1.1 	A bill for an act
1.2 	relating to retirement; Public Employees Retirement Association financial solvency 
1.3 	measures; increasing police and fire plan member and employer contribution rates; 
1.4 	eliminating certain postretirement adjustment trigger procedures; extending the 
1.5 	police and fire plan amortization target date; lowering the investment return 
1.6 	actuarial assumption; modifying the actuarial assumption requirements; modifying 
1.7 	interest rates charged on certain payments; amending Minnesota Statutes 2016, 
1.8 	sections 353.01, subdivision 16; 353.0161, subdivision 2; 353.0162; 353.27, 
1.9 	subdivisions 3c, 7a, 12, 12a, 12b; 353.28, subdivision 5; 353.35, subdivision 1; 
1.10 	353.65, subdivisions 2, 3; 356.215, subdivisions 8, 9, 11; 356.415, subdivisions 
1.11 	1b, 1c; proposing coding for new law in Minnesota Statutes, chapter 356; repealing 
1.12 	Minnesota Statutes 2016, section 356.415, subdivision 1.
1.13 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.14 	Section 1. Minnesota Statutes 2016, section 353.01, subdivision 16, is amended to read:
1.15 		Subd. 16.Allowable service; limits and computation. (a) "Allowable service" means:
1.16 	(1) service during years of actual membership in the course of which employee deductions 
1.17 	were withheld from salary and contributions were made at the applicable rates under section 
1.18 	353.27, 353.65, or 353E.03;
1.19 	(2) periods of service covered by payments in lieu of salary deductions under sections 
1.20 	353.27, subdivisions 12 and 12a, and 353.35;
1.21 	(3) service in years during which the public employee was not a member but for which 
1.22 	the member later elected, while a member, to obtain credit by making payments to the fund 
1.23 	as permitted by any law then in effect;
1.24 	(4) a period of authorized leave of absence during which the employee receives pay as 
1.25 	specified in subdivision 10, paragraph (a), clause (4) or (5), from which deductions for 
1.26 	employee contributions are made, deposited, and credited to the fund;
2.1 	(5) a period of authorized leave of absence without pay, or with pay that is not included 
2.2 	in the definition of salary under subdivision 10, paragraph (a), clause (4) or (5), for which 
2.3 	salary deductions are not authorized, and for which a member obtained service credit for 
2.4 	up to 12 months of the authorized leave period by payment under section 353.0161 or 
2.5 	353.0162, to the fund made in place of salary deductions;
2.6 	(6) a periodic, repetitive leave that is offered to all employees of a governmental 
2.7 	subdivision. The leave program may not exceed 208 hours per annual normal work cycle 
2.8 	as certified to the association by the employer. A participating member obtains service credit 
2.9 	by making employee contributions in an amount or amounts based on the member's average 
2.10 	salary, excluding overtime pay, that would have been paid if the leave had not been taken. 
2.11 	The employer shall pay the employer and additional employer contributions on behalf of 
2.12 	the participating member. The employee and the employer are responsible to pay interest 
2.13 	on their respective shares at the rate of 8.5 percent until June 30, 2015, and eight percent 
2.14 	thereafter applicable rate or rates specified in section 356.59, subdivision 3, compounded 
2.15 	annually, from the end of the normal cycle until full payment is made. An employer shall 
2.16 	also make the employer and additional employer contributions, plus 8.5 percent interest 
2.17 	until June 30, 2015, and eight percent interest thereafter at the applicable rate or rates 
2.18 	specified in section 356.59, subdivision 3, compounded annually, on behalf of an employee 
2.19 	who makes employee contributions but terminates public service. The employee contributions 
2.20 	must be made within one year after the end of the annual normal working cycle or within 
2.21 	30 days after termination of public service, whichever is sooner. The executive director 
2.22 	shall prescribe the manner and forms to be used by a governmental subdivision in 
2.23 	administering a periodic, repetitive leave. Upon payment, the member must be granted 
2.24 	allowable service credit for the purchased period;
2.25 	(7) an authorized temporary or seasonal layoff under subdivision 12, limited to three 
2.26 	months allowable service per authorized temporary or seasonal layoff in one calendar year. 
2.27 	An employee who has received the maximum service credit allowed for an authorized 
2.28 	temporary or seasonal layoff must return to public service and must obtain a minimum of 
2.29 	three months of allowable service subsequent to the layoff in order to receive allowable 
2.30 	service for a subsequent authorized temporary or seasonal layoff;
2.31 	(8) a period during which a member is absent from employment by a governmental 
2.32 	subdivision by reason of service in the uniformed services, as defined in United States Code, 
2.33 	title 38, section 4303(13), if the member returns to public service with the same governmental 
2.34 	subdivision upon discharge from service in the uniformed service within the time frames 
2.35 	required under United States Code, title 38, section 4312(e), provided that the member did 
3.1 	not separate from uniformed service with a dishonorable or bad conduct discharge or under 
3.2 	other than honorable conditions. The service must be credited if the member pays into the 
3.3 	fund equivalent employee contributions based upon the contribution rate or rates in effect 
3.4 	at the time that the uniformed service was performed multiplied by the full and fractional 
3.5 	years being purchased and applied to the annual salary rate. The annual salary rate is the 
3.6 	average annual salary during the purchase period that the member would have received if 
3.7 	the member had continued to be employed in covered employment rather than to provide 
3.8 	uniformed service, or, if the determination of that rate is not reasonably certain, the annual 
3.9 	salary rate is the member's average salary rate during the 12-month period of covered 
3.10 	employment rendered immediately preceding the period of the uniformed service. Payment 
3.11 	of the member equivalent contributions must be made during a period that begins with the 
3.12 	date on which the individual returns to public employment and that is three times the length 
3.13 	of the military leave period, or within five years of the date of discharge from the military 
3.14 	service, whichever is less. If the determined payment period is less than one year, the 
3.15 	contributions required under this clause to receive service credit may be made within one 
3.16 	year of the discharge date. Payment may not be accepted following 30 days after termination 
3.17 	of public service under subdivision 11a. If the member equivalent contributions provided 
3.18 	for in this clause are not paid in full, the member's allowable service credit must be prorated 
3.19 	by multiplying the full and fractional number of years of uniformed service eligible for 
3.20 	purchase by the ratio obtained by dividing the total member contributions received by the 
3.21 	total member contributions otherwise required under this clause. The equivalent employer 
3.22 	contribution, and, if applicable, the equivalent additional employer contribution must be 
3.23 	paid by the governmental subdivision employing the member if the member makes the 
3.24 	equivalent employee contributions. The employer payments must be made from funds 
3.25 	available to the employing unit, using the employer and additional employer contribution 
3.26 	rate or rates in effect at the time that the uniformed service was performed, applied to the 
3.27 	same annual salary rate or rates used to compute the equivalent member contribution. The 
3.28 	governmental subdivision involved may appropriate money for those payments. The amount 
3.29 	of service credit obtainable under this section may not exceed five years unless a longer 
3.30 	purchase period is required under United States Code, title 38, section 4312. The employing 
3.31 	unit shall pay interest on all equivalent member and employer contribution amounts payable 
3.32 	under this clause. Interest must be computed at the rate of 8.5 percent until June 30, 2015, 
3.33 	and eight percent thereafter applicable rate or rates specified in section 356.59, subdivision 
3.34 	3, compounded annually, from the end of each fiscal year of the leave or the break in service 
3.35 	to the end of the month in which the payment is received. Upon payment, the employee 
3.36 	must be granted allowable service credit for the purchased period; or
4.1 	(9) a period specified under section 353.0162.
4.2 	(b) No member may receive more than 12 months of allowable service credit in a year 
4.3 	either for vesting purposes or for benefit calculation purposes.
4.4 	(c) For an active member who was an active member of the former Minneapolis 
4.5 	Firefighters Relief Association on December 29, 2011, "allowable service" is the period of 
4.6 	service credited by the Minneapolis Firefighters Relief Association as reflected in the 
4.7 	transferred records of the association up to December 30, 2011, and the period of service 
4.8 	credited under paragraph (a), clause (1), after December 30, 2011. For an active member 
4.9 	who was an active member of the former Minneapolis Police Relief Association on December 
4.10 	29, 2011, "allowable service" is the period of service credited by the Minneapolis Police 
4.11 	Relief Association as reflected in the transferred records of the association up to December 
4.12 	30, 2011, and the period of service credited under paragraph (a), clause (1), after December 
4.13 	30, 2011.

4.14 	EFFECTIVE DATE. This section is effective July 1, 2017.

4.15 	Sec. 2. Minnesota Statutes 2016, section 353.0161, subdivision 2, is amended to read:
4.16 		Subd. 2.Purchase procedure. (a) An employee covered by a plan specified in 
4.17 	subdivision 1 may purchase credit for allowable service in that plan for a period specified 
4.18 	in subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c), 
4.19 	whichever applies. The employing unit, at its option, may pay the employer portion of the 
4.20 	amount specified in paragraph (b) on behalf of its employees.
4.21 	(b) If payment is received by the executive director within one year from the date the 
4.22 	member returned to work following the authorized leave, or within 30 days after the date 
4.23 	of termination of public service if the member did not return to work, the payment amount 
4.24 	is equal to the employee and employer contribution rates specified in law for the applicable 
4.25 	plan at the end of the leave period, or at termination of public service, whichever is earlier, 
4.26 	multiplied by the employee's average monthly salary, excluding overtime, upon which 
4.27 	deductions were paid during the six months, or portion thereof, before the commencement 
4.28 	of the leave of absence and by the number of months of the leave of absence for which the 
4.29 	employee wants allowable service credit. Payments made under this paragraph must include 
4.30 	compound interest at the monthly rate of 0.71 percent until June 30, 2015, and 0.667 percent
4.31 	applicable rate or rates specified in section 356.59, subdivision 3, per month thereafter, 
4.32 	compounded annually, from the last day of the leave period until the last day of the month 
4.33 	in which payment is received.
5.1 	(c) If payment is received by the executive director after one year, the payment amount 
5.2 	is the amount determined under section 356.551. Payment under this paragraph must be 
5.3 	made before the date the person terminates public service under section 353.01, subdivision 
5.4 	11a.

5.5 	EFFECTIVE DATE. This section is effective July 1, 2017.

5.6 	Sec. 3. Minnesota Statutes 2016, section 353.0162, is amended to read:
5.7 	353.0162 REDUCED SALARY PERIODS SALARY CREDIT PURCHASE.
5.8 	(a) A member may purchase additional salary credit for a period specified in this section.
5.9 	(b) The applicable period is a period during which the member is receiving a reduced 
5.10 	salary from the employer while the member is:
5.11 	(1) receiving temporary workers' compensation payments related to the member's service 
5.12 	to the public employer;
5.13 	(2) on an authorized leave of absence; or
5.14 	(3) on an authorized partial paid leave of absence as a result of a budgetary or salary 
5.15 	savings program offered or mandated by a governmental subdivision.
5.16 	(c) The differential salary amount is the difference between the average monthly salary 
5.17 	received by the member during the period of reduced salary under this section and the 
5.18 	average monthly salary of the member, excluding overtime, on which contributions to the 
5.19 	applicable plan were made during the period of the last six months of covered employment 
5.20 	occurring immediately before the period of reduced salary, applied to the member's normal 
5.21 	employment period, measured in hours or otherwise, as applicable.
5.22 	(d) To receive eligible salary credit, the member shall pay an amount equal to:
5.23 	(1) the applicable employee contribution rate under section 353.27, subdivision 2; 353.65, 
5.24 	subdivision 2; or 353E.03, subdivision 1, as applicable, multiplied by the differential salary 
5.25 	amount;
5.26 	(2) plus an employer equivalent payment equal to the applicable employer contribution 
5.27 	rate in section 353.27, subdivision 3; 353.65, subdivision 3; or 353E.03, subdivision 2, as 
5.28 	applicable, multiplied by the differential salary amount;
5.29 	(3) plus, if applicable, an equivalent employer additional amount equal to the additional 
5.30 	employer contribution rate in section 353.27, subdivision 3a, multiplied by the differential 
5.31 	salary amount.
6.1 	(e) The employer, by appropriate action of its governing body and documented in its 
6.2 	official records, may pay the employer equivalent contributions and, as applicable, the 
6.3 	equivalent employer additional contributions on behalf of the member.
6.4 	(f) Payment under this section must include interest on the contribution amount or 
6.5 	amounts, whichever applies, at an 8.5 percent annual rate until June 30, 2015, and at an 
6.6 	eight percent annual rate thereafter the applicable rate or rates specified in section 356.59, 
6.7 	subdivision 3, compounded annually, prorated for applicablethe number of months, if less 
6.8 	than 12, from the date on which the period of reduced salary specified under this section 
6.9 	terminates to the date on which the payment or payments are received by the executive 
6.10 	director. Payment under this section must be completed within the earlier of 30 days from 
6.11 	termination of public service by the employee under section 353.01, subdivision 11a, or 
6.12 	one year after the termination of the period specified in paragraph (b), as further restricted 
6.13 	under this section.
6.14 	(g) The period for which additional allowable salary credit may be purchased is limited 
6.15 	to the period during which the person receives temporary workers' compensation payments 
6.16 	or for those business years in which the governmental subdivision offers or mandates a 
6.17 	budget or salary savings program, as certified to the executive director by a resolution of 
6.18 	the governing body of the governmental subdivision. For an authorized leave of absence, 
6.19 	the period for which allowable salary credit may be purchased may not exceed 12 months 
6.20 	of authorized leave.
6.21 	(h) To purchase salary credit for a subsequent period of temporary workers' compensation 
6.22 	benefits or subsequent authorized medical leave of absence, the member must return to 
6.23 	public service and render a minimum of three months of allowable service.

6.24 	EFFECTIVE DATE. This section is effective July 1, 2017.

6.25 	Sec. 4. Minnesota Statutes 2016, section 353.27, subdivision 3c, is amended to read:
6.26 		Subd. 3c.Former MERF members; member and employer contributions. (a) For 
6.27 	the period July 1, 2015, through December 31, 2031, the member contributions for former 
6.28 	members of the Minneapolis Employees Retirement Fund and by the former Minneapolis 
6.29 	Employees Retirement Fund-covered employing units are governed by this subdivision.
6.30 	(b) The member contribution for a public employee who was a member of the former 
6.31 	Minneapolis Employees Retirement Fund on June 29, 2010, is 9.75 percent of the salary of 
6.32 	the employee.
7.1 	(c) The employer regular contribution with respect to a public employee who was a 
7.2 	member of the former Minneapolis Employees Retirement Fund on June 29, 2010, is 9.75 
7.3 	percent of the salary of the employee.
7.4 	(d) For calendar years 2015 and 2016, the employer supplemental contribution is the 
7.5 	employing unit's share of $31,000,000. For calendar years 2017 through 2031, the employer 
7.6 	supplemental contribution is the employing unit's share of $21,000,000.
7.7 	(e) Each employing unit's share under paragraph (d) is the amount determined from an 
7.8 	allocation between each employing unit in the portion equal to the unit's employer 
7.9 	supplemental contribution paid or payable under Minnesota Statutes 2012, section 353.50, 
7.10 	during calendar year 2014.
7.11 	(f) The employer supplemental contribution amount under paragraph (d) for calendar 
7.12 	year 2015 must be invoiced by the executive director of the Public Employees Retirement 
7.13 	Association by July 1, 2015. The calendar year 2015 payment is payable in a single amount 
7.14 	on or before September 30, 2015. For subsequent calendar years, the employer supplemental 
7.15 	contribution under paragraph (d) must be invoiced on January 31 of each year and is payable 
7.16 	in two parts, with the first half payable on or before July 31 and with the second half payable 
7.17 	on or before December 15. Late payments are payable with compound interest, compounded 
7.18 	annually, at the rate of 0.71 percentapplicable rate or rates specified in section 356.59, 
7.19 	subdivision 3, per month for each month or portion of a month that has elapsed after the 
7.20 	due date.
7.21 	(g) The employer supplemental contribution under paragraph (d) terminates on December 
7.22 	31, 2031.

7.23 	EFFECTIVE DATE. This section is effective July 1, 2017.

7.24 	Sec. 5. Minnesota Statutes 2016, section 353.27, subdivision 7a, is amended to read:
7.25 		Subd. 7a.Deductions or contributions transmitted by error. (a) If employee deductions 
7.26 	and employer contributions under this section, section 353.50, 353.65, or 353E.03 were 
7.27 	erroneously transmitted to the association, but should have been transmitted to a plan covered 
7.28 	by chapter 352D, 353D, 354B, or 354D, the executive director shall transfer the erroneous 
7.29 	employee deductions and employer contributions to the appropriate retirement fund or 
7.30 	individual account, as applicable. The time limitations specified in subdivisions 7 and 12 
7.31 	do not apply. The transfer to the applicable defined contribution plan account must include 
7.32 	interest at the rate of 0.71 percent per month until June 30, 2015, and 0.667 percentapplicable 
7.33 	rate or rates specified in section 356.59, subdivision 3, per month thereafter, compounded 
8.1 	annually, from the first day of the month following the month in which coverage should 
8.2 	have commenced in the defined contribution plan until the end of the month in which the 
8.3 	transfer occurs.
8.4 	(b) A potential transfer under paragraph (a) that is reasonably determined to cause the 
8.5 	plan to fail to be a qualified plan under section 401(a) of the federal Internal Revenue Code, 
8.6 	as amended, must not be made by the executive director of the association. Within 30 days 
8.7 	after being notified by the Public Employees Retirement Association of an unmade potential 
8.8 	transfer under this paragraph, the employer of the affected person must transmit an amount 
8.9 	representing the applicable salary deductions and employer contributions, without interest, 
8.10 	to the retirement fund of the appropriate Minnesota public pension plan, or to the applicable 
8.11 	individual account if the proper coverage is by a defined contribution plan. The association 
8.12 	must provide the employing unit a credit for the amount of the erroneous salary deductions 
8.13 	and employer contributions against future contributions from the employer. If the employing 
8.14 	unit receives a credit under this paragraph, the employing unit is responsible for refunding 
8.15 	to the applicable employee any amount that had been erroneously deducted from the person's 
8.16 	salary.
8.17 	(c) If erroneous employee deductions and employer contributions reflect a plan coverage 
8.18 	error involving any Public Employees Retirement Association plan specified in section 
8.19 	356.99 and any other plan specified in that section, section 356.99 applies.

8.20 	EFFECTIVE DATE. This section is effective July 1, 2017.

8.21 	Sec. 6. Minnesota Statutes 2016, section 353.27, subdivision 12, is amended to read:
8.22 		Subd. 12.Omitted salary deductions; obligations. (a) In the case of omission of 
8.23 	required deductions for the general employees retirement plan, the public employees police 
8.24 	and fire retirement plan, or the local government correctional employees retirement plan 
8.25 	from the salary of an employee, the department head or designee shall immediately, upon 
8.26 	discovery, report the employee for membership and deduct the employee deductions under 
8.27 	subdivision 4 during the current pay period or during the pay period immediately following 
8.28 	the discovery of the omission. Payment for the omitted obligations may only be made in 
8.29 	accordance with reporting procedures and methods established by the executive director.
8.30 	(b) When the entire omission period of an employee does not exceed 60 days, the 
8.31 	governmental subdivision may report and submit payment of the omitted employee 
8.32 	deductions and the omitted employer contributions through the reporting processes under 
8.33 	subdivision 4.
9.1 	(c) When the omission period of an employee exceeds 60 days, the governmental 
9.2 	subdivision shall furnish to the association sufficient data and documentation upon which 
9.3 	the obligation for omitted employee and employer contributions can be calculated. The 
9.4 	omitted employee deductions must be deducted from the employee's subsequent salary 
9.5 	payment or payments and remitted to the association for deposit in the applicable retirement 
9.6 	fund. The employee shall pay omitted employee deductions due for the 60 days prior to the 
9.7 	end of the last pay period in the omission period during which salary was earned. The 
9.8 	employer shall pay any remaining omitted employee deductions and any omitted employer 
9.9 	contributions, plus cumulative interest at the annual rate of 8.5 percent until June 30, 2015, 
9.10 	and eight percent thereafter compounded annually, from the date or dates each omitted 
9.11 	employee contribution was first payable.
9.12 	(d) An employer shall not hold an employee liable for omitted employee deductions 
9.13 	beyond the pay period dates under paragraph (c), nor attempt to recover from the employee 
9.14 	those employee deductions paid by the employer on behalf of the employee. Omitted 
9.15 	deductions due under paragraph (c) which are not paid by the employee constitute a liability 
9.16 	of the employer that failed to deduct the omitted deductions from the employee's salary. 
9.17 	The employer shall make payment with interest at the annual rate of 8.5 percent until June 
9.18 	30, 2015, and eight percent thereafterapplicable rate or rates specified in section 356.59, 
9.19 	subdivision 3, compounded annually. Omitted employee deductions are no longer due if an 
9.20 	employee terminates public service before making payment of omitted employee deductions 
9.21 	to the association, but the employer remains liable to pay omitted employer contributions 
9.22 	plus interest at the annual rate of 8.5 percent until June 30, 2015, and eight percent thereafter
9.23 	applicable rate or rates specified in section 356.59, subdivision 3, compounded annually,
9.24 	from the date the contributions were first payable.
9.25 	(e) The association may not commence action for the recovery of omitted employee 
9.26 	deductions and employer contributions after the expiration of three calendar years after the 
9.27 	calendar year in which the contributions and deductions were omitted. Except as provided 
9.28 	under paragraph (b), no payment may be made or accepted unless the association has already 
9.29 	commenced action for recovery of omitted deductions. An action for recovery commences 
9.30 	on the date of the mailing of any written correspondence from the association requesting 
9.31 	information from the governmental subdivision upon which to determine whether or not 
9.32 	omitted deductions occurred.

9.33 	EFFECTIVE DATE. This section is effective July 1, 2017.

10.1 	Sec. 7. Minnesota Statutes 2016, section 353.27, subdivision 12a, is amended to read:
10.2 		Subd. 12a.Terminated employees: omitted deductions. A terminated employee who 
10.3 	was a member of the general employees retirement plan of the Public Employees Retirement 
10.4 	Association, the public employees police and fire retirement plan, or the local government 
10.5 	correctional employees retirement plan and who has a period of employment in which 
10.6 	previously omitted employer contributions were made under subdivision 12 but for whom 
10.7 	no, or only partial, omitted employee contributions have been made, or a member who had 
10.8 	prior coverage in the association for which previously omitted employer contributions were 
10.9 	made under subdivision 12 but who terminated service before required omitted employee 
10.10 	deductions could be withheld from salary, may pay the omitted employee deductions for 
10.11 	the period on which omitted employer contributions were previously paid plus interest at 
10.12 	the annual rate of 8.5 percent until June 30, 2015, and eight percent thereafterapplicable 
10.13 	rate or rates specified in section 356.59, subdivision 3, compounded annually. A terminated 
10.14 	employee may pay the omitted employee deductions plus interest within six months of an 
10.15 	initial notification from the association of eligibility to pay those omitted deductions. If a 
10.16 	terminated employee is reemployed in a position covered under a public pension fund under 
10.17 	section 356.30, subdivision 3, and elects to pay omitted employee deductions, payment 
10.18 	must be made no later than six months after a subsequent termination of public service.

10.19 	EFFECTIVE DATE. This section is effective July 1, 2017.

10.20 	Sec. 8. Minnesota Statutes 2016, section 353.27, subdivision 12b, is amended to read:
10.21 		Subd. 12b.Terminated employees: immediate eligibility. If deductions were omitted 
10.22 	from salary adjustments or final salary of a terminated employee who was a member of the 
10.23 	general employees retirement plan, the public employees police and fire retirement plan, 
10.24 	or the local government correctional employees retirement plan and who is immediately 
10.25 	eligible to draw a monthly benefit, the employer shall pay the omitted employer and employer 
10.26 	additional contributions plus interest on both the employer and employee amounts due at 
10.27 	an annual rate of 8.5 percentthe applicable rate or rates specified in section 356.59, 
10.28 	subdivision 3, compounded annually. The employee shall pay the employee deductions 
10.29 	within six months of an initial notification from the association of eligibility to pay omitted 
10.30 	deductions or the employee forfeits the right to make the payment.

10.31 	EFFECTIVE DATE. This section is effective July 1, 2017.

11.1 	Sec. 9. Minnesota Statutes 2016, section 353.28, subdivision 5, is amended to read:
11.2 		Subd. 5.Interest chargeable on amounts due. Any amount due under this section or 
11.3 	section 353.27, subdivision 4, is payable with interest at the annual compound rate of 8.5 
11.4 	percent until June 30, 2015, and eight percent thereafterapplicable rate or rates specified 
11.5 	in section 356.59, subdivision 3, compounded annually, from the date due until the date 
11.6 	payment is received by the association, with a minimum interest charge of $10.

11.7 	EFFECTIVE DATE. This section is effective July 1, 2017.

11.8 	Sec. 10. Minnesota Statutes 2016, section 353.35, subdivision 1, is amended to read:
11.9 		Subdivision 1.Refund rights. (a) Except as provided in paragraph (b), when any former 
11.10 	member accepts a refund, all existing service credits and all rights and benefits to which 
11.11 	the person was entitled prior to the acceptance of the refund must terminate.
11.12 	(b) A refund under section 353.651, subdivision 3, paragraph (c), does not result in a 
11.13 	forfeiture of salary credit for the allowable service credit covered by the refund.
11.14 	(c) The rights and benefits of a former member must not be restored until the person 
11.15 	returns to active service and acquires at least six months of allowable service credit after 
11.16 	taking the last refund and repays the refund or refunds taken and interest received under 
11.17 	section 353.34, subdivisions 1 and 2, plus interest at the annual rate of 8.5 percent until June 
11.18 	30, 2015, and eight percent thereafterapplicable rate or rates specified in section 356.59, 
11.19 	subdivision 3, compounded annually. If the person elects to restore service credit in a 
11.20 	particular fund from which the person has taken more than one refund, the person must 
11.21 	repay all refunds to that fund. All refunds must be repaid within six months of the last date 
11.22 	of termination of public service.

11.23 	EFFECTIVE DATE. This section is effective July 1, 2017.

11.24 	Sec. 11. Minnesota Statutes 2016, section 353.65, subdivision 2, is amended to read:
11.25 		Subd. 2.Employee contribution. (a) For members other than members who were active 
11.26 	members of the former Minneapolis Firefighters Relief Association on December 29, 2011, 
11.27 	or for members other than members who were active members of the former Minneapolis 
11.28 	Police Relief Association on December 29, 2011, the employee contribution is an amount 
11.29 	equal to the following percentage of the total salary of each member, as follows: 9.6 percent 
11.30 	before calendar year 2014; 10.2 percent in calendar year 2014; and 10.8 percent in calendar 
11.31 	year 2015 and thereafter.

11.32		before January 1, 2018
	10.8 percent
	
12.1		from January 1, 2018, through December 31, 2018
	11.3 percent
	
12.2		from January 1, 2019, and thereafter
	11.8 percent
	
12.3 	(b) For members who were active members of the former Minneapolis Firefighters Relief 
12.4 	Association on December 29, 2011, the employee contribution is an amount equal to eight 
12.5 	percent of the monthly unit value under section 353.01, subdivision 10a, multiplied by 80 
12.6 	and expressed as a biweekly amount for each member. The employee contribution made 
12.7 	by a member with at least 25 years of service credit as an active member of the former 
12.8 	Minneapolis Firefighters Relief Association must be deposited in the postretirement health 
12.9 	care savings account established under section 352.98.
12.10 	(c) For members who were active members of the former Minneapolis Police Relief 
12.11 	Association on December 29, 2011, the employee contribution is an amount equal to eight 
12.12 	percent of the monthly unit value under section 353.01, subdivision 10b, multiplied by 80 
12.13 	and expressed as a biweekly amount for each member. The employee contribution made 
12.14 	by a member with at least 25 years of service credit as an active member of the former 
12.15 	Minneapolis Police Relief Association must be deposited in the postretirement health care 
12.16 	savings account established under section 352.98.
12.17 	(d) Contributions under this section must be made by deduction from salary in the manner 
12.18 	provided in subdivision 4. Where any portion of a member's salary is paid from other than 
12.19 	public funds, the member's employee contribution is based on the total salary received from 
12.20 	all sources.

12.21 	EFFECTIVE DATE. This section is effective July 1, 2017.

12.22 	Sec. 12. Minnesota Statutes 2016, section 353.65, subdivision 3, is amended to read:
12.23 		Subd. 3.Employer contribution. (a) With respect to members other than members who 
12.24 	were active members of the former Minneapolis Firefighters Relief Association on December 
12.25 	29, 2011, or for members other than members who were active members of the former 
12.26 	Minneapolis Police Relief Association on December 29, 2011, the employer contribution 
12.27 	is an amount equal to the following percentage of the total salary of each member, as follows: 
12.28 	14.4 percent before calendar year 2014; 15.3 percent in calendar year 2014; and 16.2 percent 
12.29 	in calendar year 2015 and thereafter.

12.30		before January 1, 2018
	16.2 percent
	
12.31		from January 1, 2018, through December 31, 2018
	16.95 percent
	
12.32		from January 1, 2019, and thereafter
	17.7 percent
	
13.1 	(b) With respect to members who were active members of the former Minneapolis 
13.2 	Firefighters Relief Association on December 29, 2011, the employer contribution is an 
13.3 	amount equal to the amount of the member contributions under subdivision 2, paragraph 
13.4 	(b).
13.5 	(c) With respect to members who were active members of the former Minneapolis Police 
13.6 	Relief Association on December 29, 2011, the employer contribution is an amount equal 
13.7 	to the amount of the member contributions under subdivision 2, paragraph (c).
13.8 	(d) Contributions under this subdivision must be made from funds available to the 
13.9 	employing subdivision by the means and in the manner provided in section 353.28.

13.10 	EFFECTIVE DATE. This section is effective July 1, 2017.

13.11 	Sec. 13. Minnesota Statutes 2016, section 356.215, subdivision 8, is amended to read:
13.12 		Subd. 8.Interest and salaryActuarial assumptions. (a) The actuarial valuation must 
13.13 	use the applicable following interestinvestment return assumption:
13.14 	(1) select and ultimate interest rate assumption

13.1613.15
	plan
	ultimate interest rate 
assumption
		
13.17	teachers retirement plan
	8.5%
		
13.18 	The select preretirement interest rate assumption for the period through June 30, 2017, 
13.19 	is eight percent.
13.20 	(2) single rate interest ratefor all plans other than the teachers retirement plan, the 
13.21 	investment return assumption is:

13.2413.22
13.23
	plan
	interest rate
investment return 
assumption
		
13.25	general state employees retirement plan
	8%
		
13.26	correctional state employees retirement plan
	8
		
13.27	State Patrol retirement plan
	8
		
13.28
13.29
13.30	legislators retirement plan, and for the 
constitutional officers calculation of total plan 
liabilities
	0
		
13.31	judges retirement plan
	8
		
13.32	general public employees retirement plan
	8 7.5
		
13.33	public employees police and fire retirement plan
	8 7.5
		
13.34
13.35	local government correctional service retirement 
plan
	8 7.5
		
14.1	St. Paul teachers retirement plan
	8
		
14.2	Bloomington Fire Department Relief Association
	6
		
14.3
14.4	local monthly benefit volunteer firefighter relief 
associations
	5
		
14.5
14.6	monthly benefit retirement plans in the statewide 
volunteer firefighter retirement plan
	6
		
14.7 	(b)(1) If funding stability has been attained, The actuarial valuation for each of the 
14.8 	covered plans listed in section 356.415, subdivision 2, must use atake into account the 
14.9 	postretirement adjustment rate actuarial assumption equal to the postretirement adjustment 
14.10 	rateor rates applicable to the plan as specified in section 354A.27, subdivision 7; 354A.29, 
14.11 	subdivision 9; 7, or 356.415, subdivision 1, whichever applies.
14.12 	(2) If funding stability has not been attained, the valuation must use a select postretirement 
14.13 	adjustment rate actuarial assumption equal to the postretirement adjustment rate specified 
14.14 	in section 354A.27, subdivision 6a; 354A.29, subdivision 8; or 356.415, subdivision 1a, 
14.15 	1b, 1c, 1d, 1e, or 1f, whichever applies, for a period ending when the approved actuary 
14.16 	estimates that the plan will attain the defined funding stability measure, and thereafter an 
14.17 	ultimate postretirement adjustment rate actuarial assumption equal to the postretirement 
14.18 	adjustment rate under section 354A.27, subdivision 7; 354A.29, subdivision 9; or 356.415, 
14.19 	subdivision 1, for the applicable period or periods beginning when funding stability is 
14.20 	projected to be attained.
14.21 	(c) The actuarial valuation must use the applicable following single rate future salary 
14.22 	increase assumption, the applicable following modified single rate future salary increase 
14.23 	assumption, or the applicable following graded rate future salary increase assumption:
14.24 	(1) single rate future salary increase assumption

14.25	plan
	future salary increase assumption
	
14.26	legislators retirement plan
		5%
	
14.27	judges retirement plan
		2.75
	
14.28	Bloomington Fire Department Relief Association
		4
	
14.29 	(2) age-related future salary increase age-related select and ultimate future salary increase 
14.30 	assumption or graded rate future salary increase assumption

14.31	plan
	future salary increase assumption
	
14.32	local government correctional service retirement plan
	assumption B
	
14.33	St. Paul teachers retirement plan
	assumption A
	
14.34 	For plans other than the St. Paul teachers 
14.35 	retirement plan and the local government 
15.1 	correctional service retirement plan, the select 
15.2 	calculation is: during the designated select 
15.3 	period, a designated percentage rate is 
15.4 	multiplied by the result of the designated 
15.5 	integer minus T, where T is the number of 
15.6 	completed years of service, and is added to 
15.7 	the applicable future salary increase 
15.8 	assumption. The designated select period is 
15.9 	ten years and the designated integer is ten for 
15.10 	the local government correctional service 
15.11 	retirement plan and 15 for the St. Paul 
15.12 	Teachers Retirement Fund Association. The 
15.13 	designated percentage rate is 0.2 percent for 
15.14 	the St. Paul Teachers Retirement Fund 
15.15 	Association.
15.16 	The ultimate future salary increase assumption is:

15.17	age
	A
	B
		
15.18	16
	5.9%
	8.75%
		
15.19	17
	5.9
	8.75
		
15.20	18
	5.9
	8.75
		
15.21	19
	5.9
	8.75
		
15.22	20
	5.9
	8.75
		
15.23	21
	5.9
	8.5
		
15.24	22
	5.9
	8.25
		
15.25	23
	5.85
	8
		
15.26	24
	5.8
	7.75
		
15.27	25
	5.75
	7.5
		
15.28	26
	5.7
	7.25
		
15.29	27
	5.65
	7
		
15.30	28
	5.6
	6.75
		
15.31	29
	5.55
	6.5
		
15.32	30
	5.5
	6.5
		
15.33	31
	5.45
	6.25
		
15.34	32
	5.4
	6.25
		
15.35	33
	5.35
	6.25
		
15.36	34
	5.3
	6
		
16.1	35
	5.25
	6
		
16.2	36
	5.2
	5.75
		
16.3	37
	5.15
	5.75
		
16.4	38
	5.1
	5.75
		
16.5	39
	5.05
	5.5
		
16.6	40
	5
	5.5
		
16.7	41
	4.95
	5.5
		
16.8	42
	4.9
	5.25
		
16.9	43
	4.85
	5
		
16.10	44
	4.8
	5
		
16.11	45
	4.75
	4.75
		
16.12	46
	4.7
	4.75
		
16.13	47
	4.65
	4.75
		
16.14	48
	4.6
	4.75
		
16.15	49
	4.55
	4.75
		
16.16	50
	4.5
	4.75
		
16.17	51
	4.45
	4.75
		
16.18	52
	4.4
	4.75
		
16.19	53
	4.35
	4.75
		
16.20	54
	4.3
	4.75
		
16.21	55
	4.25
	4.5
		
16.22	56
	4.2
	4.5
		
16.23	57
	4.15
	4.25
		
16.24	58
	4.1
	4
		
16.25	59
	4.05
	4
		
16.26	60
	4
	4
		
16.27	61
	4
	4
		
16.28	62
	4
	4
		
16.29	63
	4
	4
		
16.30	64
	4
	4
		
16.31	65
	4
	3.75
		
16.32	66
	4
	3.75
		
16.33	67
	4
	3.75
		
16.34	68
	4
	3.75
		
16.35	69
	4
	3.75
		
16.36	70
	4
	3.75
		
16.37 	(3) service-related ultimate future salary increase assumption

17.1
17.2	general state employees retirement plan of the Minnesota 
State Retirement System
	assumption A
	
17.3
17.4	general employees retirement plan of the Public 
Employees Retirement Association
	assumption B
	
17.5	Teachers Retirement Association
	assumption C
	
17.6	public employees police and fire retirement plan
	assumption D
	
17.7	State Patrol retirement plan
	assumption E
	
17.8
17.9	correctional state employees retirement plan of the 
Minnesota State Retirement System
	assumption F

17.10
17.11	service 
length
	A
	B
	C
	D
	E
	F
	
17.12	1
	10.25%
	11.78%
	12%
	12.75%
	7.75%
	5.75%
	
17.13	2
	7.85
	8.65
	9
	10.75
	7.25
	5.6
	
17.14	3
	6.65
	7.21
	8
	8.75
	6.75
	5.45
	
17.15	4
	5.95
	6.33
	7.5
	7.75
	6.5
	5.3
	
17.16	5
	5.45
	5.72
	7.25
	6.25
	6.25
	5.15
	
17.17	6
	5.05
	5.27
	7
	5.85
	6
	5
	
17.18	7
	4.75
	4.91
	6.85
	5.55
	5.75
	4.85
	
17.19	8
	4.45
	4.62
	6.7
	5.35
	5.6
	4.7
	
17.20	9
	4.25
	4.38
	6.55
	5.15
	5.45
	4.55
	
17.21	10
	4.15
	4.17
	6.4
	5.05
	5.3
	4.4
	
17.22	11
	3.95
	3.99
	6.25
	4.95
	5.15
	4.3
	
17.23	12
	3.85
	3.83
	6
	4.85
	5
	4.2
	
17.24	13
	3.75
	3.69
	5.75
	4.75
	4.85
	4.1
	
17.25	14
	3.55
	3.57
	5.5
	4.65
	4.7
	4
	
17.26	15
	3.45
	3.45
	5.25
	4.55
	4.55
	3.9
	
17.27	16
	3.35
	3.35
	5
	4.55
	4.4
	3.8
	
17.28	17
	3.25
	3.26
	4.75
	4.55
	4.25
	3.7
	
17.29	18
	3.25
	3.25
	4.5
	4.55
	4.1
	3.6
	
17.30	19
	3.25
	3.25
	4.25
	4.55
	3.95
	3.5
	
17.31	20
	3.25
	3.25
	4
	4.55
	3.8
	3.5
	
17.32	21
	3.25
	3.25
	3.9
	4.45
	3.75
	3.5
	
17.33	22
	3.25
	3.25
	3.8
	4.35
	3.75
	3.5
	
17.34	23
	3.25
	3.25
	3.7
	4.25
	3.75
	3.5
	
17.35	24
	3.25
	3.25
	3.6
	4.25
	3.75
	3.5
	
17.36	25
	3.25
	3.25
	3.5
	4.25
	3.75
	3.5
	
17.37	26
	3.25
	3.25
	3.5
	4.25
	3.75
	3.5
	
17.38	27
	3.25
	3.25
	3.5
	4.25
	3.75
	3.5
	
17.39	28
	3.25
	3.25
	3.5
	4.25
	3.75
	3.5
	
18.1	29
	3.25
	3.25
	3.5
	4.25
	3.75
	3.5
	
18.2	30 or more
	3.25
	3.25
	3.5
	4.25
	3.75
	3.5
	
18.3 	(d) The actuarial valuation must use the applicable following payroll growth assumption 
18.4 	for calculating the amortization requirement for the unfunded actuarial accrued liability 
18.5 	where the amortization retirement is calculated as a level percentage of an increasing payroll:

18.6	plan
	payroll growth assumption
	
18.7
18.8	general state employees retirement plan of the Minnesota 
State Retirement System
	3.5%
	
18.9	correctional state employees retirement plan
	3.5
	
18.10	State Patrol retirement plan
	3.5
	
18.11	judges retirement plan
	2.75
	
18.12
18.13	general employees retirement plan of the Public 
Employees Retirement Association
	3.5
	
18.14	public employees police and fire retirement plan
	3.5
	
18.15	local government correctional service retirement plan
	3.5
	
18.16	teachers retirement plan
	3.75
	
18.17	St. Paul teachers retirement plan
	4
	
18.18 	(e) The assumptions set forth in paragraphs (c) and (d) continue to apply, unless a 
18.19 	different salary assumption or a different payroll increase assumption:
18.20 	(1) has been proposed by the governing board of the applicable retirement plan;
18.21 	(2) is accompanied by the concurring recommendation of the actuary retained under 
18.22 	section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the most 
18.23 	recent actuarial valuation report if section 356.214 does not apply; and
18.24 	(3) has been approved or deemed approved under subdivision 18.

18.25 	EFFECTIVE DATE. This section is effective July 1, 2017.

18.26 	Sec. 14. Minnesota Statutes 2016, section 356.215, subdivision 9, is amended to read:
18.27 		Subd. 9.Other assumptions. The(a) Each plan's actuarial valuation must use 
18.28 	assumptions concerning base mortality rates, disability, retirement, withdrawal, retirement 
18.29 	age, and any other relevant demographic or economic factor. These assumptions must be 
18.30 	set at levels consistent with those determined in the most recent quadrennial experience 
18.31 	study completed under subdivision 16, if required, or representative of the best estimate of 
18.32 	future experience as recommended by the plan's approved actuary, if a quadrennial experience 
18.33 	study is not required. The actuarial valuation must contain an exhibit indicating any actuarial 
18.34 	assumptions used in preparing the valuation report.
19.1 	(b) The actuarial valuation must use an assumption concerning future mortality 
19.2 	improvement. This assumption must be set at levels consistent with those determined in the 
19.3 	most recent mortality improvement scale published by the Society of Actuaries or as 
19.4 	otherwise recommended by the plan's approved actuary.
19.5 	(c) The actuarial valuation must contain an exhibit indicating the actuarial assumptions 
19.6 	used in preparing the valuation report.

19.7 	EFFECTIVE DATE. This section is effective July 1, 2017.

19.8 	Sec. 15. Minnesota Statutes 2016, section 356.215, subdivision 11, is amended to read:
19.9 		Subd. 11.Amortization contributions. (a) In addition to the exhibit indicating the level 
19.10 	normal cost, the actuarial valuation of the retirement plan must contain an exhibit for financial 
19.11 	reporting purposes indicating the additional annual contribution sufficient to amortize the 
19.12 	unfunded actuarial accrued liability and must contain an exhibit for contribution 
19.13 	determination purposes indicating the additional contribution sufficient to amortize the 
19.14 	unfunded actuarial accrued liability. For the retirement plans listed in subdivision 8, paragraph 
19.15 	(c), but excluding the legislators retirement plan, the additional contribution must be 
19.16 	calculated on a level percentage of covered payroll basis by the established date for full 
19.17 	funding in effect when the valuation is prepared, assuming annual payroll growth at the 
19.18 	applicable percentage rate set forth in subdivision 8, paragraph (d). For all other retirement 
19.19 	plans and for the legislators retirement plan, the additional annual contribution must be 
19.20 	calculated on a level annual dollar amount basis.
19.21 	(b) For any retirement plan other than a retirement plan governed by paragraph (d), (e), 
19.22 	(f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions used for 
19.23 	calculating the actuarial accrued liability of the fund, a change in the benefit plan governing 
19.24 	annuities and benefits payable from the fund, a change in the actuarial cost method used in 
19.25 	calculating the actuarial accrued liability of all or a portion of the fund, or a combination 
19.26 	of the three, which change or changes by itself or by themselves without inclusion of any 
19.27 	other items of increase or decrease produce a net increase in the unfunded actuarial accrued 
19.28 	liability of the fund, the established date for full funding is the first actuarial valuation date 
19.29 	occurring after June 1, 2020.
19.30 	(c) For any retirement plan, if there has been a change in any or all of the actuarial 
19.31 	assumptions used for calculating the actuarial accrued liability of the fund, a change in the 
19.32 	benefit plan governing annuities and benefits payable from the fund, a change in the actuarial 
19.33 	cost method used in calculating the actuarial accrued liability of all or a portion of the fund, 
19.34 	or a combination of the three, and the change or changes, by itself or by themselves and 
20.1 	without inclusion of any other items of increase or decrease, produce a net increase in the 
20.2 	unfunded actuarial accrued liability in the fund, the established date for full funding must 
20.3 	be determined using the following procedure:
20.4 	(i) the unfunded actuarial accrued liability of the fund must be determined in accordance 
20.5 	with the plan provisions governing annuities and retirement benefits and the actuarial 
20.6 	assumptions in effect before an applicable change;
20.7 	(ii) the level annual dollar contribution or level percentage, whichever is applicable, 
20.8 	needed to amortize the unfunded actuarial accrued liability amount determined under item 
20.9 	(i) by the established date for full funding in effect before the change must be calculated 
20.10 	using the interest assumption specified in subdivision 8 in effect before the change;
20.11 	(iii) the unfunded actuarial accrued liability of the fund must be determined in accordance 
20.12 	with any new plan provisions governing annuities and benefits payable from the fund and 
20.13 	any new actuarial assumptions and the remaining plan provisions governing annuities and 
20.14 	benefits payable from the fund and actuarial assumptions in effect before the change;
20.15 	(iv) the level annual dollar contribution or level percentage, whichever is applicable, 
20.16 	needed to amortize the difference between the unfunded actuarial accrued liability amount 
20.17 	calculated under item (i) and the unfunded actuarial accrued liability amount calculated 
20.18 	under item (iii) over a period of 30 years from the end of the plan year in which the applicable 
20.19 	change is effective must be calculated using the applicable interest assumption specified in 
20.20 	subdivision 8 in effect after any applicable change;
20.21 	(v) the level annual dollar or level percentage amortization contribution under item (iv) 
20.22 	must be added to the level annual dollar amortization contribution or level percentage 
20.23 	calculated under item (ii);
20.24 	(vi) the period in which the unfunded actuarial accrued liability amount determined in 
20.25 	item (iii) is amortized by the total level annual dollar or level percentage amortization 
20.26 	contribution computed under item (v) must be calculated using the interest assumption 
20.27 	specified in subdivision 8 in effect after any applicable change, rounded to the nearest 
20.28 	integral number of years, but not to exceed 30 years from the end of the plan year in which 
20.29 	the determination of the established date for full funding using the procedure set forth in 
20.30 	this clause is made and not to be less than the period of years beginning in the plan year in 
20.31 	which the determination of the established date for full funding using the procedure set forth 
20.32 	in this clause is made and ending by the date for full funding in effect before the change; 
20.33 	and
21.1 	(vii) the period determined under item (vi) must be added to the date as of which the 
21.2 	actuarial valuation was prepared and the date obtained is the new established date for full 
21.3 	funding.
21.4 	(d) For the general employees retirement plan of the Public Employees Retirement 
21.5 	Association, the established date for full funding is June 30, 2031.
21.6 	(e) For the Teachers Retirement Association, the established date for full funding is June 
21.7 	30, 2037.
21.8 	(f) For the correctional state employees retirement plan of the Minnesota State Retirement 
21.9 	System, the established date for full funding is June 30, 2038.
21.10 	(g) For the judges retirement plan, the established date for full funding is June 30, 2038.
21.11 	(h) For the public employees police and fire retirement plan, the established date for full 
21.12 	funding is June 30, 2038 2047.
21.13 	(i) For the St. Paul Teachers Retirement Fund Association, the established date for full 
21.14 	funding is June 30, 2042. In addition to other requirements of this chapter, the annual 
21.15 	actuarial valuation must contain an exhibit indicating the funded ratio and the deficiency 
21.16 	or sufficiency in annual contributions when comparing liabilities to the market value of the 
21.17 	assets of the fund as of the close of the most recent fiscal year.
21.18 	(j) For the general state employees retirement plan of the Minnesota State Retirement 
21.19 	System, the established date for full funding is June 30, 2040.
21.20 	(k) For the retirement plans for which the annual actuarial valuation indicates an excess 
21.21 	of valuation assets over the actuarial accrued liability, the valuation assets in excess of the 
21.22 	actuarial accrued liability must be recognized as a reduction in the current contribution 
21.23 	requirements by an amount equal to the amortization of the excess expressed as a level 
21.24 	percentage of pay over a 30-year period beginning anew with each annual actuarial valuation 
21.25 	of the plan.

21.26 	EFFECTIVE DATE. This section is effective July 1, 2017.

21.27 	Sec. 16. Minnesota Statutes 2016, section 356.415, subdivision 1b, is amended to read:
21.28 		Subd. 1b.Annual postretirement adjustments; PERA; general employees retirement 
21.29 	plan and local government correctional retirement plan. (a) Retirement annuity, disability 
21.30 	benefit, or survivor benefit recipients of the general employees retirement plan of the Public 
21.31 	Employees Retirement Association and the local government correctional service retirement 
22.1 	plan are entitled to a postretirement adjustment annually on, effective as of each January 1, 
22.2 	if the definition of funding stability under paragraph (b) has not been met, as follows:
22.3 	(1) for each successive January 1 until funding stability is restored for the applicable 
22.4 	retirement plan, a postretirement increase of one percent must be applied each year, effective 
22.5 	on January 1, to the monthly annuity or benefit amount of each annuitant or benefit recipient 
22.6 	who has been receiving an annuity or benefit for at least 12 full months as of the June 30 
22.7 	of the calendar year immediately before the adjustment;
22.8 	(2) for each successive January 1 until funding stability is restored for the applicable 
22.9 	retirement plan, for each annuitant or benefit recipient who has been receiving an annuity 
22.10 	or a benefit for at least one full month, but less than 12 full months as of the June 30 of the 
22.11 	calendar year immediately before the adjustment, an annual postretirement increase of 1/12 
22.12 	of one percent for each month the person has been receiving an annuity or benefit must be 
22.13 	applied; to the monthly annuity or benefit amount of the annuitant or benefit recipient.
22.14 	(b) Funding stability is restored when the market value of assets of the applicable 
22.15 	retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities of the 
22.16 	applicable plan in the two most recent consecutive actuarial valuations prepared under 
22.17 	section 356.215 and the standards for actuarial work by the approved actuary retained by 
22.18 	the Public Employees Retirement Association under section 356.214.
22.19 	(c) Retirement annuity, disability benefit, or survivor benefit recipients of the general 
22.20 	employees retirement plan of the Public Employees Retirement Association and the local 
22.21 	government correctional service retirement plan are entitled to a postretirement adjustment 
22.22 	annually, effective as of each January 1, if the definition of funding stability under paragraph 
22.23 	(b) has been met, as follows:
22.24 	(3) for each January 1 following the restoration of funding stability for the applicable 
22.25 	retirement plan,(1) a postretirement increase of 2.5 percent must be applied each year, 
22.26 	effective January 1, to the monthly annuity or benefit amount of each annuitant or benefit 
22.27 	recipient who has been receiving an annuity or benefit for at least 12 full months as of the 
22.28 	June 30 of the calendar year immediately before the adjustment; and
22.29 	(4) for each January 1 following restoration of funding stability for the applicable 
22.30 	retirement plan,(2) for each annuity or benefit recipient who has been receiving an annuity 
22.31 	or a benefit for at least one full month, but less than 12 full months as of the June 30 of the 
22.32 	calendar year immediately before the adjustment, an annual postretirement increase of 1/12 
22.33 	of 2.5 percent for each month the person has been receiving an annuity or benefit must be 
22.34 	applied to the monthly annuity or benefit amount of the annuitant or benefit recipient.
23.1 	(b) Funding stability is restored when the market value of assets of the applicable 
23.2 	retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities of the 
23.3 	applicable plan in the two most recent consecutive actuarial valuations prepared under 
23.4 	section 356.215 and the standards for actuarial work by the approved actuary retained by 
23.5 	the Public Employees Retirement Association under section 356.214.
23.6 	(c)(d) After having met the definition of funding stability under paragraph (b), the 
23.7 	increase provided in paragraph (a), clauses (1) and (2), rather than an increase under 
23.8 	subdivision 1 provided in paragraph (c), clauses (1) and (2), is again to be applied in a 
23.9 	subsequent year or years if the market value of assets of the applicable plan equals or is less 
23.10 	than:
23.11 	(1) 85 percent of the actuarial accrued liabilities of the applicable plan for two consecutive 
23.12 	actuarial valuations; or
23.13 	(2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most recent 
23.14 	actuarial valuation.
23.15 	(d)(e) An increase in annuity or benefit payments under this section must be made 
23.16 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
23.17 	executive director of the Public Employees Retirement Association requesting that the 
23.18 	increase not be made.

23.19 	EFFECTIVE DATE. This section is effective January 1, 2018.

23.20 	Sec. 17. Minnesota Statutes 2016, section 356.415, subdivision 1c, is amended to read:
23.21 		Subd. 1c.Annual postretirement adjustments; PERA-police and fire. (a) Retirement 
23.22 	annuity, disability benefit, or survivor benefit recipients of the public employees police and 
23.23 	fire retirement plan are entitled to a postretirement adjustment annually on January 1, if the 
23.24 	definition of funding stability under paragraph (c) has not been met, as follows:
23.25 	(1) for each annuitant or benefit recipient whose annuity or benefit effective date is on 
23.26 	or before June 1, 2014, who has been receiving the annuity or benefit for at least 12 full 
23.27 	months as of the immediate preceding June 30, an amount equal to one percent in each year
23.28 	a postretirement increase of one percent must be applied each year to the monthly annuity 
23.29 	or benefit amount of the annuity or benefit recipient; or
23.30 	(2) for each annuitant or benefit recipient whose annuity or benefit effective date is on 
23.31 	or before June 1, 2014, who has been receiving the annuity or benefit for at least one full 
23.32 	month, but less than 12 months, as of the immediate preceding June 30, an amount equal 
23.33 	toa postretirement increase of 1/12 of one percent for each month that the person has been 
24.1 	receiving an annuity or benefit must be applied to the monthly annuity amount or benefit 
24.2 	amount of the annuity or benefit receipt; and
24.3 	(3) for each annuitant or benefit recipient whose annuity or benefit effective date is after 
24.4 	June 1, 2014, who will have been receiving an annuity or benefit for at least 36 full months 
24.5 	as of the immediate preceding June 30, an amount equal to one percent a postretirement 
24.6 	increase of one percent must be applied each year to the monthly annuity or benefit amount 
24.7 	of the annuity or benefit recipient; or
24.8 	(4) for each annuitant or benefit recipient whose annuity or benefit effective date is after 
24.9 	June 1, 2014, who has been receiving the annuity or benefit for at least 25 full months, but 
24.10 	less than 36 months as of the immediate preceding June 30, an amount equal toa 
24.11 	postretirement increase of 1/12 of one percent for each full month ofthat the person has 
24.12 	been receiving an annuity or benefit receipt during the fiscal year in which the annuity or 
24.13 	benefit was effective must be applied to the monthly annuity or benefit amount of the annuity 
24.14 	or benefit recipient.
24.15 	(b) Retirement annuity, disability benefit, or survivor benefit recipients of the public 
24.16 	employees police and fire retirement plan are entitled to a postretirement adjustment annually 
24.17 	on each January 1 following the restoration of funding stability as defined under paragraph 
24.18 	(c) and during the continuation of funding stability as defined under paragraph (c), as follows:
24.19 	(1) for each annuitant or benefit recipient who has been receiving the annuity or benefit 
24.20 	for at least 36 full months as of the immediate preceding June 30, an amount equal to 2.5 
24.21 	percent; and
24.22 	(2) for each annuitant or benefit recipient who has been receiving the annuity or benefit 
24.23 	for at least 25 full months, but less than 36 full months, as of the immediate preceding June 
24.24 	30, an amount equal to 1/12 of 2.5 percent for each full month of annuity or benefit receipt 
24.25 	during the fiscal year in which the annuity or benefit was effective.
24.26 	(c) Funding stability is restored when the market value of assets of the public employees 
24.27 	police and fire retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities 
24.28 	of the applicable plan in the two most recent consecutive actuarial valuations prepared under 
24.29 	section 356.215 and under the standards for actuarial work of the Legislative Commission 
24.30 	on Pensions and Retirement by the approved actuary retained by the Public Employees 
24.31 	Retirement Association under section 356.214.
24.32 	(d) After having met the definition of funding stability under paragraph (c), a full or 
24.33 	prorated increase, as provided in paragraph (a), clause (1), (2), (3), or (4), whichever applies, 
24.34 	rather than adjustments under paragraph (b), is again applied in a subsequent year or years 
25.1 	if the market value of assets of the public employees police and fire retirement plan equals 
25.2 	or is less than:
25.3 	(1) 85 percent of the actuarial accrued liabilities of the applicable plan for two consecutive 
25.4 	actuarial valuations; or
25.5 	(2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most recent 
25.6 	actuarial valuation.
25.7 	(e)(b) An increase in annuity or benefit payments under this section must be made 
25.8 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
25.9 	executive director of the Public Employees Retirement Association requesting that the 
25.10 	increase not be made.

25.11 	EFFECTIVE DATE. This section is effective January 1, 2018.

25.12 	Sec. 18. [356.59] INTEREST RATES.
25.13 		Subdivision 1.Applicable interest rates. Whenever the payment of interest is required 
25.14 	with respect to any payment, including refunds, remittances, shortages, contributions, or 
25.15 	repayments, the rate of interest is the rate or rates specified in subdivisions 2 to 4 for each 
25.16 	public retirement plan.
25.17 		Subd. 2.Minnesota State Retirement System. The interest rates for all retirement plans 
25.18 	administered by the Minnesota State Retirement System are as follows:

25.19				Annual
		Monthly
	
25.20		before July 1, 2015
	8.5 percent
	0.71 percent
	
25.21		from July 1, 2015, to June 30, 2017
	8.0 percent
	0.667 percent
	
25.22		after June 30, 2017
	7.5 percent
	0.625 percent
	
25.23 		Subd. 3.Public Employees Retirement Association. The interest rates for all retirement 
25.24 	plans administered by the Public Employees Retirement Association are as follows:

25.25		before July 1, 2015
	8.5 percent
		
25.26		from July 1, 2015, to June 30, 2017
	8.0 percent
		
25.27		after June 30, 2017
	7.5 percent
		
25.28 		Subd. 4.St. Paul Teachers Retirement Fund Association. The interest rates for the 
25.29 	retirement plan administered by the St. Paul Teachers Retirement Fund Association are as 
25.30 	follows:

25.31				Annual
		Monthly
	
25.32		before July 1, 2015
	8.5 percent
	0.71 percent
	
26.1		from July 1, 2015, to June 30, 2017
	8.0 percent
	0.667 percent
	
26.2		after June 30, 2017
	7.5 percent
	0.625 percent

26.3 	EFFECTIVE DATE. This section is effective July 1, 2017.

26.4 	Sec. 19.  REPEALER.
 26.5 	Minnesota Statutes 2016, section 356.415, subdivision 1, is repealed.

26.6 	EFFECTIVE DATE. This section is effective July 1, 2017.

APPENDIX 

Repealed Minnesota Statutes: 17-2857 

356.415 POSTRETIREMENT ADJUSTMENTS; STATEWIDE RETIREMENT PLANS.Subdivision 1.Annual postretirement adjustments; generally. 
(a) Except as otherwise provided in subdivision 1a, 1b, 1c, 1d, 1e, or 1f, retirement annuity, disability benefit, or survivor benefit recipients of a covered retirement plan are entitled to a postretirement adjustment annually on January 1, as follows: 

(1) a postretirement increase of 2.5 percent must be applied each year, effective January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the calendar year immediately before the adjustment; and 

(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit amount for at least one full month, but less than 12 full months as of the June 30 of the calendar year immediately before the adjustment, an annual postretirement increase of 1/12 of 2.5 percent for each month that the person has been receiving an annuity or benefit must be applied. 

(b) An increase in annuity or benefit payments under this section must be made automatically unless written notice is filed by the annuitant or benefit recipient with the executive director of the covered retirement plan requesting that the increase not be made.