as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
Engrossments | ||
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Introduction | Posted on 02/15/2001 |
1.1 A bill for an act 1.2 relating to retirement; public employees retirement 1.3 association; modifying membership eligibility; 1.4 modifying the definition of allowable service for 1.5 benefit calculation purposes; prorating service credit 1.6 for benefit calculation purposes; modifying employer 1.7 reporting requirements; modifying contribution rates; 1.8 changing amortization requirements; modifying the 1.9 definition of vesting; modifying contribution refunds; 1.10 amending Minnesota Statutes 2000, sections 353.01, 1.11 subdivisions 2, 2a, 2b, 7, 11b, 12, 12a, 16, and by 1.12 adding subdivisions; 353.27, subdivisions 2, 4, and 1.13 11; 353.29, subdivision 1; 353.32, subdivision 1a; 1.14 353.33, subdivision 1; 353.34, subdivisions 1, 2, 3, 1.15 and by adding subdivisions; 353.35, subdivision 2; 1.16 353.71, subdivisions 1 and 2; 353.86, subdivision 1; 1.17 and 356.215, subdivision 4g. 1.18 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.19 ARTICLE 1 1.20 Section 1. Minnesota Statutes 2000, section 353.01, 1.21 subdivision 2, is amended to read: 1.22 Subd. 2. [PUBLIC EMPLOYEE.] "Public employee" meansana 1.23 governmental employee performing personal services for a 1.24 governmental subdivisionunderdefined in subdivision 6, whose 1.25 salary is paid, in whole or in part, from revenue derived from 1.26 taxation, fees, assessments, or from other sources. The 1.27 termalsoincludesspecialthe classes of persons listed in 1.28subdivisionsubdivisions 2a, butand 2d. The term excludes 1.29specialthe classes of persons listed in subdivision 2b for 1.30 purposes of membership in the association.Public employeeThe 1.31 term does not include independent contractors and their 2.1 employees. A reemployed annuitant under section 353.37 must not 2.2 be considered to be a public employee for purposes of that 2.3 reemployment. 2.4 Sec. 2. Minnesota Statutes 2000, section 353.01, 2.5 subdivision 2a, is amended to read: 2.6 Subd. 2a. [INCLUDED EMPLOYEES.] (a) Public employeeswhose2.7salary from one governmental subdivision exceeds $425 in any2.8month shall participate as members of the association. If the2.9salary of an employee is less than $425 in a subsequent month,2.10the employee retains membership eligibility. The following2.11persons are considered public employees:2.12(1) employees whose annual salary from one governmental2.13subdivision exceeds a stipulation prepared in advance, in2.14writing, to be not more than $5,100 per calendar year or per2.15school year for school employees for employment expected to be2.16of a full year's duration or more than the prorated portion of2.17$5,100 per employment period expected to be of less than a full2.18year's duration. If compensation from one governmental2.19subdivision to an employee under this clause exceeds $5,100 per2.20calendar year or school year after being stipulated in advance2.21not to exceed that amount, the stipulation is no longer valid2.22and contributions must be made on behalf of the employee under2.23section 353.27, subdivision 12, from the month in which the2.24employee's salary first exceeded $425;2.25(2) employees whose total salary from concurrent2.26nontemporary positions in one governmental subdivision exceeds2.27$425 in any month;2.28(3) elected officers for service to which they were elected2.29by the public-at-large, or persons appointed to fill a vacancy2.30in an elective office, who elect to participate by filing an2.31application for membership, but not for service on a joint or2.32regional board that is a governmental subdivision under2.33subdivision 6, paragraph (a), unless the salary earned for that2.34service exceeds $425 in any month. The option to become a2.35member, once exercised, may not be withdrawn during the2.36incumbency of the person in office;3.1(4) members who are appointed by the governor to be a state3.2department head and elect not to be covered by the Minnesota3.3state retirement system under section 352.021;3.4(5) employees of elected officers;3.5(6) persons who elect to remain members under section3.6480.181, subdivision 2;3.7(7) employees of a school district who receive separate3.8salaries for driving their own buses;3.9(8) employees of the Minnesota association of townships3.10when the board of the association, at its option, certifies to3.11the executive director that its employees are to be included for3.12purposes of retirement coverage, in which case coverage of all3.13employees of the association is permanent;3.14(9) employees of a county historical society who are county3.15employees;3.16(10) employees of a county historical society located in3.17the county whom the county, at its option, certifies to the3.18executive director to be county employees for purposes of3.19retirement coverage under this chapter, which status must be3.20accorded to all similarly situated county historical society3.21employees and, once established, must continue as long as a3.22person is an employee of the county historical society and is3.23not excluded under subdivision 2b; and3.24(11) employees who became members before July 1, 1988,3.25based on the total salary of positions held in more than one3.26governmental subdivision.shall participate as members of the 3.27 association with retirement coverage by the public employees 3.28 retirement plan or the public employees police and fire 3.29 retirement plan under this chapter, or the local government 3.30 correctional employees retirement plan under chapter 353E, 3.31 whichever applies, as a condition of their employment on the 3.32 first day of employment unless they: 3.33 (1) are specifically excluded under subdivision 2b; 3.34 (2) do not exercise their right to elect retirement 3.35 coverage in the association as provided in subdivision 2d, 3.36 paragraph (a); or 4.1 (3) are employees of the governmental subdivisions listed 4.2 in subdivision 2d, paragraph (b), where the governmental 4.3 subdivision has not elected to participate in the association. 4.4 (b) A public employee who was a member of the association 4.5 on June 30, 2002, based on employment that qualified for 4.6 membership coverage by the public employees retirement plan or 4.7 the public employees police and fire plan under this chapter, or 4.8 the local government correctional employees retirement plan 4.9 under chapter 353E retains that membership until the employee 4.10 terminates all public employment or membership as defined in 4.11 subdivisions 11a and 11b. 4.12 Sec. 3. Minnesota Statutes 2000, section 353.01, 4.13 subdivision 2b, is amended to read: 4.14 Subd. 2b. [EXCLUDED EMPLOYEES.] The following public 4.15 employees shall not participate as members of the association 4.16 with retirement coverage by the public employees retirement 4.17 plan, the local government correctional employees retirement 4.18 plan under chapter 353E, or the public employees police and fire 4.19 retirement plan: 4.20 (1) except for elected county sheriffs, public officers 4.21 elected to a governing body, or persons appointed to fill a 4.22 vacancy in an elective office of a governing body,who do not4.23elect to participate in the association by filing an application4.24for membershipwhose term of office first commences on or after 4.25 July 1, 2002, for the service to be rendered in that elective 4.26 position. Elected governing body officials who were active 4.27 members of the association's coordinated or basic retirement 4.28 plans as of June 30, 2002, continue participation throughout 4.29 incumbency in office until termination of public service occurs 4.30 as defined in subdivision 11a; 4.31 (2) election officers or election judges; 4.32 (3) patient and inmate personnel who perform servicesin4.33charitable, penal, or correctional institutions offor a 4.34 governmental subdivision; 4.35 (4) employees who are hired for a temporary position under 4.36 subdivision 12a, and employees who resign from a nontemporary 5.1 position and accept a temporary position within 30 days in the 5.2 same governmental subdivision, but not those. An employer must 5.3 not apply the definition of temporary position so as to exclude 5.4 employees who are hiredfor an unlimited periodto fill 5.5 positions that are permanent or for an unspecified period but 5.6 who are serving a probationary period at the start of the 5.7 employment. If the period of employment extends beyond six 5.8 consecutive monthsand the employee earns more than $425 from5.9one governmental subdivision in any one calendar month, the 5.10 department head shall report the employee for membership and 5.11 require employee deductions be made on behalf of the employee 5.12 under section 353.27, subdivision 4. 5.13 The membership eligibility of an employee who resigns or is 5.14 dismissed from a temporary position and within 30 days accepts 5.15 another temporary position in the same governmental subdivision 5.16 is determined on the total length of employment rather than on 5.17 each separate position. Membership eligibility of an employee 5.18 who holds concurrent temporary and nontemporary positions in one 5.19 governmental subdivision is determined by the length of 5.20 employment and salary of each separate position; 5.21 (5)employees whose actual salary from one governmental5.22subdivision does not exceed $425 per month, or whose annual5.23salary from one governmental subdivision does not exceed a5.24stipulation prepared in advance, in writing, that the salary5.25must not exceed $5,100 per calendar year or per school year for5.26school employees for employment expected to be of a full year's5.27duration or more than the prorated portion of $5,100 per5.28employment period for employment expected to be of less than a5.29full year's duration;5.30(6)employees who are employed by reason of work emergency 5.31 caused by fire, flood, storm, or similar disaster; 5.32(7)(6) employees who by virtue of their employment in one 5.33 governmental subdivision are required by law to be a member of 5.34 and to contribute to any of the plans or funds administered by 5.35 the Minnesota state retirement system, the teachers retirement 5.36 association, the Duluth teachers retirement fund association, 6.1 the Minneapolis teachers retirement association, the St. Paul 6.2 teachers retirement fund association, the Minneapolis employees 6.3 retirement fund, or any police or firefighters relief 6.4 association governed by section 69.77 that has not consolidated 6.5 with the public employees retirement association, or any local 6.6 police or firefighters consolidation account but who have not 6.7 elected the type of benefit coverage provided by the public 6.8 employees police and fire fund under sections 353A.01 to 6.9 353A.10, or any persons covered by section 353.665, subdivision 6.10 4, 5, or 6, who have not elected public employees police and 6.11 fire plan benefit coverage. This clause must not be construed 6.12 to prevent a person from being a member of and contributing to 6.13 the public employees retirement association and also belonging 6.14 to and contributing to another public pension fund for other 6.15 service occurring during the same period of time. A person who 6.16 meets the definition of "public employee" in subdivision 2 by 6.17 virtue of other service occurring during the same period of time 6.18 becomes a member of the association unless contributions are 6.19 made to another public retirement fund on the salary based on 6.20 the other service or to the teachers retirement association by a 6.21 teacher as defined in section 354.05, subdivision 2; 6.22(8)(7) persons who are members of a religious order and 6.23 are excluded from coverage under the federal Old Age, Survivors, 6.24 Disability, and Health Insurance Program for the performance of 6.25 service as specified in United States Code, title 42, section 6.26 410(a)(8)(A), as amended through January 1, 1987, if no 6.27 irrevocable election of coverage has been made under section 6.28 3121(r) of the Internal Revenue Code of 1954, as amended; 6.29(9) full-time students who(8) employees who at the time 6.30 they are hired by a governmental subdivision are enrolledandon 6.31 a full-time basis to attend or areregularlyattending classes 6.32 at an accredited school, college, or universityand who are6.33part-time employees as defined by a governmental subdivisionin 6.34 an undergraduate, graduate, or professional-technical program, 6.35 or a public or charter high school, provided the employment is 6.36 predicated on the student status of the individual; 7.1(10)(9) resident physicians, medical interns, and 7.2 pharmacist residents and pharmacist interns who are serving in a 7.3 degree or residency program in public hospitals; 7.4(11)(10) students who are serving in an internship or 7.5 residency program sponsored by an accredited educational 7.6 institution; 7.7(12)(11) persons who hold a part-time adult supplementary 7.8 technical college license who render part-time teaching service 7.9 in a technical college; 7.10(13)(12) foreign citizens working for a governmental 7.11 subdivision with a work permit of less than three years, or an 7.12 H-1b visa valid for less than three years of employment. Upon 7.13 notice to the association that the work permit or visa extends 7.14 beyond the three-year period, the foreign citizens are eligible 7.15 for membership from the date of the extension; 7.16(14)(13) public hospital employees who elected not to 7.17 participate as members of the association before 1972 and who 7.18 did not elect to participate from July 1, 1988, to October 1, 7.19 1988; 7.20(15)(14) except as provided in section 353.86, volunteer 7.21 ambulance service personnel, as defined in subdivision 35, but 7.22 persons who serve as volunteer ambulance service personnel may 7.23 still qualify as public employees under subdivision 2 and may be 7.24 members of the public employees retirement association and 7.25 participants in the public employees retirement fund or the 7.26 public employees police and fire fund, whichever applies, on the 7.27 basis of compensation received from public employment service 7.28 other than service as volunteer ambulance service personnel; 7.29(16)(15) except as provided in section 353.87, volunteer 7.30 firefighters, as defined in subdivision 36, engaging in 7.31 activities undertaken as part of volunteer firefighter duties; 7.32 provided that a person who is a volunteer firefighter may still 7.33 qualify as a public employee under subdivision 2 and may be a 7.34 member of the public employees retirement association and a 7.35 participant in the public employees retirement fund or the 7.36 public employees police and fire fund, whichever applies, on the 8.1 basis of compensation received from public employment activities 8.2 other than those as a volunteer firefighter; 8.3(17)(16) pipefitters and associated trades personnel 8.4 employed by independent school district No. 625, St. Paul,with8.5 who have retirement coverage by the pipefitters local 455 8.6 pension plan under a collective bargaining agreement who were 8.7 either first employed after May 1, 1997, or, if first employed 8.8 before May 2, 1997, elected to be excluded under Laws 1997, 8.9 chapter 241, article 2, section 12;and8.10(18)(17) electrical workers, plumbers, carpenters, and 8.11 associated trades personnel employed by independent school 8.12 district No. 625, St. Paul, or the city of St. Paul, with 8.13 coverage by the electrical workers local 110 pension plan, the 8.14 united association plumbers local 34 pension plan, or the 8.15 carpenters local 87 pension plan under a collective bargaining 8.16 agreement who were either first employed after May 1, 2000, or, 8.17 if first employed before May 2, 2000, elected to be excluded 8.18 under Laws 2000, chapter 461, article 7, section 5.; 8.19 (18) employees hired after June 30, 2002, to fill seasonal 8.20 positions limited in duration by the employer to 185 consecutive 8.21 calendar days or less in each business year of the governmental 8.22 subdivision. A position is a seasonal position when the nature 8.23 of the work or its duration are related to a specific season or 8.24 seasons of the year, regardless of whether the employing agency 8.25 anticipates that the same employee will return to the position 8.26 each season in which it becomes available. The entire period of 8.27 employment in a business year will be used to determine whether 8.28 a position may be excluded as seasonal when there is less than a 8.29 30-day break between one seasonal position and a subsequent 8.30 seasonal position for employment with the same governmental 8.31 employer. Seasonal positions include, but may not be limited 8.32 to, coaching athletic activities; employment to plow snow or 8.33 maintain roads or parks, or to operate skating rinks, ski 8.34 lodges, golf courses, or swimming pools; and 8.35 (19) persons provided sheltered employment or work-study 8.36 positions by a governmental subdivision that participate in an 9.1 employment or industries program maintained for the benefit of 9.2 these persons where the governmental subdivision limits the 9.3 position's duration to three years or less. This includes 9.4 persons participating in a federal or state subsidized 9.5 on-the-job training, work experience, senior citizen, youth, or 9.6 unemployment relief program where the training or work 9.7 experience is not provided as a part of, or for future permanent 9.8 public employment. 9.9 Sec. 4. Minnesota Statutes 2000, section 353.01, is 9.10 amended by adding a subdivision to read: 9.11 Subd. 2d. [OPTIONAL MEMBERSHIP.] (a) Membership in the 9.12 association is optional by action of the individual employee for 9.13 the following public employees who meet the conditions set forth 9.14 in subdivision 2a: 9.15 (1) members of the coordinated plan who are also employees 9.16 of labor organizations as defined in section 353.017, 9.17 subdivision 1, for their employment by the labor organization 9.18 only if they elect to have membership under section 353.017, 9.19 subdivision 2; 9.20 (2) persons who are elected or persons who are appointed to 9.21 elected positions other than local governing body elected 9.22 positions who elect to participate by filing a written election 9.23 for membership; 9.24 (3) members of the association who are appointed by the 9.25 governor to be a state department head and elect not to be 9.26 covered by the general state employees retirement plan of the 9.27 Minnesota state retirement system under section 352.021; and 9.28 (4) city managers as defined in section 353.028, 9.29 subdivision 1, unless they elect to be excluded from membership 9.30 in the association under section 353.028, subdivision 2. 9.31 (b) Membership in the association is optional by action of 9.32 the governmental subdivision for the employees of the following 9.33 governmental subdivisions under the conditions specified: 9.34 (1) the Minnesota association of townships if the board of 9.35 the association, at its option, certifies to the executive 9.36 director that its employees are to be included for purposes of 10.1 retirement coverage, in which case the status of the association 10.2 as a participating employer is permanent; and 10.3 (2) a county historical society if the county in which the 10.4 historical society is located, at its option, certifies to the 10.5 executive director that the employees of the historical society 10.6 are to be county employees for purposes of retirement coverage 10.7 under this chapter. The status as a county employee must be 10.8 accorded to all similarly situated county historical society 10.9 employees and, once established, must continue as long as a 10.10 person is an employee of the county historical society. 10.11 (c) For employees covered by paragraph (a), clause (1), 10.12 (2), (3), or by paragraph (b), if the necessary membership 10.13 election is not made, the employee is excluded from retirement 10.14 coverage under this chapter. For employees covered by paragraph 10.15 (a), clause (4), if the necessary election is not made, the 10.16 employee must become a member and have retirement coverage under 10.17 this chapter. The option to become a member, once exercised 10.18 under this subdivision, may not be withdrawn until termination 10.19 of public service as defined under subdivision 11a. 10.20 Sec. 5. Minnesota Statutes 2000, section 353.01, 10.21 subdivision 7, is amended to read: 10.22 Subd. 7. [MEMBER.] "Member" means a person who accepts 10.23 employment as a "public employee" under subdivision 2, is an 10.24 employee who works in one or more positions that require or 10.25 allow membership in the association under subdivision 2a or 10.26 2d, for whom contributions have been withheld from salary and 10.27 who is not covered by the plan established in chapter 353D or 10.28 excluded under subdivision 2b. A person who is a member remains 10.29 a member while performing services as a public employee and 10.30 while on an authorized leave of absence or an authorized 10.31 temporary layoff. 10.32 Sec. 6. Minnesota Statutes 2000, section 353.01, 10.33 subdivision 11b, is amended to read: 10.34 Subd. 11b. [TERMINATION OF MEMBERSHIP.] (a) "Termination 10.35 of membership" means the conclusion of membership in the 10.36 association and occurs: 11.1 (1) upon termination of public service under subdivision 11.2 11a; 11.3 (2)when a member who is a part-time employee is excluded11.4from membership as a full-time student under subdivision 2b,11.5clause (9);11.6(3)when a member does not return to work within 30 days of 11.7 the expiration of an authorized temporary layoff under 11.8 subdivision 12 or an authorized leave of absence under 11.9 subdivision 31. If the employee subsequently returns to a11.10position in the same governmental subdivision, the employee11.11shall not again be required to earn a salary in excess of $42511.12per month, unless the employee has taken a refund of accumulated11.13employee deductions plus interest under section 353.34,11.14subdivision 1as evidenced by the appropriate record filed by 11.15 the governmental subdivision; or 11.16(4)(3) when a person files a written election to 11.17 discontinue employee deductions under section 353.27, 11.18 subdivision 7, paragraph (a), clause (1). 11.19 (b) The termination of membership must be reported to the 11.20 association by the governmental subdivision. 11.21 Sec. 7. Minnesota Statutes 2000, section 353.01, 11.22 subdivision 12, is amended to read: 11.23 Subd. 12. [AUTHORIZED TEMPORARY LAYOFF.] "Authorized 11.24 temporary layoff,"including seasonal leave of absence,means a 11.25 suspension of public service authorized by the employing 11.26 governmental subdivision for a specified period not exceeding 11.27 three months in any calendar year or school year for school 11.28 employees, as evidenced by appropriate record of the employer 11.29andpromptly transmitted to the association. The association 11.30 shall credit the member for an authorized temporary layoff only 11.31 as provided in subdivision 16, paragraph (a), clause (4). 11.32 Sec. 8. Minnesota Statutes 2000, section 353.01, 11.33 subdivision 12a, is amended to read: 11.34 Subd. 12a. [TEMPORARY POSITION.] (1) "Temporary position" 11.35 means an employment position predetermined by the employer at 11.36 the time of hiring to be a period of six months or lessor. 12.1 Temporary position also means an employment position occupied by 12.2 a person hired by the employer as a temporary replacement who 12.3 will be employed for a predetermined period of six months or 12.4 less. 12.5 (2) "Temporary position" does not mean an employment 12.6 position foran unlimited perioda specified term in which a 12.7 person serves a probationary periodor works an irregular12.8scheduleas a requirement for employment on a permanent or 12.9 unlimited basis. 12.10 Sec. 9. Minnesota Statutes 2000, section 353.01, is 12.11 amended by adding a subdivision to read: 12.12 Subd. 38. [BUSINESS YEAR.] "Business year" means the first 12.13 full pay period through the last full pay period of a 12.14 governmental subdivision's 12-month fiscal year. 12.15 Sec. 10. Minnesota Statutes 2000, section 353.86, 12.16 subdivision 1, is amended to read: 12.17 Subdivision 1. [PARTICIPATION.] Volunteer ambulance 12.18 service personnel, as defined in section 353.01, subdivision 35, 12.19 who are or become members of and participants in the public 12.20 employees retirement fund or the public employees police and 12.21 fire fund before July 1, 2002, and make contributions to either 12.22 of those funds based on compensation for service other than 12.23 volunteer ambulance service may elect to participate in that 12.24 same fund with respect to compensation received for volunteer 12.25 ambulance service, provided that the volunteer ambulance service 12.26 is not credited to another public or private pension plan 12.27 including the public employees retirement plan established by 12.28 chapter 353D and provided further that the volunteer ambulance 12.29 service is rendered for the same governmental unit for which the 12.30 nonvolunteer ambulance service is rendered. 12.31 Sec. 11. [EFFECTIVE DATE.] 12.32 Sections 1 to 10 are effective July 1, 2002. 12.33 ARTICLE 2 12.34 Section 1. Minnesota Statutes 2000, section 353.01, 12.35 subdivision 16, is amended to read: 12.36 Subd. 16. [ALLOWABLE SERVICE; LIMITS AND COMPUTATION.] (a) 13.1 "Allowable service" means: 13.2 (1) service during years of actual membership in the course 13.3 of which employee contributions were made, periods covered by 13.4 payments in lieu of salary deductions under section 353.35, and 13.5 service in years during which the public employee was not a 13.6 member but for which the member later elected, while a member, 13.7 to obtain credit by making payments to the fund as permitted by 13.8 any law then in effect.; 13.9(b) "Allowable service" also means(2) a period of 13.10 authorized leave of absence with pay from which deductions for 13.11 employee contributions are made, deposited, and credited to the 13.12 fund.; 13.13(c) "Allowable service" also means(3) a period of 13.14 authorized personal, parental, or medical leave of absence 13.15 without pay, including a leave of absence covered under the 13.16 Family Medical Leave Act, that does not exceed one year, and 13.17 during or for which a member obtained full or fractional service 13.18 credit for each month in the leave period by payments to the 13.19 fund made in place of salary deductions, provided that the 13.20 payments are made in an amount or amounts based on the member's 13.21 average salary on which deductions were paid for the last six 13.22 months of public service, or for that portion of the last six 13.23 months while the member was in public service, to apply to the 13.24 period in either case immediately preceding commencement of the 13.25 leave of absence. If the employee elects to pay employee 13.26 contributions for the period of any leave of absence without 13.27 pay, or for any portion of the leave, the employee shall also, 13.28 as a condition to the exercise of the election, pay to the fund 13.29 an amount equivalent to both the required employer and 13.30 additional employer contributions for the employee. The payment 13.31 must be made within one year from the expiration of the leave of 13.32 absence or within 20 days after termination of public service 13.33 under subdivision 11a. The employer by appropriate action of 13.34 its governing body, made a part of its official records, before 13.35 the date of the first payment of the employee contribution, may 13.36 certify to the association in writing its commitment to pay the 14.1 employer and additional employer contributions from the proceeds 14.2 of a tax levy made under section 353.28. Payments under this 14.3 paragraph must include interest at an annual rate of 8.5 percent 14.4 compounded annually from the date of the termination of the 14.5 leave of absence to the date payment is made. An employee shall 14.6 return to public service and receive a minimum of three months 14.7 of allowable service to be eligible to pay employee and employer 14.8 contributions for a subsequent authorized leave of absence 14.9 without pay. Upon payment the employee must be given allowable 14.10 service credit for full calendar months or fractions of a month 14.11 during the leave period as described in paragraph (d), clauses 14.12 (1) and (2), based on the salary or compensated hours used in 14.13 computing the payment amount; 14.14(d) "Allowable service" also means(4) a periodic, 14.15 repetitive leave that is offered to all employees of a 14.16 governmental subdivision. The leave program may not exceed 208 14.17 hours per annual normal work cycle as certified to the 14.18 association by the employer. A participating member obtains 14.19 service credit by making employee contributions in an amount or 14.20 amounts based on the member's average salary that would have 14.21 been paid if the leave had not been taken. The employer shall 14.22 pay the employer and additional employer contributions on behalf 14.23 of the participating member. The employee and the employer are 14.24 responsible to pay interest on their respective shares at the 14.25 rate of 8.5 percent a year, compounded annually, from the end of 14.26 the normal cycle until full payment is made. An employer shall 14.27 also make the employer and additional employer contributions, 14.28 plus 8.5 percent interest, compounded annually, on behalf of an 14.29 employee who makes employee contributions but terminates public 14.30 service. The employee contributions must be made within one 14.31 year after the end of the annual normal working cycle or within 14.32 20 days after termination of public service, whichever is 14.33 sooner. The association shall prescribe the manner and forms to 14.34 be used by a governmental subdivision in administering a 14.35 periodic, repetitive leave. Upon payment the member must be 14.36 given allowable service credit for full calendar months or 15.1 fractions of a month during the leave period as described in 15.2 paragraph (d), clauses (1) and (2), based on the salary or 15.3 compensated hours used in computing the payment amount; 15.4(e) "Allowable service" also means a period during which a15.5member is on an authorized sick leave of absence, without pay,15.6limited to one year. An employee who has received one year of15.7allowable service shall return to public service and receive a15.8minimum of three months of allowable service to receive15.9allowable service for a subsequent authorized sick leave of15.10absence.15.11(f) "Allowable service" also means(5) an authorized 15.12 temporary layoff under subdivision 12,. For temporary layoffs 15.13 beginning before July 1, 2002, allowable service shall be 15.14 limited to three months allowable service per authorized 15.15 temporary layoff in one calendar year.An employee who has15.16received the maximum service allowed for an authorized temporary15.17layoff shall return to public service and receive a minimum of15.18three months of allowable service to receive allowable service15.19for a subsequent authorized temporary layoff.For temporary 15.20 layoffs occurring on or after July 1, 2002, members shall 15.21 receive allowable service credit for the calendar month in which 15.22 the member does not receive salary due to the layoff using the 15.23 following formula: 15.24 (i) members who earn one month of credit for each of the 15.25 nine calendar months of the year of employment with the 15.26 governmental subdivision that authorized the layoff, shall 15.27 receive one month of credit, limited to three credits per year, 15.28 for each month of the temporary layoff; or 15.29 (ii) members who earn less than nine months of allowable 15.30 service credit in the year for periods of compensated employment 15.31 with the governmental subdivision that authorized the layoff, 15.32 shall receive credit on a fractional basis for each month of the 15.33 authorized layoff, limited to three, determined by dividing the 15.34 total amount of service credit earned for the compensated 15.35 employment by nine and multiplying the resulting number by the 15.36 total number of months in the layoff period that are not 16.1 compensated; or 16.2(g) Notwithstanding any law to the contrary, "allowable16.3service" also means a parental leave. The association shall16.4grant a maximum of two months service credit for a parental16.5leave, within six months after the birth or adoption, upon16.6documentation from the member's governmental subdivision or16.7presentation of a birth certificate or other evidence of birth16.8or adoption to the association.16.9(h) "Allowable service" also means(6) a period during 16.10 which a member is on an authorized leave of absence to enter 16.11 military service in the armed forces of the United States, 16.12 provided that the member returns to public service upon 16.13 discharge from military service under section 192.262 and pays 16.14 into the fund employee contributions based upon the employee's 16.15 salary at the date of return from military service. Payment 16.16 must be made within three times the length of the military leave 16.17 period, or five years of the date of discharge from the military 16.18 service, whichever is less. The amount of these contributions 16.19 must be in accord with the contribution rates and salary 16.20 limitations, if any, in effect during the leave, plus interest 16.21 at an annual rate of 8.5 percent compounded annually from the 16.22 date of return to public service to the date payment is made. 16.23 The matching employer contribution and additional employer 16.24 contribution under section 353.27, subdivisions 3 and 3a, must 16.25 be paid by the governmental subdivision employing the member 16.26 upon return to public service if the member makes the employee 16.27 contributions. The governmental subdivision involved may 16.28 appropriate money for those payments. A member may not receive 16.29 credit for a voluntary extension of military service at the 16.30 instance of the member beyond the initial period of enlistment, 16.31 induction, or call to active duty. Upon payment the employee 16.32 must be given allowable service credit for full calendar months 16.33 or fractions of a month during the leave period as described in 16.34 paragraph (d), clauses (1) and (2), based on the salary or 16.35 compensated hours used in computing the payment amount. 16.36(i)(b) For calculating benefits under sections 353.30, 17.1 353.31, 353.32, and 353.33 for state officers and employees 17.2 displaced by the Community Corrections Act, chapter 401, and 17.3 transferred into county service under section 401.04, "allowable 17.4 service" means combined years of allowable service as defined in 17.5paragraphsparagraph (a)to (i), clauses (1) to (6), and section 17.6 352.01, subdivision 11. 17.7(j)(c) For a public employee who has prior service covered 17.8 by a local police or firefighters relief association that has 17.9 consolidated with the public employees retirement association or 17.10 to which section 353.665 applies, and who has elected the type 17.11 of benefit coverage provided by the public employees police and 17.12 fire fund either under section 353A.08 following the 17.13 consolidation or under section 353.665, subdivision 4, 17.14 "applicable service" is a period of service credited by the 17.15 local police or firefighters relief association as of the 17.16 effective date of the consolidation based on law and on bylaw 17.17 provisions governing the relief association on the date of the 17.18 initiation of the consolidation procedure. 17.19 (d) For persons who, after June 30, 2002, first become 17.20 members or who terminated membership under subdivision 11b, and 17.21 again become members, of the public employees retirement plan, 17.22 the public employees police and fire plan under this chapter, or 17.23 the local government correctional employee retirement plan under 17.24 chapter 353E, whichever applies, allowable service means credit 17.25 for compensated hours from which deductions are made, or 17.26 payments are made in lieu of salary deductions as provided under 17.27 this subdivision and which are deposited and credited in the 17.28 fund as provided in section 353.27, determined as follows: 17.29 (1) one month of allowable service credit for each month 17.30 for which the employee has received salary for 80 or more 17.31 compensated hours; or 17.32 (2) a fraction of one month of allowable service for each 17.33 month for which the employee has received salary for less than 17.34 80 compensated hours based upon the number of compensated hours 17.35 as they relate to 80 hours. 17.36 (e) Elected officials and other public employees who are 18.1 compensated solely on an annual basis shall be considered to 18.2 have earned a full year of credit for each year in which 18.3 compensation is earned. 18.4 Allowable service determined and credited on a fractional 18.5 basis shall be used in calculating the amount of benefits 18.6 payable but must not be used in determining the length of 18.7 service required for vesting. For periods of part-time service 18.8 that are duplicated service credit, section 356.30, subdivision 18.9 1, paragraphs (g) and (h), govern. 18.10 No member shall receive more than 12 months of allowable 18.11 service credit in a year. 18.12 Sec. 2. Minnesota Statutes 2000, section 353.01, is 18.13 amended by adding a subdivision to read: 18.14 Subd. 39. [COMPENSATED HOURS.] "Compensated hours" means 18.15 the hours during which an employee performs services in one or 18.16 more positions for a single governmental subdivision for which 18.17 the employee receives compensation. The term also includes paid 18.18 holiday hours for which the employee is not required to work, 18.19 paid used sick leave hours, paid used personal leave hours and 18.20 vacation hours, and the paid hours drawn from accrued 18.21 compensatory time. 18.22 Sec. 3. Minnesota Statutes 2000, section 353.27, 18.23 subdivision 4, is amended to read: 18.24 Subd. 4. [EMPLOYER REPORTING REQUIREMENTS; CONTRIBUTIONS; 18.25 MEMBER STATUS.] (a) A representative authorized by the head of 18.26 each department shall deduct employee contributions from the 18.27 salary of each employee who qualifies for membership under this 18.28 chapter and remit payment in a manner prescribed by the 18.29 executive director for the aggregate amount of the employee 18.30 contributions, the employer contributions and the additional 18.31 employer contributions to be received within 14 calendar days. 18.32 The head of each department or the person's designee shall for 18.33 each pay period submit to the association a salary deduction 18.34 report in the format prescribed by the executive director. Data 18.35 to be submitted as part of salary deduction reporting must 18.36 include, but are not limited to: 19.1 (1) the legal names and social security numbers of 19.2 employees who are members; 19.3 (2) the amount of each employee's salary deduction; 19.4 (3) the amount of salary from which each deduction was 19.5 made; 19.6 (4) the beginning and ending dates of the payroll period 19.7 covered and the date of actual payment;and19.8 (5) adjustments or corrections covering past pay periods; 19.9 and 19.10 (6) the hours in the payroll period for which the member 19.11 received compensation. 19.12 (b) Employers must furnish the data required for enrollment 19.13 for each new employee who qualifies for membership in the format 19.14 prescribed by the executive director. The required enrollment 19.15 data on new employees must be submitted to the association prior 19.16 to or concurrent with the submission of the initial employee 19.17 salary deduction. The employer shall also report to the 19.18 association all member employment status changes, such as leaves 19.19 of absence, terminations, and death, and the effective dates of 19.20 those changes, on an ongoing basis for the payroll cycle in 19.21 which they occur. The employer shall furnish data, forms, and 19.22 reports as may be required by the executive director for proper 19.23 administration of the retirement system. Before implementing 19.24 new or different computerized reporting requirements, the 19.25 executive director shall give appropriate advance notice to 19.26 governmental subdivisions to allow time for system modifications. 19.27 (c) Notwithstanding paragraph (a), the association may 19.28 provide for less frequent reporting and payments for small 19.29 employers. 19.30 Sec. 4. Minnesota Statutes 2000, section 353.27, 19.31 subdivision 11, is amended to read: 19.32 Subd. 11. [EMPLOYERS; REQUIRED TO FURNISH REQUESTED 19.33 INFORMATION.] All governmental subdivisions shall furnish 19.34 promptly such other information relative to the employment 19.35 status of all employees or former employees, including but not 19.36 limited to payroll abstracts pertaining to all past and present 20.1 employees, as may be requested by the association or its 20.2 executive director, including schedules of salaries applicable 20.3 to various categories of employment, and the number of actual or 20.4 estimated hours for which the employees received compensation. 20.5 In the event payroll abstract records have been lost or 20.6 destroyed, for whatever reason or in whatever manner, so that 20.7 such schedules of salaries cannot be furnished therefrom, the 20.8 employing governmental subdivision, in lieu thereof, shall 20.9 furnish to the association an estimate of the earnings of any 20.10 employee or former employee for any period as may be requested 20.11 by the association or its executive director. Should the 20.12 association receive such schedules of estimated earnings, the 20.13 executive director is hereby authorized to use the same as a 20.14 basis for making whatever computations might be necessary for 20.15 determining obligations of the employee and employer to the 20.16 retirement fund. If estimates are not furnished by the employer 20.17 pursuant to the request of the association or its executive 20.18 director, the association may estimate the obligations of the 20.19 employee and employer to the retirement fund based upon such 20.20 records as are in its possession. Where payroll abstracts have 20.21 been lost or destroyed, the governmental agency need not furnish 20.22 any information pertaining to employment prior to July 1, 1963. 20.23 The association shall make no estimate of any obligation of any 20.24 employee, former employee, or employer covering employment prior 20.25 to July 1, 1963. 20.26 Sec. 5. [EFFECTIVE DATE.] 20.27 Sections 1 to 4 are effective July 1, 2002. 20.28 ARTICLE 3 20.29 Section 1. Minnesota Statutes 2000, section 353.27, 20.30 subdivision 2, is amended to read: 20.31 Subd. 2. [EMPLOYEE CONTRIBUTION.] (a) The employee 20.32 contribution is an amount (1) for a "basic member" equal to 8.75 20.33 percent of total salary; and (2) for a "coordinated member" 20.34 equal to4.75the following percent of total salary.: 20.35 (i) effective on the first paid date occurring after 20.36 December 31, 2001, 5.125 percent; and 21.1 (ii) effective on the first paid date occurring after 21.2 December 31, 2003, if the actuarial valuation of the public 21.3 employees retirement association general plan under section 21.4 356.215 indicates that the total contributions to the plan are 21.5 insufficient to meet the annual financial requirements of the 21.6 plan, 5.375 percent. 21.7 (b) These contributions must be made by deduction from 21.8 salary in the manner provided in subdivision 4. Where any 21.9 portion of a member's salary is paid from other than public 21.10 funds, such member's employee contribution must be based on the 21.11 total salary received from all sources. 21.12 Sec. 2. Minnesota Statutes 2000, section 356.215, 21.13 subdivision 4g, is amended to read: 21.14 Subd. 4g. [AMORTIZATION CONTRIBUTIONS.] (a) In addition to 21.15 the exhibit indicating the level normal cost, the actuarial 21.16 valuation must contain an exhibit indicating the additional 21.17 annual contribution sufficient to amortize the unfunded 21.18 actuarial accrued liability. For funds governed by chapters 3A, 21.19 352, 352B, 352C, 353, 354, 354A, and 490, the additional 21.20 contribution must be calculated on a level percentage of covered 21.21 payroll basis by the established date for full funding in effect 21.22 when the valuation is prepared. For funds governed by chapter 21.23 3A, sections 352.90 through 352.951, chapters 352B, 352C, 21.24 sections 353.63 through 353.68, and chapters 353C, 354A, and 21.25 490, the level percent additional contribution must be 21.26 calculated assuming annual payroll growth of 6.5 percent. For 21.27 funds governed by sections 352.01 through 352.86 and chapter 21.28 354, the level percent additional contribution must be 21.29 calculated assuming an annual payroll growth of five percent. 21.30 For the fund governed by sections 353.01 through 353.46, the 21.31 level percent additional contribution must be calculated 21.32 assuming an annual payroll growth of six percent. For all other 21.33 funds, the additional annual contribution must be calculated on 21.34 a level annual dollar amount basis. 21.35 (b) For any fund other than the Minneapolis employees 21.36 retirement fund and the public employees retirement association 22.1 general plan,after the first actuarial valuation date occurring22.2after June 1, 1989,if there has not been a change in the 22.3 actuarial assumptions used for calculating the actuarial accrued 22.4 liability of the fund, a change in the benefit plan governing 22.5 annuities and benefits payable from the fund, a change in the 22.6 actuarial cost method used in calculating the actuarial accrued 22.7 liability of all or a portion of the fund, or a combination of 22.8 the three, which change or changes by themselves without 22.9 inclusion of any other items of increase or decrease produce a 22.10 net increase in the unfunded actuarial accrued liability of the 22.11 fund, the established date for full fundingfor the first22.12actuarial valuation made after June 1, 1989, and each successive22.13actuarial valuationis the first actuarial valuation date 22.14 occurring after June 1, 2020. 22.15 (c) For any fund or plan other than the Minneapolis 22.16 employees retirement fund and the public employees retirement 22.17 association general plan,after the first actuarial valuation22.18date occurring after June 1, 1989,if there has been a change in 22.19 any or all of the actuarial assumptions used for calculating the 22.20 actuarial accrued liability of the fund, a change in the benefit 22.21 plan governing annuities and benefits payable from the fund, a 22.22 change in the actuarial cost method used in calculating the 22.23 actuarial accrued liability of all or a portion of the fund, or 22.24 a combination of the three, and the change or changes, by 22.25 themselves and without inclusion of any other items of increase 22.26 or decrease, produce a net increase in the unfunded actuarial 22.27 accrued liability in the fund, the established date for full 22.28 funding must be determined using the following procedure: 22.29 (i) the unfunded actuarial accrued liability of the fund 22.30 must be determined in accordance with the plan provisions 22.31 governing annuities and retirement benefits and the actuarial 22.32 assumptions in effect before an applicable change; 22.33 (ii) the level annual dollar contribution or level 22.34 percentage, whichever is applicable, needed to amortize the 22.35 unfunded actuarial accrued liability amount determined under 22.36 item (i) by the established date for full funding in effect 23.1 before the change must be calculated using the interest 23.2 assumption specified in subdivision 4d in effect before the 23.3 change; 23.4 (iii) the unfunded actuarial accrued liability of the fund 23.5 must be determined in accordance with any new plan provisions 23.6 governing annuities and benefits payable from the fund and any 23.7 new actuarial assumptions and the remaining plan provisions 23.8 governing annuities and benefits payable from the fund and 23.9 actuarial assumptions in effect before the change; 23.10 (iv) the level annual dollar contribution or level 23.11 percentage, whichever is applicable, needed to amortize the 23.12 difference between the unfunded actuarial accrued liability 23.13 amount calculated under item (i) and the unfunded actuarial 23.14 accrued liability amount calculated under item (iii) over a 23.15 period of 30 years from the end of the plan year in which the 23.16 applicable change is effective must be calculated using the 23.17 applicable interest assumption specified in subdivision 4d in 23.18 effect after any applicable change; 23.19 (v) the level annual dollar or level percentage 23.20 amortization contribution under item (iv) must be added to the 23.21 level annual dollar amortization contribution or level 23.22 percentage calculated under item (ii); 23.23 (vi) the period in which the unfunded actuarial accrued 23.24 liability amount determined in item (iii) is amortized by the 23.25 total level annual dollar or level percentage amortization 23.26 contribution computed under item (v) must be calculated using 23.27 the interest assumption specified in subdivision 4d in effect 23.28 after any applicable change, rounded to the nearest integral 23.29 number of years, but not to exceed 30 years from the end of the 23.30 plan year in which the determination of the established date for 23.31 full funding using the procedure set forth in this clause is 23.32 made and not to be less than the period of years beginning in 23.33 the plan year in which the determination of the established date 23.34 for full funding using the procedure set forth in this clause is 23.35 made and ending by the date for full funding in effect before 23.36 the change; and 24.1 (vii) the period determined under item (vi) must be added 24.2 to the date as of which the actuarial valuation was prepared and 24.3 the date obtained is the new established date for full funding. 24.4 (d) For the Minneapolis employees retirement fund, the 24.5 established date for full funding is June 30, 2020. 24.6 (e) For the public employees retirement association general 24.7 plan, the established date for full funding is June 30, 2031. 24.8 (f) For the retirement plans for which the annual actuarial 24.9 valuation indicates an excess of valuation assets over the 24.10 actuarial accrued liability, the valuation assets in excess of 24.11 the actuarial accrued liability must be recognized as a 24.12 reduction in the current contribution requirements by an amount 24.13 equal to the amortization of the excess expressed as a level 24.14 percentage of pay over a 30-year period beginning anew with each 24.15 annual actuarial valuation of the plan. 24.16 Sec. 3. [EFFECTIVE DATE.] 24.17 Section 1 is effective the first paid date following 24.18 December 31, 2001. Section 2 is effective June 30, 2001, for 24.19 actuarial valuations prepared on or after that date. 24.20 ARTICLE 4 24.21 Section 1. Minnesota Statutes 2000, section 353.01, is 24.22 amended by adding a subdivision to read: 24.23 Subd. 40. [VESTING.] "Vesting" for benefit eligibility is 24.24 defined as follows: 24.25 (1) for persons who were members of the public employees 24.26 retirement association on June 30, 2002, or the public employees 24.27 police and fire plan under this chapter, or the local government 24.28 correctional employees retirement plan under chapter 353E, 24.29 vesting means three years of allowable service as defined in 24.30 subdivision 18; and 24.31 (2) for persons who first become members or who terminated 24.32 public service under subdivision 11a and again become members of 24.33 the public employees retirement association after June 30, 2002, 24.34 vesting means five years of allowable service as defined in 24.35 subdivision 18. 24.36 Sec. 2. Minnesota Statutes 2000, section 353.29, 25.1 subdivision 1, is amended to read: 25.2 Subdivision 1. [AGE AND ALLOWABLE SERVICE REQUIREMENTS.] 25.3 Upon termination of membership, a person who has attained normal 25.4 retirement age and whoreceived credit for not less than three25.5years of allowable serviceis vested as defined in section 25.6 353.01, subdivision 40, is entitled upon application to a 25.7 retirement annuity. The retirement annuity is known as the 25.8 "normal" retirement annuity. 25.9 Sec. 3. Minnesota Statutes 2000, section 353.32, 25.10 subdivision 1a, is amended to read: 25.11 Subd. 1a. [SURVIVING SPOUSE OPTIONAL ANNUITY.] (a) If a 25.12 member or former member whohas credit for not less than three25.13years of allowable service andis vested as defined under 25.14 section 353.01, subdivision 40, dies before the annuity or 25.15 disability benefit begins to accrue under section 353.29, 25.16 subdivision 7, or 353.33, subdivision 2, notwithstanding any 25.17 designation of beneficiary to the contrary, the surviving spouse 25.18 may elect to receive, instead of a refund with interest under 25.19 subdivision 1, or surviving spouse benefits otherwise payable 25.20 under section 353.31, an annuity equal to the 100 percent joint 25.21 and survivor annuity that the member could have qualified for 25.22 had the member terminated service on the date of death. 25.23 (b) If the member was under age 55 and has credit for at 25.24 least 30 years of allowable service on the date of death, the 25.25 surviving spouse may elect to receive a 100 percent joint and 25.26 survivor annuity based on the age of the member and surviving 25.27 spouse on the date of death. The annuity is payable using the 25.28 full early retirement reduction under section 353.30, 25.29 subdivisions 1b and 1c, to age 55 and one-half of the early 25.30 retirement reduction from age 55 to the age payment begins. 25.31 (c) If the member was under age 55and has credit for at25.32least three years of allowable serviceis vested as defined 25.33 under section 353.01, subdivision 40, on the date of death but 25.34 did not qualify for retirement, the surviving spouse may elect 25.35 to receive the 100 percent joint and survivor annuity based on 25.36 the age of the member and surviving spouse at the time of 26.1 death. The annuity is payable using the full early retirement 26.2 reduction under section 353.30, subdivision 1, 1b, 1c, or 5, to 26.3 age 55 and one-half of the early retirement reduction from age 26.4 55 to the age payment begins. 26.5 Notwithstanding the definition of surviving spouse in 26.6 section 353.01, subdivision 20, a former spouse of the member, 26.7 if any, is entitled to a portion of the monthly surviving spouse 26.8 optional annuity if stipulated under the terms of a marriage 26.9 dissolution decree filed with the association. If there is no 26.10 surviving spouse or child or children, a former spouse may be 26.11 entitled to a lump-sum refund payment under subdivision 1, if 26.12 provided for in a marriage dissolution decree but not a monthly 26.13 surviving spouse optional annuity despite the terms of a 26.14 marriage dissolution decree filed with the association. 26.15 The surviving spouse eligible for surviving spouse benefits 26.16 under paragraph (a) may apply for the annuity at any time after 26.17 the date on which the deceased employee would have attained the 26.18 required age for retirement based on the employee's allowable 26.19 service. The surviving spouse eligible for surviving spouse 26.20 benefits under paragraph (b) or (c) may apply for an annuity any 26.21 time after the member's death. The annuity must be computed 26.22 under sections 353.29, subdivisions 2 and 3; 353.30, 26.23 subdivisions 1, 1a, 1b, 1c, and 5; and 353.31, subdivision 3. 26.24 Sections 353.34, subdivision 3, and 353.71, subdivision 2, 26.25 apply to a deferred annuity or surviving spouse benefit payable 26.26 under this subdivision. No payment may accrue beyond the end of 26.27 the month in which entitlement to the annuity has terminated or 26.28 upon expiration of the term certain benefit payment under 26.29 subdivision 1b. An amount equal to any excess of the 26.30 accumulated contributions that were credited to the account of 26.31 the deceased employee over and above the total of the annuities 26.32 paid and payable to the surviving spouse must be paid to the 26.33 deceased member's last designated beneficiary or, if none, as 26.34 specified under subdivision 1. 26.35 A member may specify in writing that this subdivision does 26.36 not apply and that payment may be made only to the designated 27.1 beneficiary as otherwise provided by this chapter. 27.2 Sec. 4. Minnesota Statutes 2000, section 353.33, 27.3 subdivision 1, is amended to read: 27.4 Subdivision 1. [AGE, SERVICE, AND SALARY REQUIREMENTS.] A 27.5 coordinated member whohas at least three years of allowable27.6serviceis vested as defined under section 353.01, subdivision 27.7 40, and becomes totally and permanently disabled before normal 27.8 retirement age, and a basic member whohas at least three years27.9of allowable serviceis vested as defined under section 353.01, 27.10 subdivision 40, and who becomes totally and permanently disabled 27.11 is entitled to a disability benefit in an amount under 27.12 subdivision 3. If the disabled person's public service has 27.13 terminated at any time,: (1) at least two of the required three 27.14 years of allowable service must have been rendered after last 27.15 becoming a member if vesting under section 353.01, subdivision 27.16 40, clause (1) applies; or (2) at least three of the required 27.17 five years of allowable service must have been rendered after 27.18 last becoming a member if vesting under section 353.01, 27.19 subdivision 40, clause (2), applies. A repayment of a refund 27.20 must be made within six months after the effective date of 27.21 disability benefits under subdivision 2 or within six months 27.22 after the date of the filing of the disability application, 27.23 whichever is later. No purchase of prior service or payment 27.24 made in lieu of salary deductions otherwise authorized under 27.25 section 353.01, subdivision 16, 353.017, subdivision 4, or 27.26 353.36, subdivision 2, may be made after the occurrence of the 27.27 disability for which an application under this section is filed. 27.28 Sec. 5. Minnesota Statutes 2000, section 353.34, 27.29 subdivision 1, is amended to read: 27.30 Subdivision 1. [REFUND OR DEFERRED ANNUITY.] (a) A former 27.31 member is entitled to a refund of accumulated employee 27.32 deductions under subdivision 2 and may be entitled to a portion 27.33 of accumulated matching employer contributions, as provided 27.34 under subdivision 2a, or to a deferred annuity under subdivision 27.35 3. Application for a refund may not be made prior to the date 27.36 of termination of public service or the termination of 28.1 membership, whichever is sooner. Except as specified in 28.2 paragraph (b), a refund must be paid within 120 days following 28.3 receipt of the application unless the applicant has again become 28.4 a public employee required to be covered by the association. 28.5 (b) If an individual was granted an authorized temporary 28.6 layoff, a refund is not payable before termination of membership 28.7 under section 353.01, subdivision 11b, clause (3). 28.8 (c) An individual who terminates public service covered by 28.9 the public employees retirement association general plan, the 28.10 public employees retirement association police and fire plan, or 28.11 the public employees local government corrections service 28.12 retirement plan, and who becomes an active member covered by one 28.13 of the other two plans, may receive a refund of employee 28.14 contributions plus six percent interest compounded annually from 28.15 the plan in which the member terminated service. If the 28.16 individual terminated public service covered by the public 28.17 employees retirement association general plan after June 30, 28.18 2001, the individual may also receive a portion of the employer 28.19 contributions as provided in subdivision 2a. 28.20 Sec. 6. Minnesota Statutes 2000, section 353.34, 28.21 subdivision 2, is amended to read: 28.22 Subd. 2. [REFUND WITH INTEREST.] Except as provided in 28.23 subdivision 1, any person who ceases to be a public employee 28.24 shall receive a refund in an amount equal to accumulated 28.25 deductions with interest to the first day of the month in which 28.26 the refund is processed at the rate of six percent compounded 28.27 annuallybased on fiscal year balances. If a person repays a28.28refund and subsequently applies for another refund, the28.29repayment amount, including interest, is added to the fiscal28.30year balance in which the repayment was made. 28.31 Sec. 7. Minnesota Statutes 2000, section 353.34, is 28.32 amended by adding a subdivision to read: 28.33 Subd. 2a. [PARTIAL REFUND OF EMPLOYER CONTRIBUTIONS.] A 28.34 former member who is vested as defined under section 353.01, 28.35 subdivision 40, when termination of public service or 28.36 termination of membership occurs after June 30, 2001, who 29.1 applies for a refund of the accumulated employee deductions 29.2 under subdivision 2 is also entitled to receive an additional 29.3 refund in an amount equal to the applicable percentage of the 29.4 total accumulated matching employer contributions made on the 29.5 former member's behalf, with interest to the first of the month 29.6 in which the refund is processed at the rate of six percent 29.7 compounded annually: 29.8 (1) 25 percent if the refund is paid before the person 29.9 attains the age of 55; or 29.10 (2) 50 percent if the refund is paid after the person 29.11 attains the age of 55. 29.12 Sec. 8. Minnesota Statutes 2000, section 353.34, is 29.13 amended by adding a subdivision to read: 29.14 Subd. 2b. [REFUND OF REPAYMENT.] If a person repays a 29.15 refund and subsequently applies for another refund, the 29.16 repayment amount, including interest, is added to the pay period 29.17 balance in which the repayment was made. 29.18 Sec. 9. Minnesota Statutes 2000, section 353.34, 29.19 subdivision 3, is amended to read: 29.20 Subd. 3. [DEFERRED ANNUITY; ELIGIBILITY; COMPUTATION.] A 29.21 memberwith at least three years of allowable servicewho is 29.22 vested as defined in section 353.01, subdivision 40, when 29.23 termination of public service or termination of membership 29.24 occurs has the option of leaving the accumulated deductions in 29.25 the fund and being entitled to a deferred retirement annuity 29.26 commencing at normal retirement age or to a deferred early 29.27 retirement annuity under section 353.30, subdivision 1, 1a, 1b, 29.28 1c, or 5. The deferred annuity must be computed under section 29.29 353.29, subdivisions 2 and 3, on the basis of the law in effect 29.30 on the date of termination of public service or termination of 29.31 membership and must be augmented as provided in section 353.71, 29.32 subdivision 2. A former member qualified to apply for a 29.33 deferred retirement annuity may revoke this option at any time 29.34 before the commencement of deferred annuity payments by making 29.35 application for a refund. The person is entitled to a refund of 29.36 accumulated member and employer contributions within 30 days 30.1 following date of receipt of the application by the executive 30.2 director. 30.3 Sec. 10. Minnesota Statutes 2000, section 353.35, 30.4 subdivision 2, is amended to read: 30.5 Subd. 2. [REFUND REPAYMENT.] A person who receives a 30.6 refund of accumulated employee deductions and employer 30.7 contributions as provided under section 353.34, subdivision 2a, 30.8 plus interest, may repay the total amount of the refund 30.9 including the interest, within 30 days of the date the refund 30.10 was issued, to retain allowable service. 30.11 Sec. 11. Minnesota Statutes 2000, section 353.71, 30.12 subdivision 1, is amended to read: 30.13 Subdivision 1. [ELIGIBILITY.] Any person who has been a 30.14 member of the public employees retirement association, or the 30.15 Minnesota state retirement system, or the teachers retirement 30.16 association, or any other public retirement system in the state 30.17 of Minnesota having a like provision, except a fund providing 30.18 benefits for police officers or firefighters governed by 30.19 sections 69.77 or 69.771 to 69.776, shall be entitled when 30.20 qualified to an annuity from each fund if the total allowable 30.21 service in all funds or in any two of these funds totals three 30.22 or more years, except when including allowable service in the 30.23 public employees retirement association general plan, the total 30.24 allowable service in all funds must satisfy vesting as defined 30.25 in section 353.01, subdivision 40, and provided no portion of 30.26 the allowable service upon which the retirement annuity from one 30.27 fund is based is again used in the computation for benefits from 30.28 another fund and provided further that the person has not taken 30.29 a refund from any one of these funds since the person's 30.30 membership in that association or system last terminated. The 30.31 annuity from each fund shall be determined by the appropriate 30.32 provisions of the law except that the requirement that a person 30.33 must have at least three years of allowable service in the 30.34 respective association or system, or in the case of the public 30.35 employees retirement association general plan, the vesting 30.36 requirements defined in section 353.01, subdivision 40, shall 31.1 not apply for the purposes of this sectionprovided the combined31.2service in two or more of these funds equals three or more years. 31.3 Sec. 12. Minnesota Statutes 2000, section 353.71, 31.4 subdivision 2, is amended to read: 31.5 Subd. 2. [DEFERRED ANNUITY COMPUTATION; AUGMENTATION.] (a) 31.6 The deferred annuity accruing under subdivision 1, or under 31.7 sections 353.34, subdivision 3, and 353.68, subdivision 4, must 31.8 be computed on the basis of allowable service prior to the 31.9 termination of public service and augmented as provided in this 31.10 paragraph. The required reserves applicable to a deferred 31.11 annuity, or to any deferred segment of an annuity must be 31.12 determined as of the first day of the month following the month 31.13 in which the former member ceased to be a public employee, or 31.14 July 1, 1971, whichever is later. These required reserves must 31.15 be augmented at the rate of five percentannuallycompounded 31.16 annually until January 1, 1981, and at the rate of three percent 31.17 thereafteruntil January 1 of the year following the year in31.18which the former member attains age 55. From that dateto the 31.19 effective date of retirement, the rate is five percent31.20compounded annually. If a person has more than one period of 31.21 uninterrupted service, the required reserves related to each 31.22 period must be augmented as specified in this paragraph. The 31.23 sum of the augmented required reserves is the present value of 31.24 the annuity. Uninterrupted service for the purpose of this 31.25 subdivision means periods of covered employment during which the 31.26 employee has not been separated from public service for more 31.27 than two years. If a person repays a refund, the restored 31.28 service must be considered as continuous with the next period of 31.29 service for which the employee has credit with this association. 31.30 This section must not reduce the annuity otherwise payable under 31.31 this chapter. This paragraph applies to individuals who become 31.32 deferred annuitants on or after July 1, 1971. For a member who 31.33 became a deferred annuitant before July 1, 1971, the paragraph 31.34 applies from July 1, 1971, if the former active member applies 31.35 for an annuity after July 1, 1973. 31.36 (b) The retirement annuity or disability benefit of, or the 32.1 survivor benefit payable on behalf of, a former member who 32.2 terminated service before July 1, 1997, or the survivor benefit 32.3 payable on behalf of a basic or police and fire member who was 32.4 receiving disability benefits before July 1, 1997, which is 32.5 first payable after June 30, 1997, must be increased on an 32.6 actuarial equivalent basis to reflect the change in the 32.7 postretirement interest rate actuarial assumption under section 32.8 356.215, subdivision 4d, from five percent to six percent under 32.9 a calculation procedure and tables adopted by the board and 32.10 approved by the actuary retained by the legislative commission 32.11 on pensions and retirement. 32.12 Sec. 13. [EFFECTIVE DATE.] 32.13 Sections 1 to 12 are effective July 1, 2001.