HF 3281

1st Committee Engrossment - 86th Legislature (2009 - 2010)

Posted on 03/19/2013 07:29 p.m.

1.1A bill for an act 1.2relating to retirement; various retirement plans; increasing certain contribution 1.3rates; suspending certain post-retirement adjustments; reducing certain 1.4postretirement adjustment increase rates; reducing interest rates on refunds; 1.5reducing deferred annuity augmentation rates; eliminating interest on reemployed 1.6annuitant earnings limitation deferred accounts; increasing certain vesting 1.7requirements; increasing certain early retirement reduction rates; reducing 1.8certain benefit accrual rates; extending certain amortization periods; making 1.9changes of an administrative nature for retirement plans administered by the 1.10Minnesota State Retirement Association; revising insurance withholding for 1.11certain retired public employees; authorizing state patrol plan service credit for 1.12leave procedures; addressing plan coverage errors and omitted contributions; 1.13revising unlawful discharge annuity repayment requirements; requiring 1.14employment unit accommodation of daily valuation of investment accounts; 1.15eliminating administrative fee maximum for the unclassified state employees 1.16retirement program; making changes of an administrative nature in the general 1.17employees retirement plan of the Public Employees Retirement Association, the 1.18public employees police and fire retirement plan, and the defined contribution 1.19retirement plan; making various administrative modifications in the voluntary 1.20statewide lump-sum volunteer firefighter retirement plan of the Public Employees 1.21Retirement Association; revising purchase of salary credit procedures in certain 1.22partial salary situations; adding new partial salary credit purchase authority for 1.23partial paid medical leaves and budgetary leaves; redefining TRA allowable 1.24service credit; defining annual base salary; requiring base salary reporting by 1.25TRA-covered employing units; making changes of an administrative nature in the 1.26Minnesota State Colleges and Universities System individual retirement account 1.27plan; setting deadline dates for actuarial reporting; extending and revising an 1.28early retirement incentive program; permitting the court-ordered revocation of 1.29an optional annuity election in certain marriage dissolutions; transfer of the 1.30administrative functions of the Minneapolis Employees Retirement Fund to the 1.31Public Employees Retirement Association; creation of MERF consolidation 1.32account within the Public Employees Retirement Association; making various 1.33technical corrections relating to volunteer fire relief associations; revising 1.34break-in-service return to firefighting authorizations; authorizing Minnesota 1.35deferred compensation plan service pension transfers; revising payout defaults 1.36in survivor benefits; authorizing corrections of certain special fund deposits; 1.37requiring a retirement fund investment authority study; authorizing certain 1.38bylaw amendments; making technical changes; appropriating money;amending 1.39Minnesota Statutes 2008, sections 3A.02, subdivision 4; 3A.07; 11A.04; 2.111A.23, subdivision 4; 13D.01, subdivision 1; 43A.17, subdivision 9; 43A.316, 2.2subdivision 8; 69.021, subdivision 10; 69.051, subdivision 3; 126C.41, 2.3subdivision 3; 256D.21; 352.01, subdivision 2a; 352.03, subdivision 4; 352.04, 2.4subdivision 9; 352.113, subdivision 1; 352.115, subdivisions 1, 10; 352.12, 2.5subdivision 2; 352.22, subdivisions 2, 3; 352.72, subdivisions 1, 2; 352.91, by 2.6adding a subdivision; 352.93, subdivisions 1, 2a, 3a; 352.931, subdivision 1; 2.7352.965, subdivisions 1, 2, 6; 352B.02, as amended; 352B.08, subdivisions 1, 2a; 2.8352B.11, subdivision 2b; 352B.30, subdivisions 1, 2; 352D.015, subdivisions 4, 2.99, by adding a subdivision; 352D.02, subdivisions 1, 1c, 2, 3; 352D.03; 352D.04, 2.10subdivisions 1, 2; 352D.05, subdivisions 3, 4; 352D.06, subdivision 3; 352D.065, 2.11subdivision 3; 352D.09, subdivisions 3, 7; 352F.07; 353.01, subdivisions 2b, 2d, 2.12by adding subdivisions; 353.0161, subdivision 2; 353.03, subdivision 1; 353.05; 2.13353.27, as amended; 353.29, subdivision 1; 353.30, subdivision 1c; 353.32, 2.14subdivisions 1, 1a; 353.34, subdivisions 1, 2, 3, 6; 353.37, subdivisions 1, 2, 3, 2.153a, 4, 5; 353.46, subdivisions 2, 6; 353.64, subdivision 7; 353.651, subdivisions 2.161, 4; 353.657, subdivisions 1, 2a; 353.71, subdivisions 1, 2, 4; 353.86, 2.17subdivisions 1, 2; 353.87, subdivisions 1, 2; 353.88; 353D.01, subdivision 2; 2.18353D.03, subdivision 1; 353D.04, subdivisions 1, 2; 353E.04, subdivisions 1, 2.194; 353E.07, subdivisions 1, 2; 353F.025, subdivisions 1, 2; 353F.03; 354.05, by 2.20adding a subdivision; 354.07, subdivision 5; 354.091; 354.42, subdivisions 3, 7, 2.21by adding subdivisions; 354.52, subdivision 6, by adding a subdivision; 354.66, 2.22subdivision 3; 354.71; 354A.011, subdivision 27; 354A.12, subdivisions 1, 3c, 2.23by adding a subdivision; 354A.27, subdivisions 5, 6, by adding a subdivision; 2.24354A.31, subdivision 1; 354A.35, subdivision 1; 354A.37, subdivisions 2, 3, 4; 2.25354A.39; 354B.25, subdivisions 1, 3; 354C.14; 355.095, subdivision 1; 356.214, 2.26subdivision 1; 356.215, subdivisions 3, 8; 356.24, subdivision 1; 356.30, 2.27subdivisions 1, 3; 356.302, subdivisions 1, 3, 4, 5, 7; 356.303, subdivisions 2.282, 4; 356.315, subdivision 5; 356.351, subdivision 1; 356.407, subdivision 2; 2.29356.431, subdivision 1; 356.465, subdivision 3; 356.47, subdivision 3; 356.50, 2.30subdivision 4; 356.64; 356.65, subdivision 2; 356.91; 356.96, subdivisions 2, 2.313, 7, 8; 356A.06, subdivision 8; 422A.101, subdivision 3; 422A.26; 473.511, 2.32subdivision 3; 473.606, subdivision 5; 475.52, subdivision 6; 490.123, by 2.33adding a subdivision; 518.58, subdivisions 3, 4; Minnesota Statutes 2009 2.34Supplement, sections 6.67; 69.011, subdivision 1; 69.031, subdivision 5; 69.772, 2.35subdivision 6; 69.773, subdivision 6; 352.01, subdivision 2b; 352.75, subdivision 2.364; 352.95, subdivision 2; 352B.011, subdivision 3; 353.01, subdivisions 2, 2.372a, 16; 353.06; 353.27, subdivisions 2, 3, 7; 353.33, subdivision 1; 353.371, 2.38subdivision 4; 353.65, subdivisions 2, 3; 353F.02, subdivision 4; 353G.05, 2.39subdivision 2; 353G.06, subdivision 1; 353G.08; 353G.09, subdivision 3; 2.40353G.11, subdivision 1, by adding a subdivision; 354.42, subdivision 2; 354.47, 2.41subdivision 1; 354.49, subdivision 2; 354.52, subdivision 4b; 354.55, subdivision 2.4211; 354A.12, subdivision 2a; 356.20, subdivision 2; 356.215, subdivision 11; 2.43356.32, subdivision 2; 356.351, subdivision 2; 356.401, subdivision 3; 356.415, 2.44subdivisions 1, 2, by adding subdivisions; 356.96, subdivisions 1, 5; 423A.02, 2.45subdivision 3; 424A.01, subdivisions 1, 6; 424A.015, by adding a subdivision; 2.46424A.016, subdivisions 4, 7; 424A.02, subdivisions 9, 10; 424A.05, subdivision 2.473, by adding a subdivision; 424A.08; 480.181, subdivision 2; Laws 2009, chapter 2.48169, article 4, section 49; article 5, section 2; proposing coding for new law in 2.49Minnesota Statutes, chapters 352B; 353; 353G; 356; repealing Minnesota Statutes 2.502008, sections 13.63, subdivision 1; 69.011, subdivision 2a; 352.91, subdivision 2.515; 353.01, subdivision 40; 353.46, subdivision 1a; 353.88; 353D.03, subdivision 2.522; 353D.12; 354A.27, subdivision 1; 354C.15; 356.43; 422A.01, subdivisions 1, 2.532, 3, 4, 4a, 5, 6, 7, 8, 9, 10, 11, 12, 13a, 17, 18; 422A.02; 422A.03; 422A.04; 2.54422A.05, subdivisions 1, 2a, 2b, 2c, 2d, 2e, 2f, 5, 6, 8; 422A.06, subdivisions 1, 2.552, 3, 5, 6, 7; 422A.08, subdivision 1; 422A.09; 422A.10; 422A.101, subdivisions 2.561, 1a, 2, 2a; 422A.11; 422A.12; 422A.13; 422A.14, subdivision 1; 422A.15; 2.57422A.151; 422A.155; 422A.156; 422A.16, subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 9, 2.5810; 422A.17; 422A.18, subdivisions 1, 2, 3, 4, 5, 7; 422A.19; 422A.20; 422A.21; 3.1422A.22, subdivisions 1, 3, 4, 6; 422A.23, subdivisions 1, 2, 5, 6, 7, 8, 9, 10, 3.211, 12; 422A.231; 422A.24; 422A.25; Minnesota Statutes 2009 Supplement, 3.3sections 422A.06, subdivision 8; 422A.08, subdivision 5; 424A.001, subdivision 3.46; Laws 2009, chapter 169, article 10, section 32. 3.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 3.6ARTICLE 1 3.7FINANCIAL SUSTAINABILITY PROVISIONS 3.8    Section 1. Minnesota Statutes 2008, section 3A.02, subdivision 4, is amended to read: 3.9    Subd. 4. Deferred annuities augmentation. (a) The deferred retirement allowance 3.10of any former legislator must be augmented as provided herein. 3.11    (b) The required reserves applicable to the deferred retirement allowance, 3.12determined as of the date the benefit begins to accrue using an appropriate mortality table 3.13and an interest assumption of six percent, must be augmented from the first of the month 3.14following the termination of active service, or July 1, 1973, whichever is later, to the first 3.15day of the month in which the allowance begins to accrue, at the following annually 3.16compounded rate or rates: 3.17(1) five percent until January 1, 1981; 3.18(2) three percent from January 1, 1981, or from the first day of the month following 3.19the termination of active service, whichever is later, until January 1 of the year in which 3.20the former legislator attains age 55 new text begin or until January 1, 2012, whichever is earlier new text end ; and 3.21(3) five percent from the period end date under clause (2) to new text begin until new text end the effective date 3.22of retirement new text begin or until January 1, 2012, whichever is earlier; and new text end 3.23 new text begin (4) two percent after December 31, 2011 new text end . 3.24 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 3.25    Sec. 2. Minnesota Statutes 2008, section 352.113, subdivision 1, is amended to read: 3.26    Subdivision 1. Age and service requirements. new text begin (a) new text end An employee covered by the 3.27system, who is less than normal retirement age and who becomes totally and permanently 3.28disabled after three or more years of allowable service new text begin if employed before July 1, 2010, or new text end 3.29 new text begin after five or more years of allowable service if employed after June 30, 2010 new text end , is entitled to 3.30a disability benefit in an amount provided in subdivision 3. 3.31 new text begin (b) new text end If the disabled employee's state service has terminated at any time, the employee 3.32must have at least two years of allowable service after last becoming a state employee 3.33covered by the system. 4.1 new text begin (c) new text end Refunds may be repaid under section 352.23 before the effective accrual date of 4.2the disability benefit under subdivision 2. 4.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 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, 4.6any employee (1) who has attained the age of at least 55 years and who is entitled to 4.7credit for at least three years allowable service new text begin if employed before July 1, 2010, or after new text end 4.8 new text begin five or more years of allowable service if employed after June 30, 2010 new text end , or (2) who has 4.9received credit for at least 30 years allowable service regardless of age, is entitled upon 4.10application to a retirement annuity. 4.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 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 4.14credit for at least three years allowable service new text begin if the employee was employed before July new text end 4.15 new text begin 1, 2010, or for at least five years of allowable service if the employee was employed new text end 4.16 new text begin after June 30, 2010, new text end and dies before an annuity or disability benefit has become payable, 4.17notwithstanding any designation of beneficiary to the contrary, the surviving spouse of the 4.18employee may elect to receive, in lieu of the refund with interest under subdivision 1, an 4.19annuity equal to the joint and 100 percent survivor annuity which the employee or former 4.20employee 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 4.22service on the date of death, the surviving spouse may elect to receive a 100 percent joint 4.23and survivor annuity based on the age of the employee and surviving spouse on the date 4.24of death. The annuity is payable using the full early retirement reduction under section 4.25352.116, subdivision 1 , paragraph (a), to age 55 and one-half of the early retirement 4.26reduction 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 4.28allowable service credit on the date of death new text begin if the employee was employed before July 1, new text end 4.29 new text begin 2010, or for at least five years of allowable service if the employee was employed after new text end 4.30 new text begin June 30, 2010, new text end but did not yet qualify for retirement, the surviving spouse may elect 4.31to receive a 100 percent joint and survivor annuity based on the age of the employee 4.32and surviving spouse at the time of death. The annuity is payable using the full early 5.1retirement reduction under section 352.116, subdivision 1 or 1a, to age 55 and one-half of 5.2the 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 5.4annuity at any time after the date on which the employee or former employee would 5.5have attained the required age for retirement based on the allowable service earned. 5.6The surviving spouse eligible for surviving spouse benefits under paragraph (b) or (c) 5.7may apply for the annuity at any time after the employee's death. The annuity must be 5.8computed under sections 352.115, subdivisions 1, 2, and 3, and 352.116, subdivisions 1, 5.91a, and 3 . Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply to a deferred 5.10annuity or surviving spouse benefit payable under this subdivision. The annuity must cease 5.11with the last payment received by the surviving spouse in the lifetime of the surviving 5.12spouse, or upon expiration of a term certain benefit payment to a surviving spouse under 5.13subdivision 2a. An amount equal to the excess, if any, of the accumulated contributions 5.14credited to the account of the deceased employee in excess of the total of the benefits paid 5.15and payable to the surviving spouse must be paid to the deceased employee's or former 5.16employee'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 5.18consent of the spouse, that this subdivision not apply and that payment be made only to a 5.19designated beneficiary as otherwise provided by this chapter. 5.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 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 5.23payable to a person who ceased to be a state employee by reason of a termination of state 5.24service is an amount equal to employee accumulated contributions plus interest at the rate 5.25of six percent per year compounded daily from the date that the contribution was made 5.26until new text begin June 30, 2011, or until new text end the date on which the refund is paid new text begin , whichever is earlier, and new text end 5.27 new text begin at the rate of four percent per year compounded daily from the date that the contribution new text end 5.28 new text begin was made or from July 1, 2011, whichever is later, until the date on which the refund is new text end 5.29 new text begin paid new text end . Included with the refund is any interest paid as part of repayment of a past refund, 5.30plus interest thereon from the date of repayment. 5.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 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 6.2allowable service new text begin if employed before July 1, 2010, or who has at least five years of new text end 6.3 new text begin allowable service if employed after June 30, 2010, new text end when termination occurs may elect 6.4to leave the accumulated contributions in the fund and thereby be entitled to a deferred 6.5retirement annuity. The annuity must be computed under the law in effect when state 6.6service terminated, on the basis of the allowable service credited to the person before 6.7the termination of service. 6.8(b) An employee on layoff or on leave of absence without pay, except a leave of 6.9absence for health reasons, and who does not return to state service must have an annuity, 6.10deferred annuity, or other benefit to which the employee may become entitled computed 6.11under 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 6.13the time the former employee reaches the required age for entitlement to the payment of 6.14the annuity. The deferred annuity begins to accrue no earlier than 60 days before the date 6.15the application is filed in the office of the system, but not (1) before the date on which 6.16the employee reaches the required age for entitlement to the annuity nor (2) before the 6.17day following the termination of state service in a position which is not covered by the 6.18retirement system. 6.19(d) Application for the accumulated contributions left on deposit with the fund may 6.20be made at any time following the date of the termination of service. 6.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 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 6.24covered by a retirement system listed in paragraph (b) is entitled when qualified to an 6.25annuity from each fund if total allowable service in all funds or in any two of these funds 6.26totals three or more years new text begin if employed before July 1, 2010, or totals five or more years new text end 6.27 new text begin if employed after June 30, 2010 new text end . 6.28(b) This section applies to the Minnesota State Retirement System, the Public 6.29Employees Retirement Association including the Public Employees Retirement 6.30Association police and fire fund, the Teachers Retirement Association, the State Patrol 6.31Retirement Association, or any other public employee retirement system in the state with 6.32a similar provision, except as noted in paragraph (c). 6.33(c) This section does not apply to other funds providing benefits for police officers 6.34or firefighters. 7.1(d) No portion of the allowable service upon which the retirement annuity from 7.2one fund is based shall be again used in the computation for benefits from another fund. 7.3No refund may have been taken from any one of these funds since service entitling the 7.4employee to coverage under the system or the employee's membership in any of the 7.5associations last terminated. The annuity from each fund must be determined by the 7.6appropriate provisions of the law except that the requirement that a person must have at 7.7least three new text begin a specific number of new text end years new text begin of new text end allowable service in the respective system or 7.8association does not apply for the purposes of this section if the combined service in two 7.9or more of these funds equals three or more years new text begin at least the longest period of allowable new text end 7.10 new text begin service of any of the applicable retirement plans new text end . 7.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 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, 7.14accruing under subdivision 1, or section 352.22, subdivision 3, must be computed as 7.15provided in section 352.22, subdivision 3, on the basis of allowable service before 7.16termination of state service and augmented as provided herein. The required reserves 7.17applicable to a deferred annuity or to an annuity for which a former employee was eligible 7.18but had not applied or to any deferred segment of an annuity must be determined as of 7.19the date the benefit begins to accrue and augmented by interest compounded annually 7.20from the first day of the month following the month in which the employee ceased to be 7.21a state employee, or July 1, 1971, whichever is later, to the first day of the month in 7.22which the annuity begins to accrue. The rates of interest used for this purpose must be 7.23five percent compounded annually until January 1, 1981, and three percent compounded 7.24annually thereafter until January 1 of the year following the year in which the former 7.25employee attains age 55 new text begin or until January 1, 2012, whichever is earlier new text end , and from that date 7.26 new text begin the January 1 next following the attainment of age 55 new text end to the effective date of retirement new text begin or new text end 7.27 new text begin until January 1, 2012, whichever is earlier new text end , the rate is five percent compounded annually if 7.28the employee became an employee before July 1, 2006, and at 2.5 percent compounded 7.29annually new text begin until January 1, 2012, new text end if the employee becomes an employee after June 30, 2006 new text begin , new text end 7.30 new text begin and two percent compounded annually after December 31, 2011, irrespective of when the new text end 7.31 new text begin employee became a state employee new text end . If a person has more than one period of uninterrupted 7.32service, the required reserves related to each period must be augmented by interest under 7.33this subdivision. The sum of the augmented required reserves so determined is the present 7.34value of the annuity. "Uninterrupted service" for the purpose of this subdivision means 7.35periods of covered employment during which the employee has not been separated from 8.1state service for more than two years. If a person repays a refund, the service restored by 8.2the repayment must be considered continuous with the next period of service for which the 8.3employee has credit with this system. The formula percentages used for each period of 8.4uninterrupted service must be those applicable to a new employee. The mortality table 8.5and interest assumption used to compute the annuity must be those in effect when the 8.6employee files application for annuity. This section does not reduce the annuity otherwise 8.7payable under this chapter. 8.8(b) The retirement annuity or disability benefit of, or the survivor benefit payable on 8.9behalf of, a former state employee who terminated service before July 1, 1997, which is 8.10not first payable until after June 30, 1997, must be increased on an actuarial equivalent 8.11basis to reflect the change in the postretirement interest rate actuarial assumption under 8.12section 356.215, subdivision 8, from five percent to six percent under a calculation 8.13procedure and the tables adopted by the board and approved by the actuary retained under 8.14section 356.214. 8.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 8.16    Sec. 9. Minnesota Statutes 2009 Supplement, section 352.75, subdivision 4, is 8.17amended to read: 8.18    Subd. 4. Existing deferred retirees. Any former member of the former 8.19Metropolitan Transit Commission-Transit Operating Division employees retirement 8.20fund is entitled to a retirement annuity from the Minnesota State Retirement System if 8.21the employee: 8.22(1) is not an active employee of the Transit Operating Division of the former 8.23Metropolitan Transit Commission on July 1, 1978; (2) has at least ten years of active 8.24continuous service with the Transit Operating Division of the former Metropolitan 8.25Transit Commission as defined by the former Metropolitan Transit Commission-Transit 8.26Operating 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 8.28annuity or benefit from the former Metropolitan Transit Commission-Transit Operating 8.29Division employees retirement fund; (5) is at least 55 years old; and (6) submits a valid 8.30application for a retirement annuity to the executive director of the Minnesota State 8.31Retirement System. 8.32The person is entitled to a retirement annuity in an amount equal to the normal 8.33old age retirement allowance calculated under the former Metropolitan Transit 8.34Commission-Transit Operating Division employees retirement fund plan document in 8.35effect on December 31, 1977, subject to an early retirement reduction or adjustment in 9.1amount on account of retirement before the normal retirement age specified in that former 9.2Metropolitan Transit Commission-Transit Operating Division employees retirement fund 9.3plan document. 9.4The deferred retirement annuity of any person to whom this subdivision applies 9.5must be augmented. The required reserves applicable to the deferred retirement annuity, 9.6determined as of the date the allowance begins to accrue using an appropriate mortality 9.7table and an interest assumption of five percent, must be augmented by interest at the 9.8rate of five percent per year compounded annually from January 1, 1978, to January 1, 9.91981, and three percent per year compounded annually from January 1, 1981, new text begin until the new text end 9.10 new text begin date that the annuity begins to accrue or June 30, 2011, whichever is earlier, and two new text end 9.11 new text begin percent after June 30, 2011, new text end to the first day of the month in which the annuity begins to 9.12accrue. After the commencement of the retirement annuity, the annuity is eligible for 9.13postretirement adjustments under section 356.415. On applying for a retirement annuity 9.14under this subdivision, the person is entitled to elect a joint and survivor optional annuity 9.15under section 352.116, subdivision 3. 9.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 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 9.19service, an employee covered under section 352.91 who has reached age 55 years and has 9.20credit for at least three years of covered correctional service or a combination of covered 9.21correctional service and general new text begin state new text end employees state retirement plan new text begin allowable new text end service 9.22 new text begin if first employed as a state employee before July 1, 2010, or has credit for at least ten new text end 9.23 new text begin years of covered correctional service or a combination of covered correctional service new text end 9.24 new text begin and general state employees retirement plan allowable service if first employed as a state new text end 9.25 new text begin employee after June 30, 2010, new text end is entitled upon application to a retirement annuity under 9.26this section, based only on covered correctional employees' service. Application may be 9.27made no earlier than 60 days before the date the employee is eligible to retire by reason of 9.28both age and service requirements. 9.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 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 9.32least 50 years old and who has at least three years of allowable service new text begin if first employed new text end 9.33 new text begin as a correctional state employee before July 1, 2010, or has credit for at least ten years new text end 10.1 new text begin of allowable service if first employed as a correctional state employee after June 30, new text end 10.2 new text begin 2010, new text end is entitled upon application to a reduced retirement annuity equal to the annuity 10.3calculated under subdivision 2, reduced by two-tenths of one percent for each month that 10.4the correctional employee is under age 55 at the time of retirement new text begin if first employed as new text end 10.5 new text begin a correctional state employee before July 1, 2010, and if retired before July 1, 2015, or new text end 10.6 new text begin reduced by 0.417 percent for each month that the correctional employee is under age 55 new text end 10.7 new text begin at the time of retirement if first employed as a correctional state employee after June 30, new text end 10.8 new text begin 2010, or if first employed as a correctional state employee before July 1, 2010, and if new text end 10.9 new text begin retired after June 30, 2015 new text end . 10.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 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 10.13pay a higher amount from the date of retirement until an employee is first eligible to draw 10.14Social Security benefits new text begin , reaches age 65, new text end or up to new text begin reaches new text end the age the employee is eligible 10.15to receive unreduced Social Security benefits, at which time the monthly benefits must be 10.16reduced. The optional annuity forms must be actuarially equivalent to the normal single 10.17life annuity form provided in subdivision 2. The optional annuity forms must be approved 10.18 new text begin certified as actuarially equivalent new text end by the actuary retained under section 356.214. 10.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 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 10.22least age 50, has credit for at least three years of allowable service new text begin if first employed as new text end 10.23 new text begin a correctional state employee before July 1, 2010, or has credit for at least ten years of new text end 10.24 new text begin allowable service if first employed as a correctional state employee after June 30, 2010 new text end , 10.25and dies before an annuity or disability benefit has become payable, notwithstanding any 10.26designation of beneficiary to the contrary, the surviving spouse of the employee may 10.27elect to receive, in lieu of the refund under section 352.12, subdivision 1, an annuity for 10.28life equal to the joint and 100 percent survivor annuity which the employee could have 10.29qualified for had the employee terminated service on the date of death. The election 10.30may be made at any time after the date of death of the employee. The surviving spouse 10.31benefit begins to accrue as of the first of the month next following the date on which 10.32the 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 11.2of allowable service credit on the date of death new text begin if first employed as a correctional state new text end 11.3 new text begin employee before July 1, 2010, or had credit for at least ten years of allowable service on new text end 11.4 new text begin the date of death if first employed as a correctional state employee after June 30, 2010, new text end but 11.5did not yet qualify for retirement, the surviving spouse may elect to receive a 100 percent 11.6joint and survivor annuity based on the age of the employee and surviving spouse at the 11.7time of death. The annuity is payable using the early retirement reduction under section 11.8352.93, subdivision 2a , to age 50, and one-half of the early retirement reduction from age 11.950 to the age payment begins. The surviving spouse eligible for surviving spouse benefits 11.10under this paragraph may apply for the annuity at any time after the employee's death. 11.11Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply to a deferred annuity or 11.12surviving spouse benefit payable under this subdivision. 11.13    (c) The annuity must cease with the last payment received by the surviving spouse 11.14in the lifetime of the surviving spouse. Any employee may request in writing, with the 11.15signed consent of the spouse, that this subdivision not apply and that payment be made 11.16only to a designated beneficiary as otherwise provided by this chapter. 11.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 11.18    Sec. 14. Minnesota Statutes 2009 Supplement, section 352.95, subdivision 2, is 11.19amended to read: 11.20    Subd. 2. Regular disability; computation of benefit. A covered correctional 11.21employee who was hired before July 1, 2009, after rendering at least one year of covered 11.22correctional service, or a covered correctional employee who was first hired after June 11.2330, 2009, after rendering at least three years of covered correctional plan service new text begin if first new text end 11.24 new text begin employed as a correctional state employee before July 1, 2010, or after rendering at least new text end 11.25 new text begin ten years of covered correctional plan service if first employed as a correctional state new text end 11.26 new text begin employee after June 30, 2010 new text end , and who is determined to have a regular disability, physical 11.27or psychological, as defined under section 352.01, subdivision 17c, is entitled to a regular 11.28disability benefit. The regular disability benefit must be based on covered correctional 11.29service only. The regular disability benefit must be computed as provided in section 11.30352.93, subdivisions 1 and 2 . The regular disability benefit of a covered correctional 11.31employee who was first hired before July 1, 2009, and who is determined to have a regular 11.32disability, physical or psychological, under this subdivision must be computed as though 11.33the employee had at least 15 years of covered correctional service. 11.34 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 12.1    Sec. 15. Minnesota Statutes 2008, section 352B.02, as amended by Laws 2009, chapter 12.2101, article 2, section 109; and Laws 2009, chapter 169, article 1, section 23; article 2, 12.3section 16; and article 4, sections 3 and 4, is amended to read: 12.4352B.02 STATE PATROL RETIREMENT FUND. 12.5    Subdivision 1. Fund created; membership. A State Patrol retirement fund 12.6is established. Its membership consists of all persons defined in section 352B.011, 12.7subdivision 10 . 12.8    Subd. 1a. Member contributions. (a) The member contribution is percent new text begin new text end 12.9 new text begin the following percentage new text end of the member's salary. new text begin : new text end 12.10 12.11 new text begin (1) before the first day of the first pay new text end new text begin period beginning after July 1, 2011 new text end new text begin 10.40 percent new text end 12.12 12.13 new text begin (2) on or after the first day of the first new text end new text begin pay period beginning after July 1, 2011 new text end new text begin 11.20 percent new text end 12.14(b) These contributions must be made by deduction from salary as provided in 12.15section 352.04, subdivision 4. 12.16    Subd. 1b. Salary deductions. Member contribution amounts must be deducted each 12.17pay period by the department head, who shall have the total amount of the deductions paid 12.18to the commissioner of management and budget for deposit in the State Patrol retirement 12.19fund, and have a detailed report of all deductions made each pay period to the executive 12.20director of the Minnesota State Retirement System. 12.21    Subd. 1c. Employer contributions. (a) In addition to member contributions, 12.22department heads shall pay a sum equal to 15.60 percent new text begin the specified percentage new text end of the 12.23salary upon which deductions were made, which constitutes the employer contribution 12.24to the fund. new text begin as follows: new text end 12.25 12.26 new text begin (1) before the first day of the first pay new text end new text begin period beginning after July 1, 2011 new text end new text begin 15.60 percent new text end 12.27 12.28 new text begin (2) on or after the first day of the first new text end new text begin pay period beginning after July 1, 2011 new text end new text begin 16.80 percent new text end 12.29(b) Department contributions must be paid out of money appropriated to departments 12.30for this purpose. 12.31     new text begin Subd. 1d. new text end new text begin Additional employer contributions. new text end new text begin (a) In addition to the regular new text end 12.32 new text begin employer contribution under subdivision 1c, department heads shall pay a sum equal to new text end 12.33 new text begin ten percent of the salary upon which member contribution deductions were made, which is new text end 12.34 new text begin the additional employer contribution to the fund. new text end 12.35 new text begin (b) Department additional employer contributions must be paid from departmental new text end 12.36 new text begin appropriations or revenue. new text end 13.1    Subd. 1d new text begin 1e new text end . Fund revenue and expenses. The amounts provided for in this section 13.2must be credited to the State Patrol retirement fund. All money received must be deposited 13.3by the commissioner of management and budget in the State Patrol retirement fund. The 13.4fund must be used to pay the administrative expenses of the retirement fund, and the 13.5benefits and annuities provided in this chapter. 13.6    Subd. 1e new text begin 1f new text end . Audit; new text begin regular new text end actuarial valuation new text begin ; supplemental valuations new text end . new text begin (a) new text end 13.7The legislative auditor shall audit the fund. 13.8 new text begin (b) new text end Any actuarial valuation of the fund required under section 356.215 must be 13.9prepared by the actuary retained under section 356.214. 13.10 new text begin (c) new text end Any approved actuary retained by the executive director under section 352.03, 13.11subdivision 6 , may perform actuarial valuations and experience studies to supplement 13.12those performed by the actuary retained under section 356.214. Any supplemental 13.13actuarial valuation or experience studies must be filed with the executive director of the 13.14Legislative Commission on Pensions and Retirement. 13.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 13.16    Sec. 16. Minnesota Statutes 2008, section 352B.08, subdivision 1, is amended to read: 13.17    Subdivision 1. Eligibility; when to apply; accrual. new text begin (a) new text end Every member who is 13.18credited with three or more years of allowable service new text begin if first employed before July 1, new text end 13.19 new text begin 2010, or with at least five years of allowable service if first employed after June 30, 2010, new text end 13.20is entitled to separate from state service and upon becoming 50 years old, is entitled to 13.21receive a life annuity, upon separation from state service. 13.22 new text begin (b) new text end Members shall new text begin must new text end apply for an annuity in a form and manner prescribed by the 13.23executive director. 13.24 new text begin (c) new text end No application may be made more than 90 days before the date the member is 13.25eligible to retire by reason of both age and service requirements. 13.26 new text begin (d) new text end An annuity begins to accrue no earlier than 180 days before the date the 13.27application is filed with the executive director. 13.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 13.29    Sec. 17. Minnesota Statutes 2008, section 352B.08, subdivision 2a, is amended to read: 13.30    Subd. 2a. Early retirement. Any member who has become at least 50 years old and 13.31who has at least three years of allowable service new text begin if first employed before July 1, 2010, or new text end 13.32 new text begin who has at least five years of allowable service if first employed after June 30, 2010, new text end is 13.33entitled upon application to a reduced retirement annuity equal to the annuity calculated 14.1under subdivision 2, reduced by one-tenth of one percent for each month that the member 14.2is under age 55 at the time of retirement new text begin if first employed before July 1, 2010, or reduced new text end 14.3 new text begin by two-tenths of one percent for each month that the member is under age 55 at the time of new text end 14.4 new text begin retirement if first employed after June 30, 2010 new text end . 14.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 14.6    Sec. 18. Minnesota Statutes 2008, section 352B.11, subdivision 2b, is amended to read: 14.7    Subd. 2b. Surviving spouse benefit eligibility. (a) If an active member with three or 14.8more years of allowable service new text begin if first employed before July 1, 2010, or with at least five new text end 14.9 new text begin years of allowable service if first employed after June 30, 2010, new text end dies before attaining age 14.1055, the surviving spouse is entitled to the benefit specified in subdivision 2c, paragraph (b). 14.11(b) If an active member with less than three years of allowable service new text begin if first new text end 14.12 new text begin employed before July 1, 2010, or with fewer than five years of allowable service if first new text end 14.13 new text begin employed after June 30, 2010, new text end dies at any age, the surviving spouse is entitled to receive 14.14the benefit specified in subdivision 2c, paragraph (c). 14.15(c) If an active member with three or more years of allowable service new text begin if first new text end 14.16 new text begin employed before July 1, 2010, or with at least five years of allowable service if first new text end 14.17 new text begin employed after June 30, 2010, new text end dies on or after attaining exact age 55, the surviving spouse 14.18is entitled to receive the benefits specified in subdivision 2c, paragraph (d). 14.19(d) If a disabilitant dies while receiving a disability benefit under section 352B.10 or 14.20before the benefit under that section commenced, and an optional annuity was not elected 14.21under section 352B.10, subdivision 5, the surviving spouse is entitled to receive the benefit 14.22specified in subdivision 2c, paragraph (b). 14.23(e) If a former member with three or more years of allowable service new text begin if first new text end 14.24 new text begin employed before July 1, 2010, or with at least five years of allowable service if first new text end 14.25 new text begin employed after June 30, 2010 new text end , who terminated from service and has not received a refund 14.26or commenced receipt of any other benefit provided by this chapter, dies, the surviving 14.27spouse is entitled to receive the benefit specified in subdivision 2c, paragraph (e). 14.28(f) If a former member with less than three years of allowable service new text begin if first new text end 14.29 new text begin employed before July 1, 2010, or with fewer than five years of allowable service if first new text end 14.30 new text begin employed after June 30, 2010 new text end , who terminated from service and has not received a refund 14.31or commenced receipt of any other benefit, if applicable, provided by this chapter, dies, the 14.32surviving spouse is entitled to receive the refund specified in subdivision 2c, paragraph (f). 14.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 15.1    Sec. 19. Minnesota Statutes 2008, section 352B.30, subdivision 1, is amended to read: 15.2    Subdivision 1. Entitlement to annuity. Any person who has been an employee 15.3covered by the Minnesota State Retirement System, or a member of the Public Employees 15.4Retirement Association including the Public Employees Retirement Association Police 15.5and Fire Fund, or the Teachers Retirement Association, or the State Patrol retirement fund, 15.6or any other public employee retirement system in Minnesota having a like provision but 15.7excluding all other funds providing benefits for police or firefighters is entitled when 15.8qualified to an annuity from each fund if total allowable service in all funds or in any two 15.9of these funds totals three or more new text begin the number of new text end years new text begin of allowable service required by new text end 15.10 new text begin the applicable retirement plan with the longest vesting period for the person new text end . No part of 15.11the allowable service upon which the retirement annuity from one fund is based may 15.12again be used in the computation for benefits from another fund. The member must not 15.13have taken a refund from any one of these funds since service entitling the member to 15.14coverage under the system or membership in any of the associations last terminated. 15.15The annuity from each fund must be determined by the appropriate law except that the 15.16requirement that a person must have at least three new text begin a specific number of new text end years allowable 15.17service in the respective system or association does not apply for the purposes of this 15.18section if the combined service in two or more of these funds equals three or more new text begin the new text end 15.19 new text begin number of new text end years new text begin of allowable service required by the applicable retirement plan with new text end 15.20 new text begin the longest vesting period for the person new text end . 15.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 15.22    Sec. 20. Minnesota Statutes 2008, section 352B.30, subdivision 2, is amended to read: 15.23    Subd. 2. Computation of deferred annuity. Deferred annuities must be computed 15.24according to this chapter on the basis of allowable service before termination of service 15.25and augmented as provided in this chapter. The required reserves applicable to a deferred 15.26annuity must be augmented by interest compounded annually from the first day of the 15.27month following the month in which the member terminated service, or July 1, 1971, 15.28whichever is later, to the first day of the month in which the annuity begins to accrue. The 15.29rates of interest used for this purpose shall new text begin must new text end be five percent per year compounded 15.30annually until January 1, 1981, and after that date three percent per year compounded 15.31annually new text begin after January 1, 1981, until January 1, 2012, new text end if the employee became an employee 15.32before July 1, 2006, and at 2.5 percent compounded annually if the employee becomes 15.33an employee after June 30, 2006 new text begin , and two percent per year compounded annually after new text end 15.34 new text begin December 31, 2011, irrespective of when the employee was first employed new text end . The mortality 16.1table and interest assumption used to compute the annuity shall new text begin must new text end be those in effect 16.2when the member files application for annuity. 16.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 16.4    Sec. 21. Minnesota Statutes 2008, section 352F.07, is amended to read: 16.5352F.07 EFFECT ON REFUND. 16.6Notwithstanding any provision of chapter 352 to the contrary, terminated hospital 16.7employees may receive a refund of employee accumulated contributions plus interest 16.8at the rate of six percent per year compounded annually in accordance with Minnesota 16.9Statutes 1994, section 352.22, subdivision 2, at any time after the transfer of employment 16.10to Fairview, University of Minnesota Physicians, or University Affiliated Family 16.11Physicians. If a terminated hospital employee has received a refund from a pension plan 16.12enumerated in section 356.30, subdivision 3, the person may not repay that refund unless 16.13the person again becomes a member of one of those enumerated plans and complies 16.14with section 356.30, subdivision 2. 16.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 16.16    Sec. 22. Minnesota Statutes 2008, section 353.01, is amended by adding a subdivision 16.17to read: 16.18     new text begin Subd. 47. new text end new text begin Vesting. new text end new text begin (a) "Vesting" means obtaining a nonforfeitable entitlement new text end 16.19 new text begin to an annuity or benefit from a retirement plan administered by the Public Employees new text end 16.20 new text begin Retirement Association by having credit for sufficient allowable service under paragraph new text end 16.21 new text begin (b) or (c), whichever applies. new text end 16.22 new text begin (b) For purposes of qualifying for an annuity or benefit as a basic or coordinated plan new text end 16.23 new text begin member of the general employees retirement plan of the Public Employees Retirement new text end 16.24 new text begin Association: new text end 16.25 new text begin (1) a member who first became a public employee before July 1, 2010, is vested new text end 16.26 new text begin when the person has accrued credit for not less than three years of allowable service as new text end 16.27 new text begin defined under subdivision 16; and new text end 16.28 new text begin (2) a member who first becomes a public employee after June 30, 2010, is vested new text end 16.29 new text begin when the person has accrued credit for not less than five years of allowable service new text end 16.30 new text begin as defined under subdivision 16. new text end 16.31 new text begin (c) For purposes of qualifying for an annuity or benefit as a member of the police new text end 16.32 new text begin and fire plan or a member of the local government correctional employees retirement plan: new text end 17.1 new text begin (1) a member who first became a public employee before July 1, 2010, is vested new text end 17.2 new text begin when the person has accrued credit for not less than three years of allowable service as new text end 17.3 new text begin defined under subdivision 16; and new text end 17.4 new text begin (2) a member who first becomes a public employee after June 30, 2010, is vested new text end 17.5 new text begin at the following percentages when the person has accrued credited allowable service as new text end 17.6 new text begin defined under subdivision 16, as follows: new text end 17.7 new text begin (i) 50 percent after five years; new text end 17.8 new text begin (ii) 60 percent after six years; new text end 17.9 new text begin (iii) 70 percent after seven years; new text end 17.10 new text begin (iv) 80 percent after eight years; new text end 17.11 new text begin (v) 90 percent after nine years; and new text end 17.12 new text begin (vi) 100 percent after ten years. new text end 17.13 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 17.14    Sec. 23. Minnesota Statutes 2009 Supplement, section 353.27, subdivision 2, is 17.15amended to read: 17.16    Subd. 2. Employee contribution. (a) For a basic member, the employee 17.17contribution is 9.10 percent of salary. For a coordinated member, the employee 17.18contribution is six percent new text begin the following percentage new text end of salary plus any contribution rate 17.19adjustment under subdivision 3b. new text begin : new text end 17.20 new text begin Effective before January 1, 2011 new text end new text begin 6.00 new text end 17.21 new text begin Effective after December 31, 2010 new text end new text begin 6.25 new text end 17.22(b) These contributions must be made by deduction from salary as defined in section 17.23353.01, subdivision 10 , in the manner provided in subdivision 4. If any portion of a 17.24member's salary is paid from other than public funds, the member's employee contribution 17.25must be based on the total salary received by the member from all sources. 17.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 17.27    Sec. 24. Minnesota Statutes 2009 Supplement, section 353.27, subdivision 3, is 17.28amended to read: 17.29    Subd. 3. Employer contribution. (a) For a basic member, the employer 17.30contribution is 9.10 percent of salary. For a coordinated member, the employer 17.31contribution is six percent new text begin the following percentage new text end of salary plus any contribution rate 17.32adjustment under subdivision 3b. new text begin : new text end 18.1 new text begin Effective before January 1, 2011 new text end new text begin 6.00 new text end 18.2 new text begin Effective after December 31, 2010 new text end new text begin 6.25 new text end 18.3(b) This contribution must be made from funds available to the employing 18.4subdivision by the means and in the manner provided in section 353.28. 18.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 18.6    Sec. 25. Minnesota Statutes 2008, section 353.27, subdivision 3b, is amended to read: 18.7    Subd. 3b. Change in employee and employer contributions in certain instances. 18.8(a) For purposes of this section, new text begin : new text end 18.9 new text begin (1) new text end a contribution sufficiency exists if the total of the employee contribution under 18.10subdivision 2, the employer contribution under subdivision 3, the additional employer 18.11contribution under subdivision 3a, and any additional contribution previously imposed 18.12under this subdivision exceeds the total of the normal cost, the administrative expenses, 18.13and the amortization contribution of the retirement plan as reported in the most recent 18.14actuarial valuation of the retirement plan prepared by the actuary retained under section 18.15356.214 and prepared under section 356.215 and the standards for actuarial work of the 18.16Legislative Commission on Pensions and Retirement. For purposes of this section, new text begin ; and new text end 18.17 new text begin (2) new text end a contribution deficiency exists if the total of the employee contributions under 18.18subdivision 2, the employer contributions under subdivision 3, the additional employer 18.19contribution under subdivision 3a, and any additional contribution previously imposed 18.20under this subdivision is less than the total of the normal cost, the administrative expenses, 18.21and the amortization contribution of the retirement plan as reported in the most recent 18.22actuarial valuation of the retirement plan prepared by the actuary retained under section 18.23356.214 and prepared under section 356.215 and the standards for actuarial work of the 18.24Legislative Commission on Pensions and Retirement. 18.25(b) Employee and employer contributions under subdivisions 2 and 3 must be 18.26adjusted: 18.27(1) if, new text begin on or new text end after July 1, 2010, the regular actuarial valuations new text begin valuation new text end of the 18.28general employees retirement plan of the Public Employees Retirement Association under 18.29section 356.215 indicate new text begin indicates new text end that there is a contribution sufficiency under paragraph 18.30(a) equal to or greater than 0.5 new text begin one new text end percent of covered payroll new text begin and that the sufficiency new text end 18.31 new text begin has existed new text end for new text begin at least new text end two consecutive years, the coordinated program employee and 18.32employer contribution rates must be decreased as determined under paragraph (c) to a 18.33level such that the sufficiency equals new text begin is new text end no more new text begin greater new text end than 0.25 new text begin one new text end percent of covered 18.34payroll based on the most recent actuarial valuation; or 19.1(2) if, new text begin on or new text end after July 1, 2010, the regular actuarial valuations new text begin valuation new text end of the 19.2general employees retirement plan of the Public Employees Retirement Association under 19.3section 356.215 indicate new text begin indicates new text end that there is a new text begin contribution new text end deficiency equal to or greater 19.4than 0.5 percent of covered payroll new text begin and that the deficiency has existed new text end for new text begin at least new text end two 19.5consecutive years, the coordinated program employee and employer contribution rates 19.6must be increased as determined under paragraph (c) new text begin (d) new text end to a level such that no deficiency 19.7exists based on the most recent actuarial valuation. 19.8(c) The contribution rate increase or decrease must be determined by the executive 19.9director of the Public Employees Retirement Association, must be reported to the chair 19.10and the executive director of the Legislative Commission on Pensions and Retirement 19.11on or before the next February 1, and, if the Legislative Commission on Pensions and 19.12Retirement does not recommend against the rate change or does not recommend a 19.13modification in the rate change, is effective on the next July 1 following the determination 19.14by the executive director that a contribution deficiency or sufficiency has existed for 19.15two consecutive fiscal years based on the most recent actuarial valuations under section 19.16. If the actuarially required contribution exceeds or is less than the total support 19.17provided by the combined employee and employer contribution rates new text begin under subdivisions new text end 19.18 new text begin 2, 3, and 3a, new text end by more than 0.5 new text begin one new text end percent of covered payroll, the coordinated program 19.19employee and employer contribution rates new text begin under subdivisions 2 and 3 new text end must be adjusted 19.20 new text begin decreased new text end incrementally over one or more years new text begin by no more than 0.25 percent of pay each new text end 19.21 new text begin for employee and employer matching contribution rates new text end to a level such that there remains 19.22a contribution sufficiency of no more than 0.25 new text begin at least one new text end percent of covered payroll. new text begin No new text end 19.23 new text begin contribution rate decrease may be made until at least two years have elapsed since any new text end 19.24 new text begin adjustment under this subdivision has been fully implemented. new text end 19.25(d) No new text begin If the actuarially required contribution exceeds the total support provided new text end 19.26 new text begin by the combined employee and employer contribution rates under subdivisions 2, 3, and new text end 19.27 new text begin 3a, the employee and matching employer contribution rates must be increased equally to new text end 19.28 new text begin eliminate that contribution deficiency. If the contribution deficiency is: new text end 19.29 new text begin (1) less than two percent, the new text end incremental adjustment new text begin increase new text end may exceed new text begin be up new text end 19.30 new text begin to new text end 0.25 percent for either the coordinated program employee and new text begin matching new text end employer 19.31contribution rates per year in which any adjustment is implemented. A contribution rate 19.32adjustment under this subdivision must not be made until at least two years have passed 19.33since fully implementing a previous adjustment under this subdivision. new text begin ; new text end 19.34 new text begin (2) greater than 1.99 percent and less than 4.01 percent, the incremental increase new text end 19.35 new text begin may be up to 0.5 percent for the employee and matching employer contribution rates; or new text end 20.1 new text begin (3) greater than four percent, the incremental increase may be up to 0.75 percent for new text end 20.2 new text begin the employee and matching employer contribution. new text end 20.3 new text begin (e) Any recommended adjustment to the contribution rates must be reported new text end 20.4 new text begin to the chair and the executive director of the Legislative Commission on Pensions new text end 20.5 new text begin and Retirement by January 15 following receipt of the most recent annual actuarial new text end 20.6 new text begin valuation prepared under section 356.215. If the Legislative Commission on Pensions new text end 20.7 new text begin and Retirement does not recommend against the rate change or does not recommend a new text end 20.8 new text begin modification in the rate change, the recommended adjustment becomes effective on the new text end 20.9 new text begin first day of the first full payroll period in the fiscal year following receipt of the most new text end 20.10 new text begin recent actuarial valuation that gave rise to the adjustment. new text end 20.11 new text begin (f) A contribution sufficiency of up to one percent of covered payroll must be held in new text end 20.12 new text begin reserve to be used to offset any future actuarially required contributions that are more than new text end 20.13 new text begin the total combined employee and employer contributions under subdivisions 2, 3, and 3a. new text end 20.14 new text begin (g) Before any reduction in contributions to eliminate a sufficiency in excess of one new text end 20.15 new text begin percent of covered pay may be recommended, the executive director must review any new text end 20.16 new text begin need for a change in actuarial assumptions, as recommended by the actuary retained under new text end 20.17 new text begin section 356.214 in the most recent experience study of the general employees retirement new text end 20.18 new text begin plan prepared under section 356.215 and the standards for actuarial work promulgated by new text end 20.19 new text begin the Legislative Commission on Pensions and Retirement that may result in an increase new text end 20.20 new text begin in the actuarially required contribution and must report to the Legislative Commission new text end 20.21 new text begin on Pensions and Retirement any recommendation by the board to use the sufficiency new text end 20.22 new text begin exceeding one percent of covered payroll to offset the impact of an actuarial assumption new text end 20.23 new text begin change recommended by the actuary retained under section 356.214, subdivision 1, and new text end 20.24 new text begin reviewed by the actuary retained by the commission under section 356.214, subdivision 4. new text end 20.25 new text begin (h) No contribution sufficiency in excess of one percent of covered pay may be new text end 20.26 new text begin proposed to be used to increase benefits, and no benefit increase may be proposed that new text end 20.27 new text begin would initiate an automatic adjustment to increase contributions under this subdivision. new text end 20.28 new text begin Any proposed benefit improvement must include a recommendation, prepared by the new text end 20.29 new text begin actuary retained under section 356.214, subdivision 1, and reviewed by the actuary new text end 20.30 new text begin retained by the Legislative Commission on Pensions and Retirement as provided under new text end 20.31 new text begin section 356.214, subdivision 4, on how the benefit modification will be funded. new text end 20.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 20.33    Sec. 26. Minnesota Statutes 2008, section 353.29, subdivision 1, is amended to read: 20.34    Subdivision 1. Age and allowable service requirements. Upon termination of 20.35membership, a person who has attained normal retirement age and who received credit for 21.1not less than three years of allowable service new text begin is vested under section 353.01, subdivision new text end 21.2 new text begin 47, new text end is entitled upon application to a retirement annuity. The retirement annuity is known 21.3as the "normal" retirement annuity. 21.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 21.5    Sec. 27. Minnesota Statutes 2008, section 353.30, subdivision 1c, is amended to read: 21.6    Subd. 1c. Pre-July 1, 1989, members: early retirement. Upon termination of 21.7public service, a person who first became a public employee or a member of a pension 21.8fund listed in section 356.30, subdivision 3, before July 1, 1989, who has become at least 21.955 years old but not normal retirement age, and has received credit for at least three years 21.10of allowable service new text begin is vested under section 353.01, subdivision 47, new text end is entitled new text begin , new text end upon 21.11application new text begin , new text end to a retirement annuity in an amount equal to the normal annuity provided in 21.12section 353.29, subdivision 3, paragraph (a), reduced by one-quarter of one percent for 21.13each month that the member is under normal retirement age at the time of retirement. 21.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 21.15    Sec. 28. Minnesota Statutes 2008, section 353.32, subdivision 1, is amended to read: 21.16    Subdivision 1. Before retirement. If a member or former member who terminated 21.17public service dies before retirement or before receiving any retirement annuity and no 21.18other payment of any kind is or may become payable to any person, a refund shall be paid 21.19 new text begin is payable new text end to the designated beneficiary or, if there be none, to the surviving spouse, 21.20or, if none, to the legal representative of the decedent's estate. Such new text begin The new text end refund shall 21.21 new text begin must new text end be in an amount equal to accumulated deductions plus new text begin annual compound new text end interest 21.22thereon at the rate of six percent per annum compounded annually new text begin specified in section new text end 21.23 new text begin 353.34, subdivision 2, and new text end less the sum of any disability or survivor benefits, if any, that 21.24may have been paid by the fund; provided that a survivor who has a right to benefits 21.25pursuant to new text begin under new text end section 353.31 may waive such benefits in writing, except such benefits 21.26for a dependent child under the age of 18 years may only be waived pursuant to new text begin under new text end an 21.27order of the district court. 21.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 21.29    Sec. 29. Minnesota Statutes 2008, section 353.32, subdivision 1a, is amended to read: 21.30    Subd. 1a. Surviving spouse optional annuity. (a) If a member or former member 21.31who has credit for not less than three years of allowable service new text begin is vested under section new text end 21.32 new text begin 353.01, subdivision 47, new text end and new text begin who new text end dies before the annuity or disability benefit begins to 22.1accrue under section 353.29, subdivision 7, or 353.33, subdivision 2, notwithstanding any 22.2designation of beneficiary to the contrary, the surviving spouse may elect to receive, 22.3instead of a refund with interest under subdivision 1, or surviving spouse benefits otherwise 22.4payable under section 353.31, an annuity equal to a 100 percent joint and survivor annuity 22.5computed consistent with section 353.30, subdivision 1a, 1c, or 5, whichever is applicable. 22.6    (b) If a member first became a public employee or a member of a pension fund listed 22.7in section 356.30, subdivision 3, before July 1, 1989, and has credit for at least 30 years 22.8of allowable service on the date of death, the surviving spouse may elect to receive a 22.9100 percent joint and survivor annuity computed using section 353.30, subdivision 1b, 22.10except that the early retirement reduction under that provision will be applied from age 22.1162 back to age 55 and one-half of the early retirement reduction from age 55 back to 22.12the age payment begins. 22.13    (c) If a member who was under age 55 and has credit for at least three years of 22.14allowable service new text begin who is vested under section 353.01, subdivision 47, new text end dies, but did not 22.15qualify for retirement on the date of death, the surviving spouse may elect to receive a 22.16100 percent joint and survivor annuity computed using section 353.30, subdivision 1c or 22.175, as applicable, except that the early retirement reduction specified in the applicable 22.18subdivision will be applied to age 55 and one-half of the early retirement reduction from 22.19age 55 back to the age payment begins. 22.20    (d) Notwithstanding the definition of surviving spouse in section 353.01, subdivision 22.2120 , a former spouse of the member, if any, is entitled to a portion of the monthly surviving 22.22spouse optional annuity if stipulated under the terms of a marriage dissolution decree filed 22.23with the association. If there is no surviving spouse or child or children, a former spouse 22.24may be entitled to a lump-sum refund payment under subdivision 1, if provided for in a 22.25marriage dissolution decree, but not a monthly surviving spouse optional annuity, despite 22.26the terms of a marriage dissolution decree filed with the association. 22.27    (e) The surviving spouse eligible for surviving spouse benefits under paragraph (a) 22.28may apply for the annuity at any time after the date on which the deceased employee 22.29would have attained the required age for retirement based on the employee's allowable 22.30service. The surviving spouse eligible for surviving spouse benefits under paragraph (b) or 22.31(c) may apply for an annuity any time after the member's death. 22.32    (f) Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred 22.33annuity or surviving spouse benefit payable under this subdivision. 22.34    (g) An amount equal to any excess of the accumulated contributions that were 22.35credited to the account of the deceased employee over and above the total of the annuities 22.36paid and payable to the surviving spouse must be paid to the surviving spouse's estate. 23.1    (h) A member may specify in writing, with the signed consent of the spouse, that 23.2this subdivision does not apply and that payment may be made only to the designated 23.3beneficiary as otherwise provided by this chapter. The waiver of a surviving spouse 23.4annuity under this section does not make a dependent child eligible for benefits under 23.5subdivision 1c. 23.6    (i) If the deceased member or former member first became a public employee or a 23.7member of a public pension plan listed in section 356.30, subdivision 3, on or after July 23.81, 1989, a survivor annuity computed under paragraph (a) or (c) must be computed as 23.9specified in section 353.30, subdivision 5, except for the revised early retirement reduction 23.10specified in paragraph (c), if paragraph (c) is the applicable provision. 23.11    (j) For any survivor annuity determined under this subdivision, the payment is to be 23.12based on the total allowable service that the member had accrued as of the date of death 23.13and the age of the member and surviving spouse on that date. 23.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 23.15    Sec. 30. Minnesota Statutes 2009 Supplement, section 353.33, subdivision 1, is 23.16amended to read: 23.17    Subdivision 1. Age, service, and salary requirements. new text begin (a) new text end A coordinated or 23.18basic member who has at least three years of allowable service new text begin is vested under section new text end 23.19 new text begin 353.01, subdivision 47, new text end and new text begin who new text end becomes totally and permanently disabled before normal 23.20retirement age, upon application as defined under section 353.031, is entitled to a disability 23.21benefit in an amount determined under subdivision 3. 23.22 new text begin (b) new text end If the disabled person's public service has terminated at any time, at least two of 23.23the required three years of allowable service new text begin required to be vested under section 353.01, new text end 23.24 new text begin subdivision 47, new text end must have been rendered after last becoming an active member. 23.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 23.26    Sec. 31. Minnesota Statutes 2008, section 353.34, subdivision 1, is amended to read: 23.27    Subdivision 1. Refund or deferred annuity. (a) A former member is entitled to 23.28 new text begin either new text end a refund of accumulated employee deductions under subdivision 2, or to a deferred 23.29annuity under subdivision 3. Application for a refund may not be made before the date of 23.30termination of public service. Except as specified in paragraph (b), a refund must be paid 23.31within 120 days following receipt of the application unless the applicant has again become 23.32a public employee required to be covered by the association. 24.1(b) If an individual was placed on layoff under section 353.01, subdivision 12 or 12c, 24.2a refund is not payable before termination of service under section 353.01, subdivision 11a. 24.3(c) An individual who terminates public service covered by the Public Employees 24.4Retirement Association general employees retirement plan, the Public Employees 24.5Retirement Association police and fire retirement plan, or the public employees local 24.6government corrections new text begin correctional new text end service retirement plan, and who is employed by a 24.7different employer and who becomes an active member covered by one of the other two 24.8plans, may receive a refund of employee contributions plus six percent new text begin annual compound new text end 24.9interest compounded annually from the plan from which the member terminated service new text begin at new text end 24.10 new text begin the applicable rate specified in subdivision 2 new text end . 24.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 24.12    Sec. 32. Minnesota Statutes 2008, section 353.34, subdivision 2, is amended to read: 24.13    Subd. 2. Refund with interest. new text begin (a) new text end Except as provided in subdivision 1, any person 24.14who ceases to be a public employee shall new text begin is entitled to new text end receive a refund in an amount equal 24.15to accumulated deductions with new text begin annual compound new text end interest to the first day of the month 24.16in which the refund is processed at the rate of six percent compounded annually based 24.17on fiscal year balances. 24.18 new text begin (b) For a person who ceases to be a public employee before July 1, 2011, the refund new text end 24.19 new text begin interest is at the rate of six percent to June 30, 2011, and at the rate of four percent after new text end 24.20 new text begin June 30, 2011. For a person who ceases to be a public employee after July 1, 2011, the new text end 24.21 new text begin refund interest is at the rate of four percent. new text end 24.22 new text begin (c) new text end If a person repays a refund and subsequently applies for another refund, the 24.23repayment amount, including interest, is added to the fiscal year balance in which the 24.24repayment was made. 24.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 24.26    Sec. 33. Minnesota Statutes 2008, section 353.34, subdivision 3, is amended to read: 24.27    Subd. 3. Deferred annuity; eligibility; computation. new text begin (a) new text end A member with at least 24.28three years of allowable service new text begin who is vested under section 353.01, subdivision 47, new text end when 24.29termination of public service or termination of membership occurs has the option of 24.30leaving the accumulated deductions in the fund and being entitled to a deferred retirement 24.31annuity commencing at normal retirement age or to a deferred early retirement annuity 24.32under section 353.30, subdivision 1a, 1b, 1c, or 5. 25.1 new text begin (b) new text end The deferred annuity must be computed under section 353.29, subdivision 3, on 25.2the basis of the law in effect on the date of termination of public service or termination of 25.3membership, whichever is earlier, and must be augmented as provided in section 353.71, 25.4subdivision 2 . 25.5 new text begin (c) new text end A former member qualified to apply for a deferred retirement annuity may 25.6revoke this option at any time before the commencement of deferred annuity payments 25.7by making application for a refund. The person is entitled to a refund of accumulated 25.8member contributions within 30 days following date of receipt of the application by the 25.9executive director. 25.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 25.11    Sec. 34. Minnesota Statutes 2009 Supplement, section 353.65, subdivision 2, is 25.12amended to read: 25.13    Subd. 2. Employee contribution. The employee contribution is 9.4 percent of the 25.14salary of the member new text begin in calendar year 2010 and is 9.6 percent of the salary of the member new text end 25.15 new text begin in each calendar year after 2010 new text end . This contribution must be made by deduction from 25.16salary in the manner provided in subdivision 4. Where any portion of a member's salary 25.17is paid from other than public funds, the member's employee contribution is based on 25.18the total salary received from all sources. 25.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 25.20    Sec. 35. Minnesota Statutes 2009 Supplement, section 353.65, subdivision 3, is 25.21amended to read: 25.22    Subd. 3. Employer contribution. The employer contribution is 14.1 percent of the 25.23salary of the member new text begin in calendar year 2010 and is 14.4 percent of the salary of the member new text end 25.24 new text begin in each calendar year after 2010 new text end . This contribution must be made from funds available to 25.25the employing subdivision by the means and in the manner provided in section 353.28. 25.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 25.27    Sec. 36. Minnesota Statutes 2008, section 353.651, subdivision 1, is amended to read: 25.28    Subdivision 1. Age and allowable service requirements. Upon separation from 25.29public service, any police officer or firefighter member who has attained the age of at 25.30least 55 years and who received credit for not less than three years of allowable service 25.31 new text begin is vested under section 353.01, subdivision 47, new text end is entitled upon application to a retirement 25.32annuity. Such retirement annuity is new text begin , new text end known as the "normal" retirement annuity. 26.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 26.2    Sec. 37. Minnesota Statutes 2008, section 353.651, subdivision 4, is amended to read: 26.3    Subd. 4. Early retirement. (a) A person who becomes a police and fire plan 26.4member after June 30, 2007, or a former member who is reinstated as a member of the 26.5plan after that date, who is at least 50 years of age with at least three years of allowable 26.6service new text begin and who is vested under section 353.01, subdivision 47 new text end , upon the termination of 26.7public service is entitled upon application to a retirement annuity equal to the normal 26.8annuity calculated under subdivision 3, reduced by two-tenths of one percent for each 26.9month that the member is under age 55 at the time of retirement. 26.10    (b) Upon the termination of public service, any police and fire plan member not 26.11specified in paragraph (a), upon attaining at least 50 years of age with at least three years 26.12of allowable service is entitled upon application to a retirement annuity equal to the 26.13normal annuity calculated under subdivision 3, reduced by one-tenth of one percent for 26.14each month that the member is under age 55 at the time of retirement. 26.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 26.16    Sec. 38. Minnesota Statutes 2008, section 353.657, subdivision 1, is amended to read: 26.17    Subdivision 1. Generally. (a) In the event that a member of the police and fire 26.18fund dies from any cause before retirement or before becoming disabled and receiving 26.19disability benefits, the association shall grant survivor benefits to a surviving spouse, as 26.20defined in section 353.01, subdivision 20, and to a dependent child or children, as defined 26.21in section 353.01, subdivision 15, except that if the death is not a line of duty death, the 26.22member must have accrued at least three years of credited service new text begin be vested under section new text end 26.23 new text begin 353.01, subdivision 47 new text end . 26.24    (b) Notwithstanding the definition of surviving spouse, a former spouse of the 26.25member, if any, is entitled to a portion of the monthly surviving spouse benefit if 26.26stipulated under the terms of a marriage dissolution decree filed with the association. If 26.27there is no surviving spouse or child or children, a former spouse may be entitled to 26.28a lump-sum refund payment under section 353.32, subdivision 1, if provided for in a 26.29marriage dissolution decree but not a monthly surviving spouse benefit despite the terms 26.30of a marriage dissolution decree filed with the association. 26.31    (c) The spouse and child or children are entitled to monthly benefits as provided in 26.32subdivisions 2 to 4. 26.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 27.1    Sec. 39. Minnesota Statutes 2008, section 353.657, subdivision 2a, is amended to read: 27.2    Subd. 2a. Death while eligible survivor benefit. (a) If a member or former member 27.3who has attained the age of at least 50 years and has credit for not less than three years 27.4allowable service new text begin either who is vested under section 353.01, subdivision 47, new text end or who has 27.5credit for at least 30 years of allowable service, regardless of age attained, dies before 27.6the annuity or disability benefit becomes payable, notwithstanding any designation of 27.7beneficiary to the contrary, the surviving spouse may elect to receive a death while 27.8eligible survivor benefit. 27.9    (b) Notwithstanding the definition of surviving spouse in section 353.01, subdivision 27.1020 , a former spouse of the member, if any, is entitled to a portion of the death while 27.11eligible survivor benefit if stipulated under the terms of a marriage dissolution decree 27.12filed with the association. If there is no surviving spouse or child or children, a former 27.13spouse may be entitled to a lump-sum refund payment under section 353.32, subdivision 27.141 , if provided for in a marriage dissolution decree but not a death while eligible survivor 27.15benefit despite the terms of a marriage dissolution decree filed with the association. 27.16    (c) The benefit may be elected instead of a refund with interest under section 353.32, 27.17subdivision 1 , or surviving spouse benefits otherwise payable under subdivisions 1 and 27.182. The benefit must be an annuity equal to the 100 percent joint and survivor annuity 27.19which the member could have qualified for on the date of death, computed as provided in 27.20sections 353.651, subdivisions 2 and 3, and 353.30, subdivision 3. 27.21    (d) The surviving spouse may apply for the annuity at any time after the date 27.22on which the deceased employee would have attained the required age for retirement 27.23based on the employee's allowable service. Sections 353.34, subdivision 3, and 353.71, 27.24subdivision 2 , apply to a deferred annuity payable under this subdivision. 27.25    (e) No payment accrues beyond the end of the month in which entitlement to 27.26such annuity has terminated. An amount equal to the excess, if any, of the accumulated 27.27contributions which were credited to the account of the deceased employee over and 27.28above the total of the annuities paid and payable to the surviving spouse must be paid to 27.29the deceased member's last designated beneficiary or, if none, to the legal representative of 27.30the estate of such deceased member. 27.31    (f) Any member may request in writing, with the signed consent of the spouse, that 27.32this subdivision not apply and that payment be made only to the designated beneficiary, as 27.33otherwise provided by this chapter. 27.34    (g) For a member who is employed as a full-time firefighter by the Department of 27.35Military Affairs of the state of Minnesota, allowable service as a full-time state Military 28.1Affairs Department firefighter credited by the Minnesota State Retirement System may be 28.2used in meeting the minimum allowable service requirement of this subdivision. 28.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 28.4    Sec. 40. Minnesota Statutes 2008, section 353.71, subdivision 1, is amended to read: 28.5    Subdivision 1. Eligibility. Any person who has been a member of new text begin a defined benefit new text end 28.6 new text begin retirement plan administered by new text end the Public Employees Retirement Association, or new text begin a new text end 28.7 new text begin retirement plan administered by new text end the Minnesota State Retirement System, or the Teachers 28.8Retirement Association, or any other public retirement system in the state of Minnesota 28.9having a like provision, except a fund new text begin retirement plan new text end providing benefits for police officers 28.10or firefighters governed by sections 69.77 or 69.771 to 69.776, shall be new text begin is new text end entitled new text begin , new text end when 28.11qualified new text begin , new text end to an annuity from each fund new text begin retirement plan new text end if the total allowable service in all 28.12funds new text begin retirement plans new text end or in any two of these funds new text begin retirement plans new text end totals three or more 28.13years new text begin the number of years of allowable service required to receive a normal retirement new text end 28.14 new text begin annuity for that retirement plan new text end , provided new text begin that new text end no portion of the allowable service upon 28.15which the retirement annuity from one fund new text begin retirement plan new text end is based is again used in the 28.16computation for benefits from another fund new text begin retirement plan new text end and provided further that the 28.17person has not taken a refund from any one of these funds new text begin retirement plans new text end since the 28.18person's membership in that association or system last terminated. The annuity from 28.19each fund shall new text begin must new text end be determined by the appropriate provisions of the law except that 28.20the requirement that a person must have at least three years new text begin a specific minimum period new text end 28.21of allowable service in the respective association or system shall new text begin does new text end not apply for the 28.22purposes of this section provided new text begin if new text end the combined service in two or more of these funds 28.23 new text begin retirement plans new text end equals three or more new text begin the number of new text end years new text begin of allowable service required to new text end 28.24 new text begin receive a normal retirement annuity for that retirement plan new text end . 28.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 28.26    Sec. 41. Minnesota Statutes 2008, section 353.71, subdivision 2, is amended to read: 28.27    Subd. 2. Deferred annuity computation; augmentation. (a) The deferred annuity 28.28accruing under subdivision 1, or under sections 353.34, subdivision 3, and 353.68, 28.29subdivision 4 , must be computed on the basis of allowable service prior to the termination 28.30of public service and augmented as provided in this paragraph new text begin subdivision new text end . The required 28.31reserves applicable to a deferred annuity, or to any deferred segment of an annuity must 28.32be determined as of the first day of the month following the month in which the former 28.33member ceased to be a public employee, or July 1, 1971, whichever is later. These 29.1 new text begin (b) For a person who became a public employee before July 1, 2006, whose period new text end 29.2 new text begin of deferral began after June 30, 1971, and who terminated public employment before new text end 29.3 new text begin January 1, 2012, the new text end required reserves new text begin of the deferred annuity new text end must be augmented at 29.4the new text begin following applicable new text end rate of new text begin or rates: new text end 29.5 new text begin (1) new text end five percent annually compounded annually new text begin annual compound interest new text end until 29.6January 1, 1981, and at the rate of new text begin ; new text end 29.7 new text begin (2) new text end three percent thereafter new text begin annual compound interest after January 1, 1981, or until new text end 29.8 new text begin the earlier of December 31, 2011, or after the date of the termination of public service or new text end 29.9 new text begin the termination of membership, whichever is later, new text end until January 1 of the year following 29.10the year in which the former member attains age 55 and new text begin ; new text end 29.11 new text begin (3) five percent annual compound interest new text end from that date to the effective date of 29.12retirement, the rate is five percent compounded annually if the employee became an 29.13employee before July 1, 2006, and at 2.5 percent compounded annually if the employee 29.14becomes an new text begin January 1 of the year following the year in which the former member attains new text end 29.15 new text begin age 55, or until December 31, 2011, whichever is earlier; and new text end 29.16 new text begin (4) one percent annual compound interest from January 1, 2012. new text end 29.17 new text begin (c) For a person who became a public new text end employee after June 30, 2006 new text begin , and who new text end 29.18 new text begin terminated public employment before January 1, 2012, the required reserves of the new text end 29.19 new text begin deferred annuity must be augmented at 2.5 percent annual compound interest from the date new text end 29.20 new text begin of termination of public service or termination of membership, whichever is earlier, until new text end 29.21 new text begin December 31, 2011, and one percent annual compound interest after December 31, 2011 new text end . 29.22 new text begin (d) For a person who terminates public employment after December 31, 2011, the new text end 29.23 new text begin required reserves of the deferred annuity must not be augmented. new text end 29.24 new text begin (e) new text end If a person has more than one period of uninterrupted service, the required 29.25reserves related to each period must be augmented as specified in this paragraph. The sum 29.26of the augmented required reserves is the present value of the annuity. Uninterrupted 29.27service for the purpose of this subdivision means periods of covered employment during 29.28which the employee has not been separated from public service for more than two years. 29.29If a person repays a refund, the restored service must be considered as continuous with the 29.30next period of service for which the employee has credit with this association. This section 29.31must not reduce the annuity otherwise payable under this chapter. This paragraph applies 29.32to individuals who become deferred annuitants on or after July 1, 1971. For a member 29.33who became a deferred annuitant before July 1, 1971, the paragraph applies from July 1, 29.341971, if the former active member applies for an annuity after July 1, 1973. 29.35(b) new text begin (f) new text end The retirement annuity or disability benefit of, or the survivor benefit payable 29.36on behalf of, a former member who terminated service before July 1, 1997, or the 30.1survivor benefit payable on behalf of a basic or police and fire member who was receiving 30.2disability benefits before July 1, 1997, which is first payable after June 30, 1997, must 30.3be increased on an actuarial equivalent basis to reflect the change in the postretirement 30.4interest rate actuarial assumption under section 356.215, subdivision 8, from five percent 30.5to six percent under a calculation procedure and tables adopted by the board and approved 30.6by the actuary retained under section 356.214. 30.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 30.8    Sec. 42. Minnesota Statutes 2008, section 353E.04, subdivision 1, is amended to read: 30.9    Subdivision 1. Eligibility requirements. After termination of public employment, 30.10an employee covered under section 353E.02 who has attained the age of at least 55 years 30.11and has credit for not less than three years of coverage new text begin who is vested under section new text end 30.12 new text begin 353.01, subdivision 47, new text end in the local government correctional service plan is entitled, upon 30.13application, to a normal retirement annuity. Instead of a normal retirement annuity, a 30.14retiring employee may elect to receive the optional annuity provided in section 353.30, 30.15subdivision 3 . 30.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 30.17    Sec. 43. Minnesota Statutes 2008, section 353E.04, subdivision 4, is amended to read: 30.18    Subd. 4. Early retirement. An employee covered under section 353E.02 who has 30.19attained the age of at least 50 years and has credit for not less than three years of coverage 30.20 new text begin who is vested under section 353.01, subdivision 47, new text end in the local government correctional 30.21service plan is entitled, upon application, to a reduced retirement annuity equal to the 30.22annuity calculated under subdivision 3, reduced so that the reduced annuity is the actuarial 30.23equivalent of the annuity that would be payable if the employee deferred receipt of the 30.24annuity from the day the annuity begins to accrue until age 55. 30.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 30.26    Sec. 44. Minnesota Statutes 2008, section 353E.07, subdivision 1, is amended to read: 30.27    Subdivision 1. Member at least age 50. If a member or former member of the local 30.28government correctional service retirement plan who has attained the age of at least 50 30.29years and has credit for not less than three years of allowable service new text begin who is vested under new text end 30.30 new text begin section 353.01, subdivision 47, new text end dies before the annuity or disability benefit has become 30.31payable, notwithstanding any designation of beneficiary to the contrary, the surviving 30.32spouse may elect to receive, in lieu of a refund with interest provided in section 353.32, 31.1subdivision 1 , a surviving spouse annuity equal to the 100 percent joint and survivor 31.2annuity for which the member could have qualified had the member terminated service 31.3on the date of death. 31.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 31.5    Sec. 45. Minnesota Statutes 2008, section 353E.07, subdivision 2, is amended to read: 31.6    Subd. 2. Member not yet age 50. If the member was under age 50, dies, and had 31.7credit for not less than three years of allowable service new text begin was vested under section 353.01, new text end 31.8 new text begin subdivision 47, new text end on the date of death but did not yet qualify for retirement, the surviving 31.9spouse may elect to receive a 100 percent joint and survivor annuity based on the age 31.10of the employee and the surviving spouse at the time of death. The annuity is payable 31.11using the early retirement reduction under section 353E.04, subdivision 4, to age 50 and 31.12one-half the early retirement reduction from age 50 to the age payment begins. Sections 31.13353.34, subdivision 3 , and 353.71, subdivision 2, apply to a deferred annuity or surviving 31.14spouse benefit payable under this subdivision. 31.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 31.16    Sec. 46. Minnesota Statutes 2008, section 353F.03, is amended to read: 31.17353F.03 VESTING RULE FOR CERTAIN EMPLOYEES. 31.18Notwithstanding any provision of chapter 353 to the contrary, a terminated medical 31.19facility or other public employing unit employee is eligible to receive a retirement annuity 31.20under section 353.29 of the edition of Minnesota Statutes published in the year before the 31.21year in which the privatization occurred, without regard to the requirement for three years 31.22of allowable service new text begin specified in section 353.01, subdivision 47 new text end . 31.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 31.24    Sec. 47. Minnesota Statutes 2009 Supplement, section 354.42, subdivision 2, is 31.25amended to read: 31.26    Subd. 2. Employee contribution. (a) For a basic member, the employee 31.27contribution to the fund is 9.0 percent new text begin the following percentage new text end of the member's salary. new text begin : new text end 31.28 new text begin before July 1, 2011 new text end new text begin 9.0 percent new text end 31.29 new text begin from July 1, 2011, until June 30, 2012 new text end new text begin 9.5 percent new text end 31.30 new text begin from July 1, 2012, until June 30, 2013 new text end new text begin 10.0 percent new text end 31.31 new text begin from July 1, 2013, until June 30, 2014 new text end new text begin 10.5 percent new text end 31.32 new text begin after June 30, 2014 new text end new text begin 11.0 percent new text end 32.1 new text begin (b) new text end For a coordinated member, the employee contribution is 5.5 percent new text begin the following new text end 32.2 new text begin percentage new text end of the member's salary. new text begin : new text end 32.3 new text begin before July 1, 2011 new text end new text begin 5.5 percent new text end 32.4 new text begin from July 1, 2011, until June 30, 2012 new text end new text begin 6.0 percent new text end 32.5 new text begin from July 1, 2012, until June 30, 2013 new text end new text begin 6.5 percent new text end 32.6 new text begin from July 1, 2013, until June 30, 2014 new text end new text begin 7.0 percent new text end 32.7 new text begin after June 30, 2014 new text end new text begin 7.5 percent new text end 32.8 new text begin (c) When an employee contribution rate changes for a fiscal year, the new new text end 32.9 new text begin contribution rate is effective for the entire salary paid for each employer unit with the new text end 32.10 new text begin first payroll cycle reported. new text end 32.11 new text begin (d) After June 30, 2015, if a contribution rate revision is required under subdivisions new text end 32.12 new text begin 4a, 4b, and 4c, the employee contributions under paragraphs (a) and (b) must be adjusted new text end 32.13 new text begin accordingly. new text end 32.14(b) new text begin (e) new text end This contribution must be made by deduction from salary. Where any portion 32.15of a member's salary is paid from other than public funds, the member's employee 32.16contribution must be based on the entire salary received. 32.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 32.18    Sec. 48. Minnesota Statutes 2008, section 354.42, subdivision 3, is amended to read: 32.19    Subd. 3. Employer. (a) The regular employer contribution to the fund by Special 32.20School District No. 1, Minneapolis, after July 1, 2006, and before July 1, 2007, is an 32.21amount equal to 5.0 percent of the salary of each of its teachers who is a coordinated 32.22member and 9.0 percent of the salary of each of its teachers who is a basic member. After 32.23July 1, 2007, the regular employer contribution to the fund by Special School District No. 32.241, Minneapolis, is an amount equal to 5.5 percent new text begin the applicable following percentage new text end of 32.25salary of each coordinated member and 9.5 percent new text begin the applicable following percentage new text end 32.26of salary of each basic member. new text begin : new text end 32.27 new text begin Period new text end new text begin Coordinated Member new text end new text begin Basic Member new text end 32.28 new text begin before July 1, 2011 new text end new text begin 5.5 percent new text end new text begin 9.5 percent new text end 32.29 new text begin from July 1, 2011, until June 30, 2012 new text end new text begin 6.0 percent new text end new text begin 10.0 percent new text end 32.30 new text begin from July 1, 2012, until June 30, 2013 new text end new text begin 6.5 percent new text end new text begin 10.5 percent new text end 32.31 new text begin from July 1, 2013, until June 30, 2014 new text end new text begin 7.0 percent new text end new text begin 11.0 percent new text end 32.32 new text begin after June 30, 2014 new text end new text begin 7.5 percent new text end new text begin 11.5 percent new text end 32.33 The additional employer contribution to the fund by Special School District No. 1, 32.34Minneapolis, after July 1, 2006, is an amount equal to 3.64 percent of the salary of each 32.35teacher who is a coordinated member or is a basic member. 33.1(b) The employer contribution to the fund for every other employer is an amount 33.2equal to 5.0 percent new text begin the applicable following percentage new text end of the salary of each coordinated 33.3member and 9.0 percent new text begin the applicable following percentage new text end of the salary of each basic 33.4member before July 1, 2007, and 5.5 percent of the salary of each coordinated member 33.5and 9.5 percent of the salary of each basic member after June 30, 2007. new text begin : new text end 33.6 new text begin Period new text end new text begin Coordinated Member new text end new text begin Basic Member new text end 33.7 new text begin before July 1, 2011 new text end new text begin 5.5 percent new text end new text begin 9.5 percent new text end 33.8 new text begin from July 1, 2011, until June 30, 2012 new text end new text begin 6.0 percent new text end new text begin 10.0 percent new text end 33.9 new text begin from July 1, 2012, until June 30, 2013 new text end new text begin 6.5 percent new text end new text begin 10.5 percent new text end 33.10 new text begin from July 1, 2013, until June 30, 2014 new text end new text begin 7.0 percent new text end new text begin 11.0 percent new text end 33.11 new text begin after June 30, 2014 new text end new text begin 7.5 percent new text end new text begin 11.5 percent new text end 33.12 new text begin (c) When an employer contribution rate changes for a fiscal year, the new new text end 33.13 new text begin contribution rate is effective for the entire salary paid for each employer unit with the new text end 33.14 new text begin first payroll cycle reported. new text end 33.15 new text begin (d) After June 30, 2015, if a contribution rate revision is made under subdivisions new text end 33.16 new text begin 4a, 4b, and 4c, the employer contributions under paragraphs (a) and (b) must be adjusted new text end 33.17 new text begin accordingly. new text end 33.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 33.19    Sec. 49. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision 33.20to read: 33.21     new text begin Subd. 4a. new text end new text begin Determination. new text end new text begin (a) For purposes of this section, a contribution new text end 33.22 new text begin sufficiency exists if the total of the employee contributions, the employer contributions, new text end 33.23 new text begin and any additional employer contributions, if applicable, exceeds the total of the normal new text end 33.24 new text begin cost, the administrative expenses, and the amortization contribution of the retirement plan new text end 33.25 new text begin as reported in the most recent actuarial valuation of the retirement plan prepared by the new text end 33.26 new text begin approved actuary retained under section 356.214 and prepared under section 356.215 new text end 33.27 new text begin and the standards for actuarial work of the Legislative Commission on Pensions and new text end 33.28 new text begin Retirement. new text end 33.29 new text begin (b) For purposes of this section, a contribution deficiency exists if the total of new text end 33.30 new text begin the employee contributions, the employer contributions, and any additional employer new text end 33.31 new text begin contributions are less than the total of the normal cost, the administrative expenses, and new text end 33.32 new text begin the amortization contribution of the retirement plan as reported in the most recent actuarial new text end 33.33 new text begin valuation of the retirement plan prepared by the approved actuary retained under section new text end 33.34 new text begin 356.214 and prepared under section 356.215 and the standards for actuarial work of the new text end 33.35 new text begin Legislative Commission on Pensions and Retirement. new text end 34.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 34.2    Sec. 50. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision 34.3to read: 34.4     new text begin Subd. 4b. new text end new text begin Contribution rate revision. new text end new text begin Notwithstanding the contribution rate new text end 34.5 new text begin provisions under subdivisions 2 and 3, the employee and employer contribution rates new text end 34.6 new text begin may be adjusted as follows: new text end 34.7 new text begin (1) if, after June 30, 2015, the regular actuarial valuation of the plan under section new text end 34.8 new text begin 356.215 indicates that there is a contribution sufficiency under subdivision 4a equal to new text end 34.9 new text begin or greater than one percent of covered payroll and the sufficiency has existed for at least new text end 34.10 new text begin two consecutive years, the employee and employer contribution rates for the plan may new text end 34.11 new text begin each be decreased to a level such that the sufficiency equals no more than one percent of new text end 34.12 new text begin covered payroll based on the most recent actuarial valuation; or new text end 34.13 new text begin (2) if, after June 30, 2015, the regular valuation of the plan under section 356.215 new text end 34.14 new text begin indicates that there is a deficiency equal to or greater than 0.25 percent of covered payroll new text end 34.15 new text begin and the deficiency has existed for at least two consecutive years, the employee and new text end 34.16 new text begin employer contribution rates for the applicable plan may each be increased by: new text end 34.17 new text begin (i) 0.25 percent if the deficiency is less than 2.00 percent of covered payroll; new text end 34.18 new text begin (ii) 0.5 percent if the deficiency is equal to or greater than 2.00 percent of covered new text end 34.19 new text begin payroll and less than or equal to four percent; and new text end 34.20 new text begin (iii) 0.75 percent if the deficiency is greater than four percent. new text end 34.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 34.22    Sec. 51. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision 34.23to read: 34.24     new text begin Subd. 4c. new text end new text begin Contribution sufficiency measures. new text end new text begin (a) A contribution sufficiency of up new text end 34.25 new text begin to one percent of covered payroll must be held in reserve to be used to offset any future new text end 34.26 new text begin actuarially required contributions that are more than the total combined employee and new text end 34.27 new text begin employer contributions being collected. new text end 34.28 new text begin (b) Before any reduction in contributions to eliminate a sufficiency in excess of one new text end 34.29 new text begin percent of covered pay may be recommended, the executive director must review any new text end 34.30 new text begin need for a change in actuarial assumptions, as recommended by the actuary retained new text end 34.31 new text begin under section 356.214 in the most recent experience study of the retirement plan, that new text end 34.32 new text begin may result in an increase in the actuarially required contribution and must report to the new text end 34.33 new text begin Legislative Commission on Pensions and Retirement any recommendation by the board new text end 34.34 new text begin to use the sufficiency exceeding one percent of covered payroll to offset the impact of new text end 35.1 new text begin an actuarial assumption change recommended by the actuary retained under section new text end 35.2 new text begin 356.214, subdivision 1, and reviewed by the actuary retained by the commission under new text end 35.3 new text begin section 356.214, subdivision 4. new text end 35.4 new text begin (c) A contribution sufficiency in excess of one percent of covered pay must not be new text end 35.5 new text begin used to increase benefits, and a benefit increase must not be proposed that would initiate new text end 35.6 new text begin an automatic adjustment under this section to increase contributions. A proposed benefit new text end 35.7 new text begin improvement must include a recommendation, prepared by the actuary retained under new text end 35.8 new text begin section 356.214, subdivision 1, and reviewed by the actuary retained by the Legislative new text end 35.9 new text begin Commission on Pensions and Retirement, as provided under section 356.214, subdivision new text end 35.10 new text begin 4, on the manner in which the benefit modification is to be funded. new text end 35.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 35.12    Sec. 52. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision 35.13to read: 35.14     new text begin Subd. 4d. new text end new text begin Reporting; commission review. new text end new text begin A contribution rate increase or decrease new text end 35.15 new text begin under subdivision 4b, as determined by the executive director of the Teachers Retirement new text end 35.16 new text begin Association, must be reported to the chair and the executive director of the Legislative new text end 35.17 new text begin Commission on Pensions and Retirement on or before the next February 1 and, if the new text end 35.18 new text begin Legislative Commission on Pensions and Retirement does not recommend against the rate new text end 35.19 new text begin change or does not recommend a modification in the rate change, is effective on the next new text end 35.20 new text begin July 1 following the determination by the executive director that a contribution deficiency new text end 35.21 new text begin or sufficiency exists based on the most recent actuarial valuation under section 356.215. new text end 35.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 35.23    Sec. 53. Minnesota Statutes 2009 Supplement, section 354.47, subdivision 1, is 35.24amended to read: 35.25    Subdivision 1. Death before retirement. (a) If a member dies before retirement 35.26and is covered under section 354.44, subdivision 2, and neither an optional annuity, nor a 35.27reversionary annuity, nor a benefit under section 354.46, subdivision 1, is payable to the 35.28survivors if the member was a basic member, then the surviving spouse, or if there is no 35.29surviving spouse, the designated beneficiary is entitled to an amount equal to the member's 35.30accumulated deductions with interest credited to the account of the member to the date of 35.31death of the member. If the designated beneficiary is a minor, interest must be credited to 35.32the date the beneficiary reaches legal age, or the date of receipt, whichever is earlier. 36.1(b) If a member dies before retirement and is covered under section 354.44, 36.2subdivision 6 , and neither an optional annuity, nor reversionary annuity, nor the benefit 36.3described in section 354.46, subdivision 1, is payable to the survivors if the member 36.4was a basic member, then the surviving spouse, or if there is no surviving spouse, new text begin then new text end 36.5the designated beneficiary is entitled to an amount equal to the member's accumulated 36.6deductions credited to the account of the member as of June 30, 1957, and from July 1, 36.71957, to the date of death of the member, the member's accumulated deductions plus six 36.8percent interest compounded annually. new text begin a refund equal to the accumulated deductions new text end 36.9 new text begin credited to the member's account plus interest compounded annually until the member's new text end 36.10 new text begin date of death using the following interest rates: new text end 36.11 new text begin (1) before July 1, 1957, no interest accrues; new text end 36.12 new text begin (2) July 1, 1957, to June 30, 2011, six percent; and new text end 36.13 new text begin (3) after June 30, 2011, four percent. new text end 36.14(c) If the designated beneficiary under paragraph (b) is a minor, any interest credited 36.15under that paragraph must be credited to the date the beneficiary reaches legal age, or 36.16the date of receipt, whichever is earlier. 36.17(d) The amount of any refund payable under this subdivision must be reduced by 36.18any permanent disability payment under section 354.48 received by the member. 36.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 36.20    Sec. 54. Minnesota Statutes 2009 Supplement, section 354.49, subdivision 2, is 36.21amended to read: 36.22    Subd. 2. Calculation. (a) Except as provided in section 354.44, subdivision 1, 36.23any person who ceases to be a member by reason of termination of teaching service, is 36.24entitled to receive a refund in an amount equal to the accumulated deductions credited 36.25to the account as of June 30, 1957, and after July 1, 1957, the accumulated deductions 36.26with interest at the rate of six percent per annum compounded annually. new text begin plus interest new text end 36.27 new text begin compounded annually using the following interest rates: new text end 36.28 new text begin (1) before July 1, 1957, no interest accrues; new text end 36.29 new text begin (2) July 1, 1957, to June 30, 2011, six percent; and new text end 36.30 new text begin (3) after June 30, 2011, four percent. new text end 36.31For the purpose of this subdivision, interest must be computed on fiscal year end 36.32balances to the first day of the month in which the refund is issued. 36.33(b) If the person has received permanent disability payments under section 354.48, 36.34the refund amount must be reduced by the amount of those payments. 37.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 37.2    Sec. 55. Minnesota Statutes 2009 Supplement, section 354.55, subdivision 11, is 37.3amended to read: 37.4    Subd. 11. Deferred annuity; augmentation. (a) Any person covered under section 37.5354.44, subdivision 6 , who ceases to render teaching service, may leave the person's 37.6accumulated deductions in the fund for the purpose of receiving a deferred annuity 37.7at retirement. 37.8(b) The amount of the deferred retirement annuity is determined by section 354.44, 37.9subdivision 6 , and augmented as provided in this subdivision. The required reserves for 37.10the annuity which had accrued when the member ceased to render teaching service must 37.11be augmented, as further specified in this subdivision, by new text begin the applicable new text end interest new text begin rate new text end 37.12compounded annually from the first day of the month following the month during which 37.13the member ceased to render teaching service to the effective date of retirement. 37.14(c) No augmentation is not creditable if the deferral period is less than three months 37.15or if deferral commenced before July 1, 1971. 37.16(d) For persons who became covered employees before July 1, 2006, with a deferral 37.17period commencing after June 30, 1971, the annuity must be augmented using new text begin as follows: new text end 37.18 new text begin (1) new text end five percent interest compounded annually until January 1, 1981, and new text begin ; new text end 37.19 new text begin (2) new text end three percent interest compounded annually thereafter new text begin from January 1, 1981, new text end until 37.20January 1 of the year following the year in which the deferred annuitant attains age 55. new text begin ; new text end 37.21 From that date new text begin (3) five percent interest compounded annually from the date new text end 37.22 new text begin established in clause (2) new text end to the effective date of retirement, the rate is five percent 37.23compounded annually. new text begin or until June 30, 2012, whichever is earlier; and new text end 37.24 new text begin (4) two percent interest compounded annually after June 30, 2012. new text end 37.25(e) For persons who become covered employees after June 30, 2006, the interest 37.26rate used to augment the deferred annuity is 2.5 percent interest compounded annually new text begin new text end 37.27 new text begin until June 30, 2012, or until the effective date of retirement, whichever is earlier, and two new text end 37.28 new text begin percent interest compounded annually after June 30, 2012 new text end . 37.29(f) If a person has more than one period of uninterrupted service, a separate average 37.30salary determined under section 354.44, subdivision 6, must be used for each period 37.31and the required reserves related to each period must be augmented as specified in this 37.32subdivision. The sum of the augmented required reserves is the present value of the 37.33annuity. For the purposes of this subdivision, "period of uninterrupted service" means a 37.34period of covered teaching service during which the member has not been separated from 37.35active service for more than one fiscal year. 38.1(g) If a person repays a refund, the service restored by the repayment must be 38.2considered as continuous with the next period of service for which the person has 38.3allowable service credit in the Teachers Retirement Association. 38.4(h) If a person does not render teaching service in any one fiscal year or more 38.5consecutive fiscal years and then resumes teaching service, the formula percentages used 38.6from the date of the resumption of teaching service must be those applicable to new 38.7members. 38.8(i) The mortality table and interest new text begin rate actuarial new text end assumption used to compute the 38.9annuity must be the applicable mortality table established by the board under section 38.10354.07, subdivision 1 , and the interest rate new text begin actuarial new text end assumption under section 356.215 in 38.11effect when the member retires. 38.12(j) In no case may the annuity payable under this subdivision be less than the amount 38.13of annuity payable under section 354.44, subdivision 6. 38.14(k) The requirements and provisions for retirement before normal retirement age 38.15contained in section 354.44, subdivision 6, also apply to an employee fulfilling the 38.16requirements with a combination of service as provided in section 354.60. 38.17(l) The augmentation provided by this subdivision applies to the benefit provided 38.18in section 354.46, subdivision 2. 38.19(m) The augmentation provided by this subdivision does not apply to any period 38.20in which a person is on an approved leave of absence from an employer unit covered 38.21by the provisions of this chapter. 38.22(n) The retirement annuity or disability benefit of, or the survivor benefit payable on 38.23behalf of, a former teacher who terminated service before July 1, 1997, which is not first 38.24payable until after June 30, 1997, must be increased on an actuarial equivalent basis to 38.25reflect the change in the postretirement interest rate actuarial assumption under section 38.26356.215, subdivision 8 , from five percent to six percent under a calculation procedure and 38.27tables adopted by the board as recommended by an approved actuary and approved by the 38.28actuary retained under section 356.214. 38.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 38.30    Sec. 56. Minnesota Statutes 2008, section 354A.12, subdivision 1, is amended to read: 38.31    Subdivision 1. Employee contributions. new text begin (a) new text end The contribution required to be paid 38.32by each member of a teachers retirement fund association shall not be less than new text begin is new text end the 38.33percentage of total salary specified below for the applicable association and program: 38.34 Association and Program Percentage of Total Salary 38.35 Duluth Teachers Retirement Fund Association 39.1 old law and new law 39.2 coordinated programs 5.5 percent 39.3 new text begin before July 1, 2011 new text end new text begin 5.5 percent new text end 39.4 new text begin effective July 1, 2011 new text end new text begin 6.0 percent new text end 39.5 new text begin effective July 1, 2012 new text end new text begin 6.5 percent new text end 39.6 St. Paul Teachers Retirement Fund Association 39.7 basic program new text begin before July 1, 2010 new text end 8 percent 39.8 new text begin basic program after June 30, 2010 new text end new text begin 8.5 percent new text end 39.9 new text begin basic program after June 30, 2011 new text end new text begin 9.0 percent new text end 39.10 coordinated program new text begin before July 1, 2010 new text end 5.5 percent 39.11 new text begin coordinated program after June 30, 2010 new text end new text begin 6.0 percent new text end 39.12 new text begin coordinated program after June 30, 2011 new text end new text begin 6.5 percent new text end 39.13 new text begin (b) new text end Contributions shall be made by deduction from salary and must be remitted 39.14directly to the respective teachers retirement fund association at least once each month. 39.15 new text begin (c) When an employee contribution rate changes for a fiscal year, the new new text end 39.16 new text begin contribution rate is effective for the entire salary paid by the employer with the first new text end 39.17 new text begin payroll cycle reported. new text end 39.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 39.19    Sec. 57. Minnesota Statutes 2009 Supplement, section 354A.12, subdivision 2a, 39.20is amended to read: 39.21    Subd. 2a. Employer regular and additional contributions. (a) The employing 39.22units shall make the following employer contributions to teachers retirement fund 39.23associations: 39.24(1) for any coordinated member of one of the following teachers retirement fund 39.25associations in a city of the first class, the employing unit shall make a regular employer 39.26contribution to the respective retirement fund association in an amount equal to the 39.27designated percentage of the salary of the coordinated member as provided below: 39.28 Duluth Teachers Retirement Fund Association 4.50 percent 39.29 new text begin before July 1, 2011 new text end new text begin 5.79 percent new text end 39.30 new text begin effective July 1, 2011 new text end new text begin 6.29 percent new text end 39.31 new text begin effective July 1, 2012 new text end new text begin 6.79 percent new text end 39.32 39.33 St. Paul Teachers Retirement Fund Association new text begin new text end new text begin before July 1, 2010 new text end 4.50 percent 39.34 new text begin after June 30, 2010 new text end new text begin 5.0 percent new text end 39.35 new text begin after June 30, 2011 new text end new text begin 5.5 percent new text end 39.36 new text begin after June 30, 2013 new text end new text begin 6.5 percent new text end 39.37(2) for any basic member of the St. Paul Teachers Retirement Fund Association, the 39.38employing unit shall make a regular employer contribution to the respective retirement 40.1fund in an amount equal to 8.00 percent of the salary of the basic member; new text begin according to new text end 40.2 new text begin the schedule below: new text end 40.3 new text begin before July 1, 2010 new text end new text begin 8.0 percent of the salary of the basic member new text end 40.4 new text begin before July 1, 2011 new text end new text begin 8.5 percent of the salary of the basic member new text end 40.5 new text begin before July 1, 2012 new text end new text begin 9.0 percent of the salary of the basic member new text end 40.6 new text begin before July 1, 2013 new text end new text begin 9.5 percent of the salary of the basic member new text end 40.7 new text begin before July 1, 2014 new text end new text begin 10.0 percent of the salary of the basic member new text end 40.8(3) for a basic member of the St. Paul Teachers Retirement Fund Association, the 40.9employing unit shall make an additional employer contribution to the respective fund in 40.10an amount equal to 3.64 percent of the salary of the basic member; 40.11(4) for a coordinated member of a teachers retirement fund association in a city of 40.12the first class new text begin the St. Paul Teachers Retirement Fund Association new text end , the employing unit shall 40.13make an additional employer contribution to the respective fund in an amount equal to the 40.14applicable percentage of the coordinated member's salary, as provided below: 40.15 40.16 Duluth Teachers Retirement Fund Association 1.29 percent 40.17 40.18 St. Paul Teachers Retirement Fund Association 3.84 percent 40.19(b) The regular and additional employer contributions must be remitted directly to 40.20the respective teachers retirement fund association at least once each month. Delinquent 40.21amounts are payable with interest under the procedure in subdivision 1a. 40.22(c) Payments of regular and additional employer contributions for school district 40.23or technical college employees who are paid from normal operating funds must be made 40.24from the appropriate fund of the district or technical college. 40.25 new text begin (d) When an employer contribution rate changes for a fiscal year, the new new text end 40.26 new text begin contribution rate is effective for the entire salary paid by the employer with the first new text end 40.27 new text begin payroll cycle reported. new text end 40.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 40.29    Sec. 58. Minnesota Statutes 2008, section 354A.12, subdivision 3c, is amended to read: 40.30    Subd. 3c. Termination of supplemental contributions and direct matching 40.31and state aid. (a) The supplemental contributions payable to the Minneapolis Teachers 40.32Retirement Fund Association by Special School District No. 1 and the city of Minneapolis 40.33under section 423A.02, subdivision 3, must be paid to the Teachers Retirement 40.34Association and must continue until the current assets of the fund equal or exceed the 40.35actuarial accrued liability of the fund as determined in the most recent actuarial report 40.36for the fund by the actuary retained under section 356.214, or 2037, whichever occurs 41.1earlier. The supplemental contributions payable to the St. Paul Teachers Retirement Fund 41.2Association by Independent School District No. 625 under section 423A.02, subdivision 41.33 , or the direct state aid under subdivision 3a to the St. Paul Teachers Retirement Fund 41.4Association terminate at the end of the fiscal year in which the accrued liability funding 41.5ratio for that fund, as determined in the most recent actuarial report for that fund by the 41.6actuary retained under section , equals or exceeds the accrued liability funding 41.7ratio for the Teachers Retirement Association, as determined in the most recent actuarial 41.8report for the Teachers Retirement Association by the actuary retained under section 41.9. new text begin must continue until the current assets of the fund equal or exceed the actuarial new text end 41.10 new text begin accrued liability of the fund as determined in the most recent actuarial report for the fund new text end 41.11 new text begin by the actuary retained under section 356.214 or until 2037, whichever occurs earlier. new text end 41.12    (b) If the St. Paul Teachers Retirement Fund Association is funded at an amount 41.13equal to or greater than the funding ratio applicable to the Teachers Retirement 41.14Association, then any future state aid under subdivision 3a is payable to the Teachers 41.15Retirement Association. 41.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 41.17    Sec. 59. Minnesota Statutes 2008, section 354A.27, subdivision 5, is amended to read: 41.18    Subd. 5. Calculation new text begin Eligibility for and payment new text end of postretirement adjustments. 41.19(a) Annually, after June 30, the board of trustees new text begin of the Duluth Teachers Retirement Fund new text end 41.20 new text begin Association new text end determines the amount of any postretirement adjustment using the procedures 41.21in this subdivision and subdivision 6 new text begin or 7, whichever is applicable new text end . 41.22(b) Each person who has been receiving an annuity or benefit under the articles 41.23of incorporation, bylaws, or under this section for at least 12 months as of the date of 41.24the postretirement adjustment shall be eligible for a postretirement adjustment. The 41.25postretirement adjustment shall be payable each January 1. The postretirement adjustment 41.26shall be equal to two percent of new text begin a permanent percentage increase as specified under new text end 41.27 new text begin subdivision 6 or 7, whichever is applicable, applied to new text end the annuity or benefit to which the 41.28person is entitled one month prior to the payment of the postretirement adjustment. 41.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 41.30    Sec. 60. Minnesota Statutes 2008, section 354A.27, subdivision 6, is amended to read: 41.31    Subd. 6. Additional increase new text begin Calculation of postretirement adjustments; new text end 41.32 new text begin transitional provision new text end . (a) In addition to the postretirement increases granted under 42.1subdivision 5, an additional percentage increase must be computed and paid under this 42.2subdivision. 42.3(b) The board of trustees shall determine the number of annuitants or benefit 42.4recipients who have been receiving an annuity or benefit for at least 12 months as of the 42.5current June 30. These recipients are entitled to receive the surplus investment earnings 42.6additional postretirement increase. 42.7(c) Annually, as of each June 30, the board shall determine the five-year annualized 42.8rate of return attributable to the assets of the Duluth Teachers Retirement Fund Association 42.9under the formula or formulas specified in section , clause (11). 42.10(d) The board shall determine the amount of excess five-year annualized rate of 42.11return over the preretirement interest assumption as specified in section . 42.12(e) The additional percentage increase must be determined by multiplying the 42.13quantity one minus the rate of contribution deficiency, as specified in the most recent 42.14actuarial report of the actuary retained under section , times the rate of return 42.15excess as determined in paragraph (d). 42.16(f) The additional increase is payable to all eligible annuitants or benefit recipients 42.17on the following January 1. 42.18 new text begin (a) For purposes of computing postretirement adjustments after the effective date new text end 42.19 new text begin of this section for eligible benefit recipients of the Duluth Teachers Retirement Fund new text end 42.20 new text begin Association, the funding ratio of the plan, as determined by dividing the market value of new text end 42.21 new text begin assets by the actuarial accrued liability as reported in the most recent actuarial valuation new text end 42.22 new text begin prepared under sections 356.214 and 356.215, determines the postretirement increase new text end 42.23 new text begin as follows: new text end 42.24 new text begin Funding Ratio new text end new text begin Postretirement Increase new text end 42.25 new text begin less than 80 percent new text end new text begin 0 percent new text end 42.26 42.27 new text begin at least 80 percent but less than 90 new text end new text begin percent new text end new text begin 1 percent new text end 42.28 new text begin at least 90 percent new text end new text begin 2 percent new text end 42.29 new text begin (b) If the funding ratio of the plan based on actuarial value, rather than market value, new text end 42.30 new text begin is at least 90 percent as reported in the most recent actuarial valuation prepared under new text end 42.31 new text begin sections 356.214 and 356.215, this subdivision expires and subsequent postretirement new text end 42.32 new text begin increases must be paid as specified under subdivision 7. new text end 42.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 42.34    Sec. 61. Minnesota Statutes 2008, section 354A.27, is amended by adding a 42.35subdivision to read: 43.1     new text begin Subd. 7. new text end new text begin Calculation of postretirement adjustments. new text end new text begin (a) This subdivision applies new text end 43.2 new text begin if subdivision 6 has expired. new text end 43.3 new text begin (b) A percentage adjustment must be computed and paid under this subdivision to new text end 43.4 new text begin eligible persons under subdivision 5. This adjustment is determined by reference to the new text end 43.5 new text begin Consumer Price Index for urban wage earners and clerical workers all items index as new text end 43.6 new text begin reported by the Bureau of Labor Statistics within the United States Department of Labor new text end 43.7 new text begin each year as part of the determination of annual cost-of-living adjustments to recipients new text end 43.8 new text begin of federal old-age, survivors, and disability insurance. For calculations of cost-of-living new text end 43.9 new text begin adjustments under paragraph (c), the term "average third quarter Consumer Price Index new text end 43.10 new text begin value" means the sum of the monthly index values as initially reported by the Bureau of new text end 43.11 new text begin Labor Statistics for the months of July, August, and September, divided by 3. new text end 43.12 new text begin (c) Before January 1 of each year, the executive director must calculate the amount new text end 43.13 new text begin of the cost-of-living adjustment by dividing the most recent average third quarter index new text end 43.14 new text begin value by the same average third quarter index value from the previous year, subtract one new text end 43.15 new text begin from the resulting quotient, and express the result as a percentage amount, which must be new text end 43.16 new text begin rounded to the nearest one-tenth of one percent. new text end 43.17 new text begin (d) The amount calculated under paragraph (c) is the full cost-of-living adjustment new text end 43.18 new text begin to be applied as a permanent increase to the regular payment of each eligible member new text end 43.19 new text begin on January 1 of the next calendar year. For any eligible member whose effective date new text end 43.20 new text begin of benefit commencement occurred during the calendar year before the cost-of-living new text end 43.21 new text begin adjustment is applied, the full increase amount must be prorated on the basis of whole new text end 43.22 new text begin calendar quarters in benefit payment status in the calendar year prior to the January 1 on new text end 43.23 new text begin which the cost-of-living adjustment is applied, calculated to the third decimal place. new text end 43.24 new text begin (e) The adjustment must not be less than zero nor greater than five percent. new text end 43.25 new text begin (f) If the funding ratio of the plan as determined in the most recent actuarial new text end 43.26 new text begin valuation using the actuarial value of assets is less than 80 percent there will be no new text end 43.27 new text begin postretirement adjustment the following January 1. new text end 43.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 43.29    Sec. 62. Minnesota Statutes 2008, section 354A.31, subdivision 1, is amended to read: 43.30    Subdivision 1. Age and service requirements. Any coordinated member or former 43.31coordinated member new text begin of the St. Paul Teachers Retirement Fund Association new text end who has 43.32ceased to render teaching service for the school district in which the teachers retirement 43.33fund association exists and who has either attained the age of at least 55 years with not 43.34less than three years of allowable service credit or received credit for not less than 30 43.35years of allowable service regardless of age, shall be entitled upon written application to a 44.1retirement annuity. new text begin Any coordinated member or former coordinated member of the Duluth new text end 44.2 new text begin Teachers Retirement Fund Association who has ceased to render teaching service for the new text end 44.3 new text begin school district in which the teacher retirement fund association exists and who has either new text end 44.4 new text begin attained the age of at least 55 years with not less than three years of allowable service new text end 44.5 new text begin credit if the member became an employee before July 1, 2010, or not less than five years new text end 44.6 new text begin of allowable service credit if the member became an employee after June 30, 2010, or new text end 44.7 new text begin received service credit for not less than 30 years of allowable service regardless of age, new text end 44.8 new text begin shall be entitled upon written application to a retirement annuity. new text end 44.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 44.10    Sec. 63. Minnesota Statutes 2008, section 354A.35, subdivision 1, is amended to read: 44.11    Subdivision 1. Death before retirement; refund. If a coordinated member 44.12or former coordinated member dies prior to retirement or prior to the receipt of any 44.13retirement annuity or other benefit payment which is or may be payable and a surviving 44.14spouse optional annuity is not payable pursuant to subdivision 2, a refund shall be paid to 44.15the person's surviving spouse, or if there is none, to the person's designated beneficiary, 44.16or if there is none, to the legal representative of the person's estate. new text begin For a coordinated new text end 44.17 new text begin member or former coordinated member of the St. Paul Teachers Retirement Fund new text end 44.18 new text begin Association, new text end the refund shall be in an amount equal to the person's accumulated new text begin employee new text end 44.19contributions plus interest at the rate of six percent per annum compounded annually. new text begin For new text end 44.20 new text begin a coordinated member or former coordinated member of the Duluth Teachers Retirement new text end 44.21 new text begin Fund Association, the refund shall be in an amount equal to the person's accumulated new text end 44.22 new text begin employee contributions plus interest at the rate of six percent per annum compounded new text end 44.23 new text begin annually to July 1, 2010, and four percent per annum compounded annually thereafter. new text end 44.24 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 44.25    Sec. 64. Minnesota Statutes 2008, section 354A.37, subdivision 2, is amended to read: 44.26    Subd. 2. Eligibility for deferred retirement annuity. (a) Any coordinated member 44.27who ceases to render teaching services for the school district in which the teachers 44.28retirement fund association is located, with sufficient allowable service credit to meet 44.29the minimum service requirements specified in section 354A.31, subdivision 1, shall be 44.30entitled to a deferred retirement annuity in lieu of a refund pursuant to subdivision 1. The 44.31deferred retirement annuity shall be computed pursuant to section 354A.31 and shall be 44.32augmented as provided in this subdivision. The deferred annuity shall commence upon 45.1application after the person on deferred status attains at least the minimum age specified in 45.2section 354A.31, subdivision 1. 45.3(b) The monthly annuity amount that had accrued when the member ceased to 45.4render teaching service must be augmented from the first day of the month following the 45.5month during which the member ceased to render teaching service to the effective date 45.6of retirement. There is no augmentation if this period is less than three months. new text begin For a new text end 45.7 new text begin member of the St. Paul Teachers Retirement Fund Association, new text end the rate of augmentation 45.8is three percent compounded annually until January 1 of the year following the year in 45.9which the former member attains age 55, and five percent compounded annually after that 45.10date to the effective date of retirement if the employee became an employee before July 45.111, 2006, and at 2.5 percent compounded annually if the employee becomes an employee 45.12after June 30, 2006. new text begin For a member of the Duluth Teachers Retirement Fund Association, new text end 45.13 new text begin the rate of augmentation is three percent compounded annually until January 1 of the year new text end 45.14 new text begin following the year in which the former member attains age 55, five percent compounded new text end 45.15 new text begin annually after that date to July 1, 2012, and two percent compounded annually after that new text end 45.16 new text begin date to the effective date of retirement if the employee became an employee before new text end 45.17 new text begin July 1, 2006, and at 2.5 percent compounded annually to July 1, 2012, and two percent new text end 45.18 new text begin compounded annually after that date to the effective date of retirement if the employee new text end 45.19 new text begin becomes an employee after June 30, 2006. new text end If a person has more than one period of 45.20uninterrupted service, a separate average salary determined under section 354A.31 must 45.21be used for each period, and the monthly annuity amount related to each period must be 45.22augmented as provided in this subdivision. The sum of the augmented monthly annuity 45.23amounts determines the total deferred annuity payable. If a person repays a refund, the 45.24service restored by the repayment must be considered as continuous with the next period 45.25of service for which the person has credit with the fund. If a person does not render 45.26teaching services in any one fiscal year or more consecutive fiscal years and then resumes 45.27teaching service, the formula percentages used from the date of resumption of teaching 45.28service are those applicable to new members. The mortality table and interest assumption 45.29used to compute the annuity are the table established by the fund to compute other 45.30annuities, and the interest assumption under section 356.215 in effect when the member 45.31retires. A period of uninterrupted service for the purpose of this subdivision means a 45.32period of covered teaching service during which the member has not been separated from 45.33active service for more than one fiscal year. 45.34(c) The augmentation provided by this subdivision applies to the benefit provided 45.35in section 354A.35, subdivision 2. The augmentation provided by this subdivision does 46.1not apply to any period in which a person is on an approved leave of absence from an 46.2employer unit. 46.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 46.4    Sec. 65. Minnesota Statutes 2008, section 354A.37, subdivision 3, is amended to read: 46.5    Subd. 3. Computation of refund amount. A former coordinated member new text begin of the new text end 46.6 new text begin St. Paul Teachers Retirement Fund Association new text end who qualifies for a refund pursuant to 46.7 new text begin under new text end subdivision 1 shall receive a refund equal to the amount of the former coordinated 46.8member's accumulated new text begin employee new text end contributions with interest at the rate of six percent per 46.9annum compounded annually. new text begin A former coordinated member of the Duluth Teachers new text end 46.10 new text begin Retirement Fund Association who qualifies for a refund under subdivision 1 shall receive new text end 46.11 new text begin a refund equal to the amount of the former coordinated member's accumulated employee new text end 46.12 new text begin contributions with interest at the rate of six percent per annum compounded annually to new text end 46.13 new text begin July 1, 2010, and four percent per annum compounded annually thereafter. new text end 46.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 46.15    Sec. 66. Minnesota Statutes 2008, section 354A.37, subdivision 4, is amended to read: 46.16    Subd. 4. Certain refunds at normal retirement age. Any coordinated member 46.17who has attained the normal retirement age with less than ten years of allowable service 46.18credit and has terminated active teaching service shall be entitled to a refund in lieu of 46.19a proportionate annuity pursuant to section 356.32. The refund new text begin for a member of the St. new text end 46.20 new text begin Paul Teachers Retirement Fund Association new text end shall be equal to the coordinated member's 46.21accumulated employee contributions plus interest at the rate of six percent compounded 46.22annually. new text begin The refund for a member of the Duluth Teachers Retirement Fund Association new text end 46.23 new text begin shall be equal to the coordinated member's accumulated employee contributions plus new text end 46.24 new text begin interest at the rate of six percent compounded annually to July 1, 2010, and four percent new text end 46.25 new text begin per annum compounded annually thereafter. new text end 46.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 46.27    Sec. 67. Minnesota Statutes 2008, section 356.215, subdivision 8, is amended to read: 46.28    Subd. 8. Interest and salary assumptions. (a) The actuarial valuation must use 46.29the applicable following preretirement interest assumption and the applicable following 46.30postretirement interest assumption: 47.1 47.2 47.3 plan preretirement interest rate assumption postretirement interest rate assumption 47.4 general state employees retirement plan 8.5% 6.0% 47.5 correctional state employees retirement plan 8.5 6.0 47.6 State Patrol retirement plan 8.5 6.0 47.7 legislators retirement plan 8.5 6.0 47.8 elective state officers retirement plan 8.5 6.0 47.9 judges retirement plan 8.5 6.0 47.10 general public employees retirement plan 8.5 6.0 47.11 public employees police and fire retirement plan 8.5 6.0 47.12 47.13 local government correctional service retirement plan 8.5 6.0 47.14 teachers retirement plan 8.5 6.0 47.15 Minneapolis employees retirement plan 6.0 5.0 47.16 Duluth teachers retirement plan 8.5 8.5 47.17 St. Paul teachers retirement plan 8.5 8.5 47.18 Minneapolis Police Relief Association 6.0 6.0 47.19 Fairmont Police Relief Association 5.0 5.0 47.20 Minneapolis Fire Department Relief Association 6.0 6.0 47.21 Virginia Fire Department Relief Association 5.0 5.0 47.22 Bloomington Fire Department Relief Association 6.0 6.0 47.23 47.24 local monthly benefit volunteer firefighters relief associations 5.0 5.0 47.25    (b) Before July 1, 2010, the actuarial valuation must use the applicable following 47.26single rate future salary increase assumption, the applicable following modified single 47.27rate future salary increase assumption, or the applicable following graded rate future 47.28salary increase assumption: 47.29    (1) single rate future salary increase assumption 47.30 47.31 plan future salary increase assumption 47.32 legislators retirement plan 5.0% 47.33 judges retirement plan 4.0 47.34 Minneapolis Police Relief Association 4.0 47.35 Fairmont Police Relief Association 3.5 47.36 47.37 Minneapolis Fire Department Relief Association 4.0 47.38 Virginia Fire Department Relief Association 3.5 47.39 47.40 Bloomington Fire Department Relief Association 4.0 47.41    (2) modified single rate future salary increase assumption 48.1 48.2 plan future salary increase assumption 48.3 48.4 48.5 48.6 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 48.7    (3) new text begin age-related new text end select and ultimate future salary increase assumption or graded rate 48.8future salary increase assumption 48.9 48.10 plan future salary increase assumption 48.11 48.12 general state employees retirement plan select calculation and assumption A 48.13 correctional state employees retirement plan assumption H new text begin G new text end 48.14 State Patrol retirement plan assumption G new text begin F new text end 48.15 48.16 general public employees retirement plan select calculation and assumption B 48.17 public employees police and fire fund retirement plan assumption C new text begin B new text end 48.18 local government correctional service retirement plan assumption G new text begin F new text end 48.19 teachers retirement plan assumption D new text begin C new text end 48.20 Duluth teachers retirement plan assumption E new text begin D new text end 48.21 St. Paul teachers retirement plan assumption F new text begin E new text end 48.22The select calculation is: during the 48.23designated select period, a designated 48.24percentage rate is multiplied by the result of 48.25the designated integer minus T, where T is the 48.26number of completed years of service, and is 48.27added to the applicable future salary increase 48.28assumption. The designated select period is 48.29five years and the designated integer is five 48.30for the general state employees retirement 48.31plan and the general public employees 48.32retirement plan. The designated select period 48.33is ten years and the designated integer is ten 48.34for all other retirement plans covered by 48.35this clause. The designated percentage rate 48.36is: (1) 0.2 percent for the correctional state 48.37employees retirement plan, the State Patrol 48.38retirement plan, the public employees police 48.39and fire plan, and the local government 48.40correctional service plan; (2) 0.6 percent 49.1for the general state employees retirement 49.2plan and the general public employees 49.3retirement plan; and (3) 0.3 percent for the 49.4teachers retirement plan, the Duluth Teachers 49.5Retirement Fund Association, and the St. 49.6Paul Teachers Retirement Fund Association. 49.7The select calculation for the Duluth Teachers 49.8Retirement Fund Association is 8.00 percent 49.9per year for service years one through seven, 49.107.25 percent per year for service years seven 49.11and eight, and 6.50 percent per year for 49.12service years eight and nine. 49.13    The ultimate future salary increase assumption is: 49.14 age A B C new text begin B new text end D new text begin C new text end E new text begin D new text end F new text begin E new text end G new text begin F new text end H new text begin G new text end 49.15 16 5.95% 5.95% 11.00% 7.70% 8.00% 6.90% 7.7500% 7.2500% 49.16 17 5.90 5.90 11.00 7.65 8.00 6.90 7.7500 7.2500 49.17 18 5.85 5.85 11.00 7.60 8.00 6.90 7.7500 7.2500 49.18 19 5.80 5.80 11.00 7.55 8.00 6.90 7.7500 7.2500 49.19 20 5.75 5.40 11.00 5.50 6.90 6.90 7.7500 7.2500 49.20 21 5.75 5.40 11.00 5.50 6.90 6.90 7.1454 6.6454 49.21 22 5.75 5.40 10.50 5.50 6.90 6.90 7.0725 6.5725 49.22 23 5.75 5.40 10.00 5.50 6.85 6.85 7.0544 6.5544 49.23 24 5.75 5.40 9.50 5.50 6.80 6.80 7.0363 6.5363 49.24 25 5.75 5.40 9.00 5.50 6.75 6.75 7.0000 6.5000 49.25 26 5.75 5.36 8.70 5.50 6.70 6.70 7.0000 6.5000 49.26 27 5.75 5.32 8.40 5.50 6.65 6.65 7.0000 6.5000 49.27 28 5.75 5.28 8.10 5.50 6.60 6.60 7.0000 6.5000 49.28 29 5.75 5.24 7.80 5.50 6.55 6.55 7.0000 6.5000 49.29 30 5.75 5.20 7.50 5.50 6.50 6.50 7.0000 6.5000 49.30 31 5.75 5.16 7.30 5.50 6.45 6.45 7.0000 6.5000 49.31 32 5.75 5.12 7.10 5.50 6.40 6.40 7.0000 6.5000 49.32 33 5.75 5.08 6.90 5.50 6.35 6.35 7.0000 6.5000 49.33 34 5.75 5.04 6.70 5.50 6.30 6.30 7.0000 6.5000 49.34 35 5.75 5.00 6.50 5.50 6.25 6.25 7.0000 6.5000 49.35 36 5.75 4.96 6.30 5.50 6.20 6.20 6.9019 6.4019 49.36 37 5.75 4.92 6.10 5.50 6.15 6.15 6.8074 6.3074 49.37 38 5.75 4.88 5.90 5.40 6.10 6.10 6.7125 6.2125 49.38 39 5.75 4.84 5.70 5.30 6.05 6.05 6.6054 6.1054 49.39 40 5.75 4.80 5.50 5.20 6.00 6.00 6.5000 6.0000 49.40 41 5.75 4.76 5.40 5.10 5.90 5.95 6.3540 5.8540 49.41 42 5.75 4.72 5.30 5.00 5.80 5.90 6.2087 5.7087 50.1 43 5.65 4.68 5.20 4.90 5.70 5.85 6.0622 5.5622 50.2 44 5.55 4.64 5.10 4.80 5.60 5.80 5.9048 5.4078 50.3 45 5.45 4.60 5.00 4.70 5.50 5.75 5.7500 5.2500 50.4 46 5.35 4.56 4.95 4.60 5.40 5.70 5.6940 5.1940 50.5 47 5.25 4.52 4.90 4.50 5.30 5.65 5.6375 5.1375 50.6 48 5.15 4.48 4.85 4.50 5.20 5.60 5.5822 5.0822 50.7 49 5.05 4.44 4.80 4.50 5.10 5.55 5.5404 5.0404 50.8 50 4.95 4.40 4.75 4.50 5.00 5.50 5.5000 5.0000 50.9 51 4.85 4.36 4.75 4.50 4.90 5.45 5.4384 4.9384 50.10 52 4.75 4.32 4.75 4.50 4.80 5.40 5.3776 4.8776 50.11 53 4.65 4.28 4.75 4.50 4.70 5.35 5.3167 4.8167 50.12 54 4.55 4.24 4.75 4.50 4.60 5.30 5.2826 4.7826 50.13 55 4.45 4.20 4.75 4.50 4.50 5.25 5.2500 4.7500 50.14 56 4.35 4.16 4.75 4.50 4.40 5.20 5.2500 4.7500 50.15 57 4.25 4.12 4.75 4.50 4.30 5.15 5.2500 4.7500 50.16 58 4.25 4.08 4.75 4.60 4.20 5.10 5.2500 4.7500 50.17 59 4.25 4.04 4.75 4.70 4.10 5.05 5.2500 4.7500 50.18 60 4.25 4.00 4.75 4.80 4.00 5.00 5.2500 4.7500 50.19 61 4.25 4.00 4.75 4.90 3.90 5.00 5.2500 4.7500 50.20 62 4.25 4.00 4.75 5.00 3.80 5.00 5.2500 4.7500 50.21 63 4.25 4.00 4.75 5.10 3.70 5.00 5.2500 4.7500 50.22 64 4.25 4.00 4.75 5.20 3.60 5.00 5.2500 4.7500 50.23 65 4.25 4.00 4.75 5.20 3.50 5.00 5.2500 4.7500 50.24 66 4.25 4.00 4.75 5.20 3.50 5.00 5.2500 4.7500 50.25 67 4.25 4.00 4.75 5.20 3.50 5.00 5.2500 4.7500 50.26 68 4.25 4.00 4.75 5.20 3.50 5.00 5.2500 4.7500 50.27 69 4.25 4.00 4.75 5.20 3.50 5.00 5.2500 4.7500 50.28 70 4.25 4.00 4.75 5.20 3.50 5.00 5.2500 4.7500 50.29 71 4.25 4.00 5.20 50.30 new text begin (4) service-related ultimate future salary increase assumption new text end 50.31 50.32 new text begin service length new text end new text begin general employees retirement plan of the Public new text end new text begin Employees Retirement Association new text end 50.33 new text begin 1 new text end new text begin 12.03% new text end 50.34 new text begin 2 new text end new text begin 8.90 new text end 50.35 new text begin 3 new text end new text begin 7.46 new text end 50.36 new text begin 4 new text end new text begin 6.58 new text end 50.37 new text begin 5 new text end new text begin 5.97 new text end 50.38 new text begin 6 new text end new text begin 5.52 new text end 50.39 new text begin 7 new text end new text begin 5.16 new text end 50.40 new text begin 8 new text end new text begin 4.87 new text end 50.41 new text begin 9 new text end new text begin 4.63 new text end 50.42 new text begin 10 new text end new text begin 4.42 new text end 50.43 new text begin 11 new text end new text begin 4.24 new text end 51.1 new text begin 12 new text end new text begin 4.08 new text end 51.2 new text begin 13 new text end new text begin 3.94 new text end 51.3 new text begin 14 new text end new text begin 3.82 new text end 51.4 new text begin 15 new text end new text begin 3.70 new text end 51.5 new text begin 16 new text end new text begin 3.60 new text end 51.6 new text begin 17 new text end new text begin 3.51 new text end 51.7 new text begin 18 new text end new text begin 3.50 new text end 51.8 new text begin 19 new text end new text begin 3.50 new text end 51.9 new text begin 20 new text end new text begin 3.50 new text end 51.10 new text begin 21 new text end new text begin 3.50 new text end 51.11 new text begin 22 new text end new text begin 3.50 new text end 51.12 new text begin 23 new text end new text begin 3.50 new text end 51.13 new text begin 24 new text end new text begin 3.50 new text end 51.14 new text begin 25 new text end new text begin 3.50 new text end 51.15 new text begin 26 new text end new text begin 3.50 new text end 51.16 new text begin 27 new text end new text begin 3.50 new text end 51.17 new text begin 28 new text end new text begin 3.50 new text end 51.18 new text begin 29 new text end new text begin 3.50 new text end 51.19 new text begin 30 or more new text end new text begin 3.50 new text end 51.20    (c) Before July 2, 2010, the actuarial valuation must use the applicable following 51.21payroll growth assumption for calculating the amortization requirement for the unfunded 51.22actuarial accrued liability where the amortization retirement is calculated as a level 51.23percentage of an increasing payroll: 51.24 51.25 plan payroll growth assumption 51.26 general state employees retirement plan 4.50% 51.27 correctional state employees retirement plan 4.50 51.28 State Patrol retirement plan 4.50 51.29 legislators retirement plan 4.50 51.30 judges retirement plan 4.00 51.31 51.32 general public employees retirement plan new text begin of the new text end new text begin Public Employees Retirement Association new text end 4.50 new text begin 4.00 new text end 51.33 public employees police and fire retirement plan 4.50 51.34 51.35 local government correctional service retirement plan 4.50 51.36 teachers retirement plan 4.50 51.37 Duluth teachers retirement plan 4.50 51.38 St. Paul teachers retirement plan 5.00 51.39    (d) After July 1, 2010, the assumptions set forth in paragraphs (b) and (c) continue to 51.40apply, unless a different salary assumption or a different payroll increase assumption: 51.41    (1) has been proposed by the governing board of the applicable retirement plan; 52.1    (2) is accompanied by the concurring recommendation of the actuary retained under 52.2section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the 52.3most recent actuarial valuation report if section 356.214 does not apply; and 52.4    (3) has been approved or deemed approved under subdivision 18. 52.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 52.6    Sec. 68. Minnesota Statutes 2009 Supplement, section 356.215, subdivision 11, 52.7is amended to read: 52.8    Subd. 11. Amortization contributions. (a) In addition to the exhibit indicating 52.9the level normal cost, the actuarial valuation of the retirement plan must contain an 52.10exhibit for financial reporting purposes indicating the additional annual contribution 52.11sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit 52.12for contribution determination purposes indicating the additional contribution sufficient 52.13to amortize the unfunded actuarial accrued liability. For the retirement plans listed in 52.14subdivision 8, paragraph (c), the additional contribution must be calculated on a level 52.15percentage of covered payroll basis by the established date for full funding in effect when 52.16the valuation is prepared, assuming annual payroll growth at the applicable percentage 52.17rate set forth in subdivision 8, paragraph (c). For all other retirement plans, the additional 52.18annual contribution must be calculated on a level annual dollar amount basis. 52.19    (b) For any retirement plan other than the Minneapolis Employees Retirement Fund, 52.20the general employees retirement plan of the Public Employees Retirement Association, 52.21 new text begin the general state employees retirement plan of the Minnesota State Retirement System, new text end 52.22and the St. Paul Teachers Retirement Fund Association, if there has not been a change in 52.23the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a 52.24change in the benefit plan governing annuities and benefits payable from the fund, a 52.25change in the actuarial cost method used in calculating the actuarial accrued liability of all 52.26or a portion of the fund, or a combination of the three, which change or changes by itself 52.27or by themselves without inclusion of any other items of increase or decrease produce a 52.28net increase in the unfunded actuarial accrued liability of the fund, the established date for 52.29full funding is the first actuarial valuation date occurring after June 1, 2020. 52.30    (c) For any retirement plan other than the Minneapolis Employees Retirement 52.31Fund and the general employees retirement plan of the Public Employees Retirement 52.32Association, if there has been a change in any or all of the actuarial assumptions used 52.33for calculating the actuarial accrued liability of the fund, a change in the benefit plan 52.34governing annuities and benefits payable from the fund, a change in the actuarial cost 52.35method used in calculating the actuarial accrued liability of all or a portion of the fund, 53.1or a combination of the three, and the change or changes, by itself or by themselves and 53.2without inclusion of any other items of increase or decrease, produce a net increase in the 53.3unfunded actuarial accrued liability in the fund, the established date for full funding must 53.4be determined using the following procedure: 53.5    (i) the unfunded actuarial accrued liability of the fund must be determined in 53.6accordance with the plan provisions governing annuities and retirement benefits and the 53.7actuarial assumptions in effect before an applicable change; 53.8    (ii) the level annual dollar contribution or level percentage, whichever is applicable, 53.9needed to amortize the unfunded actuarial accrued liability amount determined under item 53.10(i) by the established date for full funding in effect before the change must be calculated 53.11using the interest assumption specified in subdivision 8 in effect before the change; 53.12    (iii) the unfunded actuarial accrued liability of the fund must be determined in 53.13accordance with any new plan provisions governing annuities and benefits payable from 53.14the fund and any new actuarial assumptions and the remaining plan provisions governing 53.15annuities and benefits payable from the fund and actuarial assumptions in effect before 53.16the change; 53.17    (iv) the level annual dollar contribution or level percentage, whichever is applicable, 53.18needed to amortize the difference between the unfunded actuarial accrued liability amount 53.19calculated under item (i) and the unfunded actuarial accrued liability amount calculated 53.20under item (iii) over a period of 30 years from the end of the plan year in which the 53.21applicable change is effective must be calculated using the applicable interest assumption 53.22specified in subdivision 8 in effect after any applicable change; 53.23    (v) the level annual dollar or level percentage amortization contribution under item 53.24(iv) must be added to the level annual dollar amortization contribution or level percentage 53.25calculated under item (ii); 53.26    (vi) the period in which the unfunded actuarial accrued liability amount determined 53.27in item (iii) is amortized by the total level annual dollar or level percentage amortization 53.28contribution computed under item (v) must be calculated using the interest assumption 53.29specified in subdivision 8 in effect after any applicable change, rounded to the nearest 53.30integral number of years, but not to exceed 30 years from the end of the plan year in 53.31which the determination of the established date for full funding using the procedure set 53.32forth in this clause is made and not to be less than the period of years beginning in the 53.33plan year in which the determination of the established date for full funding using the 53.34procedure set forth in this clause is made and ending by the date for full funding in effect 53.35before the change; and 54.1    (vii) the period determined under item (vi) must be added to the date as of which 54.2the actuarial valuation was prepared and the date obtained is the new established date 54.3for full funding. 54.4    (d) For the Minneapolis Employees Retirement Fund, the established date for full 54.5funding is June 30, 2020. 54.6    (e) For the general employees retirement plan of the Public Employees Retirement 54.7Association, the established date for full funding is June 30, 2031. 54.8    (f) For the Teachers Retirement Association, the established date for full funding is 54.9June 30, 2037. 54.10    (g) For the correctional state employees retirement plan of the Minnesota State 54.11Retirement System, the established date for full funding is June 30, 2038. 54.12    (h) For the judges retirement plan, the established date for full funding is June 54.1330, 2038. 54.14    (i) For the public employees police and fire retirement plan, the established date 54.15for full funding is June 30, 2038. 54.16    (j) For the St. Paul Teachers Retirement Fund Association, the established date for 54.17full funding is June 30 of the 25th year from the valuation date. In addition to other 54.18requirements of this chapter, the annual actuarial valuation shall contain an exhibit 54.19indicating the funded ratio and the deficiency or sufficiency in annual contributions when 54.20comparing liabilities to the market value of the assets of the fund as of the close of the 54.21most recent fiscal year. 54.22    (k) new text begin For the general state employees retirement plan of the Minnesota State new text end 54.23 new text begin Retirement System, the established date for full funding is June 30, 2040. new text end 54.24 new text begin (l) new text end For the retirement plans for which the annual actuarial valuation indicates an 54.25excess of valuation assets over the actuarial accrued liability, the valuation assets in 54.26excess of the actuarial accrued liability must be recognized as a reduction in the current 54.27contribution requirements by an amount equal to the amortization of the excess expressed 54.28as a level percentage of pay over a 30-year period beginning anew with each annual 54.29actuarial valuation of the plan. 54.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 54.31    Sec. 69. Minnesota Statutes 2008, section 356.30, subdivision 1, is amended to read: 54.32    Subdivision 1. Eligibility; computation of annuity. (a) Notwithstanding any 54.33provisions of the laws governing the retirement plans enumerated in subdivision 3, a 54.34person who has met the qualifications of paragraph (b) may elect to receive a retirement 54.35annuity from each enumerated retirement plan in which the person has at least one-half 55.1year of allowable service, based on the allowable service in each plan, subject to the 55.2provisions of paragraph (c). 55.3(b) A person may receive, upon retirement, a retirement annuity from each 55.4enumerated retirement plan in which the person has at least one-half year of allowable 55.5service, and augmentation of a deferred annuity calculated at the appropriate rate under 55.6the laws governing each public pension plan or fund named in subdivision 3, based on 55.7the date of the person's initial entry into public employment from the date the person 55.8terminated all public service if: 55.9(1) the person has allowable service totaling an amount that allows the person to 55.10receive an annuity in any two or more of the enumerated plans; 55.11 new text begin (2) the person has sufficient allowable service in total that equals or exceeds the new text end 55.12 new text begin applicable service credit vesting requirement of the retirement plan with the longest new text end 55.13 new text begin applicable service credit vesting requirement; new text end and 55.14(2) new text begin (3) new text end the person has not begun to receive an annuity from any enumerated plan or 55.15the person has made application for benefits from each applicable plan and the effective 55.16dates of the retirement annuity with each plan under which the person chooses to receive 55.17an annuity are within a one-year period. 55.18(c) The retirement annuity from each plan must be based upon the allowable service, 55.19accrual rates, and average salary in the applicable plan except as further specified or 55.20modified in the following clauses: 55.21(1) the laws governing annuities must be the law in effect on the date of termination 55.22from the last period of public service under a covered retirement plan with which the 55.23person earned a minimum of one-half year of allowable service credit during that 55.24employment; 55.25(2) the "average salary" on which the annuity from each covered plan in which 55.26the employee has credit in a formula plan must be based on the employee's highest five 55.27successive years of covered salary during the entire service in covered plans; 55.28(3) the accrual rates to be used by each plan must be those percentages prescribed by 55.29each plan's formula as continued for the respective years of allowable service from one 55.30plan to the next, recognizing all previous allowable service with the other covered plans; 55.31(4) the allowable service in all the plans must be combined in determining eligibility 55.32for and the application of each plan's provisions in respect to reduction in the annuity 55.33amount for retirement prior to normal retirement age; and 55.34(5) the annuity amount payable for any allowable service under a nonformula plan 55.35of a covered plan must not be affected, but such service and covered salary must be used 55.36in the above calculation. 56.1(d) This section does not apply to any person whose final termination from the last 56.2public service under a covered plan was before May 1, 1975. 56.3(e) For the purpose of computing annuities under this section, the accrual rates 56.4used by any covered plan, except the public employees police and fire plan, the judges 56.5retirement fund, and the State Patrol retirement plan, must not exceed the percent specified 56.6in section 356.315, subdivision 4, per year of service for any year of service or fraction 56.7thereof. The formula percentage used by the judges retirement fund must not exceed the 56.8percentage rate specified in section 356.315, subdivision 8, per year of service for any 56.9year of service or fraction thereof. The accrual rate used by the public employees police 56.10and fire plan and the State Patrol retirement plan must not exceed the percentage rate 56.11specified in section 356.315, subdivision 6, per year of service for any year of service or 56.12fraction thereof. The accrual rate or rates used by the legislators retirement plan must not 56.13exceed 2.5 percent, but this limit does not apply to the adjustment provided under section 56.143A.02, subdivision 1 , paragraph (c). 56.15(f) Any period of time for which a person has credit in more than one of the covered 56.16plans must be used only once for the purpose of determining total allowable service. 56.17(g) If the period of duplicated service credit is more than one-half year, or the person 56.18has credit for more than one-half year, with each of the plans, each plan must apply its 56.19formula to a prorated service credit for the period of duplicated service based on a fraction 56.20of the salary on which deductions were paid to that fund for the period divided by the total 56.21salary on which deductions were paid to all plans for the period. 56.22(h) If the period of duplicated service credit is less than one-half year, or when 56.23added to other service credit with that plan is less than one-half year, the service credit 56.24must be ignored and a refund of contributions made to the person in accord with that 56.25plan's refund provisions. 56.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 56.27    Sec. 70. Minnesota Statutes 2008, section 356.302, subdivision 3, is amended to read: 56.28    Subd. 3. General employee plan eligibility requirements. A disabled member 56.29of a covered retirement plan who has credit for allowable service in a combination of 56.30general employee retirement plans is entitled to a combined service disability benefit 56.31if the member: 56.32(1) is less than the normal retirement age on the date of the application for the 56.33disability benefit; 56.34(2) has become totally and permanently disabled; 57.1(3) has credit for allowable service in any combination of general employee 57.2retirement plans totaling at least three years new text begin the number of years required by the applicable new text end 57.3 new text begin retirement plan with the longest service credit requirement for disability benefit receipt new text end ; 57.4(4) has credit for at least one-half year of allowable service with the current general 57.5employee retirement plan before the commencement of the disability; 57.6(5) has at least three continuous years of allowable service credit by the general 57.7employee retirement plan or has at least a total of three years of allowable service credit 57.8by a combination of general employee retirement plans in a 72-month period during 57.9which no interruption of allowable service credit from a termination of employment 57.10exceeded 29 days; and 57.11(6) was not receiving a retirement annuity or disability benefit from any covered 57.12general employee retirement plan at the time of the commencement of the disability. 57.13 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 57.14    Sec. 71. Minnesota Statutes 2008, section 356.302, subdivision 4, is amended to read: 57.15    Subd. 4. Public safety plan eligibility requirements. A disabled member of a 57.16covered retirement plan who has credit for allowable service in a combination of public 57.17safety employee retirement plans is entitled to a combined service disability benefit if the 57.18member: 57.19(1) has become occupationally disabled; 57.20(2) has credit for allowable service in any combination of public safety employee 57.21retirement plans totaling at least one year new text begin the minimum period of service credit required by new text end 57.22 new text begin the applicable retirement plan with the longest service credit eligibility requirement for the new text end 57.23 new text begin receipt of a duty-related disability benefit new text end if the disability is duty-related or totaling at least 57.24three years new text begin the minimum period of service credit required by the applicable retirement new text end 57.25 new text begin plan with the longest service credit eligibility requirement for a disability benefit that is new text end 57.26 new text begin not duty-related new text end if the disability is not duty-related; 57.27(3) has credit for at least one-half year of allowable service with the current public 57.28safety employee retirement plan before the commencement of the disability; and 57.29(4) was not receiving a retirement annuity or disability benefit from any covered 57.30public safety employee retirement plan at the time of the commencement of the disability. 57.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 57.32    Sec. 72. Minnesota Statutes 2008, section 356.302, subdivision 5, is amended to read: 58.1    Subd. 5. General and public safety plan eligibility requirements. A disabled 58.2member of a covered retirement plan who has credit for allowable service in a combination 58.3of both a public safety employee retirement plan and general employee retirement plan 58.4must meet the qualifying requirements in subdivisions 3 and 4 to receive a combined 58.5service disability benefit from the applicable general employee and public safety 58.6employee retirement plans, except that the person need only be a member of a covered 58.7retirement plan at the time of the commencement of the disability new text begin , that the person must new text end 58.8 new text begin have allowable service credit for the applicable retirement plan with the longest service new text end 58.9 new text begin credit eligibility requirement for the receipt of a disability benefit, new text end and that the minimum 58.10allowable service requirements of subdivisions 3, clauses (3) and (5), and 4, clauses (3) 58.11and (4), may be met in any combination of covered retirement plans. 58.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 58.13    Sec. 73. Minnesota Statutes 2008, section 356.303, subdivision 2, is amended to read: 58.14    Subd. 2. Entitlement; eligibility. Notwithstanding any provision of law to the 58.15contrary governing a covered retirement plan, a person who is the survivor of a deceased 58.16member of a covered retirement plan may receive a combined service survivor benefit 58.17from each covered retirement plan in which the deceased member had credit for at least 58.18one-half year of allowable service if the deceased member: 58.19(1) had credit for sufficient allowable service in any combination of covered 58.20retirement plans to meet any new text begin the new text end minimum allowable service credit requirement of the 58.21 new text begin applicable new text end covered retirement fund new text begin with the longest allowable service credit requirement new text end 58.22for qualification for a survivor benefit or annuity; 58.23(2) had credit for at least one-half year of allowable service with the most recent 58.24covered retirement plan before the date of death and was an active member of that covered 58.25retirement plan on the date of death; and 58.26(3) was not receiving a retirement annuity from any covered retirement plan on the 58.27date of death. 58.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 58.29    Sec. 74. Minnesota Statutes 2008, section 356.315, subdivision 5, is amended to read: 58.30    Subd. 5. Correctional plan members. The applicable benefit accrual rate is 2.4 58.31percent new text begin if employed as a correctional state employee before July 1, 2010, or 2.2 percent if new text end 58.32 new text begin employed as a correctional state employee after June 30, 2010 new text end . 58.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 59.1    Sec. 75. Minnesota Statutes 2009 Supplement, section 356.415, subdivision 1, is 59.2amended to read: 59.3    Subdivision 1. Annual postretirement adjustments new text begin ; generally new text end . (a) new text begin Except as new text end 59.4 new text begin otherwise provided in subdivision 1a, 1b, 1c, or 1d, new text end retirement annuity, disability benefit, 59.5or survivor benefit recipients of a covered retirement plan are entitled to a postretirement 59.6adjustment annually on January 1, as follows: 59.7(1) a postretirement increase of 2.5 percent must be applied each year, effective 59.8January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has 59.9been receiving an annuity or a benefit for at least 12 full months prior to the January 1 59.10increase; and 59.11(2) for each annuitant or benefit recipient who has been receiving an annuity or a 59.12benefit new text begin amount new text end for at least one full month, an annual postretirement increase of 1/12 of 2.5 59.13percent for each month new text begin that new text end the person has been receiving an annuity or benefit must be 59.14applied, effective new text begin on new text end January 1 following the new text begin calendar new text end year in which the person has been 59.15retired for less than 12 months. 59.16(b) The increases provided by this section new text begin subdivision new text end commence on January 1, 2010. 59.17(c) An increase in annuity or benefit payments under this section must be made 59.18automatically unless written notice is filed by the annuitant or benefit recipient with the 59.19executive director of the covered retirement plan requesting that the increase not be made. 59.20(d) The retirement annuity payable to a person who retires before becoming eligible 59.21for Social Security benefits and who has elected the optional payment as provided in 59.22section 353.29, subdivision 6, or must be treated as the sum of a period certain 59.23retirement annuity and a life retirement annuity for the purposes of any postretirement 59.24adjustment. The period certain retirement annuity plus the life retirement annuity must be 59.25the annuity amount payable until age 62 for section 353.29, subdivision 6, or age 62, 65, 59.26or normal retirement age, as selected by the member at retirement, for an annuity amount 59.27payable under section . A postretirement adjustment granted on the period certain 59.28retirement annuity must terminate when the period certain retirement annuity terminates. 59.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 59.30    Sec. 76. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding 59.31a subdivision to read: 59.32     new text begin Subd. 1a. new text end new text begin Annual postretirement adjustments; Minnesota State Retirement new text end 59.33 new text begin System plans. new text end new text begin (a) Retirement annuity, disability benefit, or survivor benefit recipients new text end 59.34 new text begin of the legislators retirement plan, the general state employees retirement plan, the new text end 59.35 new text begin correctional state employees retirement plan, the State Patrol retirement plan, the elected new text end 60.1 new text begin state officers retirement plan, the unclassified state employees retirement program, and the new text end 60.2 new text begin judges retirement plan are entitled to a postretirement adjustment annually on January new text end 60.3 new text begin 1, as follows: new text end 60.4 new text begin (1) a postretirement increase of two percent must be applied each year, effective on new text end 60.5 new text begin January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who new text end 60.6 new text begin has been receiving an annuity or a benefit for at least 18 full months before the January 1 new text end 60.7 new text begin increase; and new text end 60.8 new text begin (2) for each annuitant or benefit recipient who has been receiving an annuity or new text end 60.9 new text begin a benefit for at least six full months, an annual postretirement increase of 1/12 of two new text end 60.10 new text begin percent for each month that the person has been receiving an annuity or benefit must be new text end 60.11 new text begin applied, effective January 1, following the calendar year in which the person has been new text end 60.12 new text begin retired for at least six months, but has been retired for less than 18 months. new text end 60.13 new text begin (b) The increases provided by this subdivision commence on January 1, 2011. new text end 60.14 new text begin Increases under this subdivision for the general state employees retirement plan, the new text end 60.15 new text begin correctional state employees retirement plan, the State Patrol retirement plan, or the judges new text end 60.16 new text begin retirement plan terminate on December 31 of the calendar year in which the actuarial new text end 60.17 new text begin valuation prepared by the approved actuary under sections 356.214 and 356.215 and the new text end 60.18 new text begin standards for actuarial work promulgated by the Legislative Commission on Pensions new text end 60.19 new text begin and Retirement indicates that the market value of assets of the retirement plan equals or new text end 60.20 new text begin exceeds 90 percent of the actuarial accrued liability of the retirement plan and increases new text end 60.21 new text begin under subdivision 1 recommence after that date. Increases under this subdivision for new text end 60.22 new text begin the legislators retirement plan or the elected state officers retirement plan terminate new text end 60.23 new text begin on December 31 of the calendar year in which the actuarial valuation prepared by the new text end 60.24 new text begin approved actuary under sections 356.214 and 356.215 and the standards for actuarial work new text end 60.25 new text begin promulgated by the Legislative Commission on Pensions and Retirement indicates that the new text end 60.26 new text begin market value of assets of the general state employees retirement plan equals or exceeds new text end 60.27 new text begin 90 percent of the actuarial accrued liability of the retirement plan and increases under new text end 60.28 new text begin subdivision 1 recommence after that date. new text end 60.29 new text begin (c) An increase in annuity or benefit payments under this subdivision must be made new text end 60.30 new text begin automatically unless written notice is filed by the annuitant or benefit recipient with the new text end 60.31 new text begin executive director of the applicable covered retirement plan requesting that the increase new text end 60.32 new text begin not be made. new text end 60.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 60.34    Sec. 77. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding 60.35a subdivision to read: 61.1     new text begin Subd. 1b. new text end new text begin Annual postretirement adjustments; PERA; general employees new text end 61.2 new text begin retirement plan and local government correctional retirement plan. new text end new text begin (a) Retirement new text end 61.3 new text begin annuity, disability benefit, or survivor benefit recipients of the general employees new text end 61.4 new text begin retirement plan of the Public Employees Retirement Association and the local government new text end 61.5 new text begin correctional service retirement plan are entitled to a postretirement adjustment annually new text end 61.6 new text begin on January 1, as follows: new text end 61.7 new text begin (1) for January 1, 2011, and each successive January 1 until funding stability is new text end 61.8 new text begin restored for the applicable retirement plan, a postretirement increase of one percent must new text end 61.9 new text begin be applied each year, effective on January 1, to the monthly annuity or benefit amount of new text end 61.10 new text begin each annuitant or benefit recipient who has been receiving an annuity or benefit for at least new text end 61.11 new text begin 12 full months as of the current June 30; new text end 61.12 new text begin (2) for January 1, 2011, and each successive January 1 until funding stability is new text end 61.13 new text begin restored for the applicable retirement plan, for each annuitant or benefit recipient who has new text end 61.14 new text begin been receiving an annuity or a benefit for at least one full month, but less than 12 full new text end 61.15 new text begin months as of the current June 30, an annual postretirement increase of 1/12 of one percent new text end 61.16 new text begin for each month the person has been receiving an annuity or benefit must be applied; new text end 61.17 new text begin (3) for each January 1 following the restoration of funding stability for the applicable new text end 61.18 new text begin retirement plan, a postretirement increase of 2.5 percent must be applied each year, new text end 61.19 new text begin effective January 1, to the monthly annuity or benefit amount of each annuitant or benefit new text end 61.20 new text begin recipient who has been receiving an annuity or benefit for at least 12 full months as of new text end 61.21 new text begin the current June 30; and new text end 61.22 new text begin (4) for each January 1 following restoration of funding stability for the applicable new text end 61.23 new text begin retirement plan, for each annuity or benefit recipient who has been receiving an annuity or new text end 61.24 new text begin a benefit for at least one full month, but less than 12 full months as of the current June new text end 61.25 new text begin 30, an annual postretirement increase of 1/12 of 2.5 percent for each month the person new text end 61.26 new text begin has been receiving an annuity or benefit must be applied. new text end 61.27 new text begin (b) Funding stability is restored when the market value of assets of the applicable new text end 61.28 new text begin retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities of the new text end 61.29 new text begin applicable plan in the most recent prior actuarial valuation prepared under section 356.215 new text end 61.30 new text begin and the standards for actuarial work by the approved actuary retained by the Public new text end 61.31 new text begin Employees Retirement Association under section 356.214. new text end 61.32 new text begin (c) If, after applying the increase as provided for in paragraph (a), clauses (3) new text end 61.33 new text begin and (4), the market value of the applicable retirement plan is determined in the next new text end 61.34 new text begin subsequent actuarial valuation prepared under section 356.215 to be less than 90 percent new text end 61.35 new text begin of the actuarial accrued liability of any of the applicable Public Employees Retirement new text end 62.1 new text begin Association plans, the increase provided in paragraph (a), clauses (1) and (2), are to be new text end 62.2 new text begin applied as of the next successive January until funding stability is again restored. new text end 62.3 new text begin (d) An increase in annuity or benefit payments under this section must be made new text end 62.4 new text begin automatically unless written notice is filed by the annuitant or benefit recipient with the new text end 62.5 new text begin executive director of the Public Employees Retirement Association requesting that the new text end 62.6 new text begin increase not be made. new text end 62.7 new text begin (e) The retirement annuity payable to a person who retires before becoming eligible new text end 62.8 new text begin for Social Security benefits and who has elected the optional payment, as provided in new text end 62.9 new text begin section 353.29, subdivision 6, must be treated as the sum of a period-certain retirement new text end 62.10 new text begin annuity and a life retirement annuity for the purposes of any postretirement adjustment. new text end 62.11 new text begin The period-certain retirement annuity plus the life retirement annuity must be the new text end 62.12 new text begin annuity amount payable until age 62 for section 353.29, subdivision 6. A postretirement new text end 62.13 new text begin adjustment granted on the period-certain retirement annuity must terminate when the new text end 62.14 new text begin period-certain retirement annuity terminates. new text end 62.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 62.16    Sec. 78. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding 62.17a subdivision to read: 62.18     new text begin Subd. 1c. new text end new text begin Annual postretirement adjustments; PERA-P&F. new text end new text begin (a) Retirement new text end 62.19 new text begin annuity, disability benefit, or survivor benefit recipients of the public employees police new text end 62.20 new text begin and fire retirement plan are entitled to a postretirement adjustment annually on January new text end 62.21 new text begin 1, as follows: new text end 62.22 new text begin (1) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit new text end 62.23 new text begin recipient who has been receiving the annuity or benefit for at least 12 full months as of the new text end 62.24 new text begin immediate preceding June 30, an amount equal to one percent in each year; new text end 62.25 new text begin (2) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit new text end 62.26 new text begin recipient who has been receiving the annuity or benefit for at least one full month as of the new text end 62.27 new text begin immediate preceding June 30, an amount equal to 1/12 of one percent in each year; new text end 62.28 new text begin (3) for January 1, 2013, and each successive January 1 that follows the loss of new text end 62.29 new text begin funding stability as defined under paragraph (b) until funding stability as defined under new text end 62.30 new text begin paragraph (b) is again restored, for each annuitant or benefit recipient who has been new text end 62.31 new text begin receiving the annuity or benefit for at least 12 full months as of the immediate preceding new text end 62.32 new text begin June 30, an amount equal to the percentage increase in the Consumer Price Index for new text end 62.33 new text begin urban wage earners and clerical workers all items index published by the Bureau of Labor new text end 62.34 new text begin Statistics of the United States Department of Labor between the immediate preceding June new text end 62.35 new text begin 30 and the June 30 occurring 12 months previous, but not to exceed 1.5 percent; new text end 63.1 new text begin (4) for January 1, 2013, and each successive January 1 that follows the loss of new text end 63.2 new text begin funding stability as defined under paragraph (b) until funding stability as defined under new text end 63.3 new text begin paragraph (b) is again restored, for each annuitant or benefit recipient who has been new text end 63.4 new text begin receiving the annuity or benefit for at least one full month as of the immediate preceding new text end 63.5 new text begin June 30, an amount equal to 1/12 of the percentage increase in the Consumer Price Index new text end 63.6 new text begin for urban wage earners and clerical workers all items index published by the Bureau new text end 63.7 new text begin of Labor Statistics of the United States Department of Labor between the immediate new text end 63.8 new text begin preceding June 30 and the June 30 occurring 12 months previous for each full month of new text end 63.9 new text begin annuity or benefit receipt, but not to exceed 1/12 of 1.5 percent for each full month of new text end 63.10 new text begin annuity or benefit receipt; new text end 63.11 new text begin (5) for each January 1 following the restoration of funding stability as defined under new text end 63.12 new text begin paragraph (b) and during the continuation of funding stability as defined under paragraph new text end 63.13 new text begin (b), for each annuitant or benefit recipient who has been receiving the annuity or benefit new text end 63.14 new text begin for at least 12 full months as of the immediate preceding June 30, an amount equal to the new text end 63.15 new text begin percentage increase in the Consumer Price Index for urban wage earners and clerical new text end 63.16 new text begin workers all items index published by the Bureau of Labor Statistics of the United States new text end 63.17 new text begin Department of Labor between the immediate preceding June 30 and the June 30 occurring new text end 63.18 new text begin 12 months previous, but not to exceed 2.5 percent; and new text end 63.19 new text begin (6) for each January 1 following the restoration of funding stability as defined under new text end 63.20 new text begin paragraph (b) and during the continuation of funding stability as defined under paragraph new text end 63.21 new text begin (b), for each annuitant or benefit recipient who has been receiving the annuity or benefit new text end 63.22 new text begin for at least one full month as of the immediate preceding June 30, an amount equal to new text end 63.23 new text begin 1/12 of the percentage increase in the Consumer Price Index for urban wage earners and new text end 63.24 new text begin clerical workers all items index published by the Bureau of Labor Statistics of the United new text end 63.25 new text begin States Department of Labor between the immediate preceding June 30 and the June 30 new text end 63.26 new text begin occurring 12 months previous for each full month of annuity or benefit receipt, but not to new text end 63.27 new text begin exceed 1/12 of 2.5 percent for each full month of annuity or benefit receipt. new text end 63.28 new text begin (b) Funding stability is restored when the market value of assets of the public new text end 63.29 new text begin employees police and fire retirement plan equals or exceeds 90 percent of the actuarial new text end 63.30 new text begin accrued liabilities of the applicable plan in the most recent prior actuarial valuation new text end 63.31 new text begin prepared under section 356.215 and under the standards for actuarial work of the new text end 63.32 new text begin Legislative Commission on Pensions and Retirement by the approved actuary retained by new text end 63.33 new text begin the Public Employees Retirement Association under section 356.214. new text end 63.34 new text begin (c) An increase in annuity or benefit payments under this section must be made new text end 63.35 new text begin automatically unless written notice is filed by the annuitant or benefit recipient with the new text end 64.1 new text begin executive director of the Public Employees Retirement Association requesting that the new text end 64.2 new text begin increase not be made. new text end 64.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 64.4    Sec. 79. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding 64.5a subdivision to read: 64.6     new text begin Subd. 1d. new text end new text begin Teachers Retirement Association annual postretirement adjustments. new text end 64.7 new text begin (a) Retirement annuity, disability benefit, or survivor benefit recipients of the Teachers new text end 64.8 new text begin Retirement Association are entitled to a postretirement adjustment annually on January new text end 64.9 new text begin 1, as follows: new text end 64.10 new text begin (1) for January 1, 2011, and January 1, 2012, no postretirement increase is payable; new text end 64.11 new text begin (2) for January 1, 2013, and each successive January 1 until funding stability is new text end 64.12 new text begin restored, a postretirement increase of two percent must be applied each year, effective on new text end 64.13 new text begin January 1, to the monthly annuity or benefit amount of each annuitant or benefit recipient new text end 64.14 new text begin who has been receiving an annuity or a benefit for at least 18 full months prior to the new text end 64.15 new text begin January 1 increase; new text end 64.16 new text begin (3) for January 1, 2013, and each successive January 1 until funding stability is new text end 64.17 new text begin restored, for each annuitant or benefit recipient who has been receiving an annuity or new text end 64.18 new text begin a benefit for at least six full months, an annual postretirement increase of 1/12 of two new text end 64.19 new text begin percent for each month the person has been receiving an annuity or benefit must be new text end 64.20 new text begin applied, effective January 1, following the year in which the person has been retired new text end 64.21 new text begin for less than 12 months; new text end 64.22 new text begin (4) for each January 1 following the restoration of funding stability, a postretirement new text end 64.23 new text begin increase of 2.5 percent must be applied each year, effective January 1, to the monthly new text end 64.24 new text begin annuity or benefit amount of each annuitant or benefit recipient who has been receiving an new text end 64.25 new text begin annuity or a benefit for at least 18 full months prior to the January 1 increase; and new text end 64.26 new text begin (5) for each January 1 following the restoration of funding stability, for each new text end 64.27 new text begin annuitant or benefit recipient who has been receiving an annuity or a benefit for at least new text end 64.28 new text begin six full months, an annual postretirement increase of 1/12 of 2.5 percent for each month new text end 64.29 new text begin the person has been receiving an annuity or benefit must be applied, effective January 1, new text end 64.30 new text begin following the year in which the person has been retired for less than 12 months. new text end 64.31 new text begin (b) Funding stability is restored when the market value of assets of the Teachers new text end 64.32 new text begin Retirement Association equals or exceeds 90 percent of the actuarial accrued liabilities of new text end 64.33 new text begin the Teachers Retirement Association in the most recent prior actuarial valuation prepared new text end 64.34 new text begin under section 356.215 and the standards for actuarial work by the approved actuary new text end 64.35 new text begin retained by the Teachers Retirement Association under section 356.214. new text end 65.1 new text begin (c) An increase in annuity or benefit payments under this section must be made new text end 65.2 new text begin automatically unless written notice is filed by the annuitant or benefit recipient with the new text end 65.3 new text begin executive director of the Teachers Retirement Association requesting that the increase new text end 65.4 new text begin not be made. new text end 65.5 new text begin (d) The retirement annuity payable to a person who retires before becoming eligible new text end 65.6 new text begin for Social Security benefits and who has elected the optional payment as provided in new text end 65.7 new text begin section 354.35 must be treated as the sum of a period-certain retirement annuity and a life new text end 65.8 new text begin retirement annuity for the purposes of any postretirement adjustment. The period-certain new text end 65.9 new text begin retirement annuity plus the life retirement annuity must be the annuity amount payable new text end 65.10 new text begin until age 62, 65, or normal retirement age, as selected by the member at retirement, for an new text end 65.11 new text begin annuity amount payable under section 354.35. A postretirement adjustment granted on new text end 65.12 new text begin the period-certain retirement annuity must terminate when the period-certain retirement new text end 65.13 new text begin annuity terminates. new text end 65.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 65.15    Sec. 80. Minnesota Statutes 2008, section 356.47, subdivision 3, is amended to read: 65.16    Subd. 3. Payment. (a) Beginning one year after the reemployment withholding 65.17period ends relating to the reemployment that gave rise to the limitation, and the filing of a 65.18written application, the retired member is entitled to the payment, in a lump sum, of the 65.19value of the person's amount under subdivision 2, plus new text begin annual compound new text end interest at new text begin . For new text end 65.20 new text begin the general state employees retirement plan, the correctional state employees retirement new text end 65.21 new text begin plan, the general employees retirement plan of the Public Employees Retirement new text end 65.22 new text begin Association, the public employees police and fire retirement plan, the local government new text end 65.23 new text begin correctional employees retirement plan, and the teachers retirement plan, the annual new text end 65.24 new text begin interest rate is six percent from the date on which the amount was deducted from the new text end 65.25 new text begin retirement annuity to the date of payment or until January 1, 2011, whichever is earlier, and new text end 65.26 new text begin no interest after January 1, 2011. For the Duluth Teachers Retirement Fund Association, new text end 65.27 new text begin the annual interest is six percent from the date on which the amount was deducted from the new text end 65.28 new text begin retirement annuity to the date of payment or until June 30, 2010, whichever is earlier, and new text end 65.29 new text begin no interest after June 30, 2010. For the St. Paul Teachers Retirement Fund Association, new text end 65.30 new text begin the annual interest is new text end the compound annual rate of six percent from the date that the 65.31amount was deducted from the retirement annuity to the date of payment. 65.32    (b) The written application must be on a form prescribed by the chief administrative 65.33officer of the applicable retirement plan. 65.34    (c) If the retired member dies before the payment provided for in paragraph (a) is 65.35made, the amount is payable, upon written application, to the deceased person's surviving 66.1spouse, or if none, to the deceased person's designated beneficiary, or if none, to the 66.2deceased person's estate. 66.3    (d) In lieu of the direct payment of the person's amount under subdivision 2, on 66.4or after the payment date under paragraph (a), if the federal Internal Revenue Code so 66.5permits, the retired member may elect to have all or any portion of the payment amount 66.6under this section paid in the form of a direct rollover to an eligible retirement plan as 66.7defined in section 402(c) of the federal Internal Revenue Code that is specified by the 66.8retired member. If the retired member dies with a balance remaining payable under this 66.9section, the surviving spouse of the retired member, or if none, the deceased person's 66.10designated beneficiary, or if none, the administrator of the deceased person's estate may 66.11elect a direct rollover under this paragraph. 66.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 66.13    Sec. 81. Minnesota Statutes 2009 Supplement, section 423A.02, subdivision 3, is 66.14amended to read: 66.15    Subd. 3. Reallocation of amortization or supplementary amortization state 66.16aid. (a) Seventy percent of the difference between $5,720,000 and the current year 66.17amortization aid and supplemental amortization aid distributed under subdivisions 1 66.18and 1a that is not distributed for any reason to a municipality for use by a local police 66.19or salaried fire relief association must be distributed by the commissioner of revenue 66.20according to this paragraph. The commissioner shall distribute 50 percent of the amounts 66.21derived under this paragraph to the Teachers Retirement Association, ten percent to the 66.22Duluth Teachers Retirement Fund Association, and 40 percent to the St. Paul Teachers 66.23Retirement Fund Association to fund the unfunded actuarial accrued liabilities of the 66.24respective funds. These payments shall be made on or before June 30 each fiscal year. If 66.25the St. Paul Teachers Retirement Fund Association becomes fully funded, its eligibility 66.26for this aid ceases. Amounts remaining in the undistributed balance account at the end of 66.27the biennium if aid eligibility ceases cancel to the general fund. 66.28    (b) In order to receive amortization and supplementary amortization aid under 66.29paragraph (a), Independent School District No. 625, St. Paul, must make contributions 66.30to the St. Paul Teachers Retirement Fund Association in accordance with the following 66.31schedule: 66.32 Fiscal Year Amount 66.33 1996 $ 0 66.34 1997 $ 0 66.35 1998 $ 200,000 67.1 1999 $ 400,000 67.2 2000 $ 600,000 67.3 2001 and thereafter $ 800,000 67.4    (c) Special School District No. 1, Minneapolis, and the city of Minneapolis must 67.5each make contributions to the Teachers Retirement Association in accordance with the 67.6following schedule: 67.7 67.8 Fiscal Year City amount School district amount 67.9 1996 $ 0 $ 0 67.10 1997 $ 0 $ 0 67.11 1998 $ 250,000 $ 250,000 67.12 1999 $ 400,000 $ 400,000 67.13 2000 $ 550,000 $ 550,000 67.14 2001 $ 700,000 $ 700,000 67.15 2002 $ 850,000 $ 850,000 67.16 2003 and thereafter $ 1,000,000 $ 1,000,000 67.17    (d) Money contributed under paragraph (a) and either paragraph (b) or (c), as 67.18applicable, must be credited to a separate account in the applicable teachers retirement 67.19fund and may not be used in determining any benefit increases. The separate account 67.20terminates for a fund when the aid payments to the fund under paragraph (a) cease. 67.21    (e) new text begin (d) new text end Thirty percent of the difference between $5,720,000 and the current year 67.22amortization aid and supplemental amortization aid under subdivisions 1 and 1a that is not 67.23distributed for any reason to a municipality for use by a local police or salaried firefighter 67.24relief association must be distributed under section 69.021, subdivision 7, paragraph (d), 67.25as additional funding to support a minimum fire state aid amount for volunteer firefighter 67.26relief associations. 67.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 67.28    Sec. 82. new text begin LOCAL RETIREMENT FUND INVESTMENT AUTHORITIES new text end 67.29 new text begin STUDY. new text end 67.30 new text begin A study group consisting of representatives from pension plans subject to Minnesota new text end 67.31 new text begin Statutes, section 356A.06, subdivision 6 or 7, shall be convened by the state auditor to new text end 67.32 new text begin study investment-related provisions, authorities, and limitations under Minnesota Statutes, new text end 67.33 new text begin chapter 356A, and related sections of other chapters. Administrative support for the new text end 67.34 new text begin study group shall be provided by the state auditor. The study group shall prepare a new text end 67.35 new text begin report to include an assessment of the effectiveness of current statutory prescriptions, new text end 67.36 new text begin options for change, and recommendations for consideration by the governor and the new text end 68.1 new text begin legislature during the 2011 legislative session. The report will be provided no later than new text end 68.2 new text begin January 15, 2011, to the executive director of the Legislative Commission on Pensions and new text end 68.3 new text begin Retirement, the chair and ranking minority caucus member of the senate State and Local new text end 68.4 new text begin Government Operations and Oversight Committee, and the chair and ranking minority new text end 68.5 new text begin caucus member of the house State and Local Government Operations Reform, Technology new text end 68.6 new text begin and Elections Committee. new text end 68.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 68.8    Sec. 83. new text begin BYLAW AUTHORIZATION. new text end 68.9 new text begin Consistent with the requirements of Minnesota Statutes, section 354A.12, new text end 68.10 new text begin subdivision 4, the board of the Duluth Teachers Retirement Fund Association is authorized new text end 68.11 new text begin to revise the bylaws or articles of incorporation so that the requirements of this act apply new text end 68.12 new text begin to the old law coordinated program. new text end 68.13 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 68.14    Sec. 84. new text begin REPEALER. new text end 68.15 new text begin Minnesota Statutes 2008, section 354A.27, subdivision 1, new text end new text begin is repealed. new text end 68.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 68.17ARTICLE 2 68.18MSRS ADMINISTRATIVE PROVISIONS 68.19    Section 1. Minnesota Statutes 2008, section 352.01, subdivision 2a, is amended to read: 68.20    Subd. 2a. Included employees. (a) "State employee" includes: 68.21    (1) employees of the Minnesota Historical Society; 68.22    (2) employees of the State Horticultural Society; 68.23    (3) employees of the Minnesota Crop Improvement Association; 68.24    (4) employees of the adjutant general who new text begin whose salaries new text end are paid from federal funds 68.25and who are not covered by any federal civilian employees retirement system; 68.26    (5) employees of the Minnesota State Colleges and Universities new text begin who are new text end employed 68.27under the university or college activities program; 68.28    (6) currently contributing employees covered by the system who are temporarily 68.29employed by the legislature during a legislative session or any currently contributing 68.30employee employed for any special service as defined in subdivision 2b, clause (8); 69.1    (7) employees of the legislature new text begin who are new text end appointed without a limit on the duration 69.2of their employment and persons employed or designated by the legislature or by a 69.3legislative committee or commission or other competent authority to conduct a special 69.4inquiry, investigation, examination, or installation; 69.5    (8) trainees who are employed on a full-time established training program 69.6performing the duties of the classified position for which they will be eligible to receive 69.7immediate appointment at the completion of the training period; 69.8    (9) employees of the Minnesota Safety Council; 69.9    (10) any employees new text begin who are new text end on authorized leave of absence from the Transit 69.10Operating Division of the former Metropolitan Transit Commission new text begin and new text end who are employed 69.11by the labor organization which is the exclusive bargaining agent representing employees 69.12of the Transit Operating Division; 69.13    (11) employees of the Metropolitan Council, Metropolitan Parks and Open Space 69.14Commission, Metropolitan Sports Facilities Commission, new text begin or new text end Metropolitan Mosquito 69.15Control Commission, or Metropolitan Radio Board unless excluded new text begin under subdivision 2b new text end 69.16or new text begin are new text end covered by another public pension fund or plan under section 473.415, subdivision 3; 69.17    (12) judges of the Tax Court; 69.18    (13) personnel new text begin who were new text end employed on June 30, 1992, by the University of 69.19Minnesota in the management, operation, or maintenance of its heating plant facilities, 69.20whose employment transfers to an employer assuming operation of the heating plant 69.21facilities, so long as the person is employed at the University of Minnesota heating plant 69.22by that employer or by its successor organization; 69.23    (14) new text begin personnel who are employed as new text end seasonal help new text begin employees new text end in the classified new text begin or new text end 69.24 new text begin unclassified new text end service employed by the Department of Revenue; 69.25    (15) persons new text begin who are new text end employed by the Department of Commerce as a peace officer 69.26in the Insurance Fraud Prevention Division under section 45.0135 who have attained the 69.27mandatory retirement age specified in section 43A.34, subdivision 4; 69.28    (16) employees of the University of Minnesota unless excluded under subdivision 69.292b, clause (3); 69.30    (17) employees of the Middle Management Association whose employment began 69.31after July 1, 2007, and to whom section 352.029 does not apply; and 69.32    (18) employees of the Minnesota Government Engineers Council to whom section 69.33352.029 does not apply. 69.34    (b) Employees specified in paragraph (a), clause (13), are included employees under 69.35paragraph (a) if employer and employee contributions are made in a timely manner in the 69.36amounts required by section 352.04. Employee contributions must be deducted from 70.1salary. Employer contributions are the sole obligation of the employer assuming operation 70.2of the University of Minnesota heating plant facilities or any successor organizations to 70.3that employer. 70.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 70.5    Sec. 2. Minnesota Statutes 2008, section 352.03, subdivision 4, is amended to read: 70.6    Subd. 4. Duties and powers of board of directors. (a) The board shall: 70.7    (1) elect a chair; 70.8    (2) appoint an executive director; 70.9    (3) establish rules to administer this chapter and chapters 3A, 352B, 352C, 352D, 70.10and 490 and transact the business of the system, subject to the limitations of law; 70.11    (4) consider and dispose of, or take any other action the board of directors deems 70.12appropriate concerning new text begin , new text end denials of applications for annuities or disability benefits under 70.13this chapter, new text begin chapter 3A, 352B, 352C, 352D, or 490, new text end and complaints of employees and 70.14others pertaining to the retirement of employees and the operation of the system; 70.15    (5) oversee the administration of the state deferred compensation plan established 70.16in section 352.965; and 70.17    (6) oversee the administration of the health care savings plan established in section 70.18352.98 . 70.19    (b) The board shall advise the director on any matters relating to the system and 70.20carrying out functions and purposes of this chapter. The board's advice shall control. 70.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 70.22    Sec. 3. Minnesota Statutes 2008, section 352.04, subdivision 9, is amended to read: 70.23    Subd. 9. Erroneous deductions, canceled warrants. (a) Deductions taken from the 70.24salary of an employee for the retirement fund in error new text begin excess of required amounts new text end must, 70.25upon discovery and verification by the department making the deduction, be refunded to 70.26the employee. 70.27(b) If a deduction for the retirement fund is taken from a salary warrant or check, 70.28and the check is canceled or the amount of the warrant or check returned to the funds of 70.29the department making the payment, the sum deducted, or the part of it required to adjust 70.30the deductions, must be refunded to the department or institution if the department applies 70.31for the refund on a form furnished by the director. The department's payments must 70.32likewise be refunded to the department. 71.1(c) Employee deductions and employer contributions taken in error may be directly 71.2transferred, without interest, to another Minnesota public employee retirement plan by 71.3which the employee is actually covered. 71.4For purposes of this subdivision, a Minnesota public pension plan means a plan 71.5specified in section 356.30, subdivision 3, or the plan governed by chapter 354B. 71.6 new text begin (c) If erroneous employee deductions and employer contributions are caused by an new text end 71.7 new text begin error in plan coverage involving the plan and any other plans specified in section 356.99, new text end 71.8 new text begin that section applies. If the employee should have been covered by the plan governed by new text end 71.9 new text begin chapter 352D, 353D, 354B, or 354D, the employee deductions and employer contributions new text end 71.10 new text begin taken in error must be directly transferred to the applicable employee's account in the new text end 71.11 new text begin correct retirement plan, with interest at the rate of 0.71 percent per month, compounded new text end 71.12 new text begin annually, from the first day of the month following the month in which coverage should new text end 71.13 new text begin have commenced in the correct defined contribution plan until the end of the month in new text end 71.14 new text begin which the transfer occurs. new text end 71.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 71.16    Sec. 4. Minnesota Statutes 2008, section 352.115, subdivision 10, is amended to read: 71.17    Subd. 10. Reemployment of annuitant. (a) new text begin Except for salary or wages received new text end 71.18 new text begin as a temporary employee of the legislature during a legislative session, new text end if any retired 71.19employee again becomes entitled to receive salary or wages from the state, or any 71.20employer who employs state employees as that term is defined in section 352.01, 71.21subdivision 2 , other than salary or wages received as a temporary employee of the 71.22legislature during a legislative session new text begin in a position covered by this chapter new text end , the annuity or 71.23retirement allowance shall new text begin must new text end cease when the retired employee has earned an amount 71.24equal to the annual maximum earnings allowable for that age for the continued receipt of 71.25full benefit amounts monthly under the federal old age, survivors, and disability insurance 71.26program as set by the secretary of health and human services under United States Code, 71.27title 42, section 403, in any calendar year. If the retired employee has not yet reached the 71.28minimum age for the receipt of Social Security benefits, the maximum earnings for the 71.29retired employee shall be new text begin are new text end equal to the annual maximum earnings allowable for the 71.30minimum age for the receipt of Social Security benefits. 71.31(b) The balance of the annual retirement annuity after cessation must be handled or 71.32disposed of as provided in section 356.47. 71.33(c) The annuity must be resumed when state service ends, or, if the retired employee 71.34is still employed at the beginning of the next calendar year, at the beginning of that 71.35calendar year, and payment must again end when the retired employee has earned the 72.1applicable reemployment earnings maximum specified in this subdivision. If the retired 72.2employee is granted a sick leave without pay, but not otherwise, the annuity or retirement 72.3allowance must be resumed during the period of sick leave. 72.4(d) No payroll deductions for the retirement fund may be made from the earnings of 72.5a reemployed retired employee. 72.6(e) No change shall new text begin may new text end be made in the monthly amount of an annuity or retirement 72.7allowance because of the reemployment of an annuitant. 72.8 new text begin (f) If a reemployed annuitant whose annuity is suspended under paragraph (a) new text end 72.9 new text begin is having insurance premium amounts withheld under section 356.87, subdivision 2, new text end 72.10 new text begin insurance premium amounts must continue to be withheld and transferred from the new text end 72.11 new text begin suspended portion of the annuity. The balance of the annual retirement annuity after new text end 72.12 new text begin cessation, after deduction of the insurance premium amounts, must be treated as specified new text end 72.13 new text begin in paragraph (b). new text end 72.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2010. new text end 72.15    Sec. 5. Minnesota Statutes 2008, section 352.91, is amended by adding a subdivision 72.16to read: 72.17     new text begin Subd. 6. new text end new text begin Correction of plan coverage errors. new text end new text begin If erroneous employee deductions new text end 72.18 new text begin and employer contributions are caused by an error in plan coverage involving the new text end 72.19 new text begin correctional state employees retirement plan and any other plan specified in section new text end 72.20 new text begin 356.99, that section applies. new text end 72.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 72.22    Sec. 6. Minnesota Statutes 2008, section 352.965, subdivision 1, is amended to read: 72.23    Subdivision 1. Establishment. (a) The Minnesota state deferred compensation plan 72.24is established. For purposes of this section, "plan" means the Minnesota state deferred 72.25compensation plan, unless the context clearly indicates otherwise. The Minnesota State 72.26Retirement System shall administer the plan. 72.27    (b) The purpose of the plan is to provide a means for a public employee to contribute 72.28a portion of the employee's compensation to a tax-deferred investment account. The plan 72.29is an eligible tax-deferred compensation plan under section 457(b) of the Internal Revenue 72.30Code, United States Code, title 26, section 457(b), and the applicable regulations under 72.31Code of Federal Regulations, title 26, parts 1.457-3 to 1.457-10. 73.1    (c) The board of directors of the Minnesota State Retirement System is the plan 73.2trustee and new text begin plan sponsor. new text end The board's executive director is the plan administrator. Fiduciary 73.3activities of the plan must be undertaken in a manner consistent with chapter 356A. 73.4    (d) The executive director, with the approval of the board of directors, shall 73.5adopt and amend, as required to maintain tax-qualified status, a written plan document 73.6specifying the material terms and conditions for eligibility, benefits, applicable limitations, 73.7and the time and form under which benefit distributions can be made. With the approval 73.8of the board of directors, the executive director may also establish policies and procedures 73.9necessary for the administration of the deferred compensation plan. 73.10    (e) The plan document shall new text begin must new text end include provisions that are necessary to cause the 73.11plan to be an eligible deferred compensation plan within the meaning of section 457(b) of 73.12the Internal Revenue Code. The plan document may provide additional administrative and 73.13substantive provisions consistent with state law, provided new text begin that new text end those provisions will new text begin do new text end 73.14not cause the plan to fail to be an eligible deferred compensation plan within the meaning 73.15of section 457(b) of the Internal Revenue Code and may include provisions for certain 73.16optional features and services. 73.17    (f) The board of directors may authorize the executive director to establish and 73.18administer a Roth 457 plan if authorized by the Internal Revenue Code or a Roth 73.19individual retirement account as defined under section 408A of the Internal Revenue Code. 73.20    (g) All amounts contributed to the deferred compensation plan and all earnings 73.21on those amounts must be held in trust, in custodial accounts, or in qualifying annuity 73.22contracts for the exclusive benefit of the plan participants and beneficiaries, as required by 73.23section 457(g) of the Internal Revenue Code and in accordance with sections 356.001 and 73.24356A.06, subdivision 1 . 73.25    (h) The information and data maintained in the accounts of the participants and 73.26beneficiaries are private data and shall new text begin must new text end not be disclosed to anyone other than the 73.27participant or beneficiary pursuant to a court order or pursuant to new text begin under new text end section 356.49. 73.28    (i) The plan document is not subject to the rule adoption process under the 73.29Administrative Procedures Act, including section 14.386, but must conform with 73.30applicable federal and state laws. 73.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 73.32    Sec. 7. Minnesota Statutes 2008, section 352.965, subdivision 2, is amended to read: 73.33    Subd. 2. Right to participate in deferred compensation plan. new text begin (a) new text end At the request 73.34of an officer or employee of the state, an officer or employee of a political subdivision, or 73.35an employee covered by a retirement fund in section 356.20, subdivision 2, the appointing 74.1authority shall defer the payment of part of the compensation of the public officer or 74.2employee through payroll deduction. 74.3 new text begin (b) new text end The amount to be deferred must be as provided in a written new text begin an new text end agreement 74.4between the officer or employee and the public employer new text begin plan sponsor new text end . The agreement 74.5must be in a form specified by the executive director of the Minnesota State Retirement 74.6System and must be consistent with the requirements for an eligible plan under federal 74.7and state tax laws, regulations, and rulings. 74.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 74.9    Sec. 8. Minnesota Statutes 2009 Supplement, section 352B.011, subdivision 3, is 74.10amended to read: 74.11    Subd. 3. Allowable service. (a) "Allowable service" means: 74.12(1) service in a month during which a member is paid a salary from which a member 74.13contribution is deducted, deposited, and credited in the State Patrol retirement fund; 74.14(2) for members defined in subdivision 10, clause (1), service in any month for 74.15which payments have been made to the State Patrol retirement fund under law; and 74.16(3) for members defined in subdivision 10, clauses (2) and (3), service for which 74.17payments have been made to the State Patrol retirement fund under law, service for which 74.18payments were made to the State Police officers retirement fund under law after June 74.1930, 1961, and all prior service which was credited to a member for service on or before 74.20June 30, 1961. new text begin ; new text end 74.21 new text begin (4) any period of authorized leave of absence without pay that does not exceed one new text end 74.22 new text begin year and for which the employee obtains credit by payment to the fund under section new text end 74.23 new text begin 352B.013; and new text end 74.24 new text begin (5) eligible periods of uniformed service for which the member obtained service new text end 74.25 new text begin credit by payment under section 352B.086 to the fund. new text end 74.26(b) Allowable service also includes any period of absence from duty by a member 74.27who, by reason of injury incurred in the performance of duty, is temporarily disabled and 74.28for which disability the state is liable under the workers' compensation law, until the date 74.29authorized by the executive director for commencement of payment of a disability benefit 74.30or until the date of a return to employment. 74.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 74.32    Sec. 9. new text begin [352B.013] AUTHORIZED LEAVE OF ABSENCE SERVICE CREDIT new text end 74.33 new text begin PURCHASE PROCEDURE. new text end 75.1     new text begin Subdivision 1. new text end new text begin Application. new text end new text begin This section specifies the procedure for purchasing new text end 75.2 new text begin service credit in the State Patrol retirement plan for authorized leaves of absence under new text end 75.3 new text begin section 352B.011, subdivision 3, unless an alternative payment procedure is specified in new text end 75.4 new text begin law for a particular form of leave or break in service. new text end 75.5     new text begin Subd. 2. new text end new text begin Purchase procedure. new text end new text begin (a) An employee covered by the plan specified in new text end 75.6 new text begin this chapter may purchase credit for allowable service in the plan for a period specified new text end 75.7 new text begin in subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c), new text end 75.8 new text begin whichever applies. The employing unit, at its option, may pay the employer portion of the new text end 75.9 new text begin amount specified in paragraph (b) on behalf of its employees. new text end 75.10 new text begin (b) If payment is received by the executive director within one year from the date new text end 75.11 new text begin the employee returned to work following the authorized leave, the payment amount is new text end 75.12 new text begin equal to the employee and employer contribution rates specified in section 352B.02 at the new text end 75.13 new text begin end of the leave period multiplied by the employee's hourly rate of salary on the date of new text end 75.14 new text begin return from the leave of absence and by the days and months of the leave of absence for new text end 75.15 new text begin which the employee is eligible for allowable service credit. The payment must include new text end 75.16 new text begin compound interest at a monthly rate of 0.71 percent from the last day of the leave period new text end 75.17 new text begin until the last day of the month in which payment is received. If payment is received by the new text end 75.18 new text begin executive director after one year from the date the employee returned to work following new text end 75.19 new text begin the authorized leave, the payment amount is the amount determined under section new text end 75.20 new text begin . Payment under this paragraph must be made before the date of termination from new text end 75.21 new text begin public employment covered under this chapter. new text end 75.22 new text begin (c) If the employee terminates employment covered by this chapter during the leave new text end 75.23 new text begin or following the leave rather than returning to covered employment, payment must new text end 75.24 new text begin be received by the executive director within 30 days after the termination date. The new text end 75.25 new text begin payment amount is equal to the employee and employer contribution rates specified in new text end 75.26 new text begin section 352B.02 on the day prior to the termination date, multiplied by the employee's new text end 75.27 new text begin hourly rate of salary on that date and by the days and months of the leave of absence new text end 75.28 new text begin prior to termination. new text end 75.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 75.30    Sec. 10. Minnesota Statutes 2008, section 352B.02, is amended by adding a 75.31subdivision to read: 75.32     new text begin Subd. 3. new text end new text begin Correction of plan coverage errors. new text end new text begin If erroneous employee deductions new text end 75.33 new text begin and employer contributions are caused by an error in plan coverage involving the State new text end 75.34 new text begin Patrol retirement plan and any other plan specified in section 356.99, that section applies. new text end 76.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 76.2    Sec. 11. Minnesota Statutes 2008, section 353.27, subdivision 7a, is amended to read: 76.3    Subd. 7a. Deductions or contributions transmitted by error. (a) If employee 76.4deductions and employer contributions were erroneously transmitted to the association, 76.5but should have been transmitted to another Minnesota public pension new text begin a new text end plan new text begin covered by new text end 76.6 new text begin chapter 352D, 353D, 354B, or 354D new text end , the executive director shall transfer the erroneous 76.7employee deductions and employer contributions to the appropriate retirement fund or 76.8individual account, as applicable, without interest. The time limitations specified in 76.9subdivisions 7 and 12 do not apply. new text begin The transfer to the applicable defined contribution new text end 76.10 new text begin plan account must include interest at the rate of 0.71 percent per month, compounded new text end 76.11 new text begin annually, from the first day of the month following the month in which coverage should new text end 76.12 new text begin have commenced in the defined contribution plan until the end of the month in which new text end 76.13 new text begin the transfer occurs. new text end 76.14(b) For purposes of this subdivision, a Minnesota public pension plan means a 76.15plan specified in section 356.30, subdivision 3, or the plans governed by chapters 353D 76.16and 354B. 76.17(c) new text begin (b) new text end A potential transfer under paragraph (a) that is reasonably determined to 76.18cause the plan to fail to be a qualified plan under section 401(a) of the federal Internal 76.19Revenue Code, as amended, must not be made by the executive director of the association. 76.20Within 30 days after being notified by the Public Employees Retirement Association of 76.21an unmade potential transfer under this paragraph, the employer of the affected person 76.22must transmit an amount representing the applicable salary deductions and employer 76.23contributions, without interest, to the retirement fund of the appropriate Minnesota public 76.24pension plan, or to the applicable individual account if the proper coverage is by a defined 76.25contribution plan. The association must provide the employing unit a credit for the amount 76.26of the erroneous salary deductions and employer contributions against future contributions 76.27from the employer. If the employing unit receives a credit under this paragraph, the 76.28employing unit is responsible for refunding to the applicable employee any amount that 76.29had been erroneously deducted from the person's salary. 76.30 new text begin (c) If erroneous employee deductions and employer contributions reflect a plan new text end 76.31 new text begin coverage error involving any Public Employees Retirement Association plan specified in new text end 76.32 new text begin section 356.99 and any other plan specified in that section, section 356.99 applies. new text end 76.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 76.34    Sec. 12. Minnesota Statutes 2008, section 353.37, subdivision 3a, is amended to read: 77.1    Subd. 3a. Disposition of suspension or reduction amount. new text begin (a) new text end The balance of 77.2the annual retirement annuity after suspension or the amount of the retirement annuity 77.3reduction must be handled or disposed of as provided in section 356.47. 77.4 new text begin (b) If a reemployed annuitant whose annuity is suspended is having insurance new text end 77.5 new text begin premium amounts withheld under section 356.87, subdivision 2, insurance premium new text end 77.6 new text begin amounts must continue to be withheld and transferred from the suspended portion of the new text end 77.7 new text begin annuity. The balance of the annual retirement annuity after cessation, after deduction of new text end 77.8 new text begin the insurance premium amounts, must be treated as specified in paragraph (a). new text end 77.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2010. new text end 77.10    Sec. 13. Minnesota Statutes 2008, section 354.42, subdivision 7, is amended to read: 77.11    Subd. 7. Erroneous salary deductions or direct payments. (a) new text begin Any new text end deductions 77.12taken from the salary of an employee for the retirement fund in error new text begin excess of amounts new text end 77.13 new text begin required new text end must be refunded to the employee upon the discovery of the error and after the 77.14verification of the error by the employing unit making the deduction. The corresponding 77.15 new text begin excess new text end employer contribution and new text begin excess new text end additional employer contribution amounts 77.16attributable to the erroneous salary deduction must be refunded to the employing unit. 77.17(b) If salary deductions and employer contributions were erroneously transmitted 77.18to the retirement fund and should have been transmitted to another Minnesota public 77.19pension new text begin the new text end plan new text begin covered by chapter 352D, 353D, 354B, or 354D new text end , the executive director 77.20must transfer these salary deductions and employer contributions to the new text begin account of the new text end 77.21appropriate public pension fund without interest. For purposes of this paragraph, a 77.22Minnesota public pension plan means a plan specified in section 356.30, subdivision 3, 77.23or the plan governed by chapter 354B. new text begin person under the applicable plan. The transfer to new text end 77.24 new text begin the applicable defined contribution plan account must include interest at the rate of 0.71 new text end 77.25 new text begin percent per month, compounded annually, from the first day of the month following the new text end 77.26 new text begin month in which coverage should have commenced in the defined contribution plan until new text end 77.27 new text begin the end of the month in which the transfer occurs. new text end 77.28(c) A potential transfer under paragraph (b) that would cause the plan to fail to 77.29be a qualified plan under section 401(a) of the Internal Revenue Code, as amended, 77.30must not be made by the executive director. Within 30 days after being notified by the 77.31Teachers Retirement Association of an unmade potential transfer under this paragraph, 77.32the employer of the affected person must transmit an amount representing the applicable 77.33salary deductions and employer contributions, without interest, to the retirement fund of 77.34the appropriate Minnesota public pension plan fund new text begin account of the applicable person under new text end 77.35 new text begin the appropriate plan new text end . The retirement association must provide a credit for the amount of 78.1the erroneous salary deductions and employer contributions against future contributions 78.2from the employer. 78.3(d) If a salary warrant or check from which a deduction for the retirement fund was 78.4taken has been canceled or the amount of the warrant or if a check has been returned to 78.5the funds of the employing unit making the payment, a refund of the amount deducted, 78.6or any portion of it that is required to adjust the salary deductions, must be made to the 78.7employing unit. 78.8(e) Erroneous direct payments of member-paid contributions or erroneous salary 78.9deductions that were not refunded during the regular payroll cycle processing must be 78.10refunded to the member, plus interest computed using the rate and method specified in 78.11section 354.49, subdivision 2. 78.12(f) Any refund under this subdivision that would cause the plan to fail to be a 78.13qualified plan under section 401(a) of the Internal Revenue Code, as amended, may not 78.14be refunded and instead must be credited against future contributions payable by the 78.15employer. The employer is responsible for refunding to the applicable employee any 78.16amount that was erroneously deducted from the salary of the employee, with interest as 78.17specified in paragraph (e). 78.18 new text begin (g) If erroneous employee deductions and employer contributions are caused by an new text end 78.19 new text begin error in plan coverage involving the plan and any other plan specified in section 356.99, new text end 78.20 new text begin that section applies. new text end 78.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 78.22    Sec. 14. Minnesota Statutes 2008, section 354A.12, is amended by adding a 78.23subdivision to read: 78.24     new text begin Subd. 6a. new text end new text begin Erroneous salary deductions or direct payments. new text end new text begin If erroneous new text end 78.25 new text begin employee deductions and employer contributions reflect a plan coverage error involving new text end 78.26 new text begin any plan covered by this chapter and any plan specified in section 356.99, that section new text end 78.27 new text begin applies. new text end 78.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 78.29    Sec. 15. Minnesota Statutes 2008, section 356.24, subdivision 1, is amended to read: 78.30    Subdivision 1. Restriction; exceptions. (a) It is unlawful for a school district 78.31or other governmental subdivision or state agency to levy taxes for, or to contribute 78.32public funds to a supplemental pension or deferred compensation plan that is established, 79.1maintained, and operated in addition to a primary pension program for the benefit of the 79.2governmental subdivision employees other than: 79.3    (1) to a supplemental pension plan that was established, maintained, and operated 79.4before May 6, 1971; 79.5    (2) to a plan that provides solely for group health, hospital, disability, or death 79.6benefits; 79.7    (3) to the individual retirement account plan established by chapter 354B; 79.8    (4) to a plan that provides solely for severance pay under section 465.72 to a retiring 79.9or terminating employee; 79.10    (5) for employees other than personnel employed by the Board of Trustees of the 79.11Minnesota State Colleges and Universities and covered under the Higher Education 79.12Supplemental Retirement Plan under chapter 354C, but including city managers covered 79.13by an alternative retirement arrangement under section 353.028, subdivision 3, paragraph 79.14(a), or by the defined contribution plan of the Public Employees Retirement Association 79.15under section 353.028, subdivision 3, paragraph (b), if the supplemental plan coverage is 79.16provided for in a personnel policy of the public employer or in the collective bargaining 79.17agreement between the public employer and the exclusive representative of public 79.18employees in an appropriate unit or in the individual employment contract between a city 79.19and a city manager, and if for each available investment all fees and historic rates of return 79.20for the prior one-, three-, five-, and ten-year periods, or since inception, are disclosed in an 79.21easily comprehended document not to exceed two pages, in an amount matching employee 79.22contributions on a dollar for dollar basis, but not to exceed an employer contribution of 79.23one-half of the available elective deferral permitted per year per employee, under the 79.24Internal Revenue Code: 79.25    (i) to the state of Minnesota deferred compensation plan under section 352.965; 79.26    (ii) in payment of the applicable portion of the contribution made to any investment 79.27eligible under section 403(b) of the Internal Revenue Code, if the employing unit has 79.28complied with any applicable pension plan provisions of the Internal Revenue Code with 79.29respect to the tax-sheltered annuity program during the preceding calendar year; or 79.30    (iii) any other deferred compensation plan offered by the employer under section 79.31457 of the Internal Revenue Code; 79.32    (6) for personnel employed by the Board of Trustees of the Minnesota State Colleges 79.33and Universities and not covered by clause (5), to the supplemental retirement plan under 79.34chapter 354C, if the supplemental plan coverage is provided for in a personnel policy 79.35or in the collective bargaining agreement of the public employer with the exclusive 79.36representative of the covered employees in an appropriate unit, in an amount matching 80.1employee contributions on a dollar for dollar basis, but not to exceed an employer 80.2contribution of $2,700 a year for each employee; 80.3    (7) to a supplemental plan or to a governmental trust to save for postretirement 80.4health care expenses qualified for tax-preferred treatment under the Internal Revenue 80.5Code, if the supplemental plan coverage is provided for in a personnel policy or in the 80.6collective bargaining agreement of a public employer with the exclusive representative of 80.7the covered employees in an appropriate unit; 80.8    (8) to the laborers national industrial pension fund or to a laborers local pension 80.9fund for the employees of a governmental subdivision who are covered by a collective 80.10bargaining agreement that provides for coverage by that fund and that sets forth a fund 80.11contribution rate, but not to exceed an employer contribution of $5,000 per year per 80.12employee; 80.13    (9) to the plumbers and pipefitters national pension fund or to a plumbers and 80.14pipefitters local pension fund for the employees of a governmental subdivision who are 80.15covered by a collective bargaining agreement that provides for coverage by that fund and 80.16that sets forth a fund contribution rate, but not to exceed an employer contribution of 80.17$5,000 per year per employee; 80.18    (10) to the international union of operating engineers pension fund for the employees 80.19of a governmental subdivision who are covered by a collective bargaining agreement that 80.20provides for coverage by that fund and that sets forth a fund contribution rate, but not to 80.21exceed an employer contribution of $5,000 per year per employee; 80.22    (11) to a supplemental plan organized and operated under the federal Internal 80.23Revenue Code, as amended, that is wholly and solely funded by the employee's 80.24accumulated sick leave, accumulated vacation leave, and accumulated severance pay; 80.25    (12) to the International Association of Machinists national pension fund for the 80.26employees of a governmental subdivision who are covered by a collective bargaining 80.27agreement that provides for coverage by that fund and that sets forth a fund contribution 80.28rate, but not to exceed an employer contribution of $5,000 per year per employee; or 80.29    (13) for employees of United Hospital District, Blue Earth, to the state of Minnesota 80.30deferred compensation program, if the employee makes a contribution, in an amount that 80.31does not exceed the total percentage of covered salary under section 353.27, subdivisions 80.323 and 3a. 80.33    (b) No governmental subdivision may make a contribution to a deferred 80.34compensation plan operating under section 457 of the Internal Revenue Code for volunteer 80.35or emergency on-call firefighters in lieu of providing retirement coverage under the federal 80.36Old Age, Survivors, and Disability Insurance Program. 81.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 81.2    Sec. 16. Minnesota Statutes 2008, section 356.50, subdivision 4, is amended to read: 81.3    Subd. 4. Annuity repayment. Notwithstanding subdivisions 1 and 2, if after being 81.4discharged, the person commences receipt of an annuity from the applicable plan, and it is 81.5later determined that the person was wrongfully discharged, the person shall repay the 81.6annuity received in a lump sum within 60 days of receipt of the back pay award. If the 81.7annuity is not repaid, the person is not entitled to reinstatement in the applicable plan as 81.8an active member, the person is not authorized to make payments under subdivision 2, 81.9paragraph (a), and, for subsequent employment with the employer, the person shall be 81.10treated as a reemployed annuitant. 81.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 81.12CORRECTION OF PLAN COVERAGE ERRORS 81.13    Sec. 17. new text begin [356.99] CORRECTION OF ERRONEOUS DEFINED BENEFIT PLAN new text end 81.14 new text begin COVERAGE. new text end 81.15     new text begin Subdivision 1. new text end new text begin Definitions. new text end new text begin (a) For purposes of this section, the terms in paragraphs new text end 81.16 new text begin (b) to (e) have the meanings given them. new text end 81.17 new text begin (b) "Chief administrative officer" means the person selected or elected by the new text end 81.18 new text begin governing board of a covered pension plan with primary responsibility to administer the new text end 81.19 new text begin covered pension plan, or that person's designee or representative. new text end 81.20 new text begin (c) "Covered pension plan" means a plan enumerated in section 356.30, subdivision new text end 81.21 new text begin 3, except clauses (3), (5), (6), and (11). new text end 81.22 new text begin (d) "Governing board" means the governing board of the Minnesota State Retirement new text end 81.23 new text begin System, the Public Employees Retirement Association, the Teachers Retirement new text end 81.24 new text begin Association, the Duluth Teachers Retirement Fund Association, or the St. Paul Teachers new text end 81.25 new text begin Retirement Fund Association. new text end 81.26 new text begin (e) "Member" means an active plan member in a covered pension plan. new text end 81.27     new text begin Subd. 2. new text end new text begin Treatment of terminated employee coverage error. new text end new text begin Any person new text end 81.28 new text begin who terminated the erroneously covered service before a chief administrative officer new text end 81.29 new text begin determined the covered pension plan coverage was in error retains the coverage with the new text end 81.30 new text begin plan that originally credited the service. new text end 81.31     new text begin Subd. 3. new text end new text begin Active employee correction of prospective service coverage. new text end new text begin Upon new text end 81.32 new text begin determination by a chief administrative officer that a member is covered by the wrong new text end 81.33 new text begin pension plan, the employer must stop remitting the erroneous employee deductions and new text end 82.1 new text begin employer contributions and report the employee to the correct covered pension plan for all new text end 82.2 new text begin subsequent service. new text end 82.3     new text begin Subd. 4. new text end new text begin Active employee treatment of past service. new text end new text begin Any plan member, with past new text end 82.4 new text begin service credited in an erroneous plan, retains the coverage for that past service with the new text end 82.5 new text begin plan that originally credited that service if the reporting error began earlier than two new text end 82.6 new text begin fiscal years prior to the current fiscal year in which the error was determined by the chief new text end 82.7 new text begin administrative officer. If the reporting error began within two fiscal years prior to the new text end 82.8 new text begin current fiscal year, the pension plan coverage for that past service must be corrected as new text end 82.9 new text begin provided in subdivision 5. new text end 82.10     new text begin Subd. 5. new text end new text begin Past service transfer procedure. new text end new text begin (a) For cases under subdivision 4 new text end 82.11 new text begin requiring correction of prior service coverage, on behalf of the applicable member the new text end 82.12 new text begin chief administrative officer of the covered pension plan fund that has received erroneous new text end 82.13 new text begin employee deductions and employer contributions must transfer to the appropriate covered new text end 82.14 new text begin retirement plan fund an amount which is the lesser of all contributions made by or on new text end 82.15 new text begin behalf of the member for the period of erroneous membership, or the specific amount new text end 82.16 new text begin requested by the chief administrative officer of the other covered pension plan which new text end 82.17 new text begin represents the employee deductions and employer contributions that would have been new text end 82.18 new text begin made had the member been properly reported. new text end 82.19 new text begin (b) If excess employee deductions remain in the member's account after the transfer new text end 82.20 new text begin of funds, the remaining erroneous amount must be refunded to the person with interest new text end 82.21 new text begin at the rate provided under the general refund law of the applicable covered pension new text end 82.22 new text begin plan. The chief administrative officer must also return any remaining excess employer new text end 82.23 new text begin contributions by providing to the employer a credit against future contributions payable by new text end 82.24 new text begin that employer. new text end 82.25 new text begin (c) If the contributions transferred to the correct covered pension plan fund are less new text end 82.26 new text begin than the amounts required for the period being corrected, the chief administrative officer new text end 82.27 new text begin of the correct covered pension plan fund must collect the remaining employee deductions new text end 82.28 new text begin and employer contributions from the employer under laws for recovering deficient new text end 82.29 new text begin contributions applicable to the correct covered pension plan, except that no interest is new text end 82.30 new text begin chargeable if the additional amounts due under this paragraph are received by the chief new text end 82.31 new text begin administrative officer within 30 days of notifying the employer of the amount due. new text end 82.32 new text begin (d) A potential transfer under this section that would cause a plan to fail to be a new text end 82.33 new text begin qualified plan under section 401(a) of the Internal Revenue Code, as amended, must not be new text end 82.34 new text begin made. Within 30 days after being notified by a chief administrative officer of an unmade new text end 82.35 new text begin potential transfer under this section, the employer of the member must transmit an amount new text end 82.36 new text begin representing the applicable salary deductions and employer contributions, without interest, new text end 83.1 new text begin to the fund of the appropriate covered pension plan. The chief administrative officer of the new text end 83.2 new text begin covered pension plan which erroneously provided coverage must provide to the employer new text end 83.3 new text begin a credit for the amount of the erroneous salary deductions and employer contributions new text end 83.4 new text begin against future contributions from that employer. new text end 83.5 new text begin (e) Upon transfer of the required assets, or payment from the employer under new text end 83.6 new text begin paragraph (d), whichever is applicable, allowable service and salary credit for the period new text end 83.7 new text begin being transferred is forfeited in the erroneous plan and is granted in the correct plan. new text end 83.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 83.9    Sec. 18. Minnesota Statutes 2008, section 490.123, is amended by adding a subdivision 83.10to read: 83.11     new text begin Subd. 4. new text end new text begin Correction of contribution errors. new text end new text begin (a) If erroneous employee deductions new text end 83.12 new text begin and employer contributions are caused by an error in plan coverage involving the judges new text end 83.13 new text begin retirement plan and any other plan specified in section 356.99, that section applies. new text end 83.14 new text begin (b) The provisions of section 352.04, subdivisions 8 and 9, apply to the judges' new text end 83.15 new text begin retirement plan, except that if employee deductions or contributions are erroneously new text end 83.16 new text begin transmitted to the judges' retirement fund for service rendered after the service credit limit new text end 83.17 new text begin under section 490.121, subdivision 22, has been attained, consistent with section 352D.04, new text end 83.18 new text begin subdivision 2, no employer contributions may be transferred. new text end 83.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 83.20    Sec. 19. new text begin REPEALER. new text end 83.21 new text begin Minnesota Statutes 2008, sections 352.91, subdivision 5; and 353.88, new text end new text begin are repealed. new text end 83.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 83.23ARTICLE 3 83.24MINNESOTA STATE DEFERRED COMPENSATION PLAN AMENDMENTS 83.25    Section 1. Minnesota Statutes 2008, section 352.965, subdivision 6, is amended to read: 83.26    Subd. 6. Plan administrative expenses. (a) The reasonable and necessary 83.27administrative expenses of the deferred compensation plan may be charged to plan 83.28participants in the form of an annual fee, an asset-based fee, a percentage of the 83.29contributions to the plan, or a combination thereof, as set forth in the plan document. The 83.30executive director of the system at the direction of the board of directors shall establish 83.31procedures to carry out this section including allocation of administrative costs of the plan 84.1to participants. Processes and procedures shall be set forth in the plan document. Fees 84.2cannot be charged on contributions and investment returns attributable to contributions 84.3made to the Minnesota supplemental investment funds before July 1, 1992. 84.4    (b) The plan document must conform to federal and state tax laws, regulations, and 84.5rulings, and is not subject to the Administrative Procedure Act. 84.6    (c) The executive director may contract with a third party to perform administrative 84.7and record keeping functions. The executive director may solicit bids and negotiate such 84.8contracts. new text begin Participating employers must provide the necessary data to the third-party new text end 84.9 new text begin record keeper as determined by the executive director. The third-party record keeper and new text end 84.10 new text begin the Minnesota State Retirement System shall follow the data privacy provisions under new text end 84.11 new text begin chapter 13. The third-party record keeper may not solicit participants for any product or new text end 84.12 new text begin services not related to the deferred compensation plan. new text end 84.13    (d) The board of directors may authorize a third-party investment consultant 84.14to provide investment information and advice, provided that new text begin if new text end the offering of such 84.15information and advice is consistent with the investment advice requirements applicable 84.16to private plans under Title VI, subtitle A, of the Pension Protection Act of 2006, Public 84.17Law 109-280, section 601. 84.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 84.19ARTICLE 4 84.20MSRS UNCLASSIFIED STATE EMPLOYEES RETIREMENT 84.21PROGRAM AMENDMENTS 84.22    Section 1. Minnesota Statutes 2008, section 3A.07, is amended to read: 84.233A.07 APPLICATION. 84.24    (a) Except as provided in paragraph (b) new text begin or (d) new text end , this chapter applies to members 84.25of the legislature in service after July 1, 1965, who otherwise meet the requirements 84.26of this chapter. 84.27    (b) Members of the legislature who were elected for the first time after June 30, 84.281997, or members of the legislature who were elected before July 1, 1997, and who, after 84.29July 1, 1998, elect not to be members of the plan established by this chapter are covered 84.30by the unclassified employees retirement program governed by chapter 352D. 84.31    (c) The post-July 1, 1998, coverage election under paragraph (b) is irrevocable 84.32and must be made on a form prescribed by the director. The second chance referendum 84.33election under Laws 2002, chapter 392, article 15, also is irrevocable. 85.1 new text begin (d) Members of the legislature who are covered by the retirement plan governed by new text end 85.2 new text begin this chapter on July 1, 2010, may, on or before the end of the member's seventh year of new text end 85.3 new text begin legislative service or January 1, 2011, whichever is later, elect to have future retirement new text end 85.4 new text begin coverage by either the general state employees retirement plan governed by chapter 352 new text end 85.5 new text begin or the unclassified state employees retirement program governed by chapter 352D. The new text end 85.6 new text begin election must be made on a form prescribed by the director and is irrevocable. new text end 85.7    Sec. 2. Minnesota Statutes 2008, section 352.01, subdivision 2a, is amended to read: 85.8    Subd. 2a. Included employees. (a) "State employee" includes: 85.9    (1) employees of the Minnesota Historical Society; 85.10    (2) employees of the State Horticultural Society; 85.11    (3) employees of the Minnesota Crop Improvement Association; 85.12    (4) employees of the adjutant general who are paid from federal funds and who are 85.13not covered by any federal civilian employees retirement system; 85.14    (5) employees of the Minnesota State Colleges and Universities employed under the 85.15university or college activities program; 85.16    (6) currently contributing employees covered by the system who are temporarily 85.17employed by the legislature during a legislative session or any currently contributing 85.18employee employed for any special service as defined in subdivision 2b, clause (8); 85.19    (7) employees of the legislature appointed without a limit on the duration of their 85.20employment and persons employed or designated by the legislature or by a legislative 85.21committee or commission or other competent authority to conduct a special inquiry, 85.22investigation, examination, or installation; 85.23    (8) trainees who are employed on a full-time established training program 85.24performing the duties of the classified position for which they will be eligible to receive 85.25immediate appointment at the completion of the training period; 85.26    (9) employees of the Minnesota Safety Council; 85.27    (10) any employees on authorized leave of absence from the Transit Operating 85.28Division of the former Metropolitan Transit Commission who are employed by the 85.29labor organization which is the exclusive bargaining agent representing employees of 85.30the Transit Operating Division; 85.31    (11) employees of the Metropolitan Council, Metropolitan Parks and Open Space 85.32Commission, Metropolitan Sports Facilities Commission, Metropolitan Mosquito Control 85.33Commission, or Metropolitan Radio Board unless excluded or covered by another public 85.34pension fund or plan under section 473.415, subdivision 3; 85.35    (12) judges of the Tax Court; 86.1    (13) personnel employed on June 30, 1992, by the University of Minnesota in the 86.2management, operation, or maintenance of its heating plant facilities, whose employment 86.3transfers to an employer assuming operation of the heating plant facilities, so long as the 86.4person is employed at the University of Minnesota heating plant by that employer or by its 86.5successor organization; 86.6    (14) seasonal help in the classified service employed by the Department of Revenue; 86.7    (15) persons employed by the Department of Commerce as a peace officer in 86.8the Insurance Fraud Prevention Division under section 45.0135 who have attained the 86.9mandatory retirement age specified in section 43A.34, subdivision 4; 86.10    (16) employees of the University of Minnesota unless excluded under subdivision 86.112b, clause (3); 86.12    (17) employees of the Middle Management Association whose employment began 86.13after July 1, 2007, and to whom section 352.029 does not apply; and 86.14    (18) employees of the Minnesota Government Engineers Council to whom section 86.15352.029 does not apply. new text begin ; and new text end 86.16 new text begin (19) employees who have elected to transfer past service to the general employees new text end 86.17 new text begin retirement plan under section 352D.02, subdivision 1d, paragraph (a), or who have not new text end 86.18 new text begin elected to transfer to the unclassified program under section 352D.02, subdivision 1d, new text end 86.19 new text begin paragraph (b). new text end 86.20    (b) Employees specified in paragraph (a), clause (13), are included employees under 86.21paragraph (a) if employer and employee contributions are made in a timely manner in the 86.22amounts required by section 352.04. Employee contributions must be deducted from 86.23salary. Employer contributions are the sole obligation of the employer assuming operation 86.24of the University of Minnesota heating plant facilities or any successor organizations to 86.25that employer. 86.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective June 30, 2010. new text end 86.27    Sec. 3. Minnesota Statutes 2009 Supplement, section 352.01, subdivision 2b, is 86.28amended to read: 86.29    Subd. 2b. Excluded employees. "State employee" does not include: 86.30    (1) students new text begin who are new text end employed by the University of Minnesota, or the state colleges 86.31and universities, unless approved for coverage by the Board of Regents of the University 86.32of Minnesota or the Board of Trustees of the Minnesota State Colleges and Universities, 86.33whichever is applicable; 86.34    (2) employees who are eligible for membership in the state Teachers Retirement 86.35Association, except employees of the Department of Education who have chosen or may 87.1choose to be covered by the general state employees retirement plan of the Minnesota 87.2State Retirement System instead of the Teachers Retirement Association; 87.3    (3) employees of the University of Minnesota who are excluded from coverage by 87.4action of the Board of Regents; 87.5    (4) officers and enlisted personnel in the National Guard and the naval militia who 87.6are assigned to permanent peacetime duty and who under federal law are or are required to 87.7be members of a federal retirement system; 87.8    (5) election officers; 87.9    (6) persons who are engaged in public work for the state but who are employed 87.10by contractors when the performance of the contract is authorized by the legislature or 87.11other competent authority; 87.12    (7) officers and employees of the senate, or of the house of representatives, or of a 87.13legislative committee or commission who are temporarily employed; 87.14    (8) receivers, jurors, notaries public, and court employees who are not in the judicial 87.15branch as defined in section 43A.02, subdivision 25, except referees and adjusters 87.16employed by the Department of Labor and Industry; 87.17    (9) patient and inmate help new text begin who perform services new text end in state charitable, penal, and 87.18correctional institutions including the Minnesota Veterans Home; 87.19    (10) persons who are employed for professional services where the service is 87.20incidental to their regular professional duties and whose compensation is paid on a per 87.21diem basis; 87.22    (11) employees of the Sibley House Association; 87.23    (12) the members of any state board or commission who serve the state intermittently 87.24and are paid on a per diem basis; the secretary, secretary-treasurer, and treasurer of those 87.25boards if their compensation is $5,000 or less per year, or, if they are legally prohibited 87.26from serving more than three years; and the board of managers of the State Agricultural 87.27Society and its treasurer unless the treasurer is also its full-time secretary; 87.28    (13) state troopers and persons who are described in section 352B.011, subdivision 87.2910 , clauses (2) to (8); 87.30    (14) temporary employees of the Minnesota State Fair who are employed on or 87.31after July 1 for a period not to extend beyond October 15 of that year; and persons who 87.32are employed at any time by the state fair administration for special events held on the 87.33fairgrounds; 87.34    (15) emergency employees who are in the classified service; except that if an 87.35emergency employee, within the same pay period, becomes a provisional or probationary 88.1employee on other than a temporary basis, the employee must be considered a "state 88.2employee" retroactively to the beginning of the pay period; 88.3    (16) temporary employees in the classified service, and temporary employees in the 88.4unclassified service who are appointed for a definite period of not more than six months 88.5and who are employed less than six months in any one-year period; 88.6    (17) interns new text begin who are new text end hired for six months or less and trainee employees, except 88.7those listed in subdivision 2a, clause (8); 88.8    (18) persons whose compensation is paid on a fee basis or as an independent 88.9contractor; 88.10    (19) state employees who are employed by the Board of Trustees of the Minnesota 88.11State Colleges and Universities in unclassified positions enumerated in section 43A.08, 88.12subdivision 1 , clause (9); 88.13    (20) state employees who in any year have credit for 12 months service as teachers 88.14in the public schools of the state and as teachers are members of the Teachers Retirement 88.15Association or a retirement system in St. Paul, Minneapolis, or Duluth, except for 88.16incidental employment as a state employee that is not covered by one of the teacher 88.17retirement associations or systems; 88.18    (21) employees of the adjutant general who are employed on an unlimited 88.19intermittent or temporary basis in the classified or unclassified service for the support of 88.20Army and Air National Guard training facilities; 88.21    (22) chaplains and nuns who are excluded from coverage under the federal Old 88.22Age, Survivors, Disability, and Health Insurance Program for the performance of service 88.23as specified in United States Code, title 42, section 410(a)(8)(A), as amended, if no 88.24irrevocable election of coverage has been made under section 3121(r) of the Internal 88.25Revenue Code of 1986, as amended through December 31, 1992; 88.26    (23) examination monitors who are employed by departments, agencies, 88.27commissions, and boards to conduct examinations required by law; 88.28    (24) persons who are appointed to serve as members of fact-finding commissions or 88.29adjustment panels, arbitrators, or labor referees under chapter 179; 88.30    (25) temporary employees who are employed for limited periods under any state or 88.31federal program for training or rehabilitation, including persons who are employed for 88.32limited periods from areas of economic distress, but not including skilled and supervisory 88.33personnel and persons having civil service status covered by the system; 88.34    (26) full-time students who are employed by the Minnesota Historical Society 88.35intermittently during part of the year and full-time during the summer months; 89.1    (27) temporary employees who are appointed for not more than six months, of 89.2the Metropolitan Council and of any of its statutory boards, if the board members are 89.3appointed by the Metropolitan Council; 89.4    (28) persons who are employed in positions designated by the Department of 89.5Management and Budget as student workers; 89.6    (29) members of trades who are employed by the successor to the Metropolitan 89.7Waste Control Commission, who have trade union pension plan coverage under a 89.8collective bargaining agreement, and who are first employed after June 1, 1977; 89.9    (30) off-duty peace officers while employed by the Metropolitan Council; 89.10    (31) persons who are employed as full-time police officers by the Metropolitan 89.11Council and as police officers are members of the public employees police and fire fund; 89.12    (32) persons who are employed as full-time firefighters by the Department of Military 89.13Affairs and as firefighters are members of the public employees police and fire fund; 89.14    (33) foreign citizens with new text begin who are employed under new text end a work permit of less than three 89.15years, or an H-1b/JV visa valid for less than three years of employment, unless notice of 89.16extension is supplied which allows them to work for three or more years as of the date 89.17 new text begin that new text end the extension is granted, in which case they are eligible for coverage from the date 89.18extended; and 89.19    (34) persons who are employed by the Board of Trustees of the Minnesota State 89.20Colleges and Universities and who elected to remain members of the Public Employees 89.21Retirement Association or the Minneapolis Employees Retirement Fund, whichever 89.22applies, under Minnesota Statutes 1994, section 136C.75. new text begin ; and new text end 89.23 new text begin (35) employees who have elected to transfer service to the unclassified program new text end 89.24 new text begin under section 352D.02, subdivision 1d, paragraph (b). new text end 89.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective June 30, 2010. new text end 89.26    Sec. 4. Minnesota Statutes 2008, section 352D.015, subdivision 4, is amended to read: 89.27    Subd. 4. General fund. "General fund" means the general state employees 89.28retirement fund except the moneys for the unclassified program new text begin under chapter 352 new text end . 89.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective June 30, 2010. new text end 89.30    Sec. 5. Minnesota Statutes 2008, section 352D.015, is amended by adding a 89.31subdivision to read: 89.32     new text begin Subd. 4a. new text end new text begin General employees retirement plan. new text end new text begin "General employees retirement new text end 89.33 new text begin plan" means the general state employees retirement plan under chapter 352. new text end 90.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective June 30, 2010. new text end 90.2    Sec. 6. Minnesota Statutes 2008, section 352D.015, subdivision 9, is amended to read: 90.3    Subd. 9. Value. "Value" means cash value at the end of the month following receipt 90.4of an application. If no application is required, "value" means the cash value at the end 90.5of the month in which the event necessitating the transfer occurs new text begin the market value of the new text end 90.6 new text begin account at the end of the United States investment market day new text end . 90.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 90.8    Sec. 7. Minnesota Statutes 2008, section 352D.02, subdivision 1, is amended to read: 90.9    Subdivision 1. Coverage. (a) new text begin Employees enumerated in paragraph (b), clause new text end 90.10 new text begin (1), are participants in the unclassified program under this chapter. Persons referenced new text end 90.11 new text begin in paragraph (b), clause (15), are participants in the unclassified program under this new text end 90.12 new text begin chapter for judicial employment in excess of the service credit limit in section 490.121, new text end 90.13 new text begin subdivision 22. new text end Employees enumerated in paragraph (c) new text begin (b) new text end , clauses (2), (3), (4), (6) to 90.14(14), and (16) to (18), new text begin clauses (2) to (14) and (16) to (18), new text end if they are in the unclassified 90.15service of the state or Metropolitan Council and are eligible for coverage under the general 90.16state employees retirement plan under chapter 352, are participants in the unclassified 90.17program under this chapter unless the employee gives notice to the executive director of 90.18the Minnesota State Retirement System within one year following the commencement 90.19of employment in the unclassified service that the employee desires coverage under the 90.20general state employees retirement plan. For the purposes of this chapter, an employee 90.21who does not file notice with the executive director is deemed to have exercised the option 90.22to participate in the unclassified program. 90.23    (b) Persons referenced in paragraph (c), clause (5), are participants in the unclassified 90.24program under this chapter unless the person was eligible to elect different coverage under 90.25section and elected retirement coverage by the applicable alternative retirement 90.26plan. Persons referenced in paragraph (c), clause (15), are participants in the unclassified 90.27program under this chapter for judicial employment in excess of the service credit limit in 90.28section 490.121, subdivision 22. 90.29    (c) new text begin (b) new text end Enumerated employees and referenced persons are: 90.30    (1) the governor, the lieutenant governor, the secretary of state, the state auditor, 90.31and the attorney general; 90.32    (2) an employee in the Office of the Governor, Lieutenant Governor, Secretary 90.33of State, State Auditor, Attorney General; 90.34    (3) an employee of the State Board of Investment; 91.1    (4) the head of a department, division, or agency created by statute in the unclassified 91.2service, an acting department head subsequently appointed to the position, or an employee 91.3enumerated in section 15A.0815 or 15A.083, subdivision 4; 91.4    (5) a member of the legislature; 91.5    (6) a full-time unclassified employee of the legislature or a commission or agency of 91.6the legislature who is appointed without a limit on the duration of the employment or a 91.7temporary legislative employee having shares in the supplemental retirement fund as a 91.8result of former employment covered by this chapter, whether or not eligible for coverage 91.9under the Minnesota State Retirement System; 91.10    (7) a person who is employed in a position established under section 43A.08, 91.11subdivision 1 , clause (3), or in a position authorized under a statute creating or establishing 91.12a department or agency of the state, which is at the deputy or assistant head of department 91.13or agency or director level; 91.14    (8) the regional administrator, or executive director of the Metropolitan Council, 91.15general counsel, division directors, operations managers, and other positions as designated 91.16by the council, all of which may not exceed 27 positions at the council and the chair; 91.17    (9) the executive director, associate executive director, and not to exceed nine 91.18positions of the Minnesota Office of Higher Education in the unclassified service, as 91.19designated by the Minnesota Office of Higher Education before January 1, 1992, or 91.20subsequently redesignated with the approval of the board of directors of the Minnesota 91.21State Retirement System, unless the person has elected coverage by the individual 91.22retirement account plan under chapter 354B; 91.23    (10) the clerk of the appellate courts appointed under article VI, section 2, of the 91.24Constitution of the state of Minnesota, the state court administrator and judicial district 91.25administrators; 91.26    (11) the chief executive officers of correctional facilities operated by the Department 91.27of Corrections and of hospitals and nursing homes operated by the Department of Human 91.28Services; 91.29    (12) an employee whose principal employment is at the state ceremonial house; 91.30    (13) an employee of the Agricultural Utilization Research Institute; 91.31    (14) an employee of the State Lottery who is covered by the managerial plan 91.32established under section 43A.18, subdivision 3; 91.33    (15) a judge who has exceeded the service credit limit in section 490.121, 91.34subdivision 22 ; 91.35    (16) an employee of Enterprise Minnesota, Inc.; 92.1    (17) a person employed by the Minnesota State Colleges and Universities as faculty 92.2or in an eligible unclassified administrative position as defined in section 354B.20, 92.3subdivision 6, who was employed by the former state university or the former community 92.4college system before May 1, 1995, and elected unclassified program coverage prior to 92.5May 1, 1995; and 92.6    (18) a person employed by the Minnesota State Colleges and Universities who 92.7was employed in state service before July 1, 1995, who subsequently is employed in an 92.8eligible unclassified administrative position as defined in section 354B.20, subdivision 92.96, and who elects coverage by the unclassified program. 92.10    Sec. 8. Minnesota Statutes 2008, section 352D.02, subdivision 1c, is amended to read: 92.11    Subd. 1c. Transfer of contributions. An employee covered by the regular new text begin general new text end 92.12 new text begin employees retirement new text end plan who is subsequently employed as a full-time unclassified 92.13employee of the legislature or any commission or agency of the legislature without a 92.14limit on the duration of the employment may elect to transfer accumulated employee and 92.15matching employer contributions, as provided in section 352D.03. 92.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective June 30, 2010. new text end 92.17    Sec. 9. Minnesota Statutes 2008, section 352D.02, subdivision 2, is amended to read: 92.18    Subd. 2. Coverage upon employment change. A person becoming a participant 92.19in the unclassified program new text begin prior to July 1, 2010, new text end by virtue of employment in a position 92.20specified in subdivision 1, clause (4), and remaining in the unclassified service shall 92.21remain a participant in the program even though the position the person occupies is 92.22deleted from any of the sections referenced in subdivision 1, clause (4), by subsequent 92.23amendment, except that a person shall new text begin is new text end not be eligible to elect the unclassified program 92.24after separation from unclassified service if on the return of the person to service, that 92.25position is not specified in subdivision 1, clause (4). Any person employed in a position 92.26specified in subdivision 1 shall cease to participate in the unclassified program in the event 92.27 new text begin that new text end the position is placed in the classified service. 92.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective June 30, 2010. new text end 92.29    Sec. 10. Minnesota Statutes 2008, section 352D.02, subdivision 3, is amended to read: 92.30    Subd. 3. Transfer to general new text begin employees retirement new text end plan. (a) An employee 92.31 new text begin referred to in subdivision 1, paragraph (b), clauses (2) to (4), (6) to (14), and (16) to new text end 92.32 new text begin (18), who is new text end credited with employee shares in the unclassified program, after acquiring 93.1 new text begin and who has new text end credit for ten years of allowable service and new text begin , new text end not later than one month 93.2following the termination of covered employment, may elect to terminate participation 93.3in the unclassified program and be covered by the general new text begin employees retirement new text end plan by 93.4filing a written election with the executive director. new text begin if the employee was employed before new text end 93.5 new text begin July 1, 2010, and has at least ten years of allowable service as of the date of the election or new text end 93.6 new text begin if the employee was employed after June 30, 2010, and has no more than seven years of new text end 93.7 new text begin allowable service as of the date of the election. new text end 93.8 new text begin (b) A person referred to in subdivision 1, paragraph (b), clause (5), who is credited new text end 93.9 new text begin with employee shares in the unclassified program, and who has credit for allowable new text end 93.10 new text begin service, prior to the termination of service, may elect to terminate participation in the new text end 93.11 new text begin unclassified program and be covered by the general employees retirement plan by filing new text end 93.12 new text begin a written election with the executive director if the person first became covered by the new text end 93.13 new text begin unclassified program after June 30, 2010, and has no more than seven years of allowable new text end 93.14 new text begin service or if the person first became covered by the unclassified program before July 1, new text end 93.15 new text begin 2010, and makes the election to transfer on or before January 1, 2011. new text end 93.16 new text begin (c) If the transfer election is made, new text end the executive director shall then redeem the 93.17employee's total shares and shall credit to the employee's account in the general new text begin employees new text end 93.18 new text begin retirement new text end plan the amount of contributions that would have been so credited had the 93.19employee been covered by the general new text begin employees retirement new text end plan during the employee's 93.20entire covered employment new text begin or elective state service new text end . The balance of money so redeemed 93.21and not credited to the employee's account shall new text begin must new text end be transferred to the general 93.22 new text begin employees retirement new text end plan retirement fund, except that (1) the employee contribution paid 93.23to the unclassified program must be compared to (2) the employee contributions that 93.24would have been paid to the general new text begin employees retirement new text end plan for the comparable period, 93.25if the individual had been covered by that plan. If clause (1) is greater than clause (2), 93.26the difference must be refunded to the employee as provided in section 352.22. If clause 93.27(2) is greater than clause (1), the difference must be paid by the employee within six 93.28months of electing general new text begin employees retirement new text end plan coverage or before the effective 93.29date of the annuity, whichever is sooner. 93.30    (b) new text begin (d) new text end An election under paragraph (a) new text begin or (b) new text end to transfer coverage to the general 93.31 new text begin employees retirement new text end plan is irrevocable during any period of covered employment. 93.32 new text begin (e) A person referenced in subdivision 1, paragraph (b), clause (1) or (15), who is new text end 93.33 new text begin credited with employee shares in the unclassified program is not permitted to terminate new text end 93.34 new text begin participation in the unclassified program and be covered by the general employees new text end 93.35 new text begin retirement plan. new text end 93.36 new text begin EFFECTIVE DATE. new text end new text begin This section is effective June 30, 2010. new text end 94.1    Sec. 11. Minnesota Statutes 2008, section 352D.03, is amended to read: 94.2352D.03 TRANSFER OF ASSETS. 94.3Unless an eligible employee enumerated in section 352D.02, subdivision 1, has 94.4elected coverage under the individual retirement account plan under chapter 354B, a 94.5sum of money representing the assets credited to each employee exercising the option 94.6contained in section , plus an equal employer contribution together with interest 94.7 new text begin for an employee exercising an option under section 352D.02, an amount equal to the new text end 94.8 new text begin employee and employer contributions new text end for the employment period at the applicable 94.9preretirement interest actuarial assumption rate during this period new text begin plus six percent interest new text end , 94.10compounded annually, must be used for the purchase of shares on behalf of each employee 94.11in the accounts of the supplemental retirement fund established by section 11A.17. 94.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective June 30, 2010. new text end 94.13    Sec. 12. Minnesota Statutes 2008, section 352D.04, subdivision 1, is amended to read: 94.14    Subdivision 1. Investment options. (a) A person exercising an option to participate 94.15in the retirement program provided by this chapter may elect to purchase shares in one or 94.16a combination of the income share account, the growth share account, the international 94.17share account, the money market account, the bond market account, the fixed interest 94.18account, or the common stock index account established in section 11A.17. The person 94.19may elect to participate in one or more of the investment accounts in the fund by 94.20specifying, on a form provided new text begin in a manner prescribed new text end by the executive director, the 94.21percentage of the person's contributions provided in subdivision 2 to be used to purchase 94.22shares in each of the accounts. 94.23(b) A participant may indicate in writing on forms provided new text begin , in a manner prescribed new text end 94.24by the Minnesota State Retirement System a choice of options new text begin executive director, choose new text end 94.25 new text begin their investment allocation new text end for subsequent purchases of shares. Until a different written 94.26indication is made by the participant, the executive director shall purchase shares in the 94.27supplemental fund as selected by the participant. If no initial option is chosen, 100 percent 94.28income shares must be purchased for a participant. A change in choice of investment 94.29option is effective no later than the first pay date first occurring after 30 days following the 94.30receipt of the request for a change new text begin at the end of the most recent United States investment new text end 94.31 new text begin market day new text end . 94.32(c) Shares in the fixed interest account attributable to any guaranteed investment 94.33contract as of July 1, 1994, may not be withdrawn from the fund or transferred to another 94.34account until the guaranteed investment contract has expired, unless the participant 95.1qualifies for withdrawal under section or for benefit payments under sections 95.2 to . 95.3(d) new text begin (c) new text end A participant or former participant may also change the investment options 95.4selected for all or a portion of the participant's shares previously purchased in accounts, 95.5subject to the provisions of paragraph (c) concerning the fixed interest account. Changes 95.6in investment options for the participant's shares must be effected as soon as cash flow to 95.7an account practically permits, but not later than six months after the requested change new text begin new text end 95.8 new text begin trading restrictions imposed on the investment option new text end . 95.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 95.10    Sec. 13. Minnesota Statutes 2008, section 352D.04, subdivision 2, is amended to read: 95.11     Subd. 2. Contribution rates. (a) The money used to purchase shares under this 95.12section is the employee and employer contributions provided in this subdivision. 95.13     (b) The employee contribution is an amount equal to four new text begin the new text end percent of salary new text begin new text end 95.14 new text begin specified in section 352.04, subdivision 2, or 352.045, subdivision 3 new text end . 95.15     (c) The employer contribution is an amount equal to six percent of salary. 95.16     (d) For members of the legislature, the contributions under this subdivision also must 95.17be made on per diem payments received during a regular or special legislative session, but 95.18may not be made on per diem payments received outside of a regular or special legislative 95.19session, on the additional compensation attributable to a leadership position under section 95.203.099 , subdivision 3, living expense payments under section 3.101, or special session 95.21living expense payments under section 3.103. 95.22    (e) For a judge who is a member of the unclassified plan under section 352D.02, 95.23subdivision 1, paragraph (c), clause (16), the employee contribution rate is eight percent 95.24of salary, and there is no employer contribution. 95.25(f) These contributions must be made in the manner provided in section 352.04, 95.26subdivisions 4, 5, and 6. 95.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the first day of the first full pay new text end 95.28 new text begin period beginning after July 1, 2010. new text end 95.29    Sec. 14. Minnesota Statutes 2008, section 352D.05, subdivision 3, is amended to read: 95.30    Subd. 3. Full or partial withdrawal. After termination of covered employment 95.31or at any time thereafter, a participant is entitled, upon application, to withdraw the cash 95.32value of the participant's total shares or leave such shares on deposit with the supplemental 95.33retirement fund. The account is valued at the end of the month in which new text begin most recent new text end 96.1 new text begin United States investment market day following receipt of the new text end application for withdrawal is 96.2made. Shares not withdrawn remain on deposit with the supplemental retirement fund 96.3until the former participant becomes at least 55 years old, and applies for an annuity under 96.4section 352D.06, subdivision 1. 96.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 96.6    Sec. 15. Minnesota Statutes 2008, section 352D.05, subdivision 4, is amended to read: 96.7    Subd. 4. Repayment of refund. (a) A participant in the unclassified program may 96.8repay regular refunds taken under section 352.22, as provided in section 352.23. 96.9(b) A participant in the unclassified program or an employee covered by the general 96.10 new text begin employees retirement new text end plan who has withdrawn the value of the total shares may repay 96.11the refund taken and thereupon restore the service credit, rights and benefits forfeited by 96.12paying into the fund the amount refunded plus interest at an annual rate of 8.5 percent 96.13compounded annually from the date that the refund was taken until the date that the refund 96.14is repaid. If the participant had withdrawn only the employee shares as permitted under 96.15prior laws, repayment must be pro rata. 96.16(c) Except as provided in section 356.441, the repayment of a refund under this 96.17section must be made in a lump sum. 96.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective June 30, 2010. new text end 96.19    Sec. 16. Minnesota Statutes 2008, section 352D.06, subdivision 3, is amended to read: 96.20    Subd. 3. Accrual date. An annuity under this section accrues the first day of the 96.21first full month after an application is received or the day following termination of state 96.22service, whichever is later. The account must be valued and redeemed on the later of the 96.23end of the month of termination of covered employment, or the end of the month of receipt 96.24of the annuity application for the purpose of computing the annuity new text begin day following receipt new text end 96.25 new text begin of the application or the day following termination, whichever is later. The benefit must be new text end 96.26 new text begin based on the value of the account the day following receipt of the application or the date of new text end 96.27 new text begin termination, whichever is later, plus any contributions and interest received after that date new text end . 96.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 96.29    Sec. 17. Minnesota Statutes 2008, section 352D.065, subdivision 3, is amended to read: 96.30    Subd. 3. Annuity payment. The annuity payable under this section shall begin new text begin new text end 96.31 new text begin begins new text end to accrue the first day of the month following the date of disability new text begin receipt of the new text end 96.32 new text begin application or the day after termination, whichever is later, plus any contributions and new text end 97.1 new text begin interest received after that date, new text end and shall new text begin must new text end be based on the participant's age when the 97.2annuity begins to accrue. The shares shall new text begin must new text end be valued as of the end of the month 97.3following authorization of payments new text begin day on which the benefit accrues new text end . 97.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 97.5    Sec. 18. Minnesota Statutes 2008, section 352D.09, subdivision 3, is amended to read: 97.6    Subd. 3. Prospectus. new text begin (a) new text end The executive director shall annually distribute new text begin make new text end 97.7 new text begin available by electronic means to each participant new text end the prospectus prepared by the 97.8supplemental fund, by July 1 or when received from such fund, whichever is later, to 97.9each participant in covered employment. 97.10 new text begin (b) Any participant may contact the Minnesota State Retirement System and request new text end 97.11 new text begin a copy of the prospectus. new text end 97.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 97.13    Sec. 19. Minnesota Statutes 2008, section 352D.09, subdivision 7, is amended to read: 97.14    Subd. 7. Administrative fees. The board of directors shall establish a budget and 97.15charge participants a new text begin reasonable new text end fee to pay the administrative expenses of the unclassified 97.16program. Fees cannot new text begin may not new text end be charged on contributions and investment returns 97.17attributable to contributions made before July 1, 1992. Annual total fees charged for plan 97.18administration cannot exceed 10/100 of one percent of the contributions and investment 97.19returns attributable to contributions made on or after July 1, 1992. 97.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 97.21ARTICLE 5 97.22PUBLIC EMPLOYEES RETIREMENT ASSOCIATION 97.23ADMINISTRATIVE PROVISIONS 97.24    Section 1. Minnesota Statutes 2009 Supplement, section 353.01, subdivision 2, is 97.25amended to read: 97.26    Subd. 2. Public employee. "Public employee" means a governmental employee 97.27 new text begin or a public officer new text end performing personal services for a governmental subdivision defined 97.28in subdivision 6, whose salary is paid, in whole or in part, from revenue derived from 97.29taxation, fees, assessments, or from other sources. new text begin For purposes of membership in the new text end 97.30 new text begin association, new text end the term includes the classes of persons described or listed in subdivision 97.312a new text begin and excludes the classes of persons listed in subdivision 2b new text end . The term also includes 98.1persons who elect association membership under subdivision 2d, paragraph (a), and 98.2persons for whom the applicable governmental subdivision had elected association 98.3membership under subdivision 2d, paragraph (b). The term excludes the classes of persons 98.4listed in subdivision 2b for purposes of membership in the association. 98.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 98.6    Sec. 2. Minnesota Statutes 2009 Supplement, section 353.01, subdivision 2a, is 98.7amended to read: 98.8    Subd. 2a. Included employees new text begin ; mandatory membership new text end . (a) Public employees 98.9whose salary from employment in one or more positions within one governmental 98.10subdivision exceeds $425 in any month shall participate as members of the association. 98.11If the salary is less than $425 in a subsequent month, the employee retains membership 98.12eligibility. Eligible Public employees shall new text begin whose salary exceeds $425 in any month and new text end 98.13 new text begin who are not specifically excluded under subdivision 2b or who have not been provided new text end 98.14 new text begin an option to participate under subdivision 2d, whether individually or by action of the new text end 98.15 new text begin governmental subdivision, must new text end participate as members of the association with retirement 98.16coverage by the public employees retirement plan or the public employees police and 98.17fire retirement plan under this chapter, or the local government correctional employees 98.18retirement plan under chapter 353E, whichever applies, new text begin . Membership commences new text end as a 98.19condition of their employment on the first day of new text begin their new text end employment unless they new text begin or on the new text end 98.20 new text begin first day that the eligibility criteria are met, whichever is later. Public employees include new text end 98.21 new text begin but are not limited to new text end : 98.22    (1) are specifically excluded under subdivision 2b; 98.23    (2) do not exercise their option to elect retirement coverage in the association as 98.24provided in subdivision 2d, paragraph (a); or 98.25    (3) are employees of the governmental subdivisions listed in subdivision 2d, 98.26paragraph (b), where the governmental subdivision has not elected to participate as a 98.27governmental subdivision covered by the association. 98.28 new text begin (1) persons whose salary meets the threshold in this paragraph from employment in new text end 98.29 new text begin one or more positions within one governmental subdivision; new text end 98.30 new text begin (2) elected county sheriffs; new text end 98.31 new text begin (3) persons who are appointed, employed, or contracted to perform governmental new text end 98.32 new text begin functions that by law or local ordinance are required of a public officer, including, but new text end 98.33 new text begin not limited to: new text end 98.34 new text begin (i) town and city clerk or treasurer; new text end 98.35 new text begin (ii) county auditor, treasurer, or recorder; new text end 99.1 new text begin (iii) city manager as defined in section 353.028 who does not exercise the option new text end 99.2 new text begin provided under subdivision 2d; or new text end 99.3 new text begin (iv) emergency management director, as provided under section 12.25; new text end 99.4 new text begin (4) physicians under section 353D.01, subdivision 2, who do not elect public new text end 99.5 new text begin employees defined contribution plan coverage under section 353D.02, subdivision 2; new text end 99.6 new text begin (5) full-time employees of the Dakota County Agricultural Society; and new text end 99.7 new text begin (6) employees of the Minneapolis Firefighters Relief Association or Minneapolis new text end 99.8 new text begin Police Relief Association who are not excluded employees under subdivision 2b due new text end 99.9 new text begin to coverage by the relief association pension plan and who elected general employee new text end 99.10 new text begin retirement plan coverage before August 20, 2009. new text end 99.11    (b) A public employee new text begin or elected official new text end who was a member of the association on 99.12June 30, 2002, based on employment that qualified for membership coverage by the public 99.13employees retirement plan or the public employees police and fire plan under this chapter, 99.14or the local government correctional employees retirement plan under chapter 353E as of 99.15June 30, 2002, retains that membership for the duration of the person's employment in that 99.16position or incumbency in elected office. Except as provided in subdivision 28, the person 99.17shall participate as a member until the employee or elected official terminates public 99.18employment under subdivision 11a or terminates membership under subdivision 11b. 99.19    (c) Public employees under paragraph (a) include: 99.20(1) physicians under section , subdivision 2, who do not elect public 99.21employees defined contribution plan coverage under section , subdivision 2; 99.22(2) full-time employees of the Dakota County Agricultural Society; and 99.23(3) employees of the Minneapolis Firefighters Relief Association or Minneapolis 99.24Police Relief Association who are not excluded employees under subdivision 2b due to 99.25coverage by the relief association pension plan and who elect Public Employee Retirement 99.26Association general plan coverage under Laws 2009, chapter 169, article 12, section 10. 99.27 new text begin (c) If the salary of an included public employee is less than $425 in any subsequent new text end 99.28 new text begin month, the member retains membership eligibility. new text end 99.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010, except that the new text end 99.30 new text begin amendment to paragraph (a), clause (3), applies to any person first appointed, elected, or new text end 99.31 new text begin contracted after June 30, 2010. new text end 99.32    Sec. 3. Minnesota Statutes 2008, section 353.01, subdivision 2b, is amended to read: 99.33    Subd. 2b. Excluded employees. new text begin (a) new text end The following public employees are not eligible 99.34to participate as members of the association with retirement coverage by the public new text begin general new text end 100.1employees retirement plan, the local government correctional employees retirement plan 100.2under chapter 353E, or the public employees police and fire retirement plan: 100.3    (1) new text begin persons whose salary from one governmental subdivision never exceeds $425 in new text end 100.4 new text begin a month; new text end 100.5 new text begin (2) new text end public officers, other than county sheriffs, who are elected to a governing body, 100.6 new text begin city mayors, new text end or persons who are appointed to fill a vacancy in an elective office of a 100.7governing body, whose term of office commences on or after July 1, 2002, for the service 100.8to be rendered in that elective position; 100.9    (2) new text begin (3) new text end election officers or election judges; 100.10    (3) new text begin (4) new text end patient and inmate personnel who perform services for a governmental 100.11subdivision; 100.12    (4) new text begin (5) new text end except as otherwise specified in subdivision 12a, employees who are hired 100.13for a temporary position as defined under subdivision 12a, and employees who resign 100.14from a nontemporary position and accept a temporary position within 30 days in the 100.15same governmental subdivision; 100.16    (5) new text begin (6) new text end employees who are employed by reason of work emergency caused by fire, 100.17flood, storm, or similar disaster; 100.18    (6) new text begin (7) new text end employees who by virtue of their employment in one governmental 100.19subdivision are required by law to be a member of and to contribute to any of the plans or 100.20funds administered by the Minnesota State Retirement System, the Teachers Retirement 100.21Association, the Duluth Teachers Retirement Fund Association, the St. Paul Teachers 100.22Retirement Fund Association, the Minneapolis Employees Retirement Fund, or any police 100.23or firefighters relief association governed by section 69.77 that has not consolidated 100.24with the Public Employees Retirement Association, or any local police or firefighters 100.25consolidation account who have not elected the type of benefit coverage provided by the 100.26public employees police and fire fund under sections 353A.01 to 353A.10, or any persons 100.27covered by section 353.665, subdivision 4, 5, or 6, who have not elected public employees 100.28police and fire plan benefit coverage. This clause must not be construed to prevent a person 100.29from being a member of and contributing to the Public Employees Retirement Association 100.30and also belonging to and contributing to another public pension plan or fund for other 100.31service occurring during the same period of time. A person who meets the definition of 100.32"public employee" in subdivision 2 by virtue of other service occurring during the same 100.33period of time becomes a member of the association unless contributions are made to 100.34another public retirement fund on the salary based on the other service or to the Teachers 100.35Retirement Association by a teacher as defined in section 354.05, subdivision 2; 101.1    (7) new text begin (8) new text end persons who are members of a religious order and are excluded from coverage 101.2under the federal Old Age, Survivors, Disability, and Health Insurance Program for the 101.3performance of service as specified in United States Code, title 42, section 410(a)(8)(A), 101.4as amended through January 1, 1987, if no irrevocable election of coverage has been made 101.5under section 3121(r) of the Internal Revenue Code of 1954, as amended; 101.6    (8) new text begin (9) new text end employees of a governmental subdivision who have not reached the age of 101.723 and are enrolled on a full-time basis to attend or are attending classes on a full-time 101.8basis at an accredited school, college, or university in an undergraduate, graduate, or 101.9professional-technical program, or a public or charter high school; 101.10    (9) new text begin (10) new text end resident physicians, medical interns, and pharmacist residents and 101.11pharmacist interns who are serving in a degree or residency program in public hospitals 101.12or clinics; 101.13    (10) new text begin (11) new text end students who are serving in an internship or residency program sponsored 101.14by an accredited educational institution; 101.15    (11) new text begin (12) new text end persons who hold a part-time adult supplementary technical college license 101.16who render part-time teaching service in a technical college; 101.17    (12) new text begin (13) new text end except for employees of Hennepin County or Hennepin Healthcare System, 101.18Inc., foreign citizens working for new text begin who are employed by new text end a governmental subdivision with new text begin new text end 101.19 new text begin under new text end a work permit of less than three years, or an H-1b visa valid new text begin initially issued or new text end 101.20 new text begin extended new text end for new text begin a combined period new text end less than three years of employment. Upon notice to the 101.21association that the work permit or visa extends new text begin extension of the employment new text end beyond the 101.22three-year period, the foreign citizens must be reported for membership from the date of 101.23the extension new text begin beginning the first of the month thereafter provided the monthly earnings new text end 101.24 new text begin threshold as provided under subdivision 2a is met new text end ; 101.25    (13) new text begin (14) new text end public hospital employees who elected not to participate as members 101.26of the association before 1972 and who did not elect to participate from July 1, 1988, 101.27to October 1, 1988; 101.28    (14) new text begin (15) new text end except as provided in section 353.86, volunteer ambulance service 101.29personnel, as defined in subdivision 35, but persons who serve as volunteer ambulance 101.30service personnel may still qualify as public employees under subdivision 2 and may be 101.31members of the Public Employees Retirement Association and participants in the public new text begin new text end 101.32 new text begin general new text end employees retirement fund new text begin plan new text end or the public employees police and fire fund new text begin plan new text end , 101.33whichever applies, on the basis of compensation received from public employment service 101.34other than service as volunteer ambulance service personnel; 101.35    (15) new text begin (16) new text end except as provided in section 353.87, volunteer firefighters, as defined 101.36in subdivision 36, engaging in activities undertaken as part of volunteer firefighter 102.1duties; provided that new text begin , but new text end a person who is a volunteer firefighter may still qualify as a 102.2public employee under subdivision 2 and may be a member of the Public Employees 102.3Retirement Association and a participant in the public new text begin general new text end employees retirement 102.4fund new text begin plan new text end or the public employees police and fire fund new text begin plan new text end , whichever applies, on the 102.5basis of compensation received from public employment activities other than those as a 102.6volunteer firefighter; 102.7    (16) new text begin (17) new text end pipefitters and associated trades personnel employed by Independent 102.8School District No. 625, St. Paul, with coverage under a collective bargaining agreement 102.9by the pipefitters local 455 pension plan who were either first employed after May 1, 102.101997, or, if first employed before May 2, 1997, elected to be excluded under Laws 1997, 102.11chapter 241, article 2, section 12; 102.12    (17) new text begin (18) new text end electrical workers, plumbers, carpenters, and associated trades personnel 102.13 new text begin who are new text end employed by Independent School District No. 625, St. Paul, or the city of St. 102.14Paul, who have retirement coverage under a collective bargaining agreement by the 102.15Electrical Workers Local 110 pension plan, the United Association Plumbers Local 34 102.16pension plan, or the new text begin pension plan applicable to new text end Carpenters Local 87 pension plan who 102.17were either first employed after May 1, 2000, or, if first employed before May 2, 2000, 102.18elected to be excluded under Laws 2000, chapter 461, article 7, section 5; 102.19    (18) new text begin (19) new text end bricklayers, allied craftworkers, cement masons, glaziers, glassworkers, 102.20painters, allied tradesworkers, and plasterers new text begin who are new text end employed by the city of St. Paul 102.21or Independent School District No. 625, St. Paul, with coverage under a collective 102.22bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan, 102.23the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324 102.24pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities 102.25Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if 102.26first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special 102.27Session chapter 10, article 10, section 6; 102.28    (19) new text begin (20) new text end plumbers new text begin who are new text end employed by the Metropolitan Airports Commission, 102.29with coverage under a collective bargaining agreement by the Plumbers Local 34 pension 102.30plan, who either were first employed after May 1, 2001, or if first employed before May 2, 102.312001, elected to be excluded under Laws 2001, First Special Session chapter 10, article 102.3210, section 6; 102.33    (20) new text begin (21) new text end employees who are hired after June 30, 2002, to fill seasonal positions 102.34under subdivision 12b which are limited in duration by the employer to 185 consecutive 102.35calendar days or less in each year of employment with the governmental subdivision; 103.1    (21) new text begin (22) new text end persons who are provided supported employment or work-study positions 103.2by a governmental subdivision and who participate in an employment or industries 103.3program maintained for the benefit of these persons where the governmental subdivision 103.4limits the position's duration to three years or less, including persons participating in a 103.5federal or state subsidized on-the-job training, work experience, senior citizen, youth, or 103.6unemployment relief program where the training or work experience is not provided as a 103.7part of, or for, future permanent public employment; 103.8    (22) new text begin (23) new text end independent contractors and the employees of independent contractors; and 103.9    (23) new text begin (24) new text end reemployed annuitants of the association during the course of that 103.10reemployment. new text begin ; and new text end 103.11 new text begin (25) persons appointed to serve on a board or commission of a governmental new text end 103.12 new text begin subdivision or an instrumentality thereof. new text end 103.13 new text begin (b) Any person performing the duties of a public officer in a position defined in new text end 103.14 new text begin subdivision 2a, paragraph (a), clause (3), is not an independent contractor and is not an new text end 103.15 new text begin employee of an independent contractor. new text end 103.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010, except that clause (25) new text end 103.17 new text begin is effective for persons first appointed after June 30, 2010. new text end 103.18    Sec. 4. Minnesota Statutes 2008, section 353.01, subdivision 2d, is amended to read: 103.19    Subd. 2d. Optional membership. (a) Membership in the association is optional 103.20by action of the individual employee for the following public employees who meet the 103.21conditions set forth in subdivision 2a: 103.22(1) members of the coordinated plan who are also employees of labor organizations 103.23as defined in section 353.017, subdivision 1, for their employment by the labor 103.24organization only, if they elect to have membership under section 353.017, subdivision 2; 103.25(2) persons who are elected or persons who are appointed to elected positions other 103.26than local governing body elected positions who elect to participate by filing a written 103.27election for membership; 103.28(3) members of the association who are appointed by the governor to be a state 103.29department head and who elect not to be covered by the general state employees retirement 103.30plan of the Minnesota State Retirement System under section 352.021; 103.31(4) city managers as defined in section 353.028, subdivision 1, who do not elect to be 103.32excluded from membership in the association under section 353.028, subdivision 2; and 103.33(5) employees of the Port Authority of the city of St. Paul on January 1, 2003, 103.34who were at least age 45 on that date, and who elected to participate by filing a written 103.35election for membership. 104.1(b) Membership in the association is optional by action of the governmental 104.2subdivision for the employees of the following governmental subdivisions under the 104.3conditions specified: 104.4(1) the Minnesota Association of Townships if the board of that association, at its 104.5option, certifies to the executive director that its employees who meet the conditions set 104.6forth in subdivision 2a are to be included for purposes of retirement coverage, in which 104.7case the status of the association as a participating employer is permanent; 104.8(2) a county historical society if the county in which the historical society is located, 104.9at its option, certifies to the executive director that the employees of the historical society 104.10who meet the conditions set forth in subdivision 2a are to be considered county employees 104.11for purposes of retirement coverage under this chapter. The status as a county employee 104.12must be accorded to all similarly situated county historical society employees and, once 104.13established, must continue as long as a person is an employee of the county historical 104.14society; and 104.15(3) Hennepin Healthcare System, Inc., a public corporation, with respect to 104.16employees other than paramedics, emergency medical technicians, and protection officers, 104.17if the corporate board establishes alternative retirement plans for certain classes of 104.18employees of the corporation and certifies to the association the applicable employees to 104.19be excluded from future retirement coverage. 104.20(c) For employees who are covered by paragraph (a), clause (1), (2), or (3), or 104.21covered by paragraph (b), clause (1) or (2), if the necessary membership election is 104.22not made, the employee is excluded from retirement coverage under this chapter. For 104.23employees who are covered by paragraph (a), clause (4), if the necessary election is not 104.24made, the employee must become a member and have retirement coverage under new text begin the new text end 104.25 new text begin applicable provisions of new text end this chapter. For employees specified in paragraph (b), clause 104.26(3), membership continues until the exclusion option is exercised for the designated class 104.27of employee. 104.28 new text begin (d) new text end The option to become a member, once exercised under this subdivision, may not 104.29be withdrawn until the termination of public service as defined under subdivision 11a. 104.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 104.31    Sec. 5. Minnesota Statutes 2009 Supplement, section 353.01, subdivision 16, is 104.32amended to read: 104.33    Subd. 16. Allowable service; limits and computation. (a) "Allowable service" 104.34means: 105.1    (1) service during years of actual membership in the course of which employee 105.2deductions were withheld from salary and contributions were made at the applicable rates 105.3under section 353.27, 353.65, or 353E.03; 105.4(2) periods of service covered by payments in lieu of salary deductions under 105.5sections 353.27, subdivision 12, and 353.35; 105.6    (3) service in years during which the public employee was not a member but for 105.7which the member later elected, while a member, to obtain credit by making payments to 105.8the fund as permitted by any law then in effect; 105.9    (4) a period of authorized leave of absence with pay from which deductions for 105.10employee contributions are made, deposited, and credited to the fund; 105.11    (5) a period of authorized personal, parental, or medical leave of absence without 105.12pay, including a leave of absence covered under the federal Family Medical Leave Act, 105.13that does not exceed one year, and for which a member obtained service credit for each 105.14month in the leave period by payment under section 353.0161 to the fund made in place of 105.15salary deductions. An employee must return to public service and render a minimum of 105.16three months of allowable service in order to be eligible to make payment under section 105.17353.0161 for a subsequent authorized leave of absence without pay. Upon payment, the 105.18employee must be granted allowable service credit for the purchased period; 105.19    (6) a periodic, repetitive leave that is offered to all employees of a governmental 105.20subdivision. The leave program may not exceed 208 hours per annual normal work cycle 105.21as certified to the association by the employer. A participating member obtains service 105.22credit by making employee contributions in an amount or amounts based on the member's 105.23average salary new text begin , excluding overtime pay, new text end that would have been paid if the leave had not 105.24been taken. The employer shall pay the employer and additional employer contributions 105.25on behalf of the participating member. The employee and the employer are responsible 105.26to pay interest on their respective shares at the rate of 8.5 percent a year, compounded 105.27annually, from the end of the normal cycle until full payment is made. An employer shall 105.28also make the employer and additional employer contributions, plus 8.5 percent interest, 105.29compounded annually, on behalf of an employee who makes employee contributions but 105.30terminates public service. The employee contributions must be made within one year 105.31after the end of the annual normal working cycle or within 30 days after termination of 105.32public service, whichever is sooner. The executive director shall prescribe the manner and 105.33forms to be used by a governmental subdivision in administering a periodic, repetitive 105.34leave. Upon payment, the member must be granted allowable service credit for the 105.35purchased period; 106.1    (7) an authorized temporary or seasonal layoff under subdivision 12, limited to three 106.2months allowable service per authorized temporary or seasonal layoff in one calendar year. 106.3An employee who has received the maximum service credit allowed for an authorized 106.4temporary or seasonal layoff must return to public service and must obtain a minimum of 106.5three months of allowable service subsequent to the layoff in order to receive allowable 106.6service for a subsequent authorized temporary or seasonal layoff; 106.7    (8) a period during which a member is absent from employment by a governmental 106.8subdivision by reason of service in the uniformed services, as defined in United States 106.9Code, title 38, section 4303(13), if the member returns to public service with the same 106.10governmental subdivision upon discharge from service in the uniformed service within the 106.11time frames required under United States Code, title 38, section 4312(e), provided that 106.12the member did not separate from uniformed service with a dishonorable or bad conduct 106.13discharge or under other than honorable conditions. The service is new text begin must be new text end credited if the 106.14member pays into the fund equivalent employee contributions based upon the contribution 106.15rate or rates in effect at the time that the uniformed service was performed multiplied 106.16by the full and fractional years being purchased and applied to the annual salary rate. 106.17The annual salary rate is the average annual salary new text begin , excluding overtime pay, new text end during the 106.18purchase period that the member would have received if the member had continued to 106.19be employed in covered employment rather than to provide uniformed service, or, if 106.20the determination of that rate is not reasonably certain, the annual salary rate is the 106.21member's average salary rate new text begin , excluding overtime pay, new text end during the 12-month period of 106.22covered employment rendered immediately preceding the period of the uniformed service. 106.23Payment of the member equivalent contributions must be made during a period that begins 106.24with the date on which the individual returns to public employment and that is three times 106.25the length of the military leave period, or within five years of the date of discharge from 106.26the military service, whichever is less. If the determined payment period is less than 106.27one year, the contributions required under this clause to receive service credit may be 106.28made within one year of the discharge date. Payment may not be accepted following 30 106.29days after termination of public service under subdivision 11a. If the member equivalent 106.30contributions provided for in this clause are not paid in full, the member's allowable 106.31service credit must be prorated by multiplying the full and fractional number of years of 106.32uniformed service eligible for purchase by the ratio obtained by dividing the total member 106.33contributions received by the total member contributions otherwise required under this 106.34clause. The equivalent employer contribution, and, if applicable, the equivalent additional 106.35employer contribution must be paid by the governmental subdivision employing the 106.36member if the member makes the equivalent employee contributions. The employer 107.1payments must be made from funds available to the employing unit, using the employer 107.2and additional employer contribution rate or rates in effect at the time that the uniformed 107.3service was performed, applied to the same annual salary rate or rates used to compute the 107.4equivalent member contribution. The governmental subdivision involved may appropriate 107.5money for those payments. The amount of service credit obtainable under this section may 107.6not exceed five years unless a longer purchase period is required under United States Code, 107.7title 38, section 4312. The employing unit shall pay interest on all equivalent member and 107.8employer contribution amounts payable under this clause. Interest must be computed at a 107.9rate of 8.5 percent compounded annually from the end of each fiscal year of the leave or the 107.10break in service to the end of the month in which the payment is received. Upon payment, 107.11the employee must be granted allowable service credit for the purchased period; or 107.12(9) a period specified under subdivision 40. 107.13    (b) For calculating benefits under sections 353.30, 353.31, 353.32, and 353.33 for 107.14state officers and employees displaced by the Community Corrections Act, chapter 401, 107.15and transferred into county service under section 401.04, "allowable service" means the 107.16combined years of allowable service as defined in paragraph (a), clauses (1) to (6), and 107.17section 352.01, subdivision 11. 107.18    (c) For a public employee who has prior service covered by a local police or 107.19firefighters relief association that has consolidated with the Public Employees Retirement 107.20Association or to which section 353.665 applies, and who has elected the type of benefit 107.21coverage provided by the public employees police and fire fund either under section 107.22353A.08 following the consolidation or under section 353.665, subdivision 4, "applicable 107.23service" is a period of service credited by the local police or firefighters relief association 107.24as of the effective date of the consolidation based on law and on bylaw provisions 107.25governing the relief association on the date of the initiation of the consolidation procedure. 107.26    (d) No member may receive more than 12 months of allowable service credit in a 107.27year either for vesting purposes or for benefit calculation purposes. 107.28    (e) MS 2002 [Expired] 107.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 107.30    Sec. 6. Minnesota Statutes 2008, section 353.0161, subdivision 2, is amended to read: 107.31    Subd. 2. Purchase procedure. (a) An employee covered by a plan specified in 107.32subdivision 1 may purchase credit for allowable service in that plan for a period specified 107.33in subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c), 107.34whichever applies. The employing unit, at its option, may pay the employer portion of the 107.35amount specified in paragraph (b) on behalf of its employees. 108.1    (b) If payment is received by the executive director within one year from the date the 108.2member returned to work following the authorized leave, or within 30 days after the date 108.3of termination of public service if the member did not return to work, the payment amount 108.4is equal to the employee and employer contribution rates specified in law for the applicable 108.5plan at the end of the leave period, or at termination of public service, whichever is earlier, 108.6multiplied by the employee's average monthly salary new text begin , excluding overtime, new text end upon which 108.7deductions were paid during the six months, or portion thereof, before the commencement 108.8of the leave of absence and by the number of months of the leave of absence for which 108.9the employee wants allowable service credit. Payments made under this paragraph must 108.10include compound interest at a monthly rate of 0.71 percent from the last day of the leave 108.11period until the last day of the month in which payment is received. 108.12    (c) If payment is received by the executive director after one year, the payment 108.13amount is the amount determined under section 356.551. Payment under this paragraph 108.14must be made before the date the person terminates public service under section 353.01, 108.15subdivision 11a. 108.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 108.17    Sec. 7. new text begin [353.0162] REDUCED SALARY PERIODS SALARY CREDIT new text end 108.18 new text begin PURCHASE. new text end 108.19 new text begin (a) A member may purchase additional salary credit for a period specified in this new text end 108.20 new text begin section. new text end 108.21 new text begin (b) The applicable period is a period during which the member is receiving a reduced new text end 108.22 new text begin salary from the employer while the member is: new text end 108.23 new text begin (1) receiving temporary workers' compensation payments related to the member's new text end 108.24 new text begin service to the public employer; new text end 108.25 new text begin (2) on an authorized medical leave of absence; or new text end 108.26 new text begin (3) on an authorized partial paid leave of absence as a result of a budgetary or salary new text end 108.27 new text begin savings program offered or mandated by a governmental subdivision. new text end 108.28 new text begin (c) The differential salary amount is the difference between the average monthly new text end 108.29 new text begin salary received by the member during the period of reduced salary under this section and new text end 108.30 new text begin the average monthly salary of the member, excluding overtime, on which contributions new text end 108.31 new text begin to the applicable plan were made during the period of the last six months of covered new text end 108.32 new text begin employment occurring immediately before the period of reduced salary, applied to the new text end 108.33 new text begin member's normal employment period, measured in hours or otherwise, as applicable. new text end 108.34 new text begin (d) To receive eligible salary credit, the member shall pay an amount equal to: new text end 109.1 new text begin (1) the applicable employee contribution rate under section new text end new text begin 353.27, subdivision new text end 109.2 new text begin 2 new text end new text begin ; new text end new text begin 353.65, subdivision 2 new text end new text begin ; or new text end new text begin 353E.03, subdivision 1 new text end new text begin , as applicable, multiplied by the new text end 109.3 new text begin differential salary amount; new text end 109.4 new text begin (2) plus an employer equivalent payment equal to the applicable employer new text end 109.5 new text begin contribution rate in section new text end new text begin 353.27, subdivision 3 new text end new text begin ; new text end new text begin 353.65, subdivision 3 new text end new text begin ; or new text end new text begin 353E.03, new text end 109.6 new text begin subdivision 2 new text end new text begin , as applicable, multiplied by the differential salary amount; new text end 109.7 new text begin (3) plus, if applicable, an equivalent employer additional amount equal to the new text end 109.8 new text begin additional employer contribution rate in section new text end new text begin 353.27, subdivision 3a new text end new text begin , multiplied by the new text end 109.9 new text begin differential salary amount. new text end 109.10 new text begin (e) The employer, by appropriate action of its governing body and documented in its new text end 109.11 new text begin official records, may pay the employer equivalent contributions and, as applicable, the new text end 109.12 new text begin equivalent employer additional contributions on behalf of the member. new text end 109.13 new text begin (f) Payment under this section must include interest on the contribution amount new text end 109.14 new text begin or amounts, whichever applies, at an 8.5 percent annual rate, prorated for applicable new text end 109.15 new text begin months from the date on which the period of reduced salary specified under this section new text end 109.16 new text begin terminates to the date on which the payment or payments are received by the executive new text end 109.17 new text begin director. Payment under this section must be completed within the earlier of 30 days from new text end 109.18 new text begin termination of public service by the employee under section 353.01, subdivision 11a, or new text end 109.19 new text begin one year after the termination of the period specified in paragraph (b), as further restricted new text end 109.20 new text begin under this section. new text end 109.21 new text begin (g) The period for which additional allowable salary credit may be purchased is new text end 109.22 new text begin limited to the period during which the person receives temporary workers' compensation new text end 109.23 new text begin payments or for those business years in which the governmental subdivision offers or new text end 109.24 new text begin mandates a budget or salary savings program, as certified to the executive director by a new text end 109.25 new text begin resolution of the governing body of the governmental subdivision. For an authorized new text end 109.26 new text begin medical leave of absence, the period for which allowable salary credit may be purchased new text end 109.27 new text begin may not exceed 12 consecutive months of authorized medical leave. new text end 109.28 new text begin (h) To purchase salary credit for a subsequent period of temporary workers' new text end 109.29 new text begin compensation benefits or subsequent authorized medical leave of absence, the member new text end 109.30 new text begin must return to public service and render a minimum of three months of allowable service. new text end 109.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. Purchase of reduced new text end 109.32 new text begin salary credit may be made for a period mandated or offered by a governmental subdivision new text end 109.33 new text begin for purposes of budget or salary savings on or after July 1, 2009. new text end 109.34    Sec. 8. Minnesota Statutes 2008, section 353.03, subdivision 1, is amended to read: 110.1    Subdivision 1. Management; composition; election. (a) The management of the 110.2public employees retirement fund is vested in an 11-member board of trustees consisting 110.3of ten members and the state auditor. The state auditor may designate a deputy auditor 110.4with expertise in pension matters as the auditor's representative on the board. The 110.5governor shall appoint five trustees to four-year terms, one of whom shall be designated to 110.6represent school boards, one to represent cities, one to represent counties, one who is a 110.7retired annuitant, and one who is a public member knowledgeable in pension matters. The 110.8membership of the association, including recipients of retirement annuities and disability 110.9and survivor benefits, shall elect five trustees for terms of four years, one of whom must 110.10be a member of the police and fire fund and one of whom must be a former member who 110.11met the definition of public employee under section 353.01, subdivisions 2 and 2a, for at 110.12least five years prior to terminating membership new text begin and who is receiving a retirement annuity new text end 110.13or a member who receives a disability benefit. Terms expire on January 31 of the fourth 110.14year, and positions are vacant until newly elected members are seated. Except as provided 110.15in this subdivision, trustees elected by the membership of the association must be public 110.16employees and members of the association. 110.17(b) For seven days beginning October 1 of each year preceding a year in which 110.18an election is held, the association shall accept at its office filings in person or by mail 110.19of candidates for the board of trustees. A candidate shall submit at the time of filing a 110.20nominating petition signed by 25 or more members of the association. No name may 110.21be withdrawn from nomination by the nominee after October 15. At the request of a 110.22candidate for an elected position on the board of trustees, the board shall mail new text begin provide new text end 110.23a statement of up to 300 words prepared by the candidate to all persons eligible to vote 110.24in the election of the candidate. The board may adopt policies, subject to review and 110.25approval by the secretary of state under paragraph (e), new text begin and procedures new text end to govern the form 110.26and length of these statements, new text begin and the new text end timing of mailings, and deadlines for submitting 110.27materials to be mailed. The secretary of state shall resolve disputes between the board and 110.28a candidate concerning application of these policies to a particular statement new text begin distributed to new text end 110.29 new text begin the eligible voters new text end . 110.30(c) By January 10 of each year in which elections are to be held, the board shall 110.31distribute by mail to the members ballots listing new text begin eligible voters the instructions and new text end 110.32 new text begin materials necessary to vote for new text end the candidates new text begin seeking terms on the board of trustees. new text end 110.33 new text begin Eligible voters are the members, retirees, and other benefit recipients new text end . No member new text begin voter new text end 110.34may vote for more than one candidate for each board position to be filled. A ballot 110.35indicating a vote for more than one person for any position is void. No special marking 110.36may be used on the ballot to indicate incumbents. Ballots new text begin Votes cast by using paper ballots new text end 111.1mailed to the association must be postmarked no later than January 31. new text begin Votes cast by using new text end 111.2 new text begin telephone or other electronic means authorized under the board's procedures must be new text end 111.3 new text begin entered by the end of the day on January 31. new text end The ballot envelopes must be so designated 111.4and the ballots must be counted in a manner that ensures new text begin design of the voting response new text end 111.5 new text begin media must ensure new text end that each new text begin voter's new text end vote is secret. 111.6(d) A candidate who receives contributions or new text begin , who new text end makes expenditures in excess 111.7of $100, or new text begin who new text end has given implicit or explicit consent for any other person to receive 111.8contributions or make expenditures in excess of $100 for the purpose of bringing about the 111.9candidate's election, shall file a report with the campaign finance and public disclosure 111.10board disclosing the source and amount of all contributions to the candidate's campaign. 111.11The campaign finance and public disclosure board shall prescribe forms governing these 111.12disclosures. Expenditures and contributions have the meaning defined in section 10A.01. 111.13These terms do not include the mailing new text begin any distribution new text end made by the association board on 111.14behalf of the candidate. A candidate shall file a report within 30 days from the day that the 111.15results of the election are announced. The Campaign Finance and Public Disclosure Board 111.16shall maintain these reports and make them available for public inspection in the same 111.17manner as the board maintains and makes available other reports filed with it. 111.18(e) The secretary of state shall review and approve new text begin comment on new text end the procedures 111.19defined by the board of trustees for conducting the elections specified in this subdivision, 111.20including board policies adopted under paragraph (b). 111.21(f) The board of trustees and the executive director shall undertake their activities 111.22consistent with chapter 356A. 111.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 111.24    Sec. 9. Minnesota Statutes 2008, section 353.27, subdivision 4, is amended to read: 111.25    Subd. 4. Employer reporting requirements; contributions; member status. 111.26(a) A representative authorized by the head of each department shall deduct employee 111.27contributions from the salary of each new text begin public new text end employee who qualifies for membership 111.28under this chapter and new text begin or chapter 353D or 353E at the rate under section 353.27, 353.65, new text end 111.29 new text begin 353D.03, or 353E.03, whichever is applicable, that is in effect on the date the salary is new text end 111.30 new text begin paid. The employer representative must also new text end remit payment in a manner prescribed by 111.31the executive director for the aggregate amount of the employee contributions, new text begin and new text end the 111.32 new text begin required new text end employer contributions and the additional employer contributions to be received 111.33 new text begin by the association new text end within 14 calendar days new text begin after each pay date. If the payment is less than new text end 111.34 new text begin the amount required, the employer must pay the shortage amount to the association and new text end 111.35 new text begin collect reimbursement of any employee contribution shortage paid on behalf of a member new text end 112.1 new text begin through subsequent payroll withholdings from the wages of the employee. Payment of new text end 112.2 new text begin shortages in employee contributions and associated employer contributions, if applicable, new text end 112.3 new text begin must include interest at the rate specified in section 353.28, subdivision 5, if not received new text end 112.4 new text begin within 30 days following the date the amount was initially due under this section new text end . 112.5 new text begin (b) new text end The head of each department or the person's designee shall new text begin submit new text end for each pay 112.6period submit to the association a salary deduction report in the format prescribed by the 112.7executive director. new text begin The report must be received by the association within 14 calendar days new text end 112.8 new text begin after each pay date or the employer may be assessed a fine of $5 per calendar day until new text end 112.9 new text begin the association receives the required data. new text end Data required to be submitted as part of salary 112.10deduction reporting must include, but are not limited to: 112.11(1) the legal names and Social Security numbers of employees who are members; 112.12(2) the amount of each employee's salary deduction; 112.13(3) the amount of salary new text begin defined in section 353.01, subdivision 10, earned in the new text end 112.14 new text begin pay period new text end from which each deduction was made new text begin and the salary amount earned by a new text end 112.15 new text begin reemployed annuitant under section 353.37, subdivision 1, or 353.371, subdivision 1, or new text end 112.16 new text begin by a disabled member under section 353.33, subdivision 7 or 7a new text end ; 112.17(4) the beginning and ending dates of the payroll period covered and the date of 112.18actual payment; and 112.19(5) adjustments or corrections covering past pay periods new text begin as authorized by the new text end 112.20 new text begin executive director new text end . 112.21(b) new text begin (c) new text end Employers must furnish the data required for enrollment for each new 112.22 new text begin or reinstated new text end employee who qualifies for membership in the format prescribed by the 112.23executive director. The required enrollment data on new employees new text begin members new text end must be 112.24submitted to the association prior to or concurrent with the submission of the initial 112.25employee salary deduction. new text begin Also, new text end the employer shall also report to the association all 112.26member employment status changes, such as leaves of absence, terminations, and death, 112.27and shall report the effective dates of those changes, on an ongoing basis for the payroll 112.28cycle in which they occur. new text begin If an employer fails to comply with the reporting requirements new text end 112.29 new text begin under this paragraph, the executive director may assess a fine of $25 for each failure if the new text end 112.30 new text begin association staff has notified the employer of the noncompliance and attempted to obtain new text end 112.31 new text begin the missing data or form from the employer for a period of more than three months. new text end 112.32 new text begin (d) new text end The employer shall furnish data, forms, and reports as may be required by 112.33the executive director for proper administration of the retirement system. Before 112.34implementing new or different computerized reporting requirements, the executive 112.35director shall give appropriate advance notice to governmental subdivisions to allow time 112.36for system modifications. 113.1(c) new text begin (e) new text end Notwithstanding paragraph (a), the association may provide for less frequent 113.2reporting and payments for small employers. 113.3 new text begin (f) The executive director may establish reporting procedures and methods as new text end 113.4 new text begin required to review compliance by employers with the salary and contribution reporting new text end 113.5 new text begin requirements in this chapter. A review of the payroll records of a participating employer new text end 113.6 new text begin may be conducted by the association on a periodic basis or as a result of concerns known new text end 113.7 new text begin to exist within a governmental subdivision. An employer under review must extract new text end 113.8 new text begin requested data and provide records to the association after receiving reasonable advanced new text end 113.9 new text begin notice. Failure to provide requested information or materials will result in the employer new text end 113.10 new text begin being liable to the association for any expenses associated with a field audit, which may new text end 113.11 new text begin include staff salaries, administrative expenses, and travel expenses. new text end 113.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 113.13    Sec. 10. Minnesota Statutes 2009 Supplement, section 353.27, subdivision 7, is 113.14amended to read: 113.15    Subd. 7. Adjustment for erroneous receipts or disbursements. (a) Except 113.16as provided in paragraph (b), erroneous employee deductions and erroneous employer 113.17contributions and additional employer contributions for a person, who otherwise does not 113.18qualify for membership under this chapter, are considered: 113.19(1) valid if the initial erroneous deduction began before January 1, 1990. Upon 113.20determination of the error by the association, the person may continue membership in the 113.21association while employed in the same position for which erroneous deductions were 113.22taken, or file a written election to terminate membership and apply for a refund upon 113.23termination of public service or defer an annuity under section 353.34; or 113.24(2) invalid, if the initial erroneous employee deduction began on or after January 1, 113.251990. Upon determination of the error, the association shall refund all erroneous employee 113.26deductions and all erroneous employer contributions as specified in paragraph (e). No 113.27person may claim a right to continued or past membership in the association based on 113.28erroneous deductions which began on or after January 1, 1990. 113.29(b) Erroneous deductions taken from the salary of a person who did not qualify for 113.30membership in the association by virtue of concurrent employment before July 1, 1978, 113.31which required contributions to another retirement fund or relief association established 113.32for the benefit of officers and employees of a governmental subdivision, are invalid. Upon 113.33discovery of the error, the association shall remove new text begin allowable service credit for new text end all invalid 113.34service new text begin if forfeited new text end and, upon termination of public service, the association shall refund all 113.35erroneous employee deductions to the person, with interest as determined under section 114.1353.34, subdivision 2 , and all erroneous employer contributions without interest to the 114.2employer. This paragraph has both retroactive and prospective application. 114.3(c) Adjustments to correct employer contributions and employee deductions taken 114.4in error from amounts which are not salary under section 353.01, subdivision 10, must 114.5be made as specified in paragraph (e). The period of adjustment must be limited to the 114.6fiscal year in which the error is discovered by the association and the immediate two 114.7preceding fiscal years. 114.8(d) If there is evidence of fraud or other misconduct on the part of the employee or 114.9the employer, the board of trustees may authorize adjustments to the account of a member 114.10or former member to correct erroneous employee deductions and employer contributions 114.11on invalid salary and the recovery of any overpayments for a period longer than provided 114.12for under paragraph (c). 114.13(e) Upon discovery of the receipt of erroneous employee deductions and employer 114.14contributions under paragraph (a), clause (2), or paragraph (c), the association must require 114.15the employer to discontinue the erroneous employee deductions and erroneous employer 114.16contributions reported on behalf of a member. Upon discontinuation, the association must: 114.17(1) for a member, provide a refund or credit to the employer in the amount of the 114.18invalid employee deductions with interest on the invalid employee deductions at the rate 114.19specified under section 353.34, subdivision 2, from the received date of each invalid salary 114.20transaction through the date the credit or refund is made; and the employer must pay the 114.21refunded employee deductions plus interest to the member; 114.22(2) for a former member who: 114.23(i) is not receiving a retirement annuity or benefit, return the erroneous employee 114.24deductions to the former member through a refund with interest at the rate specified under 114.25section 353.34, subdivision 2, from the received date of each invalid salary transaction 114.26through the date the credit or refund is made; or 114.27(ii) is receiving a retirement annuity or disability benefit, or a person who is 114.28receiving an optional annuity or survivor benefit, for whom it has been determined an 114.29overpayment must be recovered, adjust the payment amount and recover the overpayments 114.30as provided under this section; and 114.31(3) return the invalid employer contributions reported on behalf of a member or 114.32former member to the employer by providing a credit against future contributions payable 114.33by the employer. 114.34(f) In the event that a salary warrant or check from which a deduction for the 114.35retirement fund was taken has been canceled or the amount of the warrant or check 114.36returned to the funds of the department making the payment, a refund of the sum 115.1deducted, or any portion of it that is required to adjust the deductions, must be made 115.2to the department or institution. 115.3(g) If the accrual date of any retirement annuity, survivor benefit, or disability benefit 115.4is within the limitation period specified in paragraph (c), and an overpayment has resulted 115.5by using invalid service or salary, or due to any erroneous calculation procedure, the 115.6association must recalculate the annuity or benefit payable and recover any overpayment 115.7as provided under subdivision 7b. 115.8(h) Notwithstanding the provisions of this subdivision, the association may apply 115.9the Revenue Procedures defined in the federal Internal Revenue Service Employee Plans 115.10Compliance Resolution System and not issue a refund of erroneous employee deductions 115.11and employer contributions or not recover a small overpayment of benefits if the cost to 115.12correct the error would exceed the amount of the member refund or overpayment. 115.13(i) Any fees or penalties assessed by the federal Internal Revenue Service for any 115.14failure by an employer to follow the statutory requirements for reporting eligible members 115.15and salary must be paid by the employer. 115.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 115.17    Sec. 11. Minnesota Statutes 2008, section 353.27, subdivision 10, is amended to read: 115.18    Subd. 10. Employer exclusion reports. new text begin (a) new text end The head of a department shall annually 115.19furnish the executive director with an exclusion report listing only those employees in 115.20potentially PERA-eligible positions who were not reported as members of the association 115.21and who worked during the school year for school employees and calendar year for 115.22nonschool employees. The department head must certify the accuracy and completeness 115.23of the exclusion report to the association. The executive director shall prescribe the 115.24manner and forms, including standardized exclusion codes, to be used by a governmental 115.25subdivision in preparing and filing exclusion reports. new text begin Also, new text end the executive director shall 115.26also check the exclusion report to ascertain whether any omissions have been made by a 115.27department head in the reporting of new public employees for membership. The executive 115.28director may delegate an association employee under section 353.03, subdivision 3a, 115.29paragraph (b), clause (5), to conduct a field audit to review the payroll records of a 115.30governmental subdivision. 115.31 new text begin (b) If an employer fails to comply with the reporting requirements under this new text end 115.32 new text begin subdivision, the executive director may assess a fine of $25 for each failure if the new text end 115.33 new text begin association staff has notified the employer of the noncompliance and attempted to obtain new text end 115.34 new text begin the missing data or form from the employer for a period of more than three months. new text end 116.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 116.2    Sec. 12. Minnesota Statutes 2009 Supplement, section 353.371, subdivision 4, is 116.3amended to read: 116.4    Subd. 4. Duration. Postretirement option employment shall new text begin may new text end be for an initial 116.5period not to exceed one year. At the end of the initial period, the governing body has sole 116.6discretion to determine if the offer of a postretirement option position will be renewed, 116.7renewed with modifications, or terminated. Postretirement option employment may be 116.8renewed annually, but may not be renewed after the individual attains retirement age as 116.9defined in United States Code, title 42, section 416(l) new text begin no more than four renewals may new text end 116.10 new text begin occur new text end . 116.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 116.12    Sec. 13. Minnesota Statutes 2008, section 353D.01, subdivision 2, is amended to read: 116.13    Subd. 2. Eligibility. (a) Eligibility to participate in the defined contribution plan 116.14is available to: 116.15(1) elected local government officials of a governmental subdivision who elect to 116.16participate in the plan under section 353D.02, subdivision 1, and who, for the elected 116.17service rendered to a governmental subdivision, are not members of the Public Employees 116.18Retirement Association within the meaning of section 353.01, subdivision 7; 116.19(2) physicians who, if they did not elect to participate in the plan under section 116.20353D.02, subdivision 2 , would meet the definition of member under section 353.01, 116.21subdivision 7 ; 116.22(3) basic and advanced life-support emergency medical service personnel new text begin who new text end 116.23 new text begin are new text end employed by any public ambulance service that elects to participate under section 116.24353D.02, subdivision 3 ; 116.25(4) members of a municipal rescue squad associated with new text begin the city of new text end Litchfield 116.26in Meeker County, or of a county rescue squad associated with Kandiyohi County, if 116.27an independent nonprofit rescue squad corporation, incorporated under chapter 317A, 116.28performing emergency management services, and if not affiliated with a fire department 116.29or ambulance service and if its members are not eligible for membership in that fire 116.30department's or ambulance service's relief association or comparable pension plan; 116.31(5) employees of the Port Authority of the city of St. Paul who elect to participate in 116.32the plan under section 353D.02, subdivision 5, and who are not members of the Public 116.33Employees Retirement Association under section 353.01, subdivision 7; 117.1(6) city managers who elected to be excluded from the general employees retirement 117.2plan of the Public Employees Retirement Association under section 353.028 and who 117.3elected to participate in the public employees defined contribution plan under section 117.4353.028 , subdivision 3, paragraph (b); and 117.5(7) volunteer or emergency on-call firefighters serving in a municipal fire department 117.6or an independent nonprofit firefighting corporation who are not covered by the public 117.7employees police and fire retirement plan and who are not covered by a volunteer 117.8firefighters relief association and who elect to participate in the public employees defined 117.9contribution plan. new text begin ; new text end 117.10 new text begin (8) elected county sheriffs who are former members of the police and fire plan and new text end 117.11 new text begin who are receiving a retirement annuity as provided under section 353.651; and new text end 117.12 new text begin (9) persons who are excluded from membership under section 353.01, subdivision new text end 117.13 new text begin 2b, paragraph (a), clause (25). new text end 117.14(b) For purposes of this chapter, an elected local government official includes 117.15a person appointed to fill a vacancy in an elective office. Service as an elected local 117.16government official only includes service for the governmental subdivision for which the 117.17official was elected by the public at large. Service as an elected local government official 117.18ceases and eligibility to participate terminates when the person ceases to be an elected 117.19official. An elected local government official does not include an elected county sheriff new text begin new text end 117.20 new text begin who must be a member of the police and fire plan as provided under chapter 353 new text end . 117.21(c) Individuals otherwise eligible to participate in the plan under this subdivision 117.22who are currently covered by a public or private pension plan because of their employment 117.23or provision of services are not eligible to participate in the public employees defined 117.24contribution plan. 117.25(d) A former participant is a person who has terminated eligible employment or 117.26service and has not withdrawn the value of the person's individual account. 117.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 117.28    Sec. 14. Minnesota Statutes 2008, section 353D.03, subdivision 1, is amended to read: 117.29    Subdivision 1. Local government official contribution new text begin Contributions for eligible new text end 117.30 new text begin participants new text end . An new text begin (a) The following classes of new text end eligible elected local government official 117.31 new text begin participants new text end who elects new text begin elect new text end to participate in the public employees defined contribution 117.32plan new text begin under section 353D.02 new text end shall contribute an amount equal to five percent of salary as 117.33defined in section 353.01, subdivision 10. A participating new text begin : new text end 117.34 new text begin (1) new text end elected local government official's new text begin officials; new text end 117.35 new text begin (2) physicians; and new text end 118.1 new text begin (3) persons who are excluded from membership under section 353.01, subdivision new text end 118.2 new text begin 2b, clause (25). new text end 118.3 new text begin (b) A participant's new text end governmental subdivision shall contribute a matching amount. 118.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 118.5    Sec. 15. Minnesota Statutes 2008, section 353D.04, subdivision 1, is amended to read: 118.6    Subdivision 1. Crediting of account new text begin contributions to participant accounts new text end . new text begin (a) new text end 118.7Contributions made by or on behalf of a participating elected local government official or 118.8physician new text begin participant under section 353D.03, subdivisions 1, 5, and 6, paragraph (a), new text end must 118.9be remitted to the Public Employees Retirement Association and credited to the individual 118.10account established for the participant. Ambulance service 118.11 new text begin (b) new text end Contributions new text begin as provided under section 353D.03, subdivisions 3, and 6, new text end 118.12 new text begin paragraph (b), new text end must be remitted on a regular basis to the association together with any 118.13member contributions paid or withheld. Those contributions must be credited to the 118.14individual account of each participating member. 118.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 118.16    Sec. 16. Minnesota Statutes 2008, section 353D.04, subdivision 2, is amended to read: 118.17    Subd. 2. Authority to adopt policies new text begin correcting erroneous contributions new text end . The 118.18executive director may adopt policies and procedures regarding deductions taken totally 118.19or partially in error by the employer from the salary of an elected official. 118.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 118.21    Sec. 17. Minnesota Statutes 2009 Supplement, section 353F.02, subdivision 4, is 118.22amended to read: 118.23    Subd. 4. Medical facility. "Medical facility" means: 118.24    (1) Bridges Medical Services; 118.25    (2) the City of Cannon Falls Hospital; 118.26    (3) new text begin the Chris Jenson Health and Rehabilitation Center in St. Louis County; new text end 118.27 new text begin (4) new text end Clearwater County Memorial Hospital doing business as Clearwater Health 118.28Services in Bagley; 118.29    (4) new text begin (5) new text end the Dassel Lakeside Community Home; 118.30 new text begin (6) the Douglas County Hospital, with respect to the Mental Health Unit; new text end 118.31    (5) new text begin (7) new text end the Fair Oaks Lodge, Wadena; 118.32    (6) new text begin (8) new text end the Glencoe Area Health Center; 119.1    (7) new text begin (9) new text end Hutchinson Area Health Care; 119.2    (8) new text begin (10) new text end the Lakefield Nursing Home; 119.3    (9) new text begin (11) new text end the Lakeview Nursing Home in Gaylord; 119.4    (10) new text begin (12) new text end the Luverne Public Hospital; 119.5    (11) new text begin (13) new text end the Oakland Park Nursing Home; 119.6    (12) new text begin (14) new text end the RenVilla Nursing Home; 119.7    (13) new text begin (15) new text end the Rice Memorial Hospital in Willmar, with respect to the Department 119.8of Radiology and the Department of Radiation/Oncology; 119.9(14) new text begin (16) new text end the St. Peter Community Health Care Center; 119.10    (15) new text begin (17) new text end the Waconia-Ridgeview Medical Center; 119.11(16) new text begin (18) new text end the Weiner Memorial Medical Center, Inc.; and 119.12 new text begin (19) the Wheaton Community Hospital; and new text end 119.13(17) new text begin (20) new text end the Worthington Regional Hospital. 119.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 119.15    Sec. 18. Minnesota Statutes 2008, section 353F.025, subdivision 1, is amended to read: 119.16    Subdivision 1. Eligibility determination. (a) The chief clerical officer of a 119.17governmental subdivision may submit a resolution from the governing body to the 119.18executive director of the Public Employees Retirement Association which supports 119.19providing coverage under this chapter for employees of that governmental subdivision 119.20who are privatized, and which states that the governing body will pay for actuarial 119.21calculations, as further specified in paragraph (c). 119.22    (b) The governing body must also provide a copy of any applicable purchase or 119.23lease agreement and any other information requested by the executive director to allow the 119.24executive director to verify that under the proposed employer change, the new employer 119.25does not qualify as a governmental subdivision under section 353.01, subdivision 6, 119.26making the employees ineligible for continued coverage as active members of the general 119.27employees retirement plan of the Public Employees Retirement Association. 119.28    (c) Following receipt of a resolution and a determination by the executive director 119.29that the new employer is not a governmental subdivision, the executive director shall 119.30direct the consulting actuary retained under section 356.214 to determine whether the 119.31general employees retirement plan of the Public Employees Retirement Association new text begin , if new text end 119.32 new text begin coverage under this chapter is provided, new text end is expected to receive a net gain new text begin or a net loss new text end if 119.33privatization occurs, by determining whether new text begin . A net gain is expected if new text end the actuarial 119.34liability of the special benefit coverage provided under this chapter, if extended to the 119.35applicable employees under the privatization, is less than the actuarial gain otherwise to 120.1accrue to the plan. new text begin A net loss is expected if the actuarial accrued liability of the special new text end 120.2 new text begin benefit coverage provided under this chapter, if extended to the applicable employees new text end 120.3 new text begin under the privatization, is more than the actuarial gain otherwise to accrue to the plan. new text end The 120.4date of the actuarial calculations used to make this determination must be within one year 120.5of the effective date, as defined in section 353F.02, subdivision 3. 120.6 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 120.7    Sec. 19. Minnesota Statutes 2008, section 353F.025, subdivision 2, is amended to read: 120.8    Subd. 2. Recommendation to legislature. (a) If the actuarial calculations under 120.9subdivision 1, paragraph (c), indicate that a net gain to the general employees retirement 120.10plan of the Public Employees Retirement Association is expected due to the privatization, 120.11 new text begin or if paragraph (c) applies, new text end the executive director shall forward a recommendation and 120.12supporting documentation to the chair of the Legislative Commission on Pensions and 120.13Retirement, the chair of the Governmental Operations, Reform, Technology and Elections 120.14Committee of the house of representatives, the chair of the State and Local Government 120.15Operations and Oversight Committee of the senate, and the executive director of the 120.16Legislative Commission on Pensions and Retirement. The recommendation must be in 120.17the form of an addition to the definition of "medical facility" under section 353F.02, 120.18subdivision 4 , or to "other public employing unit" under section 353F.02, subdivision 5, 120.19whichever is applicable. The recommendation must be forwarded to the legislature before 120.20January 15 for the recommendation to be considered in that year's legislative session. new text begin The new text end 120.21 new text begin recommendation may be included as part of public pension administrative legislation new text end 120.22 new text begin under section 356B.05. new text end 120.23    (b) If a medical facility or other public employing unit listed under section 353F.02, 120.24subdivision 4 or 5, fails to privatize within one year of the final enactment date of the 120.25legislation adding the entity to the applicable definition, its inclusion under this chapter is 120.26voided, and the executive director shall include in the new text begin subsequent new text end proposed legislation 120.27under paragraph (a) a recommendation that the applicable entity be stricken from the 120.28definition. 120.29 new text begin (c) If the calculations under subdivision 1, paragraph (c), indicate a net loss, the new text end 120.30 new text begin executive director shall forward a recommendation that the privatization be included as an new text end 120.31 new text begin addition under paragraph (a) if the chief clerical officer of the applicable governmental new text end 120.32 new text begin subdivision submits a resolution from the governing body specifying that a lump sum new text end 120.33 new text begin payment will be made to the executive director equal to the net loss, plus interest. The new text end 120.34 new text begin interest must be computed using the applicable preretirement interest rate assumption new text end 120.35 new text begin under section 356.215, subdivision 8, expressed as a monthly rate, from the date of the new text end 121.1 new text begin actuarial valuation from which the actuarial accrued liability data was used to determine new text end 121.2 new text begin the net loss in the actuarial study under subdivision 1, to the date of payment, with annual new text end 121.3 new text begin compounding. Payment must be made on or after the effective date defined under section new text end 121.4 new text begin 353F.02. new text end 121.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 121.6    Sec. 20. Minnesota Statutes 2008, section 356.96, subdivision 2, is amended to read: 121.7    Subd. 2. Right to review. A determination made by the administration new text begin chief new text end 121.8 new text begin administrative officer new text end of a covered pension plan regarding a person's eligibility, benefits, 121.9or other rights under the plan with which the person does not agree is subject to review 121.10under this section. 121.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 121.12    Sec. 21. Minnesota Statutes 2008, section 356.96, subdivision 3, is amended to read: 121.13    Subd. 3. Notice of determination. If the applicable chief administrative officer 121.14denies an application or a written request, modifies a benefit, or terminates a benefit 121.15of a person claiming a right or potential rights under a covered pension plan, the chief 121.16administrative officer shall notify that person through a written notice containing: 121.17    (1) a statement of the reasons for the determination; 121.18    (2) a notice that the person may petition the governing board of the covered pension 121.19plan for a review of the determination and that a person's petition for review must be filed 121.20in the administrative office of the covered pension plan within 60 days of the receipt 121.21of the written notice of the determination; 121.22    (3) a statement indicating that a failure to petition for review within 60 days 121.23precludes the person from contesting in any other administrative review or court procedure 121.24the issues determined by the chief administrative officer; 121.25    (4) a statement indicating that all relevant materials, documents, affidavits, and other 121.26records that the person wishes to be reviewed in support of the petition must be filed with 121.27and received in the administrative office of the covered pension plan at least 30 new text begin 15 new text end days 121.28before the date of the hearing under subdivision 10; and 121.29    (5) a copy new text begin summary new text end of this section new text begin , including all filing requirements and deadlines new text end . 121.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 121.31    Sec. 22. Minnesota Statutes 2009 Supplement, section 356.96, subdivision 5, is 121.32amended to read: 122.1    Subd. 5. Petition for review. (a) A person who claims a right under subdivision 2 122.2may petition for a review of that decision by the governing board of the covered pension 122.3plan. 122.4    (b) A petition under this section must be sent to the chief administrative officer by 122.5mail and must be postmarked no later than 60 days after the person received the notice 122.6required by subdivision 3. The petition must include the person's statement of the reason 122.7or reasons that the person believes the decision of the chief administrative officer should 122.8be reversed or modified. The petition may include all documentation and written materials 122.9that the petitioner deems to be relevant. In developing a record for review by the board 122.10when a decision is appealed, the executive director new text begin chief administrative officer new text end may direct 122.11that the applicant participate in a fact-finding session conducted by an administrative law 122.12judge assigned by the Office of Administrative Hearings and, as applicable, participate in 122.13a vocational assessment conducted by a qualified rehabilitation counselor on contract with 122.14the applicable retirement system. 122.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 122.16    Sec. 23. Minnesota Statutes 2008, section 356.96, subdivision 7, is amended to read: 122.17    Subd. 7. Notice of hearing. (a) After receiving a petition, and not less than 30 122.18calendar days from the date of the next regular board meeting, the chief administrative 122.19officer must schedule a timely review of the petition before the governing board of the 122.20covered pension plan. The review must be scheduled to take into consideration any 122.21necessary accommodations to allow the petitioner to participate in the governing board's 122.22review. 122.23    (b) Not less than 15 new text begin 30 new text end calendar days before the scheduled hearing date, the chief 122.24administrative officer must provide by mail to the petitioner an acknowledgment of the 122.25receipt of the person's petition and a follow-up notice of the time and place of the meeting 122.26at which the governing board is scheduled to consider the petition and must provide a copy 122.27of all relevant documents, evidence, summaries, and recommendations assembled by or 122.28on behalf of the plan administration to be considered by the governing board. 122.29    (c) Except as provided in subdivision 8, paragraph (c), All documents and materials 122.30that the petitioner wishes to be part of the record for review must be filed with the chief 122.31administrative officer and must be received in the offices of the covered pension plan 122.32at least 30 new text begin 15 new text end days before the date of the meeting at which the petition is scheduled to 122.33be heard. 122.34    (d) A petitioner, new text begin may request a continuance of a scheduled hearing if the request new text end 122.35 new text begin is received by the chief administrative officer new text end within ten calendar days of the scheduled 123.1date of the applicable board meeting, may request a continuance on a scheduled petition. 123.2The chief administrative officer must reschedule the review within 60 days of the date 123.3of the continuance request new text begin a reasonable time new text end . Only one continuance may be granted to 123.4any petitioner. 123.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 123.6    Sec. 24. Minnesota Statutes 2008, section 356.96, subdivision 8, is amended to read: 123.7    Subd. 8. Record for review. (a) All evidence, including all records, documents, and 123.8affidavits in the possession of the covered pension plan of which the covered pension plan 123.9desires to avail itself and be considered by the governing board, and all evidence which the 123.10petitioner wishes to present to the governing board, including any evidence which would 123.11otherwise be classified by law as "private," must be made part of the hearing record. 123.12    (b) Not later than new text begin The chief administrative officer must provide a copy of the record new text end 123.13 new text begin to each member of the governing board at least new text end seven days before the scheduled hearing 123.14date, the chief administrative officer must provide a copy of the record to each member 123.15of the governing board. 123.16    (c) At least five days before the hearing, the petitioner may submit to the chief 123.17administrative officer, for submission to the governing board, Any additional document, 123.18affidavit, or other relevant information that was not initially submitted with the petition new text begin new text end 123.19 new text begin the petitioner requests be part of the record may be admitted with the consent of the new text end 123.20 new text begin governing board new text end . 123.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 123.22    Sec. 25. Laws 2009, chapter 169, article 4, section 49, is amended to read: 123.23    Sec. 49. CITY OF DULUTH AND DULUTH AIRPORT AUTHORITY new text begin AND new text end 123.24 new text begin CITY OF VIRGINIA new text end ; CORRECTING ERRONEOUS EMPLOYEE DEDUCTIONS, 123.25EMPLOYER CONTRIBUTIONS AND ADJUSTING OVERPAID BENEFITS. 123.26    Subdivision 1. Application. Notwithstanding any provisions of Minnesota Statutes, 123.27section 353.27, subdivisions 7 and 7b, or Minnesota Statutes 2008, chapters 353 and 123.28356, to the contrary, this section establishes the procedures by which the executive 123.29director of the Public Employees Retirement Association shall adjust erroneous employee 123.30deductions and employer contributions paid on behalf of active employees and former 123.31members by the city of Duluth and new text begin , new text end by the Duluth Airport Authority new text begin , and by the city new text end 123.32 new text begin of Virginia new text end on amounts determined by the executive director to be invalid salary under 123.33Minnesota Statutes, section 353.01, subdivision 10, reported between January 1, 1997, 124.1and October 23, 2008, and for adjusting benefits that were paid to former members and 124.2their beneficiaries based upon invalid salary amounts. 124.3    Subd. 2. Refunds of employee deductions. (a) The executive director shall refund 124.4to active employees or former members who are not receiving retirement annuities or 124.5benefits all erroneous employee deductions identified by the city of Duluth or new text begin , new text end by the 124.6Duluth Airport Authority new text begin , or by the city of Virginia new text end as deductions taken from amounts 124.7determined to be invalid salary. The refunds must include interest at the rate specified in 124.8Minnesota Statutes, section 353.34, subdivision 2, from the date each invalid employee 124.9deduction was received through the date each refund is paid. 124.10(b) The refund payment for active employees must be sent to the applicable 124.11governmental subdivision which must pay the refunded employee deductions plus interest 124.12to the active new text begin home addresses of the new text end members who are employees of the city of Duluth 124.13or new text begin , new text end who are employees of the Duluth Airport Authority, new text begin or who are employees of the city new text end 124.14 new text begin of Virginia, new text end as applicable. 124.15(c) Refunds to former members must be mailed by the executive director of the 124.16Public Employees Retirement Association to the former member's last known address. 124.17    Subd. 3. Benefit adjustments. (a) For a former member who is receiving a 124.18retirement annuity or disability benefit, or for a person receiving an optional annuity or 124.19survivor benefit, the executive director must: 124.20(1) adjust the annuity or benefit payment to the correct monthly benefit amount 124.21payable by reducing the average salary under Minnesota Statutes, section 353.01, 124.22subdivision 17a , by the invalid salary amounts; 124.23(2) determine the amount of the overpaid benefits paid from the effective date of 124.24the annuity or benefit payment to the first of the month in which the monthly benefit 124.25amount is corrected; 124.26(3) calculate the amount of employee deductions taken in error on invalid salary, 124.27including interest at the rate specified in Minnesota Statutes, section 353.34, subdivision 2, 124.28from the date each invalid employee deduction was received through the date the annuity 124.29or benefit is adjusted as provided under clause (1); and 124.30(4) determine the net amount of overpaid benefits by reducing the amount of the 124.31overpaid annuity or benefit as determined in clause (2) by the amount of the erroneous 124.32employee deductions with interest new text begin as new text end determined in clause (3). 124.33(b) If a former member's erroneous employee deductions plus interest determined 124.34under this section exceeds the amount of the person's overpaid benefits, the balance must 124.35be refunded to the person to whom the annuity or benefit is being paid. 125.1(c) The executive director shall recover the net amount of all overpaid annuities or 125.2benefits as provided under subdivision 4. 125.3    Subd. 4. Employer credits and obligations. (a) The executive director shall 125.4provide a credit without interest to the city of Duluth and new text begin , new text end to the Duluth Airport Authority new text begin , new text end 125.5 new text begin and to the city of Virginia, as applicable, new text end for the amount of that governmental subdivision's 125.6erroneous employer contributions. The credit must first be used to offset the net amount of 125.7the overpaid retirement annuities and the disability and survivor benefits that remains after 125.8applying the amount of erroneous employee deductions with interest as provided under 125.9subdivision 3, paragraph (a), clause (4). The remaining erroneous employer contributions, 125.10if any, must be credited against future employer contributions required to be paid by 125.11the applicable governmental subdivision. If the overpaid benefits exceed the employer 125.12contribution credit, the balance of the overpaid benefits is the obligation of the city of 125.13Duluth or new text begin , new text end the Duluth Airport Authority, new text begin or the city of Virginia, new text end whichever is applicable. 125.14(b) The Public Employees Retirement Association board of trustees shall determine 125.15the period of time and manner for the collection of overpaid retirement annuities and 125.16benefits, if any, from the city of Duluth and new text begin , new text end the Duluth Airport Authority new text begin , and the city of new text end 125.17 new text begin Virginia new text end . 125.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 125.19    Sec. 26. Laws 2009, chapter 169, article 4, section 49, the effective date, is amended to 125.20read: 125.21EFFECTIVE DATE.(a) This section is effective for the city of Duluth the day after 125.22the Duluth city council and the chief clerical officer of the city of Duluth timely complete 125.23their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, for 125.24members who are, and former members who were, employees of the city of Duluth. 125.25(b) This section is effective for the Duluth Airport Authority the day after the Duluth 125.26Airport Authority and the chief clerical officer of the Duluth Airport Authority timely 125.27complete their compliance with Minnesota Statutes, section 645.021, subdivisions 2 125.28and 3, for members who are, and former members who were, employees of the Duluth 125.29Airport Authority. 125.30 new text begin (c) This section is effective for the city of Virginia the day after the Virginia new text end 125.31 new text begin city council and the chief clerical officer of the city of Virginia timely complete their new text end 125.32 new text begin compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, for members new text end 125.33 new text begin who are, and former members who were, employees of the city of Virginia. If this section new text end 125.34 new text begin becomes effective for the city of Virginia, it applies retroactively from June 23, 2009. new text end 126.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 126.2    Sec. 27. Laws 2009, chapter 169, article 5, section 2, the effective date, is amended to 126.3read: 126.4EFFECTIVE DATE.This section is effective the day following final enactment 126.5and expires on June 30, 2011 new text begin 2014 new text end . Individuals must not be appointed to a postretirement 126.6option position after that date. 126.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 126.8    Sec. 28. new text begin REPEALER. new text end 126.9 new text begin (a) new text end new text begin Minnesota Statutes 2008, section 353.01, subdivision 40, new text end new text begin is repealed effective new text end 126.10 new text begin July 1, 2010. new text end 126.11 new text begin (b) new text end new text begin Minnesota Statutes 2008, sections 353.46, subdivision 1a; and 353D.03, new text end 126.12 new text begin subdivision 2, new text end new text begin are repealed the day following final enactment. new text end 126.13 new text begin (c) new text end new text begin Minnesota Statutes 2008, section 353D.12, new text end new text begin is repealed effective July 1, 2011. new text end 126.14ARTICLE 6 126.15VOLUNTARY STATEWIDE LUMP-SUM VOLUNTEER FIREFIGHTER 126.16RETIREMENT PLAN 126.17    Section 1. Minnesota Statutes 2008, section 69.051, subdivision 3, is amended to read: 126.18    Subd. 3. Report by certain municipalities. new text begin (a) new text end Each municipality which has 126.19an organized fire department but which does not have a firefighters' relief association 126.20 new text begin governed by section 69.77 or sections 69.771 to 69.775 and which is not exempted new text end 126.21 new text begin under paragraph (b) new text end shall annually prepare a detailed financial report of the receipts and 126.22disbursements by the municipality for fire protection service during the preceding calendar 126.23year, on a form prescribed by the state auditor. The financial report shall new text begin must new text end contain any 126.24information which the state auditor deems necessary to disclose the sources of receipts 126.25and the purpose of disbursements for fire protection service. The financial report shall 126.26 new text begin must new text end be signed by the municipal clerk or clerk-treasurer of the municipality. The financial 126.27report shall new text begin must new text end be filed by the municipal clerk or clerk-treasurer with the state auditor on 126.28or before July 1 annually. The state auditor shall forward one copy to the county auditor of 126.29the county wherein the municipality is located. The municipality shall not qualify initially 126.30to receive, or be entitled subsequently to retain, state aid pursuant to new text begin under new text end this chapter if 126.31the financial reporting requirement or the applicable requirements of this chapter or any 126.32other statute or special law have not been complied with or are not fulfilled. 127.1 new text begin (b) Each municipality that has an organized fire department and provides retirement new text end 127.2 new text begin coverage to its firefighters through the voluntary statewide lump-sum volunteer firefighter new text end 127.3 new text begin retirement plan under chapter 353G qualifies to have fire state aid transmitted to and new text end 127.4 new text begin retained in the statewide lump-sum volunteer firefighter retirement fund without filing new text end 127.5 new text begin a detailed financial report if the executive director of the Public Employees Retirement new text end 127.6 new text begin Association certifies compliance by the municipality with the requirements of sections new text end 127.7 new text begin 353G.04 and 353G.08, paragraph (e), and by the applicable fire chief with the requirements new text end 127.8 new text begin of section 353G.07. new text end 127.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively from January 1, 2010. new text end 127.10    Sec. 2. Minnesota Statutes 2009 Supplement, section 353G.05, subdivision 2, is 127.11amended to read: 127.12    Subd. 2. Election of coverage. (a) The process for electing coverage of volunteer 127.13firefighters by the retirement plan is initiated by a request to the executive director for a 127.14cost analysis of the prospective retirement coverage. 127.15(b) If the volunteer firefighters are currently covered by a volunteer firefighters' relief 127.16association governed by chapter 424A, the cost analysis of the prospective retirement 127.17coverage must be requested jointly by the secretary of the volunteer firefighters' relief 127.18association, following approval of the request by the board of the volunteer firefighters' 127.19relief association, and the chief administrative officer of the entity associated with the 127.20relief association, following approval of the request by the governing body of the entity 127.21associated with the relief association. If the relief association is associated with more than 127.22one entity, the chief administrative officer of each associated entity must execute the 127.23request. If the volunteer firefighters are not currently covered by a volunteer firefighters' 127.24relief association, the cost analysis of the prospective retirement coverage must be 127.25requested by the chief administrative officer of the entity operating the fire department. 127.26The request must be made in writing and must be made on a form prescribed by the 127.27executive director. 127.28(c) The cost analysis of the prospective retirement coverage by the statewide 127.29retirement plan must be based on the service pension amount under section 353G.11 127.30closest to the service pension amount provided by the volunteer firefighters' relief 127.31association, if there is one new text begin the relief association is a lump-sum defined benefit plan, or new text end 127.32 new text begin the amount equal to 95 percent of the most current average account balance per relief new text end 127.33 new text begin association member if the relief association is a defined contribution plan new text end , or to the 127.34lowest service pension amount under section 353G.11 if there is no volunteer firefighters' 127.35relief association, rounded up, and any other service pension amount designated by 128.1the requester or requesters. The cost analysis must be prepared using a mathematical 128.2procedure certified as accurate by an approved actuary retained by the Public Employees 128.3Retirement Association. 128.4(d) If a cost analysis is requested and a volunteer firefighters' relief association exists 128.5that has filed the information required under section 69.051 in a timely fashion, upon 128.6request by the executive director, the state auditor shall provide the most recent data 128.7available on the financial condition of the volunteer firefighters' relief association, the most 128.8recent firefighter demographic data available, and a copy of the current relief association 128.9bylaws. If a cost analysis is requested, but no volunteer firefighters' relief association 128.10exists, the chief administrative officer of the entity operating the fire department shall 128.11provide the demographic information on the volunteer firefighters serving as members 128.12of the fire department requested by the executive director. 128.13(e) If a cost analysis is requested, the executive director of the State Board of 128.14Investment shall review the investment portfolio of the relief association, if applicable, 128.15for compliance with the applicable provisions of chapter 11A and for appropriateness 128.16for retention under the established investment objectives and investment policies of the 128.17State Board of Investment. If the prospective retirement coverage change is approved 128.18under paragraph (f), the State Board of Investment may require that the relief association 128.19liquidate any investment security or other asset which the executive director of the State 128.20Board of Investment has determined to be an ineligible or inappropriate investment for 128.21retention by the State Board of Investment. The security or asset liquidation must occur 128.22before the effective date of the transfer of retirement plan coverage. If requested to do 128.23so by the chief administrative officer of the relief association, the executive director of 128.24the State Board of Investment shall provide advice about the best means to conduct the 128.25liquidation. 128.26(f) Upon receipt of the cost analysis, the governing body of the municipality 128.27or independent nonprofit firefighting corporation associated with the fire department 128.28shall new text begin either new text end approve or disapprove the retirement coverage change within 90 days. If 128.29the retirement coverage change is not acted upon within 90 days, it is deemed to be 128.30disapproved. If the retirement coverage change is approved by the applicable governing 128.31body, coverage by the voluntary statewide lump-sum volunteer firefighter retirement plan 128.32is effective on the next following January 1. 128.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively from January 1, 2010. new text end 128.34    Sec. 3. Minnesota Statutes 2009 Supplement, section 353G.06, subdivision 1, is 128.35amended to read: 129.1    Subdivision 1. Special fund disestablishment. (a) On the date immediately prior 129.2to the effective date of the coverage change, the special fund of the applicable volunteer 129.3firefighters' relief association, if one exists, ceases to exist as a pension fund of the 129.4association and legal title to the assets of the special fund transfers to the State Board of 129.5Investment, with the beneficial title to the assets of the special fund remaining in the 129.6applicable volunteer firefighters. 129.7(b) If the market value of the special fund of the volunteer firefighters' relief 129.8association for which retirement coverage changed under this chapter declines in the 129.9interval between the date of the most recent financial report or statement, and the special 129.10fund disestablishment date, the applicable municipality shall transfer an additional amount 129.11to the State Board of Investment equal to that decline. If more than one municipality is 129.12responsible for the direct management of the fire department, the municipalities shall 129.13allocate the additional transfer amount among the various applicable municipalities 129.14one-half in proportion to the population of each municipality and one-half in proportion 129.15to the market value of each municipality. 129.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively from January 1, 2010. new text end 129.17    Sec. 4. Minnesota Statutes 2009 Supplement, section 353G.08, is amended to read: 129.18353G.08 RETIREMENT PLAN FUNDING; DISBURSEMENTS. 129.19     new text begin Subdivision 1. new text end new text begin Annual funding requirements. new text end (a) Annually, the executive director 129.20shall determine the funding requirements of each account in the voluntary statewide 129.21lump-sum volunteer firefighter retirement plan on or before August 1. The funding 129.22requirements as directed under this section, must be determined using a mathematical 129.23procedure developed and certified as accurate by an approved actuary retained by the 129.24Public Employees Retirement Association and based on present value factors using a six 129.25percent interest rate, without any decrement assumptions. The funding requirements 129.26must be certified to the entity or entities associated with the fire department whose active 129.27firefighters are covered by the retirement plan. 129.28(b) The overall funding balance of each account for the current calendar year must 129.29be determined in the following manner: 129.30(1) The total accrued liability for all active and deferred members of the account as 129.31of December 31 of the current year must be calculated based on the good time service 129.32credit of active and deferred members as of that date. 129.33(2) The total present assets of the account projected to December 31 of the current 129.34year, including receipts by and disbursements from the account anticipated to occur on or 130.1before December 31, must be calculated. To the extent possible, the market value of assets 130.2must be utilized in making this calculation. 130.3(3) The amount of the total present assets calculated under clause (2) must be 130.4subtracted from the amount of the total accrued liability calculated under clause (1). If the 130.5amount of total present assets exceeds the amount of the total accrued liability, then the 130.6account is considered to have a surplus over full funding. If the amount of the total present 130.7assets is less than the amount of the total accrued liability, then the account is considered 130.8to have a deficit from full funding. If the amount of total present assets is equal to the 130.9amount of the total accrued liability, then the special fund is considered to be fully funded. 130.10(c) The financial requirements of each account for the following calendar year must 130.11be determined in the following manner: 130.12(1) The total accrued liability for all active and deferred members of the account 130.13as of December 31 of the calendar year next following the current calendar year must be 130.14calculated based on the good time service used in the calculation under paragraph (b), 130.15clause (1), increased by one year. 130.16(2) The increase in the total accrued liability of the account for the following calendar 130.17year over the total accrued liability of the account for the current year must be calculated. 130.18(3) The amount of anticipated future administrative expenses of the account must be 130.19calculated by multiplying the dollar amount of the administrative expenses for the most 130.20recent prior calendar year by the factor of 1.035. 130.21(4) If the account is fully funded, the financial requirement of the account for the 130.22following calendar year is the total of the amounts calculated under clauses (2) and (3). 130.23(5) If the account has a deficit from full funding, the financial requirement of the 130.24account for the following calendar year is the total of the amounts calculated under clauses 130.25(2) and (3) plus an amount equal to one-tenth of the amount of the deficit from full 130.26funding of the account. 130.27(6) If the account has a surplus over full funding, the financial requirement of 130.28the account for the following calendar year is the financial requirement of the account 130.29calculated as though the account was fully funded under clause (4) and, if the account has 130.30also had a surplus over full funding during the prior two years, additionally reduced by an 130.31amount equal to one-tenth of the amount of the surplus over full funding of the account. 130.32(d) The required contribution of the entity or entities associated with the fire 130.33department whose active firefighters are covered by the retirement plan is the annual 130.34financial requirements of the account of the retirement plan under paragraph (c) reduced 130.35by the amount of any fire state aid payable under sections 69.011 to 69.051 reasonably 130.36anticipated to be received by the retirement plan attributable to the entity or entities during 131.1the following calendar year, and an amount of interest on the assets projected to be 131.2received during the following calendar year calculated at the rate of six percent per annum. 131.3The required contribution must be allocated between the entities if more than one entity 131.4is involved. A reasonable amount of anticipated fire state aid is an amount that does not 131.5exceed the fire state aid actually received in the prior year multiplied by the factor 1.035. 131.6(e) The required contribution calculated in paragraph (d) must be paid to the 131.7retirement plan on or before December 31 of the year for which it was calculated. If 131.8the contribution is not received by the retirement plan by December 31, it is payable 131.9with interest at an annual compound rate of six percent from the date due until the date 131.10payment is received by the retirement plan. If the entity does not pay the full amount of 131.11the required contribution, the executive director shall collect the unpaid amount under 131.12section 353.28, subdivision 6. 131.13     new text begin Subd. 2. new text end new text begin Cash flow funding requirement. new text end new text begin If the executive director determines that new text end 131.14 new text begin an account in the voluntary statewide lump-sum volunteer firefighter retirement plan has new text end 131.15 new text begin insufficient assets to meet the service pensions determined payable from the account, new text end 131.16 new text begin the executive director shall certify the amount of the potential service pension shortfall new text end 131.17 new text begin to the municipality or municipalities and the municipality or municipalities shall make new text end 131.18 new text begin an additional employer contribution to the account within ten days of the certification. new text end 131.19 new text begin If more than one municipality is associated with the account, unless the municipalities new text end 131.20 new text begin agree to a different allocation, the municipalities shall allocate the additional employer new text end 131.21 new text begin contribution one-half in proportion to the population of each municipality and one-half in new text end 131.22 new text begin proportion to the market value of the property of each municipality. new text end 131.23     new text begin Subd. 3. new text end new text begin Authorized account disbursements. new text end (f) The assets of the retirement 131.24fund may only be disbursed for: 131.25(1) the administrative expenses of the retirement plan; 131.26(2) the investment expenses of the retirement fund; 131.27(3) the service pensions payable under section 353G.10, 353G.11, 353G.14, or 131.28353G.15 ; and 131.29(4) the survivor benefits payable under section 353G.12 new text begin ; and new text end 131.30 new text begin (5) the disability benefit coverage insurance premiums under section 353G.115 new text end . 131.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively from January 1, 2010. new text end 131.32    Sec. 5. Minnesota Statutes 2009 Supplement, section 353G.09, subdivision 3, is 131.33amended to read: 132.1    Subd. 3. Alternative pension eligibility and computation. (a) An active member 132.2of the retirement plan is entitled to an alternative lump-sum service pension from the 132.3retirement plan if the person: 132.4(1) has separated from active service with the fire department for at least 30 days; 132.5(2) has attained the age of at least 50 years or the age for receipt of a service pension 132.6under the benefit plan of the applicable former volunteer firefighters' relief association 132.7as of the date immediately prior to the election of the retirement coverage change, 132.8whichever is later; 132.9(3) has completed at least five years of active service with the fire department and at 132.10least five years in total as a member of the applicable former volunteer firefighters' relief 132.11association or of the retirement plan, but has not rendered at least five years of good time 132.12service credit as a member of the retirement plan; and 132.13(4) applies in a manner prescribed by the executive director for the service pension. 132.14(b) new text begin If retirement coverage prior to statewide retirement plan coverage was provided new text end 132.15 new text begin by a defined benefit plan volunteer firefighters relief association, new text end the alternative lump-sum 132.16service pension is the service pension amount specified in the bylaws of the applicable 132.17former volunteer firefighters' relief association either as of the date immediately prior to 132.18the election of the retirement coverage change or as of the date immediately before the 132.19termination of firefighting services, whichever is earlier, multiplied by the total number 132.20of years of service as a member of that volunteer firefighters' relief association and as 132.21a member of the retirement plan. new text begin If retirement coverage prior to statewide retirement new text end 132.22 new text begin plan coverage was provided by a defined contribution plan volunteer firefighters relief new text end 132.23 new text begin association, the alternative lump-sum service pension is an amount equal to the person's new text end 132.24 new text begin account balance as of the date immediately prior to the date on which statewide retirement new text end 132.25 new text begin plan coverage was first provided to the person plus six percent annual compound interest new text end 132.26 new text begin from that date until the date immediately prior to the date of retirement. new text end 132.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively from January 1, 2010. new text end 132.28    Sec. 6. Minnesota Statutes 2009 Supplement, section 353G.11, subdivision 1, is 132.29amended to read: 132.30    Subdivision 1. Levels. The retirement plan provides the following levels of service 132.31pension amounts to be selected at the election of coverage, or, if fully funded, thereafter: 132.32 Level A $500 per year of good time service credit 132.33 Level B $750 new text begin $600 new text end per year of good time service credit 132.34 new text begin Level C new text end new text begin $700 per year of good time service credit new text end 132.35 new text begin Level D new text end new text begin $800 per year of good time service credit new text end 133.1 new text begin Level E new text end new text begin $900 per year of good time service credit new text end 133.2 Level C new text begin F new text end $1,000 per year of good time service credit 133.3 new text begin Level G new text end new text begin $1,250 per year of good time service credit new text end 133.4 Level D new text begin H new text end $1,500 per year of good time service credit 133.5 Level E new text begin I new text end $2,000 per year of good time service credit 133.6 Level F new text begin J new text end $2,500 per year of good time service credit 133.7 Level G new text begin K new text end $3,000 per year of good time service credit 133.8 Level H new text begin L new text end $3,500 per year of good time service credit 133.9 Level I new text begin M new text end $4,000 per year of good time service credit 133.10 Level J new text begin N new text end $4,500 per year of good time service credit 133.11 Level K new text begin O new text end $5,000 per year of good time service credit 133.12 Level L new text begin P new text end $5,500 per year of good time service credit 133.13 Level M new text begin Q new text end $6,000 per year of good time service credit 133.14 Level N new text begin R new text end $6,500 per year of good time service credit 133.15 Level O new text begin S new text end $7,000 per year of good time service credit 133.16 Level P new text begin T new text end $7,500 per year of good time service credit 133.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 133.18    Sec. 7. Minnesota Statutes 2009 Supplement, section 353G.11, is amended by adding a 133.19subdivision to read: 133.20     new text begin Subd. 1a. new text end new text begin Continuation of prior service pension levels. new text end new text begin If a municipality or new text end 133.21 new text begin independent nonprofit firefighting corporation elects to be covered by the retirement new text end 133.22 new text begin plan prior to January 1, 2010, and selects the $750 per year of good time service credit new text end 133.23 new text begin service pension amount effective for January 1, 2010, that level continues for the volunteer new text end 133.24 new text begin firefighters of that municipality or independent nonprofit firefighting corporation until a new text end 133.25 new text begin different service pension amount is selected under subdivision 2 after January 1, 2010. new text end 133.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 133.27    Sec. 8. new text begin [353G.115] DISABILITY BENEFIT COVERAGE; AUTHORITY FOR new text end 133.28 new text begin CASUALTY INSURANCE. new text end 133.29 new text begin (a) Except as provided in paragraph (b), no disability benefit is payable from the new text end 133.30 new text begin statewide retirement plan. new text end 133.31 new text begin (b) If the board approves the arrangement, disability coverage for statewide new text end 133.32 new text begin retirement plan members may be provided through a group disability insurance policy new text end 133.33 new text begin obtained from an insurance company licensed to do business in this state. The voluntary new text end 133.34 new text begin statewide lump-sum volunteer retirement plan is authorized to pay the premium for the new text end 133.35 new text begin disability insurance authorized by this paragraph. The proportional amount of the total new text end 134.1 new text begin annual disability insurance premium must be added to the required contribution amount new text end 134.2 new text begin determined under section 353G.08. new text end 134.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively from January 1, 2010. new text end 134.4    Sec. 9. Minnesota Statutes 2009 Supplement, section 424A.08, is amended to read: 134.5424A.08 MUNICIPALITY WITHOUT RELIEF ASSOCIATION; 134.6AUTHORIZED DISBURSEMENTS. 134.7(a) Any qualified municipality which is entitled to receive fire state aid but which 134.8has no volunteer firefighters' relief association directly associated with its fire department 134.9and which has no full-time firefighters with retirement coverage by the public employees 134.10police and fire retirement plan shall deposit the fire state aid in a special account 134.11established for that purpose in the municipal treasury. Disbursement from the special 134.12account may not be made for any purpose except: 134.13(1) payment of the fees, dues and assessments to the Minnesota State Fire 134.14Department Association and to the state Volunteer Firefighters' Benefit Association in 134.15order to entitle its firefighters to membership in and the benefits of these state associations; 134.16(2) payment of the cost of purchasing and maintaining needed equipment for the 134.17fire department; and 134.18(3) payment of the cost of construction, acquisition, repair, or maintenance of 134.19buildings or other premises to house the equipment of the fire department. 134.20(b) A qualified municipality which is entitled to receive fire state aid, which has no 134.21volunteer firefighters' relief association directly associated with its fire department new text begin , which new text end 134.22 new text begin does not participate in the voluntary statewide lump-sum volunteer firefighter retirement new text end 134.23 new text begin plan under chapter 353G, new text end and which has full-time firefighters with retirement coverage 134.24by the public employees police and fire retirement plan may disburse the fire state aid as 134.25provided in paragraph (a), for the payment of the employer contribution requirement with 134.26respect to firefighters covered by the public employees police and fire retirement plan under 134.27section 353.65, subdivision 3, or for a combination of the two types of disbursements. 134.28 new text begin (c) A municipality that has no volunteer firefighters' relief association directly new text end 134.29 new text begin associated with it and that participates in the voluntary statewide lump-sum volunteer new text end 134.30 new text begin firefighter retirement plan under chapter 353G shall transmit any fire state aid that it new text end 134.31 new text begin receives to the voluntary statewide lump-sum volunteer firefighter retirement fund. new text end 134.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively from January 1, 2010. new text end 135.1ARTICLE 7 135.2TEACHERS RETIREMENT ASSOCIATION SERVICE CREDIT 135.3PROCEDURE REVISIONS 135.4    Section 1. Minnesota Statutes 2008, section 354.05, is amended by adding a 135.5subdivision to read: 135.6     new text begin Subd. 41. new text end new text begin Annual base salary. new text end new text begin (a) "Annual base salary" means: new text end 135.7 new text begin (1) for an independent school district or educational cooperative, the lowest full-time new text end 135.8 new text begin Bachelor of Arts (BA) base contract salary for the previous fiscal year for that employing new text end 135.9 new text begin unit; new text end 135.10 new text begin (2) for a charter school, the lowest starting annual salary for a full-time licensed new text end 135.11 new text begin teacher employed during the previous fiscal year for that employing unit; and new text end 135.12 new text begin (3) for a state agency or professional organization, the lowest starting annual salary new text end 135.13 new text begin for a full-time Teachers Retirement Association covered position for the previous fiscal new text end 135.14 new text begin year for that employing unit. new text end 135.15 new text begin (b) If there is no previous fiscal year data because an employer unit is new and new text end 135.16 new text begin paragraph (c) does not apply, the annual base salary for the first year of operation will be new text end 135.17 new text begin as provided in paragraph (a), except that the base contract salary for the current fiscal year, new text end 135.18 new text begin rather than the previous fiscal year, must be used. new text end 135.19 new text begin (c) For a new employer unit created as a result of a merger or consolidation, the new text end 135.20 new text begin annual base salary must be the lowest annual base salary as specified in paragraph (a) for new text end 135.21 new text begin any of the employer units involved in the merger or consolidation. new text end 135.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2012. new text end 135.23    Sec. 2. Minnesota Statutes 2008, section 354.07, subdivision 5, is amended to read: 135.24    Subd. 5. Records; accounts; interest. The board shall keep a record of the 135.25receipts and disbursements of the fund and a separate account with each member of 135.26the association. The board shall also keep separate accounts for annuity payments, for 135.27employer contributions and all other necessary accounts and reserves. It shall determine 135.28annually the annual interest earnings of the fund which shall include realized capital gains 135.29and losses. Any amount in the capital reserve account on July 1, 1973 new text begin , new text end shall be transferred 135.30to the employer contribution's account. The annual interest earnings shall be apportioned 135.31and credited to the separate members' accounts except those covered under the provisions 135.32of section 354.44, subdivision 6 or 7. The rate to be used in this distribution computed to 135.33the last full quarter percent shall be determined by dividing the interest earnings by the 135.34total invested assets of the fund. The excess of the annual interest earnings in the excess 136.1earnings reserve which was not credited to the various accounts shall be credited to the 136.2gross interest earnings for the next succeeding year. 136.3    Sec. 3. Minnesota Statutes 2008, section 354.091, is amended to read: 136.4354.091 SERVICE CREDIT. 136.5     new text begin Subdivision 1. new text end new text begin Definition; monthly base salary. new text end new text begin For purposes of this section, new text end 136.6 new text begin "monthly base salary" means the annual base salary, as defined in section 354.05, new text end 136.7 new text begin subdivision 41, divided by 12. new text end 136.8     new text begin Subd. 2. new text end new text begin Service credit annual limit. new text end (a) In computing service credit, No teacher 136.9may receive credit for more than one year of teaching service for any fiscal year. 136.10Additionally, in crediting allowable service: 136.11(1) if a teacher teaches less than five hours in a day, service credit must be given for 136.12the fractional part of the day as the term of service performed bears to five hours; 136.13(2) if a teacher teaches five or more hours in a day, service credit must be given for 136.14only one day; 136.15(3) if a teacher teaches at least 170 full days in any fiscal year, service credit must be 136.16given for a full year of teaching service; and 136.17(4) if a teacher teaches for only a fractional part of the year, service credit must be 136.18given for such fractional part of the year in the same relationship as the period of service 136.19performed bears to 170 days. 136.20(b) A teacher must receive a full year of service credit based on the number of days 136.21in the employer's full school year if that school year is less than 170 days. Teaching 136.22service performed before July 1, 1961, must be computed under the law in effect at the 136.23time it was performed. 136.24(c) A teacher must not lose or gain retirement service credit as a result of the 136.25employer converting to a flexible or alternate work schedule. If the employer converts 136.26to a flexible or alternate work schedule, the forms for reporting teaching service and the 136.27procedures for determining service credit must be determined by the executive director 136.28with the approval of the board of trustees. 136.29     new text begin Subd. 3. new text end new text begin Service credit calculation. new text end new text begin (a) Except as specified in subdivisions 4 and new text end 136.30 new text begin 5, service credit must be calculated monthly by dividing the teacher's monthly salary by new text end 136.31 new text begin the monthly base salary for the teacher's employing unit and multiplying the result by new text end 136.32 new text begin 11.1 percent. new text end 136.33 new text begin (b) For purposes of computing service credit, salary must be allocated to each new text end 136.34 new text begin calendar month based on the pay period begin and end dates. If the pay period covers new text end 137.1 new text begin more than one calendar month, the salary must be allocated based on the number of days new text end 137.2 new text begin in each calendar month. new text end 137.3 new text begin (c) A teacher may not receive more than 11.1 percent of a year's service credit in new text end 137.4 new text begin a calendar month. new text end 137.5 new text begin (d) Annual service credit must be calculated by adding the allowable monthly new text end 137.6 new text begin service credit for all 12 months of the fiscal year, with the result rounded to two decimal new text end 137.7 new text begin places, subject to the annual limit specified in subdivision 2. new text end 137.8     new text begin Subd. 4. new text end new text begin Service credit determination for Minnesota State Colleges and new text end 137.9 new text begin Universities system teachers. new text end (d) For all services rendered on or after July 1, 2003, 137.10service credit for all members employed by the Minnesota State Colleges and Universities 137.11system must be determined: 137.12(1) for full-time employees, by the definition of full-time employment contained in 137.13the collective bargaining agreement for those units listed in section 179A.10, subdivision 137.142 , or contained in the applicable personnel or salary plan for those positions designated in 137.15section 179A.10, subdivision 1; new text begin and new text end 137.16(2) for part-time employees, by the appropriate proration of full-time equivalency 137.17based on the provisions contained in the collective bargaining agreement for those units 137.18listed in section 179A.10, subdivision 2, or contained in the applicable personnel or salary 137.19plan for those positions designated in section 179A.10, subdivision 1, and the applicable 137.20procedures of the Minnesota State Colleges and Universities system; and new text begin . new text end 137.21(3) in no case may a member receive more than one year of service credit for any 137.22fiscal year. 137.23     new text begin Subd. 5. new text end new text begin Service credit procedure, nontraditional schedules. new text end new text begin For employer units new text end 137.24 new text begin that have nontraditional work schedules or pay schedules, the procedure for determining new text end 137.25 new text begin service credit must be specified by the executive director with the approval of the board of new text end 137.26 new text begin trustees. new text end 137.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for teaching service performed after new text end 137.28 new text begin June 30, 2012. new text end 137.29    Sec. 4. Minnesota Statutes 2009 Supplement, section 354.52, subdivision 4b, is 137.30amended to read: 137.31    Subd. 4b. Payroll cycle reporting requirements. An employing unit shall provide 137.32the following data to the association for payroll warrants on an ongoing basis within 14 137.33calendar days after the date of the payroll warrant in a format prescribed by the executive 137.34director: 137.35(1) association member number; 138.1(2) employer-assigned employee number; 138.2(3) Social Security number; 138.3(4) amount of each salary deduction; 138.4(5) amount of salary as defined in section 354.05, subdivision 35, from which each 138.5deduction was made; 138.6(6) reason for payment; 138.7(7) service credit; 138.8(8) new text begin (7) new text end the beginning and ending dates of the payroll period covered and the date 138.9of actual payment; 138.10(9) new text begin (8) new text end fiscal year of salary earnings; 138.11(10) new text begin (9) new text end total remittance amount including employee, employer, and additional 138.12employer contributions; 138.13(11) new text begin (10) new text end reemployed annuitant salary under section 354.44, subdivision 5; and 138.14(12) new text begin (11) new text end other information as may be required by the executive director. 138.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2012. new text end 138.16    Sec. 5. Minnesota Statutes 2008, section 354.52, is amended by adding a subdivision 138.17to read: 138.18     new text begin Subd. 4d. new text end new text begin Annual base salary reporting. new text end new text begin An employing unit must provide the new text end 138.19 new text begin following data to the association on or before June 30 of each fiscal year: new text end 138.20 new text begin (1) annual base salary, as defined in section 354.05, subdivision 41; and new text end 138.21 new text begin (2) beginning and ending dates for the regular school work year. new text end 138.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2011. new text end 138.23    Sec. 6. Minnesota Statutes 2008, section 354.52, subdivision 6, is amended to read: 138.24    Subd. 6. Noncompliance consequences. new text begin (a) new text end An employing unit that does not 138.25comply with the reporting requirements under subdivision 2a, 4a, or 4b new text begin , or 4d, new text end must pay a 138.26fine of $5 per calendar day until the association receives the required data. 138.27 new text begin (b) If the annual base salary required to be reported under subdivision 4d has not new text end 138.28 new text begin been settled or determined as of June 16, the fine commences if the annual base salary has new text end 138.29 new text begin not been reported to the association within 14 days following the settlement date. new text end 138.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2011. new text end 138.31    Sec. 7. Minnesota Statutes 2008, section 354.66, subdivision 3, is amended to read: 139.1    Subd. 3. Part-time teaching position, defined. (a) For purposes of this section, 139.2the term "part-time teaching position" means a teaching position within the district in 139.3which the teacher is employed for at least 50 full days or a fractional equivalent thereof as 139.4prescribed in section , and for which the teacher is compensated in new text begin for new text end an amount 139.5 new text begin of at least 30 percent, but new text end not exceeding 80 percent of the compensation established by the 139.6board for a full-time teacher with identical education and experience with the employing 139.7unit. 139.8(b) For a teacher to which subdivision 1c, paragraph (b), applies, the term "part-time 139.9teaching position" means a teaching position within the district in which the teacher is 139.10employed for at least 25 full days or a fractional equivalent thereof as prescribed in section 139.11, and for which the teacher is compensated in new text begin for new text end an amount new text begin of at least 15 percent, new text end 139.12 new text begin but new text end not exceeding 40 percent of the compensation established by the board for a full-time 139.13teacher, with identical education and experience with the employing unit. 139.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for service provided after June 30, new text end 139.15 new text begin 2012. new text end 139.16ARTICLE 8 139.17MNSCU IRAP ADMINISTRATIVE PROVISIONS 139.18    Section 1. Minnesota Statutes 2008, section 11A.04, is amended to read: 139.1911A.04 DUTIES AND POWERS. 139.20The state board shall: 139.21(1) Act as trustees for each fund for which it invests or manages money in 139.22accordance with the standard of care set forth in section 11A.09 if state assets are involved 139.23and in accordance with chapter 356A if pension assets are involved. 139.24(2) Formulate policies and procedures deemed necessary and appropriate to carry 139.25out its functions. Procedures adopted by the board must allow fund beneficiaries and 139.26members of the public to become informed of proposed board actions. Procedures and 139.27policies of the board are not subject to the Administrative Procedure Act. 139.28(3) Employ an executive director as provided in section 11A.07. 139.29(4) Employ investment advisors and consultants as it deems necessary. 139.30(5) Prescribe policies concerning personal investments of all employees of the board 139.31to prevent conflicts of interest. 139.32(6) Maintain a record of its proceedings. 139.33(7) As it deems necessary, establish advisory committees subject to section 15.059 to 139.34assist the board in carrying out its duties. 140.1(8) Not permit state funds to be used for the underwriting or direct purchase of 140.2municipal securities from the issuer or the issuer's agent. 140.3(9) Direct the commissioner of management and budget to sell property other than 140.4money that has escheated to the state when the board determines that sale of the property 140.5is in the best interest of the state. Escheated property must be sold to the highest bidder in 140.6the manner and upon terms and conditions prescribed by the board. 140.7(10) Undertake any other activities necessary to implement the duties and powers 140.8set forth in this section. 140.9(11) Establish a formula or formulas to measure management performance and 140.10return on investment. Public pension funds in the state shall utilize the formula or 140.11formulas developed by the state board. 140.12(12) Except as otherwise provided in article XI, section 8, of the Constitution of the 140.13state of Minnesota, employ, at its discretion, qualified private firms to invest and manage 140.14the assets of funds over which the state board has investment management responsibility. 140.15There is annually appropriated to the state board, from the assets of the funds for which 140.16the state board utilizes a private investment manager, sums sufficient to pay the costs of 140.17employing private firms. Each year, by January 15, the board shall report to the governor 140.18and legislature on the cost and the investment performance of each investment manager 140.19employed by the board. 140.20(13) Adopt an investment policy statement that includes investment objectives, asset 140.21allocation, and the investment management structure for the retirement fund assets under 140.22its control. The statement may be revised at the discretion of the state board. The state 140.23board shall seek the advice of the council regarding its investment policy statement. 140.24Adoption of the statement is not subject to chapter 14. 140.25(14) Adopt a compensation plan setting the terms and conditions of employment for 140.26unclassified board employees who are not covered by a collective bargaining agreement. 140.27 new text begin (15) Contract, as necessary, with the board of trustees of the Minnesota State new text end 140.28 new text begin Universities and Colleges System for the provision of investment review and selection new text end 140.29 new text begin services under section 354B.25, subdivision 3, and arrange for the receipt of payment new text end 140.30 new text begin for those services. new text end 140.31There is annually appropriated to the state board, from the assets of the funds for 140.32which the state board provides investment services, sums sufficient to pay the costs of 140.33all necessary expenses for the administration of the board. These sums will be deposited 140.34in the State Board of Investment operating account, which must be established by the 140.35commissioner of management and budget. 141.1    Sec. 2. Minnesota Statutes 2008, section 354B.25, subdivision 1, is amended to read: 141.2    Subdivision 1. General governance. The individual retirement account plan is the 141.3administrative responsibility of the Board of Trustees of the Minnesota State Colleges 141.4and Universities. The Board of Trustees of the Minnesota State Colleges and Universities 141.5may administer the plan directly or may contract out for administrative services with a 141.6qualified third-party plan administrative entity new text begin and may contract out for investment review new text end 141.7 new text begin and selection service new text end . 141.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 141.9    Sec. 3. Minnesota Statutes 2008, section 354B.25, subdivision 3, is amended to read: 141.10    Subd. 3. Selection of financial institutions. (a) The investment options provided 141.11under subdivision 2 must be selected by new text begin the board. The board may contract with new text end the State 141.12Board of Investment new text begin or with a third party to provide the investment review and selection new text end 141.13 new text begin services. The board must not contract with a third party to provide the investment option new text end 141.14 new text begin review and selection services if the third party markets, offers, or has other material new text end 141.15 new text begin interest in investment products. The board must require any third party contracted to new text end 141.16 new text begin provide investment review and selection services to disclose to the board any contracts new text end 141.17 new text begin for services and any financial relationships it has with vendors under consideration to new text end 141.18 new text begin provide investment products under the plan new text end . 141.19In making its selection, at a minimum, the State board of Investment shall consider 141.20the following: 141.21(1) the experience and ability of the financial institution to provide benefits and 141.22products that are suited to meet the needs of plan participants; 141.23(2) the relationship of those benefits and products provided by the financial 141.24institution to their cost; 141.25(3) the financial strength and stability of the financial institution; and 141.26(4) the fees and expenses associated with the investment products in comparison to 141.27other products of similar risk and rates of return. 141.28(b) After selecting a financial institution, the State board of Investment must 141.29periodically review each financial institution and the offered products. The periodic 141.30review must occur at least every three years. In making its review, the State board of 141.31Investment may retain appropriate consulting services to assist it in its periodic review, 141.32establish a budget for the cost of the periodic review process, and charge a proportional 141.33share of these costs to the reviewed financial institution. 141.34(c) Contracts with financial institutions under this section must be executed by the 141.35board and must be approved by the State Board of Investment before execution. 142.1(d) The State Board of Investment shall also establish policies and procedures under 142.2section , clause (2), to carry out the provisions of this subdivision. 142.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 142.4    Sec. 4. Minnesota Statutes 2008, section 354C.14, is amended to read: 142.5354C.14 INVESTMENT OF DEDUCTIONS AND CONTRIBUTIONS. 142.6(a) The Board of Trustees of the Minnesota State Colleges and Universities shall 142.7invest the deductions and contributions under section 354C.12, after deduction of 142.8administrative expenses under section 354C.12, subdivision 4, in annuity contracts or 142.9custodial accounts from financial institutions selected by the State Board of Investment 142.10under section 354B.25, subdivision 3. 142.11(b) The retirement contributions and death benefits provided by annuity contracts or 142.12custodial accounts purchased by the Board of Trustees of the Minnesota State Colleges 142.13and Universities are owned by the supplemental retirement plan and must be paid in 142.14accordance with those annuity contracts or custodial account agreements. 142.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 142.16    Sec. 5. new text begin REPEALER. new text end 142.17 new text begin Minnesota Statutes 2008, section 354C.15, new text end new text begin is repealed. new text end 142.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 142.19ARTICLE 9 142.20ACTUARIAL VALUATION REPORTING DEADLINE DATES 142.21    Section 1. Minnesota Statutes 2008, section 356.215, subdivision 3, is amended to read: 142.22    Subd. 3. Reports. (a) The actuarial valuations required annually must be made as of 142.23the beginning of each fiscal year. 142.24    (b) Two copies of the completed valuation must be delivered to the executive 142.25director of the Legislative Commission on Pensions and Retirement, to the commissioner 142.26of management and budget, and to the Legislative Reference Library. new text begin The copies of the new text end 142.27 new text begin actuarial valuation must be filed with the executive director of the Legislative Commission new text end 142.28 new text begin on Pensions and Retirement, the commissioner of management and budget, and the new text end 142.29 new text begin Legislative Reference Library no later than the last day of the sixth month occurring new text end 142.30 new text begin after the end of the previous fiscal year. new text end 143.1    (c) Two copies of a quadrennial experience study must be filed with the 143.2executive director of the Legislative Commission on Pensions and Retirement, with the 143.3commissioner of management and budget, and with the Legislative Reference Library, not 143.4later than the first new text begin last new text end day of the 11th new text begin 12th new text end month occurring after the end of the last fiscal 143.5year of the four-year period which the experience study covers. 143.6    (d) For actuarial valuations and experience studies prepared at the direction of 143.7the Legislative Commission on Pensions and Retirement, two copies new text begin one copy new text end of the 143.8document must be delivered to the governing or managing board or administrative officials 143.9of the applicable public pension and retirement fund or plan. 143.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2010. new text end 143.11ARTICLE 10 143.12EARLY RETIREMENT INCENTIVE MODIFICATIONS 143.13    Section 1. Minnesota Statutes 2008, section 356.351, subdivision 1, is amended to read: 143.14    Subdivision 1. Eligibility. (a) An eligible appointing authority may offer the early 143.15retirement incentive in this section to an employee who: 143.16    (1) has at least 15 years of allowable service in one or more of the funds listed 143.17in section 356.30, subdivision 3, or has at least 15 years of coverage by the individual 143.18retirement account plan governed by chapter 354B new text begin employment as indicated in the new text end 143.19 new text begin personnel records of the applicable employing unit new text end and upon retirement is immediately 143.20eligible for a retirement annuity or benefit from one or more of these funds new text begin retirement plan new text end 143.21 new text begin governed by chapter 354B, or section 356.30 new text end ; 143.22    (2) terminates service after the effective date of this section, and before July 15, 143.232009 new text begin October 1, 2012 new text end ; and 143.24    (3) is not in receipt of a public retirement plan retirement annuity, retirement 143.25allowance, or service pension during the month preceding the termination of qualified 143.26employment. new text begin ; and new text end 143.27 new text begin (4) has not been eligible to receive a retirement annuity for a period longer than new text end 143.28 new text begin ten years. new text end 143.29    (b) An eligible appointing authority is any Minnesota governmental employing unit 143.30which employs one or more employees with retirement coverage by a retirement plan 143.31listed in section 356.30 by virtue of that employment. 143.32    (c) An elected official is not eligible to receive an incentive under this section. 144.1 new text begin (d) Employees of the Minnesota State Colleges and Universities System who new text end 144.2 new text begin participate in the incentive program under section 136F.481 are not eligible for the new text end 144.3 new text begin incentive under this section. new text end 144.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 144.5    Sec. 2. Minnesota Statutes 2009 Supplement, section 356.351, subdivision 2, is 144.6amended to read: 144.7    Subd. 2. Incentive. (a) For an employee new text begin who is new text end eligible under subdivision 1, if new text begin for new text end 144.8 new text begin whom an early retirement incentive is new text end approved under paragraph (b), new text begin and who terminates new text end 144.9 new text begin employment as provided for in the agreement, new text end the employer may provide an amount up to 144.10$17,000, to an employee who terminates service, to new text begin : new text end 144.11 new text begin (1) a severance amount in lieu of and not to exceed the maximum amount of regular new text end 144.12 new text begin state-provided unemployment compensation for that particular person if the person had new text end 144.13 new text begin been laid off; and new text end 144.14 new text begin (2) an additional severance amount not to exceed the amount of the employer's new text end 144.15 new text begin contribution for health insurance, dental insurance, and basic life insurance that would new text end 144.16 new text begin have been payable to the particular person under the applicable collective bargaining new text end 144.17 new text begin agreement or personnel policy at the time of termination. new text end 144.18 new text begin (b) The severance amounts under paragraph (a) must new text end be used: 144.19    (1) unless the appointing authority has designated the use under clause (2) or the use 144.20under clause (3) for the initial retirement incentive applicable to that employing entity 144.21under Laws 2007, chapter 134, after May 26, 2007, for deposit in the employee's account 144.22in the health care savings plan established by section 352.98; 144.23    (2) notwithstanding section 352.01, subdivision 11, or 354.05, subdivision 13, 144.24whichever applies, if the appointing authority has designated the use under this clause 144.25for the initial retirement incentive applicable to that employing entity under Laws 2007, 144.26chapter 134, after May 26, 2007, for purchase of service credit for unperformed service 144.27sufficient to enable the employee to retire under section 352.116, subdivision 1, paragraph 144.28(b); 353.30; 354.44, subdivision 6, paragraph (b), or 354A.31, subdivision 6, paragraph 144.29(b), whichever applies; or 144.30    (3) if the appointing authority has designated the use under this clause for the initial 144.31retirement incentive applicable to the employing entity under Laws 2007, chapter 134, 144.32after May 26, 2007, for purchase of a lifetime annuity or an annuity for a specific number 144.33of years from the applicable retirement plan to provide additional benefits, as provided in 144.34paragraph (d). 145.1    (b) new text begin (c) new text end Approval to provide the incentive must be obtained from the commissioner 145.2of finance if the eligible employee is a state employee and must be obtained from the 145.3applicable governing board with respect to any other employing entity. An employee is 145.4eligible for the payment under paragraph (a) new text begin (b) new text end , clause (2), if the employee uses money 145.5from a deferred compensation account that, combined with the payment under paragraph 145.6(a) new text begin (b) new text end , clause (2), would be sufficient to purchase enough service credit to qualify for 145.7retirement under section 352.116, subdivision 1, paragraph (b); 353.30, subdivision 1a; 145.8354.44, subdivision 6 , paragraph (b), or 354A.31, subdivision 6, paragraph (b), whichever 145.9applies. 145.10    (c) new text begin (d) new text end The cost to purchase service credit under paragraph (a) new text begin (b) new text end , clause (2), must 145.11be made in accordance with section 356.551. 145.12    (d) The new text begin (e) An new text end annuity purchase under paragraph (a) new text begin (b) new text end , clause (3), must be made 145.13using annuity factors, as determined by the actuary retained under section 356.214, 145.14derived from the applicable factors used by the applicable retirement plan to calculate 145.15optional annuity forms. The purchased annuity must be the actuarial equivalent of the 145.16incentive amount. 145.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 145.18ARTICLE 11 145.19OPTIONAL ANNUITY REVOCATION FOLLOWING CERTAIN 145.20MARRIAGE DISSOLUTIONS 145.21    Section 1. new text begin [356.48] REVOCATION OF OPTIONAL ANNUITY DUE TO new text end 145.22 new text begin MARRIAGE DISSOLUTION OR ANNULMENT. new text end 145.23     new text begin Subdivision 1. new text end new text begin Covered plans. new text end new text begin This section applies to the following retirement new text end 145.24 new text begin plans: new text end 145.25 new text begin (1) the general state employees retirement plan of the Minnesota State Retirement new text end 145.26 new text begin System established under chapter 352; new text end 145.27 new text begin (2) the correctional state employees retirement plan of the Minnesota State new text end 145.28 new text begin Retirement System established under chapter 352; new text end 145.29 new text begin (3) the State Patrol retirement plan established under chapter 352B; new text end 145.30 new text begin (4) the unclassified state employees retirement program of the Minnesota State new text end 145.31 new text begin Retirement System established under chapter 352D; new text end 145.32 new text begin (5) the general employee retirement plan of the Public Employees Retirement new text end 145.33 new text begin Association established under chapter 353; new text end 146.1 new text begin (6) the public employees police and fire retirement plan established under chapter new text end 146.2 new text begin 353; new text end 146.3 new text begin (7) the local government correctional employees retirement plan of the Public new text end 146.4 new text begin Employees Retirement Association established under chapter 353E; new text end 146.5 new text begin (8) the Teachers Retirement Association established under chapter 354; and new text end 146.6 new text begin (9) the uniform judicial retirement plan established under chapter 490. new text end 146.7     new text begin Subd. 2. new text end new text begin Treatment. new text end new text begin (a) The treatment specified in this section applies if, after new text end 146.8 new text begin the accrual date of an annuity or benefit from an applicable plan or plans, a marriage new text end 146.9 new text begin dissolution decree or annulment decree is rendered that specifies that the designation new text end 146.10 new text begin of an optional annuity must be revoked and if the other requirements specified in this new text end 146.11 new text begin section are satisfied. new text end 146.12 new text begin (b) Notwithstanding any law to the contrary, if the applicable pension plan or plans new text end 146.13 new text begin have provisions of law that revise the monthly benefit amount payable to the primary new text end 146.14 new text begin annuitant upon the death of the individual named as the optional joint annuitant, the new text end 146.15 new text begin monthly benefit amount must be recomputed as though the individual that had been named new text end 146.16 new text begin as the optional joint annuitant died on the date a certified copy of the marriage dissolution new text end 146.17 new text begin or annulment decree is received by the chief administrative officer. Payment of any benefit new text end 146.18 new text begin adjustment under this section is prospective only. new text end 146.19     new text begin Subd. 3. new text end new text begin Restrictions. new text end new text begin (a) This section does not apply if the marriage dissolution new text end 146.20 new text begin decree or annulment decree is not consistent with the requirements under section 518.58. new text end 146.21 new text begin (b) The pension plan benefit recipient must not designate, and the court may not new text end 146.22 new text begin require that the member designate, a subsequent optional annuity beneficiary. new text end 146.23 new text begin (c) This section does not apply if more than one surviving individual was named as new text end 146.24 new text begin an optional joint annuitant. new text end 146.25     new text begin Subd. 4. new text end new text begin Submission of documentation. new text end new text begin To receive the treatment provided in new text end 146.26 new text begin this section, an eligible retiree or disabilitant must provide, to the chief administrative new text end 146.27 new text begin officer of the applicable pension plan, a certified copy of the marriage dissolution or new text end 146.28 new text begin annulment decree. The retiree or disabilitant and the joint annuitant must also submit a new text end 146.29 new text begin form, prescribed by the chief administrative officer of the applicable pension plan and new text end 146.30 new text begin signed by both individuals, requesting the annuity bounce back as provided in subdivision new text end 146.31 new text begin 2. The individuals must also provide any other documentation the chief administrative new text end 146.32 new text begin officer may request. new text end 146.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment and new text end 146.34 new text begin applies retroactively to any marriage dissolution decree or annulment decree requiring the new text end 146.35 new text begin revocation of an optional annuity form granted at any time prior to the date of enactment. new text end 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 147.3that it is necessary to preserve the marital assets of the parties, the court may order the 147.4sale of the homestead of the parties or the sale of other marital assets, as the individual 147.5circumstances may require, during the pendency of a proceeding for a dissolution of 147.6marriage or an annulment. If the court orders a sale, it may further provide for the 147.7disposition of the funds received from the sale during the pendency of the proceeding. 147.8If liquid or readily liquidated marital property other than property representing vested 147.9pension benefits or rights is available, the court, so far as possible, shall divide the property 147.10representing vested pension benefits or rights by the disposition of an equivalent amount 147.11of the liquid or readily liquidated property. 147.12(b) The court may order a partial distribution of marital assets during the pendency 147.13of a proceeding for a dissolution of marriage or an annulment for good cause shown or 147.14upon the request of both parties, provided that the court shall fully protect the interests 147.15of the other party. 147.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 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 147.19plan 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 147.21under the terms of the plan; 147.22    (2) is not payable for a period that exceeds the time that pension plan benefits are 147.23payable to the pension plan benefit recipient; 147.24    (3) is not payable in a lump-sum amount from defined benefit pension plan assets 147.25attributable in any fashion to a spouse with the status of an active member, deferred 147.26retiree, 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 147.28of the specified payment period with the right to any remaining payments accruing to an 147.29estate or to more than one survivor, is payable only to a trustee on behalf of the estate or 147.30the 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 147.32commence until the public plan member submits a valid application for a public pension 147.33plan benefit and the benefit becomes payable. 147.34    (b) The individual retirement account plans established under chapter 354B may 147.35provide in its plan document, if published and made generally available, for an alternative 148.1marital property division or distribution of individual retirement account plan assets. If an 148.2alternative division or distribution procedure is provided, it applies in place of paragraph 148.3(a), clause (5). 148.4 new text begin (c) If liquid or readily liquidated marital property other than property representing new text end 148.5 new text begin vested pension benefits or rights is available, the court, so far as possible, shall divide the new text end 148.6 new text begin property representing vested pension benefits or rights by the disposition of an equivalent new text end 148.7 new text begin amount of the liquid or readily liquidated property. new text end 148.8 new text begin (d) If sufficient liquid or readily liquidated marital property other than property new text end 148.9 new text begin representing vested pension benefits or rights is not available, the court may order the new text end 148.10 new text begin revocation of the designation of an optional annuity beneficiary in pension plans specified new text end 148.11 new text begin in section 356.48 or in any other pension plan in which plan-governing law or governing new text end 148.12 new text begin documents allow revocation of an optional annuity in marital dissolution or annulment new text end 148.13 new text begin situations. new text end 148.14 new text begin EFFECTIVE DATE. new text end new text begin (a) This section is effective the day following final enactment. new text end 148.15 new text begin (b) This section applies retroactively, for plans specified in section 365.48, to any new text end 148.16 new text begin marriage dissolution decree or annulment decree requiring the revocation of an optional new text end 148.17 new text begin annuity form granted at any time prior to the date of enactment. new text end 148.18ARTICLE 12 148.19ADMINISTRATIVE CONSOLIDATION OF THE MINNEAPOLIS 148.20EMPLOYEES RETIREMENT FUND INTO THE PUBLIC EMPLOYEES 148.21RETIREMENT ASSOCIATION 148.22    Section 1. Minnesota Statutes 2009 Supplement, section 353.01, subdivision 2a, 148.23is amended to read: 148.24    Subd. 2a. Included employees. (a) Public employees whose salary from 148.25employment in one or more positions within one governmental subdivision exceeds $425 148.26in 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 148.28employees shall participate as members of the association with retirement coverage by 148.29the public new text begin general new text end employees retirement plan or new text begin under this chapter, new text end the public employees 148.30police and fire retirement plan under this chapter, or the local government correctional 148.31employees retirement plan under chapter 353E, whichever applies, as a condition of their 148.32employment 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 148.35provided in subdivision 2d, paragraph (a); or 149.1    (3) are employees of the governmental subdivisions listed in subdivision 2d, 149.2paragraph (b), where the governmental subdivision has not elected to participate as a 149.3governmental subdivision covered by the association. 149.4    (b) A public employee who was a member of the association on June 30, 2002, 149.5based on employment that qualified for membership coverage by the public employees 149.6retirement plan or the public employees police and fire plan under this chapter, or the 149.7local government correctional employees retirement plan under chapter 353E as of June 149.830, 2002, retains that membership for the duration of the person's employment in that 149.9position or incumbency in elected office. Except as provided in subdivision 28, the person 149.10shall participate as a member until the employee or elected official terminates public 149.11employment 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 149.14employees 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 149.17Police Relief Association who are not excluded employees under subdivision 2b due to 149.18coverage by the relief association pension plan and who elect Public Employee Retirement 149.19Association general plan coverage under Laws 2009, chapter 169, article 12, section 10. 149.20 new text begin (d) For the purpose of participation in the MERF division of the general employees new text end 149.21 new text begin retirement plan, public employees include employees who were members of the former new text end 149.22 new text begin Minneapolis Employees Retirement Fund on June 29, 2010, and who participate as new text end 149.23 new text begin members of the MERF division of the association. new text end 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 149.26participate as members of the association with retirement coverage by the public new text begin general new text end 149.27employees retirement plan, the local government correctional employees retirement plan 149.28under 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, 149.30or persons who are appointed to fill a vacancy in an elective office of a governing body, 149.31whose term of office commences on or after July 1, 2002, for the service to be rendered 149.32in that elective position; 149.33    (2) election officers or election judges; 149.34    (3) patient and inmate personnel who perform services for a governmental 149.35subdivision; 150.1    (4) except as otherwise specified in subdivision 12a, employees who are hired for 150.2a temporary position as defined under subdivision 12a, and employees who resign from 150.3a nontemporary position and accept a temporary position within 30 days in the same 150.4governmental subdivision; 150.5    (5) employees who are employed by reason of work emergency caused by fire, 150.6flood, storm, or similar disaster; 150.7    (6) employees who by virtue of their employment in one governmental subdivision 150.8are required by law to be a member of and to contribute to any of the plans or funds 150.9administered by the Minnesota State Retirement System, the Teachers Retirement 150.10Association, the Duluth Teachers Retirement Fund Association, the St. Paul Teachers 150.11Retirement Fund Association, the Minneapolis Employees Retirement Fund, or any police 150.12or firefighters relief association governed by section 69.77 that has not consolidated 150.13with the Public Employees Retirement Association, or any local police or firefighters 150.14consolidation account who have not elected the type of benefit coverage provided by the 150.15public employees police and fire fund under sections 353A.01 to 353A.10, or any persons 150.16covered by section 353.665, subdivision 4, 5, or 6, who have not elected public employees 150.17police and fire plan benefit coverage. This clause must not be construed to prevent a person 150.18from being a member of and contributing to the Public Employees Retirement Association 150.19and also belonging to and contributing to another public pension plan or fund for other 150.20service 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 150.22period of time becomes a member of the association unless contributions are made to 150.23another public retirement fund on the salary based on the other service or to the Teachers 150.24Retirement 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 150.26under the federal Old Age, Survivors, Disability, and Health Insurance Program for the 150.27performance of service as specified in United States Code, title 42, section 410(a)(8)(A), 150.28as amended through January 1, 1987, if no irrevocable election of coverage has been made 150.29under 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 150.3123 and are enrolled on a full-time basis to attend or are attending classes on a full-time 150.32basis at an accredited school, college, or university in an undergraduate, graduate, or 150.33professional-technical program, or a public or charter high school; 150.34    (9) resident physicians, medical interns, and pharmacist residents and pharmacist 150.35interns 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 151.2by an accredited educational institution; 151.3    (11) persons who hold a part-time adult supplementary technical college license who 151.4render part-time teaching service in a technical college; 151.5    (12) except for employees of Hennepin County or Hennepin Healthcare System, 151.6Inc., foreign citizens working for a governmental subdivision with a work permit of less 151.7than three years, or an H-1b visa valid for less than three years of employment. Upon 151.8notice to the association that the work permit or visa extends beyond the three-year period, 151.9the 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 151.11association before 1972 and who did not elect to participate from July 1, 1988, to October 151.121, 1988; 151.13    (14) except as provided in section 353.86, volunteer ambulance service personnel, 151.14as defined in subdivision 35, but persons who serve as volunteer ambulance service 151.15personnel may still qualify as public employees under subdivision 2 and may be members 151.16of the Public Employees Retirement Association and participants in the public new text begin general new text end 151.17employees retirement fund or the public employees police and fire fund, whichever 151.18applies, on the basis of compensation received from public employment service other than 151.19service as volunteer ambulance service personnel; 151.20    (15) except as provided in section 353.87, volunteer firefighters, as defined in 151.21subdivision 36, engaging in activities undertaken as part of volunteer firefighter duties; 151.22provided that a person who is a volunteer firefighter may still qualify as a public 151.23employee under subdivision 2 and may be a member of the Public Employees Retirement 151.24Association and a participant in the public new text begin general new text end employees retirement fund or the public 151.25employees police and fire fund, whichever applies, on the basis of compensation received 151.26from public employment activities other than those as a volunteer firefighter; 151.27    (16) pipefitters and associated trades personnel employed by Independent School 151.28District No. 625, St. Paul, with coverage under a collective bargaining agreement by the 151.29pipefitters local 455 pension plan who were either first employed after May 1, 1997, or, 151.30if first employed before May 2, 1997, elected to be excluded under Laws 1997, chapter 151.31241, article 2, section 12; 151.32    (17) electrical workers, plumbers, carpenters, and associated trades personnel 151.33employed by Independent School District No. 625, St. Paul, or the city of St. Paul, 151.34who have retirement coverage under a collective bargaining agreement by the Electrical 151.35Workers Local 110 pension plan, the United Association Plumbers Local 34 pension plan, 151.36or the Carpenters Local 87 pension plan who were either first employed after May 1, 152.12000, or, if first employed before May 2, 2000, elected to be excluded under Laws 2000, 152.2chapter 461, article 7, section 5; 152.3    (18) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers, 152.4painters, allied tradesworkers, and plasterers employed by the city of St. Paul or 152.5Independent School District No. 625, St. Paul, with coverage under a collective 152.6bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan, 152.7the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324 152.8pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities 152.9Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if 152.10first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special 152.11Session chapter 10, article 10, section 6; 152.12    (19) plumbers employed by the Metropolitan Airports Commission, with coverage 152.13under a collective bargaining agreement by the Plumbers Local 34 pension plan, who either 152.14were first employed after May 1, 2001, or if first employed before May 2, 2001, elected to 152.15be 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 152.17subdivision 12b which are limited in duration by the employer to 185 consecutive calendar 152.18days or less in each year of employment with the governmental subdivision; 152.19    (21) persons who are provided supported employment or work-study positions 152.20by a governmental subdivision and who participate in an employment or industries 152.21program maintained for the benefit of these persons where the governmental subdivision 152.22limits the position's duration to three years or less, including persons participating in a 152.23federal or state subsidized on-the-job training, work experience, senior citizen, youth, or 152.24unemployment relief program where the training or work experience is not provided as a 152.25part 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 152.28reemployment. 152.29    Sec. 3. Minnesota Statutes 2008, section 353.01, is amended by adding a subdivision 152.30to read: 152.31     new text begin Subd. 47. new text end new text begin MERF division. new text end new text begin "MERF division" means the separate retirement plan new text end 152.32 new text begin within the general employees retirement plan of the Public Employees Retirement new text end 152.33 new text begin Association containing the applicable provisions of Minnesota Statutes 2008, chapter new text end 152.34 new text begin 422A. new text end 153.1    Sec. 4. Minnesota Statutes 2008, section 353.01, is amended by adding a subdivision 153.2to read: 153.3     new text begin Subd. 48. new text end new text begin MERF division account. new text end new text begin "MERF division account" means the separate new text end 153.4 new text begin account within the retirement fund of the general employees retirement fund of the new text end 153.5 new text begin Public Employees Retirement Association in which the actuarial liabilities of the former new text end 153.6 new text begin Minneapolis Employees Retirement Fund are held, and in which the assets of the former new text end 153.7 new text begin Minneapolis Employees Retirement Fund are credited. new text end 153.8    Sec. 5. Minnesota Statutes 2008, section 353.05, is amended to read: 153.9353.05 CUSTODIAN OF FUNDS. 153.10The commissioner of management and budget shall be ex officio treasurer of the 153.11retirement funds of the association new text begin , including the MERF division, new text end and the general bond of 153.12the commissioner of management and budget to the state shall new text begin must new text end be so conditioned 153.13as to cover all liability for acts as treasurer of these funds. All moneys new text begin money new text end of the 153.14association received by the commissioner of management and budget shall new text begin must new text end be set 153.15aside in the state treasury to the credit of the proper fund new text begin or account new text end . The commissioner 153.16of management and budget shall transmit monthly to the executive director a detailed 153.17statement of all amounts so received and credited to the fund new text begin funds, including the MERF new text end 153.18 new text begin division new text end . Payments out new text begin of new text end the fund shall new text begin funds, including the MERF division, may only new text end 153.19be made only on warrants issued by the commissioner of management and budget, upon 153.20abstracts signed by the executive director; provided that abstracts for investment may be 153.21signed by the secretary new text begin executive director new text end of the State Board of Investment. 153.22    Sec. 6. Minnesota Statutes 2009 Supplement, section 353.06, is amended to read: 153.23353.06 STATE BOARD OF INVESTMENT TO INVEST FUNDS. 153.24The executive director shall from time to time certify to the State Board of 153.25Investment for investment such portions of the retirement fund new text begin funds of the association, new text end 153.26 new text begin including the MERF division, new text end as in its new text begin the director's new text end judgment may not be required for 153.27immediate use. The State Board of Investment shall thereupon invest and reinvest the sum 153.28so certified, or transferred, in such securities as are duly authorized as legal investments 153.29for state employees retirement fund new text begin under section 11A.24 new text end and shall have new text begin has new text end authority to 153.30sell, convey, and exchange such securities and invest and reinvest the securities when it 153.31deems it desirable to do so and shall sell securities upon request of the board of trustees 153.32 new text begin executive director new text end when such funds are needed for its purposes. All of the provisions 153.33regarding accounting procedures and restrictions and conditions for the purchase and 153.34sale of securities under chapter 11A must apply to the accounting, purchase and sale of 154.1securities for the new text begin funds of the new text end Public Employees Retirement fund new text begin Association, including new text end 154.2 new text begin the MERF division new text end . 154.3    Sec. 7. Minnesota Statutes 2008, section 353.27, as amended by Laws 2009, chapter 154.4169, article 1, section 32, and article 4, sections 9, 10, 11, and 12, is amended to read: 154.5353.27 PUBLIC new text begin GENERAL new text end EMPLOYEES RETIREMENT FUND. 154.6    Subdivision 1. Income; disbursements. There is a special fund known as the 154.7"public new text begin general new text end employees retirement fund," the "retirement fund," or the "fund," which 154.8must include all the assets of the new text begin general employees retirement plan of the new text end association. 154.9This fund must be credited with all contributions, all interest and all other income new text begin of the new text end 154.10 new text begin general employees retirement plan of the Public Employees Retirement Association that new text end 154.11 new text begin are new text end authorized by law. From this fund there is appropriated the payments authorized by 154.12this chapter new text begin sections 353.01 to 353.46 new text end in the amounts and at such time provided herein, 154.13including the expenses of administering the new text begin general employees retirement plan and new text end fund. 154.14     new text begin Subd. 1a. new text end new text begin MERF division account established; revenue and disbursements. new text end new text begin The new text end 154.15 new text begin MERF division account is established as a special account. The MERF division account new text end 154.16 new text begin includes all of the assets of the former Minneapolis Employees Retirement Fund that new text end 154.17 new text begin were transferred to the administration of the Public Employees Retirement Association new text end 154.18 new text begin under section 353.50. The special account is credited with the contributions under new text end 154.19 new text begin section 353.50, subdivision 7, state aid under sections 356.43 and 422A.101, subdivision new text end 154.20 new text begin 3, investment performance on the special account assets, and all other income of the new text end 154.21 new text begin MERF division authorized by law. The payments of annuities and benefits authorized by new text end 154.22 new text begin Minnesota Statutes 2008, chapter 422A, in the amounts and at the times provided in new text end 154.23 new text begin that chapter, and the administrative expenses of the MERF division are appropriated new text end 154.24 new text begin from the special account. new text end 154.25    Subd. 2. new text begin General employees retirement plan; new text end employee contribution. (a) For 154.26a basic member new text begin of the general employees retirement plan of the Public Employees new text end 154.27 new text begin Retirement Association new text end , the employee contribution is 9.10 percent of salary. For a 154.28coordinated member new text begin of the general employees retirement plan of the Public Employees new text end 154.29 new text begin Retirement Association new text end , the employee contribution is six percent of salary plus any 154.30contribution rate adjustment under subdivision 3b. 154.31(b) These contributions must be made by deduction from salary as defined in section 154.32353.01, subdivision 10 , in the manner provided in subdivision 4. If any portion of a 154.33member's salary is paid from other than public funds, the member's employee contribution 154.34must be based on the total salary received by the member from all sources. 155.1    Subd. 3. new text begin General employees retirement plan; new text end employer contribution. (a) For 155.2a basic member new text begin of the general employees retirement plan of the Public Employees new text end 155.3 new text begin Retirement Association new text end , the employer contribution is 9.10 percent of salary. For a 155.4coordinated member new text begin of the general employees retirement plan of the Public Employees new text end 155.5 new text begin Retirement Association new text end , the employer contribution is six percent of salary plus any 155.6contribution rate adjustment under subdivision 3b. 155.7(b) This contribution must be made from funds available to the employing 155.8subdivision by the means and in the manner provided in section 353.28. 155.9    Subd. 3a. Additional employer contribution. (a) An additional employer 155.10contribution new text begin to the general employees retirement fund of the Public Employees Retirement new text end 155.11 new text begin Association new text end must be made equal to the following applicable percentage of the total salary 155.12amount 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 1.00 155.18These contributions must be made from funds available to the employing subdivision 155.19by 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 155.21for January 1, 2009, or January 1, 2010, must not be implemented if, following receipt of 155.22the July 1, 2008, or July 1, 2009, annual actuarial valuation reports new text begin report new text end under section 155.23356.215 , respectively, the actuarially required contributions are equal to or less than the 155.24total 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 new text begin general new text end 155.26 new text begin employees retirement new text end plan new text begin of the Public Employees Retirement Association new text end equal or 155.27exceed the actuarial accrued liability of the plan as determined by the actuary retained 155.28under sections 356.214 and 356.215. The repeal is effective on the first day of the first full 155.29pay period occurring after March 31 of the calendar year following the issuance of the 155.30actuarial 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 155.33employee contribution under subdivision 2, the employer contribution under subdivision 155.343, the additional employer contribution under subdivision 3a, and any additional 155.35contribution previously imposed under this subdivision exceeds the total of the normal 155.36cost, the administrative expenses, and the amortization contribution of the new text begin general new text end 155.37 new text begin employees new text end retirement plan as reported in the most recent actuarial valuation of the 156.1retirement plan prepared by the actuary retained under section 356.214 and prepared under 156.2section 356.215 and the standards for actuarial work of the Legislative Commission on 156.3Pensions and Retirement. For purposes of this section, a contribution deficiency exists if 156.4the total of the employee contributions under subdivision 2, the employer contributions 156.5under subdivision 3, the additional employer contribution under subdivision 3a, and any 156.6additional contribution previously imposed under this subdivision is less than the total 156.7of the normal cost, the administrative expenses, and the amortization contribution of the 156.8 new text begin general employees new text end retirement plan as reported in the most recent actuarial valuation of the 156.9retirement plan prepared by the actuary retained under section 356.214 and prepared under 156.10section 356.215 and the standards for actuarial work of the Legislative Commission on 156.11Pensions and Retirement. 156.12(b) Employee and employer contributions new text begin to the general employees retirement plan new text end 156.13under subdivisions 2 and 3 must be adjusted: 156.14(1) if, after July 1, 2010, the regular actuarial valuations of the general employees 156.15retirement plan of the Public Employees Retirement Association under section 356.215 156.16indicate that there is a contribution sufficiency under paragraph (a) equal to or greater 156.17than 0.5 percent of covered payroll for two consecutive years, the coordinated program 156.18employee and employer contribution rates must be decreased as determined under 156.19paragraph (c) to a level such that the sufficiency equals no more than 0.25 percent of 156.20covered 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 156.22retirement plan of the Public Employees Retirement Association under section 356.215 156.23indicate that there is a deficiency equal to or greater than 0.5 percent of covered payroll for 156.24two consecutive years, the coordinated program employee and employer contribution rates 156.25must be increased as determined under paragraph (c) to a level such that no deficiency 156.26exists based on the most recent actuarial valuation. 156.27(c) The new text begin general employees retirement plan new text end contribution rate increase or decrease 156.28must be determined by the executive director of the Public Employees Retirement 156.29Association, must be reported to the chair and the executive director of the Legislative 156.30Commission on Pensions and Retirement on or before the next February 1, and, if the 156.31Legislative Commission on Pensions and Retirement does not recommend against the rate 156.32change or does not recommend a modification in the rate change, is effective on the 156.33next July 1 following the determination by the executive director that a contribution 156.34deficiency or sufficiency has existed for two consecutive fiscal years based on the most 156.35recent actuarial valuations under section 356.215. If the actuarially required contribution 156.36 new text begin of the general employees retirement plan new text end exceeds or is less than the total support provided 157.1by the combined employee and employer contribution rates by more than 0.5 percent of 157.2covered payroll, the new text begin general employees retirement plan new text end coordinated program employee 157.3and employer contribution rates must be adjusted incrementally over one or more years to 157.4a level such that there remains a contribution sufficiency of no more than 0.25 percent 157.5of covered payroll. 157.6(d) No incremental adjustment may exceed 0.25 percent for either the new text begin general new text end 157.7 new text begin employees retirement plan new text end coordinated program employee and employer contribution rates 157.8per year in which any adjustment is implemented. A new text begin general employees retirement plan new text end 157.9contribution rate adjustment under this subdivision must not be made until at least two 157.10years have passed since fully implementing a previous adjustment under this subdivision. 157.11 new text begin (e) The general employees retirement plan contribution sufficiency or deficiency new text end 157.12 new text begin determination under paragraphs (a) to (d) must be made without the inclusion of the new text end 157.13 new text begin contributions to, the funded condition of, or the actuarial funding requirements of the new text end 157.14 new text begin MERF division. new text end 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 157.17contributions from the salary of each employee who qualifies for membership new text begin in the new text end 157.18 new text begin general employees retirement plan of the Public Employees Retirement Association or in new text end 157.19 new text begin the public employees police and fire retirement plan new text end under this chapter and remit payment 157.20in a manner prescribed by the executive director for the aggregate amount of the employee 157.21contributions, the employer contributions and the additional employer contributions to be 157.22received within 14 calendar days. The head of each department or the person's designee 157.23shall for each pay period submit to the association a salary deduction report in the format 157.24prescribed by the executive director. Data required to be submitted as part of salary 157.25deduction 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 157.30actual 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 157.33who qualifies for membership new text begin in the general employees retirement plan of the Public new text end 157.34 new text begin Employees Retirement Association or in the public employees police and fire retirement new text end 157.35 new text begin plan new text end in the format prescribed by the executive director. The required enrollment data 157.36on new employees must be submitted to the association prior to or concurrent with the 158.1submission of the initial employee salary deduction. The employer shall also report 158.2to the association all member employment status changes, such as leaves of absence, 158.3terminations, and death, and shall report the effective dates of those changes, on an 158.4ongoing basis for the payroll cycle in which they occur. The employer shall furnish data, 158.5forms, and reports as may be required by the executive director for proper administration 158.6of the retirement system. Before implementing new or different computerized reporting 158.7requirements, the executive director shall give appropriate advance notice to governmental 158.8subdivisions to allow time for system modifications. 158.9(c) Notwithstanding paragraph (a), the association new text begin executive director new text end may provide 158.10for less frequent reporting and payments for small employers. 158.11    Subd. 7. Adjustment for erroneous receipts or disbursements. (a) Except 158.12as provided in paragraph (b), erroneous employee deductions and erroneous employer 158.13contributions and additional employer contributions new text begin to the general employees retirement new text end 158.14 new text begin plan of the Public Employees Retirement Association or to the public employees police new text end 158.15 new text begin and fire retirement plan new text end for a person, who otherwise does not qualify for membership 158.16under this chapter, are considered: 158.17(1) valid if the initial erroneous deduction began before January 1, 1990. Upon 158.18determination of the error by the association, the person may continue membership in the 158.19association while employed in the same position for which erroneous deductions were 158.20taken, or file a written election to terminate membership and apply for a refund upon 158.21termination 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, 158.231990. Upon determination of the error, the association shall refund all erroneous employee 158.24deductions and all erroneous employer contributions as specified in paragraph (e). No 158.25person may claim a right to continued or past membership in the association based on 158.26erroneous 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 158.28membership in the new text begin general employees retirement plan of the Public Employees Retirement new text end 158.29Association new text begin or in the public employees police and fire retirement plan new text end by virtue of 158.30concurrent employment before July 1, 1978, which required contributions to another 158.31retirement fund or relief association established for the benefit of officers and employees 158.32of a governmental subdivision, are invalid. Upon discovery of the error, the association 158.33shall remove all invalid service and, upon termination of public service, the association 158.34shall refund all erroneous employee deductions to the person, with interest as determined 158.35under section 353.34, subdivision 2, and all erroneous employer contributions without 158.36interest to the employer. This paragraph has both retroactive and prospective application. 159.1(c) Adjustments to correct employer contributions and employee deductions taken 159.2in error from amounts which are not salary under section 353.01, subdivision 10, must 159.3be made as specified in paragraph (e). The period of adjustment must be limited to the 159.4fiscal year in which the error is discovered by the association and the immediate two 159.5preceding fiscal years. 159.6(d) If there is evidence of fraud or other misconduct on the part of the employee or 159.7the employer, the board of trustees may authorize adjustments to the account of a member 159.8or former member to correct erroneous employee deductions and employer contributions 159.9on invalid salary and the recovery of any overpayments for a period longer than provided 159.10for under paragraph (c). 159.11(e) Upon discovery of the receipt of erroneous employee deductions and employer 159.12contributions under paragraph (a), clause (2), or paragraph (c), the association must require 159.13the employer to discontinue the erroneous employee deductions and erroneous employer 159.14contributions 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 159.16invalid employee deductions with interest on the invalid employee deductions at the rate 159.17specified under section 353.34, subdivision 2, from the received date of each invalid salary 159.18transaction through the date the credit or refund is made; and the employer must pay the 159.19refunded 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 159.22deductions to the former member through a refund with interest at the rate specified under 159.23section 353.34, subdivision 2, from the received date of each invalid salary transaction 159.24through 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 159.26receiving an optional annuity or survivor benefit, for whom it has been determined an 159.27overpayment must be recovered, adjust the payment amount and recover the overpayments 159.28as provided under this section; and 159.29(3) return the invalid employer contributions reported on behalf of a member or 159.30former member to the employer by providing a credit against future contributions payable 159.31by the employer. 159.32(f) In the event that a salary warrant or check from which a deduction for the 159.33retirement fund was taken has been canceled or the amount of the warrant or check 159.34returned to the funds of the department making the payment, a refund of the sum 159.35deducted, or any portion of it that is required to adjust the deductions, must be made 159.36to the department or institution. 160.1(g) If the accrual date of any retirement annuity, survivor benefit, or disability benefit 160.2is within the limitation period specified in paragraph (c), and an overpayment has resulted 160.3by using invalid service or salary, or due to any erroneous calculation procedure, the 160.4association must recalculate the annuity or benefit payable and recover any overpayment 160.5as provided under subdivision 7b. 160.6(h) Notwithstanding the provisions of this subdivision, the association may apply 160.7the Revenue Procedures defined in the federal Internal Revenue Service Employee Plans 160.8Compliance Resolution System and not issue a refund of erroneous employee deductions 160.9and employer contributions or not recover a small overpayment of benefits if the cost to 160.10correct 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 160.12failure by an employer to follow the statutory requirements for reporting eligible members 160.13and salary must be paid by the employer. 160.14    Subd. 7a. Deductions or contributions transmitted by error. (a) If employee 160.15deductions and employer contributions new text begin under this section, section 353.50, 353.65, or new text end 160.16 new text begin 353E.03 new text end were erroneously transmitted to the association, but should have been transmitted 160.17to another Minnesota public pension plan, the executive director shall transfer the 160.18erroneous employee deductions and employer contributions to the appropriate retirement 160.19fund or individual account, as applicable, without interest. The time limitations specified 160.20in subdivisions 7 and 12 do not apply. 160.21(b) For purposes of this subdivision, a Minnesota public pension plan means a 160.22plan specified in section 356.30, subdivision 3, or the plans governed by chapters 353D 160.23and 354B. 160.24(c) A potential transfer under paragraph (a) that is reasonably determined to cause 160.25the plan to fail to be a qualified plan under section 401(a) of the federal Internal Revenue 160.26Code, as amended, must not be made by the executive director of the association. Within 160.2730 days after being notified by the Public Employees Retirement Association of an 160.28unmade potential transfer under this paragraph, the employer of the affected person 160.29must transmit an amount representing the applicable salary deductions and employer 160.30contributions, without interest, to the retirement fund of the appropriate Minnesota public 160.31pension plan, or to the applicable individual account if the proper coverage is by a defined 160.32contribution plan. The association must provide the employing unit a credit for the amount 160.33of the erroneous salary deductions and employer contributions against future contributions 160.34from the employer. If the employing unit receives a credit under this paragraph, the 160.35employing unit is responsible for refunding to the applicable employee any amount that 160.36had been erroneously deducted from the person's salary. 161.1    Subd. 7b. Recovery of overpayments. (a) In the event the executive director 161.2determines that an overpaid annuity or benefit that new text begin from the general employees retirement new text end 161.3 new text begin plan of the Public Employees Retirement Association, the public employees police and new text end 161.4 new text begin fire retirement plan, or the local government correctional employees retirement plan new text end is 161.5the result of invalid salary included in the average salary used to calculate the payment 161.6amount must be recovered, the association must determine the amount of the employee 161.7deductions taken in error on the invalid salary, with interest determined in the manner 161.8provided for a former member under subdivision 7, paragraph (e), clause (2), item (i), 161.9and must subtract that amount from the total annuity or benefit overpayment, and the 161.10remaining 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 161.12overpaid benefits, the balance must be refunded to the person to whom the benefit or 161.13annuity is being paid. 161.14(c) Any invalid employer contributions reported on the invalid salary must be 161.15credited 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 161.17disability benefit for which an overpayment is being recovered, dies before recovery of 161.18the overpayment is completed and a joint and survivor optional annuity is payable, the 161.19remaining balance of the overpaid annuity or benefit must continue to be recovered from 161.20the payment to the optional annuity beneficiary. 161.21(e) If the association finds that a refund has been overpaid to a former member, 161.22beneficiary or other person, the amount of the overpayment must be recovered new text begin for the new text end 161.23 new text begin benefit of the respective retirement fund or account new text end . 161.24(f) The board of trustees shall adopt policies directing the period of time and manner 161.25for the collection of any overpaid retirement or optional annuity, and survivor or disability 161.26benefit, or a refund that the executive director determines must be recovered as provided 161.27under this section. 161.28    Subd. 7c. Limitation on additional plan coverage. No deductions for any plan 161.29under this chapter or chapter 353E may be taken from the salary of a person who is 161.30employed by a governmental subdivision under section 353.01, subdivision 6, and who is 161.31receiving disability benefit payments from any plan under this chapter or chapter 353E 161.32unless the person waives the right to further disability benefit payments. 161.33    Subd. 8. District court reporters; salary deductions. Deductions from the salary 161.34of a district court reporter in a judicial district consisting of two or more counties shall new text begin new text end 161.35 new text begin must new text end be made by the auditor of the county in which the bond and official oath of such 161.36district 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 162.2elected officer of a governmental subdivision who was or is a "public employee" within 162.3the meaning of section 353.01 and was or is a member of the fund new text begin general employees new text end 162.4 new text begin retirement plan of the Public Employees Retirement Association new text end and whose salary 162.5was or is paid in whole or in part from revenue derived by fees and assessments, shall 162.6pay employee contribution in the amount, at the time, and in the manner provided in 162.7subdivisions 2 and 4. This subdivision shall new text begin does new text end not apply to district court reporters. 162.8The employer contribution as provided in subdivision 3, and the additional employer 162.9contribution as provided in subdivision 3a, with respect to such service shall new text begin must new text end be 162.10paid by the governmental subdivision. This subdivision shall have new text begin has new text end both retroactive 162.11and prospective application as to all such members; and every employing governmental 162.12subdivision is deemed liable, retroactively and prospectively, for all employer and 162.13additional employer contributions for every such member new text begin of the general employees new text end 162.14 new text begin retirement plan new text end in its employ. Delinquencies under this section shall be new text begin are new text end governed 162.15in all respects by section 353.28. 162.16    Subd. 10. Employer exclusion reports. The head of a department shall annually 162.17furnish the executive director with an exclusion report listing only those employees in 162.18potentially PERA-eligible new text begin PERA general employees retirement plan-eligible new text end positions 162.19who were not reported as members of the association new text begin general employees retirement plan new text end 162.20and who worked during the school year for school employees and calendar year for 162.21nonschool employees. The department head must certify the accuracy and completeness 162.22of the exclusion report to the association. The executive director shall prescribe the 162.23manner and forms, including standardized exclusion codes, to be used by a governmental 162.24subdivision in preparing and filing exclusion reports. The executive director shall also 162.25check the exclusion report to ascertain whether any omissions have been made by a 162.26department head in the reporting of new public employees for membership. The executive 162.27director may delegate an association employee under section 353.03, subdivision 3a, 162.28paragraph (b), clause (5), to conduct a field audit to review the payroll records of a 162.29governmental subdivision. 162.30    Subd. 11. Employers; required to furnish requested information. (a) All 162.31governmental subdivisions shall furnish promptly such other information relative to the 162.32employment status of all employees or former employees, including, but not limited to, 162.33payroll abstracts pertaining to all past and present employees, as may be requested by the 162.34executive director, including schedules of salaries applicable to various categories of 162.35employment. 163.1(b) In the event payroll abstract records have been lost or destroyed, for whatever 163.2reason or in whatever manner, so that such schedules of salaries cannot be furnished 163.3therefrom, the employing governmental subdivision, in lieu thereof, shall furnish to the 163.4association an estimate of the earnings of any employee or former employee for any 163.5period as may be requested by the executive director. If the association is provided a 163.6schedule of estimated earnings, the executive director is authorized to use the same as a 163.7basis for making whatever computations might be necessary for determining obligations 163.8of the employee and employer to the new text begin general employees new text end retirement fund new text begin plan, the public new text end 163.9 new text begin employees police and fire retirement plan, or the local government correctional employees new text end 163.10 new text begin retirement plan new text end . If estimates are not furnished by the employer at the request of the 163.11executive director, the executive director may estimate the obligations of the employee 163.12and employer to the new text begin general employees new text end retirement fund new text begin , the public employees police and new text end 163.13 new text begin fire retirement plan, or the local government correctional employees retirement plan new text end based 163.14upon those records that are in its possession. 163.15    Subd. 12. Omitted salary deductions; obligations. (a) In the case of omission 163.16of required deductions new text begin for the general employees retirement plan, the public employees new text end 163.17 new text begin police and fire retirement plan, or the local government correctional employees retirement new text end 163.18 new text begin plan new text end from the salary of an employee, the department head or designee shall immediately, 163.19upon discovery, report the employee for membership and deduct the employee deductions 163.20under subdivision 4 during the current pay period or during the pay period immediately 163.21following the discovery of the omission. Payment for the omitted obligations may only be 163.22made in accordance with reporting procedures and methods established by the executive 163.23director. 163.24(b) When the entire omission period of an employee does not exceed 60 days, the 163.25governmental subdivision may report and submit payment of the omitted employee 163.26deductions and the omitted employer contributions through the reporting processes under 163.27subdivision 4. 163.28(c) When the omission period of an employee exceeds 60 days, the governmental 163.29subdivision shall furnish to the association sufficient data and documentation upon which 163.30the obligation for omitted employee and employer contributions can be calculated. 163.31The omitted employee deductions must be deducted from the employee's subsequent 163.32salary payment or payments and remitted to the association new text begin for deposit in the applicable new text end 163.33 new text begin retirement fund new text end . The employee shall pay omitted employee deductions due for the 60 163.34days prior to the end of the last pay period in the omission period during which salary 163.35was earned. The employer shall pay any remaining omitted employee deductions and any 163.36omitted employer contributions, plus cumulative interest at an annual rate of 8.5 percent 164.1compounded annually, from the date or dates each omitted employee contribution was 164.2first payable. 164.3(d) An employer shall not hold an employee liable for omitted employee deductions 164.4beyond the pay period dates under paragraph (c), nor attempt to recover from the employee 164.5those employee deductions paid by the employer on behalf of the employee. Omitted 164.6deductions due under paragraph (c) which are not paid by the employee constitute a 164.7liability of the employer that failed to deduct the omitted deductions from the employee's 164.8salary. The employer shall make payment with interest at an annual rate of 8.5 percent 164.9compounded annually. Omitted employee deductions are no longer due if an employee 164.10terminates public service before making payment of omitted employee deductions to 164.11the association, but the employer remains liable to pay omitted employer contributions 164.12plus interest at an annual rate of 8.5 percent compounded annually from the date the 164.13contributions were first payable. 164.14(e) The association may not commence action for the recovery of omitted employee 164.15deductions and employer contributions after the expiration of three calendar years after 164.16the calendar year in which the contributions and deductions were omitted. Except as 164.17provided under paragraph (b), no payment may be made or accepted unless the association 164.18has already commenced action for recovery of omitted deductions. An action for recovery 164.19commences on the date of the mailing of any written correspondence from the association 164.20requesting information from the governmental subdivision upon which to determine 164.21whether or not omitted deductions occurred. 164.22    Subd. 12a. Terminated employees: omitted deductions. A terminated employee 164.23 new text begin who was a member of the general employees retirement plan of the Public Employees new text end 164.24 new text begin Retirement Association, the public employees police and fire retirement plan, or the local new text end 164.25 new text begin government correctional employees retirement plan and new text end who has a period of employment 164.26in which previously omitted employer contributions were made under subdivision 12 164.27but for whom no, or only partial, omitted employee contributions have been made, or 164.28a member who had prior coverage in the association for which previously omitted 164.29employer contributions were made under subdivision 12 but who terminated service 164.30before required omitted employee deductions could be withheld from salary, may pay the 164.31omitted employee deductions for the period on which omitted employer contributions 164.32were previously paid plus interest at an annual rate of 8.5 percent compounded annually. 164.33A terminated employee may pay the omitted employee deductions plus interest within six 164.34months of an initial notification from the association of eligibility to pay those omitted 164.35deductions. If a terminated employee is reemployed in a position covered under a public 164.36pension fund under section 356.30, subdivision 3, and elects to pay omitted employee 165.1deductions, payment must be made no later than six months after a subsequent termination 165.2of public service. 165.3    Subd. 12b. Terminated employees: immediate eligibility. If deductions were 165.4omitted from salary adjustments or final salary of a terminated employee new text begin who was a new text end 165.5 new text begin member of the general employees retirement plan, the public employees police and fire new text end 165.6 new text begin retirement plan, or the local government correctional employees retirement plan and new text end who 165.7is immediately eligible to draw a monthly benefit, the employer shall pay the omitted 165.8employer and employer additional contributions plus interest on both the employer and 165.9employee amounts due at an annual rate of 8.5 percent compounded annually. The 165.10employee shall pay the employee deductions within six months of an initial notification 165.11from the association of eligibility to pay omitted deductions or the employee forfeits 165.12the right to make the payment. 165.13    Subd. 13. Certain warrants canceled. A warrant payable from the new text begin general new text end 165.14 new text begin employees new text end retirement fund new text begin , the public employees police and fire retirement fund, or the new text end 165.15 new text begin local government correctional retirement fund new text end remaining unpaid for a period of six 165.16months must be canceled into the new text begin applicable new text end retirement fund and not new text begin canceled new text end into the 165.17 new text begin state's new text end general fund. 165.18    Subd. 14. Periods before initial coverage date. (a) If an entity is determined to 165.19be a governmental subdivision due to receipt of a written notice of eligibility from the 165.20association new text begin with respect to the general employees retirement plan, the public employees new text end 165.21 new text begin police and fire retirement plan, or the local government correctional retirement plan new text end , that 165.22employer and its employees are subject to the requirements of subdivision 12, effective 165.23retroactively to the date that the executive director of the association determines that 165.24the entity first met the definition of a governmental subdivision, if that date predates 165.25the notice of eligibility. 165.26    (b) If the retroactive time period under paragraph (a) exceeds three years, an 165.27employee is authorized to purchase service credit in the applicable Public Employees 165.28Retirement Association plan for the portion of the period in excess of three years, by 165.29making payment under section 356.551. Notwithstanding new text begin any provision of new text end section 165.30356.551, subdivision 2 , new text begin to the contrary, new text end regarding time limits on purchases, payment new text begin of a new text end 165.31 new text begin service credit purchase amount new text end may be made anytime before new text begin the new text end termination of public 165.32service. 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 165.35retirement plan, other than a volunteer firefighters relief association. If this paragraph 166.1applies, an individual is prohibited from purchasing service credit new text begin from a Public Employees new text end 166.2 new text begin Retirement Association plan new text end 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 166.5to a refund of accumulated employee deductions under subdivision 2, or to a deferred 166.6annuity under subdivision 3. Application for a refund may not be made before the date of 166.7termination of public service. Except as specified in paragraph (b), a refund must be paid 166.8within 120 days following receipt of the application unless the applicant has again become 166.9a 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, 166.11a 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 166.13Retirement Association general employees retirement plan, new text begin the MERF division, new text end the 166.14Public Employees Retirement Association police and fire retirement plan, or the public 166.15employees local government corrections service retirement plan, and who is employed 166.16by a different employer and who becomes an active member covered by one of the other 166.17two plans, may receive a refund of employee contributions plus six percent interest 166.18compounded 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 new text begin general new text end 166.21 new text begin employees retirement new text end fund any moneys new text begin money new text end received in the form of contributions, 166.22donations, 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. new text begin (a) new text end The annuity of a person otherwise eligible 166.25for an annuity under this chapter new text begin from the general employees retirement plan of the Public new text end 166.26 new text begin Employees Retirement Association, the public employees police and fire retirement plan, new text end 166.27 new text begin or the local government correctional employees retirement plan new text end must be suspended under 166.28subdivision 2 or reduced under subdivision 3, whichever results in the higher annual 166.29annuity amount, if the person reenters public service as a nonelective employee of a 166.30governmental subdivision in a position covered by this chapter or returns to work as an 166.31employee of a labor organization that represents public employees who are association 166.32members under this chapter and salary for the reemployment service exceeds the annual 166.33maximum earnings allowable for that age for the continued receipt of full benefit amounts 167.1monthly under the federal Old Age, Survivors and Disability Insurance Program as set by 167.2the secretary of health and human services under United States Code, title 42, section 403, 167.3in any calendar year. If the person has not yet reached the minimum age for the receipt 167.4of Social Security benefits, the maximum salary for the person is equal to the annual 167.5maximum earnings allowable for the minimum age for the receipt of Social Security 167.6benefits. 167.7 new text begin (b) The provisions of paragraph (a) do not apply to the members of the MERF new text end 167.8 new text begin division. new text end 167.9    Sec. 11. Minnesota Statutes 2008, section 353.37, subdivision 2, is amended to read: 167.10    Subd. 2. Suspension of annuity. new text begin (a) new text end The association shall suspend the annuity on 167.11the first of the month after the month in which the salary of the reemployed annuitant 167.12 new text begin described in subdivision 1, paragraph (a), new text end exceeds the maximums set in subdivision 1, 167.13 new text begin paragraph (a), new text end based only on those months in which the annuitant is actually employed 167.14in nonelective public service in a position covered under this chapter or employment 167.15with a labor organization that represents public employees who are association members 167.16 new text begin of a retirement plan new text end under this chapter new text begin or chapter 353E new text end . 167.17 new text begin (b) new text end An annuitant who is elected to public office after retirement may hold new text begin that new text end office 167.18and receive an annuity otherwise payable from new text begin a retirement plan administered by new text end the 167.19association. 167.20    Sec. 12. Minnesota Statutes 2008, section 353.37, subdivision 3, is amended to read: 167.21    Subd. 3. Reduction of annuity. new text begin (a) new text end The association shall reduce the amount 167.22of the annuity of a person who has not reached the retirement age by one-half of the 167.23amount in excess of the applicable reemployment income maximum under subdivision 167.241 new text begin , paragraph (a) new text end . 167.25 new text begin (b) new text end There is no reduction upon reemployment, regardless of income, for a person 167.26who 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 167.29annuity to the reemployed annuitant new text begin described in subdivision 1, paragraph (a), new text end at the 167.30start of each calendar year until the salary exceeds the maximums under subdivision 1, 167.31 new text begin paragraph (a), new text end or on the first of the month following new text begin the new text end termination of new text begin the new text end employment 167.32which resulted in the suspension of the annuity. The executive director may adopt policies 167.33regarding 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 168.3performed by an annuitant new text begin described in subdivision 1, paragraph (a), new text end subsequent to 168.4retirement under this chapter new text begin from the general employees retirement plan, the public new text end 168.5 new text begin employees police and fire retirement plan, or the local government correctional employees new text end 168.6 new text begin retirement plan new text end does not increase or decrease the amount of an annuity. The annuitant shall 168.7not make any further contributions to the association's new text begin a new text end defined benefit plan new text begin administered new text end 168.8 new text begin by the association new text end 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 right new text begin entitlement new text end of a deferred 168.11annuitant or other former member new text begin of the general employees retirement plan of the new text end 168.12 new text begin Public Employees Retirement Association, the Minneapolis Employees Retirement Fund new text end 168.13 new text begin division, the public employees police and fire retirement plan, or the local government new text end 168.14 new text begin correctional employees retirement plan new text end to receive an annuity under the law in effect at the 168.15time such new text begin the new text end person terminated public service is herein preserved; provided, however, new text begin . new text end 168.16The provisions of section 353.71, subdivision 2, as amended by Laws 1973, chapter 753 168.17shall new text begin , new text end apply to a deferred annuitant or other former member who first begins receiving an 168.18annuity 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 168.21coordinated member new text begin of the general employees retirement plan of the Public Employees new text end 168.22 new text begin Retirement Association new text end who prior to new text begin , before new text end July 1, 1979 new text begin , new text end was a member of the new text begin former new text end 168.23coordinated program of the new text begin former new text end Minneapolis Municipal Employees Retirement 168.24Fund and who prior to new text begin , before new text end July 1, 1978 new text begin , new text end was a member of the basic program of the 168.25Minneapolis Municipal Employees Retirement Fund shall: 168.26(1) be new text begin is new text end entitled to receive a retirement annuity when otherwise qualified, the 168.27calculation of which shall new text begin must new text end utilize the formula accrual rates specified in section 168.28422A.15, subdivision 1 , for that portion of credited service which was rendered prior to 168.29 new text begin before new text end July 1, 1978, and the formula accrual rates specified in section 353.29, subdivision 168.303 , for the remainder of credited service, both applied to the average salary as specified 168.31in section 353.29, subdivision 2 new text begin 353.01, subdivision 17a new text end . The formula accrual rates to 168.32be used in calculating the retirement annuity shall new text begin must new text end recognize the service after July 168.331, 1978 new text begin , new text end as a member of the new text begin former new text end coordinated program of the new text begin former new text end Minneapolis 168.34Municipal Employees Retirement Fund and after July 1, 1979 new text begin , new text end as a member of the 169.1 new text begin general employees retirement plan of the new text end Public Employees Retirement Association as 169.2a continuation of service rendered prior to new text begin before new text end July 1, 1978. The annuity amount 169.3attributable to service as a member of the basic program of the new text begin former new text end Minneapolis 169.4Municipal Employees Retirement Fund shall be new text begin is new text end payable by new text begin from new text end the Minneapolis 169.5Employees Retirement Fund new text begin MERF division new text end and the annuity amount attributable to all 169.6other service shall be new text begin is new text end payable by new text begin from the general employees retirement fund of new text end the 169.7Public Employees Retirement Association; new text begin . new text end 169.8(2) retain eligibility when otherwise qualified for a disability benefit from the 169.9Minneapolis Employees Retirement Fund until July 1, 1982, notwithstanding coverage 169.10by the Public Employees Retirement Association, if the member has or would, without 169.11the transfer of retirement coverage from the basic program of the Minneapolis Municipal 169.12Employees Retirement Fund to the coordinated program of the Minneapolis Municipal 169.13Employees Retirement Fund or from the coordinated program of the Minneapolis 169.14Municipal Employees Retirement Fund to the public employees retirement fund, have 169.15sufficient credited service prior to January 1, 1983, to meet the minimum service 169.16requirements for a disability benefit pursuant to section . The disability benefit 169.17amount attributable to service as a member of the basic program of the Minneapolis 169.18Municipal Employees Retirement Fund shall be payable by the Minneapolis Employees 169.19Retirement Fund and the disability benefit amount attributable to all other service shall be 169.20payable by the Public Employees Retirement Association. 169.21    Sec. 17. new text begin [353.50] MERF CONSOLIDATION ACCOUNT; ESTABLISHMENT new text end 169.22 new text begin AND OPERATION. new text end 169.23     new text begin Subdivision 1. new text end new text begin Administrative consolidation. new text end new text begin (a) Notwithstanding any provision new text end 169.24 new text begin of this chapter or chapter 422A to the contrary, the administration of the Minneapolis new text end 169.25 new text begin Employees Retirement Fund as the MERF division is transferred to the Public Employees new text end 169.26 new text begin Retirement Association board of trustees. The assets, service credit, and benefit liabilities new text end 169.27 new text begin of the Minneapolis Employees Retirement Fund transfer to the MERF division account new text end 169.28 new text begin within the general employees retirement plan of the Public Employees Retirement new text end 169.29 new text begin Association established by section 353.27, subdivision 1a, on July 1, 2010. new text end 169.30 new text begin (b) The creation of the MERF division must not be construed to alter the Social new text end 169.31 new text begin Security or Medicare coverage of any member of the former Minneapolis Employees new text end 169.32 new text begin Retirement Fund on June 29, 2010, while the person is employed in a position covered new text end 169.33 new text begin under the MERF division of the Public Employees Retirement Association. new text end 169.34     new text begin Subd. 2. new text end new text begin Membership transfer. new text end new text begin Effective June 30, 2010, the active, inactive, and new text end 169.35 new text begin retired members of the Minneapolis Employees Retirement Fund are transferred to the new text end 170.1 new text begin MERF division administered by the Public Employees Retirement Association and are no new text end 170.2 new text begin longer members of the Minneapolis Employees Retirement Fund. new text end 170.3     new text begin Subd. 3. new text end new text begin Service credit and benefit liability transfer. new text end new text begin (a) All allowable service new text end 170.4 new text begin credit and salary credit of the members of the Minneapolis Employees Retirement Fund new text end 170.5 new text begin as specified in the records of the Minneapolis Employees Retirement Fund through June new text end 170.6 new text begin 30, 2010, are transferred to the MERF division of the Public Employees Retirement new text end 170.7 new text begin Association and are credited by the MERF division. Annuities or benefits of persons new text end 170.8 new text begin who are active members of the former Minneapolis Employees Retirement Fund on new text end 170.9 new text begin June 30, 2010, must be calculated under Minnesota Statutes 2008, sections 422A.11; new text end 170.10 new text begin 422A.12; 422A.13; 422A.14; 422A.15; 422A.151; 422A.155; 422A.156; 422A.16; new text end 170.11 new text begin 422A.17; 422A.18; 422A.19; 422A.20; and 422A.23, but are only eligible for automatic new text end 170.12 new text begin postretirement adjustments after December 31, 2010, under section 356.415. new text end 170.13 new text begin (b) The liability for the payment of annuities and benefits of the Minneapolis new text end 170.14 new text begin Employees Retirement Fund retirees and benefit recipients as specified in the records new text end 170.15 new text begin of the Minneapolis Employees Retirement Fund on June 29, 2010, is transferred to the new text end 170.16 new text begin MERF division of the Public Employees Retirement Association on June 30, 2010. new text end 170.17     new text begin Subd. 4. new text end new text begin Records transfer. new text end new text begin On June 30, 2010, the executive director of the new text end 170.18 new text begin Minneapolis Employees Retirement Fund shall transfer all records and documents relating new text end 170.19 new text begin to the Minneapolis Employees Retirement Fund and its benefit plan to the executive new text end 170.20 new text begin director of the Public Employees Retirement Association. To the extent possible, original new text end 170.21 new text begin copies of all records and documents must be transferred. new text end 170.22     new text begin Subd. 5. new text end new text begin Transfer of title to assets. new text end new text begin On June 30, 2010, legal title to the assets of new text end 170.23 new text begin the Minneapolis Employees Retirement Fund transfers to the State Board of Investment new text end 170.24 new text begin and the assets must be invested under section 11A.14, as assets of the MERF division of new text end 170.25 new text begin the Public Employees Retirement Association. The MERF division is the successor in new text end 170.26 new text begin interest to all claims that the former Minneapolis Employees Retirement Fund may have new text end 170.27 new text begin or may assert against any person and is the successor in interest to all claims which could new text end 170.28 new text begin have been asserted against the former Minneapolis Employees Retirement Fund, but the new text end 170.29 new text begin MERF division is not liable for any claim against the former Minneapolis Employees new text end 170.30 new text begin Retirement Fund, its former governing board, or its former administrative staff acting in a new text end 170.31 new text begin fiduciary capacity under chapter 356A or under common law, which is founded upon a new text end 170.32 new text begin claim of breach of fiduciary duty, but where the act or acts constituting the claimed breach new text end 170.33 new text begin were not undertaken in good faith, the Public Employees Retirement Association may new text end 170.34 new text begin assert any applicable defense to any claim in any judicial or administrative proceeding new text end 170.35 new text begin that the former Minneapolis Employees Retirement Fund, its former board, or its new text end 170.36 new text begin former administrative staff would otherwise have been entitled to assert, and the Public new text end 171.1 new text begin Employees Retirement Association may assert any applicable defense that it has in its new text end 171.2 new text begin capacity as a statewide agency. new text end 171.3     new text begin Subd. 6. new text end new text begin Benefits. new text end new text begin (a) The annuities and benefits of, or attributable to, retired, new text end 171.4 new text begin disabled, deferred, or inactive Minneapolis Employees Retirement Fund members new text end 171.5 new text begin with that status as of June 30, 2010, with the exception of post-December 31, 2010, new text end 171.6 new text begin postretirement adjustments, which are governed by paragraph (b), as calculated under new text end 171.7 new text begin Minnesota Statutes 2008, sections 422A.11; 422A.12; 422A.13; 422A.14; 422A.15; new text end 171.8 new text begin 422A.151; 422A.155; 422A.156; 422A.16; 422A.17; 422A.18; 422A.19; 422A.20; and new text end 171.9 new text begin 422A.23, continue in force after the administrative consolidation under this article. new text end 171.10 new text begin (b) After December 31, 2010, annuities and benefits from the MERF division are new text end 171.11 new text begin eligible for annual automatic postretirement adjustments solely under section 356.415. new text end 171.12     new text begin Subd. 7. new text end new text begin MERF division account contributions. new text end new text begin (a) After June 30, 2010, the new text end 171.13 new text begin member and employer contributions to the MERF division account are governed by this new text end 171.14 new text begin subdivision. new text end 171.15 new text begin (b) An active member covered by the MERF division must make an employee new text end 171.16 new text begin contribution of 9.75 percent of the total salary of the member as defined in section 353.01, new text end 171.17 new text begin subdivision 10. The employee contribution must be made by payroll deduction by the new text end 171.18 new text begin member's employing unit under section 353.27, subdivision 4, and is subject to the new text end 171.19 new text begin provisions of section 353.27, subdivisions 7, 7a, 7b, 12, 12a, and 12b. new text end 171.20 new text begin (c) The employer regular contribution to the MERF division account with respect new text end 171.21 new text begin to an active MERF division member is 9.75 percent of the total salary of the member as new text end 171.22 new text begin defined in section 353.01, subdivision 10. new text end 171.23 new text begin (d) The employer additional contribution to the MERF division account with respect new text end 171.24 new text begin to an active member of the MERF division is 2.68 percent of the total salary of the member new text end 171.25 new text begin as defined in section 353.01, subdivision 10, plus the employing unit's share of $3,900,000 new text end 171.26 new text begin that the employing unit paid or is payable to the former Minneapolis Employees new text end 171.27 new text begin Retirement Fund under Minnesota Statutes 2008, section 422A.101, subdivision 1a, 2, new text end 171.28 new text begin or 2a, during calendar year 2009, as was certified by the former executive director of the new text end 171.29 new text begin former Minneapolis Employees Retirement Fund. new text end 171.30 new text begin (e) Annually after June 30, 2012, The employer supplemental contribution to new text end 171.31 new text begin the MERF division account by the city of Minneapolis, Special School District No. 1, new text end 171.32 new text begin Minneapolis, a Minneapolis-owned public utility, improvement, or municipal activity, new text end 171.33 new text begin Hennepin county, the Metropolitan Council, the Metropolitan Airports Commission, new text end 171.34 new text begin and the Minnesota State Colleges and Universities system is the amount by which the new text end 171.35 new text begin total actuarial required contribution determined under section 356.215 by the approved new text end 171.36 new text begin actuary retained by the Public Employees Retirement Association in the most recent new text end 172.1 new text begin actuarial valuation of the MERF division and based on a June 30, 2031, amortization new text end 172.2 new text begin date, after subtracting the contributions under paragraphs (b), (c), and (d), exceeds new text end 172.3 new text begin $........ Unless the various employing units agree to a different allocation and file that new text end 172.4 new text begin agreement with the executive director by August 15 for the following calendar year, new text end 172.5 new text begin each employing unit's share of the total employer supplemental contribution amount new text end 172.6 new text begin is equal to its percentage share of the total amount allocated under Minnesota Statutes new text end 172.7 new text begin 2008, section 422A.101, subdivision 3, payable for calendar year 2009. The initial total new text end 172.8 new text begin actuarial required contribution after June 30, 2012, must be calculated using the mortality new text end 172.9 new text begin assumption change recommended on September 30, 2009, for the Minneapolis Employees new text end 172.10 new text begin Retirement Fund by the approved consulting actuary retained by the Minneapolis new text end 172.11 new text begin Employees Retirement Fund board. new text end 172.12 new text begin (f) Notwithstanding any provision of paragraph (c), (d), or (e) to the contrary, as of new text end 172.13 new text begin August 1 annually, if the amount of the retirement annuities and benefits paid from the new text end 172.14 new text begin MERF division account during the preceding fiscal year, multiplied by the factor of 1.035, new text end 172.15 new text begin exceeds the market value of the assets of the MERF division account on the preceding new text end 172.16 new text begin June 30, plus state aid of $9,000,000 or $......., whichever applies, plus the amounts new text end 172.17 new text begin payable under paragraphs (b), (c), (d), and (e) during the preceding fiscal year, multiplied new text end 172.18 new text begin by the factor of 1.035, the balance calculated is a special additional employer contribution. new text end 172.19 new text begin The special additional employer contribution under this paragraph is payable in addition new text end 172.20 new text begin to any employer contribution required under paragraphs (c), (d), and (e), and is payable new text end 172.21 new text begin on or before the following June 30. The special additional employer contribution under new text end 172.22 new text begin this paragraph must be allocated between the city of Minneapolis, Special School District new text end 172.23 new text begin No. 1, Minneapolis, any Minneapolis-owned public utility, improvement, or municipal new text end 172.24 new text begin activity, the Minnesota State Colleges and Universities system, Hennepin County, the new text end 172.25 new text begin Metropolitan Council, and the Metropolitan Airports Commission in proportion to their new text end 172.26 new text begin share of the actuarial accrued liability of the former Minneapolis Employees Retirement new text end 172.27 new text begin Fund as of July 1, 2009, as calculated by the approved actuary retained under section new text end 172.28 new text begin 356.214 as part of the actuarial valuation prepared as of July 1, 2009, under section new text end 172.29 new text begin 356.215 and the Standards for Actuarial Work adopted by the Legislative Commission on new text end 172.30 new text begin Pensions and Retirement. new text end 172.31 new text begin (g) The employer contributions under paragraphs (c), (d), and (e) must be paid as new text end 172.32 new text begin provided in section 353.28. new text end 172.33 new text begin (h) Contributions under this subdivision are subject to the provisions of section new text end 172.34 new text begin 353.27, subdivisions 4, 7, 7a, 7b, 11, 12, 12a, 12b, 13, and 14. new text end 172.35     new text begin Subd. 7a. new text end new text begin Minneapolis Municipal Retirement Association dues. new text end new text begin If authorized new text end 172.36 new text begin by an annuitant or retirement benefit recipient in writing on a form prescribed by the new text end 173.1 new text begin executive director of the Public Employees Retirement Association, the executive director new text end 173.2 new text begin shall deduct the dues for the Minneapolis Municipal Retirement Association from the new text end 173.3 new text begin person's annuity or retirement benefit. This dues deduction authority expires upon the new text end 173.4 new text begin eventual full consolidation of the MERF account under subdivision 8. new text end 173.5     new text begin Subd. 8. new text end new text begin Eventual full consolidation. new text end new text begin (a) Once the fiscal year end market value new text end 173.6 new text begin of assets of the MERF division account equals or exceeds 80 percent of the actuarial new text end 173.7 new text begin accrued liability of the MERF division as calculated by the approved actuary retained by new text end 173.8 new text begin the Public Employees Retirement Association under section 356.215 and the Standards new text end 173.9 new text begin for Actuarial Work adopted by the Legislative Commission on Pensions and Retirement, new text end 173.10 new text begin the MERF division must be merged with the general employees retirement plan of the new text end 173.11 new text begin Public Employees Retirement Association and the MERF division account ceases as a new text end 173.12 new text begin separate account within the general employees retirement fund of the Public Employees new text end 173.13 new text begin Retirement Association. new text end 173.14 new text begin (b) If the market value of the MERF division account is less than 100 percent of the new text end 173.15 new text begin actuarial accrued liability of the MERF division under paragraph (a), the total employer new text end 173.16 new text begin contribution of employing units referenced in subdivision 7, paragraph (e), for the period new text end 173.17 new text begin after the full consolidation and June 30, 2031, to amortize on a level annual dollar payment new text end 173.18 new text begin the remaining unfunded actuarial accrued liability of the former MERF division account new text end 173.19 new text begin on the full consolidation date by June 30, 2031, shall be calculated by the consulting new text end 173.20 new text begin actuary retained under section 356.214 using the applicable postretirement interest rate new text end 173.21 new text begin actuarial assumption for the general employees retirement plan under section 356.215. new text end 173.22 new text begin The actuarial accrued liability of the MERF division must be calculated using the healthy new text end 173.23 new text begin retired life mortality assumption applicable to the general employees retirement plan. new text end 173.24 new text begin (c) The merger shall occur as of the first day of the first month after the date on new text end 173.25 new text begin which the triggering actuarial valuation report is filed with the executive director of the new text end 173.26 new text begin Legislative Commission on Pensions and Retirement. new text end 173.27 new text begin (d) The executive director of the Public Employees Retirement Association shall new text end 173.28 new text begin prepare proposed legislation fully implementing the merger and updating the applicable new text end 173.29 new text begin provisions of chapters 353 and 356 and transmit the proposed legislation to the executive new text end 173.30 new text begin director of the Legislative Commission on Pensions and Retirement by the following new text end 173.31 new text begin February 15. new text end 173.32     new text begin Subd. 9. new text end new text begin Merger of former MERF membership groups into PERA-general. new text end 173.33 new text begin If provided for in an agreement between the board of trustees of the Public Employees new text end 173.34 new text begin Retirement Association and the governing board of an employing unit formerly with new text end 173.35 new text begin retirement coverage provided for its employees by the former Minneapolis Employees new text end 173.36 new text begin Retirement Fund, an employing unit may transfer sufficient assets to the general new text end 174.1 new text begin employees retirement fund to cover the anticipated actuarial accrued liability for its new text end 174.2 new text begin current or former employees that is in excess of MERF division account assets attributable new text end 174.3 new text begin to those employees, have those employees be considered full members of the general new text end 174.4 new text begin employees retirement plan, and be relieved of any further contribution obligation to the new text end 174.5 new text begin general employees retirement plan for those employees under this section. Any agreement new text end 174.6 new text begin under this subdivision and any actuarial valuation report related to a merger under this new text end 174.7 new text begin subdivision must be submitted to the executive director of the Legislative Commission on new text end 174.8 new text begin Pensions and Retirement for comment prior to the final execution. new text end 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 174.11Metropolitan Airports Commission. Any person first employed as either a full-time 174.12firefighter or a full-time police officer by the Metropolitan Airports Commission after June 174.1330, 1978, who is not eligible for coverage under the agreement signed between the state 174.14and the secretary of the federal Department of Health and Human Services making the 174.15provisions of the federal Old Age, Survivors, and Disability Insurance Act applicable to 174.16municipal employees because that position is excluded from application pursuant to new text begin under new text end 174.17Title 42, United States Code, Sections 418 (d) (5) (A) and 418 (d) (8) (D) and section 174.18355.07 , shall not be a member of the Minneapolis Employees Retirement Fund but shall 174.19be new text begin is new text end a member of the public employees police and fire fund and shall be new text begin is new text end deemed to be a 174.20firefighter or a police officer within the meaning of this section. The Metropolitan Airports 174.21Commission shall make the employer contribution required pursuant to new text begin under new text end section 174.22353.65, subdivision 3 , with respect to each of its firefighters or police officers covered 174.23by the public employees police and fire fund and shall meet the employers recording and 174.24reporting 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 174.27the applicable following preretirement interest assumption and the applicable following 174.28postretirement 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 175.18single rate future salary increase assumption, the applicable following modified single 175.19rate future salary increase assumption, or the applicable following graded rate future 175.20salary 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) new text begin (2) new text end select and ultimate future salary increase assumption or graded rate future 175.41salary 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 176.14The select calculation is: during the 176.15designated select period, a designated 176.16percentage rate is multiplied by the result of 176.17the designated integer minus T, where T is the 176.18number of completed years of service, and is 176.19added to the applicable future salary increase 176.20assumption. The designated select period is 176.21five years and the designated integer is five 176.22for the general state employees retirement 176.23plan and the general public employees 176.24retirement plan. The designated select period 176.25is ten years and the designated integer is ten 176.26for all other retirement plans covered by 176.27this clause. The designated percentage rate 176.28is: (1) 0.2 percent for the correctional state 176.29employees retirement plan, the State Patrol 176.30retirement plan, the public employees police 176.31and fire plan, and the local government 176.32correctional service plan; (2) 0.6 percent 176.33for the general state employees retirement 176.34plan and the general public employees 176.35retirement plan; and (3) 0.3 percent for the 176.36teachers retirement plan, the Duluth Teachers 176.37Retirement Fund Association, and the St. 176.38Paul Teachers Retirement Fund Association. 177.1The select calculation for the Duluth Teachers 177.2Retirement Fund Association is 8.00 percent 177.3per year for service years one through seven, 177.47.25 percent per year for service years seven 177.5and eight, and 6.50 percent per year for 177.6service 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 178.24payroll growth assumption for calculating the amortization requirement for the unfunded 178.25actuarial accrued liability where the amortization retirement is calculated as a level 178.26percentage 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 178.42apply, 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 179.3section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the 179.4most 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, 179.7is amended to read: 179.8    Subd. 11. Amortization contributions. (a) In addition to the exhibit indicating 179.9the level normal cost, the actuarial valuation of the retirement plan must contain an 179.10exhibit for financial reporting purposes indicating the additional annual contribution 179.11sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit 179.12for contribution determination purposes indicating the additional contribution sufficient 179.13to amortize the unfunded actuarial accrued liability. For the retirement plans listed in 179.14subdivision 8, paragraph (c), new text begin but excluding the MERF division of the Public Employees new text end 179.15 new text begin Retirement Association, new text end the additional contribution must be calculated on a level 179.16percentage of covered payroll basis by the established date for full funding in effect when 179.17the valuation is prepared, assuming annual payroll growth at the applicable percentage 179.18rate set forth in subdivision 8, paragraph (c). For all other retirement plans new text begin and for the new text end 179.19 new text begin MERF division of the Public Employees Retirement Association new text end , the additional annual 179.20contribution must be calculated on a level annual dollar amount basis. 179.21    (b) For any retirement plan other than the Minneapolis Employees Retirement Fund, 179.22the general employees new text begin a new text end retirement plan of the Public Employees Retirement Association, 179.23and the St. Paul Teachers Retirement Fund Association new text begin governed by paragraph (d), (e), new text end 179.24 new text begin (f), (g), (h), (i), or (j) new text end , if there has not been a change in the actuarial assumptions used 179.25for calculating the actuarial accrued liability of the fund, a change in the benefit plan 179.26governing annuities and benefits payable from the fund, a change in the actuarial cost 179.27method used in calculating the actuarial accrued liability of all or a portion of the fund, or 179.28a combination of the three, which change or changes by itself or by themselves without 179.29inclusion of any other items of increase or decrease produce a net increase in the unfunded 179.30actuarial accrued liability of the fund, the established date for full funding is the first 179.31actuarial valuation date occurring after June 1, 2020. 179.32    (c) For any retirement plan other than the Minneapolis Employees Retirement 179.33Fund and the general employees retirement plan of the Public Employees Retirement 179.34Association, if there has been a change in any or all of the actuarial assumptions used 179.35for calculating the actuarial accrued liability of the fund, a change in the benefit plan 180.1governing annuities and benefits payable from the fund, a change in the actuarial cost 180.2method used in calculating the actuarial accrued liability of all or a portion of the fund, 180.3or a combination of the three, and the change or changes, by itself or by themselves and 180.4without inclusion of any other items of increase or decrease, produce a net increase in the 180.5unfunded actuarial accrued liability in the fund, the established date for full funding must 180.6be determined using the following procedure: 180.7    (i) the unfunded actuarial accrued liability of the fund must be determined in 180.8accordance with the plan provisions governing annuities and retirement benefits and the 180.9actuarial assumptions in effect before an applicable change; 180.10    (ii) the level annual dollar contribution or level percentage, whichever is applicable, 180.11needed 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 180.13using 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 180.15accordance with any new plan provisions governing annuities and benefits payable from 180.16the fund and any new actuarial assumptions and the remaining plan provisions governing 180.17annuities and benefits payable from the fund and actuarial assumptions in effect before 180.18the change; 180.19    (iv) the level annual dollar contribution or level percentage, whichever is applicable, 180.20needed to amortize the difference between the unfunded actuarial accrued liability amount 180.21calculated under item (i) and the unfunded actuarial accrued liability amount calculated 180.22under item (iii) over a period of 30 years from the end of the plan year in which the 180.23applicable change is effective must be calculated using the applicable interest assumption 180.24specified 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 180.27calculated under item (ii); 180.28    (vi) the period in which the unfunded actuarial accrued liability amount determined 180.29in item (iii) is amortized by the total level annual dollar or level percentage amortization 180.30contribution computed under item (v) must be calculated using the interest assumption 180.31specified in subdivision 8 in effect after any applicable change, rounded to the nearest 180.32integral number of years, but not to exceed 30 years from the end of the plan year in 180.33which the determination of the established date for full funding using the procedure set 180.34forth in this clause is made and not to be less than the period of years beginning in the 180.35plan year in which the determination of the established date for full funding using the 181.1procedure set forth in this clause is made and ending by the date for full funding in effect 181.2before the change; and 181.3    (vii) the period determined under item (vi) must be added to the date as of which 181.4the actuarial valuation was prepared and the date obtained is the new established date 181.5for full funding. 181.6    (d) For the Minneapolis Employees Retirement Fund new text begin MERF division of the Public new text end 181.7 new text begin Employees Retirement Association new text end , the established date for full funding is June 30, 2020 new text begin new text end 181.8 new text begin 2031 new text end . 181.9    (e) For the general employees retirement plan of the Public Employees Retirement 181.10Association, 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 181.12June 30, 2037. 181.13    (g) For the correctional state employees retirement plan of the Minnesota State 181.14Retirement 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 181.1630, 2038. 181.17    (i) For the public employees police and fire retirement plan, the established date 181.18for full funding is June 30, 2038. 181.19    (j) For the St. Paul Teachers Retirement Fund Association, the established date for 181.20full funding is June 30 of the 25th year from the valuation date. In addition to other 181.21requirements of this chapter, the annual actuarial valuation shall new text begin must new text end contain an exhibit 181.22indicating the funded ratio and the deficiency or sufficiency in annual contributions when 181.23comparing liabilities to the market value of the assets of the fund as of the close of the 181.24most recent fiscal year. 181.25    (k) For the retirement plans for which the annual actuarial valuation indicates an 181.26excess of valuation assets over the actuarial accrued liability, the valuation assets in 181.27excess of the actuarial accrued liability must be recognized as a reduction in the current 181.28contribution requirements by an amount equal to the amortization of the excess expressed 181.29as a level percentage of pay over a 30-year period beginning anew with each annual 181.30actuarial 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 new text begin MERF division account of the Public Employees Retirement new text end 181.34 new text begin Association with respect to the former new text end Minneapolis Employees Retirement Fund annually 181.35an 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 182.2Minneapolis Employees Retirement Fund new text begin MERF division of the Public Employees new text end 182.3 new text begin Retirement Association new text end reported in the actuarial valuation of the fund new text begin general employees new text end 182.4 new text begin retirement plan of the Public Employees Retirement Association new text end prepared by the actuary 182.5retained under section 356.214 consistent with section 356.215 for the most recent year 182.6but based on a target date for full amortization of the unfunded actuarial accrued liabilities 182.7by June 30, 2020 new text begin 2031 new text end , less the amount of employee contributions required under section 182.8422A.10 new text begin 353.50, subdivision 7, paragraph (b) new text end , and the amount of employer contributions 182.9required under subdivisions 1a, 2, and 2a new text begin section 353.50, subdivision 7, paragraphs (c) new text end 182.10 new text begin and (d) new text end . Payments shall new text begin must new text end be made September 15 annually. 182.11    (c) The annual state contribution under this subdivision may not exceed $9,000,000, 182.12plus the cost of the annual supplemental benefit determined under new text begin Minnesota Statutes new text end 182.13 new text begin 2008, new text end section 356.43 new text begin , through June 30, 2012, and may not exceed $9,000,000, plus the new text end 182.14 new text begin cost of the annual supplemental benefit determined under Minnesota Statutes 2008, section new text end 182.15 new text begin 356.43, plus $....... annually after June 30, 2012, and until June 30, 2031 new text end . 182.16    (d) new text begin Annually and after June 30, 2012, new text end if the amount determined under paragraph 182.17(b) exceeds $9,000,000 new text begin the applicable maximum amount specified in paragraph (c) new text end , 182.18the excess must be allocated to and paid to the fund by the employers identified in 182.19 new text begin Minnesota Statutes 2008, section 422A.101, new text end subdivisions 1a and new text begin , new text end 2, other than units of 182.20metropolitan government new text begin and 2a new text end . Each employer's share of the excess is proportionate 182.21to the employer's share of the fund's unfunded actuarial accrued liability as disclosed in 182.22the annual actuarial valuation prepared by the actuary retained under section 356.214 182.23compared to the total unfunded actuarial accrued liability new text begin as of July 1, 2009, new text end attributed 182.24to all employers identified in new text begin Minnesota Statutes 2008, section 422A.101, new text end subdivisions 182.251a and 2, other than units of metropolitan government. Payments must be made in equal 182.26installments as set forth in paragraph (b). 182.27 new text begin (e) State contributions under this section end on September 15, 2031, or on new text end 182.28 new text begin September 1 following the first date on which the current assets of the MERF division new text end 182.29 new text begin of the Public Employees Retirement Association equal or exceed the actuarial accrued new text end 182.30 new text begin liability of the MERF division of the Public Employees Retirement Association, new text end 182.31 new text begin whichever occurs earlier. new text end 182.32    Sec. 22. Minnesota Statutes 2008, section 422A.26, is amended to read: 182.33422A.26 COVERAGE BY THE PUBLIC EMPLOYEES RETIREMENT 182.34ASSOCIATION. 183.1Notwithstanding section , or any other law to the contrary, any person 183.2whose employment by, or assumption of a position as an appointed or elected officer 183.3of, the city of Minneapolis, any of the boards, departments, or commissions operated 183.4as a department of the city of Minneapolis or independently if financed in whole or in 183.5part by funds of the city of Minneapolis, the Metropolitan Airports Commission, the 183.6 new text begin former new text end Minneapolis Employees Retirement Fund, or Special School District Number 1 if 183.7the person is not a member of the Minneapolis Teachers Retirement Fund Association 183.8by virtue of that employment or position, initially commences on or after July 1, 1979 183.9shall be new text begin , is new text end a member of the new text begin general employees retirement plan of the new text end Public Employees 183.10Retirement Association unless excluded from membership pursuant to new text begin under new text end section 183.11353.01, subdivision 2b . In no event shall there be any new members of the contributing 183.12class of the Minneapolis employees fund on or after July 1, 1979. 183.13    Sec. 23. new text begin JULY 1, 2010, MERF DIVISION ACTUARIAL VALUATION new text end 183.14 new text begin ASSUMPTIONS. new text end 183.15 new text begin The approved actuary retained by the Minneapolis Employees Retirement Fund shall new text end 183.16 new text begin compare the actuarial assumptions to be used for the July 1, 2010, actuarial valuation of new text end 183.17 new text begin the general employees retirement plan of the Public Employees Retirement Association new text end 183.18 new text begin with the actuarial assumptions used to prepare the July 1, 2009, actuarial valuation of the new text end 183.19 new text begin Minneapolis Employees Retirement Fund and, on or before July 1, 2010, shall recommend new text end 183.20 new text begin to the approved actuary retained by the Public Employees Retirement Association and to new text end 183.21 new text begin the Legislative Commission on Pensions and Retirement the actuarial assumptions that new text end 183.22 new text begin the actuary believes would be appropriate for the MERF division portion of the actuarial new text end 183.23 new text begin valuation of the general employees retirement plan of the Public Employees Retirement new text end 183.24 new text begin Association. Any actuarial assumption changes related to the MERF division must be new text end 183.25 new text begin approved under Minnesota Statutes, section 356.215, subdivision 18. new text end 183.26    Sec. 24. new text begin MINNEAPOLIS MUNICIPAL RETIREMENT ASSOCIATION. new text end 183.27 new text begin (a) The administrative consolidation of the former Minneapolis Employees new text end 183.28 new text begin Retirement Fund into the general employees retirement plan of the Public Employees new text end 183.29 new text begin Retirement Association and the merger of the MERF division of the Public Employees new text end 183.30 new text begin Retirement Association into the general employees retirement plan of the Public new text end 183.31 new text begin Employees Retirement Association does not affect the function of the Minneapolis new text end 183.32 new text begin Municipal Retirement Association, a nonprofit corporation, to monitor the administration new text end 183.33 new text begin of the retirement coverage for former members of the former Minneapolis Employees new text end 183.34 new text begin Retirement Fund. new text end 184.1 new text begin (b) Nothing in this article entitles the Minneapolis Municipal Retirement Association new text end 184.2 new text begin to receive any revenue derived from taxes or obligates the Public Employees Retirement new text end 184.3 new text begin Association to undertake any special duties with respect to the corporation. new text end 184.4    Sec. 25. new text begin TRANSFER OF MERF EMPLOYEES. new text end 184.5 new text begin (a) Unless the employee elects the severance pay option under paragraph (c), new text end 184.6 new text begin full-time employees of the Minneapolis Employees Retirement Fund first employed new text end 184.7 new text begin before June 30, 2008, and employed full time by the Minneapolis Employees Retirement new text end 184.8 new text begin Fund on June 29, 2010, with the employment title of benefits coordinator, are transferred new text end 184.9 new text begin to employment by the city of Minneapolis on July 1, 2010. The chief human relations new text end 184.10 new text begin official of the city of Minneapolis shall place the transferred employee in an appropriate new text end 184.11 new text begin employment position based on the employee's education and employment experience. new text end 184.12 new text begin Transferred employees must have their accumulated, but unused, vacation and sick leave new text end 184.13 new text begin balances as of June 30, 2010, posted to the individual accounts with the new employer. new text end 184.14 new text begin The transferred employees must receive length of service credit for time served with the new text end 184.15 new text begin Minneapolis Employees Retirement Fund. The transferred employee must be given the new text end 184.16 new text begin opportunity as of the date of transfer to be covered for all health and other insurance new text end 184.17 new text begin benefits offered by the new employer. Upon the transfer of the employee, the Minneapolis new text end 184.18 new text begin Employees Retirement Fund shall transfer assets to the city of Minneapolis equal to the new text end 184.19 new text begin present value of any accumulated unused vacation or sick leave balances as of the date new text end 184.20 new text begin of transfer. new text end 184.21 new text begin (b) Unless the employee elects the severance pay option under paragraph (c), new text end 184.22 new text begin full-time employees of the Minneapolis Employees Retirement Fund first employed before new text end 184.23 new text begin June 30, 2008, and employed full time by the Minneapolis Employees Retirement Fund new text end 184.24 new text begin on June 29, 2010, with the employment title of accounting manager or accountant II are new text end 184.25 new text begin transferred to employment by the Public Employees Retirement Association on July 1, new text end 184.26 new text begin 2010. The chief human relations official of the Public Employees Retirement Association new text end 184.27 new text begin shall place the transferred employee in an appropriate employment position based on the new text end 184.28 new text begin employee's education and employment experience. Transferred employees must have new text end 184.29 new text begin their accumulated, but unused, vacation and sick leave balances as of June 30, 2010, new text end 184.30 new text begin posted to the individual accounts with the new employer. The transferred employees new text end 184.31 new text begin must receive length of service credit for time served with the Minneapolis Employees new text end 184.32 new text begin Retirement Fund. The transferred employee must be given the opportunity as of the new text end 184.33 new text begin date of transfer to be covered for all health and other insurance benefits offered by the new text end 184.34 new text begin new employer. Upon the transfer of the employee, the executive director of the Public new text end 184.35 new text begin Employees Retirement Association shall deduct from any assets transferred under section new text end 185.1 new text begin 353.50 an amount equal to the present value of any accumulated unused vacation or sick new text end 185.2 new text begin leave balances as of the date of transfer. new text end 185.3 new text begin (c) An employee covered by paragraph (a) or (b) who elects not to transfer to the new text end 185.4 new text begin new employer unit is granted severance pay in an amount equivalent to one year of salary new text end 185.5 new text begin based on the last annual salary rate received by the employee. The election must be new text end 185.6 new text begin made prior to June 30, 2010, and is irrevocable. The severance pay is payable from the new text end 185.7 new text begin Minneapolis Employees Retirement Fund on June 30, 2010. new text end 185.8    Sec. 26. new text begin REVISOR'S INSTRUCTION. new text end 185.9 new text begin In the next and future editions of Minnesota Statutes, the revisor of statutes shall new text end 185.10 new text begin renumber Minnesota Statutes, section 422A.101, subdivision 3, as Minnesota Statutes, new text end 185.11 new text begin section 353.505, and shall renumber Minnesota Statutes, section 422A.26, as Minnesota new text end 185.12 new text begin Statutes, section 353.855. The revisor of statutes shall make conforming changes in new text end 185.13 new text begin Minnesota Statutes and Minnesota Rules consistent with the renumbering. new text end 185.14    Sec. 27. new text begin REPEALER. new text end 185.15 new text begin Minnesota Statutes 2008, sections 13.63, subdivision 1; 69.011, subdivision 2a; new text end 185.16 new text begin 356.43; 422A.01, subdivisions 1, 2, 3, 4, 4a, 5, 6, 7, 8, 9, 10, 11, 12, 13a, 17, and 18; new text end 185.17 new text begin 422A.02; 422A.03; 422A.04; 422A.05, subdivisions 1, 2a, 2b, 2c, 2d, 2e, 2f, 5, 6, new text end 185.18 new text begin and 8; 422A.06, subdivisions 1, 2, 3, 5, 6, and 7; 422A.08, subdivision 1; 422A.09; new text end 185.19 new text begin 422A.10; 422A.101, subdivisions 1, 1a, 2, and 2a; 422A.11; 422A.12; 422A.13; 422A.14, new text end 185.20 new text begin subdivision 1; 422A.15; 422A.151; 422A.155; 422A.156; 422A.16, subdivisions 1, 2, 3, new text end 185.21 new text begin 4, 5, 6, 7, 8, 9, and 10; 422A.17; 422A.18, subdivisions 1, 2, 3, 4, 5, and 7; 422A.19; new text end 185.22 new text begin 422A.20; 422A.21; 422A.22, subdivisions 1, 3, 4, and 6; 422A.23, subdivisions 1, 2, 5, 6, new text end 185.23 new text begin 7, 8, 9, 10, 11, and 12; 422A.231; 422A.24; and 422A.25, new text end new text begin are repealed. new text end 185.24 new text begin Minnesota Statutes 2009 Supplement, sections 422A.06, subdivision 8; and new text end 185.25 new text begin 422A.08, subdivision 5, new text end new text begin are repealed. new text end 185.26    Sec. 28. new text begin EFFECTIVE DATE. new text end 185.27 new text begin Sections 1 to 27 are effective June 30, 2010. new text end 185.28ARTICLE 13 185.29CONFORMING CHANGES RELATED TO THE MERF 185.30ADMINISTRATIVE CONSOLIDATION 185.31    Section 1. Minnesota Statutes 2009 Supplement, section 6.67, is amended to read: 185.326.67 PUBLIC ACCOUNTANTS; REPORT OF POSSIBLE MISCONDUCT. 186.1    Whenever a public accountant in the course of auditing the books and affairs of a 186.2political subdivision or a local public pension plan governed by section 69.77, sections 186.369.771 to 69.775, or chapter 354A, 422A, 423B, 423C, or 424A, discovers evidence 186.4pointing to nonfeasance, misfeasance, or malfeasance, on the part of an officer or 186.5employee in the conduct of duties and affairs, the public accountant shall promptly make 186.6a report of such discovery to the state auditor and the county attorney of the county in 186.7which the governmental unit is situated and the public accountant shall also furnish a 186.8copy of the report of audit upon completion to said officers. The county attorney shall 186.9act on such report in the same manner as required by law for reports made to the county 186.10attorney by the state auditor. 186.11    Sec. 2. Minnesota Statutes 2008, section 11A.23, subdivision 4, is amended to read: 186.12    Subd. 4. Covered retirement funds and plans. The provisions of this section shall 186.13apply to the following retirement funds and plans: 186.14(1) Board of Trustees of the Minnesota State Colleges and Universities supplemental 186.15retirement plan established under chapter 354C; 186.16(2) state employees retirement fund established pursuant to chapter 352; 186.17(3) correctional employees retirement plan established pursuant to chapter 352; 186.18(4) State Patrol retirement fund established pursuant to chapter 352B; 186.19(5) unclassified employees retirement plan established pursuant to chapter 352D; 186.20(6) public new text begin general new text end employees retirement fund established pursuant to chapter 353; 186.21(7) public employees police and fire fund established pursuant to chapter 353; 186.22(8) teachers' retirement fund established pursuant to chapter 354; 186.23(9) judges' retirement fund established pursuant to chapter 490; and 186.24(10) any other funds required by law to be invested by the board. 186.25    Sec. 3. Minnesota Statutes 2008, section 13D.01, subdivision 1, is amended to read: 186.26    Subdivision 1. In executive branch, local government. All meetings, including 186.27executive sessions, must be open to the public 186.28(a) of a state 186.29(1) agency, 186.30(2) board, 186.31(3) commission, or 186.32(4) department, 186.33when required or permitted by law to transact public business in a meeting; 186.34(b) of the governing body of a 187.1(1) school district however organized, 187.2(2) unorganized territory, 187.3(3) county, 187.4(4) statutory or home rule charter city, 187.5(5) town, or 187.6(6) other public body; 187.7(c) of any 187.8(1) committee, 187.9(2) subcommittee, 187.10(3) board, 187.11(4) department, or 187.12(5) commission, 187.13of a public body; and 187.14(d) of the governing body or a committee of: 187.15(1) a statewide public pension plan defined in section 356A.01, subdivision 24; or 187.16(2) a local public pension plan governed by section 69.77, sections 69.771 to 69.775, 187.17or chapter 354A, 422A, or 423B. 187.18    Sec. 4. Minnesota Statutes 2008, section 43A.17, subdivision 9, is amended to read: 187.19    Subd. 9. Political subdivision compensation limit. (a) The salary and the value of 187.20all other forms of compensation of a person employed by a political subdivision of this 187.21state, excluding a school district, or employed under section may not exceed 110 187.22percent of the salary of the governor as set under section 15A.082, except as provided 187.23in this subdivision. For purposes of this subdivision, "political subdivision of this state" 187.24includes a statutory or home rule charter city, county, town, metropolitan or regional 187.25agency, or other political subdivision, but does not include a hospital, clinic, or health 187.26maintenance organization owned by such a governmental unit. 187.27(b) Beginning in 2006, the limit in paragraph (a) shall new text begin must new text end be adjusted annually in 187.28January. The limit shall new text begin must new text end equal the limit for the prior year increased by the percentage 187.29increase, if any, in the Consumer Price Index for all-urban consumers from October of the 187.30second prior year to October of the immediately prior year. 187.31(c) Deferred compensation and payroll allocations to purchase an individual annuity 187.32contract for an employee are included in determining the employee's salary. Other forms of 187.33compensation which shall new text begin must new text end be included to determine an employee's total compensation 187.34are all other direct and indirect items of compensation which are not specifically excluded 188.1by this subdivision. Other forms of compensation which shall new text begin must new text end not be included in a 188.2determination of an employee's total compensation for the purposes of this subdivision are: 188.3(1) employee benefits that are also provided for the majority of all other full-time 188.4employees of the political subdivision, vacation and sick leave allowances, health and 188.5dental insurance, disability insurance, term life insurance, and pension benefits or like 188.6benefits the cost of which is borne by the employee or which is not subject to tax as 188.7income under the Internal Revenue Code of 1986; 188.8(2) dues paid to organizations that are of a civic, professional, educational, or 188.9governmental nature; and 188.10(3) reimbursement for actual expenses incurred by the employee which the 188.11governing body determines to be directly related to the performance of job responsibilities, 188.12including any relocation expenses paid during the initial year of employment. 188.13The value of other forms of compensation shall be new text begin is new text end the annual cost to the political 188.14subdivision for the provision of the compensation. 188.15(d) The salary of a medical doctor or doctor of osteopathy occupying a position that 188.16the governing body of the political subdivision has determined requires an M.D. or D.O. 188.17degree is excluded from the limitation in this subdivision. 188.18(e) The commissioner may increase the limitation in this subdivision for a position 188.19that the commissioner has determined requires special expertise necessitating a higher 188.20salary to attract or retain a qualified person. The commissioner shall review each proposed 188.21increase giving due consideration to salary rates paid to other persons with similar 188.22responsibilities in the state and nation. The commissioner may not increase the limitation 188.23until the commissioner has presented the proposed increase to the Legislative Coordinating 188.24Commission and received the commission's recommendation on it. The recommendation 188.25is advisory only. If the commission does not give its recommendation on a proposed 188.26increase within 30 days from its receipt of the proposal, the commission is deemed to have 188.27made no recommendation. If the commissioner grants or granted an increase under this 188.28paragraph, the new limitation shall new text begin must new text end be adjusted beginning in August 2005 and in each 188.29subsequent calendar year in January by the percentage increase equal to the percentage 188.30increase, if any, in the Consumer Price Index for all-urban consumers from October of the 188.31second prior year to October of the immediately prior year. 188.32    Sec. 5. Minnesota Statutes 2008, section 43A.316, subdivision 8, is amended to read: 188.33    Subd. 8. Continuation of coverage. (a) A former employee of an employer 188.34participating in the program who is receiving a public pension disability benefit or an 188.35annuity or has met the age and service requirements necessary to receive an annuity under 189.1chapter 353, 353C, 354, 354A, 356, 422A, 423, 423A, or 424, new text begin or Minnesota Statutes new text end 189.2 new text begin 2008, chapter 422A, new text end and the former employee's dependents, are eligible to participate in 189.3the program. This participation is at the person's expense unless a collective bargaining 189.4agreement or personnel policy provides otherwise. Premiums for these participants must 189.5be established by the commissioner. 189.6The commissioner may provide policy exclusions for preexisting conditions 189.7only when there is a break in coverage between a participant's coverage under the 189.8employment-based group insurance program and the participant's coverage under this 189.9section. An employer shall notify an employee of the option to participate under this 189.10paragraph no later than the effective date of retirement. The retired employee or the 189.11employer of a participating group on behalf of a current or retired employee shall notify 189.12the commissioner within 30 days of the effective date of retirement of intent to participate 189.13in the program according to the rules established by the commissioner. 189.14(b) The spouse of a deceased employee or former employee may purchase the 189.15benefits provided at premiums established by the commissioner if the spouse was a 189.16dependent under the employee's or former employee's coverage under this section at the 189.17time of the death. The spouse remains eligible to participate in the program as long as 189.18the group that included the deceased employee or former employee participates in the 189.19program. Coverage under this clause must be coordinated with relevant insurance benefits 189.20provided through the federally sponsored Medicare program. 189.21(c) The program benefits must continue in the event of strike permitted by section 189.22179A.18 , if the exclusive representative chooses to have coverage continue and the 189.23employee pays the total monthly premiums when due. 189.24(d) A participant who discontinues coverage may not reenroll. 189.25Persons participating under these paragraphs shall make appropriate premium 189.26payments in the time and manner established by the commissioner. 189.27    Sec. 6. Minnesota Statutes 2009 Supplement, section 69.011, subdivision 1, is 189.28amended to read: 189.29    Subdivision 1. Definitions. Unless the language or context clearly indicates that 189.30a different meaning is intended, the following words and terms, for the purposes of this 189.31chapter and chapters 423, 423A, 424 and 424A, have the meanings ascribed to them: 189.32    (a) "Commissioner" means the commissioner of revenue. 189.33    (b) "Municipality" means: 189.34    (1) a home rule charter or statutory city; 189.35    (2) an organized town; 190.1    (3) a park district subject to chapter 398; 190.2    (4) the University of Minnesota; 190.3    (5) for purposes of the fire state aid program only, an American Indian tribal 190.4government entity located within a federally recognized American Indian reservation; 190.5    (6) for purposes of the police state aid program only, an American Indian tribal 190.6government with a tribal police department which exercises state arrest powers under 190.7section 626.90, 626.91, 626.92, or 626.93; 190.8    (7) for purposes of the police state aid program only, the Metropolitan Airports 190.9Commission with respect to peace officers covered under chapter 422A; and 190.10    (8) for purposes of the police state aid program only, the Department of Natural 190.11Resources and the Department of Public Safety with respect to peace officers covered 190.12under chapter 352B. 190.13    (c) "Minnesota Firetown Premium Report" means a form prescribed by the 190.14commissioner containing space for reporting by insurers of fire, lightning, sprinkler 190.15leakage and extended coverage premiums received upon risks located or to be performed 190.16in this state less return premiums and dividends. 190.17    (d) "Firetown" means the area serviced by any municipality having a qualified fire 190.18department or a qualified incorporated fire department having a subsidiary volunteer 190.19firefighters' relief association. 190.20    (e) "Market value" means latest available market value of all property in a taxing 190.21jurisdiction, whether the property is subject to taxation, or exempt from ad valorem 190.22taxation obtained from information which appears on abstracts filed with the commissioner 190.23of revenue or equalized by the State Board of Equalization. 190.24    (f) "Minnesota Aid to Police Premium Report" means a form prescribed by the 190.25commissioner for reporting by each fire and casualty insurer of all premiums received 190.26upon direct business received by it in this state, or by its agents for it, in cash or otherwise, 190.27during the preceding calendar year, with reference to insurance written for insuring against 190.28the perils contained in auto insurance coverages as reported in the Minnesota business 190.29schedule of the annual financial statement which each insurer is required to file with 190.30the commissioner in accordance with the governing laws or rules less return premiums 190.31and dividends. 190.32    (g) "Peace officer" means any person: 190.33    (1) whose primary source of income derived from wages is from direct employment 190.34by a municipality or county as a law enforcement officer on a full-time basis of not less 190.35than 30 hours per week; 191.1    (2) who has been employed for a minimum of six months prior to December 31 191.2preceding the date of the current year's certification under subdivision 2, clause (b); 191.3    (3) who is sworn to enforce the general criminal laws of the state and local 191.4ordinances; 191.5    (4) who is licensed by the Peace Officers Standards and Training Board and is 191.6authorized to arrest with a warrant; and 191.7    (5) who is a member of a local police relief association to which section 69.77 191.8applies new text begin the Minneapolis Police Relief Association new text end , the State Patrol retirement plan, new text begin or new text end the 191.9public employees police and fire fund, or the Minneapolis Employees Retirement Fund. 191.10    (h) "Full-time equivalent number of peace officers providing contract service" means 191.11the integral or fractional number of peace officers which would be necessary to provide 191.12the contract service if all peace officers providing service were employed on a full-time 191.13basis as defined by the employing unit and the municipality receiving the contract service. 191.14    (i) "Retirement benefits other than a service pension" means any disbursement 191.15authorized under section 424A.05, subdivision 3, clauses (2) and (3). 191.16    (j) "Municipal clerk, municipal clerk-treasurer, or county auditor" means the person 191.17who was elected or appointed to the specified position or, in the absence of the person, 191.18another person who is designated by the applicable governing body. In a park district, 191.19the clerk is the secretary of the board of park district commissioners. In the case of the 191.20University of Minnesota, the clerk is that official designated by the Board of Regents. 191.21For the Metropolitan Airports Commission, the clerk is the person designated by the 191.22commission. For the Department of Natural Resources or the Department of Public Safety, 191.23the clerk is the respective commissioner. For a tribal police department which exercises 191.24state arrest powers under section 626.90, 626.91, 626.92, or 626.93, the clerk is the person 191.25designated by the applicable American Indian tribal government. 191.26(k) "Voluntary statewide lump-sum volunteer firefighter retirement plan" means the 191.27retirement plan established by chapter 353G. 191.28    Sec. 7. Minnesota Statutes 2008, section 69.021, subdivision 10, is amended to read: 191.29    Subd. 10. Reduction in police state aid apportionment. (a) The commissioner of 191.30revenue shall reduce the apportionment of police state aid under subdivisions 5, paragraph 191.31(b), 6, and 7a, for eligible employer units by any excess police state aid. 191.32(b) "Excess police state aid" is: 191.33(1) for counties and for municipalities in which police retirement coverage is 191.34provided wholly by the public employees police and fire fund and all police officers are 191.35members of the plan governed by sections 353.63 to 353.657, the amount in excess of the 192.1employer's total prior calendar year obligation as defined in paragraph (c), as certified by 192.2the executive director of the Public Employees Retirement Association; 192.3(2) for municipalities in which police retirement coverage is provided in part by the 192.4public employees police and fire fund governed by sections 353.63 to 353.657 and in 192.5part by a local police consolidation account governed by chapter 353A, and established 192.6before March 2, 1999, for which the municipality declined merger under section 353.665, 192.7subdivision 1 , or established after March 1, 1999, the amount in excess of the employer's 192.8total prior calendar year obligation as defined in paragraph (c), plus the amount of the 192.9employer's total prior calendar year obligation under section 353A.09, subdivision 5, 192.10paragraphs (a) and (b), as certified by the executive director of the Public Employees 192.11Retirement Association; 192.12(3) for municipalities in which police retirement coverage is provided by the public 192.13employees police and fire plan governed by sections 353.63 to 353.657, in which police 192.14retirement coverage was provided by a police consolidation account under chapter 192.15353A before July 1, 1999, and for which the municipality has an additional municipal 192.16contribution under section 353.665, subdivision 8, paragraph (b), the amount in excess of 192.17the employer's total prior calendar year obligation as defined in paragraph (c), plus the 192.18amount of any additional municipal contribution under section 353.665, subdivision 8, 192.19paragraph (b), until the year 2010, as certified by the executive director of the Public 192.20Employees Retirement Association; 192.21(4) for municipalities in which police retirement coverage is provided in part by the 192.22public employees police and fire fund governed by sections 353.63 to 353.657 and in part 192.23by a local police relief association governed by sections 69.77 and 423A.01, the amount 192.24in excess of the employer's total prior calendar year obligation as defined in paragraph 192.25(c), as certified by the executive director of the public employees retirement association, 192.26plus the amount of the financial requirements of the relief association certified to the 192.27applicable municipality during the prior calendar year under section 69.77, subdivisions 4 192.28and 5, reduced by the amount of member contributions deducted from the covered salary 192.29of the relief association during the prior calendar year under section 69.77, subdivision 3, 192.30as certified by the chief administrative officer of the applicable municipality; 192.31(5) for the Metropolitan Airports Commission, if there are police officers hired 192.32before July 1, 1978, with retirement coverage by the Minneapolis Employees Retirement 192.33Fund remaining, the amount in excess of the commission's total prior calendar year 192.34obligation as defined in paragraph (c), as certified by the executive director of the Public 192.35Employees Retirement Association, plus the amount determined by expressing the 192.36commission's total prior calendar year contribution to the Minneapolis Employees 193.1Retirement Fund under section 422A.101, subdivisions 2 and 2a, as a percentage of 193.2the commission's total prior calendar year covered payroll for commission employees 193.3covered by the Minneapolis Employees Retirement Fund and applying that percentage 193.4to the commission's total prior calendar year covered payroll for commission police 193.5officers covered by the Minneapolis Employees Retirement Fund, as certified by the chief 193.6administrative officer of the Metropolitan Airports Commission; and 193.7(6) for the Department of Natural Resources and for the Department of Public 193.8Safety, the amount in excess of the employer's total prior calendar year obligation under 193.9section 352B.02, subdivision 1c, for plan members who are peace officers under section 193.1069.011, subdivision 1 , clause (g), as certified by the executive director of the Minnesota 193.11State Retirement System. 193.12(c) The employer's total prior calendar year obligation with respect to the public 193.13employees police and fire plan is the total prior calendar year obligation under section 193.14353.65, subdivision 3 , for police officers as defined in section 353.64, subdivision 2, 193.15and the actual total prior calendar year obligation under section 353.65, subdivision 3, 193.16for firefighters, as defined in section 353.64, subdivision 3, but not to exceed for those 193.17firefighters the applicable following amounts: 193.18 Municipality Maximum Amount 193.19 Albert Lea $54,157.01 193.20 Anoka 10,399.31 193.21 Apple Valley 5,442.44 193.22 Austin 49,864.73 193.23 Bemidji 27,671.38 193.24 Brooklyn Center 6,605.92 193.25 Brooklyn Park 24,002.26 193.26 Burnsville 15,956.00 193.27 Cloquet 4,260.49 193.28 Coon Rapids 39,920.00 193.29 Cottage Grove 8,588.48 193.30 Crystal 5,855.00 193.31 East Grand Forks 51,009.88 193.32 Edina 32,251.00 193.33 Elk River 5,216.55 193.34 Ely 13,584.16 193.35 Eveleth 16,288.27 193.36 Fergus Falls 6,742.00 193.37 Fridley 33,420.64 193.38 Golden Valley 11,744.61 193.39 Hastings 16,561.00 194.1 Hopkins 4,324.23 194.2 International Falls 14,400.69 194.3 Lakeville 782.35 194.4 Lino Lakes 5,324.00 194.5 Little Falls 7,889.41 194.6 Maple Grove 6,707.54 194.7 Maplewood 8,476.69 194.8 Minnetonka 10,403.00 194.9 Montevideo 1,307.66 194.10 Moorhead 68,069.26 194.11 New Hope 6,739.72 194.12 North St. Paul 4,241.14 194.13 Northfield 770.63 194.14 Owatonna 37,292.67 194.15 Plymouth 6,754.71 194.16 Red Wing 3,504.01 194.17 Richfield 53,757.96 194.18 Rosemont new text begin Rosemount new text end 1,712.55 194.19 Roseville 9,854.51 194.20 St. Anthony 33,055.00 194.21 St. Louis Park 53,643.11 194.22 Thief River Falls 28,365.04 194.23 Virginia 31,164.46 194.24 Waseca 11,135.17 194.25 West St. Paul 15,707.20 194.26 White Bear Lake 6,521.04 194.27 Woodbury 3,613.00 194.28 any other municipality 0.00 194.29(d) The total amount of excess police state aid must be deposited in the excess 194.30police state-aid account in the general fund, administered and distributed as provided 194.31in subdivision 11. 194.32    Sec. 8. Minnesota Statutes 2009 Supplement, section 69.031, subdivision 5, is 194.33amended to read: 194.34    Subd. 5. Deposit of state aid. (a) If the municipality or the independent nonprofit 194.35firefighting corporation is covered by the voluntary statewide lump-sum volunteer 194.36firefighter retirement plan under chapter 353G, the executive director shall credit the fire 194.37state aid against future municipal contribution requirements under section 353G.08 and 194.38shall notify the municipality or independent nonprofit firefighting corporation of the fire 194.39state aid so credited at least annually. If the municipality or the independent nonprofit 194.40firefighting corporation is not covered by the voluntary statewide lump-sum volunteer 195.1firefighter retirement plan, the municipal treasurer shall, within 30 days after receipt, 195.2transmit the fire state aid to the treasurer of the duly incorporated firefighters' relief 195.3association if there is one organized and the association has filed a financial report with the 195.4municipality. If the relief association has not filed a financial report with the municipality, 195.5the municipal treasurer shall delay transmission of the fire state aid to the relief association 195.6until the complete financial report is filed. If the municipality or independent nonprofit 195.7firefighting corporation is not covered by the voluntary statewide lump-sum volunteer 195.8firefighter retirement plan, if there is no relief association organized, or if the association 195.9has dissolved or has been removed as trustees of state aid, then the treasurer of the 195.10municipality shall deposit the money in the municipal treasury and the money may be 195.11disbursed only for the purposes and in the manner set forth in section 424A.08 or for the 195.12payment of the employer contribution requirement with respect to firefighters covered by 195.13the public employees police and fire retirement plan under section 353.65, subdivision 3. 195.14(b) The municipal treasurer, upon receipt of the police state aid, shall disburse the 195.15police state aid in the following manner: 195.16(1) For a municipality in which a local police relief association exists and all peace 195.17officers are members of the association, the total state aid must be transmitted to the 195.18treasurer of the relief association within 30 days of the date of receipt, and the treasurer 195.19of the relief association shall immediately deposit the total state aid in the special fund 195.20of the relief association; 195.21(2) For a municipality in which police retirement coverage is provided by the public 195.22employees police and fire fund and all peace officers are members of the fund, including 195.23municipalities covered by section 353.665, the total state aid must be applied toward the 195.24municipality's employer contribution to the public employees police and fire fund under 195.25sections 353.65, subdivision 3, and 353.665, subdivision 8, paragraph (b), if applicable; or 195.26(3) For a municipality other than a city of the first class with a population of more 195.27than 300,000 in which both a police relief association exists and police retirement 195.28coverage is provided in part by the public employees police and fire fund, the municipality 195.29may elect at its option to transmit the total state aid to the treasurer of the relief association 195.30as provided in clause (1), to use the total state aid to apply toward the municipality's 195.31employer contribution to the public employees police and fire fund subject to all the 195.32provisions set forth in clause (2), or to allot the total state aid proportionately to be 195.33transmitted to the police relief association as provided in this subdivision and to apply 195.34toward the municipality's employer contribution to the public employees police and fire 195.35fund subject to the provisions of clause (2) on the basis of the respective number of active 195.36full-time peace officers, as defined in section 69.011, subdivision 1, clause (g). 196.1For a city of the first class with a population of more than 300,000, in addition, the 196.2city may elect to allot the appropriate portion of the total police state aid to apply toward 196.3the employer contribution of the city to the public employees police and fire fund based 196.4on the covered salary of police officers covered by the fund each payroll period and to 196.5transmit the balance to the police relief association; or 196.6(4) For a municipality in which police retirement coverage is provided in part by 196.7the public employees police and fire fund and in part by a local police consolidation 196.8account governed by chapter 353A and established before March 2, 1999, for which the 196.9municipality declined merger under section 353.665, subdivision 1, or established after 196.10March 1, 1999, the total police state aid must be applied towards the municipality's total 196.11employer contribution to the public employees police and fire fund and to the local police 196.12consolidation account under sections 353.65, subdivision 3, and 353A.09, subdivision 5. 196.13(c) The county treasurer, upon receipt of the police state aid for the county, shall 196.14apply the total state aid toward the county's employer contribution to the public employees 196.15police and fire fund under section 353.65, subdivision 3. 196.16(d) The designated Metropolitan Airports Commission official, upon receipt of the 196.17police state aid for the Metropolitan Airports Commission, shall apply the total police 196.18state aid first toward the commission's employer contribution for police officers to the 196.19Minneapolis Employees Retirement Fund under section 422A.101, subdivision 2a, and, if 196.20there is any amount of police state aid remaining, shall apply that remainder toward the 196.21commission's employer contribution for police officers to the public employees police and 196.22fire plan under section 353.65, subdivision 3. 196.23(e) The police state aid apportioned to the Departments of Public Safety and Natural 196.24Resources under section 69.021, subdivision 7a, is appropriated to the commissioner 196.25of management and budget for transfer to the funds and accounts from which the 196.26salaries of peace officers certified under section 69.011, subdivision 2a new text begin 2b new text end , are paid. 196.27The commissioner of revenue shall certify to the commissioners of public safety, 196.28natural resources, and management and budget the amounts to be transferred from the 196.29appropriation for police state aid. The commissioners of public safety and natural 196.30resources shall certify to the commissioner of management and budget the amounts to be 196.31credited to each of the funds and accounts from which the peace officers employed by their 196.32respective departments are paid. Each commissioner shall allocate the police state aid first 196.33for employer contributions for employees funded from the general fund and then for 196.34employer contributions for employees funded from other funds. For peace officers whose 196.35salaries are paid from the general fund, the amounts transferred from the appropriation 196.36for police state aid must be canceled to the general fund. 197.1    Sec. 9. Minnesota Statutes 2008, section 126C.41, subdivision 3, is amended to read: 197.2    Subd. 3. Retirement levies. (a) In 1991 and each year thereafter, a district to which 197.3this subdivision applies may levy an additional amount required for contributions to the 197.4 new text begin general employees retirement plan of the Public Employees Retirement Association as the new text end 197.5 new text begin successor of the new text end Minneapolis Employees Retirement Fund as a result of the maximum 197.6dollar amount limitation on state contributions to the fund new text begin that plan new text end imposed under 197.7section 422A.101, subdivision 3. The additional levy must not exceed the most recent 197.8amount certified by the board of the Minneapolis Employees Retirement Fund new text begin executive new text end 197.9 new text begin director of the Public Employees Retirement Association new text end as the district's share of the 197.10contribution requirement in excess of the maximum state contribution under section 197.11422A.101, subdivision 3 . 197.12(b) For taxes payable in 1994 and thereafter, Special School District No. 1, 197.13Minneapolis, and Independent School District No. 625, St. Paul, may levy for the increase 197.14in the employer retirement fund contributions, under Laws 1992, chapter 598, article 5, 197.15section 1. 197.16(c) If the employer retirement fund contributions under section 354A.12, subdivision 197.172a , are increased for fiscal year 1994 or later fiscal years, Special School District No. 1, 197.18Minneapolis, and Independent School District No. 625, St. Paul, may levy in payable 197.191994 or later an amount equal to the amount derived by applying the net increase in 197.20the employer retirement fund contribution rate of the respective teacher retirement fund 197.21association between fiscal year 1993 and the fiscal year beginning in the year after the 197.22levy is certified to the total covered payroll of the applicable teacher retirement fund 197.23association. If an applicable school district levies under this paragraph, they may not 197.24levy under paragraph (b). 197.25(d) In addition to the levy authorized under paragraph (c), Special School District 197.26No. 1, Minneapolis, may also levy payable in 1997 or later an amount equal to the 197.27contributions under section 423A.02, subdivision 3, and may also levy in payable 1994 197.28or later an amount equal to the state aid contribution under section 354A.12, subdivision 197.293b . Independent School District No. 625, St. Paul, may levy payable in 1997 or later an 197.30amount equal to the supplemental contributions under section 423A.02, subdivision 3. 197.31    Sec. 10. Minnesota Statutes 2008, section 256D.21, is amended to read: 197.32256D.21 CONTINUATION OF BENEFITS; FORMER MINNEAPOLIS 197.33EMPLOYEES. 197.34    Subdivision 1. Continuation of benefits. Each employee of the city of Minneapolis 197.35who is transferred to and employed by the county under the provisions of section 256D.20 198.1and who is a contributing member of a retirement system organized under the provisions 198.2of new text begin Minnesota Statutes 2008, new text end chapter 422A, shall continue to be new text begin is new text end a member of that system 198.3 new text begin the MERF division of the Public Employees Retirement Association new text end and new text begin is new text end entitled to all 198.4of the new text begin applicable new text end benefits conferred thereby new text begin by new text end and subject to all the restrictions of chapter 198.5422A, unless the member applies to cancel membership within six months after January 198.61, 1974 new text begin section 353.50 new text end . 198.7    Subd. 2. City obligation. The cost to the public of that portion of the retirement 198.8allowances or other benefits accrued while any such employee was in the service of the 198.9city of Minneapolis shall new text begin must new text end remain an obligation of the city and a tax shall new text begin must new text end be 198.10levied and collected by it to discharge its obligation as provided by chapter 422A new text begin in new text end 198.11 new text begin section 353.50, subdivision 7 new text end . 198.12    Subd. 3. County obligation. The cost to the public of the retirement allowances 198.13or other benefits accruing to employees so transferred to and employed by the county 198.14shall be new text begin is new text end the obligation of and paid by the county at such time as the retirement board 198.15shall fix and determine in accordance with chapter 422A new text begin in section 353.50, subdivision new text end 198.16 new text begin 7 new text end . The county shall pay to the municipal new text begin general employees new text end retirement fund an amount 198.17certified to the county auditor of the county by the retirement board as the cost of the 198.18retirement allowances and other benefits accruing and owing to such county employees new text begin of new text end 198.19 new text begin the Public Employees Retirement Association those amounts new text end . The cost to the public of 198.20the retirement allowances as herein provided shall new text begin coverage under this section must new text end be 198.21paid from the county revenue fund by the county auditor upon receipt of certification from 198.22the retirement board as herein provided, and the county board is authorized to levy and 198.23collect such taxes as may be necessary to pay such costs. 198.24    Sec. 11. Minnesota Statutes 2009 Supplement, section 352.01, subdivision 2b, is 198.25amended to read: 198.26    Subd. 2b. Excluded employees. "State employee" does not include: 198.27    (1) students employed by the University of Minnesota, or the state colleges and 198.28universities, unless approved for coverage by the Board of Regents of the University of 198.29Minnesota or the Board of Trustees of the Minnesota State Colleges and Universities, 198.30whichever is applicable; 198.31    (2) employees who are eligible for membership in the state Teachers Retirement 198.32Association, except employees of the Department of Education who have chosen or may 198.33choose to be covered by the general state employees retirement plan of the Minnesota 198.34State Retirement System instead of the Teachers Retirement Association; 199.1    (3) employees of the University of Minnesota who are excluded from coverage by 199.2action of the Board of Regents; 199.3    (4) officers and enlisted personnel in the National Guard and the naval militia who 199.4are assigned to permanent peacetime duty and who under federal law are or are required to 199.5be members of a federal retirement system; 199.6    (5) election officers; 199.7    (6) persons who are engaged in public work for the state but who are employed 199.8by contractors when the performance of the contract is authorized by the legislature or 199.9other competent authority; 199.10    (7) officers and employees of the senate, or of the house of representatives, or of a 199.11legislative committee or commission who are temporarily employed; 199.12    (8) receivers, jurors, notaries public, and court employees who are not in the judicial 199.13branch as defined in section 43A.02, subdivision 25, except referees and adjusters 199.14employed by the Department of Labor and Industry; 199.15    (9) patient and inmate help in state charitable, penal, and correctional institutions 199.16including the Minnesota Veterans Home; 199.17    (10) persons who are employed for professional services where the service is 199.18incidental to their regular professional duties and whose compensation is paid on a per 199.19diem basis; 199.20    (11) employees of the Sibley House Association; 199.21    (12) the members of any state board or commission who serve the state intermittently 199.22and are paid on a per diem basis; the secretary, secretary-treasurer, and treasurer of those 199.23boards if their compensation is $5,000 or less per year, or, if they are legally prohibited 199.24from serving more than three years; and the board of managers of the State Agricultural 199.25Society and its treasurer unless the treasurer is also its full-time secretary; 199.26    (13) state troopers and persons who are described in section 352B.011, subdivision 199.2710 , clauses (2) to (8); 199.28    (14) temporary employees of the Minnesota State Fair who are employed on or 199.29after July 1 for a period not to extend beyond October 15 of that year; and persons who 199.30are employed at any time by the state fair administration for special events held on the 199.31fairgrounds; 199.32    (15) emergency employees who are in the classified service; except that if an 199.33emergency employee, within the same pay period, becomes a provisional or probationary 199.34employee on other than a temporary basis, the employee must be considered a "state 199.35employee" retroactively to the beginning of the pay period; 200.1    (16) temporary employees in the classified service, and temporary employees in the 200.2unclassified service who are appointed for a definite period of not more than six months 200.3and who are employed less than six months in any one-year period; 200.4    (17) interns hired for six months or less and trainee employees, except those listed in 200.5subdivision 2a, clause (8); 200.6    (18) persons whose compensation is paid on a fee basis or as an independent 200.7contractor; 200.8    (19) state employees who are employed by the Board of Trustees of the Minnesota 200.9State Colleges and Universities in unclassified positions enumerated in section 43A.08, 200.10subdivision 1 , clause (9); 200.11    (20) state employees who in any year have credit for 12 months service as teachers 200.12in the public schools of the state and as teachers are members of the Teachers Retirement 200.13Association or a retirement system in St. Paul, Minneapolis, or Duluth, except for 200.14incidental employment as a state employee that is not covered by one of the teacher 200.15retirement associations or systems; 200.16    (21) employees of the adjutant general who are employed on an unlimited 200.17intermittent or temporary basis in the classified or unclassified service for the support of 200.18Army and Air National Guard training facilities; 200.19    (22) chaplains and nuns who are excluded from coverage under the federal Old 200.20Age, Survivors, Disability, and Health Insurance Program for the performance of service 200.21as specified in United States Code, title 42, section 410(a)(8)(A), as amended, if no 200.22irrevocable election of coverage has been made under section 3121(r) of the Internal 200.23Revenue Code of 1986, as amended through December 31, 1992; 200.24    (23) examination monitors who are employed by departments, agencies, 200.25commissions, and boards to conduct examinations required by law; 200.26    (24) persons who are appointed to serve as members of fact-finding commissions or 200.27adjustment panels, arbitrators, or labor referees under chapter 179; 200.28    (25) temporary employees who are employed for limited periods under any state or 200.29federal program for training or rehabilitation, including persons who are employed for 200.30limited periods from areas of economic distress, but not including skilled and supervisory 200.31personnel and persons having civil service status covered by the system; 200.32    (26) full-time students who are employed by the Minnesota Historical Society 200.33intermittently during part of the year and full-time during the summer months; 200.34    (27) temporary employees who are appointed for not more than six months, of 200.35the Metropolitan Council and of any of its statutory boards, if the board members are 200.36appointed by the Metropolitan Council; 201.1    (28) persons who are employed in positions designated by the Department of 201.2Management and Budget as student workers; 201.3    (29) members of trades who are employed by the successor to the Metropolitan 201.4Waste Control Commission, who have trade union pension plan coverage under a 201.5collective bargaining agreement, and who are first employed after June 1, 1977; 201.6    (30) off-duty peace officers while employed by the Metropolitan Council; 201.7    (31) persons who are employed as full-time police officers by the Metropolitan 201.8Council and as police officers are members of the public employees police and fire fund; 201.9    (32) persons who are employed as full-time firefighters by the Department of Military 201.10Affairs and as firefighters are members of the public employees police and fire fund; 201.11    (33) foreign citizens with a work permit of less than three years, or an H-1b/JV visa 201.12valid for less than three years of employment, unless notice of extension is supplied which 201.13allows them to work for three or more years as of the date the extension is granted, in 201.14which case they are eligible for coverage from the date extended; and 201.15    (34) persons who are employed by the Board of Trustees of the Minnesota State 201.16Colleges and Universities and who elected to remain members of the Public Employees 201.17Retirement Association or new text begin of the MERF division of the Public Employees Retirement new text end 201.18 new text begin Association as the successor of new text end the Minneapolis Employees Retirement Fund, whichever 201.19applies, under Minnesota Statutes 1994, section 136C.75. 201.20    Sec. 12. Minnesota Statutes 2008, section 353.03, subdivision 1, is amended to read: 201.21    Subdivision 1. Management; composition; election. (a) The management of 201.22the Public Employees Retirement fund new text begin Association new text end is vested in an 11-member board of 201.23trustees consisting of ten members and the state auditor. The state auditor may designate 201.24a deputy auditor with expertise in pension matters as the auditor's representative on the 201.25board. The governor shall appoint five trustees to four-year terms, one of whom shall be 201.26designated to represent school boards, one to represent cities, one to represent counties, 201.27one who is a retired annuitant, and one who is a public member knowledgeable in pension 201.28matters. The membership of the association, including recipients of retirement annuities 201.29and disability and survivor benefits, shall elect five trustees for terms of four years, one of 201.30whom must be a member of the police and fire fund and one of whom must be a former 201.31member who met the definition of public employee under section 353.01, subdivisions 2 201.32and 2a, for at least five years prior to terminating membership or a member who receives 201.33a disability benefit. Terms expire on January 31 of the fourth year, and positions are 201.34vacant until newly elected members are seated. Except as provided in this subdivision, 202.1trustees elected by the membership of the association must be public employees and 202.2members of the association. 202.3(b) For seven days beginning October 1 of each year preceding a year in which 202.4an election is held, the association shall accept at its office filings in person or by mail 202.5of candidates for the board of trustees. A candidate shall submit at the time of filing a 202.6nominating petition signed by 25 or more members of the association. No name may 202.7be withdrawn from nomination by the nominee after October 15. At the request of a 202.8candidate for an elected position on the board of trustees, the board shall mail a statement 202.9of up to 300 words prepared by the candidate to all persons eligible to vote in the election 202.10of the candidate. The board may adopt policies, subject to review and approval by the 202.11secretary of state under paragraph (e), to govern the form and length of these statements, 202.12timing of mailings, and deadlines for submitting materials to be mailed. The secretary 202.13of state shall resolve disputes between the board and a candidate concerning application 202.14of these policies to a particular statement. 202.15(c) By January 10 of each year in which elections are to be held, the board shall 202.16distribute by mail to the members ballots listing the candidates. No member may vote for 202.17more than one candidate for each board position to be filled. A ballot indicating a vote for 202.18more than one person for any position is void. No special marking may be used on the 202.19ballot to indicate incumbents. Ballots mailed to the association must be postmarked no 202.20later than January 31. The ballot envelopes must be so designated and the ballots must be 202.21counted in a manner that ensures that each vote is secret. 202.22(d) A candidate who receives contributions or makes expenditures in excess of $100, 202.23or has given implicit or explicit consent for any other person to receive contributions or 202.24make expenditures in excess of $100 for the purpose of bringing about the candidate's 202.25election, shall file a report with the campaign finance and public disclosure board 202.26disclosing the source and amount of all contributions to the candidate's campaign. The 202.27campaign finance and public disclosure board shall prescribe forms governing these 202.28disclosures. Expenditures and contributions have the meaning defined in section 10A.01. 202.29These terms do not include the mailing made by the association board on behalf of the 202.30candidate. A candidate shall file a report within 30 days from the day that the results of 202.31the election are announced. The Campaign Finance and Public Disclosure Board shall 202.32maintain these reports and make them available for public inspection in the same manner 202.33as the board maintains and makes available other reports filed with it. 202.34(e) The secretary of state shall review and approve the procedures defined by the 202.35board of trustees for conducting the elections specified in this subdivision, including 202.36board policies adopted under paragraph (b). 203.1(f) The board of trustees and the executive director shall undertake their activities 203.2consistent with chapter 356A. 203.3    Sec. 13. Minnesota Statutes 2008, section 353.71, subdivision 4, is amended to read: 203.4    Subd. 4. Repayment of refund. Any person who has received a refund from the 203.5Public Employees Retirement fund new text begin Association new text end and who is a member of any public 203.6retirement system referred to in subdivision 1, may repay such refund to the Public 203.7Employees Retirement fund new text begin Association new text end as provided in section 353.35. 203.8    Sec. 14. Minnesota Statutes 2008, section 353.86, subdivision 1, is amended to read: 203.9    Subdivision 1. Participation. Volunteer ambulance service personnel, as defined 203.10in section 353.01, subdivision 35, who are or become members of and participants in 203.11the public new text begin general new text end employees retirement fund or the public employees police and fire 203.12fund before July 1, 2002, and make contributions to either of those funds based on 203.13compensation for service other than volunteer ambulance service may elect to participate 203.14in that same fund with respect to compensation received for volunteer ambulance service, 203.15provided that the volunteer ambulance service is not credited to another public or private 203.16pension plan including the public employees retirement plan established by chapter 203.17353D and provided further that the volunteer ambulance service is rendered for the same 203.18governmental unit for which the nonvolunteer ambulance service is rendered. 203.19    Sec. 15. Minnesota Statutes 2008, section 353.86, subdivision 2, is amended to read: 203.20    Subd. 2. Election. Volunteer ambulance service personnel to whom subdivision 203.211 applies may exercise the election authorized under subdivision 1 within the earlier of 203.22the one-year period beginning on July 1, 1989, and extending through June 30, 1990, or 203.23the one-year period commencing on the first day of the first month following the start of 203.24employment in a position covered by the public new text begin general new text end employees retirement fund or the 203.25public employees police and fire fund. The election must be exercised by filing a written 203.26notice on a form prescribed by the executive director of the association. 203.27    Sec. 16. Minnesota Statutes 2008, section 353.87, subdivision 1, is amended to read: 203.28    Subdivision 1. Participation. Except as provided in subdivision 2, a volunteer 203.29firefighter, as defined in section 353.01, subdivision 36, who, on June 30, 1989, was 203.30a member of, and a participant in, the public new text begin general new text end employees retirement fund or the 203.31public employees police and fire fund and was making contributions to either of those 203.32funds based, at least in part, on compensation for services performed as a volunteer 204.1firefighter shall continue as a member of, and a participant in, the public new text begin general new text end 204.2employees retirement fund or the public employees police and fire fund and compensation 204.3for services performed as a volunteer firefighter shall new text begin must new text end be considered salary. 204.4    Sec. 17. Minnesota Statutes 2008, section 353.87, subdivision 2, is amended to read: 204.5    Subd. 2. Option. A volunteer firefighter to whom subdivision 1 applies has the 204.6option to terminate membership and future participation in the public new text begin general new text end employees 204.7retirement fund or the public employees police and fire fund upon filing of a written notice 204.8of intention to terminate participation. Notice must be given on a form prescribed by the 204.9executive director of the association and must be filed in the offices of the association not 204.10later than June 30, 1990. 204.11    Sec. 18. Minnesota Statutes 2008, section 353.88, is amended to read: 204.12353.88 PENALTY FOR MEMBERSHIP MISCERTIFICATIONS AND 204.13CERTIFICATION FAILURES. 204.14(a) If the board of trustees of the Public Employees Retirement Association, 204.15upon the recommendation of the executive director, determines that a governmental 204.16subdivision has certified a public employee for membership in the public employees 204.17police and fire retirement plan when the public employee was not eligible for that 204.18retirement plan coverage, the public employee must be covered by the correct retirement 204.19plan for subsequent service, the public employee retains the coverage for the period of 204.20the misclassification, and the governmental subdivision shall pay in a lump sum the 204.21difference in the actuarial present value of the retirement annuities to which the public 204.22employee would have been entitled if the public employee was properly classified. The 204.23governmental subdivision payment is payable within 30 days of the board's determination. 204.24If unpaid, it must be collected under section 353.28. The lump-sum payment must be 204.25deposited in the public new text begin general new text end employees retirement fund. 204.26(b) If the executive director of the Public Employees Retirement Association 204.27determines that a governmental subdivision has failed to certify a person for retirement 204.28plan membership and coverage under this chapter, in addition to the procedures under 204.29section 353.27, subdivision 4, 9, 10, 11, 12, 12a, or 12b, the director shall charge a fine of 204.30$25 for each membership certification failure. 204.31    Sec. 19. Minnesota Statutes 2008, section 354.71, is amended to read: 204.32354.71 MINNEAPOLIS EMPLOYEES RETIREMENT FUND STATE AID 204.33REDEDICATED. 205.1    Subdivision 1. Appropriation. The positive difference, if any, between the 205.2actual state aid paid new text begin payable new text end to the new text begin MERF division account of the Public Employees new text end 205.3 new text begin Retirement Association with respect to the former new text end Minneapolis Employees Retirement 205.4Fund under section 422A.101, subdivision 3, and $8,065,000 annually is appropriated 205.5from the general fund to the commissioner of management and budget for deposit in 205.6the Teachers Retirement Association to offset all or a portion of the current and future 205.7unfunded actuarial accrued liability of the new text begin former new text end Minneapolis Teachers Retirement 205.8Fund Association. 205.9    Subd. 2. Financial requirements. The appropriation in subdivision 1 is available to 205.10the extent that financial requirements of new text begin with respect to new text end the new text begin MERF division of the Public new text end 205.11 new text begin Employees Retirement Association as the successor of the former new text end Minneapolis Employees 205.12Retirement Fund under section , subdivision 3, new text begin 353.50 new text end have been satisfied. 205.13    Sec. 20. Minnesota Statutes 2008, section 354A.011, subdivision 27, is amended to 205.14read: 205.15    Subd. 27. Teacher. (a) "Teacher" means any person who renders service for a public 205.16school district, other than a charter school, located in the corporate limits of Duluth or 205.17St. Paul, as any of the following: 205.18(1) a full-time employee in a position for which a valid license from the state 205.19Department of Education is required; 205.20(2) an employee of the teachers retirement fund association located in the city of 205.21the first class unless the employee has exercised the option pursuant to Laws 1955, 205.22chapter 10, section 1, to retain membership in the Minneapolis Employees Retirement 205.23Fund established pursuant to chapter 422A; 205.24(3) a part-time employee in a position for which a valid license from the state 205.25Department of Education is required; or 205.26(4) a part-time employee in a position for which a valid license from the state 205.27Department of Education is required who also renders other nonteaching services for the 205.28school district, unless the board of trustees of the teachers retirement fund association 205.29determines that the combined employment is on the whole so substantially dissimilar to 205.30teaching service that the service may not be covered by the association. 205.31(b) The term does not mean any person who renders service in the school district 205.32as any of the following: 205.33(1) an independent contractor or the employee of an independent contractor; 206.1(2) an employee who is a full-time teacher covered by the Teachers Retirement 206.2Association or by another teachers retirement fund association established pursuant to this 206.3chapter or chapter 354; 206.4(3) an employee new text begin who is new text end exempt from licensure pursuant to section 122A.30; 206.5(4) an employee who is a teacher in a technical college located in a city of the first 206.6class unless the person elects coverage by the applicable first class city teacher retirement 206.7fund association under section 354B.21, subdivision 2; 206.8(5) a teacher employed by a charter school, irrespective of the location of the 206.9school; or 206.10(6) an employee who is a part-time teacher in a technical college in a city of the first 206.11class and who has elected coverage by the applicable first class city teacher retirement 206.12fund association under section 354B.21, subdivision 2, but (i) the teaching service is 206.13incidental to the regular nonteaching occupation of the person; (ii) the applicable technical 206.14college stipulates annually in advance that the part-time teaching service will not exceed 206.15300 hours in a fiscal year; and (iii) the part-time teaching actually does not exceed 300 206.16hours in the fiscal year to which the certification applies. 206.17    Sec. 21. Minnesota Statutes 2008, section 354A.39, is amended to read: 206.18354A.39 SERVICE IN OTHER PUBLIC RETIREMENT FUNDS; ANNUITY. 206.19Any person who has been a member of the Minnesota State Retirement System, the 206.20Public Employees Retirement Association including the Public Employees Retirement 206.21Association Police and Fire Fund, the Teachers Retirement Association, the Minnesota 206.22State Patrol Retirement Association, the legislators retirement plan, the constitutional 206.23officers retirement plan, the Minneapolis Employees Retirement Fund, the Duluth 206.24Teachers Retirement Fund Association new law coordinated program, the St. Paul 206.25Teachers Retirement Fund Association coordinated program, or any other public employee 206.26retirement system in the state of Minnesota having a like provision new text begin , new text end but excluding all other 206.27funds providing retirement benefits for police officers or firefighters shall be new text begin , is new text end entitled new text begin , new text end 206.28when qualified new text begin , new text end to an annuity from each fund if the person's total allowable service in all 206.29of the funds or in any two or more of the funds totals three or more years, provided that 206.30no portion of the allowable service upon which the retirement annuity from one fund is 206.31based is used again in the computation for a retirement annuity from another fund and 206.32provided further that the person has not taken a refund from any of funds or associations 206.33since the person's membership in the fund or association has terminated. The annuity from 206.34each fund or association shall new text begin must new text end be determined by the appropriate provisions of the law 206.35governing each fund or association, except that the requirement that a person must have at 207.1least three years of allowable service in the respective fund or association shall new text begin does new text end not 207.2apply for the purposes of this section, provided that the aggregate service in two or more 207.3of these funds equals three or more years. 207.4    Sec. 22. Minnesota Statutes 2008, section 355.095, subdivision 1, is amended to read: 207.5    Subdivision 1. Agreement. (a) The director, on behalf of the state, its political 207.6subdivisions, and its other governmental employers, is authorized to enter into an 207.7agreement with the Secretary of Health and Human Services to extend the provisions of 207.8United States Code, title 42, section 426, 426-1, and 1395c, to the employees in paragraph 207.9(b) who meet the requirements of United States Code, title 42, section 418(v)(2) and who 207.10do not have coverage by the federal old age, survivors, and disability insurance program 207.11for that employment under any previous modification of the agreement or previous 207.12Medicare referendum. 207.13(b) The applicable employees are: 207.14(1) employees who are members of one of the retirement plans in new text begin Minnesota Statutes new text end 207.15 new text begin 2008, new text end section 356.30, subdivision 3, except clauses (4) and (8), based on continuous 207.16employment since March 31, 1986; and 207.17(2) employees of a special authority or district who have been continuously 207.18employed by the special authority or district since March 31, 1986. 207.19    Sec. 23. Minnesota Statutes 2009 Supplement, section 356.20, subdivision 2, is 207.20amended to read: 207.21    Subd. 2. Covered public pension plans and funds. This section applies to the 207.22following public pension plans: 207.23    (1) the general state employees retirement plan of the Minnesota State Retirement 207.24System; 207.25    (2) the general employees retirement plan of the Public Employees Retirement 207.26Association; 207.27    (3) the Teachers Retirement Association; 207.28    (4) the State Patrol retirement plan; 207.29    (5) the St. Paul Teachers Retirement Fund Association; 207.30    (6) the Duluth Teachers Retirement Fund Association; 207.31    (7) the Minneapolis Employees Retirement Fund; 207.32    (8) new text begin (7) new text end the University of Minnesota faculty retirement plan; 207.33    (9) new text begin (8) new text end the University of Minnesota faculty supplemental retirement plan; 207.34    (10) new text begin (9) new text end the judges retirement fund; 208.1    (11) new text begin (10) new text end a police or firefighter's relief association specified or described in section 208.269.77, subdivision 1a ; 208.3    (12) new text begin (11) new text end a volunteer firefighter relief association governed by section 69.771, 208.4subdivision 1 ; 208.5    (13) new text begin (12) new text end the public employees police and fire plan of the Public Employees 208.6Retirement Association; 208.7    (14) new text begin (13) new text end the correctional state employees retirement plan of the Minnesota State 208.8Retirement System; 208.9    (15) new text begin (14) new text end the local government correctional service retirement plan of the Public 208.10Employees Retirement Association; and 208.11(16) new text begin (15) new text end the voluntary statewide lump-sum volunteer firefighter retirement plan. 208.12    Sec. 24. Minnesota Statutes 2008, section 356.214, subdivision 1, is amended to read: 208.13    Subdivision 1. Actuary retention. (a) The governing board or managing or 208.14administrative official of each public pension plan and retirement fund or plan enumerated 208.15in paragraph (b) shall contract with an established actuarial consulting firm to conduct 208.16annual actuarial valuations and related services. The principal from the actuarial 208.17consulting firm on the contract must be an approved actuary under section 356.215, 208.18subdivision 1 , paragraph (c). 208.19    (b) Actuarial services must include the preparation of actuarial valuations and 208.20related actuarial work for the following retirement plans: 208.21    (1) the teachers retirement plan, Teachers Retirement Association; 208.22    (2) the general state employees retirement plan, Minnesota State Retirement System; 208.23    (3) the correctional employees retirement plan, Minnesota State Retirement System; 208.24    (4) the State Patrol retirement plan, Minnesota State Retirement System; 208.25    (5) the judges retirement plan, Minnesota State Retirement System; 208.26    (6) the Minneapolis employees retirement plan, Minneapolis Employees Retirement 208.27Fund; 208.28    (7) new text begin (6) new text end the public new text begin general new text end employees retirement plan, Public Employees Retirement 208.29Association new text begin , including the MERF division new text end ; 208.30    (8) new text begin (7) new text end the public employees police and fire plan, Public Employees Retirement 208.31Association; 208.32    (9) new text begin (8) new text end the Duluth teachers retirement plan, Duluth Teachers Retirement Fund 208.33Association; 208.34    (10) new text begin (9) new text end the St. Paul teachers retirement plan, St. Paul Teachers Retirement Fund 208.35Association; 209.1    (11) new text begin (10) new text end the legislators retirement plan, Minnesota State Retirement System; 209.2    (12) new text begin (11) new text end the elective state officers retirement plan, Minnesota State Retirement 209.3System; and 209.4    (13) new text begin (12) new text end local government correctional service retirement plan, Public Employees 209.5Retirement Association. 209.6    (c) The contracts must require completion of the annual actuarial valuation 209.7calculations on a fiscal year basis, with the contents of the actuarial valuation calculations 209.8as specified in section 356.215, and in conformity with the standards for actuarial work 209.9adopted by the Legislative Commission on Pensions and Retirement. 209.10    The contracts must require completion of annual experience data collection and 209.11processing and a quadrennial published experience study for the plans listed in paragraph 209.12(b), clauses (1), (2), and (7) new text begin (6) new text end , as provided for in the standards for actuarial work 209.13adopted by the commission. The experience data collection, processing, and analysis 209.14must evaluate the following: 209.15    (1) individual salary progression; 209.16    (2) the rate of return on investments based on the current asset value; 209.17    (3) payroll growth; 209.18    (4) mortality; 209.19    (5) retirement age; 209.20    (6) withdrawal; and 209.21    (7) disablement. 209.22    (d) The actuary shall annually prepare a report to the governing or managing board 209.23or administrative official and the legislature, summarizing the results of the actuarial 209.24valuation calculations. The actuary shall include with the report any recommendations 209.25concerning the appropriateness of the support rates to achieve proper funding of 209.26the retirement plans by the required funding dates. The actuary shall, as part of the 209.27quadrennial experience study, include recommendations on the appropriateness of the 209.28actuarial valuation assumptions required for evaluation in the study. 209.29    (e) If the actuarial gain and loss analysis in the actuarial valuation calculations 209.30indicates a persistent pattern of sizable gains or losses, the governing or managing board 209.31or administrative official shall direct the actuary to prepare a special experience study for a 209.32plan listed in paragraph (b), clause (3), (4), (5), (6) new text begin (7) new text end , (8), (9), (10), (11), new text begin or new text end (12), or (13), 209.33in the manner provided for in the standards for actuarial work adopted by the commission. 209.34    Sec. 25. Minnesota Statutes 2008, section 356.30, subdivision 3, is amended to read: 209.35    Subd. 3. Covered plans. This section applies to the following retirement plans: 210.1(1) the general state employees retirement plan of the Minnesota State Retirement 210.2System, established under chapter 352; 210.3(2) the correctional state employees retirement plan of the Minnesota State 210.4Retirement System, established under chapter 352; 210.5(3) the unclassified employees retirement program, established under chapter 352D; 210.6(4) the State Patrol retirement plan, established under chapter 352B; 210.7(5) the legislators retirement plan, established under chapter 3A; 210.8(6) the elective state officers retirement plan, established under chapter 352C; 210.9(7) the general employees retirement plan of the Public Employees Retirement 210.10Association, established under chapter 353 new text begin , including the MERF division of the Public new text end 210.11 new text begin Employees Retirement Association new text end ; 210.12(8) the public employees police and fire retirement plan of the Public Employees 210.13Retirement Association, established under chapter 353; 210.14(9) the local government correctional service retirement plan of the Public 210.15Employees Retirement Association, established under chapter 353E; 210.16(10) the Teachers Retirement Association, established under chapter 354; 210.17(11) the Minneapolis Employees Retirement Fund, established under chapter 422A; 210.18(12) new text begin (11) new text end the St. Paul Teachers Retirement Fund Association, established under 210.19chapter 354A; 210.20(13) new text begin (12) new text end the Duluth Teachers Retirement Fund Association, established under 210.21chapter 354A; and 210.22(14) new text begin (13) new text end the judges retirement fund, established by chapter 490. 210.23    Sec. 26. Minnesota Statutes 2008, section 356.302, subdivision 1, is amended to read: 210.24    Subdivision 1. Definitions. (a) The terms used in this section are defined in this 210.25subdivision. 210.26(b) "Average salary" means the highest average of covered salary for the appropriate 210.27period of credited service that is required for the calculation of a disability benefit by 210.28the covered retirement plan and that is drawn from any period of credited service and 210.29successive years of covered salary in a covered retirement plan. 210.30(c) "Covered retirement plan" or "plan" means a retirement plan listed in subdivision 210.317. 210.32(d) "Duty-related" means a disabling illness or injury that occurred while the person 210.33was actively engaged in employment duties or that arose out of the person's active 210.34employment duties. 211.1(e) "General employee retirement plan" means a covered retirement plan listed in 211.2subdivision 7, clauses (1) to (8) new text begin (6) new text end and (13) new text begin (12) new text end . 211.3(f) "Occupationally disabled" means the condition of having a medically 211.4determinable physical or mental impairment that makes a person unable to satisfactorily 211.5perform the minimum requirements of the person's employment position or a substantially 211.6similar employment position. 211.7(g) "Public safety employee retirement plan" means a covered retirement plan listed 211.8in subdivision 7, clauses (9) new text begin (7) new text end to (12) new text begin (11) new text end . 211.9(h) "Totally and permanently disabled" means the condition of having a medically 211.10determinable physical or mental impairment that makes a person unable to engage in any 211.11substantial gainful activity and that is expected to continue or has continued for a period 211.12of at least one year or that is expected to result directly in the person's death. 211.13    Sec. 27. Minnesota Statutes 2008, section 356.302, subdivision 7, is amended to read: 211.14    Subd. 7. Covered retirement plans. This section applies to the following 211.15retirement plans: 211.16(1) the general state employees retirement plan of the Minnesota State Retirement 211.17System, established by chapter 352; 211.18(2) the unclassified state employees retirement program of the Minnesota State 211.19Retirement System, established by chapter 352D; 211.20(3) the general employees retirement plan of the Public Employees Retirement 211.21Association, established by chapter 353 new text begin , including the MERF division of the Public new text end 211.22 new text begin Employees Retirement Association new text end ; 211.23(4) the Teachers Retirement Association, established by chapter 354; 211.24(5) the Duluth Teachers Retirement Fund Association, established by chapter 354A; 211.25(6) the St. Paul Teachers Retirement Fund Association, established by chapter 354A; 211.26(7) the Minneapolis Employees Retirement Fund, established by chapter 422A; 211.27(8) new text begin (7) new text end the state correctional employees retirement plan of the Minnesota State 211.28Retirement System, established by chapter 352; 211.29(9) new text begin (8) new text end the State Patrol retirement plan, established by chapter 352B; 211.30(10) new text begin (9) new text end the public employees police and fire plan of the Public Employees 211.31Retirement Association, established by chapter 353; 211.32(11) new text begin (10) new text end the local government correctional service retirement plan of the Public 211.33Employees Retirement Association, established by chapter 353E; and 211.34(12) new text begin (11) new text end the judges retirement plan, established by chapter 490. 212.1    Sec. 28. Minnesota Statutes 2008, section 356.303, subdivision 4, is amended to read: 212.2    Subd. 4. Covered retirement plans. This section applies to the following 212.3retirement plans: 212.4(1) the legislators retirement plan, established by chapter 3A; 212.5(2) the general state employees retirement plan of the Minnesota State Retirement 212.6System, established by chapter 352; 212.7(3) the correctional state employees retirement plan of the Minnesota State 212.8Retirement System, established by chapter 352; 212.9(4) the State Patrol retirement plan, established by chapter 352B; 212.10(5) the elective state officers retirement plan, established by chapter 352C; 212.11(6) the unclassified state employees retirement program, established by chapter 212.12352D; 212.13(7) the general employees retirement plan of the Public Employees Retirement 212.14Association, established by chapter 353 new text begin , including the MERF division of the Public new text end 212.15 new text begin Employees Retirement Association new text end ; 212.16(8) the public employees police and fire plan of the Public Employees Retirement 212.17Association, established by chapter 353; 212.18(9) the local government correctional service retirement plan of the Public 212.19Employees Retirement Association, established by chapter 353E; 212.20(10) the Teachers Retirement Association, established by chapter 354; 212.21(11) the Duluth Teachers Retirement Fund Association, established by chapter 354A; 212.22(12) the St. Paul Teachers Retirement Fund Association, established by chapter 212.23354A; new text begin and new text end 212.24(13) the Minneapolis Employees Retirement Fund, established by chapter 422A; and 212.25(14) new text begin (13) new text end the judges retirement fund, established by chapter 490. 212.26    Sec. 29. Minnesota Statutes 2009 Supplement, section 356.32, subdivision 2, is 212.27amended to read: 212.28    Subd. 2. Covered retirement plans. The provisions of this section apply to the 212.29following retirement plans: 212.30(1) the general state employees retirement plan of the Minnesota State Retirement 212.31System, established under chapter 352; 212.32(2) the correctional state employees retirement plan of the Minnesota State 212.33Retirement System, established under chapter 352; 212.34(3) the State Patrol retirement plan, established under chapter 352B; 213.1(4) the general employees retirement plan of the Public Employees Retirement 213.2Association, established under chapter 353 new text begin , including the MERF division of the Public new text end 213.3 new text begin Employees Retirement Association new text end ; 213.4(5) the public employees police and fire plan of the Public Employees Retirement 213.5Association, established under chapter 353; 213.6(6) the Teachers Retirement Association, established under chapter 354; 213.7(7) the Minneapolis Employees Retirement Fund, established under chapter 422A; 213.8(8) new text begin (7) new text end the Duluth Teachers Retirement Fund Association, established under chapter 213.9354A; and 213.10(9) new text begin (8) new text end the St. Paul Teachers Retirement Fund Association, established under chapter 213.11354A. 213.12    Sec. 30. Minnesota Statutes 2009 Supplement, section 356.401, subdivision 3, is 213.13amended to read: 213.14    Subd. 3. Covered retirement plans. The provisions of this section apply to the 213.15following retirement plans: 213.16(1) the legislators retirement plan, established by chapter 3A; 213.17(2) the general state employees retirement plan of the Minnesota State Retirement 213.18System, established by chapter 352; 213.19(3) the correctional state employees retirement plan of the Minnesota State 213.20Retirement System, established by chapter 352; 213.21(4) the State Patrol retirement plan, established by chapter 352B; 213.22(5) the elective state officers retirement plan, established by chapter 352C; 213.23(6) the unclassified state employees retirement program, established by chapter 213.24352D; 213.25(7) the general employees retirement plan of the Public Employees Retirement 213.26Association, established by chapter 353 new text begin , including the MERF division of the Public new text end 213.27 new text begin Employees Retirement Association new text end ; 213.28(8) the public employees police and fire plan of the Public Employees Retirement 213.29Association, established by chapter 353; 213.30(9) the public employees defined contribution plan, established by chapter 353D; 213.31(10) the local government correctional service retirement plan of the Public 213.32Employees Retirement Association, established by chapter 353E; 213.33(11) the voluntary statewide lump-sum volunteer firefighter retirement plan, 213.34established by chapter 353G; 213.35(12) the Teachers Retirement Association, established by chapter 354; 214.1(13) the Duluth Teachers Retirement Fund Association, established by chapter 354A; 214.2(14) the St. Paul Teachers Retirement Fund Association, established by chapter 214.3354A; 214.4(15) the individual retirement account plan, established by chapter 354B; 214.5(16) the higher education supplemental retirement plan, established by chapter 354C; 214.6(17) the Minneapolis Employees Retirement Fund, established by chapter 422A; 214.7(18) new text begin (17) new text end the Minneapolis Police Relief Association, established by chapter 423B; 214.8(19) new text begin (18) new text end the Minneapolis Firefighters Relief Association, established by chapter 214.9423C; and 214.10(20) new text begin (19) new text end the judges retirement fund, established by chapter 490. 214.11    Sec. 31. Minnesota Statutes 2008, section 356.407, subdivision 2, is amended to read: 214.12    Subd. 2. Covered funds. The provisions of this section apply to the following 214.13retirement funds: 214.14(1) the general employees retirement plan of the Public Employees Retirement 214.15Association established under chapter 353 new text begin , including the MERF division of the Public new text end 214.16 new text begin Employees Retirement Association new text end ; 214.17(2) the public employees police and fire plan of the Public Employees Retirement 214.18Association established under chapter 353; 214.19(3) the State Patrol retirement plan established under chapter 352B; 214.20(4) the legislators retirement plan established under chapter 3A; 214.21(5) the elective state officers retirement plan established under chapter 352C; new text begin and new text end 214.22(6) the Teachers Retirement Association established under chapter 354; and new text begin . new text end 214.23(7) the Minneapolis Employees Retirement Fund established under chapter 422A. 214.24    Sec. 32. Minnesota Statutes 2009 Supplement, section 356.415, subdivision 2, is 214.25amended to read: 214.26    Subd. 2. Covered retirement plans. The provisions of this section apply to the 214.27following retirement plans: 214.28(1) the legislators retirement plan established under chapter 3A; 214.29(2) the correctional state employees retirement plan of the Minnesota State 214.30Retirement System established under chapter 352; 214.31(3) the general state employees retirement plan of the Minnesota State Retirement 214.32System established under chapter 352; 214.33(4) the State Patrol retirement plan established under chapter 352B; 214.34(5) the elective state officers retirement plan established under chapter 352C; 215.1(6) the general employees retirement plan of the Public Employees Retirement 215.2Association established under chapter 353 new text begin , including the MERF division of the Public new text end 215.3 new text begin Employees Retirement Association new text end ; 215.4(7) the public employees police and fire retirement plan of the Public Employees 215.5Retirement Association established under chapter 353; 215.6(8) the local government correctional employees retirement plan of the Public 215.7Employees Retirement Association established under chapter 353E; 215.8(9) the teachers retirement plan established under chapter 354; and 215.9(10) the judges retirement plan established under chapter 490. 215.10    Sec. 33. Minnesota Statutes 2008, section 356.431, subdivision 1, is amended to read: 215.11    Subdivision 1. Lump-sum postretirement payment conversion. For benefits paid 215.12after December 31, 2001, to eligible persons under sections new text begin section new text end 356.42 and 356.43, 215.13the amount of the most recent lump-sum benefit payable to an eligible recipient under 215.14sections new text begin section new text end 356.42 and must be divided by 12. The result must be added to 215.15the monthly annuity or benefit otherwise payable to an eligible recipient, must become a 215.16permanent part of the benefit recipient's pension, and must be included in any pension 215.17benefit subject to future increases. 215.18    Sec. 34. Minnesota Statutes 2008, section 356.465, subdivision 3, is amended to read: 215.19    Subd. 3. Covered retirement plans. The provisions of this section apply to the 215.20following retirement plans: 215.21(1) the general state employees retirement plan of the Minnesota State Retirement 215.22System established under chapter 352; 215.23(2) the correctional state employees retirement plan of the Minnesota State 215.24Retirement System established under chapter 352; 215.25(3) the State Patrol retirement plan established under chapter 352B; 215.26(4) the legislators retirement plan established under chapter 3A; 215.27(5) the judges retirement plan established under chapter 490; 215.28(6) the general employees retirement plan of the Public Employees Retirement 215.29Association established under chapter 353 new text begin , including the MERF division of the Public new text end 215.30 new text begin Employees Retirement Association new text end ; 215.31(7) the public employees police and fire plan of the Public Employees Retirement 215.32Association established under chapter 353; 215.33(8) the teachers retirement plan established under chapter 354; 216.1(9) the Duluth Teachers Retirement Fund Association established under chapter 216.2354A; 216.3(10) the St. Paul Teachers Retirement Fund Association established under chapter 216.4354A; 216.5(11) the Minneapolis Employees Retirement Fund established under chapter 422A; 216.6(12) new text begin (11) new text end the Minneapolis Firefighters Relief Association established under chapter 216.7423C; 216.8(13) new text begin (12) new text end the Minneapolis Police Relief Association established under chapter 216.9423B; and 216.10(14) new text begin (13) new text end the local government correctional service retirement plan of the Public 216.11Employees Retirement Association established under chapter 353E. 216.12    Sec. 35. Minnesota Statutes 2008, section 356.64, is amended to read: 216.13356.64 REAL ESTATE INVESTMENTS. 216.14(a) Notwithstanding any law to the contrary, any public pension plan whose assets 216.15are not invested by the State Board of Investment may invest its funds in Minnesota situs 216.16nonfarm real estate ownership interests or loans secured by mortgages or deeds of trust if 216.17the investment is consistent with section 356A.04. 216.18(b) Except to the extent authorized in the case of the Minneapolis Employees 216.19Retirement Fund under section 422A.05, subdivision 2c, paragraph (a), An investment 216.20otherwise authorized by this section must also comply with the requirements and 216.21limitations of section 11A.24, subdivision 6. 216.22    Sec. 36. Minnesota Statutes 2008, section 356.65, subdivision 2, is amended to read: 216.23    Subd. 2. Disposition of abandoned amounts. Any unclaimed public pension 216.24fund amounts existing in any public pension fund are presumed to be abandoned, but are 216.25not subject to the provisions of sections 345.31 to 345.60. Unless the benefit plan of 216.26the public pension fund specifically provides for a different disposition of unclaimed or 216.27abandoned funds or amounts, any unclaimed public pension fund amounts cancel and 216.28must be credited to the public pension fund. If the unclaimed public pension fund amount 216.29exceeds $25 and the inactive or former member again becomes a member of the applicable 216.30public pension plan or applies for a retirement annuity under section 3A.12, 352.72, 216.31352B.30 , 353.71, 354.60, new text begin or new text end 356.30, or 422A.16, subdivision 8, whichever applies, the 216.32canceled amount must be restored to the credit of the person. 217.1    Sec. 37. Minnesota Statutes 2008, section 356.91, is amended to read: 217.2356.91 VOLUNTARY MEMBERSHIP DUES DEDUCTION. 217.3    (a) Upon written authorization of a person receiving an annuity from a public 217.4pension fund administered by the Minnesota State Retirement System, new text begin or new text end the Public 217.5Employees Retirement Association, or the Minneapolis Employees Retirement Fund, the 217.6executive director of the public pension fund may deduct from the retirement annuity an 217.7amount requested by the annuitant to be paid as dues to any labor organization that is an 217.8exclusive bargaining agent representing public employees or an organization representing 217.9retired public employees of which the annuitant is a member and shall pay the amount to 217.10the organization so designated by the annuitant. 217.11    (b) A pension fund and the plan fiduciaries which authorize or administer deductions 217.12of dues payments under paragraph (a) are not liable for failure to properly deduct or 217.13transmit the dues amounts, provided that the fund and the fiduciaries have acted in good 217.14faith. 217.15    (c) The deductions under paragraph (a) may occur no more frequently than two 217.16times per year and may not be used for political purposes. 217.17    (d) Any labor organization specified in paragraph (a) shall reimburse the public 217.18pension fund for the administrative expense of withholding premium amounts. 217.19    Sec. 38. Minnesota Statutes 2009 Supplement, section 356.96, subdivision 1, is 217.20amended to read: 217.21    Subdivision 1. Definitions. (a) Unless the language or context clearly indicates that 217.22a different meaning is intended, for the purpose of this section, the terms in paragraphs 217.23(b) to (e) have the meanings given them. 217.24    (b) "Chief administrative officer" means the executive director of a covered pension 217.25plan or the executive director's designee or representative. 217.26    (c) "Covered pension plan" means a plan enumerated in section 356.20, subdivision 217.272 , clauses (1) to (4), (10) new text begin (9) new text end , and (13) new text begin (12) new text end to (16) new text begin (15) new text end , but does not mean the 217.28deferred compensation plan administered under sections 352.965 and 352.97 or to the 217.29postretirement health care savings plan administered under section 352.98. 217.30    (d) "Governing board" means the Board of Trustees of the Public Employees 217.31Retirement Association, the Board of Trustees of the Teachers Retirement Association, or 217.32the Board of Directors of the Minnesota State Retirement System. 217.33    (e) "Person" includes an active, retired, deferred, or nonvested inactive participant in 217.34a covered pension plan or a beneficiary of a participant, or an individual who has applied 218.1to be a participant or who is or may be a survivor of a participant, or a state agency or 218.2other governmental unit that employs active participants in a covered pension plan. 218.3    Sec. 39. Minnesota Statutes 2008, section 473.511, subdivision 3, is amended to read: 218.4    Subd. 3. Existing sanitary districts, joint sewer boards. Effective January 1, 218.51971, the corporate existence of the Minneapolis-St. Paul Sanitary District, the North 218.6Suburban Sanitary Sewer District, and any joint board created by agreement among local 218.7government units pursuant to new text begin under new text end section 471.59, to provide interceptors and treatment 218.8works for such local government units, shall terminate. All persons regularly employed by 218.9such sanitary districts and joint boards on that date or on any earlier date on which the 218.10former waste control commission pursuant to subdivisions 1 and 2 assumed ownership and 218.11control of any interceptors or treatment works owned or operated by such sanitary districts 218.12and joint boards, and who are employees of the commission on July 1, 1994, shall be new text begin are new text end 218.13employees of the council, and may at their option become members of the Minnesota 218.14State Retirement System or may continue as members of a public retirement association 218.15under chapter 422A or any other law, to which they belonged before such date, and shall 218.16retain all pension rights which they may have under such latter laws, and all other rights to 218.17which they are entitled by contract or law. Members of trades who are employed by the 218.18former Metropolitan Waste Control Commission, who have trade union pension coverage 218.19pursuant to new text begin under new text end a collective bargaining agreement, and who elected exclusion from 218.20coverage pursuant to new text begin under new text end section 473.512, or who are first employed after July 1, 1977, 218.21shall new text begin may new text end not be covered by the Minnesota State Retirement System. The council shall 218.22make the employer's contributions to pension funds of its employees. Such employees 218.23shall perform such duties as may be prescribed by the council. All funds of such sanitary 218.24districts and joint boards then on hand, and all subsequent collections of taxes, special 218.25assessments or service charges levied or imposed by or for such sanitary districts or joint 218.26boards shall new text begin must new text end be transferred to the council. The local government units otherwise 218.27entitled to such cash, taxes, assessments or service charges shall new text begin must new text end be credited with 218.28such amounts, and such credits shall new text begin must new text end be offset against any amounts to be paid by 218.29them to the council as provided in section 473.517. The former Metropolitan Waste 218.30Control Commission, and on July 1, 1994, the council shall succeed to and become vested 218.31by action of law with all right, title and interest in and to any property, real or personal, 218.32owned or operated by such sanitary districts and joint boards. Prior to that date the proper 218.33officers of such sanitary districts and joint boards, or the former Metropolitan Waste 218.34Control Commission, shall execute and deliver to the council all deeds, conveyances, bills 218.35of sale, and other documents or instruments required to vest in the council good and 219.1marketable title to all such real or personal property; provided that vesting of the title shall new text begin new text end 219.2 new text begin must new text end occur by operation of law and failure to execute and deliver the documents shall new text begin does new text end 219.3not affect the vesting of title in the former Metropolitan Waste Control Commission or the 219.4council on the dates indicated in this subdivision. The council shall become obligated to 219.5pay or assume all bonded or other debt and contract obligations incurred by the former 219.6Metropolitan Waste Control Commission, or by such sanitary districts and joint boards, or 219.7incurred by local government units for the acquisition or betterment of any interceptors or 219.8treatment works owned or operated by such sanitary districts or joint boards. 219.9    Sec. 40. Minnesota Statutes 2008, section 473.606, subdivision 5, is amended to read: 219.10    Subd. 5. Employees, others, affirmative action; prevailing wage. The corporation 219.11shall have the power to appoint engineers and other consultants, attorneys, and such 219.12other officers, agents, and employees as it may see fit, who shall perform such duties and 219.13receive such compensation as the corporation may determine, and be removable at the 219.14pleasure of the corporation. The corporation shall new text begin must new text end adopt an affirmative action plan, 219.15which shall be submitted to the appropriate agency or office of the state for review and 219.16approval. The plan shall new text begin must new text end include a yearly progress report to the agency or office. 219.17Officers and employees of the corporation who cannot qualify and participate in the 219.18municipal employees retirement fund under chapter 422A, shall be separated from service 219.19at the retirement age applicable to officers or employees of the state of Minnesota in the 219.20classified service of the state civil service as provided in section , or as the same 219.21may from time to time be amended, regardless of the provisions of the Veteran's Preference 219.22Act. Whenever the corporation performs any work within the limits of a city of the first 219.23class, or establishes a minimum wage for skilled or unskilled labor in the specifications or 219.24any contract for work within one of the cities, the rate of pay to such skilled and unskilled 219.25labor shall new text begin must new text end be the prevailing rate of wage for such labor in that city. 219.26    Sec. 41. Minnesota Statutes 2008, section 475.52, subdivision 6, is amended to read: 219.27    Subd. 6. Certain purposes. Any municipality may issue bonds for paying 219.28judgments against it; for refunding outstanding bonds; for funding floating indebtedness; 219.29for funding actuarial liabilities to pay postemployment benefits to employees or officers 219.30after their termination of service; or for funding all or part of the municipality's current 219.31and future unfunded liability for a pension or retirement fund or plan referred to in 219.32section 356.20, subdivision 2, as those liabilities are most recently computed pursuant 219.33to new text begin under new text end sections 356.215 and 356.216. The board of trustees or directors of a pension 219.34fund or relief association referred to in section 69.77 or chapter 422A must consent and 220.1must be a party to any contract made under this section with respect to the fund held by 220.2it for the benefit of and in trust for its members. For purposes of this section, the term 220.3"postemployment benefits" means benefits giving rise to a liability under Statement No. 220.445 of the Governmental Accounting Standards Board. 220.5    Sec. 42. Minnesota Statutes 2009 Supplement, section 480.181, subdivision 2, is 220.6amended to read: 220.7    Subd. 2. Election to retain insurance and benefits; retirement. (a) Before a 220.8person is transferred to state employment under this section, the person may elect to do 220.9either or both of the following: 220.10(1) keep life insurance; hospital, medical, and dental insurance; and vacation and 220.11sick leave benefits and accumulated time provided by the county instead of receiving 220.12benefits from the state under the judicial branch personnel rules; or 220.13(2) remain a member of the new text begin general employees retirement plan of the new text end Public 220.14Employees Retirement Association or the Minneapolis employees retirement fund new text begin MERF new text end 220.15 new text begin division of the Public Employees Retirement Association new text end instead of joining the Minnesota 220.16State Retirement System. 220.17Employees who make an election under clause (1) remain on the county payroll, 220.18but the state shall reimburse the county on a quarterly basis for the salary and cost of the 220.19benefits provided by the county. The state shall make the employer contribution to the 220.20 new text begin general employees retirement plan of the new text end Public Employees Retirement Association or the 220.21employer contribution under section 422A.101 new text begin 353.50 new text end , subdivision 1a new text begin 7, paragraphs (c) new text end 220.22 new text begin and (d) new text end , to the Minneapolis Employees Retirement Fund new text begin MERF division of the Public new text end 220.23 new text begin Employees Retirement Association new text end on behalf of employees who make an election under 220.24clause (2). 220.25(b) An employee who makes an election under paragraph (a), clause (1), may revoke 220.26the election, once, at any time, but if the employee revokes the election, the employee 220.27cannot make another election. An employee who makes an election under paragraph (a), 220.28clause (2), may revoke the election at any time within six months after the person becomes 220.29a state employee. Once an employee revokes this election, the employee cannot make 220.30another election. 220.31(c) The Supreme Court, after consultation with the Judicial Council, the 220.32commissioner of management and budget, and the executive directors of the Public 220.33Employees Retirement Association and the Minnesota State Retirement Association, shall 220.34adopt procedures for making elections under this section. 221.1(d) The Supreme Court shall notify all affected employees of the options available 221.2under this section. The executive directors of the Public Employees Retirement 221.3Association and the Minnesota State Retirement System shall provide counseling to 221.4affected employees on the effect of making an election to remain a member of the Public 221.5Employees Retirement Association. 221.6    Sec. 43. new text begin EFFECTIVE DATE. new text end 221.7 new text begin Sections 1 to 42 are effective June 30, 2010. new text end 221.8ARTICLE 14 221.9VOLUNTEER FIREFIGHTER RELIEF ASSOCIATION MODIFICATIONS 221.10    Section 1. Minnesota Statutes 2009 Supplement, section 69.772, subdivision 6, is 221.11amended to read: 221.12    Subd. 6. Municipal ratification for plan amendments. If the special fund of the 221.13relief association does not have a surplus over full funding pursuant to new text begin under new text end subdivision 3, 221.14clause (2), subclause (e), or new text begin and new text end if the municipality is required to provide financial support 221.15to the special fund of the relief association pursuant to new text begin under new text end this section, the adoption of 221.16or any amendment to the articles of incorporation or bylaws of a relief association which 221.17increases or otherwise affects the retirement coverage provided by or the service pensions 221.18or retirement benefits payable from the special fund of any relief association to which this 221.19section applies is not effective until it is ratified by the governing body of the municipality 221.20in which the relief association is located and the officers of a relief association shall not 221.21seek municipal ratification prior to preparing and certifying an estimate of the expected 221.22increase in the accrued liability and annual accruing liability of the relief association 221.23attributable to the amendment. If the special fund of the relief association has a surplus 221.24over full funding pursuant to new text begin under new text end subdivision 3, clause (2), subclause (e), and if the 221.25municipality is not required to provide financial support to the special fund of the relief 221.26association pursuant to new text begin under new text end this section, the relief association may adopt or amend its 221.27articles of incorporation or bylaws which increase or otherwise affect the retirement 221.28coverage provided by or the service pensions or retirement benefits payable from the 221.29special fund of the relief association which are effective without municipal ratification so 221.30long as this does not cause the amount of the resulting increase in the accrued liability 221.31of the special fund of the relief association to exceed 90 percent of the amount of the 221.32surplus over full funding reported in the prior year and this does not result in the financial 221.33requirements of the special fund of the relief association exceeding the expected amount 221.34of the future fire state aid to be received by the relief association as determined by the 222.1board of trustees following the preparation of an estimate of the expected increase in the 222.2accrued liability and annual accruing liability of the relief association attributable to the 222.3change. If a relief association adopts or amends its articles of incorporation or bylaws 222.4without municipal ratification pursuant to new text begin under new text end this subdivision, and, subsequent to 222.5the amendment or adoption, the financial requirements of the special fund of the relief 222.6association pursuant to new text begin under new text end this section are such so as to require financial support from 222.7the municipality, the provision which was implemented without municipal ratification is 222.8no longer effective without municipal ratification and any service pensions or retirement 222.9benefits payable after that date may be paid only in accordance with the articles of 222.10incorporation or bylaws as amended or adopted with municipal ratification. 222.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 222.12    Sec. 2. Minnesota Statutes 2009 Supplement, section 69.773, subdivision 6, is 222.13amended to read: 222.14    Subd. 6. Municipal ratification for plan amendments. If the special fund of the 222.15relief association does not have a surplus over full funding pursuant to new text begin under new text end subdivision 222.164, or new text begin and new text end if the municipality is required to provide financial support to the special fund of 222.17the relief association pursuant to new text begin under new text end this section, the adoption of or any amendment to 222.18the articles of incorporation or bylaws of a relief association which increases or otherwise 222.19affects the retirement coverage provided by or the service pensions or retirement benefits 222.20payable from the special fund of any relief association to which this section applies is not 222.21effective until it is ratified by the governing body of the municipality in which the relief 222.22association is located. If the special fund of the relief association has a surplus over full 222.23funding pursuant to new text begin under new text end subdivision 4, and if the municipality is not required to provide 222.24financial support to the special fund of the relief association pursuant to new text begin under new text end this section, 222.25the relief association may adopt or amend its articles of incorporation or bylaws which 222.26increase or otherwise affect the retirement coverage provided by or the service pensions 222.27or retirement benefits payable from the special fund of the relief association which are 222.28effective without municipal ratification so long as this does not cause the amount of the 222.29resulting increase in the accrued liability of the special fund of the relief association to 222.30exceed 90 percent of the amount of the surplus over full funding reported in the prior year 222.31and this does not result in the financial requirements of the special fund of the relief 222.32association exceeding the expected amount of the future fire state aid to be received by the 222.33relief association as determined by the board of trustees following the preparation of an 222.34updated actuarial valuation including the proposed change or an estimate of the expected 222.35actuarial impact of the proposed change prepared by the actuary of the relief association. 223.1If a relief association adopts or amends its articles of incorporation or bylaws without 223.2municipal ratification pursuant to this subdivision, and, subsequent to the amendment or 223.3adoption, the financial requirements of the special fund of the relief association pursuant 223.4to new text begin under new text end this section are such so as to require financial support from the municipality, the 223.5provision which was implemented without municipal ratification is no longer effective 223.6without municipal ratification and any service pensions or retirement benefits payable after 223.7that date may be paid only in accordance with the articles of incorporation or bylaws as 223.8amended or adopted with municipal ratification. 223.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 223.10    Sec. 3. Minnesota Statutes 2008, section 356A.06, subdivision 8, is amended to read: 223.11    Subd. 8. Minimum liquidity requirements. A covered pension plan described by 223.12subdivision 6, paragraph (a) new text begin or 7 new text end , in order to pay benefits as they come due, shall invest 223.13a portion of its assets in authorized short-term debt obligations that can be immediately 223.14liquidated without accrual of a substantial determinable penalty or loss and that have an 223.15average maturity of no more than 90 days. The chief administrative officer of the plan 223.16shall determine the minimum liquidity requirement of the plan and shall retain appropriate 223.17documentation of that determination for three years from the date of determination. 223.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 223.19    Sec. 4. Minnesota Statutes 2009 Supplement, section 424A.01, subdivision 1, is 223.20amended to read: 223.21    Subdivision 1. Minors. (a) No volunteer firefighters' relief association associated 223.22with a municipality or an independent nonprofit firefighting corporation may include as a 223.23relief association member a minor serving as a firefighter, except for members of a youth, 223.24civic, or educational organization or program who participate with uninterrupted adult 223.25supervision, as allowed by federal law and by section . Such organizations or 223.26programs include, but are not limited to, Boy Scout Explorer programs or firefighting 223.27degree programs. 223.28(b) No volunteer firefighters' relief association associated with a municipality or an 223.29independent nonprofit firefighting corporation may include as a relief association member 223.30a minor serving as a volunteer firefighter. 223.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 224.1    Sec. 5. Minnesota Statutes 2009 Supplement, section 424A.01, subdivision 6, is 224.2amended to read: 224.3    Subd. 6. Return to active firefighting after break in service. (a) new text begin The requirements new text end 224.4 new text begin of this section apply to all breaks in service, except breaks in service mandated by federal new text end 224.5 new text begin or state law. new text end 224.6 new text begin (b)(1) new text end If a former active firefighter who has ceased to perform or supervise fire 224.7suppression and fire prevention duties for at least 60 days resumes performing active 224.8firefighting with the fire department associated with the relief association, if the bylaws of 224.9the relief association so permit, the person new text begin firefighter new text end may again become an active member 224.10of the relief association. new text begin A firefighter who returns to active service and membership is new text end 224.11 new text begin subject to the service pension calculation requirements under this section. new text end 224.12 new text begin (2) A firefighter who has been granted an approved leave of absence not exceeding new text end 224.13 new text begin one year by the fire department or by the relief association is exempt from the minimum new text end 224.14 new text begin period of resumption service requirement of this section. new text end 224.15 new text begin (3) A person who has a break in service not exceeding one year but has not been new text end 224.16 new text begin granted an approved leave of absence and who has not received a service pension or new text end 224.17 new text begin disability benefit may be made exempt from the minimum period of resumption service new text end 224.18 new text begin requirement of this section by the relief association bylaws. new text end 224.19 new text begin (4) If the bylaws so provide, a firefighter who returns to active relief association new text end 224.20 new text begin membership under this paragraph may continue to collect a monthly service pension, new text end 224.21 new text begin notwithstanding the service pension eligibility requirements under chapter 424A. new text end 224.22(b) new text begin (c) If new text end a new text begin former new text end firefighter who new text begin has received a service pension or disability benefit new text end 224.23returns to active relief association membership under paragraph (a) new text begin (b), the firefighter new text end may 224.24qualify for the receipt of a service pension from the relief association for the resumption 224.25service period if the firefighter meets a minimum period of resumption service specified in 224.26the relief association bylaws new text begin the service requirements of section 424A.016, subdivision 3, new text end 224.27 new text begin or 424A.02, subdivision 2 new text end . 224.28 new text begin (d) If a former firefighter who has not received a service pension or disability benefit new text end 224.29 new text begin returns to active relief association membership under paragraph (b), the firefighter may new text end 224.30 new text begin qualify for the receipt of a service pension from the relief association for the resumption new text end 224.31 new text begin service period if the firefighter meets the minimum period of resumption service specified new text end 224.32 new text begin in the relief association bylaws and the service requirements of section 424A.016, new text end 224.33 new text begin subdivision 3, or 424A.02, subdivision 2. new text end 224.34(c) new text begin (e) new text end A firefighter who returns to active lump-sum relief association membership 224.35and who qualifies for a service pension under paragraph (b) new text begin (c) or (d) new text end must have, upon 224.36a subsequent cessation of duties, any service pension for the resumption service period 225.1calculated as a separate benefit. If a lump-sum service pension had been paid to the 225.2firefighter upon the firefighter's previous cessation of duties, a second lump-sum service 225.3pension for the resumption service period must be calculated to apply the service pension 225.4amount in effect on the date of the firefighter's termination of the resumption service for all 225.5years of the resumption service. No firefighter may be paid a service pension twice for the 225.6same period of service. If a lump-sum service pension had not been paid to the firefighter 225.7upon the firefighter's previous cessation of duties and the firefighter meets the minimum 225.8service requirement of section new text begin 424A.016, subdivision 3, or new text end 424A.02, subdivision 2, a 225.9service pension must be calculated to apply the service pension amount in effect on the 225.10date of the firefighter's termination of the resumption service for all years of service credit. 225.11(d) new text begin (f) new text end A firefighter who had not been paid a lump-sum service pension returns 225.12to active relief association membership under paragraph (a) new text begin (b) new text end , who does not qualify 225.13for a service pension under paragraph (b) new text begin (d) new text end , but who does meet the minimum service 225.14requirement of section new text begin 424A.016, subdivision 3, or new text end 424A.02, subdivision 2, based on the 225.15firefighter's previous years of active service, must have, upon a subsequent cessation of 225.16duties, a service pension calculated for the previous years of service based on the service 225.17pension amount in effect on the date of the firefighter's termination of the resumption 225.18service, or, if the bylaws so provide, based on the service pension amount in effect on the 225.19date of the firefighter's previous cessation of duties. 225.20(e) new text begin (g) new text end If a firefighter receiving a monthly benefit service pension returns to active 225.21monthly benefit relief association membership under paragraph (a) new text begin (b) new text end , new text begin and if the relief new text end 225.22 new text begin association bylaws do not allow for the firefighter to continue collecting a monthly service new text end 225.23 new text begin pension, new text end any monthly benefit service pension payable to the firefighter is suspended as 225.24of the first day of the month next following the date on which the firefighter returns to 225.25active membership. If the firefighter was receiving a monthly benefit service pension, 225.26and qualifies for a service pension under paragraph (b) new text begin (c) new text end , the firefighter is entitled to 225.27an additional monthly benefit service pension upon a subsequent cessation of duties 225.28calculated based on the resumption service credit and the service pension accrual amount 225.29in effect on the date of the termination of the resumption service. The new text begin A new text end suspended initial 225.30service pension resumes as of the first of the month next following the termination of the 225.31resumption service. If the firefighter was not receiving a monthly benefit service pension 225.32and meets the minimum service requirement of section 424A.02, subdivision 2, a service 225.33pension must be calculated to apply the service pension amount in effect on the date of the 225.34firefighter's termination of the resumption service for all years of service credit. 225.35(f) new text begin (h) new text end A firefighter who was not receiving a monthly benefit service pension returns 225.36to active relief association membership under paragraph (a) new text begin (b) new text end , who does not qualify 226.1for a service pension under paragraph (b) new text begin (d) new text end , but who does meet the minimum service 226.2requirement of section 424A.02, subdivision 2, based on the firefighter's previous years 226.3of active service, must have, upon a subsequent cessation of duties, a service pension 226.4calculated for the previous years of service based on the service pension amount in effect 226.5on the date of the firefighter's termination of the resumption service, or, if the bylaws so 226.6provide, based on the service pension amount in effect on the date of the firefighter's 226.7previous cessation of duties. 226.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 226.9    Sec. 6. Minnesota Statutes 2009 Supplement, section 424A.015, is amended by adding 226.10a subdivision to read: 226.11     new text begin Subd. 5. new text end new text begin Minnesota deferred compensation plan transfers. new text end new text begin A relief association new text end 226.12 new text begin may directly transfer on an institution-to-institution basis the eligible member's new text end 226.13 new text begin lump-sum pension amount to the requesting member's account in the Minnesota deferred new text end 226.14 new text begin compensation plan, if: new text end 226.15 new text begin (1) the governing articles of incorporation or bylaws so provide; new text end 226.16 new text begin (2) the volunteer firefighter participates in the Minnesota deferred compensation new text end 226.17 new text begin plan at the time of retirement; and new text end 226.18 new text begin (3) the applicable retiring firefighter requests in writing that the relief association new text end 226.19 new text begin do so. new text end 226.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 226.21    Sec. 7. Minnesota Statutes 2009 Supplement, section 424A.016, subdivision 4, is 226.22amended to read: 226.23    Subd. 4. Individual accounts. (a) An individual account must be established for 226.24each firefighter who is a member of the relief association. 226.25(b) To each individual active member account must be credited an equal share of: 226.26(1) any amounts of fire state aid received by the relief association; 226.27(2) any amounts of municipal contributions to the relief association raised from 226.28levies on real estate or from other available municipal revenue sources exclusive of fire 226.29state aid; and 226.30(3) any amounts equal to the share of the assets of the special fund to the credit of: 226.31(i) any former member who terminated active service with the fire department to 226.32which the relief association is associated before meeting the minimum service requirement 227.1provided for in subdivision 2, paragraph (b), and has not returned to active service with 227.2the fire department for a period no shorter than five years; or 227.3(ii) any retired member who retired before obtaining a full nonforfeitable interest in 227.4the amounts credited to the individual member account under subdivision 2, paragraph 227.5(b), and any applicable provision of the bylaws of the relief association. In addition, any 227.6investment return on the assets of the special fund must be credited in proportion to the 227.7share of the assets of the special fund to the credit of each individual active member 227.8account. Administrative expenses of the relief association payable from the special 227.9fund may be deducted from individual accounts in a manner specified in the bylaws of 227.10the relief association. 227.11(c) new text begin If the bylaws so permit and as the bylaws define, the relief association may credit new text end 227.12 new text begin any investment return on the assets of the special fund to the accounts of inactive members. new text end 227.13 new text begin (d) new text end Amounts to be credited to individual accounts must be allocated uniformly for 227.14all years of active service and allocations must be made for all years of service, except for 227.15caps on service credit if so provided in the bylaws of the relief association. The allocation 227.16method may utilize monthly proration for fractional years of service, as the bylaws or 227.17articles of incorporation of the relief association so provide. The bylaws or articles of 227.18incorporation may define a "month," but the definition must require a calendar month to 227.19have at least 16 days of active service. If the bylaws or articles of incorporation do not 227.20define a "month," a "month" is a completed calendar month of active service measured 227.21from the member's date of entry to the same date in the subsequent month. 227.22(d) new text begin (e) new text end At the time of retirement under subdivision 2 and any applicable provision 227.23of the bylaws of the relief association, a retiring member is entitled to that portion of the 227.24assets of the special fund to the credit of the member in the individual member account 227.25which is nonforfeitable under subdivision 3 and any applicable provision of the bylaws of 227.26the relief association based on the number of years of service to the credit of the retiring 227.27member. 227.28(e) new text begin (f) new text end Annually, the secretary of the relief association shall certify the individual 227.29account allocations to the state auditor at the same time that the annual financial statement 227.30or financial report and audit of the relief association, whichever applies, is due under 227.31section 69.051. 227.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 227.33    Sec. 8. Minnesota Statutes 2009 Supplement, section 424A.016, subdivision 7, is 227.34amended to read: 228.1    Subd. 7. Limitation on ancillary benefits. (a) A defined contribution relief 228.2association may only pay an ancillary benefit which would constitute an authorized 228.3disbursement as specified in section 424A.05. The ancillary benefit for active members 228.4must equal the vested or new text begin and new text end nonvested amount of the individual account of the member. 228.5(b) For deferred members, the ancillary benefit must equal the vested amount of 228.6the individual account of the member. For the recipient of installment payments of a 228.7service pension, the ancillary benefit must equal the remaining balance in the individual 228.8account of the recipient. 228.9 new text begin (c)(1) If a survivor or death benefit is payable under the articles of incorporation or new text end 228.10 new text begin bylaws, the benefit must be paid: new text end 228.11 new text begin (i) as a survivor benefit to the surviving spouse of the deceased firefighter; new text end 228.12 new text begin (ii) as a survivor benefit to the surviving children of the deceased firefighter if no new text end 228.13 new text begin surviving spouse; new text end 228.14 new text begin (iii) as a survivor benefit to a designated beneficiary of the deceased firefighter if no new text end 228.15 new text begin surviving spouse or surviving children; or new text end 228.16 new text begin (iv) as a death benefit to the estate of the deceased active or deferred firefighter if no new text end 228.17 new text begin surviving spouse, no surviving children, and no beneficiary designated. new text end 228.18 new text begin (2) If there are no surviving children, the surviving spouse may waive, in writing, new text end 228.19 new text begin wholly or partially, the spouse's entitlement to a survivor benefit. new text end 228.20 new text begin (d) For purposes of this section, for a defined contribution volunteer fire relief new text end 228.21 new text begin association, a trust created under chapter 501B may be a designated beneficiary. If a trust new text end 228.22 new text begin payable to the surviving children organized under chapter 501B has been established as new text end 228.23 new text begin authorized by this section and there is no surviving spouse, the survivor benefit may be new text end 228.24 new text begin paid to the trust, notwithstanding the requirements of this section. new text end 228.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 228.26    Sec. 9. Minnesota Statutes 2009 Supplement, section 424A.02, subdivision 9, is 228.27amended to read: 228.28    Subd. 9. Limitation on ancillary benefits. A defined benefit relief association, 228.29including any volunteer firefighters relief association governed by section 69.77 or any 228.30volunteer firefighters division of a relief association governed by chapter 424, may only 228.31pay ancillary benefits which would constitute an authorized disbursement as specified in 228.32section 424A.05 subject to the following requirements or limitations: 228.33    (1) with respect to a defined benefit relief association in which governing bylaws 228.34provide for a lump-sum service pension to a retiring member, no ancillary benefit may 228.35be paid to any former member or paid to any person on behalf of any former member 229.1after the former member (i) terminates active service with the fire department and active 229.2membership in the relief association; and (ii) commences receipt of a service pension as 229.3authorized under this section; and 229.4    (2) with respect to any defined benefit relief association, no ancillary benefit paid or 229.5payable to any member, to any former member, or to any person on behalf of any member 229.6or former member, may exceed in amount the total earned service pension of the member 229.7or former member. The total earned service pension must be calculated by multiplying 229.8the service pension amount specified in the bylaws of the relief association at the time of 229.9death or disability, whichever applies, by the years of service credited to the member or 229.10former member. The years of service must be determined as of (i) the date the member or 229.11former member became entitled to the ancillary benefit; or (ii) the date the member or 229.12former member died entitling a survivor or the estate of the member or former member to 229.13an ancillary benefit. The ancillary benefit must be calculated without regard to whether the 229.14member had attained the minimum amount of service and membership credit specified in 229.15the governing bylaws. For active members, the amount of a permanent disability benefit 229.16or a survivor benefit must be equal to the member's total earned service pension except 229.17that the bylaws of a defined benefit relief association may provide for the payment of a 229.18survivor benefit in an amount not to exceed five times the yearly service pension amount 229.19specified in the bylaws on behalf of any member who dies before having performed five 229.20years of active service in the fire department with which the relief association is affiliated. 229.21 new text begin (3)(i) If a lump sum survivor or death benefit is payable under the articles of new text end 229.22 new text begin incorporation or bylaws, the benefit must be paid: new text end 229.23 new text begin (A) as a survivor benefit to the surviving spouse of the deceased firefighter; new text end 229.24 new text begin (B) as a survivor benefit to the surviving children of the deceased firefighter if new text end 229.25 new text begin no surviving spouse; new text end 229.26 new text begin (C) as a survivor benefit to a designated beneficiary of the deceased firefighter if no new text end 229.27 new text begin surviving spouse or surviving children; or new text end 229.28 new text begin (D) as a death benefit to the estate of the deceased active or deferred firefighter if no new text end 229.29 new text begin surviving children and no beneficiary designated. new text end 229.30 new text begin (ii) If there are no surviving children, the surviving spouse may waive, in writing, new text end 229.31 new text begin wholly or partially, the spouse's entitlement to a survivor benefit. new text end 229.32 new text begin (4)(i) If a monthly benefit survivor or death benefit is payable under the articles of new text end 229.33 new text begin incorporation or bylaws, the benefit must be paid: new text end 229.34 new text begin (A) as a survivor benefit to the surviving spouse of the deceased firefighter; new text end 229.35 new text begin (B) as a survivor benefit to the surviving children of the deceased firefighter if new text end 229.36 new text begin no surviving spouse; new text end 230.1 new text begin (C) as a survivor benefit to a designated beneficiary of the deceased firefighter if no new text end 230.2 new text begin surviving spouse or surviving children; or new text end 230.3 new text begin (D) as a death benefit to the estate of the deceased active or deferred firefighter if no new text end 230.4 new text begin surviving spouse, no surviving children, and no beneficiary designated. new text end 230.5 new text begin (ii) If there are no surviving children, the surviving spouse may waive, in writing, new text end 230.6 new text begin wholly or partially, the spouse's entitlement to a survivor benefit. new text end 230.7 new text begin (iii) For purposes of this clause, if the relief association bylaws authorize a monthly new text end 230.8 new text begin survivor benefit payable to a designated beneficiary, the relief association bylaws may new text end 230.9 new text begin limit the total survivor benefit amount payable. new text end 230.10 new text begin (5) For purposes of this section, for a monthly benefit volunteer fire relief association new text end 230.11 new text begin or for a combination lump-sum and monthly benefit volunteer fire relief association where new text end 230.12 new text begin a monthly benefit service pension has been elected by or a monthly benefit is payable with new text end 230.13 new text begin respect to a firefighter, a designated beneficiary must be a natural person. For purposes new text end 230.14 new text begin of this section, for a lump-sum volunteer fire relief association or for a combination new text end 230.15 new text begin lump-sum and monthly benefit volunteer fire relief association where a lump-sum service new text end 230.16 new text begin pension has been elected by or a lump-sum benefit is payable with respect to a firefighter, new text end 230.17 new text begin a trust created under chapter 501B may be a designated beneficiary. If a trust is payable to new text end 230.18 new text begin the surviving children organized under chapter 501B as authorized by this section and new text end 230.19 new text begin there is no surviving spouse, the survivor benefit may be paid to the trust, notwithstanding new text end 230.20 new text begin a requirement of this section to the contrary. new text end 230.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 230.22    Sec. 10. Minnesota Statutes 2009 Supplement, section 424A.02, subdivision 10, 230.23is amended to read: 230.24    Subd. 10. Local approval of bylaw amendments; filing requirements. (a) Each 230.25defined benefit relief association to which this section applies must file a revised copy 230.26of its governing bylaws with the state auditor upon the adoption of any amendment to 230.27its governing bylaws by the relief association or upon the approval of any amendment 230.28to its governing bylaws granted by the governing body of each municipality served by 230.29the fire department to which the relief association is directly associated. Failure of the 230.30relief association to file a copy of the bylaws or any bylaw amendments with the state 230.31auditor disqualifies the municipality from the distribution of any future fire state aid until 230.32this filing requirement has been completed. 230.33(b) If the special fund of the relief association does not have a surplus over full 230.34funding under section 69.772, subdivision 3, clause (2), subclause (e), or 69.773, 230.35subdivision 4 , and if the municipality is required to provide financial support to the special 231.1fund of the relief association under section 69.772 or 69.773, no bylaw amendment which 231.2would affect the amount of, the manner of payment of, or the conditions for qualification 231.3for service pensions or ancillary benefits or disbursements other than administrative 231.4expenses authorized under section 69.80 payable from the special fund of the relief 231.5association is effective until it has been ratified by the governing body or bodies of the 231.6appropriate municipalities new text begin as required under section 69.772, subdivision 6, or 69.773, new text end 231.7 new text begin subdivision 6 new text end . If new text begin the special fund of the relief association has a surplus over full funding new text end 231.8 new text begin under section 69.772, subdivision 3, or 69.773, subdivision 4, and if new text end the municipality is 231.9not required to provide financial support to the special fund under this section, the relief 231.10association may adopt or amend without municipal ratification its articles of incorporation 231.11or bylaws which increase or otherwise affect the service pensions or ancillary benefits 231.12payable from the special fund so long as the changes do not cause the amount of the 231.13resulting increase in the accrued liability of the special fund to exceed 90 percent of the 231.14amount of the surplus over full funding reported in the prior year and the changes do not 231.15result in the financial requirements of the special fund exceeding the expected amount 231.16of the subsequent calendar year's fire state aid to be received by the relief association new text begin if new text end 231.17 new text begin authorized under section 69.772, subdivision 6, or 69.773, subdivision 6 new text end . 231.18(c) If the relief association pays only a lump-sum pension, the financial requirements 231.19are to be determined by the board of trustees following the preparation of an estimate 231.20of the expected increase in the accrued liability and annual accruing liability of the 231.21relief association attributable to the change. If the relief association pays a monthly 231.22benefit service pension, the financial requirements are to be determined by the board of 231.23trustees following either an updated actuarial valuation including the proposed change 231.24or an estimate of the expected actuarial impact of the proposed change prepared by the 231.25actuary of the relief association. If a relief association adopts or amends its articles 231.26of incorporation or bylaws without municipal ratification under this subdivision, and, 231.27subsequent to the amendment or adoption, the financial requirements of the special fund 231.28under this section are such so as to require financial support from the municipality, the 231.29provision which was implemented without municipal ratification is no longer effective 231.30without municipal ratification, and any service pensions or ancillary benefits payable after 231.31that date must be paid only in accordance with the articles of incorporation or bylaws as 231.32amended or adopted with municipal ratification. 231.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 231.34    Sec. 11. Minnesota Statutes 2009 Supplement, section 424A.05, subdivision 3, is 231.35amended to read: 232.1    Subd. 3. Authorized disbursements from the special fund. (a) Disbursements 232.2from the special fund may not be made for any purpose other than one of the following: 232.3    (1) for the payment of service pensions to retired members of the relief association if 232.4authorized and paid under law and the bylaws governing the relief association; 232.5 new text begin (2) for the purchase of an annuity for the applicable person under section 424A.015, new text end 232.6 new text begin subdivision 3, for the transfer of service pension or benefit amounts to the applicable new text end 232.7 new text begin person's individual retirement account under section 424A.015, subdivision 4, or to the new text end 232.8 new text begin applicable person's account in the Minnesota deferred compensation plan under section new text end 232.9 new text begin 424A.015, subdivision 5; new text end 232.10    (2) new text begin (3) new text end for the payment of temporary or permanent disability benefits to disabled 232.11members of the relief association if authorized and paid under law and specified in amount 232.12in the bylaws governing the relief association; 232.13    (3) new text begin (4) new text end for the payment of survivor benefits to surviving spouses and surviving 232.14children, or if none, to designated beneficiaries, of deceased members of the relief 232.15association, and if no survivors and if no designated beneficiary, new text begin or new text end for the payment of a 232.16death benefit to the estate of the deceased active or deferred firefighter, if authorized by 232.17and paid under law and specified in amount in the bylaws governing the relief association; 232.18    (4) new text begin (5) new text end for the payment of the fees, dues and assessments to the Minnesota State 232.19Fire Department Association and to the Minnesota Area Relief Association Coalition in 232.20order to entitle relief association members to membership in and the benefits of these 232.21associations or organizations; 232.22(5) new text begin (6) new text end for the payment of insurance premiums to the state Volunteer Firefighters 232.23Benefit Association, or an insurance company licensed by the state of Minnesota offering 232.24casualty insurance, in order to entitle relief association members to membership in and the 232.25benefits of the association or organization; and 232.26    (6) new text begin (7) new text end for the payment of administrative expenses of the relief association as 232.27authorized under section 69.80. 232.28    (b) For purposes of this chapter, for a monthly benefit volunteer fire relief association 232.29or for a combination lump-sum and monthly benefit volunteer fire relief association where 232.30a monthly benefit service pension has been elected by or a monthly benefit is payable with 232.31respect to a firefighter, a designated beneficiary must be a natural person. For purposes of 232.32this chapter, for a defined contribution volunteer fire relief association, for a lump-sum 232.33volunteer fire relief association, or for a combination lump-sum and monthly benefit 232.34volunteer fire relief association where a lump-sum service pension has been elected by 232.35or a lump-sum benefit is payable with respect to a firefighter, a designated beneficiary 232.36may be a trust created under chapter 501B. 233.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 233.2    Sec. 12. Minnesota Statutes 2009 Supplement, section 424A.05, is amended by adding 233.3a subdivision to read: 233.4     new text begin Subd. 3a. new text end new text begin Corrections of erroneous special fund deposits. new text end new text begin Upon notification new text end 233.5 new text begin of funds deposited in error in the special fund and after presentation of evidence that new text end 233.6 new text begin the error occurred in good faith, the state auditor may require the relief association to new text end 233.7 new text begin provide a written legal opinion concluding that the transfer of funds from the special new text end 233.8 new text begin fund is consistent with federal and state law. Taking into consideration the evidence of new text end 233.9 new text begin good faith presented and the legal opinion, if any, provided, the state auditor may order new text end 233.10 new text begin the transfer from the special fund to the appropriate fund or account an amount equal new text end 233.11 new text begin to the funds deposited in error. new text end 233.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 233.13    Sec. 13. new text begin REPEALER. new text end 233.14 new text begin (a) new text end new text begin Minnesota Statutes 2009 Supplement, section 424A.001, subdivision 6, new text end new text begin is new text end 233.15 new text begin repealed. new text end 233.16 new text begin (b) new text end new text begin Laws 2009, chapter 169, article 10, section 32, new text end new text begin is repealed. new text end 233.17 new text begin EFFECTIVE DATE. new text end new text begin Paragraph (a) is effective the day following final enactment. new text end 233.18 new text begin Paragraph (b) is effective retroactively from July 1, 2009. new text end 233.19ARTICLE 15 233.20ONE PERSON/SMALL GROUP PENSION ISSUES 233.21    Section 1. new text begin PERA-GENERAL; PURCHASE OF OMITTED INVER GROVE new text end 233.22 new text begin HEIGHTS SCHOOL DISTRICT OMITTED MEMBER CONTRIBUTIONS. new text end 233.23 new text begin (a) Notwithstanding any provision of law to the contrary, an eligible person new text end 233.24 new text begin described in paragraph (b) is entitled to purchase from the general employees retirement new text end 233.25 new text begin plan of the Public Employees Retirement Association allowable service credit under new text end 233.26 new text begin Minnesota Statutes, section 353.01, subdivision 16, for the period of omitted member new text end 233.27 new text begin deductions described in paragraph (c). new text end 233.28 new text begin (b) An eligible person is a person who: new text end 233.29 new text begin (1) was born on April 17, 1948; new text end 233.30 new text begin (2) is a current employee of Independent School District No. 199, Inver Grove new text end 233.31 new text begin Heights; new text end 234.1 new text begin (3) is a current member of the general employees retirement plan of the Public new text end 234.2 new text begin Employees Retirement Association; new text end 234.3 new text begin (4) was employed by Independent School District No. 199, Inver Grove Heights, new text end 234.4 new text begin on August 26, 1985; and new text end 234.5 new text begin (5) was not reported by Independent School District No. 199, Inver Grove Heights, new text end 234.6 new text begin for retirement coverage by and membership in the general employees retirement plan of new text end 234.7 new text begin the Public Employees Retirement Association until September 1, 1986. new text end 234.8 new text begin (c) The period of uncredited service authorized for purchase is the period of August new text end 234.9 new text begin 26, 1985, until August 31, 1986, during which no member contributions for the general new text end 234.10 new text begin employees retirement plan of the Public Employees Retirement Association were new text end 234.11 new text begin deducted from the eligible person's salary by Independent School District No. 199, Inver new text end 234.12 new text begin Grove Heights. new text end 234.13 new text begin (d) The purchase payment amount payable by the eligible person is four percent of new text end 234.14 new text begin the eligible person's salary under Minnesota Statutes 1984, section 353.01, subdivision new text end 234.15 new text begin 10, from Independent School District No. 199, Inver Grove Heights, during the period of new text end 234.16 new text begin August 26, 1985, until August 31, 1986, plus annual compound interest on that amount at new text end 234.17 new text begin the rate of 8.5 percent from March 1, 1986, until the date on which payment is made to new text end 234.18 new text begin the Public Employees Retirement Association. The purchase payment amount payable new text end 234.19 new text begin by Independent School District No. 199, Inver Grove Heights, is the balance of the full new text end 234.20 new text begin actuarial value prior service credit purchase payment amount determined under Minnesota new text end 234.21 new text begin Statutes, section 356.551, as of the first day of the month next following the receipt of the new text end 234.22 new text begin eligible person's payment that is remaining after deducting the purchase payment amount new text end 234.23 new text begin payable by the eligible person. new text end 234.24 new text begin (e) The school district purchase payment amount payable under paragraph (d) must new text end 234.25 new text begin be made on or before the 15th of the month next following the receipt of the eligible new text end 234.26 new text begin person's payment under paragraph (d). If the school district purchase payment amount is new text end 234.27 new text begin not paid in a timely fashion, the amount due accrues compound monthly interest at the new text end 234.28 new text begin rate of 0.71 percent per month from the first day of the month next following the receipt new text end 234.29 new text begin of the eligible person's payment until the school district purchase payment amount is new text end 234.30 new text begin received by the Public Employees Retirement Association. If the school district purchase new text end 234.31 new text begin payment amount is not paid to the Public Employees Retirement Association 90 days new text end 234.32 new text begin after the receipt of the eligible person's payment, the executive director shall notify new text end 234.33 new text begin the commissioner of management and budget, the commissioner of education, and the new text end 234.34 new text begin commissioner of revenue of that unpaid obligation and the unpaid obligation must be new text end 234.35 new text begin deducted from any state aid otherwise payable to the school district, plus interest. new text end 235.1 new text begin (f) The eligible person must provide the executive director of the Public Employees new text end 235.2 new text begin Retirement Association with any relevant requested information pertaining to this service new text end 235.3 new text begin credit purchase. new text end 235.4 new text begin (g) Authority to make a service credit purchase under this section expires on June new text end 235.5 new text begin 30, 2011, or upon the termination from public employment under Minnesota Statutes, new text end 235.6 new text begin section 353.01, subdivision 11a, whichever occurs earlier. new text end 235.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 235.8    Sec. 2. new text begin TEACHERS RETIREMENT ASSOCIATION; SECOND CHANCE new text end 235.9 new text begin RETIREMENT COVERAGE AUTHORITY FOR IRAP MEMBER. new text end 235.10 new text begin (a) Notwithstanding any provision of Minnesota Statutes, chapter 352, 353, or new text end 235.11 new text begin 354B or section 356.551 to the contrary, an eligible person described in paragraph (b) is new text end 235.12 new text begin entitled to elect retirement coverage for Minnesota State Colleges and Universities System new text end 235.13 new text begin employment by the Teachers Retirement Association under Minnesota Statutes, section new text end 235.14 new text begin 354B.21, subdivisions 2 and 3, despite the time limitation on the election. new text end 235.15 new text begin (b) An eligible person is a person who: new text end 235.16 new text begin (1) was born on July 19, 1948; new text end 235.17 new text begin (2) was employed by Mankato State University in 1969, with retirement coverage in new text end 235.18 new text begin the general state employees retirement plan of the Minnesota State Retirement System, for new text end 235.19 new text begin which a refund of member contributions and interest was taken before 2007; new text end 235.20 new text begin (3) was employed by the city of Austin in the early 1980s, with retirement coverage new text end 235.21 new text begin in the general employees retirement plan of the Public Employees Retirement Association, new text end 235.22 new text begin for which a refund of member contributions and interest was taken before 2007; new text end 235.23 new text begin (4) is employed by the Minnesota State Colleges and Universities System at new text end 235.24 new text begin Riverland Community College; and new text end 235.25 new text begin (5) had the person's employment position upgraded by the Minnesota State Colleges new text end 235.26 new text begin and Universities System on September 9, 2007, and had retirement coverage transferred new text end 235.27 new text begin by operation of law to the higher education individual retirement account plan. new text end 235.28 new text begin (c) An election to change retirement coverage from the Minnesota State Colleges new text end 235.29 new text begin and Universities System individual retirement account plan to the Teachers Retirement new text end 235.30 new text begin Association must be made by July 1, 2010, and is retroactive to September 9, 2007. If new text end 235.31 new text begin the election is made, Minnesota Statutes, section 356.551, applies to the purchase of new text end 235.32 new text begin past service except for subdivision 1, paragraph (c), of that provision, which requires new text end 235.33 new text begin all refunds to be paid before the service credit purchase. The eligible person's account new text end 235.34 new text begin in the individual retirement account plan must be liquidated by transfer to the Teachers new text end 235.35 new text begin Retirement Association fund by August 1, 2010, and used to cover part of the service new text end 236.1 new text begin credit purchase payment amount. Any remaining payment amount must be paid in a lump new text end 236.2 new text begin sum to the executive director of the Teachers Retirement Association for deposit in the new text end 236.3 new text begin Teachers Retirement Association fund by September 1, 2010. Retroactive service credit new text end 236.4 new text begin in the Teachers Retirement Association must be granted to the eligible person once the new text end 236.5 new text begin transfers and payments required under this paragraph have been made. new text end 236.6 new text begin (d) If an eligible person under paragraph (b) elects Teachers Retirement Association new text end 236.7 new text begin coverage but fails to make the full payment required under paragraph (c), the election of new text end 236.8 new text begin Teachers Retirement Association coverage is voided and the individual retains coverage new text end 236.9 new text begin by the Minnesota State Colleges and Universities System individual retirement account new text end 236.10 new text begin plan. If amounts were transferred under paragraph (c) from the individual retirement new text end 236.11 new text begin account plan, those amounts must be returned to the individual's account or accounts new text end 236.12 new text begin under that plan. new text end 236.13 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 236.14ARTICLE 16 236.15MISCELLANEOUS PROVISIONS 236.16    Section 1. Minnesota Statutes 2008, section 356.24, subdivision 1, is amended to read: 236.17    Subdivision 1. Restriction; exceptions. (a) It is unlawful for a school district 236.18or other governmental subdivision or state agency to levy taxes for, or to contribute 236.19public funds to a supplemental pension or deferred compensation plan that is established, 236.20maintained, and operated in addition to a primary pension program for the benefit of the 236.21governmental subdivision employees other than: 236.22    (1) to a supplemental pension plan that was established, maintained, and operated 236.23before May 6, 1971; 236.24    (2) to a plan that provides solely for group health, hospital, disability, or death 236.25benefits; 236.26    (3) to the individual retirement account plan established by chapter 354B; 236.27    (4) to a plan that provides solely for severance pay under section 465.72 to a retiring 236.28or terminating employee; 236.29    (5) for employees other than personnel employed by the Board of Trustees of the 236.30Minnesota State Colleges and Universities and covered under the Higher Education 236.31Supplemental Retirement Plan under chapter 354C, but including city managers covered 236.32by an alternative retirement arrangement under section 353.028, subdivision 3, paragraph 236.33(a), or by the defined contribution plan of the Public Employees Retirement Association 236.34under section 353.028, subdivision 3, paragraph (b), if the supplemental plan coverage is 237.1provided for in a personnel policy of the public employer or in the collective bargaining 237.2agreement between the public employer and the exclusive representative of public 237.3employees in an appropriate unit or in the individual employment contract between a city 237.4and a city manager, and if for each available investment all fees and historic rates of return 237.5for the prior one-, three-, five-, and ten-year periods, or since inception, are disclosed in an 237.6easily comprehended document not to exceed two pages, in an amount matching employee 237.7contributions on a dollar for dollar basis, but not to exceed an employer contribution of 237.8one-half of the available elective deferral permitted per year per employee, under the 237.9Internal Revenue Code: 237.10    (i) to the state of Minnesota deferred compensation plan under section 352.965; 237.11    (ii) in payment of the applicable portion of the contribution made to any investment 237.12eligible under section 403(b) of the Internal Revenue Code, if the employing unit has 237.13complied with any applicable pension plan provisions of the Internal Revenue Code with 237.14respect to the tax-sheltered annuity program during the preceding calendar year; or 237.15    (iii) any other deferred compensation plan offered by the employer under section 237.16457 of the Internal Revenue Code; 237.17    (6) for personnel employed by the Board of Trustees of the Minnesota State Colleges 237.18and Universities and not covered by clause (5), to the supplemental retirement plan under 237.19chapter 354C, if the supplemental plan coverage is provided for in a personnel policy 237.20or in the collective bargaining agreement of the public employer with the exclusive 237.21representative of the covered employees in an appropriate unit, in an amount matching 237.22employee contributions on a dollar for dollar basis, but not to exceed an employer 237.23contribution of $2,700 a year for each employee; 237.24    (7) to a supplemental plan or to a governmental trust to save for postretirement 237.25health care expenses qualified for tax-preferred treatment under the Internal Revenue 237.26Code, if the supplemental plan coverage is provided for in a personnel policy or in the 237.27collective bargaining agreement of a public employer with the exclusive representative of 237.28the covered employees in an appropriate unit; 237.29    (8) to the laborers national industrial pension fund or to a laborers local pension 237.30fund for the employees of a governmental subdivision who are covered by a collective 237.31bargaining agreement that provides for coverage by that fund and that sets forth a fund 237.32contribution rate, but not to exceed an employer contribution of $5,000 per year per 237.33employee; 237.34    (9) to the plumbers and pipefitters national pension fund or to a plumbers and 237.35pipefitters local pension fund for the employees of a governmental subdivision who are 237.36covered by a collective bargaining agreement that provides for coverage by that fund and 238.1that sets forth a fund contribution rate, but not to exceed an employer contribution of 238.2$5,000 per year per employee; 238.3    (10) to the international union of operating engineers pension fund for the employees 238.4of a governmental subdivision who are covered by a collective bargaining agreement that 238.5provides for coverage by that fund and that sets forth a fund contribution rate, but not to 238.6exceed an employer contribution of $5,000 per year per employee; 238.7    (11) to a supplemental plan organized and operated under the federal Internal 238.8Revenue Code, as amended, that is wholly and solely funded by the employee's 238.9accumulated sick leave, accumulated vacation leave, and accumulated severance pay; 238.10    (12) to the International Association of Machinists national pension fund for the 238.11employees of a governmental subdivision who are covered by a collective bargaining 238.12agreement that provides for coverage by that fund and that sets forth a fund contribution 238.13rate, but not to exceed an employer contribution of $5,000 per year per employee; or 238.14    (13) for employees of United Hospital District, Blue Earth, to the state of Minnesota 238.15deferred compensation program, if the employee makes a contribution, in an amount that 238.16does not exceed the total percentage of covered salary under section 353.27, subdivisions 238.173 and 3a new text begin ; or new text end 238.18 new text begin (14) to the alternative retirement plans established by the Hennepin County Medical new text end 238.19 new text begin Center under section 383B.914, subdivision 5 new text end . 238.20    (b) No governmental subdivision may make a contribution to a deferred 238.21compensation plan operating under section 457 of the Internal Revenue Code for volunteer 238.22or emergency on-call firefighters in lieu of providing retirement coverage under the federal 238.23Old Age, Survivors, and Disability Insurance Program. 238.24 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end