality's 
127.20 	employer contribution to the public employees police and fire fund subject to all the 
127.21 	provisions set forth in clause (2), or to allot the total state aid proportionately to be 
127.22 	transmitted to the police relief association as provided in this subdivision and to apply 
127.23 	toward the municipality's employer contribution to the public employees police and fire 
127.24 	fund subject to the provisions of clause (2) on the basis of the respective number of active 
127.25 	full-time peace officers, as defined in section 69.011, subdivision 1, clause (g).  
127.26 	For a city of the first class with a population of more than 300,000, in addition, the 
127.27 	city may elect to allot the appropriate portion of the total police state aid to apply toward 
127.28 	the employer contribution of the city to the public employees police and fire fund based 
127.29 	on the covered salary of police officers covered by the fund each payroll period and to 
127.30 	transmit the balance to the police relief association; or
127.31 	(4) For a municipality in which police retirement coverage is provided in part by 
127.32 	the public employees police and fire fund and in part by a local police consolidation 
127.33 	account governed by chapter 353A and established before March 2, 1999, for which the 
127.34 	municipality declined merger under section 353.665, subdivision 1, or established after 
127.35 	March 1, 1999, the total police state aid must be applied towards the municipality's total 
128.1 	employer contribution to the public employees police and fire fund and to the local police 
128.2 	consolidation account under sections 353.65, subdivision 3, and 353A.09, subdivision 5.  
128.3 	(c) The county treasurer, upon receipt of the police state aid for the county, shall 
128.4 	apply the total state aid toward the county's employer contribution to the public employees 
128.5 	police and fire fund under section 353.65, subdivision 3.  
128.6 	(d) The designated Metropolitan Airports Commission official, upon receipt of the 
128.7 	police state aid for the Metropolitan Airports Commission, shall apply the total police 
128.8 	state aid first toward the commission's employer contribution for police officers to the 
128.9 	Minneapolis Employees Retirement Fund under section 422A.101, subdivision 2a, and, if 
128.10 	there is any amount of police state aid remaining, shall apply that remainder toward the 
128.11 	commission's employer contribution for police officers to the public employees police and 
128.12 	fire plan under section 353.65, subdivision 3.  
128.13 	(e) The police state aid apportioned to the Departments of Public Safety and Natural 
128.14 	Resources under section 69.021, subdivision 7a, is appropriated to the commissioner of 
128.15 	finance for transfer to the funds and accounts from which the salaries of peace officers 
128.16 	certified under section 69.011, subdivision 2a, are paid. The commissioner of revenue 
128.17 	shall certify to the commissioners of public safety, natural resources, and finance the 
128.18 	amounts to be transferred from the appropriation for police state aid. The commissioners 
128.19 	of public safety and natural resources shall certify to the commissioner of finance the 
128.20 	amounts to be credited to each of the funds and accounts from which the peace officers 
128.21 	employed by their respective departments are paid. Each commissioner must shall allocate 
128.22 	the police state aid first for employer contributions for employees funded from the general 
128.23 	fund and then for employer contributions for employees funded from other funds. For 
128.24 	peace officers whose salaries are paid from the general fund, the amounts transferred from 
128.25 	the appropriation for police state aid must be canceled to the general fund.  

128.26 	Sec. 10. [353G.01] DEFINITIONS.
128.27 		Subdivision 1.Scope. For the purposes of this chapter, the words or terms defined 
128.28 	in this section have the meanings given to them unless the context of the word or term 
128.29 	clearly indicates otherwise.
128.30 		Subd. 2.Advisory board. "Advisory board" means the board established by section 
128.31 	353G.03.
128.32 		Subd. 3.Board. "Board" means the board of trustees of the Public Employees 
128.33 	Retirement Association operating under section 353.03.
128.34 		Subd. 4.Commissioner of finance. "Commissioner of finance" means the state 
128.35 	official appointed and qualified under section 16A.01.
129.1 		Subd. 5.Executive director; director. "Executive director" or "director" means 
129.2 	the person appointed under section 353.03, subdivision 3a.
129.3 		Subd. 6.Fund. "Fund" means the voluntary statewide lump-sum volunteer 
129.4 	firefighter retirement fund established under section 353G.02, subdivision 3.
129.5 		Subd. 7.Good time service credit. "Good time service credit" means the length of 
129.6 	service credit for an active firefighter that is reported by the applicable fire chief based 
129.7 	on the minimum firefighter activity standards of the fire department. The credit may be 
129.8 	recognized on an annual or monthly basis.
129.9 		Subd. 8.Member. "Member" means a volunteer firefighter who provides active 
129.10 	service to a municipal fire department or an independent nonprofit firefighting corporation 
129.11 	where the applicable municipality or corporation has elected coverage by the retirement 
129.12 	plan under section 353G.05, and which service is covered by the retirement plan.
129.13 		Subd. 9.Municipality. "Municipality" means a governmental entity specified in 
129.14 	section 69.011, subdivision 1, paragraph (b), clauses (1), (2), and (5).
129.15 		Subd. 10.Plan. "Plan" means the retirement plan established by this chapter.
129.16 		Subd. 11.Retirement fund. "Retirement fund" means the voluntary statewide 
129.17 	lump-sum volunteer firefighter retirement fund established under section 353G.02, 
129.18 	subdivision 3.
129.19 		Subd. 12.Retirement plan. "Retirement plan" means the retirement plan 
129.20 	established by this chapter.
129.21 		Subd. 13.Standards for actuarial work. "Standards for actuarial work" means 
129.22 	the standards adopted by the Legislative Commission on Pensions and Retirement under 
129.23 	section 3.85, subdivision 10.
129.24 		Subd. 14.State Board of Investment. "State Board of Investment" means the 
129.25 	board created by article XI, section 8, of the Minnesota Constitution and governed by 
129.26 	chapter 11A.
129.27 		Subd. 15.Volunteer firefighter. "Volunteer firefighter" means a person who is 
129.28 	an active member of a municipal fire department or independent nonprofit firefighting 
129.29 	corporation and who, in that capacity, engages in fire suppression activities, provides 
129.30 	emergency response services, or delivers fire education or prevention services on an 
129.31 	on-call basis.

129.32 	Sec. 11. [353G.02] PLAN AND FUND CREATION.
129.33 		Subdivision 1.Retirement plan. The voluntary statewide lump-sum volunteer 
129.34 	firefighter retirement plan is created.
130.1 		Subd. 2.Administration. The policy-making, management, and administrative 
130.2 	functions related to the voluntary statewide lump-sum volunteer firefighter retirement 
130.3 	plan and fund are vested in the board of trustees and the executive director of the Public 
130.4 	Employees Retirement Association. Their duties, authority, and responsibilities are as 
130.5 	provided in section 353.03. Fiduciary activities of the plan and fund must be undertaken 
130.6 	in a manner consistent with chapter 356A.
130.7 		Subd. 3.Retirement fund. (a) The voluntary statewide lump-sum volunteer 
130.8 	firefighter retirement fund is created. The fund contains the assets attributable to the 
130.9 	voluntary statewide lump-sum volunteer firefighter retirement plan.
130.10 	(b) The State Board of Investment shall invest those portions of the retirement 
130.11 	fund not required for immediate purposes in the voluntary statewide lump-sum volunteer 
130.12 	firefighter retirement plan in the statewide lump-sum volunteer firefighter account of the 
130.13 	Minnesota supplemental investment fund under section 11A.17.
130.14 	(c) The commissioner of finance is the ex officio treasurer of the voluntary statewide 
130.15 	lump-sum volunteer firefighter retirement fund. The commissioner of finance's general 
130.16 	bond to the state covers all liability for actions taken as the treasurer of the retirement fund.
130.17 	(d) The revenues of the retirement plan beyond investment returns are governed by 
130.18 	section 353G.08 and must be deposited in the retirement fund. The disbursements of the 
130.19 	retirement plan are governed by section 353G.08. The commissioner of finance shall 
130.20 	transmit a detailed statement showing all credits to and disbursements from the retirement 
130.21 	fund to the executive director monthly.
130.22 		Subd. 4.Audit; actuarial valuation. (a) The legislative auditor shall periodically 
130.23 	audit the voluntary statewide lump-sum volunteer firefighter retirement fund.
130.24 	(b) An actuarial valuation of the voluntary statewide lump-sum volunteer firefighter 
130.25 	retirement plan may be performed periodically as determined to be appropriate or useful 
130.26 	by the board. An actuarial valuation must be performed by the approved actuary retained 
130.27 	under section 356.214 and must conform with section 356.215 and the standards for 
130.28 	actuarial work. An actuarial valuation must contain sufficient detail for each participating 
130.29 	employing entity to ascertain the actuarial condition of its account in the fund and the 
130.30 	contribution requirement towards its account.
130.31 		Subd. 5.Legal advisor; attorney general. (a) The legal advisor of the board 
130.32 	and the executive director with respect to the voluntary statewide lump-sum volunteer 
130.33 	firefighter retirement plan is the attorney general.
130.34 	(b) The board may sue, petition, be sued, or be petitioned under this chapter with 
130.35 	respect to the plan or the fund in the name of the board.
131.1 	(c) The attorney general shall represent the board in all actions by the board or 
131.2 	against the board with respect to the plan or the fund.
131.3 	(d) Venue of all actions related to the plan or fund is in the court for the first judicial 
131.4 	district unless the action is an appeal to the Court of Appeals under section 356.96.

131.5 	Sec. 12. [353G.03] VOLUNTARY STATEWIDE LUMP-SUM VOLUNTEER 
131.6 	FIREFIGHTER RETIREMENT PLAN ADVISORY BOARD.
131.7 		Subdivision 1.Establishment. A Voluntary Statewide Lump-Sum Volunteer 
131.8 	Firefighter Retirement Plan Advisory Board is created.
131.9 		Subd. 2.Function; purpose. The advisory board shall provide advice to the board 
131.10 	of trustees of the Public Employees Retirement Association about the retirement coverage 
131.11 	needs of volunteer firefighters who are members of the plan and about the legislative and 
131.12 	administrative changes that would assist the retirement plan in accommodating volunteer 
131.13 	firefighters who are not members of the plan.
131.14 		Subd. 3.Composition. (a) The advisory board consists of seven members.
131.15 	(b) The advisory board members are:
131.16 	(1) one representative of Minnesota townships, appointed by the Minnesota 
131.17 	Association of Townships;
131.18 	(2) two representatives of Minnesota cities, appointed by the League of Minnesota 
131.19 	Cities;
131.20 	(3) one representative of Minnesota fire chiefs, who is a fire chief, appointed by the 
131.21 	Minnesota State Fire Chiefs Association;
131.22 	(4) two representatives of Minnesota volunteer firefighters, who are active volunteer 
131.23 	firefighters, appointed by the Minnesota State Fire Departments Association; and
131.24 	(5) one representative of the Office of the State Auditor, designated by the state 
131.25 	auditor.
131.26 		Subd. 4.Term. (a) The initial terms on the advisory board for the Minnesota 
131.27 	townships representative and the Minnesota fire chiefs representative are one year. The 
131.28 	initial terms on the advisory board for one of the Minnesota cities representatives and one 
131.29 	of the Minnesota active volunteer firefighter representatives are two years. The initial 
131.30 	terms on the advisory board for the other Minnesota cities representative and the other 
131.31 	Minnesota active volunteer firefighter representative are three years. The term for the 
131.32 	Office of the State Auditor representative is determined by the state auditor.
131.33 	(b) Subsequent terms on the advisory board other than the Office of the State 
131.34 	Auditor representative are three years.
132.1 		Subd. 5.Compensation of advisory board. The compensation of members of the 
132.2 	advisory board other than the Office of the State Auditor representative is governed by 
132.3 	section 15.0575, subdivision 3.

132.4 	Sec. 13. [353G.04] INFORMATION FROM MUNICIPALITIES AND FIRE 
132.5 	DEPARTMENTS.
132.6 	The chief executive officers of municipalities and fire departments with volunteer 
132.7 	firefighters covered by the voluntary lump-sum volunteer firefighter retirement plan shall 
132.8 	provide all relevant information and records requested by the board, the executive director, 
132.9 	and the State Board of Investment as required to perform their duties.

132.10 	Sec. 14. [353G.05] PLAN COVERAGE ELECTION.
132.11 		Subdivision 1.Coverage. Any municipality or independent nonprofit firefighting 
132.12 	corporation may elect to have its volunteer firefighters covered by the retirement plan.
132.13 		Subd. 2.Election of coverage. (a) The process for electing coverage of volunteer 
132.14 	firefighters by the retirement plan is initiated by a request to the executive director for a 
132.15 	cost analysis of the prospective retirement coverage.
132.16 	(b) If the volunteer firefighters are currently covered by a volunteer firefighters' relief 
132.17 	association governed by chapter 424A, the cost analysis of the prospective retirement 
132.18 	coverage must be requested jointly by the secretary of the volunteer firefighters' relief 
132.19 	association, following approval of the request by the board of the volunteer firefighters' 
132.20 	relief association, and the chief administrative officer of the entity associated with the 
132.21 	relief association, following approval of the request by the governing body of the entity 
132.22 	associated with the relief association. If the relief association is associated with more than 
132.23 	one entity, the chief administrative officer of each associated entity must execute the 
132.24 	request. If the volunteer firefighters are not currently covered by a volunteer firefighters' 
132.25 	relief association, the cost analysis of the prospective retirement coverage must be 
132.26 	requested by the chief administrative officer of the entity operating the fire department. 
132.27 	The request must be made in writing and must be made on a form prescribed by the 
132.28 	executive director.
132.29 	(c) The cost analysis of the prospective retirement coverage by the statewide 
132.30 	retirement plan must be based on the service pension amount under section 353G.11 
132.31 	closest to the service pension amount provided by the volunteer firefighters' relief 
132.32 	association, if there is one, or to the lowest service pension amount under section 353G.11 
132.33 	if there is no volunteer firefighters' relief association, rounded up, and any other service 
132.34 	pension amount designated by the requester or requesters. The cost analysis must be 
133.1 	prepared using a mathematical procedure certified as accurate by an approved actuary 
133.2 	retained by the Public Employees Retirement Association.
133.3 	(d) If a cost analysis is requested and a volunteer firefighters' relief association exists 
133.4 	that has filed the information required under section 69.051 in a timely fashion, upon 
133.5 	request by the executive director, the state auditor shall provide the most recent data 
133.6 	available on the financial condition of the volunteer firefighters' relief association, the most 
133.7 	recent firefighter demographic data available, and a copy of the current relief association 
133.8 	bylaws. If a cost analysis is requested, but no volunteer firefighters' relief association 
133.9 	exists, the chief administrative officer of the entity operating the fire department shall 
133.10 	provide the demographic information on the volunteer firefighters serving as members 
133.11 	of the fire department requested by the executive director.
133.12 	(e) If a cost analysis is requested, the executive director of the State Board of 
133.13 	Investment shall review the investment portfolio of the relief association, if applicable, 
133.14 	for compliance with the applicable provisions of chapter 11A and for appropriateness 
133.15 	for retention under the established investment objectives and investment policies of the 
133.16 	State Board of Investment. If the prospective retirement coverage change is approved 
133.17 	under paragraph (f), the State Board of Investment may require that the relief association 
133.18 	liquidate any investment security or other asset which the executive director of the State 
133.19 	Board of Investment has determined to be an ineligible or inappropriate investment for 
133.20 	retention by the State Board of Investment. The security or asset liquidation must occur 
133.21 	before the effective date of the transfer of retirement plan coverage. If requested to do 
133.22 	so by the chief administrative officer of the relief association, the executive director of 
133.23 	the State Board of Investment shall provide advice about the best means to conduct the 
133.24 	liquidation.
133.25 	(f) Upon receipt of the cost analysis, the governing body of the municipality or 
133.26 	independent nonprofit firefighting corporation associated with the fire department shall 
133.27 	approve or disapprove the retirement coverage change within 90 days. If the retirement 
133.28 	coverage change is not acted upon within 90 days, it is deemed to be disapproved. If the 
133.29 	retirement coverage change is approved by the applicable governing body, coverage by 
133.30 	the voluntary statewide lump-sum volunteer firefighter retirement plan is effective on the 
133.31 	next following January 1.

133.32 	Sec. 15. [353G.06] DISESTABLISHMENT OF PRIOR VOLUNTEER 
133.33 	FIREFIGHTERS' RELIEF ASSOCIATION SPECIAL FUND UPON 
133.34 	RETIREMENT COVERAGE CHANGE.
134.1 		Subdivision 1.Special fund disestablishment. (a) On the date immediately prior 
134.2 	to the effective date of the coverage change, the special fund of the applicable volunteer 
134.3 	firefighters' relief association, if one exists, ceases to exist as a pension fund of the 
134.4 	association and legal title to the assets of the special fund transfers to the State Board of 
134.5 	Investment, with the beneficial title to the assets of the special fund remaining in the 
134.6 	applicable volunteer firefighters.
134.7 	(b) If the market value of the special fund of the volunteer firefighters' relief 
134.8 	association for which retirement coverage changed under this chapter declines in the 
134.9 	interval between the date of the most recent financial report or statement, and the special 
134.10 	fund disestablishment date, the applicable municipality shall transfer an additional amount 
134.11 	to the State Board of Investment equal to that decline. If more than one municipality is 
134.12 	responsible for the direct management of the fire department, the municipalities shall 
134.13 	allocate the additional transfer amount among the various applicable municipalities 
134.14 	one-half in proportion to the population of each municipality and one-half in proportion 
134.15 	to the market value of each municipality.
134.16 		Subd. 2.Other relief association changes. In addition to the transfer and 
134.17 	disestablishment of the special fund under subdivision 1, notwithstanding any provisions 
134.18 	of chapter 424A or 424B to the contrary, upon the effective date of the change in volunteer 
134.19 	firefighter retirement coverage, if the relief association membership elects to retain the 
134.20 	relief association after the benefit coverage election, the following changes must be 
134.21 	implemented with respect to the applicable volunteer firefighters' relief association:
134.22 	(1) the relief association board of trustees membership is reduced to five, comprised 
134.23 	of the fire chief of the fire department and four trustees elected by and from the relief 
134.24 	association membership;
134.25 	(2) the relief association may only maintain a general fund, which continues to 
134.26 	be governed by section 424A.06;
134.27 	(3) the relief association is not authorized to receive the proceeds of any state aid or 
134.28 	to receive any municipal funds; and
134.29 	(4) the relief association may not pay any service pension or benefit that was not 
134.30 	authorized as a general fund disbursement under the articles of incorporation or bylaws of 
134.31 	the relief association in effect prior to the plan coverage election process.
134.32 		Subd. 3.Successor in interest. Upon the disestablishment of the special fund of 
134.33 	the volunteer firefighters' relief association under this section, the voluntary statewide 
134.34 	lump-sum volunteer firefighter retirement plan is the successor in interest of the special 
134.35 	fund of the volunteer firefighters' relief association for all claims against the special fund 
134.36 	other than a claim against the special fund, the volunteer firefighters' relief association, 
135.1 	the municipality, the fire department, or any person connected with the volunteer 
135.2 	firefighters' relief association in a fiduciary capacity under chapter 356A or common law 
135.3 	that was based on any act or acts which were not performed in good faith and which 
135.4 	constituted a breach of a fiduciary obligation. As the successor in interest of the special 
135.5 	fund of the volunteer firefighters' relief association, the voluntary statewide lump-sum 
135.6 	volunteer firefighter retirement plan may assert any applicable defense in any judicial 
135.7 	proceeding which the board of trustees of the volunteer firefighters' relief association or 
135.8 	the municipality would have been entitled to assert.

135.9 	Sec. 16. [353G.07] CERTIFICATION OF GOOD TIME SERVICE CREDIT.
135.10 	(a) Annually, by March 31, the fire chief of the fire department with firefighters who 
135.11 	are active members of the retirement plan shall certify to the executive director the good 
135.12 	time service credit for the previous calendar year of each firefighter rendering active 
135.13 	service with the fire department.
135.14 	(b) The fire chief shall provide to each firefighter rendering active service with 
135.15 	the fire department notification of the amount of good time service credit rendered by 
135.16 	the firefighter for the calendar year. The good time service credit notification must be 
135.17 	provided to the firefighter 60 days before its certification to the executive director of the 
135.18 	Public Employees Retirement Association, along with an indication of the process for the 
135.19 	firefighter to challenge the fire chief's determination of good time service credit. If the 
135.20 	good time service credit amount is challenged in a timely fashion, the fire chief shall hold 
135.21 	a hearing on the challenge, accept and consider any additional pertinent information, 
135.22 	and make a final determination of good time service credit. The final determination of 
135.23 	good time service credit by the fire chief is not reviewable by the executive director of 
135.24 	the Public Employees Retirement Association or by the board of trustees of the Public 
135.25 	Employees Retirement Association.
135.26 	(c) The good time service credit certification is an official public document. If a 
135.27 	false good time service credit certification is filed or if false information regarding good 
135.28 	time service credits is provided, section 353.19 applies.
135.29 	(d) The good time service credit certification must be expressed as a percentage of a 
135.30 	full year of service during which an active firefighter rendered at least the minimum level 
135.31 	and quantity of fire suppression, emergency response, fire prevention, or fire education 
135.32 	duties required by the fire department under the rules and regulations applicable to the 
135.33 	fire department. No more than one year of good time service credit may be certified 
135.34 	for a calendar year.
136.1 	(e) If a firefighter covered by the retirement plan leaves active firefighting service 
136.2 	to render active military service that is required to be covered by the federal Uniformed 
136.3 	Services Employment and Reemployment Rights Act, as amended, the person must be 
136.4 	certified as providing a full year of good time service credit in each year of the military 
136.5 	service, up to the applicable limit of the federal Uniformed Services Employment and 
136.6 	Reemployment Rights Act. If the firefighter does not return from the military service in 
136.7 	compliance with the federal Uniformed Services Employment and Reemployment Rights 
136.8 	Act, the good time service credits applicable to that military service credit period are 
136.9 	forfeited and cancel at the end of the calendar year in which the federal law time limit 
136.10 	occurs.

136.11 	Sec. 17. [353G.08] RETIREMENT PLAN FUNDING; DISBURSEMENTS.
136.12 	(a) Annually, the executive director shall determine the funding requirements of 
136.13 	each account in the voluntary statewide lump-sum volunteer firefighter retirement plan 
136.14 	on or before August 1. The funding requirements as directed under this section, must be 
136.15 	determined using a mathematical procedure developed and certified as accurate by an 
136.16 	approved actuary retained by the Public Employees Retirement Association and based on 
136.17 	present value factors using a six percent interest rate, without any decrement assumptions. 
136.18 	The funding requirements must be certified to the entity or entities associated with the fire 
136.19 	department whose active firefighters are covered by the retirement plan.
136.20 	(b) The overall funding balance of each account for the current calendar year must 
136.21 	be determined in the following manner:
136.22 	(1) The total accrued liability for all active and deferred members of the account as 
136.23 	of December 31 of the current year must be calculated based on the good time service 
136.24 	credit of active and deferred members as of that date.
136.25 	(2) The total present assets of the account projected to December 31 of the current 
136.26 	year, including receipts by and disbursements from the account anticipated to occur on or 
136.27 	before December 31, must be calculated. To the extent possible, the market value of assets 
136.28 	must be utilized in making this calculation.
136.29 	(3) The amount of the total present assets calculated under clause (2) must be 
136.30 	subtracted from the amount of the total accrued liability calculated under clause (1). If the 
136.31 	amount of total present assets exceeds the amount of the total accrued liability, then the 
136.32 	account is considered to have a surplus over full funding. If the amount of the total present 
136.33 	assets is less than the amount of the total accrued liability, then the account is considered 
136.34 	to have a deficit from full funding. If the amount of total present assets is equal to the 
136.35 	amount of the total accrued liability, then the special fund is considered to be fully funded.
137.1 	(c) The financial requirements of each account for the following calendar year must 
137.2 	be determined in the following manner:
137.3 	(1) The total accrued liability for all active and deferred members of the account 
137.4 	as of December 31 of the calendar year next following the current calendar year must be 
137.5 	calculated based on the good time service used in the calculation under paragraph (b), 
137.6 	clause (1), increased by one year.
137.7 	(2) The increase in the total accrued liability of the account for the following calendar 
137.8 	year over the total accrued liability of the account for the current year must be calculated.
137.9 	(3) The amount of anticipated future administrative expenses of the account must be 
137.10 	calculated by multiplying the dollar amount of the administrative expenses for the most 
137.11 	recent prior calendar year by the factor of 1.035.
137.12 	(4) If the account is fully funded, the financial requirement of the account for the 
137.13 	following calendar year is the total of the amounts calculated under clauses (2) and (3).
137.14 	(5) If the account has a deficit from full funding, the financial requirement of the 
137.15 	account for the following calendar year is the total of the amounts calculated under clauses 
137.16 	(2) and (3) plus an amount equal to one-tenth of the amount of the deficit from full 
137.17 	funding of the account.
137.18 	(6) If the account has a surplus over full funding, the financial requirement of 
137.19 	the account for the following calendar year is the financial requirement of the account 
137.20 	calculated as though the account was fully funded under clause (4) and, if the account has 
137.21 	also had a surplus over full funding during the prior two years, additionally reduced by an 
137.22 	amount equal to one-tenth of the amount of the surplus over full funding of the account.
137.23 	(d) The required contribution of the entity or entities associated with the fire 
137.24 	department whose active firefighters are covered by the retirement plan is the annual 
137.25 	financial requirements of the account of the retirement plan under paragraph (c) reduced 
137.26 	by the amount of any fire state aid payable under sections 69.011 to 69.051 reasonably 
137.27 	anticipated to be received by the retirement plan attributable to the entity or entities during 
137.28 	the following calendar year, and an amount of interest on the assets projected to be 
137.29 	received during the following calendar year calculated at the rate of six percent per annum. 
137.30 	The required contribution must be allocated between the entities if more than one entity 
137.31 	is involved. A reasonable amount of anticipated fire state aid is an amount that does not 
137.32 	exceed the fire state aid actually received in the prior year multiplied by the factor 1.035.
137.33 	(e) The required contribution calculated in paragraph (d) must be paid to the 
137.34 	retirement plan on or before December 31 of the year for which it was calculated. If 
137.35 	the contribution is not received by the retirement plan by December 31, it is payable 
137.36 	with interest at an annual compound rate of six percent from the date due until the date 
138.1 	payment is received by the retirement plan. If the entity does not pay the full amount of 
138.2 	the required contribution, the executive director shall collect the unpaid amount under 
138.3 	section 353.28, subdivision 6.
138.4 	(f) The assets of the retirement fund may only be disbursed for:
138.5 	(1) the administrative expenses of the retirement plan;
138.6 	(2) the investment expenses of the retirement fund; 
138.7 	(3) the service pensions payable under section 353G.10, 353G.11, 353G.14, or 
138.8 	353G.15; and 
138.9 	(4) the survivor benefits payable under section 353G.12.

138.10 	Sec. 18. [353G.09] RETIREMENT BENEFIT ELIGIBILITY.
138.11 		Subdivision 1.Entitlement. Except as provided in subdivision 3, an active member 
138.12 	of the retirement plan is entitled to a lump-sum service pension from the retirement plan 
138.13 	if the person:
138.14 	(1) has separated from active service with the fire department for at least 30 days;
138.15 	(2) has attained the age of at least 50 years;
138.16 	(3) has completed at least five years of good time service credit as a member of 
138.17 	the retirement plan; and
138.18 	(4) applies in a manner prescribed by the executive director for the service pension.
138.19 		Subd. 2.Vesting schedule; nonforfeitable portion of service pension. If an 
138.20 	active member has completed less than 20 years of good time service credit, the person's 
138.21 	entitlement is to the nonforfeitable percentage of the applicable service pension amount, 
138.22 	as follows:

138.23
138.24		Completed years of good time 
service credit
	Nonforfeitable percentage of the 
service pension
	
138.25			5
		40 percent
	
138.26			6
		44 percent
	
138.27			7
		48 percent
	
138.28			8
		52 percent
	
138.29			9
		56 percent
	
138.30			10
		60 percent
	
138.31			11
		64 percent
	
138.32			12
		68 percent
	
138.33			13
		72 percent
	
138.34			14
		76 percent
	
138.35			15
		80 percent
	
138.36			16
		84 percent
	
138.37			17
		88 percent
	
138.38			18
		92 percent
	
139.1			19
		96 percent
	
139.2			20 and thereafter
		100 percent
	
139.3 		Subd. 3.Alternative pension eligibility and computation. (a) An active member 
139.4 	of the retirement plan is entitled to an alternative lump-sum service pension from the 
139.5 	retirement plan if the person:
139.6 	(1) has separated from active service with the fire department for at least 30 days;
139.7 	(2) has attained the age of at least 50 years or the age for receipt of a service pension 
139.8 	under the benefit plan of the applicable former volunteer firefighters' relief association 
139.9 	as of the date immediately prior to the election of the retirement coverage change, 
139.10 	whichever is later;
139.11 	(3) has completed at least five years of active service with the fire department and at 
139.12 	least five years in total as a member of the applicable former volunteer firefighters' relief 
139.13 	association or of the retirement plan, but has not rendered at least five years of good time 
139.14 	service credit as a member of the retirement plan; and
139.15 	(4) applies in a manner prescribed by the executive director for the service pension.
139.16 	(b) The alternative lump-sum service pension is the service pension amount specified 
139.17 	in the bylaws of the applicable former volunteer firefighters' relief association either 
139.18 	as of the date immediately prior to the election of the retirement coverage change or 
139.19 	as of the date immediately before the termination of firefighting services, whichever is 
139.20 	earlier, multiplied by the total number of years of service as a member of that volunteer 
139.21 	firefighters' relief association and as a member of the retirement plan.

139.22 	Sec. 19. [353G.10] DEFERRED SERVICE PENSION AMOUNT.
139.23 	A person who was an active member of a fire department covered by the retirement 
139.24 	plan who has separated from active firefighting service for at least 30 days and who has 
139.25 	completed at least five years of good time service credit, but has not attained the age of 
139.26 	50 years, is entitled to a deferred service pension on or after attaining the age of 50 years 
139.27 	and applying in a manner specified by the executive director for the service pension. The 
139.28 	service pension payable is the nonforfeitable percentage of the service pension under 
139.29 	section 353G.09, subdivision 2, and is payable without any interest over the period of 
139.30 	deferral.

139.31 	Sec. 20. [353G.11] SERVICE PENSION LEVELS.
139.32 		Subdivision 1.Levels. The retirement plan provides the following levels of service 
139.33 	pension amounts to be selected at the election of coverage, or, if fully funded, thereafter:

140.1		Level A
	$500 per year of good time service credit
	
140.2		Level B
	$750 per year of good time service credit
	
140.3		Level C
	$1,000 per year of good time service credit
	
140.4		Level D
	$1,500 per year of good time service credit
	
140.5		Level E
	$2,000 per year of good time service credit
	
140.6		Level F
	$2,500 per year of good time service credit
	
140.7		Level G
	$3,000 per year of good time service credit
	
140.8		Level H
	$3,500 per year of good time service credit
	
140.9		Level I
	$4,000 per year of good time service credit
	
140.10		Level J
	$4,500 per year of good time service credit
	
140.11		Level K
	$5,000 per year of good time service credit
	
140.12		Level L
	$5,500 per year of good time service credit
	
140.13		Level M
	$6,000 per year of good time service credit
	
140.14		Level N
	$6,500 per year of good time service credit
	
140.15		Level O
	$7,000 per year of good time service credit
	
140.16		Level P
	$7,500 per year of good time service credit
	
140.17 		Subd. 2.Level selection. At the time of the election to transfer retirement coverage, 
140.18 	or on April 30 thereafter, the governing body or bodies of the entity or entities operating 
140.19 	the fire department whose firefighters are covered by the retirement plan may request 
140.20 	a cost estimate from the executive director of an increase in the service pension level 
140.21 	applicable to the active firefighters of the fire department. Within 90 days of the receipt of 
140.22 	the cost estimate prepared by the executive director using a procedure certified as accurate 
140.23 	by the approved actuary retained by the Public Employees Retirement Association, the 
140.24 	governing body or bodies may approve the service pension level change, effective for the 
140.25 	following calendar year. If not approved in a timely fashion, the service pension level 
140.26 	change is considered to have been disapproved.
140.27 		Subd. 3.Supplemental benefit. The retirement plan also shall pay a supplemental 
140.28 	benefit as provided for in section 424A.10.
140.29 		Subd. 4.Ancillary benefits. No disability, death, funeral, or other ancillary benefit 
140.30 	beyond a service pension or a survivor benefit is payable from the retirement plan.

140.31 	Sec. 21. [353G.12] SURVIVOR BENEFIT.
140.32 		Subdivision 1.Entitlement. (a) A survivor of a deceased active member of the 
140.33 	retirement plan or a deceased deferred member of the retirement plan, upon application as 
140.34 	prescribed by the executive director, is entitled to receive a survivor benefit.
140.35 	(b) A survivor is the spouse of the member, or if none, the minor child or children of 
140.36 	the member, or if none, the estate of the member.
141.1 		Subd. 2.Survivor benefit amount. The amount of the survivor benefit is the 
141.2 	amount of the service pension that would have been payable to the member of the 
141.3 	retirement plan on the date of death if the member had been age 50 or older on that date.

141.4 	Sec. 22. [353G.13] PORTABILITY.
141.5 		Subdivision 1.Eligibility. An active firefighter who is a member of the retirement 
141.6 	plan who also renders firefighting service and has good time service credit in the retirement 
141.7 	plan from another fire department, if the good time service credit in the plan from a 
141.8 	combination of periods totals at least five years, is eligible, upon complying with the other 
141.9 	requirements of section 353G.09, to receive a service pension upon filing an application in 
141.10 	the manner prescribed by the executive director, computed as provided in subdivision 2.
141.11 		Subd. 2.Combined service pension computation. The service pension payable to 
141.12 	a firefighter who qualifies under subdivision 1 is the per year of good time service credit 
141.13 	service pension amount in effect for each account in which the firefighter has good time 
141.14 	service credit as of the date on which the firefighter terminated active service with the fire 
141.15 	department associated with the applicable account, multiplied by the number of years of 
141.16 	good time service credit that the firefighter has in the applicable account.
141.17 		Subd. 3.Payment. A service pension under this section must be paid in a single 
141.18 	payment, with the applicable portion of the total service pension payment amount 
141.19 	deducted from each account.

141.20 	Sec. 23. [353G.14] PURCHASE OF ANNUITY CONTRACTS.
141.21 	The executive director may purchase an annuity contract on behalf of a retiring 
141.22 	firefighter with a total premium payment in an amount equal to the lump-sum service 
141.23 	pension payable under section 353G.09 if the purchase was requested by the retiring 
141.24 	firefighter in a manner prescribed by the executive director. The annuity contract must 
141.25 	be purchased from an insurance carrier that is licensed to do business in this state. If 
141.26 	purchased, the annuity contract is in lieu of any service pension or other benefit from the 
141.27 	retirement plan. The annuity contract may be purchased at any time after the volunteer 
141.28 	firefighter discontinues active service, but the annuity contract must stipulate that no 
141.29 	annuity amounts are payable before the former volunteer firefighter attains the age of 50.

141.30 	Sec. 24. [353G.15] INDIVIDUAL RETIREMENT ACCOUNT TRANSFER.
141.31 	Upon receipt of a determination that the retirement plan is a qualified pension plan 
141.32 	under section 401(a) of the Internal Revenue Code, as amended, the executive director, 
141.33 	upon request, shall transfer the service pension amount under sections 353G.08 and 
142.1 	353G.11 of a former volunteer firefighter who has terminated active firefighting services 
142.2 	covered by the plan and who has attained the age of at least 50 years to the person's 
142.3 	individual retirement account under section 408(a) of the federal Internal Revenue Code, 
142.4 	as amended. The transfer request must be in a manner prescribed by the executive director 
142.5 	and must be filed by the former volunteer firefighter who has sufficient service credit to be 
142.6 	entitled to a service pension or, following the death of a participating active firefighter, 
142.7 	must be filed by the deceased firefighter's surviving spouse.

142.8 	Sec. 25. [353G.16] EXEMPTION FROM PROCESS.
142.9 	The provisions of section 356.401 apply to the retirement plan.

142.10 	Sec. 26. Minnesota Statutes 2008, section 356.20, subdivision 2, is amended to read:
142.11 		Subd. 2.Covered public pension plans and funds. This section applies to the 
142.12 	following public pension plans:
142.13 	(1) the general state employees retirement plan of the Minnesota State Retirement 
142.14 	System;
142.15 	(2) the general employees retirement plan of the Public Employees Retirement 
142.16 	Association;
142.17 	(3) the Teachers Retirement Association;
142.18 	(4) the State Patrol retirement plan;
142.19 	(5) the St. Paul Teachers Retirement Fund Association;
142.20 	(6) the Duluth Teachers Retirement Fund Association;
142.21 	(7) the Minneapolis Employees Retirement Fund;
142.22 	(8) the University of Minnesota faculty retirement plan;
142.23 	(9) the University of Minnesota faculty supplemental retirement plan;
142.24 	(10) the judges retirement fund;
142.25 	(11) a police or firefighter's relief association specified or described in section 69.77, 
142.26 	subdivision 1a;
142.27 	(12) a volunteer firefighter relief association governed by section 69.771, subdivision 
142.28 	1; 
142.29 	(13) the public employees police and fire plan of the Public Employees Retirement 
142.30 	Association;
142.31 	(14) the correctional state employees retirement plan of the Minnesota State 
142.32 	Retirement System; and
142.33 	(15) the local government correctional service retirement plan of the Public 
142.34 	Employees Retirement Association; and
143.1 	(16) the voluntary statewide lump-sum volunteer firefighter retirement plan.

143.2 	Sec. 27. Minnesota Statutes 2008, section 356.401, subdivision 3, is amended to read:
143.3 		Subd. 3.Covered retirement plans. The provisions of this section apply to the 
143.4 	following retirement plans:
143.5 	(1) the legislators retirement plan, established by chapter 3A;
143.6 	(2) the general state employees retirement plan of the Minnesota State Retirement 
143.7 	System, established by chapter 352;
143.8 	(3) the correctional state employees retirement plan of the Minnesota State 
143.9 	Retirement System, established by chapter 352;
143.10 	(4) the State Patrol retirement plan, established by chapter 352B;
143.11 	(5) the elective state officers retirement plan, established by chapter 352C;
143.12 	(6) the unclassified state employees retirement program, established by chapter 
143.13 	352D;
143.14 	(7) the general employees retirement plan of the Public Employees Retirement 
143.15 	Association, established by chapter 353;
143.16 	(8) the public employees police and fire plan of the Public Employees Retirement 
143.17 	Association, established by chapter 353;
143.18 	(9) the public employees defined contribution plan, established by chapter 353D;
143.19 	(10) the local government correctional service retirement plan of the Public 
143.20 	Employees Retirement Association, established by chapter 353E;
143.21 	(11) the voluntary statewide lump-sum volunteer firefighter retirement plan, 
143.22 	established by chapter 353G;
143.23 	(12) the Teachers Retirement Association, established by chapter 354;
143.24 	(12)(13) the Duluth Teachers Retirement Fund Association, established by chapter 
143.25 	354A;
143.26 	(13) the Minneapolis Teachers Retirement Fund Association, established by chapter 
143.27 	354A;
143.28 	(14) the St. Paul Teachers Retirement Fund Association, established by chapter 
143.29 	354A;
143.30 	(15) the individual retirement account plan, established by chapter 354B;
143.31 	(16) the higher education supplemental retirement plan, established by chapter 354C;
143.32 	(17) the Minneapolis Employees Retirement Fund, established by chapter 422A;
143.33 	(18) the Minneapolis Police Relief Association, established by chapter 423B;
143.34 	(19) the Minneapolis Firefighters Relief Association, established by chapter 423C; 
143.35 	and
144.1 	(20) the judges retirement fund, established by chapter 490.

144.2 	Sec. 28. Minnesota Statutes 2008, section 356.96, subdivision 1, is amended to read:
144.3 		Subdivision 1.Definitions. (a) Unless the language or context clearly indicates that 
144.4 	a different meaning is intended, for the purpose of this section, the terms in paragraphs 
144.5 	(b) to (e) have the meanings given them.
144.6 	(b) "Chief administrative officer" means the executive director of a covered pension 
144.7 	plan or the executive director's designee or representative.
144.8 	(c) "Covered pension plan" means a plan enumerated in section 356.20, 
144.9 	subdivision 2, clauses (1) to (4), (10), and (13) to (15) (16), but does not mean the 
144.10 	deferred compensation plan administered under sections 352.965 and 352.97 or to the 
144.11 	postretirement health care savings plan administered under section 352.98.
144.12 	(d) "Governing board" means the Board of Trustees of the Public Employees 
144.13 	Retirement Association, the Board of Trustees of the Teachers Retirement Association, or 
144.14 	the Board of Directors of the Minnesota State Retirement System.
144.15 	(e) "Person" includes an active, retired, deferred, or nonvested inactive participant in 
144.16 	a covered pension plan or a beneficiary of a participant, or an individual who has applied 
144.17 	to be a participant or who is or may be a survivor of a participant, or a state agency or 
144.18 	other governmental unit that employs active participants in a covered pension plan.

144.19 	Sec. 29. Minnesota Statutes 2008, section 424A.10, subdivision 1, is amended to read:
144.20 		Subdivision 1. Definitions. For purposes of this section: 
144.21 	(1) "qualified recipient" means an individual who receives a lump-sum distribution 
144.22 	of pension or retirement benefits from a firefighters' relief association or from the 
144.23 	voluntary statewide lump-sum volunteer firefighter retirement plan for service that the 
144.24 	individual has performed as a volunteer firefighter;
144.25 	(2) "survivor of a deceased active or deferred volunteer firefighter" means the legally 
144.26 	married spouse of a deceased volunteer firefighter, or, if none, the surviving minor child or 
144.27 	minor children of a deceased volunteer firefighter; 
144.28 	(3) "active volunteer firefighter" means a person who regularly renders fire 
144.29 	suppression service for a municipal fire department or an independent nonprofit firefighting 
144.30 	corporation, who has met the statutory and other requirements for relief association 
144.31 	membership, and who has been a fully qualified member of the relief association or from 
144.32 	the voluntary statewide lump-sum volunteer firefighter retirement plan for at least one 
144.33 	month; and
145.1 	(4) "deferred volunteer firefighter" means a former active volunteer firefighter who 
145.2 	terminated active firefighting service, has sufficient service credit from the applicable 
145.3 	relief association or from the voluntary statewide lump-sum volunteer firefighter 
145.4 	retirement plan to be entitled to a service pension, but has not applied for or has not 
145.5 	received the service pension.

145.6 	Sec. 30. Minnesota Statutes 2008, section 424A.10, subdivision 2, is amended to read:
145.7 		Subd. 2.Payment of supplemental benefit. (a) Upon the payment by a 
145.8 	firefighters' relief association or by the voluntary statewide lump-sum volunteer firefighter 
145.9 	retirement plan of a lump-sum distribution to a qualified recipient, the association must 
145.10 	pay a supplemental benefit to the qualified recipient. Notwithstanding any law to the 
145.11 	contrary, the relief association must pay the supplemental benefit out of its special fund
145.12 	and the voluntary statewide lump-sum volunteer firefighter retirement plan must pay 
145.13 	the supplemental benefit out of the voluntary statewide lump-sum volunteer firefighter 
145.14 	retirement plan. The amount of this benefit equals ten percent of the regular lump-sum 
145.15 	distribution that is paid on the basis of the recipient's service as a volunteer firefighter. 
145.16 	In no case may the amount of the supplemental benefit exceed $1,000. A supplemental 
145.17 	benefit under this paragraph may not be paid to a survivor of a deceased active or deferred 
145.18 	volunteer firefighter in that capacity.
145.19 	(b) Upon the payment by a relief association or the retirement plan of a lump-sum 
145.20 	survivor benefit or funeral benefit to a survivor of a deceased active volunteer firefighter 
145.21 	or of a deceased deferred volunteer firefighter, the association may pay a supplemental 
145.22 	survivor benefit to the survivor of the deceased active or deferred volunteer firefighter 
145.23 	from the special fund of the relief association if its articles of incorporation or bylaws so 
145.24 	provide and the retirement plan may pay a supplemental survivor benefit to the survivor of 
145.25 	the deceased active or deferred volunteer firefighter from the retirement fund if chapter 
145.26 	353G so provides. The amount of the supplemental survivor benefit is 20 percent of the 
145.27 	survivor benefit or funeral benefit, but not to exceed $2,000.
145.28 	(c) An individual may receive a supplemental benefit under paragraph (a) or under 
145.29 	paragraph (b), but not under both paragraphs with respect to one lump-sum volunteer 
145.30 	firefighter benefit.

145.31 	Sec. 31. Minnesota Statutes 2008, section 424A.10, subdivision 3, is amended to read:
145.32 		Subd. 3. State reimbursement. (a) Each year, to be eligible for state reimbursement 
145.33 	of the amount of supplemental benefits paid under subdivision 2 during the preceding 
145.34 	calendar year, the relief association mustor the voluntary statewide lump-sum volunteer 
146.1 	firefighter retirement plan shall apply to the commissioner of revenue by February 15. 
146.2 	By March 15, the commissioner shall reimburse the relief association for the amount of 
146.3 	the supplemental benefits paid to qualified recipients and to survivors of deceased active 
146.4 	or deferred volunteer firefighters. 
146.5 	(b) The commissioner of revenue shall prescribe the form of and supporting 
146.6 	information that must be supplied as part of the application for state reimbursement. 
146.7 	The commissioner of revenue shall reimburse the relief association by paying the 
146.8 	reimbursement amount to the treasurer of the municipality where the association is 
146.9 	located and shall reimburse the retirement plan by paying the reimbursement amount to 
146.10 	the executive director of the Public Employees Retirement Association. Within 30 days 
146.11 	after receipt, the municipal treasurer shall transmit the state reimbursement to the treasurer 
146.12 	of the association if the association has filed a financial report with the municipality. If 
146.13 	the relief association has not filed a financial report with the municipality, the municipal 
146.14 	treasurer shall delay transmission of the reimbursement payment to the association until 
146.15 	the complete financial report is filed. If the association has dissolved or has been removed 
146.16 	as a trustee of state aid, the treasurer shall deposit the money in a special account in the 
146.17 	municipal treasury, and the money may be disbursed only for the purposes and in the 
146.18 	manner provided in section 424A.08. When paid to the association, the reimbursement 
146.19 	payment must be deposited in the special fund of the relief association and when paid to 
146.20 	the retirement plan, the reimbursement payment must be deposited in the retirement 
146.21 	fund of the plan. 
146.22 	(c) A sum sufficient to make the payments is appropriated from the general fund 
146.23 	to the commissioner of revenue. 

146.24 	Sec. 32. EFFECTIVE DATE.
 146.25 	Sections 1 to 31 are effective August 1, 2009.

146.26 	ARTICLE 11
146.27 	VOLUNTEER FIRE RELIEF ASSOCIATION CHANGES

146.28 	Section 1. Minnesota Statutes 2008, section 69.031, subdivision 5, is amended to read:
146.29 		Subd. 5.Deposit of state aid. (a) The municipal treasurer shall, within 30 days 
146.30 	after receipt, transmit the fire state aid to the treasurer of the duly incorporated firefighters' 
146.31 	relief association if there is one organized and the association has filed a financial report 
146.32 	with the municipality. If the relief association has not filed a financial report with the 
146.33 	municipality, the municipal treasurer shall delay transmission of the fire state aid to the 
146.34 	relief association until the complete financial report is filed. If there is no relief association 
147.1 	organized, or if the association has dissolved, or has been removed as trustees of state aid, 
147.2 	then the treasurer of the municipality shall deposit the money in the municipal treasury 
147.3 	as provided for in section 424A.08 and the money may be disbursed only for the purposes 
147.4 	and in the manner set forth in that section 424A.08 or for the payment of the employer 
147.5 	contribution requirement with respect to firefighters covered by the public employees 
147.6 	police and fire retirement plan under section 353.65, subdivision 3.
147.7 	(b) The municipal treasurer, upon receipt of the police state aid, shall disburse the 
147.8 	police state aid in the following manner:
147.9 	(1) For a municipality in which a local police relief association exists and all peace 
147.10 	officers are members of the association, the total state aid must be transmitted to the 
147.11 	treasurer of the relief association within 30 days of the date of receipt, and the treasurer 
147.12 	of the relief association shall immediately deposit the total state aid in the special fund 
147.13 	of the relief association;
147.14 	(2) For a municipality in which police retirement coverage is provided by the public 
147.15 	employees police and fire fund and all peace officers are members of the fund, including 
147.16 	municipalities covered by section 353.665, the total state aid must be applied toward the 
147.17 	municipality's employer contribution to the public employees police and fire fund under 
147.18 	sections 353.65, subdivision 3, and 353.665, subdivision 8, paragraph (b), if applicable; or
147.19 	(3) For a municipality other than a city of the first class with a population of more 
147.20 	than 300,000 in which both a police relief association exists and police retirement 
147.21 	coverage is provided in part by the public employees police and fire fund, the municipality 
147.22 	may elect at its option to transmit the total state aid to the treasurer of the relief association 
147.23 	as provided in clause (1), to use the total state aid to apply toward the municipality's 
147.24 	employer contribution to the public employees police and fire fund subject to all the 
147.25 	provisions set forth in clause (2), or to allot the total state aid proportionately to be 
147.26 	transmitted to the police relief association as provided in this subdivision and to apply 
147.27 	toward the municipality's employer contribution to the public employees police and fire 
147.28 	fund subject to the provisions of clause (2) on the basis of the respective number of active 
147.29 	full-time peace officers, as defined in section 69.011, subdivision 1, clause (g).
147.30 	For a city of the first class with a population of more than 300,000, in addition, the 
147.31 	city may elect to allot the appropriate portion of the total police state aid to apply toward 
147.32 	the employer contribution of the city to the public employees police and fire fund based 
147.33 	on the covered salary of police officers covered by the fund each payroll period and to 
147.34 	transmit the balance to the police relief association; or
147.35 	(4) For a municipality in which police retirement coverage is provided in part by 
147.36 	the public employees police and fire fund and in part by a local police consolidation 
148.1 	account governed by chapter 353A and established before March 2, 1999, for which the 
148.2 	municipality declined merger under section 353.665, subdivision 1, or established after 
148.3 	March 1, 1999, the total police state aid must be applied towards the municipality's total 
148.4 	employer contribution to the public employees police and fire fund and to the local police 
148.5 	consolidation account under sections 353.65, subdivision 3, and 353A.09, subdivision 5.
148.6 	(c) The county treasurer, upon receipt of the police state aid for the county, shall 
148.7 	apply the total state aid toward the county's employer contribution to the public employees 
148.8 	police and fire fund under section 353.65, subdivision 3.
148.9 	(d) The designated Metropolitan Airports Commission official, upon receipt of the 
148.10 	police state aid for the Metropolitan Airports Commission, shall apply the total police 
148.11 	state aid first toward the commission's employer contribution for police officers to the 
148.12 	Minneapolis Employees Retirement Fund under section 422A.101, subdivision 2a, and, if 
148.13 	there is any amount of police state aid remaining, shall apply that remainder toward the 
148.14 	commission's employer contribution for police officers to the public employees police and 
148.15 	fire plan under section 353.65, subdivision 3.
148.16 	(e) The police state aid apportioned to the Departments of Public Safety and Natural 
148.17 	Resources under section 69.021, subdivision 7a, is appropriated to the commissioner of 
148.18 	finance for transfer to the funds and accounts from which the salaries of peace officers 
148.19 	certified under section 69.011, subdivision 2a, are paid. The commissioner of revenue 
148.20 	shall certify to the commissioners of public safety, natural resources, and finance the 
148.21 	amounts to be transferred from the appropriation for police state aid. The commissioners 
148.22 	of public safety and natural resources shall certify to the commissioner of finance the 
148.23 	amounts to be credited to each of the funds and accounts from which the peace officers 
148.24 	employed by their respective departments are paid. Each commissioner must shall allocate 
148.25 	the police state aid first for employer contributions for employees funded from the general 
148.26 	fund and then for employer contributions for employees funded from other funds. For 
148.27 	peace officers whose salaries are paid from the general fund, the amounts transferred from 
148.28 	the appropriation for police state aid must be canceled to the general fund.

148.29 	EFFECTIVE DATE. This section is effective July 1, 2009.

148.30 	Sec. 2. Minnesota Statutes 2008, section 69.771, subdivision 3, is amended to read:
148.31 		Subd. 3.Remedy for noncompliance; determination. (a) A municipality in which 
148.32 	there exists a firefighters' relief association as specified in subdivision 1 which does not 
148.33 	comply with the applicable provisions of sections 69.771 to 69.776 or the provisions of 
148.34 	any applicable special law relating to the funding or financing of the association does 
148.35 	not qualify initially to receive, and is not entitled subsequently to retain, fire state aid 
149.1 	under sections 69.011 to 69.051 until the reason for the disqualification specified by the 
149.2 	state auditor is remedied, whereupon the municipality or relief association, if otherwise 
149.3 	qualified, is entitled to again receive fire state aid for the year occurring immediately 
149.4 	subsequent to the year in which the disqualification is remedied.
149.5 	(b) The state auditor shall determine if a municipality to which a firefighters' relief 
149.6 	association is directly associated or a firefighters' relief association fails to comply with 
149.7 	the provisions of sections 69.771 to 69.776 or the funding or financing provisions of any 
149.8 	applicable special law based upon the information contained in the annual financial report 
149.9 	of the firefighters' relief association required under section 69.051, the actuarial valuation 
149.10 	of the relief association, if applicable, the relief association officers' financial requirements 
149.11 	of the relief association and minimum municipal obligation determination documentation 
149.12 	under section 69.772, subdivisions 3 and 4; 69.773, subdivisions 4 and 5; or 69.774, 
149.13 	subdivision 2, if requested to be filed by the state auditor, the applicable municipal or 
149.14 	nonprofit firefighting corporation budget, if requested to be filed by the state auditor, and 
149.15 	any other relevant documents or reports obtained by the state auditor.
149.16 	(c) The municipality or nonprofit firefighting corporation and the associated relief 
149.17 	association are not eligible to receive or to retain fire state aid if:
149.18 	(1) the relief association fails to prepare or to file the financial report or financial 
149.19 	statement under section 69.051;
149.20 	(2) the relief association treasurer is not bonded in the manner and in the amount 
149.21 	required by section 69.051, subdivision 2;
149.22 	(3) the relief association officers fail to determine or improperly determine the 
149.23 	accrued liability and the annual accruing liability of the relief association under section 
149.24 	69.772, subdivisions 2, 2a, and 3, paragraph (c), clause (2), if applicable;
149.25 	(4) if applicable, the relief association officers fail to obtain and file a required 
149.26 	actuarial valuation or the officers file an actuarial valuation that does not contain the 
149.27 	special fund actuarial liability calculated under the entry age normal actuarial cost 
149.28 	method, the special fund current assets, the special fund unfunded actuarial accrued 
149.29 	liability, the special fund normal cost under the entry age normal actuarial cost method, 
149.30 	the amortization requirement for the special fund unfunded actuarial accrued liability 
149.31 	by the applicable target date, a summary of the applicable benefit plan, a summary of 
149.32 	the membership of the relief association, a summary of the actuarial assumptions used 
149.33 	in preparing the valuation, and a signed statement by the actuary attesting to its results 
149.34 	and certifying to the qualifications of the actuary as an approved actuary under section 
149.35 	356.215, subdivision 1, paragraph (c);
150.1 	(5) the municipality failed to provide a municipal contribution, or the nonprofit 
150.2 	firefighting corporation failed to provide a corporate contribution, in the amount equal 
150.3 	to the minimum municipal obligation if the relief association is governed under section 
150.4 	69.772, or the amount necessary, when added to the fire state aid actually received 
150.5 	in the plan year in question, to at least equal in total the calculated annual financial 
150.6 	requirements of the special fund of the relief association if the relief association is 
150.7 	governed under section 69.773, and, if the municipal or corporate contribution is deficient, 
150.8 	the municipality failed to include the minimum municipal obligation certified under 
150.9 	section 69.772, subdivision 3, or 69.773, subdivision 5, in its budget and tax levy or the 
150.10 	nonprofit firefighting corporation failed to include the minimum corporate obligation 
150.11 	certified under section 69.774, subdivision 2, in the corporate budget;
150.12 	(6) the defined benefit relief association did not receive municipal ratification for 
150.13 	the most recent plan amendment when municipal ratification was required under section 
150.14 	69.772, subdivision 6; 69.773, subdivision 6; or 424A.02, subdivision 10;
150.15 	(7) the relief association invested special fund assets in an investment security 
150.16 	that is not authorized under section 69.775;
150.17 	(8) the relief association had an administrative expense that is not authorized under 
150.18 	section 69.80 or 424A.05, subdivision 3, or the municipality had an expenditure that 
150.19 	is not authorized under section 424A.08;
150.20 	(9) the relief association officers fail to provide a complete and accurate public 
150.21 	pension plan investment portfolio and performance disclosure under section 356.219;
150.22 	(10) the relief association fails to obtain the acknowledgment from a broker of the 
150.23 	statement of investment restrictions under section 356A.06, subdivision 8b;
150.24 	(11) the relief association officers permitted to occur a prohibited transaction under 
150.25 	section 356A.06, subdivision 9, or 424A.001 424A.04, subdivision 7 2a, or failed to 
150.26 	undertake correction of a prohibited transaction that did occur; or
150.27 	(12) the relief association pays a defined benefit service pension in an amount 
150.28 	that is in excess of the applicable service pension maximum under section 424A.02, 
150.29 	subdivision 3.

150.30 	EFFECTIVE DATE. This section is effective July 1, 2009.

150.31 	Sec. 3. Minnesota Statutes 2008, section 69.772, subdivision 4, is amended to read:
150.32 		Subd. 4.Certification of financial requirements and minimum municipal 
150.33 	obligation; levy. (a) The officers of the relief association shall certify the financial 
150.34 	requirements of the special fund of the relief association and the minimum obligation of 
150.35 	the municipality with respect to the special fund of the relief association as determined 
151.1 	under subdivision 3 to the governing body of the municipality on or before August 1 of 
151.2 	each year. The financial requirements of the relief association and the minimum municipal 
151.3 	obligation must be included in the financial report or financial statement under section 
151.4 	69.051. The schedule forms related to the determination of the financial requirements 
151.5 	must be filed with the state auditor by March 31, annually, if the relief association is 
151.6 	required to file a financial statement under section 69.051, subdivision 1a, or by June 30, 
151.7 	annually, if the relief association is required to file a financial report and audit under 
151.8 	section 69.051, subdivision 1.
151.9 	(b) The municipality shall provide for at least the minimum obligation of the 
151.10 	municipality with respect to the special fund of the relief association by tax levy or from 
151.11 	any other source of public revenue.
151.12 	(c) The municipality may levy taxes for the payment of the minimum municipal 
151.13 	obligation without any limitation as to rate or amount and irrespective of any limitations 
151.14 	imposed by other provisions of law upon the rate or amount of taxation until the balance 
151.15 	of the special fund or any fund of the relief association has attained a specified level. In 
151.16 	addition, any taxes levied under this section must not cause the amount or rate of any other 
151.17 	taxes levied in that year or to be levied in a subsequent year by the municipality which are 
151.18 	subject to a limitation as to rate or amount to be reduced.
151.19 	(d) If the municipality does not include the full amount of the minimum municipal 
151.20 	obligations in its levy for any year, the officers of the relief association shall certify that 
151.21 	amount to the county auditor, who shall spread a levy in the amount of the certified 
151.22 	minimum municipal obligation on the taxable property of the municipality.
151.23 	(e) If the state auditor determines that a municipal contribution actually made in a 
151.24 	plan year was insufficient under section 69.771, subdivision 3, paragraph (c), clause (5), 
151.25 	the state auditor may request a copy of the certifications under this subdivision from the 
151.26 	relief association or from the city. The relief association or the city, whichever applies, 
151.27 	must provide the certifications within 14 days of the date of the request from the state 
151.28 	auditor.

151.29 	EFFECTIVE DATE. This section is effective July 1, 2009.

151.30 	Sec. 4. Minnesota Statutes 2008, section 69.772, subdivision 6, is amended to read:
151.31 		Subd. 6.Municipal ratification for plan amendments. If the special fund of the 
151.32 	relief association does not have a surplus over full funding pursuant to subdivision 3, 
151.33 	clause (2), subclause (e), or if the municipality is required to provide financial support 
151.34 	to the special fund of the relief association pursuant to this section, the adoption of or 
151.35 	any amendment to the articles of incorporation or bylaws of a relief association which 
152.1 	increases or otherwise affects the retirement coverage provided by or the service pensions 
152.2 	or retirement benefits payable from the special fund of any relief association to which this 
152.3 	section applies shall is not be effective until it is ratified by the governing body of the 
152.4 	municipality in which the relief association is located and the officers of a relief association 
152.5 	shall not seek municipal ratification prior to preparing and certifying an estimate of 
152.6 	the expected increase in the accrued liability and annual accruing liability of the relief 
152.7 	association attributable to the amendment. If the special fund of the relief association has 
152.8 	a surplus over full funding pursuant to subdivision 3, clause (2), subclause (e), and if the 
152.9 	municipality is not required to provide financial support to the special fund of the relief 
152.10 	association pursuant to this section, the relief association may adopt or amend its articles 
152.11 	of incorporation or bylaws which increase or otherwise affect the retirement coverage 
152.12 	provided by or the service pensions or retirement benefits payable from the special fund 
152.13 	of the relief association which shall be are effective without municipal ratification so 
152.14 	long as this does not cause the amount of the resulting increase in the accrued liability 
152.15 	of the special fund of the relief association to exceed 90 percent of the amount of the 
152.16 	prior surplus over full funding reported in the prior year and this does not result in the 
152.17 	financial requirements of the special fund of the relief association exceeding the expected 
152.18 	amount of the future fire state aid to be received by the relief association as determined 
152.19 	by the board of trustees following the preparation of an estimate of the expected increase 
152.20 	in the accrued liability and annual accruing liability of the relief association attributable 
152.21 	to the change. If a relief association adopts or amends its articles of incorporation or 
152.22 	bylaws without municipal ratification pursuant to this subdivision, and, subsequent to 
152.23 	the amendment or adoption, the financial requirements of the special fund of the relief 
152.24 	association pursuant to this section are such so as to require financial support from the 
152.25 	municipality, the provision which was implemented without municipal ratification shall
152.26 	is no longer be effective without municipal ratification and any service pensions or 
152.27 	retirement benefits payable after that date shall may be paid only in accordance with the 
152.28 	articles of incorporation or bylaws as amended or adopted with municipal ratification.

152.29 	EFFECTIVE DATE. This section is effective July 1, 2009.

152.30 	Sec. 5. Minnesota Statutes 2008, section 69.773, subdivision 6, is amended to read:
152.31 		Subd. 6.Municipal ratification for plan amendments. If the special fund of the 
152.32 	relief association does not have a surplus over full funding pursuant to subdivision 4, or if 
152.33 	the municipality is required to provide financial support to the special fund of the relief 
152.34 	association pursuant to this section, the adoption of or any amendment to the articles of 
152.35 	incorporation or bylaws of a relief association which increases or otherwise affects the 
153.1 	retirement coverage provided by or the service pensions or retirement benefits payable 
153.2 	from the special fund of any relief association to which this section applies shall is not 
153.3 	be effective until it is ratified by the governing body of the municipality in which the 
153.4 	relief association is located. If the special fund of the relief association has a surplus over 
153.5 	full funding pursuant to subdivision 4, and if the municipality is not required to provide 
153.6 	financial support to the special fund of the relief association pursuant to this section, 
153.7 	the relief association may adopt or amend its articles of incorporation or bylaws which 
153.8 	increase or otherwise affect the retirement coverage provided by or the service pensions or 
153.9 	retirement benefits payable from the special fund of the relief association which shall be
153.10 	are effective without municipal ratification so long as this does not cause the amount of 
153.11 	the resulting increase in the accrued liability of the special fund of the relief association to 
153.12 	exceed 90 percent of the amount of the prior surplus over full funding reported in the prior 
153.13 	year and this does not result in the financial requirements of the special fund of the relief 
153.14 	association exceeding the expected amount of the future fire state aid to be received by the 
153.15 	relief association as determined by the board of trustees following the preparation of an 
153.16 	updated actuarial valuation including the proposed change or an estimate of the expected 
153.17 	actuarial impact of the proposed change prepared by the actuary of the relief association. 
153.18 	If a relief association adopts or amends its articles of incorporation or bylaws without 
153.19 	municipal ratification pursuant to this subdivision, and, subsequent to the amendment or 
153.20 	adoption, the financial requirements of the special fund of the relief association pursuant to 
153.21 	this section are such so as to require financial support from the municipality, the provision 
153.22 	which was implemented without municipal ratification shall is no longer be effective 
153.23 	without municipal ratification and any service pensions or retirement benefits payable 
153.24 	after that date shall be may paid only in accordance with the articles of incorporation or 
153.25 	bylaws as amended or adopted with municipal ratification.

153.26 	EFFECTIVE DATE. This section is effective July 1, 2009.

153.27 	Sec. 6. Minnesota Statutes 2008, section 356.219, subdivision 3, is amended to read:
153.28 		Subd. 3.Content of reports. (a) The report required by subdivision 1 must include 
153.29 	a written statement of the investment policy. Following that initial report, subsequent 
153.30 	reports must include investment policy changes and the effective date of each policy 
153.31 	change rather than a complete statement of investment policy, unless the state auditor 
153.32 	requests submission of a complete current statement. The report must also include the 
153.33 	information required by the following paragraphs, as applicable.
153.34 	(b) If, after four years of reporting under this paragraph, the total portfolio time 
153.35 	weighted rate of return, net of all investment related costs and fees, provided by the public 
154.1 	pension plan differs by no more than 0.1 percent from the comparable return for the plan 
154.2 	calculated by the Office of the State Auditor, and if a public pension plan has a total 
154.3 	market value of $25,000,000 or more as of the beginning of the calendar year, and if the 
154.4 	public pension plan's annual audit is performed by the state auditor or by the legislative 
154.5 	auditor, the report required by subdivision 1 must include the market value of the total 
154.6 	portfolio and the market value of each asset class included in the pension fund as of the 
154.7 	beginning of the calendar year and as of the end of the calendar year. At the discretion of 
154.8 	the state auditor, the public pension plan may be required to submit the market value of the 
154.9 	total portfolio and the market value of each investment account, investment portfolio, or 
154.10 	asset class included in the pension fund for each month, and the amount and date of each 
154.11 	injection and withdrawal to the total portfolio and to each investment account, investment 
154.12 	portfolio, or asset class. If the market value of a public pension plan's fund drops below 
154.13 	$25,000,000 in a subsequent year, it must continue reporting under this paragraph for any 
154.14 	subsequent year in which the public pension plan is not fully invested as specified in 
154.15 	subdivision 1, paragraph (b), except that if the public pension plan's annual audit is not 
154.16 	performed by the state auditor or legislative auditor, paragraph (c) applies.
154.17 	(c) If paragraph (b) would apply if the annual audit were provided by the state 
154.18 	auditor or legislative auditor, the report required by subdivision 1 must include the market 
154.19 	value of the total portfolio and the market value of each asset class included in the pension 
154.20 	fund as of the beginning of the calendar year and for each month, and the amount and date 
154.21 	of each injection and withdrawal to the total portfolio and to each investment account, 
154.22 	investment portfolio, or asset class.
154.23 	(d) For public pension plans to which paragraph (b) or (c) applies, the report required 
154.24 	by subdivision 1 must also include a calculation of the total time-weighted rate of return 
154.25 	available from index-matching investments assuming the asset class performance targets 
154.26 	and target asset mix indicated in the written statement of investment policy. The provided 
154.27 	information must include a description of indices used in the analyses and an explanation 
154.28 	of why those indices are appropriate. This paragraph does not apply to any fully invested 
154.29 	plan, as defined by subdivision 1, paragraph (b). Reporting by the State Board of 
154.30 	Investment under this paragraph is limited to information on the Minnesota public pension 
154.31 	plans required to be invested by the State Board of Investment under section 11A.23. 
154.32 	(e) If a public pension plan has a total market value of less than $25,000,000 as of 
154.33 	the beginning of the calendar year and was never required to file under paragraph (b) or 
154.34 	(c), the report required by subdivision 1 must include the amount and date of each total 
154.35 	portfolio injection and withdrawal. In addition, the report must include the market value 
154.36 	of the total portfolio as of the beginning of the calendar year and for each quarter.
155.1 	(f) Any public pension plan reporting under paragraph (b) or (c) must include 
155.2 	computed time-weighted rates of return with the report, in addition to all other required 
155.3 	information, as applicable. The chief administrative officer of the public pension plan 
155.4 	submitting the returns must certify, on a form prescribed by the state auditor, that the 
155.5 	returns have been computed by the pension plan's investment performance consultant or 
155.6 	custodial bank. The chief administrative officer of the public pension plan submitting the 
155.7 	returns also must certify that the returns are net of all costs and fees, including investment 
155.8 	management fees, and that the procedures used to compute the returns are consistent 
155.9 	with Bank Administration Institute studies of investment performance measurement 
155.10 	and presentation standards set by the Certified Financial AnalystCFA Institute. If the 
155.11 	certifications required under this paragraph are not provided, the reporting requirements of 
155.12 	paragraph (c) apply.
155.13 	(g) For public pension plans reporting under paragraph (e), the public pension plan 
155.14 	must retain supporting information specifying the date and amount of each injection and 
155.15 	withdrawal to each investment account and investment portfolio. The public pension plan 
155.16 	must also retain the market value of each investment account and investment portfolio at 
155.17 	the beginning of the calendar year and for each quarter. Information that is required to be 
155.18 	collected and retained for any given year or years under this paragraph must be submitted 
155.19 	to the Office of the State Auditor if the Office of the State Auditor requests in writing that 
155.20 	the information be submitted by a public pension plan or plans, or be submitted by the 
155.21 	State Board of Investment for any plan or plans for which the State Board of Investment is 
155.22 	the investment authority under this section. If the state auditor requests information under 
155.23 	this subdivision, and the public plan fails to comply, the pension plan is subject to penalties 
155.24 	under subdivision 5, unless penalties are waived by the state auditor under that subdivision.

155.25 	EFFECTIVE DATE. This section is effective July 1, 2009.

155.26 	Sec. 7. [420.20] PROHIBITION OF SERVICE BY MINORS AS VOLUNTEER 
155.27 	FIREFIGHTERS.
155.28 	It is unlawful for any municipality or independent nonprofit firefighting corporation 
155.29 	to employ a minor to serve as a firefighter or to permit a minor to serve in any capacity 
155.30 	performing any firefighting duties with a fire department, except for members of a youth, 
155.31 	civic, or educational organization or program who participate with uninterrupted adult 
155.32 	supervision, as allowed by federal law and by section 181A.04. Such organizations or 
155.33 	programs include, but are not limited to, Boy Scout Explorer programs or firefighting 
155.34 	degree programs.

156.1 	EFFECTIVE DATE. This section is effective July 1, 2009.

156.2 	Sec. 8. Minnesota Statutes 2008, section 424A.001, subdivision 1, is amended to read:
156.3 		Subdivision 1.Terms defined. Unless the context clearly indicates otherwise, as 
156.4 	used in this chapter, the terms defined in this section have the meanings given.

156.5 	EFFECTIVE DATE. This section is effective July 1, 2009.

156.6 	Sec. 9. Minnesota Statutes 2008, section 424A.001, subdivision 1a, is amended to read:
156.7 		Subd. 1a.Ancillary benefit. "Ancillary benefit" means a benefit payable from the 
156.8 	special fund of the relief association other than a service pension that is permitted by law 
156.9 	and that is provided for in the relief association bylaws.

156.10 	EFFECTIVE DATE. This section is effective July 1, 2009.

156.11 	Sec. 10. Minnesota Statutes 2008, section 424A.001, is amended by adding a 
156.12 	subdivision to read:
156.13 		Subd. 1b.Defined benefit relief association. "Defined benefit relief association" 
156.14 	means a volunteer firefighters' relief association that provides a lump-sum service pension, 
156.15 	provides a monthly benefit service pension, or provides a lump-sum service pension as an 
156.16 	alternative to the monthly benefit service pension.

156.17 	EFFECTIVE DATE. This section is effective July 1, 2009.

156.18 	Sec. 11. Minnesota Statutes 2008, section 424A.001, is amended by adding a 
156.19 	subdivision to read:
156.20 		Subd. 1c.Defined contribution relief association. "Defined contribution relief 
156.21 	association" means a volunteer firefighters' relief association that provides a service 
156.22 	pension based solely on an individual account balance rather than a specified annual 
156.23 	lump-sum or monthly benefit service pension amount.

156.24 	EFFECTIVE DATE. This section is effective July 1, 2009.

156.25 	Sec. 12. Minnesota Statutes 2008, section 424A.001, subdivision 2, is amended to read:
156.26 		Subd. 2.Fire department. "Fire department" includes a municipal fire department 
156.27 	andor an independent nonprofit firefighting corporation.

156.28 	EFFECTIVE DATE. This section is effective July 1, 2009.

157.1 	Sec. 13. Minnesota Statutes 2008, section 424A.001, subdivision 3, is amended to read:
157.2 		Subd. 3.Municipality. "Municipality" means a municipality which has 
157.3 	established a fire department with which the relief association is directly associated, or 
157.4 	the municipalities which have entered into a contract with the independent nonprofit 
157.5 	firefighting corporation of which the relief association is a subsidiary.

157.6 	EFFECTIVE DATE. This section is effective July 1, 2009.

157.7 	Sec. 14. Minnesota Statutes 2008, section 424A.001, subdivision 4, is amended to read:
157.8 		Subd. 4.Relief association. "Relief association" means (a)
157.9 	(1) a volunteer firefighters' relief association or a volunteer firefighters' division or 
157.10 	account of a partially salaried and partially volunteer firefighters' relief association that is 
157.11 	organized and incorporated under chapter 317A and any laws of the state, is governed by 
157.12 	this chapter and chapter 69, and is directly associated with a fire department established by 
157.13 	municipal ordinance; or 
157.14 	(b)(2) any separateseparately incorporated volunteer firefighters' relief association 
157.15 	that is subsidiary to and providingthat provides service pension and retirement benefit 
157.16 	coverage for members of an independent nonprofit firefighting corporation that is 
157.17 	organized under the provisions of chapter 317A, is governed by this chapter, and operating
157.18 	operates exclusively for firefighting purposes. A relief association is a governmental entity 
157.19 	that receives and manages public money to provide retirement benefits for individuals 
157.20 	providing the governmental services of firefighting and emergency first response.

157.21 	EFFECTIVE DATE. This section is effective July 1, 2009.

157.22 	Sec. 15. Minnesota Statutes 2008, section 424A.001, subdivision 5, is amended to read:
157.23 		Subd. 5.Special fund. "Special fund" means the special fund of a volunteer 
157.24 	firefighters' relief association or the account for volunteer firefighters within the special 
157.25 	fund of a partially salaried and partially volunteer firefighters' relief association.

157.26 	EFFECTIVE DATE. This section is effective July 1, 2009.

157.27 	Sec. 16. Minnesota Statutes 2008, section 424A.001, subdivision 6, is amended to read:
157.28 		Subd. 6.Surviving spouse. For purposes of this chapter, and the governing bylaws 
157.29 	of anygoverning a relief association to which this chapter applies, the term "surviving 
157.30 	spouse" means the spouse of a deceased member who was legally married to the member 
157.31 	at the time of the member's death.

158.1 	EFFECTIVE DATE. This section is effective July 1, 2009.

158.2 	Sec. 17. Minnesota Statutes 2008, section 424A.001, subdivision 8, is amended to read:
158.3 		Subd. 8.Firefighting service. "Firefighting service," if the applicable municipality 
158.4 	approves for a fire department that is a municipal department, or if the applicable 
158.5 	contracting municipality or municipalities approve for a fire department that is an 
158.6 	independent nonprofit firefighting corporation, includes fire department service rendered 
158.7 	by fire prevention personnel.

158.8 	EFFECTIVE DATE. This section is effective July 1, 2009.

158.9 	Sec. 18. Minnesota Statutes 2008, section 424A.001, subdivision 9, is amended to read:
158.10 		Subd. 9.Separate from active service. "Separate from active service" means 
158.11 	tothat a firefighter permanently ceaseceases to perform fire suppression duties with 
158.12 	a particular volunteer fire department, to permanently ceaseceases to perform fire 
158.13 	prevention duties, to permanently ceaseceases to supervise fire suppression duties, and to
158.14 	permanently ceaseceases to supervise fire prevention duties.

158.15 	EFFECTIVE DATE. This section is effective July 1, 2009.

158.16 	Sec. 19. Minnesota Statutes 2008, section 424A.001, subdivision 10, is amended to 
158.17 	read:
158.18 		Subd. 10.Volunteer firefighter. "Volunteer firefighter" means a person who either:
158.19 	(1) was a member of the applicable fire department or the independent nonprofit 
158.20 	firefighting corporation and a member of the relief association on July 1, 2006; or
158.21 	(2) became a member of the applicable fire department or the independent nonprofit 
158.22 	firefighting corporation and is eligible for membership in the applicable relief association 
158.23 	after June 30, 2006, and
158.24 	(i) is engaged in providing emergency response services or delivering fire education 
158.25 	or prevention services as a member of a municipal fire department, a joint powers entity 
158.26 	fire department, or an independent nonprofit firefighting corporation;
158.27 	(ii) is trained in or is qualified to provide fire suppression duties or to provide fire 
158.28 	prevention duties under subdivision 8; and
158.29 	(iii) meets any other minimum firefighter and service standards established by the 
158.30 	fire department or the independent nonprofit firefighting corporation or specified in the 
158.31 	articles of incorporation or bylaws of the relief association.

158.32 	EFFECTIVE DATE. This section is effective July 1, 2009.

159.1 	Sec. 20. [424A.002] AUTHORIZATION OF NEW OR CONTINUING 
159.2 	VOLUNTEER FIREFIGHTERS' RELIEF ASSOCIATIONS.
159.3 		Subdivision 1.Authorization. A municipal fire department or an independent 
159.4 	nonprofit firefighting corporation, with approval by the applicable municipality or 
159.5 	municipalities, may establish a new volunteer firefighters' relief association or may retain 
159.6 	an existing volunteer firefighters' relief association.
159.7 		Subd. 2.Defined benefit or defined contribution relief association. The articles 
159.8 	of incorporation or the bylaws of the volunteer firefighters' relief association must specify 
159.9 	that the relief association is either a defined benefit relief association subject to sections 
159.10 	69.771 to 69.774, 424A.015, and 424A.02 or is a defined contribution relief association 
159.11 	subject to sections 424A.015 and 424A.016.

159.12 	EFFECTIVE DATE. This section is effective July 1, 2009.

159.13 	Sec. 21. Minnesota Statutes 2008, section 424A.01, is amended to read:
159.14 	424A.01 MEMBERSHIP IN A VOLUNTEER FIREFIGHTERS' RELIEF 
159.15 	ASSOCIATION.
159.16 		Subdivision 1.Minors. It is unlawful for any(a) No volunteer firefighters' relief 
159.17 	association associated with a municipality or an independent nonprofit firefighting 
159.18 	corporation to employmay include as a relief association member a minor serving as 
159.19 	a volunteer firefighter or to permit a minor to serve in any capacity performing any 
159.20 	firefighting duties with a volunteer fire department, except for members of a youth, 
159.21 	civic, or educational organization or program who participate with uninterrupted adult 
159.22 	supervision, as allowed by federal law and by section 181A.04. Such organizations or 
159.23 	programs include, but are not limited to, Boy Scout Explorer programs or firefighting 
159.24 	degree programs.
159.25 	(b) No volunteer firefighters' relief association associated with a municipality or an 
159.26 	independent nonprofit firefighting corporation may include as a relief association member 
159.27 	a minor serving as a volunteer firefighter.
159.28 		Subd. 2.Status of substitute volunteer firefighters. No person who is serving as a 
159.29 	substitute volunteer firefighter shall be deemedmay be considered to be a firefighter for 
159.30 	purposes of chapter 69 or this chapter nor shall beand no substitute volunteer firefighter is 
159.31 	authorized to be a member of any volunteer firefighters' relief association governed by 
159.32 	chapter 69 or this chapter.
159.33 		Subd. 3.Status of nonmember volunteer firefighters. No person who is serving 
159.34 	as a firefighter in a fire department but who is not a member of the applicable firefighters' 
160.1 	relief association shall beis entitled to any service pension or ancillary benefits from 
160.2 	the relief association.
160.3 		Subd. 4.Exclusion of persons constituting an unwarranted health risk. The 
160.4 	board of trustees of every relief association may exclude from membership in the relief 
160.5 	association all applicants who, due to some medically determinable physical or mental 
160.6 	impairment or condition, wouldis determined to constitute a predictable and unwarranted 
160.7 	risk of imposing liability for an ancillary benefit at any age earlier than the minimum 
160.8 	age specified for receipt of a service pension. Notwithstanding any provision of section 
160.9 	363A.25, it shall beis a good and valid defense to a complaint or action brought under 
160.10 	chapter 363A that the board of trustees of the relief association made a good faith 
160.11 	determination that the applicant suffers from an impairment or condition constituting a 
160.12 	predictable and unwarranted risk for the relief association if the determination was made 
160.13 	following consideration of: (a)(1) the person's medical history; and (b)(2) the report of 
160.14 	the physician completing a physical examination of the applicant completedundertaken at 
160.15 	the expense of the relief association.
160.16 		Subd. 5.Fire prevention personnel. (a) If the fire department is a municipal 
160.17 	department and the applicable municipality approves, or if the fire department is an 
160.18 	independent nonprofit firefighting corporation and the contracting municipality or 
160.19 	municipalities approve, the fire department may employ or otherwise utilize the services 
160.20 	of persons as volunteer firefighters to perform fire prevention duties and to supervise 
160.21 	fire prevention activities.
160.22 	(b) Personnel serving in fire prevention positions are eligible to be members of 
160.23 	the applicable volunteer firefighter relief association and to qualify for service pension 
160.24 	or other benefit coverage of the relief association on the same basis as fire department 
160.25 	personnel who perform fire suppression duties.
160.26 	(c) Personnel serving in fire prevention positions also are eligible to receive any 
160.27 	other benefits under the applicable law or practice for services on the same basis as 
160.28 	personnel who are employed to perform fire suppression duties.
160.29 		Subd. 6.Return to active firefighting after break in service. (a) If a former active 
160.30 	firefighter who has ceased to perform or supervise fire suppression and fire prevention 
160.31 	duties for at least 60 days resumes performing active firefighting with the fire department 
160.32 	associated with the relief association, if the bylaws of the relief association so permit, the 
160.33 	person may again become an active member of the relief association.
160.34 	(b) A firefighter who returns to active relief association membership under paragraph 
160.35 	(a) may qualify for the receipt of a service pension from the relief association for the 
161.1 	resumption service period if the firefighter meets a minimum period of resumption service 
161.2 	specified in the relief association bylaws.
161.3 	(c) A firefighter who returns to active lump-sum relief association membership and 
161.4 	who qualifies for a service pension under paragraph (b) must have, upon a subsequent 
161.5 	cessation of duties, any service pension for the resumption service period calculated as 
161.6 	a separate benefit. If a lump-sum service pension had been paid to the firefighter upon 
161.7 	the firefighter's previous cessation of duties, a second lump-sum service pension for the 
161.8 	resumption service period must be calculated to apply the service pension amount in effect 
161.9 	on the date of the firefighter's termination of the resumption service for all years of the 
161.10 	resumption service. No firefighter may be paid a service pension twice for the same period 
161.11 	of service. If a lump-sum service pension had not been paid to the firefighter upon the 
161.12 	firefighter's previous cessation of duties and the firefighter meets the minimum service 
161.13 	requirement of section 424A.02, subdivision 2, a service pension must be calculated to 
161.14 	apply the service pension amount in effect on the date of the firefighter's termination of the 
161.15 	resumption service for all years of service credit.
161.16 	(d) A firefighter who had not been paid a lump-sum service pension returns to active 
161.17 	relief association membership under paragraph (a), who does not qualify for a service 
161.18 	pension under paragraph (b), but who does meet the minimum service requirement of 
161.19 	section 424A.02, subdivision 2, based on the firefighter's previous years of active service, 
161.20 	must have, upon a subsequent cessation of duties, a service pension calculated for the 
161.21 	previous years of service based on the service pension amount in effect on the date of the 
161.22 	firefighter's termination of the resumption service, or, if the bylaws so provide, based on the 
161.23 	service pension amount in effect on the date of the firefighter's previous cessation of duties.
161.24 	(e) If a firefighter receiving a monthly benefit service pension returns to active 
161.25 	monthly benefit relief association membership under paragraph (a), any monthly benefit 
161.26 	service pension payable to the firefighter is suspended as of the first day of the month next 
161.27 	following the date on which the firefighter returns to active membership. If the firefighter 
161.28 	was receiving a monthly benefit service pension, and qualifies for a service pension under 
161.29 	paragraph (b), the firefighter is entitled to an additional monthly benefit service pension 
161.30 	upon a subsequent cessation of duties calculated based on the resumption service credit 
161.31 	and the service pension accrual amount in effect on the date of the termination of the 
161.32 	resumption service. The suspended initial service pension resumes as of the first of 
161.33 	the month next following the termination of the resumption service. If the firefighter 
161.34 	was not receiving a monthly benefit service pension and meets the minimum service 
161.35 	requirement of section 424A.02, subdivision 2, a service pension must be calculated to 
162.1 	apply the service pension amount  in effect on the date of the firefighter's termination of the 
162.2 	resumption service for all years of service credit.
162.3 	(f) A firefighter who was not receiving a monthly benefit service pension returns 
162.4 	to active relief association membership under paragraph (a), who does not qualify for a 
162.5 	service pension under paragraph (b), but who does meet the minimum service requirement 
162.6 	of section 424A.02, subdivision 2, based on the firefighter's previous years of active 
162.7 	service, must have, upon a subsequent cessation of duties, a service pension calculated for 
162.8 	the previous years of service based on the service pension amount in effect on the date 
162.9 	of the firefighter's termination of the resumption service, or, if the bylaws so provide, 
162.10 	based on the service pension amount in effect on the date of the firefighter's previous 
162.11 	cessation of duties.

162.12 	EFFECTIVE DATE. This section is effective July 1, 2009.

162.13 	Sec. 22. [424A.015] GENERALLY APPLICABLE VOLUNTEER 
162.14 	FIREFIGHTERS' RELIEF ASSOCIATION PENSION PLAN REGULATION.
162.15 		Subdivision 1.Separation from active service; exception. (a) No service pension 
162.16 	is payable to a person while the person remains an active member of the respective fire 
162.17 	department, and a person who is receiving a service pension is not entitled to receive any 
162.18 	other benefits from the special fund of the relief association.
162.19 	(b) No relief association as defined in section 424A.001, subdivision 4, may pay a 
162.20 	service pension or disability benefit to a former member of the relief association if that 
162.21 	person has not separated from active service with the fire department to which the relief 
162.22 	association is directly associated, unless: 
162.23 	(1) the person is employed subsequent to retirement by the municipality or the 
162.24 	independent nonprofit firefighting corporation, whichever applies, to perform duties within 
162.25 	the municipal fire department or corporation on a full-time basis;
162.26 	(2) the governing body of the municipality or of the corporation has filed its 
162.27 	determination with the board of trustees of the relief association that the person's 
162.28 	experience with and service to the fire department in that person's full-time capacity 
162.29 	would be difficult to replace; and
162.30 	(3) the bylaws of the relief association were amended to provide for the payment of 
162.31 	a service pension or disability benefit for such full-time employees.
162.32 		Subd. 2.No assignment or garnishment. A service pension or ancillary benefits 
162.33 	paid or payable from the special fund of a relief association to any person receiving or 
162.34 	entitled to receive a service pension or ancillary benefits is not subject to garnishment, 
162.35 	judgment, execution, or other legal process, except as provided in section 518.58, 518.581, 
163.1 	or 518A.53. No person entitled to a service pension or ancillary benefits from the special 
163.2 	fund of a relief association may assign any service pension or ancillary benefit payments, 
163.3 	and the association does not have the authority to recognize any assignment or pay over 
163.4 	any sum which has been assigned.
163.5 		Subd. 3.Purchase of annuity contract. A relief association that provides a service 
163.6 	pension in a single payment, if the governing articles of incorporation or bylaws so 
163.7 	provide, may purchase an annuity contract on behalf of a retiring member in an amount 
163.8 	equal to the service pension otherwise payable at the request of the person and in place of 
163.9 	a direct payment to the person. The annuity contract must be purchased from an insurance 
163.10 	carrier licensed to do business in this state.
163.11 		Subd. 4.Transfer to individual retirement account. A relief association that is a 
163.12 	qualified pension plan under section 401(a) of the Internal Revenue Code, as amended, 
163.13 	and that provides a single payment service pension, at the written request of the applicable 
163.14 	retiring member or, following the death of the active member, at the written request of the 
163.15 	deceased member's surviving spouse, may directly transfer on an institution-to-institution 
163.16 	basis the eligible member's lump-sum pension or the death or survivor benefit attributable 
163.17 	to the member, whichever applies, to the requesting person's individual retirement account 
163.18 	under section 408(a) of the Internal Revenue Code, as amended.

163.19 	EFFECTIVE DATE. This section is effective July 1, 2009.

163.20 	Sec. 23. [424A.016] DEFINED CONTRIBUTION VOLUNTEER 
163.21 	FIREFIGHTERS' RELIEF ASSOCIATION SPECIFIC REGULATION.
163.22 		Subdivision 1.Defined contribution relief association authorization. If the 
163.23 	articles of incorporation or the bylaws governing the volunteer firefighters' relief 
163.24 	association so provide exclusively, the relief association may pay a defined contribution 
163.25 	lump-sum service pension instead of a defined benefit service pension governed by section 
163.26 	424A.02.
163.27 		Subd. 2.Defined contribution service pension eligibility. (a) A relief association, 
163.28 	when its articles of incorporation or bylaws so provide, may pay out of the assets of its 
163.29 	special fund a defined contribution service pension to each of its members who:
163.30 	(1) separates from active service with the fire department;
163.31 	(2) reaches age 50;
163.32 	(3) completes at least five years of active service as an active member of the 
163.33 	municipal fire department to which the relief association is associated;
163.34 	(4) completes at least five years of active membership with the relief association 
163.35 	before separation from active service; and
164.1 	(5) complies with any additional conditions as to age, service, and membership that 
164.2 	are prescribed by the bylaws of the relief association.
164.3 	(b) In the case of a member who has completed at least five years of active service as 
164.4 	an active member of the fire department to which the relief association is associated on 
164.5 	the date that the relief association is established and incorporated, the requirement that 
164.6 	the member complete at least five years of active membership with the relief association 
164.7 	before separation from active service may be waived by the board of trustees of the relief 
164.8 	association if the member completes at least five years of inactive membership with the 
164.9 	relief association before the date of the payment of the service pension. During the period 
164.10 	of inactive membership, the member is not entitled to receive any disability benefit 
164.11 	coverage, is not entitled to receive additional individual account allocation of fire state 
164.12 	aid or municipal contribution towards a service pension, and is considered to have the 
164.13 	status of a person entitled to a deferred service pension.
164.14 	(c) The service pension earned by a volunteer under this chapter and the articles 
164.15 	of incorporation and bylaws of the relief association may be paid whether or not the 
164.16 	municipality or nonprofit firefighting corporation to which the relief association is 
164.17 	associated qualifies for the receipt of fire state aid under chapter 69.
164.18 		Subd. 3.Reduced vesting schedule. If the articles of incorporation or bylaws of a 
164.19 	defined contribution relief association so provide, a relief association may pay a reduced 
164.20 	service pension not to exceed the nonforfeitable percentage of the account balance to a 
164.21 	retiring member who has completed fewer than 20 years of service. The reduced service 
164.22 	pension may be paid when the retiring member meets the minimum age and service 
164.23 	requirements of subdivision 2. The nonforfeitable percentage of pension amounts are 
164.24 	as follows:

164.25
164.26		Completed Years of Service
	Nonforfeitable Percentage 
of Pension Amount
	
164.27		5
		40 percent
	
164.28		6
		52 percent
	
164.29		7
		64 percent
	
164.30		8
		76 percent
	
164.31		9
		88 percent
	
164.32		10
	and thereafter
	100 percent
	
164.33 		Subd. 4.Individual accounts. (a) An individual account must be established for 
164.34 	each firefighter who is a member of the relief association.
164.35 	(b) To each individual active member account must be credited an equal share of:
164.36 	(1) any amounts of fire state aid received by the relief association;
165.1 	(2) any amounts of municipal contributions to the relief association raised from 
165.2 	levies on real estate or from other available municipal revenue sources exclusive of fire 
165.3 	state aid; and
165.4 	(3) any amounts equal to the share of the assets of the special fund to the credit of:
165.5 	(i) any former member who terminated active service with the fire department to 
165.6 	which the relief association is associated before meeting the minimum service requirement 
165.7 	provided for in subdivision 2, paragraph (b), and has not returned to active service with 
165.8 	the fire department for a period no shorter than five years; or
165.9 	(ii) any retired member who retired before obtaining a full nonforfeitable interest in 
165.10 	the amounts credited to the individual member account under subdivision 2, paragraph 
165.11 	(b), and any applicable provision of the bylaws of the relief association. In addition, any 
165.12 	investment return on the assets of the special fund must be credited in proportion to the 
165.13 	share of the assets of the special fund to the credit of each individual active member 
165.14 	account. Administrative expenses of the relief association payable from the special 
165.15 	fund may be deducted from individual accounts in a manner specified in the bylaws of 
165.16 	the relief association. 
165.17 	(c) Amounts to be credited to individual accounts must be allocated uniformly for all 
165.18 	years of active service and allocations must be made for all years of service, except for 
165.19 	caps on service credit if so provided in the bylaws of the relief association. The allocation 
165.20 	method may utilize monthly proration for fractional years of service, as the bylaws or 
165.21 	articles of incorporation of the relief association so provide. The bylaws or articles of 
165.22 	incorporation may define a "month," but the definition must require a calendar month to 
165.23 	have at least 16 days of active service. If the bylaws or articles of incorporation do not 
165.24 	define a "month," a "month" is a completed calendar month of active service measured 
165.25 	from the member's date of entry to the same date in the subsequent month. 
165.26 	(d) At the time of retirement under subdivision 2 and any applicable provision of the 
165.27 	bylaws of the relief association, a retiring member is entitled to that portion of the assets 
165.28 	of the special fund to the credit of the member in the individual member account which is 
165.29 	nonforfeitable under subdivision 3 and any applicable provision of the bylaws of the relief 
165.30 	association based on the number of years of service to the credit of the retiring member.
165.31 	(e) Annually, the secretary of the relief association shall certify the individual 
165.32 	account allocations to the state auditor at the same time that the annual financial statement 
165.33 	or financial report and audit of the relief association, whichever applies, is due under 
165.34 	section 69.051.
165.35 		Subd. 5.Service pension installment payments. A defined contribution relief 
165.36 	association, if the governing bylaws so provide, may pay, at the option of the retiring 
166.1 	member and in lieu of a single payment of a service pension, the service pension in 
166.2 	installments. The election of installment payments is irrevocable and must be made by the 
166.3 	retiring member in writing and filed with the secretary of the relief association no later 
166.4 	than 30 days before the commencement of payment of the service pension. The amount of 
166.5 	the installment payments must be the fractional portion of the remaining account balance 
166.6 	equal to one divided by the number of remaining annual installment payments.
166.7 		Subd. 6.Deferred service pensions. (a) A member of a relief association is entitled 
166.8 	to a deferred service pension if the member:
166.9 	(1) has completed the lesser of the minimum period of active service with the fire 
166.10 	department specified in the bylaws or 20 years of active service with the fire department;
166.11 	(2) has completed at least five years of active membership in the relief association; 
166.12 	and
166.13 	(3) separates from active service and membership before reaching age 50 or the 
166.14 	minimum age for retirement and commencement of a service pension specified in the 
166.15 	bylaws governing the relief association if that age is greater than age 50.
166.16 	(b) The deferred service pension is payable when the former member reaches age 
166.17 	50, or the minimum age specified in the bylaws governing the relief association if that age 
166.18 	is greater than age 50, and when the former member makes a valid written application.
166.19 	(c) A defined contribution relief association may, if its governing bylaws so provide, 
166.20 	credit interest or additional investment performance on the deferred lump-sum service 
166.21 	pension during the period of deferral. If provided for in the bylaws, the interest must be 
166.22 	paid:
166.23 	(1) at the investment performance rate actually earned on that portion of the assets 
166.24 	if the deferred benefit amount is invested by the relief association in a separate account 
166.25 	established and maintained by the relief association or if the deferred benefit amount is 
166.26 	invested in a separate investment vehicle held by the relief association; or 
166.27 	(2) the investment return on the assets of the special fund of the defined contribution 
166.28 	volunteer firefighter relief association in proportion to the share of the assets of the special 
166.29 	fund to the credit of each individual deferred member account through the date on which 
166.30 	the investment return is recognized by and credited to the special fund.
166.31 	(d) The deferred service pension is governed by and must be calculated under 
166.32 	the general statute, special law, relief association articles of incorporation, and relief 
166.33 	association bylaw provisions applicable on the date on which the member separated from 
166.34 	active service with the fire department and active membership in the relief association.
166.35 		Subd. 7.Limitation on ancillary benefits. (a) A defined contribution relief 
166.36 	association may only pay an ancillary benefit which would constitute an authorized 
167.1 	disbursement as specified in section 424A.05. The ancillary benefit for active members 
167.2 	must equal the vested or nonvested amount of the individual account of the member.
167.3 	(b) For deferred members, the ancillary benefit must equal the vested amount of 
167.4 	the individual account of the member. For the recipient of installment payments of a 
167.5 	service pension, the ancillary benefit must equal the remaining balance in the individual 
167.6 	account of the recipient.
167.7 		Subd. 8.Filing of bylaw amendments. Each relief association to which this section 
167.8 	applies must file a revised copy of its governing bylaws with the state auditor upon the 
167.9 	adoption of any amendment to its governing bylaws by the relief association. Failure of 
167.10 	the relief association to file a copy of the bylaws or any bylaw amendments with the state 
167.11 	auditor disqualifies the municipality from the distribution of any future fire state aid until 
167.12 	this filing requirement has been completed.

167.13 	EFFECTIVE DATE. This section is effective July 1, 2009.

167.14 	Sec. 24. Minnesota Statutes 2008, section 424A.02, subdivision 1, is amended to read:
167.15 		Subdivision 1.Authorization. (a) A defined benefit relief association, when its 
167.16 	articles of incorporation or bylaws so provide, may pay out of the assets of its special fund 
167.17 	a defined benefit service pension to each of its members who: (1) separates from active 
167.18 	service with the fire department; (2) reaches age 50; (3) completes at least five years of 
167.19 	active service as an active member of the municipal fire department to which the relief 
167.20 	association is associated; (4) completes at least five years of active membership with 
167.21 	the relief association before separation from active service; and (5) complies with any 
167.22 	additional conditions as to age, service, and membership that are prescribed by the bylaws 
167.23 	of the relief association. A service pension computed under this section may be prorated 
167.24 	monthly for fractional years of service,ifas the bylaws or articles of incorporation of 
167.25 	the relief association so provide. The bylaws or articles of incorporation may define 
167.26 	a "month," but the definition must require a calendar month to have at least 16 days of 
167.27 	active service. If the bylaws or articles of incorporation do not define a "month," a 
167.28 	"month" is a completed calendar month of active service measured from the member's 
167.29 	date of entry to the same date in the subsequent month. The service pension earned by a 
167.30 	volunteer firefighter under this chapter and the articles of incorporation and bylaws of the 
167.31 	volunteer firefighters' relief association may be paid whether or not the municipality or 
167.32 	nonprofit firefighting corporation to which the relief association is associated qualifies for 
167.33 	the receipt of fire state aid under chapter 69.
167.34 	(b) In the case of a member who has completed at least five years of active service as 
167.35 	an active member of the fire department to which the relief association is associated on 
168.1 	the date that the relief association is established and incorporated, the requirement that 
168.2 	the member complete at least five years of active membership with the relief association 
168.3 	before separation from active service may be waived by the board of trustees of the relief 
168.4 	association if the member completes at least five years of inactive membership with the 
168.5 	relief association before the date of the payment of the service pension. During the 
168.6 	period of inactive membership, the member is not entitled to receive disability benefit 
168.7 	coverage, is not entitled to receive additional service credit towards computation of a 
168.8 	service pension, and is considered to have the status of a person entitled to a deferred 
168.9 	service pension under subdivision 7.
168.10 	(c) No municipality or nonprofit firefighting corporation may delegate the power to 
168.11 	take final action in setting a service pension or ancillary benefit amount or level to the 
168.12 	board of trustees of the relief association or to approve in advance a service pension or 
168.13 	ancillary benefit amount or level equal to the maximum amount or level that this chapter 
168.14 	would allow rather than a specific dollar amount or level.
168.15 	(d) No relief association as defined in section 424A.001, subdivision 4, may pay a 
168.16 	defined benefit service pension or disability benefit to a former member of the relief 
168.17 	association if that person has not separated from active service with the fire department to 
168.18 	which the relief association is directly associated, unless:
168.19 	(1) the person is employed subsequent to retirement by the municipality or the 
168.20 	independent nonprofit firefighting corporation, whichever applies, to perform duties within 
168.21 	the municipal fire department or corporation on a full-time basis;
168.22 	(2) the governing body of the municipality or of the corporation has filed its 
168.23 	determination with the board of trustees of the relief association that the person's 
168.24 	experience with and service to the fire department in that person's full-time capacity 
168.25 	would be difficult to replace; and
168.26 	(3) the bylaws of the relief association were amended to provide for the payment of 
168.27 	a service pension or disability benefit for such full-time employees.

168.28 	EFFECTIVE DATE. This section is effective July 1, 2009.

168.29 	Sec. 25. Minnesota Statutes 2008, section 424A.02, subdivision 2, is amended to read:
168.30 		Subd. 2.Nonforfeitable portion of service pension. (a) If the articles of 
168.31 	incorporation or bylaws of a defined benefit relief association so provide, athe relief 
168.32 	association may pay a reduced service pension to a retiring member who has completed 
168.33 	fewer than 20 years of service. The reduced service pension may be paid when the retiring 
168.34 	member meets the minimum age and service requirements of subdivision 1.
169.1 	(b) The amount of the reduced service pension may not exceed the amount calculated 
169.2 	by multiplying the service pension appropriate for the completed years of service as 
169.3 	specified in the bylaws timesmultiplied by the applicable nonforfeitable percentage of 
169.4 	pension.
169.5 	(c) For a defined benefit volunteer firefighter relief association that pays a lump-sum 
169.6 	service pension, a monthly benefit service pension, or a lump-sum service pension or a 
169.7 	monthly benefit service pension as alternative benefit forms, the nonforfeitable percentage 
169.8 	of pension amounts are as follows:

169.9169.10
		Completed Years of Service
	Nonforfeitable Percentage of 
Pension Amount
	
169.11		5
		40 percent
		
169.12		6
		44 percent
		
169.13		7
		48 percent
		
169.14		8
		52 percent
		
169.15		9
		56 percent
		
169.16		10
		60 percent
		
169.17		11
		64 percent
		
169.18		12
		68 percent
		
169.19		13
		72 percent
		
169.20		14
		76 percent
		
169.21		15
		80 percent
		
169.22		16
		84 percent
		
169.23		17
		88 percent
		
169.24		18
		92 percent
		
169.25		19
		96 percent
		
169.26		20
	and thereafter
	100 percent
		
169.27 	(d) For a volunteer firefighter relief association that pays a defined contribution 
169.28 	service pension, the nonforfeitable percentage of pension amounts are as follows:

169.29
169.30		Completed Years of Service
	Nonforfeitable Percentage of 
Pension Amount 
	
169.31		5
		40 percent
		
169.32		6
		52 percent
		
169.33		7
		64 percent
		
169.34		8
		76 percent
		
169.35		9
		88 percent
		
169.36		10
	and thereafter
	100 percent

169.37 	EFFECTIVE DATE. This section is effective July 1, 2009.

169.38 	Sec. 26. Minnesota Statutes 2008, section 424A.02, subdivision 3, is amended to read:
170.1 		Subd. 3.Flexible service pension maximums. (a) Annually on or before August 1 
170.2 	as part of the certification of the financial requirements and minimum municipal obligation 
170.3 	determined under section 69.772, subdivision 4, or 69.773, subdivision 5, as applicable, 
170.4 	the secretary or some other official of the relief association designated in the bylaws of 
170.5 	each defined benefit relief association shall calculate and certify to the governing body 
170.6 	of the applicable qualified municipality the average amount of available financing per 
170.7 	active covered firefighter for the most recent three-year period. The amount of available 
170.8 	financing shall includeincludes any amounts of fire state aid received or receivable by the 
170.9 	relief association, any amounts of municipal contributions to the relief association raised 
170.10 	from levies on real estate or from other available revenue sources exclusive of fire state 
170.11 	aid, and one-tenth of the amount of assets in excess of the accrued liabilities of the relief 
170.12 	association calculated under section 69.772, subdivision 2; 69.773, subdivisions 2 and 4; 
170.13 	or 69.774, subdivision 2, if any.
170.14 	(b) The maximum service pension which the defined benefit relief association has 
170.15 	authority to provide for in its bylaws for payment to a member retiring after the calculation 
170.16 	date when the minimum age and service requirements specified in subdivision 1 are met 
170.17 	must be determined using the table in paragraph (c) or (d), whichever applies.
170.18 	(c) For a defined benefit relief association where the governing bylaws provide for 
170.19 	a monthly service pension to a retiring member, the maximum monthly service pension 
170.20 	amount per month for each year of service credited that may be provided for in the bylaws 
170.21 	is the greater of the service pension amount provided for in the bylaws on the date of the 
170.22 	calculation of the average amount of the available financing per active covered firefighter 
170.23 	or the maximum service pension figure corresponding to the average amount of available 
170.24 	financing per active covered firefighter:

170.25
170.26
170.27	Minimum Average Amount of Available 
Financing per Firefighter
	Maximum Service Pension Amount 
Payable per Month for Each 
Year of Service
	
170.28	$ ...
		$ .25
		
170.29	41
		.50
		
170.30	81
		1.00
		
170.31	122
		1.50
		
170.32	162
		2.00
		
170.33	203
		2.50
		
170.34	243
		3.00
		
170.35	284
		3.50
		
170.36	324
		4.00
		
170.37	365
		4.50
		
170.38	405
		5.00
		
170.39	486
		6.00
		
171.1	567
		7.00
		
171.2	648
		8.00
		
171.3	729
		9.00
		
171.4	810
		10.00
		
171.5	891
		11.00
		
171.6	972
		12.00
		
171.7	1053
		13.00
		
171.8	1134
		14.00
		
171.9	1215
		15.00
		
171.10	1296
		16.00
		
171.11	1377
		17.00
		
171.12	1458
		18.00
		
171.13	1539
		19.00
		
171.14	1620
		20.00
		
171.15	1701
		21.00
		
171.16	1782
		22.00
		
171.17	1823
		22.50
		
171.18	1863
		23.00
		
171.19	1944
		24.00
		
171.20	2025
		25.00
		
171.21	2106
		26.00
		
171.22	2187
		27.00
		
171.23	2268
		28.00
		
171.24	2349
		29.00
		
171.25	2430
		30.00
		
171.26	2511
		31.00
		
171.27	2592
		32.00
		
171.28	2673
		33.00
		
171.29	2754
		34.00
		
171.30	2834
		35.00
		
171.31	2916
		36.00
		
171.32	2997
		37.00
		
171.33	3078
		38.00
		
171.34	3159
		39.00
		
171.35	3240
		40.00
		
171.36	3321
		41.00
		
171.37	3402
		42.00
		
171.38	3483
		43.00
		
171.39	3564
		44.00
		
171.40	3645
		45.00
		
171.41	3726
		46.00
		
171.42	3807
		47.00
		
171.43	3888
		48.00
		
172.1	3969
		49.00
		
172.2	4050
		50.00
		
172.3	4131
		51.00
		
172.4	4212
		52.00
		
172.5	4293
		53.00
		
172.6	4374
		54.00
		
172.7	4455
		55.00
		
172.8	4536
		56.00
		
172.9	Effective beginning December 31, 2008
			
172.10	4617
		57.00
		
172.11	4698
		58.00
		
172.12	4779
		59.00
		
172.13	4860
		60.00
		
172.14	4941
		61.00
		
172.15	5022
		62.00
		
172.16	5103
		63.00
		
172.17	5184
		64.00
		
172.18	5265
		65.00
		
172.19	Effective beginning December 31, 2009
			
172.20	5346
		66.00
		
172.21	5427
		67.00
		
172.22	5508
		68.00
		
172.23	5589
		69.00
		
172.24	5670
		70.00
		
172.25	5751
		71.00
		
172.26	5832
		72.00
		
172.27	5913
		73.00
		
172.28	5994
		74.00
		
172.29	Effective beginning December 31, 2010
			
172.30	6075
		75.00
		
172.31	6156
		76.00
		
172.32	6237
		77.00
		
172.33	6318
		78.00
		
172.34	6399
		79.00
		
172.35	6480
		80.00
		
172.36	6561
		81.00
		
172.37	6642
		82.00
		
172.38	6723
		83.00
		
172.39	Effective beginning December 31, 2011
			
172.40	6804
		84.00
		
172.41	6885
		85.00
		
172.42	6966
		86.00
		
172.43	7047
		87.00
		
173.1	7128
		88.00
		
173.2	7209
		89.00
		
173.3	7290
		90.00
		
173.4	7371
		91.00
		
173.5	7452
		92.00
		
173.6	Effective beginning December 31, 2012
			
173.7	7533
		93.00
		
173.8	7614
		94.00
		
173.9	7695
		95.00
		
173.10	7776
		96.00
		
173.11	7857
		97.00
		
173.12	7938
		98.00
		
173.13	8019
		99.00
		
173.14	8100
		100.00
		
173.15	any amount in excess of 
				
173.16	8100
		100.00
		
173.17 	(d) For a defined benefit relief association in which the governing bylaws provide 
173.18 	for a lump-sum service pension to a retiring member, the maximum lump-sum service 
173.19 	pension amount for each year of service credited that may be provided for in the bylaws is 
173.20 	the greater of the service pension amount provided for in the bylaws on the date of the 
173.21 	calculation of the average amount of the available financing per active covered firefighter 
173.22 	or the maximum service pension figure corresponding to the average amount of available 
173.23 	financing per active covered firefighter for the applicable specified period:

173.24
173.25
173.26	Minimum Average Amount of Available 
Financing per Firefighter
	Maximum Lump-Sum Service 
Pension Amount Payable for 
Each Year of Service
	
173.27	$ ...
		$ 10
		
173.28	11
		20
		
173.29	16
		30
		
173.30	23
		40
		
173.31	27
		50
		
173.32	32
		60
		
173.33	43
		80
		
173.34	54
		100
		
173.35	65
		120
		
173.36	77
		140
		
173.37	86
		160
		
173.38	97
		180
		
173.39	108
		200
		
173.40	131
		240
		
173.41	151
		280
		
173.42	173
		320
		
174.1	194
		360
		
174.2	216
		400
		
174.3	239
		440
		
174.4	259
		480
		
174.5	281
		520
		
174.6	302
		560
		
174.7	324
		600
		
174.8	347
		640
		
174.9	367
		680
		
174.10	389
		720
		
174.11	410
		760
		
174.12	432
		800
		
174.13	486
		900
		
174.14	540
		1000
		
174.15	594
		1100
		
174.16	648
		1200
		
174.17	702
		1300
		
174.18	756
		1400
		
174.19	810
		1500
		
174.20	864
		1600
		
174.21	918
		1700
		
174.22	972
		1800
		
174.23	1026
		1900
		
174.24	1080
		2000
		
174.25	1134
		2100
		
174.26	1188
		2200
		
174.27	1242
		2300
		
174.28	1296
		2400
		
174.29	1350
		2500
		
174.30	1404
		2600
		
174.31	1458
		2700
		
174.32	1512
		2800
		
174.33	1566
		2900
		
174.34	1620
		3000
		
174.35	1672
		3100
		
174.36	1726
		3200
		
174.37	1753
		3250
		
174.38	1780
		3300
		
174.39	1820
		3375
		
174.40	1834
		3400
		
174.41	1888
		3500
		
174.42	1942
		3600
		
174.43	1996
		3700
		
175.1	2023
		3750
		
175.2	2050
		3800
		
175.3	2104
		3900
		
175.4	2158
		4000
		
175.5	2212
		4100
		
175.6	2265
		4200
		
175.7	2319
		4300
		
175.8	2373
		4400
		
175.9	2427
		4500
		
175.10	2481
		4600
		
175.11	2535
		4700
		
175.12	2589
		4800
		
175.13	2643
		4900
		
175.14	2697
		5000
		
175.15	2751
		5100
		
175.16	2805
		5200
		
175.17	2859
		5300
		
175.18	2913
		5400
		
175.19	2967
		5500
		
175.20	3021
		5600
		
175.21	3075
		5700
		
175.22	3129
		5800
		
175.23	3183
		5900
		
175.24	3237
		6000
		
175.25	3291
		6100
		
175.26	3345
		6200
		
175.27	3399
		6300
		
175.28	3453
		6400
		
175.29	3507
		6500
		
175.30	3561
		6600
		
175.31	3615
		6700
		
175.32	3669
		6800
		
175.33	3723
		6900
		
175.34	3777
		7000
		
175.35	3831
		7100
		
175.36	3885
		7200
		
175.37	3939
		7300
		
175.38	3993
		7400
		
175.39	4047
		7500
		
175.40	Effective beginning December 31, 2008
			
175.41	4101
		7600
		
175.42	4155
		7700
		
175.43	4209
		7800
		
176.1	4263
		7900
		
176.2	4317
		8000
		
176.3	4371
		8100
		
176.4	4425
		8200
		
176.5	4479
		8300
		
176.6	Effective beginning December 31, 2009
			
176.7	4533
		8400
		
176.8	4587
		8500
		
176.9	4641
		8600
		
176.10	4695
		8700
		
176.11	4749
		8800
		
176.12	4803
		8900
		
176.13	4857
		9000
		
176.14	4911
		9100
		
176.15	Effective beginning December 31, 2010
			
176.16	4965
		9200
		
176.17	5019
		9300
		
176.18	5073
		9400
		
176.19	5127
		9500
		
176.20	5181
		9600
		
176.21	5235
		9700
		
176.22	5289
		9800
		
176.23	5343
		9900
		
176.24	5397
		10,000
		
176.25	any amount in excess of
				
176.26	5397
		10,000
		
176.27 	(e) For a defined benefit relief association in which the governing bylaws provide 
176.28 	for a monthly benefit service pension as an alternative form of service pension payment 
176.29 	to a lump-sum service pension, the maximum service pension amount for each pension 
176.30 	payment type must be determined using the applicable table contained in this subdivision.
176.31 	(f) If a defined benefit relief association establishes a service pension in compliance 
176.32 	with the applicable maximum contained in paragraph (c) or (d) and the minimum average 
176.33 	amount of available financing per active covered firefighter is subsequently reduced 
176.34 	because of a reduction in fire state aid or because of an increase in the number of active 
176.35 	firefighters, the relief association may continue to provide the prior service pension 
176.36 	amount specified in its bylaws, but may not increase the service pension amount until 
176.37 	the minimum average amount of available financing per firefighter under the table in 
176.38 	paragraph (c) or (d), whichever applies, permits.
176.39 	(g) No defined benefit relief association is authorized to provide a service pension in 
176.40 	an amount greater than the largest applicable flexible service pension maximum amount 
177.1 	even if the amount of available financing per firefighter is greater than the financing 
177.2 	amount associated with the largest applicable flexible service pension maximum.
177.3 	(h) The method of calculating service pensions must be applied uniformly for all 
177.4 	years of active service. Credit must be given for all years of active service except for caps 
177.5 	on service credit if so provided in the bylaws of the relief association.

177.6 	EFFECTIVE DATE. This section is effective July 1, 2009.

177.7 	Sec. 27. Minnesota Statutes 2008, section 424A.02, subdivision 3a, is amended to read:
177.8 		Subd. 3a.Penalty for paying pension greater than applicable maximum. (a) 
177.9 	If a defined benefit relief association pays a service pension greater than the maximum 
177.10 	service pension associated with the applicable average amount of available financing per 
177.11 	active covered firefighter under the table in subdivision 3, paragraph (c) or (d), whichever 
177.12 	applies, the maximum service pension under subdivision 3, paragraph (f), or the applicable 
177.13 	maximum service pension amount specified in subdivision 3, paragraph (g), whichever is 
177.14 	less, the state auditor shall:
177.15 	(1) disqualify the municipality or the nonprofit firefighting corporation associated 
177.16 	with the relief association from receiving fire state aid by making the appropriate 
177.17 	notification to the municipality and the commissioner of revenue, with the disqualification 
177.18 	applicable for the next apportionment and payment of fire state aid; and
177.19 	(2) order the treasurer of the applicable relief association to recover the amount of 
177.20 	the overpaid service pension or pensions from any retired firefighter who received an 
177.21 	overpayment.
177.22 	(b) Fire state aid amounts from disqualified municipalities for the period of 
177.23 	disqualifications under paragraph (a), clause (1), must be credited to the amount of 
177.24 	fire insurance premium tax proceeds available for the next subsequent fire state aid 
177.25 	apportionment.
177.26 	(c) The amount of any overpaid service pension recovered under paragraph (a), 
177.27 	clause (2), must be credited to the amount of fire insurance premium tax proceeds 
177.28 	available for the next subsequent fire state aid apportionment.
177.29 	(d) The determination of the state auditor that a relief association has paid a service 
177.30 	pension greater than the applicable maximum must be made on the basis of the information 
177.31 	filed by the relief association and the municipality with the state auditor under sections 
177.32 	69.011, subdivision 2, and 69.051, subdivision 1 or 1a, whichever applies, and any other 
177.33 	relevant information that comes to the attention of the state auditor. The determination 
177.34 	of the state auditor is final. An aggrieved municipality, relief association, or person may 
177.35 	appeal the determination under section 480A.06.

178.1 	EFFECTIVE DATE. This section is effective July 1, 2009.

178.2 	Sec. 28. Minnesota Statutes 2008, section 424A.02, subdivision 7, is amended to read:
178.3 		Subd. 7.Deferred service pensions. (a) A member of a defined benefit relief 
178.4 	association is entitled to a deferred service pension if the member:
178.5 	(1) has completed the lesser of either the minimum period of active service with 
178.6 	the fire department specified in the bylaws or 20 years of active service with the fire 
178.7 	department;
178.8 	(2) has completed at least five years of active membership in the relief association; 
178.9 	and
178.10 	(3) separates from active service and membership before reaching age 50 or the 
178.11 	minimum age for retirement and commencement of a service pension specified in the 
178.12 	bylaws governing the relief association if that age is greater than age 50.
178.13 	(b) The deferred service pension is payable when the former member reaches age 
178.14 	50, or the minimum age specified in the bylaws governing the relief association if that age 
178.15 	is greater than age 50, and when the former member makes a valid written application.
178.16 	(c) A defined benefit relief association that provides a lump-sum service pension 
178.17 	governed by subdivision 3 may, when its governing bylaws so provide, pay interest on the 
178.18 	deferred lump-sum service pension during the period of deferral. If provided for in the 
178.19 	bylaws, interest must be paid in one of the following manners:
178.20 	(1) at the investment performance rate actually earned on that portion of the assets 
178.21 	if the deferred benefit amount is invested by the relief association in a separate account 
178.22 	established and maintained by the relief association or if the deferred benefit amount is 
178.23 	invested in a separate investment vehicle held by the relief association; or
178.24 	(2) at an interest rate of up to five percent, compounded annually, as set by the board 
178.25 	of directors and approved as provided in subdivision 10.
178.26 	(d) Interest under paragraph (c), clause (2), is payable following the date on which 
178.27 	the municipality has approved the deferred service pension interest rate established by 
178.28 	the board of trustees.
178.29 	(e) A relief association that provides a defined contribution service pension may, 
178.30 	if its governing bylaws so provide, credit interest or additional investment performance 
178.31 	on the deferred lump-sum service pension during the period of deferral. If provided for 
178.32 	in the bylaws, the interest must be paid in one of the manners specified in paragraph 
178.33 	(c) or alternatively the relief association may credit any investment return on the assets 
178.34 	of the special fund of the defined contribution volunteer firefighter relief association in 
178.35 	proportion to the share of the assets of the special fund to the credit of each individual 
179.1 	deferred member account through the date on which the investment return is recognized 
179.2 	by and credited to the special fund.
179.3 	(f)(e) For a deferred service pension that is transferred to a separate account 
179.4 	established and maintained by the relief association or separate investment vehicle held 
179.5 	by the relief association, the deferred member bears the full investment risk subsequent 
179.6 	to transfer and in calculating the accrued liability of the volunteer firefighters relief 
179.7 	association that pays a lump-sum service pension, the accrued liability for deferred service 
179.8 	pensions is equal to the separate relief association account balance or the fair market value 
179.9 	of the separate investment vehicle held by the relief association.
179.10 	(g)(f) The deferred service pension is governed by and must be calculated under 
179.11 	the general statute, special law, relief association articles of incorporation, and relief 
179.12 	association bylaw provisions applicable on the date on which the member separated from 
179.13 	active service with the fire department and active membership in the relief association.

179.14 	EFFECTIVE DATE. This section is effective July 1, 2009.

179.15 	Sec. 29. Minnesota Statutes 2008, section 424A.02, subdivision 8, is amended to read:
179.16 		Subd. 8.Lump-sum service pensions; installment payments. (a) AnyA defined 
179.17 	benefit relief association, if the governing bylaws so provide, may pay, at the option of the 
179.18 	retiring memberintended recipient and in lieu of a single payment of a lump-sum service 
179.19 	pension or survivor benefit, a lump-sum service pension or survivor benefit in installments.
179.20 	(b) The election of installment payments shall beis irrevocable and shallmust be 
179.21 	made by the retiring memberintended recipient in writing and filed with the secretary of 
179.22 	the relief association no later than 30 days prior tobefore the commencement of payment 
179.23 	of the service pension or survivor benefit. The amount of the installment payments shall
179.24 	must be determined so that the present value of the aggregate installment payments 
179.25 	computed at an interest rate of five percent, compounded annually, is equal to the amount 
179.26 	of the single lump-sum payment which would have been made had the installment 
179.27 	payments option not been elected. The payment of each installment shall include interest 
179.28 	at the rate of five percent, compounded annually on the reserve supporting the remaining 
179.29 	installment payments as of the date on which the previous installment payment was paid 
179.30 	and computed from the date on which the previous installment payment was paid to the 
179.31 	date of payment for the current installment payment in any reasonable manner provided 
179.32 	for in the governing bylaws, but the total amount of installment payments may not exceed 
179.33 	the single payment service pension amount plus interest at an annual rate of five percent 
179.34 	on the amount of delayed payments for the period during which payment was delayed.
180.1 	(c) To the extent that the commissioner of commerce deems it to be necessary or 
180.2 	practical, the commissioner may specify and issue procedures, forms or mathematical 
180.3 	tables for use in performing the calculations required pursuant to this subdivision.

180.4 	EFFECTIVE DATE. This section is effective July 1, 2009.

180.5 	Sec. 30. Minnesota Statutes 2008, section 424A.02, subdivision 9, is amended to read:
180.6 		Subd. 9.Limitation on ancillary benefits. AnyA defined benefit relief association, 
180.7 	including any volunteer firefighters relief association governed by section 69.77 or any 
180.8 	volunteer firefighters division of a relief association governed by chapter 424, may only 
180.9 	pay ancillary benefits which would constitute an authorized disbursement as specified in 
180.10 	section 424A.05 subject to the following requirements or limitations:
180.11 	(1) with respect to a defined benefit relief association in which governing bylaws 
180.12 	provide for a lump-sum service pension to a retiring member, no ancillary benefit may 
180.13 	be paid to any former member or paid to any person on behalf of any former member 
180.14 	after the former member (i) terminates active service with the fire department and active 
180.15 	membership in the relief association; and (ii) commences receipt of a service pension as 
180.16 	authorized under this section; and
180.17 	(2) with respect to any defined benefit relief association, no ancillary benefit paid or 
180.18 	payable to any member, to any former member, or to any person on behalf of any member 
180.19 	or former member, may exceed in amount the total earned service pension of the member 
180.20 	or former member. The total earned service pension must be calculated by multiplying 
180.21 	the service pension amount specified in the bylaws of the relief association at the time of 
180.22 	death or disability, whichever applies, by the years of service credited to the member or 
180.23 	former member. The years of service must be determined as of (i) the date the member or 
180.24 	former member became entitled to the ancillary benefit; or (ii) the date the member or 
180.25 	former member died entitling a survivor or the estate of the member or former member to 
180.26 	an ancillary benefit. The ancillary benefit must be calculated without regard to whether the 
180.27 	member had attained the minimum amount of service and membership credit specified in 
180.28 	the governing bylaws. For active members, the amount of a permanent disability benefit 
180.29 	or a survivor benefit must be equal to the member's total earned service pension except 
180.30 	that the bylaws of anya defined benefit relief association may provide for the payment of 
180.31 	a survivor benefit in an amount not to exceed five times the yearly service pension amount 
180.32 	specified in the bylaws on behalf of any member who dies before having performed five 
180.33 	years of active service in the fire department with which the relief association is affiliated.

180.34 	EFFECTIVE DATE. This section is effective July 1, 2009.

181.1 	Sec. 31. Minnesota Statutes 2008, section 424A.02, subdivision 9a, is amended to read:
181.2 		Subd. 9a.Postretirement increases. Notwithstanding any provision of general or 
181.3 	special law to the contrary, a defined benefit relief association paying a monthly service 
181.4 	pension may provide a postretirement increase to retired members and ancillary benefit 
181.5 	recipients of the relief association if (1) the relief association adopts an appropriate bylaw 
181.6 	amendment; and (2) the bylaw amendment is approved by the municipality pursuant to 
181.7 	subdivision 10 and section 69.773, subdivision 6. The postretirement increase shall be
181.8 	is applicable only to retired members and ancillary benefit recipients receiving a service 
181.9 	pension or ancillary benefit as of the effective date of the bylaw amendment. The authority 
181.10 	to provide a postretirement increase to retired members and ancillary benefit recipients 
181.11 	of a relief association contained in this subdivision shall supersedesupersedes any prior 
181.12 	special law authorization relating to the provision of postretirement increases.

181.13 	EFFECTIVE DATE. This section is effective July 1, 2009.

181.14 	Sec. 32. Minnesota Statutes 2008, section 424A.02, subdivision 9b, is amended to read:
181.15 		Subd. 9b.Repayment of service pension in certain instances. If a retired 
181.16 	volunteer firefighter does not permanently separate from active firefighting service as 
181.17 	required by subdivision 1 and section 424A.001, subdivision 9, by resuming active service 
181.18 	as a firefighter in the same volunteer fire department or as a person in charge of firefighters 
181.19 	in the same volunteer fire department, no additional service pension amount is payable 
181.20 	to the person, no additional service is creditable to the person, and the person shallmust 
181.21 	repay to the defined benefit relief association any previously received service pension.

181.22 	EFFECTIVE DATE. This section is effective July 1, 2009.

181.23 	Sec. 33. Minnesota Statutes 2008, section 424A.02, subdivision 10, is amended to read:
181.24 		Subd. 10.Local approval of bylaw amendments; filing requirements. (a) Each 
181.25 	defined benefit relief association to which this section applies shallmust file a revised 
181.26 	copy of its governing bylaws with the state auditor upon the adoption of any amendment 
181.27 	to its governing bylaws by the relief association or upon the approval of any amendment 
181.28 	to its governing bylaws granted by the governing body of each municipality served by the 
181.29 	fire department to which the relief association is directly associated. Failure of the relief 
181.30 	association to file a copy of the bylaws or any bylaw amendments with the state auditor 
181.31 	shall disqualifydisqualifies the municipality from the distribution of any future fire state 
181.32 	aid until this filing requirement has been completed.
182.1 	(b) If the special fund of the relief association does not have a surplus over full 
182.2 	funding pursuant tounder section 69.772, subdivision 3, clause (2), subclause (e), or 
182.3 	69.773, subdivision 4, and if the municipality is required to provide financial support to 
182.4 	the special fund of the relief association pursuant tounder section 69.772 or 69.773, no 
182.5 	bylaw amendment which would affect the amount of, the manner of payment of, or the 
182.6 	conditions for qualification for service pensions or ancillary benefits or disbursements 
182.7 	other than administrative expenses authorized pursuant tounder section 69.80 payable 
182.8 	from the special fund of the relief association shall beis effective until it has been ratified 
182.9 	by the governing body or bodies of the appropriate municipalities. If the municipality is 
182.10 	not required to provide financial support to the special fund pursuant tounder this section, 
182.11 	the relief association may adopt or amend without municipal ratification its articles 
182.12 	of incorporation or bylaws which increase or otherwise affect the service pensions or 
182.13 	ancillary benefits payable from the special fund so long as the changes do not cause the 
182.14 	amount of the resulting increase in the accrued liability of the special fund to exceed 90 
182.15 	percent of the amount of the prior surplus over full funding reported in the prior year and 
182.16 	the changes do not result in the financial requirements of the special fund exceeding the 
182.17 	expected amount of the futuresubsequent calendar year's fire state aid to be received 
182.18 	by the relief association.
182.19 	(c) If the relief association pays only a lump-sum pension, the financial requirements 
182.20 	are to be determined by the board of trustees following the preparation of an estimate 
182.21 	of the expected increase in the accrued liability and annual accruing liability of the 
182.22 	relief association attributable to the change. If the relief association pays a monthly 
182.23 	benefit service pension, the financial requirements are to be determined by the board of 
182.24 	trustees following either an updated actuarial valuation including the proposed change 
182.25 	or an estimate of the expected actuarial impact of the proposed change prepared by the 
182.26 	actuary of the relief association. If a relief association adopts or amends its articles of 
182.27 	incorporation or bylaws without municipal ratification pursuant tounder this subdivision, 
182.28 	and, subsequent to the amendment or adoption, the financial requirements of the special 
182.29 	fund pursuant tounder this section are such so as to require financial support from the 
182.30 	municipality, the provision which was implemented without municipal ratification shallis 
182.31 	no longer be effective without municipal ratification, and any service pensions or ancillary 
182.32 	benefits payable after that date shallmust be paid only in accordance with the articles of 
182.33 	incorporation or bylaws as amended or adopted with municipal ratification.

182.34 	EFFECTIVE DATE. This section is effective July 1, 2009.

182.35 	Sec. 34. Minnesota Statutes 2008, section 424A.02, subdivision 12, is amended to read:
183.1 		Subd. 12.Transfer of service credit to new district. Notwithstanding the 
183.2 	requirements of subdivision 1 or any other law, a member of a fire department which is 
183.3 	disbanded upon formation of a fire district to serve substantially the same geographic 
183.4 	area, who serves as an active firefighter with the new district fire department, and is a 
183.5 	member of the district firefighters' defined benefit relief association shall beis entitled 
183.6 	to a nonforfeitable service pension from the new relief association upon completion of 
183.7 	a combined total of 20 years active service in the disbanded and the new departments. 
183.8 	The amount of the service pension shall beis based upon years of service in the new 
183.9 	department only, and shallmust be in an amount equal to the accrued liability for the 
183.10 	appropriate years of service calculated in accordance with section 69.772, subdivision 2.

183.11 	Sec. 35. Minnesota Statutes 2008, section 424A.02, subdivision 13, is amended to read:
183.12 		Subd. 13.Combined service pensions. (a) If the articles of incorporation or bylaws 
183.13 	of the defined benefit relief associations so provide, a volunteer firefighter with credit for 
183.14 	service as an active firefighter in more than one defined benefit volunteer firefighters relief 
183.15 	association is entitled, when the applicable requirements of paragraph (b) are met and 
183.16 	when otherwise qualified, to a prorated service credit from each relief association.
183.17 	(b) A volunteer firefighter receiving a prorated service pension under this subdivision 
183.18 	must have a total amount of service credit of ten years or more, if the bylaws of every 
183.19 	affected relief association doesdo not requirespecify only a five-year service vesting 
183.20 	requirement, or five years or more, if the bylaws of every affected relief association 
183.21 	requiresrequire only a five-year service vesting requirement, as a member of two or more 
183.22 	relief associations otherwise qualified. The member must have one year or more of service 
183.23 	credit in each relief association. The prorated service pension must be based on the service 
183.24 	pension amount in effect for the relief association on the date on which active volunteer 
183.25 	firefighting services covered by that relief association terminate. To receive a service 
183.26 	pension under this subdivision, the firefighter must become a member of the second or 
183.27 	succeeding association and must give notice of membership to the prior association within 
183.28 	two years of the date of termination of active service with the prior association. The notice 
183.29 	must be attested to by the second or subsequent relief association secretary.

183.30 	EFFECTIVE DATE. This section is effective July 1, 2009.

183.31 	Sec. 36. Minnesota Statutes 2008, section 424A.021, is amended to read:
183.32 	424A.021 CREDIT FOR BREAK IN SERVICE TO PROVIDE UNIFORMED 
183.33 	SERVICE.
184.1 		Subdivision 1.Authorization. Subject to restrictions stated in this section, a 
184.2 	volunteer firefighter who is absent from firefighting service due to service in the uniformed 
184.3 	services, as defined in United States Code, title 38, section 4303(13), may obtain service 
184.4 	credit if the relief association is a defined benefit plan or an allocation of any fire state 
184.5 	aid, any municipal contributions, and any investment return received by the relief 
184.6 	association as though the person was an active member if the relief association is a defined 
184.7 	contribution plan for the period of the uniformed service, not to exceed five years, unless a 
184.8 	longer period is required under United States Code, title 38, section 4312.
184.9 		Subd. 2.Limitations. (a) To be eligible for service credit or an investment return
184.10 	allocation as though an active member under this section, the volunteer firefighter must 
184.11 	return to firefighting service with coverage by the same relief association or by the 
184.12 	successor to that relief association upon discharge from service in the uniformed service 
184.13 	within the time frame required in United States Code, title 38, section 4312(e).
184.14 	(b) Service credit or an investment return allocation as though an active member is 
184.15 	not authorized if the firefighter separates from uniformed service with a dishonorable or 
184.16 	bad conduct discharge or under other than honorable conditions.
184.17 	(c) Service credit or an investment return allocation as though an active member 
184.18 	is not authorized if the firefighter fails to provide notice to the fire department that the 
184.19 	individual is leaving to provide service in the uniformed service, unless it is not feasible to 
184.20 	provide that notice due to the emergency nature of the situation.

184.21 	EFFECTIVE DATE. This section is effective July 1, 2009.

184.22 	Sec. 37. Minnesota Statutes 2008, section 424A.03, is amended to read:
184.23 	424A.03 UNIFORMITY OF VOLUNTEER FIREFIGHTER SERVICE 
184.24 	PENSION AND RETIREMENT BENEFITS.
184.25 		Subdivision 1.Limitation on nonuniformity of pensions. Every partially salaried 
184.26 	and partially volunteer firefighters' relief association shallmust provide service pensions 
184.27 	to volunteer firefighter members based on the years of service of the members not on 
184.28 	the compensation paid to the members for firefighting services. Each relief association 
184.29 	shallmust provide service pensions to salaried members as set forth in chapter 424 and 
184.30 	applicable special laws.
184.31 		Subd. 2.Penalties for violations. AnyA municipality which has a fire department 
184.32 	to whichassociated with a relief association which violates the provisions of subdivision 
184.33 	1 is directly associated or which contracts with an independent nonprofit firefighting 
184.34 	corporation of whichassociated with a relief association which violates the provisions 
185.1 	of subdivision 1 is a subsidiary shallmay not be included in the apportionment of fire 
185.2 	state aid by the commissioner of commerce to the applicable county auditor pursuant to
185.3 	under section 69.021, subdivision 6, and shallmay not be included in the apportionment 
185.4 	of fire state aid by the county auditor to the various municipalities pursuant tounder 
185.5 	section 69.021, subdivision 7.
185.6 		Subd. 3.Exception to application of limitation and penalty. The limitation 
185.7 	provided for in subdivision 1 shalldoes not apply to any relief association which prior to
185.8 	before January 1, 1957, had established a definite service pension formula for members 
185.9 	of the partially salaried and partially volunteer firefighters' relief association who are 
185.10 	regularly employed firefighters.

185.11 	EFFECTIVE DATE. This section is effective July 1, 2009.

185.12 	Sec. 38. Minnesota Statutes 2008, section 424A.04, is amended to read:
185.13 	424A.04 VOLUNTEER RELIEF ASSOCIATIONS; BOARD OF TRUSTEES.
185.14 		Subdivision 1.Membership. (a) A relief association that is directly associated with 
185.15 	a municipal fire department must be managed by a board of trustees consisting of nine 
185.16 	members. Six trustees must be elected from the membership of the relief association and 
185.17 	three trustees must be drawn from the officials of the municipalities served by the fire 
185.18 	department to which the relief association is directly associated. The bylaws of a relief 
185.19 	association which provides a monthly benefit service pension may provide that one of 
185.20 	the six trustees elected from the relief association membership may be a retired member 
185.21 	receiving a monthly pension who is elected by the membership of the relief association. 
185.22 	The three municipal trustees must be one elected municipal official and one elected or 
185.23 	appointed municipal official who are designated as municipal representatives by the 
185.24 	municipal governing board annually and the chief of the municipal fire department.
185.25 	(b) A relief association that is a subsidiary of an independent nonprofit firefighting 
185.26 	corporation must be managed by a board of trustees consisting of nine members. Six 
185.27 	trustees must be elected from the membership of the relief association, two trustees must 
185.28 	be drawn from the officials of the municipalities served by the fire department to which 
185.29 	the relief association is directly associated, and one trustee shallmust be the fire chief 
185.30 	serving with the independent nonprofit firefighting corporation. The bylaws of a relief 
185.31 	association may provide that one of the six trustees elected from the relief association 
185.32 	membership may be a retired member receiving a monthly pension who is elected by the 
185.33 	membership of the relief association. The two municipal trustees must be elected or 
185.34 	appointed municipal officials, selected as follows:
186.1 	(1) if only one municipality contracts with the independent nonprofit firefighting 
186.2 	corporation, the municipal trustees must be two officials of the contracting municipality 
186.3 	who are designated annually by the governing body of the municipality; or
186.4 	(2) if two or more municipalities contract with the independent nonprofit corporation, 
186.5 	the municipal trustees must be one official from each of the two largest municipalities 
186.6 	in population who are designated annually by the governing bodies of the applicable 
186.7 	municipalities.
186.8 	(c) The municipal trustees for a relief association that is directly associated with a 
186.9 	fire department operated as or by a joint powers entity must be the fire chief of the fire 
186.10 	department and two trustees designated annually by the joint powers board. The municipal 
186.11 	trustees for a relief association that is directly associated with a fire department service 
186.12 	area township must be the fire chief of the fire department and two trustees designated by 
186.13 	the township board.
186.14 	(d) If a relief association lacks the municipal board members provided for in 
186.15 	paragraph (a), (b), or (c) because the fire department is not located in or associated with an 
186.16 	organized municipality, joint powers entity, or township, the municipal board members 
186.17 	must be the fire chief of the fire department and two board members appointed from the 
186.18 	fire department service area by the board of commissioners of the applicable county.
186.19 	(e) The term of thesethe appointed municipal board members is one year or until the 
186.20 	person's successor is qualified, whichever is later.
186.21 	(f) A municipal trustee under paragraph (a), (b), (c), or (d) has all the rights 
186.22 	and duties accorded to any other trustee, except the right to be an officer of the relief 
186.23 	association board of trustees.
186.24 	(g) A board must have at least three officers, who are a president, a secretary and a 
186.25 	treasurer. These officers must be elected from among the elected trustees by either the full 
186.26 	board of trustees or by the relief association membership, as specified in the bylaws. In 
186.27 	no event may any trustee hold more than one officer position at any one time. The terms 
186.28 	of the elected trustees and of the officers of the board must be specified in the bylaws of 
186.29 	the relief association, but may not exceed three years. If the term of the elected trustees 
186.30 	exceeds one year, the election of the various trustees elected from the membership must be 
186.31 	staggered on as equal a basis as is practicable.
186.32 		Subd. 2.Fiduciary duty. The board of trustees of a relief association shall 
186.33 	undertake their activities consistent with chapter 356A.
186.34 		Subd. 2a.Fiduciary responsibility. In the discharge of their respective duties, the 
186.35 	officers and trustees shall be held to the standard of care specified in section 11A.09. In 
186.36 	addition, the trustees shall act in accordance with chapter 356A. Each member of the 
187.1 	board is a fiduciary and shall undertake all fiduciary activities in accordance with the 
187.2 	standard of care of section 11A.09, and in a manner consistent with chapter 356A. No 
187.3 	fiduciary of a relief association shall cause a relief association to engage in a transaction if 
187.4 	the fiduciary knows or should know that the transaction constitutes one of the following 
187.5 	direct or indirect transactions:
187.6 	(1) sale or exchange or leasing of any real property between the relief association 
187.7 	and a board member;
187.8 	(2) lending of money or other extension of credit between the relief association and 
187.9 	a board member or member of the relief association;
187.10 	(3) furnishing of goods, services, or facilities between the relief association and a 
187.11 	board member; or
187.12 	(4) transfer to a board member, or use by or for the benefit of a board member, of any 
187.13 	assets of the relief association. A transfer of assets does not mean the payment of relief 
187.14 	association benefits or administrative expenses permitted by law.
187.15 		Subd. 3.Conditions on relief association consultants. (a) If a volunteer firefighter 
187.16 	relief association hiresemploys or contracts with a consultant to provide legal or financial 
187.17 	advice, the secretary of the relief association shall obtain and the consultant shall provide 
187.18 	to the secretary of the relief association a copy of the consultant's certificate of insurance.
187.19 	(b) A consultant is any person who is employed under contract to provide legal or 
187.20 	financial advice and who is or who represents to the volunteer firefighter relief association 
187.21 	that the person is:
187.22 	(1) an actuary;
187.23 	(2) a licensed public accountant or a certified public accountant;
187.24 	(3) an attorney;
187.25 	(4) an investment advisor or manager, or an investment counselor;
187.26 	(5) an investment advisor or manager selection consultant;
187.27 	(6) a pension benefit design advisor or consultant; or
187.28 	(7) any other financial consultant.

187.29 	EFFECTIVE DATE. This section is effective July 1, 2009.

187.30 	Sec. 39. Minnesota Statutes 2008, section 424A.05, subdivision 1, is amended to read:
187.31 		Subdivision 1.Establishment of special fund. Every volunteer firefighters' relief 
187.32 	association shall establish and maintain a special fund within the relief association.

187.33 	EFFECTIVE DATE. This section is effective July 1, 2009.

188.1 	Sec. 40. Minnesota Statutes 2008, section 424A.05, subdivision 2, is amended to read:
188.2 		Subd. 2.Special fund assets and revenues. The special fund shallmust be credited 
188.3 	with all fire state aid moneys received pursuant tounder sections 69.011 to 69.051, 
188.4 	all taxes levied by or other revenues received from the municipality pursuant tounder 
188.5 	sections 69.771 to 69.776 or any applicable special law requiring municipal support for 
188.6 	the relief association, any moneys or property donated, given, granted or devised by any 
188.7 	person which is specified for use for the support of the special fund and any interest or 
188.8 	investment return earned upon the assets of the special fund. The treasurer of the relief 
188.9 	association shall beis the custodian of the assets of the special fund and shallmust be the 
188.10 	recipient on behalf of the special fund of all revenues payable to the special fund. The 
188.11 	treasurer shall maintain adequate records documenting any transaction involving the assets 
188.12 	or the revenues of the special fund. These records and the bylaws of the relief association 
188.13 	shall beare public and shallmust be open for inspection by any member of the relief 
188.14 	association, any officer or employee of the state or of the municipality, or any member of 
188.15 	the public, at reasonable times and places.

188.16 	EFFECTIVE DATE. This section is effective July 1, 2009.

188.17 	Sec. 41. Minnesota Statutes 2008, section 424A.05, subdivision 3, is amended to read:
188.18 		Subd. 3.Authorized disbursements from the special fund. (a) Disbursements 
188.19 	from the special fund aremay not permitted to be made for any purpose other than one of 
188.20 	the following:
188.21 	(1) for the payment of service pensions to retired members of the relief association if 
188.22 	authorized and paid under law and the bylaws governing the relief association;
188.23 	(2) for the payment of temporary or permanent disability benefits to disabled 
188.24 	members of the relief association if authorized and paid pursuant tounder law and 
188.25 	specified in amount in the bylaws governing the relief association;
188.26 	(3) for the payment of survivor benefits to surviving spouses and surviving children, 
188.27 	or if none, to designated beneficiaries, of deceased members of the relief association, and 
188.28 	if no survivors and if no designated beneficiary, for the payment of a death benefit to the 
188.29 	estate of the deceased active or deferred firefighter, if authorized by and paid pursuant to
188.30 	under law and specified in amount in the bylaws governing the relief association;
188.31 	(4) for the payment of the fees, dues and assessments to the Minnesota State Fire 
188.32 	Department Association,and to the Minnesota Area Relief Association Coalition, and to 
188.33 	the state Volunteer Firefighters Benefit Association in order to entitle relief association 
188.34 	members to membership in and the benefits of these associations or organizations; and
189.1 	(5) for the payment of insurance premiums to the state Volunteer Firefighters Benefit 
189.2 	Association, or an insurance company licensed by the state of Minnesota offering casualty 
189.3 	insurance, in order to entitle relief association members to membership in and the benefits 
189.4 	of the association or organization; and
189.5 	(5)(6) for the payment of administrative expenses of the relief association as 
189.6 	authorized under section 69.80. 
189.7 	(b) For purposes of this chapter, for a monthly benefit volunteer fire relief association 
189.8 	or for a combination lump-sum and monthly benefit volunteer fire relief association where 
189.9 	a monthly benefit service pension has been elected by or a monthly benefit is payable with 
189.10 	respect to a firefighter, a designated beneficiary must be a natural person. For purposes of 
189.11 	this chapter, for a defined contribution volunteer fire relief association, for a lump-sum 
189.12 	volunteer fire relief association, or for a combination lump-sum and monthly benefit 
189.13 	volunteer fire relief association where a lump-sum service pension has been elected by 
189.14 	or a lump-sum benefit is payable with respect to a firefighter, a designated beneficiary 
189.15 	may be a trust created under chapter 501B.

189.16 	EFFECTIVE DATE. This section is effective July 1, 2009.

189.17 	Sec. 42. Minnesota Statutes 2008, section 424A.05, subdivision 4, is amended to read:
189.18 		Subd. 4.Investments of assets of the special fund. The assets of the special fund 
189.19 	shallmust be invested only in securities authorized by section 69.775.

189.20 	EFFECTIVE DATE. This section is effective July 1, 2009.

189.21 	Sec. 43. Minnesota Statutes 2008, section 424A.06, is amended to read:
189.22 	424A.06 RELIEF ASSOCIATION GENERAL FUND.
189.23 		Subdivision 1.Establishment of general fund. AnyA volunteer firefighters' relief 
189.24 	association may establish and maintain a general fund within the relief association.
189.25 		Subd. 2.General fund assets and revenues. To the general fund, if established, 
189.26 	shallmust be credited all moneys received from dues, fines, initiation fees, entertainment 
189.27 	revenues and any moneys or property donated, given, granted or devised by any person, 
189.28 	for unspecified uses. The treasurer of the relief association shall beis the custodian of the 
189.29 	assets of the general fund and shallmust be the recipient on behalf of the general fund of 
189.30 	all revenues payable to the general fund. The treasurer shall maintain adequate records 
189.31 	documenting any transaction involving the assets or the revenues of the general fund. 
189.32 	These records shallmust be open for inspection by any member of the relief association 
189.33 	at reasonable times and places.
190.1 		Subd. 3.Authorized disbursements from the general fund. Disbursements from 
190.2 	the general fund may be made for any purpose that is authorized by either the articles of 
190.3 	incorporation or bylaws of the relief association.
190.4 		Subd. 4.Investment of assets of the general fund. The assets of the general 
190.5 	fund may be invested in any securities that are authorized by the bylaws of the relief 
190.6 	association and may be certified for investment by the State Board of Investment in fixed 
190.7 	income pools or in a separately managed account at the discretion of the State Board of 
190.8 	Investment as provided in section 11A.14.

190.9 	EFFECTIVE DATE. This section is effective July 1, 2009.

190.10 	Sec. 44. Minnesota Statutes 2008, section 424A.07, is amended to read:
190.11 	424A.07 NONPROFIT FIREFIGHTING CORPORATIONS; 
190.12 	ESTABLISHMENT OF RELIEF ASSOCIATIONS.
190.13 	Prior toBefore paying any service pensions or retirement benefits pursuant to
190.14 	under section 424A.02 or before becoming entitled to receive any amounts of fire state 
190.15 	aid upon transmittal from a contracting municipality pursuant tounder section 69.031, 
190.16 	subdivision 5, a nonprofit firefighting corporation shall establish a volunteer firefighters' 
190.17 	relief association governed by this chapter.

190.18 	Sec. 45. Minnesota Statutes 2008, section 424A.08, is amended to read:
190.19 	424A.08 MUNICIPALITY WITHOUT RELIEF ASSOCIATION; 
190.20 	AUTHORIZED DISBURSEMENTS.
190.21 	(a) Any qualified municipality which is entitled to receive fire state aid but which 
190.22 	has no volunteer firefighters' relief association directly associated with its fire department 
190.23 	and which has no full-time firefighters with retirement coverage by the public employees 
190.24 	police and fire retirement plan shall deposit the fire state aid in a special account 
190.25 	established for that purpose in the municipal treasury. Disbursement from the special 
190.26 	account shallmay not be made for any purpose except:
190.27 	(1) payment of the fees, dues and assessments to the Minnesota State Fire 
190.28 	Department Association and to the state Volunteer Firefighters' Benefit Association in 
190.29 	order to entitle its firefighters to membership in and the benefits of these state associations;
190.30 	(2) payment of the cost of purchasing and maintaining needed equipment for the 
190.31 	fire department; and
190.32 	(3) payment of the cost forof construction, acquisition, repair and, or maintenance 
190.33 	of buildings or other premises to house the equipment of the fire department.
191.1 	(b) A qualified municipality which is entitled to receive fire state aid, which has no 
191.2 	volunteer firefighters' relief association directly associated with its fire department and 
191.3 	which has full-time firefighters with retirement coverage by the public employees police 
191.4 	and fire retirement plan may disburse the fire state aid as provided in paragraph (a), for the 
191.5 	payment of the employer contribution requirement with respect to firefighters covered by 
191.6 	the public employees police and fire retirement plan under section 353.65, subdivision 3, 
191.7 	or for a combination of the two types of disbursements.

191.8 	EFFECTIVE DATE. This section is effective July 1, 2009.

191.9 	Sec. 46. Minnesota Statutes 2008, section 424A.10, subdivision 1, is amended to read:
191.10 		Subdivision 1. Definitions. For purposes of this section: 
191.11 	(1) "qualified recipient" means an individual who receives a lump-sum distribution 
191.12 	of pension or retirement benefits from a volunteer firefighters' relief association for service 
191.13 	that the individual has performed as a volunteer firefighter;
191.14 	(2) "survivor of a deceased active or deferred volunteer firefighter" means the legally 
191.15 	marriedsurviving spouse of a deceased active or deferred volunteer firefighter under 
191.16 	section 424A.001, subdivision 6, or, if none, the surviving minor child or minor children 
191.17 	of a deceased active or deferred volunteer firefighter; 
191.18 	(3) "active volunteer firefighter" means a person who regularly renders fire 
191.19 	suppression service for a municipal fire department or an independent nonprofit firefighting 
191.20 	corporation, who has met the statutory and other requirements for relief association 
191.21 	membership, and who has beenis deemed by the relief association under law and its 
191.22 	bylaws to be a fully qualified member of the relief association for at least one month; and
191.23 	(4) "deferred volunteer firefighter" means a former active volunteer firefighter who 
191.24 	terminated active firefighting service, has sufficient service credit from the applicable relief 
191.25 	association to be entitled to a service pension under the bylaws of the relief association, 
191.26 	but has not applied for or has not received the service pension.

191.27 	EFFECTIVE DATE. This section is effective July 1, 2009.

191.28 	Sec. 47. Minnesota Statutes 2008, section 424A.10, subdivision 2, is amended to read:
191.29 		Subd. 2.Payment of supplemental benefit. (a) Upon the payment by a volunteer 
191.30 	firefighters' relief association of a lump-sum distribution to a qualified recipient, the 
191.31 	association must pay a supplemental benefit to the qualified recipient. Notwithstanding 
191.32 	any law to the contrary, the relief association must pay the supplemental benefit out of 
191.33 	its special fund. The amount of This benefit equalsis an amount equal to ten percent of 
192.1 	the regular lump-sum distribution that is paid on the basis of the recipient's service as 
192.2 	a volunteer firefighter. In no case may the amount of the supplemental benefit exceed 
192.3 	$1,000. A supplemental benefit under this paragraph may not be paid to a survivor of a 
192.4 	deceased active or deferred volunteer firefighter in that capacity.
192.5 	(b) Upon the payment by a relief association of a lump-sum survivor benefit or
192.6 	funeral benefit to a survivor of a deceased active volunteer firefighter or of a deceased 
192.7 	deferred volunteer firefighter, the association may pay a supplemental survivor benefit 
192.8 	to the survivor of the deceased active or deferred volunteer firefighter from the special 
192.9 	fund of the relief association if its articles of incorporation or bylaws so provide. The 
192.10 	amount of the supplemental survivor benefit is 20 percent of the survivor benefit or funeral
192.11 	benefit, but not to exceed $2,000.
192.12 	(c) An individual may receive a supplemental benefit under paragraph (a) or under 
192.13 	paragraph (b), but not under both paragraphs with respect to one lump-sum volunteer 
192.14 	firefighter benefit.

192.15 	EFFECTIVE DATE. This section is effective July 1, 2009.

192.16 	Sec. 48. Minnesota Statutes 2008, section 424A.10, subdivision 3, is amended to read:
192.17 		Subd. 3. State reimbursement. (a) Each year, to be eligible for state reimbursement 
192.18 	of the amount of supplemental benefits paid under subdivision 2 during the preceding 
192.19 	calendar year, the volunteer firefighters' relief association must shall apply to the 
192.20 	commissioner of revenue by February 15. By March 15, the commissioner shall 
192.21 	reimburse the relief association for the amount of the supplemental benefits paid by the 
192.22 	relief association to qualified recipients and to survivors of deceased active or deferred 
192.23 	volunteer firefighters. 
192.24 	(b) The commissioner of revenue shall prescribe the form of and supporting 
192.25 	information that must be supplied as part of the application for state reimbursement. 
192.26 	The commissioner of revenue shall reimburse the relief association by paying the 
192.27 	reimbursement amount to the treasurer of the municipality where the association is located. 
192.28 	Within 30 days after receipt, the municipal treasurer shall transmit the state reimbursement 
192.29 	to the treasurer of the association if the association has filed a financial report with the 
192.30 	municipality. If the relief association has not filed a financial report with the municipality, 
192.31 	the municipal treasurer shall delay transmission of the reimbursement payment to the 
192.32 	association until the complete financial report is filed. If the association has dissolved or 
192.33 	has been removed as a trustee of state aid, the treasurer shall deposit the money in a 
192.34 	special account in the municipal treasury, and the money may be disbursed only for the 
193.1 	purposes and in the manner provided in section 424A.08. When paid to the association, 
193.2 	the reimbursement payment must be deposited in the special fund of the relief association. 
193.3 	(c) A sum sufficient to make the payments is appropriated from the general fund 
193.4 	to the commissioner of revenue. 

193.5 	EFFECTIVE DATE. This section is effective July 1, 2009.

193.6 	Sec. 49. Minnesota Statutes 2008, section 424A.10, subdivision 4, is amended to read:
193.7 		Subd. 4.In lieu of income tax exclusion. (a) The supplemental benefit provided 
193.8 	by this section is in lieu of the state income tax exclusion for lump-sum distributions of 
193.9 	retirement benefits paid to volunteer firefighters. 
193.10 	(b) If the law is modified to exclude or exempt volunteer firefighters' lump-sum 
193.11 	distributions from state income taxation, the supplemental benefits under this section 
193.12 	mayare no longer be paidpayable, beginning with the first calendar year in which the 
193.13 	exclusion or exemption is effective. This subdivision does not apply to exemption of all or 
193.14 	part of a lump-sum distribution under section 290.032 or 290.0802. 

193.15 	EFFECTIVE DATE. This section is effective July 1, 2009.

193.16 	Sec. 50. Minnesota Statutes 2008, section 424A.10, subdivision 5, is amended to read:
193.17 		Subd. 5.Retroactive reimbursement in certain instances.  A supplemental 
193.18 	survivor or funeral benefit may be paid by a relief association for the death of an active 
193.19 	volunteer firefighter or of a deferred volunteer firefighter that occurred on or after August 
193.20 	1, 2005, if the relief association articles of incorporation or bylaws so provide for a 
193.21 	supplemental survivor benefit and provide for retroactivity.

193.22 	EFFECTIVE DATE. This section is effective July 1, 2009.

193.23 	Sec. 51. Minnesota Statutes 2008, section 424B.10, is amended by adding a 
193.24 	subdivision to read:
193.25 		Subd. 1a.Applicability. This section applies when all of the volunteer firefighters' 
193.26 	relief associations involved in the consolidation are defined benefit relief associations as 
193.27 	defined in section 424A.001, subdivision 1b.

193.28 	EFFECTIVE DATE. This section is effective July 1, 2009.

193.29 	Sec. 52. Minnesota Statutes 2008, section 424B.10, is amended by adding a 
193.30 	subdivision to read:
194.1 		Subd. 1b.Benefits. (a) The successor relief association following the consolidation 
194.2 	of two or more defined benefit relief associations must be a defined benefit relief 
194.3 	association.
194.4 	(b) Notwithstanding any provision of section 424A.02, subdivision 3, to the contrary, 
194.5 	the initial service pension amount of the subsequent defined benefit relief association as 
194.6 	of the effective date of consolidation is either the service pension amount specified in 
194.7 	clause (1) or the service pension amounts specified in clause (2), as provided for in the 
194.8 	consolidated relief association's articles of incorporation or bylaws:
194.9 	(1) the highest dollar amount service pension amount of any prior volunteer 
194.10 	firefighters relief association in effect immediately before the consolidation initiation if the 
194.11 	pension amount was implemented consistent with section 424A.02; or
194.12 	(2) for service rendered by each individual volunteer firefighter before consolidation, 
194.13 	the service pension amount under the consolidating volunteer firefighters relief association 
194.14 	that the firefighter belonged to immediately before the consolidation if the pension amount 
194.15 	was implemented consistent with section 424A.02 and for service rendered after the 
194.16 	effective date of the consolidation, the highest dollar amount service pension of any of the 
194.17 	consolidating volunteer firefighters relief associations in effect immediately before the 
194.18 	consolidation if the pension amount was implemented consistent with section 424A.02.
194.19 	(c) Any increase in the service pension amount beyond the amount implemented 
194.20 	under paragraph (a) must conform with the requirements and limitations of sections 
194.21 	69.771 to 69.775 and section 424A.02.

194.22 	EFFECTIVE DATE. This section is effective July 1, 2009.

194.23 	Sec. 53. Minnesota Statutes 2008, section 424B.10, subdivision 2, is amended to read:
194.24 		Subd. 2.Funding. (a) Unless the applicable municipalities agree in writing to 
194.25 	allocate the minimum municipal obligation in a different manner, the minimum municipal 
194.26 	obligation under section 69.772 or 69.773, whichever applies, must be allocated between 
194.27 	the applicable municipalities in proportion to their fire state aid.
194.28 	(b) If any applicable municipality fails to meet its portion of the minimum municipal 
194.29 	obligation to the subsequent relief association, all other applicable municipalities are 
194.30 	jointly obligated to provide the required funding upon certification by the relief association 
194.31 	secretary. An applicable municipality that pays the minimum municipal obligation 
194.32 	amount for another applicable municipality, the municipality may collect thethat payment 
194.33 	amount, plus a 25 percent surcharge, from the responsible applicable municipality by any 
194.34 	available means, including a deduction from any state aid or payment amount payable 
195.1 	to the responsible municipality upon certification of the necessary information to the 
195.2 	commissioner of finance.

195.3 	EFFECTIVE DATE. This section is effective July 1, 2009.

195.4 	Sec. 54. [424B.11] CONSOLIDATING DEFINED CONTRIBUTION RELIEF 
195.5 	ASSOCIATIONS; INDIVIDUAL ACCOUNTS; FUNDING.
195.6 		Subdivision 1.Applicability. This section applies when all of the volunteer 
195.7 	firefighters' relief associations involved in the consolidation are defined contribution relief 
195.8 	associations as defined in section 424A.001, subdivision 1c.
195.9 		Subd. 2.Individual accounts. The successor relief association following the 
195.10 	consolidation of two or more defined contribution relief associations must be a defined 
195.11 	contribution relief association and the successor relief association board shall establish 
195.12 	individual accounts for every active member, inactive member, deferred member, or 
195.13 	retired member receiving installment payments with that status as of the consolidation 
195.14 	date. To each individual account the successor relief association must credit the amount to 
195.15 	the credit of each person by a predecessor relief association as of the date of consolidation 
195.16 	plus a proportional share, based on account value, of any subsequent net revenue during 
195.17 	the consolidation process.
195.18 		Subd. 3.Funding. Unless the articles of incorporation or bylaws of the successor 
195.19 	relief association specify that municipal contributions are wholly voluntary or unless the 
195.20 	municipalities associated with the consolidating defined contribution relief associations 
195.21 	agree in writing to a different municipal support arrangement, each municipality must 
195.22 	continue to provide the same amount of municipal support to the successor relief 
195.23 	association as the municipality provided to the applicable predecessor relief association in 
195.24 	the calendar year immediately prior to the calendar year in which the consolidation occurs.

195.25 	EFFECTIVE DATE. This section is effective July 1, 2009.

195.26 	Sec. 55. [424B.12] MIXED CONSOLIDATING RELIEF ASSOCIATIONS; 
195.27 	BENEFIT PLAN; FUNDING.
195.28 		Subdivision 1.Applicability. This section applies where one or more of the 
195.29 	volunteer firefighters' relief associations involved in the consolidation are defined benefit 
195.30 	relief associations as defined in section 424A.001, subdivision 1b, and one or more of 
195.31 	the volunteer firefighters' relief associations involved in the consolidation are defined 
195.32 	contribution relief associations as defined in section 424A.001, subdivision 1c.
196.1 		Subd. 2.Benefit plan. The articles of incorporation or bylaws of the successor 
196.2 	relief association must specify whether the relief association is a defined benefit relief 
196.3 	association or whether the relief association is a defined contribution relief association. If 
196.4 	the successor relief association is a defined benefit relief association, the relief association 
196.5 	benefits must comply with sections 424A.02 and 424B.11, subdivision 1a. If the successor 
196.6 	relief association is a defined contribution relief association, the relief association must 
196.7 	comply with sections 424A.016 and 424B.12, subdivision 2.
196.8 		Subd. 3.Funding. If the successor relief association is a defined benefit relief 
196.9 	association, the relief association funding is governed by section 424B.11, subdivision 2. 
196.10 	If the successor relief association is a defined contribution relief association, the relief 
196.11 	association funding is governed by section 424B.12, subdivision 3.

196.12 	EFFECTIVE DATE. This section is effective July 1, 2009.

196.13 	Sec. 56. Minnesota Statutes 2008, section 424B.21, is amended to read:
196.14 	424B.21 ANNUITY PURCHASES UPON DISSOLUTION.
196.15 	The board of trustees of a volunteer firefighters relief association that is scheduled 
196.16 	for dissolution may purchase annuity contracts under section 424A.02 424A.015, 
196.17 	subdivision 8a 3, instead of transferring special fund assets to a municipal trust fund 
196.18 	under section 424B.20, subdivision 4. Payment of an annuity for which a contract is 
196.19 	purchased may not commence before the retirement age specified in the relief association 
196.20 	bylaws and in compliance with section 424A.016, subdivision 2, or 424A.02, subdivision 
196.21 	1. Legal title to the annuity contract transfers to the municipal trust fund under section 
196.22 	424B.20, subdivision 4.

196.23 	EFFECTIVE DATE. This section is effective July 1, 2009, if article 1 is also 
196.24 	enacted.

196.25 	Sec. 57. BRIMSON FIREFIGHTERS RELIEF ASSOCIATION; BOARD OF 
196.26 	TRUSTEES MEMBERSHIP.
 196.27 	Notwithstanding any provisions of Minnesota Statutes, section 424A.04, or other 
196.28 	law to the contrary, the Brimson Firefighters Relief Association must be managed by a 
196.29 	board of trustees consisting of ten members, with six trustees elected from the membership 
196.30 	of the relief association, one trustee drawn from the officials of each municipality served 
196.31 	by the fire department to which the relief association is directly associated, and one trustee 
196.32 	who is the fire chief serving with the independent nonprofit firefighting corporation.

197.1 	EFFECTIVE DATE. This section is effective the day after the governing body 
197.2 	of the Fairbanks Township and its chief clerical officer timely comply with Minnesota 
197.3 	Statutes, section 645.021, subdivisions 2 and 3.

197.4 	Sec. 58.  REPEALER.
 197.5 		Subdivision 1.Repealed for recodification. Minnesota Statutes 2008, sections 
197.6 	424A.001, subdivision 7; 424A.02, subdivisions 4, 6, 8a, and 8b; and 424B.10, subdivision 
197.7 	1, are repealed.
197.8 		Subd. 2.Repealed as obsolete. Minnesota Statutes 2008, section 424A.09, is 
197.9 	repealed.
197.10 		Subd. 3.Substantive repeal.  Minnesota Statutes 2008, section 424A.02, 
197.11 	subdivision 9b, is repealed.

197.12 	ARTICLE 12
197.13 	CORRECTION OF PRIOR DRAFTING ERRORS

197.14 	Section 1. Minnesota Statutes 2008, section 354.66, subdivision 6, is amended to read:
197.15 		Subd. 6.Insurance. A board of an employing district entering into an agreement 
197.16 	authorized by this section shall take all steps necessary to assure continuance of any 
197.17 	insurance programs furnished or authorized a full-time teacher on an identical basis and 
197.18 	with identical sharing of costs for a part-time teacher pursuant to this section, provided, 
197.19 	however, that the requirements of this sentence may be modified by a collective bargaining 
197.20 	agreement between a board and an exclusive representative pursuant to chapter 179 179A. 
197.21 	Teachers as defined in section 136F.43 employed on a less than 75 percent time basis 
197.22 	pursuant to this section shall be eligible for state paid insurance benefits as if the teachers 
197.23 	were employed full time.  

197.24 	EFFECTIVE DATE. This section is effective the day following final enactment.

197.25 	Sec. 2. Minnesota Statutes 2008, section 356.32, subdivision 2, is amended to read:
197.26 		Subd. 2.Covered retirement plans. The provisions of this section apply to the 
197.27 	following retirement plans:
197.28 	(1) the general state employees retirement plan of the Minnesota State Retirement 
197.29 	System, established under chapter 352;
197.30 	(2) the correctional state employees retirement plan of the Minnesota State 
197.31 	Retirement System, established under chapter 352;
197.32 	(3) the State Patrol retirement plan, established under chapter 352B;
198.1 	(4) the general employees retirement plan of the Public Employees Retirement 
198.2 	Association, established under chapter 353;
198.3 	(5) the public employees police and fire plan of the Public Employees Retirement 
198.4 	Association, established under chapter 353;
198.5 	(6) the Teachers Retirement Association, established under chapter 354;
198.6 	(7) the Minneapolis Employees Retirement Fund, established under chapter 422A;
198.7 	(8) the Duluth Teachers Retirement Fund Association, established under chapter 
198.8 	354A; and
198.9 	(9) the Minneapolis Teachers Retirement Fund Association, established under 
198.10 	chapter 354A; and
198.11 	(10)(9) the St. Paul Teachers Retirement Fund Association, established under 
198.12 	chapter 354A.

198.13 	EFFECTIVE DATE. This section is effective the day following final enactment.

198.14 	Sec. 3. Minnesota Statutes 2008, section 422A.06, subdivision 8, is amended to read:
198.15 		Subd. 8.Retirement benefit fund. (a) The retirement benefit fund consists of 
198.16 	amounts held for payment of retirement allowances for members retired under this chapter, 
198.17 	including any transfer amount payable under subdivision 3, paragraph (c).
198.18 	(b) Unless subdivision 3, paragraph (c), applies, assets equal to the required 
198.19 	reserves for retirement allowances under this chapter determined in accordance with the 
198.20 	appropriate mortality table adopted by the board of trustees based on the experience of the 
198.21 	fund as recommended by the actuary retained under section 356.214 must be transferred 
198.22 	from the deposit accumulation fund to the retirement benefit fund as of the last business 
198.23 	day of the month in which the retirement allowance begins. The income from investments 
198.24 	of these assets must be allocated to this fund and any interest charge under subdivision 
198.25 	3, paragraph (c), must be credited to the fund. There must be paid from this fund the 
198.26 	retirement annuities authorized by law. A required reserve calculation for the retirement 
198.27 	benefit fund must be made by the actuary retained under section 356.214 and must be 
198.28 	certified to the retirement board by the actuary retained under section 356.214.
198.29 	(c) There is established a deferred yield adjustment account which must be increased 
198.30 	by the sale or disposition of any debt securities at less than book value and must be 
198.31 	decreased by the sale or disposition of debt securities at more than book value. At the 
198.32 	end of each fiscal year, a portion of the balance of this account must be offset against the 
198.33 	investment income for that year. The annual portion of the balance to be offset must be 
198.34 	proportional to the reciprocal of the average remaining life of the bonds sold, unless the 
198.35 	amounts are offset by gains on the future sales of these securities. The amount of this 
199.1 	account must be included in the recognized value of assets other than corporate stocks 
199.2 	and all other equity investments. In any fiscal year in which the gains on the sales of debt 
199.3 	securities exceed the discounts realized on the sales of such securities, the excess must 
199.4 	be used to reduce the balance of the account. If the realized capital gains are sufficient 
199.5 	to reduce the balance of the account to zero, any excess gains must be available for the 
199.6 	calculation of postretirement adjustments.
199.7 	(d)(1) Annually, following June 30, the board shall use the procedures in clauses (2), 
199.8 	(3), and (4), to determine whether a postretirement adjustment is payable and to determine 
199.9 	the amount of any postretirement adjustment.
199.10 	(2) If the Consumer Price Index for urban wage earners and clerical workers all 
199.11 	items index published by the Bureau of Labor Statistics of the United States Department 
199.12 	of Labor increases from June 30 of the preceding year to June 30 of the current year, the 
199.13 	board shall certify the percentage increase. The amount certified must not exceed the 
199.14 	lesser of the difference between the preretirement interest assumption and postretirement 
199.15 	interest assumption in section 356.215, subdivision 8, paragraph (a), or 3.5 percent.
199.16 	(3) In addition to any percentage increase certified under paragraph (b), the board 
199.17 	shall use the following procedures to determine if a postretirement adjustment is payable 
199.18 	under this paragraph:
199.19 	(i) the board shall determine the market value of the fund on June 30 of that year;
199.20 	(ii) the amount of reserves required as of the current June 30 for the annuity or 
199.21 	benefit payable to an annuitant and benefit recipient must be determined by the actuary 
199.22 	retained under section 356.214. An annuitant or benefit recipient who has been receiving 
199.23 	an annuity or benefit for at least 12 full months as of the current June 30 is eligible to 
199.24 	receive a full postretirement adjustment. An annuitant or benefit recipient who has been 
199.25 	receiving an annuity or benefit for at least one full month, but less than 12 full months as of 
199.26 	the current June 30, is eligible to receive a partial postretirement adjustment. The amount 
199.27 	of the reserves for those annuitants and benefit recipients who are eligible to receive a 
199.28 	full postretirement benefit adjustment is known as "eligible reserves." The amount of 
199.29 	the reserves for those annuitants and benefit recipients who are not eligible to receive a 
199.30 	postretirement adjustment is known as "noneligible reserves." For an annuitant or benefit 
199.31 	recipient who is eligible to receive a partial postretirement adjustment, additional "eligible 
199.32 	reserves" is an amount that bears the same ratio to the total reserves required for the 
199.33 	annuitant or benefit recipient as the number of full months of annuity or benefit receipt as 
199.34 	of the current June 30 bears to 12 full months. The remainder of the annuitant's or benefit 
199.35 	recipient's reserves are "noneligible reserves";
200.1 	(iii) the board shall determine the percentage increase certified under clause (2) 
200.2 	multiplied by the eligible required reserves, as adjusted for mortality gains and losses, 
200.3 	determined under item (ii);
200.4 	(iv) the board shall add the amount of reserves required for the annuities or benefits 
200.5 	payable to annuitants and benefit recipients of the participating public pension plans or 
200.6 	funds as of the current June 30 to the amount determined under item (iii);
200.7 	(v) the board shall subtract the amount determined under item (iv) from the market 
200.8 	value of the fund determined under item (i);
200.9 	(vi) the board shall adjust the amount determined under item (v) by the cumulative 
200.10 	current balance determined under item (viii) and any negative balance carried forward 
200.11 	under item (ix);
200.12 	(vii) a positive amount resulting from the calculations in items (i) to (vi) is the excess 
200.13 	market value. A negative amount is the negative balance;
200.14 	(viii) the board shall allocate one-fifth of the excess market value or one-fifth of the 
200.15 	negative balance to each of five consecutive years, beginning with the fiscal year ending 
200.16 	the current June 30; and
200.17 	(ix) to calculate the postretirement adjustment under this paragraph based on 
200.18 	investment performance for a fiscal year, the board shall add together all excess market 
200.19 	value allocated to that year and subtract from the sum all negative balances allocated to 
200.20 	that year. If this calculation results in a negative number, the entire negative balance must 
200.21 	be carried forward and allocated to the next year. If the resulting amount is positive, a 
200.22 	postretirement adjustment is payable under this paragraph. The board shall express a 
200.23 	positive amount as a percentage of the total eligible required reserves certified to the 
200.24 	board under item (ii).
200.25 	(4) The board shall determine the amount of any postretirement adjustment which 
200.26 	is payable using the following procedure:
200.27 	(i) the total "eligible" required reserves as of the first of January next following the 
200.28 	end of the fiscal year for the annuitants and benefit recipients eligible to receive a full or 
200.29 	partial postretirement adjustment as determined by item (ii) must be certified to the board 
200.30 	by the actuary retained under section 356.214. The total "eligible" required reserves 
200.31 	must be determined by the actuary retained under section 356.214 on the assumption that 
200.32 	all annuitants and benefit recipients eligible to receive a full or partial postretirement 
200.33 	adjustment will be alive on the January 1 in question; and
200.34 	(ii) the board shall add the percentage certified under clause (2) to any positive 
200.35 	percentage calculated under clause (3). The board shall not subtract from the percentage 
200.36 	certified under paragraph (b) any negative amount calculated under clause (3). The sum 
201.1 	of these percentages must be carried to five decimal places and must be certified as the 
201.2 	full postretirement adjustment percentage.
201.3 	(e) The board shall determine the amount of the postretirement adjustment payable 
201.4 	to each eligible annuitant and benefit recipient. The dollar amount of the postretirement 
201.5 	adjustment must be calculated by applying the certified postretirement adjustment 
201.6 	percentage to the amount of the monthly annuity or benefit payable to each eligible 
201.7 	annuitant or benefit recipient eligible for a full adjustment.
201.8 	The dollar amount of the partial postretirement adjustment payable to each annuitant 
201.9 	or benefit recipient eligible for a partial adjustment must be calculated by first determining 
201.10 	a partial percentage amount that bears the same ratio to the certified full adjustment 
201.11 	percentage amount as the number of full months of annuity or benefit receipt as of the 
201.12 	current June 30 bears to 12 full months. The partial percentage amount determined 
201.13 	must then be applied to the amount of the monthly annuity or benefit payable to each 
201.14 	annuitant or benefit recipient eligible to receive a partial postretirement adjustment. The 
201.15 	postretirement adjustments are payable on January 1 following the calculations required 
201.16 	under this section and must thereafter be included in the monthly annuity or benefit paid to 
201.17 	the recipient. Any adjustments under this section must be paid automatically unless the 
201.18 	intended recipient files a written notice with the applicable participating public pension 
201.19 	fund or plan requesting that the adjustment not be paid.
201.20 	(f) As of June 30 annually, the actuary retained under section 356.214 shall calculate 
201.21 	the amount of required reserves representing any mortality gains and any mortality losses 
201.22 	incurred during the fiscal year and report the results of those calculations to the plan. 
201.23 	The actuary shall report separately the amount of the reserves for annuitants and benefit 
201.24 	recipients who are eligible for a postretirement benefit adjustment and the amount of 
201.25 	reserves for annuitants and benefit recipients who are not eligible for a postretirement 
201.26 	benefit adjustment. If the net amount of required reserves represents a mortality gain, 
201.27 	the board shall sell sufficient securities or transfer sufficient available cash to equal the 
201.28 	amount. If the amount of required reserves represents a mortality loss, the plan shall 
201.29 	transfer an amount equal to the amount of the net mortality loss. The amount of the 
201.30 	transfers must be determined before any postretirement benefit adjustments have been 
201.31 	made. All transfers resulting from mortality adjustments must be completed annually 
201.32 	by December 31 for the preceding June 30. Interest is payable on any transfers after 
201.33 	December 31 based upon the preretirement interest assumption for the participating plan 
201.34 	or fund as specified in section 356.215, subdivision 8, stated as a monthly rate. Book 
201.35 	values of the assets of the fund must be determined only after all adjustments for mortality 
201.36 	gains and losses for the fiscal year have been made.
202.1 	(g) All money necessary to meet the requirements of the certification of withdrawals 
202.2 	and all money necessary to pay postretirement adjustments under this section are hereby 
202.3 	and from time to time appropriated from the postretirement investment fund to the board.
202.4 	(h) Annually, following the calculation of any postretirement adjustment payable 
202.5 	from the retirement benefit fund, the board of trustees shall submit a report to the 
202.6 	executive director of the Legislative Commission on Pensions and Retirement and to the 
202.7 	commissioner of finance indicating the amount of any postretirement adjustment and 
202.8 	the underlying calculations on which that postretirement adjustment amount is based, 
202.9 	including the amount of dividends, the amount of interest, and the amount of net realized 
202.10 	capital gains or losses utilized in the calculations.
202.11 	(i) With respect to a former contributing member who began receiving a retirement 
202.12 	annuity or disability benefit under section 422A.151, paragraph (a), clause (2), after June 
202.13 	30, 1997, or with respect to a survivor of a former contributing member who began 
202.14 	receiving a survivor benefit under section 422A.151, paragraph (a), clause (2), after June 
202.15 	30, 1997, the reserves attributable to the one percent lower amount of the cost-of-living 
202.16 	adjustment payable to those annuity or benefit recipients annually must be transferred back 
202.17 	to the deposit accumulation fund to the credit of the Metropolitan Airports Commission. 
202.18 	The calculation of this annual reduced cost-of-living adjustment reserve transfer must be 
202.19 	reviewed by the actuary retained under section 356.214.

202.20 	EFFECTIVE DATE. This section is effective retroactively from June 30, 2008.

202.21 	Sec. 4. Minnesota Statutes 2008, section 422A.08, subdivision 5, is amended to read:
202.22 		Subd. 5.Service credit purchase. Any contributor who prior to entering the service 
202.23 	of the city was an employee of a public corporation, is authorized, using the procedure in 
202.24 	subdivision 5a section 356.551, to purchase allowable service credit in the retirement fund 
202.25 	for employment by the public corporation in the same manner as though the service had 
202.26 	been rendered to the city, providing that the individual has not received service credit and 
202.27 	is not eligible to receive service credit for this period under any other plan or fund listed 
202.28 	in section 356.30, subdivision 3. Before receiving credit for service rendered to a public 
202.29 	corporation as herein set forth, the contributing employee shall make application therefor 
202.30 	in writing to the retirement board, and shall contribute to the retirement fund the amount 
202.31 	specified in subdivision 5a section 356.551.  

202.32 	EFFECTIVE DATE. This section is effective the day following final enactment.

202.33 	Sec. 5. Laws 1989, chapter 319, article 11, section 13, is amended to read:
203.1 	Sec. 13. REPEALER.
 203.2 	Laws 1967, chapter 815; Laws 1978, chapter 683; and Laws 1981, chapter 224, 
203.3 	sections 2 and 5 section 245, are repealed.

203.4 	EFFECTIVE DATE. This section is effective the day following final enactment 
203.5 	and applies retroactively from June 2, 1989.

203.6 	Sec. 6. Laws 2008, chapter 349, article 14, section 13, is amended to read:
203.7 	Sec. 13. REPEALER OF PRIOR INCONSISTENT SPECIAL VOLUNTEER 
203.8 	FIRE RELIEF ASSOCIATION ANCILLARY BENEFIT LEGISLATION.
 203.9 		Subdivision 1.Anoka. Laws 1969, chapter 352 252, section 1, subdivisions 3, 
203.10 	4, 5, and 6, are repealed.
203.11 		Subd. 2.Butterfield. Laws 1975, chapter 185, section 1, is repealed.
203.12 		Subd. 3.Coon Rapids. Laws 1973, chapter 304, section 1, subdivisions 3, 4, 5, 6, 
203.13 	7, 8, and 9, are repealed.
203.14 		Subd. 4.Edina. (1) Laws 1965, chapter 592, section 3, as amendedadded by Laws 
203.15 	1969, chapter 644, section 2, and amended by Laws 1975, chapter 229, section 2; (2) Laws 
203.16 	1965, chapter 592, section 4, as amendedadded by Laws 1969, chapter 644, section 2, and 
203.17 	amended by Laws 1975, chapter 229, section 3, Laws 1985, chapter 261, section 37, and 
203.18 	Laws 1991, chapter 125, section 1; (3) Laws 1985, chapter 261, section 37, as amended by 
203.19 	Laws 1991, chapter 125, section 1; and (4) Laws 1991, chapter 125, section 1, are repealed.
203.20 		Subd. 5.Fairmont. Laws 1967, chapter 575, sections 2, as amended by Laws 1979, 
203.21 	chapter 201, section 23; 3; and 4, are repealed.
203.22 		Subd. 6.Falcon Heights. Laws 1969, chapter 526, sections 3; 4; 5, as amended 
203.23 	by Laws 1974, chapter 208, section 2; and 7, as amended by Laws 1974, chapter 208, 
203.24 	section 3, are repealed.
203.25 		Subd. 7.Golden Valley. Laws 1971, chapter 140, sections 2, as amended by Laws 
203.26 	1973, chapter 30, section 2; 3, as amended by Laws 1973, chapter 30, section 3; 4, as 
203.27 	amended by Laws 1973, chapter 30, section 4; and 5, as amended by Laws 1973, chapter 
203.28 	30, section 5; and Laws 1993, chapter 244, article 4, section 1, are repealed.
203.29 		Subd. 8.Wayzata. Laws 1973, chapter 472, section 1, as amended by Laws 1976, 
203.30 	chapter 272, section 1, and Laws 1979, chapter 201, section 33, is repealed.
203.31 		Subd. 9.White Bear Lake. Laws 1971, chapter 214, section 1, subdivisions
203.32 	sections 1, 2, 3, 4, and 5, are repealed.

203.33 	EFFECTIVE DATE; LOCAL APPROVAL. (a) Subdivision 1 is effective the day 
203.34 	after the governing body of Anoka and its chief clerical officer timely complete their 
204.1 	compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, after June 
204.2 	30, 2009.
204.3 	(b) Subdivision 2 is effective the day after the governing body of Butterfield and its 
204.4 	chief clerical officer timely complete their compliance with Minnesota Statutes, section 
204.5 	645.021, subdivisions 2 and 3, after June 30, 2009.
204.6 	(c) Subdivision 3 is effective the day after the governing body of Coon Rapids and 
204.7 	its chief clerical officer timely complete their compliance with Minnesota Statutes, section 
204.8 	645.021, subdivisions 2 and 3, after June 30, 2009.
204.9 	(d) Subdivision 4 is effective the day after the governing body of Edina and its 
204.10 	chief clerical officer timely complete their compliance with Minnesota Statutes, section 
204.11 	645.021, subdivisions 2 and 3, after June 30, 2009.
204.12 	(e) Subdivision 5 is effective the day after the governing body of Fairmont and its 
204.13 	chief clerical officer timely complete their compliance with Minnesota Statutes, section 
204.14 	645.021, subdivisions 2 and 3, after June 30, 2009.
204.15 	(f) Subdivision 6 is effective the day after the governing body of Falcon Heights 
204.16 	and its chief clerical officer timely complete their compliance with Minnesota Statutes, 
204.17 	section 645.021, subdivisions 2 and 3, after June 30, 2009.
204.18 	(g) Subdivision 7 is effective the day after the governing body of Golden Valley and 
204.19 	its chief clerical officer timely complete their compliance with Minnesota Statutes, section 
204.20 	645.021, subdivisions 2 and 3, after June 30, 2009.
204.21 	(h) Subdivision 8 is effective the day after the governing body of Wayzata and its 
204.22 	chief clerical officer timely complete their compliance with Minnesota Statutes, section 
204.23 	645.021, subdivisions 2 and 3, after June 30, 2009.
204.24 	(i) Subdivision 9 is effective the day after the governing body of White Bear Lake 
204.25 	and its chief clerical officer timely complete their compliance with Minnesota Statutes, 
204.26 	section 645.021, subdivisions 2 and 3, after June 30, 2009.

204.27 	EFFECTIVE DATE. This section is effective the day following final enactment.

204.28 	Sec. 7.  REPEALER.
 204.29 	Minnesota Statutes 2008, sections 356.2165; and 422A.08, subdivision 5a, are 
204.30 	repealed.

204.31 	EFFECTIVE DATE. This section is effective the day following final enactment.

205.1 	ARTICLE 13
205.2 	ONE PERSON AND SMALL GROUP RETIREMENT PROVISIONS

205.3 	Section 1. Minnesota Statutes 2008, section 352.86, subdivision 1, is amended to read:
205.4 		Subdivision 1.Eligibility; retirement annuity. A person who is employed by
205.5 	This section applies to any employee of the Department of Transportation in the civil 
205.6 	service employment classification of aircraft pilot or chief pilot, who is covered for 
205.7 	that employment by the general employee retirement plan of the system under section 
205.8 	352.01, subdivision 23, and who elects thiselected before June 1, 2008, special retirement 
205.9 	coverage under subdivision 3, who is prohibited from performing the duties of aircraft 
205.10 	pilot or chief pilot after reaching age 65 by a policy adopted by the commissioner of 
205.11 	transportation, andthis section by an irrevocable election on forms provided by the 
205.12 	executive director.
205.13 		Subd. 2.Retirement annuity. An eligible person under subdivision 1 who 
205.14 	terminates employment as a state employee on or after age 62 but prior to normal 
205.15 	retirement age is entitled, upon application, to a retirement annuity computed under 
205.16 	section 352.115, subdivisions 2 and 3, without any reduction for early retirement under 
205.17 	section 352.116, subdivision 1.

205.18 	EFFECTIVE DATE. This section is effective the day following final enactment.

205.19 	Sec. 2. Minnesota Statutes 2008, section 352.86, subdivision 1a, is amended to read:
205.20 		Subd. 1a 3.Disability benefits. An employee described in subdivision 1, who is 
205.21 	less than 62 years of age and who becomes disabled and physically or mentally unfit 
205.22 	to perform occupational duties due to injury, sickness, or other disability, and who is 
205.23 	found disqualified for retention as chief pilot or pilot as a result of a physical examination 
205.24 	required by applicable federal laws or regulations, is entitled upon application to disability 
205.25 	benefits for a maximum of five years in the amount ofmay submit an application for 
205.26 	disability benefits calculated under section 352.113, subdivision 3. In considering the 
205.27 	disability benefit application, the executive director must use the disability standard 
205.28 	specified in this subdivision rather than the total and permanent standard specified in 
205.29 	section 352.113, subdivision 1. If disability benefits commence under section 352.113, 
205.30 	subdivision 3, the appointing authority shall also provide payments from the state airports 
205.31 	fund, totaling 75 percent of current monthly salary, to be paid by the appointing authority
205.32 	less the amount payable under section 352.113, subdivision 3. Payments from the state 
205.33 	airports fund must be made for five years or until normal retirement age, whichever is 
205.34 	earlier. Disability benefits must not continue after the employee reaches age 62. These 
206.1 	benefits are in lieu of all other state benefits for the disability, including, but not limited to, 
206.2 	workers' compensation benefits.

206.3 	EFFECTIVE DATE. This section is effective the day following final enactment.

206.4 	Sec. 3. Minnesota Statutes 2008, section 352.86, subdivision 2, is amended to read:
206.5 		Subd. 2 4.Additional contributions. The special retirement annuity authorized 
206.6 	by subdivision 1 shall be financed by An employee covered by this section must pay an 
206.7 	additional employee contribution from the covered aircraft pilot or chief pilot of 1.6 
206.8 	percent and an employer contribution fromof salary. The Department of Transportation 
206.9 	must pay an additional employer contribution of of 1.6 percent of salary. These 
206.10 	contributions are in addition to the contributions required by section 352.04, subdivisions 
206.11 	2 and 3. They must be made in the manner provided for in section 352.04, subdivisions 4, 
206.12 	5, and 6.  

206.13 	EFFECTIVE DATE. This section is effective the day following final enactment.

206.14 	Sec. 4. Minnesota Statutes 2008, section 353.01, subdivision 2, is amended to read:
206.15 		Subd. 2.Public employee. "Public employee" means a governmental employee 
206.16 	performing personal services for a governmental subdivision defined in subdivision 6, 
206.17 	whose salary is paid, in whole or in part, from revenue derived from taxation, fees, 
206.18 	assessments, or from other sources. The term includes the classes of persons described or 
206.19 	listed in subdivision 2a. The term also includes persons who elect association membership 
206.20 	under subdivision 2d, paragraph (a), and persons for whom the applicable governmental 
206.21 	subdivision had elected association membership under subdivision 2d, paragraph (b). The 
206.22 	term also includes full-time employees of the Dakota County Agricultural Society. The 
206.23 	term excludes the classes of persons listed in subdivision 2b for purposes of membership 
206.24 	in the association.

206.25 	EFFECTIVE DATE. This section is effective the first day of the first full payroll 
206.26 	period commencing after final enactment.

206.27 	Sec. 5. Minnesota Statutes 2008, section 353.01, subdivision 2a, is amended to read:
206.28 		Subd. 2a.Included employees. (a) Public employees whose salary from 
206.29 	employment in one or more positions within one governmental subdivision exceeds $425 
206.30 	in any month shall participate as members of the association. If the salary is less than 
206.31 	$425 in a subsequent month, the employee retains membership eligibility. Eligible public 
206.32 	employees shall participate as members of the association with retirement coverage by 
207.1 	the public employees retirement plan or the public employees police and fire retirement 
207.2 	plan under this chapter, or the local government correctional employees retirement plan 
207.3 	under chapter 353E, whichever applies, as a condition of their employment on the first 
207.4 	day of employment unless they:
207.5 	(1) are specifically excluded under subdivision 2b;
207.6 	(2) do not exercise their option to elect retirement coverage in the association as 
207.7 	provided in subdivision 2d, paragraph (a); or
207.8 	(3) are employees of the governmental subdivisions listed in subdivision 2d, 
207.9 	paragraph (b), where the governmental subdivision has not elected to participate as a 
207.10 	governmental subdivision covered by the association.
207.11 	(b) A public employee who was a member of the association on June 30, 2002, 
207.12 	based on employment that qualified for membership coverage by the public employees 
207.13 	retirement plan or the public employees police and fire plan under this chapter, or the 
207.14 	local government correctional employees retirement plan under chapter 353E as of June 
207.15 	30, 2002, retains that membership for the duration of the person's employment in that 
207.16 	position or incumbency in elected office. Except as provided in subdivision 28, the person 
207.17 	shall participate as a member until the employee or elected official terminates public 
207.18 	employment under subdivision 11a or terminates membership under subdivision 11b.
207.19 	(c) Public employees under paragraph (a) include:
207.20 	(1) physicians under section 353D.01, subdivision 2, who do not elect public 
207.21 	employees defined contribution plan coverage under section 353D.02, subdivision 2.;
207.22 	(2) full-time employees of the Dakota County Agricultural Society; and
207.23 	(3) employees of the Minneapolis Firefighters Relief Association or Minneapolis 
207.24 	Police Relief Association who are not excluded employees under subdivision 2b due to 
207.25 	coverage by the relief association pension plan and who elect Public Employee Retirement 
207.26 	Association general plan coverage under section 5.

207.27 	EFFECTIVE DATE. This section is effective the first day of the first full payroll 
207.28 	period commencing after final enactment.

207.29 	Sec. 6. Minnesota Statutes 2008, section 353.01, subdivision 6, is amended to read:
207.30 		Subd. 6.Governmental subdivision. (a) "Governmental subdivision" means a 
207.31 	county, city, town, school district within this state, or a department, unit or instrumentality 
207.32 	of state or local government, or any public body established under state or local 
207.33 	authority that has a governmental purpose, is under public control, is responsible for the 
207.34 	employment and payment of the salaries of employees of the entity, and receives a major 
207.35 	portion of its revenues from taxation, fees, assessments or from other public sources.
208.1 	(b) Governmental subdivision also means the Public Employees Retirement 
208.2 	Association, the League of Minnesota Cities, the Association of Metropolitan 
208.3 	Municipalities, charter schools formed under section 124D.10, service cooperatives 
208.4 	exercising retirement plan participation under section 123A.21, subdivision 5, joint powers 
208.5 	boards organized under section 471.59, subdivision 11, paragraph (a), family service 
208.6 	collaboratives and children's mental health collaboratives organized under section 471.59, 
208.7 	subdivision 11, paragraph (b) or (c), provided that the entities creating the collaboratives 
208.8 	are governmental units that otherwise qualify for retirement plan membership, public 
208.9 	hospitals owned or operated by, or an integral part of, a governmental subdivision or 
208.10 	governmental subdivisions, the Association of Minnesota Counties, the Minnesota 
208.11 	Inter-county Association, the Minnesota Municipal Utilities Association, the Metropolitan 
208.12 	Airports Commission, the University of Minnesota with respect to police officers covered 
208.13 	by the public employees police and fire retirement plan, the Minneapolis Employees 
208.14 	Retirement Fund for employment initially commenced after June 30, 1979, the Range 
208.15 	Association of Municipalities and Schools, soil and water conservation districts, economic 
208.16 	development authorities created or operating under sections 469.090 to 469.108, the Port 
208.17 	Authority of the city of St. Paul, the Spring Lake Park Fire Department, incorporated, 
208.18 	the Lake Johanna Volunteer Fire Department, incorporated, the Red Wing Environmental 
208.19 	Learning Center, the Dakota County Agricultural Society, and Hennepin Healthcare 
208.20 	System, Inc., and the Minneapolis Firefighters Relief Association and Minneapolis Police 
208.21 	Relief Association with respect to staff covered by the Public Employees Retirement 
208.22 	Association general plan.
208.23 	(c) Governmental subdivision does not mean any municipal housing and 
208.24 	redevelopment authority organized under the provisions of sections 469.001 to 469.047; 
208.25 	or any port authority organized under sections 469.048 to 469.089 other than the Port 
208.26 	Authority of the city of St. Paul; or any hospital district organized or reorganized prior 
208.27 	to July 1, 1975, under sections 447.31 to 447.37 or the successor of the district; or the 
208.28 	board of a family service collaborative or children's mental health collaborative organized 
208.29 	under sections 124D.23, 245.491 to 245.495, or 471.59, if that board is not controlled 
208.30 	by representatives of governmental units.
208.31 	(d) A nonprofit corporation governed by chapter 317A or organized under Internal 
208.32 	Revenue Code, section 501(c)(3), which is not covered by paragraph (a) or (b), is not a 
208.33 	governmental subdivision unless the entity has obtained a written advisory opinion from 
208.34 	the United States Department of Labor or a ruling from the Internal Revenue Service 
208.35 	declaring the entity to be an instrumentality of the state so as to provide that any future 
209.1 	contributions by the entity on behalf of its employees are contributions to a governmental 
209.2 	plan within the meaning of Internal Revenue Code, section 414(d).
209.3 	(e) A public body created by state or local authority may request membership on 
209.4 	behalf of its employees by providing sufficient evidence that it meets the requirements in 
209.5 	paragraph (a).
209.6 	(f) An entity determined to be a governmental subdivision is subject to the reporting 
209.7 	requirements of this chapter upon receipt of a written notice of eligibility from the 
209.8 	association. 

209.9 	EFFECTIVE DATE. This section is effective the first day of the first full payroll 
209.10 	period commencing after final enactment.

209.11 	Sec. 7. PRIOR PENSION PLAN TERMINATION.
 209.12 	As of the effective date of this section, contributions to the defined contribution or 
209.13 	defined benefit pension plan or plans which previously provided primary pension coverage 
209.14 	for any individual who elects coverage by the general employees retirement plan of the 
209.15 	Public Employee Retirement Association under section 5 must terminate and must not be 
209.16 	resumed.

209.17 	EFFECTIVE DATE. This section is effective the first day of the first full payroll 
209.18 	period commencing after final enactment.

209.19 	Sec. 8. PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; SERVICE 
209.20 	CREDIT PURCHASE AUTHORIZATION.
 209.21 	(a) Notwithstanding any provision of Minnesota Statutes, chapter 353, to the 
209.22 	contrary, unless the period to be purchased is credited as allowable service by another 
209.23 	retirement plan covered by Minnesota Statutes, section 356.30, or would be ineligible 
209.24 	for credit as allowable service under Minnesota Statutes, section 353.01, subdivision 
209.25 	16, if the service had been performed after the effective date of this section, an eligible 
209.26 	person described in paragraph (b) may purchase allowable service credit under Minnesota 
209.27 	Statutes, section 353.01, subdivision 16, from the general employees retirement plan of 
209.28 	the Public Employees Retirement Association for the period specified in paragraph (c), by 
209.29 	making the payment required under paragraph (d). 
209.30 	(b) An eligible person is a person who began employment as staff to the Minneapolis 
209.31 	Firefighters Relief Association or the Minneapolis Police Relief Association prior to 
209.32 	the effective date of this section, and due to that employment became a member of the 
210.1 	general employees retirement plan of the Public Employees Retirement Association on 
210.2 	the effective date of this section.
210.3 	(c) The period of prior service credit available for purchase is the period of 
210.4 	employment with the Minneapolis Firefighters Relief Association or the Minneapolis 
210.5 	Police Relief Association,  whichever is applicable, which would be includable service 
210.6 	under the Public Employees Retirement Association general plan if that service had been 
210.7 	performed after the effective date rather than before. 
210.8 	(d) Except as otherwise stated under this section, Minnesota Statutes, section 
210.9 	356.551, applies to this purchase. 
210.10 	(e) An eligible person may purchase allowable service credit for a portion of the 
210.11 	eligible period, resulting in prorated service credit.
210.12 	(f) The election to purchase prior service credit under this section must be made in 
210.13 	writing and must be filed with the executive director of the Public Employees Retirement 
210.14 	Association.
210.15 	(g) This section expires one year after the effective date of this section.

210.16 	EFFECTIVE DATE. This section is effective the first day of the first full payroll 
210.17 	period commencing after final enactment.

210.18 	Sec. 9. ELECTION OF COVERAGE.
 210.19 	(a) An individual who is an employee of the Minneapolis Firefighters Relief 
210.20 	Association or the Minneapolis Police Relief Association on the effective date of this 
210.21 	section, and who is not excluded under section 353.01, subdivision 2b, due to coverage 
210.22 	by the relief association pension plan, may elect prospective coverage by the general 
210.23 	employees retirement plan of the Public Employees Retirement Association under an 
210.24 	election as specified in this section.
210.25 	(b) An eligible individual under paragraph (a) may elect coverage by the general 
210.26 	employees retirement plan of the Public Employees Retirement Association by making an 
210.27 	election on a form provided by the Public Employees Retirement Association executive 
210.28 	director. For an election to be valid, it must be made within 90 days of the effective date 
210.29 	of this section and is irrevocable.
210.30 	(c) The Public Employees Retirement Association must provide eligible individuals 
210.31 	with information and counseling regarding the general employees retirement plan of the 
210.32 	Public Employees Retirement Association and the implications of electing that coverage.
210.33 	(d) If an eligible individual elects not to be covered by the general employees 
210.34 	retirement plan of the Public Employees Retirement Association, or if no election is made, 
210.35 	the prior coverage, if any, remains unchanged.

211.1 	EFFECTIVE DATE. This section is effective the first day of the first full payroll 
211.2 	period commencing after final enactment.

211.3 	Sec. 10. PERA-GENERAL; PURCHASE OF CREDIT FOR OMITTED 
211.4 	CONTRIBUTION PERIOD.
 211.5 	(a) An eligible person described in paragraph (b) is entitled, upon written application 
211.6 	filed with the executive director of the Public Employees Retirement Association, to 
211.7 	purchase service credit for the period of omitted contributions specified in paragraph (c) 
211.8 	by paying the amount determined under paragraph (d). The employer of the eligible 
211.9 	person shall pay the amount determined under paragraph (e) within 30 days of being 
211.10 	notified by the Public Employees Retirement Association executive director that the 
211.11 	eligible person made the person's payment.
211.12 	(b) An eligible person is a person who:
211.13 	(1) was born on December 16, 1946;
211.14 	(2) was first employed by the city of Elizabeth, Minnesota, municipal liquor store on 
211.15 	July 23, 2004;
211.16 	(3) was first eligible for coverage by the general employees retirement plan of the 
211.17 	Public Employees Retirement Association in September 2004;
211.18 	(4) was not reported as a general employees retirement plan member by the city of 
211.19 	Elizabeth, Minnesota, to the Public Employees Retirement Association until January 
211.20 	2005; and
211.21 	(5) did not receive service credit under Minnesota Statutes, section 353.27, 
211.22 	subdivision 12, paragraph (e), in a timely fashion.
211.23 	(c) The period of purchasable service credit is that portion of the period September 
211.24 	1, 2004, until January 1, 2005, during which the eligible person was an included employee 
211.25 	under Minnesota Statutes, section 353.01, subdivision 2a, and during which the required 
211.26 	deductions from the compensation of the eligible employee were not made under 
211.27 	Minnesota Statutes, section 353.27, subdivision 2.
211.28 	(d) The member purchase amount is the amount of the omitted member contributions 
211.29 	during the period of purchasable service credit, plus compound annual interest at the rate 
211.30 	of 8.5 percent from October 15, 2004, to the date on which payment is made.
211.31 	(e) The employer purchase amount is either the balance of the full actuarial value 
211.32 	purchase payment amount determined under Minnesota Statutes, section 356.551, 
211.33 	remaining after subtracting the amount under paragraph (d) or the amount of the employer 
211.34 	and employer additional contributions under Minnesota Statutes, section 353.27, 
211.35 	subdivisions 3 and 3a, plus compound annual interest at the rate of 8.5 percent from 
212.1 	October 15, 2004, to the date on which payment is made, whichever is larger. If the 
212.2 	employer fails to pay the employer purchase amount in a timely fashion, the executive 
212.3 	director of the Public Employees Retirement Association shall certify the unpaid 
212.4 	amount, plus monthly compound interest at the rate of 0.71 percent for the period, to the 
212.5 	commissioners of finance and revenue, who shall deduct the unpaid amount from any state 
212.6 	aid or state transfers that the employing unit is eligible to receive and shall transmit the 
212.7 	amount to the Public Employees Retirement Association.
212.8 	(f) Purchase authority under this section expires on July 1, 2010.

212.9 	EFFECTIVE DATE. This section is effective the day following final enactment.

212.10 	Sec. 11. PERA-GENERAL AND TRA; ANNUITY APPLICATION 
212.11 	REVOCATION.
 212.12 	(a) An eligible person specified in paragraph (b) may elect to revoke retirement 
212.13 	annuity applications as provided in paragraph (c). The election must be made in writing 
212.14 	and must be filed with the executive director of the applicable retirement plan.
212.15 	(b) An eligible person is a person who:
212.16 	(1) was born in 1943;
212.17 	(2) was employed as publications editor for St. Cloud State University for twenty 
212.18 	years, ending in 1998, and was covered by virtue of that employment by the general state 
212.19 	employees retirement plan of the Minnesota State Retirement System;
212.20 	(3) retired from the general state employees retirement plan of the Minnesota State 
212.21 	Retirement System in 2007;
212.22 	(4) was employed by the Underwood, Minnesota, municipal liquor store in early 
212.23 	2008, terminated that employment on April 18, 2008, applied for a retirement annuity from 
212.24 	the general employee retirement plan of the Public Employees Retirement Association 
212.25 	and from the Teachers Retirement Association under Minnesota Statutes, section 356.30, 
212.26 	in April or May 2008, and was subsequently reemployed by the municipal liquor store 
212.27 	on or about May 20, 2008; and
212.28 	(5) was informed by the Public Employees Retirement Association of a retirement 
212.29 	annuity overpayment of $349.65 on July 22, 2008.
212.30 	(c) If elected, the eligible person may revoke the person's application for a retirement 
212.31 	annuity from the general employee retirement plan of the Public Employees Retirement 
212.32 	Association, or revoke the person's application for a retirement annuity from the Teachers 
212.33 	Retirement Association, or revoke the person's application for a retirement annuity from 
212.34 	both retirement plans. If a retirement application is revoked, the person's retirement 
212.35 	annuity ends, the entitlement of the person to a future retirement annuity is restored, and 
213.1 	that future retirement annuity amount must be adjusted by subtracting the total value of 
213.2 	the retirement annuity amounts received from that retirement plan from the actuarial 
213.3 	present value of the eligible person's future annuity without adjustment, calculated based 
213.4 	on the mortality table for retired lives of the applicable retirement plan and 8.5 percent 
213.5 	interest rate assumption, and determining the adjusted annuity amount from the remaining 
213.6 	actuarial present value amount using the same interest and mortality assumption.

213.7 	EFFECTIVE DATE. This section is effective the day following final enactment.

213.8 	Sec. 12. MSRS-GENERAL AND PERA-GENERAL; PLAN MEMBERSHIP 
213.9 	EXCLUSION AND DEFERRED ANNUITY AUGMENTATION.
 213.10 	(a) A qualified person described in paragraph (b) may, upon written application 
213.11 	filed with the executive director of the Public Employees Retirement Association, elect 
213.12 	retroactive exclusion from coverage by the general employees retirement plan of the 
213.13 	Public Employees Retirement Association for any period of teacher assistant service for 
213.14 	Independent School District No. 623, Roseville, and qualification for deferred annuities 
213.15 	augmentation for the retroactively excluded period.
213.16 	(b) A qualified person is a person who:
213.17 	(1) was born on January 17, 1951;
213.18 	(2) was employed by Ramsey County from January 20, 1975, to June 22, 1999;
213.19 	(3) was employed by the state of Minnesota from June 22, 1999, to April 4, 2006; and
213.20 	(4) was employed by Independent School District No. 623, Roseville, as a teacher 
213.21 	assistant following terminating state employment from December 13, 2007, to June 6, 
213.22 	2008.
213.23 	(c) If the retroactive exclusion is elected, all member and employer contributions to 
213.24 	the general employees retirement plan of the Public Employees Retirement Association 
213.25 	made with respect to Independent School District No. 623, Roseville, teacher assistant 
213.26 	employment must be refunded with interest under Minnesota Statutes, section 353.27, 
213.27 	subdivision 7, and the qualified person is entitled, if otherwise eligible, for deferred 
213.28 	annuities augmentation from the general employees retirement plan of the Public 
213.29 	Employees Retirement Association and from the general state employees retirement plan 
213.30 	of the Minnesota State Retirement System for the period of retroactive exclusion.
213.31 	(d) Authority to make the election under this section expires September 1, 2009.

213.32 	EFFECTIVE DATE. This section is effective the day following final enactment.

214.1 	Sec. 13. MSRS-GENERAL; EXCEPTION TO DISABILITY BENEFIT 
214.2 	APPLICATION DEADLINE.
 214.3 	(a) Notwithstanding any provision of Minnesota Statutes, section 352.113, 
214.4 	subdivision 4, paragraph (e), to the contrary, an eligible person described in paragraph 
214.5 	(b) is entitled to file a disability benefit application with the general state employees 
214.6 	retirement plan of the Minnesota State Retirement System and, if otherwise qualified under 
214.7 	Minnesota Statutes, section 352.113, receive a disability benefit from the retirement plan.
214.8 	(b) An eligible person is a person who:
214.9 	(1) was born on March 8, 1966;
214.10 	(2) was an employee of the Minnesota Veterans Home at Silver Bay, Minnesota;
214.11 	(3) terminated state employment on July 25, 2007;
214.12 	(4) attempted to apply for a disability benefit in February 2008;
214.13 	(5) had a request to apply for a disability benefit denied by the executive director of 
214.14 	the Minnesota State Retirement System on April 3, 2008;
214.15 	(6) appealed the executive director's decision to the Minnesota State Retirement 
214.16 	System board of directors on April 24, 2008; and
214.17 	(7) had the appeal to the Minnesota State Retirement System board of directors 
214.18 	denied on August 4, 2008.
214.19 	(c) This section expires on June 1, 2010.

214.20 	EFFECTIVE DATE. This section is effective the day following final enactment.

214.21 	Sec. 14. MSRS-GENERAL; ALLOWABLE SERVICE CREDIT REVISION FOR 
214.22 	JOB-SHARE EMPLOYEES.
 214.23 	(a) An eligible person as described in paragraph (b) is entitled to have any partial 
214.24 	month allowable service credit in the general state employees retirement plan of the 
214.25 	Minnesota State Retirement System for part-time employment as a job-share employee 
214.26 	revised to be identical to allowable service credit for part-time state employment under 
214.27 	Minnesota Statutes, section 352.01, subdivision 11, that was not rendered as a job-share 
214.28 	employee.
214.29 	(b) An eligible person:
214.30 	(1) is an active member of the general state employees retirement plan or a retired 
214.31 	member of the general state employees retirement plan;
214.32 	(2) was employed in the demonstration job-sharing project under Laws 1980, 
214.33 	chapter 572, or in the job-sharing program under Minnesota Statutes 1998, sections 
214.34 	43A.41 to 43A.46;
215.1 	(3) was employed in the demonstration job-sharing project or in the job-sharing 
215.2 	program for one-half of full time; and
215.3 	(4) received partial month allowable service credit under Minnesota Statutes, section 
215.4 	352.01, subdivision 11.
215.5 	(c) To have allowable service credit revised under this section, an eligible person 
215.6 	shall provide the executive director of the Minnesota State Retirement System any 
215.7 	relevant documentation that the executive director requests.
215.8 	(d) If the eligible person is a retired member of the general state employees 
215.9 	retirement plan, the person's retirement annuity must be recomputed based on the revised 
215.10 	service credit under this section and the recomputed retirement annuity is payable on the 
215.11 	first day of the month next following the effective date of this section.
215.12 	(e) Nothing in this section may be interpreted to authorize the crediting of more than 
215.13 	one year of allowable service during any 12-month period or to authorize the payment of 
215.14 	any retroactive recomputed retirement annuity amounts.

215.15 	EFFECTIVE DATE. This section is effective the day following final enactment.

215.16 	Sec. 15. HENNEPIN COUNTY EMPLOYEE WAIVER OF SERVICE 
215.17 	REQUIREMENT TO APPLY FOR DISABILITY.
 215.18 	(a) Notwithstanding Minnesota Statutes, section 353.33, subdivision 1, an eligible 
215.19 	person specified in paragraph (b) is authorized to submit an application for disability 
215.20 	benefits from the general employees retirement plan of the Public Employees Retirement 
215.21 	Association.
215.22 	(b) An eligible person is a person who:
215.23 	(1) was born May 6, 1972;
215.24 	(2) was employed by Independent School District No. 11, Anoka-Hennepin, from 
215.25 	September 11, 1995, to August 6, 1996;
215.26 	(3) was employed by Hennepin County from July 31, 2000, to December 30, 2004;
215.27 	(4) was again employed by Hennepin County starting April 2, 2007, with the most 
215.28 	recent employment position being a principal child support officer;
215.29 	(5) has service credit with the Public Employees Retirement Association due to the 
215.30 	employment under clauses (2), (3), and (4); and
215.31 	(6) has had several leaves from Hennepin County employment of a medical-related 
215.32 	nature.
215.33 	(c) If an eligible person under paragraph (b) files a valid application, the executive 
215.34 	director of the Public Employees Retirement Association shall determine whether that 
215.35 	eligible person qualifies to receive a disability benefit under the laws and procedures 
216.1 	applicable to the general employees retirement plan of the Public Employees Retirement 
216.2 	Association.
216.3 	(d) This section expires one year after the effective date of this section.

216.4 	EFFECTIVE DATE. This section is effective the day following final enactment.

216.5 	Sec. 16.  REPEALER.
 216.6 	Minnesota Statutes 2008, section 352.86, subdivision 3, is repealed.