as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am
Engrossments | ||
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Introduction | Posted on 02/22/1999 |
1.1 A bill for an act 1.2 relating to retirement; modifying various public 1.3 pension plan provisions; providing for uniformity in 1.4 various administrative provisions; modifying 1.5 definitions; making technical and administrative 1.6 changes; establishing a pilot program; amending 1.7 Minnesota Statutes 1998, sections 3A.03, subdivision 1.8 2; 122A.46, subdivision 2; 352.01, subdivision 26; 1.9 352.03, subdivision 1; 352.04, subdivision 8; 352.12, 1.10 subdivisions 2 and 2a; 352.22, subdivision 2; 352B.01, 1.11 subdivisions 3 and 10; 352B.11, subdivisions 1 and 2; 1.12 352D.05, subdivision 3; 352D.06, subdivision 3; 1.13 352D.09, subdivision 5a; 353.01, subdivisions 6, 15a, 1.14 and 28; 353.03, subdivision 4; 353.15, subdivision 2; 1.15 353.32, subdivisions 1a and 1b; 353.33, subdivisions 1.16 2, 6, 7, and 9; 353.34, subdivision 3; 353.656, 1.17 subdivisions 1, 3, and 4; 353.71, subdivision 2; 1.18 353B.11, subdivision 3; 354.05, subdivisions 2, 8a, 1.19 35, 37, and 40; 354.06, subdivision 1; 354.091; 1.20 354.092, subdivision 2; 354.093; 354.094, subdivision 1.21 1; 354.10, subdivisions 2 and 4; 354.35; 354.445; 1.22 354.46, subdivisions 2 and 2a; 354.48, subdivision 6; 1.23 354.49, subdivision 1; 354.52, subdivisions 3, 4, 4a, 1.24 and 4b; 354.63, subdivision 2; 356.30, subdivision 1; 1.25 490.121, subdivision 17; and 490.124, subdivision 12; 1.26 proposing coding for new law in Minnesota Statutes, 1.27 chapter 356; repealing Minnesota Statutes 1998, 1.28 sections 353.024; and 354.52, subdivision 2. 1.29 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.30 ARTICLE 1 1.31 MINNESOTA STATE RETIREMENT SYSTEM 1.32 Section 1. Minnesota Statutes 1998, section 3A.03, 1.33 subdivision 2, is amended to read: 1.34 Subd. 2. [REFUND.] (1) Anypersonformer member who has 1.35 ever made contributions pursuant to subdivision 1 who is no 1.36 longer a member of the legislature is entitled to receive upon 1.37 application to the director a refund of all contributions 2.1 credited to the member's account with interest at an annual rate 2.2 of six percent compounded annually. 2.3 (2) The refund of contributions as provided in clause (1) 2.4 terminates all rights of a former member of the legislature or 2.5 survivors of the former member under this chapter. Should the 2.6 former member of the legislature again be a member of the 2.7 legislature after having taken a refund as provided above, the 2.8 member shall be considered a new member. However, a new member 2.9 may reinstate the rights and credit for service forfeited, 2.10 provided the new member repays all refunds taken plus interest 2.11 at an annual rate of 8.5 percent compounded annually. 2.12 (3) No person shall be required to apply for or accept a 2.13 refund. 2.14 Sec. 2. Minnesota Statutes 1998, section 352.01, 2.15 subdivision 26, is amended to read: 2.16 Subd. 26. [DEPENDENT CHILD.] "Dependent child" means a 2.17 biological or adopted child of a deceased employee who has not 2.18 reached the age of20 and is dependent upon the employee for2.19more than one-half of the child's support22 or a dependent 2.20 child at any age if totally and permanently disabled as defined 2.21 in subdivision 17 at the time of the employee's death. It also 2.22 means a child of thememberemployee conceived during the 2.23member'semployee's lifetime and born after themember's2.24 employee's death. 2.25 Sec. 3. Minnesota Statutes 1998, section 352.03, 2.26 subdivision 1, is amended to read: 2.27 Subdivision 1. [MEMBERSHIP OF BOARD; ELECTION; TERM.] The 2.28 policy-making function of the system is vested in a board of 11 2.29 members, who must beknown as the board of directors. This 2.30 board shall consist of three members appointed by the governor, 2.31 one of whom must be a constitutional officer or appointed state 2.32 official and two of whom must be public members knowledgeable in 2.33 pension matters, four state employees elected by state employees 2.34 covered by the system excluding employees in categories 2.35 specifically authorized to designate or elect a member by this 2.36 subdivision, one employeeof the transit operating divisionof 3.1 the metropolitan council's transitcommissionoperations or its 3.2 successor agency designated by the executive committee of the 3.3 labor organization that is the exclusive bargaining agent 3.4 representing employees of the transit division, one member of 3.5 the state patrol retirement fund elected by members of that fund 3.6 at a time and in a manner fixed by the board, one employee 3.7 covered by the correctional employees plan elected by employees 3.8 covered by that plan, and one retired employee elected by 3.9 disabled and retired employees of all plans administered by the 3.10 system at a time and in a manner to be fixed by the board. Two 3.11 state employee members, whose terms of office begin on the first 3.12 Monday in May after their election, must be elected biennially. 3.13 Elected members and the appointed member of the metropolitan 3.14 council'soffice oftransit operations hold office for a term of 3.15 four years, except the retired member whose term is two years,3.16 and until their successors are elected or appointed, and have 3.17 qualified. An employee of the system is not eligible for 3.18 membership on the board of directors. A state employee on leave 3.19 of absence is not eligible for election or reelection to 3.20 membership on the board of directors. The term of any board 3.21 member who is on leave for more than six months automatically 3.22 ends on expiration ofthis periodthe term of office. 3.23 Sec. 4. Minnesota Statutes 1998, section 352.04, 3.24 subdivision 8, is amended to read: 3.25 Subd. 8. [DEPARTMENT REQUIRED TO PAY OMITTED SALARY 3.26 DEDUCTIONS.] (a) If a department fails to take deductions past 3.27 due for a period of6015 days or less from an employee's salary 3.28 as provided in this section, those deductions must be taken on 3.29 later payroll abstracts. 3.30 (b) If a department fails to take deductions past due for a 3.31 period in excess of6015 days from an employee's salary as 3.32 provided in this section, the department, and not the employee, 3.33 must pay on later payroll abstracts the employee and employer 3.34 contributions and an amount equivalent to 8.5 percent of the 3.35 total amount due in lieu of interest, or if the delay in payment 3.36 exceeds one year, 8.5 percent compound annual interest. 4.1 (c) If a department fails to take deductions past due for a 4.2 period of6015 days or less and the employee is no longer in 4.3 state service so that the required deductions cannot be taken 4.4 from the salary of the employee, the department must 4.5 nevertheless pay the required employer contributions. If any 4.6 department fails to take deductions past due for a period in 4.7 excess of6015 days and the employee is no longer in state 4.8 service, the omitted contributions must be recovered under 4.9 paragraph (b). 4.10 (d) If an employee from whose salary required deductions 4.11 were past due for a period of6015 days or less leaves state 4.12 service before the payment of the omitted deductions and 4.13 subsequently returns to state service, the unpaid amount is 4.14 considered the equivalent of a refund. The employee accrues no 4.15 right by reason of the unpaid amount, except that the employee 4.16 may pay the amount of omitted deductions as provided in section 4.17 352.23. 4.18 Sec. 5. Minnesota Statutes 1998, section 352.12, 4.19 subdivision 2, is amended to read: 4.20 Subd. 2. [SURVIVING SPOUSE BENEFIT.] (a) If an employee or 4.21 former employee has credit for at least three years allowable 4.22 service and dies before an annuity or disability benefit has 4.23 become payable, notwithstanding any designation of beneficiary 4.24 to the contrary, the surviving spouse of the employee may elect 4.25 to receive, in lieu of the refund with interest under 4.26 subdivision 1, an annuity equal to the joint and 100 percent 4.27 survivor annuity which the employee or former employeecould4.28have qualified for on the date of deathhad earned based on 4.29 length of service, average salary, and age the employee would 4.30 have been at the date payment begins. 4.31 (b) If the employee was under age 55 and has credit for at 4.32 least 30 years of allowable service on the date of death, the 4.33 surviving spouse may elect to receive a 100 percent joint and 4.34 survivor annuity based on the ageofthe employee would have 4.35 been and the age of the surviving spouse on the dateof death4.36 payment begins. The annuity is payable using the full early 5.1 retirement reduction under section 352.116, subdivision 1, 5.2 paragraph (a), from age 55 to age5562 and one-half of the 5.3 early retirement reduction from age 55 to the age payment begins. 5.4 (c) If the employee was under age 55 and has credit for at 5.5 least three years of allowable service credit on the date of 5.6 death but did not yet qualify for retirement, the surviving 5.7 spouse may elect to receive a 100 percent joint and survivor 5.8 annuity based on the ageofthe deceased employee would have 5.9 been and the age of the surviving spouse at thetime of death5.10 date payment begins. The annuity is payable using the full 5.11 early retirement reduction under section 352.116, subdivision 1 5.12 or 1a,to age 55from age 55 to retirement age and one-half of 5.13 the early retirement reduction from age 55 to the age payment 5.14 begins. 5.15 The surviving spouse of a former employee eligible for 5.16 benefits under paragraph (a) may apply for the annuity at any 5.17 time after the date on which theemployee orformer employee 5.18 would have attained the required age for retirement based on the 5.19 allowable service earned. The surviving spouse eligible for 5.20 surviving spouse benefits under paragraph (b) or (c) may apply 5.21 for the annuity at any time after the employee's death. The 5.22 annuity must be computed under sections 352.115, subdivisions 1, 5.23 2, and 3, and 352.116, subdivisions 1, 1a, and 3. Sections 5.24 352.22, subdivision 3, and 352.72, subdivision 2, apply to a 5.25 deferred annuity or surviving spouse benefit payable under this 5.26 subdivision. The annuity must cease with the last payment 5.27 received by the surviving spouse in the lifetime of the 5.28 surviving spouse, or upon expiration of a term certain benefit 5.29 payment to a surviving spouse under subdivision 2a. An amount 5.30 equal to the excess, if any, of the accumulated contributions 5.31 credited to the account of the deceased employee in excess of 5.32 the total of the benefits paid and payable to the surviving 5.33 spouse must be paid to thedeceased employee's or former5.34employee's last designated beneficiary or, if none, as specified5.35under subdivision 1surviving spouse's estate. 5.36 Any employee or former employee may request in writing that 6.1 this subdivision not apply and that payment be made only to a 6.2 designated beneficiary as otherwise provided by this chapter. 6.3 Sec. 6. Minnesota Statutes 1998, section 352.12, 6.4 subdivision 2a, is amended to read: 6.5 Subd. 2a. [SURVIVING SPOUSE COVERAGE TERM CERTAIN.] In 6.6 lieu of the 100 percent optional annuity under subdivision 2, or 6.7 refund under subdivision 1, the surviving spouse of a deceased 6.8 employee or former employee may elect to receive survivor 6.9 coverage in a term certain offive,ten, 15, or 20 years, but 6.10 monthly payments must not exceed 75 percent of the average 6.11 high-five monthly salary of the deceased employee or former 6.12 employee. The monthly term certain annuity must be actuarially 6.13 equivalent to the 100 percent optional annuity under subdivision 6.14 2. 6.15 If a survivor elects a term certain annuity and dies before 6.16 the expiration of the specified term certain period, the 6.17 commuted value of the remaining annuity payments must be paid in 6.18 a lump sum to the survivor's estate. 6.19 Sec. 7. Minnesota Statutes 1998, section 352.22, 6.20 subdivision 2, is amended to read: 6.21 Subd. 2. [AMOUNT OF REFUND.] Except as provided in 6.22 subdivision 3, the refund payable to a person who at any time in 6.23 the past ceased to be a state employee by reason of termination 6.24 of state service is in an amount equal to employee accumulated 6.25 contributions plus interest at the rate of six percent per year 6.26 compounded annually. Included with the refund is any interest 6.27 paid as part of repayment of a past refund, plus interest 6.28 thereon from the date of repayment. Interest must be computed 6.29 to the first day of the month in which the refund is processed 6.30 and must be based on fiscal year or monthly balances, whichever 6.31 applies. 6.32 Sec. 8. Minnesota Statutes 1998, section 352B.01, 6.33 subdivision 3, is amended to read: 6.34 Subd. 3. [ALLOWABLE SERVICES.] "Allowable service" means: 6.35 (a) for members defined in subdivision 2, clause 6.36 (a), monthly service is granted for any month for which payments 7.1 have been made to the state patrol retirement fund, and 7.2 (b) for members defined in subdivision 2, clauses (b) and 7.3 (c), service for which payments have been made to the state 7.4 patrol retirement fund, service for which payments were made to 7.5 the state police officers retirement fund after June 30, 1961, 7.6 and all prior service which was credited to a member for service 7.7 on or before June 30, 1961. 7.8 Allowable service also includes any period of absence from duty 7.9 by a member who, by reason of injury incurred in the performance 7.10 of duty, is temporarily disabled and for which disability the 7.11 state is liable under the workers' compensation law, until the 7.12 date authorized by the executive director for commencement of 7.13 payment of a disability benefit or return to employment. 7.14 Sec. 9. Minnesota Statutes 1998, section 352B.01, 7.15 subdivision 10, is amended to read: 7.16 Subd. 10. [DEPENDENT CHILD.] "Dependent child" means a 7.17naturalbiological or adoptedunmarriedchild of a deceased 7.18 member under the age of1823 years, or a dependent child of any 7.19 age if totally and permanently disabled as defined in section 7.20 352.01, subdivision 17, including any child of the member 7.21 conceived during the lifetime of the member and born after the 7.22 death of the member. 7.23 Sec. 10. Minnesota Statutes 1998, section 352B.11, 7.24 subdivision 1, is amended to read: 7.25 Subdivision 1. [REFUND OF PAYMENTS.] A member who has not 7.26 received other benefits under this chapter is entitled to a 7.27 refund of payments made by salary deduction at any time in the 7.28 past, plus interest, if the member is separated, either 7.29 voluntarily or involuntarily, from state service that entitled 7.30 the member to membership. In the event of the member's death, 7.31 if there are no survivor benefits payable under this chapter, a 7.32 refund is payable to the last designated beneficiary on a form 7.33 filed with the director before death, or if no designation is 7.34 filed, the refund is payable to the member's estate. Interest 7.35 must be computed at the rate of six percent a year, compounded 7.36 annually. To receive a refund, application must be made on a 8.1 form prescribed by the executive director. 8.2 Sec. 11. Minnesota Statutes 1998, section 352B.11, 8.3 subdivision 2, is amended to read: 8.4 Subd. 2. [DEATH; PAYMENT TO SPOUSE AND CHILDREN.] If a 8.5 member serving actively as a member, or a member or former 8.6 member receiving the disability benefit before attaining age 65 8.7 or reaching the five-year anniversary of the effective date of 8.8 the disability benefit, whichever is later, provided by section 8.9 352B.10, subdivisions 1 and 2, dies from any cause before 8.10 attaining age 65 or reaching the five-year anniversary of the 8.11 effective date of the disability benefit, whichever is later, 8.12 the surviving spouse and dependent children are entitled to 8.13 benefit payments as follows: 8.14 (a) A member with at least three years of allowable service 8.15 is deemed to have elected a 100 percent joint and survivor 8.16 annuity payable to a surviving spouse only on or after the date 8.17 the member or former member became or would have become 55. 8.18 (b) The surviving spouse of a member who had credit for 8.19 less than three years of service shall receive, for life, a 8.20 monthly annuity equal to 50 percent of that part of the average 8.21 monthly salary of the member from which deductions were made for 8.22 retirement. 8.23 (c) The surviving spouse of a member who had credit for at 8.24 least three years service and who died after becoming 55 years 8.25 old, may elect to receive a 100 percent joint and survivor 8.26 annuity, for life, notwithstanding a subsequent remarriage, in 8.27 lieu of the annuity prescribed in paragraph (b). 8.28 (d) The surviving spouse of any member who had credit for 8.29 three years or more and who was not 55 years old at death, shall 8.30 receive the benefit equal to 50 percent of the average monthly 8.31 salary as described in clause (b) until the deceased member 8.32 would have become 55 years old, and beginning the first of the 8.33 month following that date, may elect to receive the 100 percent 8.34 joint and survivor annuity. 8.35 (e) Each dependent child shall receive a monthly annuity 8.36 equal toten12-1/2 percent of that part of the average monthly 9.1 salary of the former member from which deductions were made for 9.2 retirement.A dependent child over 18 and under 23 years of age9.3also may receive the monthly benefit provided in this section,9.4if the child is continuously attending an accredited school as a9.5full-time student during the normal school year as determined by9.6the director. If the child does not continuously attend school9.7but separates from full-time attendance during any part of a9.8school year, the annuity shall cease at the end of the month of9.9separation. In addition, a payment of $20 per month shall be9.10prorated equally to surviving dependent children when the former9.11member is survived by one or more dependent children.Payments 9.12 for the benefit of anyqualified dependentminor child must be 9.13 made to the surviving spouse, or if there is none, to the legal 9.14 guardian of the child. The maximum monthly benefit for any one 9.15 family must not be less than 50 nor exceed 70 percent of the 9.16 average monthly salary for any number of children. 9.17 (f) If the member dies under circumstances that entitle the 9.18 surviving spouse and dependent children to receive benefits 9.19 under the workers' compensation law, the workers' compensation 9.20 benefits received by them must not be deducted from the benefits 9.21 payable under this section. 9.22 (g) The surviving spouse of a deceased former member who 9.23 had credit for three or more years of allowable service, but not 9.24 the spouse of a former member receiving a disability benefit 9.25 under section 352B.10, subdivision 2, is entitled to receive the 9.26 100 percent joint and survivor annuity at the time the deceased 9.27 member would have become 55 years old. If a former member dies 9.28 who does not qualify for other benefits under this chapter, the 9.29 surviving spouse or, if none, the children, designated 9.30 beneficiary, orheirsthe member's estate are entitled to a 9.31 refund of the accumulated deductions left in the fund plus 9.32 interest at the rate of six percent per year compounded annually. 9.33 Sec. 12. Minnesota Statutes 1998, section 352D.05, 9.34 subdivision 3, is amended to read: 9.35 Subd. 3. After termination of covered employment or at any 9.36 time thereafter, a participant is entitled, upon application, to 10.1 withdraw the cash value of the participant's total shares or 10.2 leave such shares on deposit with the supplemental retirement 10.3 fund. The account is valued at the end of the month in which 10.4 application for withdrawal is made. Shares not withdrawn remain 10.5 on deposit with the supplemental retirement fund until the 10.6 former participant becomes at least 55 years old, and applies 10.7 for an annuity under section 352D.06, subdivision 1. 10.8 Sec. 13. Minnesota Statutes 1998, section 352D.06, 10.9 subdivision 3, is amended to read: 10.10 Subd. 3. An annuity herein shall begin to accrue the first 10.11 day of the first full month after an application is received or 10.12 after termination of state service, whichever is later. Upon 10.13 the former employee's request, the annuity may begin to accrue 10.14 up to six months before redemption of shares, and will be based 10.15 on the account value at redemption and upon the age of the 10.16 former employee at the date annuity accrual starts. The account 10.17 is valued and redeemed the later of the end of the month of 10.18 termination of employment, or the end of the month of receipt of 10.19 the annuity application for the purpose of computing the annuity. 10.20 Sec. 14. Minnesota Statutes 1998, section 352D.09, 10.21 subdivision 5a, is amended to read: 10.22 Subd. 5a. [SMALL BALANCE ACCOUNTS.] If a former 10.23 participant who contributed less than$100$500 in employee 10.24 contributions cannot be contacted by the system for five or more 10.25 years, the value of the shares shall be appropriated to the 10.26 general employees retirement fund, but upon subsequent contact 10.27 by the former employee the account shall be reinstated to the 10.28 amount that would have been payable had the money been left in 10.29 the unclassified plan. 10.30 Sec. 15. [356.89] [PILOT PROGRAM.] 10.31 The Minnesota state retirement system and the public 10.32 employees retirement association are authorized to start a pilot 10.33 program to transfer previous service credit to the plan to which 10.34 the employee is currently contributing, transfer credit to the 10.35 plan to which the employee is currently contributing, transfer 10.36 credit for employees who are no longer contributing, and 11.1 transfer payments to current retirees who had service covered by 11.2 both of the plans. The pilot program will be established for a 11.3 three-year period after being certified by the actuary retained 11.4 by the legislative commission on pensions and retirement that 11.5 there is no significant additional liability added to the fund 11.6 receiving the additional service credit and that the employees' 11.7 benefits will not increase or decrease under the pilot program. 11.8 The plan receiving the service credit or benefit obligation 11.9 will pay all future benefits to the employee and must retain the 11.10 appropriate records to pay future benefits. The amount of the 11.11 benefit from the plan receiving the service credit must be equal 11.12 to the benefit that would have been payable from the plan 11.13 transferring the service credit under the applicable laws under 11.14 this chapter and chapters 352 and 353. 11.15 Upon the transfer of service credit or benefit payment, the 11.16 fund transferring the service will transfer assets representing 11.17 the actuarial present value of the service credit being 11.18 transferred to the fund receiving the service credit. Once the 11.19 service credit is transferred, the fund transferring the service 11.20 is no longer liable to make benefit payments of any kind, and 11.21 any future liability will be the responsibility of the fund 11.22 receiving the service credit. 11.23 Full details of the pilot program must be submitted to the 11.24 actuary retained by the legislative commission on pensions and 11.25 retirement prior to implementation. The transfer of service 11.26 credit must result in no benefit increase or decrease for the 11.27 member and cannot result in a significant cost to either the 11.28 fund transferring the service credit or the fund receiving the 11.29 service credit. The actuary retained by the legislative 11.30 commission on pensions and retirement must certify that the 11.31 pilot program meets the requirements under this statute before 11.32 it is implemented. 11.33 The executive director of the Minnesota state retirement 11.34 system and the public employees retirement association will 11.35 report back to the legislative commission on pensions and 11.36 retirement one year after the program is established. The 12.1 report will include data regarding the number of accounts 12.2 transferred and whether or not any financial impact resulted 12.3 from the pilot project. 12.4 Sec. 16. Minnesota Statutes 1998, section 490.121, 12.5 subdivision 17, is amended to read: 12.6 Subd. 17. [DEPENDENT CHILD.] "Dependent child" meansany12.7naturala biological or adopted child of a deceased judge who 12.8has not reached the age of 18 years, or having reached the age12.9of 18,is under age 22and is a full time student throughout the12.10normal school year, unmarried, or at any age who is totally and 12.11 permanently disabled as defined in section 352.01, subdivision 12.12 17, and actually dependent for more than one-half of the child's 12.13 support upon such judge for a period of at least 90 days prior 12.14 to the judge's death. It also includesany naturala biological 12.15 child of the judge born after the judge's death. 12.16 Sec. 17. Minnesota Statutes 1998, section 490.124, 12.17 subdivision 12, is amended to read: 12.18 Subd. 12. [REFUND.] (a) Any person who ceases to be a 12.19 judge but who does not qualify for a retirement annuity or other 12.20 benefit under section 490.121 shall be entitled to a refund in 12.21 an amount equal to all the person's contributions to the judges' 12.22 retirement fund, regardless of when they were made, plus 12.23 interest computed to the first day of the month in which the 12.24 refund is processed based on fiscal year balances at an annual 12.25 rate offivesix percent compounded annually. 12.26 (b) A refund of contributions under paragraph (a) 12.27 terminates all service credits and all rights and benefits of 12.28 the judge and the judge's survivors. A person who becomes a 12.29 judge again after taking a refund under paragraph (a) may 12.30 reinstate previously terminated service credits, rights, and 12.31 benefits by repaying all refunds. A repayment must include 12.32 interest at an annual rate of 8.5 percent compounded annually. 12.33 Sec. 18. [EFFECTIVE DATE.] 12.34 Sections 1 to 17 are effective July 1, 1999. 12.35 ARTICLE 2 12.36 PUBLIC EMPLOYEES RETIREMENT ASSOCIATION 13.1 Section 1. Minnesota Statutes 1998, section 353.01, 13.2 subdivision 6, is amended to read: 13.3 Subd. 6. [GOVERNMENTAL SUBDIVISION.] (a) "Governmental 13.4 subdivision" means a county, city, town, school district within 13.5 this state, or a department or unit of state government, or any 13.6 public body whose revenues are derived from taxation, fees, 13.7 assessments or from other sources. 13.8 (b) Governmental subdivision also means the public 13.9 employees retirement association, the league of Minnesota 13.10 cities, the association of metropolitan municipalities, public 13.11 hospitals owned or operated by, or an integral part of, a 13.12 governmental subdivision or governmental subdivisions, the 13.13 association of Minnesota counties, the metropolitan intercounty 13.14 association, the Minnesota municipal utilities association, the 13.15 metropolitan airports commission, and the Minneapolis employees 13.16 retirement fund for employment initially commenced after June 13.17 30, 1979, the range association of municipalities and schools, 13.18 soil and water conservation districts, and economic development 13.19 authorities created or operating under sections 469.090 to 13.20 469.108. 13.21 (c) Governmental subdivision does not mean any municipal 13.22 housing and redevelopment authority organized under the 13.23 provisions of sections 469.001 to 469.047; or any port authority 13.24 organized under sections 469.048 to469.068469.089; or any 13.25 hospital district organized or reorganized prior to July 1, 13.26 1975, under sections 447.31 to 447.37 or the successor of the 13.27 district, nor the Minneapolis community development agency. 13.28 Sec. 2. Minnesota Statutes 1998, section 353.01, 13.29 subdivision 15a, is amended to read: 13.30 Subd. 15a. [DEPENDENT CHILD.] For the purpose of survivor 13.31 benefit eligibility under section 353.32, subdivision 1c, 13.32 "dependent child" means any biological or adopted, unmarried 13.33 child of a deceased member who has not reached the age of 20and13.34is dependent for more than one-half of support upon the member. 13.35 It also includes any child of the member conceived during the 13.36 member's lifetime and born after the member's death. 14.1 Sec. 3. Minnesota Statutes 1998, section 353.01, 14.2 subdivision 28, is amended to read: 14.3 Subd. 28. [RETIREMENT.] (a) "Retirement" means the 14.4 commencement of payment of an annuity based on a date designated 14.5 by the board of trustees. This date determines the rights under 14.6 this chapter which occur either before or after retirement. A 14.7 right to retirement is subject to termination of public service 14.8 under subdivision 11aor termination of membership under14.9subdivision 11b, the earlier of which will determine the date14.10membership and coverage cease. A right to retirementmust not14.11accrue withoutis contingent upon a complete and continuous 14.12 separation for 30 days from employment as a public 14.13 employeeunder subdivision 2or independent contractor with a 14.14 governmental subdivision as defined under subdivision 6. 14.15 A former member of the basic or police and fire fund who 14.16 becomes a coordinated member upon returning to eligible, 14.17 nontemporary public service, terminates employment before 14.18 obtaining six months' allowable service under subdivision 16, 14.19 paragraph (a), in the coordinated fund, and is eligible to 14.20 receive an annuity the first day of the month after the most 14.21 recent termination date shall not accrue a right to a retirement 14.22 annuity under the coordinated fund. An annuity otherwise 14.23 payable to the former member must be based on the laws in effect 14.24 on the date of termination of the most recent service under the 14.25 basic or police and fire fund and shall be retroactive to the 14.26 first day of the month following that termination date or one 14.27 year preceding the filing of an application for retirement 14.28 annuity as provided by section 353.29, subdivision 7, whichever 14.29 is later. The annuity payment must be suspended or reduced 14.30 under the provisions of section 353.37, if earned compensation 14.31 for the reemployment equals or exceeds the amounts indicated 14.32 under that section. The association will refund the employee 14.33 deductions made to the coordinated fund, with interest under 14.34 section 353.34, subdivision 2, return the accompanying employer 14.35 contributions, and remove the allowable service credits covering 14.36 the deductions refunded. 15.1 (b) Notwithstanding the 30-day separation requirement under 15.2 clause (a), a member of the defined benefit plan under this 15.3 chapter, who also participates in the public employees defined 15.4 contribution plan under chapter 353D for other public service, 15.5 may be paid, if eligible, a retirement annuity from the defined 15.6 benefit plan while participating in the defined contribution 15.7 plan. 15.8 Sec. 4. Minnesota Statutes 1998, section 353.03, 15.9 subdivision 4, is amended to read: 15.10 Subd. 4. [OFFICES.] The board of trustees with approval of 15.11 the commissioner of administration shall make provision for 15.12 suitable office spacein the state capitol or other state office15.13buildings, orat suchotherlocationin St. Paulas is 15.14 determined by the board with approval of the commissioner for 15.15 the use of theboard of trustees and its executive director.15.16The commissioner shall give the board at least four months15.17notice for any proposed removal from their present15.18locationassociation. Any and all purchase or rental charges 15.19 shall be paid by the trustees from the public employees 15.20 retirement fund. 15.21 Sec. 5. Minnesota Statutes 1998, section 353.15, 15.22 subdivision 2, is amended to read: 15.23 Subd. 2. [AUTOMATIC DEPOSITS.] The association may pay an 15.24 annuity, benefit or refund to a trust company, qualified under 15.25 chapter 48, that is trustee for a person eligible to receive 15.26 such annuity, benefit, or refund. Upon the request of a 15.27 retired, disabled or former member, the association may mail or 15.28 send by electronic transfer the annuity, benefit or refund check 15.29 to a banking institution, savings association, domestic cash 15.30 management account, or credit union for deposit to such person's 15.31 account or joint account with a spouse. The association may 15.32 prescribe the conditions under which such payment will be made. 15.33 Sec. 6. Minnesota Statutes 1998, section 353.32, 15.34 subdivision 1a, is amended to read: 15.35 Subd. 1a. [SURVIVING SPOUSE OPTIONAL ANNUITY.] (a) If a 15.36 member or former member who has credit for not less than three 16.1 years of allowable service and dies before the annuity or 16.2 disability benefit begins to accrue under section 353.29, 16.3 subdivision 7, or 353.33, subdivision 2, notwithstanding any 16.4 designation of beneficiary to the contrary, the surviving spouse 16.5 may elect to receive, instead of a refund with interest under 16.6 subdivision 1, or surviving spouse benefits otherwise payable 16.7 under section 353.31, an annuity equal to the 100 percent joint 16.8 and survivor annuity that the membercould have qualified for16.9had the member terminatedearned based on length of service and 16.10 average salary on the date of death and the age the member would 16.11 have been and the age of the surviving spouse on the date 16.12 payment begins. 16.13 (b) If the member was under age 55 and has credit for at 16.14 least 30 years of allowable service on the date of death, the 16.15 surviving spouse may elect to receive a 100 percent joint and 16.16 survivor annuity based on the ageofthe member would have been 16.17 and the age of the surviving spouse on the dateof deathpayment 16.18 begins. The annuity is payable using the full early retirement 16.19 reduction under section 353.30, subdivisions 1b and 1c,tofrom 16.20 age 55 to age 62 and one-half of the early retirement reduction 16.21 from age 55 to the age payment begins. 16.22 (c) If the member was under age 55 and has credit for at 16.23 least three years of allowable service on the date of death but 16.24 did not qualify for retirement, the surviving spouse may elect 16.25 to receive the 100 percent joint and survivor annuity based on 16.26 the ageofthe member would have been and the age of the 16.27 surviving spouseaton thetime of deathdate payment begins. 16.28 The annuity is payable using the full early retirement reduction 16.29 under section 353.30, subdivision 1, 1b, 1c, or 5, to age 55 and 16.30 one-half of the early retirement reduction from age 55 to the 16.31 age payment begins. 16.32 Notwithstanding the definition of surviving spouse in 16.33 section 353.01, subdivision 20, a former spouse of the member, 16.34 if any, is entitled to a portion of the monthly surviving spouse 16.35 optional annuity if stipulated under the terms of a marriage 16.36 dissolution decree filed with the association. If there is no 17.1 surviving spouse or child or children, a former spouse may be 17.2 entitled to a lump-sum refund payment under subdivision 1, if 17.3 provided for in a marriage dissolution decree but not a monthly 17.4 surviving spouse optional annuity despite the terms of a 17.5 marriage dissolution decree filed with the association. 17.6 The surviving spouse eligible for surviving spouse benefits 17.7 under paragraph (a) may apply for the annuity at any time after 17.8 the date on which the deceased employee would have attained the 17.9 required age for retirement based on the employee's allowable 17.10 service. The surviving spouse eligible for surviving spouse 17.11 benefits under paragraph (b) or (c) may apply for an annuity any 17.12 time after the member's death. The annuity must be computed 17.13 under sections 353.29, subdivisions 2 and 3; 353.30, 17.14 subdivisions 1, 1a, 1b, 1c, and 5; and 353.31, subdivision 3. 17.15 Sections 353.34, subdivision 3, and 353.71, subdivision 2, 17.16 apply to a deferred annuity or surviving spouse benefit payable 17.17 under this subdivision. No payment may accrue beyond the end of 17.18 the month in which entitlement to the annuity has terminated or 17.19 upon expiration of the term certain benefit payment under 17.20 subdivision 1b. An amount equal to any excess of the 17.21 accumulated contributions that were credited to the account of 17.22 the deceased employee over and above the total of the annuities 17.23 paid and payable to the surviving spouse must be paid to the 17.24deceased member's last designated beneficiary or, if none, as17.25specified under subdivision 1surviving spouse's estate. 17.26 A member may specify in writing that this subdivision does 17.27 not apply and that payment may be made only to the designated 17.28 beneficiary as otherwise provided by this chapter. The waiver 17.29 of a surviving spouse annuity under this section does not make a 17.30 dependent child eligible for benefits under subdivision 1c. 17.31 Sec. 7. Minnesota Statutes 1998, section 353.32, 17.32 subdivision 1b, is amended to read: 17.33 Subd. 1b. [SURVIVOR COVERAGE TERM CERTAIN.] In lieu of the 17.34 100 percent optional annuity under subdivision 1a, or a refund 17.35 under subdivision 1, the surviving spouse of a deceased member 17.36 may elect to receive survivor coverage for a term certain 18.1 offive,ten, 15, or 20 years, but monthly payments must not 18.2 exceed 75 percent of the average high-five monthly salary of the 18.3 deceased member. The monthly term certain annuity must be 18.4 actuarially equivalent to the 100 percent optional annuity under 18.5 subdivision 1a. 18.6 If a surviving spouse elects a term certain annuity and 18.7 dies before the expiration of the specified term certain period, 18.8 the commuted value of the remaining annuity payments must be 18.9 paid in a lump sum to the survivor's estate. 18.10 Sec. 8. Minnesota Statutes 1998, section 353.33, 18.11 subdivision 2, is amended to read: 18.12 Subd. 2. [APPLICATIONS; ACCRUAL OF BENEFITS.] Every claim 18.13 or demand for a total and permanent disability benefit must be 18.14 initiated by written application in the manner and form 18.15 prescribed by the executive director showing compliance with the 18.16 statutory conditions qualifying the applicant for a total and 18.17 permanent disability benefit and filed with the executive 18.18 director. A member or former member who became totally and 18.19 permanently disabled during a period of membership shall file 18.20 application for total and permanent disability benefits within 18.21 three years next following termination of public service. This 18.22 benefit begins to accrue the day following the commencement of 18.23 disability, 90 days preceding the filing of the application, or, 18.24 if annual or sick leave is paid for more than the 90-day period, 18.25 from the date salary ceased, whichever is later. No member is 18.26 entitled to receive a disability benefit payment when there 18.27 remains to the member's credit unused annual leave or sick leave 18.28 or under any other circumstances when, during the period of 18.29 disability, there has been no impairment of the person's 18.30 salary. Payment must not accrue beyond the end of the month in 18.31 which entitlement has terminated. If the disabilitant dies 18.32 prior to negotiating the check for the month in which death 18.33 occurs, payment is made to the surviving spouse, or if none, to 18.34 the designated beneficiary, or if none, to the estate. An 18.35 applicant for total and permanent disability benefits may file a 18.36 retirement annuity application under section 353.29, subdivision 19.1 4, simultaneously with an application for total and permanent 19.2 disability benefits. The retirement annuity application is void 19.3 upon the determination of the entitlement for disability 19.4 benefits by the executive director. If disability benefits are 19.5 denied, the retirement annuity application must be initiated and 19.6 processed. 19.7 Sec. 9. Minnesota Statutes 1998, section 353.33, 19.8 subdivision 6, is amended to read: 19.9 Subd. 6. [CONTINUING ELIGIBILITY FOR BENEFITS.] The 19.10 association shall determine eligibility for continuation of 19.11 disability benefits and require periodic examinations and 19.12 evaluations of disabled members as frequently as deemed 19.13 necessary. The association shall require the disabled member to 19.14 provide and authorize release of medical evidence, including all 19.15 medical records and information from any source, relating to an 19.16 application for continuation of disability benefits. Disability 19.17 benefits are contingent upon a disabled person's participation 19.18 in a vocational rehabilitation program if the executive director 19.19 determines that the disabled person may be able to return to a 19.20 gainful occupation. If a member is found to be no longer 19.21 totally and permanently disabledand is reinstated to the19.22payroll, payments must cease the first of the month following 19.23the reinstatement to the payrollthe expiration of 30 days after 19.24 the member receives a certified letter notifying the member that 19.25 payments will cease. 19.26 Sec. 10. Minnesota Statutes 1998, section 353.33, 19.27 subdivision 7, is amended to read: 19.28 Subd. 7. [PARTIAL REEMPLOYMENT.] If, following a work or19.29non-work-related injury or illness,a disabled person resumes 19.30 againfulpart-time occupationfrom which earnings are less than19.31the salary at the date of disability or the salary currently19.32paid for similar positions, the board shall continue the 19.33 disability benefit in an amount that, when the normal disability 19.34 benefit is added to the earnings, and workers' compensation 19.35 benefit if applicable, does not exceed the salary at the date of 19.36 disability or the salary currently paid for similar positions, 20.1 whichever is higher, provided that the member remains disabled 20.2 and the disability benefit does not exceed the disability 20.3 benefit originally allowed, plus any postretirement adjustments 20.4 payable after December 31, 1988, in accordance with section 20.5 11A.18, subdivision 10. No deductions for the retirement fund 20.6 may be taken from the salary of a disabled person who is 20.7 receiving a disability benefit as provided in this subdivision. 20.8 Sec. 11. Minnesota Statutes 1998, section 353.33, 20.9 subdivision 9, is amended to read: 20.10 Subd. 9. [RETURN TOPUBLIC SERVICEFULL-TIME EMPLOYMENT.] 20.11 Any person receiving a disability benefit under this section who 20.12 is restored toactive public service except persons receiving20.13benefits as provided in subdivision 7,full-time employment 20.14 shall have the disability benefit discontinued on the first day 20.15 of the month following the return to full-time employment: 20.16 (1) if the person is employed by a governmental subdivision 20.17 as defined under section 353.01, subdivision 6, deductions must 20.18 be taken for the retirement fund and upon subsequent retirement 20.19 have the retirement annuity payable based upon all allowable 20.20 service including that upon which the disability benefits were 20.21 based; or 20.22 (2) if the full-time employment is not through public 20.23 service covered under this chapter, the account shall be placed 20.24 on a deferred status and the subsequent retirement annuity will 20.25 be calculated as provided in section 353.34, subdivision 3, and 20.26 will be based upon all allowable service including that upon 20.27 which the disability benefits were based. 20.28 Sec. 12. Minnesota Statutes 1998, section 353.34, 20.29 subdivision 3, is amended to read: 20.30 Subd. 3. [DEFERRED ANNUITY; ELIGIBILITY; COMPUTATION.] A 20.31 member with at least three years of allowable service when 20.32 termination of public service or termination of membership 20.33 occurs, instead of applying for a refund, has the option of 20.34 leaving the accumulated deductions in the fund and being 20.35 entitled to a deferred retirement annuity commencing at normal 20.36 retirement age or to a deferred early retirement annuity under 21.1 section 353.30, subdivision 1, 1a, 1b, 1c, or 5. The deferred 21.2 annuity must be computed under section 353.29, subdivisions 2 21.3 and 3, on the basis of the law in effect on the date of 21.4 termination of public service or termination of membership and 21.5 must be augmented as provided in section 353.71, subdivision 2. 21.6 A former member qualified to apply for a deferred retirement 21.7 annuity may revoke this option at any time before the 21.8 commencement of deferred annuity payments by making application 21.9 for a refund. The person is entitled to a refund of accumulated 21.10 member contributions within 30 days following date of receipt of 21.11 the application by the executive director. 21.12 Sec. 13. Minnesota Statutes 1998, section 353.656, 21.13 subdivision 1, is amended to read: 21.14 Subdivision 1. [IN LINE OF DUTY; COMPUTATION OF BENEFITS.] 21.15 A member of the police and fire fund who becomes disabled and 21.16 physically unfit to perform duties as a police officeror, 21.17 firefightersubsequent to June 30, 1973, or paramedic as defined 21.18 under section 353.64, subdivision 10, as a direct result of an 21.19 injury, sickness, or other disability incurred in or arising out 21.20 of any act of duty, which has or is expected to render the 21.21 member physically or mentally unable to perform the duties as a 21.22 police officeror, firefighter, or paramedic as defined under 21.23 section 353.64, subdivision 10, for a period of at least one 21.24 year, shall receive disability benefits during the period of 21.25 such disability. The benefits must be in an amount equal to 60 21.26 percent of the "average salary" under subdivision 3, plus an 21.27 additional percent specified in section 356.19, subdivision 6, 21.28 of said average salary for each year of service in excess of 20 21.29 years. Should disability under this subdivision occur before 21.30 the member has at least five years of allowable service credit 21.31 in the police and fire fund, the disability benefit must be 21.32 computed on the "average salary" from which deductions were made 21.33 for contribution to the police and fire fund. 21.34 Sec. 14. Minnesota Statutes 1998, section 353.656, 21.35 subdivision 3, is amended to read: 21.36 Subd. 3. [NONDUTY DISABILITY BENEFIT.] Any member of the 22.1 police and fire fund who becomes disabled after not less than 22.2 one year of allowable service because of sickness or injury 22.3 occurring while not on duty as a police officeror, firefighter, 22.4 or paramedic as defined under section 353.64, subdivision 10, 22.5 and by reason of that sickness or injury the member has been or 22.6 is expected to be unable to perform the duties as a police 22.7 officeror, firefighter, or paramedic as defined under section 22.8 353.64, subdivision 10, for a period of at least one year, is 22.9 entitled to receive a disability benefit. The benefit must be 22.10 paid in the same manner as if the benefit were paid under 22.11 section 353.651. If a disability under this subdivision occurs 22.12 after one but in less than 15 years of allowable service, the 22.13 disability benefit must be the same as though the member had at 22.14 least 15 years service. For a member who is employed as a 22.15 full-time firefighter by the department of military affairs of 22.16 the state of Minnesota, allowable service as a full-time state 22.17 military affairs department firefighter credited by the 22.18 Minnesota state retirement system may be used in meeting the 22.19 minimum allowable service requirement of this subdivision. 22.20 Sec. 15. Minnesota Statutes 1998, section 353.656, 22.21 subdivision 4, is amended to read: 22.22 Subd. 4. [LIMITATION ON DISABILITY BENEFIT PAYMENTS.] (a) 22.23 No member is entitled to receive a disability benefit payment 22.24 when there remains to the member's credit unused annual leave or 22.25 sick leave or under any other circumstances when, during the 22.26 period of disability, there has been no impairment of the 22.27 person's salary as a police officeror, a firefighter, or a 22.28 paramedic as defined under section 353.64, subdivision 10, 22.29 whichever applies. 22.30 (b) If a disabled member resumes a gainful occupation with 22.31 earningsless than, that when added to the normal disability 22.32 benefit, and workers' compensation benefit if applicable, exceed 22.33 the disabilitant reemployment earnings limit, the amount of the 22.34 disability benefit must be reduced as provided in this 22.35 paragraph. The disabilitant reemployment earnings limit is the 22.36 greater of: 23.1 (1) the salary earned at the date of disability; or 23.2 (2) 125 percent of the salary currently paid by the 23.3 employing governmental subdivision for similar positions. 23.4 The disability benefit must be reduced by one dollar for 23.5 each three dollars by which the total amount of the current 23.6 disability benefit, any workers' compensation benefits if 23.7 applicable, and actual earnings exceed the greater disabilitant 23.8 reemployment earnings limit. In no event may the disability 23.9 benefit as adjusted under this subdivision exceed the disability 23.10 benefit originally allowed. 23.11 Sec. 16. Minnesota Statutes 1998, section 353.71, 23.12 subdivision 2, is amended to read: 23.13 Subd. 2. [DEFERRED ANNUITY COMPUTATION; AUGMENTATION.] (a) 23.14 The deferred annuity, if any, accruing under subdivision 1, or 23.15 sections 353.34, subdivision 3, and 353.68, subdivision 4, must 23.16 be computed in the manner provided in said sections, on the 23.17 basis of allowable service prior to termination of public 23.18 service and augmented as provided herein. The required reserves 23.19 applicable to a deferred annuity, or to an annuity for which a 23.20 former member was eligible but had not applied, or to any 23.21 deferred segment of an annuity shall be determined as of the 23.22 date the annuity begins to accrue and shall be augmented from 23.23 the first day of the month following the month in which the 23.24 former member ceased to be a public employee, or July 1, 1971, 23.25 whichever is later, to the first day of the month in which the 23.26 annuity begins to accrue, at the rate of five percent per annum 23.27 compounded annually until January 1, 1981, and at the rate of 23.28 three percent thereafter until January 1 of the year following 23.29 the year in which the former member attains age 55. From that 23.30 date to the effective date of retirement, the rate is five 23.31 percent per annum compounded annually. If a person has more 23.32 than one period of uninterrupted service, the required reserves 23.33 related to each period shall be augmented by interest pursuant 23.34 to this subdivision. The sum of the augmented required reserves 23.35 so determined shall be the present value of the annuity. 23.36 Uninterrupted service for the purpose of this subdivision shall 24.1 mean periods of covered employment during which the employee has 24.2 not been separated from public service for more than two years. 24.3 If a person repays a refund, the service restored thereby shall 24.4 be considered as continuous with the next period of service for 24.5 which the employee has credit with this association. The formula 24.6 percentages used for each period of uninterrupted service shall 24.7 be those as would be applicable to a new employee. This section 24.8 shall not reduce the annuity otherwise payable under this 24.9 chapter. This subdivision shall apply to deferred annuitants of 24.10 record on July 1, 1971, and to employees who thereafter become 24.11 deferred annuitants; it shall also apply from July 1, 1971, to 24.12 former members who make application for an annuity after July 1, 24.13 1973. 24.14 (b) The retirement annuity or disability benefit of, or the 24.15 survivor benefit payable on behalf of, a former member who 24.16 terminated service before July 1, 1997, or the survivor benefit 24.17 payable on behalf of a basic or police and fire member who was 24.18 receiving disability benefits before July 1, 1997, which isnot24.19 first payable until after June 30, 1997, must be increased on an 24.20 actuarial equivalent basis to reflect the change in the 24.21 postretirement interest rate actuarial assumption under section 24.22 356.215, subdivision 4d, from five percent to six percent under 24.23 a calculation procedure and tables adopted by the board and 24.24 approved by the actuary retained by the legislative commission 24.25 on pensions and retirement. 24.26 Sec. 17. Minnesota Statutes 1998, section 353B.11, 24.27 subdivision 3, is amended to read: 24.28 Subd. 3. [AMOUNT; SURVIVING SPOUSE BENEFIT.] (a) The 24.29 surviving spouse benefit shall be 30 percent of the salary base 24.30 for the former members of the following consolidating relief 24.31 associations: 24.32 (1) Albert Lea firefighters relief association; 24.33 (2) Albert Lea police relief association; 24.34 (3) Anoka police relief association; 24.35 (4) Austin police relief association; 24.36 (5) Brainerd police benefit association; 25.1 (6) Crookston police relief association; 25.2 (7) Faribault fire department relief association; and 25.3 (8) West St. Paul firefighters relief association. 25.4 (b) The surviving spouse benefit shall be 25 percent of the 25.5 salary base for the former members of the following 25.6 consolidating relief associations: 25.7 (1) Chisholm police relief association; 25.8 (2) Duluth firefighters relief association; 25.9 (3) Duluth police pension association; 25.10 (4) Fairmont police benefit association; 25.11 (5) Red Wing fire department relief association; 25.12 (6) South St. Paul police relief association; and 25.13 (7) West St. Paul police relief association. 25.14 (c) The surviving spouse benefit shall be 24 percent of the 25.15 salary base for the former members of the following 25.16 consolidating relief associations: 25.17 (1) Fridley police pension association; 25.18 (2) Richfield police relief association; 25.19 (3) Rochester fire department relief association; 25.20 (4) Rochester police relief association; 25.21 (5) Winona fire department relief association; and 25.22 (6) Winona police relief association. 25.23 (d) The surviving spouse benefit shall be 40 percent of the 25.24 salary base for the former members of the following 25.25 consolidating relief associations: 25.26 (1) Columbia Heights fire department relief association, 25.27 paid division; and 25.28 (2) New Ulm police relief association. 25.29 (e) The surviving spouse benefit shall be$250 per month30 25.30 percent of the average salary during the last six months of 25.31 service for the former members of the following consolidating 25.32 relief associations: 25.33 (1) Hibbing firefighters relief association; and 25.34 (2) Hibbing police relief association. 25.35 (f) The surviving spouse benefit shall be 23.75 percent of 25.36 the salary base for the former members of the following 26.1 consolidating relief associations: 26.2 (1) Crystal police relief associations; and 26.3 (2) Minneapolis police relief association. 26.4 (g) The surviving spouse benefit shall be 32 percent of the 26.5 salary base for the former members of the following 26.6 consolidating relief associations: 26.7 (1) St. Cloud fire department relief association; and 26.8 (2) St. Cloud police relief association. 26.9 (h) The surviving spouse benefit shall be one-half of the 26.10 service pension or disability benefit which the deceased member 26.11 was receiving as of the date of death, or of the service pension 26.12 which the deferred member would have been receiving if the 26.13 service pension had commenced as of the date of death or of the 26.14 service pension which the active member would have received 26.15 based on the greater of the allowable service credit of the 26.16 person as of the date of death or 20 years of allowable service 26.17 credit if the person would have been eligible as of the date of 26.18 death, for the former members of the following consolidating 26.19 relief associations: 26.20 (1) Virginia fire department relief association; and 26.21 (2) Virginia police relief association. 26.22 (i) The surviving spouse benefit shall be the following for 26.23 the former members of the consolidating relief associations as 26.24 indicated: 26.25 (1) 30 percent of the salary base, reduced by any amount 26.26 awarded or payable from the service pension or disability 26.27 benefit of the deceased former firefighter to a former spouse of 26.28 the member by virtue of the legal dissolution of the member's 26.29 marriage to the former spouse if the surviving spouse married 26.30 the member after the time of separation from active service, 26.31 Austin firefighters relief association; 26.32 (2) 27.333 percent of the salary base, or one-half of the 26.33 service pension payable to or accrued by the deceased former 26.34 member, whichever is greater, Bloomington police relief 26.35 association; 26.36 (3) 72.25 percent of the salary base, Buhl police relief 27.1 association; 27.2 (4) 50 percent of the service pension which the active 27.3 member would have received based on allowable service credit to 27.4 the date of death and prospective service from the date of death 27.5 until the date on which the person would have attained the 27.6 normal retirement age, 50 percent of the service pension which 27.7 the deferred member would have been receiving if the service 27.8 pension had commenced as of the date of death or $175 per month 27.9 if the deceased member was receiving a service pension or 27.10 disability benefit as of the date of death, Chisholm 27.11 firefighters relief association; 27.12 (5) two-thirds of the service pension or disability benefit 27.13 which the deceased member was receiving as of the date of death, 27.14 or of the service pension which the deferred member would have 27.15 been receiving if the service pension had commenced as of the 27.16 date of death or of the service pension which the active member 27.17 would have received based on the greater of the allowable 27.18 service credit of the person as of the date of death or 20 years 27.19 of allowable service credit if the person would have been 27.20 eligible as of the date of death, Columbia Heights police relief 27.21 association; 27.22 (6) the greater of $300 per month or one-half of the 27.23 service pension or disability benefit which the deceased member 27.24 was receiving as of the date of death, or of the service pension 27.25 which the deferred member would have been receiving if the 27.26 service pension had commenced as of the date of death or of the 27.27 service pension which the active member would have received 27.28 based on the allowable service credit of the person as of the 27.29 date of death if the person would have been eligible as of the 27.30 date of death, Crookston fire department relief association; 27.31 (7) $100 per month, Faribault police benefit association; 27.32 (8) 60 percent of the service pension or disability benefit 27.33 which the deceased member was receiving as of the date of death, 27.34 or of the service pension which the deferred member would have 27.35 been receiving if the service pension had commenced as of the 27.36 date of death or of the service pension which the active member 28.1 would have received based on the allowable service credit of the 28.2 person as of the date of death if the person would have been 28.3 eligible as of the date of death, Mankato fire department relief 28.4 association; 28.5 (9) $175 per month, Mankato police benefit association; 28.6 (10) 26.25 percent of the salary base, Minneapolis fire 28.7 department relief association; 28.8 (11) equal to the service pension or disability benefit 28.9 which the deceased member was receiving as of the date of death, 28.10 or of the service pension which the deferred member would have 28.11 been receiving if the service pension had commenced as of the 28.12 date of death or of the service pension which the active member 28.13 would have received based on the allowable service credit of the 28.14 person as of the date of death if the person would have been 28.15 eligible as of the date of death, Red Wing police relief 28.16 association; 28.17 (12) 78.545 percent of the benefit amount payable prior to 28.18 the death of the deceased active, disabled, deferred, or retired 28.19 firefighter if that firefighter's benefit was 55 percent of 28.20 salary or would have been 55 percent of salary if the 28.21 firefighter had survived to begin benefit receipt; or 80 percent 28.22 of the benefit amount payable prior to the death of the deceased 28.23 active, disabled, deferred, or retired firefighter if that 28.24 firefighter's benefit was 54 percent of salary or would have 28.25 been 54 percent of salary if the firefighter had survived to 28.26 begin benefit receipt, Richfield fire department relief 28.27 association; 28.28 (13) 40 percent of the salary base for a surviving spouse 28.29 of a deceased active member, disabled member, or retired or 28.30 deferred member with at least 20 years of allowable service, or 28.31 the prorated portion of 40 percent of the salary base that bears 28.32 the same relationship to 40 percent that the deceased member's 28.33 years of allowable service bear to 20 years of allowable service 28.34 for the surviving spouse of a deceased retired or deferred 28.35 member with at least ten but less than 20 years of allowable 28.36 service, St. Louis Park fire department relief association; 29.1 (14) 26.6667 percent of the salary base, St. Louis Park 29.2 police relief association; 29.3 (15) 27.5 percent of the salary base, St. Paul fire 29.4 department relief association; 29.5 (16)2027.5 percent of the salary base, St. Paul police 29.6 relief association; and 29.7 (17) 27 percent of the salary base, South St. Paul 29.8 firefighters relief association. 29.9 Sec. 18. [REPEALER.] 29.10 Minnesota Statutes 1998, section 353.024, is repealed. 29.11 Sec. 19. [EFFECTIVE DATE.] 29.12 Sections 1 to 18 are effective July 1, 1999. 29.13 ARTICLE 3 29.14 TEACHERS RETIREMENT ASSOCIATION 29.15 Section 1. Minnesota Statutes 1998, section 122A.46, 29.16 subdivision 2, is amended to read: 29.17 Subd. 2. [LEAVE OF ABSENCE.] The board of any district may 29.18 grant an extended leave of absence without salary to any full- 29.19 or part-time elementary or secondary teacher who has been 29.20 employed by the district for at least five years and has at 29.21 least ten years of allowable service, as defined in section 29.22 354.05, subdivision 13, or the bylaws of the appropriate 29.23 retirement association or ten years of full-time teaching 29.24 service in Minnesota public elementary and secondary schools. 29.25 Themaximumduration of an extended leave of absence pursuant to 29.26 this section must be determined by mutual agreement of the board 29.27 and the teacher at the time the leave is granted and shall be at 29.28 least three but no more than five years. An extended leave of 29.29 absence pursuant to this section shall be taken by mutual 29.30 consent of the board and the teacher. If the school board 29.31 denies a teacher's request, it must provide reasonable 29.32 justification for the denial. 29.33 Sec. 2. Minnesota Statutes 1998, section 354.05, 29.34 subdivision 2, is amended to read: 29.35 Subd. 2. [TEACHER.] (a) "Teacher" means: 29.36 (1) a person who renders service as a teacher, supervisor, 30.1 principal, superintendent, librarian, nurse, counselor, social 30.2 worker, therapist, or psychologist in the public schools of the 30.3 state located outside of the corporate limits of the cities of 30.4 the first class as those cities were so classified on January 1, 30.5 1979, or in the state colleges and universities system, or in 30.6 any charitable, penal, or correctional institutions of a 30.7 governmental subdivision, or who is engaged in educational 30.8 administration in connection with the state public school 30.9 system, including the state colleges and university system, but 30.10 excluding the University of Minnesota, whether the position be a 30.11 public office or an employment, not including members or 30.12 officers of any general governing or managing board or body; 30.13 (2) an employee of the teachers retirement association 30.14 unless the employee is covered by the Minnesota state retirement 30.15 system by virtue of prior employment by the association; 30.16 (3) a person who renders teaching service on a part-time 30.17 basis and who also renders other services for a single employing 30.18 unit. In such cases, the executive director shall determine 30.19 whether all or none of the combined service is covered by the 30.20 association, however a person whose teaching service comprises 30.21 at least 50 percent of the combined employment salary is a 30.22 member of the association for all services with the single 30.23 employing unit. 30.24 (b) The term does not mean: 30.25 (1) an employee described in section 352D.02, subdivision 30.26 1a, who is hired after the effective date of Laws 1986, chapter 30.27 458; 30.28 (2) a person who works for a school or institution as an 30.29 independent contractor as defined by the Internal Revenue 30.30 Service; 30.31 (3) a person employed in subsidized on-the-job training, 30.32 work experience or public service employment as an enrollee 30.33 under the federal Comprehensive Employment and Training Act from 30.34 and after March 30, 1978, unless the person has, as of the later 30.35 of March 30, 1978, or the date of employment, sufficient service 30.36 credit in the retirement association to meet the minimum vesting 31.1 requirements for a deferred retirement annuity, or the employer 31.2 agrees in writing on forms prescribed by the executive director 31.3 to make the required employer contributions, including any 31.4 employer additional contributions, on account of that person 31.5 from revenue sources other than funds provided under the federal 31.6 Comprehensive Training and Employment Act, or the person agrees 31.7 in writing on forms prescribed by the executive director to make 31.8 the required employer contribution in addition to the required 31.9 employee contribution; 31.10 (4) a person holding a part-time adult supplementary 31.11 technical college license who renders part-time adult noncredit 31.12 teaching service or a customized trainer as defined by the 31.13 Minnesota state colleges and universities system in a technical 31.14 college if (i) the service is incidental to the regular 31.15 nonteaching occupation of the person; and (ii) the applicable 31.16 technical college stipulates annually in advance that the 31.17 part-time teaching service or customized training will not 31.18 exceed 300 hours in a fiscal year and retains the stipulation in 31.19 its records; and (iii) the part-time teaching service or 31.20 customized training actually does not exceed 300 hours in a 31.21 fiscal year; or 31.22 (5) a person exempt from licensure pursuant to section 31.23 122A.30. 31.24 Sec. 3. Minnesota Statutes 1998, section 354.05, 31.25 subdivision 35, is amended to read: 31.26 Subd. 35. [SALARY.] (a) "Salary" means the periodic 31.27 compensation, upon which member contributions are required and31.28made, that is paid to a teacher before employee-paid fringe31.29benefits, tax sheltered annuities, deferred compensation, or any31.30combination of these employee-paid items are deductedbefore 31.31 deductions for deferred compensation, supplemental retirement 31.32 plans, or other voluntary salary reduction programs. 31.33 (b) "Salary" does not mean: 31.34 (1) lump sum annual leave payments; 31.35 (2) lump sum wellness and sick leave payments; 31.36 (3)payments in lieu of any employer-paid group insurance32.1coverage;32.2(4) payments for the difference between single and family32.3premium rates that may be paid to a member with single coverage;32.4(5) employer-paid fringe benefits including, but not32.5limited to, flexible spending accounts, cafeteria plans, health32.6care expense accounts, day care expenses, or automobile32.7allowances and expenses;employer-paid amounts used by an 32.8 employee toward the cost of insurance coverage, employer-paid 32.9 fringe benefits, flexible spending accounts, cafeteria plans, 32.10 health care expense accounts, day care expenses, or any payments 32.11 in lieu of any employer-paid group insurance coverage, including 32.12 the difference between single and family rates that may be paid 32.13 to a member with single coverage and certain amounts determined 32.14 by the executive director to be ineligible; 32.15(6)(4) any form of payment made in lieu of any other 32.16 employer-paid fringe benefit or expense; 32.17(7)(5) any form of severance payments; 32.18(8)(6) workers' compensation payments; 32.19(9)(7) disability insurance payments including 32.20 self-insured disability payments; 32.21(10)(8) payments to school principals and all other 32.22 administrators for services in addition to the normal work year 32.23 contract if these additional services are performed on an 32.24 extended duty day, Saturday, Sunday, holiday, annual leave day, 32.25 sick leave day, or any other nonduty day; 32.26(11)(9) payments under section 356.24, subdivision 1, 32.27 clause (4); and 32.28(12)(10) payments made under section 122A.40, subdivision 32.29 12, except for payments for sick leave accumulated under the 32.30 provisions of a uniform school district policy that applies 32.31 equally to all similarly situated persons in the district. 32.32 Sec. 4. Minnesota Statutes 1998, section 354.05, 32.33 subdivision 37, is amended to read: 32.34 Subd. 37. [TERMINATION OF TEACHING SERVICE.] "Termination 32.35 of teaching service" means the withdrawal of a member from 32.36 active teaching service by resignation or the termination of the 33.1 member's teaching contract by the employer. A member is not 33.2 considered to have terminated teaching service, if before the 33.3 effective date of the termination or retirement, the member has 33.4 entered into a contract to resume teaching service with an 33.5 employing unit covered by the provisions of this chapter. If a 33.6 member is paid a full annual contract salary for the performance 33.7 of a full year's teaching service contract duties, termination 33.8 of teaching service occurs on the last day of the school 33.9 calendar as stipulated by the employer at the end of the school 33.10 year. 33.11 Sec. 5. Minnesota Statutes 1998, section 354.05, 33.12 subdivision 40, is amended to read: 33.13 Subd. 40. [TIMELY RECEIPT.] An application, payment, 33.14 return, claim, or other document that is not personally 33.15 delivered to the association on or before the applicable due 33.16 date is considered to be a timely receipt ifofficially33.17postmarkedreceived on or before the due date or if delivered or 33.18 filed under section 645.151. 33.19 Sec. 6. Minnesota Statutes 1998, section 354.06, 33.20 subdivision 1, is amended to read: 33.21 Subdivision 1. [BOARD OF TRUSTEES; MEMBERSHIP; DUTIES.] 33.22 The management of the association is vested in a board of eight 33.23 trustees known as the board of trustees of the teachers 33.24 retirement association. It is composed of the following 33.25 persons: the commissioner of children, families, and learning, 33.26 the commissioner of finance, a representative of the Minnesota 33.27 school boards association, four members of the association 33.28 elected by the members of the association, and one retiree 33.29 elected by the retirees of the association. The five elected 33.30 members of the board of trustees must be chosen bytwofour 34.1 years commencing on the first of July next succeeding the 34.2 election. The filing of candidacy for a retiree election must 34.3 include a petition of endorsement signed by at least ten 34.4 retirees of the association. Each election must be completed by 34.5 June first of each succeeding odd-numbered year. In the case of 34.6 elective members, any vacancy must be filled by appointment by 34.7 the remainder of the board, and the appointee shall serve until 34.8 the members or retirees of the association at the next regular 34.9 election have elected a trustee to serve for the unexpired term 34.10 caused by the vacancy. No member or retiree may be appointed by 34.11 the board, or elected by the members of the association as a 34.12 trustee, if the person is not a member or retiree of the 34.13 association in good standing at the time of the appointment or 34.14 election. 34.15 Sec. 7. Minnesota Statutes 1998, section 354.091, is 34.16 amended to read: 34.17 354.091 [SERVICE CREDIT.] 34.18 In computingthe time of service of a teacher, the length34.19of a legal school year in the district or institution where such34.20service was rendered must constitute a year under sections34.21354.05 to 354.10, provided the year is not less than the legal34.22minimum school year of this state.service credit, noperson34.23 teacher shall receive credit for more than one year of teaching 34.24 service for any fiscal year. Commencing July 1, 1961, (1) if a 34.25 teacher teachesonly a fractional part of a day, credit must be34.26given for a day of teaching service for eachless than five 34.27 hourstaughtin a day, service credit must be given for the 34.28 fractional part of the day as the term of service performed 34.29 bears to five hours, and (2) if a teacher teaches five or more 34.30 hours in a day, service credit must be given for only one day, 34.31 and (3) if a teacher teaches at least 170 full days in any 34.32 fiscal year, credit must be given for a full year of teaching 34.33 service, and(3)(4) if a teacher teaches for only a fractional 34.34 part of the year, credit must be given for such fractional part 34.35 of the year as the term of servicerenderedperformed bears to 34.36 170 days. Aperson who teaches in the state colleges and35.1university systemteacher shall receive a full year of service 35.2 credit based on the number of days in thesystem'semployer's 35.3 full school year if it is less than 170 days. Teaching service 35.4 performedprior tobefore July 1, 1961, must be computed under 35.5 the law in effect at the time it wasrenderedperformed. 35.6 A teachershalldoes not lose or gain retirement service 35.7 credit as a result of the employer converting to afour-day work35.8weekflexible or alternate work schedule. If the employerdoes35.9convertconverts to afour-day work weekflexible or alternate 35.10 work schedule, the forms for reporting and procedures for 35.11 determining service creditshallmust be determined by the 35.12 executive director with the approval of the board of trustees. 35.13 Sec. 8. Minnesota Statutes 1998, section 354.092, 35.14 subdivision 2, is amended to read: 35.15 Subd. 2. [PAY RATE; CERTIFICATION.] A sabbatical leave 35.16 must be compensated by a minimum of one-third of the salary the 35.17 member received for a comparable period during the prior fiscal 35.18 year.Before the end of the fiscal year during which any35.19sabbatical leave is grantedUpon granting a sabbatical leave, 35.20 the employing unit granting the leave must certify the leave to 35.21 the association on a form specified by the executive director. 35.22 Sec. 9. Minnesota Statutes 1998, section 354.093, is 35.23 amended to read: 35.24 354.093 [PARENTALOR MATERNITYLEAVE.] 35.25Before the end of the fiscal year during which any parental35.26or maternity leave is granted,Upon granting a parental leave 35.27 for the birth or adoption of a child, the employing unit 35.28 granting the leave must certify the leave to the association on 35.29 a form specified by the executive director. A member of the 35.30 association granted a parentalor maternityleave of absence by 35.31 the employing unit is entitled to service credit not to exceed 35.32 one year for the period of leave upon payment to the association 35.33 by the end of the fiscal year following the fiscal year in which 35.34 the leave of absence terminated. This payment must include the 35.35 required employee, employer and amortization contributions for 35.36 the period of leave prescribed in section 354.42. The payment 36.1 must be based on the member's average full-time monthly salary 36.2 rate on the date the leave of absence commenced, and must be 36.3 without interest. Notwithstanding the provisions of any 36.4 agreements to the contrary, employee and employer contributions 36.5 may not be made to receive allowable service credit under this 36.6 section if the member does not retain the right to full 36.7 reinstatement at the end of the leave. 36.8 Sec. 10. Minnesota Statutes 1998, section 354.094, 36.9 subdivision 1, is amended to read: 36.10 Subdivision 1. [SERVICE CREDIT CONTRIBUTIONS.]Before the36.11end of the fiscal year during whichUpon granting any extended 36.12 leave of absenceis grantedpursuant to section 122A.46 or 36.13 136F.43, the employing unit granting the leave must certify the 36.14 leave to the association on a form specified by the executive 36.15 director. A member granted an extended leave of absence 36.16 pursuant to section 122A.46 or 136F.43 may pay employee 36.17 contributions and receive allowable service credit toward 36.18 annuities and other benefits under this chapter, for each year 36.19 of the leave provided the member and the employing board make 36.20 the required employer contribution in any proportion they may 36.21 agree upon, during the period of the leave which shall not 36.22 exceed five years. A member may not receive more than five 36.23 years of allowable service credit under this section. The 36.24 employee and employer contributions must be based upon the rates 36.25 of contribution prescribed by section 354.42 for the salary 36.26 received during the year immediately preceding the extended 36.27 leave. Payments for the years for which a member is receiving 36.28 service credit while on extended leave must be made on or before 36.29 the later of June 30 of each fiscal year for which service 36.30 credit is received or within 30 days after first notification of 36.31 the amount due, if requested by the member, is given by the 36.32 association. No payment is permitted after the following 36.33 September 30. Payments received after June 30 must include 36.34 interest at an annual rate of 8.5 percent from June 30 through 36.35 the end of the month in which payment is received. 36.36 Notwithstanding the provisions of any agreements to the 37.1 contrary, employee and employer contributions may not be made to 37.2 receive allowable service credit if the member does not have 37.3 full reinstatement rights as provided in section 122A.46 or 37.4 136F.43, both during and at the end of the extended leave. 37.5 Sec. 11. Minnesota Statutes 1998, section 354.10, 37.6 subdivision 2, is amended to read: 37.7 Subd. 2. [AUTOMATIC DEPOSITS.] Upon receipt of the 37.8 properly completed forms as provided by the executive director, 37.9 the annuity or benefit amount may be electronically transferred 37.10 or the annuity or benefit check may be mailed to a banking 37.11 institution, savings association, domestic cash management 37.12 account, or credit union for deposit to the recipient's 37.13 individual account or joint account with the recipient's spouse 37.14 or any other person designated by the recipient. An overpayment 37.15 to a joint account after the death of the annuity or benefit 37.16 recipient must be repaid to the fund by the joint tenant if the 37.17 overpayment is not repaid to the fund by the banking 37.18 institution, savings association,orcredit union, or the 37.19 domestic cash management account institution. The board may 37.20 prescribe the conditions which govern these procedures. 37.21 Sec. 12. Minnesota Statutes 1998, section 354.10, 37.22 subdivision 4, is amended to read: 37.23 Subd. 4. [CHANGES IN DESIGNATED BENEFICIARIES.] Any 37.24 beneficiary designated by a retiree or member under section 37.25 354.05, subdivision 22, may be changed or revoked by the retiree 37.26 or member on a form provided by the executive director. A 37.27 change or revocation made under this subdivision is valid only 37.28 if the properly completed form is received by the association 37.29postmarkedon or before the date of death of the retiree or the 37.30 member. If a designated beneficiary dies before the retiree or 37.31 member designating the beneficiary, and a new beneficiary is not 37.32 designated, the retiree's or member's estate is the beneficiary. 37.33 Sec. 13. Minnesota Statutes 1998, section 354.35, is 37.34 amended to read: 37.35 354.35 [OPTIONAL ACCELERATED RETIREMENT ANNUITY BEFORE AGE 37.36 65.] 38.1 Any coordinated member who retires before age 65 may elect 38.2 to receive an optional accelerated retirement annuity from the 38.3 association which provides for different annuity amounts over 38.4 different periods of retirement. The election of this optional 38.5 accelerated retirement annuity is exercised by making an 38.6 application to the board on a form provided by the executive 38.7 director. The optional accelerated retirement annuity must take 38.8 the form of an annuity payable for the period before the member 38.9 attains age 65 in a greater amount than the amount of the 38.10 annuity calculated under section 354.44 on the basis of the age 38.11 of the member at retirement, but the optional accelerated 38.12 retirement annuity must be the actuarial equivalent of the 38.13 member's annuity computed on the basis of the member's age at 38.14 retirement. The greater amount must be paid until the retiree 38.15 reaches age 65 and at that time the payment from the association 38.16 must be reduced. For each year the retiree is under age 65, up 38.17 to five percent of the total life annuity required reserves may 38.18 be used to accelerate the optional retirement annuity under this 38.19 section. At retirement, members who retire before age 62 may 38.20 elect to have the age specified in this section be 62 instead of 38.21 65. This electionis irrevocable and maymust be madeonly once38.22 on the application form provided by the executive director. The 38.23 method of computing the optional accelerated retirement annuity 38.24 provided in this section is established by the board of 38.25 trustees. In establishing the method of computing the optional 38.26 accelerated retirement annuity, the board of trustees must 38.27 obtain the written approval of the commission-retained actuary. 38.28 The written approval must be a part of the permanent records of 38.29 the board of trustees. 38.30 Sec. 14. Minnesota Statutes 1998, section 354.445, is 38.31 amended to read: 38.32 354.445 [NO ANNUITY REDUCTION.] 38.33 (a) The annuity reduction provisions of section 354.44, 38.34 subdivision 5, do not apply to a person who: 38.35 (1) retires from the state university system, technical 38.36 college system, or the community college system, or from a 39.1 successor system employing state university, technical college, 39.2 or community college faculty, with at least ten years of 39.3 combined service credit in a system under the jurisdiction of 39.4 the board of trustees of the Minnesota state colleges and 39.5 universities; 39.6 (2) was employed on a full-time basis immediately preceding 39.7 retirement as a state university, technical college, or 39.8 community college faculty member or as an unclassified 39.9 administrator in one of these systems; 39.10 (3) begins drawing an annuity from the teachers retirement 39.11 association; and 39.12 (4) returns to work on not less than a one-third time basis 39.13 and not more than a two-thirds time basis in the system from 39.14 which the person retired under an agreement in which the person 39.15 may not earn a salary of more than $35,000 in a calendar year 39.16 from employment after retirement in the system from which the 39.17 person retired. 39.18 If the person is retired for only a fractional part of the 39.19 calendar year during the initial year of retirement, the maximum 39.20 reemployment income specified in this subdivision must be 39.21 prorated for that calendar year. 39.22 (b) Initial participation, the amount of time worked, and 39.23 the duration of participation under this section must be 39.24 mutually agreed upon by the president of the institution where 39.25 the person returns to work and the employee. The president may 39.26 require up to one-year notice of intent to participate in the 39.27 program as a condition of participation under this section. The 39.28 president shall determine the time of year the employee shall 39.29 work. The employer or the president may not require a person to 39.30 waive any rights under a collective bargaining agreement as a 39.31 condition of participation under this section. 39.32 (c) Notwithstanding any law to the contrary, a person 39.33 eligible under paragraphs (a) and (b) may not earn further 39.34 service credit in the teachers retirement association and is not 39.35 eligible to participate in the individual retirement account 39.36 plan or the supplemental retirement plan established in chapter 40.1 354B as a result of service under this section. No employer or 40.2 employee contribution to any of these plans may be made on 40.3 behalf of such a person. 40.4 (d) For a person eligible under paragraphs (a) and (b) who 40.5 earns more than $35,000 in a calendar year from employment after 40.6 retirement in the system from which the person retired, the 40.7 annuity reduction provisions of section 354.44, subdivision 5, 40.8 apply only to income over $35,000. 40.9 (e) A person who returns to work under this section is a 40.10 member of the appropriate bargaining unit and is covered by the 40.11 appropriate collective bargaining contract. Except as provided 40.12 in this section, the person's coverage is subject to any part of 40.13 the contract limiting rights of part-time employees. 40.14 Sec. 15. Minnesota Statutes 1998, section 354.48, 40.15 subdivision 6, is amended to read: 40.16 Subd. 6. [REGULAR PHYSICAL EXAMINATIONS.] At least once 40.17 each year during the first five years following the allowance of 40.18 a disability benefit to any member, and at least once in every 40.19 three-year period thereafter, the executive director shall 40.20 require the disability beneficiary to undergo a medical 40.21 examinationto be made at the place of residence of such person,40.22or at any other place mutually agreed upon,by a physician or 40.23 physicians engaged by the executive director. If any 40.24 examination indicates that the member is no longer permanently 40.25 and totally disabled or that the member is engaged or is able to 40.26 engage in a substantial gainful occupation, payments of the 40.27 disability benefit by the association shall be discontinued. 40.28 The payments shall discontinue as soon as the member is 40.29 reinstated to the payroll following sick leave, but payment may 40.30 not be made for more than 60 days after physicians engaged by 40.31 the executive director find that the person is no longer 40.32 permanently and totally disabled. 40.33 Sec. 16. Minnesota Statutes 1998, section 354.49, 40.34 subdivision 1, is amended to read: 40.35 Subdivision 1. [ENTITLEMENT, APPLICATION.] A person who 40.36 ceases to render teaching service in any school or institution 41.1 to which the provisions of this chapter apply is entitled to a 41.2 refund provided in subdivision 2, or a deferred retirement 41.3 annuity under section 354.55, subdivision 11. An application 41.4 for a refund must not be made sooner than 30 days after 41.5 termination of teaching service if the applicant has not again 41.6 become a teacher. This payment must be made within9045 days 41.7 after receipt of application for refund or uponcompletion of41.8processing the report made pursuant to section 354.52,41.9subdivision 2receipt of member reporting data under section 41.10 354.52, subdivision 4a and payroll cycle data under section 41.11 354.52, subdivision 4b, whichever is later. 41.12 Sec. 17. Minnesota Statutes 1998, section 354.52, 41.13 subdivision 3, is amended to read: 41.14 Subd. 3. [DUTY OF FINANCE OFFICIALSDEDUCTION 41.15 REQUIREMENTS.]It is the duty of each person, officer, school41.16board, or managing body required by law to draw the warrants or41.17orders for payment of salaries to teachers toEvery pay period 41.18 each employer shall deduct and withhold fromallthe salarypaid41.19each pay periodto every teacher who is a member of the fund the 41.20 amountwhich the teacher is required to pay into the fund41.21and,required under section 354.42. At the time of each 41.22 deduction,tothe employer shall also furnish to each teacher a 41.23 statement showing the amount of the deduction. 41.24 Sec. 18. Minnesota Statutes 1998, section 354.52, 41.25 subdivision 4, is amended to read: 41.26 Subd. 4. [REPORTING AND REMITTANCE REQUIREMENTS.]At least41.27once each month, a representative authorized byAnemploying41.28unitemployer shalltransmitremit all amounts due to the 41.29 association and furnish asignedstatement indicating the amount 41.30 due and transmitted with any other information required by the 41.31 executive director.Signing the statement has the force and41.32effect of an oath as to the correctness of the amount due and41.33transmitted.If an amount dueandis nottransmitted41.34 remitted to the association within seven calendar days of the 41.35 payroll warrant, the amount accrues interest at an annual rate 41.36 of 8.5 percent compounded annually commencing15 daysafter the 42.1 date first due until the amount istransmitted and must be paid42.2by the employing unit. These paymentsreceived by the 42.3 association. An amount due and otheremploying unitemployer 42.4 obligations not remitted within 60 days of notification by the 42.5 association must be certified to the commissioner of finance who 42.6 shall deduct the amount from any state aid or appropriation 42.7 amount applicable to the employing unit. 42.8 Sec. 19. Minnesota Statutes 1998, section 354.52, 42.9 subdivision 4a, is amended to read: 42.10 Subd. 4a. [MEMBER DATA REPORTING REQUIREMENTS.] (a) An 42.11 employing unit shall initially provide the following member data 42.12 or any of that data not previously provided to the association 42.13 for payroll warrants dated after June 30, 1995, in a format 42.14 prescribed by the executive director. Data changes and the 42.15 dates of those changes under this subdivision must be reported 42.16 to the association on an ongoing basisforwithin 14 calendar 42.17 days after the date of the end of the payroll cycle in which 42.18 they occur with the data under subdivision 4b. Data on the 42.19 member includes: 42.20 (1) legal name, address, date of birth, association member 42.21 number, employer-assigned employee number, and social security 42.22 number; 42.23 (2) association status, including, but not limited to, 42.24 basic, coordinated, exempt annuitant, exempt technical college 42.25 teacher, and exempt independent contractor or consultant; 42.26 (3) employment status, including, but not limited to, full 42.27 time, part time, intermittent, substitute, or part-time 42.28 mobility; 42.29 (4) employment position, including, but not limited to, 42.30 teacher, superintendent, principal, administrator, or other; 42.31 (5) employment activity, including, but not limited to, 42.32 hire, termination, resumption of employment, disability, or 42.33 death; 42.34 (6) leaves of absence; 42.35 (7) county district number assigned by the association for 42.36 the employing unit; 43.1 (8) data center identification number, if applicable; and 43.2 (9) other information as may be required by the executive 43.3 director. 43.4 Sec. 20. Minnesota Statutes 1998, section 354.52, 43.5 subdivision 4b, is amended to read: 43.6 Subd. 4b. [PAYROLL CYCLE REPORTING REQUIREMENTS.] An 43.7 employing unit shall provide the following data to the 43.8 association for payroll warrantsdated after June 30, 1995, for43.9eachon an ongoing basis within 14 calendar days after the date 43.10 of the payrollcyclewarrant in a format prescribed by the 43.11 executive director: 43.12 (1) association member number; 43.13 (2) employer-assigned employee number; 43.14 (3) social security number; 43.15 (4) amount of each salary deduction; 43.16 (5) amount of salary as defined in section 354.05, 43.17 subdivision 35, from which each deduction was made; 43.18 (6) reason for payment; 43.19 (7) service credit; 43.20 (8) the beginning and ending dates of the payroll period 43.21 covered and the date of actual payment; 43.22 (9) fiscal year of salary earnings; 43.23 (10) total remittance amount including employee, employer, 43.24 and additional employer contributions; and 43.25 (11) other information as may be required by the executive 43.26 director. 43.27 Sec. 21. Minnesota Statutes 1998, section 354.63, 43.28 subdivision 2, is amended to read: 43.29 Subd. 2. [VALUATION OF ASSETS; ADJUSTMENT OF BENEFITS.] 43.30 (1) The required reserves for retirement annuities as determined 43.31 in accordance with this chapter shall be transferred to the 43.32 Minnesota postretirement investment fundas ofno later than the 43.33 last business day of the month in which the retirement annuity 43.34 begins. The required reserves shall be determined in accordance 43.35 with the appropriate annuity table of mortality adopted by the 43.36 board of trustees as provided in section 354.07, subdivision 1, 44.1 based on the experience of the fund as recommended by the 44.2 commission-retained actuary and using the interest assumption 44.3 specified in section 356.215, subdivision 4d. 44.4 (2) Annuity payments shall be adjusted in accordance with 44.5 the provisions of section 11A.18. In making these adjustments, 44.6 members who retire effective July 1 shall be considered to have 44.7 retired effective the preceding June 30. This section applies 44.8 to persons who retired effective July 1, 1982, or later. 44.9 (3) An increase in annuity payments pursuant to this 44.10 section will be made automatically unless written notice is 44.11 filed by the annuitant with the executive director of the 44.12 teachers retirement association requesting that the increase 44.13 shall not be made. 44.14 Sec. 22. [REPEALER.] 44.15 Minnesota Statutes, section 354.52, subdivision 2, is 44.16 repealed. 44.17 Sec. 23. [EFFECTIVE DATE.] 44.18 Sections 1 to 13 and 15 to 22 are effective July 1, 1999. 44.19 Section 14 is effective January 1, 2000. 44.20 ARTICLE 4 44.21 TEACHERS RETIREMENT; MISCELLANEOUS CHANGES 44.22 Section 1. Minnesota Statutes 1998, section 354.05, 44.23 subdivision 8a, is amended to read: 44.24 Subd. 8a. [DEPENDENT CHILD.] For the purpose of survivor 44.25 benefit eligibility under section 354.46, subdivision 2b, 44.26 "dependent child" means any biological or adopted child of a 44.27 deceased member who has not reached the age of 20 andis44.28dependent for more than one-half of support upon the member. It44.29also includesany child of the member conceived while living and 44.30 born after death. 44.31 Sec. 2. Minnesota Statutes 1998, section 354.46, 44.32 subdivision 2, is amended to read: 44.33 Subd. 2. [DEATH WHILE ELIGIBLE DESIGNATED BENEFICIARY 44.34 BENEFIT.] (a) The surviving spouse of any member or former 44.35 member who has credit for at least three years of allowable 44.36 service is entitled to joint and survivor annuity coverage in 45.1 the event of death of the member prior to retirement. If the 45.2 surviving spouse does not elect to receive a surviving spouse 45.3 benefit under subdivision 1, if applicable, or does not elect to 45.4 receive a refund of accumulated member contributions under 45.5 section 354.47, subdivision 1, the surviving spouse is entitled 45.6 to receive, upon written application on a form prescribed by the 45.7 executive director, a benefit equal to the second portion of a 45.8 100 percent joint and survivor annuity specified under section 45.9 354.45, based on the ageofthe memberand surviving spouse at45.10the time of death of the memberwould have been and the age of 45.11 the surviving spouse at the time the benefit accrues, and 45.12 computed under section 354.44, subdivision 2 or 6, whichever is 45.13 applicable. 45.14 (b) If the member was under age 55 and has credit for at 45.15 least 30 years of allowable service on the date of death, the 45.16 surviving spouse may elect to receive a 100 percent joint and 45.17 survivor annuity based on the ageofthe memberand surviving45.18spouse on the date of deathwould have been and the age of the 45.19 surviving spouse at the time the benefit accrues. The annuity 45.20 is payable using the full early retirement reduction under 45.21 section 354.44, subdivision 6, paragraph (3)(ii), to age 55 and 45.22 one-half of the early retirement reduction from age 55 to the 45.23 age payment begins. 45.24 (c) If the member was under age 55 and has credit for at 45.25 least three years of allowable service on the date of death but 45.26 did not yet qualify for retirement, the surviving spouse may 45.27 elect to receive the 100 percent joint and survivor annuity 45.28 based on the ageofthe memberand the surviving spousewould 45.29 have been at the time of death and the age of the surviving 45.30 spouse at the time the benefit accrues. The annuity is 45.31 calculated using the full early retirement reduction under 45.32 section 354.44, subdivision 6, to age 55 and one-half of the 45.33 early retirement reduction from age 55 to the age the annuity 45.34 begins. The surviving spouse eligible for a surviving spouse 45.35 benefit under paragraph (a) may apply for the annuity at any 45.36 time after the date on which the deceased employee would have 46.1 attained the required age for retirement based on the employee's 46.2 allowable service. The surviving spouse eligible for surviving 46.3 spouse benefits under paragraph (b) or (c) may apply for the 46.4 annuity any time after the member's death. This benefit accrues 46.5 from the day following the date of the member's death but may 46.6 not begin to accrue more than six months before the date the 46.7 application is filed with the executive director. Sections 46.8 354.55, subdivision 11, and 354.60 apply to a deferred annuity 46.9 payable under this section. The benefit is payable for life. 46.10 Sec. 3. Minnesota Statutes 1998, section 354.46, 46.11 subdivision 2a, is amended to read: 46.12 Subd. 2a. [SURVIVOR COVERAGE TERM CERTAIN.] In lieu of the 46.13 100 percent optional annuity under subdivision 2, or a refund 46.14 under section 354.47, subdivision 1, the surviving spouse of a 46.15 deceased member may elect to receive survivor coverage in a term 46.16 certain offive,ten, 15, or 20 years, but monthly payments must 46.17 not exceed 75 percent of the average high-five monthly salary of 46.18 the deceased member. The monthly term certain annuity must be 46.19 actuarially equivalent to the 100 percent optional annuity under 46.20 subdivision 2. 46.21 If a surviving spouse elects a term certain payment and 46.22 dies before the expiration of the specified term certain period, 46.23 the commuted value of the remaining annuity payments must be 46.24 paid in a lump sum to thesurvivor'ssurviving spouse's estate. 46.25 Sec. 4. Minnesota Statutes 1998, section 356.30, 46.26 subdivision 1, is amended to read: 46.27 Subdivision 1. [ELIGIBILITY; COMPUTATION OF ANNUITY.] (1) 46.28 Notwithstanding any provisions to the contrary of the laws 46.29 governing the funds enumerated in subdivision 3, a person who 46.30 has met the qualifications of clause (2) may elect to receive a 46.31 retirement annuity from each fund in which the person has at 46.32 leastsix monthsone-half year of allowable service, based on 46.33 the allowable service in each fund, subject to the provisions of 46.34 clause (3). 46.35 (2) A person may receive upon retirement a retirement 46.36 annuity from each fund in which the person has at leastsix47.1monthsone-half year of allowable service, and augmentation of a 47.2 deferred annuity calculated under the laws governing each public 47.3 pension plan or fund named in subdivision 3, from the date the 47.4 person terminated all public service if: 47.5 (a) the person has allowable service totaling an amount 47.6 that allows the person to receive an annuity in any two or more 47.7 of the enumerated funds; and 47.8 (b) the person has not begun to receive an annuity from any 47.9 enumerated fund or the person has made application for benefits 47.10 from all funds and the effective dates of the retirement annuity 47.11 with each fund under which the person chooses to receive an 47.12 annuity are within a one-year period. 47.13 (3) The retirement annuity from each fund must be based 47.14 upon the allowable service in each fund, except that: 47.15 (a) The laws governing annuities must be the law in effect 47.16 on the date of termination from the last period of public 47.17 service under a covered fund with which the person earned a 47.18 minimum of one-half year of allowable service credit during that 47.19 employment. 47.20 (b) The "average salary" on which the annuity from each 47.21 covered fund in which the employee has credit in a formula plan 47.22 shall be based on the employee's highest five successive years 47.23 of covered salary during the entire service in covered funds. 47.24 (c) The formula percentages to be used by each fund must be 47.25 those percentages prescribed by each fund's formula as continued 47.26 for the respective years of allowable service from one fund to 47.27 the next, recognizing all previous allowable service with the 47.28 other covered funds. 47.29 (d) Allowable service in all the funds must be combined in 47.30 determining eligibility for and the application of each fund's 47.31 provisions in respect to actuarial reduction in the annuity 47.32 amount for retirement prior to normal retirement. 47.33 (e) The annuity amount payable for any allowable service 47.34 under a nonformula plan of a covered fund must not be affected 47.35 but such service and covered salary must be used in the above 47.36 calculation. 48.1 (f) This section shall not apply to any person whose final 48.2 termination from the last public service under a covered fund is 48.3 prior to May 1, 1975. 48.4 (g) For the purpose of computing annuities under this 48.5 section the formula percentages used by any covered fund, except 48.6 the public employees police and fire fund and the state patrol 48.7 retirement fund, must not exceed the percent specified in 48.8 section 356.19, subdivision 4, per year of service for any year 48.9 of service or fraction thereof. The formula percentage used by 48.10 the public employees police and fire fund and the state patrol 48.11 retirement fund must not exceed the percent specified in section 48.12 356.19, subdivision 6, per year of service for any year of 48.13 service or fraction thereof. The formula percentage used by the 48.14 legislators retirement plan and the elective state officers 48.15 retirement must not exceed 2.5 percent, but this limit does not 48.16 apply to the adjustment provided under section 3A.02, 48.17 subdivision 1, paragraph (c), or 352C.031, paragraph (b). 48.18 (h) Any period of time for which a person has credit in 48.19 more than one of the covered funds must be used only once for 48.20 the purpose of determining total allowable service. 48.21 (i) If the period of duplicated service credit is more than 48.22 six months, or the person has credit for more than six months 48.23 with each of the funds, each fund shall apply its formula to a 48.24 prorated service credit for the period of duplicated service 48.25 based on a fraction of the salary on which deductions were paid 48.26 to that fund for the period divided by the total salary on which 48.27 deductions were paid to all funds for the period. 48.28 (j) If the period of duplicated service credit is less than 48.29 six months, or when added to other service credit with that fund 48.30 is less than six months, the service credit must be ignored and 48.31 a refund of contributions made to the person in accord with that 48.32 fund's refund provisions. 48.33 Sec. 5. [EFFECTIVE DATE.] 48.34 Sections 1 to 4 are effective July 1, 1999. 48.35 ARTICLE 5 48.36 TEACHERS RETIREMENT; CHARTER SCHOOLS 49.1 Section 1. [CHARTER SCHOOL SERVICE CREDIT PURCHASE.] 49.2 A member of the teachers retirement association who 49.3 performed teaching service in a charter school under Minnesota 49.4 Statutes, section 124D.125, before July 1, 1995, may purchase 49.5 credit for any prior service that otherwise would be covered 49.6 under Minnesota Statutes, chapter 354. The purchase may be made 49.7 during a two-year window period from July 1, 1999, to June 30, 49.8 2001. The member must not have received nor be eligible to 49.9 receive service credit in a public pension fund listed under 49.10 Minnesota Statutes, section 356.30, subdivision 3, for the 49.11 purchased period of service. The member also must prove 49.12 eligibility to make a service credit purchase by providing 49.13 sufficient and satisfactory documentation as prescribed by the 49.14 executive director. The service credit purchase payment amount 49.15 must be determined and calculated under Minnesota Statutes, 49.16 section 356.55. 49.17 Sec. 2. [EFFECTIVE DATE.] 49.18 Section 1 is effective July 1, 1999.