1.1 	A bill for an act
1.2 	relating to retirement; various retirement plans; increasing certain contribution 
1.3 	rates; suspending certain post-retirement adjustments; reducing certain 
1.4 	postretirement adjustment increase rates; reducing interest rates on refunds; 
1.5 	reducing deferred annuity augmentation rates; eliminating interest on reemployed 
1.6 	annuitant earnings limitation deferred accounts; increasing certain vesting 
1.7 	requirements; increasing certain early retirement reduction rates; reducing 
1.8 	certain benefit accrual rates; extending certain amortization periods; making 
1.9 	changes of an administrative nature for retirement plans administered by the 
1.10 	Minnesota State Retirement Association; revising insurance withholding for 
1.11 	certain retired public employees; authorizing state patrol plan service credit for 
1.12 	leave procedures; addressing plan coverage errors and omitted contributions; 
1.13 	revising unlawful discharge annuity repayment requirements; requiring 
1.14 	employment unit accommodation of daily valuation of investment accounts; 
1.15 	eliminating administrative fee maximum for the unclassified state employees 
1.16 	retirement program; making changes of an administrative nature in the general 
1.17 	employees retirement plan of the Public Employees Retirement Association, the 
1.18 	public employees police and fire retirement plan, and the defined contribution 
1.19 	retirement plan; making various administrative modifications in the voluntary 
1.20 	statewide lump-sum volunteer firefighter retirement plan of the Public Employees 
1.21 	Retirement Association; revising purchase of salary credit procedures in certain 
1.22 	partial salary situations; adding new partial salary credit purchase authority for 
1.23 	partial paid medical leaves and budgetary leaves; redefining TRA allowable 
1.24 	service credit; defining annual base salary; requiring base salary reporting by 
1.25 	TRA-covered employing units; making changes of an administrative nature in the 
1.26 	Minnesota State Colleges and Universities System individual retirement account 
1.27 	plan; setting deadline dates for actuarial reporting; extending and revising an 
1.28 	early retirement incentive program; permitting the court-ordered revocation of 
1.29 	an optional annuity election in certain marriage dissolutions; transfer of the 
1.30 	administrative functions of the Minneapolis Employees Retirement Fund to the 
1.31 	Public Employees Retirement Association; creation of MERF consolidation 
1.32 	account within the Public Employees Retirement Association; making various 
1.33 	technical corrections relating to volunteer fire relief associations; revising 
1.34 	break-in-service return to firefighting authorizations; authorizing Minnesota 
1.35 	deferred compensation plan service pension transfers; revising payout defaults 
1.36 	in survivor benefits; authorizing corrections of certain special fund deposits; 
1.37 	requiring a retirement fund investment authority study; authorizing certain 
1.38 	bylaw amendments; making technical changes; appropriating money;amending 
1.39 	Minnesota Statutes 2008, sections 3A.02, subdivision 4; 3A.07; 11A.04; 
2.1 	11A.23, subdivision 4; 13D.01, subdivision 1; 43A.17, subdivision 9; 43A.316, 
2.2 	subdivision 8; 69.021, subdivision 10; 69.051, subdivision 3; 126C.41, 
2.3 	subdivision 3; 256D.21; 352.01, subdivision 2a; 352.03, subdivision 4; 352.04, 
2.4 	subdivision 9; 352.113, subdivision 1; 352.115, subdivisions 1, 10; 352.12, 
2.5 	subdivision 2; 352.22, subdivisions 2, 3; 352.72, subdivisions 1, 2; 352.91, by 
2.6 	adding a subdivision; 352.93, subdivisions 1, 2a, 3a; 352.931, subdivision 1; 
2.7 	352.965, subdivisions 1, 2, 6; 352B.02, as amended; 352B.08, subdivisions 
2.8 	1, 2a; 352B.11, subdivision 2b; 352B.30, subdivisions 1, 2; 352D.015, 
2.9 	subdivisions 4, 9, by adding a subdivision; 352D.02, subdivisions 1, 1c, 2, 3; 
2.10 	352D.03; 352D.04, subdivisions 1, 2; 352D.05, subdivisions 3, 4; 352D.06, 
2.11 	subdivision 3; 352D.065, subdivision 3; 352D.09, subdivisions 3, 7; 352F.07; 
2.12 	353.01, subdivisions 2b, 2d, by adding subdivisions; 353.0161, subdivision 2; 
2.13 	353.03, subdivision 1; 353.05; 353.27, as amended; 353.29, subdivision 1; 
2.14 	353.30, subdivision 1c; 353.32, subdivisions 1, 1a; 353.34, subdivisions 1, 2, 
2.15 	3, 6; 353.37, subdivisions 1, 2, 3, 3a, 4, 5; 353.46, subdivisions 2, 6; 353.64, 
2.16 	subdivision 7; 353.651, subdivisions 1, 4; 353.657, subdivisions 1, 2a; 353.71, 
2.17 	subdivisions 1, 2, 4; 353.86, subdivisions 1, 2; 353.87, subdivisions 1, 2; 353.88; 
2.18 	353D.01, subdivision 2; 353D.03, subdivision 1; 353D.04, subdivisions 1, 2; 
2.19 	353E.04, subdivisions 1, 4; 353E.07, subdivisions 1, 2; 353F.025, subdivisions 
2.20 	1, 2; 353F.03; 354.05, by adding a subdivision; 354.07, subdivision 5; 354.091; 
2.21 	354.42, subdivisions 3, 7, by adding subdivisions; 354.52, subdivision 6, by 
2.22 	adding a subdivision; 354.66, subdivision 3; 354.71; 354A.011, subdivision 27; 
2.23 	354A.12, subdivisions 1, 3c, by adding a subdivision; 354A.27, subdivisions 5, 
2.24 	6, by adding a subdivision; 354A.31, subdivision 1; 354A.35, subdivision 1; 
2.25 	354A.37, subdivisions 2, 3, 4; 354A.39; 354B.25, subdivisions 1, 3; 354C.14; 
2.26 	355.095, subdivision 1; 356.214, subdivision 1; 356.215, subdivisions 3, 8; 
2.27 	356.216; 356.24, subdivision 1; 356.30, subdivisions 1, 3; 356.302, subdivisions 
2.28 	1, 3, 4, 5, 7; 356.303, subdivisions 2, 4; 356.315, subdivision 5; 356.351, 
2.29 	subdivision 1; 356.407, subdivision 2; 356.431, subdivision 1; 356.465, 
2.30 	subdivision 3; 356.47, subdivision 3; 356.50, subdivision 4; 356.64; 356.65, 
2.31 	subdivision 2; 356.91; 356.96, subdivisions 2, 3, 7, 8; 356A.06, subdivision 8; 
2.32 	422A.101, subdivision 3; 422A.26; 473.511, subdivision 3; 473.606, subdivision 
2.33 	5; 475.52, subdivision 6; 490.123, by adding a subdivision; 518.58, subdivisions 
2.34 	3, 4; Minnesota Statutes 2009 Supplement, sections 6.67; 69.011, subdivision 
2.35 	1; 69.031, subdivision 5; 69.772, subdivision 6; 69.773, subdivision 6; 352.01, 
2.36 	subdivision 2b; 352.75, subdivision 4; 352.95, subdivision 2; 352B.011, 
2.37 	subdivision 3; 353.01, subdivisions 2, 2a, 16; 353.06; 353.27, subdivisions 
2.38 	2, 3, 7; 353.33, subdivision 1; 353.371, subdivision 4; 353.65, subdivisions 
2.39 	2, 3; 353F.02, subdivision 4; 353G.05, subdivision 2; 353G.06, subdivision 
2.40 	1; 353G.08; 353G.09, subdivision 3; 353G.11, subdivision 1, by adding a 
2.41 	subdivision; 354.42, subdivision 2; 354.47, subdivision 1; 354.49, subdivision 
2.42 	2; 354.52, subdivision 4b; 354.55, subdivision 11; 354A.12, subdivision 2a; 
2.43 	356.20, subdivision 2; 356.215, subdivision 11; 356.32, subdivision 2; 356.351, 
2.44 	subdivision 2; 356.401, subdivision 3; 356.415, subdivisions 1, 2, by adding 
2.45 	subdivisions; 356.96, subdivisions 1, 5; 423A.02, subdivision 3; 424A.01, 
2.46 	subdivisions 1, 6; 424A.015, by adding a subdivision; 424A.016, subdivisions 4, 
2.47 	7; 424A.02, subdivisions 9, 10; 424A.05, subdivision 3, by adding a subdivision; 
2.48 	424A.08; 480.181, subdivision 2; Laws 2006, chapter 271, article 3, section 43, 
2.49 	as amended; Laws 2009, chapter 169, article 4, section 49; article 5, section 2; 
2.50 	article 7, section 4; proposing coding for new law in Minnesota Statutes, chapters 
2.51 	352B; 353; 353G; 356; repealing Minnesota Statutes 2008, sections 13.63, 
2.52 	subdivision 1; 69.011, subdivision 2a; 352.91, subdivision 5; 353.01, subdivision 
2.53 	40; 353.46, subdivision 1a; 353.88; 353D.03, subdivision 2; 353D.12; 354A.27, 
2.54 	subdivision 1; 354C.15; 356.43; 422A.01, subdivisions 1, 2, 3, 4, 4a, 5, 6, 7, 8, 9, 
2.55 	10, 11, 12, 13a, 17, 18; 422A.02; 422A.03; 422A.04; 422A.05, subdivisions 1, 
2.56 	2a, 2b, 2c, 2d, 2e, 2f, 5, 6, 8; 422A.06, subdivisions 1, 2, 3, 5, 6, 7; 422A.08, 
2.57 	subdivision 1; 422A.09; 422A.10; 422A.101, subdivisions 1, 1a, 2, 2a; 422A.11; 
2.58 	422A.12; 422A.13; 422A.14, subdivision 1; 422A.15; 422A.151; 422A.155; 
3.1 	422A.156; 422A.16, subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 9, 10; 422A.17; 422A.18, 
3.2 	subdivisions 1, 2, 3, 4, 5, 7; 422A.19; 422A.20; 422A.21; 422A.22, subdivisions 
3.3 	1, 3, 4, 6; 422A.23, subdivisions 1, 2, 5, 6, 7, 8, 9, 10, 11, 12; 422A.231; 
3.4 	422A.24; 422A.25; Minnesota Statutes 2009 Supplement, sections 422A.06, 
3.5 	subdivision 8; 422A.08, subdivision 5; 424A.001, subdivision 6; Laws 2009, 
3.6 	chapter 169, article 10, section 32.
3.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

3.8 	ARTICLE 1
3.9 	FINANCIAL SUSTAINABILITY PROVISIONS

3.10 	Section 1. Minnesota Statutes 2008, section 3A.02, subdivision 4, is amended to read:
3.11 		Subd. 4.Deferred annuities augmentation.  (a) The deferred retirement allowance 
3.12 	of any former legislator must be augmented as provided herein.
3.13 	(b) The required reserves applicable to the deferred retirement allowance, 
3.14 	determined as of the date the benefit begins to accrue using an appropriate mortality table 
3.15 	and an interest assumption of six percent, must be augmented from the first of the month 
3.16 	following the termination of active service, or July 1, 1973, whichever is later, to the first 
3.17 	day of the month in which the allowance begins to accrue, at the following annually 
3.18 	compounded rate or rates:
3.19 	(1) five percent until January 1, 1981;
3.20 	(2) three percent from January 1, 1981, or from the first day of the month following 
3.21 	the termination of active service, whichever is later, until January 1 of the year in which 
3.22 	the former legislator attains age 55 or until January 1, 2012, whichever is earlier; and
3.23 	(3) five percent from the period end date under clause (2) tountil the effective date 
3.24 	of retirement or until January 1, 2012, whichever is earlier; and
3.25 	(4) two percent after December 31, 2011.

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

3.27 	Sec. 2. Minnesota Statutes 2008, section 352.113, subdivision 1, is amended to read:
3.28 		Subdivision 1.Age and service requirements. (a) An employee covered by the 
3.29 	system, who is less than normal retirement age and who becomes totally and permanently 
3.30 	disabled after three or more years of allowable service if employed before July 1, 2010, or 
3.31 	after five or more years of allowable service if employed after June 30, 2010, is entitled to 
3.32 	a disability benefit in an amount provided in subdivision 3.
3.33 	(b) If the disabled employee's state service has terminated at any time, the employee 
3.34 	must have at least two years of allowable service after last becoming a state employee 
3.35 	covered by the system.
4.1 	(c) Refunds may be repaid under section 352.23 before the effective accrual date of 
4.2 	the disability benefit under subdivision 2. 

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

4.4 	Sec. 3. Minnesota Statutes 2008, section 352.115, subdivision 1, is amended to read:
4.5 		Subdivision 1.Age and service requirements. After separation from state service, 
4.6 	any employee (1) who has attained the age of at least 55 years and who is entitled to 
4.7 	credit for at least three years allowable service if employed before July 1, 2010, or after 
4.8 	five or more years of allowable service if employed after June 30, 2010, or (2) who has 
4.9 	received credit for at least 30 years allowable service regardless of age, is entitled upon 
4.10 	application to a retirement annuity.

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

4.12 	Sec. 4. Minnesota Statutes 2008, section 352.12, subdivision 2, is amended to read:
4.13 		Subd. 2.Surviving spouse benefit. (a) If an employee or former employee has 
4.14 	credit for at least three years allowable service if the employee was employed before July 
4.15 	1, 2010, or for at least five years of allowable service if the employee was employed 
4.16 	after June 30, 2010, and dies before an annuity or disability benefit has become payable, 
4.17 	notwithstanding any designation of beneficiary to the contrary, the surviving spouse of the 
4.18 	employee may elect to receive, in lieu of the refund with interest under subdivision 1, an 
4.19 	annuity equal to the joint and 100 percent survivor annuity which the employee or former 
4.20 	employee could have qualified for on the date of death.
4.21 	(b) If the employee was under age 55 and has credit for at least 30 years of allowable 
4.22 	service on the date of death, the surviving spouse may elect to receive a 100 percent joint 
4.23 	and survivor annuity based on the age of the employee and surviving spouse on the date 
4.24 	of death. The annuity is payable using the full early retirement reduction under section 
4.25 	352.116, subdivision 1, paragraph (a), to age 55 and one-half of the early retirement 
4.26 	reduction from age 55 to the age payment begins. 
4.27 	(c) If the employee was under age 55 and has credit for at least three years of 
4.28 	allowable service credit on the date of death if the employee was employed before July 1, 
4.29 	2010, or for at least five years of allowable service if the employee was employed after 
4.30 	June 30, 2010, but did not yet qualify for retirement, the surviving spouse may elect 
4.31 	to receive a 100 percent joint and survivor annuity based on the age of the employee 
4.32 	and surviving spouse at the time of death. The annuity is payable using the full early 
5.1 	retirement reduction under section 352.116, subdivision 1 or 1a, to age 55 and one-half of 
5.2 	the early retirement reduction from age 55 to the age payment begins. 
5.3 	(d) The surviving spouse eligible for benefits under paragraph (a) may apply for the 
5.4 	annuity at any time after the date on which the employee or former employee would 
5.5 	have attained the required age for retirement based on the allowable service earned. 
5.6 	The surviving spouse eligible for surviving spouse benefits under paragraph (b) or (c) 
5.7 	may apply for the annuity at any time after the employee's death. The annuity must be 
5.8 	computed under sections 352.115, subdivisions 1, 2, and 3, and 352.116, subdivisions 1, 
5.9 	1a, and 3. Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply to a deferred 
5.10 	annuity or surviving spouse benefit payable under this subdivision. The annuity must cease 
5.11 	with the last payment received by the surviving spouse in the lifetime of the surviving 
5.12 	spouse, or upon expiration of a term certain benefit payment to a surviving spouse under 
5.13 	subdivision 2a. An amount equal to the excess, if any, of the accumulated contributions 
5.14 	credited to the account of the deceased employee in excess of the total of the benefits paid 
5.15 	and payable to the surviving spouse must be paid to the deceased employee's or former 
5.16 	employee's last designated beneficiary or, if none, as specified under subdivision 1. 
5.17 	(e) Any employee or former employee may request in writing, with the signed 
5.18 	consent of the spouse, that this subdivision not apply and that payment be made only to a 
5.19 	designated beneficiary as otherwise provided by this chapter.

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

5.21 	Sec. 5. Minnesota Statutes 2008, section 352.22, subdivision 2, is amended to read:
5.22 		Subd. 2.Amount of refund. Except as provided in subdivision 3, the refund 
5.23 	payable to a person who ceased to be a state employee by reason of a termination of state 
5.24 	service is an amount equal to employee accumulated contributions plus interest at the rate 
5.25 	of six percent per year compounded daily from the date that the contribution was made 
5.26 	until June 30, 2011, or until the date on which the refund is paid, whichever is earlier, and 
5.27 	at the rate of four percent per year compounded daily from the date that the contribution 
5.28 	was made or from July 1, 2011, whichever is later, until the date on which the refund is 
5.29 	paid. Included with the refund is any interest paid as part of repayment of a past refund, 
5.30 	plus interest thereon from the date of repayment.

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

5.32 	Sec. 6. Minnesota Statutes 2008, section 352.22, subdivision 3, is amended to read:
6.1 		Subd. 3.Deferred annuity. (a) An employee who has at least three years of 
6.2 	allowable service if employed before July 1, 2010, or who has at least five years of 
6.3 	allowable service if employed after June 30, 2010, when termination occurs may elect 
6.4 	to leave the accumulated contributions in the fund and thereby be entitled to a deferred 
6.5 	retirement annuity. The annuity must be computed under the law in effect when state 
6.6 	service terminated, on the basis of the allowable service credited to the person before 
6.7 	the termination of service.
6.8 	(b) An employee on layoff or on leave of absence without pay, except a leave of 
6.9 	absence for health reasons, and who does not return to state service must have an annuity, 
6.10 	deferred annuity, or other benefit to which the employee may become entitled computed 
6.11 	under the law in effect on the employee's last working day.
6.12 	(c) No application for a deferred annuity may be made more than 60 days before 
6.13 	the time the former employee reaches the required age for entitlement to the payment of 
6.14 	the annuity. The deferred annuity begins to accrue no earlier than 60 days before the date 
6.15 	the application is filed in the office of the system, but not (1) before the date on which 
6.16 	the employee reaches the required age for entitlement to the annuity nor (2) before the 
6.17 	day following the termination of state service in a position which is not covered by the 
6.18 	retirement system.
6.19 	(d) Application for the accumulated contributions left on deposit with the fund may 
6.20 	be made at any time following the date of the termination of service.

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

6.22 	Sec. 7. Minnesota Statutes 2008, section 352.72, subdivision 1, is amended to read:
6.23 		Subdivision 1.Entitlement to annuity. (a) Any person who has been an employee 
6.24 	covered by a retirement system listed in paragraph (b) is entitled when qualified to an 
6.25 	annuity from each fund if total allowable service in all funds or in any two of these funds 
6.26 	totals three or more years if employed before July 1, 2010, or totals five or more years 
6.27 	if employed after June 30, 2010.
6.28 	(b) This section applies to the Minnesota State Retirement System, the Public 
6.29 	Employees Retirement Association including the Public Employees Retirement 
6.30 	Association police and fire fund, the Teachers Retirement Association, the State Patrol 
6.31 	Retirement Association, or any other public employee retirement system in the state with 
6.32 	a similar provision, except as noted in paragraph (c).
6.33 	(c) This section does not apply to other funds providing benefits for police officers 
6.34 	or firefighters.
7.1 	(d) No portion of the allowable service upon which the retirement annuity from 
7.2 	one fund is based shall be again used in the computation for benefits from another fund. 
7.3 	No refund may have been taken from any one of these funds since service entitling the 
7.4 	employee to coverage under the system or the employee's membership in any of the 
7.5 	associations last terminated. The annuity from each fund must be determined by the 
7.6 	appropriate provisions of the law except that the requirement that a person must have at 
7.7 	least threea specific number of years of allowable service in the respective system or 
7.8 	association does not apply for the purposes of this section if the combined service in two 
7.9 	or more of these funds equals three or more years at least the longest period of allowable 
7.10 	service of any of the applicable retirement plans.

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

7.12 	Sec. 8. Minnesota Statutes 2008, section 352.72, subdivision 2, is amended to read:
7.13 		Subd. 2.Computation of deferred annuity. (a) The deferred annuity, if any, 
7.14 	accruing under subdivision 1, or section 352.22, subdivision 3, must be computed as 
7.15 	provided in section 352.22, subdivision 3, on the basis of allowable service before 
7.16 	termination of state service and augmented as provided herein. The required reserves 
7.17 	applicable to a deferred annuity or to an annuity for which a former employee was eligible 
7.18 	but had not applied or to any deferred segment of an annuity must be determined as of 
7.19 	the date the benefit begins to accrue and augmented by interest compounded annually 
7.20 	from the first day of the month following the month in which the employee ceased to be 
7.21 	a state employee, or July 1, 1971, whichever is later, to the first day of the month in 
7.22 	which the annuity begins to accrue. The rates of interest used for this purpose must be 
7.23 	five percent compounded annually until January 1, 1981, and three percent compounded 
7.24 	annually thereafter until January 1 of the year following the year in which the former 
7.25 	employee attains age 55 or until January 1, 2012, whichever is earlier, and from that date
7.26 	the January 1 next following the attainment of age 55 to the effective date of retirement or 
7.27 	until January 1, 2012, whichever is earlier, the rate is five percent compounded annually if 
7.28 	the employee became an employee before July 1, 2006, and at 2.5 percent compounded 
7.29 	annually until January 1, 2012, if the employee becomes an employee after June 30, 2006, 
7.30 	and two percent compounded annually after December 31, 2011, irrespective of when the 
7.31 	employee became a state employee. If a person has more than one period of uninterrupted 
7.32 	service, the required reserves related to each period must be augmented by interest under 
7.33 	this subdivision. The sum of the augmented required reserves so determined is the present 
7.34 	value of the annuity. "Uninterrupted service" for the purpose of this subdivision means 
7.35 	periods of covered employment during which the employee has not been separated from 
8.1 	state service for more than two years. If a person repays a refund, the service restored by 
8.2 	the repayment must be considered continuous with the next period of service for which the 
8.3 	employee has credit with this system. The formula percentages used for each period of 
8.4 	uninterrupted service must be those applicable to a new employee. The mortality table 
8.5 	and interest assumption used to compute the annuity must be those in effect when the 
8.6 	employee files application for annuity. This section does not reduce the annuity otherwise 
8.7 	payable under this chapter. 
8.8 	(b) The retirement annuity or disability benefit of, or the survivor benefit payable on 
8.9 	behalf of, a former state employee who terminated service before July 1, 1997, which is 
8.10 	not first payable until after June 30, 1997, must be increased on an actuarial equivalent 
8.11 	basis to reflect the change in the postretirement interest rate actuarial assumption under 
8.12 	section 356.215, subdivision 8, from five percent to six percent under a calculation 
8.13 	procedure and the tables adopted by the board and approved by the actuary retained under 
8.14 	section 356.214. 

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

8.16 	Sec. 9. Minnesota Statutes 2009 Supplement, section 352.75, subdivision 4, is 
8.17 	amended to read:
8.18 		Subd. 4.Existing deferred retirees. Any former member of the former 
8.19 	Metropolitan Transit Commission-Transit Operating Division employees retirement 
8.20 	fund is entitled to a retirement annuity from the Minnesota State Retirement System if 
8.21 	the employee:
8.22 	(1) is not an active employee of the Transit Operating Division of the former 
8.23 	Metropolitan Transit Commission on July 1, 1978; (2) has at least ten years of active 
8.24 	continuous service with the Transit Operating Division of the former Metropolitan 
8.25 	Transit Commission as defined by the former Metropolitan Transit Commission-Transit 
8.26 	Operating Division employees retirement plan document in effect on December 31, 1977; 
8.27 	(3) has not received a refund of contributions; (4) has not retired or begun receiving an 
8.28 	annuity or benefit from the former Metropolitan Transit Commission-Transit Operating 
8.29 	Division employees retirement fund; (5) is at least 55 years old; and (6) submits a valid 
8.30 	application for a retirement annuity to the executive director of the Minnesota State 
8.31 	Retirement System.
8.32 	The person is entitled to a retirement annuity in an amount equal to the normal 
8.33 	old age retirement allowance calculated under the former Metropolitan Transit 
8.34 	Commission-Transit Operating Division employees retirement fund plan document in 
8.35 	effect on December 31, 1977, subject to an early retirement reduction or adjustment in 
9.1 	amount on account of retirement before the normal retirement age specified in that former 
9.2 	Metropolitan Transit Commission-Transit Operating Division employees retirement fund 
9.3 	plan document.
9.4 	The deferred retirement annuity of any person to whom this subdivision applies 
9.5 	must be augmented. The required reserves applicable to the deferred retirement annuity, 
9.6 	determined as of the date the allowance begins to accrue using an appropriate mortality 
9.7 	table and an interest assumption of five percent, must be augmented by interest at the 
9.8 	rate of five percent per year compounded annually from January 1, 1978, to January 1, 
9.9 	1981, and three percent per year compounded annually from January 1, 1981, until the 
9.10 	date that the annuity begins to accrue or June 30, 2011, whichever is earlier, and two 
9.11 	percent after June 30, 2011, to the first day of the month in which the annuity begins to 
9.12 	accrue. After the commencement of the retirement annuity, the annuity is eligible for 
9.13 	postretirement adjustments under section 356.415. On applying for a retirement annuity 
9.14 	under this subdivision, the person is entitled to elect a joint and survivor optional annuity 
9.15 	under section 352.116, subdivision 3. 

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

9.17 	Sec. 10. Minnesota Statutes 2008, section 352.93, subdivision 1, is amended to read:
9.18 		Subdivision 1.Basis of annuity; when to apply. After separation from state 
9.19 	service, an employee covered under section 352.91 who has reached age 55 years and has 
9.20 	credit for at least three years of covered correctional service or a combination of covered 
9.21 	correctional service and general state employees state retirement plan allowable service 
9.22 	if first employed as a state employee before July 1, 2010, or has credit for at least ten 
9.23 	years of covered correctional service or a combination of covered correctional service 
9.24 	and general state employees retirement plan allowable service if first employed as a state 
9.25 	employee after June 30, 2010, is entitled upon application to a retirement annuity under 
9.26 	this section, based only on covered correctional employees' service. Application may be 
9.27 	made no earlier than 60 days before the date the employee is eligible to retire by reason of 
9.28 	both age and service requirements.

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

9.30 	Sec. 11. Minnesota Statutes 2008, section 352.93, subdivision 2a, is amended to read:
9.31 		Subd. 2a.Early retirement. Any covered correctional employee who becomes at 
9.32 	least 50 years old and who has at least three years of allowable service if first employed 
9.33 	as a correctional state employee before July 1, 2010, or has credit for at least ten years 
10.1 	of allowable service if first employed as a correctional state employee after June 30, 
10.2 	2010, is entitled upon application to a reduced retirement annuity equal to the annuity 
10.3 	calculated under subdivision 2, reduced by two-tenths of one percent for each month that 
10.4 	the correctional employee is under age 55 at the time of retirement if first employed as 
10.5 	a correctional state employee before July 1, 2010, and if retired before July 1, 2015, or 
10.6 	reduced by 0.417 percent for each month that the correctional employee is under age 55 
10.7 	at the time of retirement if first employed as a correctional state employee after June 30, 
10.8 	2010, or if first employed as a correctional state employee before July 1, 2010, and if 
10.9 	retired after June 30, 2015.

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

10.11 	Sec. 12. Minnesota Statutes 2008, section 352.93, subdivision 3a, is amended to read:
10.12 		Subd. 3a.Optional annuities. The board may establish optional annuity forms to 
10.13 	pay a higher amount from the date of retirement until an employee is first eligible to draw 
10.14 	Social Security benefits, reaches age 65, or up toreaches the age the employee is eligible 
10.15 	to receive unreduced Social Security benefits, at which time the monthly benefits must be 
10.16 	reduced. The optional annuity forms must be actuarially equivalent to the normal single 
10.17 	life annuity form provided in subdivision 2. The optional annuity forms must be approved
10.18 	certified as actuarially equivalent by the actuary retained under section 356.214.

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

10.20 	Sec. 13. Minnesota Statutes 2008, section 352.931, subdivision 1, is amended to read:
10.21 		Subdivision 1.Surviving spouse benefit. (a) If the correctional employee was at 
10.22 	least age 50, has credit for at least three years of allowable service if first employed as 
10.23 	a correctional state employee before July 1, 2010, or has credit for at least ten years of 
10.24 	allowable service if first employed as a correctional state employee after June 30, 2010, 
10.25 	and dies before an annuity or disability benefit has become payable, notwithstanding any 
10.26 	designation of beneficiary to the contrary, the surviving spouse of the employee may 
10.27 	elect to receive, in lieu of the refund under section 352.12, subdivision 1, an annuity for 
10.28 	life equal to the joint and 100 percent survivor annuity which the employee could have 
10.29 	qualified for had the employee terminated service on the date of death. The election 
10.30 	may be made at any time after the date of death of the employee. The surviving spouse 
10.31 	benefit begins to accrue as of the first of the month next following the date on which 
10.32 	the application for the benefit was filed. 
11.1 	(b) If the employee was under age 50, dies, and had credit for at least three years 
11.2 	of allowable service credit on the date of death if first employed as a correctional state 
11.3 	employee before July 1, 2010, or had credit for at least ten years of allowable service on 
11.4 	the date of death if first employed as a correctional state employee after June 30, 2010, but 
11.5 	did not yet qualify for retirement, the surviving spouse may elect to receive a 100 percent 
11.6 	joint and survivor annuity based on the age of the employee and surviving spouse at the 
11.7 	time of death. The annuity is payable using the early retirement reduction under section 
11.8 	352.93, subdivision 2a, to age 50, and one-half of the early retirement reduction from age 
11.9 	50 to the age payment begins. The surviving spouse eligible for surviving spouse benefits 
11.10 	under this paragraph may apply for the annuity at any time after the employee's death. 
11.11 	Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply to a deferred annuity or 
11.12 	surviving spouse benefit payable under this subdivision. 
11.13 	(c) The annuity must cease with the last payment received by the surviving spouse 
11.14 	in the lifetime of the surviving spouse. Any employee may request in writing, with the 
11.15 	signed consent of the spouse, that this subdivision not apply and that payment be made 
11.16 	only to a designated beneficiary as otherwise provided by this chapter.

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

11.18 	Sec. 14. Minnesota Statutes 2009 Supplement, section 352.95, subdivision 2, is 
11.19 	amended to read:
11.20 		Subd. 2.Regular disability; computation of benefit. A covered correctional 
11.21 	employee who was hired before July 1, 2009, after rendering at least one year of covered 
11.22 	correctional service, or a covered correctional employee who was first hired after June 
11.23 	30, 2009, after rendering at least three years of covered correctional plan service if first 
11.24 	employed as a correctional state employee before July 1, 2010, or after rendering at least 
11.25 	ten years of covered correctional plan service if first employed as a correctional state 
11.26 	employee after June 30, 2010, and who is determined to have a regular disability, physical 
11.27 	or psychological, as defined under section 352.01, subdivision 17c, is entitled to a regular 
11.28 	disability benefit. The regular disability benefit must be based on covered correctional 
11.29 	service only. The regular disability benefit must be computed as provided in section 
11.30 	352.93, subdivisions 1 and 2. The regular disability benefit of a covered correctional 
11.31 	employee who was first hired before July 1, 2009, and who is determined to have a regular 
11.32 	disability, physical or psychological, under this subdivision must be computed as though 
11.33 	the employee had at least 15 years of covered correctional service.

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

12.1 	Sec. 15. Minnesota Statutes 2008, section 352B.02, as amended by Laws 2009, chapter 
12.2 	101, article 2, section 109; and Laws 2009, chapter 169, article 1, section 23; article 2, 
12.3 	section 16; and article 4, sections 3 and 4, is amended to read:
12.4 	352B.02 STATE PATROL RETIREMENT FUND.
12.5 		Subdivision 1.Fund created; membership. A State Patrol retirement fund 
12.6 	is established. Its membership consists of all persons defined in section 352B.011, 
12.7 	subdivision 10. 
12.8 		Subd. 1a.Member contributions. (a) The member contribution is 10.40percent
12.9 	the following percentage of the member's salary.:

12.10
12.11		(1) before the first day of the first pay 
period beginning after July 1, 2011
	10.40 percent
	
12.12
12.13		(2) on or after the first day of the first 
pay period beginning after July 1, 2011
	12.40 percent
	
12.14 	(b) These contributions must be made by deduction from salary as provided in 
12.15 	section 352.04, subdivision 4.
12.16 		Subd. 1b.Salary deductions. Member contribution amounts must be deducted each 
12.17 	pay period by the department head, who shall have the total amount of the deductions paid 
12.18 	to the commissioner of management and budget for deposit in the State Patrol retirement 
12.19 	fund, and have a detailed report of all deductions made each pay period to the executive 
12.20 	director of the Minnesota State Retirement System.
12.21 		Subd. 1c.Employer contributions. (a) In addition to member contributions, 
12.22 	department heads shall pay a sum equal to 15.60percent the specified percentage of the 
12.23 	salary upon which deductions were made, which constitutes the employer contribution 
12.24 	to the fund. as follows:

12.25
12.26		(1) before the first day of the first pay 
period beginning after July 1, 2011
	15.60 percent
	
12.27
12.28		(2) on or after the first day of the first 
pay period beginning after July 1, 2011
	18.60 percent
	
12.29 	(b) Department contributions must be paid out of money appropriated to departments 
12.30 	for this purpose.
12.31 		Subd. 1d.Fund revenue and expenses. The amounts provided for in this section 
12.32 	must be credited to the State Patrol retirement fund. All money received must be deposited 
12.33 	by the commissioner of management and budget in the State Patrol retirement fund. The 
12.34 	fund must be used to pay the administrative expenses of the retirement fund, and the 
12.35 	benefits and annuities provided in this chapter. 
12.36 		Subd. 1e.Audit; actuarial valuation. (a) The legislative auditor shall audit the 
12.37 	fund.
13.1 	(b) Any actuarial valuation of the fund required under section 356.215 must be 
13.2 	prepared by the actuary retained under section 356.214.
13.3 	(c) Any approved actuary retained by the executive director under section 352.03, 
13.4 	subdivision 6, may perform actuarial valuations and experience studies to supplement 
13.5 	those performed by the actuary retained under section 356.214. Any supplemental 
13.6 	actuarial valuation or experience studies must be filed with the executive director of the 
13.7 	Legislative Commission on Pensions and Retirement.

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

13.9 	Sec. 16. Minnesota Statutes 2008, section 352B.08, subdivision 1, is amended to read:
13.10 		Subdivision 1.Eligibility; when to apply; accrual. (a) Every member who is 
13.11 	credited with three or more years of allowable service if first employed before July 1, 
13.12 	2010, or with at least five years of allowable service if first employed after June 30, 2010, 
13.13 	is entitled to separate from state service and upon becoming 50 years old, is entitled to 
13.14 	receive a life annuity, upon separation from state service.
13.15 	(b) Members shallmust apply for an annuity in a form and manner prescribed by the 
13.16 	executive director.
13.17 	(c) No application may be made more than 90 days before the date the member is 
13.18 	eligible to retire by reason of both age and service requirements.
13.19 	(d) An annuity begins to accrue no earlier than 180 days before the date the 
13.20 	application is filed with the executive director.

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

13.22 	Sec. 17. Minnesota Statutes 2008, section 352B.08, subdivision 2a, is amended to read:
13.23 		Subd. 2a.Early retirement. Any member who has become at least 50 years old and 
13.24 	who has at least three years of allowable service if first employed before July 1, 2010, or 
13.25 	who has at least five years of allowable service if first employed after June 30, 2010, is 
13.26 	entitled upon application to a reduced retirement annuity equal to the annuity calculated 
13.27 	under subdivision 2, reduced by one-tenth of one percent for each month that the member 
13.28 	is under age 55 at the time of retirement if first employed before July 1, 2010, or reduced 
13.29 	by two-tenths of one percent for each month that the member is under age 55 at the time of 
13.30 	retirement if first employed after June 30, 2010.

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

13.32 	Sec. 18. Minnesota Statutes 2008, section 352B.11, subdivision 2b, is amended to read:
14.1 		Subd. 2b.Surviving spouse benefit eligibility. (a) If an active member with three or 
14.2 	more years of allowable service if first employed before July 1, 2010, or with at least five 
14.3 	years of allowable service if first employed after June 30, 2010, dies before attaining age 
14.4 	55, the surviving spouse is entitled to the benefit specified in subdivision 2c, paragraph (b).
14.5 	(b) If an active member with less than three years of allowable service if first 
14.6 	employed before July 1, 2010, or with fewer than five years of allowable service if first 
14.7 	employed after June 30, 2010, dies at any age, the surviving spouse is entitled to receive 
14.8 	the benefit specified in subdivision 2c, paragraph (c).
14.9 	(c) If an active member with three or more years of allowable service if first 
14.10 	employed before July 1, 2010, or with at least five years of allowable service if first 
14.11 	employed after June 30, 2010, dies on or after attaining exact age 55, the surviving spouse 
14.12 	is entitled to receive the benefits specified in subdivision 2c, paragraph (d).
14.13 	(d) If a disabilitant dies while receiving a disability benefit under section 352B.10 or 
14.14 	before the benefit under that section commenced, and an optional annuity was not elected 
14.15 	under section 352B.10, subdivision 5, the surviving spouse is entitled to receive the benefit 
14.16 	specified in subdivision 2c, paragraph (b).  
14.17 	(e) If a former member with three or more years of allowable service if first 
14.18 	employed before July 1, 2010, or with at least five years of allowable service if first 
14.19 	employed after June 30, 2010, who terminated from service and has not received a refund 
14.20 	or commenced receipt of any other benefit provided by this chapter, dies, the surviving 
14.21 	spouse is entitled to receive the benefit specified in subdivision 2c, paragraph (e).
14.22 	(f) If a former member with less than three years of allowable service if first 
14.23 	employed before July 1, 2010, or with fewer than five years of allowable service if first 
14.24 	employed after June 30, 2010, who terminated from service and has not received a refund 
14.25 	or commenced receipt of any other benefit, if applicable, provided by this chapter, dies, the 
14.26 	surviving spouse is entitled to receive the refund specified in subdivision 2c, paragraph (f).

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

14.28 	Sec. 19. Minnesota Statutes 2008, section 352B.30, subdivision 1, is amended to read:
14.29 		Subdivision 1.Entitlement to annuity. Any person who has been an employee 
14.30 	covered by the Minnesota State Retirement System, or a member of the Public Employees 
14.31 	Retirement Association including the Public Employees Retirement Association Police 
14.32 	and Fire Fund, or the Teachers Retirement Association, or the State Patrol retirement fund, 
14.33 	or any other public employee retirement system in Minnesota having a like provision but 
14.34 	excluding all other funds providing benefits for police or firefighters is entitled when 
14.35 	qualified to an annuity from each fund if total allowable service in all funds or in any two 
15.1 	of these funds totals three or morethe number of years of allowable service required by 
15.2 	the applicable retirement plan with the longest vesting period for the person. No part of 
15.3 	the allowable service upon which the retirement annuity from one fund is based may 
15.4 	again be used in the computation for benefits from another fund. The member must not 
15.5 	have taken a refund from any one of these funds since service entitling the member to 
15.6 	coverage under the system or membership in any of the associations last terminated. 
15.7 	The annuity from each fund must be determined by the appropriate law except that the 
15.8 	requirement that a person must have at least threea specific number of years allowable 
15.9 	service in the respective system or association does not apply for the purposes of this 
15.10 	section if the combined service in two or more of these funds equals three or morethe 
15.11 	number of years of allowable service required by the applicable retirement plan with 
15.12 	the longest vesting period for the person.

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

15.14 	Sec. 20. Minnesota Statutes 2008, section 352B.30, subdivision 2, is amended to read:
15.15 		Subd. 2.Computation of deferred annuity. Deferred annuities must be computed 
15.16 	according to this chapter on the basis of allowable service before termination of service 
15.17 	and augmented as provided in this chapter. The required reserves applicable to a deferred 
15.18 	annuity must be augmented by interest compounded annually from the first day of the 
15.19 	month following the month in which the member terminated service, or July 1, 1971, 
15.20 	whichever is later, to the first day of the month in which the annuity begins to accrue. The 
15.21 	rates of interest used for this purpose shallmust be five percent per year compounded 
15.22 	annually until January 1, 1981, and after that date three percent per year compounded 
15.23 	annually after January 1, 1981, until January 1, 2012, if the employee became an employee 
15.24 	before July 1, 2006, and at 2.5 percent compounded annually if the employee becomes 
15.25 	an employee after June 30, 2006, and two percent per year compounded annually after 
15.26 	December 31, 2011, irrespective of when the employee was first employed. The mortality 
15.27 	table and interest assumption used to compute the annuity shallmust be those in effect 
15.28 	when the member files application for annuity.

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

15.30 	Sec. 21. Minnesota Statutes 2008, section 352F.07, is amended to read:
15.31 	352F.07 EFFECT ON REFUND.
15.32 	Notwithstanding any provision of chapter 352 to the contrary, terminated hospital 
15.33 	employees may receive a refund of employee accumulated contributions plus interest 
16.1 	at the rate of six percent per year compounded annually in accordance with Minnesota 
16.2 	Statutes 1994, section 352.22, subdivision 2, at any time after the transfer of employment 
16.3 	to Fairview, University of Minnesota Physicians, or University Affiliated Family 
16.4 	Physicians. If a terminated hospital employee has received a refund from a pension plan 
16.5 	enumerated in section 356.30, subdivision 3, the person may not repay that refund unless 
16.6 	the person again becomes a member of one of those enumerated plans and complies 
16.7 	with section 356.30, subdivision 2.  

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

16.9 	Sec. 22. Minnesota Statutes 2008, section 353.01, is amended by adding a subdivision 
16.10 	to read:
16.11 		Subd. 47.Vesting. (a) "Vesting" means obtaining a nonforfeitable entitlement 
16.12 	to an annuity or benefit from a retirement plan administered by the Public Employees 
16.13 	Retirement Association by having credit for sufficient allowable service under paragraph 
16.14 	(b) or (c), whichever applies.
16.15 	(b) For purposes of qualifying for an annuity or benefit as a basic or coordinated plan 
16.16 	member of the general employees retirement plan of the Public Employees Retirement 
16.17 	Association:
16.18 	(1) a member who first became a public employee before July 1, 2010, is vested 
16.19 	when the person has accrued credit for not less than three years of allowable service as 
16.20 	defined under subdivision 16; and
16.21 	(2) a member who first becomes a public employee after June 30, 2010, is vested 
16.22 	when the person has accrued credit for not less than five years of allowable service 
16.23 	as defined under subdivision 16.
16.24 	(c) For purposes of qualifying for an annuity or benefit as a member of the police 
16.25 	and fire plan or a member of the local government correctional employees retirement plan:
16.26 	(1) a member who first became a public employee before July 1, 2010, is vested 
16.27 	when the person has accrued credit for not less than three years of allowable service as 
16.28 	defined under subdivision 16; and
16.29 	(2) a member who first becomes a public employee after June 30, 2010, is vested 
16.30 	at the following percentages when the person has accrued credited allowable service as 
16.31 	defined under subdivision 16, as follows:
16.32 	(i) 50 percent after five years;
16.33 	(ii) 60 percent after six years;
16.34 	(iii) 70 percent after seven years;
16.35 	(iv) 80 percent after eight years;
17.1 	(v) 90 percent after nine years; and
17.2 	(vi) 100 percent after ten years.

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

17.4 	Sec. 23. Minnesota Statutes 2009 Supplement, section 353.27, subdivision 2, is 
17.5 	amended to read:
17.6 		Subd. 2.Employee contribution. (a) For a basic member, the employee 
17.7 	contribution is 9.10 percent of salary. For a coordinated member, the employee 
17.8 	contribution is six percentthe following percentage of salary plus any contribution rate 
17.9 	adjustment under subdivision 3b.:

17.10		Effective before January 1, 2011
	6.00
	
17.11		Effective after December 31, 2010
	6.25
	
17.12 	(b) These contributions must be made by deduction from salary as defined in section 
17.13 	353.01, subdivision 10, in the manner provided in subdivision 4. If any portion of a 
17.14 	member's salary is paid from other than public funds, the member's employee contribution 
17.15 	must be based on the total salary received by the member from all sources.

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

17.17 	Sec. 24. Minnesota Statutes 2009 Supplement, section 353.27, subdivision 3, is 
17.18 	amended to read:
17.19 		Subd. 3.Employer contribution. (a) For a basic member, the employer 
17.20 	contribution is 9.10 percent of salary. For a coordinated member, the employer 
17.21 	contribution is six percentthe following percentage of salary plus any contribution rate 
17.22 	adjustment under subdivision 3b.:

17.23		Effective before January 1, 2011
	6.00
	
17.24		Effective after December 31, 2010
	6.25
	
17.25 	(b) This contribution must be made from funds available to the employing 
17.26 	subdivision by the means and in the manner provided in section 353.28.

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

17.28 	Sec. 25. Minnesota Statutes 2008, section 353.27, subdivision 3b, is amended to read:
17.29 		Subd. 3b.Change in employee and employer contributions in certain instances.
 17.30 	(a) For purposes of this section,:
18.1 	(1) a contribution sufficiency exists if the total of the employee contribution under 
18.2 	subdivision 2, the employer contribution under subdivision 3, the additional employer 
18.3 	contribution under subdivision 3a, and any additional contribution previously imposed 
18.4 	under this subdivision exceeds the total of the normal cost, the administrative expenses, 
18.5 	and the amortization contribution of the retirement plan as reported in the most recent 
18.6 	actuarial valuation of the retirement plan prepared by the actuary retained under section 
18.7 	356.214 and prepared under section 356.215 and the standards for actuarial work of the 
18.8 	Legislative Commission on Pensions and Retirement. For purposes of this section,; and
18.9 	(2) a contribution deficiency exists if the total of the employee contributions under 
18.10 	subdivision 2, the employer contributions under subdivision 3, the additional employer 
18.11 	contribution under subdivision 3a, and any additional contribution previously imposed 
18.12 	under this subdivision is less than the total of the normal cost, the administrative expenses, 
18.13 	and the amortization contribution of the retirement plan as reported in the most recent 
18.14 	actuarial valuation of the retirement plan prepared by the actuary retained under section 
18.15 	356.214 and prepared under section 356.215 and the standards for actuarial work of the 
18.16 	Legislative Commission on Pensions and Retirement.
18.17 	(b) Employee and employer contributions under subdivisions 2 and 3 must be 
18.18 	adjusted:
18.19 	(1) if, on or after July 1, 2010, the regular actuarial valuationsvaluation of the 
18.20 	general employees retirement plan of the Public Employees Retirement Association under 
18.21 	section 356.215indicateindicates that there is a contribution sufficiency under paragraph 
18.22 	(a) equal to or greater than 0.5one percent of covered payroll and that the sufficiency 
18.23 	has existed for at least two consecutive years, the coordinated program employee and 
18.24 	employer contribution rates must be decreased as determined under paragraph (c) to a 
18.25 	level such that the sufficiency equalsis no moregreater than 0.25one percent of covered 
18.26 	payroll based on the most recent actuarial valuation; or
18.27 	(2) if, on or after July 1, 2010, the regular actuarial valuationsvaluation of the 
18.28 	general employees retirement plan of the Public Employees Retirement Association under 
18.29 	section 356.215indicateindicates that there is a contribution deficiency equal to or greater 
18.30 	than 0.5 percent of covered payroll and that the deficiency has existed for at least two 
18.31 	consecutive years, the coordinated program employee and employer contribution rates 
18.32 	must be increased as determined under paragraph (c)(d) to a level such that no deficiency 
18.33 	exists based on the most recent actuarial valuation.
18.34 	(c) The contribution rate increase or decrease must be determined by the executive 
18.35 	director of the Public Employees Retirement Association, must be reported to the chair 
18.36 	and the executive director of the Legislative Commission on Pensions and Retirement 
19.1 	on or before the next February 1, and, if the Legislative Commission on Pensions and 
19.2 	Retirement does not recommend against the rate change or does not recommend a 
19.3 	modification in the rate change, is effective on the next July 1 following the determination 
19.4 	by the executive director that a contribution deficiency or sufficiency has existed for 
19.5 	two consecutive fiscal years based on the most recent actuarial valuations under section 
19.6 	356.215. If the actuarially required contribution exceeds or is less than the total support 
19.7 	provided by the combined employee and employer contribution rates under subdivisions 
19.8 	2, 3, and 3a, by more than 0.5one percent of covered payroll, the coordinated program 
19.9 	employee and employer contribution rates under subdivisions 2 and 3 must be adjusted
19.10 	decreased incrementally over one or more years by no more than 0.25 percent of pay each 
19.11 	for employee and employer matching contribution rates to a level such that there remains 
19.12 	a contribution sufficiency of no more than 0.25at least one percent of covered payroll. No 
19.13 	contribution rate decrease may be made until at least two years have elapsed since any 
19.14 	adjustment under this subdivision has been fully implemented.
19.15 	(d) NoIf the actuarially required contribution exceeds the total support provided 
19.16 	by the combined employee and employer contribution rates under subdivisions 2, 3, and 
19.17 	3a, the employee and matching employer contribution rates must be increased equally to 
19.18 	eliminate that contribution deficiency. If the contribution deficiency is:
19.19 	(1) less than two percent, the incremental adjustmentincrease may exceedbe up 
19.20 	to 0.25 percent for either the coordinated program employee and matching employer 
19.21 	contribution rates per year in which any adjustment is implemented. A contribution rate 
19.22 	adjustment under this subdivision must not be made until at least two years have passed 
19.23 	since fully implementing a previous adjustment under this subdivision.;
19.24 	(2) greater than 1.99 percent and less than 4.01 percent, the incremental increase 
19.25 	may be up to 0.5 percent for the employee and matching employer contribution rates; or
19.26 	(3) greater than four percent, the incremental increase may be up to 0.75 percent for 
19.27 	the employee and matching employer contribution.
19.28 	(e) Any recommended adjustment to the contribution rates must be reported 
19.29 	to the chair and the executive director of the Legislative Commission on Pensions 
19.30 	and Retirement by January 15 following receipt of the most recent annual actuarial 
19.31 	valuation prepared under section 356.215. If the Legislative Commission on Pensions 
19.32 	and Retirement does not recommend against the rate change or does not recommend a 
19.33 	modification in the rate change, the recommended adjustment becomes effective on the 
19.34 	first day of the first full payroll period in the fiscal year following receipt of the most 
19.35 	recent actuarial valuation that gave rise to the adjustment.
20.1 	(f) A contribution sufficiency of up to one percent of covered payroll must be held in 
20.2 	reserve to be used to offset any future actuarially required contributions that are more than 
20.3 	the total combined employee and employer contributions under subdivisions 2, 3, and 3a.
20.4 	(g) Before any reduction in contributions to eliminate a sufficiency in excess of one 
20.5 	percent of covered pay may be recommended, the executive director must review any 
20.6 	need for a change in actuarial assumptions, as recommended by the actuary retained under 
20.7 	section 356.214 in the most recent experience study of the general employees retirement 
20.8 	plan prepared under section 356.215 and the standards for actuarial work promulgated by 
20.9 	the Legislative Commission on Pensions and Retirement that may result in an increase 
20.10 	in the actuarially required contribution and must report to the Legislative Commission 
20.11 	on Pensions and Retirement any recommendation by the board to use the sufficiency 
20.12 	exceeding one percent of covered payroll to offset the impact of an actuarial assumption 
20.13 	change recommended by the actuary retained under section 356.214, subdivision 1, and 
20.14 	reviewed by the actuary retained by the commission under section 356.214, subdivision 4.
20.15 	(h) No contribution sufficiency in excess of one percent of covered pay may be 
20.16 	proposed to be used to increase benefits, and no benefit increase may be proposed that 
20.17 	would initiate an automatic adjustment to increase contributions under this subdivision. 
20.18 	Any proposed benefit improvement must include a recommendation, prepared by the 
20.19 	actuary retained under section 356.214, subdivision 1, and reviewed by the actuary 
20.20 	retained by the Legislative Commission on Pensions and Retirement as provided under 
20.21 	section 356.214, subdivision 4, on how the benefit modification will be funded.

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

20.23 	Sec. 26. Minnesota Statutes 2008, section 353.29, subdivision 1, is amended to read:
20.24 		Subdivision 1.Age and allowable service requirements. Upon termination of 
20.25 	membership, a person who has attained normal retirement age and who received credit for 
20.26 	not less than three years of allowable serviceis vested under section 353.01, subdivision 
20.27 	47, is entitled upon application to a retirement annuity. The retirement annuity is known 
20.28 	as the "normal" retirement annuity.

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

20.30 	Sec. 27. Minnesota Statutes 2008, section 353.30, subdivision 1c, is amended to read:
20.31 		Subd. 1c.Pre-July 1, 1989, members: early retirement. Upon termination of 
20.32 	public service, a person who first became a public employee or a member of a pension 
20.33 	fund listed in section 356.30, subdivision 3, before July 1, 1989, who has become at least 
21.1 	55 years old but not normal retirement age, and has received credit for at least three years 
21.2 	of allowable serviceis vested under section 353.01, subdivision 47, is entitled, upon 
21.3 	application, to a retirement annuity in an amount equal to the normal annuity provided in 
21.4 	section 353.29, subdivision 3, paragraph (a), reduced by one-quarter of one percent for 
21.5 	each month that the member is under normal retirement age at the time of retirement. 

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

21.7 	Sec. 28. Minnesota Statutes 2008, section 353.32, subdivision 1, is amended to read:
21.8 		Subdivision 1.Before retirement. If a member or former member who terminated 
21.9 	public service dies before retirement or before receiving any retirement annuity and no 
21.10 	other payment of any kind is or may become payable to any person, a refund shall be paid
21.11 	is payable to the designated beneficiary or, if there be none, to the surviving spouse, 
21.12 	or, if none, to the legal representative of the decedent's estate. SuchThe refund shall
21.13 	must be in an amount equal to accumulated deductions plus annual compound interest 
21.14 	thereon at the rate of six percent per annum compounded annuallyspecified in section 
21.15 	353.34, subdivision 2, and less the sum of any disability or survivor benefits, if any, that 
21.16 	may have been paid by the fund; provided that a survivor who has a right to benefits 
21.17 	pursuant tounder section 353.31 may waive such benefits in writing, except such benefits 
21.18 	for a dependent child under the age of 18 years may only be waived pursuant tounder an 
21.19 	order of the district court.  

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

21.21 	Sec. 29. Minnesota Statutes 2008, section 353.32, subdivision 1a, is amended to read:
21.22 		Subd. 1a.Surviving spouse optional annuity. (a) If a member or former member 
21.23 	who has credit for not less than three years of allowable serviceis vested under section 
21.24 	353.01, subdivision 47, and who dies before the annuity or disability benefit begins to 
21.25 	accrue under section 353.29, subdivision 7, or 353.33, subdivision 2, notwithstanding any 
21.26 	designation of beneficiary to the contrary, the surviving spouse may elect to receive, 
21.27 	instead of a refund with interest under subdivision 1, or surviving spouse benefits otherwise 
21.28 	payable under section 353.31, an annuity equal to a 100 percent joint and survivor annuity 
21.29 	computed consistent with section 353.30, subdivision 1a, 1c, or 5, whichever is applicable. 
21.30 	(b) If a member first became a public employee or a member of a pension fund listed 
21.31 	in section 356.30, subdivision 3, before July 1, 1989, and has credit for at least 30 years 
21.32 	of allowable service on the date of death, the surviving spouse may elect to receive a 
21.33 	100 percent joint and survivor annuity computed using section 353.30, subdivision 1b, 
22.1 	except that the early retirement reduction under that provision will be applied from age 
22.2 	62 back to age 55 and one-half of the early retirement reduction from age 55 back to 
22.3 	the age payment begins. 
22.4 	(c) If a member who was under age 55 and has credit for at least three years of 
22.5 	allowable servicewho is vested under section 353.01, subdivision 47, dies, but did not 
22.6 	qualify for retirement on the date of death, the surviving spouse may elect to receive a 
22.7 	100 percent joint and survivor annuity computed using section 353.30, subdivision 1c or 
22.8 	5, as applicable, except that the early retirement reduction specified in the applicable 
22.9 	subdivision will be applied to age 55 and one-half of the early retirement reduction from 
22.10 	age 55 back to the age payment begins. 
22.11 	(d) Notwithstanding the definition of surviving spouse in section 353.01, subdivision 
22.12 	20, a former spouse of the member, if any, is entitled to a portion of the monthly surviving 
22.13 	spouse optional annuity if stipulated under the terms of a marriage dissolution decree filed 
22.14 	with the association. If there is no surviving spouse or child or children, a former spouse 
22.15 	may be entitled to a lump-sum refund payment under subdivision 1, if provided for in a 
22.16 	marriage dissolution decree, but not a monthly surviving spouse optional annuity, despite 
22.17 	the terms of a marriage dissolution decree filed with the association. 
22.18 	(e) The surviving spouse eligible for surviving spouse benefits under paragraph (a) 
22.19 	may apply for the annuity at any time after the date on which the deceased employee 
22.20 	would have attained the required age for retirement based on the employee's allowable 
22.21 	service. The surviving spouse eligible for surviving spouse benefits under paragraph (b) or 
22.22 	(c) may apply for an annuity any time after the member's death. 
22.23 	(f) Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred 
22.24 	annuity or surviving spouse benefit payable under this subdivision. 
22.25 	(g) An amount equal to any excess of the accumulated contributions that were 
22.26 	credited to the account of the deceased employee over and above the total of the annuities 
22.27 	paid and payable to the surviving spouse must be paid to the surviving spouse's estate. 
22.28 	(h) A member may specify in writing, with the signed consent of the spouse, that 
22.29 	this subdivision does not apply and that payment may be made only to the designated 
22.30 	beneficiary as otherwise provided by this chapter. The waiver of a surviving spouse 
22.31 	annuity under this section does not make a dependent child eligible for benefits under 
22.32 	subdivision 1c. 
22.33 	(i) If the deceased member or former member first became a public employee or a 
22.34 	member of a public pension plan listed in section 356.30, subdivision 3, on or after July 
22.35 	1, 1989, a survivor annuity computed under paragraph (a) or (c) must be computed as 
23.1 	specified in section 353.30, subdivision 5, except for the revised early retirement reduction 
23.2 	specified in paragraph (c), if paragraph (c) is the applicable provision.
23.3 	(j) For any survivor annuity determined under this subdivision, the payment is to be 
23.4 	based on the total allowable service that the member had accrued as of the date of death 
23.5 	and the age of the member and surviving spouse on that date.

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

23.7 	Sec. 30. Minnesota Statutes 2009 Supplement, section 353.33, subdivision 1, is 
23.8 	amended to read:
23.9 		Subdivision 1.Age, service, and salary requirements. (a) A coordinated or 
23.10 	basic member who has at least three years of allowable serviceis vested under section 
23.11 	353.01, subdivision 47, and who becomes totally and permanently disabled before normal 
23.12 	retirement age, upon application as defined under section 353.031, is entitled to a disability 
23.13 	benefit in an amount determined under subdivision 3.
23.14 	(b) If the disabled person's public service has terminated at any time, at least two of 
23.15 	the required three years of allowable service required to be vested under section 353.01, 
23.16 	subdivision 47, must have been rendered after last becoming an active member. 

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

23.18 	Sec. 31. Minnesota Statutes 2008, section 353.34, subdivision 1, is amended to read:
23.19 		Subdivision 1.Refund or deferred annuity. (a) A former member is entitled to 
23.20 	either a refund of accumulated employee deductions under subdivision 2, or to a deferred 
23.21 	annuity under subdivision 3. Application for a refund may not be made before the date of 
23.22 	termination of public service. Except as specified in paragraph (b), a refund must be paid 
23.23 	within 120 days following receipt of the application unless the applicant has again become 
23.24 	a public employee required to be covered by the association.
23.25 	(b) If an individual was placed on layoff under section 353.01, subdivision 12 or 12c, 
23.26 	a refund is not payable before termination of service under section 353.01, subdivision 11a. 
23.27 	(c) An individual who terminates public service covered by the Public Employees 
23.28 	Retirement Association general employees retirement plan, the Public Employees 
23.29 	Retirement Association police and fire retirement plan, or the public employees local 
23.30 	government correctionscorrectional service retirement plan, and who is employed by a 
23.31 	different employer and who becomes an active member covered by one of the other two 
23.32 	plans, may receive a refund of employee contributions plus six percentannual compound 
24.1 	interest compounded annually from the plan from which the member terminated service at 
24.2 	the applicable rate specified in subdivision 2.

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

24.4 	Sec. 32. Minnesota Statutes 2008, section 353.34, subdivision 2, is amended to read:
24.5 		Subd. 2.Refund with interest. (a) Except as provided in subdivision 1, any person 
24.6 	who ceases to be a public employee shallis entitled to receive a refund in an amount equal 
24.7 	to accumulated deductions with annual compound interest to the first day of the month 
24.8 	in which the refund is processed at the rate of six percent compounded annually based 
24.9 	on fiscal year balances.
24.10 	(b) For a person who ceases to be a public employee before July 1, 2011, the refund 
24.11 	interest is at the rate of six percent to June 30, 2011, and at the rate of four percent after 
24.12 	June 30, 2011. For a person who ceases to be a public employee after July 1, 2011, the 
24.13 	refund interest is at the rate of four percent.
24.14 	(c) If a person repays a refund and subsequently applies for another refund, the 
24.15 	repayment amount, including interest, is added to the fiscal year balance in which the 
24.16 	repayment was made.

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

24.18 	Sec. 33. Minnesota Statutes 2008, section 353.34, subdivision 3, is amended to read:
24.19 		Subd. 3.Deferred annuity; eligibility; computation. (a) A member with at least 
24.20 	three years of allowable servicewho is vested under section 353.01, subdivision 47, when 
24.21 	termination of public service or termination of membership occurs has the option of 
24.22 	leaving the accumulated deductions in the fund and being entitled to a deferred retirement 
24.23 	annuity commencing at normal retirement age or to a deferred early retirement annuity 
24.24 	under section 353.30, subdivision 1a, 1b, 1c, or 5.
24.25 	(b) The deferred annuity must be computed under section 353.29, subdivision 3, on 
24.26 	the basis of the law in effect on the date of termination of public service or termination of 
24.27 	membership, whichever is earlier, and must be augmented as provided in section 353.71, 
24.28 	subdivision 2.
24.29 	(c) A former member qualified to apply for a deferred retirement annuity may 
24.30 	revoke this option at any time before the commencement of deferred annuity payments 
24.31 	by making application for a refund. The person is entitled to a refund of accumulated 
24.32 	member contributions within 30 days following date of receipt of the application by the 
24.33 	executive director. 

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

25.2 	Sec. 34. Minnesota Statutes 2009 Supplement, section 353.65, subdivision 2, is 
25.3 	amended to read:
25.4 		Subd. 2.Employee contribution.  The employee contribution is 9.4 percent of the 
25.5 	salary of the member in calendar year 2010 and is 9.6 percent of the salary of the member 
25.6 	in each calendar year after 2010. This contribution must be made by deduction from 
25.7 	salary in the manner provided in subdivision 4. Where any portion of a member's salary 
25.8 	is paid from other than public funds, the member's employee contribution is based on 
25.9 	the total salary received from all sources.

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

25.11 	Sec. 35. Minnesota Statutes 2009 Supplement, section 353.65, subdivision 3, is 
25.12 	amended to read:
25.13 		Subd. 3.Employer contribution.  The employer contribution is 14.1 percent of the 
25.14 	salary of the member in calendar year 2010 and is 14.4 percent of the salary of the member 
25.15 	in each calendar year after 2010. This contribution must be made from funds available to 
25.16 	the employing subdivision by the means and in the manner provided in section 353.28.

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

25.18 	Sec. 36. Minnesota Statutes 2008, section 353.651, subdivision 1, is amended to read:
25.19 		Subdivision 1.Age and allowable service requirements. Upon separation from 
25.20 	public service, any police officer or firefighter member who has attained the age of at 
25.21 	least 55 years and who received credit for not less than three years of allowable service
25.22 	is vested under section 353.01, subdivision 47, is entitled upon application to a retirement 
25.23 	annuity. Such retirement annuity is, known as the "normal" retirement annuity.

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

25.25 	Sec. 37. Minnesota Statutes 2008, section 353.651, subdivision 4, is amended to read:
25.26 		Subd. 4.Early retirement. (a) A person who becomes a police and fire plan 
25.27 	member after June 30, 2007, or a former member who is reinstated as a member of the 
25.28 	plan after that date, who is at least 50 years of age with at least three years of allowable 
25.29 	service and who is vested under section 353.01, subdivision 47, upon the termination of 
25.30 	public service is entitled upon application to a retirement annuity equal to the normal 
26.1 	annuity calculated under subdivision 3, reduced by two-tenths of one percent for each 
26.2 	month that the member is under age 55 at the time of retirement.
26.3 	(b) Upon the termination of public service, any police and fire plan member not 
26.4 	specified in paragraph (a), upon attaining at least 50 years of age with at least three years 
26.5 	of allowable service is entitled upon application to a retirement annuity equal to the 
26.6 	normal annuity calculated under subdivision 3, reduced by one-tenth of one percent for 
26.7 	each month that the member is under age 55 at the time of retirement.

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

26.9 	Sec. 38. Minnesota Statutes 2008, section 353.657, subdivision 1, is amended to read:
26.10 		Subdivision 1.Generally. (a) In the event that a member of the police and fire 
26.11 	fund dies from any cause before retirement or before becoming disabled and receiving 
26.12 	disability benefits, the association shall grant survivor benefits to a surviving spouse, as 
26.13 	defined in section 353.01, subdivision 20, and to a dependent child or children, as defined 
26.14 	in section 353.01, subdivision 15, except that if the death is not a line of duty death, the 
26.15 	member must have accrued at least three years of credited service be vested under section 
26.16 	353.01, subdivision 47.
26.17 	(b) Notwithstanding the definition of surviving spouse, a former spouse of the 
26.18 	member, if any, is entitled to a portion of the monthly surviving spouse benefit if 
26.19 	stipulated under the terms of a marriage dissolution decree filed with the association. If 
26.20 	there is no surviving spouse or child or children, a former spouse may be entitled to 
26.21 	a lump-sum refund payment under section 353.32, subdivision 1, if provided for in a 
26.22 	marriage dissolution decree but not a monthly surviving spouse benefit despite the terms 
26.23 	of a marriage dissolution decree filed with the association.
26.24 	(c) The spouse and child or children are entitled to monthly benefits as provided in 
26.25 	subdivisions 2 to 4.

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

26.27 	Sec. 39. Minnesota Statutes 2008, section 353.657, subdivision 2a, is amended to read:
26.28 		Subd. 2a.Death while eligible survivor benefit. (a) If a member or former member 
26.29 	who has attained the age of at least 50 years and has credit for not less than three years 
26.30 	allowable serviceeither who is vested under section 353.01, subdivision 47, or who has 
26.31 	credit for at least 30 years of allowable service, regardless of age attained, dies before 
26.32 	the annuity or disability benefit becomes payable, notwithstanding any designation of 
27.1 	beneficiary to the contrary, the surviving spouse may elect to receive a death while 
27.2 	eligible survivor benefit.
27.3 	(b) Notwithstanding the definition of surviving spouse in section 353.01, subdivision 
27.4 	20, a former spouse of the member, if any, is entitled to a portion of the death while 
27.5 	eligible survivor benefit if stipulated under the terms of a marriage dissolution decree 
27.6 	filed with the association. If there is no surviving spouse or child or children, a former 
27.7 	spouse may be entitled to a lump-sum refund payment under section 353.32, subdivision 
27.8 	1, if provided for in a marriage dissolution decree but not a death while eligible survivor 
27.9 	benefit despite the terms of a marriage dissolution decree filed with the association. 
27.10 	(c) The benefit may be elected instead of a refund with interest under section 353.32, 
27.11 	subdivision 1, or surviving spouse benefits otherwise payable under subdivisions 1 and 
27.12 	2. The benefit must be an annuity equal to the 100 percent joint and survivor annuity 
27.13 	which the member could have qualified for on the date of death, computed as provided in 
27.14 	sections 353.651, subdivisions 2 and 3, and 353.30, subdivision 3. 
27.15 	(d) The surviving spouse may apply for the annuity at any time after the date 
27.16 	on which the deceased employee would have attained the required age for retirement 
27.17 	based on the employee's allowable service. Sections 353.34, subdivision 3, and 353.71, 
27.18 	subdivision 2, apply to a deferred annuity payable under this subdivision.
27.19 	(e) No payment accrues beyond the end of the month in which entitlement to 
27.20 	such annuity has terminated. An amount equal to the excess, if any, of the accumulated 
27.21 	contributions which were credited to the account of the deceased employee over and 
27.22 	above the total of the annuities paid and payable to the surviving spouse must be paid to 
27.23 	the deceased member's last designated beneficiary or, if none, to the legal representative of 
27.24 	the estate of such deceased member.
27.25 	(f) Any member may request in writing, with the signed consent of the spouse, that 
27.26 	this subdivision not apply and that payment be made only to the designated beneficiary, as 
27.27 	otherwise provided by this chapter.
27.28 	(g) For a member who is employed as a full-time firefighter by the Department of 
27.29 	Military Affairs of the state of Minnesota, allowable service as a full-time state Military 
27.30 	Affairs Department firefighter credited by the Minnesota State Retirement System may be 
27.31 	used in meeting the minimum allowable service requirement of this subdivision.

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

27.33 	Sec. 40. Minnesota Statutes 2008, section 353.71, subdivision 1, is amended to read:
27.34 		Subdivision 1.Eligibility. Any person who has been a member of a defined benefit 
27.35 	retirement plan administered by the Public Employees Retirement Association, or a 
28.1 	retirement plan administered by the Minnesota State Retirement System, or the Teachers 
28.2 	Retirement Association, or any other public retirement system in the state of Minnesota 
28.3 	having a like provision, except a fundretirement plan providing benefits for police officers 
28.4 	or firefighters governed by sections 69.77 or 69.771 to 69.776, shall beis entitled, when 
28.5 	qualified, to an annuity from each fundretirement plan if the total allowable service in all 
28.6 	fundsretirement plans or in any two of these fundsretirement plans totals three or more 
28.7 	years the number of years of allowable service required to receive a normal retirement 
28.8 	annuity for that retirement plan, provided that no portion of the allowable service upon 
28.9 	which the retirement annuity from one fundretirement plan is based is again used in the 
28.10 	computation for benefits from another fundretirement plan and provided further that the 
28.11 	person has not taken a refund from any one of these fundsretirement plans since the 
28.12 	person's membership in that association or system last terminated. The annuity from 
28.13 	each fund shallmust be determined by the appropriate provisions of the law except that 
28.14 	the requirement that a person must have at least three yearsa specific minimum period 
28.15 	of allowable service in the respective association or system shalldoes not apply for the 
28.16 	purposes of this section providedif the combined service in two or more of these funds
28.17 	retirement plans equals three or morethe number of years of allowable service required to 
28.18 	receive a normal retirement annuity for that retirement plan. 

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

28.20 	Sec. 41. Minnesota Statutes 2008, section 353.71, subdivision 2, is amended to read:
28.21 		Subd. 2.Deferred annuity computation; augmentation. (a) The deferred annuity 
28.22 	accruing under subdivision 1, or under sections 353.34, subdivision 3, and 353.68, 
28.23 	subdivision 4, must be computed on the basis of allowable service prior to the termination 
28.24 	of public service and augmented as provided in this paragraph subdivision. The required 
28.25 	reserves applicable to a deferred annuity, or to any deferred segment of an annuity must 
28.26 	be determined as of the first day of the month following the month in which the former 
28.27 	member ceased to be a public employee, or July 1, 1971, whichever is later. These
28.28 	(b) For a person who became a public employee before July 1, 2006, whose period 
28.29 	of deferral began after June 30, 1971, and who terminated public employment before 
28.30 	January 1, 2012, the required reserves of the deferred annuity must be augmented at 
28.31 	the following applicable rate of or rates:
28.32 	(1) five percent annually compounded annuallyannual compound interest until 
28.33 	January 1, 1981, and at the rate of;
28.34 	(2)  three percent thereafterannual compound interest after January 1, 1981, or until 
28.35 	the earlier of December 31, 2011, or after the date of the termination of public service or 
29.1 	the termination of membership, whichever is later, until January 1 of the year following 
29.2 	the year in which the former member attains age 55 and;
29.3 	(3) five percent annual compound interest from that date to the effective date of 
29.4 	retirement, the rate is five percent compounded annually if the employee became an 
29.5 	employee before July 1, 2006, and at 2.5 percent compounded annually if the employee 
29.6 	becomes an January 1 of the year following the year in which the former member attains 
29.7 	age 55, or until December 31, 2011, whichever is earlier; and
29.8 	(4) one percent annual compound interest from January 1, 2012.
29.9 	(c) For a person who became a public employee after June 30, 2006, and who 
29.10 	terminated public employment before January 1, 2012, the required reserves of the 
29.11 	deferred annuity must be augmented at 2.5 percent annual compound interest from the date 
29.12 	of termination of public service or termination of membership, whichever is earlier, until 
29.13 	December 31, 2011, and one percent annual compound interest after December 31, 2011.
29.14 	(d) For a person who terminates public employment after December 31, 2011, the 
29.15 	required reserves of the deferred annuity must not be augmented.
29.16 	(e) If a person has more than one period of uninterrupted service, the required 
29.17 	reserves related to each period must be augmented as specified in this paragraph. The sum 
29.18 	of the augmented required reserves is the present value of the annuity. Uninterrupted 
29.19 	service for the purpose of this subdivision means periods of covered employment during 
29.20 	which the employee has not been separated from public service for more than two years. 
29.21 	If a person repays a refund, the restored service must be considered as continuous with the 
29.22 	next period of service for which the employee has credit with this association. This section 
29.23 	must not reduce the annuity otherwise payable under this chapter. This paragraph applies 
29.24 	to individuals who become deferred annuitants on or after July 1, 1971. For a member 
29.25 	who became a deferred annuitant before July 1, 1971, the paragraph applies from July 1, 
29.26 	1971, if the former active member applies for an annuity after July 1, 1973. 
29.27 	(b)(f) The retirement annuity or disability benefit of, or the survivor benefit payable 
29.28 	on behalf of, a former member who terminated service before July 1, 1997, or the 
29.29 	survivor benefit payable on behalf of a basic or police and fire member who was receiving 
29.30 	disability benefits before July 1, 1997, which is first payable after June 30, 1997, must 
29.31 	be increased on an actuarial equivalent basis to reflect the change in the postretirement 
29.32 	interest rate actuarial assumption under section 356.215, subdivision 8, from five percent 
29.33 	to six percent under a calculation procedure and tables adopted by the board and approved 
29.34 	by the actuary retained under section 356.214. 

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

30.1 	Sec. 42. Minnesota Statutes 2008, section 353E.04, subdivision 1, is amended to read:
30.2 		Subdivision 1.Eligibility requirements. After termination of public employment, 
30.3 	an employee covered under section 353E.02 who has attained the age of at least 55 years 
30.4 	and has credit for not less than three years of coveragewho is vested under section 
30.5 	353.01, subdivision 47, in the local government correctional service plan is entitled, upon 
30.6 	application, to a normal retirement annuity. Instead of a normal retirement annuity, a 
30.7 	retiring employee may elect to receive the optional annuity provided in section 353.30, 
30.8 	subdivision 3.  

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

30.10 	Sec. 43. Minnesota Statutes 2008, section 353E.04, subdivision 4, is amended to read:
30.11 		Subd. 4.Early retirement. An employee covered under section 353E.02 who has 
30.12 	attained the age of at least 50 years and has credit for not less than three years of coverage
30.13 	who is vested under section 353.01, subdivision 47, in the local government correctional 
30.14 	service plan is entitled, upon application, to a reduced retirement annuity equal to the 
30.15 	annuity calculated under subdivision 3, reduced so that the reduced annuity is the actuarial 
30.16 	equivalent of the annuity that would be payable if the employee deferred receipt of the 
30.17 	annuity from the day the annuity begins to accrue until age 55.  

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

30.19 	Sec. 44. Minnesota Statutes 2008, section 353E.07, subdivision 1, is amended to read:
30.20 		Subdivision 1.Member at least age 50. If a member or former member of the local 
30.21 	government correctional service retirement plan who has attained the age of at least 50 
30.22 	years and has credit for not less than three years of allowable servicewho is vested under 
30.23 	section 353.01, subdivision 47, dies before the annuity or disability benefit has become 
30.24 	payable, notwithstanding any designation of beneficiary to the contrary, the surviving 
30.25 	spouse may elect to receive, in lieu of a refund with interest provided in section 353.32, 
30.26 	subdivision 1, a surviving spouse annuity equal to the 100 percent joint and survivor 
30.27 	annuity for which the member could have qualified had the member terminated service 
30.28 	on the date of death. 

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

30.30 	Sec. 45. Minnesota Statutes 2008, section 353E.07, subdivision 2, is amended to read:
30.31 		Subd. 2.Member not yet age 50. If the member was under age 50, dies, and had 
30.32 	credit for not less than three years of allowable servicewas vested under section 353.01, 
31.1 	subdivision 47, on the date of death but did not yet qualify for retirement, the surviving 
31.2 	spouse may elect to receive a 100 percent joint and survivor annuity based on the age 
31.3 	of the employee and the surviving spouse at the time of death. The annuity is payable 
31.4 	using the early retirement reduction under section 353E.04, subdivision 4, to age 50 and 
31.5 	one-half the early retirement reduction from age 50 to the age payment begins. Sections 
31.6 	353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred annuity or surviving 
31.7 	spouse benefit payable under this subdivision. 

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

31.9 	Sec. 46. Minnesota Statutes 2008, section 353F.03, is amended to read:
31.10 	353F.03 VESTING RULE FOR CERTAIN EMPLOYEES.
31.11 	Notwithstanding any provision of chapter 353 to the contrary, a terminated medical 
31.12 	facility or other public employing unit employee is eligible to receive a retirement annuity 
31.13 	under section 353.29 of the edition of Minnesota Statutes published in the year before the 
31.14 	year in which the privatization occurred, without regard to the requirement for three years 
31.15 	of allowable service specified in section 353.01, subdivision 47.  

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

31.17 	Sec. 47. Minnesota Statutes 2009 Supplement, section 354.42, subdivision 2, is 
31.18 	amended to read:
31.19 		Subd. 2.Employee contribution. (a) For a basic member, the employee 
31.20 	contribution to the fund is 9.0 percentthe following percentage of the member's salary.:

31.21		before July 1, 2011
	9.0 percent
	
31.22		from July 1, 2011, until June 30, 2012
	9.5 percent
	
31.23		from July 1, 2012, until June 30, 2013
	10.0 percent
	
31.24		from July 1, 2013, until June 30, 2014
	10.5 percent
	
31.25		after June 30, 2014
	11.0 percent
	
31.26 	(b) For a coordinated member, the employee contribution is 5.5 percent the following 
31.27 	percentage of the member's salary.:

31.28		before July 1, 2011
	5.5 percent
	
31.29		from July 1, 2011, until June 30, 2012
	6.0 percent
	
31.30		from July 1, 2012, until June 30, 2013
	6.5 percent
	
31.31		from July 1, 2013, until June 30, 2014
	7.0 percent
	
31.32		after June 30, 2014
	7.5 percent
	
32.1 	(c) When an employee contribution rate changes for a fiscal year, the new 
32.2 	contribution rate is effective for the entire salary paid for each employer unit with the 
32.3 	first payroll cycle reported.
32.4 	(d) After June 30, 2015, if a contribution rate revision is required under subdivisions 
32.5 	4a, 4b, and 4c, the employee contributions under paragraphs (a) and (b) must be adjusted 
32.6 	accordingly.
32.7 	(b)(e) This contribution must be made by deduction from salary. Where any portion 
32.8 	of a member's salary is paid from other than public funds, the member's employee 
32.9 	contribution must be based on the entire salary received.

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

32.11 	Sec. 48. Minnesota Statutes 2008, section 354.42, subdivision 3, is amended to read:
32.12 		Subd. 3.Employer. (a) The regular employer contribution to the fund by Special 
32.13 	School District No. 1, Minneapolis, after July 1, 2006, and before July 1, 2007, is an 
32.14 	amount equal to 5.0 percent of the salary of each of its teachers who is a coordinated 
32.15 	member and 9.0 percent of the salary of each of its teachers who is a basic member. After 
32.16 	July 1, 2007, the regular employer contribution to the fund by Special School District No. 
32.17 	1, Minneapolis, is an amount equal to 5.5 percentthe applicable following percentage of 
32.18 	salary of each coordinated member and 9.5 percentthe applicable following percentage 
32.19 	of salary of each basic member.:

32.20		Period
	Coordinated Member
	Basic Member
	
32.21		before July 1, 2011
		5.5 percent
		9.5 percent
	
32.22		from July 1, 2011, until June 30, 2012
		6.0 percent
		10.0 percent
	
32.23		from July 1, 2012, until June 30, 2013
		6.5 percent
		10.5 percent
	
32.24		from July 1, 2013, until June 30, 2014
		7.0 percent
		11.0 percent
	
32.25		after June 30, 2014
		7.5 percent
		11.5 percent
	
32.26 	 The additional employer contribution to the fund by Special School District No. 1, 
32.27 	Minneapolis, after July 1, 2006, is an amount equal to 3.64 percent of the salary of each 
32.28 	teacher who is a coordinated member or is a basic member.
32.29 	(b) The employer contribution to the fund for every other employer is an amount 
32.30 	equal to 5.0 percentthe applicable following percentage of the salary of each coordinated 
32.31 	member and 9.0 percentthe applicable following percentage of the salary of each basic 
32.32 	member before July 1, 2007, and 5.5 percent of the salary of each coordinated member 
32.33 	and 9.5 percent of the salary of each basic member after June 30, 2007.:

32.34		Period
	Coordinated Member
	Basic Member
	
32.35		before July 1, 2011
		5.5 percent
		9.5 percent
	
33.1		from July 1, 2011, until June 30, 2012
		6.0 percent
		10.0 percent
	
33.2		from July 1, 2012, until June 30, 2013
		6.5 percent
		10.5 percent
	
33.3		from July 1, 2013, until June 30, 2014
		7.0 percent
		11.0 percent
	
33.4		after June 30, 2014
		7.5 percent
		11.5 percent
	
33.5 	(c) When an employer contribution rate changes for a fiscal year, the new 
33.6 	contribution rate is effective for the entire salary paid for each employer unit with the 
33.7 	first payroll cycle reported.
33.8 	(d) After June 30, 2015, if a contribution rate revision is made under subdivisions 
33.9 	4a, 4b, and 4c, the employer contributions under paragraphs (a) and (b) must be adjusted 
33.10 	accordingly.

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

33.12 	Sec. 49. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision 
33.13 	to read:
33.14 		Subd. 4a.Determination. (a) For purposes of this section, a contribution 
33.15 	sufficiency exists if the total of the employee contributions, the employer contributions, 
33.16 	and any additional employer contributions, if applicable, exceeds the total of the normal 
33.17 	cost, the administrative expenses, and the amortization contribution of the retirement plan 
33.18 	as reported in the most recent actuarial valuation of the retirement plan prepared by the 
33.19 	approved actuary retained under section 356.214 and prepared under section 356.215 
33.20 	and the standards for actuarial work of the Legislative Commission on Pensions and 
33.21 	Retirement.
33.22 	(b) For purposes of this section, a contribution deficiency exists if the total of 
33.23 	the employee contributions, the employer contributions, and any additional employer 
33.24 	contributions are less than the total of the normal cost, the administrative expenses, and 
33.25 	the amortization contribution of the retirement plan as reported in the most recent actuarial 
33.26 	valuation of the retirement plan prepared by the approved actuary retained under section 
33.27 	356.214 and prepared under section 356.215 and the standards for actuarial work of the 
33.28 	Legislative Commission on Pensions and Retirement.

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

33.30 	Sec. 50. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision 
33.31 	to read:
34.1 		Subd. 4b.Contribution rate revision. Notwithstanding the contribution rate 
34.2 	provisions under subdivisions 2 and 3, the employee and employer contribution rates 
34.3 	may be adjusted as follows:
34.4 	(1) if, after June 30, 2015, the regular actuarial valuation of the plan under section 
34.5 	356.215 indicates that there is a contribution sufficiency under subdivision 4a equal to 
34.6 	or greater than one percent of covered payroll and the sufficiency has existed for at least 
34.7 	two consecutive years, the employee and employer contribution rates for the plan may 
34.8 	each be decreased to a level such that the sufficiency equals no more than one percent of 
34.9 	covered payroll based on the most recent actuarial valuation; or
34.10 	(2) if, after June 30, 2015, the regular valuation of the plan under section 356.215 
34.11 	indicates that there is a deficiency equal to or greater than 0.25 percent of covered payroll 
34.12 	and the deficiency has existed for at least two consecutive years, the employee and 
34.13 	employer contribution rates for the applicable plan may each be increased by:
34.14 	(i) 0.25 percent if the deficiency is less than 2.00 percent of covered payroll;
34.15 	(ii) 0.5 percent if the deficiency is equal to or greater than 2.00 percent of covered 
34.16 	payroll and less than or equal to four percent; and
34.17 	(iii) 0.75 percent if the deficiency is greater than four percent.

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

34.19 	Sec. 51. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision 
34.20 	to read:
34.21 		Subd. 4c.Contribution sufficiency measures. (a) A contribution sufficiency of up 
34.22 	to one percent of covered payroll must be held in reserve to be used to offset any future 
34.23 	actuarially required contributions that are more than the total combined employee and 
34.24 	employer contributions being collected.
34.25 	(b) Before any reduction in contributions to eliminate a sufficiency in excess of one 
34.26 	percent of covered pay may be recommended, the executive director must review any 
34.27 	need for a change in actuarial assumptions, as recommended by the actuary retained 
34.28 	under section 356.214 in the most recent experience study of the retirement plan, that 
34.29 	may result in an increase in the actuarially required contribution and must report to the 
34.30 	Legislative Commission on Pensions and Retirement any recommendation by the board 
34.31 	to use the sufficiency exceeding one percent of covered payroll to offset the impact of 
34.32 	an actuarial assumption change recommended by the actuary retained under section 
34.33 	356.214, subdivision 1, and reviewed by the actuary retained by the commission under 
34.34 	section 356.214, subdivision 4.
35.1 	(c) A contribution sufficiency in excess of one percent of covered pay must not be 
35.2 	used to increase benefits, and a benefit increase must not be proposed that would initiate 
35.3 	an automatic adjustment under this section to increase contributions. A proposed benefit 
35.4 	improvement must include a recommendation, prepared by the actuary retained under 
35.5 	section 356.214, subdivision 1, and reviewed by the actuary retained by the Legislative 
35.6 	Commission on Pensions and Retirement, as provided under section 356.214, subdivision 
35.7 	4, on the manner in which the benefit modification is to be funded.

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

35.9 	Sec. 52. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision 
35.10 	to read:
35.11 		Subd. 4d.Reporting; commission review. A contribution rate increase or decrease 
35.12 	under subdivision 4b, as determined by the executive director of the Teachers Retirement 
35.13 	Association, must be reported to the chair and the executive director of the Legislative 
35.14 	Commission on Pensions and Retirement on or before the next February 1 and, if the 
35.15 	Legislative Commission on Pensions and Retirement does not recommend against the rate 
35.16 	change or does not recommend a modification in the rate change, is effective on the next 
35.17 	July 1 following the determination by the executive director that a contribution deficiency 
35.18 	or sufficiency exists based on the most recent actuarial valuation under section 356.215.

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

35.20 	Sec. 53. Minnesota Statutes 2009 Supplement, section 354.47, subdivision 1, is 
35.21 	amended to read:
35.22 		Subdivision 1.Death before retirement. (a) If a member dies before retirement 
35.23 	and is covered under section 354.44, subdivision 2, and neither an optional annuity, nor a 
35.24 	reversionary annuity, nor a benefit under section 354.46, subdivision 1, is payable to the 
35.25 	survivors if the member was a basic member, then the surviving spouse, or if there is no 
35.26 	surviving spouse, the designated beneficiary is entitled to an amount equal to the member's 
35.27 	accumulated deductions with interest credited to the account of the member to the date of 
35.28 	death of the member. If the designated beneficiary is a minor, interest must be credited to 
35.29 	the date the beneficiary reaches legal age, or the date of receipt, whichever is earlier. 
35.30 	(b) If a member dies before retirement and is covered under section 354.44, 
35.31 	subdivision 6, and neither an optional annuity, nor reversionary annuity, nor the benefit 
35.32 	described in section 354.46, subdivision 1, is payable to the survivors if the member 
35.33 	was a basic member, then the surviving spouse, or if there is no surviving spouse, then 
36.1 	the designated beneficiary is entitled to an amount equal to the member's accumulated 
36.2 	deductions credited to the account of the member as of June 30, 1957, and from July 1, 
36.3 	1957, to the date of death of the member, the member's accumulated deductions plus six 
36.4 	percent interest compounded annually.a refund equal to the accumulated deductions 
36.5 	credited to the member's account plus interest compounded annually until the member's 
36.6 	date of death using the following interest rates:
36.7 	(1) before July 1, 1957, no interest accrues;
36.8 	(2) July 1, 1957, to June 30, 2011, six percent; and
36.9 	(3) after June 30, 2011, four percent.
36.10 	(c) If the designated beneficiary under paragraph (b) is a minor, any interest credited 
36.11 	under that paragraph must be credited to the date the beneficiary reaches legal age, or 
36.12 	the date of receipt, whichever is earlier.
36.13 	(d) The amount of any refund payable under this subdivision must be reduced by 
36.14 	any permanent disability payment under section 354.48 received by the member.

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

36.16 	Sec. 54. Minnesota Statutes 2009 Supplement, section 354.49, subdivision 2, is 
36.17 	amended to read:
36.18 		Subd. 2.Calculation. (a) Except as provided in section 354.44, subdivision 1, 
36.19 	any person who ceases to be a member by reason of termination of teaching service, is 
36.20 	entitled to receive a refund in an amount equal to the accumulated deductions credited 
36.21 	to the account as of June 30, 1957, and after July 1, 1957, the accumulated deductions 
36.22 	with interest at the rate of six percent per annum compounded annually.plus interest 
36.23 	compounded annually using the following interest rates:
36.24 	(1) before July 1, 1957, no interest accrues;
36.25 	(2) July 1, 1957, to June 30, 2011, six percent; and
36.26 	(3) after June 30, 2011, four percent.
36.27 	For the purpose of this subdivision, interest must be computed on fiscal year end 
36.28 	balances to the first day of the month in which the refund is issued. 
36.29 	(b) If the person has received permanent disability payments under section 354.48, 
36.30 	the refund amount must be reduced by the amount of those payments.

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

36.32 	Sec. 55. Minnesota Statutes 2009 Supplement, section 354.55, subdivision 11, is 
36.33 	amended to read:
37.1 		Subd. 11.Deferred annuity; augmentation. (a) Any person covered under section 
37.2 	354.44, subdivision 6, who ceases to render teaching service, may leave the person's 
37.3 	accumulated deductions in the fund for the purpose of receiving a deferred annuity 
37.4 	at retirement. 
37.5 	(b) The amount of the deferred retirement annuity is determined by section 354.44, 
37.6 	subdivision 6, and augmented as provided in this subdivision. The required reserves for 
37.7 	the annuity which had accrued when the member ceased to render teaching service must 
37.8 	be augmented, as further specified in this subdivision, by the applicable interest rate 
37.9 	compounded annually from the first day of the month following the month during which 
37.10 	the member ceased to render teaching service to the effective date of retirement.
37.11 	(c) No augmentation is not creditable if the deferral period is less than three months 
37.12 	or if deferral commenced before July 1, 1971. 
37.13 	(d) For persons who became covered employees before July 1, 2006, with a deferral 
37.14 	period commencing after June 30, 1971, the annuity must be augmented usingas follows:
37.15 	(1) five percent interest compounded annually until January 1, 1981, and;
37.16 	(2) three percent interest compounded annually thereafter from January 1, 1981, until 
37.17 	January 1 of the year following the year in which the deferred annuitant attains age 55.;
37.18 	From that date(3) five percent interest compounded annually from the date 
37.19 	established in clause (2) to the effective date of retirement, the rate is five percent 
37.20 	compounded annually. or until June 30, 2012, whichever is earlier; and
37.21 	(4) two percent interest compounded annually after June 30, 2012.
37.22 	(e) For persons who become covered employees after June 30, 2006, the interest 
37.23 	rate used to augment the deferred annuity is 2.5 percent interest compounded annually
37.24 	until June 30, 2012, or until the effective date of retirement, whichever is earlier, and two 
37.25 	percent interest compounded annually after June 30, 2012.
37.26 	(f) If a person has more than one period of uninterrupted service, a separate average 
37.27 	salary determined under section 354.44, subdivision 6, must be used for each period 
37.28 	and the required reserves related to each period must be augmented as specified in this 
37.29 	subdivision. The sum of the augmented required reserves is the present value of the 
37.30 	annuity. For the purposes of this subdivision, "period of uninterrupted service" means a 
37.31 	period of covered teaching service during which the member has not been separated from 
37.32 	active service for more than one fiscal year.
37.33 	(g) If a person repays a refund, the service restored by the repayment must be 
37.34 	considered as continuous with the next period of service for which the person has 
37.35 	allowable service credit in the Teachers Retirement Association.
38.1 	(h) If a person does not render teaching service in any one fiscal year or more 
38.2 	consecutive fiscal years and then resumes teaching service, the formula percentages used 
38.3 	from the date of the resumption of teaching service must be those applicable to new 
38.4 	members.
38.5 	(i) The mortality table and interest rate actuarial assumption used to compute the 
38.6 	annuity must be the applicable mortality table established by the board under section 
38.7 	354.07, subdivision 1, and the interest rate actuarial assumption under section 356.215 in 
38.8 	effect when the member retires. 
38.9 	(j) In no case may the annuity payable under this subdivision be less than the amount 
38.10 	of annuity payable under section 354.44, subdivision 6. 
38.11 	(k) The requirements and provisions for retirement before normal retirement age 
38.12 	contained in section 354.44, subdivision 6, also apply to an employee fulfilling the 
38.13 	requirements with a combination of service as provided in section 354.60. 
38.14 	(l) The augmentation provided by this subdivision applies to the benefit provided 
38.15 	in section 354.46, subdivision 2. 
38.16 	(m) The augmentation provided by this subdivision does not apply to any period 
38.17 	in which a person is on an approved leave of absence from an employer unit covered 
38.18 	by the provisions of this chapter.
38.19 	(n) The retirement annuity or disability benefit of, or the survivor benefit payable on 
38.20 	behalf of, a former teacher who terminated service before July 1, 1997, which is not first 
38.21 	payable until after June 30, 1997, must be increased on an actuarial equivalent basis to 
38.22 	reflect the change in the postretirement interest rate actuarial assumption under section 
38.23 	356.215, subdivision 8, from five percent to six percent under a calculation procedure and 
38.24 	tables adopted by the board as recommended by an approved actuary and approved by the 
38.25 	actuary retained under section 356.214.

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

38.27 	Sec. 56. Minnesota Statutes 2008, section 354A.12, subdivision 1, is amended to read:
38.28 		Subdivision 1. Employee contributions. (a) The contribution required to be paid 
38.29 	by each member of a teachers retirement fund association shall not be less thanis the 
38.30 	percentage of total salary specified below for the applicable association and program: 

38.31		Association and Program
	Percentage of Total Salary
	
38.32	Duluth Teachers Retirement Fund Association
		
38.33		old law and new law
		
38.34		coordinated programs
	5.5 percent
	
38.35		before July 1, 2011
	5.5 percent
	
39.1		effective July 1, 2011
	6.0 percent
	
39.2		effective July 1, 2012 
	6.5 percent
	
39.3	St. Paul Teachers Retirement Fund Association
		
39.4		basic program before July 1, 2010
	8 percent
	
39.5		basic program after June 30, 2010
	8.5 percent
	
39.6		basic program after June 30, 2011
	9.0 percent
	
39.7		coordinated program before July 1, 2010
	5.5 percent
	
39.8		coordinated program after June 30, 2010
	6.0 percent
	
39.9		coordinated program after June 30, 2011
	6.5 percent
	
39.10 	(b) Contributions shall be made by deduction from salary and must be remitted 
39.11 	directly to the respective teachers retirement fund association at least once each month. 
39.12 	(c) When an employee contribution rate changes for a fiscal year, the new 
39.13 	contribution rate is effective for the entire salary paid by the employer with the first 
39.14 	payroll cycle reported.

39.15 	EFFECTIVE DATE. This section is effective July 1, 2010.

39.16 	Sec. 57. Minnesota Statutes 2009 Supplement, section 354A.12, subdivision 2a, 
39.17 	is amended to read:
39.18 		Subd. 2a. Employer regular and additional contributions. (a) The employing 
39.19 	units shall make the following employer contributions to teachers retirement fund 
39.20 	associations: 
39.21 	(1) for any coordinated member of one of the following teachers retirement fund 
39.22 	associations in a city of the first class, the employing unit shall make a regular employer 
39.23 	contribution to the respective retirement fund association in an amount equal to the 
39.24 	designated percentage of the salary of the coordinated member as provided below: 

39.25		Duluth Teachers Retirement Fund Association 
		4.50 percent
	
39.26		before July 1, 2011
		5.79 percent
	
39.27		effective July 1, 2011
		6.29 percent
	
39.28		effective July 1, 2012
		6.79 percent
	
39.29
39.30		St. Paul Teachers Retirement Fund Association
before July 1, 2010
		4.50 percent
	
39.31		after June 30, 2010
		5.0 percent
	
39.32		after June 30, 2011
		5.5 percent
	
39.33		after June 30, 2013
		6.5 percent
	
39.34 	(2) for any basic member of the St. Paul Teachers Retirement Fund Association, the 
39.35 	employing unit shall make a regular employer contribution to the respective retirement 
39.36 	fund in an amount equal to 8.00 percent of the salary of the basic member;according to 
39.37 	the schedule below:

40.1		before July 1, 2010
	8.0 percent of the salary of the basic member
	
40.2		before July 1, 2011
	8.5 percent of the salary of the basic member
	
40.3		before July 1, 2012
	9.0 percent of the salary of the basic member
	
40.4		before July 1, 2013
	9.5 percent of the salary of the basic member
	
40.5		before July 1, 2014
	10.0 percent of the salary of the basic member
	
40.6 	(3) for a basic member of the St. Paul Teachers Retirement Fund Association, the 
40.7 	employing unit shall make an additional employer contribution to the respective fund in 
40.8 	an amount equal to 3.64 percent of the salary of the basic member;
40.9 	(4) for a coordinated member of a teachers retirement fund association in a city of 
40.10 	the first class the St. Paul Teachers Retirement Fund Association, the employing unit shall 
40.11 	make an additional employer contribution to the respective fund in an amount equal to the 
40.12 	applicable percentage of the coordinated member's salary, as provided below:

40.13
40.14		Duluth Teachers Retirement 
Fund Association
		1.29 percent
	
40.15
40.16		St. Paul Teachers Retirement 
Fund Association
		3.84 percent
	
40.17 	(b) The regular and additional employer contributions must be remitted directly to 
40.18 	the respective teachers retirement fund association at least once each month. Delinquent 
40.19 	amounts are payable with interest under the procedure in subdivision 1a.
40.20 	(c) Payments of regular and additional employer contributions for school district 
40.21 	or technical college employees who are paid from normal operating funds must be made 
40.22 	from the appropriate fund of the district or technical college. 
40.23 	(d) When an employer contribution rate changes for a fiscal year, the new 
40.24 	contribution rate is effective for the entire salary paid by the employer with the first 
40.25 	payroll cycle reported.

40.26 	EFFECTIVE DATE. This section is effective July 1, 2010.

40.27 	Sec. 58. Minnesota Statutes 2008, section 354A.12, subdivision 3c, is amended to read:
40.28 		Subd. 3c.Termination of supplemental contributions and direct matching 
40.29 	and state aid. (a) The supplemental contributions payable to the Minneapolis Teachers 
40.30 	Retirement Fund Association by Special School District No. 1 and the city of Minneapolis 
40.31 	under section 423A.02, subdivision 3, must be paid to the Teachers Retirement 
40.32 	Association and must continue until the current assets of the fund equal or exceed the 
40.33 	actuarial accrued liability of the fund as determined in the most recent actuarial report 
40.34 	for the fund by the actuary retained under section 356.214, or 2037, whichever occurs 
40.35 	earlier. The supplemental contributions payable to the St. Paul Teachers Retirement Fund 
40.36 	Association by Independent School District No. 625 under section 423A.02, subdivision 
41.1 	3, or the direct state aid under subdivision 3a to the St. Paul Teachers Retirement Fund 
41.2 	Association terminate at the end of the fiscal year in which the accrued liability funding 
41.3 	ratio for that fund, as determined in the most recent actuarial report for that fund by the 
41.4 	actuary retained under section 356.214, equals or exceeds the accrued liability funding 
41.5 	ratio for the Teachers Retirement Association, as determined in the most recent actuarial 
41.6 	report for the Teachers Retirement Association by the actuary retained under section 
41.7 	356.214. must continue until the current assets of the fund equal or exceed the actuarial 
41.8 	accrued liability of the fund as determined in the most recent actuarial report for the fund 
41.9 	by the actuary retained under section 356.214 or until 2037, whichever occurs earlier.
41.10 	(b) If the St. Paul Teachers Retirement Fund Association is funded at an amount 
41.11 	equal to or greater than the funding ratio applicable to the Teachers Retirement 
41.12 	Association, then any future state aid under subdivision 3a is payable to the Teachers 
41.13 	Retirement Association.

41.14 	EFFECTIVE DATE. This section is effective July 1, 2010.

41.15 	Sec. 59. Minnesota Statutes 2008, section 354A.27, subdivision 5, is amended to read:
41.16 		Subd. 5.CalculationEligibility for and payment of postretirement adjustments.
 41.17 	(a) Annually, after June 30, the board of trustees of the Duluth Teachers Retirement Fund 
41.18 	Association determines the amount of any postretirement adjustment using the procedures 
41.19 	in this subdivision and subdivision 6 or 7, whichever is applicable.
41.20 	(b) Each person who has been receiving an annuity or benefit under the articles 
41.21 	of incorporation, bylaws, or under this section for at least 12 months as of the date of 
41.22 	the postretirement adjustment shall be eligible for a postretirement adjustment. The 
41.23 	postretirement adjustment shall be payable each January 1. The postretirement adjustment 
41.24 	shall be equal to two percent ofa permanent percentage increase as specified under 
41.25 	subdivision 6 or 7, whichever is applicable, applied to the annuity or benefit to which the 
41.26 	person is entitled one month prior to the payment of the postretirement adjustment.

41.27 	EFFECTIVE DATE. This section is effective July 1, 2010.

41.28 	Sec. 60. Minnesota Statutes 2008, section 354A.27, subdivision 6, is amended to read:
41.29 		Subd. 6.Additional increase Calculation of postretirement adjustments; 
41.30 	transitional provision. (a) In addition to the postretirement increases granted under 
41.31 	subdivision 5, an additional percentage increase must be computed and paid under this 
41.32 	subdivision.
42.1 	(b) The board of trustees shall determine the number of annuitants or benefit 
42.2 	recipients who have been receiving an annuity or benefit for at least 12 months as of the 
42.3 	current June 30. These recipients are entitled to receive the surplus investment earnings 
42.4 	additional postretirement increase.
42.5 	(c) Annually, as of each June 30, the board shall determine the five-year annualized 
42.6 	rate of return attributable to the assets of the Duluth Teachers Retirement Fund Association 
42.7 	under the formula or formulas specified in section 11A.04, clause (11). 
42.8 	(d) The board shall determine the amount of excess five-year annualized rate of 
42.9 	return over the preretirement interest assumption as specified in section 356.215. 
42.10 	(e) The additional percentage increase must be determined by multiplying the 
42.11 	quantity one minus the rate of contribution deficiency, as specified in the most recent 
42.12 	actuarial report of the actuary retained under section 356.214, times the rate of return 
42.13 	excess as determined in paragraph (d).
42.14 	(f) The additional increase is payable to all eligible annuitants or benefit recipients 
42.15 	on the following January 1.
42.16 	(a) For purposes of computing postretirement adjustments after the effective date 
42.17 	of this section for eligible benefit recipients of the Duluth Teachers Retirement Fund 
42.18 	Association, the funding ratio of the plan, as determined by dividing the market value of 
42.19 	assets by the actuarial accrued liability as reported in the most recent actuarial valuation 
42.20 	prepared under sections 356.214 and 356.215, determines the postretirement increase 
42.21 	as follows:

42.22		Funding Ratio
	Postretirement Increase
	
42.23		less than 80 percent
	0 percent
	
42.24
42.25		at least 80 percent but less than 90 
percent
	1 percent
	
42.26		at least 90 percent
	2 percent
	
42.27 	(b) If the funding ratio of the plan based on actuarial value, rather than market value, 
42.28 	is at least 90 percent as reported in the most recent actuarial valuation prepared under 
42.29 	sections 356.214 and 356.215, this subdivision expires and subsequent postretirement 
42.30 	increases must be paid as specified under subdivision 7.

42.31 	EFFECTIVE DATE. This section is effective July 1, 2010.

42.32 	Sec. 61. Minnesota Statutes 2008, section 354A.27, is amended by adding a 
42.33 	subdivision to read:
42.34 		Subd. 7.Calculation of postretirement adjustments. (a) This subdivision applies 
42.35 	if subdivision 6 has expired.
43.1 	(b) A percentage adjustment must be computed and paid under this subdivision to 
43.2 	eligible persons under subdivision 5. This adjustment is determined by reference to the 
43.3 	Consumer Price Index for urban wage earners and clerical workers all items index as 
43.4 	reported by the Bureau of Labor Statistics within the United States Department of Labor 
43.5 	each year as part of the determination of annual cost-of-living adjustments to recipients 
43.6 	of federal old-age, survivors, and disability insurance. For calculations of cost-of-living 
43.7 	adjustments under paragraph (c), the term "average third quarter Consumer Price Index 
43.8 	value" means the sum of the monthly index values as initially reported by the Bureau of 
43.9 	Labor Statistics for the months of July, August, and September, divided by 3.
43.10 	(c) Before January 1 of each year, the executive director must calculate the amount 
43.11 	of the cost-of-living adjustment by dividing the most recent average third quarter index 
43.12 	value by the same average third quarter index value from the previous year, subtract one 
43.13 	from the resulting quotient, and express the result as a percentage amount, which must be 
43.14 	rounded to the nearest one-tenth of one percent.
43.15 	(d) The amount calculated under paragraph (c) is the full cost-of-living adjustment 
43.16 	to be applied as a permanent increase to the regular payment of each eligible member 
43.17 	on January 1 of the next calendar year. For any eligible member whose effective date 
43.18 	of benefit commencement occurred during the calendar year before the cost-of-living 
43.19 	adjustment is applied, the full increase amount must be prorated on the basis of whole 
43.20 	calendar quarters in benefit payment status in the calendar year prior to the January 1 on 
43.21 	which the cost-of-living adjustment is applied, calculated to the third decimal place.
43.22 	(e) The adjustment must not be less than zero nor greater than five percent.
43.23 	(f) If the funding ratio of the plan as determined in the most recent actuarial 
43.24 	valuation using the actuarial value of assets is less than 80 percent there will be no 
43.25 	postretirement adjustment the following January 1.

43.26 	EFFECTIVE DATE. This section is effective July 1, 2010.

43.27 	Sec. 62. Minnesota Statutes 2008, section 354A.31, subdivision 1, is amended to read:
43.28 		Subdivision 1.Age and service requirements. Any coordinated member or former 
43.29 	coordinated member of the St. Paul Teachers Retirement Fund Association who has 
43.30 	ceased to render teaching service for the school district in which the teachers retirement 
43.31 	fund association exists and who has either attained the age of at least 55 years with not 
43.32 	less than three years of allowable service credit or received credit for not less than 30 
43.33 	years of allowable service regardless of age, shall be entitled upon written application to a 
43.34 	retirement annuity. Any coordinated member or former coordinated member of the Duluth 
43.35 	Teachers Retirement Fund Association who has ceased to render teaching service for the 
44.1 	school district in which the teacher retirement fund association exists and who has either 
44.2 	attained the age of at least 55 years with not less than three years of allowable service 
44.3 	credit if the member became an employee before July 1, 2010, or not less than five years 
44.4 	of allowable service credit if the member became an employee after June 30, 2010, or 
44.5 	received service credit for not less than 30 years of allowable service regardless of age, 
44.6 	shall be entitled upon written application to a retirement annuity.

44.7 	EFFECTIVE DATE. This section is effective July 1, 2010.

44.8 	Sec. 63. Minnesota Statutes 2008, section 354A.35, subdivision 1, is amended to read:
44.9 		Subdivision 1.Death before retirement; refund. If a coordinated member 
44.10 	or former coordinated member dies prior to retirement or prior to the receipt of any 
44.11 	retirement annuity or other benefit payment which is or may be payable and a surviving 
44.12 	spouse optional annuity is not payable pursuant to subdivision 2, a refund shall be paid to 
44.13 	the person's surviving spouse, or if there is none, to the person's designated beneficiary, 
44.14 	or if there is none, to the legal representative of the person's estate. For a coordinated 
44.15 	member or former coordinated member of the St. Paul Teachers Retirement Fund 
44.16 	Association, the refund shall be in an amount equal to the person's accumulated employee 
44.17 	contributions plus interest at the rate of six percent per annum compounded annually. For 
44.18 	a coordinated member or former coordinated member of the Duluth Teachers Retirement 
44.19 	Fund Association, the refund shall be in an amount equal to the person's accumulated 
44.20 	employee contributions plus interest at the rate of six percent per annum compounded 
44.21 	annually to July 1, 2010, and four percent per annum compounded annually thereafter.

44.22 	EFFECTIVE DATE. This section is effective July 1, 2010.

44.23 	Sec. 64. Minnesota Statutes 2008, section 354A.37, subdivision 2, is amended to read:
44.24 		Subd. 2.Eligibility for deferred retirement annuity. (a) Any coordinated member 
44.25 	who ceases to render teaching services for the school district in which the teachers 
44.26 	retirement fund association is located, with sufficient allowable service credit to meet 
44.27 	the minimum service requirements specified in section 354A.31, subdivision 1, shall be 
44.28 	entitled to a deferred retirement annuity in lieu of a refund pursuant to subdivision 1. The 
44.29 	deferred retirement annuity shall be computed pursuant to section 354A.31 and shall be 
44.30 	augmented as provided in this subdivision. The deferred annuity shall commence upon 
44.31 	application after the person on deferred status attains at least the minimum age specified in 
44.32 	section 354A.31, subdivision 1. 
45.1 	(b) The monthly annuity amount that had accrued when the member ceased to 
45.2 	render teaching service must be augmented from the first day of the month following the 
45.3 	month during which the member ceased to render teaching service to the effective date 
45.4 	of retirement. There is no augmentation if this period is less than three months. For a 
45.5 	member of the St. Paul Teachers Retirement Fund Association, the rate of augmentation 
45.6 	is three percent compounded annually until January 1 of the year following the year in 
45.7 	which the former member attains age 55, and five percent compounded annually after that 
45.8 	date to the effective date of retirement if the employee became an employee before July 
45.9 	1, 2006, and at 2.5 percent compounded annually if the employee becomes an employee 
45.10 	after June 30, 2006. For a member of the Duluth Teachers Retirement Fund Association, 
45.11 	the rate of augmentation is three percent compounded annually until January 1 of the year 
45.12 	following the year in which the former member attains age 55, five percent compounded 
45.13 	annually after that date to July 1, 2012, and two percent compounded annually after that 
45.14 	date to the effective date of retirement if the employee became an employee before 
45.15 	July 1, 2006, and at 2.5 percent compounded annually to July 1, 2012, and two percent 
45.16 	compounded annually after that date to the effective date of retirement if the employee 
45.17 	becomes an employee after June 30, 2006. If a person has more than one period of 
45.18 	uninterrupted service, a separate average salary determined under section 354A.31 must 
45.19 	be used for each period, and the monthly annuity amount related to each period must be 
45.20 	augmented as provided in this subdivision. The sum of the augmented monthly annuity 
45.21 	amounts determines the total deferred annuity payable. If a person repays a refund, the 
45.22 	service restored by the repayment must be considered as continuous with the next period 
45.23 	of service for which the person has credit with the fund. If a person does not render 
45.24 	teaching services in any one fiscal year or more consecutive fiscal years and then resumes 
45.25 	teaching service, the formula percentages used from the date of resumption of teaching 
45.26 	service are those applicable to new members. The mortality table and interest assumption 
45.27 	used to compute the annuity are the table established by the fund to compute other 
45.28 	annuities, and the interest assumption under section 356.215 in effect when the member 
45.29 	retires. A period of uninterrupted service for the purpose of this subdivision means a 
45.30 	period of covered teaching service during which the member has not been separated from 
45.31 	active service for more than one fiscal year. 
45.32 	(c) The augmentation provided by this subdivision applies to the benefit provided 
45.33 	in section 354A.35, subdivision 2. The augmentation provided by this subdivision does 
45.34 	not apply to any period in which a person is on an approved leave of absence from an 
45.35 	employer unit. 

45.36 	EFFECTIVE DATE. This section is effective July 1, 2010.

46.1 	Sec. 65. Minnesota Statutes 2008, section 354A.37, subdivision 3, is amended to read:
46.2 		Subd. 3.Computation of refund amount. A former coordinated member of the 
46.3 	St. Paul Teachers Retirement Fund Association who qualifies for a refund pursuant to
46.4 	under subdivision 1 shall receive a refund equal to the amount of the former coordinated 
46.5 	member's accumulated employee contributions with interest at the rate of six percent per 
46.6 	annum compounded annually. A former coordinated member of the Duluth Teachers 
46.7 	Retirement Fund Association who qualifies for a refund under subdivision 1 shall receive 
46.8 	a refund equal to the amount of the former coordinated member's accumulated employee 
46.9 	contributions with interest at the rate of six percent per annum compounded annually to 
46.10 	July 1, 2010, and four percent per annum compounded annually thereafter.

46.11 	EFFECTIVE DATE. This section is effective July 1, 2010.

46.12 	Sec. 66. Minnesota Statutes 2008, section 354A.37, subdivision 4, is amended to read:
46.13 		Subd. 4.Certain refunds at normal retirement age. Any coordinated member 
46.14 	who has attained the normal retirement age with less than ten years of allowable service 
46.15 	credit and has terminated active teaching service shall be entitled to a refund in lieu of 
46.16 	a proportionate annuity pursuant to section 356.32. The refund for a member of the St. 
46.17 	Paul Teachers Retirement Fund Association shall be equal to the coordinated member's 
46.18 	accumulated employee contributions plus interest at the rate of six percent compounded 
46.19 	annually. The refund for a member of the Duluth Teachers Retirement Fund Association 
46.20 	shall be equal to the coordinated member's accumulated employee contributions plus 
46.21 	interest at the rate of six percent compounded annually to July 1, 2010, and four percent 
46.22 	per annum compounded annually thereafter.

46.23 	EFFECTIVE DATE. This section is effective July 1, 2010.

46.24 	Sec. 67. Minnesota Statutes 2008, section 356.215, subdivision 8, is amended to read:
46.25 		Subd. 8.Interest and salary assumptions. (a) The actuarial valuation must use 
46.26 	the applicable following preretirement interest assumption and the applicable following 
46.27 	postretirement interest assumption:

46.28
46.29
46.30	plan
	preretirement
interest rate
assumption
	postretirement 
interest rate
assumption
	
46.31	general state employees retirement plan
		8.5%
	6.0%
	
46.32	correctional state employees retirement plan
		8.5
	6.0
	
46.33	State Patrol retirement plan
		8.5
	6.0
	
46.34	legislators retirement plan
		8.5
	6.0
	
46.35	elective state officers retirement plan
		8.5
	6.0
	
47.1	judges retirement plan
		8.5
	6.0
	
47.2	general public employees retirement plan
		8.5
	6.0
	
47.3	public employees police and fire retirement plan
		8.5
	6.0
	
47.4
47.5	local government correctional service retirement 
plan
		8.5
	6.0
	
47.6	teachers retirement plan
		8.5
	6.0
	
47.7	Minneapolis employees retirement plan
		6.0
	5.0
	
47.8	Duluth teachers retirement plan
		8.5
	8.5
	
47.9	St. Paul teachers retirement plan
		8.5
	8.5
	
47.10	Minneapolis Police Relief Association
		6.0
	6.0
	
47.11	Fairmont Police Relief Association
		5.0
	5.0
	
47.12	Minneapolis Fire Department Relief Association
		6.0
	6.0
	
47.13	Virginia Fire Department Relief Association
		5.0
	5.0
	
47.14	Bloomington Fire Department Relief Association
		6.0
	6.0
	
47.15
47.16	local monthly benefit volunteer firefighters relief 
associations
		5.0
	5.0
	
47.17 	(b) Before July 1, 2010, the actuarial valuation must use the applicable following 
47.18 	single rate future salary increase assumption, the applicable following modified single 
47.19 	rate future salary increase assumption, or the applicable following graded rate future 
47.20 	salary increase assumption:
47.21 	(1) single rate future salary increase assumption

47.22
47.23	plan
	future salary
increase assumption
	
47.24	legislators retirement plan
		5.0%
	
47.25	judges retirement plan
		4.0 
	
47.26	Minneapolis Police Relief Association
		4.0
	
47.27	Fairmont Police Relief Association
		3.5
	
47.28
47.29	Minneapolis Fire Department Relief 
Association
		4.0
	
47.30	Virginia Fire Department Relief Association
		3.5
	
47.31
47.32	Bloomington Fire Department Relief 
Association
		4.0
	
47.33 	(2) modified single rate future salary increase assumption

47.34
47.35	plan
		future salary
increase assumption
	
47.36
47.37
47.38
47.39	Minneapolis employees 
retirement plan
		the prior calendar year amount increased 
first by 1.0198 percent to prior fiscal year 
date and then increased by 4.0 percent 
annually for each future year
	
47.40 	(3) age-related select and ultimate future salary increase assumption or graded rate 
47.41 	future salary increase assumption

48.1
48.2	plan
	future salary
increase assumption
	
48.3
48.4	general state employees retirement plan
	select calculation and 
assumption A
	
48.5	correctional state employees retirement plan
	assumption H G
	
48.6	State Patrol retirement plan
	assumption G F
	
48.7
48.8	general public employees retirement plan
	select calculation and 
assumption B
	
48.9	public employees police and fire fund retirement plan
	assumption C B
	
48.10	local government correctional service retirement plan
	assumption G F
	
48.11	teachers retirement plan
	assumption D C
	
48.12	Duluth teachers retirement plan
	assumption E D
	
48.13	St. Paul teachers retirement plan
	assumption F E
	
48.14 	The select calculation is: during the 
48.15 	designated select period, a designated 
48.16 	percentage rate is multiplied by the result of 
48.17 	the designated integer minus T, where T is the 
48.18 	number of completed years of service, and is 
48.19 	added to the applicable future salary increase 
48.20 	assumption. The designated select period is 
48.21 	five years and the designated integer is five 
48.22 	for the general state employees retirement 
48.23 	plan and the general public employees 
48.24 	retirement plan. The designated select period 
48.25 	is ten years and the designated integer is ten 
48.26 	for all other retirement plans covered by 
48.27 	this clause. The designated percentage rate 
48.28 	is: (1) 0.2 percent for the correctional state 
48.29 	employees retirement plan, the State Patrol 
48.30 	retirement plan, the public employees police 
48.31 	and fire plan, and the local government 
48.32 	correctional service plan; (2) 0.6 percent 
48.33 	for the general state employees retirement 
48.34 	plan and the general public employees 
48.35 	retirement plan; and (3) 0.3 percent for the 
48.36 	teachers retirement plan, the Duluth Teachers 
48.37 	Retirement Fund Association, and the St. 
48.38 	Paul Teachers Retirement Fund Association. 
49.1 	The select calculation for the Duluth Teachers 
49.2 	Retirement Fund Association is 8.00 percent 
49.3 	per year for service years one through seven, 
49.4 	7.25 percent per year for service years seven 
49.5 	and eight, and 6.50 percent per year for 
49.6 	service years eight and nine.
49.7 	The ultimate future salary increase assumption is:

49.8	age
	A
	B
	CB
	DC
	ED
	FE
	GF
	HG
	
49.9	16
	5.95%
	5.95%
	11.00%
	7.70%
	8.00%
	6.90%
	7.7500%
	7.2500%
	
49.10	17
	5.90
	5.90
	11.00
	7.65
	8.00
	6.90
	7.7500
	7.2500
	
49.11	18
	5.85
	5.85
	11.00
	7.60
	8.00
	6.90
	7.7500
	7.2500
	
49.12	19
	5.80
	5.80
	11.00
	7.55
	8.00
	6.90
	7.7500
	7.2500
	
49.13	20
	5.75
	5.40
	11.00
	5.50
	6.90
	6.90
	7.7500
	7.2500
	
49.14	21
	5.75
	5.40
	11.00
	5.50
	6.90
	6.90
	7.1454
	6.6454
	
49.15	22
	5.75
	5.40
	10.50
	5.50
	6.90
	6.90
	7.0725
	6.5725
	
49.16	23
	5.75
	5.40
	10.00
	5.50
	6.85
	6.85
	7.0544
	6.5544
	
49.17	24
	5.75
	5.40
	9.50
	5.50
	6.80
	6.80
	7.0363
	6.5363
	
49.18	25
	5.75
	5.40
	9.00
	5.50
	6.75
	6.75
	7.0000
	6.5000
	
49.19	26
	5.75
	5.36
	8.70
	5.50
	6.70
	6.70
	7.0000
	6.5000
	
49.20	27
	5.75
	5.32
	8.40
	5.50
	6.65
	6.65
	7.0000
	6.5000
	
49.21	28
	5.75
	5.28
	8.10
	5.50
	6.60
	6.60
	7.0000
	6.5000
	
49.22	29
	5.75
	5.24
	7.80
	5.50
	6.55
	6.55
	7.0000
	6.5000
	
49.23	30
	5.75
	5.20
	7.50
	5.50
	6.50
	6.50
	7.0000
	6.5000
	
49.24	31
	5.75
	5.16
	7.30
	5.50
	6.45
	6.45
	7.0000
	6.5000
	
49.25	32
	5.75
	5.12
	7.10
	5.50
	6.40
	6.40
	7.0000
	6.5000
	
49.26	33
	5.75
	5.08
	6.90
	5.50
	6.35
	6.35
	7.0000
	6.5000
	
49.27	34
	5.75
	5.04
	6.70
	5.50
	6.30
	6.30
	7.0000
	6.5000
	
49.28	35
	5.75
	5.00
	6.50
	5.50
	6.25
	6.25
	7.0000
	6.5000
	
49.29	36
	5.75
	4.96
	6.30
	5.50
	6.20
	6.20
	6.9019
	6.4019
	
49.30	37
	5.75
	4.92
	6.10
	5.50
	6.15
	6.15
	6.8074
	6.3074
	
49.31	38
	5.75
	4.88
	5.90
	5.40
	6.10
	6.10
	6.7125
	6.2125
	
49.32	39
	5.75
	4.84
	5.70
	5.30
	6.05
	6.05
	6.6054
	6.1054
	
49.33	40
	5.75
	4.80
	5.50
	5.20
	6.00
	6.00
	6.5000
	6.0000
	
49.34	41
	5.75
	4.76
	5.40
	5.10
	5.90
	5.95
	6.3540
	5.8540
	
49.35	42
	5.75
	4.72
	5.30
	5.00
	5.80
	5.90
	6.2087
	5.7087
	
49.36	43
	5.65
	4.68
	5.20
	4.90
	5.70
	5.85
	6.0622
	5.5622
	
49.37	44
	5.55
	4.64
	5.10
	4.80
	5.60
	5.80
	5.9048
	5.4078
	
49.38	45
	5.45
	4.60
	5.00
	4.70
	5.50
	5.75
	5.7500
	5.2500
	
49.39	46
	5.35
	4.56
	4.95
	4.60
	5.40
	5.70
	5.6940
	5.1940
	
49.40	47
	5.25
	4.52
	4.90
	4.50
	5.30
	5.65
	5.6375
	5.1375
	
49.41	48
	5.15
	4.48
	4.85
	4.50
	5.20
	5.60
	5.5822
	5.0822
	
49.42	49
	5.05
	4.44
	4.80
	4.50
	5.10
	5.55
	5.5404
	5.0404
	
50.1	50
	4.95
	4.40
	4.75
	4.50
	5.00
	5.50
	5.5000
	5.0000
	
50.2	51
	4.85
	4.36
	4.75
	4.50
	4.90
	5.45
	5.4384
	4.9384
	
50.3	52
	4.75
	4.32
	4.75
	4.50
	4.80
	5.40
	5.3776
	4.8776
	
50.4	53
	4.65
	4.28
	4.75
	4.50
	4.70
	5.35
	5.3167
	4.8167
	
50.5	54
	4.55
	4.24
	4.75
	4.50
	4.60
	5.30
	5.2826
	4.7826
	
50.6	55
	4.45
	4.20
	4.75
	4.50
	4.50
	5.25
	5.2500
	4.7500
	
50.7	56
	4.35
	4.16
	4.75
	4.50
	4.40
	5.20
	5.2500
	4.7500
	
50.8	57
	4.25
	4.12
	4.75
	4.50
	4.30
	5.15
	5.2500
	4.7500
	
50.9	58
	4.25
	4.08
	4.75
	4.60
	4.20
	5.10
	5.2500
	4.7500
	
50.10	59
	4.25
	4.04
	4.75
	4.70
	4.10
	5.05
	5.2500
	4.7500
	
50.11	60
	4.25
	4.00
	4.75
	4.80
	4.00
	5.00
	5.2500
	4.7500
	
50.12	61
	4.25
	4.00
	4.75
	4.90
	3.90
	5.00
	5.2500
	4.7500
	
50.13	62
	4.25
	4.00
	4.75
	5.00
	3.80
	5.00
	5.2500
	4.7500
	
50.14	63
	4.25
	4.00
	4.75
	5.10
	3.70
	5.00
	5.2500
	4.7500
	
50.15	64
	4.25
	4.00
	4.75
	5.20
	3.60
	5.00
	5.2500
	4.7500
	
50.16	65
	4.25
	4.00
	4.75
	5.20
	3.50
	5.00
	5.2500
	4.7500
	
50.17	66
	4.25
	4.00
	4.75
	5.20
	3.50
	5.00
	5.2500
	4.7500
	
50.18	67
	4.25
	4.00
	4.75
	5.20
	3.50
	5.00
	5.2500
	4.7500
	
50.19	68
	4.25
	4.00
	4.75
	5.20
	3.50
	5.00
	5.2500
	4.7500
	
50.20	69
	4.25
	4.00
	4.75
	5.20
	3.50
	5.00
	5.2500
	4.7500
	
50.21	70
	4.25
	4.00
	4.75
	5.20
	3.50
	5.00
	5.2500
	4.7500
	
50.22	71
	4.25
	4.00
		5.20
					
50.23 	(4) service-related ultimate future salary increase assumption

50.24
50.25	service length
	general employees retirement plan of the Public 
Employees Retirement Association
	
50.26	1
	12.03%
	
50.27	2
	8.90
	
50.28	3
	7.46
	
50.29	4
	6.58
	
50.30	5
	5.97
	
50.31	6
	5.52
	
50.32	7
	5.16
	
50.33	8
	4.87
	
50.34	9
	4.63
	
50.35	10
	4.42
	
50.36	11
	4.24
	
50.37	12
	4.08
	
50.38	13
	3.94
	
50.39	14
	3.82
	
50.40	15
	3.70
	
50.41	16
	3.60
	
50.42	17
	3.51
	
50.43	18
	3.50
	
51.1	19
	3.50
	
51.2	20
	3.50
	
51.3	21
	3.50
	
51.4	22
	3.50
	
51.5	23
	3.50
	
51.6	24
	3.50
	
51.7	25
	3.50
	
51.8	26
	3.50
	
51.9	27
	3.50
	
51.10	28
	3.50
	
51.11	29
	3.50
	
51.12	30 or more
	3.50
	
51.13 	(c) Before July 2, 2010, the actuarial valuation must use the applicable following 
51.14 	payroll growth assumption for calculating the amortization requirement for the unfunded 
51.15 	actuarial accrued liability where the amortization retirement is calculated as a level 
51.16 	percentage of an increasing payroll:

51.17
51.18	plan
	payroll growth
assumption
	
51.19	general state employees retirement plan
		4.50%
	
51.20	correctional state employees retirement plan
		4.50
	
51.21	State Patrol retirement plan
		4.50
	
51.22	legislators retirement plan
		4.50
	
51.23	judges retirement plan
		4.00
	
51.24
51.25	general public employees retirement plan of the 
Public Employees Retirement Association
		4.504.00
	
51.26	public employees police and fire retirement plan
		4.50
	
51.27
51.28	local government correctional service retirement 
plan
		4.50
	
51.29	teachers retirement plan
		4.50
	
51.30	Duluth teachers retirement plan
		4.50
	
51.31	St. Paul teachers retirement plan
		5.00
	
51.32 	(d) After July 1, 2010, the assumptions set forth in paragraphs (b) and (c) continue to 
51.33 	apply, unless a different salary assumption or a different payroll increase assumption:
51.34 	(1) has been proposed by the governing board of the applicable retirement plan;
51.35 	(2) is accompanied by the concurring recommendation of the actuary retained under 
51.36 	section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the 
51.37 	most recent actuarial valuation report if section 356.214 does not apply; and
51.38 	(3) has been approved or deemed approved under subdivision 18.

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

52.1 	Sec. 68. Minnesota Statutes 2009 Supplement, section 356.215, subdivision 11, 
52.2 	is amended to read:
52.3 		Subd. 11.Amortization contributions. (a) In addition to the exhibit indicating 
52.4 	the level normal cost, the actuarial valuation of the retirement plan must contain an 
52.5 	exhibit for financial reporting purposes indicating the additional annual contribution 
52.6 	sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit 
52.7 	for contribution determination purposes indicating the additional contribution sufficient 
52.8 	to amortize the unfunded actuarial accrued liability. For the retirement plans listed in 
52.9 	subdivision 8, paragraph (c), the additional contribution must be calculated on a level 
52.10 	percentage of covered payroll basis by the established date for full funding in effect when 
52.11 	the valuation is prepared, assuming annual payroll growth at the applicable percentage 
52.12 	rate set forth in subdivision 8, paragraph (c). For all other retirement plans, the additional 
52.13 	annual contribution must be calculated on a level annual dollar amount basis. 
52.14 	(b) For any retirement plan other than the Minneapolis Employees Retirement Fund, 
52.15 	the general employees retirement plan of the Public Employees Retirement Association, 
52.16 	the general state employees retirement plan of the Minnesota State Retirement System, 
52.17 	and the St. Paul Teachers Retirement Fund Association, if there has not been a change in 
52.18 	the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a 
52.19 	change in the benefit plan governing annuities and benefits payable from the fund, a 
52.20 	change in the actuarial cost method used in calculating the actuarial accrued liability of all 
52.21 	or a portion of the fund, or a combination of the three, which change or changes by itself 
52.22 	or by themselves without inclusion of any other items of increase or decrease produce a 
52.23 	net increase in the unfunded actuarial accrued liability of the fund, the established date for 
52.24 	full funding is the first actuarial valuation date occurring after June 1, 2020.
52.25 	(c) For any retirement plan other than the Minneapolis Employees Retirement 
52.26 	Fund and the general employees retirement plan of the Public Employees Retirement 
52.27 	Association, if there has been a change in any or all of the actuarial assumptions used 
52.28 	for calculating the actuarial accrued liability of the fund, a change in the benefit plan 
52.29 	governing annuities and benefits payable from the fund, a change in the actuarial cost 
52.30 	method used in calculating the actuarial accrued liability of all or a portion of the fund, 
52.31 	or a combination of the three, and the change or changes, by itself or by themselves and 
52.32 	without inclusion of any other items of increase or decrease, produce a net increase in the 
52.33 	unfunded actuarial accrued liability in the fund, the established date for full funding must 
52.34 	be determined using the following procedure:
53.1 	(i) the unfunded actuarial accrued liability of the fund must be determined in 
53.2 	accordance with the plan provisions governing annuities and retirement benefits and the 
53.3 	actuarial assumptions in effect before an applicable change;
53.4 	(ii) the level annual dollar contribution or level percentage, whichever is applicable, 
53.5 	needed to amortize the unfunded actuarial accrued liability amount determined under item 
53.6 	(i) by the established date for full funding in effect before the change must be calculated 
53.7 	using the interest assumption specified in subdivision 8 in effect before the change;
53.8 	(iii) the unfunded actuarial accrued liability of the fund must be determined in 
53.9 	accordance with any new plan provisions governing annuities and benefits payable from 
53.10 	the fund and any new actuarial assumptions and the remaining plan provisions governing 
53.11 	annuities and benefits payable from the fund and actuarial assumptions in effect before 
53.12 	the change;
53.13 	(iv) the level annual dollar contribution or level percentage, whichever is applicable, 
53.14 	needed to amortize the difference between the unfunded actuarial accrued liability amount 
53.15 	calculated under item (i) and the unfunded actuarial accrued liability amount calculated 
53.16 	under item (iii) over a period of 30 years from the end of the plan year in which the 
53.17 	applicable change is effective must be calculated using the applicable interest assumption 
53.18 	specified in subdivision 8 in effect after any applicable change;
53.19 	(v) the level annual dollar or level percentage amortization contribution under item 
53.20 	(iv) must be added to the level annual dollar amortization contribution or level percentage 
53.21 	calculated under item (ii);
53.22 	(vi) the period in which the unfunded actuarial accrued liability amount determined 
53.23 	in item (iii) is amortized by the total level annual dollar or level percentage amortization 
53.24 	contribution computed under item (v) must be calculated using the interest assumption 
53.25 	specified in subdivision 8 in effect after any applicable change, rounded to the nearest 
53.26 	integral number of years, but not to exceed 30 years from the end of the plan year in 
53.27 	which the determination of the established date for full funding using the procedure set 
53.28 	forth in this clause is made and not to be less than the period of years beginning in the 
53.29 	plan year in which the determination of the established date for full funding using the 
53.30 	procedure set forth in this clause is made and ending by the date for full funding in effect 
53.31 	before the change; and
53.32 	(vii) the period determined under item (vi) must be added to the date as of which 
53.33 	the actuarial valuation was prepared and the date obtained is the new established date 
53.34 	for full funding.
53.35 	(d) For the Minneapolis Employees Retirement Fund, the established date for full 
53.36 	funding is June 30, 2020.
54.1 	(e) For the general employees retirement plan of the Public Employees Retirement 
54.2 	Association, the established date for full funding is June 30, 2031.
54.3 	(f) For the Teachers Retirement Association, the established date for full funding is 
54.4 	June 30, 2037.
54.5 	(g) For the correctional state employees retirement plan of the Minnesota State 
54.6 	Retirement System, the established date for full funding is June 30, 2038.
54.7 	(h) For the judges retirement plan, the established date for full funding is June 
54.8 	30, 2038.
54.9 	(i) For the public employees police and fire retirement plan, the established date 
54.10 	for full funding is June 30, 2038.
54.11 	(j) For the St. Paul Teachers Retirement Fund Association, the established date for 
54.12 	full funding is June 30 of the 25th year from the valuation date. In addition to other 
54.13 	requirements of this chapter, the annual actuarial valuation shall contain an exhibit 
54.14 	indicating the funded ratio and the deficiency or sufficiency in annual contributions when 
54.15 	comparing liabilities to the market value of the assets of the fund as of the close of the 
54.16 	most recent fiscal year.
54.17 	(k) For the general state employees retirement plan of the Minnesota State 
54.18 	Retirement System, the established date for full funding is June 30, 2040.
54.19 	(l) For the retirement plans for which the annual actuarial valuation indicates an 
54.20 	excess of valuation assets over the actuarial accrued liability, the valuation assets in 
54.21 	excess of the actuarial accrued liability must be recognized as a reduction in the current 
54.22 	contribution requirements by an amount equal to the amortization of the excess expressed 
54.23 	as a level percentage of pay over a 30-year period beginning anew with each annual 
54.24 	actuarial valuation of the plan.

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

54.26 	Sec. 69. Minnesota Statutes 2008, section 356.30, subdivision 1, is amended to read:
54.27 		Subdivision 1. Eligibility; computation of annuity. (a) Notwithstanding any 
54.28 	provisions of the laws governing the retirement plans enumerated in subdivision 3, a 
54.29 	person who has met the qualifications of paragraph (b) may elect to receive a retirement 
54.30 	annuity from each enumerated retirement plan in which the person has at least one-half 
54.31 	year of allowable service, based on the allowable service in each plan, subject to the 
54.32 	provisions of paragraph (c). 
54.33 	(b) A person may receive, upon retirement, a retirement annuity from each 
54.34 	enumerated retirement plan in which the person has at least one-half year of allowable 
54.35 	service, and augmentation of a deferred annuity calculated at the appropriate rate under 
55.1 	the laws governing each public pension plan or fund named in subdivision 3, based on 
55.2 	the date of the person's initial entry into public employment from the date the person 
55.3 	terminated all public service if: 
55.4 	(1) the person has allowable service totaling an amount that allows the person to 
55.5 	receive an annuity in any two or more of the enumerated plans; 
55.6 	(2) the person has sufficient allowable service in total that equals or exceeds the 
55.7 	applicable service credit vesting requirement of the retirement plan with the longest 
55.8 	applicable service credit vesting requirement; and 
55.9 	(2)(3) the person has not begun to receive an annuity from any enumerated plan or 
55.10 	the person has made application for benefits from each applicable plan and the effective 
55.11 	dates of the retirement annuity with each plan under which the person chooses to receive 
55.12 	an annuity are within a one-year period. 
55.13 	(c) The retirement annuity from each plan must be based upon the allowable service, 
55.14 	accrual rates, and average salary in the applicable plan except as further specified or 
55.15 	modified in the following clauses: 
55.16 	(1) the laws governing annuities must be the law in effect on the date of termination 
55.17 	from the last period of public service under a covered retirement plan with which the 
55.18 	person earned a minimum of one-half year of allowable service credit during that 
55.19 	employment; 
55.20 	(2) the "average salary" on which the annuity from each covered plan in which 
55.21 	the employee has credit in a formula plan must be based on the employee's highest five 
55.22 	successive years of covered salary during the entire service in covered plans; 
55.23 	(3) the accrual rates to be used by each plan must be those percentages prescribed by 
55.24 	each plan's formula as continued for the respective years of allowable service from one 
55.25 	plan to the next, recognizing all previous allowable service with the other covered plans; 
55.26 	(4) the allowable service in all the plans must be combined in determining eligibility 
55.27 	for and the application of each plan's provisions in respect to reduction in the annuity 
55.28 	amount for retirement prior to normal retirement age; and 
55.29 	(5) the annuity amount payable for any allowable service under a nonformula plan 
55.30 	of a covered plan must not be affected, but such service and covered salary must be used 
55.31 	in the above calculation. 
55.32 	(d) This section does not apply to any person whose final termination from the last 
55.33 	public service under a covered plan was before May 1, 1975. 
55.34 	(e) For the purpose of computing annuities under this section, the accrual rates 
55.35 	used by any covered plan, except the public employees police and fire plan, the judges 
55.36 	retirement fund, and the State Patrol retirement plan, must not exceed the percent specified 
56.1 	in section 356.315, subdivision 4, per year of service for any year of service or fraction 
56.2 	thereof. The formula percentage used by the judges retirement fund must not exceed the 
56.3 	percentage rate specified in section 356.315, subdivision 8, per year of service for any 
56.4 	year of service or fraction thereof. The accrual rate used by the public employees police 
56.5 	and fire plan and the State Patrol retirement plan must not exceed the percentage rate 
56.6 	specified in section 356.315, subdivision 6, per year of service for any year of service or 
56.7 	fraction thereof. The accrual rate or rates used by the legislators retirement plan must not 
56.8 	exceed 2.5 percent, but this limit does not apply to the adjustment provided under section 
56.9 	3A.02, subdivision 1, paragraph (c). 
56.10 	(f) Any period of time for which a person has credit in more than one of the covered 
56.11 	plans must be used only once for the purpose of determining total allowable service. 
56.12 	(g) If the period of duplicated service credit is more than one-half year, or the person 
56.13 	has credit for more than one-half year, with each of the plans, each plan must apply its 
56.14 	formula to a prorated service credit for the period of duplicated service based on a fraction 
56.15 	of the salary on which deductions were paid to that fund for the period divided by the total 
56.16 	salary on which deductions were paid to all plans for the period. 
56.17 	(h) If the period of duplicated service credit is less than one-half year, or when 
56.18 	added to other service credit with that plan is less than one-half year, the service credit 
56.19 	must be ignored and a refund of contributions made to the person in accord with that 
56.20 	plan's refund provisions. 

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

56.22 	Sec. 70. Minnesota Statutes 2008, section 356.302, subdivision 3, is amended to read:
56.23 		Subd. 3.General employee plan eligibility requirements. A disabled member 
56.24 	of a covered retirement plan who has credit for allowable service in a combination of 
56.25 	general employee retirement plans is entitled to a combined service disability benefit 
56.26 	if the member:
56.27 	(1) is less than the normal retirement age on the date of the application for the 
56.28 	disability benefit;
56.29 	(2) has become totally and permanently disabled;
56.30 	(3) has credit for allowable service in any combination of general employee 
56.31 	retirement plans totaling at least three years the number of years required by the applicable 
56.32 	retirement plan with the longest service credit requirement for disability benefit receipt;
56.33 	(4) has credit for at least one-half year of allowable service with the current general 
56.34 	employee retirement plan before the commencement of the disability;
57.1 	(5) has at least three continuous years of allowable service credit by the general 
57.2 	employee retirement plan or has at least a total of three years of allowable service credit 
57.3 	by a combination of general employee retirement plans in a 72-month period during 
57.4 	which no interruption of allowable service credit from a termination of employment 
57.5 	exceeded 29 days; and
57.6 	(6) was not receiving a retirement annuity or disability benefit from any covered 
57.7 	general employee retirement plan at the time of the commencement of the disability.

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

57.9 	Sec. 71. Minnesota Statutes 2008, section 356.302, subdivision 4, is amended to read:
57.10 		Subd. 4.Public safety plan eligibility requirements. A disabled member of a 
57.11 	covered retirement plan who has credit for allowable service in a combination of public 
57.12 	safety employee retirement plans is entitled to a combined service disability benefit if the 
57.13 	member:
57.14 	(1) has become occupationally disabled;
57.15 	(2) has credit for allowable service in any combination of public safety employee 
57.16 	retirement plans totaling at least one yearthe minimum period of service credit required by 
57.17 	the applicable retirement plan with the longest service credit eligibility requirement for the 
57.18 	receipt of a duty-related disability benefit if the disability is duty-related or totaling at least 
57.19 	three yearsthe minimum period of service credit required by the applicable retirement 
57.20 	plan with the longest service credit eligibility requirement for a disability benefit that is 
57.21 	not duty-related if the disability is not duty-related;
57.22 	(3) has credit for at least one-half year of allowable service with the current public 
57.23 	safety employee retirement plan before the commencement of the disability; and
57.24 	(4) was not receiving a retirement annuity or disability benefit from any covered 
57.25 	public safety employee retirement plan at the time of the commencement of the disability.

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

57.27 	Sec. 72. Minnesota Statutes 2008, section 356.302, subdivision 5, is amended to read:
57.28 		Subd. 5.General and public safety plan eligibility requirements. A disabled 
57.29 	member of a covered retirement plan who has credit for allowable service in a combination 
57.30 	of both a public safety employee retirement plan and general employee retirement plan 
57.31 	must meet the qualifying requirements in subdivisions 3 and 4 to receive a combined 
57.32 	service disability benefit from the applicable general employee and public safety 
57.33 	employee retirement plans, except that the person need only be a member of a covered 
58.1 	retirement plan at the time of the commencement of the disability, that the person must 
58.2 	have allowable service credit for the applicable retirement plan with the longest service 
58.3 	credit eligibility requirement for the receipt of a disability benefit, and that the minimum 
58.4 	allowable service requirements of subdivisions 3, clauses (3) and (5), and 4, clauses (3) 
58.5 	and (4), may be met in any combination of covered retirement plans.

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

58.7 	Sec. 73. Minnesota Statutes 2008, section 356.303, subdivision 2, is amended to read:
58.8 		Subd. 2.Entitlement; eligibility. Notwithstanding any provision of law to the 
58.9 	contrary governing a covered retirement plan, a person who is the survivor of a deceased 
58.10 	member of a covered retirement plan may receive a combined service survivor benefit 
58.11 	from each covered retirement plan in which the deceased member had credit for at least 
58.12 	one-half year of allowable service if the deceased member:
58.13 	(1) had credit for sufficient allowable service in any combination of covered 
58.14 	retirement plans to meet anythe minimum allowable service credit requirement of the 
58.15 	applicable covered retirement fund with the longest allowable service credit requirement 
58.16 	for qualification for a survivor benefit or annuity;
58.17 	(2) had credit for at least one-half year of allowable service with the most recent 
58.18 	covered retirement plan before the date of death and was an active member of that covered 
58.19 	retirement plan on the date of death; and
58.20 	(3) was not receiving a retirement annuity from any covered retirement plan on the 
58.21 	date of death.

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

58.23 	Sec. 74. Minnesota Statutes 2008, section 356.315, subdivision 5, is amended to read:
58.24 		Subd. 5.Correctional plan members. The applicable benefit accrual rate is 2.4 
58.25 	percent if employed as a correctional state employee before July 1, 2010, or 2.2 percent if 
58.26 	employed as a correctional state employee after June 30, 2010.

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

58.28 	Sec. 75. Minnesota Statutes 2009 Supplement, section 356.415, subdivision 1, is 
58.29 	amended to read:
58.30 		Subdivision 1.Annual postretirement adjustments; generally. (a) Except as 
58.31 	otherwise provided in subdivision 1a, 1b, 1c, 1d, or 1e, retirement annuity, disability 
59.1 	benefit, or survivor benefit recipients of a covered retirement plan are entitled to a 
59.2 	postretirement adjustment annually on January 1, as follows:
59.3 	(1) a postretirement increase of 2.5 percent must be applied each year, effective 
59.4 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has 
59.5 	been receiving an annuity or a benefit for at least 12 full months prior to the January 1 
59.6 	increase; and
59.7 	(2) for each annuitant or benefit recipient who has been receiving an annuity or a 
59.8 	benefit amount for at least one full month, an annual postretirement increase of 1/12 of 2.5 
59.9 	percent for each month that the person has been receiving an annuity or benefit must be 
59.10 	applied, effective on January 1 following the calendar year in which the person has been 
59.11 	retired for less than 12 months.
59.12 	(b) The increases provided by this section subdivision commence on January 1, 2010.
59.13 	(c) An increase in annuity or benefit payments under this section must be made 
59.14 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
59.15 	executive director of the covered retirement plan requesting that the increase not be made.
59.16 	(d) The retirement annuity payable to a person who retires before becoming eligible 
59.17 	for Social Security benefits and who has elected the optional payment as provided in 
59.18 	section 353.29, subdivision 6, or 354.35 must be treated as the sum of a period certain 
59.19 	retirement annuity and a life retirement annuity for the purposes of any postretirement 
59.20 	adjustment. The period certain retirement annuity plus the life retirement annuity must be 
59.21 	the annuity amount payable until age 62 for section 353.29, subdivision 6, or age 62, 65, 
59.22 	or normal retirement age, as selected by the member at retirement, for an annuity amount 
59.23 	payable under section 354.35. A postretirement adjustment granted on the period certain 
59.24 	retirement annuity must terminate when the period certain retirement annuity terminates.

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

59.26 	Sec. 76. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding 
59.27 	a subdivision to read:
59.28 		Subd. 1a.Annual postretirement adjustments; Minnesota State Retirement 
59.29 	System plans other than State Patrol retirement plan. (a) Retirement annuity, disability 
59.30 	benefit, or survivor benefit recipients of the legislators retirement plan, the general state 
59.31 	employees retirement plan, the correctional state employees retirement plan, the elected 
59.32 	state officers retirement plan, the unclassified state employees retirement program, and the 
59.33 	judges retirement plan are entitled to a postretirement adjustment annually on January 
59.34 	1, as follows:
60.1 	(1) a postretirement increase of two percent must be applied each year, effective on 
60.2 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who 
60.3 	has been receiving an annuity or a benefit for at least 18 full months before the January 1 
60.4 	increase; and
60.5 	(2) for each annuitant or benefit recipient who has been receiving an annuity or 
60.6 	a benefit for at least six full months, an annual postretirement increase of 1/12 of two 
60.7 	percent for each month that the person has been receiving an annuity or benefit must be 
60.8 	applied, effective January 1, following the calendar year in which the person has been 
60.9 	retired for at least six months, but has been retired for less than 18 months.
60.10 	(b) The increases provided by this subdivision commence on January 1, 2011. 
60.11 	Increases under this subdivision for the general state employees retirement plan, the 
60.12 	correctional state employees retirement plan, or the judges retirement plan terminate 
60.13 	on December 31 of the calendar year in which the actuarial valuation prepared by the 
60.14 	approved actuary under sections 356.214 and 356.215 and the standards for actuarial work 
60.15 	promulgated by the Legislative Commission on Pensions and Retirement indicates that the 
60.16 	market value of assets of the retirement plan equals or exceeds 90 percent of the actuarial 
60.17 	accrued liability of the retirement plan and increases under subdivision 1 recommence 
60.18 	after that date. Increases under this subdivision for the legislators retirement plan or the 
60.19 	elected state officers retirement plan terminate on December 31 of the calendar year in 
60.20 	which the actuarial valuation prepared by the approved actuary under sections 356.214 and 
60.21 	356.215 and the standards for actuarial work promulgated by the Legislative Commission 
60.22 	on Pensions and Retirement indicates that the market value of assets of the general state 
60.23 	employees retirement plan equals or exceeds 90 percent of the actuarial accrued liability 
60.24 	of the retirement plan and increases under subdivision 1 recommence after that date.
60.25 	(c) An increase in annuity or benefit payments under this subdivision must be made 
60.26 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
60.27 	executive director of the applicable covered retirement plan requesting that the increase 
60.28 	not be made.

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

60.30 	Sec. 77. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding 
60.31 	a subdivision to read:
60.32 		Subd. 1b.Annual postretirement adjustments; PERA; general employees 
60.33 	retirement plan and local government correctional retirement plan. (a) Retirement 
60.34 	annuity, disability benefit, or survivor benefit recipients of the general employees 
60.35 	retirement plan of the Public Employees Retirement Association and the local government 
61.1 	correctional service retirement plan are entitled to a postretirement adjustment annually 
61.2 	on January 1, as follows:
61.3 	(1) for January 1, 2011, and each successive January 1 until funding stability is 
61.4 	restored for the applicable retirement plan, a postretirement increase of one percent must 
61.5 	be applied each year, effective on January 1, to the monthly annuity or benefit amount of 
61.6 	each annuitant or benefit recipient who has been receiving an annuity or benefit for at least 
61.7 	12 full months as of the current June 30; 
61.8 	(2) for January 1, 2011, and each successive January 1 until funding stability is 
61.9 	restored for the applicable retirement plan, for each annuitant or benefit recipient who has 
61.10 	been receiving an annuity or a benefit for at least one full month, but less than 12 full 
61.11 	months as of the current June 30, an annual postretirement increase of 1/12 of one percent 
61.12 	for each month the person has been receiving an annuity or benefit must be applied;
61.13 	(3) for each January 1 following the restoration of funding stability for the applicable 
61.14 	retirement plan, a postretirement increase of 2.5 percent must be applied each year, 
61.15 	effective January 1, to the monthly annuity or benefit amount of each annuitant or benefit 
61.16 	recipient who has been receiving an annuity or benefit for at least 12 full months as of 
61.17 	the current June 30; and
61.18 	(4) for each January 1 following restoration of funding stability for the applicable 
61.19 	retirement plan, for each annuity or benefit recipient who has been receiving an annuity or 
61.20 	a benefit for at least one full month, but less than 12 full months as of the current June 
61.21 	30, an annual postretirement increase of 1/12 of 2.5 percent for each month the person 
61.22 	has been receiving an annuity or benefit must be applied.
61.23 	(b) Funding stability is restored when the market value of assets of the applicable 
61.24 	retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities of the 
61.25 	applicable plan in the most recent prior actuarial valuation prepared under section 356.215 
61.26 	and the standards for actuarial work by the approved actuary retained by the Public 
61.27 	Employees Retirement Association under section 356.214.
61.28 	(c) If, after applying the increase as provided for in paragraph (a), clauses (3) 
61.29 	and (4), the market value of the applicable retirement plan is determined in the next 
61.30 	subsequent actuarial valuation prepared under section 356.215 to be less than 90 percent 
61.31 	of the actuarial accrued liability of any of the applicable Public Employees Retirement 
61.32 	Association plans, the increase provided in paragraph (a), clauses (1) and (2), are to be 
61.33 	applied as of the next successive January until funding stability is again restored.
61.34 	(d) An increase in annuity or benefit payments under this section must be made 
61.35 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
62.1 	executive director of the Public Employees Retirement Association requesting that the 
62.2 	increase not be made.
62.3 	(e) The retirement annuity payable to a person who retires before becoming eligible 
62.4 	for Social Security benefits and who has elected the optional payment, as provided in 
62.5 	section 353.29, subdivision 6, must be treated as the sum of a period-certain retirement 
62.6 	annuity and a life retirement annuity for the purposes of any postretirement adjustment. 
62.7 	The period-certain retirement annuity plus the life retirement annuity must be the 
62.8 	annuity amount payable until age 62 for section 353.29, subdivision 6. A postretirement 
62.9 	adjustment granted on the period-certain retirement annuity must terminate when the 
62.10 	period-certain retirement annuity terminates.

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

62.12 	Sec. 78. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding 
62.13 	a subdivision to read:
62.14 		Subd. 1c.Annual postretirement adjustments; PERA-P&F. (a) Retirement 
62.15 	annuity, disability benefit, or survivor benefit recipients of the public employees police 
62.16 	and fire retirement plan are entitled to a postretirement adjustment annually on January 
62.17 	1, as follows:
62.18 	(1) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit 
62.19 	recipient who has been receiving the annuity or benefit for at least 12 full months as of the 
62.20 	immediate preceding June 30, an amount equal to one percent in each year;
62.21 	(2) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit 
62.22 	recipient who has been receiving the annuity or benefit for at least one full month as of the 
62.23 	immediate preceding June 30, an amount equal to 1/12 of one percent in each year;
62.24 	(3) for January 1, 2013, and each successive January 1 that follows the loss of 
62.25 	funding stability as defined under paragraph (b) until funding stability as defined under 
62.26 	paragraph (b) is again restored, for each annuitant or benefit recipient who has been 
62.27 	receiving the annuity or benefit for at least 12 full months as of the immediate preceding 
62.28 	June 30, an amount equal to the percentage increase in the Consumer Price Index for 
62.29 	urban wage earners and clerical workers all items index published by the Bureau of Labor 
62.30 	Statistics of the United States Department of Labor between the immediate preceding June 
62.31 	30 and the June 30 occurring 12 months previous, but not to exceed 1.5 percent;
62.32 	(4) for January 1, 2013, and each successive January 1 that follows the loss of 
62.33 	funding stability as defined under paragraph (b) until funding stability as defined under 
62.34 	paragraph (b) is again restored, for each annuitant or benefit recipient who has been 
62.35 	receiving the annuity or benefit for at least one full month as of the immediate preceding 
63.1 	June 30, an amount equal to 1/12 of the percentage increase in the Consumer Price Index 
63.2 	for urban wage earners and clerical workers all items index published by the Bureau 
63.3 	of Labor Statistics of the United States Department of Labor between the immediate 
63.4 	preceding June 30 and the June 30 occurring 12 months previous for each full month of 
63.5 	annuity or benefit receipt, but not to exceed 1/12 of 1.5 percent for each full month of 
63.6 	annuity or benefit receipt;
63.7 	(5) for each January 1 following the restoration of funding stability as defined under 
63.8 	paragraph (b) and during the continuation of funding stability as defined under paragraph 
63.9 	(b), for each annuitant or benefit recipient who has been receiving the annuity or benefit 
63.10 	for at least 12 full months as of the immediate preceding June 30, an amount equal to the 
63.11 	percentage increase in the Consumer Price Index for urban wage earners and clerical 
63.12 	workers all items index published by the Bureau of Labor Statistics of the United States 
63.13 	Department of Labor between the immediate preceding June 30 and the June 30 occurring 
63.14 	12 months previous, but not to exceed 2.5 percent; and
63.15 	(6) for each January 1 following the restoration of funding stability as defined under 
63.16 	paragraph (b) and during the continuation of funding stability as defined under paragraph 
63.17 	(b), for each annuitant or benefit recipient who has been receiving the annuity or benefit 
63.18 	for at least one full month as of the immediate preceding June 30, an amount equal to 
63.19 	1/12 of the percentage increase in the Consumer Price Index for urban wage earners and 
63.20 	clerical workers all items index published by the Bureau of Labor Statistics of the United 
63.21 	States Department of Labor between the immediate preceding June 30 and the June 30 
63.22 	occurring 12 months previous for each full month of annuity or benefit receipt, but not to 
63.23 	exceed 1/12 of 2.5 percent for each full month of annuity or benefit receipt.
63.24 	(b) Funding stability is restored when the market value of assets of the public 
63.25 	employees police and fire retirement plan equals or exceeds 90 percent of the actuarial 
63.26 	accrued liabilities of the applicable plan in the most recent prior actuarial valuation 
63.27 	prepared under section 356.215 and under the standards for actuarial work of the 
63.28 	Legislative Commission on Pensions and Retirement by the approved actuary retained by 
63.29 	the Public Employees Retirement Association under section 356.214.
63.30 	(c) An increase in annuity or benefit payments under this section must be made 
63.31 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
63.32 	executive director of the Public Employees Retirement Association requesting that the 
63.33 	increase not be made.

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

64.1 	Sec. 79. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding 
64.2 	a subdivision to read:
64.3 		Subd. 1d.Teachers Retirement Association annual postretirement adjustments.
 64.4 	(a) Retirement annuity, disability benefit, or survivor benefit recipients of the Teachers 
64.5 	Retirement Association are entitled to a postretirement adjustment annually on January 
64.6 	1, as follows:
64.7 	(1) for January 1, 2011, and January 1, 2012, no postretirement increase is payable;
64.8 	(2) for January 1, 2013, and each successive January 1 until funding stability is 
64.9 	restored, a postretirement increase of two percent must be applied each year, effective on 
64.10 	January 1, to the monthly annuity or benefit amount of each annuitant or benefit recipient 
64.11 	who has been receiving an annuity or a benefit for at least 18 full months prior to the 
64.12 	January 1 increase;
64.13 	(3) for January 1, 2013, and each successive January 1 until funding stability is 
64.14 	restored, for each annuitant or benefit recipient who has been receiving an annuity or 
64.15 	a benefit for at least six full months, an annual postretirement increase of 1/12 of two 
64.16 	percent for each month the person has been receiving an annuity or benefit must be 
64.17 	applied, effective January 1, following the year in which the person has been retired 
64.18 	for less than 12 months;
64.19 	(4) for each January 1 following the restoration of funding stability, a postretirement 
64.20 	increase of 2.5 percent must be applied each year, effective January 1, to the monthly 
64.21 	annuity or benefit amount of each annuitant or benefit recipient who has been receiving an 
64.22 	annuity or a benefit for at least 18 full months prior to the January 1 increase; and
64.23 	(5) for each January 1 following the restoration of funding stability, for each 
64.24 	annuitant or benefit recipient who has been receiving an annuity or a benefit for at least 
64.25 	six full months, an annual postretirement increase of 1/12 of 2.5 percent for each month 
64.26 	the person has been receiving an annuity or benefit must be applied, effective January 1, 
64.27 	following the year in which the person has been retired for less than 12 months.
64.28 	(b) Funding stability is restored when the market value of assets of the Teachers 
64.29 	Retirement Association equals or exceeds 90 percent of the actuarial accrued liabilities of 
64.30 	the Teachers Retirement Association in the most recent prior actuarial valuation prepared 
64.31 	under section 356.215 and the standards for actuarial work by the approved actuary 
64.32 	retained by the Teachers Retirement Association under section 356.214.
64.33 	(c) An increase in annuity or benefit payments under this section must be made 
64.34 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
64.35 	executive director of the Teachers Retirement Association requesting that the increase 
64.36 	not be made.
65.1 	(d) The retirement annuity payable to a person who retires before becoming eligible 
65.2 	for Social Security benefits and who has elected the optional payment as provided in 
65.3 	section 354.35 must be treated as the sum of a period-certain retirement annuity and a life 
65.4 	retirement annuity for the purposes of any postretirement adjustment. The period-certain 
65.5 	retirement annuity plus the life retirement annuity must be the annuity amount payable 
65.6 	until age 62, 65, or normal retirement age, as selected by the member at retirement, for an 
65.7 	annuity amount payable under section 354.35. A postretirement adjustment granted on 
65.8 	the period-certain retirement annuity must terminate when the period-certain retirement 
65.9 	annuity terminates.

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

65.11 	Sec. 80. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding 
65.12 	a subdivision to read:
65.13 		Subd. 1e.Annual postretirement adjustments; State Patrol retirement plan.
 65.14 	(a) Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol 
65.15 	retirement plan are entitled to a postretirement adjustment annually on January 1, as 
65.16 	follows:
65.17 	(1) a postretirement increase of 1.5 percent must be applied each year, effective on 
65.18 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who 
65.19 	has been receiving an annuity or a benefit for at least 18 full months before the January 1 
65.20 	increase; and
65.21 	(2) for each annuitant or benefit recipient who has been receiving an annuity or a 
65.22 	benefit for at least six full months, an annual postretirement increase of 1/12 of 1.5 percent 
65.23 	for each month that the person has been receiving an annuity or benefit must be applied, 
65.24 	effective January 1, following the calendar year in which the person has been retired for at 
65.25 	least six months, but has been retired for less than 18 months.
65.26 	(b) The increases provided by this subdivision commence on January 1, 2011. 
65.27 	Increases under this subdivision for the State Patrol retirement plan terminate on December 
65.28 	31 of the calendar year in which the actuarial valuation prepared by the approved actuary 
65.29 	under sections 356.214 and 356.215 and the standards for actuarial work promulgated by 
65.30 	the Legislative Commission on Pensions and Retirement indicates that the market value of 
65.31 	assets of the retirement plan equals or exceeds 90 percent of the actuarial accrued liability 
65.32 	of the retirement plan and increases under subdivision 1 recommence after that date.
65.33 	(c) An increase in annuity or benefit payments under this subdivision must be made 
65.34 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
66.1 	executive director of the applicable covered retirement plan requesting that the increase 
66.2 	not be made.

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

66.4 	Sec. 81. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding 
66.5 	a subdivision to read:
66.6 		Subd. 3.Actuarial valuation reports until funding is stabilized. Notwithstanding 
66.7 	any provision of section 356.215, subdivision 8, to the contrary, until the actuarial 
66.8 	valuations, prepared annually by the approved actuary under sections 356.214 and 
66.9 	356.215 and the standards for actuarial work promulgated by the Legislative Commission 
66.10 	on Pensions and Retirement, indicate that the market value of assets of the applicable 
66.11 	covered plans equals or exceeds 90 percent of the actuarial accrued liabilities, the actuarial 
66.12 	valuation reports must utilize a postretirement interest rate assumption that is equal to the 
66.13 	difference between the preretirement interest rate assumption provided in section 356.215, 
66.14 	subdivision 8, and the stated annual postretirement adjustment rate provided under this 
66.15 	section, as applicable to each covered plan.

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

66.17 	Sec. 82. Minnesota Statutes 2008, section 356.47, subdivision 3, is amended to read:
66.18 		Subd. 3.Payment. (a) Beginning one year after the reemployment withholding 
66.19 	period ends relating to the reemployment that gave rise to the limitation, and the filing of a 
66.20 	written application, the retired member is entitled to the payment, in a lump sum, of the 
66.21 	value of the person's amount under subdivision 2, plus annual compound interest at. For 
66.22 	the general state employees retirement plan, the correctional state employees retirement 
66.23 	plan, the general employees retirement plan of the Public Employees Retirement 
66.24 	Association, the public employees police and fire retirement plan, the local government 
66.25 	correctional employees retirement plan, and the teachers retirement plan, the annual 
66.26 	interest rate is six percent from the date on which the amount was deducted from the 
66.27 	retirement annuity to the date of payment or until January 1, 2011, whichever is earlier, and 
66.28 	no interest after January 1, 2011. For the Duluth Teachers Retirement Fund Association, 
66.29 	the annual interest is six percent from the date on which the amount was deducted from the 
66.30 	retirement annuity to the date of payment or until June 30, 2010, whichever is earlier, and 
66.31 	no interest after June 30, 2010. For the St. Paul Teachers Retirement Fund Association, 
66.32 	the annual interest is the compound annual rate of six percent from the date that the 
66.33 	amount was deducted from the retirement annuity to the date of payment.
67.1 	(b) The written application must be on a form prescribed by the chief administrative 
67.2 	officer of the applicable retirement plan.
67.3 	(c) If the retired member dies before the payment provided for in paragraph (a) is 
67.4 	made, the amount is payable, upon written application, to the deceased person's surviving 
67.5 	spouse, or if none, to the deceased person's designated beneficiary, or if none, to the 
67.6 	deceased person's estate.
67.7 	(d) In lieu of the direct payment of the person's amount under subdivision 2, on 
67.8 	or after the payment date under paragraph (a), if the federal Internal Revenue Code so 
67.9 	permits, the retired member may elect to have all or any portion of the payment amount 
67.10 	under this section paid in the form of a direct rollover to an eligible retirement plan as 
67.11 	defined in section 402(c) of the federal Internal Revenue Code that is specified by the 
67.12 	retired member. If the retired member dies with a balance remaining payable under this 
67.13 	section, the surviving spouse of the retired member, or if none, the deceased person's 
67.14 	designated beneficiary, or if none, the administrator of the deceased person's estate may 
67.15 	elect a direct rollover under this paragraph.

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

67.17 	Sec. 83. Minnesota Statutes 2009 Supplement, section 423A.02, subdivision 3, is 
67.18 	amended to read:
67.19 		Subd. 3.Reallocation of amortization or supplementary amortization state 
67.20 	aid. (a) Seventy percent of the difference between $5,720,000 and the current year 
67.21 	amortization aid and supplemental amortization aid distributed under subdivisions 1 
67.22 	and 1a that is not distributed for any reason to a municipality for use by a local police 
67.23 	or salaried fire relief association must be distributed by the commissioner of revenue 
67.24 	according to this paragraph. The commissioner shall distribute 50 percent of the amounts 
67.25 	derived under this paragraph to the Teachers Retirement Association, ten percent to the 
67.26 	Duluth Teachers Retirement Fund Association, and 40 percent to the St. Paul Teachers 
67.27 	Retirement Fund Association to fund the unfunded actuarial accrued liabilities of the 
67.28 	respective funds. These payments shall be made on or before June 30 each fiscal year. If 
67.29 	the St. Paul Teachers Retirement Fund Association becomes fully funded, its eligibility 
67.30 	for this aid ceases. Amounts remaining in the undistributed balance account at the end of 
67.31 	the biennium if aid eligibility ceases cancel to the general fund.
67.32 	(b) In order to receive amortization and supplementary amortization aid under 
67.33 	paragraph (a), Independent School District No. 625, St. Paul, must make contributions 
67.34 	to the St. Paul Teachers Retirement Fund Association in accordance with the following 
67.35 	schedule:

68.1		Fiscal Year
		Amount
		
68.2		1996
	$
	0
		
68.3		1997
	$
	0
		
68.4		1998
	$
	200,000
		
68.5		1999
	$
	400,000
		
68.6		2000
	$
	600,000
		
68.7		2001 and thereafter
	$
	800,000
		
68.8 	(c) Special School District No. 1, Minneapolis, and the city of Minneapolis must 
68.9 	each make contributions to the Teachers Retirement Association in accordance with the 
68.10 	following schedule:

68.11
68.12		Fiscal Year
	City amount
		School district 
amount
		
68.13		1996
	$
	0
		$
	0
		
68.14		1997
	$
	0
		$
	0
		
68.15		1998
	$
	250,000
		$
	250,000
		
68.16		1999
	$
	400,000
		$
	400,000
		
68.17		2000
	$
	550,000
		$
	550,000
		
68.18		2001
	$
	700,000
		$
	700,000
		
68.19		2002
	$
	850,000
		$
	850,000
		
68.20		2003 and thereafter
	$
	1,000,000
		$
	1,000,000
		
68.21 	(d) Money contributed under paragraph (a) and either paragraph (b) or (c), as 
68.22 	applicable, must be credited to a separate account in the applicable teachers retirement 
68.23 	fund and may not be used in determining any benefit increases. The separate account 
68.24 	terminates for a fund when the aid payments to the fund under paragraph (a) cease.
68.25 	(e)(d) Thirty percent of the difference between $5,720,000 and the current year 
68.26 	amortization aid and supplemental amortization aid under subdivisions 1 and 1a that is not 
68.27 	distributed for any reason to a municipality for use by a local police or salaried firefighter 
68.28 	relief association must be distributed under section 69.021, subdivision 7, paragraph (d), 
68.29 	as additional funding to support a minimum fire state aid amount for volunteer firefighter 
68.30 	relief associations.

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

68.32 	Sec. 84. LOCAL RETIREMENT FUND INVESTMENT AUTHORITIES 
68.33 	STUDY.
 68.34 	A study group consisting of representatives from pension plans subject to Minnesota 
68.35 	Statutes, section 356A.06, subdivision 6 or 7, shall be convened by the state auditor to 
68.36 	study investment-related provisions, authorities, and limitations under Minnesota Statutes, 
68.37 	chapter 356A, and related sections of other chapters. Administrative support for the 
69.1 	study group shall be provided by the state auditor. The study group shall prepare a 
69.2 	report to include an assessment of the effectiveness of current statutory prescriptions, 
69.3 	options for change, and recommendations for consideration by the governor and the 
69.4 	legislature during the 2011 legislative session. The report will be provided no later than 
69.5 	January 15, 2011, to the executive director of the Legislative Commission on Pensions and 
69.6 	Retirement, the chair and ranking minority caucus member of the senate State and Local 
69.7 	Government Operations and Oversight Committee, and the chair and ranking minority 
69.8 	caucus member of the house State and Local Government Operations Reform, Technology 
69.9 	and Elections Committee.

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

69.11 	Sec. 85. BYLAW AUTHORIZATION.
 69.12 	Consistent with the requirements of Minnesota Statutes, section 354A.12, 
69.13 	subdivision 4, the board of the Duluth Teachers Retirement Fund Association is authorized 
69.14 	to revise the bylaws or articles of incorporation so that the requirements of this act apply 
69.15 	to the old law coordinated program.

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

69.17 	Sec. 86.  REPEALER.
 69.18 	Minnesota Statutes 2008, section 354A.27, subdivision 1, is repealed.

69.19 	EFFECTIVE DATE. This section is effective July 1, 2010.

69.20 	ARTICLE 2
69.21 	MSRS ADMINISTRATIVE PROVISIONS

69.22 	Section 1. Minnesota Statutes 2008, section 352.01, subdivision 2a, is amended to read:
69.23 		Subd. 2a.Included employees. (a) "State employee" includes:
69.24 	(1) employees of the Minnesota Historical Society;
69.25 	(2) employees of the State Horticultural Society;
69.26 	(3) employees of the Minnesota Crop Improvement Association;
69.27 	(4) employees of the adjutant general who whose salaries are paid from federal funds 
69.28 	and who are not covered by any federal civilian employees retirement system;
69.29 	(5) employees of the Minnesota State Colleges and Universities who are employed 
69.30 	under the university or college activities program;
70.1 	(6) currently contributing employees covered by the system who are temporarily 
70.2 	employed by the legislature during a legislative session or any currently contributing 
70.3 	employee employed for any special service as defined in subdivision 2b, clause (8);
70.4 	(7) employees of the legislature who are appointed without a limit on the duration 
70.5 	of their employment and persons employed or designated by the legislature or by a 
70.6 	legislative committee or commission or other competent authority to conduct a special 
70.7 	inquiry, investigation, examination, or installation;
70.8 	(8) trainees who are employed on a full-time established training program 
70.9 	performing the duties of the classified position for which they will be eligible to receive 
70.10 	immediate appointment at the completion of the training period;
70.11 	(9) employees of the Minnesota Safety Council;
70.12 	(10) any employees who are on authorized leave of absence from the Transit 
70.13 	Operating Division of the former Metropolitan Transit Commission and who are employed 
70.14 	by the labor organization which is the exclusive bargaining agent representing employees 
70.15 	of the Transit Operating Division;
70.16 	(11) employees of the Metropolitan Council, Metropolitan Parks and Open Space 
70.17 	Commission, Metropolitan Sports Facilities Commission, or Metropolitan Mosquito 
70.18 	Control Commission, or Metropolitan Radio Board unless excluded under subdivision 2b
70.19 	or are covered by another public pension fund or plan under section 473.415, subdivision 3;
70.20 	(12) judges of the Tax Court;
70.21 	(13) personnel who were employed on June 30, 1992, by the University of 
70.22 	Minnesota in the management, operation, or maintenance of its heating plant facilities, 
70.23 	whose employment transfers to an employer assuming operation of the heating plant 
70.24 	facilities, so long as the person is employed at the University of Minnesota heating plant 
70.25 	by that employer or by its successor organization;
70.26 	(14) personnel who are employed as seasonal helpemployees in the classified or 
70.27 	unclassified service employed by the Department of Revenue; 
70.28 	(15) persons who are employed by the Department of Commerce as a peace officer 
70.29 	in the Insurance Fraud Prevention Division under section 45.0135 who have attained the 
70.30 	mandatory retirement age specified in section 43A.34, subdivision 4;
70.31 	(16) employees of the University of Minnesota unless excluded under subdivision 
70.32 	2b, clause (3); 
70.33 	(17) employees of the Middle Management Association whose employment began 
70.34 	after July 1, 2007, and to whom section 352.029 does not apply; and
70.35 	(18) employees of the Minnesota Government Engineers Council to whom section 
70.36 	352.029 does not apply.
71.1 	(b) Employees specified in paragraph (a), clause (13), are included employees under 
71.2 	paragraph (a) if employer and employee contributions are made in a timely manner in the 
71.3 	amounts required by section 352.04. Employee contributions must be deducted from 
71.4 	salary. Employer contributions are the sole obligation of the employer assuming operation 
71.5 	of the University of Minnesota heating plant facilities or any successor organizations to 
71.6 	that employer.

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

71.8 	Sec. 2. Minnesota Statutes 2008, section 352.03, subdivision 4, is amended to read:
71.9 		Subd. 4.Duties and powers of board of directors. (a) The board shall:
71.10 	(1) elect a chair;
71.11 	(2) appoint an executive director;
71.12 	(3) establish rules to administer this chapter and chapters 3A, 352B, 352C, 352D, 
71.13 	and 490 and transact the business of the system, subject to the limitations of law;
71.14 	(4) consider and dispose of, or take any other action the board of directors deems 
71.15 	appropriate concerning, denials of applications for annuities or disability benefits under 
71.16 	this chapter, chapter 3A, 352B, 352C, 352D, or 490, and complaints of employees and 
71.17 	others pertaining to the retirement of employees and the operation of the system;
71.18 	(5) oversee the administration of the state deferred compensation plan established 
71.19 	in section 352.965; and
71.20 	(6) oversee the administration of the health care savings plan established in section 
71.21 	352.98. 
71.22 	(b) The board shall advise the director on any matters relating to the system and 
71.23 	carrying out functions and purposes of this chapter. The board's advice shall control.

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

71.25 	Sec. 3. Minnesota Statutes 2008, section 352.04, subdivision 9, is amended to read:
71.26 		Subd. 9.Erroneous deductions, canceled warrants. (a) Deductions taken from the 
71.27 	salary of an employee for the retirement fund in errorexcess of required amounts must, 
71.28 	upon discovery and verification by the department making the deduction, be refunded to 
71.29 	the employee.
71.30 	(b) If a deduction for the retirement fund is taken from a salary warrant or check, 
71.31 	and the check is canceled or the amount of the warrant or check returned to the funds of 
71.32 	the department making the payment, the sum deducted, or the part of it required to adjust 
71.33 	the deductions, must be refunded to the department or institution if the department applies 
72.1 	for the refund on a form furnished by the director. The department's payments must 
72.2 	likewise be refunded to the department.
72.3 	(c) Employee deductions and employer contributions taken in error may be directly 
72.4 	transferred, without interest, to another Minnesota public employee retirement plan by 
72.5 	which the employee is actually covered.
72.6 	For purposes of this subdivision, a Minnesota public pension plan means a plan 
72.7 	specified in section 356.30, subdivision 3, or the plan governed by chapter 354B. 
72.8 	(c) If erroneous employee deductions and employer contributions are caused by an 
72.9 	error in plan coverage involving the plan and any other plans specified in section 356.99, 
72.10 	that section applies. If the employee should have been covered by the plan governed by 
72.11 	chapter 352D, 353D, 354B, or 354D, the employee deductions and employer contributions 
72.12 	taken in error must be directly transferred to the applicable employee's account in the 
72.13 	correct retirement plan, with interest at the rate of 0.71 percent per month, compounded 
72.14 	annually, from the first day of the month following the month in which coverage should 
72.15 	have commenced in the correct defined contribution plan until the end of the month in 
72.16 	which the transfer occurs.

72.17 	EFFECTIVE DATE. This section is effective July 1, 2010.

72.18 	Sec. 4. Minnesota Statutes 2008, section 352.115, subdivision 10, is amended to read:
72.19 		Subd. 10.Reemployment of annuitant. (a) Except for salary or wages received 
72.20 	as a temporary employee of the legislature during a legislative session, if any retired 
72.21 	employee again becomes entitled to receive salary or wages from the state, or any 
72.22 	employer who employs state employees as that term is defined in section 352.01, 
72.23 	subdivision 2, other than salary or wages received as a temporary employee of the 
72.24 	legislature during a legislative session in a position covered by this chapter, the annuity or 
72.25 	retirement allowance shall must cease when the retired employee has earned an amount 
72.26 	equal to the annual maximum earnings allowable for that age for the continued receipt of 
72.27 	full benefit amounts monthly under the federal old age, survivors, and disability insurance 
72.28 	program as set by the secretary of health and human services under United States Code, 
72.29 	title 42, section 403, in any calendar year. If the retired employee has not yet reached the 
72.30 	minimum age for the receipt of Social Security benefits, the maximum earnings for the 
72.31 	retired employee shall be are equal to the annual maximum earnings allowable for the 
72.32 	minimum age for the receipt of Social Security benefits. 
72.33 	(b) The balance of the annual retirement annuity after cessation must be handled or 
72.34 	disposed of as provided in section 356.47. 
73.1 	(c) The annuity must be resumed when state service ends, or, if the retired employee 
73.2 	is still employed at the beginning of the next calendar year, at the beginning of that 
73.3 	calendar year, and payment must again end when the retired employee has earned the 
73.4 	applicable reemployment earnings maximum specified in this subdivision. If the retired 
73.5 	employee is granted a sick leave without pay, but not otherwise, the annuity or retirement 
73.6 	allowance must be resumed during the period of sick leave.
73.7 	(d) No payroll deductions for the retirement fund may be made from the earnings of 
73.8 	a reemployed retired employee.
73.9 	(e) No change shall may be made in the monthly amount of an annuity or retirement 
73.10 	allowance because of the reemployment of an annuitant.
73.11 	(f) If a reemployed annuitant whose annuity is suspended under paragraph (a) 
73.12 	is having insurance premium amounts withheld under section 356.87, subdivision 2, 
73.13 	insurance premium amounts must continue to be withheld and transferred from the 
73.14 	suspended portion of the annuity. The balance of the annual retirement annuity after 
73.15 	cessation, after deduction of the insurance premium amounts, must be treated as specified 
73.16 	in paragraph (b).

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

73.18 	Sec. 5. Minnesota Statutes 2008, section 352.91, is amended by adding a subdivision 
73.19 	to read:
73.20 		Subd. 6.Correction of plan coverage errors. If erroneous employee deductions 
73.21 	and employer contributions are caused by an error in plan coverage involving the 
73.22 	correctional state employees retirement plan and any other plan specified in section 
73.23 	356.99, that section applies.

73.24 	EFFECTIVE DATE. This section is effective July 1, 2010.

73.25 	Sec. 6. Minnesota Statutes 2008, section 352.965, subdivision 1, is amended to read:
73.26 		Subdivision 1.Establishment. (a) The Minnesota state deferred compensation plan 
73.27 	is established. For purposes of this section, "plan" means the Minnesota state deferred 
73.28 	compensation plan, unless the context clearly indicates otherwise. The Minnesota State 
73.29 	Retirement System shall administer the plan.
73.30 	(b) The purpose of the plan is to provide a means for a public employee to contribute 
73.31 	a portion of the employee's compensation to a tax-deferred investment account. The plan 
73.32 	is an eligible tax-deferred compensation plan under section 457(b) of the Internal Revenue 
74.1 	Code, United States Code, title 26, section 457(b), and the applicable regulations under 
74.2 	Code of Federal Regulations, title 26, parts 1.457-3 to 1.457-10.
74.3 	(c) The board of directors of the Minnesota State Retirement System is the plan 
74.4 	trustee and plan sponsor. The board's executive director is the plan administrator. Fiduciary 
74.5 	activities of the plan must be undertaken in a manner consistent with chapter 356A.
74.6 	(d) The executive director, with the approval of the board of directors, shall 
74.7 	adopt and amend, as required to maintain tax-qualified status, a written plan document 
74.8 	specifying the material terms and conditions for eligibility, benefits, applicable limitations, 
74.9 	and the time and form under which benefit distributions can be made. With the approval 
74.10 	of the board of directors, the executive director may also establish policies and procedures 
74.11 	necessary for the administration of the deferred compensation plan.
74.12 	(e) The plan document shall must include provisions that are necessary to cause the 
74.13 	plan to be an eligible deferred compensation plan within the meaning of section 457(b) of 
74.14 	the Internal Revenue Code. The plan document may provide additional administrative and 
74.15 	substantive provisions consistent with state law, provided that those provisions will do
74.16 	not cause the plan to fail to be an eligible deferred compensation plan within the meaning 
74.17 	of section 457(b) of the Internal Revenue Code and may include provisions for certain 
74.18 	optional features and services.
74.19 	(f) The board of directors may authorize the executive director to establish and 
74.20 	administer a Roth 457 plan if authorized by the Internal Revenue Code or a Roth 
74.21 	individual retirement account as defined under section 408A of the Internal Revenue Code.
74.22 	(g) All amounts contributed to the deferred compensation plan and all earnings 
74.23 	on those amounts must be held in trust, in custodial accounts, or in qualifying annuity 
74.24 	contracts for the exclusive benefit of the plan participants and beneficiaries, as required by 
74.25 	section 457(g) of the Internal Revenue Code and in accordance with sections 356.001 and 
74.26 	356A.06, subdivision 1.
74.27 	(h) The information and data maintained in the accounts of the participants and 
74.28 	beneficiaries are private data and shall must not be disclosed to anyone other than the 
74.29 	participant or beneficiary pursuant to a court order or pursuant to under section 356.49.
74.30 	(i) The plan document is not subject to the rule adoption process under the 
74.31 	Administrative Procedures Act, including section 14.386, but must conform with 
74.32 	applicable federal and state laws.

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

74.34 	Sec. 7. Minnesota Statutes 2008, section 352.965, subdivision 2, is amended to read:
75.1 		Subd. 2.Right to participate in deferred compensation plan. (a) At the request 
75.2 	of an officer or employee of the state, an officer or employee of a political subdivision, or 
75.3 	an employee covered by a retirement fund in section 356.20, subdivision 2, the appointing 
75.4 	authority shall defer the payment of part of the compensation of the public officer or 
75.5 	employee through payroll deduction.
75.6 	(b) The amount to be deferred must be as provided in a writtenan agreement 
75.7 	between the officer or employee and the public employer plan sponsor. The agreement 
75.8 	must be in a form specified by the executive director of the Minnesota State Retirement 
75.9 	System and must be consistent with the requirements for an eligible plan under federal 
75.10 	and state tax laws, regulations, and rulings.

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

75.12 	Sec. 8. Minnesota Statutes 2009 Supplement, section 352B.011, subdivision 3, is 
75.13 	amended to read:
75.14 		Subd. 3.Allowable service. (a) "Allowable service" means:
75.15 	(1) service in a month during which a member is paid a salary from which a member 
75.16 	contribution is deducted, deposited, and credited in the State Patrol retirement fund;
75.17 	(2) for members defined in subdivision 10, clause (1), service in any month for 
75.18 	which payments have been made to the State Patrol retirement fund under law; and
75.19 	(3) for members defined in subdivision 10, clauses (2) and (3), service for which 
75.20 	payments have been made to the State Patrol retirement fund under law, service for which 
75.21 	payments were made to the State Police officers retirement fund under law after June 
75.22 	30, 1961, and all prior service which was credited to a member for service on or before 
75.23 	June 30, 1961.;
75.24 	(4) any period of authorized leave of absence without pay that does not exceed one 
75.25 	year and for which the employee obtains credit by payment to the fund under section 
75.26 	352B.013; and
75.27 	(5) eligible periods of uniformed service for which the member obtained service 
75.28 	credit by payment under section 352B.086 to the fund.
75.29 	(b) Allowable service also includes any period of absence from duty by a member 
75.30 	who, by reason of injury incurred in the performance of duty, is temporarily disabled and 
75.31 	for which disability the state is liable under the workers' compensation law, until the date 
75.32 	authorized by the executive director for commencement of payment of a disability benefit 
75.33 	or until the date of a return to employment.

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

76.1 	Sec. 9. [352B.013] AUTHORIZED LEAVE OF ABSENCE SERVICE CREDIT 
76.2 	PURCHASE PROCEDURE.
76.3 		Subdivision 1.Application. This section specifies the procedure for purchasing 
76.4 	service credit in the State Patrol retirement plan for authorized leaves of absence under 
76.5 	section 352B.011, subdivision 3, unless an alternative payment procedure is specified in 
76.6 	law for a particular form of leave or break in service.
76.7 		Subd. 2.Purchase procedure. (a) An employee covered by the plan specified in 
76.8 	this chapter may purchase credit for allowable service in the plan for a period specified 
76.9 	in subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c), 
76.10 	whichever applies. The employing unit, at its option, may pay the employer portion of the 
76.11 	amount specified in paragraph (b) on behalf of its employees.
76.12 	(b) If payment is received by the executive director within one year from the date 
76.13 	the employee returned to work following the authorized leave, the payment amount is 
76.14 	equal to the employee and employer contribution rates specified in section 352B.02 at the 
76.15 	end of the leave period multiplied by the employee's hourly rate of salary on the date of 
76.16 	return from the leave of absence and by the days and months of the leave of absence for 
76.17 	which the employee is eligible for allowable service credit. The payment must include 
76.18 	compound interest at a monthly rate of 0.71 percent from the last day of the leave period 
76.19 	until the last day of the month in which payment is received. If payment is received by the 
76.20 	executive director after one year from the date the employee returned to work following 
76.21 	the authorized leave, the payment amount is the amount determined under section 
76.22 	356.551. Payment under this paragraph must be made before the date of termination from 
76.23 	public employment covered under this chapter.
76.24 	(c) If the employee terminates employment covered by this chapter during the leave 
76.25 	or following the leave rather than returning to covered employment, payment must 
76.26 	be received by the executive director within 30 days after the termination date. The 
76.27 	payment amount is equal to the employee and employer contribution rates specified in 
76.28 	section 352B.02 on the day prior to the termination date, multiplied by the employee's 
76.29 	hourly rate of salary on that date and by the days and months of the leave of absence 
76.30 	prior to termination.

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

76.32 	Sec. 10. Minnesota Statutes 2008, section 352B.02, is amended by adding a 
76.33 	subdivision to read:
77.1 		Subd. 3.Correction of plan coverage errors. If erroneous employee deductions 
77.2 	and employer contributions are caused by an error in plan coverage involving the State 
77.3 	Patrol retirement plan and any other plan specified in section 356.99, that section applies.

77.4 	EFFECTIVE DATE. This section is effective July 1, 2010.

77.5 	Sec. 11. Minnesota Statutes 2008, section 353.27, subdivision 7a, is amended to read:
77.6 		Subd. 7a.Deductions or contributions transmitted by error. (a) If employee 
77.7 	deductions and employer contributions were erroneously transmitted to the association, 
77.8 	but should have been transmitted to another Minnesota public pensiona plan covered by 
77.9 	chapter 352D, 353D, 354B, or 354D, the executive director shall transfer the erroneous 
77.10 	employee deductions and employer contributions to the appropriate retirement fund or 
77.11 	individual account, as applicable, without interest. The time limitations specified in 
77.12 	subdivisions 7 and 12 do not apply. The transfer to the applicable defined contribution 
77.13 	plan account must include interest at the rate of 0.71 percent per month, compounded 
77.14 	annually, from the first day of the month following the month in which coverage should 
77.15 	have commenced in the defined contribution plan until the end of the month in which 
77.16 	the transfer occurs.
77.17 	(b) For purposes of this subdivision, a Minnesota public pension plan means a 
77.18 	plan specified in section 356.30, subdivision 3, or the plans governed by chapters 353D 
77.19 	and 354B. 
77.20 	(c)(b) A potential transfer under paragraph (a) that is reasonably determined to 
77.21 	cause the plan to fail to be a qualified plan under section 401(a) of the federal Internal 
77.22 	Revenue Code, as amended, must not be made by the executive director of the association. 
77.23 	Within 30 days after being notified by the Public Employees Retirement Association of 
77.24 	an unmade potential transfer under this paragraph, the employer of the affected person 
77.25 	must transmit an amount representing the applicable salary deductions and employer 
77.26 	contributions, without interest, to the retirement fund of the appropriate Minnesota public 
77.27 	pension plan, or to the applicable individual account if the proper coverage is by a defined 
77.28 	contribution plan. The association must provide the employing unit a credit for the amount 
77.29 	of the erroneous salary deductions and employer contributions against future contributions 
77.30 	from the employer. If the employing unit receives a credit under this paragraph, the 
77.31 	employing unit is responsible for refunding to the applicable employee any amount that 
77.32 	had been erroneously deducted from the person's salary.
77.33 	(c) If erroneous employee deductions and employer contributions reflect a plan 
77.34 	coverage error involving any Public Employees Retirement Association plan specified in 
77.35 	section 356.99 and any other plan specified in that section, section 356.99 applies.

78.1 	EFFECTIVE DATE. This section is effective July 1, 2010.

78.2 	Sec. 12. Minnesota Statutes 2008, section 353.37, subdivision 3a, is amended to read:
78.3 		Subd. 3a.Disposition of suspension or reduction amount. (a) The balance of 
78.4 	the annual retirement annuity after suspension or the amount of the retirement annuity 
78.5 	reduction must be handled or disposed of as provided in section 356.47.  
78.6 	(b) If a reemployed annuitant whose annuity is suspended is having insurance 
78.7 	premium amounts withheld under section 356.87, subdivision 2, insurance premium 
78.8 	amounts must continue to be withheld and transferred from the suspended portion of the 
78.9 	annuity. The balance of the annual retirement annuity after cessation, after deduction of 
78.10 	the insurance premium amounts, must be treated as specified in paragraph (a).

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

78.12 	Sec. 13. Minnesota Statutes 2008, section 354.42, subdivision 7, is amended to read:
78.13 		Subd. 7.Erroneous salary deductions or direct payments. (a) Any deductions 
78.14 	taken from the salary of an employee for the retirement fund in errorexcess of amounts 
78.15 	required must be refunded to the employee upon the discovery of the error and after the 
78.16 	verification of the error by the employing unit making the deduction. The corresponding 
78.17 	excess employer contribution and excess additional employer contribution amounts 
78.18 	attributable to the erroneous salary deduction must be refunded to the employing unit.
78.19 	(b) If salary deductions and employer contributions were erroneously transmitted 
78.20 	to the retirement fund and should have been transmitted to another Minnesota public 
78.21 	pensionthe plan covered by chapter 352D, 353D, 354B, or 354D, the executive director 
78.22 	must transfer these salary deductions and employer contributions to the account of the 
78.23 	appropriate public pension fund without interest. For purposes of this paragraph, a 
78.24 	Minnesota public pension plan means a plan specified in section 356.30, subdivision 3, 
78.25 	or the plan governed by chapter 354B.person under the applicable plan. The transfer to 
78.26 	the applicable defined contribution plan account must include interest at the rate of 0.71 
78.27 	percent per month, compounded annually, from the first day of the month following the 
78.28 	month in which coverage should have commenced in the defined contribution plan until 
78.29 	the end of the month in which the transfer occurs.
78.30 	(c) A potential transfer under paragraph (b) that would cause the plan to fail to 
78.31 	be a qualified plan under section 401(a) of the Internal Revenue Code, as amended, 
78.32 	must not be made by the executive director. Within 30 days after being notified by the 
78.33 	Teachers Retirement Association of an unmade potential transfer under this paragraph, 
78.34 	the employer of the affected person must transmit an amount representing the applicable 
79.1 	salary deductions and employer contributions, without interest, to the retirement fund of 
79.2 	the appropriate Minnesota public pension plan fund account of the applicable person under 
79.3 	the appropriate plan. The retirement association must provide a credit for the amount of 
79.4 	the erroneous salary deductions and employer contributions against future contributions 
79.5 	from the employer.
79.6 	(d) If a salary warrant or check from which a deduction for the retirement fund was 
79.7 	taken has been canceled or the amount of the warrant or if a check has been returned to 
79.8 	the funds of the employing unit making the payment, a refund of the amount deducted, 
79.9 	or any portion of it that is required to adjust the salary deductions, must be made to the 
79.10 	employing unit.
79.11 	(e) Erroneous direct payments of member-paid contributions or erroneous salary 
79.12 	deductions that were not refunded during the regular payroll cycle processing must be 
79.13 	refunded to the member, plus interest computed using the rate and method specified in 
79.14 	section 354.49, subdivision 2.  
79.15 	(f) Any refund under this subdivision that would cause the plan to fail to be a 
79.16 	qualified plan under section 401(a) of the Internal Revenue Code, as amended, may not 
79.17 	be refunded and instead must be credited against future contributions payable by the 
79.18 	employer. The employer is responsible for refunding to the applicable employee any 
79.19 	amount that was erroneously deducted from the salary of the employee, with interest as 
79.20 	specified in paragraph (e).
79.21 	(g) If erroneous employee deductions and employer contributions are caused by an 
79.22 	error in plan coverage involving the plan and any other plan specified in section 356.99, 
79.23 	that section applies.

79.24 	EFFECTIVE DATE. This section is effective July 1, 2010.

79.25 	Sec. 14. Minnesota Statutes 2008, section 354A.12, is amended by adding a 
79.26 	subdivision to read:
79.27 		Subd. 6a.Erroneous salary deductions or direct payments. If erroneous 
79.28 	employee deductions and employer contributions reflect a plan coverage error involving 
79.29 	any plan covered by this chapter and any plan specified in section 356.99, that section 
79.30 	applies.

79.31 	EFFECTIVE DATE. This section is effective July 1, 2010.

79.32 	Sec. 15. Minnesota Statutes 2008, section 356.24, subdivision 1, is amended to read:
80.1 		Subdivision 1.Restriction; exceptions. (a) It is unlawful for a school district 
80.2 	or other governmental subdivision or state agency to levy taxes for, or to contribute 
80.3 	public funds to a supplemental pension or deferred compensation plan that is established, 
80.4 	maintained, and operated in addition to a primary pension program for the benefit of the 
80.5 	governmental subdivision employees other than:
80.6 	(1) to a supplemental pension plan that was established, maintained, and operated 
80.7 	before May 6, 1971;
80.8 	(2) to a plan that provides solely for group health, hospital, disability, or death 
80.9 	benefits;
80.10 	(3) to the individual retirement account plan established by chapter 354B;
80.11 	(4) to a plan that provides solely for severance pay under section 465.72 to a retiring 
80.12 	or terminating employee; 
80.13 	(5) for employees other than personnel employed by the Board of Trustees of the 
80.14 	Minnesota State Colleges and Universities and covered under the Higher Education 
80.15 	Supplemental Retirement Plan under chapter 354C, but including city managers covered 
80.16 	by an alternative retirement arrangement under section 353.028, subdivision 3, paragraph 
80.17 	(a), or by the defined contribution plan of the Public Employees Retirement Association 
80.18 	under section 353.028, subdivision 3, paragraph (b), if the supplemental plan coverage is 
80.19 	provided for in a personnel policy of the public employer or in the collective bargaining 
80.20 	agreement between the public employer and the exclusive representative of public 
80.21 	employees in an appropriate unit or in the individual employment contract between a city 
80.22 	and a city manager, and if for each available investment all fees and historic rates of return 
80.23 	for the prior one-, three-, five-, and ten-year periods, or since inception, are disclosed in an 
80.24 	easily comprehended document not to exceed two pages, in an amount matching employee 
80.25 	contributions on a dollar for dollar basis, but not to exceed an employer contribution of 
80.26 	one-half of the available elective deferral permitted per year per employee, under the 
80.27 	Internal Revenue Code:
80.28 	(i) to the state of Minnesota deferred compensation plan under section 352.965; 
80.29 	(ii) in payment of the applicable portion of the contribution made to any investment 
80.30 	eligible under section 403(b) of the Internal Revenue Code, if the employing unit has 
80.31 	complied with any applicable pension plan provisions of the Internal Revenue Code with 
80.32 	respect to the tax-sheltered annuity program during the preceding calendar year; or
80.33 	(iii) any other deferred compensation plan offered by the employer under section 
80.34 	457 of the Internal Revenue Code;
80.35 	(6) for personnel employed by the Board of Trustees of the Minnesota State Colleges 
80.36 	and Universities and not covered by clause (5), to the supplemental retirement plan under 
81.1 	chapter 354C, if the supplemental plan coverage is provided for in a personnel policy 
81.2 	or in the collective bargaining agreement of the public employer with the exclusive 
81.3 	representative of the covered employees in an appropriate unit, in an amount matching 
81.4 	employee contributions on a dollar for dollar basis, but not to exceed an employer 
81.5 	contribution of $2,700 a year for each employee;
81.6 	(7) to a supplemental plan or to a governmental trust to save for postretirement 
81.7 	health care expenses qualified for tax-preferred treatment under the Internal Revenue 
81.8 	Code, if the supplemental plan coverage is provided for in a personnel policy or in the 
81.9 	collective bargaining agreement of a public employer with the exclusive representative of 
81.10 	the covered employees in an appropriate unit;
81.11 	(8) to the laborers national industrial pension fund or to a laborers local pension 
81.12 	fund for the employees of a governmental subdivision who are covered by a collective 
81.13 	bargaining agreement that provides for coverage by that fund and that sets forth a fund 
81.14 	contribution rate, but not to exceed an employer contribution of $5,000 per year per 
81.15 	employee;
81.16 	(9) to the plumbers and pipefitters national pension fund or to a plumbers and 
81.17 	pipefitters local pension fund for the employees of a governmental subdivision who are 
81.18 	covered by a collective bargaining agreement that provides for coverage by that fund and 
81.19 	that sets forth a fund contribution rate, but not to exceed an employer contribution of 
81.20 	$5,000 per year per employee;
81.21 	(10) to the international union of operating engineers pension fund for the employees 
81.22 	of a governmental subdivision who are covered by a collective bargaining agreement that 
81.23 	provides for coverage by that fund and that sets forth a fund contribution rate, but not to 
81.24 	exceed an employer contribution of $5,000 per year per employee; 
81.25 	(11) to a supplemental plan organized and operated under the federal Internal 
81.26 	Revenue Code, as amended, that is wholly and solely funded by the employee's 
81.27 	accumulated sick leave, accumulated vacation leave, and accumulated severance pay; 
81.28 	(12) to the International Association of Machinists national pension fund for the 
81.29 	employees of a governmental subdivision who are covered by a collective bargaining 
81.30 	agreement that provides for coverage by that fund and that sets forth a fund contribution 
81.31 	rate, but not to exceed an employer contribution of $5,000 per year per employee; or
81.32 	(13) for employees of United Hospital District, Blue Earth, to the state of Minnesota 
81.33 	deferred compensation program, if the employee makes a contribution, in an amount that 
81.34 	does not exceed the total percentage of covered salary under section 353.27, subdivisions 
81.35 	3 and 3a.
82.1 	(b) No governmental subdivision may make a contribution to a deferred 
82.2 	compensation plan operating under section 457 of the Internal Revenue Code for volunteer 
82.3 	or emergency on-call firefighters in lieu of providing retirement coverage under the federal 
82.4 	Old Age, Survivors, and Disability Insurance Program.

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

82.6 	Sec. 16. Minnesota Statutes 2008, section 356.50, subdivision 4, is amended to read:
82.7 		Subd. 4.Annuity repayment. Notwithstanding subdivisions 1 and 2, if after being 
82.8 	discharged, the person commences receipt of an annuity from the applicable plan, and it is 
82.9 	later determined that the person was wrongfully discharged, the person shall repay the 
82.10 	annuity received in a lump sum within 60 days of receipt of the back pay award. If the 
82.11 	annuity is not repaid, the person is not entitled to reinstatement in the applicable plan as 
82.12 	an active member, the person is not authorized to make payments under subdivision 2, 
82.13 	paragraph (a), and, for subsequent employment with the employer, the person shall be 
82.14 	treated as a reemployed annuitant.

82.15 	EFFECTIVE DATE. This section is effective the day following final enactment.
82.16 	CORRECTION OF PLAN COVERAGE ERRORS

82.17 	Sec. 17. [356.99] CORRECTION OF ERRONEOUS DEFINED BENEFIT PLAN 
82.18 	COVERAGE.
82.19 		Subdivision 1.Definitions. (a) For purposes of this section, the terms in paragraphs 
82.20 	(b) to (e) have the meanings given them.
82.21 	(b) "Chief administrative officer" means the person selected or elected by the 
82.22 	governing board of a covered pension plan with primary responsibility to administer the 
82.23 	covered pension plan, or that person's designee or representative.
82.24 	(c) "Covered pension plan" means a plan enumerated in section 356.30, subdivision 
82.25 	3, except clauses (3), (5), (6), and (11).
82.26 	(d) "Governing board" means the governing board of the Minnesota State Retirement 
82.27 	System, the Public Employees Retirement Association, the Teachers Retirement 
82.28 	Association, the Duluth Teachers Retirement Fund Association, or the St. Paul Teachers 
82.29 	Retirement Fund Association.
82.30 	(e) "Member" means an active plan member in a covered pension plan.
82.31 		Subd. 2.Treatment of terminated employee coverage error. Any person 
82.32 	who terminated the erroneously covered service before a chief administrative officer 
83.1 	determined the covered pension plan coverage was in error retains the coverage with the 
83.2 	plan that originally credited the service.
83.3 		Subd. 3.Active employee correction of prospective service coverage. Upon 
83.4 	determination by a chief administrative officer that a member is covered by the wrong 
83.5 	pension plan, the employer must stop remitting the erroneous employee deductions and 
83.6 	employer contributions and report the employee to the correct covered pension plan for all 
83.7 	subsequent service.
83.8 		Subd. 4.Active employee treatment of past service. Any plan member, with past 
83.9 	service credited in an erroneous plan, retains the coverage for that past service with the 
83.10 	plan that originally credited that service if the reporting error began earlier than two 
83.11 	fiscal years prior to the current fiscal year in which the error was determined by the chief 
83.12 	administrative officer. If the reporting error began within two fiscal years prior to the 
83.13 	current fiscal year, the pension plan coverage for that past service must be corrected as 
83.14 	provided in subdivision 5.
83.15 		Subd. 5.Past service transfer procedure. (a) For cases under subdivision 4 
83.16 	requiring correction of prior service coverage, on behalf of the applicable member the 
83.17 	chief administrative officer of the covered pension plan fund that has received erroneous 
83.18 	employee deductions and employer contributions must transfer to the appropriate covered 
83.19 	retirement plan fund an amount which is the lesser of all contributions made by or on 
83.20 	behalf of the member for the period of erroneous membership, or the specific amount 
83.21 	requested by the chief administrative officer of the other covered pension plan which 
83.22 	represents the employee deductions and employer contributions that would have been 
83.23 	made had the member been properly reported.
83.24 	(b) If excess employee deductions remain in the member's account after the transfer 
83.25 	of funds, the remaining erroneous amount must be refunded to the person with interest 
83.26 	at the rate provided under the general refund law of the applicable covered pension 
83.27 	plan. The chief administrative officer must also return any remaining excess employer 
83.28 	contributions by providing to the employer a credit against future contributions payable by 
83.29 	that employer.
83.30 	(c) If the contributions transferred to the correct covered pension plan fund are less 
83.31 	than the amounts required for the period being corrected, the chief administrative officer 
83.32 	of the correct covered pension plan fund must collect the remaining employee deductions 
83.33 	and employer contributions from the employer under laws for recovering deficient 
83.34 	contributions applicable to the correct covered pension plan, except that no interest is 
83.35 	chargeable if the additional amounts due under this paragraph are received by the chief 
83.36 	administrative officer within 30 days of notifying the employer of the amount due.
84.1 	(d) A potential transfer under this section that would cause a plan to fail to be a 
84.2 	qualified plan under section 401(a) of the Internal Revenue Code, as amended, must not be 
84.3 	made. Within 30 days after being notified by a chief administrative officer of an unmade 
84.4 	potential transfer under this section, the employer of the member must transmit an amount 
84.5 	representing the applicable salary deductions and employer contributions, without interest, 
84.6 	to the fund of the appropriate covered pension plan. The chief administrative officer of the 
84.7 	covered pension plan which erroneously provided coverage must provide to the employer 
84.8 	a credit for the amount of the erroneous salary deductions and employer contributions 
84.9 	against future contributions from that employer.
84.10 	(e) Upon transfer of the required assets, or payment from the employer under 
84.11 	paragraph (d), whichever is applicable, allowable service and salary credit for the period 
84.12 	being transferred is forfeited in the erroneous plan and is granted in the correct plan.

84.13 	EFFECTIVE DATE. This section is effective July 1, 2010.

84.14 	Sec. 18. Minnesota Statutes 2008, section 490.123, is amended by adding a subdivision 
84.15 	to read:
84.16 		Subd. 4.Correction of contribution errors. (a) If erroneous employee deductions 
84.17 	and employer contributions are caused by an error in plan coverage involving the judges 
84.18 	retirement plan and any other plan specified in section 356.99, that section applies.
84.19 	(b) The provisions of section 352.04, subdivisions 8 and 9, apply to the judges' 
84.20 	retirement plan, except that if employee deductions or contributions are erroneously 
84.21 	transmitted to the judges' retirement fund for service rendered after the service credit limit 
84.22 	under section 490.121, subdivision 22, has been attained, consistent with section 352D.04, 
84.23 	subdivision 2, no employer contributions may be transferred.

84.24 	EFFECTIVE DATE. This section is effective July 1, 2010.

84.25 	Sec. 19.  REPEALER.
 84.26 	Minnesota Statutes 2008, sections 352.91, subdivision 5; and 353.88, are repealed.

84.27 	EFFECTIVE DATE. This section is effective July 1, 2010.

84.28 	ARTICLE 3
84.29 	MINNESOTA STATE DEFERRED COMPENSATION PLAN AMENDMENTS

84.30 	Section 1. Minnesota Statutes 2008, section 352.965, subdivision 6, is amended to read:
85.1 		Subd. 6.Plan administrative expenses. (a) The reasonable and necessary 
85.2 	administrative expenses of the deferred compensation plan may be charged to plan 
85.3 	participants in the form of an annual fee, an asset-based fee, a percentage of the 
85.4 	contributions to the plan, or a combination thereof, as set forth in the plan document. The 
85.5 	executive director of the system at the direction of the board of directors shall establish 
85.6 	procedures to carry out this section including allocation of administrative costs of the plan 
85.7 	to participants. Processes and procedures shall be set forth in the plan document. Fees 
85.8 	cannot be charged on contributions and investment returns attributable to contributions 
85.9 	made to the Minnesota supplemental investment funds before July 1, 1992. 
85.10 	(b) The plan document must conform to federal and state tax laws, regulations, and 
85.11 	rulings, and is not subject to the Administrative Procedure Act.
85.12 	(c) The executive director may contract with a third party to perform administrative 
85.13 	and record keeping functions. The executive director may solicit bids and negotiate such 
85.14 	contracts. Participating employers must provide the necessary data to the third-party 
85.15 	record keeper as determined by the executive director. The third-party record keeper and 
85.16 	the Minnesota State Retirement System shall follow the data privacy provisions under 
85.17 	chapter 13. The third-party record keeper may not solicit participants for any product or 
85.18 	services not related to the deferred compensation plan.
85.19 	(d) The board of directors may authorize a third-party investment consultant 
85.20 	to provide investment information and advice, provided that if the offering of such 
85.21 	information and advice is consistent with the investment advice requirements applicable 
85.22 	to private plans under Title VI, subtitle A, of the Pension Protection Act of 2006, Public 
85.23 	Law 109-280, section 601.

85.24 	EFFECTIVE DATE. This section is effective July 1, 2010.

85.25 	ARTICLE 4
85.26 	MSRS UNCLASSIFIED STATE EMPLOYEES RETIREMENT 
85.27 	PROGRAM AMENDMENTS

85.28 	Section 1. Minnesota Statutes 2008, section 3A.07, is amended to read:
85.29 	3A.07 APPLICATION.
85.30 	(a) Except as provided in paragraph (b) or (d), this chapter applies to members 
85.31 	of the legislature in service after July 1, 1965, who otherwise meet the requirements 
85.32 	of this chapter.
85.33 	(b) Members of the legislature who were elected for the first time after June 30, 
85.34 	1997, or members of the legislature who were elected before July 1, 1997, and who, after 
86.1 	July 1, 1998, elect not to be members of the plan established by this chapter are covered 
86.2 	by the unclassified employees retirement program governed by chapter 352D.
86.3 	(c) The post-July 1, 1998, coverage election under paragraph (b) is irrevocable 
86.4 	and must be made on a form prescribed by the director. The second chance referendum 
86.5 	election under Laws 2002, chapter 392, article 15, also is irrevocable.
86.6 	(d) Members of the legislature who are covered by the retirement plan governed by 
86.7 	this chapter on July 1, 2010, may, on or before the end of the member's seventh year of 
86.8 	legislative service or January 1, 2011, whichever is later, elect to have future retirement 
86.9 	coverage by either the general state employees retirement plan governed by chapter 352 
86.10 	or the unclassified state employees retirement program governed by chapter 352D. The 
86.11 	election must be made on a form prescribed by the director and is irrevocable.

86.12 	Sec. 2. Minnesota Statutes 2009 Supplement, section 352.01, subdivision 2b, is 
86.13 	amended to read:
86.14 		Subd. 2b. Excluded employees. "State employee" does not include: 
86.15 	(1) students who are employed by the University of Minnesota, or the state colleges 
86.16 	and universities, unless approved for coverage by the Board of Regents of the University 
86.17 	of Minnesota or the Board of Trustees of the Minnesota State Colleges and Universities, 
86.18 	whichever is applicable; 
86.19 	(2) employees who are eligible for membership in the state Teachers Retirement 
86.20 	Association, except employees of the Department of Education who have chosen or may 
86.21 	choose to be covered by the general state employees retirement plan of the Minnesota 
86.22 	State Retirement System instead of the Teachers Retirement Association; 
86.23 	(3) employees of the University of Minnesota who are excluded from coverage by 
86.24 	action of the Board of Regents; 
86.25 	(4) officers and enlisted personnel in the National Guard and the naval militia who 
86.26 	are assigned to permanent peacetime duty and who under federal law are or are required to 
86.27 	be members of a federal retirement system; 
86.28 	(5) election officers; 
86.29 	(6) persons who are engaged in public work for the state but who are employed 
86.30 	by contractors when the performance of the contract is authorized by the legislature or 
86.31 	other competent authority; 
86.32 	(7) officers and employees of the senate, or of the house of representatives, or of a 
86.33 	legislative committee or commission who are temporarily employed; 
87.1 	(8) receivers, jurors, notaries public, and court employees who are not in the judicial 
87.2 	branch as defined in section 43A.02, subdivision 25, except referees and adjusters 
87.3 	employed by the Department of Labor and Industry; 
87.4 	(9) patient and inmate help who perform services in state charitable, penal, and 
87.5 	correctional institutions including the Minnesota Veterans Home; 
87.6 	(10) persons who are employed for professional services where the service is 
87.7 	incidental to their regular professional duties and whose compensation is paid on a per 
87.8 	diem basis; 
87.9 	(11) employees of the Sibley House Association; 
87.10 	(12) the members of any state board or commission who serve the state intermittently 
87.11 	and are paid on a per diem basis; the secretary, secretary-treasurer, and treasurer of those 
87.12 	boards if their compensation is $5,000 or less per year, or, if they are legally prohibited 
87.13 	from serving more than three years; and the board of managers of the State Agricultural 
87.14 	Society and its treasurer unless the treasurer is also its full-time secretary; 
87.15 	(13) state troopers and persons who are described in section 352B.011, subdivision 
87.16 	10, clauses (2) to (8); 
87.17 	(14) temporary employees of the Minnesota State Fair who are employed on or 
87.18 	after July 1 for a period not to extend beyond October 15 of that year; and persons who 
87.19 	are employed at any time by the state fair administration for special events held on the 
87.20 	fairgrounds; 
87.21 	(15) emergency employees who are in the classified service; except that if an 
87.22 	emergency employee, within the same pay period, becomes a provisional or probationary 
87.23 	employee on other than a temporary basis, the employee must be considered a "state 
87.24 	employee" retroactively to the beginning of the pay period; 
87.25 	(16) temporary employees in the classified service, and temporary employees in the 
87.26 	unclassified service who are appointed for a definite period of not more than six months 
87.27 	and who are employed less than six months in any one-year period; 
87.28 	(17) interns who are hired for six months or less and trainee employees, except 
87.29 	those listed in subdivision 2a, clause (8); 
87.30 	(18) persons whose compensation is paid on a fee basis or as an independent 
87.31 	contractor; 
87.32 	(19) state employees who are employed by the Board of Trustees of the Minnesota 
87.33 	State Colleges and Universities in unclassified positions enumerated in section 43A.08, 
87.34 	subdivision 1, clause (9); 
87.35 	(20) state employees who in any year have credit for 12 months service as teachers 
87.36 	in the public schools of the state and as teachers are members of the Teachers Retirement 
88.1 	Association or a retirement system in St. Paul, Minneapolis, or Duluth, except for 
88.2 	incidental employment as a state employee that is not covered by one of the teacher 
88.3 	retirement associations or systems; 
88.4 	(21) employees of the adjutant general who are employed on an unlimited 
88.5 	intermittent or temporary basis in the classified or unclassified service for the support of 
88.6 	Army and Air National Guard training facilities; 
88.7 	(22) chaplains and nuns who are excluded from coverage under the federal Old 
88.8 	Age, Survivors, Disability, and Health Insurance Program for the performance of service 
88.9 	as specified in United States Code, title 42, section 410(a)(8)(A), as amended, if no 
88.10 	irrevocable election of coverage has been made under section 3121(r) of the Internal 
88.11 	Revenue Code of 1986, as amended through December 31, 1992; 
88.12 	(23) examination monitors who are employed by departments, agencies, 
88.13 	commissions, and boards to conduct examinations required by law; 
88.14 	(24) persons who are appointed to serve as members of fact-finding commissions or 
88.15 	adjustment panels, arbitrators, or labor referees under chapter 179; 
88.16 	(25) temporary employees who are employed for limited periods under any state or 
88.17 	federal program for training or rehabilitation, including persons who are employed for 
88.18 	limited periods from areas of economic distress, but not including skilled and supervisory 
88.19 	personnel and persons having civil service status covered by the system; 
88.20 	(26) full-time students who are employed by the Minnesota Historical Society 
88.21 	intermittently during part of the year and full-time during the summer months; 
88.22 	(27) temporary employees who are appointed for not more than six months, of 
88.23 	the Metropolitan Council and of any of its statutory boards, if the board members are 
88.24 	appointed by the Metropolitan Council; 
88.25 	(28) persons who are employed in positions designated by the Department of 
88.26 	Management and Budget as student workers; 
88.27 	(29) members of trades who are employed by the successor to the Metropolitan 
88.28 	Waste Control Commission, who have trade union pension plan coverage under a 
88.29 	collective bargaining agreement, and who are first employed after June 1, 1977; 
88.30 	(30) off-duty peace officers while employed by the Metropolitan Council; 
88.31 	(31) persons who are employed as full-time police officers by the Metropolitan 
88.32 	Council and as police officers are members of the public employees police and fire fund; 
88.33 	(32) persons who are employed as full-time firefighters by the Department of Military 
88.34 	Affairs and as firefighters are members of the public employees police and fire fund; 
88.35 	(33) foreign citizens withwho are employed under a work permit of less than three 
88.36 	years, or an H-1b/JV visa valid for less than three years of employment, unless notice of 
89.1 	extension is supplied which allows them to work for three or more years as of the date 
89.2 	that the extension is granted, in which case they are eligible for coverage from the date 
89.3 	extended; and
89.4 	(34) persons who are employed by the Board of Trustees of the Minnesota State 
89.5 	Colleges and Universities and who elected to remain members of the Public Employees 
89.6 	Retirement Association or the Minneapolis Employees Retirement Fund, whichever 
89.7 	applies, under Minnesota Statutes 1994, section 136C.75.; and
89.8 	(35) employees who have elected to transfer service to the unclassified program 
89.9 	under section 352D.02, subdivision 1d.

89.10 	EFFECTIVE DATE. This section is effective June 30, 2010.

89.11 	Sec. 3. Minnesota Statutes 2008, section 352D.015, subdivision 4, is amended to read:
89.12 		Subd. 4.General fund. "General fund" means the general state employees 
89.13 	retirement fund except the moneys for the unclassified program under chapter 352.

89.14 	EFFECTIVE DATE. This section is effective June 30, 2010.

89.15 	Sec. 4. Minnesota Statutes 2008, section 352D.015, is amended by adding a 
89.16 	subdivision to read:
89.17 		Subd. 4a.General employees retirement plan. "General employees retirement 
89.18 	plan" means the general state employees retirement plan under chapter 352.

89.19 	EFFECTIVE DATE. This section is effective June 30, 2010.

89.20 	Sec. 5. Minnesota Statutes 2008, section 352D.015, subdivision 9, is amended to read:
89.21 		Subd. 9.Value. "Value" means cash value at the end of the month following receipt 
89.22 	of an application. If no application is required, "value" means the cash value at the end 
89.23 	of the month in which the event necessitating the transfer occurs the market value of the 
89.24 	account at the end of the United States investment market day.

89.25 	EFFECTIVE DATE. This section is effective July 1, 2010.

89.26 	Sec. 6. Minnesota Statutes 2008, section 352D.02, subdivision 1, is amended to read:
89.27 		Subdivision 1.Coverage.  (a) Employees enumerated in paragraph (b), clause 
89.28 	(1), are participants in the unclassified program under this chapter. Persons referenced 
89.29 	in paragraph (b), clause (15), are participants in the unclassified program under this 
89.30 	chapter for judicial employment in excess of the service credit limit in section 490.121, 
90.1 	subdivision 22. Employees enumerated in paragraph (c) (b), clauses (2), (3), (4), (6) to 
90.2 	(14), and (16) to (18),clauses (2) to (14) and (16) to (18), if they are in the unclassified 
90.3 	service of the state or Metropolitan Council and are eligible for coverage under the general 
90.4 	state employees retirement plan under chapter 352, are participants in the unclassified 
90.5 	program under this chapter unless the employee gives notice to the executive director of 
90.6 	the Minnesota State Retirement System within one year following the commencement 
90.7 	of employment in the unclassified service that the employee desires coverage under the 
90.8 	general state employees retirement plan. For the purposes of this chapter, an employee 
90.9 	who does not file notice with the executive director is deemed to have exercised the option 
90.10 	to participate in the unclassified program.
90.11 	(b) Persons referenced in paragraph (c), clause (5), are participants in the unclassified 
90.12 	program under this chapter unless the person was eligible to elect different coverage under 
90.13 	section 3A.07 and elected retirement coverage by the applicable alternative retirement 
90.14 	plan. Persons referenced in paragraph (c), clause (15), are participants in the unclassified 
90.15 	program under this chapter for judicial employment in excess of the service credit limit in 
90.16 	section 490.121, subdivision 22.
90.17 	(c) (b) Enumerated employees and referenced persons are:
90.18 	(1) the governor, the lieutenant governor, the secretary of state, the state auditor, 
90.19 	and the attorney general;
90.20 	(2) an employee in the Office of the Governor, Lieutenant Governor, Secretary 
90.21 	of State, State Auditor, Attorney General;
90.22 	(3) an employee of the State Board of Investment;
90.23 	(4) the head of a department, division, or agency created by statute in the unclassified 
90.24 	service, an acting department head subsequently appointed to the position, or an employee 
90.25 	enumerated in section 15A.0815 or 15A.083, subdivision 4;
90.26 	(5) a member of the legislature;
90.27 	(6) a full-time unclassified employee of the legislature or a commission or agency of 
90.28 	the legislature who is appointed without a limit on the duration of the employment or a 
90.29 	temporary legislative employee having shares in the supplemental retirement fund as a 
90.30 	result of former employment covered by this chapter, whether or not eligible for coverage 
90.31 	under the Minnesota State Retirement System;
90.32 	(7) a person who is employed in a position established under section 43A.08, 
90.33 	subdivision 1, clause (3), or in a position authorized under a statute creating or establishing 
90.34 	a department or agency of the state, which is at the deputy or assistant head of department 
90.35 	or agency or director level;
91.1 	(8) the regional administrator, or executive director of the Metropolitan Council, 
91.2 	general counsel, division directors, operations managers, and other positions as designated 
91.3 	by the council, all of which may not exceed 27 positions at the council and the chair;
91.4 	(9) the executive director, associate executive director, and not to exceed nine 
91.5 	positions of the Minnesota Office of Higher Education in the unclassified service, as 
91.6 	designated by the Minnesota Office of Higher Education before January 1, 1992, or 
91.7 	subsequently redesignated with the approval of the board of directors of the Minnesota 
91.8 	State Retirement System, unless the person has elected coverage by the individual 
91.9 	retirement account plan under chapter 354B;
91.10 	(10) the clerk of the appellate courts appointed under article VI, section 2, of the 
91.11 	Constitution of the state of Minnesota, the state court administrator and judicial district 
91.12 	administrators;
91.13 	(11) the chief executive officers of correctional facilities operated by the Department 
91.14 	of Corrections and of hospitals and nursing homes operated by the Department of Human 
91.15 	Services;
91.16 	(12) an employee whose principal employment is at the state ceremonial house;
91.17 	(13) an employee of the Agricultural Utilization Research Institute;
91.18 	(14) an employee of the State Lottery who is covered by the managerial plan 
91.19 	established under section 43A.18, subdivision 3; 
91.20 	(15) a judge who has exceeded the service credit limit in section 490.121, 
91.21 	subdivision 22;
91.22 	(16) an employee of Enterprise Minnesota, Inc.;
91.23 	(17) a person employed by the Minnesota State Colleges and Universities as faculty 
91.24 	or in an eligible unclassified administrative position as defined in section 354B.20, 
91.25 	subdivision 6, who was employed by the former state university or the former community 
91.26 	college system before May 1, 1995, and elected unclassified program coverage prior to 
91.27 	May 1, 1995; and
91.28 	(18) a person employed by the Minnesota State Colleges and Universities who 
91.29 	was employed in state service before July 1, 1995, who subsequently is employed in an 
91.30 	eligible unclassified administrative position as defined in section 354B.20, subdivision 
91.31 	6, and who elects coverage by the unclassified program.

91.32 	Sec. 7. Minnesota Statutes 2008, section 352D.02, subdivision 1c, is amended to read:
91.33 		Subd. 1c.Transfer of contributions. An employee covered by the regular general 
91.34 	employees retirement plan who is subsequently employed as a full-time unclassified 
91.35 	employee of the legislature or any commission or agency of the legislature without a 
92.1 	limit on the duration of the employment may elect to transfer accumulated employee and 
92.2 	matching employer contributions, as provided in section 352D.03. 

92.3 	EFFECTIVE DATE. This section is effective June 30, 2010.

92.4 	Sec. 8. Minnesota Statutes 2008, section 352D.02, subdivision 2, is amended to read:
92.5 		Subd. 2.Coverage upon employment change. A person becoming a participant 
92.6 	in the unclassified program prior to July 1, 2010, by virtue of employment in a position 
92.7 	specified in subdivision 1, clause (4), and remaining in the unclassified service shall 
92.8 	remain a participant in the program even though the position the person occupies is 
92.9 	deleted from any of the sections referenced in subdivision 1, clause (4), by subsequent 
92.10 	amendment, except that a person shall is not be eligible to elect the unclassified program 
92.11 	after separation from unclassified service if on the return of the person to service, that 
92.12 	position is not specified in subdivision 1, clause (4). Any person employed in a position 
92.13 	specified in subdivision 1 shall cease to participate in the unclassified program in the event 
92.14 	that the position is placed in the classified service.

92.15 	EFFECTIVE DATE. This section is effective June 30, 2010.

92.16 	Sec. 9. Minnesota Statutes 2008, section 352D.02, subdivision 3, is amended to read:
92.17 		Subd. 3.Transfer to general employees retirement plan. (a) An employee 
92.18 	referred to in subdivision 1, paragraph (b), clauses (2) to (4), (6) to (14), and (16) to 
92.19 	(18), who is credited with employee shares in the unclassified program, after acquiring
92.20 	and who has credit for ten years of allowable service and, not later than one month 
92.21 	following the termination of covered employment, may elect to terminate participation 
92.22 	in the unclassified program and be covered by the general employees retirement plan by 
92.23 	filing a written election with the executive director. if the employee was employed before 
92.24 	July 1, 2010, and has at least ten years of allowable service as of the date of the election or 
92.25 	if the employee was employed after June 30, 2010, and has no more than seven years of 
92.26 	allowable service as of the date of the election.
92.27 	(b) A person referred to in subdivision 1, paragraph (b), clause (5), who is credited 
92.28 	with employee shares in the unclassified program, and who has credit for allowable 
92.29 	service, prior to the termination of service, may elect to terminate participation in the 
92.30 	unclassified program and be covered by the general employees retirement plan by filing 
92.31 	a written election with the executive director if the person first became covered by the 
92.32 	unclassified program after June 30, 2010, and has no more than seven years of allowable 
93.1 	service or if the person first became covered by the unclassified program before July 1, 
93.2 	2010, and makes the election to transfer on or before January 1, 2011.
93.3 	(c) If the transfer election is made, the executive director shall then redeem the 
93.4 	employee's total shares and shall credit to the employee's account in the general employees 
93.5 	retirement plan the amount of contributions that would have been so credited had the 
93.6 	employee been covered by the general employees retirement plan during the employee's 
93.7 	entire covered employment or elective state service. The balance of money so redeemed 
93.8 	and not credited to the employee's account shallmust be transferred to the general 
93.9 	employees retirement plan retirement fund, except that (1) the employee contribution paid 
93.10 	to the unclassified program must be compared to (2) the employee contributions that 
93.11 	would have been paid to the general employees retirement plan for the comparable period, 
93.12 	if the individual had been covered by that plan. If clause (1) is greater than clause (2), 
93.13 	the difference must be refunded to the employee as provided in section 352.22. If clause 
93.14 	(2) is greater than clause (1), the difference must be paid by the employee within six 
93.15 	months of electing general employees retirement plan coverage or before the effective 
93.16 	date of the annuity, whichever is sooner. 
93.17 	(b)(d) An election under paragraph (a) or (b) to transfer coverage to the general 
93.18 	employees retirement plan is irrevocable during any period of covered employment.
93.19 	(e) A person referenced in subdivision 1, paragraph (b), clause (1) or (15), who is 
93.20 	credited with employee shares in the unclassified program is not permitted to terminate 
93.21 	participation in the unclassified program and be covered by the general employees 
93.22 	retirement plan.

93.23 	EFFECTIVE DATE. This section is effective June 30, 2010.

93.24 	Sec. 10. Minnesota Statutes 2008, section 352D.03, is amended to read:
93.25 	352D.03 TRANSFER OF ASSETS.
93.26 	Unless an eligible employee enumerated in section 352D.02, subdivision 1, has 
93.27 	elected coverage under the individual retirement account plan under chapter 354B, a
93.28 	sum of money representing the assets credited to each employee exercising the option 
93.29 	contained in section 352D.02, plus an equal employer contribution together with interest 
93.30 	for an employee exercising an option under section 352D.02, an amount equal to the 
93.31 	employee and employer contributions for the employment period at the applicable 
93.32 	preretirement interest actuarial assumption rate during this period plus six percent interest, 
93.33 	compounded annually, must be used for the purchase of shares on behalf of each employee 
93.34 	in the accounts of the supplemental retirement fund established by section 11A.17.

94.1 	EFFECTIVE DATE. This section is effective June 30, 2010.

94.2 	Sec. 11. Minnesota Statutes 2008, section 352D.04, subdivision 1, is amended to read:
94.3 		Subdivision 1.Investment options. (a) A person exercising an option to participate 
94.4 	in the retirement program provided by this chapter may elect to purchase shares in one or 
94.5 	a combination of the income share account, the growth share account, the international 
94.6 	share account, the money market account, the bond market account, the fixed interest 
94.7 	account, or the common stock index account established in section 11A.17. The person 
94.8 	may elect to participate in one or more of the investment accounts in the fund by 
94.9 	specifying, on a form providedin a manner prescribed by the executive director, the 
94.10 	percentage of the person's contributions provided in subdivision 2 to be used to purchase 
94.11 	shares in each of the accounts. 
94.12 	(b) A participant may indicate in writing on forms provided, in a manner prescribed 
94.13 	by the Minnesota State Retirement System a choice of optionsexecutive director, choose 
94.14 	their investment allocation for subsequent purchases of shares. Until a different written 
94.15 	indication is made by the participant, the executive director shall purchase shares in the 
94.16 	supplemental fund as selected by the participant. If no initial option is chosen, 100 percent 
94.17 	income shares must be purchased for a participant. A change in choice of investment 
94.18 	option is effective no later than the first pay date first occurring after 30 days following the 
94.19 	receipt of the request for a change at the end of the most recent United States investment 
94.20 	market day.
94.21 	(c) Shares in the fixed interest account attributable to any guaranteed investment 
94.22 	contract as of July 1, 1994, may not be withdrawn from the fund or transferred to another 
94.23 	account until the guaranteed investment contract has expired, unless the participant 
94.24 	qualifies for withdrawal under section 352D.05 or for benefit payments under sections 
94.25 	352D.06 to 352D.075. 
94.26 	(d)(c) A participant or former participant may also change the investment options 
94.27 	selected for all or a portion of the participant's shares previously purchased in accounts, 
94.28 	subject to the provisions of paragraph (c) concerning the fixed interest account. Changes 
94.29 	in investment options for the participant's shares must be effected as soon as cash flow to 
94.30 	an account practically permits, but not later than six months after the requested change
94.31 	trading restrictions imposed on the investment option.

94.32 	EFFECTIVE DATE. This section is effective July 1, 2010.

94.33 	Sec. 12. Minnesota Statutes 2008, section 352D.04, subdivision 2, is amended to read:
95.1 		 Subd. 2.Contribution rates.  (a) The money used to purchase shares under this 
95.2 	section is the employee and employer contributions provided in this subdivision.
95.3 	 (b) The employee contribution is an amount equal to fourthe percent of salary
95.4 	specified in section 352.04, subdivision 2, or 352.045, subdivision 3.
95.5 	 (c) The employer contribution is an amount equal to six percent of salary.
95.6 	 (d) For members of the legislature, the contributions under this subdivision also must 
95.7 	be made on per diem payments received during a regular or special legislative session, but 
95.8 	may not be made on per diem payments received outside of a regular or special legislative 
95.9 	session, on the additional compensation attributable to a leadership position under section 
95.10 	3.099, subdivision 3, living expense payments under section 3.101, or special session 
95.11 	living expense payments under section 3.103.
95.12 	(e) For a judge who is a member of the unclassified plan under section 352D.02, 
95.13 	subdivision 1, paragraph (c), clause (16), the employee contribution rate is eight percent 
95.14 	of salary, and there is no employer contribution.
95.15 	(f) These contributions must be made in the manner provided in section 352.04, 
95.16 	subdivisions 4, 5, and 6.

95.17 	EFFECTIVE DATE. This section is effective the first day of the first full pay 
95.18 	period beginning after July 1, 2010.

95.19 	Sec. 13. Minnesota Statutes 2008, section 352D.05, subdivision 3, is amended to read:
95.20 		Subd. 3.Full or partial withdrawal. After termination of covered employment 
95.21 	or at any time thereafter, a participant is entitled, upon application, to withdraw the cash 
95.22 	value of the participant's total shares or leave such shares on deposit with the supplemental 
95.23 	retirement fund. The account is valued at the end of the month in which most recent 
95.24 	United States investment market day following receipt of the application for withdrawal is 
95.25 	made. Shares not withdrawn remain on deposit with the supplemental retirement fund 
95.26 	until the former participant becomes at least 55 years old, and applies for an annuity under 
95.27 	section 352D.06, subdivision 1.  

95.28 	EFFECTIVE DATE. This section is effective July 1, 2010.

95.29 	Sec. 14. Minnesota Statutes 2008, section 352D.05, subdivision 4, is amended to read:
95.30 		Subd. 4.Repayment of refund. (a) A participant in the unclassified program may 
95.31 	repay regular refunds taken under section 352.22, as provided in section 352.23.
95.32 	(b) A participant in the unclassified program or an employee covered by the general 
95.33 	employees retirement plan who has withdrawn the value of the total shares may repay 
96.1 	the refund taken and thereupon restore the service credit, rights and benefits forfeited by 
96.2 	paying into the fund the amount refunded plus interest at an annual rate of 8.5 percent 
96.3 	compounded annually from the date that the refund was taken until the date that the refund 
96.4 	is repaid. If the participant had withdrawn only the employee shares as permitted under 
96.5 	prior laws, repayment must be pro rata.
96.6 	(c) Except as provided in section 356.441, the repayment of a refund under this 
96.7 	section must be made in a lump sum.

96.8 	EFFECTIVE DATE. This section is effective June 30, 2010.

96.9 	Sec. 15. Minnesota Statutes 2008, section 352D.06, subdivision 3, is amended to read:
96.10 		Subd. 3.Accrual date. An annuity under this section accrues the first day of the 
96.11 	first full month after an application is received or the day following termination of state 
96.12 	service, whichever is later. The account must be valued and redeemed on the later of the 
96.13 	end of the month of termination of covered employment, or the end of the month of receipt 
96.14 	of the annuity application for the purpose of computing the annuity day following receipt 
96.15 	of the application or the day following termination, whichever is later. The benefit must be 
96.16 	based on the value of the account the day following receipt of the application or the date of 
96.17 	termination, whichever is later, plus any contributions and interest received after that date.

96.18 	EFFECTIVE DATE. This section is effective July 1, 2010.

96.19 	Sec. 16. Minnesota Statutes 2008, section 352D.065, subdivision 3, is amended to read:
96.20 		Subd. 3.Annuity payment. The annuity payable under this section shall begin
96.21 	begins to accrue the first day of the month following the date of disability receipt of the 
96.22 	application or the day after termination, whichever is later, plus any contributions and 
96.23 	interest received after that date, and shall must be based on the participant's age when the 
96.24 	annuity begins to accrue. The shares shall must be valued as of the end of the month 
96.25 	following authorization of payments day on which the benefit accrues.

96.26 	EFFECTIVE DATE. This section is effective July 1, 2010.

96.27 	Sec. 17. Minnesota Statutes 2008, section 352D.09, subdivision 3, is amended to read:
96.28 		Subd. 3.Prospectus. (a) The executive director shall annually distribute make 
96.29 	available by electronic means to each participant the prospectus prepared by the 
96.30 	supplemental fund, by July 1 or when received from such fund, whichever is later, to 
96.31 	each participant in covered employment.
97.1 	(b) Any participant may contact the Minnesota State Retirement System and request 
97.2 	a copy of the prospectus.

97.3 	EFFECTIVE DATE. This section is effective July 1, 2010.

97.4 	Sec. 18. Minnesota Statutes 2008, section 352D.09, subdivision 7, is amended to read:
97.5 		Subd. 7.Administrative fees. The board of directors shall establish a budget and 
97.6 	charge participants a reasonable fee to pay the administrative expenses of the unclassified 
97.7 	program. Fees cannot may not be charged on contributions and investment returns 
97.8 	attributable to contributions made before July 1, 1992. Annual total fees charged for plan 
97.9 	administration cannot exceed 10/100 of one percent of the contributions and investment 
97.10 	returns attributable to contributions made on or after July 1, 1992.

97.11 	EFFECTIVE DATE. This section is effective July 1, 2010.

97.12 	ARTICLE 5
97.13 	PUBLIC EMPLOYEES RETIREMENT ASSOCIATION 
97.14 	ADMINISTRATIVE PROVISIONS

97.15 	Section 1. Minnesota Statutes 2009 Supplement, section 353.01, subdivision 2, is 
97.16 	amended to read:
97.17 		Subd. 2.Public employee. "Public employee" means a governmental employee 
97.18 	or a public officer performing personal services for a governmental subdivision defined 
97.19 	in subdivision 6, whose salary is paid, in whole or in part, from revenue derived from 
97.20 	taxation, fees, assessments, or from other sources. For purposes of membership in the 
97.21 	association, the term includes the classes of persons described or listed in subdivision 
97.22 	2a and excludes the classes of persons listed in subdivision 2b. The term also includes 
97.23 	persons who elect association membership under subdivision 2d, paragraph (a), and 
97.24 	persons for whom the applicable governmental subdivision had elected association 
97.25 	membership under subdivision 2d, paragraph (b). The term excludes the classes of persons 
97.26 	listed in subdivision 2b for purposes of membership in the association.

97.27 	EFFECTIVE DATE. This section is effective July 1, 2010.

97.28 	Sec. 2. Minnesota Statutes 2009 Supplement, section 353.01, subdivision 2a, is 
97.29 	amended to read:
97.30 		Subd. 2a.Included employees; mandatory membership. (a) Public employees 
97.31 	whose salary from employment in one or more positions within one governmental 
98.1 	subdivision exceeds $425 in any month shall participate as members of the association. 
98.2 	If the salary is less than $425 in a subsequent month, the employee retains membership 
98.3 	eligibility. Eligible Public employees shallwhose salary exceeds $425 in any month and 
98.4 	who are not specifically excluded under subdivision 2b or who have not been provided 
98.5 	an option to participate under subdivision 2d, whether individually or by action of the 
98.6 	governmental subdivision, must participate as members of the association with retirement 
98.7 	coverage by the public employees retirement plan or the public employees police and 
98.8 	fire retirement plan under this chapter, or the local government correctional employees 
98.9 	retirement plan under chapter 353E, whichever applies,. Membership commences as a 
98.10 	condition of their employment on the first day of their employment unless they or on the 
98.11 	first day that the eligibility criteria are met, whichever is later. Public employees include 
98.12 	but are not limited to:
98.13 	(1) are specifically excluded under subdivision 2b;
98.14 	(2) do not exercise their option to elect retirement coverage in the association as 
98.15 	provided in subdivision 2d, paragraph (a); or
98.16 	(3) are employees of the governmental subdivisions listed in subdivision 2d, 
98.17 	paragraph (b), where the governmental subdivision has not elected to participate as a 
98.18 	governmental subdivision covered by the association.
98.19 	(1) persons whose salary meets the threshold in this paragraph from employment in 
98.20 	one or more positions within one governmental subdivision;
98.21 	(2) elected county sheriffs;
98.22 	(3) persons who are appointed, employed, or contracted to perform governmental 
98.23 	functions that by law or local ordinance are required of a public officer, including, but 
98.24 	not limited to:
98.25 	(i) town and city clerk or treasurer;
98.26 	(ii) county auditor, treasurer, or recorder;
98.27 	(iii) city manager as defined in section 353.028 who does not exercise the option 
98.28 	provided under subdivision 2d; or
98.29 	(iv) emergency management director, as provided under section 12.25;
98.30 	(4) physicians under section 353D.01, subdivision 2, who do not elect public 
98.31 	employees defined contribution plan coverage under section 353D.02, subdivision 2;
98.32 	(5) full-time employees of the Dakota County Agricultural Society; and
98.33 	(6) employees of the Minneapolis Firefighters Relief Association or Minneapolis 
98.34 	Police Relief Association who are not excluded employees under subdivision 2b due 
98.35 	to coverage by the relief association pension plan and who elected general employee 
98.36 	retirement plan coverage before August 20, 2009.
99.1 	(b) A public employee or elected official who was a member of the association on 
99.2 	June 30, 2002, based on employment that qualified for membership coverage by the public 
99.3 	employees retirement plan or the public employees police and fire plan under this chapter, 
99.4 	or the local government correctional employees retirement plan under chapter 353E as of 
99.5 	June 30, 2002, retains that membership for the duration of the person's employment in that 
99.6 	position or incumbency in elected office. Except as provided in subdivision 28, the person 
99.7 	shall participate as a member until the employee or elected official terminates public 
99.8 	employment under subdivision 11a or terminates membership under subdivision 11b.
99.9 	(c) Public employees under paragraph (a) include:
99.10 	(1) physicians under section 353D.01, subdivision 2, who do not elect public 
99.11 	employees defined contribution plan coverage under section 353D.02, subdivision 2;
99.12 	(2) full-time employees of the Dakota County Agricultural Society; and
99.13 	(3) employees of the Minneapolis Firefighters Relief Association or Minneapolis 
99.14 	Police Relief Association who are not excluded employees under subdivision 2b due to 
99.15 	coverage by the relief association pension plan and who elect Public Employee Retirement 
99.16 	Association general plan coverage under Laws 2009, chapter 169, article 12, section 10.
99.17 	(c) If the salary of an included public employee is less than $425 in any subsequent 
99.18 	month, the member retains membership eligibility.

99.19 	EFFECTIVE DATE. This section is effective July 1, 2010, except that the 
99.20 	amendment to paragraph (a), clause (3), applies to any person first appointed, elected, or 
99.21 	contracted after June 30, 2010.

99.22 	Sec. 3. Minnesota Statutes 2008, section 353.01, subdivision 2b, is amended to read:
99.23 		Subd. 2b.Excluded employees. (a) The following public employees are not eligible 
99.24 	to participate as members of the association with retirement coverage by the public general
99.25 	employees retirement plan, the local government correctional employees retirement plan 
99.26 	under chapter 353E, or the public employees police and fire retirement plan:
99.27 	(1) persons whose salary from one governmental subdivision never exceeds $425 in 
99.28 	a month;
99.29 	(2) public officers, other than county sheriffs, who are elected to a governing body, 
99.30 	city mayors, or persons who are appointed to fill a vacancy in an elective office of a 
99.31 	governing body, whose term of office commences on or after July 1, 2002, for the service 
99.32 	to be rendered in that elective position;
99.33 	(2)(3) election officers or election judges;
99.34 	(3)(4) patient and inmate personnel who perform services for a governmental 
99.35 	subdivision;
100.1 	(4)(5) except as otherwise specified in subdivision 12a, employees who are hired 
100.2 	for a temporary position as defined under subdivision 12a, and employees who resign 
100.3 	from a nontemporary position and accept a temporary position within 30 days in the 
100.4 	same governmental subdivision;
100.5 	(5)(6) employees who are employed by reason of work emergency caused by fire, 
100.6 	flood, storm, or similar disaster;
100.7 	(6)(7) employees who by virtue of their employment in one governmental 
100.8 	subdivision are required by law to be a member of and to contribute to any of the plans or 
100.9 	funds administered by the Minnesota State Retirement System, the Teachers Retirement 
100.10 	Association, the Duluth Teachers Retirement Fund Association, the St. Paul Teachers 
100.11 	Retirement Fund Association, the Minneapolis Employees Retirement Fund, or any police 
100.12 	or firefighters relief association governed by section 69.77 that has not consolidated 
100.13 	with the Public Employees Retirement Association, or any local police or firefighters 
100.14 	consolidation account who have not elected the type of benefit coverage provided by the 
100.15 	public employees police and fire fund under sections 353A.01 to 353A.10, or any persons 
100.16 	covered by section 353.665, subdivision 4, 5, or 6, who have not elected public employees 
100.17 	police and fire plan benefit coverage. This clause must not be construed to prevent a person 
100.18 	from being a member of and contributing to the Public Employees Retirement Association 
100.19 	and also belonging to and contributing to another public pension plan or fund for other 
100.20 	service occurring during the same period of time. A person who meets the definition of 
100.21 	"public employee" in subdivision 2 by virtue of other service occurring during the same 
100.22 	period of time becomes a member of the association unless contributions are made to 
100.23 	another public retirement fund on the salary based on the other service or to the Teachers 
100.24 	Retirement Association by a teacher as defined in section 354.05, subdivision 2;
100.25 	(7)(8) persons who are members of a religious order and are excluded from coverage 
100.26 	under the federal Old Age, Survivors, Disability, and Health Insurance Program for the 
100.27 	performance of service as specified in United States Code, title 42, section 410(a)(8)(A), 
100.28 	as amended through January 1, 1987, if no irrevocable election of coverage has been made 
100.29 	under section 3121(r) of the Internal Revenue Code of 1954, as amended;
100.30 	(8)(9) employees of a governmental subdivision who have not reached the age of 
100.31 	23 and are enrolled on a full-time basis to attend or are attending classes on a full-time 
100.32 	basis at an accredited school, college, or university in an undergraduate, graduate, or 
100.33 	professional-technical program, or a public or charter high school;
100.34 	(9)(10) resident physicians, medical interns, and pharmacist residents and 
100.35 	pharmacist interns who are serving in a degree or residency program in public hospitals 
100.36 	or clinics;
101.1 	(10)(11) students who are serving in an internship or residency program sponsored 
101.2 	by an accredited educational institution;
101.3 	(11)(12) persons who hold a part-time adult supplementary technical college license 
101.4 	who render part-time teaching service in a technical college;
101.5 	(12)(13) except for employees of Hennepin County or Hennepin Healthcare System, 
101.6 	Inc., foreign citizens working for who are employed by a governmental subdivision with
101.7 	under a work permit of less than three years, or an H-1b visa validinitially issued or 
101.8 	extended for a combined period less than three years of employment. Upon notice to the 
101.9 	association that the work permit or visa extendsextension of the employment beyond the 
101.10 	three-year period, the foreign citizens must be reported for membership from the date of 
101.11 	the extension beginning the first of the month thereafter provided the monthly earnings 
101.12 	threshold as provided under subdivision 2a is met;
101.13 	(13)(14) public hospital employees who elected not to participate as members 
101.14 	of the association before 1972 and who did not elect to participate from July 1, 1988, 
101.15 	to October 1, 1988;
101.16 	(14)(15) except as provided in section 353.86, volunteer ambulance service 
101.17 	personnel, as defined in subdivision 35, but persons who serve as volunteer ambulance 
101.18 	service personnel may still qualify as public employees under subdivision 2 and may be 
101.19 	members of the Public Employees Retirement Association and participants in the public
101.20 	general employees retirement fund plan or the public employees police and fire fund plan, 
101.21 	whichever applies, on the basis of compensation received from public employment service 
101.22 	other than service as volunteer ambulance service personnel;
101.23 	(15)(16) except as provided in section 353.87, volunteer firefighters, as defined 
101.24 	in subdivision 36, engaging in activities undertaken as part of volunteer firefighter 
101.25 	duties; provided that, but a person who is a volunteer firefighter may still qualify as a 
101.26 	public employee under subdivision 2 and may be a member of the Public Employees 
101.27 	Retirement Association and a participant in the public general employees retirement 
101.28 	fund plan or the public employees police and fire fund plan, whichever applies, on the 
101.29 	basis of compensation received from public employment activities other than those as a 
101.30 	volunteer firefighter;
101.31 	(16)(17) pipefitters and associated trades personnel employed by Independent 
101.32 	School District No. 625, St. Paul, with coverage under a collective bargaining agreement 
101.33 	by the pipefitters local 455 pension plan who were either first employed after May 1, 
101.34 	1997, or, if first employed before May 2, 1997, elected to be excluded under Laws 1997, 
101.35 	chapter 241, article 2, section 12;
102.1 	(17)(18) electrical workers, plumbers, carpenters, and associated trades personnel 
102.2 	who are employed by Independent School District No. 625, St. Paul, or the city of St. 
102.3 	Paul, who have retirement coverage under a collective bargaining agreement by the 
102.4 	Electrical Workers Local 110 pension plan, the United Association Plumbers Local 34 
102.5 	pension plan, or the pension plan applicable to Carpenters Local 87 pension plan who 
102.6 	were either first employed after May 1, 2000, or, if first employed before May 2, 2000, 
102.7 	elected to be excluded under Laws 2000, chapter 461, article 7, section 5;
102.8 	(18)(19) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers, 
102.9 	painters, allied tradesworkers, and plasterers who are employed by the city of St. Paul 
102.10 	or Independent School District No. 625, St. Paul, with coverage under a collective 
102.11 	bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan, 
102.12 	the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324 
102.13 	pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities 
102.14 	Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if 
102.15 	first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special 
102.16 	Session chapter 10, article 10, section 6;
102.17 	(19)(20) plumbers who are employed by the Metropolitan Airports Commission, 
102.18 	with coverage under a collective bargaining agreement by the Plumbers Local 34 pension 
102.19 	plan, who either were first employed after May 1, 2001, or if first employed before May 2, 
102.20 	2001, elected to be excluded under Laws 2001, First Special Session chapter 10, article 
102.21 	10, section 6;
102.22 	(20)(21) employees who are hired after June 30, 2002, to fill seasonal positions 
102.23 	under subdivision 12b which are limited in duration by the employer to 185 consecutive 
102.24 	calendar days or less in each year of employment with the governmental subdivision;
102.25 	(21)(22) persons who are provided supported employment or work-study positions 
102.26 	by a governmental subdivision and who participate in an employment or industries 
102.27 	program maintained for the benefit of these persons where the governmental subdivision 
102.28 	limits the position's duration to three years or less, including persons participating in a 
102.29 	federal or state subsidized on-the-job training, work experience, senior citizen, youth, or 
102.30 	unemployment relief program where the training or work experience is not provided as a 
102.31 	part of, or for, future permanent public employment;
102.32 	(22)(23) independent contractors and the employees of independent contractors; and
102.33 	(23)(24) reemployed annuitants of the association during the course of that 
102.34 	reemployment.; and
102.35 	(25) persons appointed to serve on a board or commission of a governmental 
102.36 	subdivision or an instrumentality thereof.
103.1 	(b) Any person performing the duties of a public officer in a position defined in 
103.2 	subdivision 2a, paragraph (a), clause (3), is not an independent contractor and is not an 
103.3 	employee of an independent contractor.

103.4 	EFFECTIVE DATE. This section is effective July 1, 2010, except that clause (25) 
103.5 	is effective for persons first appointed after June 30, 2010.

103.6 	Sec. 4. Minnesota Statutes 2008, section 353.01, subdivision 2d, is amended to read:
103.7 		Subd. 2d.Optional membership. (a) Membership in the association is optional 
103.8 	by action of the individual employee for the following public employees who meet the 
103.9 	conditions set forth in subdivision 2a:
103.10 	(1) members of the coordinated plan who are also employees of labor organizations 
103.11 	as defined in section 353.017, subdivision 1, for their employment by the labor 
103.12 	organization only, if they elect to have membership under section 353.017, subdivision 2;
103.13 	(2) persons who are elected or persons who are appointed to elected positions other 
103.14 	than local governing body elected positions who elect to participate by filing a written 
103.15 	election for membership;
103.16 	(3) members of the association who are appointed by the governor to be a state 
103.17 	department head and who elect not to be covered by the general state employees retirement 
103.18 	plan of the Minnesota State Retirement System under section 352.021;
103.19 	(4) city managers as defined in section 353.028, subdivision 1, who do not elect to be 
103.20 	excluded from membership in the association under section 353.028, subdivision 2; and
103.21 	(5) employees of the Port Authority of the city of St. Paul on January 1, 2003, 
103.22 	who were at least age 45 on that date, and who elected to participate by filing a written 
103.23 	election for membership.
103.24 	(b) Membership in the association is optional by action of the governmental 
103.25 	subdivision for the employees of the following governmental subdivisions under the 
103.26 	conditions specified:
103.27 	(1) the Minnesota Association of Townships if the board of that association, at its 
103.28 	option, certifies to the executive director that its employees who meet the conditions set 
103.29 	forth in subdivision 2a are to be included for purposes of retirement coverage, in which 
103.30 	case the status of the association as a participating employer is permanent;
103.31 	(2) a county historical society if the county in which the historical society is located, 
103.32 	at its option, certifies to the executive director that the employees of the historical society 
103.33 	who meet the conditions set forth in subdivision 2a are to be considered county employees 
103.34 	for purposes of retirement coverage under this chapter. The status as a county employee 
103.35 	must be accorded to all similarly situated county historical society employees and, once 
104.1 	established, must continue as long as a person is an employee of the county historical 
104.2 	society; and
104.3 	(3) Hennepin Healthcare System, Inc., a public corporation, with respect to 
104.4 	employees other than paramedics, emergency medical technicians, and protection officers, 
104.5 	if the corporate board establishes alternative retirement plans for certain classes of 
104.6 	employees of the corporation and certifies to the association the applicable employees to 
104.7 	be excluded from future retirement coverage.
104.8 	(c) For employees who are covered by paragraph (a), clause (1), (2), or (3), or 
104.9 	covered by paragraph (b), clause (1) or (2), if the necessary membership election is 
104.10 	not made, the employee is excluded from retirement coverage under this chapter. For 
104.11 	employees who are covered by paragraph (a), clause (4), if the necessary election is not 
104.12 	made, the employee must become a member and have retirement coverage under the 
104.13 	applicable provisions of this chapter. For employees specified in paragraph (b), clause 
104.14 	(3), membership continues until the exclusion option is exercised for the designated class 
104.15 	of employee.
104.16 	(d) The option to become a member, once exercised under this subdivision, may not 
104.17 	be withdrawn until the termination of public service as defined under subdivision 11a.

104.18 	EFFECTIVE DATE. This section is effective July 1, 2010.

104.19 	Sec. 5. Minnesota Statutes 2009 Supplement, section 353.01, subdivision 16, is 
104.20 	amended to read:
104.21 		Subd. 16.Allowable service; limits and computation. (a) "Allowable service" 
104.22 	means:
104.23 	(1) service during years of actual membership in the course of which employee 
104.24 	deductions were withheld from salary and contributions were made at the applicable rates 
104.25 	under section 353.27, 353.65, or 353E.03;
104.26 	(2) periods of service covered by payments in lieu of salary deductions under 
104.27 	sections 353.27, subdivision 12, and 353.35; 
104.28 	(3) service in years during which the public employee was not a member but for 
104.29 	which the member later elected, while a member, to obtain credit by making payments to 
104.30 	the fund as permitted by any law then in effect;
104.31 	(4) a period of authorized leave of absence with pay from which deductions for 
104.32 	employee contributions are made, deposited, and credited to the fund;
104.33 	(5) a period of authorized personal, parental, or medical leave of absence without 
104.34 	pay, including a leave of absence covered under the federal Family Medical Leave Act, 
104.35 	that does not exceed one year, and for which a member obtained service credit for each 
105.1 	month in the leave period by payment under section 353.0161 to the fund made in place of 
105.2 	salary deductions. An employee must return to public service and render a minimum of 
105.3 	three months of allowable service in order to be eligible to make payment under section 
105.4 	353.0161 for a subsequent authorized leave of absence without pay. Upon payment, the 
105.5 	employee must be granted allowable service credit for the purchased period; 
105.6 	(6) a periodic, repetitive leave that is offered to all employees of a governmental 
105.7 	subdivision. The leave program may not exceed 208 hours per annual normal work cycle 
105.8 	as certified to the association by the employer. A participating member obtains service 
105.9 	credit by making employee contributions in an amount or amounts based on the member's 
105.10 	average salary, excluding overtime pay, that would have been paid if the leave had not 
105.11 	been taken. The employer shall pay the employer and additional employer contributions 
105.12 	on behalf of the participating member. The employee and the employer are responsible 
105.13 	to pay interest on their respective shares at the rate of 8.5 percent a year, compounded 
105.14 	annually, from the end of the normal cycle until full payment is made. An employer shall 
105.15 	also make the employer and additional employer contributions, plus 8.5 percent interest, 
105.16 	compounded annually, on behalf of an employee who makes employee contributions but 
105.17 	terminates public service. The employee contributions must be made within one year 
105.18 	after the end of the annual normal working cycle or within 30 days after termination of 
105.19 	public service, whichever is sooner. The executive director shall prescribe the manner and 
105.20 	forms to be used by a governmental subdivision in administering a periodic, repetitive 
105.21 	leave. Upon payment, the member must be granted allowable service credit for the 
105.22 	purchased period;
105.23 	(7) an authorized temporary or seasonal layoff under subdivision 12, limited to three 
105.24 	months allowable service per authorized temporary or seasonal layoff in one calendar year. 
105.25 	An employee who has received the maximum service credit allowed for an authorized 
105.26 	temporary or seasonal layoff must return to public service and must obtain a minimum of 
105.27 	three months of allowable service subsequent to the layoff in order to receive allowable 
105.28 	service for a subsequent authorized temporary or seasonal layoff; 
105.29 	(8) a period during which a member is absent from employment by a governmental 
105.30 	subdivision by reason of service in the uniformed services, as defined in United States 
105.31 	Code, title 38, section 4303(13), if the member returns to public service with the same 
105.32 	governmental subdivision upon discharge from service in the uniformed service within the 
105.33 	time frames required under United States Code, title 38, section 4312(e), provided that 
105.34 	the member did not separate from uniformed service with a dishonorable or bad conduct 
105.35 	discharge or under other than honorable conditions. The service is must be credited if the 
105.36 	member pays into the fund equivalent employee contributions based upon the contribution 
106.1 	rate or rates in effect at the time that the uniformed service was performed multiplied 
106.2 	by the full and fractional years being purchased and applied to the annual salary rate. 
106.3 	The annual salary rate is the average annual salary, excluding overtime pay, during the 
106.4 	purchase period that the member would have received if the member had continued to 
106.5 	be employed in covered employment rather than to provide uniformed service, or, if 
106.6 	the determination of that rate is not reasonably certain, the annual salary rate is the 
106.7 	member's average salary rate, excluding overtime pay, during the 12-month period of 
106.8 	covered employment rendered immediately preceding the period of the uniformed service. 
106.9 	Payment of the member equivalent contributions must be made during a period that begins 
106.10 	with the date on which the individual returns to public employment and that is three times 
106.11 	the length of the military leave period, or within five years of the date of discharge from 
106.12 	the military service, whichever is less. If the determined payment period is less than 
106.13 	one year, the contributions required under this clause to receive service credit may be 
106.14 	made within one year of the discharge date. Payment may not be accepted following 30 
106.15 	days after termination of public service under subdivision 11a. If the member equivalent 
106.16 	contributions provided for in this clause are not paid in full, the member's allowable 
106.17 	service credit must be prorated by multiplying the full and fractional number of years of 
106.18 	uniformed service eligible for purchase by the ratio obtained by dividing the total member 
106.19 	contributions received by the total member contributions otherwise required under this 
106.20 	clause. The equivalent employer contribution, and, if applicable, the equivalent additional 
106.21 	employer contribution must be paid by the governmental subdivision employing the 
106.22 	member if the member makes the equivalent employee contributions. The employer 
106.23 	payments must be made from funds available to the employing unit, using the employer 
106.24 	and additional employer contribution rate or rates in effect at the time that the uniformed 
106.25 	service was performed, applied to the same annual salary rate or rates used to compute the 
106.26 	equivalent member contribution. The governmental subdivision involved may appropriate 
106.27 	money for those payments. The amount of service credit obtainable under this section may 
106.28 	not exceed five years unless a longer purchase period is required under United States Code, 
106.29 	title 38, section 4312. The employing unit shall pay interest on all equivalent member and 
106.30 	employer contribution amounts payable under this clause. Interest must be computed at a 
106.31 	rate of 8.5 percent compounded annually from the end of each fiscal year of the leave or the 
106.32 	break in service to the end of the month in which the payment is received. Upon payment, 
106.33 	the employee must be granted allowable service credit for the purchased period; or
106.34 	(9) a period specified under subdivision 40.
106.35 	(b) For calculating benefits under sections 353.30, 353.31, 353.32, and 353.33 for 
106.36 	state officers and employees displaced by the Community Corrections Act, chapter 401, 
107.1 	and transferred into county service under section 401.04, "allowable service" means the 
107.2 	combined years of allowable service as defined in paragraph (a), clauses (1) to (6), and 
107.3 	section 352.01, subdivision 11. 
107.4 	(c) For a public employee who has prior service covered by a local police or 
107.5 	firefighters relief association that has consolidated with the Public Employees Retirement 
107.6 	Association or to which section 353.665 applies, and who has elected the type of benefit 
107.7 	coverage provided by the public employees police and fire fund either under section 
107.8 	353A.08 following the consolidation or under section 353.665, subdivision 4, "applicable 
107.9 	service" is a period of service credited by the local police or firefighters relief association 
107.10 	as of the effective date of the consolidation based on law and on bylaw provisions 
107.11 	governing the relief association on the date of the initiation of the consolidation procedure. 
107.12 	(d) No member may receive more than 12 months of allowable service credit in a 
107.13 	year either for vesting purposes or for benefit calculation purposes.
107.14 	(e) MS 2002 [Expired]

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

107.16 	Sec. 6. Minnesota Statutes 2008, section 353.0161, subdivision 2, is amended to read:
107.17 		Subd. 2.Purchase procedure. (a) An employee covered by a plan specified in 
107.18 	subdivision 1 may purchase credit for allowable service in that plan for a period specified 
107.19 	in subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c), 
107.20 	whichever applies. The employing unit, at its option, may pay the employer portion of the 
107.21 	amount specified in paragraph (b) on behalf of its employees.
107.22 	(b) If payment is received by the executive director within one year from the date the 
107.23 	member returned to work following the authorized leave, or within 30 days after the date 
107.24 	of termination of public service if the member did not return to work, the payment amount 
107.25 	is equal to the employee and employer contribution rates specified in law for the applicable 
107.26 	plan at the end of the leave period, or at termination of public service, whichever is earlier, 
107.27 	multiplied by the employee's average monthly salary, excluding overtime, upon which 
107.28 	deductions were paid during the six months, or portion thereof, before the commencement 
107.29 	of the leave of absence and by the number of months of the leave of absence for which 
107.30 	the employee wants allowable service credit. Payments made under this paragraph must 
107.31 	include compound interest at a monthly rate of 0.71 percent from the last day of the leave 
107.32 	period until the last day of the month in which payment is received.
107.33 	(c) If payment is received by the executive director after one year, the payment 
107.34 	amount is the amount determined under section 356.551. Payment under this paragraph 
108.1 	must be made before the date the person terminates public service under section 353.01, 
108.2 	subdivision 11a.

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

108.4 	Sec. 7. [353.0162] REDUCED SALARY PERIODS SALARY CREDIT 
108.5 	PURCHASE.
108.6 	(a) A member may purchase additional salary credit for a period specified in this 
108.7 	section.
108.8 	(b) The applicable period is a period during which the member is receiving a reduced 
108.9 	salary from the employer while the member is:
108.10 	(1) receiving temporary workers' compensation payments related to the member's 
108.11 	service to the public employer;
108.12 	(2) on an authorized medical leave of absence; or
108.13 	(3) on an authorized partial paid leave of absence as a result of a budgetary or salary 
108.14 	savings program offered or mandated by a governmental subdivision.
108.15 	(c) The differential salary amount is the difference between the average monthly 
108.16 	salary received by the member during the period of reduced salary under this section and 
108.17 	the average monthly salary of the member, excluding overtime, on which contributions 
108.18 	to the applicable plan were made during the period of the last six months of covered 
108.19 	employment occurring immediately before the period of reduced salary, applied to the 
108.20 	member's normal employment period, measured in hours or otherwise, as applicable.
108.21 	(d) To receive eligible salary credit, the member shall pay an amount equal to:
108.22 	(1) the applicable employee contribution rate under section 353.27, subdivision 
108.23 	2; 353.65, subdivision 2; or 353E.03, subdivision 1, as applicable, multiplied by the 
108.24 	differential salary amount;
108.25 	(2) plus an employer equivalent payment equal to the applicable employer 
108.26 	contribution rate in section 353.27, subdivision 3; 353.65, subdivision 3; or 353E.03, 
108.27 	subdivision 2, as applicable, multiplied by the differential salary amount;
108.28 	(3) plus, if applicable, an equivalent employer additional amount equal to the 
108.29 	additional employer contribution rate in section 353.27, subdivision 3a, multiplied by the 
108.30 	differential salary amount. 
108.31 	(e) The employer, by appropriate action of its governing body and documented in its 
108.32 	official records, may pay the employer equivalent contributions and, as applicable, the 
108.33 	equivalent employer additional contributions on behalf of the member.
108.34 	(f) Payment under this section must include interest on the contribution amount 
108.35 	or amounts, whichever applies, at an 8.5 percent annual rate, prorated for applicable 
109.1 	months from the date on which the period of reduced salary specified under this section 
109.2 	terminates to the date on which the payment or payments are received by the executive 
109.3 	director. Payment under this section must be completed within the earlier of 30 days from 
109.4 	termination of public service by the employee under section 353.01, subdivision 11a, or 
109.5 	one year after the termination of the period specified in paragraph (b), as further restricted 
109.6 	under this section.
109.7 	(g) The period for which additional allowable salary credit may be purchased is 
109.8 	limited to the period during which the person receives temporary workers' compensation 
109.9 	payments or for those business years in which the governmental subdivision offers or 
109.10 	mandates a budget or salary savings program, as certified to the executive director by a 
109.11 	resolution of the governing body of the governmental subdivision. For an authorized 
109.12 	medical leave of absence, the period for which allowable salary credit may be purchased 
109.13 	may not exceed 12 consecutive months of authorized medical leave.
109.14 	(h) To purchase salary credit for a subsequent period of temporary workers' 
109.15 	compensation benefits or subsequent authorized medical leave of absence, the member 
109.16 	must return to public service and render a minimum of three months of allowable service.

109.17 	EFFECTIVE DATE. This section is effective July 1, 2010. Purchase of reduced 
109.18 	salary credit may be made for a period mandated or offered by a governmental subdivision 
109.19 	for purposes of budget or salary savings on or after July 1, 2009.

109.20 	Sec. 8. Minnesota Statutes 2008, section 353.03, subdivision 1, is amended to read:
109.21 		Subdivision 1.Management; composition; election. (a) The management of the 
109.22 	public employees retirement fund is vested in an 11-member board of trustees consisting 
109.23 	of ten members and the state auditor. The state auditor may designate a deputy auditor 
109.24 	with expertise in pension matters as the auditor's representative on the board. The 
109.25 	governor shall appoint five trustees to four-year terms, one of whom shall be designated to 
109.26 	represent school boards, one to represent cities, one to represent counties, one who is a 
109.27 	retired annuitant, and one who is a public member knowledgeable in pension matters. The 
109.28 	membership of the association, including recipients of retirement annuities and disability 
109.29 	and survivor benefits, shall elect five trustees for terms of four years, one of whom must 
109.30 	be a member of the police and fire fund and one of whom must be a former member who 
109.31 	met the definition of public employee under section 353.01, subdivisions 2 and 2a, for at 
109.32 	least five years prior to terminating membership and who is receiving a retirement annuity 
109.33 	or a member who receives a disability benefit. Terms expire on January 31 of the fourth 
109.34 	year, and positions are vacant until newly elected members are seated. Except as provided 
110.1 	in this subdivision, trustees elected by the membership of the association must be public 
110.2 	employees and members of the association. 
110.3 	(b) For seven days beginning October 1 of each year preceding a year in which 
110.4 	an election is held, the association shall accept at its office filings in person or by mail
110.5 	of candidates for the board of trustees. A candidate shall submit at the time of filing a 
110.6 	nominating petition signed by 25 or more members of the association. No name may 
110.7 	be withdrawn from nomination by the nominee after October 15. At the request of a 
110.8 	candidate for an elected position on the board of trustees, the board shall mailprovide 
110.9 	a statement of up to 300 words prepared by the candidate to all persons eligible to vote 
110.10 	in the election of the candidate. The board may adopt policies, subject to review and 
110.11 	approval by the secretary of state under paragraph (e),and procedures to govern the form 
110.12 	and length of these statements,and the timing of mailings, and deadlines for submitting 
110.13 	materials to be mailed. The secretary of state shall resolve disputes between the board and 
110.14 	a candidate concerning application of these policies to a particular statement distributed to 
110.15 	the eligible voters. 
110.16 	(c) By January 10 of each year in which elections are to be held, the board shall 
110.17 	distribute by mail to the members ballots listingeligible voters the instructions and 
110.18 	materials necessary to vote for the candidates seeking terms on the board of trustees. 
110.19 	Eligible voters are the members, retirees, and other benefit recipients. No membervoter 
110.20 	may vote for more than one candidate for each board position to be filled. A ballot 
110.21 	indicating a vote for more than one person for any position is void. No special marking 
110.22 	may be used on the ballot to indicate incumbents. BallotsVotes cast by using paper ballots 
110.23 	mailed to the association must be postmarked no later than January 31. Votes cast by using 
110.24 	telephone or other electronic means authorized under the board's procedures must be 
110.25 	entered by the end of the day on January 31. The ballot envelopes must be so designated 
110.26 	and the ballots must be counted in a manner that ensures design of the voting response 
110.27 	media must ensure that each voter's vote is secret.
110.28 	(d) A candidate who receives contributions or, who makes expenditures in excess 
110.29 	of $100, or who has given implicit or explicit consent for any other person to receive 
110.30 	contributions or make expenditures in excess of $100 for the purpose of bringing about the 
110.31 	candidate's election, shall file a report with the campaign finance and public disclosure 
110.32 	board disclosing the source and amount of all contributions to the candidate's campaign. 
110.33 	The campaign finance and public disclosure board shall prescribe forms governing these 
110.34 	disclosures. Expenditures and contributions have the meaning defined in section 10A.01. 
110.35 	These terms do not include the mailing any distribution made by the association board on 
110.36 	behalf of the candidate. A candidate shall file a report within 30 days from the day that the 
111.1 	results of the election are announced. The Campaign Finance and Public Disclosure Board 
111.2 	shall maintain these reports and make them available for public inspection in the same 
111.3 	manner as the board maintains and makes available other reports filed with it. 
111.4 	(e) The secretary of state shall review and approvecomment on the procedures 
111.5 	defined by the board of trustees for conducting the elections specified in this subdivision, 
111.6 	including board policies adopted under paragraph (b). 
111.7 	(f) The board of trustees and the executive director shall undertake their activities 
111.8 	consistent with chapter 356A.

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

111.10 	Sec. 9. Minnesota Statutes 2008, section 353.27, subdivision 4, is amended to read:
111.11 		Subd. 4.Employer reporting requirements; contributions; member status.
 111.12 	(a) A representative authorized by the head of each department shall deduct employee 
111.13 	contributions from the salary of each public employee who qualifies for membership 
111.14 	under this chapter andor chapter 353D or 353E at the rate under section 353.27, 353.65, 
111.15 	353D.03, or 353E.03, whichever is applicable, that is in effect on the date the salary is 
111.16 	paid. The employer representative must also remit payment in a manner prescribed by 
111.17 	the executive director for the aggregate amount of the employee contributions,and the 
111.18 	required employer contributions and the additional employer contributions to be received 
111.19 	by the association within 14 calendar days after each pay date. If the payment is less than 
111.20 	the amount required, the employer must pay the shortage amount to the association and 
111.21 	collect reimbursement of any employee contribution shortage paid on behalf of a member 
111.22 	through subsequent payroll withholdings from the wages of the employee. Payment of 
111.23 	shortages in employee contributions and associated employer contributions, if applicable, 
111.24 	must include interest at the rate specified in section 353.28, subdivision 5, if not received 
111.25 	within 30 days following the date the amount was initially due under this section.
111.26 	(b) The head of each department or the person's designee shall submit for each pay 
111.27 	period submit to the association a salary deduction report in the format prescribed by the 
111.28 	executive director. The report must be received by the association within 14 calendar days 
111.29 	after each pay date or the employer may be assessed a fine of $5 per calendar day until 
111.30 	the association receives the required data. Data required to be submitted as part of salary 
111.31 	deduction reporting must include, but are not limited to:
111.32 	(1)  the legal names and Social Security numbers of employees who are members;
111.33 	(2) the amount of each employee's salary deduction;
111.34 	(3) the amount of salary defined in section 353.01, subdivision 10, earned in the 
111.35 	pay period from which each deduction was made and the salary amount earned by a 
112.1 	reemployed annuitant under section 353.37, subdivision 1, or 353.371, subdivision 1, or 
112.2 	by a disabled member under section 353.33, subdivision 7 or 7a;
112.3 	(4) the beginning and ending dates of the payroll period covered and the date of 
112.4 	actual payment; and
112.5 	(5) adjustments or corrections covering past pay periods as authorized by the 
112.6 	executive director.
112.7 	(b)(c) Employers must furnish the data required for enrollment for each new 
112.8 	or reinstated employee who qualifies for membership in the format prescribed by the 
112.9 	executive director. The required enrollment data on new employeesmembers must be 
112.10 	submitted to the association prior to or concurrent with the submission of the initial 
112.11 	employee salary deduction. Also, the employer shall also report to the association all 
112.12 	member employment status changes, such as leaves of absence, terminations, and death, 
112.13 	and shall report the effective dates of those changes, on an ongoing basis for the payroll 
112.14 	cycle in which they occur. If an employer fails to comply with the reporting requirements 
112.15 	under this paragraph, the executive director may assess a fine of $25 for each failure if the 
112.16 	association staff has notified the employer of the noncompliance and attempted to obtain 
112.17 	the missing data or form from the employer for a period of more than three months.
112.18 	(d) The employer shall furnish data, forms, and reports as may be required by 
112.19 	the executive director for proper administration of the retirement system. Before 
112.20 	implementing new or different computerized reporting requirements, the executive 
112.21 	director shall give appropriate advance notice to governmental subdivisions to allow time 
112.22 	for system modifications.
112.23 	(c)(e) Notwithstanding paragraph (a), the association may provide for less frequent 
112.24 	reporting and payments for small employers.
112.25 	(f) The executive director may establish reporting procedures and methods as 
112.26 	required to review compliance by employers with the salary and contribution reporting 
112.27 	requirements in this chapter. A review of the payroll records of a participating employer 
112.28 	may be conducted by the association on a periodic basis or as a result of concerns known 
112.29 	to exist within a governmental subdivision.  An employer under review must extract 
112.30 	requested data and provide records to the association after receiving reasonable advanced 
112.31 	notice.  Failure to provide requested information or materials will result in the employer 
112.32 	being liable to the association for any expenses associated with a field audit, which may 
112.33 	include staff salaries, administrative expenses, and travel expenses.

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

113.1 	Sec. 10. Minnesota Statutes 2009 Supplement, section 353.27, subdivision 7, is 
113.2 	amended to read:
113.3 		Subd. 7.Adjustment for erroneous receipts or disbursements. (a) Except 
113.4 	as provided in paragraph (b), erroneous employee deductions and erroneous employer 
113.5 	contributions and additional employer contributions for a person, who otherwise does not 
113.6 	qualify for membership under this chapter, are considered:
113.7 	(1) valid if the initial erroneous deduction began before January 1, 1990. Upon 
113.8 	determination of the error by the association, the person may continue membership in the 
113.9 	association while employed in the same position for which erroneous deductions were 
113.10 	taken, or file a written election to terminate membership and apply for a refund upon 
113.11 	termination of public service or defer an annuity under section 353.34; or 
113.12 	(2) invalid, if the initial erroneous employee deduction began on or after January 1, 
113.13 	1990. Upon determination of the error, the association shall refund all erroneous employee 
113.14 	deductions and all erroneous employer contributions as specified in paragraph (e). No 
113.15 	person may claim a right to continued or past membership in the association based on 
113.16 	erroneous deductions which began on or after January 1, 1990. 
113.17 	(b) Erroneous deductions taken from the salary of a person who did not qualify for 
113.18 	membership in the association by virtue of concurrent employment before July 1, 1978, 
113.19 	which required contributions to another retirement fund or relief association established 
113.20 	for the benefit of officers and employees of a governmental subdivision, are invalid. Upon 
113.21 	discovery of the error, the association shall remove allowable service credit for all invalid 
113.22 	service if forfeited and, upon termination of public service, the association shall refund all 
113.23 	erroneous employee deductions to the person, with interest as determined under section 
113.24 	353.34, subdivision 2, and all erroneous employer contributions without interest to the 
113.25 	employer. This paragraph has both retroactive and prospective application. 
113.26 	(c) Adjustments to correct employer contributions and employee deductions taken 
113.27 	in error from amounts which are not salary under section 353.01, subdivision 10, must 
113.28 	be made as specified in paragraph (e). The period of adjustment must be limited to the 
113.29 	fiscal year in which the error is discovered by the association and the immediate two 
113.30 	preceding fiscal years. 
113.31 	(d) If there is evidence of fraud or other misconduct on the part of the employee or 
113.32 	the employer, the board of trustees may authorize adjustments to the account of a member 
113.33 	or former member to correct erroneous employee deductions and employer contributions 
113.34 	on invalid salary and the recovery of any overpayments for a period longer than provided 
113.35 	for under paragraph (c).
114.1 	(e) Upon discovery of the receipt of erroneous employee deductions and employer 
114.2 	contributions under paragraph (a), clause (2), or paragraph (c), the association must require 
114.3 	the employer to discontinue the erroneous employee deductions and erroneous employer 
114.4 	contributions reported on behalf of a member. Upon discontinuation, the association must:
114.5 	(1) for a member, provide a refund or credit to the employer in the amount of the 
114.6 	invalid employee deductions with interest on the invalid employee deductions at the rate 
114.7 	specified under section 353.34, subdivision 2, from the received date of each invalid salary 
114.8 	transaction through the date the credit or refund is made; and the employer must pay the 
114.9 	refunded employee deductions plus interest to the member;
114.10 	(2) for a former member who:
114.11 	(i) is not receiving a retirement annuity or benefit, return the erroneous employee 
114.12 	deductions to the former member through a refund with interest at the rate specified under 
114.13 	section 353.34, subdivision 2, from the received date of each invalid salary transaction 
114.14 	through the date the credit or refund is made; or
114.15 	(ii) is receiving a retirement annuity or disability benefit, or a person who is 
114.16 	receiving an optional annuity or survivor benefit, for whom it has been determined an 
114.17 	overpayment must be recovered, adjust the payment amount and recover the overpayments 
114.18 	as provided under this section; and
114.19 	(3) return the invalid employer contributions reported on behalf of a member or 
114.20 	former member to the employer by providing a credit against future contributions payable 
114.21 	by the employer.
114.22 	(f) In the event that a salary warrant or check from which a deduction for the 
114.23 	retirement fund was taken has been canceled or the amount of the warrant or check 
114.24 	returned to the funds of the department making the payment, a refund of the sum 
114.25 	deducted, or any portion of it that is required to adjust the deductions, must be made 
114.26 	to the department or institution.
114.27 	(g) If the accrual date of any retirement annuity, survivor benefit, or disability benefit 
114.28 	is within the limitation period specified in paragraph (c), and an overpayment has resulted 
114.29 	by using invalid service or salary, or due to any erroneous calculation procedure, the 
114.30 	association must recalculate the annuity or benefit payable and recover any overpayment 
114.31 	as provided under subdivision 7b.
114.32 	(h) Notwithstanding the provisions of this subdivision, the association may apply 
114.33 	the Revenue Procedures defined in the federal Internal Revenue Service Employee Plans 
114.34 	Compliance Resolution System and not issue a refund of erroneous employee deductions 
114.35 	and employer contributions or not recover a small overpayment of benefits if the cost to 
114.36 	correct the error would exceed the amount of the member refund or overpayment.
115.1 	(i) Any fees or penalties assessed by the federal Internal Revenue Service for any 
115.2 	failure by an employer to follow the statutory requirements for reporting eligible members 
115.3 	and salary must be paid by the employer.

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

115.5 	Sec. 11. Minnesota Statutes 2008, section 353.27, subdivision 10, is amended to read:
115.6 		Subd. 10.Employer exclusion reports. (a) The head of a department shall annually 
115.7 	furnish the executive director with an exclusion report listing only those employees in 
115.8 	potentially PERA-eligible positions who were not reported as members of the association 
115.9 	and who worked during the school year for school employees and calendar year for 
115.10 	nonschool employees. The department head must certify the accuracy and completeness 
115.11 	of the exclusion report to the association. The executive director shall prescribe the 
115.12 	manner and forms, including standardized exclusion codes, to be used by a governmental 
115.13 	subdivision in preparing and filing exclusion reports. Also, the executive director shall 
115.14 	also check the exclusion report to ascertain whether any omissions have been made by a 
115.15 	department head in the reporting of new public employees for membership. The executive 
115.16 	director may delegate an association employee under section 353.03, subdivision 3a, 
115.17 	paragraph (b), clause (5), to conduct a field audit to review the payroll records of a 
115.18 	governmental subdivision. 
115.19 	(b) If an employer fails to comply with the reporting requirements under this 
115.20 	subdivision, the executive director may assess a fine of $25 for each failure if the 
115.21 	association staff has notified the employer of the noncompliance and attempted to obtain 
115.22 	the missing data or form from the employer for a period of more than three months.

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

115.24 	Sec. 12. Minnesota Statutes 2009 Supplement, section 353.371, subdivision 4, is 
115.25 	amended to read:
115.26 		Subd. 4.Duration. Postretirement option employment shall may be for an initial 
115.27 	period not to exceed one year. At the end of the initial period, the governing body has sole 
115.28 	discretion to determine if the offer of a postretirement option position will be renewed, 
115.29 	renewed with modifications, or terminated. Postretirement option employment may be 
115.30 	renewed annually, but may not be renewed after the individual attains retirement age as 
115.31 	defined in United States Code, title 42, section 416(l) no more than four renewals may 
115.32 	occur. 

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

116.1 	Sec. 13. Minnesota Statutes 2008, section 353D.01, subdivision 2, is amended to read:
116.2 		Subd. 2.Eligibility. (a) Eligibility to participate in the defined contribution plan 
116.3 	is available to:
116.4 	(1) elected local government officials of a governmental subdivision who elect to 
116.5 	participate in the plan under section 353D.02, subdivision 1, and who, for the elected 
116.6 	service rendered to a governmental subdivision, are not members of the Public Employees 
116.7 	Retirement Association within the meaning of section 353.01, subdivision 7; 
116.8 	(2) physicians who, if they did not elect to participate in the plan under section 
116.9 	353D.02, subdivision 2, would meet the definition of member under section 353.01, 
116.10 	subdivision 7; 
116.11 	(3) basic and advanced life-support emergency medical service personnel who 
116.12 	are employed by any public ambulance service that elects to participate under section 
116.13 	353D.02, subdivision 3; 
116.14 	(4) members of a municipal rescue squad associated with the city of Litchfield 
116.15 	in Meeker County, or of a county rescue squad associated with Kandiyohi County, if 
116.16 	an independent nonprofit rescue squad corporation, incorporated under chapter 317A, 
116.17 	performing emergency management services, and if not affiliated with a fire department 
116.18 	or ambulance service and if its members are not eligible for membership in that fire 
116.19 	department's or ambulance service's relief association or comparable pension plan; 
116.20 	(5) employees of the Port Authority of the city of St. Paul who elect to participate in 
116.21 	the plan under section 353D.02, subdivision 5, and who are not members of the Public 
116.22 	Employees Retirement Association under section 353.01, subdivision 7; 
116.23 	(6) city managers who elected to be excluded from the general employees retirement 
116.24 	plan of the Public Employees Retirement Association under section 353.028 and who 
116.25 	elected to participate in the public employees defined contribution plan under section 
116.26 	353.028, subdivision 3, paragraph (b); and
116.27 	(7) volunteer or emergency on-call firefighters serving in a municipal fire department 
116.28 	or an independent nonprofit firefighting corporation who are not covered by the public 
116.29 	employees police and fire retirement plan and who are not covered by a volunteer 
116.30 	firefighters relief association and who elect to participate in the public employees defined 
116.31 	contribution plan.;
116.32 	(8) elected county sheriffs who are former members of the police and fire plan and 
116.33 	who are receiving a retirement annuity as provided under section 353.651; and
116.34 	(9) persons who are excluded from membership under section 353.01, subdivision 
116.35 	2b, paragraph (a), clause (25).
117.1 	(b) For purposes of this chapter, an elected local government official includes 
117.2 	a person appointed to fill a vacancy in an elective office. Service as an elected local 
117.3 	government official only includes service for the governmental subdivision for which the 
117.4 	official was elected by the public at large. Service as an elected local government official 
117.5 	ceases and eligibility to participate terminates when the person ceases to be an elected 
117.6 	official. An elected local government official does not include an elected county sheriff
117.7 	who must be a member of the police and fire plan as provided under chapter 353.
117.8 	(c) Individuals otherwise eligible to participate in the plan under this subdivision 
117.9 	who are currently covered by a public or private pension plan because of their employment 
117.10 	or provision of services are not eligible to participate in the public employees defined 
117.11 	contribution plan.
117.12 	(d) A former participant is a person who has terminated eligible employment or 
117.13 	service and has not withdrawn the value of the person's individual account.

117.14 	EFFECTIVE DATE. This section is effective July 1, 2010.

117.15 	Sec. 14. Minnesota Statutes 2008, section 353D.03, subdivision 1, is amended to read:
117.16 		Subdivision 1.Local government official contribution Contributions for eligible 
117.17 	participants. An(a) The following classes of eligible elected local government official
117.18 	participants who electselect to participate in the public employees defined contribution 
117.19 	plan under section 353D.02 shall contribute an amount equal to five percent of salary as 
117.20 	defined in section 353.01, subdivision 10. A participating:
117.21 	(1) elected local government official'sofficials;
117.22 	(2) physicians; and
117.23 	(3) persons who are excluded from membership under section 353.01, subdivision 
117.24 	2b, clause (25).
117.25 	(b) A participant's governmental subdivision shall contribute a matching amount.  

117.26 	EFFECTIVE DATE. This section is effective July 1, 2010.

117.27 	Sec. 15. Minnesota Statutes 2008, section 353D.04, subdivision 1, is amended to read:
117.28 		Subdivision 1.Crediting of account contributions to participant accounts. (a) 
117.29 	Contributions made by or on behalf of a participating elected local government official or 
117.30 	physicianparticipant under section 353D.03, subdivisions 1, 5, and 6, paragraph (a), must 
117.31 	be remitted to the Public Employees Retirement Association and credited to the individual 
117.32 	account established for the participant. Ambulance service
118.1 	(b) Contributions as provided under section 353D.03, subdivisions 3, and 6, 
118.2 	paragraph (b), must be remitted on a regular basis to the association together with any 
118.3 	member contributions paid or withheld. Those contributions must be credited to the 
118.4 	individual account of each participating member.

118.5 	EFFECTIVE DATE. This section is effective July 1, 2010.

118.6 	Sec. 16. Minnesota Statutes 2008, section 353D.04, subdivision 2, is amended to read:
118.7 		Subd. 2.Authority to adopt policies correcting erroneous contributions. The 
118.8 	executive director may adopt policies and procedures regarding deductions taken totally 
118.9 	or partially in error by the employer from the salary of an elected official.

118.10 	EFFECTIVE DATE. This section is effective July 1, 2010.

118.11 	Sec. 17. Minnesota Statutes 2009 Supplement, section 353F.02, subdivision 4, is 
118.12 	amended to read:
118.13 		Subd. 4.Medical facility. "Medical facility" means:
118.14 	(1) Bridges Medical Services;
118.15 	(2) the City of Cannon Falls Hospital;
118.16 	(3) the Chris Jenson Health and Rehabilitation Center in St. Louis County;
118.17 	(4) Clearwater County Memorial Hospital doing business as Clearwater Health 
118.18 	Services in Bagley;
118.19 	(4)(5) the Dassel Lakeside Community Home;
118.20 	(6) the Douglas County Hospital, with respect to the Mental Health Unit;
118.21 	(5)(7) the Fair Oaks Lodge, Wadena;
118.22 	(6)(8) the Glencoe Area Health Center;
118.23 	(7)(9) Hutchinson Area Health Care;
118.24 	(8)(10) the Lakefield Nursing Home;
118.25 	(9)(11) the Lakeview Nursing Home in Gaylord;
118.26 	(10)(12) the Luverne Public Hospital;
118.27 	(11)(13) the Oakland Park Nursing Home;
118.28 	(12)(14) the RenVilla Nursing Home;
118.29 	(13)(15) the Rice Memorial Hospital in Willmar, with respect to the Department 
118.30 	of Radiology and the Department of Radiation/Oncology;
118.31 	(14)(16) the St. Peter Community Health Care Center;
118.32 	(15)(17) the Waconia-Ridgeview Medical Center; 
118.33 	(16)(18) the Weiner Memorial Medical Center, Inc.; and
119.1 	(19) the Wheaton Community Hospital; and
119.2 	(17)(20) the Worthington Regional Hospital.

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

119.4 	Sec. 18. Minnesota Statutes 2008, section 353F.025, subdivision 1, is amended to read:
119.5 		Subdivision 1.Eligibility determination. (a) The chief clerical officer of a 
119.6 	governmental subdivision may submit a resolution from the governing body to the 
119.7 	executive director of the Public Employees Retirement Association which supports 
119.8 	providing coverage under this chapter for employees of that governmental subdivision 
119.9 	who are privatized, and which states that the governing body will pay for actuarial 
119.10 	calculations, as further specified in paragraph (c). 
119.11 	(b) The governing body must also provide a copy of any applicable purchase or 
119.12 	lease agreement and any other information requested by the executive director to allow the 
119.13 	executive director to verify that under the proposed employer change, the new employer 
119.14 	does not qualify as a governmental subdivision under section 353.01, subdivision 6, 
119.15 	making the employees ineligible for continued coverage as active members of the general 
119.16 	employees retirement plan of the Public Employees Retirement Association.
119.17 	(c) Following receipt of a resolution and a determination by the executive director 
119.18 	that the new employer is not a governmental subdivision, the executive director shall 
119.19 	direct the consulting actuary retained under section 356.214 to determine whether the 
119.20 	general employees retirement plan of the Public Employees Retirement Association, if 
119.21 	coverage under this chapter is provided, is expected to receive a net gain or a net loss if 
119.22 	privatization occurs, by determining whether. A net gain is expected if the actuarial 
119.23 	liability of the special benefit coverage provided under this chapter, if extended to the 
119.24 	applicable employees under the privatization, is less than the actuarial gain otherwise to 
119.25 	accrue to the plan. A net loss is expected if the actuarial accrued liability of the special 
119.26 	benefit coverage provided under this chapter, if extended to the applicable employees 
119.27 	under the privatization, is more than the actuarial gain otherwise to accrue to the plan. The 
119.28 	date of the actuarial calculations used to make this determination must be within one year 
119.29 	of the effective date, as defined in section 353F.02, subdivision 3.

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

119.31 	Sec. 19. Minnesota Statutes 2008, section 353F.025, subdivision 2, is amended to read:
119.32 		Subd. 2.Recommendation to legislature. (a) If the actuarial calculations under 
119.33 	subdivision 1, paragraph (c), indicate that a net gain to the general employees retirement 
120.1 	plan of the Public Employees Retirement Association is expected due to the privatization, 
120.2 	or if paragraph (c) applies, the executive director shall forward a recommendation and 
120.3 	supporting documentation to the chair of the Legislative Commission on Pensions and 
120.4 	Retirement, the chair of the Governmental Operations, Reform, Technology and Elections 
120.5 	Committee of the house of representatives, the chair of the State and Local Government 
120.6 	Operations and Oversight Committee of the senate, and the executive director of the 
120.7 	Legislative Commission on Pensions and Retirement. The recommendation must be in 
120.8 	the form of an addition to the definition of "medical facility" under section 353F.02, 
120.9 	subdivision 4, or to "other public employing unit" under section 353F.02, subdivision 5, 
120.10 	whichever is applicable. The recommendation must be forwarded to the legislature before 
120.11 	January 15 for the recommendation to be considered in that year's legislative session. The 
120.12 	recommendation may be included as part of public pension administrative legislation 
120.13 	under section 356B.05.
120.14 	(b) If a medical facility or other public employing unit listed under section 353F.02, 
120.15 	subdivision 4 or 5, fails to privatize within one year of the final enactment date of the 
120.16 	legislation adding the entity to the applicable definition, its inclusion under this chapter is 
120.17 	voided, and the executive director shall include in the subsequent proposed legislation 
120.18 	under paragraph (a) a recommendation that the applicable entity be stricken from the 
120.19 	definition.
120.20 	(c) If the calculations under subdivision 1, paragraph (c), indicate a net loss, the 
120.21 	executive director shall forward a recommendation that the privatization be included as an 
120.22 	addition under paragraph (a) if the chief clerical officer of the applicable governmental 
120.23 	subdivision submits a resolution from the governing body specifying that a lump sum 
120.24 	payment will be made to the executive director equal to the net loss, plus interest. The 
120.25 	interest must be computed using the applicable preretirement interest rate assumption 
120.26 	under section 356.215, subdivision 8, expressed as a monthly rate, from the date of the 
120.27 	actuarial valuation from which the actuarial accrued liability data was used to determine 
120.28 	the net loss in the actuarial study under subdivision 1, to the date of payment, with annual 
120.29 	compounding. Payment must be made on or after the effective date defined under section 
120.30 	353F.02.

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

120.32 	Sec. 20. Minnesota Statutes 2008, section 356.96, subdivision 2, is amended to read:
120.33 		Subd. 2.Right to review. A determination made by the administrationchief 
120.34 	administrative officer of a covered pension plan regarding a person's eligibility, benefits, 
121.1 	or other rights under the plan with which the person does not agree is subject to review 
121.2 	under this section.

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

121.4 	Sec. 21. Minnesota Statutes 2008, section 356.96, subdivision 3, is amended to read:
121.5 		Subd. 3.Notice of determination. If the applicable chief administrative officer 
121.6 	denies an application or a written request, modifies a benefit, or terminates a benefit 
121.7 	of a person claiming a right or potential rights under a covered pension plan, the chief 
121.8 	administrative officer shall notify that person through a written notice containing:
121.9 	(1) a statement of the reasons for the determination;
121.10 	(2) a notice that the person may petition the governing board of the covered pension 
121.11 	plan for a review of the determination and that a person's petition for review must be filed 
121.12 	in the administrative office of the covered pension plan within 60 days of the receipt 
121.13 	of the written notice of the determination;
121.14 	(3) a statement indicating that a failure to petition for review within 60 days 
121.15 	precludes the person from contesting in any other administrative review or court procedure 
121.16 	the issues determined by the chief administrative officer;
121.17 	(4) a statement indicating that all relevant materials, documents, affidavits, and other 
121.18 	records that the person wishes to be reviewed in support of the petition must be filed with 
121.19 	and received in the administrative office of the covered pension plan at least 3015 days 
121.20 	before the date of the hearing under subdivision 10; and
121.21 	(5) a copysummary of this section, including all filing requirements and deadlines.

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

121.23 	Sec. 22. Minnesota Statutes 2009 Supplement, section 356.96, subdivision 5, is 
121.24 	amended to read:
121.25 		Subd. 5.Petition for review. (a) A person who claims a right under subdivision 2 
121.26 	may petition for a review of that decision by the governing board of the covered pension 
121.27 	plan.
121.28 	(b) A petition under this section must be sent to the chief administrative officer by 
121.29 	mail and must be postmarked no later than 60 days after the person received the notice 
121.30 	required by subdivision 3. The petition must include the person's statement of the reason 
121.31 	or reasons that the person believes the decision of the chief administrative officer should 
121.32 	be reversed or modified. The petition may include all documentation and written materials 
121.33 	that the petitioner deems to be relevant. In developing a record for review by the board 
122.1 	when a decision is appealed, the executive directorchief administrative officer may direct 
122.2 	that the applicant participate in a fact-finding session conducted by an administrative law 
122.3 	judge assigned by the Office of Administrative Hearings and, as applicable, participate in 
122.4 	a vocational assessment conducted by a qualified rehabilitation counselor on contract with 
122.5 	the applicable retirement system.

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

122.7 	Sec. 23. Minnesota Statutes 2008, section 356.96, subdivision 7, is amended to read:
122.8 		Subd. 7.Notice of hearing. (a) After receiving a petition, and not less than 30 
122.9 	calendar days from the date of the next regular board meeting, the chief administrative 
122.10 	officer must schedule a timely review of the petition before the governing board of the 
122.11 	covered pension plan. The review must be scheduled to take into consideration any 
122.12 	necessary accommodations to allow the petitioner to participate in the governing board's 
122.13 	review.
122.14 	(b) Not less than 1530 calendar days before the scheduled hearing date, the chief 
122.15 	administrative officer must provide by mail to the petitioner an acknowledgment of the 
122.16 	receipt of the person's petition and a follow-up notice of the time and place of the meeting 
122.17 	at which the governing board is scheduled to consider the petition and must provide a copy 
122.18 	of all relevant documents, evidence, summaries, and recommendations assembled by or 
122.19 	on behalf of the plan administration to be considered by the governing board.
122.20 	(c) Except as provided in subdivision 8, paragraph (c), All documents and materials 
122.21 	that the petitioner wishes to be part of the record for review must be filed with the chief 
122.22 	administrative officer and must be received in the offices of the covered pension plan 
122.23 	at least 3015 days before the date of the meeting at which the petition is scheduled to 
122.24 	be heard.
122.25 	(d) A petitioner,may request a continuance of a scheduled hearing if the request 
122.26 	is received by the chief administrative officer within ten calendar days of the scheduled 
122.27 	date of the applicable board meeting, may request a continuance on a scheduled petition. 
122.28 	The chief administrative officer must reschedule the review within 60 days of the date 
122.29 	of the continuance request a reasonable time. Only one continuance may be granted to 
122.30 	any petitioner.

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

122.32 	Sec. 24. Minnesota Statutes 2008, section 356.96, subdivision 8, is amended to read:
123.1 		Subd. 8.Record for review. (a) All evidence, including all records, documents, and 
123.2 	affidavits in the possession of the covered pension plan of which the covered pension plan 
123.3 	desires to avail itself and be considered by the governing board, and all evidence which the 
123.4 	petitioner wishes to present to the governing board, including any evidence which would 
123.5 	otherwise be classified by law as "private," must be made part of the hearing record.
123.6 	(b) Not later thanThe chief administrative officer must provide a copy of the record 
123.7 	to each member of the governing board at least seven days before the scheduled hearing 
123.8 	date, the chief administrative officer must provide a copy of the record to each member 
123.9 	of the governing board.
123.10 	(c) At least five days before the hearing, the petitioner may submit to the chief 
123.11 	administrative officer, for submission to the governing board, Any additional document, 
123.12 	affidavit, or other relevant information that was not initially submitted with the petition
123.13 	the petitioner requests be part of the record may be admitted with the consent of the 
123.14 	governing board.

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

123.16 	Sec. 25. Laws 2009, chapter 169, article 4, section 49, is amended to read:
123.17 	Sec. 49. CITY OF DULUTH AND DULUTH AIRPORT AUTHORITY AND 
123.18 	CITY OF VIRGINIA; CORRECTING ERRONEOUS EMPLOYEE DEDUCTIONS, 
123.19 	EMPLOYER CONTRIBUTIONS AND ADJUSTING OVERPAID BENEFITS.
 123.20 		Subdivision 1.Application. Notwithstanding any provisions of Minnesota Statutes, 
123.21 	section 353.27, subdivisions 7 and 7b, or Minnesota Statutes 2008, chapters 353 and 
123.22 	356, to the contrary, this section establishes the procedures by which the executive 
123.23 	director of the Public Employees Retirement Association shall adjust erroneous employee 
123.24 	deductions and employer contributions paid on behalf of active employees and former 
123.25 	members by the city of Duluth and, by the Duluth Airport Authority, and by the city 
123.26 	of Virginia on amounts determined by the executive director to be invalid salary under 
123.27 	Minnesota Statutes, section 353.01, subdivision 10, reported between January 1, 1997, 
123.28 	and October 23, 2008, and for adjusting benefits that were paid to former members and 
123.29 	their beneficiaries based upon invalid salary amounts.
123.30 		Subd. 2.Refunds of employee deductions. (a) The executive director shall refund 
123.31 	to active employees or former members who are not receiving retirement annuities or 
123.32 	benefits all erroneous employee deductions identified by the city of Duluth or, by the 
123.33 	Duluth Airport Authority, or by the city of Virginia as deductions taken from amounts 
123.34 	determined to be invalid salary. The refunds must include interest at the rate specified in 
124.1 	Minnesota Statutes, section 353.34, subdivision 2, from the date each invalid employee 
124.2 	deduction was received through the date each refund is paid.
124.3 	(b) The refund payment for active employees must be sent to the applicable 
124.4 	governmental subdivision which must pay the refunded employee deductions plus interest 
124.5 	to the activehome addresses of the members who are employees of the city of Duluth
124.6 	or, who are employees of the Duluth Airport Authority, or who are employees of the city 
124.7 	of Virginia, as applicable.
124.8 	(c) Refunds to former members must be mailed by the executive director of the 
124.9 	Public Employees Retirement Association to the former member's last known address.
124.10 		Subd. 3.Benefit adjustments. (a) For a former member who is receiving a 
124.11 	retirement annuity or disability benefit, or for a person receiving an optional annuity or 
124.12 	survivor benefit, the executive director must:
124.13 	(1) adjust the annuity or benefit payment to the correct monthly benefit amount 
124.14 	payable by reducing the average salary under Minnesota Statutes, section 353.01, 
124.15 	subdivision 17a, by the invalid salary amounts;
124.16 	(2) determine the amount of the overpaid benefits paid from the effective date of 
124.17 	the annuity or benefit payment to the first of the month in which the monthly benefit 
124.18 	amount is corrected;
124.19 	(3) calculate the amount of employee deductions taken in error on invalid salary, 
124.20 	including interest at the rate specified in Minnesota Statutes, section 353.34, subdivision 2, 
124.21 	from the date each invalid employee deduction was received through the date the annuity 
124.22 	or benefit is adjusted as provided under clause (1); and
124.23 	(4) determine the net amount of overpaid benefits by reducing the amount of the 
124.24 	overpaid annuity or benefit as determined in clause (2) by the amount of the erroneous 
124.25 	employee deductions with interest as determined in clause (3).
124.26 	(b) If a former member's erroneous employee deductions plus interest determined 
124.27 	under this section exceeds the amount of the person's overpaid benefits, the balance must 
124.28 	be refunded to the person to whom the annuity or benefit is being paid.
124.29 	(c) The executive director shall recover the net amount of all overpaid annuities or 
124.30 	benefits as provided under subdivision 4.
124.31 		Subd. 4.Employer credits and obligations. (a) The executive director shall 
124.32 	provide a credit without interest to the city of Duluth and, to the Duluth Airport Authority, 
124.33 	and to the city of Virginia, as applicable, for the amount of that governmental subdivision's 
124.34 	erroneous employer contributions. The credit must first be used to offset the net amount of 
124.35 	the overpaid retirement annuities and the disability and survivor benefits that remains after 
124.36 	applying the amount of erroneous employee deductions with interest as provided under 
125.1 	subdivision 3, paragraph (a), clause (4). The remaining erroneous employer contributions, 
125.2 	if any, must be credited against future employer contributions required to be paid by 
125.3 	the applicable governmental subdivision. If the overpaid benefits exceed the employer 
125.4 	contribution credit, the balance of the overpaid benefits is the obligation of the city of 
125.5 	Duluth or, the Duluth Airport Authority, or the city of Virginia, whichever is applicable.
125.6 	(b) The Public Employees Retirement Association board of trustees shall determine 
125.7 	the period of time and manner for the collection of overpaid retirement annuities and 
125.8 	benefits, if any, from the city of Duluth and, the Duluth Airport Authority, and the city of 
125.9 	Virginia.

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

125.11 	Sec. 26. Laws 2009, chapter 169, article 4, section 49, the effective date, is amended to 
125.12 	read:

125.13 	EFFECTIVE DATE. (a) This section is effective for the city of Duluth the day after 
125.14 	the Duluth city council and the chief clerical officer of the city of Duluth timely complete 
125.15 	their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, for 
125.16 	members who are, and former members who were, employees of the city of Duluth.
125.17 	(b) This section is effective for the Duluth Airport Authority the day after the Duluth 
125.18 	Airport Authority and the chief clerical officer of the Duluth Airport Authority timely 
125.19 	complete their compliance with Minnesota Statutes, section 645.021, subdivisions 2
125.20 	and 3, for members who are, and former members who were, employees of the Duluth 
125.21 	Airport Authority.
125.22 	(c) This section is effective for the city of Virginia the day after the Virginia 
125.23 	city council and the chief clerical officer of the city of Virginia timely complete their 
125.24 	compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, for members 
125.25 	who are, and former members who were, employees of the city of Virginia. If this section 
125.26 	becomes effective for the city of Virginia, it applies retroactively from June 23, 2009.

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

125.28 	Sec. 27. Laws 2009, chapter 169, article 5, section 2, the effective date, is amended to 
125.29 	read:

125.30 	EFFECTIVE DATE. This section is effective the day following final enactment 
125.31 	and expires on June 30, 2011 2014. Individuals must not be appointed to a postretirement 
125.32 	option position after that date.

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

126.2 	Sec. 28.  REPEALER.
 126.3 	(a) Minnesota Statutes 2008, section 353.01, subdivision 40, is repealed effective 
126.4 	July 1, 2010.
126.5 	(b) Minnesota Statutes 2008, sections 353.46, subdivision 1a; and 353D.03, 
126.6 	subdivision 2, are repealed the day following final enactment.
126.7 	(c) Minnesota Statutes 2008, section 353D.12, is repealed effective July 1, 2011.

126.8 	ARTICLE 6
126.9 	VOLUNTARY STATEWIDE LUMP-SUM VOLUNTEER FIREFIGHTER 
126.10 	RETIREMENT PLAN

126.11 	Section 1. Minnesota Statutes 2008, section 69.051, subdivision 3, is amended to read:
126.12 		Subd. 3.Report by certain municipalities. (a) Each municipality which has 
126.13 	an organized fire department but which does not have a firefighters' relief association 
126.14 	governed by section 69.77 or sections 69.771 to 69.775 and which is not exempted 
126.15 	under paragraph (b) shall annually prepare a detailed financial report of the receipts and 
126.16 	disbursements by the municipality for fire protection service during the preceding calendar 
126.17 	year, on a form prescribed by the state auditor. The financial report shallmust contain any 
126.18 	information which the state auditor deems necessary to disclose the sources of receipts 
126.19 	and the purpose of disbursements for fire protection service. The financial report shall
126.20 	must be signed by the municipal clerk or clerk-treasurer of the municipality. The financial 
126.21 	report shallmust be filed by the municipal clerk or clerk-treasurer with the state auditor on 
126.22 	or before July 1 annually. The state auditor shall forward one copy to the county auditor of 
126.23 	the county wherein the municipality is located. The municipality shall not qualify initially 
126.24 	to receive, or be entitled subsequently to retain, state aid pursuant tounder this chapter if 
126.25 	the financial reporting requirement or the applicable requirements of this chapter or any 
126.26 	other statute or special law have not been complied with or are not fulfilled.
126.27 	(b) Each municipality that has an organized fire department and provides retirement 
126.28 	coverage to its firefighters through the voluntary statewide lump-sum volunteer firefighter 
126.29 	retirement plan under chapter 353G qualifies to have fire state aid transmitted to and 
126.30 	retained in the statewide lump-sum volunteer firefighter retirement fund without filing 
126.31 	a detailed financial report if the executive director of the Public Employees Retirement 
126.32 	Association certifies compliance by the municipality with the requirements of sections 
126.33 	353G.04 and 353G.08, paragraph (e), and by the applicable fire chief with the requirements 
126.34 	of section 353G.07.

127.1 	EFFECTIVE DATE. This section is effective retroactively from January 1, 2010.

127.2 	Sec. 2. Minnesota Statutes 2009 Supplement, section 353G.05, subdivision 2, is 
127.3 	amended to read:
127.4 		Subd. 2.Election of coverage. (a) The process for electing coverage of volunteer 
127.5 	firefighters by the retirement plan is initiated by a request to the executive director for a 
127.6 	cost analysis of the prospective retirement coverage.
127.7 	(b) If the volunteer firefighters are currently covered by a volunteer firefighters' relief 
127.8 	association governed by chapter 424A, the cost analysis of the prospective retirement 
127.9 	coverage must be requested jointly by the secretary of the volunteer firefighters' relief 
127.10 	association, following approval of the request by the board of the volunteer firefighters' 
127.11 	relief association, and the chief administrative officer of the entity associated with the 
127.12 	relief association, following approval of the request by the governing body of the entity 
127.13 	associated with the relief association. If the relief association is associated with more than 
127.14 	one entity, the chief administrative officer of each associated entity must execute the 
127.15 	request. If the volunteer firefighters are not currently covered by a volunteer firefighters' 
127.16 	relief association, the cost analysis of the prospective retirement coverage must be 
127.17 	requested by the chief administrative officer of the entity operating the fire department. 
127.18 	The request must be made in writing and must be made on a form prescribed by the 
127.19 	executive director.
127.20 	(c) The cost analysis of the prospective retirement coverage by the statewide 
127.21 	retirement plan must be based on the service pension amount under section 353G.11 
127.22 	closest to the service pension amount provided by the volunteer firefighters' relief 
127.23 	association, if there is one the relief association is a lump-sum defined benefit plan, or 
127.24 	the amount equal to 95 percent of the most current average account balance per relief 
127.25 	association member if the relief association is a defined contribution plan, or to the 
127.26 	lowest service pension amount under section 353G.11 if there is no volunteer firefighters' 
127.27 	relief association, rounded up, and any other service pension amount designated by 
127.28 	the requester or requesters. The cost analysis must be prepared using a mathematical 
127.29 	procedure certified as accurate by an approved actuary retained by the Public Employees 
127.30 	Retirement Association.
127.31 	(d) If a cost analysis is requested and a volunteer firefighters' relief association exists 
127.32 	that has filed the information required under section 69.051 in a timely fashion, upon 
127.33 	request by the executive director, the state auditor shall provide the most recent data 
127.34 	available on the financial condition of the volunteer firefighters' relief association, the most 
127.35 	recent firefighter demographic data available, and a copy of the current relief association 
128.1 	bylaws. If a cost analysis is requested, but no volunteer firefighters' relief association 
128.2 	exists, the chief administrative officer of the entity operating the fire department shall 
128.3 	provide the demographic information on the volunteer firefighters serving as members 
128.4 	of the fire department requested by the executive director.
128.5 	(e) If a cost analysis is requested, the executive director of the State Board of 
128.6 	Investment shall review the investment portfolio of the relief association, if applicable, 
128.7 	for compliance with the applicable provisions of chapter 11A and for appropriateness 
128.8 	for retention under the established investment objectives and investment policies of the 
128.9 	State Board of Investment. If the prospective retirement coverage change is approved 
128.10 	under paragraph (f), the State Board of Investment may require that the relief association 
128.11 	liquidate any investment security or other asset which the executive director of the State 
128.12 	Board of Investment has determined to be an ineligible or inappropriate investment for 
128.13 	retention by the State Board of Investment. The security or asset liquidation must occur 
128.14 	before the effective date of the transfer of retirement plan coverage. If requested to do 
128.15 	so by the chief administrative officer of the relief association, the executive director of 
128.16 	the State Board of Investment shall provide advice about the best means to conduct the 
128.17 	liquidation.
128.18 	(f) Upon receipt of the cost analysis, the governing body of the municipality 
128.19 	or independent nonprofit firefighting corporation associated with the fire department 
128.20 	shall either approve or disapprove the retirement coverage change within 90 days. If 
128.21 	the retirement coverage change is not acted upon within 90 days, it is deemed to be 
128.22 	disapproved. If the retirement coverage change is approved by the applicable governing 
128.23 	body, coverage by the voluntary statewide lump-sum volunteer firefighter retirement plan 
128.24 	is effective on the next following January 1.

128.25 	EFFECTIVE DATE. This section is effective retroactively from January 1, 2010.

128.26 	Sec. 3. Minnesota Statutes 2009 Supplement, section 353G.06, subdivision 1, is 
128.27 	amended to read:
128.28 		Subdivision 1.Special fund disestablishment. (a) On the date immediately prior 
128.29 	to the effective date of the coverage change, the special fund of the applicable volunteer 
128.30 	firefighters' relief association, if one exists, ceases to exist as a pension fund of the 
128.31 	association and legal title to the assets of the special fund transfers to the State Board of 
128.32 	Investment, with the beneficial title to the assets of the special fund remaining in the 
128.33 	applicable volunteer firefighters.
128.34 	(b) If the market value of the special fund of the volunteer firefighters' relief 
128.35 	association for which retirement coverage changed under this chapter declines in the 
129.1 	interval between the date of the most recent financial report or statement, and the special 
129.2 	fund disestablishment date, the applicable municipality shall transfer an additional amount 
129.3 	to the State Board of Investment equal to that decline. If more than one municipality is 
129.4 	responsible for the direct management of the fire department, the municipalities shall 
129.5 	allocate the additional transfer amount among the various applicable municipalities 
129.6 	one-half in proportion to the population of each municipality and one-half in proportion 
129.7 	to the market value of each municipality.

129.8 	EFFECTIVE DATE. This section is effective retroactively from January 1, 2010.

129.9 	Sec. 4. Minnesota Statutes 2009 Supplement, section 353G.08, is amended to read:
129.10 	353G.08 RETIREMENT PLAN FUNDING; DISBURSEMENTS.
129.11 		Subdivision 1.Annual funding requirements. (a) Annually, the executive director 
129.12 	shall determine the funding requirements of each account in the voluntary statewide 
129.13 	lump-sum volunteer firefighter retirement plan on or before August 1. The funding 
129.14 	requirements as directed under this section, must be determined using a mathematical 
129.15 	procedure developed and certified as accurate by an approved actuary retained by the 
129.16 	Public Employees Retirement Association and based on present value factors using a six 
129.17 	percent interest rate, without any decrement assumptions. The funding requirements 
129.18 	must be certified to the entity or entities associated with the fire department whose active 
129.19 	firefighters are covered by the retirement plan.
129.20 	(b) The overall funding balance of each account for the current calendar year must 
129.21 	be determined in the following manner:
129.22 	(1) The total accrued liability for all active and deferred members of the account as 
129.23 	of December 31 of the current year must be calculated based on the good time service 
129.24 	credit of active and deferred members as of that date.
129.25 	(2) The total present assets of the account projected to December 31 of the current 
129.26 	year, including receipts by and disbursements from the account anticipated to occur on or 
129.27 	before December 31, must be calculated. To the extent possible, the market value of assets 
129.28 	must be utilized in making this calculation.
129.29 	(3) The amount of the total present assets calculated under clause (2) must be 
129.30 	subtracted from the amount of the total accrued liability calculated under clause (1). If the 
129.31 	amount of total present assets exceeds the amount of the total accrued liability, then the 
129.32 	account is considered to have a surplus over full funding. If the amount of the total present 
129.33 	assets is less than the amount of the total accrued liability, then the account is considered 
130.1 	to have a deficit from full funding. If the amount of total present assets is equal to the 
130.2 	amount of the total accrued liability, then the special fund is considered to be fully funded.
130.3 	(c) The financial requirements of each account for the following calendar year must 
130.4 	be determined in the following manner:
130.5 	(1) The total accrued liability for all active and deferred members of the account 
130.6 	as of December 31 of the calendar year next following the current calendar year must be 
130.7 	calculated based on the good time service used in the calculation under paragraph (b), 
130.8 	clause (1), increased by one year.
130.9 	(2) The increase in the total accrued liability of the account for the following calendar 
130.10 	year over the total accrued liability of the account for the current year must be calculated.
130.11 	(3) The amount of anticipated future administrative expenses of the account must be 
130.12 	calculated by multiplying the dollar amount of the administrative expenses for the most 
130.13 	recent prior calendar year by the factor of 1.035.
130.14 	(4) If the account is fully funded, the financial requirement of the account for the 
130.15 	following calendar year is the total of the amounts calculated under clauses (2) and (3).
130.16 	(5) If the account has a deficit from full funding, the financial requirement of the 
130.17 	account for the following calendar year is the total of the amounts calculated under clauses 
130.18 	(2) and (3) plus an amount equal to one-tenth of the amount of the deficit from full 
130.19 	funding of the account.
130.20 	(6) If the account has a surplus over full funding, the financial requirement of 
130.21 	the account for the following calendar year is the financial requirement of the account 
130.22 	calculated as though the account was fully funded under clause (4) and, if the account has 
130.23 	also had a surplus over full funding during the prior two years, additionally reduced by an 
130.24 	amount equal to one-tenth of the amount of the surplus over full funding of the account.
130.25 	(d) The required contribution of the entity or entities associated with the fire 
130.26 	department whose active firefighters are covered by the retirement plan is the annual 
130.27 	financial requirements of the account of the retirement plan under paragraph (c) reduced 
130.28 	by the amount of any fire state aid payable under sections 69.011 to 69.051 reasonably 
130.29 	anticipated to be received by the retirement plan attributable to the entity or entities during 
130.30 	the following calendar year, and an amount of interest on the assets projected to be 
130.31 	received during the following calendar year calculated at the rate of six percent per annum. 
130.32 	The required contribution must be allocated between the entities if more than one entity 
130.33 	is involved. A reasonable amount of anticipated fire state aid is an amount that does not 
130.34 	exceed the fire state aid actually received in the prior year multiplied by the factor 1.035.
130.35 	(e) The required contribution calculated in paragraph (d) must be paid to the 
130.36 	retirement plan on or before December 31 of the year for which it was calculated. If 
131.1 	the contribution is not received by the retirement plan by December 31, it is payable 
131.2 	with interest at an annual compound rate of six percent from the date due until the date 
131.3 	payment is received by the retirement plan. If the entity does not pay the full amount of 
131.4 	the required contribution, the executive director shall collect the unpaid amount under 
131.5 	section 353.28, subdivision 6.
131.6 		Subd. 2.Cash flow funding requirement. If the executive director determines that 
131.7 	an account in the voluntary statewide lump-sum volunteer firefighter retirement plan has 
131.8 	insufficient assets to meet the service pensions determined payable from the account, 
131.9 	the executive director shall certify the amount of the potential service pension shortfall 
131.10 	to the municipality or municipalities and the municipality or municipalities shall make 
131.11 	an additional employer contribution to the account within ten days of the certification. 
131.12 	If more than one municipality is associated with the account, unless the municipalities 
131.13 	agree to a different allocation, the municipalities shall allocate the additional employer 
131.14 	contribution one-half in proportion to the population of each municipality and one-half in 
131.15 	proportion to the market value of the property of each municipality.
131.16 		Subd. 3.Authorized account disbursements. (f) The assets of the retirement 
131.17 	fund may only be disbursed for:
131.18 	(1) the administrative expenses of the retirement plan;
131.19 	(2) the investment expenses of the retirement fund; 
131.20 	(3) the service pensions payable under section 353G.10, 353G.11, 353G.14, or 
131.21 	353G.15; and
131.22 	(4) the survivor benefits payable under section 353G.12; and
131.23 	(5) the disability benefit coverage insurance premiums under section 353G.115.

131.24 	EFFECTIVE DATE. This section is effective retroactively from January 1, 2010.

131.25 	Sec. 5. Minnesota Statutes 2009 Supplement, section 353G.09, subdivision 3, is 
131.26 	amended to read:
131.27 		Subd. 3.Alternative pension eligibility and computation. (a) An active member 
131.28 	of the retirement plan is entitled to an alternative lump-sum service pension from the 
131.29 	retirement plan if the person:
131.30 	(1) has separated from active service with the fire department for at least 30 days;
131.31 	(2) has attained the age of at least 50 years or the age for receipt of a service pension 
131.32 	under the benefit plan of the applicable former volunteer firefighters' relief association 
131.33 	as of the date immediately prior to the election of the retirement coverage change, 
131.34 	whichever is later;
132.1 	(3) has completed at least five years of active service with the fire department and at 
132.2 	least five years in total as a member of the applicable former volunteer firefighters' relief 
132.3 	association or of the retirement plan, but has not rendered at least five years of good time 
132.4 	service credit as a member of the retirement plan; and
132.5 	(4) applies in a manner prescribed by the executive director for the service pension.
132.6 	(b) If retirement coverage prior to statewide retirement plan coverage was provided 
132.7 	by a defined benefit plan volunteer firefighters relief association, the alternative lump-sum 
132.8 	service pension is the service pension amount specified in the bylaws of the applicable 
132.9 	former volunteer firefighters' relief association either as of the date immediately prior to 
132.10 	the election of the retirement coverage change or as of the date immediately before the 
132.11 	termination of firefighting services, whichever is earlier, multiplied by the total number 
132.12 	of years of service as a member of that volunteer firefighters' relief association and as 
132.13 	a member of the retirement plan. If retirement coverage prior to statewide retirement 
132.14 	plan coverage was provided by a defined contribution plan volunteer firefighters relief 
132.15 	association, the alternative lump-sum service pension is an amount equal to the person's 
132.16 	account balance as of the date immediately prior to the date on which statewide retirement 
132.17 	plan coverage was first provided to the person plus six percent annual compound interest 
132.18 	from that date until the date immediately prior to the date of retirement.

132.19 	EFFECTIVE DATE. This section is effective retroactively from January 1, 2010.

132.20 	Sec. 6. Minnesota Statutes 2009 Supplement, section 353G.11, subdivision 1, is 
132.21 	amended to read:
132.22 		Subdivision 1.Levels. The retirement plan provides the following levels of service 
132.23 	pension amounts to be selected at the election of coverage, or, if fully funded, thereafter:

132.24		Level A
	$500 per year of good time service credit
	
132.25		Level B
	$750$600 per year of good time service credit
	
132.26		Level C
	$700 per year of good time service credit
	
132.27		Level D
	$800 per year of good time service credit
	
132.28		Level E
	$900 per year of good time service credit
	
132.29		Level CF
	$1,000 per year of good time service credit
	
132.30		Level G
	$1,250 per year of good time service credit
	
132.31		Level DH
	$1,500 per year of good time service credit
	
132.32		Level EI
	$2,000 per year of good time service credit
	
132.33		Level FJ
	$2,500 per year of good time service credit
	
132.34		Level GK
	$3,000 per year of good time service credit
	
132.35		Level HL
	$3,500 per year of good time service credit
	
132.36		Level IM
	$4,000 per year of good time service credit
	
132.37		Level JN
	$4,500 per year of good time service credit
	
133.1		Level KO
	$5,000 per year of good time service credit
	
133.2		Level LP
	$5,500 per year of good time service credit
	
133.3		Level MQ
	$6,000 per year of good time service credit
	
133.4		Level NR
	$6,500 per year of good time service credit
	
133.5		Level OS
	$7,000 per year of good time service credit
	
133.6		Level PT
	$7,500 per year of good time service credit

133.7 	EFFECTIVE DATE. This section is effective July 1, 2010.

133.8 	Sec. 7. Minnesota Statutes 2009 Supplement, section 353G.11, is amended by adding a 
133.9 	subdivision to read:
133.10 		Subd. 1a.Continuation of prior service pension levels. If a municipality or 
133.11 	independent nonprofit firefighting corporation elects to be covered by the retirement 
133.12 	plan prior to January 1, 2010, and selects the $750 per year of good time service credit 
133.13 	service pension amount effective for January 1, 2010, that level continues for the volunteer 
133.14 	firefighters of that municipality or independent nonprofit firefighting corporation until a 
133.15 	different service pension amount is selected under subdivision 2 after January 1, 2010.

133.16 	EFFECTIVE DATE. This section is effective July 1, 2010.

133.17 	Sec. 8. [353G.115] DISABILITY BENEFIT COVERAGE; AUTHORITY FOR 
133.18 	CASUALTY INSURANCE.
133.19 	(a) Except as provided in paragraph (b), no disability benefit is payable from the 
133.20 	statewide retirement plan.
133.21 	(b) If the board approves the arrangement, disability coverage for statewide 
133.22 	retirement plan members may be provided through a group disability insurance policy 
133.23 	obtained from an insurance company licensed to do business in this state. The voluntary 
133.24 	statewide lump-sum volunteer retirement plan is authorized to pay the premium for the 
133.25 	disability insurance authorized by this paragraph. The proportional amount of the total 
133.26 	annual disability insurance premium must be added to the required contribution amount 
133.27 	determined under section 353G.08.

133.28 	EFFECTIVE DATE. This section is effective retroactively from January 1, 2010.

133.29 	Sec. 9. Minnesota Statutes 2009 Supplement, section 424A.08, is amended to read:
133.30 	424A.08 MUNICIPALITY WITHOUT RELIEF ASSOCIATION; 
133.31 	AUTHORIZED DISBURSEMENTS.
134.1 	(a) Any qualified municipality which is entitled to receive fire state aid but which 
134.2 	has no volunteer firefighters' relief association directly associated with its fire department 
134.3 	and which has no full-time firefighters with retirement coverage by the public employees 
134.4 	police and fire retirement plan shall deposit the fire state aid in a special account 
134.5 	established for that purpose in the municipal treasury. Disbursement from the special 
134.6 	account may not be made for any purpose except:
134.7 	(1) payment of the fees, dues and assessments to the Minnesota State Fire 
134.8 	Department Association and to the state Volunteer Firefighters' Benefit Association in 
134.9 	order to entitle its firefighters to membership in and the benefits of these state associations;
134.10 	(2) payment of the cost of purchasing and maintaining needed equipment for the 
134.11 	fire department; and
134.12 	(3) payment of the cost of construction, acquisition, repair, or maintenance of 
134.13 	buildings or other premises to house the equipment of the fire department.
134.14 	(b) A qualified municipality which is entitled to receive fire state aid, which has no 
134.15 	volunteer firefighters' relief association directly associated with its fire department, which 
134.16 	does not participate in the voluntary statewide lump-sum volunteer firefighter retirement 
134.17 	plan under chapter 353G, and which has full-time firefighters with retirement coverage 
134.18 	by the public employees police and fire retirement plan may disburse the fire state aid as 
134.19 	provided in paragraph (a), for the payment of the employer contribution requirement with 
134.20 	respect to firefighters covered by the public employees police and fire retirement plan under 
134.21 	section 353.65, subdivision 3, or for a combination of the two types of disbursements.
134.22 	(c) A municipality that has no volunteer firefighters' relief association directly 
134.23 	associated with it and that participates in the voluntary statewide lump-sum volunteer 
134.24 	firefighter retirement plan under chapter 353G shall transmit any fire state aid that it 
134.25 	receives to the voluntary statewide lump-sum volunteer firefighter retirement fund.

134.26 	EFFECTIVE DATE. This section is effective retroactively from January 1, 2010.

134.27 	ARTICLE 7
134.28 	TEACHERS RETIREMENT ASSOCIATION SERVICE CREDIT 
134.29 	PROCEDURE REVISIONS

134.30 	Section 1. Minnesota Statutes 2008, section 354.05, is amended by adding a 
134.31 	subdivision to read:
134.32 		Subd. 41.Annual base salary. (a) "Annual base salary" means:
135.1 	(1) for an independent school district or educational cooperative, the lowest full-time 
135.2 	Bachelor of Arts (BA) base contract salary for the previous fiscal year for that employing 
135.3 	unit;
135.4 	(2) for a charter school, the lowest starting annual salary for a full-time licensed 
135.5 	teacher employed during the previous fiscal year for that employing unit; and
135.6 	(3) for a state agency or professional organization, the lowest starting annual salary 
135.7 	for a full-time Teachers Retirement Association covered position for the previous fiscal 
135.8 	year for that employing unit.
135.9 	(b) If there is no previous fiscal year data because an employer unit is new and 
135.10 	paragraph (c) does not apply, the annual base salary for the first year of operation will be 
135.11 	as provided in paragraph (a), except that the base contract salary for the current fiscal year, 
135.12 	rather than the previous fiscal year, must be used.
135.13 	(c) For a new employer unit created as a result of a merger or consolidation, the 
135.14 	annual base salary must be the lowest annual base salary as specified in paragraph (a) for 
135.15 	any of the employer units involved in the merger or consolidation.

135.16 	EFFECTIVE DATE. This section is effective July 1, 2012.

135.17 	Sec. 2. Minnesota Statutes 2008, section 354.07, subdivision 5, is amended to read:
135.18 		Subd. 5.Records; accounts; interest. The board shall keep a record of the 
135.19 	receipts and disbursements of the fund and a separate account with each member of 
135.20 	the association. The board shall also keep separate accounts for annuity payments, for 
135.21 	employer contributions and all other necessary accounts and reserves. It shall determine 
135.22 	annually the annual interest earnings of the fund which shall include realized capital gains 
135.23 	and losses. Any amount in the capital reserve account on July 1, 1973, shall be transferred 
135.24 	to the employer contribution's account. The annual interest earnings shall be apportioned 
135.25 	and credited to the separate members' accounts except those covered under the provisions 
135.26 	of section 354.44, subdivision 6or 7. The rate to be used in this distribution computed to 
135.27 	the last full quarter percent shall be determined by dividing the interest earnings by the 
135.28 	total invested assets of the fund. The excess of the annual interest earnings in the excess 
135.29 	earnings reserve which was not credited to the various accounts shall be credited to the 
135.30 	gross interest earnings for the next succeeding year. 

135.31 	Sec. 3. Minnesota Statutes 2008, section 354.091, is amended to read:
135.32 	354.091 SERVICE CREDIT.
136.1 		Subdivision 1.Definition; monthly base salary. For purposes of this section, 
136.2 	"monthly base salary" means the annual base salary, as defined in section 354.05, 
136.3 	subdivision 41, divided by 12.
136.4 		Subd. 2.Service credit annual limit. (a) In computing service credit, No teacher 
136.5 	may receive credit for more than one year of teaching service for any fiscal year. 
136.6 	Additionally, in crediting allowable service:
136.7 	(1) if a teacher teaches less than five hours in a day, service credit must be given for 
136.8 	the fractional part of the day as the term of service performed bears to five hours;
136.9 	(2) if a teacher teaches five or more hours in a day, service credit must be given for 
136.10 	only one day;
136.11 	(3) if a teacher teaches at least 170 full days in any fiscal year, service credit must be 
136.12 	given for a full year of teaching service; and
136.13 	(4) if a teacher teaches for only a fractional part of the year, service credit must be 
136.14 	given for such fractional part of the year in the same relationship as the period of service 
136.15 	performed bears to 170 days.
136.16 	(b) A teacher must receive a full year of service credit based on the number of days 
136.17 	in the employer's full school year if that school year is less than 170 days. Teaching 
136.18 	service performed before July 1, 1961, must be computed under the law in effect at the 
136.19 	time it was performed.
136.20 	(c) A teacher must not lose or gain retirement service credit as a result of the 
136.21 	employer converting to a flexible or alternate work schedule. If the employer converts 
136.22 	to a flexible or alternate work schedule, the forms for reporting teaching service and the 
136.23 	procedures for determining service credit must be determined by the executive director 
136.24 	with the approval of the board of trustees.
136.25 		Subd. 3.Service credit calculation. (a) Except as specified in subdivisions 4 and 
136.26 	5, service credit must be calculated monthly by dividing the teacher's monthly salary by 
136.27 	the monthly base salary for the teacher's employing unit and multiplying the result by 
136.28 	11.1 percent.
136.29 	(b) For purposes of computing service credit, salary must be allocated to each 
136.30 	calendar month based on the pay period begin and end dates. If the pay period covers 
136.31 	more than one calendar month, the salary must be allocated based on the number of days 
136.32 	in each calendar month.
136.33 	(c) A teacher may not receive more than 11.1 percent of a year's service credit in 
136.34 	a calendar month.
137.1 	(d) Annual service credit must be calculated by adding the allowable monthly 
137.2 	service credit for all 12 months of the fiscal year, with the result rounded to two decimal 
137.3 	places, subject to the annual limit specified in subdivision 2.
137.4 		Subd. 4.Service credit determination for Minnesota State Colleges and 
137.5 	Universities system teachers. (d) For all services rendered on or after July 1, 2003, 
137.6 	service credit for all members employed by the Minnesota State Colleges and Universities 
137.7 	system must be determined:
137.8 	(1) for full-time employees, by the definition of full-time employment contained in 
137.9 	the collective bargaining agreement for those units listed in section 179A.10, subdivision 
137.10 	2, or contained in the applicable personnel or salary plan for those positions designated in 
137.11 	section 179A.10, subdivision 1; and
137.12 	(2) for part-time employees, by the appropriate proration of full-time equivalency 
137.13 	based on the provisions contained in the collective bargaining agreement for those units 
137.14 	listed in section 179A.10, subdivision 2, or contained in the applicable personnel or salary 
137.15 	plan for those positions designated in section 179A.10, subdivision 1, and the applicable 
137.16 	procedures of the Minnesota State Colleges and Universities system; and.
137.17 	(3) in no case may a member receive more than one year of service credit for any 
137.18 	fiscal year.
137.19 		Subd. 5.Service credit procedure, nontraditional schedules. For employer units 
137.20 	that have nontraditional work schedules or pay schedules, the procedure for determining 
137.21 	service credit must be specified by the executive director with the approval of the board of 
137.22 	trustees.

137.23 	EFFECTIVE DATE. This section is effective for teaching service performed after 
137.24 	June 30, 2012.

137.25 	Sec. 4. Minnesota Statutes 2009 Supplement, section 354.52, subdivision 4b, is 
137.26 	amended to read:
137.27 		Subd. 4b.Payroll cycle reporting requirements. An employing unit shall provide 
137.28 	the following data to the association for payroll warrants on an ongoing basis within 14 
137.29 	calendar days after the date of the payroll warrant in a format prescribed by the executive 
137.30 	director:
137.31 	(1) association member number;
137.32 	(2) employer-assigned employee number;
137.33 	(3) Social Security number;
137.34 	(4) amount of each salary deduction;
138.1 	(5) amount of salary as defined in section 354.05, subdivision 35, from which each 
138.2 	deduction was made; 
138.3 	(6) reason for payment;
138.4 	(7) service credit;
138.5 	(8)(7) the beginning and ending dates of the payroll period covered and the date 
138.6 	of actual payment;
138.7 	(9)(8) fiscal year of salary earnings;
138.8 	(10)(9) total remittance amount including employee, employer, and additional 
138.9 	employer contributions; 
138.10 	(11)(10) reemployed annuitant salary under section 354.44, subdivision 5; and
138.11 	(12)(11) other information as may be required by the executive director.

138.12 	EFFECTIVE DATE. This section is effective July 1, 2012.

138.13 	Sec. 5. Minnesota Statutes 2008, section 354.52, is amended by adding a subdivision 
138.14 	to read:
138.15 		Subd. 4d.Annual base salary reporting. An employing unit must provide the 
138.16 	following data to the association on or before June 30 of each fiscal year:
138.17 	(1) annual base salary, as defined in section 354.05, subdivision 41; and
138.18 	(2) beginning and ending dates for the regular school work year.

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

138.20 	Sec. 6. Minnesota Statutes 2008, section 354.52, subdivision 6, is amended to read:
138.21 		Subd. 6.Noncompliance consequences. (a) An employing unit that does not 
138.22 	comply with the reporting requirements under subdivision 2a, 4a, or 4b, or 4d, must pay a 
138.23 	fine of $5 per calendar day until the association receives the required data.
138.24 	(b) If the annual base salary required to be reported under subdivision 4d has not 
138.25 	been settled or determined as of June 16, the fine commences if the annual base salary has 
138.26 	not been reported to the association within 14 days following the settlement date.

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

138.28 	Sec. 7. Minnesota Statutes 2008, section 354.66, subdivision 3, is amended to read:
138.29 		Subd. 3.Part-time teaching position, defined. (a) For purposes of this section, 
138.30 	the term "part-time teaching position" means a teaching position within the district in 
138.31 	which the teacher is employed for at least 50 full days or a fractional equivalent thereof as 
138.32 	prescribed in section 354.091, and for which the teacher is compensated infor an amount 
139.1 	of at least 30 percent, but not exceeding 80 percent of the compensation established by the 
139.2 	board for a full-time teacher with identical education and experience with the employing 
139.3 	unit.  
139.4 	(b) For a teacher to which subdivision 1c, paragraph (b), applies, the term "part-time 
139.5 	teaching position" means a teaching position within the district in which the teacher is 
139.6 	employed for at least 25 full days or a fractional equivalent thereof as prescribed in section 
139.7 	354.091, and for which the teacher is compensated infor an amount of at least 15 percent, 
139.8 	but not exceeding 40 percent of the compensation established by the board for a full-time 
139.9 	teacher, with identical education and experience with the employing unit.  

139.10 	EFFECTIVE DATE. This section is effective for service provided after June 30, 
139.11 	2012.

139.12 	ARTICLE 8
139.13 	MNSCU IRAP ADMINISTRATIVE PROVISIONS

139.14 	Section 1. Minnesota Statutes 2008, section 11A.04, is amended to read:
139.15 	11A.04 DUTIES AND POWERS.
139.16 	The state board shall:
139.17 	(1) Act as trustees for each fund for which it invests or manages money in 
139.18 	accordance with the standard of care set forth in section 11A.09 if state assets are involved 
139.19 	and in accordance with chapter 356A if pension assets are involved.
139.20 	(2) Formulate policies and procedures deemed necessary and appropriate to carry 
139.21 	out its functions. Procedures adopted by the board must allow fund beneficiaries and 
139.22 	members of the public to become informed of proposed board actions. Procedures and 
139.23 	policies of the board are not subject to the Administrative Procedure Act.
139.24 	(3) Employ an executive director as provided in section 11A.07.
139.25 	(4) Employ investment advisors and consultants as it deems necessary.
139.26 	(5) Prescribe policies concerning personal investments of all employees of the board 
139.27 	to prevent conflicts of interest.
139.28 	(6) Maintain a record of its proceedings.
139.29 	(7) As it deems necessary, establish advisory committees subject to section 15.059 to 
139.30 	assist the board in carrying out its duties.
139.31 	(8) Not permit state funds to be used for the underwriting or direct purchase of 
139.32 	municipal securities from the issuer or the issuer's agent.
139.33 	(9) Direct the commissioner of management and budget to sell property other than 
139.34 	money that has escheated to the state when the board determines that sale of the property 
140.1 	is in the best interest of the state. Escheated property must be sold to the highest bidder in 
140.2 	the manner and upon terms and conditions prescribed by the board.
140.3 	(10) Undertake any other activities necessary to implement the duties and powers 
140.4 	set forth in this section.
140.5 	(11) Establish a formula or formulas to measure management performance and 
140.6 	return on investment. Public pension funds in the state shall utilize the formula or 
140.7 	formulas developed by the state board.
140.8 	(12) Except as otherwise provided in article XI, section 8, of the Constitution of the 
140.9 	state of Minnesota, employ, at its discretion, qualified private firms to invest and manage 
140.10 	the assets of funds over which the state board has investment management responsibility. 
140.11 	There is annually appropriated to the state board, from the assets of the funds for which 
140.12 	the state board utilizes a private investment manager, sums sufficient to pay the costs of 
140.13 	employing private firms. Each year, by January 15, the board shall report to the governor 
140.14 	and legislature on the cost and the investment performance of each investment manager 
140.15 	employed by the board.
140.16 	(13) Adopt an investment policy statement that includes investment objectives, asset 
140.17 	allocation, and the investment management structure for the retirement fund assets under 
140.18 	its control. The statement may be revised at the discretion of the state board. The state 
140.19 	board shall seek the advice of the council regarding its investment policy statement. 
140.20 	Adoption of the statement is not subject to chapter 14.
140.21 	(14) Adopt a compensation plan setting the terms and conditions of employment for 
140.22 	unclassified board employees who are not covered by a collective bargaining agreement.
140.23 	(15) Contract, as necessary, with the board of trustees of the Minnesota State 
140.24 	Universities and Colleges System for the provision of investment review and selection 
140.25 	services under section 354B.25, subdivision 3, and arrange for the receipt of payment 
140.26 	for those services.
140.27 	There is annually appropriated to the state board, from the assets of the funds for 
140.28 	which the state board provides investment services, sums sufficient to pay the costs of 
140.29 	all necessary expenses for the administration of the board. These sums will be deposited 
140.30 	in the State Board of Investment operating account, which must be established by the 
140.31 	commissioner of management and budget.

140.32 	Sec. 2. Minnesota Statutes 2008, section 354B.25, subdivision 1, is amended to read:
140.33 		Subdivision 1.General governance. The individual retirement account plan is the 
140.34 	administrative responsibility of the Board of Trustees of the Minnesota State Colleges 
140.35 	and Universities. The Board of Trustees of the Minnesota State Colleges and Universities 
141.1 	may administer the plan directly or may contract out for administrative services with a 
141.2 	qualified third-party plan administrative entity and may contract out for investment review 
141.3 	and selection service.

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

141.5 	Sec. 3. Minnesota Statutes 2008, section 354B.25, subdivision 3, is amended to read:
141.6 		Subd. 3.Selection of financial institutions. (a) The investment options provided 
141.7 	under subdivision 2 must be selected by the board. The board may contract with the State 
141.8 	Board of Investment or with a third party to provide the investment review and selection 
141.9 	services. The board must not contract with a third party to provide the investment option 
141.10 	review and selection services if the third party markets, offers, or has other material 
141.11 	interest in investment products. The board must require any third party contracted to 
141.12 	provide investment review and selection services to disclose to the board any contracts 
141.13 	for services and any financial relationships it has with vendors under consideration to 
141.14 	provide investment products under the plan.
141.15 	In making its selection, at a minimum, the State board of Investment shall consider 
141.16 	the following:
141.17 	(1) the experience and ability of the financial institution to provide benefits and 
141.18 	products that are suited to meet the needs of plan participants;
141.19 	(2) the relationship of those benefits and products provided by the financial 
141.20 	institution to their cost;
141.21 	(3) the financial strength and stability of the financial institution; and
141.22 	(4) the fees and expenses associated with the investment products in comparison to 
141.23 	other products of similar risk and rates of return.
141.24 	(b) After selecting a financial institution, the State board of Investment must 
141.25 	periodically review each financial institution and the offered products. The periodic 
141.26 	review must occur at least every three years. In making its review, the State board of 
141.27 	Investment may retain appropriate consulting services to assist it in its periodic review, 
141.28 	establish a budget for the cost of the periodic review process, and charge a proportional 
141.29 	share of these costs to the reviewed financial institution.
141.30 	(c) Contracts with financial institutions under this section must be executed by the 
141.31 	board and must be approved by the State Board of Investment before execution.
141.32 	(d) The State Board of Investment shall also establish policies and procedures under 
141.33 	section 11A.04, clause (2), to carry out the provisions of this subdivision.  

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

142.1 	Sec. 4. Minnesota Statutes 2008, section 354C.14, is amended to read:
142.2 	354C.14 INVESTMENT OF DEDUCTIONS AND CONTRIBUTIONS.
142.3 	(a) The Board of Trustees of the Minnesota State Colleges and Universities shall 
142.4 	invest the deductions and contributions under section 354C.12, after deduction of 
142.5 	administrative expenses under section 354C.12, subdivision 4, in annuity contracts or 
142.6 	custodial accounts from financial institutions selected by the State Board of Investment
142.7 	under section 354B.25, subdivision 3.  
142.8 	(b) The retirement contributions and death benefits provided by annuity contracts or 
142.9 	custodial accounts purchased by the Board of Trustees of the Minnesota State Colleges 
142.10 	and Universities are owned by the supplemental retirement plan and must be paid in 
142.11 	accordance with those annuity contracts or custodial account agreements.

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

142.13 	Sec. 5.  REPEALER.
 142.14 	Minnesota Statutes 2008, section 354C.15, is repealed.

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

142.16 	ARTICLE 9
142.17 	ACTUARIAL VALUATION REPORTING DEADLINE DATES

142.18 	Section 1. Minnesota Statutes 2008, section 356.215, subdivision 3, is amended to read:
142.19 		Subd. 3.Reports. (a) The actuarial valuations required annually must be made as of 
142.20 	the beginning of each fiscal year.
142.21 	(b) Two copies of the completed valuation must be delivered to the executive 
142.22 	director of the Legislative Commission on Pensions and Retirement, to the commissioner 
142.23 	of management and budget, and to the Legislative Reference Library. The copies of the 
142.24 	actuarial valuation must be filed with the executive director of the Legislative Commission 
142.25 	on Pensions and Retirement, the commissioner of management and budget, and the 
142.26 	Legislative Reference Library no later than the last day of the sixth month occurring 
142.27 	after the end of the previous fiscal year.
142.28 	(c) Two copies of a quadrennial experience study must be filed with the 
142.29 	executive director of the Legislative Commission on Pensions and Retirement, with the 
142.30 	commissioner of management and budget, and with the Legislative Reference Library, not 
142.31 	later than the firstlast day of the 11th12th month occurring after the end of the last fiscal 
142.32 	year of the four-year period which the experience study covers.
143.1 	(d) For actuarial valuations and experience studies prepared at the direction of 
143.2 	the Legislative Commission on Pensions and Retirement, two copiesone copy of the 
143.3 	document must be delivered to the governing or managing board or administrative officials 
143.4 	of the applicable public pension and retirement fund or plan.

143.5 	EFFECTIVE DATE. This section is effective July 1, 2010.

143.6 	ARTICLE 10
143.7 	EARLY RETIREMENT INCENTIVE MODIFICATIONS

143.8 	Section 1. Minnesota Statutes 2008, section 356.351, subdivision 1, is amended to read:
143.9 		Subdivision 1.Eligibility. (a) An eligible appointing authority may offer the early 
143.10 	retirement incentive in this section to an employee who: 
143.11 	(1) has at least 15 years of allowable service in one or more of the funds listed 
143.12 	in section 356.30, subdivision 3, or has at least 15 years of coverage by the individual 
143.13 	retirement account plan governed by chapter 354B employment as indicated in the 
143.14 	personnel records of the applicable employing unit and upon retirement is immediately 
143.15 	eligible for a retirement annuity or benefit from one or more of these funds retirement plan 
143.16 	governed by chapter 354B, or section 356.30; 
143.17 	(2) terminates service after the effective date of this section, and before July 15, 
143.18 	2009 October 1, 2012; and
143.19 	(3) is not in receipt of a public retirement plan retirement annuity, retirement 
143.20 	allowance, or service pension during the month preceding the termination of qualified 
143.21 	employment.; and
143.22 	(4) has not been eligible to receive a retirement annuity for a period longer than 
143.23 	ten years.
143.24 	(b) An eligible appointing authority is any Minnesota governmental employing unit 
143.25 	which employs one or more employees with retirement coverage by a retirement plan 
143.26 	listed in section 356.30 by virtue of that employment.
143.27 	(c) An elected official is not eligible to receive an incentive under this section.
143.28 	(d) Employees of the Minnesota State Colleges and Universities System who 
143.29 	participate in the incentive program under section 136F.481 are not eligible for the 
143.30 	incentive under this section.

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

143.32 	Sec. 2. Minnesota Statutes 2009 Supplement, section 356.351, subdivision 2, is 
143.33 	amended to read:
144.1 		Subd. 2.Incentive. (a) For an employee who is eligible under subdivision 1, iffor 
144.2 	whom an early retirement incentive is approved under paragraph (b), and who terminates 
144.3 	employment as provided for in the agreement, the employer may provide an amount up to 
144.4 	$17,000, to an employee who terminates service, to:
144.5 	(1) a severance amount in lieu of and not to exceed the maximum amount of regular 
144.6 	state-provided unemployment compensation for that particular person if the person had 
144.7 	been laid off; and
144.8 	(2) an additional severance amount not to exceed the amount of the employer's 
144.9 	contribution for health insurance, dental insurance, and basic life insurance that would 
144.10 	have been payable to the particular person under the applicable collective bargaining 
144.11 	agreement or personnel policy at the time of termination.
144.12 	(b) The severance amounts under paragraph (a) must be used: 
144.13 	(1) unless the appointing authority has designated the use under clause (2) or the use 
144.14 	under clause (3) for the initial retirement incentive applicable to that employing entity 
144.15 	under Laws 2007, chapter 134, after May 26, 2007, for deposit in the employee's account 
144.16 	in the health care savings plan established by section 352.98; 
144.17 	(2) notwithstanding section 352.01, subdivision 11, or 354.05, subdivision 13, 
144.18 	whichever applies, if the appointing authority has designated the use under this clause 
144.19 	for the initial retirement incentive applicable to that employing entity under Laws 2007, 
144.20 	chapter 134, after May 26, 2007, for purchase of service credit for unperformed service 
144.21 	sufficient to enable the employee to retire under section 352.116, subdivision 1, paragraph 
144.22 	(b); 353.30; 354.44, subdivision 6, paragraph (b), or 354A.31, subdivision 6, paragraph 
144.23 	(b), whichever applies; or 
144.24 	(3) if the appointing authority has designated the use under this clause for the initial 
144.25 	retirement incentive applicable to the employing entity under Laws 2007, chapter 134, 
144.26 	after May 26, 2007, for purchase of a lifetime annuity or an annuity for a specific number 
144.27 	of years from the applicable retirement plan to provide additional benefits, as provided in 
144.28 	paragraph (d). 
144.29 	(b)(c) Approval to provide the incentive must be obtained from the commissioner 
144.30 	of finance if the eligible employee is a state employee and must be obtained from the 
144.31 	applicable governing board with respect to any other employing entity. An employee is 
144.32 	eligible for the payment under paragraph (a) (b), clause (2), if the employee uses money 
144.33 	from a deferred compensation account that, combined with the payment under paragraph 
144.34 	(a) (b), clause (2), would be sufficient to purchase enough service credit to qualify for 
144.35 	retirement under section 352.116, subdivision 1, paragraph (b); 353.30, subdivision 1a; 
145.1 	354.44, subdivision 6, paragraph (b), or 354A.31, subdivision 6, paragraph (b), whichever 
145.2 	applies. 
145.3 	(c)(d) The cost to purchase service credit under paragraph (a) (b), clause (2), must 
145.4 	be made in accordance with section 356.551.
145.5 	(d) The(e) An annuity purchase under paragraph (a) (b), clause (3), must be made 
145.6 	using annuity factors, as determined by the actuary retained under section 356.214, 
145.7 	derived from the applicable factors used by the applicable retirement plan to calculate 
145.8 	optional annuity forms. The purchased annuity must be the actuarial equivalent of the 
145.9 	incentive amount.

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

145.11 	Sec. 3. Laws 2006, chapter 271, article 3, section 43, as amended by Laws 2007, 
145.12 	chapter 134, article 11, section 11, the effective date, is amended to read:

145.13 	EFFECTIVE DATE. (a) This section is effective the day following final enactment.
145.14 	(b) This section expires on July 15, 2009.

145.15 	EFFECTIVE DATE. This section is effective retroactively from July 2, 2009.

145.16 	ARTICLE 11
145.17 	OPTIONAL ANNUITY REVOCATION FOLLOWING CERTAIN 
145.18 	MARRIAGE DISSOLUTIONS

145.19 	Section 1. [356.48] REVOCATION OF OPTIONAL ANNUITY DUE TO 
145.20 	MARRIAGE DISSOLUTION OR ANNULMENT.
145.21 		Subdivision 1.Covered plans. This section applies to the following retirement 
145.22 	plans:
145.23 	(1) the general state employees retirement plan of the Minnesota State Retirement 
145.24 	System established under chapter 352;
145.25 	(2) the correctional state employees retirement plan of the Minnesota State 
145.26 	Retirement System established under chapter 352;
145.27 	(3) the State Patrol retirement plan established under chapter 352B;
145.28 	(4) the unclassified state employees retirement program of the Minnesota State 
145.29 	Retirement System established under chapter 352D;
145.30 	(5) the general employee retirement plan of the Public Employees Retirement 
145.31 	Association established under chapter 353;
146.1 	(6) the public employees police and fire retirement plan established under chapter 
146.2 	353;
146.3 	(7) the local government correctional employees retirement plan of the Public 
146.4 	Employees Retirement Association established under chapter 353E; 
146.5 	(8) the Teachers Retirement Association established under chapter 354; and
146.6 	(9) the uniform judicial retirement plan established under chapter 490.
146.7 		Subd. 2.Treatment. (a) The treatment specified in this section applies if, after 
146.8 	the accrual date of an annuity or benefit from an applicable plan or plans, a marriage 
146.9 	dissolution decree or annulment decree is rendered that specifies that the designation 
146.10 	of an optional annuity must be revoked and if the other requirements specified in this 
146.11 	section are satisfied.
146.12 	(b) Notwithstanding any law to the contrary, if the applicable pension plan or plans 
146.13 	have provisions of law that revise the monthly benefit amount payable to the primary 
146.14 	annuitant upon the death of the individual named as the optional joint annuitant, the 
146.15 	monthly benefit amount must be recomputed as though the individual that had been named 
146.16 	as the optional joint annuitant died on the date a certified copy of the marriage dissolution 
146.17 	or annulment decree is received by the chief administrative officer. Payment of any benefit 
146.18 	adjustment under this section is prospective only.
146.19 		Subd. 3.Restrictions. (a) This section does not apply if the marriage dissolution 
146.20 	decree or annulment decree is not consistent with the requirements under section 518.58.
146.21 	(b) The pension plan benefit recipient must not designate, and the court may not 
146.22 	require that the member designate, a subsequent optional annuity beneficiary.
146.23 	(c) This section does not apply if more than one surviving individual was named as 
146.24 	an optional joint annuitant.
146.25 		Subd. 4.Submission of documentation. To receive the treatment provided in 
146.26 	this section, an eligible retiree or disabilitant must provide, to the chief administrative 
146.27 	officer of the applicable pension plan, a certified copy of the marriage dissolution or 
146.28 	annulment decree. The retiree or disabilitant and the joint annuitant must also submit a 
146.29 	form, prescribed by the chief administrative officer of the applicable pension plan and 
146.30 	signed by both individuals, requesting the annuity bounce back as provided in subdivision 
146.31 	2. The individuals must also provide any other documentation the chief administrative 
146.32 	officer may request.

146.33 	EFFECTIVE DATE. This section is effective the day following final enactment and 
146.34 	applies retroactively to any marriage dissolution decree or annulment decree requiring the 
146.35 	revocation of an optional annuity form granted at any time prior to the date of enactment.

147.1 	Sec. 2. Minnesota Statutes 2008, section 518.58, subdivision 3, is amended to read:
147.2 		Subd. 3.Sale or distribution while proceeding pending. (a) If the court finds 
147.3 	that it is necessary to preserve the marital assets of the parties, the court may order the 
147.4 	sale of the homestead of the parties or the sale of other marital assets, as the individual 
147.5 	circumstances may require, during the pendency of a proceeding for a dissolution of 
147.6 	marriage or an annulment. If the court orders a sale, it may further provide for the 
147.7 	disposition of the funds received from the sale during the pendency of the proceeding. 
147.8 	If liquid or readily liquidated marital property other than property representing vested 
147.9 	pension benefits or rights is available, the court, so far as possible, shall divide the property 
147.10 	representing vested pension benefits or rights by the disposition of an equivalent amount 
147.11 	of the liquid or readily liquidated property.
147.12 	(b) The court may order a partial distribution of marital assets during the pendency 
147.13 	of a proceeding for a dissolution of marriage or an annulment for good cause shown or 
147.14 	upon the request of both parties, provided that the court shall fully protect the interests 
147.15 	of the other party.

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

147.17 	Sec. 3. Minnesota Statutes 2008, section 518.58, subdivision 4, is amended to read:
147.18 		Subd. 4.Pension plans.  (a) The division of marital property that represents pension 
147.19 	plan benefits or rights in the form of future pension plan payments:
147.20 	(1) is payable only to the extent of the amount of the pension plan benefit payable 
147.21 	under the terms of the plan;
147.22 	(2) is not payable for a period that exceeds the time that pension plan benefits are 
147.23 	payable to the pension plan benefit recipient;
147.24 	(3) is not payable in a lump-sum amount from defined benefit pension plan assets 
147.25 	attributable in any fashion to a spouse with the status of an active member, deferred 
147.26 	retiree, or benefit recipient of a pension plan;
147.27 	(4) if the former spouse to whom the payments are to be made dies prior to the end 
147.28 	of the specified payment period with the right to any remaining payments accruing to an 
147.29 	estate or to more than one survivor, is payable only to a trustee on behalf of the estate or 
147.30 	the group of survivors for subsequent apportionment by the trustee; and
147.31 	(5) in the case of defined benefit public pension plan benefits or rights, may not 
147.32 	commence until the public plan member submits a valid application for a public pension 
147.33 	plan benefit and the benefit becomes payable.
147.34 	(b) The individual retirement account plans established under chapter 354B may 
147.35 	provide in its plan document, if published and made generally available, for an alternative 
148.1 	marital property division or distribution of individual retirement account plan assets. If an 
148.2 	alternative division or distribution procedure is provided, it applies in place of paragraph 
148.3 	(a), clause (5).
148.4 	(c) If liquid or readily liquidated marital property other than property representing 
148.5 	vested pension benefits or rights is available, the court, so far as possible, shall divide the 
148.6 	property representing vested pension benefits or rights by the disposition of an equivalent 
148.7 	amount of the liquid or readily liquidated property.
148.8 	(d) If sufficient liquid or readily liquidated marital property other than property 
148.9 	representing vested pension benefits or rights is not available, the court may order the 
148.10 	revocation of the designation of an optional annuity beneficiary in pension plans specified 
148.11 	in section 356.48 or in any other pension plan in which plan-governing law or governing 
148.12 	documents allow revocation of an optional annuity in marital dissolution or annulment 
148.13 	situations.

148.14 	EFFECTIVE DATE. (a) This section is effective the day following final enactment. 
148.15 	(b) This section applies retroactively, for plans specified in section 365.48, to any 
148.16 	marriage dissolution decree or annulment decree requiring the revocation of an optional 
148.17 	annuity form granted at any time prior to the date of enactment.

148.18 	ARTICLE 12
148.19 	ADMINISTRATIVE CONSOLIDATION OF THE MINNEAPOLIS 
148.20 	EMPLOYEES RETIREMENT FUND INTO THE PUBLIC EMPLOYEES 
148.21 	RETIREMENT ASSOCIATION

148.22 	Section 1. Minnesota Statutes 2009 Supplement, section 353.01, subdivision 2a, 
148.23 	is amended to read:
148.24 		Subd. 2a.Included employees. (a) Public employees whose salary from 
148.25 	employment in one or more positions within one governmental subdivision exceeds $425 
148.26 	in any month shall participate as members of the association. If the salary is less than 
148.27 	$425 in a subsequent month, the employee retains membership eligibility. Eligible public 
148.28 	employees shall participate as members of the association with retirement coverage by 
148.29 	the public general employees retirement plan or under this chapter, the public employees 
148.30 	police and fire retirement plan under this chapter, or the local government correctional 
148.31 	employees retirement plan under chapter 353E, whichever applies, as a condition of their 
148.32 	employment on the first day of employment unless they:
148.33 	(1) are specifically excluded under subdivision 2b;
148.34 	(2) do not exercise their option to elect retirement coverage in the association as 
148.35 	provided in subdivision 2d, paragraph (a); or
149.1 	(3) are employees of the governmental subdivisions listed in subdivision 2d, 
149.2 	paragraph (b), where the governmental subdivision has not elected to participate as a 
149.3 	governmental subdivision covered by the association.
149.4 	(b) A public employee who was a member of the association on June 30, 2002, 
149.5 	based on employment that qualified for membership coverage by the public employees 
149.6 	retirement plan or the public employees police and fire plan under this chapter, or the 
149.7 	local government correctional employees retirement plan under chapter 353E as of June 
149.8 	30, 2002, retains that membership for the duration of the person's employment in that 
149.9 	position or incumbency in elected office. Except as provided in subdivision 28, the person 
149.10 	shall participate as a member until the employee or elected official terminates public 
149.11 	employment under subdivision 11a or terminates membership under subdivision 11b.
149.12 	(c) Public employees under paragraph (a) include:
149.13 	(1) physicians under section 353D.01, subdivision 2, who do not elect public 
149.14 	employees defined contribution plan coverage under section 353D.02, subdivision 2;
149.15 	(2) full-time employees of the Dakota County Agricultural Society; and
149.16 	(3) employees of the Minneapolis Firefighters Relief Association or Minneapolis 
149.17 	Police Relief Association who are not excluded employees under subdivision 2b due to 
149.18 	coverage by the relief association pension plan and who elect Public Employee Retirement 
149.19 	Association general plan coverage under Laws 2009, chapter 169, article 12, section 10.
149.20 	(d) For the purpose of participation in the MERF division of the general employees 
149.21 	retirement plan, public employees include employees who were members of the former 
149.22 	Minneapolis Employees Retirement Fund on June 29, 2010, and who participate as 
149.23 	members of the MERF division of the association.

149.24 	Sec. 2. Minnesota Statutes 2008, section 353.01, subdivision 2b, is amended to read:
149.25 		Subd. 2b.Excluded employees. The following public employees are not eligible to 
149.26 	participate as members of the association with retirement coverage by the publicgeneral 
149.27 	employees retirement plan, the local government correctional employees retirement plan 
149.28 	under chapter 353E, or the public employees police and fire retirement plan:
149.29 	(1) public officers, other than county sheriffs, who are elected to a governing body, 
149.30 	or persons who are appointed to fill a vacancy in an elective office of a governing body, 
149.31 	whose term of office commences on or after July 1, 2002, for the service to be rendered 
149.32 	in that elective position;
149.33 	(2) election officers or election judges;
149.34 	(3) patient and inmate personnel who perform services for a governmental 
149.35 	subdivision;
150.1 	(4) except as otherwise specified in subdivision 12a, employees who are hired for 
150.2 	a temporary position as defined under subdivision 12a, and employees who resign from 
150.3 	a nontemporary position and accept a temporary position within 30 days in the same 
150.4 	governmental subdivision;
150.5 	(5) employees who are employed by reason of work emergency caused by fire, 
150.6 	flood, storm, or similar disaster;
150.7 	(6) employees who by virtue of their employment in one governmental subdivision 
150.8 	are required by law to be a member of and to contribute to any of the plans or funds 
150.9 	administered by the Minnesota State Retirement System, the Teachers Retirement 
150.10 	Association, the Duluth Teachers Retirement Fund Association, the St. Paul Teachers 
150.11 	Retirement Fund Association, the Minneapolis Employees Retirement Fund, or any police 
150.12 	or firefighters relief association governed by section 69.77 that has not consolidated 
150.13 	with the Public Employees Retirement Association, or any local police or firefighters 
150.14 	consolidation account who have not elected the type of benefit coverage provided by the 
150.15 	public employees police and fire fund under sections 353A.01 to 353A.10, or any persons 
150.16 	covered by section 353.665, subdivision 4, 5, or 6, who have not elected public employees 
150.17 	police and fire plan benefit coverage. This clause must not be construed to prevent a person 
150.18 	from being a member of and contributing to the Public Employees Retirement Association 
150.19 	and also belonging to and contributing to another public pension plan or fund for other 
150.20 	service occurring during the same period of time. A person who meets the definition of 
150.21 	"public employee" in subdivision 2 by virtue of other service occurring during the same 
150.22 	period of time becomes a member of the association unless contributions are made to 
150.23 	another public retirement fund on the salary based on the other service or to the Teachers 
150.24 	Retirement Association by a teacher as defined in section 354.05, subdivision 2;
150.25 	(7) persons who are members of a religious order and are excluded from coverage 
150.26 	under the federal Old Age, Survivors, Disability, and Health Insurance Program for the 
150.27 	performance of service as specified in United States Code, title 42, section 410(a)(8)(A), 
150.28 	as amended through January 1, 1987, if no irrevocable election of coverage has been made 
150.29 	under section 3121(r) of the Internal Revenue Code of 1954, as amended;
150.30 	(8) employees of a governmental subdivision who have not reached the age of 
150.31 	23 and are enrolled on a full-time basis to attend or are attending classes on a full-time 
150.32 	basis at an accredited school, college, or university in an undergraduate, graduate, or 
150.33 	professional-technical program, or a public or charter high school;
150.34 	(9) resident physicians, medical interns, and pharmacist residents and pharmacist 
150.35 	interns who are serving in a degree or residency program in public hospitals or clinics;
151.1 	(10) students who are serving in an internship or residency program sponsored 
151.2 	by an accredited educational institution;
151.3 	(11) persons who hold a part-time adult supplementary technical college license who 
151.4 	render part-time teaching service in a technical college;
151.5 	(12) except for employees of Hennepin County or Hennepin Healthcare System, 
151.6 	Inc., foreign citizens working for a governmental subdivision with a work permit of less 
151.7 	than three years, or an H-1b visa valid for less than three years of employment. Upon 
151.8 	notice to the association that the work permit or visa extends beyond the three-year period, 
151.9 	the foreign citizens must be reported for membership from the date of the extension;
151.10 	(13) public hospital employees who elected not to participate as members of the 
151.11 	association before 1972 and who did not elect to participate from July 1, 1988, to October 
151.12 	1, 1988;
151.13 	(14) except as provided in section 353.86, volunteer ambulance service personnel, 
151.14 	as defined in subdivision 35, but persons who serve as volunteer ambulance service 
151.15 	personnel may still qualify as public employees under subdivision 2 and may be members 
151.16 	of the Public Employees Retirement Association and participants in the public general
151.17 	employees retirement fund or the public employees police and fire fund, whichever 
151.18 	applies, on the basis of compensation received from public employment service other than 
151.19 	service as volunteer ambulance service personnel;
151.20 	(15) except as provided in section 353.87, volunteer firefighters, as defined in 
151.21 	subdivision 36, engaging in activities undertaken as part of volunteer firefighter duties; 
151.22 	provided that a person who is a volunteer firefighter may still qualify as a public 
151.23 	employee under subdivision 2 and may be a member of the Public Employees Retirement 
151.24 	Association and a participant in the public general employees retirement fund or the public 
151.25 	employees police and fire fund, whichever applies, on the basis of compensation received 
151.26 	from public employment activities other than those as a volunteer firefighter;
151.27 	(16) pipefitters and associated trades personnel employed by Independent School 
151.28 	District No. 625, St. Paul, with coverage under a collective bargaining agreement by the 
151.29 	pipefitters local 455 pension plan who were either first employed after May 1, 1997, or, 
151.30 	if first employed before May 2, 1997, elected to be excluded under Laws 1997, chapter 
151.31 	241, article 2, section 12;
151.32 	(17) electrical workers, plumbers, carpenters, and associated trades personnel 
151.33 	employed by Independent School District No. 625, St. Paul, or the city of St. Paul, 
151.34 	who have retirement coverage under a collective bargaining agreement by the Electrical 
151.35 	Workers Local 110 pension plan, the United Association Plumbers Local 34 pension plan, 
151.36 	or the Carpenters Local 87 pension plan who were either first employed after May 1, 
152.1 	2000, or, if first employed before May 2, 2000, elected to be excluded under Laws 2000, 
152.2 	chapter 461, article 7, section 5;
152.3 	(18) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers, 
152.4 	painters, allied tradesworkers, and plasterers employed by the city of St. Paul or 
152.5 	Independent School District No. 625, St. Paul, with coverage under a collective 
152.6 	bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan, 
152.7 	the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324 
152.8 	pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities 
152.9 	Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if 
152.10 	first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special 
152.11 	Session chapter 10, article 10, section 6;
152.12 	(19) plumbers employed by the Metropolitan Airports Commission, with coverage 
152.13 	under a collective bargaining agreement by the Plumbers Local 34 pension plan, who either 
152.14 	were first employed after May 1, 2001, or if first employed before May 2, 2001, elected to 
152.15 	be excluded under Laws 2001, First Special Session chapter 10, article 10, section 6;
152.16 	(20) employees who are hired after June 30, 2002, to fill seasonal positions under 
152.17 	subdivision 12b which are limited in duration by the employer to 185 consecutive calendar 
152.18 	days or less in each year of employment with the governmental subdivision;
152.19 	(21) persons who are provided supported employment or work-study positions 
152.20 	by a governmental subdivision and who participate in an employment or industries 
152.21 	program maintained for the benefit of these persons where the governmental subdivision 
152.22 	limits the position's duration to three years or less, including persons participating in a 
152.23 	federal or state subsidized on-the-job training, work experience, senior citizen, youth, or 
152.24 	unemployment relief program where the training or work experience is not provided as a 
152.25 	part of, or for, future permanent public employment;
152.26 	(22) independent contractors and the employees of independent contractors; and
152.27 	(23) reemployed annuitants of the association during the course of that 
152.28 	reemployment.

152.29 	Sec. 3. Minnesota Statutes 2008, section 353.01, is amended by adding a subdivision 
152.30 	to read:
152.31 		Subd. 47.MERF division. "MERF division" means the separate retirement plan 
152.32 	within the general employees retirement plan of the Public Employees Retirement 
152.33 	Association containing the applicable provisions of Minnesota Statutes 2008, chapter 
152.34 	422A.

153.1 	Sec. 4. Minnesota Statutes 2008, section 353.01, is amended by adding a subdivision 
153.2 	to read:
153.3 		Subd. 48.MERF division account. "MERF division account" means the separate 
153.4 	account within the retirement fund of the general employees retirement fund of the 
153.5 	Public Employees Retirement Association in which the actuarial liabilities of the former 
153.6 	Minneapolis Employees Retirement Fund are held, and in which the assets of the former 
153.7 	Minneapolis Employees Retirement Fund are credited.

153.8 	Sec. 5. Minnesota Statutes 2008, section 353.05, is amended to read:
153.9 	353.05 CUSTODIAN OF FUNDS.
153.10 	The commissioner of management and budget shall be ex officio treasurer of the 
153.11 	retirement funds of the association, including the MERF division,  and the general bond of 
153.12 	the commissioner of management and budget to the state shall must be so conditioned 
153.13 	as to cover all liability for acts as treasurer of these funds. All moneysmoney of the 
153.14 	association received by the commissioner of management and budget shall must be set 
153.15 	aside in the state treasury to the credit of the proper fund or account. The commissioner 
153.16 	of management and budget shall transmit monthly to the executive director a detailed 
153.17 	statement of all amounts so received and credited to the fund funds, including the MERF 
153.18 	division. Payments out of the fund shallfunds, including the MERF division, may only 
153.19 	be made only on warrants issued by the commissioner of management and budget, upon 
153.20 	abstracts signed by the executive director; provided that abstracts for investment may be 
153.21 	signed by the secretaryexecutive director of the State Board of Investment.

153.22 	Sec. 6. Minnesota Statutes 2009 Supplement, section 353.06, is amended to read:
153.23 	353.06 STATE BOARD OF INVESTMENT TO INVEST FUNDS.
153.24 	The executive director shall from time to time certify to the State Board of 
153.25 	Investment for investment such portions of the retirement fundfunds of the association, 
153.26 	including the MERF division, as in itsthe director's judgment may not be required for 
153.27 	immediate use. The State Board of Investment shall thereupon invest and reinvest the sum 
153.28 	so certified, or transferred, in such securities as are duly authorized as legal investments 
153.29 	for state employees retirement fundunder section 11A.24 and shall havehas authority to 
153.30 	sell, convey, and exchange such securities and invest and reinvest the securities when it 
153.31 	deems it desirable to do so and shall sell securities upon request of the board of trustees
153.32 	executive director when such funds are needed for its purposes. All of the provisions 
153.33 	regarding accounting procedures and restrictions and conditions for the purchase and 
153.34 	sale of securities under chapter 11A must apply to the accounting, purchase and sale of 
154.1 	securities for the funds of the Public Employees Retirement fund Association, including 
154.2 	the MERF division. 

154.3 	Sec. 7. Minnesota Statutes 2008, section 353.27, as amended by Laws 2009, chapter 
154.4 	169, article 1, section 32, and article 4, sections 9, 10, 11, and 12, is amended to read:
154.5 	353.27 PUBLICGENERAL EMPLOYEES RETIREMENT FUND.
154.6 		Subdivision 1.Income; disbursements. There is a special fund known as the 
154.7 	"public general employees retirement fund," the "retirement fund," or the "fund," which 
154.8 	must include all the assets of the general employees retirement plan of the association. 
154.9 	This fund must be credited with all contributions, all interest and all other income of the 
154.10 	general employees retirement plan of the Public Employees Retirement Association that 
154.11 	are authorized by law. From this fund there is appropriated the payments authorized by 
154.12 	this chaptersections 353.01 to 353.46 in the amounts and at such time provided herein, 
154.13 	including the expenses of administering the general employees retirement plan and fund.
154.14 		Subd. 1a.MERF division account established; revenue and disbursements. The 
154.15 	MERF division account is established as a special account. The MERF division account 
154.16 	includes all of the assets of the former Minneapolis Employees Retirement Fund that 
154.17 	were transferred to the administration of the Public Employees Retirement Association 
154.18 	under section 353.50. The special account is credited with the contributions under 
154.19 	section 353.50, subdivision 7, state aid under sections 356.43 and 422A.101, subdivision 
154.20 	3, investment performance on the special account assets, and all other income of the 
154.21 	MERF division authorized by law. The payments of annuities and benefits authorized by 
154.22 	Minnesota Statutes 2008, chapter 422A, in the amounts and at the times provided in 
154.23 	that chapter, and the administrative expenses of the MERF division are appropriated 
154.24 	from the special account.
154.25 		Subd. 2.General employees retirement plan; employee contribution. (a) For 
154.26 	a basic member of the general employees retirement plan of the Public Employees 
154.27 	Retirement Association, the employee contribution is 9.10 percent of salary. For a 
154.28 	coordinated member of the general employees retirement plan of the Public Employees 
154.29 	Retirement Association, the employee contribution is six percent of salary plus any 
154.30 	contribution rate adjustment under subdivision 3b.
154.31 	(b) These contributions must be made by deduction from salary as defined in section 
154.32 	353.01, subdivision 10, in the manner provided in subdivision 4. If any portion of a 
154.33 	member's salary is paid from other than public funds, the member's employee contribution 
154.34 	must be based on the total salary received by the member from all sources.
155.1 		Subd. 3.General employees retirement plan; employer contribution. (a) For 
155.2 	a basic member of the general employees retirement plan of the Public Employees 
155.3 	Retirement Association, the employer contribution is 9.10 percent of salary. For a 
155.4 	coordinated member of the general employees retirement plan of the Public Employees 
155.5 	Retirement Association, the employer contribution is six percent of salary plus any 
155.6 	contribution rate adjustment under subdivision 3b.
155.7 	(b) This contribution must be made from funds available to the employing 
155.8 	subdivision by the means and in the manner provided in section 353.28.
155.9 		Subd. 3a.Additional employer contribution. (a) An additional employer 
155.10 	contribution to the general employees retirement fund of the Public Employees Retirement 
155.11 	Association must be made equal to the following applicable percentage of the total salary 
155.12 	amount for "basic members" and for "coordinated members":

155.13			Basic Program
		Coordinated Program
	
155.14	Effective before January 1, 2006
		2.68
		.43
	
155.15	Effective January 1, 2006
		2.68
		.50
	
155.16	Effective January 1, 2009
		2.68
		.75
	
155.17	Effective January 1, 2010
		2.68
		1.00
	
155.18 	These contributions must be made from funds available to the employing subdivision 
155.19 	by the means and in the manner provided in section 353.28.
155.20 	(b) The coordinated program contribution rates set forth in paragraph (a) effective 
155.21 	for January 1, 2009, or January 1, 2010, must not be implemented if, following receipt of 
155.22 	the July 1, 2008, or July 1, 2009, annual actuarial valuation reportsreport under section 
155.23 	356.215, respectively, the actuarially required contributions are equal to or less than the 
155.24 	total rates under this section in effect as of January 1, 2008.
155.25 	(c) This subdivision is repealed once the actuarial value of the assets of the general 
155.26 	employees retirement plan of the Public Employees Retirement Association equal or 
155.27 	exceed the actuarial accrued liability of the plan as determined by the actuary retained 
155.28 	under sections 356.214 and 356.215. The repeal is effective on the first day of the first full 
155.29 	pay period occurring after March 31 of the calendar year following the issuance of the 
155.30 	actuarial valuation upon which the repeal is based.
155.31 		Subd. 3b.Change in employee and employer contributions in certain instances.
 155.32 	(a) For purposes of this section, a contribution sufficiency exists if the total of the 
155.33 	employee contribution under subdivision 2, the employer contribution under subdivision 
155.34 	3, the additional employer contribution under subdivision 3a, and any additional 
155.35 	contribution previously imposed under this subdivision exceeds the total of the normal 
155.36 	cost, the administrative expenses, and the amortization contribution of the general 
155.37 	employees retirement plan as reported in the most recent actuarial valuation of the 
156.1 	retirement plan prepared by the actuary retained under section 356.214 and prepared under 
156.2 	section 356.215 and the standards for actuarial work of the Legislative Commission on 
156.3 	Pensions and Retirement. For purposes of this section, a contribution deficiency exists if 
156.4 	the total of the employee contributions under subdivision 2, the employer contributions 
156.5 	under subdivision 3, the additional employer contribution under subdivision 3a, and any 
156.6 	additional contribution previously imposed under this subdivision is less than the total 
156.7 	of the normal cost, the administrative expenses, and the amortization contribution of the 
156.8 	general employees retirement plan as reported in the most recent actuarial valuation of the 
156.9 	retirement plan prepared by the actuary retained under section 356.214 and prepared under 
156.10 	section 356.215 and the standards for actuarial work of the Legislative Commission on 
156.11 	Pensions and Retirement.
156.12 	(b) Employee and employer contributions to the general employees retirement plan 
156.13 	under subdivisions 2 and 3 must be adjusted:
156.14 	(1) if, after July 1, 2010, the regular actuarial valuations of the general employees 
156.15 	retirement plan of the Public Employees Retirement Association under section 356.215
156.16 	indicate that there is a contribution sufficiency under paragraph (a) equal to or greater 
156.17 	than 0.5 percent of covered payroll for two consecutive years, the coordinated program 
156.18 	employee and employer contribution rates must be decreased as determined under 
156.19 	paragraph (c) to a level such that the sufficiency equals no more than 0.25 percent of 
156.20 	covered payroll based on the most recent actuarial valuation; or
156.21 	(2) if, after July 1, 2010, the regular actuarial valuations of the general employees 
156.22 	retirement plan of the Public Employees Retirement Association under section 356.215
156.23 	indicate that there is a deficiency equal to or greater than 0.5 percent of covered payroll for 
156.24 	two consecutive years, the coordinated program employee and employer contribution rates 
156.25 	must be increased as determined under paragraph (c) to a level such that no deficiency 
156.26 	exists based on the most recent actuarial valuation.
156.27 	(c) The general employees retirement plan contribution rate increase or decrease 
156.28 	must be determined by the executive director of the Public Employees Retirement 
156.29 	Association, must be reported to the chair and the executive director of the Legislative 
156.30 	Commission on Pensions and Retirement on or before the next February 1, and, if the 
156.31 	Legislative Commission on Pensions and Retirement does not recommend against the rate 
156.32 	change or does not recommend a modification in the rate change, is effective on the 
156.33 	next July 1 following the determination by the executive director that a contribution 
156.34 	deficiency or sufficiency has existed for two consecutive fiscal years based on the most 
156.35 	recent actuarial valuations under section 356.215. If the actuarially required contribution 
156.36 	of the general employees retirement plan exceeds or is less than the total support provided 
157.1 	by the combined employee and employer contribution rates by more than 0.5 percent of 
157.2 	covered payroll, the general employees retirement plan coordinated program employee 
157.3 	and employer contribution rates must be adjusted incrementally over one or more years to 
157.4 	a level such that there remains a contribution sufficiency of no more than 0.25 percent 
157.5 	of covered payroll.
157.6 	(d) No incremental adjustment may exceed 0.25 percent for either the general 
157.7 	employees retirement plan coordinated program employee and employer contribution rates 
157.8 	per year in which any adjustment is implemented. A general employees retirement plan 
157.9 	contribution rate adjustment under this subdivision must not be made until at least two 
157.10 	years have passed since fully implementing a previous adjustment under this subdivision.
157.11 	(e) The general employees retirement plan contribution sufficiency or deficiency 
157.12 	determination under paragraphs (a) to (d) must be made without the inclusion of the 
157.13 	contributions to, the funded condition of, or the actuarial funding requirements of the 
157.14 	MERF division.
157.15 		Subd. 4.Employer reporting requirements; contributions; member status.
 157.16 	(a) A representative authorized by the head of each department shall deduct employee 
157.17 	contributions from the salary of each employee who qualifies for membership in the 
157.18 	general employees retirement plan of the Public Employees Retirement Association or in 
157.19 	the public employees police and fire retirement plan under this chapter and remit payment 
157.20 	in a manner prescribed by the executive director for the aggregate amount of the employee 
157.21 	contributions, the employer contributions and the additional employer contributions to be 
157.22 	received within 14 calendar days. The head of each department or the person's designee 
157.23 	shall for each pay period submit to the association a salary deduction report in the format 
157.24 	prescribed by the executive director. Data required to be submitted as part of salary 
157.25 	deduction reporting must include, but are not limited to:
157.26 	(1)  the legal names and Social Security numbers of employees who are members;
157.27 	(2) the amount of each employee's salary deduction;
157.28 	(3) the amount of salary from which each deduction was made;
157.29 	(4) the beginning and ending dates of the payroll period covered and the date of 
157.30 	actual payment; and
157.31 	(5) adjustments or corrections covering past pay periods.
157.32 	(b) Employers must furnish the data required for enrollment for each new employee 
157.33 	who qualifies for membership in the general employees retirement plan of the Public 
157.34 	Employees Retirement Association or in the public employees police and fire retirement 
157.35 	plan in the format prescribed by the executive director. The required enrollment data 
157.36 	on new employees must be submitted to the association prior to or concurrent with the 
158.1 	submission of the initial employee salary deduction. The employer shall also report 
158.2 	to the association all member employment status changes, such as leaves of absence, 
158.3 	terminations, and death, and shall report the effective dates of those changes, on an 
158.4 	ongoing basis for the payroll cycle in which they occur. The employer shall furnish data, 
158.5 	forms, and reports as may be required by the executive director for proper administration 
158.6 	of the retirement system. Before implementing new or different computerized reporting 
158.7 	requirements, the executive director shall give appropriate advance notice to governmental 
158.8 	subdivisions to allow time for system modifications.
158.9 	(c) Notwithstanding paragraph (a), the associationexecutive director may provide 
158.10 	for less frequent reporting and payments for small employers.
158.11 		Subd. 7.Adjustment for erroneous receipts or disbursements. (a) Except 
158.12 	as provided in paragraph (b), erroneous employee deductions and erroneous employer 
158.13 	contributions and additional employer contributions to the general employees retirement 
158.14 	plan of the Public Employees Retirement Association or to the public employees police 
158.15 	and fire retirement plan for a person, who otherwise does not qualify for membership 
158.16 	under this chapter, are considered:
158.17 	(1) valid if the initial erroneous deduction began before January 1, 1990. Upon 
158.18 	determination of the error by the association, the person may continue membership in the 
158.19 	association while employed in the same position for which erroneous deductions were 
158.20 	taken, or file a written election to terminate membership and apply for a refund upon 
158.21 	termination of public service or defer an annuity under section 353.34; or 
158.22 	(2) invalid, if the initial erroneous employee deduction began on or after January 1, 
158.23 	1990. Upon determination of the error, the association shall refund all erroneous employee 
158.24 	deductions and all erroneous employer contributions as specified in paragraph (e). No 
158.25 	person may claim a right to continued or past membership in the association based on 
158.26 	erroneous deductions which began on or after January 1, 1990. 
158.27 	(b) Erroneous deductions taken from the salary of a person who did not qualify for 
158.28 	membership in the general employees retirement plan of the Public Employees Retirement 
158.29 	Association or in the public employees police and fire retirement plan by virtue of 
158.30 	concurrent employment before July 1, 1978, which required contributions to another 
158.31 	retirement fund or relief association established for the benefit of officers and employees 
158.32 	of a governmental subdivision, are invalid. Upon discovery of the error, the association 
158.33 	shall remove all invalid service and, upon termination of public service, the association 
158.34 	shall refund all erroneous employee deductions to the person, with interest as determined 
158.35 	under section 353.34, subdivision 2, and all erroneous employer contributions without 
158.36 	interest to the employer. This paragraph has both retroactive and prospective application. 
159.1 	(c) Adjustments to correct employer contributions and employee deductions taken 
159.2 	in error from amounts which are not salary under section 353.01, subdivision 10, must 
159.3 	be made as specified in paragraph (e). The period of adjustment must be limited to the 
159.4 	fiscal year in which the error is discovered by the association and the immediate two 
159.5 	preceding fiscal years. 
159.6 	(d) If there is evidence of fraud or other misconduct on the part of the employee or 
159.7 	the employer, the board of trustees may authorize adjustments to the account of a member 
159.8 	or former member to correct erroneous employee deductions and employer contributions 
159.9 	on invalid salary and the recovery of any overpayments for a period longer than provided 
159.10 	for under paragraph (c).
159.11 	(e) Upon discovery of the receipt of erroneous employee deductions and employer 
159.12 	contributions under paragraph (a), clause (2), or paragraph (c), the association must require 
159.13 	the employer to discontinue the erroneous employee deductions and erroneous employer 
159.14 	contributions reported on behalf of a member. Upon discontinuation, the association must:
159.15 	(1) for a member, provide a refund or credit to the employer in the amount of the 
159.16 	invalid employee deductions with interest on the invalid employee deductions at the rate 
159.17 	specified under section 353.34, subdivision 2, from the received date of each invalid salary 
159.18 	transaction through the date the credit or refund is made; and the employer must pay the 
159.19 	refunded employee deductions plus interest to the member;
159.20 	(2) for a former member who:
159.21 	(i) is not receiving a retirement annuity or benefit, return the erroneous employee 
159.22 	deductions to the former member through a refund with interest at the rate specified under 
159.23 	section 353.34, subdivision 2, from the received date of each invalid salary transaction 
159.24 	through the date the credit or refund is made; or
159.25 	(ii) is receiving a retirement annuity or disability benefit, or a person who is 
159.26 	receiving an optional annuity or survivor benefit, for whom it has been determined an 
159.27 	overpayment must be recovered, adjust the payment amount and recover the overpayments 
159.28 	as provided under this section; and
159.29 	(3) return the invalid employer contributions reported on behalf of a member or 
159.30 	former member to the employer by providing a credit against future contributions payable 
159.31 	by the employer.
159.32 	(f) In the event that a salary warrant or check from which a deduction for the 
159.33 	retirement fund was taken has been canceled or the amount of the warrant or check 
159.34 	returned to the funds of the department making the payment, a refund of the sum 
159.35 	deducted, or any portion of it that is required to adjust the deductions, must be made 
159.36 	to the department or institution.
160.1 	(g) If the accrual date of any retirement annuity, survivor benefit, or disability benefit 
160.2 	is within the limitation period specified in paragraph (c), and an overpayment has resulted 
160.3 	by using invalid service or salary, or due to any erroneous calculation procedure, the 
160.4 	association must recalculate the annuity or benefit payable and recover any overpayment 
160.5 	as provided under subdivision 7b.
160.6 	(h) Notwithstanding the provisions of this subdivision, the association may apply 
160.7 	the Revenue Procedures defined in the federal Internal Revenue Service Employee Plans 
160.8 	Compliance Resolution System and not issue a refund of erroneous employee deductions 
160.9 	and employer contributions or not recover a small overpayment of benefits if the cost to 
160.10 	correct the error would exceed the amount of the member refund or overpayment.
160.11 	(i) Any fees or penalties assessed by the federal Internal Revenue Service for any 
160.12 	failure by an employer to follow the statutory requirements for reporting eligible members 
160.13 	and salary must be paid by the employer.
160.14 		Subd. 7a.Deductions or contributions transmitted by error. (a) If employee 
160.15 	deductions and employer contributions under this section, section 353.50, 353.65, or 
160.16 	353E.03 were erroneously transmitted to the association, but should have been transmitted 
160.17 	to another Minnesota public pension plan, the executive director shall transfer the 
160.18 	erroneous employee deductions and employer contributions to the appropriate retirement 
160.19 	fund or individual account, as applicable, without interest. The time limitations specified 
160.20 	in subdivisions 7 and 12 do not apply.
160.21 	(b) For purposes of this subdivision, a Minnesota public pension plan means a 
160.22 	plan specified in section 356.30, subdivision 3, or the plans governed by chapters 353D 
160.23 	and 354B. 
160.24 	(c) A potential transfer under paragraph (a) that is reasonably determined to cause 
160.25 	the plan to fail to be a qualified plan under section 401(a) of the federal Internal Revenue 
160.26 	Code, as amended, must not be made by the executive director of the association. Within 
160.27 	30 days after being notified by the Public Employees Retirement Association of an 
160.28 	unmade potential transfer under this paragraph, the employer of the affected person 
160.29 	must transmit an amount representing the applicable salary deductions and employer 
160.30 	contributions, without interest, to the retirement fund of the appropriate Minnesota public 
160.31 	pension plan, or to the applicable individual account if the proper coverage is by a defined 
160.32 	contribution plan. The association must provide the employing unit a credit for the amount 
160.33 	of the erroneous salary deductions and employer contributions against future contributions 
160.34 	from the employer. If the employing unit receives a credit under this paragraph, the 
160.35 	employing unit is responsible for refunding to the applicable employee any amount that 
160.36 	had been erroneously deducted from the person's salary.
161.1 		Subd. 7b.Recovery of overpayments. (a) In the event the executive director 
161.2 	determines that an overpaid annuity or benefit thatfrom the general employees retirement 
161.3 	plan of the Public Employees Retirement Association, the public employees police and 
161.4 	fire retirement plan, or the local government correctional employees retirement plan is 
161.5 	the result of invalid salary included in the average salary used to calculate the payment 
161.6 	amount must be recovered, the association must determine the amount of the employee 
161.7 	deductions taken in error on the invalid salary, with interest determined in the manner 
161.8 	provided for a former member under subdivision 7, paragraph (e), clause (2), item (i), 
161.9 	and must subtract that amount from the total annuity or benefit overpayment, and the 
161.10 	remaining balance of the overpaid annuity or benefit, if any, must be recovered.
161.11 	(b) If the invalid employee deductions plus interest exceed the amount of the 
161.12 	overpaid benefits, the balance must be refunded to the person to whom the benefit or 
161.13 	annuity is being paid.
161.14 	(c) Any invalid employer contributions reported on the invalid salary must be 
161.15 	credited to the employer as provided in subdivision 7, paragraph (e).
161.16 	(d) If a member or former member, who is receiving a retirement annuity or 
161.17 	disability benefit for which an overpayment is being recovered, dies before recovery of 
161.18 	the overpayment is completed and a joint and survivor optional annuity is payable, the 
161.19 	remaining balance of the overpaid annuity or benefit must continue to be recovered from 
161.20 	the payment to the optional annuity beneficiary.
161.21 	(e) If the association finds that a refund has been overpaid to a former member, 
161.22 	beneficiary or other person, the amount of the overpayment must be recovered for the 
161.23 	benefit of the respective retirement fund or account.
161.24 	(f) The board of trustees shall adopt policies directing the period of time and manner 
161.25 	for the collection of any overpaid retirement or optional annuity, and survivor or disability 
161.26 	benefit, or a refund that the executive director determines must be recovered as provided 
161.27 	under this section.
161.28 		Subd. 7c.Limitation on additional plan coverage. No deductions for any plan 
161.29 	under this chapter or chapter 353E may be taken from the salary of a person who is 
161.30 	employed by a governmental subdivision under section 353.01, subdivision 6, and who is 
161.31 	receiving disability benefit payments from any plan under this chapter or chapter 353E 
161.32 	unless the person waives the right to further disability benefit payments.
161.33 		Subd. 8.District court reporters; salary deductions. Deductions from the salary 
161.34 	of a district court reporter in a judicial district consisting of two or more counties shall
161.35 	must be made by the auditor of the county in which the bond and official oath of such 
161.36 	district court reporter are filed, from the portion of salary paid by such county.
162.1 		Subd. 9.Fee officers; contributions; obligations of employers. Any appointed or 
162.2 	elected officer of a governmental subdivision who was or is a "public employee" within 
162.3 	the meaning of section 353.01 and was or is a member of the fundgeneral employees 
162.4 	retirement plan of the Public Employees Retirement Association and whose salary 
162.5 	was or is paid in whole or in part from revenue derived by fees and assessments, shall 
162.6 	pay employee contribution in the amount, at the time, and in the manner provided in 
162.7 	subdivisions 2 and 4. This subdivision shalldoes not apply to district court reporters. 
162.8 	The employer contribution as provided in subdivision 3, and the additional employer 
162.9 	contribution as provided in subdivision 3a,  with respect to such service shallmust be 
162.10 	paid by the governmental subdivision. This subdivision shall havehas both retroactive 
162.11 	and prospective application as to all such members; and every employing governmental 
162.12 	subdivision is deemed liable, retroactively and prospectively, for all employer and 
162.13 	additional employer contributions for every such member of the general employees 
162.14 	retirement plan in its employ. Delinquencies under this section shall be are governed 
162.15 	in all respects by section 353.28. 
162.16 		Subd. 10.Employer exclusion reports. The head of a department shall annually 
162.17 	furnish the executive director with an exclusion report listing only those employees in 
162.18 	potentially PERA-eligible PERA general employees retirement plan-eligible positions 
162.19 	who were not reported as members of the associationgeneral employees retirement plan 
162.20 	and who worked during the school year for school employees and calendar year for 
162.21 	nonschool employees. The department head must certify the accuracy and completeness 
162.22 	of the exclusion report to the association. The executive director shall prescribe the 
162.23 	manner and forms, including standardized exclusion codes, to be used by a governmental 
162.24 	subdivision in preparing and filing exclusion reports. The executive director shall also 
162.25 	check the exclusion report to ascertain whether any omissions have been made by a 
162.26 	department head in the reporting of new public employees for membership. The executive 
162.27 	director may delegate an association employee under section 353.03, subdivision 3a, 
162.28 	paragraph (b), clause (5), to conduct a field audit to review the payroll records of a 
162.29 	governmental subdivision. 
162.30 		Subd. 11.Employers; required to furnish requested information. (a) All 
162.31 	governmental subdivisions shall furnish promptly such other information relative to the 
162.32 	employment status of all employees or former employees, including, but not limited to, 
162.33 	payroll abstracts pertaining to all past and present employees, as may be requested by the 
162.34 	executive director, including schedules of salaries applicable to various categories of 
162.35 	employment.
163.1 	(b) In the event payroll abstract records have been lost or destroyed, for whatever 
163.2 	reason or in whatever manner, so that such schedules of salaries cannot be furnished 
163.3 	therefrom, the employing governmental subdivision, in lieu thereof, shall furnish to the 
163.4 	association an estimate of the earnings of any employee or former employee for any 
163.5 	period as may be requested by the executive director. If the association is provided a 
163.6 	schedule of estimated earnings, the executive director is authorized to use the same as a 
163.7 	basis for making whatever computations might be necessary for determining obligations 
163.8 	of the employee and employer to the general employees retirement fund plan, the public 
163.9 	employees police and fire retirement plan, or the local government correctional employees 
163.10 	retirement plan. If estimates are not furnished by the employer at the request of the 
163.11 	executive director, the executive director may estimate the obligations of the employee 
163.12 	and employer to the general employees retirement fund, the public employees police and 
163.13 	fire retirement plan, or the local government correctional employees retirement plan based 
163.14 	upon those records that are in its possession.
163.15 		Subd. 12.Omitted salary deductions; obligations. (a) In the case of omission 
163.16 	of required deductions for the general employees retirement plan, the public employees 
163.17 	police and fire retirement plan, or the local government correctional employees retirement 
163.18 	plan from the salary of an employee, the department head or designee shall immediately, 
163.19 	upon discovery, report the employee for membership and deduct the employee deductions 
163.20 	under subdivision 4 during the current pay period or during the pay period immediately 
163.21 	following the discovery of the omission. Payment for the omitted obligations may only be 
163.22 	made in accordance with reporting procedures and methods established by the executive 
163.23 	director.
163.24 	(b) When the entire omission period of an employee does not exceed 60 days, the 
163.25 	governmental subdivision may report and submit payment of the omitted employee 
163.26 	deductions and the omitted employer contributions through the reporting processes under 
163.27 	subdivision 4.
163.28 	(c) When the omission period of an employee exceeds 60 days, the governmental 
163.29 	subdivision shall furnish to the association sufficient data and documentation upon which 
163.30 	the obligation for omitted employee and employer contributions can be calculated. 
163.31 	The omitted employee deductions must be deducted from the employee's subsequent 
163.32 	salary payment or payments and remitted to the association for deposit in the applicable 
163.33 	retirement fund. The employee shall pay omitted employee deductions due for the 60 
163.34 	days prior to the end of the last pay period in the omission period during which salary 
163.35 	was earned. The employer shall pay any remaining omitted employee deductions and any 
163.36 	omitted employer contributions, plus cumulative interest at an annual rate of 8.5 percent 
164.1 	compounded annually, from the date or dates each omitted employee contribution was 
164.2 	first payable.
164.3 	(d) An employer shall not hold an employee liable for omitted employee deductions 
164.4 	beyond the pay period dates under paragraph (c), nor attempt to recover from the employee 
164.5 	those employee deductions paid by the employer on behalf of the employee. Omitted 
164.6 	deductions due under paragraph (c) which are not paid by the employee constitute a 
164.7 	liability of the employer that failed to deduct the omitted deductions from the employee's 
164.8 	salary. The employer shall make payment with interest at an annual rate of 8.5 percent 
164.9 	compounded annually. Omitted employee deductions are no longer due if an employee 
164.10 	terminates public service before making payment of omitted employee deductions to 
164.11 	the association, but the employer remains liable to pay omitted employer contributions 
164.12 	plus interest at an annual rate of 8.5 percent compounded annually from the date the 
164.13 	contributions were first payable.
164.14 	(e) The association may not commence action for the recovery of omitted employee 
164.15 	deductions and employer contributions after the expiration of three calendar years after 
164.16 	the calendar year in which the contributions and deductions were omitted. Except as 
164.17 	provided under paragraph (b), no payment may be made or accepted unless the association 
164.18 	has already commenced action for recovery of omitted deductions. An action for recovery 
164.19 	commences on the date of the mailing of any written correspondence from the association 
164.20 	requesting information from the governmental subdivision upon which to determine 
164.21 	whether or not omitted deductions occurred.
164.22 		Subd. 12a.Terminated employees: omitted deductions. A terminated employee 
164.23 	who was a member of the general employees retirement plan of the Public Employees 
164.24 	Retirement Association, the public employees police and fire retirement plan, or the local 
164.25 	government correctional employees retirement plan and who has a period of employment 
164.26 	in which previously omitted employer contributions were made under subdivision 12 
164.27 	but for whom no, or only partial, omitted employee contributions have been made, or 
164.28 	a member who had prior coverage in the association for which previously omitted 
164.29 	employer contributions were made under subdivision 12 but who terminated service 
164.30 	before required omitted employee deductions could be withheld from salary, may pay the 
164.31 	omitted employee deductions for the period on which omitted employer contributions 
164.32 	were previously paid plus interest at an annual rate of 8.5 percent compounded annually. 
164.33 	A terminated employee may pay the omitted employee deductions plus interest within six 
164.34 	months of an initial notification from the association of eligibility to pay those omitted 
164.35 	deductions. If a terminated employee is reemployed in a position covered under a public 
164.36 	pension fund under section 356.30, subdivision 3, and elects to pay omitted employee 
165.1 	deductions, payment must be made no later than six months after a subsequent termination 
165.2 	of public service. 
165.3 		Subd. 12b.Terminated employees: immediate eligibility. If deductions were 
165.4 	omitted from salary adjustments or final salary of a terminated employee who was a 
165.5 	member of the general employees retirement plan, the public employees police and fire 
165.6 	retirement plan, or the local government correctional employees retirement plan and who 
165.7 	is immediately eligible to draw a monthly benefit, the employer shall pay the omitted 
165.8 	employer and employer additional contributions plus interest on both the employer and 
165.9 	employee amounts due at an annual rate of 8.5 percent compounded annually. The 
165.10 	employee shall pay the employee deductions within six months of an initial notification 
165.11 	from the association of eligibility to pay omitted deductions or the employee forfeits 
165.12 	the right to make the payment.
165.13 		Subd. 13.Certain warrants canceled. A warrant payable from the general 
165.14 	employees retirement fund, the public employees police and fire retirement fund, or the 
165.15 	local government correctional retirement fund remaining unpaid for a period of six 
165.16 	months must be canceled into the applicable retirement fund and not canceled into the 
165.17 	state's general fund.
165.18 		Subd. 14.Periods before initial coverage date. (a) If an entity is determined to 
165.19 	be a governmental subdivision due to receipt of a written notice of eligibility from the 
165.20 	association with respect to the general employees retirement plan, the public employees 
165.21 	police and fire retirement plan, or the local government correctional retirement plan, that 
165.22 	employer and its employees are subject to the requirements of subdivision 12, effective 
165.23 	retroactively to the date that the executive director of the association determines that 
165.24 	the entity first met the definition of a governmental subdivision, if that date predates 
165.25 	the notice of eligibility.
165.26 	(b) If the retroactive time period under paragraph (a) exceeds three years, an 
165.27 	employee is authorized to purchase service credit in the applicable Public Employees 
165.28 	Retirement Association plan for the portion of the period in excess of three years, by 
165.29 	making payment under section 356.551. Notwithstanding any provision of section 
165.30 	356.551, subdivision 2, to the contrary, regarding time limits on purchases, payment of a 
165.31 	service credit purchase amount may be made anytime before the termination of public 
165.32 	service.
165.33 	(c) This subdivision does not apply if the applicable employment under paragraph 
165.34 	(a) included coverage by any public or private defined benefit or defined contribution 
165.35 	retirement plan, other than a volunteer firefighters relief association. If this paragraph 
166.1 	applies, an individual is prohibited from purchasing service credit from a Public Employees 
166.2 	Retirement Association plan for any period or periods specified in paragraph (a).

166.3 	Sec. 8. Minnesota Statutes 2008, section 353.34, subdivision 1, is amended to read:
166.4 		Subdivision 1.Refund or deferred annuity. (a) A former member is entitled 
166.5 	to a refund of accumulated employee deductions under subdivision 2, or to a deferred 
166.6 	annuity under subdivision 3. Application for a refund may not be made before the date of 
166.7 	termination of public service. Except as specified in paragraph (b), a refund must be paid 
166.8 	within 120 days following receipt of the application unless the applicant has again become 
166.9 	a public employee required to be covered by the association.
166.10 	(b) If an individual was placed on layoff under section 353.01, subdivision 12 or 12c, 
166.11 	a refund is not payable before termination of service under section 353.01, subdivision 11a. 
166.12 	(c) An individual who terminates public service covered by the Public Employees 
166.13 	Retirement Association general employees retirement plan, the MERF division, the 
166.14 	Public Employees Retirement Association police and fire retirement plan, or the public 
166.15 	employees local government corrections service retirement plan, and who is employed 
166.16 	by a different employer and who becomes an active member covered by one of the other 
166.17 	two plans, may receive a refund of employee contributions plus six percent interest 
166.18 	compounded annually from the plan from which the member terminated service.

166.19 	Sec. 9. Minnesota Statutes 2008, section 353.34, subdivision 6, is amended to read:
166.20 		Subd. 6.Additions to fund. The board of trustees may credit to the general 
166.21 	employees retirement fund any moneysmoney received in the form of contributions, 
166.22 	donations, gifts, appropriations, bequests, or otherwise.

166.23 	Sec. 10. Minnesota Statutes 2008, section 353.37, subdivision 1, is amended to read:
166.24 		Subdivision 1.Salary maximums. (a) The annuity of a person otherwise eligible 
166.25 	for an annuity under this chapterfrom the general employees retirement plan of the Public 
166.26 	Employees Retirement Association, the public employees police and fire retirement plan, 
166.27 	or the local government correctional employees retirement plan must be suspended under 
166.28 	subdivision 2 or reduced under subdivision 3, whichever results in the higher annual 
166.29 	annuity amount, if the person reenters public service as a nonelective employee of a 
166.30 	governmental subdivision in a position covered by this chapter or returns to work as an 
166.31 	employee of a labor organization that represents public employees who are association 
166.32 	members under this chapter and salary for the reemployment service exceeds the annual 
166.33 	maximum earnings allowable for that age for the continued receipt of full benefit amounts 
167.1 	monthly under the federal Old Age, Survivors and Disability Insurance Program as set by 
167.2 	the secretary of health and human services under United States Code, title 42, section 403, 
167.3 	in any calendar year. If the person has not yet reached the minimum age for the receipt 
167.4 	of Social Security benefits, the maximum salary for the person is equal to the annual 
167.5 	maximum earnings allowable for the minimum age for the receipt of Social Security 
167.6 	benefits.
167.7 	(b) The provisions of paragraph (a) do not apply to the members of the MERF 
167.8 	division.

167.9 	Sec. 11. Minnesota Statutes 2008, section 353.37, subdivision 2, is amended to read:
167.10 		Subd. 2.Suspension of annuity. (a) The association shall suspend the annuity on 
167.11 	the first of the month after the month in which the salary of the reemployed annuitant 
167.12 	described in subdivision 1, paragraph (a), exceeds the maximums set in subdivision 1, 
167.13 	paragraph (a), based only on those months in which the annuitant is actually employed 
167.14 	in nonelective public service in a position covered under this chapter or employment 
167.15 	with a labor organization that represents public employees who are association members 
167.16 	of a retirement plan under this chapter or chapter 353E. 
167.17 	(b) An annuitant who is elected to public office after retirement may hold that office 
167.18 	and receive an annuity otherwise payable from a retirement plan administered by the 
167.19 	association.

167.20 	Sec. 12. Minnesota Statutes 2008, section 353.37, subdivision 3, is amended to read:
167.21 		Subd. 3.Reduction of annuity. (a) The association shall reduce the amount 
167.22 	of the annuity of a person who has not reached the retirement age by one-half of the 
167.23 	amount in excess of the applicable reemployment income maximum under subdivision 
167.24 	1, paragraph (a).
167.25 	(b) There is no reduction upon reemployment, regardless of income, for a person 
167.26 	who has reached the retirement age.

167.27 	Sec. 13. Minnesota Statutes 2008, section 353.37, subdivision 4, is amended to read:
167.28 		Subd. 4.Resumption of annuity. The association shall resume paying a full 
167.29 	annuity to the reemployed annuitant described in subdivision 1, paragraph (a), at the 
167.30 	start of each calendar year until the salary exceeds the maximums under subdivision 1, 
167.31 	paragraph (a), or on the first of the month following the termination of the employment 
167.32 	which resulted in the suspension of the annuity. The executive director may adopt policies 
167.33 	regarding the suspension and reduction of annuities under this section.

168.1 	Sec. 14. Minnesota Statutes 2008, section 353.37, subdivision 5, is amended to read:
168.2 		Subd. 5.Effect on annuity. Except as provided under this section, public service 
168.3 	performed by an annuitant described in subdivision 1, paragraph (a), subsequent to 
168.4 	retirement under this chapterfrom the general employees retirement plan, the public 
168.5 	employees police and fire retirement plan, or the local government correctional employees 
168.6 	retirement plan does not increase or decrease the amount of an annuity. The annuitant shall 
168.7 	not make any further contributions to the association'sa defined benefit plan administered 
168.8 	by the association by reason of this subsequent public service.

168.9 	Sec. 15. Minnesota Statutes 2008, section 353.46, subdivision 2, is amended to read:
168.10 		Subd. 2.Rights of deferred annuitant. The rightentitlement of a deferred 
168.11 	annuitant or other former member of the general employees retirement plan of the 
168.12 	Public Employees Retirement Association, the Minneapolis Employees Retirement Fund 
168.13 	division, the public employees police and fire retirement plan, or the local government 
168.14 	correctional employees retirement plan to receive an annuity under the law in effect at the 
168.15 	time suchthe person terminated public service is herein preserved; provided, however,.
168.16 	The provisions of section 353.71, subdivision 2, as amended by Laws 1973, chapter 753
168.17 	shall, apply to a deferred annuitant or other former member who first begins receiving an 
168.18 	annuity after July 1, 1973.  

168.19 	Sec. 16. Minnesota Statutes 2008, section 353.46, subdivision 6, is amended to read:
168.20 		Subd. 6.Computation of benefits for certain coordinated members. Any 
168.21 	coordinated member of the general employees retirement plan of the Public Employees 
168.22 	Retirement Association who prior to, before July 1, 1979, was a member of the former 
168.23 	coordinated program of the former Minneapolis Municipal Employees Retirement 
168.24 	Fund and who prior to, before July 1, 1978, was a member of the basic program of the 
168.25 	Minneapolis Municipal Employees Retirement Fund shall:
168.26 	(1) beis entitled to receive a retirement annuity when otherwise qualified, the 
168.27 	calculation of which shallmust utilize the formula accrual rates specified in section 
168.28 	422A.15, subdivision 1, for that portion of credited service which was rendered prior to
168.29 	before July 1, 1978, and the formula accrual rates specified in section 353.29, subdivision 
168.30 	3, for the remainder of credited service, both applied to the average salary as specified 
168.31 	in section 353.29, subdivision 2 353.01, subdivision 17a. The formula accrual rates to 
168.32 	be used in calculating the retirement annuity shallmust recognize the service after July 
168.33 	1, 1978, as a member of the former coordinated program of the former Minneapolis 
168.34 	Municipal Employees Retirement Fund and after July 1, 1979, as a member of the 
169.1 	general employees retirement plan of the Public Employees Retirement Association as 
169.2 	a continuation of service rendered prior tobefore July 1, 1978. The annuity amount 
169.3 	attributable to service as a member of the basic program of the former Minneapolis 
169.4 	Municipal Employees Retirement Fund shall beis payable byfrom the Minneapolis 
169.5 	Employees Retirement FundMERF division and the annuity amount attributable to all 
169.6 	other service shall beis payable byfrom the general employees retirement fund of the 
169.7 	Public Employees Retirement Association;  .
169.8 	(2) retain eligibility when otherwise qualified for a disability benefit from the 
169.9 	Minneapolis Employees Retirement Fund until July 1, 1982, notwithstanding coverage 
169.10 	by the Public Employees Retirement Association, if the member has or would, without 
169.11 	the transfer of retirement coverage from the basic program of the Minneapolis Municipal 
169.12 	Employees Retirement Fund to the coordinated program of the Minneapolis Municipal 
169.13 	Employees Retirement Fund or from the coordinated program of the Minneapolis 
169.14 	Municipal Employees Retirement Fund to the public employees retirement fund, have 
169.15 	sufficient credited service prior to January 1, 1983, to meet the minimum service 
169.16 	requirements for a disability benefit pursuant to section 422A.18. The disability benefit 
169.17 	amount attributable to service as a member of the basic program of the Minneapolis 
169.18 	Municipal Employees Retirement Fund shall be payable by the Minneapolis Employees 
169.19 	Retirement Fund and the disability benefit amount attributable to all other service shall be 
169.20 	payable by the Public Employees Retirement Association.  

169.21 	Sec. 17. [353.50] MERF CONSOLIDATION ACCOUNT; ESTABLISHMENT 
169.22 	AND OPERATION.
169.23 		Subdivision 1.Administrative consolidation. (a) Notwithstanding any provision 
169.24 	of this chapter or chapter 422A to the contrary, the administration of the Minneapolis 
169.25 	Employees Retirement Fund as the MERF division is transferred to the Public Employees 
169.26 	Retirement Association board of trustees. The assets, service credit, and benefit liabilities 
169.27 	of the Minneapolis Employees Retirement Fund transfer to the MERF division account 
169.28 	within the general employees retirement plan of the Public Employees Retirement 
169.29 	Association established by section 353.27, subdivision 1a, on July 1, 2010.
169.30 	(b) The creation of the MERF division must not be construed to alter the Social 
169.31 	Security or Medicare coverage of any member of the former Minneapolis Employees 
169.32 	Retirement Fund on June 29, 2010, while the person is employed in a position covered 
169.33 	under the MERF division of the Public Employees Retirement Association.
169.34 		Subd. 2.Membership transfer. Effective June 30, 2010, the active, inactive, and 
169.35 	retired members of the Minneapolis Employees Retirement Fund are transferred to the 
170.1 	MERF division administered by the Public Employees Retirement Association and are no 
170.2 	longer members of the Minneapolis Employees Retirement Fund.
170.3 		Subd. 3.Service credit and benefit liability transfer. (a) All allowable service 
170.4 	credit and salary credit of the members of the  Minneapolis Employees Retirement Fund 
170.5 	as specified in the records of the Minneapolis Employees Retirement Fund through June 
170.6 	30, 2010, are transferred to the MERF division of the Public Employees Retirement 
170.7 	Association and are credited by the MERF division. Annuities or benefits of persons 
170.8 	who are active members of the former Minneapolis Employees Retirement Fund on 
170.9 	June 30, 2010, must be calculated under Minnesota Statutes 2008, sections 422A.11; 
170.10 	422A.12; 422A.13; 422A.14; 422A.15; 422A.151; 422A.155; 422A.156; 422A.16; 
170.11 	422A.17; 422A.18; 422A.19; 422A.20; and 422A.23, but are only eligible for automatic 
170.12 	postretirement adjustments after December 31, 2010, under section 356.415.
170.13 	(b) The liability for the payment of annuities and benefits of the Minneapolis 
170.14 	Employees Retirement Fund retirees and benefit recipients as specified in the records 
170.15 	of the Minneapolis Employees Retirement Fund on June 29, 2010, is transferred to the 
170.16 	MERF division of the Public Employees Retirement Association on June 30, 2010.
170.17 		Subd. 4.Records transfer. On June 30, 2010, the executive director of the 
170.18 	Minneapolis Employees Retirement Fund shall transfer all records and documents relating 
170.19 	to the Minneapolis Employees Retirement Fund and its benefit plan to the executive 
170.20 	director of the Public Employees Retirement Association. To the extent possible, original 
170.21 	copies of all records and documents must be transferred.
170.22 		Subd. 5.Transfer of title to assets. On June 30, 2010, legal title to the assets of 
170.23 	the Minneapolis Employees Retirement Fund transfers to the State Board of Investment 
170.24 	and the assets must be invested under section 11A.14, as assets of the MERF division of 
170.25 	the Public Employees Retirement Association.  The MERF division is the successor in 
170.26 	interest to all claims that the former Minneapolis Employees Retirement Fund may have 
170.27 	or may assert against any person and is the successor in interest to all claims which could 
170.28 	have been asserted against the former Minneapolis Employees Retirement Fund, but the 
170.29 	MERF division is not liable for any claim against the former Minneapolis Employees 
170.30 	Retirement Fund, its former governing board, or its former administrative staff acting in a 
170.31 	fiduciary capacity under chapter 356A or under common law, which is founded upon a 
170.32 	claim of breach of fiduciary duty, but where the act or acts constituting the claimed breach 
170.33 	were not undertaken in good faith, the Public Employees Retirement Association may 
170.34 	assert any applicable defense to any claim in any judicial or administrative proceeding 
170.35 	that the former Minneapolis Employees Retirement Fund, its former board, or its 
170.36 	former administrative staff would otherwise have been entitled to assert, and the Public 
171.1 	Employees Retirement Association may assert any applicable defense that it has in its 
171.2 	capacity as a statewide agency.
171.3 		Subd. 6.Benefits. (a) The annuities and benefits of, or attributable to, retired, 
171.4 	disabled, deferred, or inactive Minneapolis Employees Retirement Fund members 
171.5 	with that status as of June 30, 2010, with the exception of post-December 31, 2010, 
171.6 	postretirement adjustments, which are governed by paragraph (b), as calculated under 
171.7 	Minnesota Statutes 2008, sections 422A.11; 422A.12; 422A.13; 422A.14; 422A.15; 
171.8 	422A.151; 422A.155; 422A.156; 422A.16; 422A.17; 422A.18; 422A.19; 422A.20; and 
171.9 	422A.23, continue in force after the administrative consolidation under this article.
171.10 	(b) After December 31, 2010, annuities and benefits from the MERF division are 
171.11 	eligible for annual automatic postretirement adjustments solely under section 356.415.
171.12 		Subd. 7.MERF division account contributions. (a) After June 30, 2010, the 
171.13 	member and employer contributions to the MERF division account are governed by this 
171.14 	subdivision.
171.15 	(b) An active member covered by the MERF division must make an employee 
171.16 	contribution of 9.75 percent of the total salary of the member as defined in section 353.01, 
171.17 	subdivision 10. The employee contribution must be made by payroll deduction by the 
171.18 	member's employing unit under section 353.27, subdivision 4, and is subject to the 
171.19 	provisions of section 353.27, subdivisions 7, 7a, 7b, 12, 12a, and 12b.
171.20 	(c) The employer regular contribution to the MERF division account with respect 
171.21 	to an active MERF division member is 9.75 percent of the total salary of the member as 
171.22 	defined in section 353.01, subdivision 10.
171.23 	(d) The employer additional contribution to the MERF division account with respect 
171.24 	to an active member of the MERF division is 2.68 percent of the total salary of the member 
171.25 	as defined in section 353.01, subdivision 10, plus the employing unit's share of $3,900,000 
171.26 	that the employing unit paid or is payable to the former Minneapolis Employees 
171.27 	Retirement Fund under Minnesota Statutes 2008, section 422A.101, subdivision 1a, 2, 
171.28 	or 2a, during calendar year 2009, as was certified by the former executive director of the 
171.29 	former Minneapolis Employees Retirement Fund.
171.30 	(e) Annually after June 30, 2012, the employer supplemental contribution to 
171.31 	the MERF division account by the city of Minneapolis, Special School District No. 1, 
171.32 	Minneapolis, a Minneapolis-owned public utility, improvement, or municipal activity, 
171.33 	Hennepin county, the Metropolitan Council, the Metropolitan Airports Commission, and 
171.34 	the Minnesota State Colleges and Universities system is the larger of the following:
171.35 	(1) the amount by which the total actuarial required contribution determined under 
171.36 	section 356.215 by the approved actuary retained by the Public Employees Retirement 
172.1 	Association in the most recent actuarial valuation of the MERF division and based on a 
172.2 	June 30, 2031, amortization date, after subtracting the contributions under paragraphs 
172.3 	(b), (c), and (d), exceeds $24,000,000; or
172.4 	(2) the amount of $27,000,000. Each employing unit's share of the total employer 
172.5 	supplemental contribution amount is equal to the applicable portion specified in paragraph 
172.6 	(g). The initial total actuarial required contribution after June 30, 2012, must be calculated 
172.7 	using the mortality assumption change recommended on September 30, 2009, for the 
172.8 	Minneapolis Employees Retirement Fund by the approved consulting actuary retained 
172.9 	by the Minneapolis Employees Retirement Fund board.
172.10 	(f) Notwithstanding any provision of paragraph (c), (d), or (e) to the contrary, as of 
172.11 	August 1 annually, if the amount of the retirement annuities and benefits paid from the 
172.12 	MERF division account during the preceding fiscal year, multiplied by the factor of 1.035, 
172.13 	exceeds the market value of the assets of the MERF division account on the preceding 
172.14 	June 30, plus state aid of $9,000,000 or $24,000,000, whichever applies, plus the amounts 
172.15 	payable under paragraphs (b), (c), (d), and (e) during the preceding fiscal year, multiplied 
172.16 	by the factor of 1.035, the balance calculated is a special additional employer contribution. 
172.17 	The special additional employer contribution under this paragraph is payable in addition 
172.18 	to any employer contribution required under paragraphs (c), (d), and (e), and is payable on 
172.19 	or before the following June 30. The special additional employer contribution under this 
172.20 	paragraph must be allocated as specified in paragraph (g).
172.21 	(g) The employer supplemental contribution under paragraph (e) or the special 
172.22 	additional employer contribution under paragraph (f) must be allocated between the city 
172.23 	of Minneapolis, Special School District No. 1, Minneapolis, any Minneapolis-owned 
172.24 	public utility, improvement, or municipal activity, the Minnesota State Colleges and 
172.25 	Universities system, Hennepin County, the Metropolitan Council, and the Metropolitan 
172.26 	Airports Commission in proportion to their share of the actuarial accrued liability of the 
172.27 	former Minneapolis Employees Retirement Fund as of July 1, 2009, as calculated by the 
172.28 	approved actuary retained under section 356.214 as part of the actuarial valuation prepared 
172.29 	as of July 1, 2009, under section 356.215 and the Standards for Actuarial Work adopted by 
172.30 	the Legislative Commission on Pensions and Retirement.
172.31 	(h) The employer contributions under paragraphs (c), (d), and (e) must be paid as 
172.32 	provided in section 353.28.
172.33 	(i) Contributions under this subdivision are subject to the provisions of section 
172.34 	353.27, subdivisions 4, 7, 7a, 7b, 11, 12, 12a, 12b, 13, and 14.
172.35 		Subd. 7a.Minneapolis Municipal Retirement Association dues. If authorized 
172.36 	by an annuitant or retirement benefit recipient in writing on a form prescribed by the 
173.1 	executive director of the Public Employees Retirement Association, the executive director 
173.2 	shall deduct the dues for the Minneapolis Municipal Retirement Association from the 
173.3 	person's annuity or retirement benefit. This dues deduction authority expires upon the 
173.4 	eventual full consolidation of the MERF account under subdivision 8.
173.5 		Subd. 8.Eventual full consolidation. (a) Once the fiscal year end market value 
173.6 	of assets of the MERF division account equals or exceeds 80 percent of the actuarial 
173.7 	accrued liability of the MERF division as calculated by the approved actuary retained by 
173.8 	the Public Employees Retirement Association under section 356.215 and the Standards 
173.9 	for Actuarial Work adopted by the Legislative Commission on Pensions and Retirement, 
173.10 	the MERF division must be merged with the general employees retirement plan of the 
173.11 	Public Employees Retirement Association and the MERF division account ceases as a 
173.12 	separate account within the general employees retirement fund of the Public Employees 
173.13 	Retirement Association.
173.14 	(b) If the market value of the MERF division account is less than 100 percent of the 
173.15 	actuarial accrued liability of the MERF division under paragraph (a), the total employer 
173.16 	contribution of employing units referenced in subdivision 7, paragraph (e), for the period 
173.17 	after the full consolidation and June 30, 2031, to amortize on a level annual dollar payment 
173.18 	the remaining unfunded actuarial accrued liability of the former MERF division account 
173.19 	on the full consolidation date by June 30, 2031, shall be calculated by the consulting 
173.20 	actuary retained under section 356.214 using the applicable postretirement interest rate 
173.21 	actuarial assumption for the general employees retirement plan under section 356.215. 
173.22 	The actuarial accrued liability of the MERF division must be calculated using the healthy 
173.23 	retired life mortality assumption applicable to the general employees retirement plan.
173.24 	(c) The merger shall occur as of the first day of the first month after the date on 
173.25 	which the triggering actuarial valuation report is filed with the executive director of the 
173.26 	Legislative Commission on Pensions and Retirement.
173.27 	(d) The executive director of the Public Employees Retirement Association shall 
173.28 	prepare proposed legislation fully implementing the merger and updating the applicable 
173.29 	provisions of chapters 353 and 356 and transmit the proposed legislation to the executive 
173.30 	director of the Legislative Commission on Pensions and Retirement by the following 
173.31 	February 15.
173.32 		Subd. 9.Merger of former MERF membership groups into PERA-general.
 173.33 	If provided for in an agreement between the board of trustees of the Public Employees 
173.34 	Retirement Association and the governing board of an employing unit formerly with 
173.35 	retirement coverage provided for its employees by the former Minneapolis Employees 
173.36 	Retirement Fund, an employing unit may transfer sufficient assets to the general 
174.1 	employees retirement fund to cover the anticipated actuarial accrued liability for its 
174.2 	current or former employees that is in excess of MERF division account assets attributable 
174.3 	to those employees, have those employees be considered full members of the general 
174.4 	employees retirement plan, and be relieved of any further contribution obligation to the 
174.5 	general employees retirement plan for those employees under this section. Any agreement 
174.6 	under this subdivision and any actuarial valuation report related to a merger under this 
174.7 	subdivision must be submitted to the executive director of the Legislative Commission on 
174.8 	Pensions and Retirement for comment prior to the final execution.

174.9 	Sec. 18. Minnesota Statutes 2008, section 353.64, subdivision 7, is amended to read:
174.10 		Subd. 7.Pension coverage for certain public safety employees of the
174.11 	Metropolitan Airports Commission. Any person first employed as either a full-time 
174.12 	firefighter or a full-time police officer by the Metropolitan Airports Commission after June 
174.13 	30, 1978, who is not eligible for coverage under the agreement signed between the state 
174.14 	and the secretary of the federal Department of Health and Human Services making the 
174.15 	provisions of the federal Old Age, Survivors, and Disability Insurance Act applicable to 
174.16 	municipal employees because that position is excluded from application pursuant tounder 
174.17 	Title 42, United States Code, Sections 418 (d) (5) (A) and 418 (d) (8) (D) and section 
174.18 	355.07, shall not be a member of the Minneapolis Employees Retirement Fund but shall 
174.19 	beis a member of the public employees police and fire fund and shall beis deemed to be a 
174.20 	firefighter or a police officer within the meaning of this section. The Metropolitan Airports 
174.21 	Commission shall make the employer contribution required pursuant tounder section 
174.22 	353.65, subdivision 3, with respect to each of its firefighters or police officers covered 
174.23 	by the public employees police and fire fund and shall meet the employers recording and 
174.24 	reporting requirements set forth in section 353.65, subdivision 4. 

174.25 	Sec. 19. Minnesota Statutes 2008, section 356.215, subdivision 8, is amended to read:
174.26 		Subd. 8.Interest and salary assumptions. (a) The actuarial valuation must use 
174.27 	the applicable following preretirement interest assumption and the applicable following 
174.28 	postretirement interest assumption:

174.29
174.30
174.31	plan
	preretirement
interest rate
assumption
	postretirement 
interest rate
assumption
	
174.32	general state employees retirement plan
		8.5%
	6.0%
	
174.33	correctional state employees retirement plan
		8.5
	6.0
	
174.34	State Patrol retirement plan
		8.5
	6.0
	
174.35	legislators retirement plan
		8.5
	6.0
	
174.36	elective state officers retirement plan
		8.5
	6.0
	
175.1	judges retirement plan
		8.5
	6.0
	
175.2	general public employees retirement plan
		8.5
	6.0
	
175.3	public employees police and fire retirement plan
		8.5
	6.0
	
175.4
175.5	local government correctional service retirement 
plan
		8.5
	6.0
	
175.6	teachers retirement plan
		8.5
	6.0
	
175.7	Minneapolis employees retirement plan
		6.0
	5.0
	
175.8	Duluth teachers retirement plan
		8.5
	8.5
	
175.9	St. Paul teachers retirement plan
		8.5
	8.5
	
175.10	Minneapolis Police Relief Association
		6.0
	6.0
	
175.11	Fairmont Police Relief Association
		5.0
	5.0
	
175.12	Minneapolis Fire Department Relief Association
		6.0
	6.0
	
175.13	Virginia Fire Department Relief Association
		5.0
	5.0
	
175.14	Bloomington Fire Department Relief Association
		6.0
	6.0
	
175.15
175.16	local monthly benefit volunteer firefighters relief 
associations
		5.0
	5.0
	
175.17 	(b) Before July 1, 2010, the actuarial valuation must use the applicable following 
175.18 	single rate future salary increase assumption, the applicable following modified single 
175.19 	rate future salary increase assumption, or the applicable following graded rate future 
175.20 	salary increase assumption:
175.21 	(1) single rate future salary increase assumption

175.22
175.23	plan
	future salary
increase assumption
	
175.24	legislators retirement plan
		5.0%
	
175.25	judges retirement plan
		4.0 
	
175.26	Minneapolis Police Relief Association
		4.0
	
175.27	Fairmont Police Relief Association
		3.5
	
175.28
175.29	Minneapolis Fire Department Relief 
Association
		4.0
	
175.30	Virginia Fire Department Relief Association
		3.5
	
175.31
175.32	Bloomington Fire Department Relief 
Association
		4.0
	
175.33 	(2) modified single rate future salary increase assumption

175.34
175.35	plan
		future salary
increase assumption
	
175.36
175.37
175.38
175.39	Minneapolis employees 
retirement plan
		the prior calendar year amount increased 
first by 1.0198 percent to prior fiscal year 
date and then increased by 4.0 percent 
annually for each future year
	
175.40 	(3)(2) select and ultimate future salary increase assumption or graded rate future 
175.41 	salary increase assumption

176.1
176.2	plan
	future salary
increase assumption
	
176.3
176.4	general state employees retirement plan
	select calculation and 
assumption A
	
176.5	correctional state employees retirement plan
	assumption H
	
176.6	State Patrol retirement plan
	assumption G
	
176.7
176.8	general public employees retirement plan
	select calculation and 
assumption B
	
176.9	public employees police and fire fund retirement plan
	assumption C
	
176.10	local government correctional service retirement plan
	assumption G
	
176.11	teachers retirement plan
	assumption D
	
176.12	Duluth teachers retirement plan
	assumption E
	
176.13	St. Paul teachers retirement plan
	assumption F
	
176.14 	The select calculation is: during the 
176.15 	designated select period, a designated 
176.16 	percentage rate is multiplied by the result of 
176.17 	the designated integer minus T, where T is the 
176.18 	number of completed years of service, and is 
176.19 	added to the applicable future salary increase 
176.20 	assumption. The designated select period is 
176.21 	five years and the designated integer is five 
176.22 	for the general state employees retirement 
176.23 	plan and the general public employees 
176.24 	retirement plan. The designated select period 
176.25 	is ten years and the designated integer is ten 
176.26 	for all other retirement plans covered by 
176.27 	this clause. The designated percentage rate 
176.28 	is: (1) 0.2 percent for the correctional state 
176.29 	employees retirement plan, the State Patrol 
176.30 	retirement plan, the public employees police 
176.31 	and fire plan, and the local government 
176.32 	correctional service plan; (2) 0.6 percent 
176.33 	for the general state employees retirement 
176.34 	plan and the general public employees 
176.35 	retirement plan; and (3) 0.3 percent for the 
176.36 	teachers retirement plan, the Duluth Teachers 
176.37 	Retirement Fund Association, and the St. 
176.38 	Paul Teachers Retirement Fund Association. 
177.1 	The select calculation for the Duluth Teachers 
177.2 	Retirement Fund Association is 8.00 percent 
177.3 	per year for service years one through seven, 
177.4 	7.25 percent per year for service years seven 
177.5 	and eight, and 6.50 percent per year for 
177.6 	service years eight and nine.
177.7 	The ultimate future salary increase assumption is:

177.8	age
	A
	B
	C
	D
	E
	F
	G
	H
	
177.9	16
	5.95%
	5.95%
	11.00%
	7.70%
	8.00%
	6.90%
	7.7500%
	7.2500%
	
177.10	17
	5.90
	5.90
	11.00
	7.65
	8.00
	6.90
	7.7500
	7.2500
	
177.11	18
	5.85
	5.85
	11.00
	7.60
	8.00
	6.90
	7.7500
	7.2500
	
177.12	19
	5.80
	5.80
	11.00
	7.55
	8.00
	6.90
	7.7500
	7.2500
	
177.13	20
	5.75
	5.40
	11.00
	5.50
	6.90
	6.90
	7.7500
	7.2500
	
177.14	21
	5.75
	5.40
	11.00
	5.50
	6.90
	6.90
	7.1454
	6.6454
	
177.15	22
	5.75
	5.40
	10.50
	5.50
	6.90
	6.90
	7.0725
	6.5725
	
177.16	23
	5.75
	5.40
	10.00
	5.50
	6.85
	6.85
	7.0544
	6.5544
	
177.17	24
	5.75
	5.40
	9.50
	5.50
	6.80
	6.80
	7.0363
	6.5363
	
177.18	25
	5.75
	5.40
	9.00
	5.50
	6.75
	6.75
	7.0000
	6.5000
	
177.19	26
	5.75
	5.36
	8.70
	5.50
	6.70
	6.70
	7.0000
	6.5000
	
177.20	27
	5.75
	5.32
	8.40
	5.50
	6.65
	6.65
	7.0000
	6.5000
	
177.21	28
	5.75
	5.28
	8.10
	5.50
	6.60
	6.60
	7.0000
	6.5000
	
177.22	29
	5.75
	5.24
	7.80
	5.50
	6.55
	6.55
	7.0000
	6.5000
	
177.23	30
	5.75
	5.20
	7.50
	5.50
	6.50
	6.50
	7.0000
	6.5000
	
177.24	31
	5.75
	5.16
	7.30
	5.50
	6.45
	6.45
	7.0000
	6.5000
	
177.25	32
	5.75
	5.12
	7.10
	5.50
	6.40
	6.40
	7.0000
	6.5000
	
177.26	33
	5.75
	5.08
	6.90
	5.50
	6.35
	6.35
	7.0000
	6.5000
	
177.27	34
	5.75
	5.04
	6.70
	5.50
	6.30
	6.30
	7.0000
	6.5000
	
177.28	35
	5.75
	5.00
	6.50
	5.50
	6.25
	6.25
	7.0000
	6.5000
	
177.29	36
	5.75
	4.96
	6.30
	5.50
	6.20
	6.20
	6.9019
	6.4019
	
177.30	37
	5.75
	4.92
	6.10
	5.50
	6.15
	6.15
	6.8074
	6.3074
	
177.31	38
	5.75
	4.88
	5.90
	5.40
	6.10
	6.10
	6.7125
	6.2125
	
177.32	39
	5.75
	4.84
	5.70
	5.30
	6.05
	6.05
	6.6054
	6.1054
	
177.33	40
	5.75
	4.80
	5.50
	5.20
	6.00
	6.00
	6.5000
	6.0000
	
177.34	41
	5.75
	4.76
	5.40
	5.10
	5.90
	5.95
	6.3540
	5.8540
	
177.35	42
	5.75
	4.72
	5.30
	5.00
	5.80
	5.90
	6.2087
	5.7087
	
177.36	43
	5.65
	4.68
	5.20
	4.90
	5.70
	5.85
	6.0622
	5.5622
	
177.37	44
	5.55
	4.64
	5.10
	4.80
	5.60
	5.80
	5.9048
	5.4078
	
177.38	45
	5.45
	4.60
	5.00
	4.70
	5.50
	5.75
	5.7500
	5.2500
	
177.39	46
	5.35
	4.56
	4.95
	4.60
	5.40
	5.70
	5.6940
	5.1940
	
177.40	47
	5.25
	4.52
	4.90
	4.50
	5.30
	5.65
	5.6375
	5.1375
	
177.41	48
	5.15
	4.48
	4.85
	4.50
	5.20
	5.60
	5.5822
	5.0822
	
177.42	49
	5.05
	4.44
	4.80
	4.50
	5.10
	5.55
	5.5404
	5.0404
	
178.1	50
	4.95
	4.40
	4.75
	4.50
	5.00
	5.50
	5.5000
	5.0000
	
178.2	51
	4.85
	4.36
	4.75
	4.50
	4.90
	5.45
	5.4384
	4.9384
	
178.3	52
	4.75
	4.32
	4.75
	4.50
	4.80
	5.40
	5.3776
	4.8776
	
178.4	53
	4.65
	4.28
	4.75
	4.50
	4.70
	5.35
	5.3167
	4.8167
	
178.5	54
	4.55
	4.24
	4.75
	4.50
	4.60
	5.30
	5.2826
	4.7826
	
178.6	55
	4.45
	4.20
	4.75
	4.50
	4.50
	5.25
	5.2500
	4.7500
	
178.7	56
	4.35
	4.16
	4.75
	4.50
	4.40
	5.20
	5.2500
	4.7500
	
178.8	57
	4.25
	4.12
	4.75
	4.50
	4.30
	5.15
	5.2500
	4.7500
	
178.9	58
	4.25
	4.08
	4.75
	4.60
	4.20
	5.10
	5.2500
	4.7500
	
178.10	59
	4.25
	4.04
	4.75
	4.70
	4.10
	5.05
	5.2500
	4.7500
	
178.11	60
	4.25
	4.00
	4.75
	4.80
	4.00
	5.00
	5.2500
	4.7500
	
178.12	61
	4.25
	4.00
	4.75
	4.90
	3.90
	5.00
	5.2500
	4.7500
	
178.13	62
	4.25
	4.00
	4.75
	5.00
	3.80
	5.00
	5.2500
	4.7500
	
178.14	63
	4.25
	4.00
	4.75
	5.10
	3.70
	5.00
	5.2500
	4.7500
	
178.15	64
	4.25
	4.00
	4.75
	5.20
	3.60
	5.00
	5.2500
	4.7500
	
178.16	65
	4.25
	4.00
	4.75
	5.20
	3.50
	5.00
	5.2500
	4.7500
	
178.17	66
	4.25
	4.00
	4.75
	5.20
	3.50
	5.00
	5.2500
	4.7500
	
178.18	67
	4.25
	4.00
	4.75
	5.20
	3.50
	5.00
	5.2500
	4.7500
	
178.19	68
	4.25
	4.00
	4.75
	5.20
	3.50
	5.00
	5.2500
	4.7500
	
178.20	69
	4.25
	4.00
	4.75
	5.20
	3.50
	5.00
	5.2500
	4.7500
	
178.21	70
	4.25
	4.00
	4.75
	5.20
	3.50
	5.00
	5.2500
	4.7500
	
178.22	71
	4.25
	4.00
		5.20
					
178.23 	(c) Before July 2, 2010, the actuarial valuation must use the applicable following 
178.24 	payroll growth assumption for calculating the amortization requirement for the unfunded 
178.25 	actuarial accrued liability where the amortization retirement is calculated as a level 
178.26 	percentage of an increasing payroll:

178.27
178.28	plan
	payroll growth
assumption
	
178.29	general state employees retirement plan
		4.50%
	
178.30	correctional state employees retirement plan
		4.50
	
178.31	State Patrol retirement plan
		4.50
	
178.32	legislators retirement plan
		4.50
	
178.33	judges retirement plan
		4.00
	
178.34	general public employees retirement plan
		4.50
	
178.35	public employees police and fire retirement plan
		4.50
	
178.36
178.37	local government correctional service retirement 
plan
		4.50
	
178.38	teachers retirement plan
		4.50
	
178.39	Duluth teachers retirement plan
		4.50
	
178.40	St. Paul teachers retirement plan
		5.00
	
178.41 	(d) After July 1, 2010, the assumptions set forth in paragraphs (b) and (c) continue to 
178.42 	apply, unless a different salary assumption or a different payroll increase assumption:
179.1 	(1) has been proposed by the governing board of the applicable retirement plan;
179.2 	(2) is accompanied by the concurring recommendation of the actuary retained under 
179.3 	section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the 
179.4 	most recent actuarial valuation report if section 356.214 does not apply; and
179.5 	(3) has been approved or deemed approved under subdivision 18.

179.6 	Sec. 20. Minnesota Statutes 2009 Supplement, section 356.215, subdivision 11, 
179.7 	is amended to read:
179.8 		Subd. 11.Amortization contributions. (a) In addition to the exhibit indicating 
179.9 	the level normal cost, the actuarial valuation of the retirement plan must contain an 
179.10 	exhibit for financial reporting purposes indicating the additional annual contribution 
179.11 	sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit 
179.12 	for contribution determination purposes indicating the additional contribution sufficient 
179.13 	to amortize the unfunded actuarial accrued liability. For the retirement plans listed in 
179.14 	subdivision 8, paragraph (c), but excluding the MERF division of the Public Employees 
179.15 	Retirement Association, the additional contribution must be calculated on a level 
179.16 	percentage of covered payroll basis by the established date for full funding in effect when 
179.17 	the valuation is prepared, assuming annual payroll growth at the applicable percentage 
179.18 	rate set forth in subdivision 8, paragraph (c). For all other retirement plans and for the 
179.19 	MERF division of the Public Employees Retirement Association, the additional annual 
179.20 	contribution must be calculated on a level annual dollar amount basis. 
179.21 	(b) For any retirement plan other than the Minneapolis Employees Retirement Fund, 
179.22 	the general employeesa retirement plan of the Public Employees Retirement Association, 
179.23 	and the St. Paul Teachers Retirement Fund Association governed by paragraph (d), (e), 
179.24 	(f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions used 
179.25 	for calculating the actuarial accrued liability of the fund, a change in the benefit plan 
179.26 	governing annuities and benefits payable from the fund, a change in the actuarial cost 
179.27 	method used in calculating the actuarial accrued liability of all or a portion of the fund, or 
179.28 	a combination of the three, which change or changes by itself or by themselves without 
179.29 	inclusion of any other items of increase or decrease produce a net increase in the unfunded 
179.30 	actuarial accrued liability of the fund, the established date for full funding is the first 
179.31 	actuarial valuation date occurring after June 1, 2020.
179.32 	(c) For any retirement plan other than the Minneapolis Employees Retirement 
179.33 	Fund and the general employees retirement plan of the Public Employees Retirement 
179.34 	Association, if there has been a change in any or all of the actuarial assumptions used 
179.35 	for calculating the actuarial accrued liability of the fund, a change in the benefit plan 
180.1 	governing annuities and benefits payable from the fund, a change in the actuarial cost 
180.2 	method used in calculating the actuarial accrued liability of all or a portion of the fund, 
180.3 	or a combination of the three, and the change or changes, by itself or by themselves and 
180.4 	without inclusion of any other items of increase or decrease, produce a net increase in the 
180.5 	unfunded actuarial accrued liability in the fund, the established date for full funding must 
180.6 	be determined using the following procedure:
180.7 	(i) the unfunded actuarial accrued liability of the fund must be determined in 
180.8 	accordance with the plan provisions governing annuities and retirement benefits and the 
180.9 	actuarial assumptions in effect before an applicable change;
180.10 	(ii) the level annual dollar contribution or level percentage, whichever is applicable, 
180.11 	needed to amortize the unfunded actuarial accrued liability amount determined under item 
180.12 	(i) by the established date for full funding in effect before the change must be calculated 
180.13 	using the interest assumption specified in subdivision 8 in effect before the change;
180.14 	(iii) the unfunded actuarial accrued liability of the fund must be determined in 
180.15 	accordance with any new plan provisions governing annuities and benefits payable from 
180.16 	the fund and any new actuarial assumptions and the remaining plan provisions governing 
180.17 	annuities and benefits payable from the fund and actuarial assumptions in effect before 
180.18 	the change;
180.19 	(iv) the level annual dollar contribution or level percentage, whichever is applicable, 
180.20 	needed to amortize the difference between the unfunded actuarial accrued liability amount 
180.21 	calculated under item (i) and the unfunded actuarial accrued liability amount calculated 
180.22 	under item (iii) over a period of 30 years from the end of the plan year in which the 
180.23 	applicable change is effective must be calculated using the applicable interest assumption 
180.24 	specified in subdivision 8 in effect after any applicable change;
180.25 	(v) the level annual dollar or level percentage amortization contribution under item 
180.26 	(iv) must be added to the level annual dollar amortization contribution or level percentage 
180.27 	calculated under item (ii);
180.28 	(vi) the period in which the unfunded actuarial accrued liability amount determined 
180.29 	in item (iii) is amortized by the total level annual dollar or level percentage amortization 
180.30 	contribution computed under item (v) must be calculated using the interest assumption 
180.31 	specified in subdivision 8 in effect after any applicable change, rounded to the nearest 
180.32 	integral number of years, but not to exceed 30 years from the end of the plan year in 
180.33 	which the determination of the established date for full funding using the procedure set 
180.34 	forth in this clause is made and not to be less than the period of years beginning in the 
180.35 	plan year in which the determination of the established date for full funding using the 
181.1 	procedure set forth in this clause is made and ending by the date for full funding in effect 
181.2 	before the change; and
181.3 	(vii) the period determined under item (vi) must be added to the date as of which 
181.4 	the actuarial valuation was prepared and the date obtained is the new established date 
181.5 	for full funding.
181.6 	(d) For the Minneapolis Employees Retirement Fund MERF division of the Public 
181.7 	Employees Retirement Association, the established date for full funding is June 30, 2020
181.8 	2031.
181.9 	(e) For the general employees retirement plan of the Public Employees Retirement 
181.10 	Association, the established date for full funding is June 30, 2031.
181.11 	(f) For the Teachers Retirement Association, the established date for full funding is 
181.12 	June 30, 2037.
181.13 	(g) For the correctional state employees retirement plan of the Minnesota State 
181.14 	Retirement System, the established date for full funding is June 30, 2038.
181.15 	(h) For the judges retirement plan, the established date for full funding is June 
181.16 	30, 2038.
181.17 	(i) For the public employees police and fire retirement plan, the established date 
181.18 	for full funding is June 30, 2038.
181.19 	(j) For the St. Paul Teachers Retirement Fund Association, the established date for 
181.20 	full funding is June 30 of the 25th year from the valuation date. In addition to other 
181.21 	requirements of this chapter, the annual actuarial valuation shall must contain an exhibit 
181.22 	indicating the funded ratio and the deficiency or sufficiency in annual contributions when 
181.23 	comparing liabilities to the market value of the assets of the fund as of the close of the 
181.24 	most recent fiscal year.
181.25 	(k) For the retirement plans for which the annual actuarial valuation indicates an 
181.26 	excess of valuation assets over the actuarial accrued liability, the valuation assets in 
181.27 	excess of the actuarial accrued liability must be recognized as a reduction in the current 
181.28 	contribution requirements by an amount equal to the amortization of the excess expressed 
181.29 	as a level percentage of pay over a 30-year period beginning anew with each annual 
181.30 	actuarial valuation of the plan.

181.31 	Sec. 21. Minnesota Statutes 2008, section 422A.101, subdivision 3, is amended to read:
181.32 		Subd. 3.State contributions. (a) Subject to the limitation set forth in paragraph 
181.33 	(c), the state shall pay to the MERF division account of the Public Employees Retirement 
181.34 	Association with respect to the former Minneapolis Employees Retirement Fund annually 
181.35 	an amount equal to the amount calculated under paragraph (b).
182.1 	(b) The payment amount is an amount equal to the financial requirements of the 
182.2 	Minneapolis Employees Retirement FundMERF division of the Public Employees 
182.3 	Retirement Association reported in the actuarial valuation of the fundgeneral employees 
182.4 	retirement plan of the Public Employees Retirement Association prepared by the actuary 
182.5 	retained under section 356.214 consistent with section 356.215 for the most recent year 
182.6 	but based on a target date for full amortization of the unfunded actuarial accrued liabilities 
182.7 	by June 30, 2020 2031, less the amount of employee contributions required under section 
182.8 	422A.10 353.50, subdivision 7, paragraph (b), and the amount of employer contributions 
182.9 	required under subdivisions 1a, 2, and 2a section 353.50, subdivision 7, paragraphs (c) 
182.10 	and (d). Payments shallmust be made September 15 annually. 
182.11 	(c) The annual state contribution under this subdivision may not exceed $9,000,000, 
182.12 	plus the cost of the annual supplemental benefit determined under Minnesota Statutes 
182.13 	2008, section 356.43, through June 30, 2012, and may not exceed $9,000,000, plus the 
182.14 	cost of the annual supplemental benefit determined under Minnesota Statutes 2008, section 
182.15 	356.43, plus $15,000,000 annually after June 30, 2012, and until June 30, 2031. 
182.16 	(d) Annually and after June 30, 2012, if the amount determined under paragraph 
182.17 	(b) exceeds $9,000,000 the applicable maximum amount specified in paragraph (c), 
182.18 	the excess must be allocated to and paid to the fund by the employers identified in 
182.19 	Minnesota Statutes 2008, section 422A.101, subdivisions 1a and, 2, other than units of 
182.20 	metropolitan government and 2a. Each employer's share of the excess is proportionate 
182.21 	to the employer's share of the fund's unfunded actuarial accrued liability as disclosed in 
182.22 	the annual actuarial valuation prepared by the actuary retained under section 356.214
182.23 	compared to the total unfunded actuarial accrued liability as of July 1, 2009, attributed 
182.24 	to all employers identified in Minnesota Statutes 2008, section 422A.101, subdivisions 
182.25 	1a and 2, other than units of metropolitan government. Payments must be made in equal 
182.26 	installments as set forth in paragraph (b).
182.27 	(e) State contributions under this section end on September 15, 2031, or on 
182.28 	September 1 following the first date on which the current assets of the MERF division 
182.29 	of the Public Employees Retirement Association equal or exceed the actuarial accrued 
182.30 	liability of the MERF division of the Public Employees Retirement Association, 
182.31 	whichever occurs earlier.

182.32 	Sec. 22. Minnesota Statutes 2008, section 422A.26, is amended to read:
182.33 	422A.26 COVERAGE BY THE PUBLIC EMPLOYEES RETIREMENT 
182.34 	ASSOCIATION.
183.1 	Notwithstanding section 422A.09, or any other law to the contrary, any person 
183.2 	whose employment by, or assumption of a position as an appointed or elected officer 
183.3 	of, the city of Minneapolis, any of the boards, departments, or commissions operated 
183.4 	as a department of the city of Minneapolis or independently if financed in whole or in 
183.5 	part by funds of the city of Minneapolis, the Metropolitan Airports Commission, the 
183.6 	former Minneapolis Employees Retirement Fund, or Special School District Number 1 if 
183.7 	the person is not a member of the Minneapolis Teachers Retirement Fund Association 
183.8 	by virtue of that employment or position, initially commences on or after July 1, 1979 
183.9 	shall be, is a member of the general employees retirement plan of the Public Employees 
183.10 	Retirement Association unless excluded from membership pursuant tounder section 
183.11 	353.01, subdivision 2b. In no event shall there be any new members of the contributing 
183.12 	class of the Minneapolis employees fund on or after July 1, 1979.  

183.13 	Sec. 23. JULY 1, 2010, MERF DIVISION ACTUARIAL VALUATION 
183.14 	ASSUMPTIONS.
 183.15 	The approved actuary retained by the Minneapolis Employees Retirement Fund shall 
183.16 	compare the actuarial assumptions to be used for the July 1, 2010, actuarial valuation of 
183.17 	the general employees retirement plan of the Public Employees Retirement Association 
183.18 	with the actuarial assumptions used to prepare the July 1, 2009, actuarial valuation of the 
183.19 	Minneapolis Employees Retirement Fund and, on or before July 1, 2010, shall recommend 
183.20 	to the approved actuary retained by the Public Employees Retirement Association and to 
183.21 	the Legislative Commission on Pensions and Retirement the actuarial assumptions that 
183.22 	the actuary believes would be appropriate for the MERF division portion of the actuarial 
183.23 	valuation of the general employees retirement plan of the Public Employees Retirement 
183.24 	Association. Any actuarial assumption changes related to the MERF division must be 
183.25 	approved under Minnesota Statutes, section 356.215, subdivision 18.

183.26 	Sec. 24. MINNEAPOLIS MUNICIPAL RETIREMENT ASSOCIATION.
 183.27 	(a) The administrative consolidation of the former Minneapolis Employees 
183.28 	Retirement Fund into the general employees retirement plan of the Public Employees 
183.29 	Retirement Association and the merger of the MERF division of the Public Employees 
183.30 	Retirement Association into the general employees retirement plan of the Public 
183.31 	Employees Retirement Association does not affect the function of the Minneapolis 
183.32 	Municipal Retirement Association, a nonprofit corporation, to monitor the administration 
183.33 	of the retirement coverage for former members of the former Minneapolis Employees 
183.34 	Retirement Fund.
184.1 	(b) Nothing in this article entitles the Minneapolis Municipal Retirement Association 
184.2 	to receive any revenue derived from taxes or obligates the Public Employees Retirement 
184.3 	Association to undertake any special duties with respect to the corporation.

184.4 	Sec. 25. TRANSFER OF MERF EMPLOYEES.
 184.5 	(a) Unless the employee elects the severance pay option under paragraph (c), 
184.6 	full-time employees of the Minneapolis Employees Retirement Fund first employed 
184.7 	before June 30, 2008, and employed full time by the Minneapolis Employees Retirement 
184.8 	Fund on June 29, 2010, with the employment title of benefits coordinator, are transferred 
184.9 	to employment by the city of Minneapolis on July 1, 2010. The chief human relations 
184.10 	official of the city of Minneapolis shall place the transferred employee in an appropriate 
184.11 	employment position based on the employee's education and employment experience. 
184.12 	Transferred employees must have their accumulated, but unused, vacation and sick leave 
184.13 	balances as of June 30, 2010, posted to the individual accounts with the new employer. 
184.14 	The transferred employees must receive length of service credit for time served with the 
184.15 	Minneapolis Employees Retirement Fund. The transferred employee must be given the 
184.16 	opportunity as of the date of transfer to be covered for all health and other insurance 
184.17 	benefits offered by the new employer. Upon the transfer of the employee, the Minneapolis 
184.18 	Employees Retirement Fund shall transfer assets to the city of Minneapolis equal to the 
184.19 	present value of any accumulated unused vacation or sick leave balances as of the date 
184.20 	of transfer.
184.21 	(b) Unless the employee elects the severance pay option under paragraph (c), 
184.22 	full-time employees of the Minneapolis Employees Retirement Fund first employed before 
184.23 	June 30, 2008, and employed full time by the Minneapolis Employees Retirement Fund 
184.24 	on June 29, 2010, with the employment title of accounting manager or accountant II are 
184.25 	transferred to employment by the Public Employees Retirement Association on July 1, 
184.26 	2010. The chief human relations official of the Public Employees Retirement Association 
184.27 	shall place the transferred employee in an appropriate employment position based on the 
184.28 	employee's education and employment experience. Transferred employees must have 
184.29 	their accumulated, but unused, vacation and sick leave balances as of June 30, 2010, 
184.30 	posted to the individual accounts with the new employer. The transferred employees 
184.31 	must receive length of service credit for time served with the Minneapolis Employees 
184.32 	Retirement Fund. The transferred employee must be given the opportunity as of the 
184.33 	date of transfer to be covered for all health and other insurance benefits offered by the 
184.34 	new employer. Upon the transfer of the employee, the executive director of the Public 
184.35 	Employees Retirement Association shall deduct from any assets transferred under section 
185.1 	353.50 an amount equal to the present value of any accumulated unused vacation or sick 
185.2 	leave balances as of the date of transfer.
185.3 	(c) An employee covered by paragraph (a) or (b) who elects not to transfer to the 
185.4 	new employer unit is granted severance pay in an amount equivalent to one year of salary 
185.5 	based on the last annual salary rate received by the employee. The election must be 
185.6 	made prior to June 30, 2010, and is irrevocable. The severance pay is payable from the 
185.7 	Minneapolis Employees Retirement Fund on June 30, 2010.

185.8 	Sec. 26. MINNEAPOLIS EMPLOYEES RETIREMENT FUND.
 185.9 	$10,000,000 in fiscal year 2010 is appropriated to the Minneapolis employees 
185.10 	retirement fund, and is payable to the Minneapolis employees retirement fund on or before 
185.11 	June 29, 2010. This is a onetime appropriation, and is in addition to the amounts paid by 
185.12 	the state in fiscal year 2010 under Minnesota Statutes, section 422A.101, subdivision 2.

185.13 	Sec. 27. REVISOR'S INSTRUCTION.
 185.14 	In the next and future editions of Minnesota Statutes, the revisor of statutes shall 
185.15 	renumber Minnesota Statutes, section 422A.101, subdivision 3, as Minnesota Statutes, 
185.16 	section 353.505, and shall renumber Minnesota Statutes, section 422A.26, as Minnesota 
185.17 	Statutes, section 353.855. The revisor of statutes shall make conforming changes in 
185.18 	Minnesota Statutes and Minnesota Rules consistent with the renumbering.

185.19 	Sec. 28.  REPEALER.
 185.20 	Minnesota Statutes 2008, sections 13.63, subdivision 1; 69.011, subdivision 2a; 
185.21 	356.43; 422A.01, subdivisions 1, 2, 3, 4, 4a, 5, 6, 7, 8, 9, 10, 11, 12, 13a, 17, and 18; 
185.22 	422A.02; 422A.03; 422A.04; 422A.05, subdivisions 1, 2a, 2b, 2c, 2d, 2e, 2f, 5, 6, 
185.23 	and 8; 422A.06, subdivisions 1, 2, 3, 5, 6, and 7; 422A.08, subdivision 1; 422A.09; 
185.24 	422A.10; 422A.101, subdivisions 1, 1a, 2, and 2a; 422A.11; 422A.12; 422A.13; 422A.14, 
185.25 	subdivision 1; 422A.15; 422A.151; 422A.155; 422A.156; 422A.16, subdivisions 1, 2, 3, 
185.26 	4, 5, 6, 7, 8, 9, and 10; 422A.17; 422A.18, subdivisions 1, 2, 3, 4, 5, and 7; 422A.19; 
185.27 	422A.20; 422A.21; 422A.22, subdivisions 1, 3, 4, and 6; 422A.23, subdivisions 1, 2, 5, 6, 
185.28 	7, 8, 9, 10, 11, and 12; 422A.231; 422A.24; and 422A.25, are repealed.
185.29 	Minnesota Statutes 2009 Supplement, sections 422A.06, subdivision 8; and 
185.30 	422A.08, subdivision 5, are repealed.

185.31 	Sec. 29. EFFECTIVE DATE.
 185.32 	(a) Sections 1 to 25, 27, and 28 are effective June 30, 2010.
186.1 	(b) Section 26 is effective the day following final enactment.

186.2 	ARTICLE 13
186.3 	CONFORMING CHANGES RELATED TO THE MERF 
186.4 	ADMINISTRATIVE CONSOLIDATION

186.5 	Section 1. Minnesota Statutes 2009 Supplement, section 6.67, is amended to read:
186.6 	6.67 PUBLIC ACCOUNTANTS; REPORT OF POSSIBLE MISCONDUCT.
186.7 	Whenever a public accountant in the course of auditing the books and affairs of a 
186.8 	political subdivision or a local public pension plan governed by section 69.77, sections 
186.9 	69.771 to 69.775, or chapter 354A, 422A, 423B, 423C, or 424A, discovers evidence 
186.10 	pointing to nonfeasance, misfeasance, or malfeasance, on the part of an officer or 
186.11 	employee in the conduct of duties and affairs, the public accountant shall promptly make 
186.12 	a report of such discovery to the state auditor and the county attorney of the county in 
186.13 	which the governmental unit is situated and the public accountant shall also furnish a 
186.14 	copy of the report of audit upon completion to said officers. The county attorney shall 
186.15 	act on such report in the same manner as required by law for reports made to the county 
186.16 	attorney by the state auditor.

186.17 	Sec. 2. Minnesota Statutes 2008, section 11A.23, subdivision 4, is amended to read:
186.18 		Subd. 4.Covered retirement funds and plans. The provisions of this section shall
186.19 	apply to the following retirement funds and plans:
186.20 	(1) Board of Trustees of the Minnesota State Colleges and Universities supplemental 
186.21 	retirement plan established under chapter 354C;
186.22 	(2) state employees retirement fund established pursuant to chapter 352;
186.23 	(3) correctional employees retirement plan established pursuant to chapter 352;
186.24 	(4) State Patrol retirement fund established pursuant to chapter 352B;
186.25 	(5) unclassified employees retirement plan established pursuant to chapter 352D;
186.26 	(6) public general employees retirement fund established pursuant to chapter 353;
186.27 	(7) public employees police and fire fund established pursuant to chapter 353;
186.28 	(8) teachers' retirement fund established pursuant to chapter 354;
186.29 	(9) judges' retirement fund established pursuant to chapter 490; and
186.30 	(10) any other funds required by law to be invested by the board.

186.31 	Sec. 3. Minnesota Statutes 2008, section 13D.01, subdivision 1, is amended to read:
186.32 		Subdivision 1.In executive branch, local government. All meetings, including 
186.33 	executive sessions, must be open to the public
187.1 	(a) of a state
187.2 	(1) agency,
187.3 	(2) board,
187.4 	(3) commission, or
187.5 	(4) department,
187.6 	when required or permitted by law to transact public business in a meeting;
187.7 	(b) of the governing body of a
187.8 	(1) school district however organized,
187.9 	(2) unorganized territory,
187.10 	(3) county,
187.11 	(4) statutory or home rule charter city,
187.12 	(5) town, or
187.13 	(6) other public body;
187.14 	(c) of any
187.15 	(1) committee,
187.16 	(2) subcommittee,
187.17 	(3) board,
187.18 	(4) department, or
187.19 	(5) commission,
187.20 	of a public body; and
187.21 	(d) of the governing body or a committee of:
187.22 	(1) a statewide public pension plan defined in section 356A.01, subdivision 24; or  
187.23 	(2) a local public pension plan governed by section 69.77, sections 69.771 to 69.775, 
187.24 	or chapter 354A, 422A, or 423B.  

187.25 	Sec. 4. Minnesota Statutes 2008, section 43A.17, subdivision 9, is amended to read:
187.26 		Subd. 9.Political subdivision compensation limit. (a) The salary and the value of 
187.27 	all other forms of compensation of a person employed by a political subdivision of this 
187.28 	state, excluding a school district, or employed under section 422A.03 may not exceed 110 
187.29 	percent of the salary of the governor as set under section 15A.082, except as provided 
187.30 	in this subdivision. For purposes of this subdivision, "political subdivision of this state" 
187.31 	includes a statutory or home rule charter city, county, town, metropolitan or regional 
187.32 	agency, or other political subdivision, but does not include a hospital, clinic, or health 
187.33 	maintenance organization owned by such a governmental unit.
187.34 	(b) Beginning in 2006, the limit in paragraph (a) shall must be adjusted annually in 
187.35 	January. The limit shall must equal the limit for the prior year increased by the percentage 
188.1 	increase, if any, in the Consumer Price Index for all-urban consumers from October of the 
188.2 	second prior year to October of the immediately prior year.
188.3 	(c) Deferred compensation and payroll allocations to purchase an individual annuity 
188.4 	contract for an employee are included in determining the employee's salary. Other forms of 
188.5 	compensation which shall must be included to determine an employee's total compensation 
188.6 	are all other direct and indirect items of compensation which are not specifically excluded 
188.7 	by this subdivision. Other forms of compensation which shall must not be included in a 
188.8 	determination of an employee's total compensation for the purposes of this subdivision are:
188.9 	(1) employee benefits that are also provided for the majority of all other full-time 
188.10 	employees of the political subdivision, vacation and sick leave allowances, health and 
188.11 	dental insurance, disability insurance, term life insurance, and pension benefits or like 
188.12 	benefits the cost of which is borne by the employee or which is not subject to tax as 
188.13 	income under the Internal Revenue Code of 1986;
188.14 	(2) dues paid to organizations that are of a civic, professional, educational, or 
188.15 	governmental nature; and
188.16 	(3) reimbursement for actual expenses incurred by the employee which the 
188.17 	governing body determines to be directly related to the performance of job responsibilities, 
188.18 	including any relocation expenses paid during the initial year of employment.
188.19 	The value of other forms of compensation shall be is the annual cost to the political 
188.20 	subdivision for the provision of the compensation.
188.21 	(d) The salary of a medical doctor or doctor of osteopathy occupying a position that 
188.22 	the governing body of the political subdivision has determined requires an M.D. or D.O. 
188.23 	degree is excluded from the limitation in this subdivision.
188.24 	(e) The commissioner may increase the limitation in this subdivision for a position 
188.25 	that the commissioner has determined requires special expertise necessitating a higher 
188.26 	salary to attract or retain a qualified person. The commissioner shall review each proposed 
188.27 	increase giving due consideration to salary rates paid to other persons with similar 
188.28 	responsibilities in the state and nation. The commissioner may not increase the limitation 
188.29 	until the commissioner has presented the proposed increase to the Legislative Coordinating 
188.30 	Commission and received the commission's recommendation on it. The recommendation 
188.31 	is advisory only. If the commission does not give its recommendation on a proposed 
188.32 	increase within 30 days from its receipt of the proposal, the commission is deemed to have 
188.33 	made no recommendation. If the commissioner grants or granted an increase under this 
188.34 	paragraph, the new limitation shall must be adjusted beginning in August 2005 and in each 
188.35 	subsequent calendar year in January by the percentage increase equal to the percentage 
189.1 	increase, if any, in the Consumer Price Index for all-urban consumers from October of the 
189.2 	second prior year to October of the immediately prior year.

189.3 	Sec. 5. Minnesota Statutes 2008, section 43A.316, subdivision 8, is amended to read:
189.4 		Subd. 8.Continuation of coverage. (a) A former employee of an employer 
189.5 	participating in the program who is receiving a public pension disability benefit or an 
189.6 	annuity or has met the age and service requirements necessary to receive an annuity under 
189.7 	chapter 353, 353C, 354, 354A, 356, 422A, 423, 423A, or 424, or Minnesota Statutes 
189.8 	2008, chapter 422A, and the former employee's dependents, are eligible to participate in 
189.9 	the program. This participation is at the person's expense unless a collective bargaining 
189.10 	agreement or personnel policy provides otherwise. Premiums for these participants must 
189.11 	be established by the commissioner.
189.12 	The commissioner may provide policy exclusions for preexisting conditions 
189.13 	only when there is a break in coverage between a participant's coverage under the 
189.14 	employment-based group insurance program and the participant's coverage under this 
189.15 	section. An employer shall notify an employee of the option to participate under this 
189.16 	paragraph no later than the effective date of retirement. The retired employee or the 
189.17 	employer of a participating group on behalf of a current or retired employee shall notify 
189.18 	the commissioner within 30 days of the effective date of retirement of intent to participate 
189.19 	in the program according to the rules established by the commissioner.
189.20 	(b) The spouse of a deceased employee or former employee may purchase the 
189.21 	benefits provided at premiums established by the commissioner if the spouse was a 
189.22 	dependent under the employee's or former employee's coverage under this section at the 
189.23 	time of the death. The spouse remains eligible to participate in the program as long as 
189.24 	the group that included the deceased employee or former employee participates in the 
189.25 	program. Coverage under this clause must be coordinated with relevant insurance benefits 
189.26 	provided through the federally sponsored Medicare program.
189.27 	(c) The program benefits must continue in the event of strike permitted by section 
189.28 	179A.18, if the exclusive representative chooses to have coverage continue and the 
189.29 	employee pays the total monthly premiums when due. 
189.30 	(d) A participant who discontinues coverage may not reenroll.
189.31 	Persons participating under these paragraphs shall make appropriate premium 
189.32 	payments in the time and manner established by the commissioner.

189.33 	Sec. 6. Minnesota Statutes 2009 Supplement, section 69.011, subdivision 1, is 
189.34 	amended to read:
190.1 		Subdivision 1.Definitions. Unless the language or context clearly indicates that 
190.2 	a different meaning is intended, the following words and terms, for the purposes of this 
190.3 	chapter and chapters 423, 423A, 424 and 424A, have the meanings ascribed to them:
190.4 	(a) "Commissioner" means the commissioner of revenue.
190.5 	(b) "Municipality" means:
190.6 	(1) a home rule charter or statutory city;
190.7 	(2) an organized town;
190.8 	(3) a park district subject to chapter 398;
190.9 	(4) the University of Minnesota;
190.10 	(5) for purposes of the fire state aid program only, an American Indian tribal 
190.11 	government entity located within a federally recognized American Indian reservation;
190.12 	(6) for purposes of the police state aid program only, an American Indian tribal 
190.13 	government with a tribal police department which exercises state arrest powers under 
190.14 	section 626.90, 626.91, 626.92, or 626.93; 
190.15 	(7) for purposes of the police state aid program only, the Metropolitan Airports 
190.16 	Commission with respect to peace officers covered under chapter 422A; and
190.17 	(8) for purposes of the police state aid program only, the Department of Natural 
190.18 	Resources and the Department of Public Safety with respect to peace officers covered 
190.19 	under chapter 352B.
190.20 	(c) "Minnesota Firetown Premium Report" means a form prescribed by the 
190.21 	commissioner containing space for reporting by insurers of fire, lightning, sprinkler 
190.22 	leakage and extended coverage premiums received upon risks located or to be performed 
190.23 	in this state less return premiums and dividends.
190.24 	(d) "Firetown" means the area serviced by any municipality having a qualified fire 
190.25 	department or a qualified incorporated fire department having a subsidiary volunteer 
190.26 	firefighters' relief association.
190.27 	(e) "Market value" means latest available market value of all property in a taxing 
190.28 	jurisdiction, whether the property is subject to taxation, or exempt from ad valorem 
190.29 	taxation obtained from information which appears on abstracts filed with the commissioner 
190.30 	of revenue or equalized by the State Board of Equalization.
190.31 	(f) "Minnesota Aid to Police Premium Report" means a form prescribed by the 
190.32 	commissioner for reporting by each fire and casualty insurer of all premiums received 
190.33 	upon direct business received by it in this state, or by its agents for it, in cash or otherwise, 
190.34 	during the preceding calendar year, with reference to insurance written for insuring against 
190.35 	the perils contained in auto insurance coverages as reported in the Minnesota business 
190.36 	schedule of the annual financial statement which each insurer is required to file with 
191.1 	the commissioner in accordance with the governing laws or rules less return premiums 
191.2 	and dividends.
191.3 	(g) "Peace officer" means any person:
191.4 	(1) whose primary source of income derived from wages is from direct employment 
191.5 	by a municipality or county as a law enforcement officer on a full-time basis of not less 
191.6 	than 30 hours per week;
191.7 	(2) who has been employed for a minimum of six months prior to December 31 
191.8 	preceding the date of the current year's certification under subdivision 2, clause (b);
191.9 	(3) who is sworn to enforce the general criminal laws of the state and local 
191.10 	ordinances;
191.11 	(4) who is licensed by the Peace Officers Standards and Training Board and is 
191.12 	authorized to arrest with a warrant; and
191.13 	(5) who is a member of a local police relief association to which section 69.77 
191.14 	applies the Minneapolis Police Relief Association, the State Patrol retirement plan, or the 
191.15 	public employees police and fire fund, or the Minneapolis Employees Retirement Fund. 
191.16 	(h) "Full-time equivalent number of peace officers providing contract service" means 
191.17 	the integral or fractional number of peace officers which would be necessary to provide 
191.18 	the contract service if all peace officers providing service were employed on a full-time 
191.19 	basis as defined by the employing unit and the municipality receiving the contract service.
191.20 	(i) "Retirement benefits other than a service pension" means any disbursement 
191.21 	authorized under section 424A.05, subdivision 3, clauses (2) and (3). 
191.22 	(j) "Municipal clerk, municipal clerk-treasurer, or county auditor" means the person 
191.23 	who was elected or appointed to the specified position or, in the absence of the person, 
191.24 	another person who is designated by the applicable governing body. In a park district, 
191.25 	the clerk is the secretary of the board of park district commissioners. In the case of the 
191.26 	University of Minnesota, the clerk is that official designated by the Board of Regents. 
191.27 	For the Metropolitan Airports Commission, the clerk is the person designated by the 
191.28 	commission. For the Department of Natural Resources or the Department of Public Safety, 
191.29 	the clerk is the respective commissioner. For a tribal police department which exercises 
191.30 	state arrest powers under section 626.90, 626.91, 626.92, or 626.93, the clerk is the person 
191.31 	designated by the applicable American Indian tribal government. 
191.32 	(k) "Voluntary statewide lump-sum volunteer firefighter retirement plan" means the 
191.33 	retirement plan established by chapter 353G.

191.34 	Sec. 7. Minnesota Statutes 2008, section 69.021, subdivision 10, is amended to read:
192.1 		Subd. 10.Reduction in police state aid apportionment. (a) The commissioner of 
192.2 	revenue shall reduce the apportionment of police state aid under subdivisions 5, paragraph 
192.3 	(b), 6, and 7a, for eligible employer units by any excess police state aid.
192.4 	(b)  "Excess police state aid" is:
192.5 	(1) for counties and for municipalities in which police retirement coverage is 
192.6 	provided wholly by the public employees police and fire fund and all police officers are 
192.7 	members of the plan governed by sections 353.63 to 353.657, the amount in excess of the 
192.8 	employer's total prior calendar year obligation as defined in paragraph (c), as certified by 
192.9 	the executive director of the Public Employees Retirement Association; 
192.10 	(2) for municipalities in which police retirement coverage is provided in part by the 
192.11 	public employees police and fire fund governed by sections 353.63 to 353.657 and in 
192.12 	part by a local police consolidation account governed by chapter 353A, and established 
192.13 	before March 2, 1999, for which the municipality declined merger under section 353.665, 
192.14 	subdivision 1, or established after March 1, 1999, the amount in excess of the employer's 
192.15 	total prior calendar year obligation as defined in paragraph (c), plus the amount of the 
192.16 	employer's total prior calendar year obligation under section 353A.09, subdivision 5, 
192.17 	paragraphs (a) and (b), as certified by the executive director of the Public Employees 
192.18 	Retirement Association; 
192.19 	(3)  for municipalities in which police retirement coverage is provided by the public 
192.20 	employees police and fire plan governed by sections 353.63 to 353.657, in which police 
192.21 	retirement coverage was provided by a police consolidation account under chapter 
192.22 	353A before July 1, 1999, and for which the municipality has an additional municipal 
192.23 	contribution under section 353.665, subdivision 8, paragraph (b), the amount in excess of 
192.24 	the employer's total prior calendar year obligation as defined in paragraph (c), plus the 
192.25 	amount of any additional municipal contribution under section 353.665, subdivision 8, 
192.26 	paragraph (b), until the year 2010, as certified by the executive director of the Public 
192.27 	Employees Retirement Association; 
192.28 	(4) for municipalities in which police retirement coverage is provided in part by the 
192.29 	public employees police and fire fund governed by sections 353.63 to 353.657 and in part 
192.30 	by a local police relief association governed by sections 69.77 and 423A.01, the amount 
192.31 	in excess of the employer's total prior calendar year obligation as defined in paragraph 
192.32 	(c), as certified by the executive director of the public employees retirement association, 
192.33 	plus the amount of the financial requirements of the relief association certified to the 
192.34 	applicable municipality during the prior calendar year under section 69.77, subdivisions 4 
192.35 	and 5, reduced by the amount of member contributions deducted from the covered salary 
193.1 	of the relief association during the prior calendar year under section 69.77, subdivision 3, 
193.2 	as certified by the chief administrative officer of the applicable municipality; 
193.3 	(5) for the Metropolitan Airports Commission, if there are police officers hired 
193.4 	before July 1, 1978, with retirement coverage by the Minneapolis Employees Retirement 
193.5 	Fund remaining, the amount in excess of the commission's total prior calendar year 
193.6 	obligation as defined in paragraph (c), as certified by the executive director of the Public 
193.7 	Employees Retirement Association, plus the amount determined by expressing the 
193.8 	commission's total prior calendar year contribution to the Minneapolis Employees 
193.9 	Retirement Fund under section 422A.101, subdivisions 2 and 2a, as a percentage of 
193.10 	the commission's total prior calendar year covered payroll for commission employees 
193.11 	covered by the Minneapolis Employees Retirement Fund and applying that percentage 
193.12 	to the commission's total prior calendar year covered payroll for commission police 
193.13 	officers covered by the Minneapolis Employees Retirement Fund, as certified by the chief 
193.14 	administrative officer of the Metropolitan Airports Commission; and 
193.15 	(6) for the Department of Natural Resources and for the Department of Public 
193.16 	Safety, the amount in excess of the employer's total prior calendar year obligation under 
193.17 	section 352B.02, subdivision 1c, for plan members who are peace officers under section 
193.18 	69.011, subdivision 1, clause (g), as certified by the executive director of the Minnesota 
193.19 	State Retirement System. 
193.20 	(c) The employer's total prior calendar year obligation with respect to the public 
193.21 	employees police and fire plan is the total prior calendar year obligation under section 
193.22 	353.65, subdivision 3, for police officers as defined in section 353.64, subdivision 2, 
193.23 	and the actual total prior calendar year obligation under section 353.65, subdivision 3, 
193.24 	for firefighters, as defined in section 353.64, subdivision 3, but not to exceed for those 
193.25 	firefighters the applicable following amounts: 

193.26		Municipality
	Maximum Amount

193.27		Albert Lea
	$54,157.01
		
193.28		Anoka
	10,399.31
		
193.29		Apple Valley
	5,442.44
		
193.30		Austin
	49,864.73
		
193.31		Bemidji
	27,671.38
		
193.32		Brooklyn Center
	6,605.92
		
193.33		Brooklyn Park
	24,002.26
		
193.34		Burnsville
	15,956.00
		
193.35		Cloquet
	4,260.49
		
193.36		Coon Rapids
	39,920.00
		
193.37		Cottage Grove
	8,588.48
		
193.38		Crystal
	5,855.00
		
194.1		East Grand Forks
	51,009.88
		
194.2		Edina
	32,251.00
		
194.3		Elk River
	5,216.55
		
194.4		Ely
	13,584.16
		
194.5		Eveleth
	16,288.27
		
194.6		Fergus Falls
	6,742.00
		
194.7		Fridley
	33,420.64
		
194.8		Golden Valley
	11,744.61
		
194.9		Hastings
	16,561.00
		
194.10		Hopkins
	4,324.23
		
194.11		International Falls
	14,400.69
		
194.12		Lakeville
	782.35
		
194.13		Lino Lakes
	5,324.00
		
194.14		Little Falls
	7,889.41
		
194.15		Maple Grove
	6,707.54
		
194.16		Maplewood
	8,476.69
		
194.17		Minnetonka
	10,403.00
		
194.18		Montevideo
	1,307.66
		
194.19		Moorhead
	68,069.26
		
194.20		New Hope
	6,739.72
		
194.21		North St. Paul
	4,241.14
		
194.22		Northfield
	770.63
		
194.23		Owatonna
	37,292.67
		
194.24		Plymouth
	6,754.71
		
194.25		Red Wing
	3,504.01
		
194.26		Richfield
	53,757.96
		
194.27		RosemontRosemount
	1,712.55
		
194.28		Roseville
	9,854.51
		
194.29		St. Anthony
	33,055.00
		
194.30		St. Louis Park
	53,643.11
		
194.31		Thief River Falls
	28,365.04
		
194.32		Virginia
	31,164.46
		
194.33		Waseca
	11,135.17
		
194.34		West St. Paul
	15,707.20
		
194.35		White Bear Lake
	6,521.04
		
194.36		Woodbury
	3,613.00
		
194.37		any other municipality
	0.00
		
194.38 	(d) The total amount of excess police state aid must be deposited in the excess 
194.39 	police state-aid account in the general fund, administered and distributed as provided 
194.40 	in subdivision 11.

195.1 	Sec. 8. Minnesota Statutes 2009 Supplement, section 69.031, subdivision 5, is 
195.2 	amended to read:
195.3 		Subd. 5.Deposit of state aid. (a) If the municipality or the independent nonprofit 
195.4 	firefighting corporation is covered by the voluntary statewide lump-sum volunteer 
195.5 	firefighter retirement plan under chapter 353G, the executive director shall credit the fire 
195.6 	state aid against future municipal contribution requirements under section 353G.08 and 
195.7 	shall notify the municipality or independent nonprofit firefighting corporation of the fire 
195.8 	state aid so credited at least annually. If the municipality or the independent nonprofit 
195.9 	firefighting corporation is not covered by the voluntary statewide lump-sum volunteer 
195.10 	firefighter retirement plan, the municipal treasurer shall, within 30 days after receipt, 
195.11 	transmit the fire state aid to the treasurer of the duly incorporated firefighters' relief 
195.12 	association if there is one organized and the association has filed a financial report with the 
195.13 	municipality. If the relief association has not filed a financial report with the municipality, 
195.14 	the municipal treasurer shall delay transmission of the fire state aid to the relief association 
195.15 	until the complete financial report is filed. If the municipality or independent nonprofit 
195.16 	firefighting corporation is not covered by the voluntary statewide lump-sum volunteer 
195.17 	firefighter retirement plan, if there is no relief association organized, or if the association 
195.18 	has dissolved or has been removed as trustees of state aid, then the treasurer of the 
195.19 	municipality shall deposit the money in the municipal treasury and the money may be 
195.20 	disbursed only for the purposes and in the manner set forth in section 424A.08 or for the 
195.21 	payment of the employer contribution requirement with respect to firefighters covered by 
195.22 	the public employees police and fire retirement plan under section 353.65, subdivision 3.
195.23 	(b) The municipal treasurer, upon receipt of the police state aid, shall disburse the 
195.24 	police state aid in the following manner:
195.25 	(1) For a municipality in which a local police relief association exists and all peace 
195.26 	officers are members of the association, the total state aid must be transmitted to the 
195.27 	treasurer of the relief association within 30 days of the date of receipt, and the treasurer 
195.28 	of the relief association shall immediately deposit the total state aid in the special fund 
195.29 	of the relief association;
195.30 	(2) For a municipality in which police retirement coverage is provided by the public 
195.31 	employees police and fire fund and all peace officers are members of the fund, including 
195.32 	municipalities covered by section 353.665, the total state aid must be applied toward the 
195.33 	municipality's employer contribution to the public employees police and fire fund under 
195.34 	sections 353.65, subdivision 3, and 353.665, subdivision 8, paragraph (b), if applicable; or 
195.35 	(3) For a municipality other than a city of the first class with a population of more 
195.36 	than 300,000 in which both a police relief association exists and police retirement 
196.1 	coverage is provided in part by the public employees police and fire fund, the municipality 
196.2 	may elect at its option to transmit the total state aid to the treasurer of the relief association 
196.3 	as provided in clause (1), to use the total state aid to apply toward the municipality's 
196.4 	employer contribution to the public employees police and fire fund subject to all the 
196.5 	provisions set forth in clause (2), or to allot the total state aid proportionately to be 
196.6 	transmitted to the police relief association as provided in this subdivision and to apply 
196.7 	toward the municipality's employer contribution to the public employees police and fire 
196.8 	fund subject to the provisions of clause (2) on the basis of the respective number of active 
196.9 	full-time peace officers, as defined in section 69.011, subdivision 1, clause (g). 
196.10 	For a city of the first class with a population of more than 300,000, in addition, the 
196.11 	city may elect to allot the appropriate portion of the total police state aid to apply toward 
196.12 	the employer contribution of the city to the public employees police and fire fund based 
196.13 	on the covered salary of police officers covered by the fund each payroll period and to 
196.14 	transmit the balance to the police relief association; or
196.15 	(4) For a municipality in which police retirement coverage is provided in part by 
196.16 	the public employees police and fire fund and in part by a local police consolidation 
196.17 	account governed by chapter 353A and established before March 2, 1999, for which the 
196.18 	municipality declined merger under section 353.665, subdivision 1, or established after 
196.19 	March 1, 1999, the total police state aid must be applied towards the municipality's total 
196.20 	employer contribution to the public employees police and fire fund and to the local police 
196.21 	consolidation account under sections 353.65, subdivision 3, and 353A.09, subdivision 5. 
196.22 	(c) The county treasurer, upon receipt of the police state aid for the county, shall 
196.23 	apply the total state aid toward the county's employer contribution to the public employees 
196.24 	police and fire fund under section 353.65, subdivision 3. 
196.25 	(d) The designated Metropolitan Airports Commission official, upon receipt of the 
196.26 	police state aid for the Metropolitan Airports Commission, shall apply the total police 
196.27 	state aid first toward the commission's employer contribution for police officers to the 
196.28 	Minneapolis Employees Retirement Fund under section 422A.101, subdivision 2a, and, if 
196.29 	there is any amount of police state aid remaining, shall apply that remainder toward the 
196.30 	commission's employer contribution for police officers to the public employees police and 
196.31 	fire plan under section 353.65, subdivision 3. 
196.32 	(e) The police state aid apportioned to the Departments of Public Safety and Natural 
196.33 	Resources under section 69.021, subdivision 7a, is appropriated to the commissioner 
196.34 	of management and budget for transfer to the funds and accounts from which the 
196.35 	salaries of peace officers certified under section 69.011, subdivision 2a 2b, are paid. 
196.36 	The commissioner of revenue shall certify to the commissioners of public safety, 
197.1 	natural resources, and management and budget the amounts to be transferred from the 
197.2 	appropriation for police state aid. The commissioners of public safety and natural 
197.3 	resources shall certify to the commissioner of management and budget the amounts to be 
197.4 	credited to each of the funds and accounts from which the peace officers employed by their 
197.5 	respective departments are paid. Each commissioner shall allocate the police state aid first 
197.6 	for employer contributions for employees funded from the general fund and then for 
197.7 	employer contributions for employees funded from other funds. For peace officers whose 
197.8 	salaries are paid from the general fund, the amounts transferred from the appropriation 
197.9 	for police state aid must be canceled to the general fund. 

197.10 	Sec. 9. Minnesota Statutes 2008, section 126C.41, subdivision 3, is amended to read:
197.11 		Subd. 3.Retirement levies. (a) In 1991 and each year thereafter, a district to which 
197.12 	this subdivision applies may levy an additional amount required for contributions to the 
197.13 	general employees retirement plan of the Public Employees Retirement Association as the 
197.14 	successor of the Minneapolis Employees Retirement Fund as a result of the maximum 
197.15 	dollar amount limitation on state contributions to the fundthat plan imposed under 
197.16 	section 422A.101, subdivision 3. The additional levy must not exceed the most recent 
197.17 	amount certified by the board of the Minneapolis Employees Retirement Fundexecutive 
197.18 	director of the Public Employees Retirement Association as the district's share of the 
197.19 	contribution requirement in excess of the maximum state contribution under section 
197.20 	422A.101, subdivision 3.  
197.21 	(b) For taxes payable in 1994 and thereafter, Special School District No. 1, 
197.22 	Minneapolis, and Independent School District No. 625, St. Paul, may levy for the increase 
197.23 	in the employer retirement fund contributions, under Laws 1992, chapter 598, article 5, 
197.24 	section 1.
197.25 	(c) If the employer retirement fund contributions under section 354A.12, subdivision 
197.26 	2a, are increased for fiscal year 1994 or later fiscal years, Special School District No. 1, 
197.27 	Minneapolis, and Independent School District No. 625, St. Paul, may levy in payable 
197.28 	1994 or later an amount equal to the amount derived by applying the net increase in 
197.29 	the employer retirement fund contribution rate of the respective teacher retirement fund 
197.30 	association between fiscal year 1993 and the fiscal year beginning in the year after the 
197.31 	levy is certified to the total covered payroll of the applicable teacher retirement fund 
197.32 	association. If an applicable school district levies under this paragraph, they may not 
197.33 	levy under paragraph (b).  
197.34 	(d) In addition to the levy authorized under paragraph (c), Special School District 
197.35 	No. 1, Minneapolis, may also levy payable in 1997 or later an amount equal to the 
198.1 	contributions under section 423A.02, subdivision 3, and may also levy in payable 1994 
198.2 	or later an amount equal to the state aid contribution under section 354A.12, subdivision 
198.3 	3b. Independent School District No. 625, St. Paul, may levy payable in 1997 or later an 
198.4 	amount equal to the supplemental contributions under section 423A.02, subdivision 3.  

198.5 	Sec. 10. Minnesota Statutes 2008, section 256D.21, is amended to read:
198.6 	256D.21 CONTINUATION OF BENEFITS; FORMER MINNEAPOLIS 
198.7 	EMPLOYEES.
198.8 		Subdivision 1.Continuation of benefits. Each employee of the city of Minneapolis 
198.9 	who is transferred to and employed by the county under the provisions of section 256D.20
198.10 	and who is a contributing member of a retirement system organized under the provisions 
198.11 	of Minnesota Statutes 2008, chapter 422A, shall continue to beis a member of that system
198.12 	the MERF division of the Public Employees Retirement Association and is entitled to all 
198.13 	of the applicable benefits conferred therebyby and subject to all the restrictions of chapter 
198.14 	422A, unless the member applies to cancel membership within six months after January 
198.15 	1, 1974 section 353.50. 
198.16 		Subd. 2.City obligation. The cost to the public of that portion of the retirement 
198.17 	allowances or other benefits accrued while any such employee was in the service of the 
198.18 	city of Minneapolis shall must remain an obligation of the city and a tax shall must be 
198.19 	levied and collected by it to discharge its obligation as provided by chapter 422A in 
198.20 	section 353.50, subdivision 7.
198.21 		Subd. 3.County obligation. The cost to the public of the retirement allowances 
198.22 	or other benefits accruing to employees so transferred to and employed by the county 
198.23 	shall be is the obligation of and paid by the county at such time as the retirement board 
198.24 	shall fix and determine in accordance with chapter 422A in section 353.50, subdivision 
198.25 	7. The county shall pay to the municipalgeneral employees retirement fund an amount 
198.26 	certified to the county auditor of the county by the retirement board as the cost of the 
198.27 	retirement allowances and other benefits accruing and owing to such county employees of 
198.28 	the Public Employees Retirement Association those amounts. The cost to the public of 
198.29 	the retirement allowances as herein provided shallcoverage under this section must be 
198.30 	paid from the county revenue fund by the county auditor upon receipt of certification from 
198.31 	the retirement board as herein provided, and the county board is authorized to levy and 
198.32 	collect such taxes as may be necessary to pay such costs.

198.33 	Sec. 11. Minnesota Statutes 2009 Supplement, section 352.01, subdivision 2b, is 
198.34 	amended to read:
199.1 		Subd. 2b. Excluded employees. "State employee" does not include: 
199.2 	(1) students employed by the University of Minnesota, or the state colleges and 
199.3 	universities, unless approved for coverage by the Board of Regents of the University of 
199.4 	Minnesota or the Board of Trustees of the Minnesota State Colleges and Universities, 
199.5 	whichever is applicable; 
199.6 	(2) employees who are eligible for membership in the state Teachers Retirement 
199.7 	Association, except employees of the Department of Education who have chosen or may 
199.8 	choose to be covered by the general state employees retirement plan of the Minnesota 
199.9 	State Retirement System instead of the Teachers Retirement Association; 
199.10 	(3) employees of the University of Minnesota who are excluded from coverage by 
199.11 	action of the Board of Regents; 
199.12 	(4) officers and enlisted personnel in the National Guard and the naval militia who 
199.13 	are assigned to permanent peacetime duty and who under federal law are or are required to 
199.14 	be members of a federal retirement system; 
199.15 	(5) election officers; 
199.16 	(6) persons who are engaged in public work for the state but who are employed 
199.17 	by contractors when the performance of the contract is authorized by the legislature or 
199.18 	other competent authority; 
199.19 	(7) officers and employees of the senate, or of the house of representatives, or of a 
199.20 	legislative committee or commission who are temporarily employed; 
199.21 	(8) receivers, jurors, notaries public, and court employees who are not in the judicial 
199.22 	branch as defined in section 43A.02, subdivision 25, except referees and adjusters 
199.23 	employed by the Department of Labor and Industry; 
199.24 	(9) patient and inmate help in state charitable, penal, and correctional institutions 
199.25 	including the Minnesota Veterans Home; 
199.26 	(10) persons who are employed for professional services where the service is 
199.27 	incidental to their regular professional duties and whose compensation is paid on a per 
199.28 	diem basis; 
199.29 	(11) employees of the Sibley House Association; 
199.30 	(12) the members of any state board or commission who serve the state intermittently 
199.31 	and are paid on a per diem basis; the secretary, secretary-treasurer, and treasurer of those 
199.32 	boards if their compensation is $5,000 or less per year, or, if they are legally prohibited 
199.33 	from serving more than three years; and the board of managers of the State Agricultural 
199.34 	Society and its treasurer unless the treasurer is also its full-time secretary; 
199.35 	(13) state troopers and persons who are described in section 352B.011, subdivision 
199.36 	10, clauses (2) to (8); 
200.1 	(14) temporary employees of the Minnesota State Fair who are employed on or 
200.2 	after July 1 for a period not to extend beyond October 15 of that year; and persons who 
200.3 	are employed at any time by the state fair administration for special events held on the 
200.4 	fairgrounds; 
200.5 	(15) emergency employees who are in the classified service; except that if an 
200.6 	emergency employee, within the same pay period, becomes a provisional or probationary 
200.7 	employee on other than a temporary basis, the employee must be considered a "state 
200.8 	employee" retroactively to the beginning of the pay period; 
200.9 	(16) temporary employees in the classified service, and temporary employees in the 
200.10 	unclassified service who are appointed for a definite period of not more than six months 
200.11 	and who are employed less than six months in any one-year period; 
200.12 	(17) interns hired for six months or less and trainee employees, except those listed in 
200.13 	subdivision 2a, clause (8); 
200.14 	(18) persons whose compensation is paid on a fee basis or as an independent 
200.15 	contractor; 
200.16 	(19) state employees who are employed by the Board of Trustees of the Minnesota 
200.17 	State Colleges and Universities in unclassified positions enumerated in section 43A.08, 
200.18 	subdivision 1, clause (9); 
200.19 	(20) state employees who in any year have credit for 12 months service as teachers 
200.20 	in the public schools of the state and as teachers are members of the Teachers Retirement 
200.21 	Association or a retirement system in St. Paul, Minneapolis, or Duluth, except for 
200.22 	incidental employment as a state employee that is not covered by one of the teacher 
200.23 	retirement associations or systems; 
200.24 	(21) employees of the adjutant general who are employed on an unlimited 
200.25 	intermittent or temporary basis in the classified or unclassified service for the support of 
200.26 	Army and Air National Guard training facilities; 
200.27 	(22) chaplains and nuns who are excluded from coverage under the federal Old 
200.28 	Age, Survivors, Disability, and Health Insurance Program for the performance of service 
200.29 	as specified in United States Code, title 42, section 410(a)(8)(A), as amended, if no 
200.30 	irrevocable election of coverage has been made under section 3121(r) of the Internal 
200.31 	Revenue Code of 1986, as amended through December 31, 1992; 
200.32 	(23) examination monitors who are employed by departments, agencies, 
200.33 	commissions, and boards to conduct examinations required by law; 
200.34 	(24) persons who are appointed to serve as members of fact-finding commissions or 
200.35 	adjustment panels, arbitrators, or labor referees under chapter 179; 
201.1 	(25) temporary employees who are employed for limited periods under any state or 
201.2 	federal program for training or rehabilitation, including persons who are employed for 
201.3 	limited periods from areas of economic distress, but not including skilled and supervisory 
201.4 	personnel and persons having civil service status covered by the system; 
201.5 	(26) full-time students who are employed by the Minnesota Historical Society 
201.6 	intermittently during part of the year and full-time during the summer months; 
201.7 	(27) temporary employees who are appointed for not more than six months, of 
201.8 	the Metropolitan Council and of any of its statutory boards, if the board members are 
201.9 	appointed by the Metropolitan Council; 
201.10 	(28) persons who are employed in positions designated by the Department of 
201.11 	Management and Budget as student workers; 
201.12 	(29) members of trades who are employed by the successor to the Metropolitan 
201.13 	Waste Control Commission, who have trade union pension plan coverage under a 
201.14 	collective bargaining agreement, and who are first employed after June 1, 1977; 
201.15 	(30) off-duty peace officers while employed by the Metropolitan Council; 
201.16 	(31) persons who are employed as full-time police officers by the Metropolitan 
201.17 	Council and as police officers are members of the public employees police and fire fund; 
201.18 	(32) persons who are employed as full-time firefighters by the Department of Military 
201.19 	Affairs and as firefighters are members of the public employees police and fire fund; 
201.20 	(33) foreign citizens with a work permit of less than three years, or an H-1b/JV visa 
201.21 	valid for less than three years of employment, unless notice of extension is supplied which 
201.22 	allows them to work for three or more years as of the date the extension is granted, in 
201.23 	which case they are eligible for coverage from the date extended; and 
201.24 	(34) persons who are employed by the Board of Trustees of the Minnesota State 
201.25 	Colleges and Universities and who elected to remain members of the Public Employees 
201.26 	Retirement Association or of the MERF division of the Public Employees Retirement 
201.27 	Association as the successor of the Minneapolis Employees Retirement Fund, whichever 
201.28 	applies, under Minnesota Statutes 1994, section 136C.75. 

201.29 	Sec. 12. Minnesota Statutes 2008, section 353.03, subdivision 1, is amended to read:
201.30 		Subdivision 1.Management; composition; election. (a) The management of 
201.31 	the Public Employees Retirement fundAssociation is vested in an 11-member board of 
201.32 	trustees consisting of ten members and the state auditor. The state auditor may designate 
201.33 	a deputy auditor with expertise in pension matters as the auditor's representative on the 
201.34 	board. The governor shall appoint five trustees to four-year terms, one of whom shall be 
201.35 	designated to represent school boards, one to represent cities, one to represent counties, 
202.1 	one who is a retired annuitant, and one who is a public member knowledgeable in pension 
202.2 	matters. The membership of the association, including recipients of retirement annuities 
202.3 	and disability and survivor benefits, shall elect five trustees for terms of four years, one of 
202.4 	whom must be a member of the police and fire fund and one of whom must be a former 
202.5 	member who met the definition of public employee under section 353.01, subdivisions 2 
202.6 	and 2a, for at least five years prior to terminating membership or a member who receives 
202.7 	a disability benefit. Terms expire on January 31 of the fourth year, and positions are 
202.8 	vacant until newly elected members are seated. Except as provided in this subdivision, 
202.9 	trustees elected by the membership of the association must be public employees and 
202.10 	members of the association. 
202.11 	(b) For seven days beginning October 1 of each year preceding a year in which 
202.12 	an election is held, the association shall accept at its office filings in person or by mail 
202.13 	of candidates for the board of trustees. A candidate shall submit at the time of filing a 
202.14 	nominating petition signed by 25 or more members of the association. No name may 
202.15 	be withdrawn from nomination by the nominee after October 15. At the request of a 
202.16 	candidate for an elected position on the board of trustees, the board shall mail a statement 
202.17 	of up to 300 words prepared by the candidate to all persons eligible to vote in the election 
202.18 	of the candidate. The board may adopt policies, subject to review and approval by the 
202.19 	secretary of state under paragraph (e), to govern the form and length of these statements, 
202.20 	timing of mailings, and deadlines for submitting materials to be mailed. The secretary 
202.21 	of state shall resolve disputes between the board and a candidate concerning application 
202.22 	of these policies to a particular statement. 
202.23 	(c) By January 10 of each year in which elections are to be held, the board shall 
202.24 	distribute by mail to the members ballots listing the candidates. No member may vote for 
202.25 	more than one candidate for each board position to be filled. A ballot indicating a vote for 
202.26 	more than one person for any position is void. No special marking may be used on the 
202.27 	ballot to indicate incumbents. Ballots mailed to the association must be postmarked no 
202.28 	later than January 31. The ballot envelopes must be so designated and the ballots must be 
202.29 	counted in a manner that ensures that each vote is secret.
202.30 	(d) A candidate who receives contributions or makes expenditures in excess of $100, 
202.31 	or has given implicit or explicit consent for any other person to receive contributions or 
202.32 	make expenditures in excess of $100 for the purpose of bringing about the candidate's 
202.33 	election, shall file a report with the campaign finance and public disclosure board 
202.34 	disclosing the source and amount of all contributions to the candidate's campaign. The 
202.35 	campaign finance and public disclosure board shall prescribe forms governing these 
202.36 	disclosures. Expenditures and contributions have the meaning defined in section 10A.01. 
203.1 	These terms do not include the mailing made by the association board on behalf of the 
203.2 	candidate. A candidate shall file a report within 30 days from the day that the results of 
203.3 	the election are announced. The Campaign Finance and Public Disclosure Board shall 
203.4 	maintain these reports and make them available for public inspection in the same manner 
203.5 	as the board maintains and makes available other reports filed with it. 
203.6 	(e) The secretary of state shall review and approve the procedures defined by the 
203.7 	board of trustees for conducting the elections specified in this subdivision, including 
203.8 	board policies adopted under paragraph (b). 
203.9 	(f) The board of trustees and the executive director shall undertake their activities 
203.10 	consistent with chapter 356A.

203.11 	Sec. 13. Minnesota Statutes 2008, section 353.71, subdivision 4, is amended to read:
203.12 		Subd. 4.Repayment of refund. Any person who has received a refund from the 
203.13 	Public Employees Retirement fundAssociation and who is a member of any public 
203.14 	retirement system referred to in subdivision 1, may repay such refund to the Public 
203.15 	Employees Retirement fundAssociation as provided in section 353.35. 

203.16 	Sec. 14. Minnesota Statutes 2008, section 353.86, subdivision 1, is amended to read:
203.17 		Subdivision 1.Participation. Volunteer ambulance service personnel, as defined 
203.18 	in section 353.01, subdivision 35, who are or become members of and participants in 
203.19 	the public general employees retirement fund or the public employees police and fire 
203.20 	fund before July 1, 2002, and make contributions to either of those funds based on 
203.21 	compensation for service other than volunteer ambulance service may elect to participate 
203.22 	in that same fund with respect to compensation received for volunteer ambulance service, 
203.23 	provided that the volunteer ambulance service is not credited to another public or private 
203.24 	pension plan including the public employees retirement plan established by chapter 
203.25 	353D and provided further that the volunteer ambulance service is rendered for the same 
203.26 	governmental unit for which the nonvolunteer ambulance service is rendered.  

203.27 	Sec. 15. Minnesota Statutes 2008, section 353.86, subdivision 2, is amended to read:
203.28 		Subd. 2.Election. Volunteer ambulance service personnel to whom subdivision 
203.29 	1 applies may exercise the election authorized under subdivision 1 within the earlier of 
203.30 	the one-year period beginning on July 1, 1989, and extending through June 30, 1990, or 
203.31 	the one-year period commencing on the first day of the first month following the start of 
203.32 	employment in a position covered by the public general employees retirement fund or the 
204.1 	public employees police and fire fund. The election must be exercised by filing a written 
204.2 	notice on a form prescribed by the executive director of the association.

204.3 	Sec. 16. Minnesota Statutes 2008, section 353.87, subdivision 1, is amended to read:
204.4 		Subdivision 1.Participation. Except as provided in subdivision 2, a volunteer 
204.5 	firefighter, as defined in section 353.01, subdivision 36, who, on June 30, 1989, was 
204.6 	a member of, and a participant in, the public general employees retirement fund or the 
204.7 	public employees police and fire fund and was making contributions to either of those 
204.8 	funds based, at least in part, on compensation for services performed as a volunteer 
204.9 	firefighter shall continue as a member of, and a participant in, the public general
204.10 	employees retirement fund or the public employees police and fire fund and compensation 
204.11 	for services performed as a volunteer firefighter shall must be considered salary. 

204.12 	Sec. 17. Minnesota Statutes 2008, section 353.87, subdivision 2, is amended to read:
204.13 		Subd. 2.Option. A volunteer firefighter to whom subdivision 1 applies has the 
204.14 	option to terminate membership and future participation in the public general employees 
204.15 	retirement fund or the public employees police and fire fund upon filing of a written notice 
204.16 	of intention to terminate participation. Notice must be given on a form prescribed by the 
204.17 	executive director of the association and must be filed in the offices of the association not 
204.18 	later than June 30, 1990.

204.19 	Sec. 18. Minnesota Statutes 2008, section 353.88, is amended to read:
204.20 	353.88 PENALTY FOR MEMBERSHIP MISCERTIFICATIONS AND 
204.21 	CERTIFICATION FAILURES.
204.22 	(a) If the board of trustees of the Public Employees Retirement Association, 
204.23 	upon the recommendation of the executive director, determines that a governmental 
204.24 	subdivision has certified a public employee for membership in the public employees 
204.25 	police and fire retirement plan when the public employee was not eligible for that 
204.26 	retirement plan coverage, the public employee must be covered by the correct retirement 
204.27 	plan for subsequent service, the public employee retains the coverage for the period of 
204.28 	the misclassification, and the governmental subdivision shall pay in a lump sum the 
204.29 	difference in the actuarial present value of the retirement annuities to which the public 
204.30 	employee would have been entitled if the public employee was properly classified. The 
204.31 	governmental subdivision payment is payable within 30 days of the board's determination. 
204.32 	If unpaid, it must be collected under section 353.28. The lump-sum payment must be 
204.33 	deposited in the public general employees retirement fund. 
205.1 	(b) If the executive director of the Public Employees Retirement Association 
205.2 	determines that a governmental subdivision has failed to certify a person for retirement 
205.3 	plan membership and coverage under this chapter, in addition to the procedures under 
205.4 	section 353.27, subdivision 4, 9, 10, 11, 12, 12a, or 12b, the director shall charge a fine of 
205.5 	$25 for each membership certification failure. 

205.6 	Sec. 19. Minnesota Statutes 2008, section 354.71, is amended to read:
205.7 	354.71 MINNEAPOLIS EMPLOYEES RETIREMENT FUND STATE AID 
205.8 	REDEDICATED.
205.9 		Subdivision 1.Appropriation. The positive difference, if any, between the 
205.10 	actual state aid paidpayable to the MERF division account of the Public Employees 
205.11 	Retirement Association with respect to the former Minneapolis Employees Retirement 
205.12 	Fund under section 422A.101, subdivision 3, and $8,065,000 annually is appropriated 
205.13 	from the general fund to the commissioner of management and budget for deposit in 
205.14 	the Teachers Retirement Association to offset all or a portion of the current and future
205.15 	unfunded actuarial accrued liability of the former Minneapolis Teachers Retirement 
205.16 	Fund Association.
205.17 		Subd. 2.Financial requirements. The appropriation in subdivision 1 is available to 
205.18 	the extent that financial requirements ofwith respect to the MERF division of the Public 
205.19 	Employees Retirement Association as the successor of the former Minneapolis Employees 
205.20 	Retirement Fund under section 422A.101, subdivision 3,353.50 have been satisfied.

205.21 	Sec. 20. Minnesota Statutes 2008, section 354A.011, subdivision 27, is amended to 
205.22 	read:
205.23 		Subd. 27.Teacher. (a) "Teacher" means any person who renders service for a public 
205.24 	school district, other than a charter school, located in the corporate limits of Duluth or 
205.25 	St. Paul, as any of the following:
205.26 	(1) a full-time employee in a position for which a valid license from the state 
205.27 	Department of Education is required;
205.28 	(2) an employee of the teachers retirement fund association located in the city of 
205.29 	the first class unless the employee has exercised the option pursuant to Laws 1955, 
205.30 	chapter 10, section 1, to retain membership in the Minneapolis Employees Retirement 
205.31 	Fund established pursuant to chapter 422A;
205.32 	(3) a part-time employee in a position for which a valid license from the state 
205.33 	Department of Education is required; or
206.1 	(4) a part-time employee in a position for which a valid license from the state 
206.2 	Department of Education is required who also renders other nonteaching services for the 
206.3 	school district, unless the board of trustees of the teachers retirement fund association 
206.4 	determines that the combined employment is on the whole so substantially dissimilar to 
206.5 	teaching service that the service may not be covered by the association.
206.6 	(b) The term does not mean any person who renders service in the school district 
206.7 	as any of the following:
206.8 	(1) an independent contractor or the employee of an independent contractor;
206.9 	(2) an employee who is a full-time teacher covered by the Teachers Retirement 
206.10 	Association or by another teachers retirement fund association established pursuant to this 
206.11 	chapter or chapter 354;
206.12 	(3) an employee who is exempt from licensure pursuant to section 122A.30; 
206.13 	(4) an employee who is a teacher in a technical college located in a city of the first 
206.14 	class unless the person elects coverage by the applicable first class city teacher retirement 
206.15 	fund association under section 354B.21, subdivision 2; 
206.16 	(5) a teacher employed by a charter school, irrespective of the location of the 
206.17 	school; or
206.18 	(6) an employee who is a part-time teacher in a technical college in a city of the first 
206.19 	class and who has elected coverage by the applicable first class city teacher retirement 
206.20 	fund association under section 354B.21, subdivision 2, but (i) the teaching service is 
206.21 	incidental to the regular nonteaching occupation of the person; (ii) the applicable technical 
206.22 	college stipulates annually in advance that the part-time teaching service will not exceed 
206.23 	300 hours in a fiscal year; and (iii) the part-time teaching actually does not exceed 300 
206.24 	hours in the fiscal year to which the certification applies. 

206.25 	Sec. 21. Minnesota Statutes 2008, section 354A.39, is amended to read:
206.26 	354A.39 SERVICE IN OTHER PUBLIC RETIREMENT FUNDS; ANNUITY.
206.27 	Any person who has been a member of the Minnesota State Retirement System, the 
206.28 	Public Employees Retirement Association including the Public Employees Retirement 
206.29 	Association Police and Fire Fund, the Teachers Retirement Association, the Minnesota 
206.30 	State Patrol Retirement Association, the legislators retirement plan, the constitutional 
206.31 	officers retirement plan, the Minneapolis Employees Retirement Fund, the Duluth 
206.32 	Teachers Retirement Fund Association new law coordinated program, the St. Paul 
206.33 	Teachers Retirement Fund Association coordinated program, or any other public employee 
206.34 	retirement system in the state of Minnesota having a like provision, but excluding all other 
206.35 	funds providing retirement benefits for police officers or firefighters shall be, is entitled,
207.1 	when qualified, to an annuity from each fund if the person's total allowable service in all 
207.2 	of the funds or in any two or more of the funds totals three or more years, provided that 
207.3 	no portion of the allowable service upon which the retirement annuity from one fund is 
207.4 	based is used again in the computation for a retirement annuity from another fund and 
207.5 	provided further that the person has not taken a refund from any of funds or associations 
207.6 	since the person's membership in the fund or association has terminated. The annuity from 
207.7 	each fund or association shall must be determined by the appropriate provisions of the law 
207.8 	governing each fund or association, except that the requirement that a person must have at 
207.9 	least three years of allowable service in the respective fund or association shall does not 
207.10 	apply for the purposes of this section, provided that the aggregate service in two or more 
207.11 	of these funds equals three or more years.

207.12 	Sec. 22. Minnesota Statutes 2008, section 355.095, subdivision 1, is amended to read:
207.13 		Subdivision 1.Agreement. (a) The director, on behalf of the state, its political 
207.14 	subdivisions, and its other governmental employers, is authorized to enter into an 
207.15 	agreement with the Secretary of Health and Human Services to extend the provisions of 
207.16 	United States Code, title 42, section 426, 426-1, and 1395c, to the employees in paragraph 
207.17 	(b) who meet the requirements of United States Code, title 42, section 418(v)(2) and who 
207.18 	do not have coverage by the federal old age, survivors, and disability insurance program 
207.19 	for that employment under any previous modification of the agreement or previous 
207.20 	Medicare referendum.
207.21 	(b) The applicable employees are:
207.22 	(1) employees who are members of one of the retirement plans in Minnesota Statutes 
207.23 	2008, section 356.30, subdivision 3, except clauses (4) and (8), based on continuous 
207.24 	employment since March 31, 1986; and
207.25 	(2) employees of a special authority or district who have been continuously 
207.26 	employed by the special authority or district since March 31, 1986.

207.27 	Sec. 23. Minnesota Statutes 2009 Supplement, section 356.20, subdivision 2, is 
207.28 	amended to read:
207.29 		Subd. 2.Covered public pension plans and funds. This section applies to the 
207.30 	following public pension plans:
207.31 	(1) the general state employees retirement plan of the Minnesota State Retirement 
207.32 	System;
207.33 	(2) the general employees retirement plan of the Public Employees Retirement 
207.34 	Association;
208.1 	(3) the Teachers Retirement Association;
208.2 	(4) the State Patrol retirement plan;
208.3 	(5) the St. Paul Teachers Retirement Fund Association;
208.4 	(6) the Duluth Teachers Retirement Fund Association;
208.5 	(7) the Minneapolis Employees Retirement Fund;
208.6 	(8)(7) the University of Minnesota faculty retirement plan;
208.7 	(9)(8) the University of Minnesota faculty supplemental retirement plan;
208.8 	(10)(9) the judges retirement fund;
208.9 	(11)(10) a police or firefighter's relief association specified or described in section 
208.10 	69.77, subdivision 1a;
208.11 	(12)(11) a volunteer firefighter relief association governed by section 69.771, 
208.12 	subdivision 1; 
208.13 	(13)(12) the public employees police and fire plan of the Public Employees 
208.14 	Retirement Association;
208.15 	(14)(13) the correctional state employees retirement plan of the Minnesota State 
208.16 	Retirement System; 
208.17 	(15)(14) the local government correctional service retirement plan of the Public 
208.18 	Employees Retirement Association; and
208.19 	(16)(15) the voluntary statewide lump-sum volunteer firefighter retirement plan.

208.20 	Sec. 24. Minnesota Statutes 2008, section 356.214, subdivision 1, is amended to read:
208.21 		Subdivision 1.Actuary retention. (a) The governing board or managing or 
208.22 	administrative official of each public pension plan and retirement fund or plan enumerated 
208.23 	in paragraph (b) shall contract with an established actuarial consulting firm to conduct 
208.24 	annual actuarial valuations and related services. The principal from the actuarial 
208.25 	consulting firm on the contract must be an approved actuary under section 356.215, 
208.26 	subdivision 1, paragraph (c). 
208.27 	(b) Actuarial services must include the preparation of actuarial valuations and 
208.28 	related actuarial work for the following retirement plans:
208.29 	(1) the teachers retirement plan, Teachers Retirement Association;
208.30 	(2) the general state employees retirement plan, Minnesota State Retirement System;
208.31 	(3) the correctional employees retirement plan, Minnesota State Retirement System;
208.32 	(4) the State Patrol retirement plan, Minnesota State Retirement System;
208.33 	(5) the judges retirement plan, Minnesota State Retirement System;
208.34 	(6) the Minneapolis employees retirement plan, Minneapolis Employees Retirement 
208.35 	Fund;
209.1 	(7)(6) the publicgeneral employees retirement plan, Public Employees Retirement 
209.2 	Association, including the MERF division;
209.3 	(8)(7) the public employees police and fire plan, Public Employees Retirement 
209.4 	Association;
209.5 	(9)(8) the Duluth teachers retirement plan, Duluth Teachers Retirement Fund 
209.6 	Association;
209.7 	(10)(9) the St. Paul teachers retirement plan, St. Paul Teachers Retirement Fund 
209.8 	Association;
209.9 	(11)(10) the legislators retirement plan, Minnesota State Retirement System;
209.10 	(12)(11) the elective state officers retirement plan, Minnesota State Retirement 
209.11 	System; and
209.12 	(13)(12) local government correctional service retirement plan, Public Employees 
209.13 	Retirement Association.
209.14 	(c) The contracts must require completion of the annual actuarial valuation 
209.15 	calculations on a fiscal year basis, with the contents of the actuarial valuation calculations 
209.16 	as specified in section 356.215, and in conformity with the standards for actuarial work 
209.17 	adopted by the Legislative Commission on Pensions and Retirement. 
209.18 	The contracts must require completion of annual experience data collection and 
209.19 	processing and a quadrennial published experience study for the plans listed in paragraph 
209.20 	(b), clauses (1), (2), and (7) (6), as provided for in the standards for actuarial work 
209.21 	adopted by the commission. The experience data collection, processing, and analysis 
209.22 	must evaluate the following:
209.23 	(1) individual salary progression;
209.24 	(2) the rate of return on investments based on the current asset value;
209.25 	(3) payroll growth;
209.26 	(4) mortality;
209.27 	(5) retirement age;
209.28 	(6) withdrawal; and
209.29 	(7) disablement.
209.30 	(d) The actuary shall annually prepare a report to the governing or managing board 
209.31 	or administrative official and the legislature, summarizing the results of the actuarial 
209.32 	valuation calculations. The actuary shall include with the report any recommendations 
209.33 	concerning the appropriateness of the support rates to achieve proper funding of 
209.34 	the retirement plans by the required funding dates. The actuary shall, as part of the 
209.35 	quadrennial experience study, include recommendations on the appropriateness of the 
209.36 	actuarial valuation assumptions required for evaluation in the study.
210.1 	(e) If the actuarial gain and loss analysis in the actuarial valuation calculations 
210.2 	indicates a persistent pattern of sizable gains or losses, the governing or managing board 
210.3 	or administrative official shall direct the actuary to prepare a special experience study for a 
210.4 	plan listed in paragraph (b), clause (3), (4), (5), (6) (7), (8), (9), (10), (11), or (12), or (13),
210.5 	in the manner provided for in the standards for actuarial work adopted by the commission.

210.6 	Sec. 25. Minnesota Statutes 2008, section 356.30, subdivision 3, is amended to read:
210.7 		Subd. 3.Covered plans. This section applies to the following retirement plans:
210.8 	(1) the general state employees retirement plan of the Minnesota State Retirement 
210.9 	System, established under chapter 352;
210.10 	(2) the correctional state employees retirement plan of the Minnesota State 
210.11 	Retirement System, established under chapter 352;
210.12 	(3) the unclassified employees retirement program, established under chapter 352D;
210.13 	(4) the State Patrol retirement plan, established under chapter 352B;
210.14 	(5) the legislators retirement plan, established under chapter 3A;
210.15 	(6) the elective state officers retirement plan, established under chapter 352C;
210.16 	(7) the general employees retirement plan of the Public Employees Retirement 
210.17 	Association, established under chapter 353, including the MERF division of the Public 
210.18 	Employees Retirement Association;
210.19 	(8) the public employees police and fire retirement plan of the Public Employees 
210.20 	Retirement Association, established under chapter 353;
210.21 	(9) the local government correctional service retirement plan of the Public 
210.22 	Employees Retirement Association, established under chapter 353E;
210.23 	(10) the Teachers Retirement Association, established under chapter 354;
210.24 	(11) the Minneapolis Employees Retirement Fund, established under chapter 422A;
210.25 	(12)(11) the St. Paul Teachers Retirement Fund Association, established under 
210.26 	chapter 354A;
210.27 	(13)(12) the Duluth Teachers Retirement Fund Association, established under 
210.28 	chapter 354A; and
210.29 	(14)(13) the judges retirement fund, established by chapter 490. 

210.30 	Sec. 26. Minnesota Statutes 2008, section 356.302, subdivision 1, is amended to read:
210.31 		Subdivision 1.Definitions. (a) The terms used in this section are defined in this 
210.32 	subdivision.
210.33 	(b) "Average salary" means the highest average of covered salary for the appropriate 
210.34 	period of credited service that is required for the calculation of a disability benefit by 
211.1 	the covered retirement plan and that is drawn from any period of credited service and 
211.2 	successive years of covered salary in a covered retirement plan.
211.3 	(c) "Covered retirement plan" or "plan" means a retirement plan listed in subdivision 
211.4 	7.
211.5 	(d) "Duty-related" means a disabling illness or injury that occurred while the person 
211.6 	was actively engaged in employment duties or that arose out of the person's active 
211.7 	employment duties.
211.8 	(e) "General employee retirement plan" means a covered retirement plan listed in 
211.9 	subdivision 7, clauses (1) to (8)(6) and (13) (12).
211.10 	(f) "Occupationally disabled" means the condition of having a medically 
211.11 	determinable physical or mental impairment that makes a person unable to satisfactorily 
211.12 	perform the minimum requirements of the person's employment position or a substantially 
211.13 	similar employment position.
211.14 	(g) "Public safety employee retirement plan" means a covered retirement plan listed 
211.15 	in subdivision 7, clauses (9) (7) to (12) (11).
211.16 	(h) "Totally and permanently disabled" means the condition of having a medically 
211.17 	determinable physical or mental impairment that makes a person unable to engage in any 
211.18 	substantial gainful activity and that is expected to continue or has continued for a period 
211.19 	of at least one year or that is expected to result directly in the person's death.

211.20 	Sec. 27. Minnesota Statutes 2008, section 356.302, subdivision 7, is amended to read:
211.21 		Subd. 7.Covered retirement plans. This section applies to the following 
211.22 	retirement plans:
211.23 	(1) the general state employees retirement plan of the Minnesota State Retirement 
211.24 	System, established by chapter 352;
211.25 	(2) the unclassified state employees retirement program of the Minnesota State 
211.26 	Retirement System, established by chapter 352D;
211.27 	(3) the general employees retirement plan of the Public Employees Retirement 
211.28 	Association, established by chapter 353, including the MERF division of the Public 
211.29 	Employees Retirement Association;
211.30 	(4) the Teachers Retirement Association, established by chapter 354;
211.31 	(5) the Duluth Teachers Retirement Fund Association, established by chapter 354A;
211.32 	(6) the St. Paul Teachers Retirement Fund Association, established by chapter 354A;
211.33 	(7) the Minneapolis Employees Retirement Fund, established by chapter 422A;
211.34 	(8)(7) the state correctional employees retirement plan of the Minnesota State 
211.35 	Retirement System, established by chapter 352;
212.1 	(9)(8) the State Patrol retirement plan, established by chapter 352B;
212.2 	(10)(9) the public employees police and fire plan of the Public Employees 
212.3 	Retirement Association, established by chapter 353;
212.4 	(11)(10) the local government correctional service retirement plan of the Public 
212.5 	Employees Retirement Association, established by chapter 353E; and
212.6 	(12)(11) the judges retirement plan, established by chapter 490. 

212.7 	Sec. 28. Minnesota Statutes 2008, section 356.303, subdivision 4, is amended to read:
212.8 		Subd. 4.Covered retirement plans. This section applies to the following 
212.9 	retirement plans:
212.10 	(1) the legislators retirement plan, established by chapter 3A;
212.11 	(2) the general state employees retirement plan of the Minnesota State Retirement 
212.12 	System, established by chapter 352;
212.13 	(3) the correctional state employees retirement plan of the Minnesota State 
212.14 	Retirement System, established by chapter 352;
212.15 	(4) the State Patrol retirement plan, established by chapter 352B;
212.16 	(5) the elective state officers retirement plan, established by chapter 352C;
212.17 	(6) the unclassified state employees retirement program, established by chapter 
212.18 	352D;
212.19 	(7) the general employees retirement plan of the Public Employees Retirement 
212.20 	Association, established by chapter 353, including the MERF division of the Public 
212.21 	Employees Retirement Association;
212.22 	(8) the public employees police and fire plan of the Public Employees Retirement 
212.23 	Association, established by chapter 353;
212.24 	(9) the local government correctional service retirement plan of the Public 
212.25 	Employees Retirement Association, established by chapter 353E;
212.26 	(10) the Teachers Retirement Association, established by chapter 354;
212.27 	(11) the Duluth Teachers Retirement Fund Association, established by chapter 354A;
212.28 	(12) the St. Paul Teachers Retirement Fund Association, established by chapter 
212.29 	354A; and
212.30 	(13) the Minneapolis Employees Retirement Fund, established by chapter 422A; and
212.31 	(14)(13) the judges retirement fund, established by chapter 490. 

212.32 	Sec. 29. Minnesota Statutes 2009 Supplement, section 356.32, subdivision 2, is 
212.33 	amended to read:
213.1 		Subd. 2.Covered retirement plans. The provisions of this section apply to the 
213.2 	following retirement plans:
213.3 	(1) the general state employees retirement plan of the Minnesota State Retirement 
213.4 	System, established under chapter 352;
213.5 	(2) the correctional state employees retirement plan of the Minnesota State 
213.6 	Retirement System, established under chapter 352;
213.7 	(3) the State Patrol retirement plan, established under chapter 352B;
213.8 	(4) the general employees retirement plan of the Public Employees Retirement 
213.9 	Association, established under chapter 353, including the MERF division of the Public 
213.10 	Employees Retirement Association;
213.11 	(5) the public employees police and fire plan of the Public Employees Retirement 
213.12 	Association, established under chapter 353;
213.13 	(6) the Teachers Retirement Association, established under chapter 354;
213.14 	(7) the Minneapolis Employees Retirement Fund, established under chapter 422A;
213.15 	(8)(7) the Duluth Teachers Retirement Fund Association, established under chapter 
213.16 	354A; and
213.17 	(9)(8) the St. Paul Teachers Retirement Fund Association, established under chapter 
213.18 	354A.

213.19 	Sec. 30. Minnesota Statutes 2009 Supplement, section 356.401, subdivision 3, is 
213.20 	amended to read:
213.21 		Subd. 3.Covered retirement plans. The provisions of this section apply to the 
213.22 	following retirement plans:
213.23 	(1) the legislators retirement plan, established by chapter 3A;
213.24 	(2) the general state employees retirement plan of the Minnesota State Retirement 
213.25 	System, established by chapter 352;
213.26 	(3) the correctional state employees retirement plan of the Minnesota State 
213.27 	Retirement System, established by chapter 352;
213.28 	(4) the State Patrol retirement plan, established by chapter 352B;
213.29 	(5) the elective state officers retirement plan, established by chapter 352C;
213.30 	(6) the unclassified state employees retirement program, established by chapter 
213.31 	352D;
213.32 	(7) the general employees retirement plan of the Public Employees Retirement 
213.33 	Association, established by chapter 353, including the MERF division of the Public 
213.34 	Employees Retirement Association;
214.1 	(8) the public employees police and fire plan of the Public Employees Retirement 
214.2 	Association, established by chapter 353;
214.3 	(9) the public employees defined contribution plan, established by chapter 353D;
214.4 	(10) the local government correctional service retirement plan of the Public 
214.5 	Employees Retirement Association, established by chapter 353E;
214.6 	(11) the voluntary statewide lump-sum volunteer firefighter retirement plan, 
214.7 	established by chapter 353G;
214.8 	(12) the Teachers Retirement Association, established by chapter 354;
214.9 	(13) the Duluth Teachers Retirement Fund Association, established by chapter 354A;
214.10 	(14) the St. Paul Teachers Retirement Fund Association, established by chapter 
214.11 	354A;
214.12 	(15) the individual retirement account plan, established by chapter 354B;
214.13 	(16) the higher education supplemental retirement plan, established by chapter 354C;
214.14 	(17) the Minneapolis Employees Retirement Fund, established by chapter 422A;
214.15 	(18)(17) the Minneapolis Police Relief Association, established by chapter 423B;
214.16 	(19)(18) the Minneapolis Firefighters Relief Association, established by chapter 
214.17 	423C; and
214.18 	(20)(19) the judges retirement fund, established by chapter 490.

214.19 	Sec. 31. Minnesota Statutes 2008, section 356.407, subdivision 2, is amended to read:
214.20 		Subd. 2.Covered funds. The provisions of this section apply to the following 
214.21 	retirement funds:
214.22 	(1) the general employees retirement plan of the Public Employees Retirement 
214.23 	Association established under chapter 353, including the MERF division of the Public 
214.24 	Employees Retirement Association;
214.25 	(2) the public employees police and fire plan of the Public Employees Retirement 
214.26 	Association established under chapter 353;
214.27 	(3) the State Patrol retirement plan established under chapter 352B;
214.28 	(4) the legislators retirement plan established under chapter 3A;
214.29 	(5) the elective state officers retirement plan established under chapter 352C; and
214.30 	(6) the Teachers Retirement Association established under chapter 354; and.
214.31 	(7) the Minneapolis Employees Retirement Fund established under chapter 422A.

214.32 	Sec. 32. Minnesota Statutes 2009 Supplement, section 356.415, subdivision 2, is 
214.33 	amended to read:
215.1 		Subd. 2.Covered retirement plans. The provisions of this section apply to the 
215.2 	following retirement plans:
215.3 	(1) the legislators retirement plan established under chapter 3A;
215.4 	(2) the correctional state employees retirement plan of the Minnesota State 
215.5 	Retirement System established under chapter 352;
215.6 	(3) the general state employees retirement plan of the Minnesota State Retirement 
215.7 	System established under chapter 352;
215.8 	(4) the State Patrol retirement plan established under chapter 352B;
215.9 	(5) the elective state officers retirement plan established under chapter 352C;
215.10 	(6) the general employees retirement plan of the Public Employees Retirement 
215.11 	Association established under chapter 353, including the MERF division of the Public 
215.12 	Employees Retirement Association;
215.13 	(7) the public employees police and fire retirement plan of the Public Employees 
215.14 	Retirement Association established under chapter 353;
215.15 	(8) the local government correctional employees retirement plan of the Public 
215.16 	Employees Retirement Association established under chapter 353E;
215.17 	(9) the teachers retirement plan established under chapter 354; and
215.18 	(10) the judges retirement plan established under chapter 490.

215.19 	Sec. 33. Minnesota Statutes 2008, section 356.431, subdivision 1, is amended to read:
215.20 		Subdivision 1.Lump-sum postretirement payment conversion. For benefits paid 
215.21 	after December 31, 2001, to eligible persons under sectionssection 356.42 and 356.43, 
215.22 	the amount of the most recent lump-sum benefit payable to an eligible recipient under 
215.23 	sectionssection 356.42and 356.43 must be divided by 12. The result must be added to 
215.24 	the monthly annuity or benefit otherwise payable to an eligible recipient, must become a 
215.25 	permanent part of the benefit recipient's pension, and must be included in any pension 
215.26 	benefit subject to future increases.

215.27 	Sec. 34. Minnesota Statutes 2008, section 356.465, subdivision 3, is amended to read:
215.28 		Subd. 3.Covered retirement plans. The provisions of this section apply to the 
215.29 	following retirement plans:
215.30 	(1) the general state employees retirement plan of the Minnesota State Retirement 
215.31 	System established under chapter 352;
215.32 	(2) the correctional state employees retirement plan of the Minnesota State 
215.33 	Retirement System established under chapter 352;
215.34 	(3) the State Patrol retirement plan established under chapter 352B;
216.1 	(4) the legislators retirement plan established under chapter 3A;
216.2 	(5) the judges retirement plan established under chapter 490;
216.3 	(6) the general employees retirement plan of the Public Employees Retirement 
216.4 	Association established under chapter 353, including the MERF division of the Public 
216.5 	Employees Retirement Association;
216.6 	(7) the public employees police and fire plan of the Public Employees Retirement 
216.7 	Association established under chapter 353;
216.8 	(8) the teachers retirement plan established under chapter 354;
216.9 	(9) the Duluth Teachers Retirement Fund Association established under chapter 
216.10 	354A;
216.11 	(10) the St. Paul Teachers Retirement Fund Association established under chapter 
216.12 	354A;
216.13 	(11) the Minneapolis Employees Retirement Fund established under chapter 422A;
216.14 	(12)(11) the Minneapolis Firefighters Relief Association established under chapter 
216.15 	423C;
216.16 	(13)(12) the Minneapolis Police Relief Association established under chapter 
216.17 	423B; and
216.18 	(14)(13) the local government correctional service retirement plan of the Public 
216.19 	Employees Retirement Association established under chapter 353E.

216.20 	Sec. 35. Minnesota Statutes 2008, section 356.64, is amended to read:
216.21 	356.64 REAL ESTATE INVESTMENTS.
216.22 	(a) Notwithstanding any law to the contrary, any public pension plan whose assets 
216.23 	are not invested by the State Board of Investment may invest its funds in Minnesota situs 
216.24 	nonfarm real estate ownership interests or loans secured by mortgages or deeds of trust if 
216.25 	the investment is consistent with section 356A.04.  
216.26 	(b) Except to the extent authorized in the case of the Minneapolis Employees 
216.27 	Retirement Fund under section 422A.05, subdivision 2c, paragraph (a), An investment 
216.28 	otherwise authorized by this section must also comply with the requirements and 
216.29 	limitations of section 11A.24, subdivision 6.  

216.30 	Sec. 36. Minnesota Statutes 2008, section 356.65, subdivision 2, is amended to read:
216.31 		Subd. 2. Disposition of abandoned amounts. Any unclaimed public pension 
216.32 	fund amounts existing in any public pension fund are presumed to be abandoned, but are 
216.33 	not subject to the provisions of sections 345.31 to 345.60. Unless the benefit plan of 
216.34 	the public pension fund specifically provides for a different disposition of unclaimed or 
217.1 	abandoned funds or amounts, any unclaimed public pension fund amounts cancel and 
217.2 	must be credited to the public pension fund. If the unclaimed public pension fund amount 
217.3 	exceeds $25 and the inactive or former member again becomes a member of the applicable 
217.4 	public pension plan or applies for a retirement annuity under section 3A.12, 352.72, 
217.5 	352B.30, 353.71, 354.60, or 356.30, or 422A.16, subdivision 8, whichever applies, the 
217.6 	canceled amount must be restored to the credit of the person. 

217.7 	Sec. 37. Minnesota Statutes 2008, section 356.91, is amended to read:
217.8 	356.91 VOLUNTARY MEMBERSHIP DUES DEDUCTION.
217.9 	(a) Upon written authorization of a person receiving an annuity from a public 
217.10 	pension fund administered by the Minnesota State Retirement System,or the Public 
217.11 	Employees Retirement Association, or the Minneapolis Employees Retirement Fund, the 
217.12 	executive director of the public pension fund may deduct from the retirement annuity an 
217.13 	amount requested by the annuitant to be paid as dues to any labor organization that is an 
217.14 	exclusive bargaining agent representing public employees or an organization representing 
217.15 	retired public employees of which the annuitant is a member and shall pay the amount to 
217.16 	the organization so designated by the annuitant.
217.17 	(b) A pension fund and the plan fiduciaries which authorize or administer deductions 
217.18 	of dues payments under paragraph (a) are not liable for failure to properly deduct or 
217.19 	transmit the dues amounts, provided that the fund and the fiduciaries have acted in good 
217.20 	faith.
217.21 	(c) The deductions under paragraph (a) may occur no more frequently than two 
217.22 	times per year and may not be used for political purposes.
217.23 	(d) Any labor organization specified in paragraph (a) shall reimburse the public 
217.24 	pension fund for the administrative expense of withholding premium amounts.

217.25 	Sec. 38. Minnesota Statutes 2009 Supplement, section 356.96, subdivision 1, is 
217.26 	amended to read:
217.27 		Subdivision 1.Definitions. (a) Unless the language or context clearly indicates that 
217.28 	a different meaning is intended, for the purpose of this section, the terms in paragraphs 
217.29 	(b) to (e) have the meanings given them.
217.30 	(b) "Chief administrative officer" means the executive director of a covered pension 
217.31 	plan or the executive director's designee or representative.
217.32 	(c) "Covered pension plan" means a plan enumerated in section 356.20, subdivision 
217.33 	2, clauses (1) to (4), (10) (9), and (13)(12) to (16) (15), but does not mean the 
218.1 	deferred compensation plan administered under sections 352.965 and 352.97 or to the 
218.2 	postretirement health care savings plan administered under section 352.98.
218.3 	(d) "Governing board" means the Board of Trustees of the Public Employees 
218.4 	Retirement Association, the Board of Trustees of the Teachers Retirement Association, or 
218.5 	the Board of Directors of the Minnesota State Retirement System.
218.6 	(e) "Person" includes an active, retired, deferred, or nonvested inactive participant in 
218.7 	a covered pension plan or a beneficiary of a participant, or an individual who has applied 
218.8 	to be a participant or who is or may be a survivor of a participant, or a state agency or 
218.9 	other governmental unit that employs active participants in a covered pension plan.

218.10 	Sec. 39. Minnesota Statutes 2008, section 473.511, subdivision 3, is amended to read:
218.11 		Subd. 3.Existing sanitary districts, joint sewer boards. Effective January 1, 
218.12 	1971, the corporate existence of the Minneapolis-St. Paul Sanitary District, the North 
218.13 	Suburban Sanitary Sewer District, and any joint board created by agreement among local 
218.14 	government units pursuant to under section 471.59, to provide interceptors and treatment 
218.15 	works for such local government units, shall terminate. All persons regularly employed by 
218.16 	such sanitary districts and joint boards on that date or on any earlier date on which the 
218.17 	former waste control commission pursuant to subdivisions 1 and 2 assumed ownership and 
218.18 	control of any interceptors or treatment works owned or operated by such sanitary districts 
218.19 	and joint boards, and who are employees of the commission on July 1, 1994, shall be are
218.20 	employees of the council, and may at their option become members of the Minnesota 
218.21 	State Retirement System or may continue as members of a public retirement association 
218.22 	under chapter 422A or any other law, to which they belonged before such date, and shall 
218.23 	retain all pension rights which they may have under such latter laws, and all other rights to 
218.24 	which they are entitled by contract or law. Members of trades who are employed by the 
218.25 	former Metropolitan Waste Control Commission, who have trade union pension coverage 
218.26 	pursuant to under a collective bargaining agreement, and who elected exclusion from 
218.27 	coverage pursuant to under section 473.512, or who are first employed after July 1, 1977, 
218.28 	shall may not be covered by the Minnesota State Retirement System. The council shall 
218.29 	make the employer's contributions to pension funds of its employees. Such employees 
218.30 	shall perform such duties as may be prescribed by the council. All funds of such sanitary 
218.31 	districts and joint boards then on hand, and all subsequent collections of taxes, special 
218.32 	assessments or service charges levied or imposed by or for such sanitary districts or joint 
218.33 	boards shall must be transferred to the council. The local government units otherwise 
218.34 	entitled to such cash, taxes, assessments or service charges shall must be credited with 
218.35 	such amounts, and such credits shall must be offset against any amounts to be paid by 
219.1 	them to the council as provided in section 473.517. The former Metropolitan Waste 
219.2 	Control Commission, and on July 1, 1994, the council shall succeed to and become vested 
219.3 	by action of law with all right, title and interest in and to any property, real or personal, 
219.4 	owned or operated by such sanitary districts and joint boards. Prior to that date the proper 
219.5 	officers of such sanitary districts and joint boards, or the former Metropolitan Waste 
219.6 	Control Commission, shall execute and deliver to the council all deeds, conveyances, bills 
219.7 	of sale, and other documents or instruments required to vest in the council good and 
219.8 	marketable title to all such real or personal property; provided that vesting of the title shall
219.9 	must occur by operation of law and failure to execute and deliver the documents shall does
219.10 	not affect the vesting of title in the former Metropolitan Waste Control Commission or the 
219.11 	council on the dates indicated in this subdivision. The council shall become obligated to 
219.12 	pay or assume all bonded or other debt and contract obligations incurred by the former 
219.13 	Metropolitan Waste Control Commission, or by such sanitary districts and joint boards, or 
219.14 	incurred by local government units for the acquisition or betterment of any interceptors or 
219.15 	treatment works owned or operated by such sanitary districts or joint boards.  

219.16 	Sec. 40. Minnesota Statutes 2008, section 473.606, subdivision 5, is amended to read:
219.17 		Subd. 5.Employees, others, affirmative action; prevailing wage. The corporation 
219.18 	shall have the power to appoint engineers and other consultants, attorneys, and such 
219.19 	other officers, agents, and employees as it may see fit, who shall perform such duties and 
219.20 	receive such compensation as the corporation may determine, and be removable at the 
219.21 	pleasure of the corporation. The corporation shall must adopt an affirmative action plan, 
219.22 	which shall be submitted to the appropriate agency or office of the state for review and 
219.23 	approval. The plan shall must include a yearly progress report to the agency or office. 
219.24 	Officers and employees of the corporation who cannot qualify and participate in the 
219.25 	municipal employees retirement fund under chapter 422A, shall be separated from service 
219.26 	at the retirement age applicable to officers or employees of the state of Minnesota in the 
219.27 	classified service of the state civil service as provided in section 43A.34, or as the same 
219.28 	may from time to time be amended, regardless of the provisions of the Veteran's Preference 
219.29 	Act. Whenever the corporation performs any work within the limits of a city of the first 
219.30 	class, or establishes a minimum wage for skilled or unskilled labor in the specifications or 
219.31 	any contract for work within one of the cities, the rate of pay to such skilled and unskilled 
219.32 	labor shall must be the prevailing rate of wage for such labor in that city.  

219.33 	Sec. 41. Minnesota Statutes 2008, section 475.52, subdivision 6, is amended to read:
220.1 		Subd. 6. Certain purposes. Any municipality may issue bonds for paying 
220.2 	judgments against it; for refunding outstanding bonds; for funding floating indebtedness; 
220.3 	for funding actuarial liabilities to pay postemployment benefits to employees or officers 
220.4 	after their termination of service; or for funding all or part of the municipality's current 
220.5 	and future unfunded liability for a pension or retirement fund or plan referred to in 
220.6 	section 356.20, subdivision 2, as those liabilities are most recently computed pursuant
220.7 	to under sections 356.215 and 356.216. The board of trustees or directors of a pension 
220.8 	fund or relief association referred to in section 69.77or chapter 422A must consent and 
220.9 	must be a party to any contract made under this section with respect to the fund held by 
220.10 	it for the benefit of and in trust for its members. For purposes of this section, the term 
220.11 	"postemployment benefits" means benefits giving rise to a liability under Statement No. 
220.12 	45 of the Governmental Accounting Standards Board. 

220.13 	Sec. 42. Minnesota Statutes 2009 Supplement, section 480.181, subdivision 2, is 
220.14 	amended to read:
220.15 		Subd. 2.Election to retain insurance and benefits; retirement. (a) Before a 
220.16 	person is transferred to state employment under this section, the person may elect to do 
220.17 	either or both of the following:
220.18 	(1) keep life insurance; hospital, medical, and dental insurance; and vacation and 
220.19 	sick leave benefits and accumulated time provided by the county instead of receiving 
220.20 	benefits from the state under the judicial branch personnel rules; or
220.21 	(2) remain a member of the general employees retirement plan of the Public 
220.22 	Employees Retirement Association or the Minneapolis employees retirement fundMERF 
220.23 	division of the Public Employees Retirement Association instead of joining the Minnesota 
220.24 	State Retirement System.
220.25 	Employees who make an election under clause (1) remain on the county payroll, 
220.26 	but the state shall reimburse the county on a quarterly basis for the salary and cost of the 
220.27 	benefits provided by the county. The state shall make the employer contribution to the 
220.28 	general employees retirement plan of the Public Employees Retirement Association or the 
220.29 	employer contribution under section 422A.101 353.50, subdivision 1a 7, paragraphs (c) 
220.30 	and (d), to the Minneapolis Employees Retirement FundMERF division of the Public 
220.31 	Employees Retirement Association on behalf of employees who make an election under 
220.32 	clause (2). 
220.33 	(b) An employee who makes an election under paragraph (a), clause (1), may revoke 
220.34 	the election, once, at any time, but if the employee revokes the election, the employee 
220.35 	cannot make another election. An employee who makes an election under paragraph (a), 
221.1 	clause (2), may revoke the election at any time within six months after the person becomes 
221.2 	a state employee. Once an employee revokes this election, the employee cannot make 
221.3 	another election.
221.4 	(c) The Supreme Court, after consultation with the Judicial Council, the 
221.5 	commissioner of management and budget, and the executive directors of the Public 
221.6 	Employees Retirement Association and the Minnesota State Retirement Association, shall 
221.7 	adopt procedures for making elections under this section.
221.8 	(d) The Supreme Court shall notify all affected employees of the options available 
221.9 	under this section. The executive directors of the Public Employees Retirement 
221.10 	Association and the Minnesota State Retirement System shall provide counseling to 
221.11 	affected employees on the effect of making an election to remain a member of the Public 
221.12 	Employees Retirement Association.

221.13 	Sec. 43. EFFECTIVE DATE.
 221.14 	Sections 1 to 42 are effective June 30, 2010.

221.15 	ARTICLE 14
221.16 	VOLUNTEER FIREFIGHTER RELIEF ASSOCIATION MODIFICATIONS

221.17 	Section 1. Minnesota Statutes 2009 Supplement, section 69.772, subdivision 6, is 
221.18 	amended to read:
221.19 		Subd. 6.Municipal ratification for plan amendments. If the special fund of the 
221.20 	relief association does not have a surplus over full funding pursuant to under subdivision 3, 
221.21 	clause (2), subclause (e), orand if the municipality is required to provide financial support 
221.22 	to the special fund of the relief association pursuant to under this section, the adoption of 
221.23 	or any amendment to the articles of incorporation or bylaws of a relief association which 
221.24 	increases or otherwise affects the retirement coverage provided by or the service pensions 
221.25 	or retirement benefits payable from the special fund of any relief association to which this 
221.26 	section applies is not effective until it is ratified by the governing body of the municipality 
221.27 	in which the relief association is located and the officers of a relief association shall not 
221.28 	seek municipal ratification prior to preparing and certifying an estimate of the expected 
221.29 	increase in the accrued liability and annual accruing liability of the relief association 
221.30 	attributable to the amendment. If the special fund of the relief association has a surplus 
221.31 	over full funding pursuant to under subdivision 3, clause (2), subclause (e), and if the 
221.32 	municipality is not required to provide financial support to the special fund of the relief 
221.33 	association pursuant to under this section, the relief association may adopt or amend its 
221.34 	articles of incorporation or bylaws which increase or otherwise affect the retirement 
222.1 	coverage provided by or the service pensions or retirement benefits payable from the 
222.2 	special fund of the relief association which are effective without municipal ratification so 
222.3 	long as this does not cause the amount of the resulting increase in the accrued liability 
222.4 	of the special fund of the relief association to exceed 90 percent of the amount of the 
222.5 	surplus over full funding reported in the prior year and this does not result in the financial 
222.6 	requirements of the special fund of the relief association exceeding the expected amount 
222.7 	of the future fire state aid to be received by the relief association as determined by the 
222.8 	board of trustees following the preparation of an estimate of the expected increase in the 
222.9 	accrued liability and annual accruing liability of the relief association attributable to the 
222.10 	change. If a relief association adopts or amends its articles of incorporation or bylaws 
222.11 	without municipal ratification pursuant to under this subdivision, and, subsequent to 
222.12 	the amendment or adoption, the financial requirements of the special fund of the relief 
222.13 	association pursuant to under this section are such so as to require financial support from 
222.14 	the municipality, the provision which was implemented without municipal ratification is 
222.15 	no longer effective without municipal ratification and any service pensions or retirement 
222.16 	benefits payable after that date may be paid only in accordance with the articles of 
222.17 	incorporation or bylaws as amended or adopted with municipal ratification.

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

222.19 	Sec. 2. Minnesota Statutes 2009 Supplement, section 69.773, subdivision 6, is 
222.20 	amended to read:
222.21 		Subd. 6.Municipal ratification for plan amendments. If the special fund of the 
222.22 	relief association does not have a surplus over full funding pursuant to under subdivision 
222.23 	4, orand if the municipality is required to provide financial support to the special fund of 
222.24 	the relief association pursuant to under this section, the adoption of or any amendment to 
222.25 	the articles of incorporation or bylaws of a relief association which increases or otherwise 
222.26 	affects the retirement coverage provided by or the service pensions or retirement benefits 
222.27 	payable from the special fund of any relief association to which this section applies is not 
222.28 	effective until it is ratified by the governing body of the municipality in which the relief 
222.29 	association is located. If the special fund of the relief association has a surplus over full 
222.30 	funding pursuant to under subdivision 4, and if the municipality is not required to provide 
222.31 	financial support to the special fund of the relief association pursuant to under this section, 
222.32 	the relief association may adopt or amend its articles of incorporation or bylaws which 
222.33 	increase or otherwise affect the retirement coverage provided by or the service pensions 
222.34 	or retirement benefits payable from the special fund of the relief association which are 
222.35 	effective without municipal ratification so long as this does not cause the amount of the 
223.1 	resulting increase in the accrued liability of the special fund of the relief association to 
223.2 	exceed 90 percent of the amount of the surplus over full funding reported in the prior year 
223.3 	and this does not result in the financial requirements of the special fund of the relief 
223.4 	association exceeding the expected amount of the future fire state aid to be received by the 
223.5 	relief association as determined by the board of trustees following the preparation of an 
223.6 	updated actuarial valuation including the proposed change or an estimate of the expected 
223.7 	actuarial impact of the proposed change prepared by the actuary of the relief association. 
223.8 	If a relief association adopts or amends its articles of incorporation or bylaws without 
223.9 	municipal ratification pursuant to this subdivision, and, subsequent to the amendment or 
223.10 	adoption, the financial requirements of the special fund of the relief association pursuant
223.11 	to under this section are such so as to require financial support from the municipality, the 
223.12 	provision which was implemented without municipal ratification is no longer effective 
223.13 	without municipal ratification and any service pensions or retirement benefits payable after 
223.14 	that date may be paid only in accordance with the articles of incorporation or bylaws as 
223.15 	amended or adopted with municipal ratification.

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

223.17 	Sec. 3. Minnesota Statutes 2008, section 356A.06, subdivision 8, is amended to read:
223.18 		Subd. 8.Minimum liquidity requirements. A covered pension plan described by 
223.19 	subdivision 6, paragraph (a) or 7, in order to pay benefits as they come due, shall invest 
223.20 	a portion of its assets in authorized short-term debt obligations that can be immediately 
223.21 	liquidated without accrual of a substantial determinable penalty or loss and that have an 
223.22 	average maturity of no more than 90 days. The chief administrative officer of the plan 
223.23 	shall determine the minimum liquidity requirement of the plan and shall retain appropriate 
223.24 	documentation of that determination for three years from the date of determination.

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

223.26 	Sec. 4. Minnesota Statutes 2009 Supplement, section 424A.01, subdivision 1, is 
223.27 	amended to read:
223.28 		Subdivision 1.Minors. (a) No volunteer firefighters' relief association associated 
223.29 	with a municipality or an independent nonprofit firefighting corporation may include as a 
223.30 	relief association member a minor serving as a firefighter, except for members of a youth, 
223.31 	civic, or educational organization or program who participate with uninterrupted adult 
223.32 	supervision, as allowed by federal law and by section 181A.04. Such organizations or 
224.1 	programs include, but are not limited to, Boy Scout Explorer programs or firefighting 
224.2 	degree programs.
224.3 	(b) No volunteer firefighters' relief association associated with a municipality or an 
224.4 	independent nonprofit firefighting corporation may include as a relief association member 
224.5 	a minor serving as a volunteer firefighter.

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

224.7 	Sec. 5. Minnesota Statutes 2009 Supplement, section 424A.01, subdivision 6, is 
224.8 	amended to read:
224.9 		Subd. 6.Return to active firefighting after break in service. (a) The requirements 
224.10 	of this section apply to all breaks in service, except breaks in service mandated by federal 
224.11 	or state law.
224.12 	(b)(1) If a former active firefighter who has ceased to perform or supervise fire 
224.13 	suppression and fire prevention duties for at least 60 days resumes performing active 
224.14 	firefighting with the fire department associated with the relief association, if the bylaws of 
224.15 	the relief association so permit, the personfirefighter may again become an active member 
224.16 	of the relief association. A firefighter who returns to active service and membership is 
224.17 	subject to the service pension calculation requirements under this section.
224.18 	(2) A firefighter who has been granted an approved leave of absence not exceeding 
224.19 	one year by the fire department or by the relief association is exempt from the minimum 
224.20 	period of resumption service requirement of this section.
224.21 	(3) A person who has a break in service not exceeding one year but has not been 
224.22 	granted an approved leave of absence and who has not received a service pension or 
224.23 	disability benefit may be made exempt from the minimum period of resumption service 
224.24 	requirement of this section by the relief association bylaws.
224.25 	(4) If the bylaws so provide, a firefighter who returns to active relief association 
224.26 	membership under this paragraph may continue to collect a monthly service pension, 
224.27 	notwithstanding the service pension eligibility requirements under chapter 424A.
224.28 	(b)(c) If a former firefighter who has received a service pension or disability benefit 
224.29 	returns to active relief association membership under paragraph (a)(b), the firefighter may 
224.30 	qualify for the receipt of a service pension from the relief association for the resumption 
224.31 	service period if the firefighter meets a minimum period of resumption service specified in 
224.32 	the relief association bylaws the service requirements of section 424A.016, subdivision 3, 
224.33 	or 424A.02, subdivision 2.
224.34 	(d) If a former firefighter who has not received a service pension or disability benefit 
224.35 	returns to active relief association membership under paragraph (b), the firefighter may 
225.1 	qualify for the receipt of a service pension from the relief association for the resumption 
225.2 	service period if the firefighter meets the minimum period of resumption service specified 
225.3 	in the relief association bylaws and the service requirements of section 424A.016, 
225.4 	subdivision 3, or 424A.02, subdivision 2.
225.5 	(c)(e) A firefighter who returns to active lump-sum relief association membership 
225.6 	and who qualifies for a service pension under paragraph (b)(c) or (d) must have, upon 
225.7 	a subsequent cessation of duties, any service pension for the resumption service period 
225.8 	calculated as a separate benefit. If a lump-sum service pension had been paid to the 
225.9 	firefighter upon the firefighter's previous cessation of duties, a second lump-sum service 
225.10 	pension for the resumption service period must be calculated to apply the service pension 
225.11 	amount in effect on the date of the firefighter's termination of the resumption service for all 
225.12 	years of the resumption service. No firefighter may be paid a service pension twice for the 
225.13 	same period of service. If a lump-sum service pension had not been paid to the firefighter 
225.14 	upon the firefighter's previous cessation of duties and the firefighter meets the minimum 
225.15 	service requirement of section 424A.016, subdivision 3, or 424A.02, subdivision 2, a 
225.16 	service pension must be calculated to apply the service pension amount in effect on the 
225.17 	date of the firefighter's termination of the resumption service for all years of service credit.
225.18 	(d)(f) A firefighter who had not been paid a lump-sum service pension returns 
225.19 	to active relief association membership under paragraph (a) (b), who does not qualify 
225.20 	for a service pension under paragraph (b) (d), but who does meet the minimum service 
225.21 	requirement of section 424A.016, subdivision 3, or 424A.02, subdivision 2, based on the 
225.22 	firefighter's previous years of active service, must have, upon a subsequent cessation of 
225.23 	duties, a service pension calculated for the previous years of service based on the service 
225.24 	pension amount in effect on the date of the firefighter's termination of the resumption 
225.25 	service, or, if the bylaws so provide, based on the service pension amount in effect on the 
225.26 	date of the firefighter's previous cessation of duties.
225.27 	(e)(g) If a firefighter receiving a monthly benefit service pension returns to active 
225.28 	monthly benefit relief association membership under paragraph (a) (b), and if the relief 
225.29 	association bylaws do not allow for the firefighter to continue collecting a monthly service 
225.30 	pension, any monthly benefit service pension payable to the firefighter is suspended as 
225.31 	of the first day of the month next following the date on which the firefighter returns to 
225.32 	active membership. If the firefighter was receiving a monthly benefit service pension, 
225.33 	and qualifies for a service pension under paragraph (b) (c), the firefighter is entitled to 
225.34 	an additional monthly benefit service pension upon a subsequent cessation of duties 
225.35 	calculated based on the resumption service credit and the service pension accrual amount 
225.36 	in effect on the date of the termination of the resumption service. TheA suspended initial 
226.1 	service pension resumes as of the first of the month next following the termination of the 
226.2 	resumption service. If the firefighter was not receiving a monthly benefit service pension 
226.3 	and meets the minimum service requirement of section 424A.02, subdivision 2, a service 
226.4 	pension must be calculated to apply the service pension amount in effect on the date of the 
226.5 	firefighter's termination of the resumption service for all years of service credit.
226.6 	(f)(h) A firefighter who was not receiving a monthly benefit service pension returns 
226.7 	to active relief association membership under paragraph (a) (b), who does not qualify 
226.8 	for a service pension under paragraph (b) (d), but who does meet the minimum service 
226.9 	requirement of section 424A.02, subdivision 2, based on the firefighter's previous years 
226.10 	of active service, must have, upon a subsequent cessation of duties, a service pension 
226.11 	calculated for the previous years of service based on the service pension amount in effect 
226.12 	on the date of the firefighter's termination of the resumption service, or, if the bylaws so 
226.13 	provide, based on the service pension amount in effect on the date of the firefighter's 
226.14 	previous cessation of duties.

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

226.16 	Sec. 6. Minnesota Statutes 2009 Supplement, section 424A.015, is amended by adding 
226.17 	a subdivision to read:
226.18 		Subd. 5.Minnesota deferred compensation plan transfers. A relief association 
226.19 	may directly transfer on an institution-to-institution basis the eligible member's 
226.20 	lump-sum pension amount to the requesting member's account in the Minnesota deferred 
226.21 	compensation plan, if:
226.22 	(1) the governing articles of incorporation or bylaws so provide;
226.23 	(2) the volunteer firefighter participates in the Minnesota deferred compensation 
226.24 	plan at the time of retirement; and
226.25 	(3) the applicable retiring firefighter requests in writing that the relief association 
226.26 	do so.

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

226.28 	Sec. 7. Minnesota Statutes 2009 Supplement, section 424A.016, subdivision 4, is 
226.29 	amended to read:
226.30 		Subd. 4.Individual accounts. (a) An individual account must be established for 
226.31 	each firefighter who is a member of the relief association.
226.32 	(b) To each individual active member account must be credited an equal share of:
226.33 	(1) any amounts of fire state aid received by the relief association;
227.1 	(2) any amounts of municipal contributions to the relief association raised from 
227.2 	levies on real estate or from other available municipal revenue sources exclusive of fire 
227.3 	state aid; and
227.4 	(3) any amounts equal to the share of the assets of the special fund to the credit of:
227.5 	(i) any former member who terminated active service with the fire department to 
227.6 	which the relief association is associated before meeting the minimum service requirement 
227.7 	provided for in subdivision 2, paragraph (b), and has not returned to active service with 
227.8 	the fire department for a period no shorter than five years; or
227.9 	(ii) any retired member who retired before obtaining a full nonforfeitable interest in 
227.10 	the amounts credited to the individual member account under subdivision 2, paragraph 
227.11 	(b), and any applicable provision of the bylaws of the relief association. In addition, any 
227.12 	investment return on the assets of the special fund must be credited in proportion to the 
227.13 	share of the assets of the special fund to the credit of each individual active member 
227.14 	account. Administrative expenses of the relief association payable from the special 
227.15 	fund may be deducted from individual accounts in a manner specified in the bylaws of 
227.16 	the relief association. 
227.17 	(c) If the bylaws so permit and as the bylaws define, the relief association may credit 
227.18 	any investment return on the assets of the special fund to the accounts of inactive members.
227.19 	(d) Amounts to be credited to individual accounts must be allocated uniformly for 
227.20 	all years of active service and allocations must be made for all years of service, except for 
227.21 	caps on service credit if so provided in the bylaws of the relief association. The allocation 
227.22 	method may utilize monthly proration for fractional years of service, as the bylaws or 
227.23 	articles of incorporation of the relief association so provide. The bylaws or articles of 
227.24 	incorporation may define a "month," but the definition must require a calendar month to 
227.25 	have at least 16 days of active service. If the bylaws or articles of incorporation do not 
227.26 	define a "month," a "month" is a completed calendar month of active service measured 
227.27 	from the member's date of entry to the same date in the subsequent month. 
227.28 	(d)(e) At the time of retirement under subdivision 2 and any applicable provision 
227.29 	of the bylaws of the relief association, a retiring member is entitled to that portion of the 
227.30 	assets of the special fund to the credit of the member in the individual member account 
227.31 	which is nonforfeitable under subdivision 3 and any applicable provision of the bylaws of 
227.32 	the relief association based on the number of years of service to the credit of the retiring 
227.33 	member.
227.34 	(e)(f) Annually, the secretary of the relief association shall certify the individual 
227.35 	account allocations to the state auditor at the same time that the annual financial statement 
228.1 	or financial report and audit of the relief association, whichever applies, is due under 
228.2 	section 69.051.

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

228.4 	Sec. 8. Minnesota Statutes 2009 Supplement, section 424A.016, subdivision 7, is 
228.5 	amended to read:
228.6 		Subd. 7.Limitation on ancillary benefits. (a) A defined contribution relief 
228.7 	association may only pay an ancillary benefit which would constitute an authorized 
228.8 	disbursement as specified in section 424A.05. The ancillary benefit for active members 
228.9 	must equal the vested orand nonvested amount of the individual account of the member.
228.10 	(b) For deferred members, the ancillary benefit must equal the vested amount of 
228.11 	the individual account of the member. For the recipient of installment payments of a 
228.12 	service pension, the ancillary benefit must equal the remaining balance in the individual 
228.13 	account of the recipient.
228.14 	(c)(1) If a survivor or death benefit is payable under the articles of incorporation or 
228.15 	bylaws, the benefit must be paid:
228.16 	(i) as a survivor benefit to the surviving spouse of the deceased firefighter;
228.17 	(ii) as a survivor benefit to the surviving children of the deceased firefighter if no 
228.18 	surviving spouse;
228.19 	(iii) as a survivor benefit to a designated beneficiary of the deceased firefighter if no 
228.20 	surviving spouse or surviving children; or
228.21 	(iv) as a death benefit to the estate of the deceased active or deferred firefighter if no 
228.22 	surviving spouse, no surviving children, and no beneficiary designated.
228.23 	(2) If there are no surviving children, the surviving spouse may waive, in writing, 
228.24 	wholly or partially, the spouse's entitlement to a survivor benefit.
228.25 	(d) For purposes of this section, for a defined contribution volunteer fire relief 
228.26 	association, a trust created under chapter 501B may be a designated beneficiary. If a trust 
228.27 	payable to the surviving children organized under chapter 501B has been established as 
228.28 	authorized by this section and there is no surviving spouse, the survivor benefit may be 
228.29 	paid to the trust, notwithstanding the requirements of this section.

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

228.31 	Sec. 9. Minnesota Statutes 2009 Supplement, section 424A.02, subdivision 9, is 
228.32 	amended to read:
229.1 		Subd. 9.Limitation on ancillary benefits. A defined benefit relief association, 
229.2 	including any volunteer firefighters relief association governed by section 69.77 or any 
229.3 	volunteer firefighters division of a relief association governed by chapter 424, may only 
229.4 	pay ancillary benefits which would constitute an authorized disbursement as specified in 
229.5 	section 424A.05 subject to the following requirements or limitations:
229.6 	(1) with respect to a defined benefit relief association in which governing bylaws 
229.7 	provide for a lump-sum service pension to a retiring member, no ancillary benefit may 
229.8 	be paid to any former member or paid to any person on behalf of any former member 
229.9 	after the former member (i) terminates active service with the fire department and active 
229.10 	membership in the relief association; and (ii) commences receipt of a service pension as 
229.11 	authorized under this section; and
229.12 	(2) with respect to any defined benefit relief association, no ancillary benefit paid or 
229.13 	payable to any member, to any former member, or to any person on behalf of any member 
229.14 	or former member, may exceed in amount the total earned service pension of the member 
229.15 	or former member. The total earned service pension must be calculated by multiplying 
229.16 	the service pension amount specified in the bylaws of the relief association at the time of 
229.17 	death or disability, whichever applies, by the years of service credited to the member or 
229.18 	former member. The years of service must be determined as of (i) the date the member or 
229.19 	former member became entitled to the ancillary benefit; or (ii) the date the member or 
229.20 	former member died entitling a survivor or the estate of the member or former member to 
229.21 	an ancillary benefit. The ancillary benefit must be calculated without regard to whether the 
229.22 	member had attained the minimum amount of service and membership credit specified in 
229.23 	the governing bylaws. For active members, the amount of a permanent disability benefit 
229.24 	or a survivor benefit must be equal to the member's total earned service pension except 
229.25 	that the bylaws of a defined benefit relief association may provide for the payment of a 
229.26 	survivor benefit in an amount not to exceed five times the yearly service pension amount 
229.27 	specified in the bylaws on behalf of any member who dies before having performed five 
229.28 	years of active service in the fire department with which the relief association is affiliated.
229.29 	(3)(i) If a lump sum survivor or death benefit is payable under the articles of 
229.30 	incorporation or bylaws, the benefit must be paid:
229.31 	(A) as a survivor benefit to the surviving spouse of the deceased firefighter;
229.32 	(B) as a survivor benefit to the surviving children of the deceased firefighter if 
229.33 	no surviving spouse;
229.34 	(C) as a survivor benefit to a designated beneficiary of the deceased firefighter if no 
229.35 	surviving spouse or surviving children; or
230.1 	(D) as a death benefit to the estate of the deceased active or deferred firefighter if no 
230.2 	surviving children and no beneficiary designated.
230.3 	(ii) If there are no surviving children, the surviving spouse may waive, in writing, 
230.4 	wholly or partially, the spouse's entitlement to a survivor benefit.
230.5 	(4)(i) If a monthly benefit survivor or death benefit is payable under the articles of 
230.6 	incorporation or bylaws, the benefit must be paid:
230.7 	(A) as a survivor benefit to the surviving spouse of the deceased firefighter;
230.8 	(B) as a survivor benefit to the surviving children of the deceased firefighter if 
230.9 	no surviving spouse;
230.10 	(C) as a survivor benefit to a designated beneficiary of the deceased firefighter if no 
230.11 	surviving spouse or surviving children; or
230.12 	(D) as a death benefit to the estate of the deceased active or deferred firefighter if no 
230.13 	surviving spouse, no surviving children, and no beneficiary designated.
230.14 	(ii) If there are no surviving children, the surviving spouse may waive, in writing, 
230.15 	wholly or partially, the spouse's entitlement to a survivor benefit.
230.16 	(iii) For purposes of this clause, if the relief association bylaws authorize a monthly 
230.17 	survivor benefit payable to a designated beneficiary, the relief association bylaws may 
230.18 	limit the total survivor benefit amount payable.
230.19 	(5) For purposes of this section, for a monthly benefit volunteer fire relief association 
230.20 	or for a combination lump-sum and monthly benefit volunteer fire relief association where 
230.21 	a monthly benefit service pension has been elected by or a monthly benefit is payable with 
230.22 	respect to a firefighter, a designated beneficiary must be a natural person. For purposes 
230.23 	of this section, for a lump-sum volunteer fire relief association or for a combination 
230.24 	lump-sum and monthly benefit volunteer fire relief association where a lump-sum service 
230.25 	pension has been elected by or a lump-sum benefit is payable with respect to a firefighter, 
230.26 	a trust created under chapter 501B may be a designated beneficiary. If a trust is payable to 
230.27 	the surviving children organized under chapter 501B as authorized by this section and 
230.28 	there is no surviving spouse, the survivor benefit may be paid to the trust, notwithstanding 
230.29 	a requirement of this section to the contrary.

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

230.31 	Sec. 10. Minnesota Statutes 2009 Supplement, section 424A.02, subdivision 10, 
230.32 	is amended to read:
230.33 		Subd. 10.Local approval of bylaw amendments; filing requirements. (a) Each 
230.34 	defined benefit relief association to which this section applies must file a revised copy 
230.35 	of its governing bylaws with the state auditor upon the adoption of any amendment to 
231.1 	its governing bylaws by the relief association or upon the approval of any amendment 
231.2 	to its governing bylaws granted by the governing body of each municipality served by 
231.3 	the fire department to which the relief association is directly associated. Failure of the 
231.4 	relief association to file a copy of the bylaws or any bylaw amendments with the state 
231.5 	auditor disqualifies the municipality from the distribution of any future fire state aid until 
231.6 	this filing requirement has been completed.
231.7 	(b) If the special fund of the relief association does not have a surplus over full 
231.8 	funding under section 69.772, subdivision 3, clause (2), subclause (e), or 69.773, 
231.9 	subdivision 4, and if the municipality is required to provide financial support to the special 
231.10 	fund of the relief association under section 69.772 or 69.773, no bylaw amendment which 
231.11 	would affect the amount of, the manner of payment of, or the conditions for qualification 
231.12 	for service pensions or ancillary benefits or disbursements other than administrative 
231.13 	expenses authorized under section 69.80 payable from the special fund of the relief 
231.14 	association is effective until it has been ratified by the governing body or bodies of the 
231.15 	appropriate municipalities as required under section 69.772, subdivision 6, or 69.773, 
231.16 	subdivision 6. If the special fund of the relief association has a surplus over full funding 
231.17 	under section 69.772, subdivision 3, or 69.773, subdivision 4, and if the municipality is 
231.18 	not required to provide financial support to the special fund under this section, the relief 
231.19 	association may adopt or amend without municipal ratification its articles of incorporation 
231.20 	or bylaws which increase or otherwise affect the service pensions or ancillary benefits 
231.21 	payable from the special fund so long as the changes do not cause the amount of the 
231.22 	resulting increase in the accrued liability of the special fund to exceed 90 percent of the 
231.23 	amount of the surplus over full funding reported in the prior year and the changes do not 
231.24 	result in the financial requirements of the special fund exceeding the expected amount 
231.25 	of the subsequent calendar year's fire state aid to be received by the relief association if 
231.26 	authorized under section 69.772, subdivision 6, or 69.773, subdivision 6.
231.27 	(c) If the relief association pays only a lump-sum pension, the financial requirements 
231.28 	are to be determined by the board of trustees following the preparation of an estimate 
231.29 	of the expected increase in the accrued liability and annual accruing liability of the 
231.30 	relief association attributable to the change. If the relief association pays a monthly 
231.31 	benefit service pension, the financial requirements are to be determined by the board of 
231.32 	trustees following either an updated actuarial valuation including the proposed change 
231.33 	or an estimate of the expected actuarial impact of the proposed change prepared by the 
231.34 	actuary of the relief association. If a relief association adopts or amends its articles 
231.35 	of incorporation or bylaws without municipal ratification under this subdivision, and, 
231.36 	subsequent to the amendment or adoption, the financial requirements of the special fund 
232.1 	under this section are such so as to require financial support from the municipality, the 
232.2 	provision which was implemented without municipal ratification is no longer effective 
232.3 	without municipal ratification, and any service pensions or ancillary benefits payable after 
232.4 	that date must be paid only in accordance with the articles of incorporation or bylaws as 
232.5 	amended or adopted with municipal ratification.

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

232.7 	Sec. 11. Minnesota Statutes 2009 Supplement, section 424A.05, subdivision 3, is 
232.8 	amended to read:
232.9 		Subd. 3.Authorized disbursements from the special fund. (a) Disbursements 
232.10 	from the special fund may not be made for any purpose other than one of the following:
232.11 	(1) for the payment of service pensions to retired members of the relief association if 
232.12 	authorized and paid under law and the bylaws governing the relief association;
232.13 	(2) for the purchase of an annuity for the applicable person under section 424A.015, 
232.14 	subdivision 3, for the transfer of service pension or benefit amounts to the applicable 
232.15 	person's individual retirement account under section 424A.015, subdivision 4, or to the 
232.16 	applicable person's account in the Minnesota deferred compensation plan under section 
232.17 	424A.015, subdivision 5;
232.18 	(2)(3) for the payment of temporary or permanent disability benefits to disabled 
232.19 	members of the relief association if authorized and paid under law and specified in amount 
232.20 	in the bylaws governing the relief association;
232.21 	(3)(4) for the payment of survivor benefits to surviving spouses and surviving 
232.22 	children, or if none, to designated beneficiaries, of deceased members of the relief 
232.23 	association, and if no survivors and if no designated beneficiary,or for the payment of a 
232.24 	death benefit to the estate of the deceased active or deferred firefighter, if authorized by
232.25 	and paid under law and specified in amount in the bylaws governing the relief association;
232.26 	(4)(5) for the payment of the fees, dues and assessments to the Minnesota State 
232.27 	Fire Department Association and to the Minnesota Area Relief Association Coalition in 
232.28 	order to entitle relief association members to membership in and the benefits of these 
232.29 	associations or organizations; 
232.30 	(5)(6) for the payment of insurance premiums to the state Volunteer Firefighters 
232.31 	Benefit Association, or an insurance company licensed by the state of Minnesota offering 
232.32 	casualty insurance, in order to entitle relief association members to membership in and the 
232.33 	benefits of the association or organization; and
232.34 	(6)(7) for the payment of administrative expenses of the relief association as 
232.35 	authorized under section 69.80. 
233.1 	(b) For purposes of this chapter, for a monthly benefit volunteer fire relief association 
233.2 	or for a combination lump-sum and monthly benefit volunteer fire relief association where 
233.3 	a monthly benefit service pension has been elected by or a monthly benefit is payable with 
233.4 	respect to a firefighter, a designated beneficiary must be a natural person. For purposes of 
233.5 	this chapter, for a defined contribution volunteer fire relief association, for a lump-sum 
233.6 	volunteer fire relief association, or for a combination lump-sum and monthly benefit 
233.7 	volunteer fire relief association where a lump-sum service pension has been elected by 
233.8 	or a lump-sum benefit is payable with respect to a firefighter, a designated beneficiary 
233.9 	may be a trust created under chapter 501B.

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

233.11 	Sec. 12. Minnesota Statutes 2009 Supplement, section 424A.05, is amended by adding 
233.12 	a subdivision to read:
233.13 		Subd. 3a.Corrections of erroneous special fund deposits. Upon notification 
233.14 	of funds deposited in error in the special fund and after presentation of evidence that 
233.15 	the error occurred in good faith, the state auditor may require the relief association to 
233.16 	provide a written legal opinion concluding that the transfer of funds from the special 
233.17 	fund is consistent with federal and state law. Taking into consideration the evidence of 
233.18 	good faith presented and the legal opinion, if any, provided, the state auditor may order 
233.19 	the transfer from the special fund to the appropriate fund or account an amount equal 
233.20 	to the funds deposited in error.

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

233.22 	Sec. 13.  REPEALER.
 233.23 	(a) Minnesota Statutes 2009 Supplement, section 424A.001, subdivision 6, is 
233.24 	repealed.
233.25 	(b) Laws 2009, chapter 169, article 10, section 32, is repealed.

233.26 	EFFECTIVE DATE. Paragraph (a) is effective the day following final enactment. 
233.27 	Paragraph (b) is effective retroactively from July 1, 2009.

233.28 	ARTICLE 15
233.29 	ONE PERSON/SMALL GROUP PENSION ISSUES

233.30 	Section 1. PERA-GENERAL; PURCHASE OF OMITTED INVER GROVE 
233.31 	HEIGHTS SCHOOL DISTRICT OMITTED MEMBER CONTRIBUTIONS.
 234.1 	(a) Notwithstanding any provision of law to the contrary, an eligible person 
234.2 	described in paragraph (b) is entitled to purchase from the general employees retirement 
234.3 	plan of the Public Employees Retirement Association allowable service credit under 
234.4 	Minnesota Statutes, section 353.01, subdivision 16, for the period of omitted member 
234.5 	deductions described in paragraph (c).
234.6 	(b) An eligible person is a person who:
234.7 	(1) was born on April 17, 1948;
234.8 	(2) is a current employee of Independent School District No. 199, Inver Grove 
234.9 	Heights;
234.10 	(3) is a current member of the general employees retirement plan of the Public 
234.11 	Employees Retirement Association;
234.12 	(4) was employed by Independent School District No. 199, Inver Grove Heights, 
234.13 	on August 26, 1985; and
234.14 	(5) was not reported by Independent School District No. 199, Inver Grove Heights, 
234.15 	for retirement coverage by and membership in the general employees retirement plan of 
234.16 	the Public Employees Retirement Association until September 1, 1986.
234.17 	(c) The period of uncredited service authorized for purchase is the period of August 
234.18 	26, 1985, until August 31, 1986, during which no member contributions for the general 
234.19 	employees retirement plan of the Public Employees Retirement Association were 
234.20 	deducted from the eligible person's salary by Independent School District No. 199, Inver 
234.21 	Grove Heights.
234.22 	(d) The purchase payment amount payable by the eligible person is four percent of 
234.23 	the eligible person's salary under Minnesota Statutes 1984, section 353.01, subdivision 
234.24 	10, from Independent School District No. 199, Inver Grove Heights, during the period of 
234.25 	August 26, 1985, until August 31, 1986, plus annual compound interest on that amount at 
234.26 	the rate of 8.5 percent from March 1, 1986, until the date on which payment is made to 
234.27 	the Public Employees Retirement Association. The purchase payment amount payable 
234.28 	by Independent School District No. 199, Inver Grove Heights, is the balance of the full 
234.29 	actuarial value prior service credit purchase payment amount determined under Minnesota 
234.30 	Statutes, section 356.551, as of the first day of the month next following the receipt of the 
234.31 	eligible person's payment that is remaining after deducting the purchase payment amount 
234.32 	payable by the eligible person.
234.33 	(e) The school district purchase payment amount payable under paragraph (d) must 
234.34 	be made on or before the 15th of the month next following the receipt of the eligible 
234.35 	person's payment under paragraph (d). If the school district purchase payment amount is 
234.36 	not paid in a timely fashion, the amount due accrues compound monthly interest at the 
235.1 	rate of 0.71 percent per month from the first day of the month next following the receipt 
235.2 	of the eligible person's payment until the school district purchase payment amount is 
235.3 	received by the Public Employees Retirement Association. If the school district purchase 
235.4 	payment amount is not paid to the Public Employees Retirement Association 90 days 
235.5 	after the receipt of the eligible person's payment, the executive director shall notify 
235.6 	the commissioner of management and budget, the commissioner of education, and the 
235.7 	commissioner of revenue of that unpaid obligation and the unpaid obligation must be 
235.8 	deducted from any state aid otherwise payable to the school district, plus interest.
235.9 	(f) The eligible person must provide the executive director of the Public Employees 
235.10 	Retirement Association with any relevant requested information pertaining to this service 
235.11 	credit purchase.
235.12 	(g) Authority to make a service credit purchase under this section expires on June 
235.13 	30, 2011, or upon the termination from public employment under Minnesota Statutes, 
235.14 	section 353.01, subdivision 11a, whichever occurs earlier.

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

235.16 	Sec. 2. TEACHERS RETIREMENT ASSOCIATION; SECOND CHANCE 
235.17 	RETIREMENT COVERAGE AUTHORITY FOR IRAP MEMBER.
 235.18 	(a) Notwithstanding any provision of Minnesota Statutes, chapter 352, 353, or 
235.19 	354B or section 356.551 to the contrary, an eligible person described in paragraph (b) is 
235.20 	entitled to elect retirement coverage for Minnesota State Colleges and Universities System 
235.21 	employment by the Teachers Retirement Association under Minnesota Statutes, section 
235.22 	354B.21, subdivisions 2 and 3, despite the time limitation on the election.
235.23 	(b) An eligible person is a person who:
235.24 	(1) was born on July 19, 1948;
235.25 	(2) was employed by Mankato State University in 1969, with retirement coverage in 
235.26 	the general state employees retirement plan of the Minnesota State Retirement System, for 
235.27 	which a refund of member contributions and interest was taken before 2007;
235.28 	(3) was employed by the city of Austin in the early 1980s, with retirement coverage 
235.29 	in the general employees retirement plan of the Public Employees Retirement Association, 
235.30 	for which a refund of member contributions and interest was taken before 2007;
235.31 	(4) is employed by the Minnesota State Colleges and Universities System at 
235.32 	Riverland Community College; and
235.33 	(5) had the person's employment position upgraded by the Minnesota State Colleges 
235.34 	and Universities System on September 9, 2007, and had retirement coverage transferred 
235.35 	by operation of law to the higher education individual retirement account plan.
236.1 	(c) An election to change retirement coverage from the Minnesota State Colleges 
236.2 	and Universities System individual retirement account plan to the Teachers Retirement 
236.3 	Association must be made by July 1, 2010, and is retroactive to September 9, 2007. If 
236.4 	the election is made, Minnesota Statutes, section 356.551, applies to the purchase of 
236.5 	past service except for subdivision 1, paragraph (c), of that provision, which requires 
236.6 	all refunds to be paid before the service credit purchase. The eligible person's account 
236.7 	in the individual retirement account plan must be liquidated by transfer to the Teachers 
236.8 	Retirement Association fund by August 1, 2010, and used to cover part of the service 
236.9 	credit purchase payment amount. Any remaining payment amount must be paid in a lump 
236.10 	sum to the executive director of the Teachers Retirement Association for deposit in the 
236.11 	Teachers Retirement Association fund by September 1, 2010. Retroactive service credit 
236.12 	in the Teachers Retirement Association must be granted to the eligible person once the 
236.13 	transfers and payments required under this paragraph have been made.
236.14 	(d) If an eligible person under paragraph (b) elects Teachers Retirement Association 
236.15 	coverage but fails to make the full payment required under paragraph (c), the election of 
236.16 	Teachers Retirement Association coverage is voided and the individual retains coverage 
236.17 	by the Minnesota State Colleges and Universities System individual retirement account 
236.18 	plan. If amounts were transferred under paragraph (c) from the individual retirement 
236.19 	account plan, those amounts must be returned to the individual's account or accounts 
236.20 	under that plan.

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

236.22 	ARTICLE 16
236.23 	MISCELLANEOUS PROVISIONS

236.24 	Section 1. Minnesota Statutes 2008, section 356.216, is amended to read:
236.25 	356.216 CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL POLICE 
236.26 	AND FIRE FUNDS.
236.27 	(a) The provisions of section 356.215 that govern the contents of actuarial valuations 
236.28 	must apply to any local police or fire pension fund or relief association required to make 
236.29 	an actuarial report under this section, except as follows:
236.30 	(1) in calculating normal cost and other requirements, if required to be expressed as 
236.31 	a level percentage of covered payroll, the salaries used in computing covered payroll must 
236.32 	be the maximum rate of salary on which retirement and survivorship credits and amounts 
236.33 	of benefits are determined and from which any member contributions are calculated and 
236.34 	deducted;
237.1 	(2) in lieu of the amortization date specified in section 356.215, subdivision 11, 
237.2 	the appropriate amortization target date specified in section 69.77, subdivision 4, or 
237.3 	69.773, subdivision 4, clause (c), must be used in calculating any required amortization 
237.4 	contribution, except that if the actuarial report for the Bloomington Fire Department Relief 
237.5 	Association indicates an unfunded actuarial accrued liability, the unfunded obligation is 
237.6 	to be amortized on a level dollar basis by December 31 of the year occurring 20 years 
237.7 	later, and if subsequent actuarial valuations for the Bloomington Fire Department Relief 
237.8 	Association determine a net actuarial experience loss incurred during the year which 
237.9 	ended as of the day before the most recent actuarial valuation date, any unfunded liability 
237.10 	due to that loss is to be amortized on a level dollar basis by December 31 of the year 
237.11 	occurring 20 years later and except that the amortization date for the Minneapolis Police 
237.12 	Relief Association is December 31, 2020;
237.13 	(3) in addition to the tabulation of active members and annuitants provided for in 
237.14 	section 356.215, subdivision 13, the member contributions for active members for the 
237.15 	calendar year and the prospective annual retirement annuities under the benefit plan for 
237.16 	active members must be reported;
237.17 	(4) actuarial valuations required under section 69.773, subdivision 2, must be made 
237.18 	at least every four years and actuarial valuations required under section 69.77 shall be 
237.19 	made annually;
237.20 	(5) the actuarial balance sheet showing accrued assets valued at market value if the 
237.21 	actuarial valuation is required to be prepared at least every four years or valued as current 
237.22 	assets under section 356.215, subdivision 1, clause (6) paragraph (f), or paragraph (b), 
237.23 	whichever applies, if the actuarial valuation is required to be prepared annually, actuarial 
237.24 	accrued liabilities, and the unfunded actuarial accrued liability must include the following 
237.25 	required reserves:
237.26 	(i) for active members:
237.27 	1. retirement benefits;
237.28 	2. disability benefits;
237.29 	3. refund liability due to death or withdrawal;
237.30 	4. survivors' benefits;
237.31 	(ii) for deferred annuitants' benefits;
237.32 	(iii) for former members without vested rights;
237.33 	(iv) for annuitants;
237.34 	1. retirement annuities;
237.35 	2. disability annuities;
237.36 	3. surviving spouses' annuities; 
238.1 	4. surviving children's annuities;
238.2 	In addition to those required reserves, separate items must be shown for additional 
238.3 	benefits, if any, which may not be appropriately included in the reserves listed above; and
238.4 	(6) actuarial valuations are due by the first day of the seventh month after the end of 
238.5 	the fiscal year which the actuarial valuation covers.
238.6 	(b) For the Minneapolis Firefighters Relief Association or the Minneapolis Police 
238.7 	Relief Association, the following provisions additionally apply:
238.8 	(1) in calculating the actuarial balance sheet, unfunded actuarial accrued liability, 
238.9 	and amortization contribution of the relief association, "current assets" means the value of 
238.10 	all assets at cost, including realized capital gains and losses, plus or minus, whichever 
238.11 	applies, the average value of total unrealized capital gains or losses for the most recent 
238.12 	three-year period ending with the end of the plan year immediately preceding the actuarial 
238.13 	valuation report transmission date; and
238.14 	(2) in calculating the applicable portions of the actuarial valuation, an annual 
238.15 	preretirement interest assumption of six percent, an annual postretirement interest 
238.16 	assumption of six percent, and an annual salary increase assumption of four percent must 
238.17 	be used.

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

238.19 	Sec. 2. Minnesota Statutes 2008, section 356.24, subdivision 1, is amended to read:
238.20 		Subdivision 1.Restriction; exceptions. (a) It is unlawful for a school district 
238.21 	or other governmental subdivision or state agency to levy taxes for, or to contribute 
238.22 	public funds to a supplemental pension or deferred compensation plan that is established, 
238.23 	maintained, and operated in addition to a primary pension program for the benefit of the 
238.24 	governmental subdivision employees other than:
238.25 	(1) to a supplemental pension plan that was established, maintained, and operated 
238.26 	before May 6, 1971;
238.27 	(2) to a plan that provides solely for group health, hospital, disability, or death 
238.28 	benefits;
238.29 	(3) to the individual retirement account plan established by chapter 354B;
238.30 	(4) to a plan that provides solely for severance pay under section 465.72 to a retiring 
238.31 	or terminating employee; 
238.32 	(5) for employees other than personnel employed by the Board of Trustees of the 
238.33 	Minnesota State Colleges and Universities and covered under the Higher Education 
238.34 	Supplemental Retirement Plan under chapter 354C, but including city managers covered 
238.35 	by an alternative retirement arrangement under section 353.028, subdivision 3, paragraph 
239.1 	(a), or by the defined contribution plan of the Public Employees Retirement Association 
239.2 	under section 353.028, subdivision 3, paragraph (b), if the supplemental plan coverage is 
239.3 	provided for in a personnel policy of the public employer or in the collective bargaining 
239.4 	agreement between the public employer and the exclusive representative of public 
239.5 	employees in an appropriate unit or in the individual employment contract between a city 
239.6 	and a city manager, and if for each available investment all fees and historic rates of return 
239.7 	for the prior one-, three-, five-, and ten-year periods, or since inception, are disclosed in an 
239.8 	easily comprehended document not to exceed two pages, in an amount matching employee 
239.9 	contributions on a dollar for dollar basis, but not to exceed an employer contribution of 
239.10 	one-half of the available elective deferral permitted per year per employee, under the 
239.11 	Internal Revenue Code:
239.12 	(i) to the state of Minnesota deferred compensation plan under section 352.965; 
239.13 	(ii) in payment of the applicable portion of the contribution made to any investment 
239.14 	eligible under section 403(b) of the Internal Revenue Code, if the employing unit has 
239.15 	complied with any applicable pension plan provisions of the Internal Revenue Code with 
239.16 	respect to the tax-sheltered annuity program during the preceding calendar year; or
239.17 	(iii) any other deferred compensation plan offered by the employer under section 
239.18 	457 of the Internal Revenue Code;
239.19 	(6) for personnel employed by the Board of Trustees of the Minnesota State Colleges 
239.20 	and Universities and not covered by clause (5), to the supplemental retirement plan under 
239.21 	chapter 354C, if the supplemental plan coverage is provided for in a personnel policy 
239.22 	or in the collective bargaining agreement of the public employer with the exclusive 
239.23 	representative of the covered employees in an appropriate unit, in an amount matching 
239.24 	employee contributions on a dollar for dollar basis, but not to exceed an employer 
239.25 	contribution of $2,700 a year for each employee;
239.26 	(7) to a supplemental plan or to a governmental trust to save for postretirement 
239.27 	health care expenses qualified for tax-preferred treatment under the Internal Revenue 
239.28 	Code, if the supplemental plan coverage is provided for in a personnel policy or in the 
239.29 	collective bargaining agreement of a public employer with the exclusive representative of 
239.30 	the covered employees in an appropriate unit;
239.31 	(8) to the laborers national industrial pension fund or to a laborers local pension 
239.32 	fund for the employees of a governmental subdivision who are covered by a collective 
239.33 	bargaining agreement that provides for coverage by that fund and that sets forth a fund 
239.34 	contribution rate, but not to exceed an employer contribution of $5,000 per year per 
239.35 	employee;
240.1 	(9) to the plumbers and pipefitters national pension fund or to a plumbers and 
240.2 	pipefitters local pension fund for the employees of a governmental subdivision who are 
240.3 	covered by a collective bargaining agreement that provides for coverage by that fund and 
240.4 	that sets forth a fund contribution rate, but not to exceed an employer contribution of 
240.5 	$5,000 per year per employee;
240.6 	(10) to the international union of operating engineers pension fund for the employees 
240.7 	of a governmental subdivision who are covered by a collective bargaining agreement that 
240.8 	provides for coverage by that fund and that sets forth a fund contribution rate, but not to 
240.9 	exceed an employer contribution of $5,000 per year per employee; 
240.10 	(11) to a supplemental plan organized and operated under the federal Internal 
240.11 	Revenue Code, as amended, that is wholly and solely funded by the employee's 
240.12 	accumulated sick leave, accumulated vacation leave, and accumulated severance pay; 
240.13 	(12) to the International Association of Machinists national pension fund for the 
240.14 	employees of a governmental subdivision who are covered by a collective bargaining 
240.15 	agreement that provides for coverage by that fund and that sets forth a fund contribution 
240.16 	rate, but not to exceed an employer contribution of $5,000 per year per employee; or
240.17 	(13) for employees of United Hospital District, Blue Earth, to the state of Minnesota 
240.18 	deferred compensation program, if the employee makes a contribution, in an amount that 
240.19 	does not exceed the total percentage of covered salary under section 353.27, subdivisions 
240.20 	3 and 3a; or
240.21 	(14) to the alternative retirement plans established by the Hennepin County Medical 
240.22 	Center under section 383B.914, subdivision 5.
240.23 	(b) No governmental subdivision may make a contribution to a deferred 
240.24 	compensation plan operating under section 457 of the Internal Revenue Code for volunteer 
240.25 	or emergency on-call firefighters in lieu of providing retirement coverage under the federal 
240.26 	Old Age, Survivors, and Disability Insurance Program.

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

240.28 	Sec. 3. Laws 2009, chapter 169, article 7, section 4, is amended to read:
240.29 	Sec. 4. EFFECTIVE DATE.
 240.30 	Sections 1 to 3 are effective January 1, 2010, and. Sections 1 and 2 expire June 
240.31 	30, 2011.

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