1.1 	A bill for an act
1.2 	relating to retirement; modifying various retirement plans; redefining salary 
1.3 	for benefit and contribution purposes; increasing member and employer 
1.4 	contributions; increasing vesting to ten years for new hires; capping allowable 
1.5 	service for computing annuities; modifying the trigger for increasing or lowering 
1.6 	annual postretirement adjustments for all plans; modifying duty disability 
1.7 	definitions and clarifying disability application requirements for the public 
1.8 	employees police and fire and local government correctional plan; increasing the 
1.9 	reduction for early retirement; clarifying survivor benefit provisions; delaying 
1.10 	the first annual postretirement adjustment for the public employees police 
1.11 	and fire retirement plan; increasing the normal retirement age for new judges; 
1.12 	permitting existing judges to elect to be treated as a new judge for benefit and 
1.13 	contribution purposes; mandating certain dues and other payment deductions 
1.14 	by MSRS and PERA; modifying the Teachers Retirement Association level 
1.15 	benefit tier early retirement reduction factors; increasing member and employer 
1.16 	contributions to the Duluth Teachers Retirement Fund Association and the St. 
1.17 	Paul Teachers Retirement Fund Association; increasing direct state aid to the 
1.18 	DTRFA and to the SPTRFA; increasing the DTRFA and SPTRFA benefit accrual 
1.19 	rates for prospective allowable service; revising the DTRFA postretirement 
1.20 	adjustment provision; modifying certain salary increase and payroll growth 
1.21 	actuarial assumptions;amending Minnesota Statutes 2012, sections 352B.011, 
1.22 	subdivision 4; 352B.02, subdivisions 1a, 1c; 352B.08, subdivisions 1, 2, 2a; 
1.23 	352B.10, subdivision 5; 352B.11, subdivisions 1, 2b; 353.01, subdivisions 10, 
1.24 	17a, 41, 47; 353.031, subdivision 4; 353.35, subdivision 1; 353.65, subdivisions 
1.25 	2, 3; 353.651, subdivisions 3, 4; 353.657, subdivisions 2a, 3a; 353E.001, 
1.26 	subdivision 1; 354.44, subdivision 6; 354A.011, subdivision 21; 354A.12, 
1.27 	subdivisions 1, 2a, 3a, 3c, 7, by adding subdivisions; 354A.27, subdivision 7, by 
1.28 	adding a subdivision; 354A.31, subdivisions 3, 4, 4a, 7; 354A.35, subdivision 2; 
1.29 	356.215, subdivision 8; 356.315, by adding a subdivision; 356.415, subdivisions 
1.30 	1, 1b, 1c, 1e, by adding a subdivision; 356.47, subdivision 1; 356.91; 423A.02, 
1.31 	subdivision 5; 490.121, subdivisions 21f, 22, by adding subdivisions; 490.123, 
1.32 	subdivisions 1a, 1b; 490.124, subdivision 1; proposing coding for new law in 
1.33 	Minnesota Statutes, chapters 354; 490; repealing Minnesota Statutes 2012, 
1.34 	sections 352B.11, subdivision 2c; 354A.27, subdivision 6.
1.35 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.1 	ARTICLE 1
2.2 	STATE PATROL RETIREMENT PLAN FINANCIAL SOLVENCY MEASURES

2.3 	Section 1. Minnesota Statutes 2012, section 352B.011, subdivision 4, is amended to 
2.4 	read:
2.5 		Subd. 4.Average monthly salary. (a) Subject to the limitations of section 356.611, 
2.6 	"average monthly salary" means the average of the highest monthly salaries for five years 
2.7 	of service as a member upon which contributions were deducted from pay under section 
2.8 	352B.02, or upon which appropriate contributions or payments were made to the fund to 
2.9 	receive allowable service and salary credit as specified under the applicable law. Average 
2.10 	monthly salary must be based upon all allowable service if this service is less than five years.
2.11 	(b) The salary used for the calculation of "average monthly salary" means the salary 
2.12 	of the member as defined in section 352.01, subdivision 13. "Average monthly salary" 
2.13 	includes the salary of the member during the period of covered employment rendered after 
2.14 	reaching the allowable service credit limit of section 352B.08, subdivision 2, paragraph 
2.15 	(b). The salary used for the calculation of "average monthly salary" does not include any 
2.16 	lump-sum annual leave payments and overtime payments made at the time of separation 
2.17 	from state service, any amounts of severance pay, or any reduced salary paid during the 
2.18 	period the person is entitled to workers' compensation benefit payments for temporary 
2.19 	disability.

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

2.21 	Sec. 2. Minnesota Statutes 2012, section 352B.02, subdivision 1a, is amended to read:
2.22 		Subd. 1a.Member contributions. (a) The member contribution is the following 
2.23 	percentage of the member's salary:

2.24
2.25		(1) before the first day of the first pay period beginning 
after July 1, 2011 2014
	10.4012.4 percent
	
2.26
2.27		(2) on or after the first day of the first pay period 
beginning after July 1, 2011 2014, to June 30, 2016
	12.4013.4 percent
	
2.28		(3) after June 30, 2016
	14.4 percent
	
2.29 	(b) These contributions must be made by deduction from salary as provided in 
2.30 	section 352.04, subdivision 4.

2.31 	EFFECTIVE DATE. This section is effective July 1, 2013.

2.32 	Sec. 3. Minnesota Statutes 2012, section 352B.02, subdivision 1c, is amended to read:
3.1 		Subd. 1c.Employer contributions. (a) In addition to member contributions, 
3.2 	department heads shall pay a sum equal to the specified percentage of the salary upon which 
3.3 	deductions were made, which constitutes the employer contribution to the fund as follows:

3.4
3.5		(1) before the first day of the first pay period beginning 
after July 1, 2011 2014
	15.6018.6 percent
	
3.6
3.7		(2) on or after the first day of the first pay period 
beginning after July 1, 2011 2014, to June 30, 2016
	18.6020.1 percent
	
3.8		(3) after June 30, 2016
	21.6 percent
	
3.9 	(b) Department contributions must be paid out of money appropriated to departments 
3.10 	for this purpose.

3.11 	EFFECTIVE DATE. This section is effective July 1, 2013.

3.12 	Sec. 4. Minnesota Statutes 2012, section 352B.08, subdivision 1, is amended to read:
3.13 		Subdivision 1.Eligibility; when to apply; accrual. (a) Every member who is 
3.14 	credited with three or more years of allowable service if first employed before July 1, 2010
3.15 	 2013, or with at least fiveten years of allowable service if first employed after June 30, 
3.16 	2010 2013, is entitled to separate from state service and upon becoming 50 years old, is 
3.17 	entitled to receive a life annuity, upon separation from state service.
3.18 	(b) Members must apply for an annuity in a form and manner prescribed by the 
3.19 	executive director.
3.20 	(c) No application may be made more than 90 days before the date the member is 
3.21 	eligible to retire by reason of both age and service requirements.
3.22 	(d) An annuity begins to accrue no earlier than 180 days before the date the 
3.23 	application is filed with the executive director.

3.24 	EFFECTIVE DATE. This section is effective July 1, 2013.

3.25 	Sec. 5. Minnesota Statutes 2012, section 352B.08, subdivision 2, is amended to read:
3.26 		Subd. 2.Normal retirement annuity. (a) The annuity must be paid in monthly 
3.27 	installments. The annuity shall be equal to the amount determined by multiplying 
3.28 	the average monthly salary of the member by the percent specified in section 356.315, 
3.29 	subdivision 6, for each year of allowable service and pro rataprorated for additional 
3.30 	completed months of allowable service, unless restricted under paragraph (b).
3.31 	(b) Allowable service in excess of 33 years must not be used in computing the 
3.32 	annuity. This restriction does not apply to any member who has at least 28 years of 
3.33 	allowable service before July 1, 2013.
4.1 	(c) When the annuity commences, any member contributions attributable to 
4.2 	allowable service not used to compute the annuity due to the restrictions in paragraph (b) 
4.3 	must be refunded using procedures specified in section 352B.11, subdivision 1.

4.4 	EFFECTIVE DATE. This section is effective July 1, 2013.

4.5 	Sec. 6. Minnesota Statutes 2012, section 352B.08, subdivision 2a, is amended to read:
4.6 		Subd. 2a.Early retirement. Any member who has become at least 50 years old 
4.7 	and who has at least three years of allowable service if first employed before July 1, 
4.8 	2010 2013, or who has at least fiveten years of allowable service if first employed after 
4.9 	June 30, 2010 2013, is entitled upon application to a reduced retirement annuity equal 
4.10 	to the annuity calculated under subdivision 2, reduced by one-tenth of one percent for 
4.11 	each month that the member is under age 55 at the time of retirement, if first employed
4.12 	the effective date of retirement is before July 1, 2010, or reduced by two-tenths of one 
4.13 	percent2015. If the effective date of retirement is after June 30, 2015, the reduction is 
4.14 	0.34 percent for each month that the member is under age 55 at the time of retirement if 
4.15 	first employed after June 30, 2010.

4.16 	EFFECTIVE DATE. This section is effective July 1, 2013.

4.17 	Sec. 7. Minnesota Statutes 2012, section 352B.10, subdivision 5, is amended to read:
4.18 		Subd. 5.Optional annuity. A disabilitant may elect, in lieu of spousal survivorship 
4.19 	coverage under section 352B.11, subdivisions subdivision 2b and 2c, the normal disability 
4.20 	benefit or an optional annuity as provided in section 352B.08, subdivision 3. The choice 
4.21 	of an optional annuity must be made in writing, on a form prescribed by the executive 
4.22 	director, and must be made before the commencement of the payment of the disability 
4.23 	benefit, or within 90 days before reaching age 55 or before reaching the five-year 
4.24 	anniversary of the effective date of the disability benefit, whichever is later. The optional 
4.25 	annuity is effective on the date on which the disability benefit begins to accrue, or the 
4.26 	month following the attainment of age 55 or following the five-year anniversary of the 
4.27 	effective date of the disability benefit, whichever is later.

4.28 	Sec. 8. Minnesota Statutes 2012, section 352B.11, subdivision 1, is amended to read:
4.29 		Subdivision 1.Refund of payments. (a) A member who has not received other 
4.30 	benefits under this chapter is entitled to a refund of payments made by salary deduction, 
4.31 	plus interest, if the member is separated, either voluntarily or involuntarily, from the state 
4.32 	service that entitled the member to membership.
5.1 	(b) A refund under section 352B.08, subdivision 2, paragraph (c), does not result in 
5.2 	a forfeiture of salary credit for the allowable service credit covered by the refund.
5.3 	(b)(c) In the event of the member's death, if there are no survivor benefits payable 
5.4 	under this chapter, a refund plus interest is payable to the last designated beneficiary on 
5.5 	a form filed with the director before death, or if no designation is filed, is payable to 
5.6 	the member's estate. Interest under this subdivision must be calculated as provided in 
5.7 	section 352.22, subdivision 2. To receive a refund, the application must be made on a 
5.8 	form prescribed by the executive director.

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

5.10 	Sec. 9. Minnesota Statutes 2012, section 352B.11, subdivision 2b, is amended to read:
5.11 		Subd. 2b.Surviving spouse benefit eligibility. (a) If an active member with 
5.12 	three or more years of allowable service if first employed before July 1, 2010 2013, or 
5.13 	with at least five years of allowable service if first employed after June 30, 2010 2013, 
5.14 	dies before attaining age 55, the surviving spouse is entitled to thea benefit specified in 
5.15 	subdivision 2c, paragraph (b) for life equal to 50 percent of the average monthly salary 
5.16 	of the deceased member. On the first of the month next following the date on which the 
5.17 	deceased member would have attained exact age 55, in lieu of continued receipt of the 
5.18 	prior benefit, the surviving spouse is eligible to commence receipt of the second half of 
5.19 	a 100 percent joint and survivor annuity if this provides a larger benefit. The joint and 
5.20 	survivor annuity must be computed assuming the exact age 55 for the deceased member 
5.21 	and the age of the surviving spouse on the date of death.
5.22 	(b) If an active member with less than three years of allowable service if first 
5.23 	employed before July 1, 2010 2013, or with fewer than five years of allowable service if 
5.24 	first employed after June 30, 2010 2013, dies at any age, the surviving spouse is entitled to 
5.25 	receive thea benefit specified in subdivision 2c, paragraph (c) for life equal to 50 percent 
5.26 	of the average monthly salary of the deceased member.
5.27 	(c) If an active member with three or more years of allowable service if first 
5.28 	employed before July 1, 2010 2013, or with at least five years of allowable service if first 
5.29 	employed after June 30, 2010 2013, dies on or after attaining exact age 55, the surviving 
5.30 	spouse is entitled to receive the benefits specified in subdivision 2c, paragraph (d) a benefit 
5.31 	for life equal to 50 percent of the average monthly salary of the deceased member, or the 
5.32 	second half of a 100 percent joint and survivor annuity, whichever is larger. The joint and 
5.33 	survivor annuity must be computed using the age of the deceased member on the date of 
5.34 	death and the age of the surviving spouse on that same date.
6.1 	(d) If a disabilitant dies while receiving a disability benefit under section 352B.10
6.2 	or before the benefit under that section commenced, and an optional annuity was not 
6.3 	elected under section 352B.10, subdivision 5, the surviving spouse is entitled to receive 
6.4 	thea benefit specified in subdivision 2c, paragraph (b) for life equal to 50 percent of the 
6.5 	average monthly salary of the deceased member. On the first of the month next following 
6.6 	the date on which the deceased member would have attained exact age 55, in lieu of 
6.7 	continued receipt of the prior benefit, the surviving spouse is eligible to commence receipt 
6.8 	of the second half of a 100 percent joint and survivor annuity if this provides a larger 
6.9 	benefit. The joint and survivor annuity must be computed assuming the exact age 55 for 
6.10 	the deceased member and the age of the surviving spouse on the date of death.
6.11 	(e) If a former member with three or more years of allowable service if first employed 
6.12 	before July 1, 2010 2013, or with at least five years of allowable service if first employed 
6.13 	after June 30, 2010 2013, who terminated from service and has not received a refund or 
6.14 	commenced receipt of any other benefit provided by this chapter, dies, the surviving 
6.15 	spouse is entitled to receive theas a benefit specified in subdivision 2c, paragraph (e) the 
6.16 	second half of a 100 percent joint and survivor annuity, commencing on the first of the 
6.17 	month next following the deceased member's date of death, or the first of the month next 
6.18 	following the date on which the deceased member would have attained age 55, whichever 
6.19 	is later. The joint and survivor annuity must be computed using the age of the deceased 
6.20 	member on the date of death and the age of the surviving spouse on that same date.
6.21 	(f) If a former member with less than three years of allowable service if first 
6.22 	employed before July 1, 2010 2013, or with fewer than five years of allowable service if 
6.23 	first employed after June 30, 2010 2013, who terminated from service and has not received 
6.24 	a refund or commenced receipt of any other benefit, if applicable, provided by this chapter, 
6.25 	dies, the surviving spouse is entitled to receive the refund specified in subdivision 2c, 
6.26 	paragraph (f) or, if none, the children or, if none, the deceased member's estate is entitled to 
6.27 	a refund of the employee contributions plus interest computed as specified in subdivision 1.

6.28 	EFFECTIVE DATE. This section is effective July 1, 2013.

6.29 	Sec. 10. Minnesota Statutes 2012, section 356.415, subdivision 1e, is amended to read:
6.30 		Subd. 1e.Annual postretirement adjustments; State Patrol retirement plan.
 6.31 	(a) Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol 
6.32 	retirement plan are entitled to a postretirement adjustment annually on January 1, as 
6.33 	follows:
6.34 	(1) a postretirement increase of 1.5one percent must be applied each year, effective 
6.35 	on January 1, to the monthly annuity or benefit of each annuitant or benefit recipient 
7.1 	who has been receiving an annuity or a benefit for at least 18 full months before the 
7.2 	January 1 increase; and
7.3 	(2) for each annuitant or benefit recipient who has been receiving an annuity or a 
7.4 	benefit for at least six full months, an annual postretirement increase of 1/12 of 1.5one 
7.5 	percent for each month that the person has been receiving an annuity or benefit must be 
7.6 	applied, effective January 1, following the calendar year in which the person has been 
7.7 	retired for at least six months, but has been retired for less than 18 months.
7.8 	(b) The increases provided by this subdivision commence on January 1, 2011
7.9 	 2014. Increases under this subdivisionparagraph (a) for the State Patrol retirement plan 
7.10 	terminate on December 31 of the calendar year in which the actuarial valuation prepared 
7.11 	by the approved actuary under sections 356.214 and 356.215 and the standards for 
7.12 	actuarial work promulgated by the Legislative Commission on Pensions and Retirement 
7.13 	indicates that the market value of assets of the retirement plan equals or exceeds 90
7.14 	85 percent of the actuarial accrued liability of the retirement plan and increases under 
7.15 	subdivision 1paragraph (c) recommence after that date.
7.16 	(c) Retirement annuity, disability benefit, or survivor benefit recipients of the State 
7.17 	Patrol retirement plan are entitled to a postretirement adjustment annually on January 
7.18 	1, as follows:
7.19 	(1) a postretirement increase of 1.5 percent must be applied each year, effective on 
7.20 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who 
7.21 	has been receiving an annuity or a benefit for at least 18 full months before the January 1 
7.22 	increase; and
7.23 	(2) for each annuitant or benefit recipient who has been receiving an annuity or a 
7.24 	benefit for at least six full months, an annual postretirement increase of 1/12 of 1.5 percent 
7.25 	for each month that the person has been receiving an annuity or benefit must be applied, 
7.26 	effective January 1, following the calendar year in which the person has been retired for at 
7.27 	least six months, but has been retired for less than 18 months.
7.28 	(d) Increases under paragraph (c) for the State Patrol retirement plan terminate on 
7.29 	December 31 of the calendar year in which the actuarial valuation prepared by the approved 
7.30 	actuary under sections 356.214 and 356.215 and the standards for actuarial work adopted by 
7.31 	the Legislative Commission on Pensions and Retirement indicates that the market value of 
7.32 	assets of the retirement plan equals or exceeds 90 percent of the actuarial accrued liability 
7.33 	of the retirement plan and increases under subdivision 1 recommence after that date.
7.34 	(c)(e) An increase in annuity or benefit payments under this subdivision must be 
7.35 	made automatically unless written notice is filed by the annuitant or benefit recipient 
8.1 	with the executive director of the applicable covered retirement plan requesting that the 
8.2 	increase not be made.

8.3 	EFFECTIVE DATE. This section is effective July 1, 2013.

8.4 	Sec. 11.  REPEALER.
 8.5 	Minnesota Statutes 2012, section 352B.11, subdivision 2c, is repealed.

8.6 	EFFECTIVE DATE. This section is effective July 1, 2013.

8.7 	ARTICLE 2
8.8 	PERA PLANS SALARY DEFINITION

8.9 	Section 1. Minnesota Statutes 2012, section 353.01, subdivision 10, is amended to read:
8.10 		Subd. 10.Salary. (a) Subject to the limitations of section 356.611, "salary" means:
8.11 	(1) the wages or periodic compensation ofpayable to a public employee,by the 
8.12 	employing governmental subdivision before:
8.13 	(i) employee retirement deductions that are designated as picked-up contributions 
8.14 	under section 356.62;
8.15 	(ii) any employee-elected  deductions for deferred compensation, supplemental 
8.16 	retirement plans, or other voluntary salary reduction programs, and also means "wages" 
8.17 	and includes net income from fees that would have otherwise been available as a cash 
8.18 	payment to the employee; and
8.19 	(iii) employee deductions for contributions to a supplemental plan or to a 
8.20 	governmental trust established under section 356.24, subdivision 1, clause (7), to save for 
8.21 	postretirement health care expenses,  unless otherwise excluded under paragraph (b);
8.22 	(2) for a public employee who is covered by a supplemental retirement plan under 
8.23 	section 356.24, subdivision 1, clause (8), (9), or (10), which require all plan contributions 
8.24 	be made by or (12), the employer, the contributioncontributions to the applicable 
8.25 	supplemental retirement plan when an agreement between the parties establishes that the 
8.26 	contributioncontributions will either result in a mandatory reduction of employees' wages 
8.27 	through payroll withholdings, or be made in lieu of an amount that would otherwise be 
8.28 	paid as wages; and
8.29 	(3) for a public employee who has prior service covered by a local police or 
8.30 	firefighters relief association that has consolidated with the Public Employees Retirement 
8.31 	Association or to which section 353.665 applies and who has elected coverage either 
8.32 	under the public employees police and fire fund benefit plan under section 353A.08 
8.33 	following the consolidation or under section 353.665, subdivision 4, the rate of salary 
9.1 	upon which member contributions to the special fund of the relief association were made 
9.2 	prior to the effective date of the consolidation as specified by law and by bylaw provisions 
9.3 	governing the relief association on the date of the initiation of the consolidation procedure 
9.4 	and the actual periodic compensation of the public employee after the effective date of 
9.5 	consolidation.;
9.6 	(4) a payment from a public employer through a grievance proceeding, settlement, 
9.7 	or court order that is attached to a specific earnings period in which the employee's regular 
9.8 	salary was not earned or paid to the member due to a suspension or a period of involuntary 
9.9 	termination that is not a wrongful discharge under section 356.50; provided the amount is 
9.10 	not less than the equivalent of the average of the hourly  base salary rate in effect during 
9.11 	the last six months of allowable service prior to the suspension or period of involuntary 
9.12 	termination, plus any applicable increases awarded during the period that would have been 
9.13 	paid under a collective bargaining agreement or personnel policy but for the suspension 
9.14 	or involuntary termination, multiplied by the average number of regular hours for which 
9.15 	the employee was compensated  during the six months of allowable service prior to the 
9.16 	suspension or period of involuntary termination, but not to exceed the compensation that 
9.17 	the public employee would have earned if regularly employed during the applicable period;
9.18 	(5) the amount paid to a member who is absent from employment by reason of 
9.19 	personal, parental, or military leave of absence if equivalent to the hourly base salary 
9.20 	rate in effect during the six months of allowable service, or portions thereof, prior to the 
9.21 	leave, multiplied by the average number of regular hours for which the employee was 
9.22 	compensated during the six months of allowable service prior to the applicable leave of 
9.23 	absence;
9.24 	(6) the amount paid to a member who is absent from employment by reason of an 
9.25 	authorized medical leave of absence if specified in advance to be at least one-half but 
9.26 	no more than equal to the earnings the member received, on which contributions were 
9.27 	reported and allowable service credited during the six months immediately preceding 
9.28 	the medical leave of absence; and
9.29 	(7) for a public employee who receives performance or merit bonus payment under 
9.30 	a written compensation plan, policy, or collective bargaining agreement in addition 
9.31 	to regular salary or in lieu of regular salary increases, the compensation paid to the 
9.32 	employee for attaining or exceeding performance goals, duties, or measures during a 
9.33 	specified period of employment.
9.34 	(b) Salary does not mean:
9.35 	(1) the fees paid to district court reporters,;
10.1 	(2) unused annual leave, vacation, or sick leave payments, in the form of lump-sum 
10.2 	or periodic payments,;
10.3 	(3) for the donor, payment to another person of the value of hours donated under a 
10.4 	benevolent vacation, personal, or sick leave donation program;
10.5 	(4) any form of severance payments,or retirement incentive payments;
10.6 	(5) an allowance payment or per diem payments for or reimbursement of expenses,;
10.7 	(6) lump-sum settlements not attached to a specific earnings period, or;
10.8 	(7)  workers' compensation payments or disability insurance payments, including 
10.9 	payments from employer self-insurance arrangements;
10.10 	(2)(8) employer-paid amounts used by an employee toward the cost of insurance 
10.11 	coverage, employer-paid fringe benefits, flexible spending accounts, cafeteria plans, health 
10.12 	care expense accounts, day care expenses, or any payments in lieu of any employer-paid 
10.13 	group insurance coverage, including the difference between single and family rates that 
10.14 	may be paid to a member with single coverage and certain amounts determined by the 
10.15 	executive director to be ineligible;
10.16 	(9) employer-paid fringe benefits, including, but not limited to:
10.17 	(i) employer-paid premiums or supplemental contributions for employees for all 
10.18 	types of insurance;
10.19 	(ii) membership dues or fees for the use of fitness or recreational facilities;
10.20 	(iii) incentive payments or cash awards relating to a wellness program;
10.21 	(iv) the value of any nonmonetary benefits;
10.22 	(v) any form of payment made in lieu of an employer-paid fringe benefit;
10.23 	(vi) an employer-paid amount made to a deferred compensation or tax-sheltered 
10.24 	annuity program; and
10.25 	(vii) any amount paid by the employer as a supplement to salary, either as a 
10.26 	lump-sum amount or a fixed or matching amount paid on a recurring basis, that is not 
10.27 	available to the employee as cash;
10.28 	(3)(10) the amount equal to that which the employing governmental subdivision 
10.29 	would otherwise pay toward single or family insurance coverage for a covered employee 
10.30 	when, through a contract or agreement with some but not all employees, the employer:
10.31 	(i) discontinues, or for new hires does not provide, payment toward the cost of the 
10.32 	employee's selected insurance coverages under a group plan offered by the employer;
10.33 	(ii) makes the employee solely responsible for all contributions toward the cost of 
10.34 	the employee's selected insurance coverages under a group plan offered by the employer, 
10.35 	including any amount the employer makes toward other employees' selected insurance 
10.36 	coverages under a group plan offered by the employer; and
11.1 	(iii) provides increased salary rates for employees who do not have any 
11.2 	employer-paid group insurance coverages;
11.3 	(4)(11) except as provided in section 353.86 or 353.87, compensation of any 
11.4 	kind paid to volunteer ambulance service personnel or volunteer firefighters, as defined 
11.5 	in subdivision 35 or 36;
11.6 	(5)(12) the amount of compensation that exceeds the limitation provided in section 
11.7 	356.611; and
11.8 	(6)(13) amounts paid by a federal or state grant for which the grant specifically 
11.9 	prohibits grant proceeds from being used to make pension plan contributions, unless the 
11.10 	contributions to the plan are made from sources other than the federal or state grant.; and
11.11 	(14) bonus pay that is not performance or merit pay under paragraph (a), clause (6).
11.12 	(c) Amounts, other than those provided under paragraph (a), clause (4), provided to 
11.13 	an employee by the employer through a grievance proceeding, a court order, or a legal 
11.14 	settlement are salary only if the settlement or court order is reviewed by the executive 
11.15 	director and the amounts are determined by the executive director to be consistent with 
11.16 	paragraph (a) and prior determinations.

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

11.18 	ARTICLE 3
11.19 	PUBLIC EMPLOYEES POLICE AND FIRE RETIREMENT PLAN 
11.20 	FINANCIAL SOLVENCY MEASURES

11.21 	Section 1. Minnesota Statutes 2012, section 353.01, subdivision 17a, is amended to read:
11.22 		Subd. 17a.Average salary. (a) "Average salary," for purposes of calculating a 
11.23 	retirement annuity under section 353.29, subdivision 3, means an amount equivalent to 
11.24 	the average of the highest salary of the member, police officer, or firefighter, whichever 
11.25 	applies, upon which employee contributions were paid for any five successive years of 
11.26 	allowable service, based on dates of salary periods as listed on salary deduction reports. 
11.27 	"Average salary" includes the salary of the employee during the period of covered 
11.28 	employment rendered after reaching the allowable service credit limit of section 353.651, 
11.29 	subdivision 3, paragraph (b). Average salary must be based upon all allowable service if 
11.30 	this service is less than five years.
11.31 	(b) "Average salary" may not include any reduced salary paid during a period 
11.32 	in which the employee is entitled to benefit payments from workers' compensation for 
11.33 	temporary disability, unless the average salary is higher, including this period.

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

12.1 	Sec. 2. Minnesota Statutes 2012, section 353.01, subdivision 41, is amended to read:
12.2 		Subd. 41.Duty disability. "Duty disability," physical or psychological, means a 
12.3 	condition that is expected to prevent a member, for a period of not less than 12 months, 
12.4 	from performing the normal duties of the position held by a person who is a member of the 
12.5 	public employees police and fire retirement plan, and that is the direct result of an injury 
12.6 	incurred during, or a disease arising out of, the performance of normal duties or the actual 
12.7 	performance of less frequentinherently dangerous duties, either of which are specific to 
12.8 	protecting the property and personal safety of others and that present inherent dangers that 
12.9 	are specific to the positions covered by the public employees police and fire retirement plan.

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

12.11 	Sec. 3. Minnesota Statutes 2012, section 353.01, subdivision 47, is amended to read:
12.12 		Subd. 47.Vesting. (a) "Vesting" means obtaining a nonforfeitable entitlement 
12.13 	to an annuity or benefit from a retirement plan administered by the Public Employees 
12.14 	Retirement Association by having credit for sufficient allowable service under paragraph 
12.15 	(b) or, (c), or (d), whichever applies.
12.16 	(b) For purposes of qualifying for an annuity or benefit as a basic or coordinated plan 
12.17 	member of the general employees retirement plan of the Public Employees Retirement 
12.18 	Association:
12.19 	(1) a public employee who first became a member of the association before July 
12.20 	1, 2010, is 100 percent vested when the person has accrued credit for not less than three 
12.21 	years of allowable service as defined under subdivision 16; and
12.22 	(2) a public employee who first becomes a member of the association after June 30, 
12.23 	2010, is 100 percent vested when the person has accrued credit for not less than five years 
12.24 	of allowable service as defined under subdivision 16.
12.25 	(c) For purposes of qualifying for an annuity or benefit as a member of the police 
12.26 	and fire plan or a member of the local government correctional employees retirement plan:
12.27 	(1) a public employee who first became a member of the association before July 
12.28 	1, 2010, is 100 percent vested when the person has accrued credit for not less than three 
12.29 	years of allowable service as defined under subdivision 16; and
12.30 	(2) a public employee who first becomes a member of the association after June 
12.31 	30, 2010, is vested at the following percentages when the person has accrued credited 
12.32 	allowable service as defined under subdivision 16, as follows:
12.33 	(i) 50 percent after five years;
12.34 	(ii) 60 percent after six years;
12.35 	(iii) 70 percent after seven years;
13.1 	(iv) 80 percent after eight years;
13.2 	(v) 90 percent after nine years; and
13.3 	(vi) 100 percent after ten years.
13.4 	(d) For purposes of qualifying for an annuity or benefit as a member of the public 
13.5 	employees police and fire retirement plan:
13.6 	(1) a public employee who first became a member of the association before July 
13.7 	1, 2010, is 100 percent vested when the person has accrued credit for not less than three 
13.8 	years of allowable service as defined under subdivision 16;
13.9 	(2) a public employee who first becomes a member of the association after June 30, 
13.10 	2010, and before July 1, 2014, is vested at the following percentages when the person has 
13.11 	accrued credited allowable service as defined under subdivision 16, as follows:
13.12 	(i) 50 percent after five years;
13.13 	(ii) 60 percent after six years;
13.14 	(iii) 70 percent after seven years;
13.15 	(iv) 80 percent after eight years;
13.16 	(v) 90 percent after nine years; and
13.17 	(vi) 100 percent after ten years; and
13.18 	(3) a public employee who first becomes a member of the association after June 
13.19 	30, 2014, is vested at the following percentages when the person has accrued credited 
13.20 	allowable service as defined under subdivision 16, as follows:
13.21 	(i) 50 percent after ten years;
13.22 	(ii) 55 percent after 11 years;
13.23 	(iii) 60 percent after 12 years;
13.24 	(iv) 65 percent after 13 years;
13.25 	(v) 70 percent after 14 years;
13.26 	(vi) 75 percent after 15 years;
13.27 	(vii) 80 percent after 16 years;
13.28 	(viii) 85 percent after 17 years;
13.29 	(ix) 90 percent after 18 years;
13.30 	(x) 95 percent after 19 years; and
13.31 	(xi) 100 percent after 20 or more years.

13.32 	Sec. 4. Minnesota Statutes 2012, section 353.031, subdivision 4, is amended to read:
13.33 		Subd. 4.Additional requirements; eligibility for police and fire or local 
13.34 	government correctional service retirement plan disability benefits. (a) If an 
13.35 	application for disability benefits is filed within two years of the date of the injury or the 
14.1 	onset of the illness that gave rise to the disability application, the application must be 
14.2 	supported by evidence that the applicant is unable to perform the duties of the position 
14.3 	held by the applicant on the date of the injury or the onset of the illness causing the 
14.4 	disability. The employer must provide evidence indicating whether the applicant is able or 
14.5 	unable to perform the duties of the position held on the date of the injury or onset of the 
14.6 	illness causing the disability and the specifications, a clear explanation of any duties that 
14.7 	the individual can or cannot perform, and an explanation of why the employer may or may 
14.8 	not authorize continued employment to the applicant in the current or other position.
14.9 	(b) If an application for disability benefits is filed more than two years after the 
14.10 	date of injury or the onset of an illness causing the disability, the application must be 
14.11 	supported by evidence that the applicant is unable to perform the most recent duties that 
14.12 	arewere expected to be performed by the applicant during the 90 days beforepreceding 
14.13 	the filing oflast day the application applicant performed services for the employer. The 
14.14 	employer must provide evidence of the duties that arewere expected to be performed by 
14.15 	the applicant during the 90 days beforepreceding the filing oflast day the application
14.16 	 applicant performed services, whether the applicant can or cannot perform those duties 
14.17 	overall, and the specificationsa clear explanation of any duties that the applicant can 
14.18 	or cannot perform, and an explanation of why the employer may or may not authorize 
14.19 	continued employment to the applicant in the current or other position.
14.20 	(c) Any report supporting a claim to disability benefits under section 353.656 or 
14.21 	353E.06 must specifically relate the disability to its cause; and for any claim to duty 
14.22 	disability from an injury or illness arising out of an act of duty, the report must state the 
14.23 	specific act of duty giving rise to the claim, and relate the cause of disability to inherently 
14.24 	dangerous duties specific tasks or functions required to be performed by the employee in 
14.25 	fulfilling the employee's duty-related acts which must be specific to the inherent dangers of 
14.26 	the positions eligible for membership incovered by the public employees police and fire 
14.27 	fundplan and the local government correctional service retirement plan. Any report that 
14.28 	does not relate the cause of disability to specific acts or functionsinherently dangerous 
14.29 	duties performed by the employee may not be relied upon as evidence to support eligibility 
14.30 	for benefits and may be disregarded in the executive director's decision-making process.
14.31 	(d) Any application for duty disability must be supported by a first report of injury as 
14.32 	defined in section 176.231.
14.33 	(e) If a member who has applied for and been approved for disability benefits before 
14.34 	the termination of service does not terminate service or is not placed on an authorized 
14.35 	leave of absence as certified by the governmental subdivision within 45 days following 
14.36 	the date on which the application is approved, the application shall be canceled. If an 
15.1 	approved application for disability benefits has been canceled, a subsequent application 
15.2 	for disability benefits may not be filed on the basis of the same medical condition for a 
15.3 	minimum of one year from the date on which the previous application was canceled.

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

15.5 	Sec. 5. Minnesota Statutes 2012, section 353.35, subdivision 1, is amended to read:
15.6 		Subdivision 1.Refund rights. (a) Except as provided in paragraph (b), when any 
15.7 	former member accepts a refund, all existing service credits and all rights and benefits to 
15.8 	which the person was entitled prior to the acceptance of the refund must terminate.
15.9 	(b) A refund under section 353.651, subdivision 3, paragraph (c), does not result in a 
15.10 	forfeiture of salary credit for the allowable service credit covered by the refund.
15.11 	(c) The rights and benefits of a former member must not be restored until the person 
15.12 	returns to active service and acquires at least six months of allowable service credit 
15.13 	after taking the last refund and repays the refund or refunds taken and interest received 
15.14 	under section 353.34, subdivisions 1 and 2, plus interest at an annual rate of 8.5 percent 
15.15 	compounded annually. If the person elects to restore service credit in a particular fund 
15.16 	from which the person has taken more than one refund, the person must repay all refunds 
15.17 	to that fund. All refunds must be repaid within six months of the last date of termination 
15.18 	of public service.

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

15.20 	Sec. 6. Minnesota Statutes 2012, section 353.65, subdivision 2, is amended to read:
15.21 		Subd. 2.Employee contribution. (a) For members other than members who were 
15.22 	active members of the former Minneapolis Firefighters Relief Association on December 
15.23 	29, 2011, or for members other than members who were active members of the former 
15.24 	Minneapolis Police Relief Association on December 29, 2011, the employee contribution 
15.25 	is 9.4 percentan amount equal to the following percentage of the total salary of theeach 
15.26 	member in calendar year 2010 and is, as follows: 9.6 percent of the salary of the member 
15.27 	in eachbefore calendar year after 2010 2014; 10.2 percent in calendar year 2014; and 10.8 
15.28 	percent in calendar year 2015 and thereafter.
15.29 	(b) For members who were active members of the former Minneapolis Firefighters 
15.30 	Relief Association on December 29, 2011, the employee contribution is an amount 
15.31 	equal to eight percent of the monthly unit value under section 353.01, subdivision 10a, 
15.32 	multiplied by 80 and expressed as a biweekly amount for each member. The employee 
15.33 	contribution made by a member with at least 25 years of service credit as an active 
16.1 	member of the former Minneapolis Firefighters Relief Association must be deposited in 
16.2 	the postretirement health care savings account established under section 352.98.
16.3 	(c) For members who were active members of the former Minneapolis Police Relief 
16.4 	Association on December 29, 2011, the employee contribution is an amount equal to eight 
16.5 	percent of the monthly unit value under section 353.01, subdivision 10b, multiplied by 80 
16.6 	and expressed as a biweekly amount for each member. The employee contribution made 
16.7 	by a member with at least 25 years of service credit as an active member of the former 
16.8 	Minneapolis Police Relief Association must be deposited in the postretirement health care 
16.9 	savings account established under section 352.98.
16.10 	(d) Contributions under this section must be made by deduction from salary in 
16.11 	the manner provided in subdivision 4. Where any portion of a member's salary is paid 
16.12 	from other than public funds, the member's employee contribution is based on the total 
16.13 	salary received from all sources.

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

16.15 	Sec. 7. Minnesota Statutes 2012, section 353.65, subdivision 3, is amended to read:
16.16 		Subd. 3.Employer contribution. (a) With respect to members other than members 
16.17 	who were active members of the former Minneapolis Firefighters Relief Association on 
16.18 	December 29, 2011, or for members other than members who were active members of 
16.19 	the former Minneapolis Police Relief Association on December 29, 2011, the employer 
16.20 	contribution is 14.1 percentan amount equal to the following percentage of the total salary 
16.21 	of theeach member in calendar year 2010 and is, as follows: 14.4 percent of the salary of 
16.22 	the member in eachbefore calendar year after 2010 2014; 15.3 percent in calendar year 
16.23 	2014; and 16.2 percent in calendar year 2015 and thereafter.
16.24 	(b) With respect to members who were active members of the former Minneapolis 
16.25 	Firefighters Relief Association on December 29, 2011, the employer contribution is an 
16.26 	amount equal to the amount of the member contributions under subdivision 2, paragraph 
16.27 	(b).
16.28 	(c) With respect to members who were active members of the former Minneapolis 
16.29 	Police Relief Association on December 29, 2011, the employer contribution is an amount 
16.30 	equal to the amount of the member contributions under subdivision 2, paragraph (c).
16.31 	(d) Contributions under this subdivision must be made from funds available to the 
16.32 	employing subdivision by the means and in the manner provided in section 353.28.

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

17.1 	Sec. 8. Minnesota Statutes 2012, section 353.651, subdivision 3, is amended to read:
17.2 		Subd. 3.Retirement annuity formula. (a) The average salary as defined in 
17.3 	section 353.01, subdivision 17a, multiplied by the percent specified in section 356.315, 
17.4 	subdivision 6, per yearmultiplied by years of allowable service, multiplied by the 
17.5 	applicable vesting percentage indicated in section 353.01, subdivision 47, determines the 
17.6 	amount of the normal retirement annuity. If the member has earned allowable service 
17.7 	for performing services other than those of a police officer or firefighter, the annuity 
17.8 	representing that service must be computed under sections 353.29 and 353.30.
17.9 	(b) For a member first enrolled in the public employees police and fire retirement 
17.10 	plan after June 30, 2014, the average salary as defined in section 353.01, subdivision 17a, 
17.11 	paragraph (a), includes salary for all years for which contributions have been reported to 
17.12 	the public employees police and fire retirement plan, but allowable service included in 
17.13 	the calculation is limited to 33 years and the normal retirement annuity must not exceed 
17.14 	99 percent of the average salary.
17.15 	(c) When the annuity begins for members of the public employees police and fire 
17.16 	retirement plan enrolled after June 30, 2014, a prorated share of the contributions for 
17.17 	allowable service exceeding 33 years must be refunded to the member. The prorated 
17.18 	share of the contributions to be refunded is determined by multiplying the accumulated 
17.19 	deductions paid by the member to the public employees police and fire retirement plan by 
17.20 	a percentage determined using the number of months of service in excess of 396 as the 
17.21 	numerator and the total number of months of allowable service on which contributions 
17.22 	were reported as the denominator. Interest as defined in section 353.34, subdivision 2, 
17.23 	is to be applied to the prorated share of contributions from the first of the 397th month 
17.24 	of allowable service reported to the public employees police and fire retirement plan to 
17.25 	the first of the month the annuity begins.

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

17.27 	Sec. 9. Minnesota Statutes 2012, section 353.651, subdivision 4, is amended to read:
17.28 		Subd. 4.Early retirement. (a) A person who becomes a public employees police 
17.29 	and fire retirement plan member after June 30, 2007, or a former member who is reinstated 
17.30 	as a member of the plan after that date, who is at least 50 years of age and who is at least 
17.31 	partially vested under section 353.01, subdivision 47, upon the termination of public 
17.32 	service before July 1, 2014, if the person is other than a county sheriff or after January 4, 
17.33 	2015, if the person is a county sheriff is entitled upon application to a retirement annuity 
17.34 	equal to the normal annuity calculated under subdivision 3, reduced by two-tenths of one 
17.35 	percent for each month that the member is under age 55 at the time of retirement.
18.1 	(b) Upon the termination of public service before July 1, 2014, if the person is 
18.2 	other than a county sheriff or upon the termination of public service before January 5, 
18.3 	2015, if the person is a county sheriff, any public employees police and fire retirement 
18.4 	plan member who first became a member of the plan before July 1, 2007, and who is 
18.5 	not specified in paragraph (a), upon attaining at least 50 years of age with at least three 
18.6 	years of allowable service is entitled upon application to a retirement annuity equal to the 
18.7 	normal annuity calculated under subdivision 3, reduced by one-tenth of one percent for 
18.8 	each month that the member is under age 55 at the time of retirement.
18.9 	(c) A person other than a county sheriff who is a member of the public employees 
18.10 	police and fire retirement plan on or after July 1, 2014, or a county sheriff who is a 
18.11 	member of the public employees police and fire retirement plan on or after January 5, 
18.12 	2015, and who is at least 50 years old and is at least partially vested under section 353.01, 
18.13 	subdivision 47, and whose benefit effective date is after July 1, 2014, if other than a 
18.14 	county sheriff or after January 4, 2015, if a county sheriff and on or before July 1, 2019, is 
18.15 	entitled upon application to a retirement annuity equal to the normal annuity calculated 
18.16 	under subdivision 3, reduced for each month the member is under age 55 at the time of 
18.17 	retirement by applying a blended monthly rate that is equivalent to the sum of:
18.18 	(1) one-sixtieth of the annual rate of five percent, prorated for each month the 
18.19 	person's benefit effective date is after July 1, 2014, or after December 31, 2014, whichever 
18.20 	applies; and
18.21 	(2) one-sixtieth of the annual rate provided under paragraph (a) or (b), whichever 
18.22 	applies, for each month the person's benefit effective date is before July 1, 2019.
18.23 	(d) A person other than a county sheriff who is a member of the public employees 
18.24 	police and fire retirement plan on or after July 1, 2014, or a county sheriff who is a member 
18.25 	of the public employees police and fire retirement plan on or after January 5, 2015, and 
18.26 	who is at least 50 years old and is at least partially vested under section 353.01, subdivision 
18.27 	47, whose benefit effective date is after July 1, 2019, is entitled, upon application, to a 
18.28 	retirement annuity equal to the normal annuity calculated under subdivision 3, reduced by 
18.29 	five percent annually, prorated for each month that the member is under age 55.

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

18.31 	Sec. 10. Minnesota Statutes 2012, section 353.657, subdivision 2a, is amended to read:
18.32 		Subd. 2a.Death while eligible survivor benefit. (a) If a member or former member 
18.33 	who has attained the age of at least 50 years and either who is vested under section 
18.34 	353.01, subdivision 47, or who has credit for at least 30 years of allowable service, 
18.35 	regardless of age attained, dies before the annuity or disability benefit becomes payable, 
19.1 	notwithstanding any designation of beneficiary to the contrary, the surviving spouse may 
19.2 	elect to receive a death while eligible survivor benefit.
19.3 	(b) Notwithstanding the definition of surviving spouse in section 353.01, subdivision 
19.4 	20, a former spouse of the member, if any, is entitled to a portion of the death while 
19.5 	eligible survivor benefit if stipulated under the terms of a marriage dissolution decree 
19.6 	filed with the association. If there is no surviving spouse or child or children, a former 
19.7 	spouse may be entitled to a lump-sum refund payment under section 353.32, subdivision 
19.8 	1, if provided for in a marriage dissolution decree but not a death while eligible survivor 
19.9 	benefit despite the terms of a marriage dissolution decree filed with the association.
19.10 	(c) The benefit may be elected instead of a refund with interest under section 353.32, 
19.11 	subdivision 1, or surviving spouse benefits otherwise payable under subdivisions 1 and 
19.12 	2. The benefit must be an annuity equal to the 100 percent joint and survivor annuity 
19.13 	which the member could have qualified for on the date of death, computed as provided in 
19.14 	sections 353.651, subdivisions 2 andsubdivision 3, and 353.30, subdivision 3.
19.15 	(d) The surviving spouse may apply for the annuity at any time after the date 
19.16 	on which the deceased employee would have attained the required age for retirement 
19.17 	based on the employee's allowable service. Sections 353.34, subdivision 3, and 353.71, 
19.18 	subdivision 2, apply to a deferred annuity payable under this subdivision.
19.19 	(e) No payment accrues beyond the end of the month in which entitlement to 
19.20 	such annuity has terminated. An amount equal to the excess, if any, of the accumulated 
19.21 	contributions which were credited to the account of the deceased employee over and 
19.22 	above the total of the annuities paid and payable to the surviving spouse must be paid to 
19.23 	the deceased member's last designated beneficiary or, if none, to the legal representative of 
19.24 	the estate of such deceased member.
19.25 	(f) Any member may request in writing, with the signed consent of the spouse, that 
19.26 	this subdivision not apply and that payment be made only to the designated beneficiary, as 
19.27 	otherwise provided by this chapter.
19.28 	(g) For a member who is employed as a full-time firefighter by the Department of 
19.29 	Military Affairs of the state of Minnesota, allowable service as a full-time state Military 
19.30 	Affairs Department firefighter credited by the Minnesota State Retirement System may be 
19.31 	used in meeting the minimum allowable service requirement of this subdivision.

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

19.33 	Sec. 11. Minnesota Statutes 2012, section 353.657, subdivision 3a, is amended to read:
20.1 		Subd. 3a.Maximum and minimum family benefits. (a) The maximum monthly 
20.2 	benefit per family must not exceed the following percentages of the member's average 
20.3 	monthly salary as specified in subdivision 3:
20.4 	(1) 80 percent, if the member's death was a line of duty death; or
20.5 	(2) 70 percent, if the member's death was not a line of duty death or occurred while 
20.6 	the member was receiving a disability benefit that accrued before July 1, 2007.
20.7 	(b) The minimum monthly benefit per family, including the joint and survivor 
20.8 	optional annuity under subdivision 2a, and section 353.656, subdivision 1a, must not be 
20.9 	less than the following percentage of the member's average monthly salary as specified in 
20.10 	subdivision 3:
20.11 	(1) 60 percent, if the death was a line of duty death; or
20.12 	(2) 50 percent, if the death was not a line of duty death or occurred while the member 
20.13 	was receiving a disability benefit that accrued before July 1, 2007.
20.14 	(c) If the maximum under paragraph (a) is exceeded, the monthly benefit of the 
20.15 	joint annuitant, surviving spouse, and dependent children, as applicable, must each be 
20.16 	reduced to the amount necessaryproportionately so that the total family benefit does 
20.17 	not exceed the applicable maximum. The joint and survivor optional annuity, surviving 
20.18 	spouse, or dependent children benefit, as applicable, must be restored, plus applicable 
20.19 	postretirement adjustments under Minnesota Statutes 2008, section 356.41 or section 
20.20 	356.415, as the dependent child or children become no longer dependent under section 
20.21 	353.01, subdivision 15, or in the event of the death of the joint and survivor annuity 
20.22 	recipient or the surviving spouse.

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

20.24 	Sec. 12. Minnesota Statutes 2012, section 353E.001, subdivision 1, is amended to read:
20.25 		Subdivision 1.Duty disability. "Duty disability," physical or psychological, means 
20.26 	a condition that is expected to prevent a member, for a period of not less than 12 months, 
20.27 	from performing the normal duties of a local government correctional service employee as 
20.28 	defined under section 353E.02 and that is the direct result of an injury incurred during, or 
20.29 	a disease arising out of, the performance of normal duties or the actual performance of 
20.30 	less frequentinherently dangerous duties, either of which are specific to protecting the 
20.31 	property and personal safety of others and that present inherent dangers that are specific to 
20.32 	the positions covered by the local government correctional service retirement plan.

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

21.1 	Sec. 13. Minnesota Statutes 2012, section 356.415, subdivision 1b, is amended to read:
21.2 		Subd. 1b.Annual postretirement adjustments; PERA; general employees 
21.3 	retirement plan and local government correctional retirement plan. (a) Retirement 
21.4 	annuity, disability benefit, or survivor benefit recipients of the general employees 
21.5 	retirement plan of the Public Employees Retirement Association and the local government 
21.6 	correctional service retirement plan are entitled to a postretirement adjustment annually 
21.7 	on January 1, as follows:
21.8 	(1) for January 1, 2011, and each successive January 1 until funding stability is 
21.9 	restored for the applicable retirement plan, a postretirement increase of one percent must 
21.10 	be applied each year, effective on January 1, to the monthly annuity or benefit amount of 
21.11 	each annuitant or benefit recipient who has been receiving an annuity or benefit for at least 
21.12 	12 full months as of the current June 30;
21.13 	(2) for January 1, 2011, and each successive January 1 until funding stability is 
21.14 	restored for the applicable retirement plan, for each annuitant or benefit recipient who has 
21.15 	been receiving an annuity or a benefit for at least one full month, but less than 12 full 
21.16 	months as of the current June 30, an annual postretirement increase of 1/12 of one percent 
21.17 	for each month the person has been receiving an annuity or benefit must be applied;
21.18 	(3) for each January 1 following the restoration of funding stability for the applicable 
21.19 	retirement plan, a postretirement increase of 2.5 percent must be applied each year, 
21.20 	effective January 1, to the monthly annuity or benefit amount of each annuitant or benefit 
21.21 	recipient who has been receiving an annuity or benefit for at least 12 full months as of 
21.22 	the current June 30; and
21.23 	(4) for each January 1 following restoration of funding stability for the applicable 
21.24 	retirement plan, for each annuity or benefit recipient who has been receiving an annuity or 
21.25 	a benefit for at least one full month, but less than 12 full months as of the current June 
21.26 	30, an annual postretirement increase of 1/12 of 2.5 percent for each month the person 
21.27 	has been receiving an annuity or benefit must be applied.
21.28 	(b) Funding stability is restored when the market value of assets of the applicable 
21.29 	retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities of the 
21.30 	applicable plan in the two most recent priorconsecutive actuarial valuationvaluations 
21.31 	prepared under section 356.215 and the standards for actuarial work by the approved 
21.32 	actuary retained by the Public Employees Retirement Association under section 356.214.
21.33 	(c) If, after applying the increase as provided for in paragraph (a), clauses (3) 
21.34 	and (4), the market value of the applicable retirement plan is determined in the next 
21.35 	subsequent actuarial valuation prepared under section 356.215 to be less than 90 percent 
21.36 	of the actuarial accrued liability of any of the applicable Public Employees Retirement 
22.1 	Association plans, After having met the definition of funding stability under paragraph 
22.2 	(b), the increase provided in paragraph (a), clauses (1) and (2), arerather than an increase 
22.3 	under subdivision 1, is again to be applied as of the next successive January until funding 
22.4 	stability is again restored. in a subsequent year or years if the market value of assets of 
22.5 	the applicable plan equals or is less than:
22.6 	(1) 85 percent of the actuarial accrued liabilities of the applicable plan for two 
22.7 	consecutive actuarial valuations; or
22.8 	(2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most 
22.9 	recent actuarial valuation.
22.10 	(d) An increase in annuity or benefit payments under this section must be made 
22.11 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
22.12 	executive director of the Public Employees Retirement Association requesting that the 
22.13 	increase not be made.
22.14 	(e) The retirement annuity payable to a person who retires before becoming eligible 
22.15 	for Social Security benefits and who has elected the optional payment, as provided in 
22.16 	section 353.29, subdivision 6, must be treated as the sum of a period-certain retirement 
22.17 	annuity and a life retirement annuity for the purposes of any postretirement adjustment. 
22.18 	The period-certain retirement annuity plus the life retirement annuity must be the 
22.19 	annuity amount payable until age 62 for section 353.29, subdivision 6. A postretirement 
22.20 	adjustment granted on the period-certain retirement annuity must terminate when the 
22.21 	period-certain retirement annuity terminates.

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

22.23 	Sec. 14. Minnesota Statutes 2012, section 356.415, subdivision 1c, is amended to read:
22.24 		Subd. 1c.Annual postretirement adjustments; PERA-police and fire. (a) 
22.25 	Retirement annuity, disability benefit, or survivor benefit recipients of the public 
22.26 	employees police and fire retirement plan are entitled to a postretirement adjustment 
22.27 	annually on January 1, until funding stability is restored, as follows:
22.28 	(1) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit 
22.29 	recipient whose annuity or benefit effective date is on or before June 1, 2014, who has 
22.30 	been receiving the annuity or benefit for at least 12 full months as of the immediate 
22.31 	preceding June 30, an amount equal to one percent in each year; or
22.32 	(2) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit 
22.33 	recipient whose annuity or benefit effective date is on or before June 1, 2014, who has 
22.34 	been receiving the annuity or benefit for at least one full month, but not less than 11 
23.1 	months, as of the immediate preceding June 30, an amount equal to 1/12 of one percent in 
23.2 	each year for each month of annuity or benefit receipt; and
23.3 	(3) for January 1, 2013, and each successive January 1 that follows the loss of 
23.4 	funding stability as defined under paragraph (b) until funding stability as defined under 
23.5 	paragraph (b) is again restored, for each annuitant or benefit recipient whose annuity 
23.6 	or benefit effective date is after June 1, 2014, who haswill have been receiving thean 
23.7 	annuity or benefit for at least 1236 full months as of the immediate preceding June 30, 
23.8 	an amount equal to the percentage increase in the Consumer Price Index for urban wage 
23.9 	earners and clerical workers all items index published by the Bureau of Labor Statistics of 
23.10 	the United States Department of Labor between the immediate preceding June 30 and the 
23.11 	June 30 occurring 12 months previous, but not to exceed 1.5one percent; or
23.12 	(4) for January 1, 2013, and each successive January 1 that follows the loss of funding 
23.13 	stability as defined under paragraph (b) until funding stability as defined under paragraph 
23.14 	(b) is again restored, for each annuitant or benefit recipient whose annuity or benefit 
23.15 	effective date is after June 1, 2014, who has been receiving the annuity or benefit for at 
23.16 	least one25 full monthmonths, but less than 36 months as of the immediate preceding June 
23.17 	30, an amount equal to 1/12 of the percentage increase in the Consumer Price Index for 
23.18 	urban wage earners and clerical workers all items index published by the Bureau of Labor 
23.19 	Statistics of the United States Department of Labor between the immediate preceding June 
23.20 	30 and the June 30 occurring 12 months previous for each full month of annuity or benefit 
23.21 	receipt, but not to exceed 1/12 of 1.5one percent for each full month of annuity or benefit 
23.22 	receipt; during the fiscal year in which the annuity or benefit was effective.
23.23 	(5) for(b) Retirement annuity, disability benefit, or survivor benefit recipients of 
23.24 	the public employees police and fire retirement plan are entitled to a postretirement 
23.25 	adjustment annually on each January 1 following the restoration of funding stability as 
23.26 	defined under paragraph (b)(c) and during the continuation of funding stability as defined 
23.27 	under paragraph (b) (c), as follows:
23.28 	(1) for each annuitant or benefit recipient who has been receiving the annuity or 
23.29 	benefit for at least 1236 full months as of the immediate preceding June 30, an amount 
23.30 	equal to the percentage increase in the Consumer Price Index for urban wage earners and 
23.31 	clerical workers all items index published by the Bureau of Labor Statistics of the United 
23.32 	States Department of Labor between the immediate preceding June 30 and the June 30 
23.33 	occurring 12 months previous, but not to exceed 2.5 percent; and
23.34 	(6) for each January 1 following the restoration of funding stability as defined under 
23.35 	paragraph (b) and during the continuation of funding stability as defined under paragraph 
23.36 	(b),(2) for each annuitant or benefit recipient who has been receiving the annuity or benefit 
24.1 	for at least one25 full monthmonths, but less than 36 full months, as of the immediate 
24.2 	preceding June 30, an amount equal to 1/12 of the percentage increase in the Consumer 
24.3 	Price Index for urban wage earners and clerical workers all items index published by 
24.4 	the Bureau of Labor Statistics of the United States Department of Labor between the 
24.5 	immediate preceding June 30 and the June 30 occurring 12 months previous for each full 
24.6 	month of annuity or benefit receipt during the fiscal year in which the annuity or benefit 
24.7 	was effective, but not to exceed 1/12 of 2.5 percent for each full month of annuity or 
24.8 	benefit receipt during the fiscal year in which the annuity or benefit was effective.
24.9 	(b)(c) Funding stability is restored when the market value of assets of the public 
24.10 	employees police and fire retirement plan equals or exceeds 90 percent of the actuarial 
24.11 	accrued liabilities of the applicable plan in the two most recent priorconsecutive actuarial 
24.12 	valuationvaluations prepared under section 356.215 and under the standards for actuarial 
24.13 	work of the Legislative Commission on Pensions and Retirement by the approved actuary 
24.14 	retained by the Public Employees Retirement Association under section 356.214.
24.15 	(d) After having met the definition of funding stability under paragraph (c), a full 
24.16 	or prorated increase, as provided in paragraph (a), clause (1), (2), (3), or (4), whichever 
24.17 	applies, rather than adjustments under paragraph (b), is again applied in a subsequent year 
24.18 	or years if the market value of assets of the public employees police and fire retirement 
24.19 	plan equals or is less than:
24.20 	(1) 85 percent of the actuarial accrued liabilities of the applicable plan for two 
24.21 	consecutive actuarial valuations; or
24.22 	(2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most 
24.23 	recent actuarial valuation.
24.24 	(c)(e) An increase in annuity or benefit payments under this section must be made 
24.25 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
24.26 	executive director of the Public Employees Retirement Association requesting that the 
24.27 	increase not be made.

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

24.29 	ARTICLE 4
24.30 	TEACHERS RETIREMENT ASSOCIATION EARLY RETIREMENT 
24.31 	REDUCTION FACTORS

24.32 	Section 1. Minnesota Statutes 2012, section 354.44, subdivision 6, is amended to read:
24.33 		Subd. 6.Computation of formula program retirement annuity. (a) The formula 
24.34 	retirement annuity must be computed in accordance with the applicable provisions of the 
25.1 	formulas stated in paragraph (b) or (d) on the basis of each member's average salary under 
25.2 	section 354.05, subdivision 13a, for the period of the member's formula service credit.
25.3 	(b) This paragraph, in conjunction with paragraph (c), applies to a person who first 
25.4 	became a member of the association or a member of a pension fund listed in section 
25.5 	356.30, subdivision 3, before July 1, 1989, unless paragraph (d), in conjunction with 
25.6 	paragraph (e), produces a higher annuity amount, in which case paragraph (d) applies. The 
25.7 	average salary as defined in section 354.05, subdivision 13a, multiplied by the following 
25.8 	percentages per year of formula service credit shall determine the amount of the annuity to 
25.9 	which the member qualifying therefor is entitled for service rendered before July 1, 2006:

25.10				Coordinated Member
		Basic Member
	
25.11
25.12
25.13		Each year of service during 
first ten
		the percent specified 
in section 356.315, 
subdivision 1, per year
		the percent specified 
in section 356.315, 
subdivision 3, per year
	
25.14
25.15
25.16		Each year of service 
thereafter
		the percent specified 
in section 356.315, 
subdivision 2, per year
		the percent specified 
in section 356.315, 
subdivision 4, per year
	
25.17 	For service rendered on or after July 1, 2006, the average salary as defined in section 
25.18 	354.05, subdivision 13a, multiplied by the following percentages per year of service credit, 
25.19 	determines the amount the annuity to which the member qualifying therefor is entitled:

25.20				Coordinated Member
		Basic Member
	
25.21
25.22
25.23		Each year of service during 
first ten
		the percent specified 
in section 356.315, 
subdivision 1a, per year
		the percent specified 
in section 356.315, 
subdivision 3, per year
	
25.24
25.25
25.26		Each year of service after 
ten years of service
		the percent specified 
in section 356.315, 
subdivision 2b, per year
		the percent specified 
in section 356.315, 
subdivision 4, per year
	
25.27 	(c)(i) This paragraph applies only to a person who first became a member of the 
25.28 	association or a member of a pension fund listed in section 356.30, subdivision 3, before 
25.29 	July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in 
25.30 	conjunction with this paragraph than when calculated under paragraph (d), in conjunction 
25.31 	with paragraph (e).
25.32 	(ii) Where any member retires prior to normal retirement age under a formula 
25.33 	annuity, the member shall be paid a retirement annuity in an amount equal to the normal 
25.34 	annuity provided in paragraph (b) reduced by one-quarter of one percent for each month 
25.35 	that the member is under normal retirement age at the time of retirement except that for 
25.36 	any member who has 30 or more years of allowable service credit, the reduction shall be 
25.37 	applied only for each month that the member is under age 62.
26.1 	(iii) Any member whose attained age plus credited allowable service totals 90 years 
26.2 	is entitled, upon application, to a retirement annuity in an amount equal to the normal 
26.3 	annuity provided in paragraph (b), without any reduction by reason of early retirement.
26.4 	(d) This paragraph applies to a member who has become at least 55 years old and 
26.5 	first became a member of the association after June 30, 1989, and to any other member 
26.6 	who has become at least 55 years old and whose annuity amount when calculated under 
26.7 	this paragraph and in conjunction with paragraph (e), is higher than it is when calculated 
26.8 	under paragraph (b), in conjunction with paragraph (c). For a basic member, the average 
26.9 	salary, as defined in section 354.05, subdivision 13a, multiplied by the percent specified 
26.10 	by section 356.315, subdivision 4, for each year of service for a basic member shall 
26.11 	determine the amount of the retirement annuity to which the basic member is entitled. 
26.12 	The annuity of a basic member who was a member of the former Minneapolis Teachers 
26.13 	Retirement Fund Association as of June 30, 2006, must be determined according to the 
26.14 	annuity formula under the articles of incorporation of the former Minneapolis Teachers 
26.15 	Retirement Fund Association in effect as of that date. For a coordinated member, the 
26.16 	average salary, as defined in section 354.05, subdivision 13a, multiplied by the percent 
26.17 	specified in section 356.315, subdivision 2, for each year of service rendered before July 
26.18 	1, 2006, and by the percent specified in section 356.315, subdivision 2b, for each year of 
26.19 	service rendered on or after July 1, 2006, determines the amount of the retirement annuity 
26.20 	to which the coordinated member is entitled.
26.21 	(e) This paragraph applies to a person who has become at least 55 years old and first 
26.22 	becomes a member of the association after June 30, 1989, and to any other member who 
26.23 	has become at least 55 years old and whose annuity is higher when calculated under 
26.24 	paragraph (d) in conjunction with this paragraph than when calculated under paragraph 
26.25 	(b), in conjunction with paragraph (c). An employee who retires under the formula annuity 
26.26 	before the normal retirement age shall be paid the normal annuity provided in paragraph 
26.27 	(d) reduced so that the reduced annuity is the actuarial equivalent of the annuity that 
26.28 	would be payable to the employee if the employee deferred receipt of the annuity and the 
26.29 	annuity amount were augmented at an annual rate of three percent compounded annually 
26.30 	from the day the annuity begins to accrue until the normal retirement age if the employee 
26.31 	became an employee before July 1, 2006, and at 2.5 percent compounded annually if the 
26.32 	employee becomes an employee after June 30, 2006. Except in regards to section 354.46, 
26.33 	this paragraph remains in effect until June 30, 2015.
26.34 	(f) After June 30, 2020, this paragraph applies to a person who has become at least 
26.35 	55 years old and first becomes a member of the association after June 30, 1989, and to any 
26.36 	other member who has become at least 55 years old and whose annuity is higher when 
27.1 	calculated under paragraph (d) in conjunction with this paragraph than when calculated 
27.2 	under paragraph (b), in conjunction with paragraph (c). An employee who retires under 
27.3 	the formula annuity before the normal retirement age is entitled to receive the normal 
27.4 	annuity provided in paragraph (d). For a person who is at least age 62 or older and has at 
27.5 	least 30 years of service, the annuity must be reduced by an early reduction factor of six 
27.6 	percent per year of the annuity that would be payable to the employee if the employee 
27.7 	deferred receipt of the annuity and the annuity amount were augmented at an annual rate 
27.8 	of three percent compounded annually from the day the annuity begins to accrue until the 
27.9 	normal retirement age if the employee became an employee before July 1, 2006, and at 2.5 
27.10 	percent compounded annually if the employee became an employee after June 30, 2006. 
27.11 	For a person who is not at least age 62 or older and does not have at least 30 years of 
27.12 	service, the annuity would be reduced by an early reduction factor of four percent per year 
27.13 	for ages 55 through 59 and seven percent per year of the annuity that would be payable 
27.14 	to the employee if the employee deferred receipt of the annuity and the annuity amount 
27.15 	were augmented at an annual rate of three percent compounded annually from the day 
27.16 	the annuity begins to accrue until the normal retirement age if the employee became an 
27.17 	employee before July 1, 2006, and at 2.5 percent compounded annually if the employee 
27.18 	became an employee after June 30, 2006.
27.19 	(g) After June 30, 2015, and before July 1, 2020, for a person who would have 
27.20 	a reduced retirement annuity under either paragraph (e) or (f) if they were applicable, 
27.21 	the employee is entitled to receive a reduced annuity which must be calculated using 
27.22 	a blended reduction factor augmented monthly by 1/60 of the difference between the 
27.23 	reduction required under paragraph (e) and the reduction required under paragraph (f).
27.24 	(f) (h) No retirement annuity is payable to a former employee with a salary that 
27.25 	exceeds 95 percent of the governor's salary unless and until the salary figures used in 
27.26 	computing the highest five successive years average salary under paragraph (a) have been 
27.27 	audited by the Teachers Retirement Association and determined by the executive director 
27.28 	to comply with the requirements and limitations of section 354.05, subdivisions 35 and 35a.

27.29 	EFFECTIVE DATE. This section is effective July 1, 2013.

27.30 	ARTICLE 5
27.31 	FIRST CLASS CITY TEACHER RETIREMENT INCREASES AND 
27.32 	FINANCIAL SOLVENCY MEASURES

27.33 	Section 1. [354.436] DIRECT STATE AID ON BEHALF OF THE FORMER 
27.34 	MINNEAPOLIS TEACHERS RETIREMENT FUND ASSOCIATION.
28.1 		Subdivision 1.Aid authorization. The state shall pay $12,954,000 to the Teachers 
28.2 	Retirement Association on behalf of the former Minneapolis Teachers Retirement Fund 
28.3 	Association. 
28.4 		Subd. 2.Aid appropriation. The commissioner of management and budget shall 
28.5 	pay the aid annually on October 1. The amount required is appropriated annually from the 
28.6 	general fund to the commissioner of management and budget.
28.7 		Subd. 3.Aid expiration. The aid specified in this section terminates and this 
28.8 	section expires when the current assets of the Teachers Retirement Association fund equal 
28.9 	or exceed the actuarial accrued liabilities of the fund as determined in the most recent 
28.10 	actuarial valuation report for the Teachers Retirement Association fund by the actuary 
28.11 	retained under section 356.214, or on the established date for full funding under section 
28.12 	356.215, subdivision 11, whichever occurs earlier.

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

28.14 	Sec. 2. Minnesota Statutes 2012, section 354A.011, subdivision 21, is amended to read:
28.15 		Subd. 21.Retirement. (a) "Retirement" means the time after the date of cessation 
28.16 	of active teaching service by a teacher who is thereafterthen entitled to an accrued 
28.17 	retirement annuity commencingbeginning as designated by the board of trustees and 
28.18 	payable pursuant to anupon filing a valid application for an annuity filed with the board. 
28.19 	The applicable provisions of law, articles of incorporation and bylaws in effect on the date 
28.20 	of cessation of active teaching service thereafter determine the rights of the person.
28.21 	(b) For members of the St. Paul Teachers Retirement Fund Association, a right to 
28.22 	a retirement annuity requires a complete and continuous separation for 90 days from 
28.23 	employment in any form with Independent School District No. 625, including service 
28.24 	provided to the school district as an independent contractor or as an employee of an 
28.25 	independent contractor.

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

28.27 	Sec. 3. Minnesota Statutes 2012, section 354A.12, subdivision 1, is amended to read:
28.28 		Subdivision 1.Employee contributions. (a) The contribution required to be paid 
28.29 	by each member of a teachers retirement fund association is the percentage of total salary 
28.30 	specified below for the applicable association and program:

28.31		Association and Program
	Percentage of Total Salary
	
28.32	Duluth Teachers Retirement Fund Association
		
28.33		old law and new law
		
29.1		coordinated programs
		
29.2		before July 1, 2011 2013
	5.56.5 percent
	
29.3		effective July 1, 2011 2013
	6.07.0 percent
	
29.4		effective July 1, 2012 2014
	6.57.5 percent
	
29.5	St. Paul Teachers Retirement Fund Association
		
29.6		basic program before July 1, 2011
	8 percent
	
29.7		basic program after June 30, 2011
	8.25 percent
	
29.8		basic program after June 30, 2012
	8.5 percent
	
29.9		basic program after June 30, 2013
	8.75 percent
	
29.10		basic program after June 30, 2014
	9.0 percent
	
29.11		basic program after June 30, 2015
	9.5 percent
	
29.12		basic program after June 30, 2016
	10.0 percent
	
29.13		coordinated program before July 1, 2011
	5.5 percent
	
29.14		coordinated program after June 30, 2011
	5.75 percent
	
29.15		coordinated program after June 30, 2012
	6.0 percent
	
29.16		coordinated program after June 30, 2013
	6.25 percent
	
29.17		coordinated program after June 30, 2014
	6.50 percent
	
29.18		coordinated program after June 30, 2015
	7.0 percent
	
29.19		coordinated program after June 30, 2016
	7.50 percent
	
29.20 	(b) Contributions shall be made by deduction from salary and must be remitted 
29.21 	directly to the respective teachers retirement fund association at least once each month.
29.22 	(c) When an employee contribution rate changes for a fiscal year, the new 
29.23 	contribution rate is effective for the entire salary paid by the employer with the first 
29.24 	payroll cycle reported.

29.25 	EFFECTIVE DATE. This section is effective with respect to the Duluth Teachers 
29.26 	Retirement Fund Association on July 1, 2013, and is effective with respect to the St. Paul 
29.27 	Teachers Retirement Fund Association on the day following final enactment.

29.28 	Sec. 4. Minnesota Statutes 2012, section 354A.12, subdivision 2a, is amended to read:
29.29 		Subd. 2a.Employer regular and additional contributions. (a) The employing 
29.30 	units shall make the following employer contributions to teachers retirement fund 
29.31 	associations:
29.32 	(1) for any coordinated member of one of the following teachers retirement fund 
29.33 	associations in a city of the first class, the employing unit shall make a regular employer 
29.34 	contribution to the respective retirement fund association in an amount equal to the 
29.35 	designated percentage of the salary of the coordinated member as provided below:

29.36	Duluth Teachers Retirement Fund Association
		
29.37		before July 1, 2011 2013
	5.79 6.79 percent
	
29.38		effective July 1, 2011 2013
	6.297.29 percent
	
30.1		effective July 1, 2012 2014
	6.797.50 percent
	
30.2	St. Paul Teachers Retirement Fund Association
		
30.3		before July 1, 2011
	4.50 percent
	
30.4		after June 30, 2011
	4.75 percent
	
30.5		after June 30, 2012
	5.0 percent
	
30.6		after June 30, 2013
	5.25 percent
	
30.7		after June 30, 2014
	5.5 percent
	
30.8		after June 30, 2015
	6.0 percent
	
30.9		after June 30, 2016
	6.25 percent
	
30.10		after June 30, 2017
	6.5 percent
	
30.11 	(2) for any basic member of the St. Paul Teachers Retirement Fund Association, the 
30.12 	employing unit shall make a regular employer contribution to the respective retirement 
30.13 	fund in an amount according to the schedule below:

30.14		before July 1, 2011
	8.0 percent of salary
	
30.15		after June 30, 2011
	8.25 percent of salary
	
30.16		after June 30, 2012
	8.5 percent of salary
	
30.17		after June 30, 2013
	8.75 percent of salary
	
30.18		after June 30, 2014
	9.0 percent of salary
	
30.19		after June 30, 2015
	9.5 percent of salary
	
30.20		after June 30, 2016
	9.75 percent of salary
	
30.21		after June 30, 2017
	10.0 percent of salary
	
30.22 	(3) for a basic member of the St. Paul Teachers Retirement Fund Association, the 
30.23 	employing unit shall make an additional employer contribution to the respective fund in 
30.24 	an amount equal to 3.64 percent of the salary of the basic member;
30.25 	(4) for a coordinated member of the St. Paul Teachers Retirement Fund Association, 
30.26 	the employing unit shall make an additional employer contribution to the respective fund 
30.27 	in an amount equal to the applicable percentage of the coordinated member's salary, 
30.28 	as provided below:

30.29	St. Paul Teachers Retirement Fund Association
	3.84 percent
	
30.30 	(b) The regular and additional employer contributions must be remitted directly to 
30.31 	the respective teachers retirement fund association at least once each month. Delinquent 
30.32 	amounts are payable with interest under the procedure in subdivision 1a.
30.33 	(c) Payments of regular and additional employer contributions for school district 
30.34 	or technical college employees who are paid from normal operating funds must be made 
30.35 	from the appropriate fund of the district or technical college.
30.36 	(d) When an employer contribution rate changes for a fiscal year, the new 
30.37 	contribution rate is effective for the entire salary paid by the employer with the first 
30.38 	payroll cycle reported.

31.1 	EFFECTIVE DATE. This section is effective with respect to the Duluth Teachers 
31.2 	Retirement Fund Association on July 1, 2013, and is effective with respect to the St. Paul 
31.3 	Teachers Retirement Fund Association on the day following final enactment.

31.4 	Sec. 5. Minnesota Statutes 2012, section 354A.12, is amended by adding a subdivision 
31.5 	to read:
31.6 		Subd. 2c.Duluth Teachers Retirement Fund Association; employer 
31.7 	contributions for reemployed annuitants. The school district shall make the regular 
31.8 	employer contributions and additional employer contributions specified in subdivision 2a 
31.9 	on behalf of any retired member of the Duluth Teachers Retirement Fund Association who 
31.10 	is reemployed by Independent School District No. 709, including providing service to the 
31.11 	school district as an independent contractor or as an employee of an independent contractor.

31.12 	EFFECTIVE DATE. This section is effective July 1, 2013.

31.13 	Sec. 6. Minnesota Statutes 2012, section 354A.12, is amended by adding a subdivision 
31.14 	to read:
31.15 		Subd. 2d.St. Paul Teachers Retirement Fund Association; employer 
31.16 	contributions for reemployed annuitants. Independent School District No. 625 shall 
31.17 	make the regular employer contribution and additional employer contribution specified in 
31.18 	subdivision 2a, plus a supplemental contribution equal to 2.5 percent of salary, on behalf 
31.19 	of any retired member of the St. Paul Teachers Retirement Fund Association who is 
31.20 	reemployed by Independent School District No. 625, including providing service to the 
31.21 	school district as an independent contractor or as an employee of an independent contractor.

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

31.23 	Sec. 7. Minnesota Statutes 2012, section 354A.12, subdivision 3a, is amended to read:
31.24 		Subd. 3a.Special direct state aid to first class city teachers retirement fund 
31.25 	associations. (a) The state shall pay $346,000$6,346,000 as special direct state aid to 
31.26 	the Duluth Teachers Retirement Fund Association,and $2,827,000 $9,827,000 to the St. 
31.27 	Paul Teachers Retirement Fund Association and, for the former Minneapolis Teachers 
31.28 	Retirement Fund Association, $12,954,000 to the Teachers Retirement Association.
31.29 	(b) The direct state aids under this subdivision are payable October 1 annually. The 
31.30 	commissioner of management and budget shall pay the direct state aidaids specified in 
31.31 	this subdivision. The amount amounts required under this subdivision isare appropriated 
31.32 	annually from the general fund to the commissioner of management and budget.

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

32.2 	Sec. 8. Minnesota Statutes 2012, section 354A.12, subdivision 3c, is amended to read:
32.3 		Subd. 3c.Termination of supplemental contributions and direct matching 
32.4 	and state aid. (a) The supplemental contributions payable to the St. Paul Teachers 
32.5 	Retirement Fund Association by Independent School District No. 625 under section 
32.6 	423A.02, subdivision 3, or the directand all forms of state aid under subdivision 3a to the 
32.7 	St. Paul Teachers Retirement Fund Association must continue until the current assets of 
32.8 	the fund equal or exceed the actuarial accrued liability of the fund as determined in the 
32.9 	most recent actuarial report for the fund by the actuary retained under section 356.214 or 
32.10 	until June 30, 2037, whichever occurs earlier.
32.11 	(b) The aid to the Duluth Teachers Retirement Fund Association under section 
32.12 	423A.02, subdivision 3, and all forms of state aid under subdivision 3a to the Duluth 
32.13 	Teachers Retirement Fund Association must continue until the current assets of the fund 
32.14 	equal or exceed the actuarial accrued liability of the fund as determined in the most 
32.15 	recent actuarial report for the fund by the actuary retained under section 356.214 or until 
32.16 	the established date for full funding under section 356.215, subdivision 11, whichever 
32.17 	occurs earlier.

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

32.19 	Sec. 9. Minnesota Statutes 2012, section 354A.12, subdivision 7, is amended to read:
32.20 		Subd. 7.Recovery of benefit overpayments. (a) If the executive director discovers, 
32.21 	within the time period specified in subdivision 8 following the payment of a refund or 
32.22 	the accrual date of any retirement annuity, survivor benefit, or disability benefit, that 
32.23 	benefit overpayment has occurred due to using invalid service or salary, or due to any 
32.24 	erroneous calculation procedure, the executive director must recalculate the annuity or 
32.25 	benefit payable and recover any overpayment. The executive director shall recover the 
32.26 	overpayment by requiring direct repayment or by suspending or reducing the payment of a 
32.27 	retirement annuity or other benefit payable under this chapter to the applicable person or 
32.28 	the person's estate, whichever applies, until all outstanding amounts have been recovered.
32.29 	 If a benefit overpayment or improper payment of benefits occurred caused by a failure 
32.30 	of the person to satisfy length of separation requirements for retirement under section 
32.31 	354A.011, subdivision 21, the executive director shall recover the improper payments by 
32.32 	requiring direct repayment. The repayment must include interest at the rate of 0.71 percent 
32.33 	per month from the first of the month in which a monthly benefit amount was paid to the 
32.34 	first of the month in which the amount is repaid, with annual compounding.
33.1 	(b) In the event the executive director determines that an overpaid annuity or benefit 
33.2 	that is the result of invalid salary included in the average salary used to calculate the 
33.3 	payment amount must be recovered, the executive director must determine the amount of 
33.4 	the employee deductions taken in error on the invalid salary, with interest as determined 
33.5 	under 354A.37, subdivision 3, and must subtract that amount from the total annuity or 
33.6 	benefit overpayment, and the remaining balance of the overpaid annuity or benefit, if 
33.7 	any, must be recovered.
33.8 	(c) If the invalid employee deductions plus interest exceed the amount of the 
33.9 	overpaid benefits, the balance must be refunded to the person to whom the benefit or 
33.10 	annuity is being paid.
33.11 	(d) Any invalid employer contributions reported on the invalid salary must be 
33.12 	credited against future contributions payable by the employer.
33.13 	(e) If a member or former member, who is receiving a retirement annuity or 
33.14 	disability benefit for which an overpayment is being recovered, dies before recovery of the 
33.15 	overpayment is completed and an optional annuity or refund is payable, the remaining 
33.16 	balance of the overpaid annuity or benefit must continue to be recovered from the payment 
33.17 	to the optional annuity beneficiary or refund recipient.
33.18 	(f) The board of trustees shall adopt policies directing the period of time and manner 
33.19 	for the collection of any overpaid retirement or optional annuity, and survivor or disability 
33.20 	benefit, or a refund that the executive director determines must be recovered as provided 
33.21 	under this section.

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

33.23 	Sec. 10. Minnesota Statutes 2012, section 354A.27, is amended by adding a 
33.24 	subdivision to read:
33.25 		Subd. 6a.Postretirement adjustment transition. (a) If the funded ratio of the 
33.26 	retirement plan based on the actuarial value of assets is at least 90 percent as reported 
33.27 	in the most recent actuarial valuation prepared under sections 356.214 and 356.215, 
33.28 	this subdivision expires and subsequent postretirement adjustments are governed by 
33.29 	subdivision 7.
33.30 	(b) Each annuity or benefit recipient of the retirement plan who has been receiving 
33.31 	that annuity or benefit for at least 12 months as of the applicable January 1 is eligible to 
33.32 	receive a postretirement adjustment of one percent, payable on January 1.

33.33 	EFFECTIVE DATE. This section is effective July 1, 2013, and applies to the 
33.34 	January 1, 2014, postretirement increase.

34.1 	Sec. 11. Minnesota Statutes 2012, section 354A.27, subdivision 7, is amended to read:
34.2 		Subd. 7.Calculation of postretirement adjustments. (a) This subdivision applies 
34.3 	if subdivision 66a has expired.
34.4 	(b) A percentage adjustment must be computed and paid under this subdivision to 
34.5 	eligible persons under subdivision 5. This adjustment is determined by reference to the 
34.6 	Consumer Price Index for urban wage earners and clerical workers all items index as 
34.7 	reported by the Bureau of Labor Statistics within the United States Department of Labor 
34.8 	each year as part of the determination of annual cost-of-living adjustments to recipients 
34.9 	of federal old-age, survivors, and disability insurance. For calculations of cost-of-living 
34.10 	adjustments under paragraph (c), the term "average third quarter Consumer Price Index 
34.11 	value" means the sum of the monthly index values as initially reported by the Bureau of 
34.12 	Labor Statistics for the months of July, August, and September, divided by 3.
34.13 	(c) Before January 1 of each year, the executive director must calculate the amount 
34.14 	of the cost-of-living adjustment by dividing the most recent average third quarter index 
34.15 	value by the same average third quarter index value from the previous year, subtract one 
34.16 	from the resulting quotient, and express the result as a percentage amount, which must be 
34.17 	rounded to the nearest one-tenth of one percent.
34.18 	(d) The amount calculated under paragraph (c) is the full cost-of-living adjustment 
34.19 	to be applied as a permanent increase to the regular payment of each eligible member 
34.20 	on January 1 of the next calendar year. For any eligible member whose effective date 
34.21 	of benefit commencement occurred during the calendar year before the cost-of-living 
34.22 	adjustment is applied, the full increase amount must be prorated on the basis of whole 
34.23 	calendar quarters in benefit payment status in the calendar year prior to the January 1 on 
34.24 	which the cost-of-living adjustment is applied, calculated to the third decimal place.
34.25 	(e) The adjustment must not be less than zero nor greater than five percent.
34.26 	(f) If the funding ratio of the plan as determined in the most recent actuarial 
34.27 	valuation using the actuarial value of assets is less than 80 percent there will be no 
34.28 	postretirement adjustment the following January 1.

34.29 	EFFECTIVE DATE. This section is effective July 1, 2013.

34.30 	Sec. 12. Minnesota Statutes 2012, section 354A.31, subdivision 3, is amended to read:
34.31 		Subd. 3.Resumption of teaching after commencement of a retirement annuity.
 34.32 	(a) Any person who retired and is receiving a coordinated program retirement annuity 
34.33 	under the provisions of sections 354A.31 to 354A.41 or any person receiving a basic 
34.34 	program retirement annuity under the governing sections in the articles of incorporation 
34.35 	or bylaws and who has resumed teaching service for the school district in which the 
35.1 	teachers retirement fund association exists is entitled to continue to receive retirement 
35.2 	annuity payments, except that all or a portion of the annuity payments must be deferred 
35.3 	during the calendar year immediately following the calendar year in which the person's 
35.4 	salary from the teaching service is in an amount greater than $46,000. The amount of the 
35.5 	annuity deferral is one-third the salary amount in excess of $46,000 and must be deducted 
35.6 	from the annuity payable for the calendar year immediately following the calendar year 
35.7 	in which the excess amount was earned.
35.8 	(b) If the person is retired for only a fractional part of the calendar year during the 
35.9 	initial year of retirement, the maximum reemployment salary exempt from triggering a 
35.10 	deferral as specified in this subdivision must be prorated for that calendar year.
35.11 	(c) After a person has reached the Social Security normal retirement age, no deferral 
35.12 	requirement is applicable regardless of the amount of any compensation received for 
35.13 	teaching service for the school district in which the teachers retirement fund association 
35.14 	exists.
35.15 	(d) The amount of the retirement annuity deferral must be handled or disposed 
35.16 	of as provided in section 356.47.
35.17 	(e) Notwithstanding other paragraphs of this subdivision, for any retired Duluth 
35.18 	Teachers Retirement Fund Association member whose effective date of retirement is after 
35.19 	June 30, 2013, amounts specified as deferred under this subdivision must instead be 
35.20 	forfeited to the Duluth Teachers Retirement Fund Association fund.
35.21 	(f) Notwithstanding other paragraphs of this subdivision, for any retired St. Paul 
35.22 	Teachers Retirement Fund Association basic or coordinated program member whose 
35.23 	effective date of retirement is after June 30, 2013, amounts specified as deferred under 
35.24 	this subdivision must instead be forfeited to the St. Paul Teachers Retirement Fund 
35.25 	Association fund.
35.26 	(e)(g) For the purpose of this subdivision, salary from teaching service includes: (i) 
35.27 	all income for services performed as a consultant or independent contractor; or income 
35.28 	resulting from working with the school district in any capacity; and (ii) the greater of either 
35.29 	the income received or an amount based on the rate paid with respect to an administrative 
35.30 	position, consultant, or independent contractor in the school district in which the teachers 
35.31 	retirement fund association exists and at the same level as the position occupied by the 
35.32 	person who resumes teaching service.
35.33 	(f)(h) On or before February 15 of each year, each applicable employing unit 
35.34 	shall report to the teachers retirement fund association the amount of postretirement 
35.35 	salary as defined in this subdivision, earned as a teacher, consultant, or independent 
35.36 	contractor during the previous calendar year by each retiree of the teachers retirement 
36.1 	fund association for teaching service performed after retirement. The report must be in 
36.2 	a format approved by the executive secretary or director.

36.3 	EFFECTIVE DATE. This section is effective with respect to the Duluth Teachers 
36.4 	Retirement Fund Association on July 1, 2013, and is effective with respect to the St. Paul 
36.5 	Teachers Retirement Fund Association the day following final enactment.

36.6 	Sec. 13. Minnesota Statutes 2012, section 354A.31, subdivision 4, is amended to read:
36.7 		Subd. 4.Computation of normal coordinated retirement annuity; St. Paul 
36.8 	fund. (a) This subdivision applies to the coordinated program of the St. Paul Teachers 
36.9 	Retirement Fund Association.
36.10 	(b) The normal coordinated retirement annuity is an amount equal to a retiring 
36.11 	coordinated member's average salary under section 354A.011, subdivision 7a, multiplied 
36.12 	by the retirement annuity formula percentage.
36.13 	(c) This paragraph, in conjunction with subdivision 6, applies to a person who first 
36.14 	became a member or a member in a pension fund listed in section 356.30, subdivision 3, 
36.15 	before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces 
36.16 	a higher annuity amount, in which case paragraph (d) will apply. For service rendered 
36.17 	before July 1, 2015, the retirement annuity formula percentage for purposes of this 
36.18 	paragraph is the percent specified in section 356.315, subdivision 1, per year for each year 
36.19 	of coordinated service for the first ten years and the percent specified in section 356.315, 
36.20 	subdivision 2, for each year of coordinated service thereafter. For service rendered after 
36.21 	June 30, 2015, the retirement annuity formula percentage for purposes of this paragraph 
36.22 	is the percent specified in section 356.315, subdivision 1a, per year for each year of 
36.23 	coordinated service for the first ten years and the percent specified in section 356.315, 
36.24 	subdivision 2b, for each year of coordinated service thereafter.
36.25 	(d) This paragraph applies to a person who has become at least 55 years old and who 
36.26 	first becomes a member after June 30, 1989, and to any other member who has become 
36.27 	at least 55 years old and whose annuity amount, when calculated under this paragraph 
36.28 	and in conjunction with subdivision 7 is higher than it is when calculated under paragraph 
36.29 	(c), in conjunction with the provisions of subdivision 6. The retirement annuity formula 
36.30 	percentage for purposes of this paragraph is the percent specified in section 356.315, 
36.31 	subdivision 2, for each year of coordinated service rendered before July 1, 2015, and 
36.32 	the percent specified in section 356.215, subdivision 2b, for each year of coordinated 
36.33 	service thereafter.

36.34 	EFFECTIVE DATE. This section is effective July 1, 2014.

37.1 	Sec. 14. Minnesota Statutes 2012, section 354A.31, subdivision 4a, is amended to read:
37.2 		Subd. 4a.Computation of normal coordinated retirement annuity; Duluth 
37.3 	fund. (a) This subdivision applies to the new law coordinated program of the Duluth 
37.4 	Teachers Retirement Fund Association.
37.5 	(b) The normal coordinated retirement annuity is an amount equal to a retiring 
37.6 	coordinated member's average salary under section 354A.011, subdivision 7a, multiplied 
37.7 	by the retirement annuity formula percentage.
37.8 	(c) This paragraph, in conjunction with subdivision 6, applies to a person who first 
37.9 	became a member or a member in a pension fund listed in section 356.30, subdivision 3, 
37.10 	before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a 
37.11 	higher annuity amount, in which case paragraph (d) applies. The retirement annuity 
37.12 	formula percentage for purposes of this paragraph is the percent specified in section 
37.13 	356.315, subdivision 1, per year for each year of coordinated program service for the first 
37.14 	ten years rendered through June 30, 2013, and the percent specified in section 356.315, 
37.15 	subdivision 1a, per year for each year of coordinated program service rendered after June 
37.16 	30, 2013, and the percent specified in section 356.315, subdivision 2, for each subsequent 
37.17 	year of coordinated program service through June 30, 2013, and the percent specified in 
37.18 	section 356.315, subdivision 2b, per year for each year of coordinated program service 
37.19 	rendered after June 30, 2013.
37.20 	(d) This paragraph applies to a person who is at least 55 years old and who first 
37.21 	becomes a member after June 30, 1989, and to any other member who is at least 55 years 
37.22 	old and whose annuity amount, when calculated under this paragraph and in conjunction 
37.23 	with subdivision 7, is higher than it is when calculated under paragraph (c) in conjunction 
37.24 	with subdivision 6. The retirement annuity formula percentage for purposes of this 
37.25 	paragraph is the percent specified in section 356.315, subdivision 2, for each year of 
37.26 	coordinated program service through June 30, 2013, and the percent specified in section 
37.27 	356.315, subdivision 2b, per year for each year of coordinated program service rendered 
37.28 	after June 30, 2013.

37.29 	EFFECTIVE DATE. This section is effective July 1, 2013.

37.30 	Sec. 15. Minnesota Statutes 2012, section 354A.31, subdivision 7, is amended to read:
37.31 		Subd. 7.Actuarial Reduction for early retirement. (a) This subdivision applies to 
37.32 	a person who has become at least 55 years old and first becomes a coordinated member 
37.33 	after June 30, 1989, and to any other coordinated member who has become at least 55 
37.34 	years old and whose annuity is higher when calculated using the retirement annuity 
37.35 	formula percentage in subdivision 4, paragraph (d), andor subdivision 4a, paragraph (d), 
38.1 	as applicable, in conjunction with this subdivision than when calculated under subdivision 
38.2 	4, paragraph (c), or subdivision 4a, paragraph (c), in conjunction with subdivision 6.
38.3 	(b) A coordinated member who retires before the full benefitnormal retirement 
38.4 	age shall be paid the retirement annuity calculated using the retirement annuity formula 
38.5 	percentage in subdivision 4, paragraph (d), or subdivision 4a, paragraph (d), reduced so 
38.6 	that the reduced annuity is the actuarial equivalent of the annuity that would be payable 
38.7 	to the member if the member deferred receipt of the annuity and the annuity amount 
38.8 	were augmented at an annual rate of three percent compounded annually from the day 
38.9 	the annuity begins to accrue until the normal retirement age if the employee became an 
38.10 	employee before July 1, 2006, and at 2.5 percent compounded annually from the day the 
38.11 	annuity begins to accrue until the normal retirement age if the person initially becomes a 
38.12 	teacher after June 30, 2006. whichever is applicable, multiplied by the applicable early 
38.13 	retirement factor specified below:

38.14				Under age 62
	Age 62 or older
	
38.15				or less than 30 years of service
	with 30 years of service
	
38.16	Normal retirement age:
	65
	66
	65
	66
	
38.17		Age at retirement
					
38.18			55
	0.5376
	0.4592
			
38.19			56
	0.5745
	0.4992
			
38.20			57
	0.6092
	0.5370
			
38.21			58
	0.6419
	0.5726
			
38.22			59
	0.6726
	0.6062
			
38.23			60
	0.7354
	0.6726
			
38.24			61
	0.7947
	0.7354
			
38.25			62
	0.8507
	0.7947
	0.8831
	0.8389
	
38.26			63
	0.9035
	0.8507
	0.9246
	0.8831
	
38.27			64
	0.9533
	0.9035
	0.9635
	0.9246
	
38.28			65
	1.0000
	0.9533
	1.0000
	0.9635
	
38.29			66
		1.0000
		1.0000
	
38.30 	For normal retirement ages between ages 65 and 66, the early retirement factors will 
38.31 	be determined by linear interpolation between the early retirement factors applicable for 
38.32 	normal retirement ages 65 and 66.

38.33 	EFFECTIVE DATE. This section is effective July 1, 2013.

38.34 	Sec. 16. Minnesota Statutes 2012, section 354A.35, subdivision 2, is amended to read:
38.35 		Subd. 2.Death while eligible to retire; surviving spouse optional annuity. (a) 
38.36 	The surviving spouse of a vested coordinated member who dies prior to retirement may 
38.37 	elect to receive, instead of a refund with interest under subdivision 1, an annuity equal 
39.1 	to the 100 percent joint and survivor annuity the member could have qualified for had 
39.2 	the member terminated service on the date of death. The surviving spouse eligible for 
39.3 	a surviving spouse benefit under this paragraph may apply for the annuity at any time 
39.4 	after the date on which the deceased employee would have attained the required age for 
39.5 	retirement based on the employee's allowable service. A surviving spouse eligible for 
39.6 	surviving spouse benefits under paragraph (b) or (c) may apply for an annuity at any time 
39.7 	after the member's death. The member's surviving spouse shall be paid a joint and survivor 
39.8 	annuity under section 354A.32 and computed under section 354A.31.
39.9 	(b) If the member was under age 55 and has credit for at least 30 years of allowable 
39.10 	service on the date of death, the surviving spouse may elect to receive a 100 percent joint 
39.11 	and survivor annuity based on the age of the member and surviving spouse on the date 
39.12 	of death. The annuity is payable using the full early retirement reduction under section 
39.13 	354A.31, subdivision 6, paragraph (a), to age 55 and one-half of the early retirement 
39.14 	reduction from age 55 to the age payment begins.
39.15 	(c) If a vested member of the Duluth Teachers Retirement Fund Association was 
39.16 	under age 55 on the date of death but did not yet qualify for retirement, the surviving 
39.17 	spouse may elect to receive the 100 percent joint and survivor annuity based on the age 
39.18 	of the member and the survivor at the time of death. The annuity is payable using the 
39.19 	full early retirement reduction under section 354A.31, subdivision 6 or 7, to age 55 and 
39.20 	one-half of the early retirement reduction from age 55 to the date payment begins.
39.21 	(d) If a vested member of the St. Paul Teachers Retirement Fund Association was 
39.22 	under age 55 on the date of death but did not yet qualify for retirement, the surviving 
39.23 	spouse may elect to receive the 100 percent joint and survivor annuity based on the age 
39.24 	of the member and the survivor at the time of death. The annuity is payable using the 
39.25 	full early retirement reduction under section 354A.31, subdivision 6 or 7, to age 55 and 
39.26 	one-half of the actuarial equivalent reduction from age 55 to the date payment begins. 
39.27 	The actuarial equivalent reduction is calculated so that the reduced annuity is the actuarial 
39.28 	equivalent of the annuity that would be payable to the member if the member deferred 
39.29 	receipt of the annuity and the annuity amount were augmented at an annual rate of 2.5 
39.30 	percent compounded annually from the day the annuity begins to accrue until the normal 
39.31 	retirement age. 
39.32 	(d) (e) Sections 354A.37, subdivision 2, and 354A.39 apply to a deferred annuity 
39.33 	or surviving spouse benefit payable under this section. The benefits are payable for the 
39.34 	life of the surviving spouse, or upon expiration of the term certain benefit payment under 
39.35 	subdivision 2b.

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

40.1 	Sec. 17. Minnesota Statutes 2012, section 356.215, subdivision 8, is amended to read:
40.2 		Subd. 8.Interest and salary assumptions. (a) The actuarial valuation must use 
40.3 	the applicable following preretirement interest assumption and the applicable following 
40.4 	postretirement interest assumption:
40.5 	(1) select and ultimate interest rate assumption

40.6
40.7
40.8
40.9	plan
	ultimate 
preretirement 
interest rate 
assumption
	ultimate 
postretirement 
interest rate 
assumption
	
40.10	general state employees retirement plan
	 8.5%
	 6.0%
	
40.11	correctional state employees retirement plan
	8.5
	6.0
	
40.12	State Patrol retirement plan
	8.5
	6.0
	
40.13
40.14
40.15	legislators retirement plan
	 0.0 
	 -2.0 until June 30, 
2040, and -2.5 after 
June 30, 2040 
	
40.16
40.17
40.18	elective state officers retirement plan
	 0.0 
	 -2.0 until June 30, 
2040, and -2.5 after 
June 30, 2040 
	
40.19	judges retirement plan
	8.5
	6.0
	
40.20	general public employees retirement plan
	8.5
	6.0
	
40.21	public employees police and fire retirement plan
	8.5
	6.0
	
40.22
40.23	local government correctional service 
retirement plan
	8.5
	6.0
	
40.24	teachers retirement plan
	8.5
	6.0
	
40.25	Duluth teachers retirement plan
	8.5
	8.5
	
40.26	St. Paul teachers retirement plan
	8.5
	8.5
	
40.27 	Except for the legislators retirement plan and the elective state officers retirement 
40.28 	plan, the select preretirement interest rate assumption for the period after June 30, 2012, 
40.29 	through June 30, 2017, is 8.0 percent. Except for the legislators retirement plan and the 
40.30 	elective state officers retirement plan, the select postretirement interest rate assumption for 
40.31 	the period after June 30, 2012, through June 30, 2017, is 5.5 percent, except for the Duluth 
40.32 	teachers retirement plan and the St. Paul teachers retirement plan, each with a select 
40.33 	postretirement interest rate assumption for the period after June 30, 2012, through June 
40.34 	30, 2017, of 8.0 percent.
40.35 	(2) single rate preretirement and postretirement interest rate assumption

40.36
40.37	plan
	interest rate 
assumption
		
40.38	Bloomington Fire Department Relief Association
	6.0
		
40.39
40.40	local monthly benefit volunteer firefighters relief 
associations
	5.0
		
41.1 	(b) The actuarial valuation must use the applicable following single rate future salary 
41.2 	increase assumption, the applicable following modified single rate future salary increase 
41.3 	assumption, or the applicable following graded rate future salary increase assumption:
41.4 	(1) single rate future salary increase assumption

41.5	plan
	future salary increase assumption
	
41.6	legislators retirement plan
		5.0%
	
41.7	judges retirement plan
		3.0 
	
41.8
41.9	Bloomington Fire Department Relief 
Association
		4.0
	
41.10 	(2) age-related future salary increase age-related select and ultimate future salary 
41.11 	increase assumption or graded rate future salary increase assumption

41.12	plan
	future salary increase assumption
	
41.13	local government correctional service retirement plan
	assumption C
	
41.14	Duluth teachers retirement plan
	assumption A
	
41.15	St. Paul teachers retirement plan
	assumption B
	
41.16 	For plans other than the Duluth teachers 
41.17 	retirement plan, the select calculation 
41.18 	is: during the designated select period, a 
41.19 	designated percentage rate is multiplied by 
41.20 	the result of the designated integer minus T, 
41.21 	where T is the number of completed years 
41.22 	of service, and is added to the applicable 
41.23 	future salary increase assumption. The 
41.24 	designated select period is ten years and the 
41.25 	designated integer is ten for all retirement 
41.26 	plans covered by this clause the Duluth 
41.27 	Teachers Retirement Fund Association 
41.28 	and for the local government correctional 
41.29 	service retirement plan and 15 for the St. 
41.30 	Paul Teachers Retirement Fund Association. 
41.31 	The designated percentage rate is 0.30.2 
41.32 	percent for the St. Paul Teachers Retirement 
41.33 	Fund Association. The select calculation 
41.34 	for the Duluth Teachers Retirement Fund 
41.35 	Association is 8.00 percent per year for 
41.36 	service years one through seven, 7.25 percent 
41.37 	per year for service years seven and eight, 
42.1 	and 6.50 percent per year for service years 
42.2 	eight and nine.
42.3 	The ultimate future salary increase assumption is:

42.4	age
	A
	B
	C
		
42.5	16
	8.00%6.00%
	6.90%5.90%
	9.00%
		
42.6	17
	8.006.00
	6.905.90
	9.00
		
42.7	18
	8.006.00
	6.905.90
	9.00
		
42.8	19
	8.006.00
	6.905.90
	9.00
		
42.9	20
	6.906.00
	6.905.90
	9.00
		
42.10	21
	6.906.00
	6.905.90
	8.75
		
42.11	22
	6.906.00
	6.905.90
	8.50
		
42.12	23
	6.856.00
	6.855.85
	8.25
		
42.13	24
	6.806.00
	6.805.80
	8.00
		
42.14	25
	6.756.00
	6.755.75
	7.75
		
42.15	26
	6.706.00
	6.705.70
	7.50
		
42.16	27
	6.656.00
	6.655.65
	7.25
		
42.17	28
	6.606.00
	6.605.60
	7.00
		
42.18	29
	6.556.00
	6.555.55
	6.75
		
42.19	30
	6.506.00
	6.505.50
	6.75
		
42.20	31
	6.456.00
	6.455.45
	6.50
		
42.21	32
	6.406.00
	6.405.40
	6.50
		
42.22	33
	6.356.00
	6.355.35
	6.50
		
42.23	34
	6.306.00
	6.305.30
	6.25
		
42.24	35
	6.256.00
	6.255.25
	6.25
		
42.25	36
	6.205.86
	6.205.20
	6.00
		
42.26	37
	6.155.73
	6.155.15
	6.00
		
42.27	38
	6.105.59
	6.105.10
	6.00
		
42.28	39
	6.055.45
	6.055.05
	5.75
		
42.29	40
	6.005.31
	6.005.00
	5.75
		
42.30	41
	5.905.18
	5.954.95
	5.75
		
42.31	42
	5.805.04
	5.904.90
	5.50
		
42.32	43
	5.704.90
	5.854.85
	5.25
		
42.33	44
	5.604.76
	5.804.80
	5.25
		
42.34	45
	5.504.63
	5.754.75
	5.00
		
42.35	46
	5.404.49
	5.704.70
	5.00
		
42.36	47
	5.304.35
	5.654.65
	5.00
		
42.37	48
	5.204.21
	5.604.60
	5.00
		
42.38	49
	5.104.08
	5.554.55
	5.00
		
42.39	50
	5.003.94
	5.504.50
	5.00
		
42.40	51
	4.903.80
	5.454.45
	5.00
		
42.41	52
	4.803.66
	5.404.40
	5.00
		
42.42	53
	4.703.53
	5.354.35
	5.00
		
42.43	54
	4.603.39
	5.304.30
	5.00
		
43.1	55
	4.503.25
	5.254.25
	4.75
		
43.2	56
	4.403.25
	5.204.20
	4.75
		
43.3	57
	4.303.25
	5.154.15
	4.50
		
43.4	58
	4.203.25
	5.104.10
	4.25
		
43.5	59
	4.103.25
	5.054.05
	4.25
		
43.6	60
	4.003.25
	5.004.00
	4.25
		
43.7	61
	3.903.25
	5.004.00
	4.25
		
43.8	62
	3.803.25
	5.004.00
	4.25
		
43.9	63
	3.703.25
	5.004.00
	4.25
		
43.10	64
	3.603.25
	5.004.00
	4.25
		
43.11	65
	3.503.25
	5.004.00
	4.00
		
43.12	66
	3.503.25
	5.004.00
	4.00
		
43.13	67
	3.503.25
	5.004.00
	4.00
		
43.14	68
	3.503.25
	5.004.00
	4.00
		
43.15	69
	3.503.25
	5.004.00
	4.00
		
43.16	70
	3.503.25
	5.004.00
	4.00
		
43.17 	(3) service-related ultimate future salary increase assumption

43.18
43.19	general state employees retirement plan of the 
Minnesota State Retirement System
	assumption A
	
43.20
43.21	general employees retirement plan of the Public 
Employees Retirement Association
	assumption B
	
43.22	Teachers Retirement Association
	assumption C
	
43.23	public employees police and fire retirement plan
	assumption D
	
43.24	State Patrol retirement plan
	assumption E
	
43.25
43.26	correctional state employees retirement plan of the 
Minnesota State Retirement System
	assumption F

43.27
43.28	service 
length
	A
	B
	C
	D
	E
	F
	
43.29	1
	10.50%
	12.03%
	12.00%
	13.00%
	8.00%
	6.00%
	
43.30	2
	8.10
	8.90
	9.00
	11.00
	7.50
	5.85
	
43.31	3
	6.90
	7.46
	8.00
	9.00
	7.00
	5.70
	
43.32	4
	6.20
	6.58
	7.50
	8.00
	6.75
	5.55
	
43.33	5
	5.70
	5.97
	7.25
	6.50
	6.50
	5.40
	
43.34	6
	5.30
	5.52
	7.00
	6.10
	6.25
	5.25
	
43.35	7
	5.00
	5.16
	6.85
	5.80
	6.00
	5.10
	
43.36	8
	4.70
	4.87
	6.70
	5.60
	5.85
	4.95
	
43.37	9
	4.50
	4.63
	6.55
	5.40
	5.70
	4.80
	
43.38	10
	4.40
	4.42
	6.40
	5.30
	5.55
	4.65
	
43.39	11
	4.20
	4.24
	6.25
	5.20
	5.40
	4.55
	
43.40	12
	4.10
	4.08
	6.00
	5.10
	5.25
	4.45
	
43.41	13
	4.00
	3.94
	5.75
	5.00
	5.10
	4.35
	
43.42	14
	3.80
	3.82
	5.50
	4.90
	4.95
	4.25
	
43.43	15
	3.70
	3.70
	5.25
	4.80
	4.80
	4.15
	
44.1	16
	3.60
	3.60
	5.00
	4.80
	4.65
	4.05
	
44.2	17
	3.50
	3.51
	4.75
	4.80
	4.50
	3.95
	
44.3	18
	3.50
	3.50
	4.50
	4.80
	4.35
	3.85
	
44.4	19
	3.50
	3.50
	4.25
	4.80
	4.20
	3.75
	
44.5	20
	3.50
	3.50
	4.00
	4.80
	4.05
	3.75
	
44.6	21
	3.50
	3.50
	3.90
	4.70
	4.00
	3.75
	
44.7	22
	3.50
	3.50
	3.80
	4.60
	4.00
	3.75
	
44.8	23
	3.50
	3.50
	3.70
	4.50
	4.00
	3.75
	
44.9	24
	3.50
	3.50
	3.60
	4.50
	4.00
	3.75
	
44.10	25
	3.50
	3.50
	3.50
	4.50
	4.00
	3.75
	
44.11	26
	3.50
	3.50
	3.50
	4.50
	4.00
	3.75
	
44.12	27
	3.50
	3.50
	3.50
	4.50
	4.00
	3.75
	
44.13	28
	3.50
	3.50
	3.50
	4.50
	4.00
	3.75
	
44.14	29
	3.50
	3.50
	3.50
	4.50
	4.00
	3.75
	
44.15
44.16	30 or 
more
	3.50
	3.50
	3.50
	4.50
	4.00
	3.75
	
44.17 	(c) The actuarial valuation must use the applicable following payroll growth 
44.18 	assumption for calculating the amortization requirement for the unfunded actuarial 
44.19 	accrued liability where the amortization retirement is calculated as a level percentage 
44.20 	of an increasing payroll:

44.21	plan
	payroll growth assumption
	
44.22
44.23	general state employees retirement plan of the 
Minnesota State Retirement System
	3.75%
	
44.24	correctional state employees retirement plan
	3.75
	
44.25	State Patrol retirement plan
	3.75
	
44.26	judges retirement plan
	3.00
	
44.27
44.28	general employees retirement plan of the Public 
Employees Retirement Association
	3.75
	
44.29	public employees police and fire retirement plan
	3.75
	
44.30	local government correctional service retirement plan
	3.75
	
44.31	teachers retirement plan
	3.75
	
44.32	Duluth teachers retirement plan
	4.503.50
	
44.33	St. Paul teachers retirement plan
	5.004.00
	
44.34 	(d) The assumptions set forth in paragraphs (b) and (c) continue to apply, unless a 
44.35 	different salary assumption or a different payroll increase assumption:
44.36 	(1) has been proposed by the governing board of the applicable retirement plan;
44.37 	(2) is accompanied by the concurring recommendation of the actuary retained under 
44.38 	section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the 
44.39 	most recent actuarial valuation report if section 356.214 does not apply; and
44.40 	(3) has been approved or deemed approved under subdivision 18.

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

45.2 	Sec. 18. Minnesota Statutes 2012, section 356.47, subdivision 1, is amended to read:
45.3 		Subdivision 1.Application. (a) This section applies to the balance of annual 
45.4 	retirement annuities on the amount of retirement annuity reductions after reemployed 
45.5 	annuitant earnings limitations for retirement plans governed by section 352.115, 
45.6 	subdivision 10; 353.37; 354.44, subdivision 5; or 354A.31, subdivision 3.
45.7 	(b) This section also applies to the balance of annual retirement annuities on 
45.8 	the amount of retirement annuity reductions under section 354A.31, subdivision 3, for 
45.9 	members of the Duluth Teachers Retirement Fund Association whose effective date of 
45.10 	retirement is before July 1, 2013.
45.11 	(c) This section also applies to the balance of annual retirement annuities on 
45.12 	the amount of retirement annuity reductions under section 354A.31, subdivision 3, for 
45.13 	members of the St. Paul Teachers Retirement Fund Association whose effective date of 
45.14 	retirement is before July 1, 2013.

45.15 	EFFECTIVE DATE. This section is effective with respect to the Duluth Teachers 
45.16 	Retirement Fund Association on July 1, 2013, and is effective with respect to the St. Paul 
45.17 	Teachers Retirement Fund Association the day following final enactment.

45.18 	Sec. 19. Minnesota Statutes 2012, section 423A.02, subdivision 5, is amended to read:
45.19 		Subd. 5.Termination of state aid programs. The amortization state aid, 
45.20 	supplemental amortization state aid, and additional amortization state aid programs 
45.21 	terminate as of the December 31, next following the date of the actuarial valuation when 
45.22 	the assets of the St. Paul Teachers Retirement Fund Association equal the actuarial accrued 
45.23 	liability of that plan or December 31, 2009 June 30, 2037, whichever is later earlier.

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

45.25 	Sec. 20. DULUTH TEACHERS RETIREMENT FUND ASSOCIATION BYLAW 
45.26 	AMENDMENT AUTHORIZATION.
 45.27 	Consistent with Minnesota Statutes, section 354A.12, subdivision 4, the Duluth 
45.28 	Teachers Retirement Fund Association is authorized to amend its articles of incorporation 
45.29 	or its bylaws to specify the revised contribution rates under sections 3 and 4, required 
45.30 	employee contributions on behalf of reemployed annuitants as specified under section 5, 
45.31 	and revised treatment of reemployed annuitant holding accounts under sections 12 and 18.

45.32 	EFFECTIVE DATE. This section is effective July 1, 2013.

46.1 	Sec. 21. ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION BYLAW 
46.2 	AMENDMENT AUTHORIZATION.
 46.3 	Consistent with Minnesota Statutes, section 354A.12, subdivision 4, the St. Paul 
46.4 	Teachers Retirement Fund Association is authorized to amend its articles of incorporation 
46.5 	or its bylaws to apply the reduction factors stated in section 15 rather than the actuarial 
46.6 	reduction factors previously authorized.

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

46.8 	Sec. 22.  REPEALER.
 46.9 	Minnesota Statutes 2012, section 354A.27, subdivision 6, is repealed.

46.10 	ARTICLE 6
46.11 	JUDGES RETIREMENT PLAN FINANCIAL SOLVENCY MEASURES

46.12 	Section 1. Minnesota Statutes 2012, section 356.315, is amended by adding a 
46.13 	subdivision to read:
46.14 		Subd. 8a.Judges plan. The applicable benefit accrual rate is 2.5 percent.

46.15 	EFFECTIVE DATE. This section is effective July 1, 2013.

46.16 	Sec. 2. Minnesota Statutes 2012, section 356.415, subdivision 1, is amended to read:
46.17 		Subdivision 1.Annual postretirement adjustments; generally. (a) Except as 
46.18 	otherwise provided in subdivision 1a, 1b, 1c, 1d, or 1e, or 1f, retirement annuity, disability 
46.19 	benefit, or survivor benefit recipients of a covered retirement plan are entitled to a 
46.20 	postretirement adjustment annually on January 1, as follows:
46.21 	(1) a postretirement increase of 2.5 percent must be applied each year, effective 
46.22 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has 
46.23 	been receiving an annuity or a benefit for at least 12 full months prior to the January 1 
46.24 	increase; and
46.25 	(2) for each annuitant or benefit recipient who has been receiving an annuity or a 
46.26 	benefit amount for at least one full month, an annual postretirement increase of 1/12 of 2.5 
46.27 	percent for each month that the person has been receiving an annuity or benefit must be 
46.28 	applied, effective on January 1 following the calendar year in which the person has been 
46.29 	retired for less than 12 months.
46.30 	(b) The increases provided by this subdivision commence on January 1, 2010.
47.1 	(c) An increase in annuity or benefit payments under this section must be made 
47.2 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
47.3 	executive director of the covered retirement plan requesting that the increase not be made.
47.4 	(d) The retirement annuity payable to a person who retires before becoming eligible 
47.5 	for Social Security benefits and who has elected the optional payment as provided in 
47.6 	section 353.29, subdivision 6, must be treated as the sum of a period certain retirement 
47.7 	annuity and a life retirement annuity for the purposes of any postretirement adjustment. 
47.8 	The period certain retirement annuity plus the life retirement annuity must be the 
47.9 	annuity amount payable until age 62 for section 353.29, subdivision 6. A postretirement 
47.10 	adjustment granted on the period certain retirement annuity must terminate when the 
47.11 	period certain retirement annuity terminates.

47.12 	EFFECTIVE DATE. This section is effective July 1, 2013.

47.13 	Sec. 3. Minnesota Statutes 2012, section 356.415, is amended by adding a subdivision 
47.14 	to read:
47.15 		Subd. 1f.Annual postretirement adjustments; Minnesota State Retirement 
47.16 	System judges retirement plan. (a) The increases provided under this subdivision begin 
47.17 	on January 1, 2014, and are in lieu of increases under subdivision 1 or 1a for retirement 
47.18 	annuity, disability benefit, or survivor benefit recipients of the judges retirement plan.
47.19 	(b) Retirement annuity, disability benefit, or survivor benefit recipients of the 
47.20 	judges retirement plan are entitled to a postretirement adjustment annually on January 
47.21 	1, as follows:
47.22 	(1) a postretirement increase of 1.75 percent must be applied each year, effective 
47.23 	on January 1, to the monthly annuity or benefit of each annuitant or benefit recipient 
47.24 	who has been receiving an annuity or a benefit for at least 18 full months before the 
47.25 	January 1 increase; and
47.26 	(2) for each annuitant or benefit recipient who has been receiving an annuity or a 
47.27 	benefit for at least six full months, an annual postretirement increase of 1/12 of 1.75 
47.28 	percent for each month that the person has been receiving an annuity or benefit must be 
47.29 	applied, effective January 1, following the calendar year in which the person has been 
47.30 	retired for at least six months, but has been retired for less than 18 months.
47.31 	(c) Increases under this subdivision terminate on December 31 of the calendar 
47.32 	year in which the actuarial valuation prepared by the approved actuary under sections 
47.33 	356.214 and 356.215 and the standards for actuarial work promulgated by the Legislative 
47.34 	Commission on Pensions and Retirement indicates that the market value of assets of the 
47.35 	judges retirement plan equals or exceeds 70 percent of the actuarial accrued liability of 
48.1 	the retirement plan. Increases under subdivision 1 or 1a, whichever is applicable, begin 
48.2 	on the January 1 next following that date.
48.3 	(d) An increase in annuity or benefit payments under this subdivision must be made 
48.4 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
48.5 	executive director of the applicable covered retirement plan requesting that the increase 
48.6 	not be made.

48.7 	EFFECTIVE DATE. This section is effective July 1, 2013.

48.8 	Sec. 4. Minnesota Statutes 2012, section 490.121, subdivision 21f, is amended to read:
48.9 		Subd. 21f.Normal retirement date. (a) For a judge in the tier I program, "normal 
48.10 	retirement date" means the date athe judge attains the age of 65.
48.11 	(b) For a judge in the tier II program, normal retirement date means the date the 
48.12 	judge attains age 66.

48.13 	EFFECTIVE DATE. This section is effective July 1, 2013.

48.14 	Sec. 5. Minnesota Statutes 2012, section 490.121, subdivision 22, is amended to read:
48.15 		Subd. 22.Service credit limit. "Service credit limit" means, for a judge covered 
48.16 	by tier I, the greater of: (1) 24 years of allowable service under this chapter; or (2), for 
48.17 	judgesa judge with allowable service rendered before July 1, 1980, the number of years of 
48.18 	allowable service under chapter 490, which, when multiplied by the percentage listed in 
48.19 	section 356.315, subdivision 7 or 8, whichever is applicable to each year of service, equals 
48.20 	76.8. For a judge covered by tier II, there is no service credit limit.

48.21 	EFFECTIVE DATE. This section is effective July 1, 2013.

48.22 	Sec. 6. Minnesota Statutes 2012, section 490.121, is amended by adding a subdivision 
48.23 	to read:
48.24 		Subd. 25.Tier I. "Tier I" is the benefit program of the retirement plan with a 
48.25 	membership specified by section 490.1221, paragraph (b), and governed by sections 
48.26 	356.315, subdivisions 7 and 8; 356.415, subdivisions 1 and 1f; and 490.121 to 490.133, 
48.27 	except as modified in sections 356.315, subdivision 8a; 490.121, subdivision 21f, 
48.28 	paragraph (b); 490.1222; 490.123, subdivision 1a, paragraph (b); and 490.124, subdivision 
48.29 	1, paragraphs (c) and (d).

48.30 	EFFECTIVE DATE. This section is effective July 1, 2013.

49.1 	Sec. 7. Minnesota Statutes 2012, section 490.121, is amended by adding a subdivision 
49.2 	to read:
49.3 		Subd. 26.Tier II. "Tier II" is the benefit program of the retirement plan with a 
49.4 	membership specified by section 490.1221, paragraph (c), and governed by sections 
49.5 	356.315, subdivision 8a; 356.415, subdivisions 1 and 1f; 490.121 to 490.133, as modified 
49.6 	in section 490.121, subdivision 21f, paragraph (b); 490.1222; 490.123, subdivision 1a, 
49.7 	paragraph (b); and 490.124, subdivision 1, paragraphs (c) and (d).

49.8 	EFFECTIVE DATE. This section is effective July 1, 2013.

49.9 	Sec. 8. [490.1221] JUDGES PLAN PROGRAMS.
49.10 	(a) Members of the judges retirement plan are members of either the tier I or tier II 
49.11 	program.
49.12 	(b) A tier I program judge is a person who was first appointed or elected as a judge 
49.13 	before July 1, 2013, who was not eligible for the tier II program because the judge had 
49.14 	five or more years of allowable service on or before December 30, 2013, or did not elect 
49.15 	that program.
49.16 	(c) A tier II program judge is a person who:
49.17 	(1) was first appointed or elected as a judge after June 30, 2013; or
49.18 	(2) was first appointed or elected as a judge before July 1, 2013, had less than five 
49.19 	years of allowable service on or before December 30, 2013, and made an election under 
49.20 	section 14 to be in the tier II program.

49.21 	EFFECTIVE DATE. This section is effective July 1, 2013.

49.22 	Sec. 9. [490.1222] APPLICATION OF SERVICE CREDIT LIMIT.
49.23 	The service credit limit specified in section 490.121, subdivision 22, does not apply 
49.24 	to a judge in the tier II program.

49.25 	EFFECTIVE DATE. This section is effective July 1, 2013.

49.26 	Sec. 10. Minnesota Statutes 2012, section 490.123, subdivision 1a, is amended to read:
49.27 		Subd. 1a.Member contribution rates.  (a) A judge who is covered by the federal 
49.28 	Old Age, Survivors, Disability, and Health Insurance Program andin the tier I program 
49.29 	whose service does not exceed the service credit limit in section 490.121, subdivision 22, 
49.30 	shall contribute to the fund from each salary payment a sum equal to 8.009.00 percent 
49.31 	of salary.
50.1 	(b) A judge in the tier II program shall contribute to the fund from each salary 
50.2 	payment a sum equal to 7.00 percent of salary.
50.3 	(b) The contribution(c) Contributions under this subdivision isare payable by salary 
50.4 	deduction. The deduction must be made by the state court administrator under section 
50.5 	352.04, subdivisions 4, 5, and 8.

50.6 	EFFECTIVE DATE. This section is effective beginning on the first day of the first 
50.7 	full payroll period following an increase in judicial salaries of at least one percent due to 
50.8 	action by the legislature during calendar year 2013 or later.

50.9 	Sec. 11. Minnesota Statutes 2012, section 490.123, subdivision 1b, is amended to read:
50.10 		Subd. 1b.Employer contribution rate. (a) The employer contribution rate to the 
50.11 	fund on behalf of a judge is 20.522.5 percent of salary. The employer obligation continues 
50.12 	after a judge exceeds the service credit limit in section 490.121, subdivision 22.
50.13 	(b) The employer contribution must be paid by the state court administrator. The 
50.14 	employer contribution is payable at the same time as member contributions are made 
50.15 	under subdivision 1a or as employee contributions are made to the unclassified program 
50.16 	governed by chapter 352D for judges whose service exceeds the limit in section 490.121, 
50.17 	subdivision 22, are remitted.

50.18 	EFFECTIVE DATE. This section is effective the first day of the first full payroll 
50.19 	period after June 30, 2013.

50.20 	Sec. 12. Minnesota Statutes 2012, section 490.124, subdivision 1, is amended to read:
50.21 		Subdivision 1.Basic Retirement annuity. (a) Except as qualified hereinafter from 
50.22 	and after the mandatory retirement date, the normal retirement date, the early retirement 
50.23 	date, or one year from the disability retirement date, as the case may be, a retiring judge is 
50.24 	eligible to receive a retirement annuity from the judges' retirement fund.
50.25 	(b) For a tier I program judge, the retirement annuity is an amount equal to: 
50.26 	(1) the percent specified in section 356.315, subdivision 7, multiplied by the judge's 
50.27 	final average compensation with that result then multiplied by the number of years and 
50.28 	fractions of years of allowable service rendered before July 1, 1980; plus 
50.29 	(2) the percent specified in section 356.315, subdivision 8, multiplied by the judge's 
50.30 	final average compensation with that result then multiplied by the number of years and 
50.31 	fractions of years of allowable service rendered after June 30, 1980.
50.32 	(c) For a tier II program judge who was first appointed or elected as a judge before 
50.33 	July 1, 2013, the retirement annuity is an amount equal to:
51.1 	(1) the percent specified in section 356.315, subdivision 8, multiplied by the judge's 
51.2 	final average compensation with that result then multiplied by the number of years and 
51.3 	fractions of years of allowable service rendered before January 1, 2014; plus
51.4 	(2) the percentage specified in section 356.315, subdivision 8a, multiplied by the 
51.5 	judge's final average compensation with that result then multiplied by the number of years 
51.6 	and fractions of years of allowable service rendered after December 31, 2013.
51.7 	(d) For a tier II program judge who was first appointed or elected as a judge after 
51.8 	June 30, 2013, the retirement annuity is an amount equal to the percent specified in section 
51.9 	356.315, subdivision 8a, multiplied by the judge's final average compensation with that 
51.10 	result then multiplied by the number of years and fractions of years of allowable service.
51.11 	(c)(e) For a judge in the tier I program, service that exceeds the service credit limit in 
51.12 	section 490.121, subdivision 22, must be excluded in calculating the retirement annuity, but 
51.13 	the compensation earned by the judge during this period of judicial service must be used in 
51.14 	determining a judge's final average compensation and calculating the retirement annuity.

51.15 	EFFECTIVE DATE. This section is effective July 1, 2013.

51.16 	Sec. 13. MEMBER CONTRIBUTION INCREASE CONDITION.
 51.17 	Any increase in judicial salaries enacted by the legislature during calendar year 2013 
51.18 	or later is not applicable to a judge in the tier I program if the member contribution rate 
51.19 	applicable to that judge in the tier I program under Minnesota Statutes, section 490.123, 
51.20 	subdivision 1a, is not deducted from the salary of the judge.

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

51.22 	Sec. 14. TIER II PROGRAM ELECTION; PRE-JULY 1, 2013, JUDGES.
 51.23 		Subdivision 1.Authority. A person who was first appointed or elected as a judge 
51.24 	covered by the Minnesota State Retirement System judges retirement plan before July 1, 
51.25 	2013, is eligible to elect treatment as a tier II program judge if the judge has less than five 
51.26 	years of allowable service on the date the judge makes a valid election under subdivision 2.
51.27 		Subd. 2.Election procedure. An eligible judge under subdivision 1 may elect to 
51.28 	be subject to the provisions of Minnesota Statutes, chapter 490, applicable to a tier II 
51.29 	program judge rather than the tier I program by electing that treatment in writing before 
51.30 	January 1, 2014, on a form provided by the executive director of the Minnesota State 
51.31 	Retirement System.
51.32 		Subd. 3.Effect of election. (a) The election is irrevocable.
51.33 	(b) An eligible judge who fails to make an election remains in the tier I program.
52.1 	(c) If the tier II program is elected by an eligible judge, member contributions based on 
52.2 	revised member contribution rates under Minnesota Statutes, section 490.123, subdivision 
52.3 	1a, begin on the first day of the first full pay period occurring after January 1, 2014.

52.4 	EFFECTIVE DATE. This section is effective July 1, 2013.

52.5 	ARTICLE 7
52.6 	MISCELLANEOUS PROVISIONS

52.7 	Section 1. Minnesota Statutes 2012, section 356.91, is amended to read:
52.8 	356.91 VOLUNTARY MEMBERSHIP DUES DEDUCTION.
52.9 	(a) Upon written authorization of a person receiving an annuity from a public 
52.10 	pension fund administered by the Minnesota State Retirement System or the Public 
52.11 	Employees Retirement Association, the executive director of the public pension fund may
52.12 	 shall deduct from the retirement annuity an amount requested by the annuitant to be paid 
52.13 	as membership dues or other payments to any labor organization that is an exclusive 
52.14 	bargaining agent representing public employees or an organization representing retired 
52.15 	public employees of which the annuitant is a member and shall, on a monthly basis, pay 
52.16 	the amount to the organization so designated by the annuitant.
52.17 	(b) A pension fund and the plan fiduciaries which authorize or administer deductions 
52.18 	of dues payments under paragraph (a) are not liable for failure to properly deduct or transmit 
52.19 	the dues amounts, provided that the fund and the fiduciaries have acted in good faith.
52.20 	(c) The deductions under paragraph (a) may occur no more frequently than two times 
52.21 	per year and may not be used for political purposes. Any labor organization that is an 
52.22 	exclusive bargaining agent representing public employees or an organization representing 
52.23 	retired public employees may conduct blind mailings to the annuitants of a retirement 
52.24 	system specified in paragraph (a) by requesting that the retirement system mail voluntary 
52.25 	membership information and dues deduction cards to annuitants. Such mailings shall not 
52.26 	be for the purpose of supporting or opposing any candidate, political party, or ballot 
52.27 	measure. The organization requesting the blind mailing shall pay all costs associated 
52.28 	with these mailings, including but not limited to copying, labeling, mailing, postage, and 
52.29 	record keeping. In lieu of administering a blind mailing in-house, a retirement system 
52.30 	may transmit annuitant data necessary for conducting a blind mailing to a mail center 
52.31 	pursuant to a secure data share agreement with the mail center which provides that neither 
52.32 	the organization nor any other entity shall have direct access to the data transmitted by 
52.33 	the retirement system. The retirement system shall have no obligation to approve or 
53.1 	disapprove, or otherwise be responsible for, the content of the mailings. No organization 
53.2 	shall conduct more than two blind mailings per calendar year.
53.3 	(d) Any labor organization specified in paragraph (a) shall reimburse the public 
53.4 	pension fund for the administrative expense of withholding premium amounts.