HF 1968

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to retirement; changing investment reporting 
  1.3             requirements; modifying penalty provisions; amending 
  1.4             Minnesota Statutes 1996, sections 69.051, subdivisions 
  1.5             1, 1a, and 1b; 356.20, by adding a subdivision; 
  1.6             356.219; and 424A.02, subdivision 10; repealing 
  1.7             Minnesota Statutes 1996, section 356.218.  
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 1996, section 69.051, 
  1.10  subdivision 1, is amended to read: 
  1.11     Subdivision 1.  [FINANCIAL REPORT AND AUDIT.] The board of 
  1.12  each salaried firefighters' and relief association, police 
  1.13  relief association, and of each volunteer firefighters' relief 
  1.14  association as defined in section 424A.001, subdivision 4, with 
  1.15  assets of at least $200,000 or liabilities of at least $200,000, 
  1.16  according to the most recent actuarial valuation or financial 
  1.17  report if no valuation is required, shall:  
  1.18     (a) (1) Prepare a financial report covering the special and 
  1.19  general funds of the relief association for the preceding fiscal 
  1.20  year on a form prescribed by the state auditor.  The financial 
  1.21  report shall contain financial statements and disclosures which 
  1.22  present the true financial condition of the relief association 
  1.23  and the results of relief association operations in conformity 
  1.24  with generally accepted accounting principles and in compliance 
  1.25  with the regulatory, financing and funding provisions of this 
  1.26  chapter and any other applicable laws.  The financial report 
  2.1   shall be countersigned by the municipal clerk or clerk-treasurer 
  2.2   of the municipality in which the relief association is located 
  2.3   if the relief association is a firefighters' relief association 
  2.4   which is directly associated with a municipal fire department or 
  2.5   is a police relief association, or countersigned by the 
  2.6   secretary of the independent nonprofit firefighting corporation 
  2.7   and by the municipal clerk or clerk-treasurer of the largest 
  2.8   municipality in population which contracts with the independent 
  2.9   nonprofit firefighting corporation if the relief association is 
  2.10  a subsidiary of an independent nonprofit firefighting 
  2.11  corporation; 
  2.12     (b) (2) File the financial report in its office for public 
  2.13  inspection and present it to the city council after the close of 
  2.14  the fiscal year.  One copy of the financial report shall be 
  2.15  furnished to the state auditor after the close of the fiscal 
  2.16  year; and 
  2.17     (c) (3) Submit to the state auditor audited financial 
  2.18  statements which have been attested to by a certified public 
  2.19  accountant, public accountant, or the state auditor within 180 
  2.20  days after the close of the fiscal year, except that the state 
  2.21  auditor may upon request of a city and a showing of inability to 
  2.22  conform, extend the deadline.  The state auditor may accept this 
  2.23  report in lieu of the report required in clause (b) (2). 
  2.24     Sec. 2.  Minnesota Statutes 1996, section 69.051, 
  2.25  subdivision 1a, is amended to read: 
  2.26     Subd. 1a.  [FINANCIAL STATEMENT.] (a) The board of each 
  2.27  volunteer firefighters' relief association and each independent 
  2.28  nonprofit firefighting corporation, as defined in section 
  2.29  424A.001, subdivision 4, with assets of less than $200,000 and 
  2.30  liabilities less than $200,000, according to the most recent 
  2.31  financial report, shall: 
  2.32     (a) prepare a detailed statement of the financial affairs 
  2.33  for the preceding fiscal year of the relief association's 
  2.34  special and general funds in the style and form prescribed by 
  2.35  the state auditor, for the preceding fiscal year showing all 
  2.36  money received, with the sources, and respective amounts 
  3.1   thereof.  The detailed statement must show the sources and 
  3.2   amounts of all money received; all disbursements for which 
  3.3   orders have been drawn upon the treasurer; all, accounts 
  3.4   payable; all, and accounts receivable; the amount of money 
  3.5   remaining in the treasury; total assets including a listing of 
  3.6   all investments; the accrued liabilities; and all items 
  3.7   necessary to show accurately the revenues and expenditures and 
  3.8   financial position of the relief association;. 
  3.9      (b) The detailed financial statement shall required under 
  3.10  paragraph (a) must be certified by an independent public 
  3.11  accountant or auditor or by the auditor or accountant who 
  3.12  regularly examines or audits the financial transactions of the 
  3.13  municipality.  In addition to certifying the financial condition 
  3.14  of the special and general funds of the relief association, the 
  3.15  accountant or auditor conducting the examination shall give an 
  3.16  opinion as to the condition of the special and general funds of 
  3.17  the relief association, and shall comment upon any exceptions to 
  3.18  the report.  The independent accountant or auditor shall have at 
  3.19  least five years of public accounting, auditing, or similar 
  3.20  experience, and shall not be an active, inactive, or retired 
  3.21  member of the relief association or the fire or police 
  3.22  department;. 
  3.23     (c) The detailed statement shall required under paragraph 
  3.24  (a) must be countersigned by the municipal clerk or 
  3.25  clerk-treasurer of the municipality, or, where applicable, by 
  3.26  the secretary of the independent nonprofit firefighting 
  3.27  corporation and by the municipal clerk or clerk-treasurer of the 
  3.28  largest municipality in population which contracts with the 
  3.29  independent nonprofit firefighting corporation if the relief 
  3.30  association is a subsidiary of an independent nonprofit 
  3.31  firefighting corporation;. 
  3.32     (d) The volunteer firefighters' relief association board 
  3.33  must file the detailed statement required under paragraph (a) in 
  3.34  the relief association office for public inspection and present 
  3.35  it to the city council within 45 days after the close of the 
  3.36  fiscal year;, and must 
  4.1      (e) submit within 90 days after the close of the fiscal 
  4.2   year a copy of the detailed statement to the state auditor 
  4.3   within 90 days of the close of the fiscal year.  
  4.4      Sec. 3.  Minnesota Statutes 1996, section 69.051, 
  4.5   subdivision 1b, is amended to read: 
  4.6      Subd. 1b.  [QUALIFICATION.] The state auditor may, upon a 
  4.7   demonstration by a relief association of hardship or inability 
  4.8   to conform, extend the deadline for reports under subdivision 1 
  4.9   or 1a, but not beyond November 30 following the due date.  If 
  4.10  the reports are not received by November 30, the municipality or 
  4.11  relief association will forfeit its current year state aid, and 
  4.12  until the state auditor receives the required information, the 
  4.13  relief or municipality will be ineligible to receive any future 
  4.14  state aid.  A municipality or police or firefighters' relief 
  4.15  association shall not qualify initially to receive, or be 
  4.16  entitled subsequently to retain, state aid pursuant to this 
  4.17  chapter if the financial reporting requirement or the applicable 
  4.18  requirements of this chapter or any other statute or special law 
  4.19  have not been complied with or are not fulfilled.  
  4.20     Sec. 4.  Minnesota Statutes 1996, section 356.20, is 
  4.21  amended by adding a subdivision to read: 
  4.22     Subd. 4b.  [ADDITIONAL REPORTING REQUIREMENTS.] Pension 
  4.23  funds referred to in subdivision 2, clauses (5) to (10), must 
  4.24  include, as part of the report required by this section, the 
  4.25  information required under section 356.219.  A pension fund 
  4.26  which fails to include that information is subject to penalties 
  4.27  specified in section 356.219, subdivision 5.  The office of the 
  4.28  state auditor is authorized to develop forms to facilitate the 
  4.29  reporting required under this subdivision.  For pension funds 
  4.30  subject to this subdivision, at the time when reports are filed 
  4.31  under subdivision 3, a copy of the reports must also be 
  4.32  delivered to the office of the state auditor. 
  4.33     Sec. 5.  Minnesota Statutes 1996, section 356.219, is 
  4.34  amended to read: 
  4.35     356.219 [DISCLOSURE OF ADDITIONAL PUBLIC PENSION PLAN 
  4.36  INVESTMENT INFORMATION.] 
  5.1      Subdivision 1.  [REPORT REQUIRED.] (a) Except as indicated 
  5.2   in subdivision 4, the state board of investment on behalf of the 
  5.3   public pension funds and programs for which it is the investment 
  5.4   authority and any Minnesota public pension plan not wholly fully 
  5.5   invested through the state board of investment, including a 
  5.6   local police or firefighters' relief association governed by 
  5.7   sections 69.77 or 69.771 to 69.775, shall report the information 
  5.8   specified in subdivision 2 to the state auditor, and collect and 
  5.9   retain the information required by subdivision 3.  The state 
  5.10  auditor may prescribe a form or forms for the purposes of the 
  5.11  reporting requirements contained in this section. 
  5.12     (b) For purposes of this section, the state board of 
  5.13  investment is considered to be the investment authority for any 
  5.14  Minnesota public pension fund required to be invested by the 
  5.15  state board of investment under section 11A.23, or for any 
  5.16  Minnesota public pension fund authorized to invest in the 
  5.17  supplemental investment fund under section 11A.17 and which is 
  5.18  fully invested.  A local police or firefighters relief 
  5.19  association governed by sections 69.77 or 69.771 to 69.775 is 
  5.20  fully invested for purposes of this section if all assets of the 
  5.21  applicable pension plan beyond sufficient cash equivalent 
  5.22  investments to cover six months expected expenses are invested 
  5.23  under section 11A.17. 
  5.24     Subd. 2.  [CONTENT AND TIMING OF REPORTS.] (a) The 
  5.25  following information, as further specified in paragraphs (b) to 
  5.26  (f), shall be included in the report required by subdivision 1: 
  5.27     (1) the total portfolio market value of all investments at 
  5.28  the close of the reporting period as of the beginning and end of 
  5.29  the calendar year; 
  5.30     (2) regular payroll-based contributions to the fund the 
  5.31  total portfolio market value for each month or quarter, as 
  5.32  specified in paragraph (c), (d), (e), or (f), as applicable; 
  5.33     (3) other contributions and revenue paid into the fund, 
  5.34  including, but not limited to, state or local non-payroll-based 
  5.35  contributions, repaid refunds, and buybacks for the calendar 
  5.36  year end, the market value of each asset class as a percentage 
  6.1   of total portfolio market value; and 
  6.2      (4) total benefits paid to members; 
  6.3      (5) fees paid for investment management services; 
  6.4      (6) salaries and other administrative expenses paid; and 
  6.5      (7) total return on investment the amount and date of each 
  6.6   total portfolio injection and withdrawal, including all 
  6.7   investment-related and administrative expenses. 
  6.8      (b) The report must also include a written statement of the 
  6.9   investment policy in effect on June 30, 1988, and any 1997, if 
  6.10  that statement has not been previously submitted.  The 
  6.11  investment policy statement must include a target percentage 
  6.12  allocation among the asset classes represented in the investment 
  6.13  policy. Following June 30, 1997, subsequent reports shall 
  6.14  include investment policy changes made subsequently and shall 
  6.15  include the effective date of each policy change rather than a 
  6.16  complete statement of investment policy, unless the state 
  6.17  auditor requests submission of a complete current 
  6.18  statement.  The information required under this subdivision must 
  6.19  be reported separately for each investment account or investment 
  6.20  portfolio included in the pension fund. 
  6.21     (b) For public pension plans other than volunteer 
  6.22  firefighters' relief associations governed by sections 69.77 or 
  6.23  69.771 to 69.775, the information specified in paragraph (a) 
  6.24  must be provided separately for each quarter for the fiscal 
  6.25  years of the pension fund ending during calendar years 1989 
  6.26  through 1991 and on a monthly basis thereafter.  For volunteer 
  6.27  firefighters' relief associations governed by sections 69.77 or 
  6.28  69.771 to 69.775, the information specified in paragraph (a) 
  6.29  must be provided separately each quarter. 
  6.30     (c) Firefighters' relief associations that have assets with 
  6.31  a market value of less than $300,000 must submit a written 
  6.32  statement of their current investment policy on or before 
  6.33  October 1, 1996, must report any subsequent investment policy 
  6.34  changes, including the effective date of the change, within 90 
  6.35  days of the change, must begin collecting the required 
  6.36  information under paragraph (a), clauses (1) to (7), on January 
  7.1   1, 1997, and must submit the required information to the state 
  7.2   auditor on or before October 1, 1998, and subsequently within 
  7.3   six months of the end of each fiscal year.  Other associations 
  7.4   must submit the required information through fiscal year 1993 to 
  7.5   the state auditor on or before October 1, 1994, and subsequently 
  7.6   within six months of the end of each fiscal year.  
  7.7      (c) For public pension plans not fully invested through the 
  7.8   state board of investment with assets less than $1,000,000 in 
  7.9   market value at the beginning of the calendar year, the 
  7.10  information required in paragraph (a), clauses (2) and (4), must 
  7.11  be provided separately for each quarter. 
  7.12     (d) For public pension plans not fully invested through the 
  7.13  state board of investment with assets of $1,000,000 in market 
  7.14  value or more at the beginning of the calendar year, the 
  7.15  information required in paragraph (a), clauses (2) and (4), must 
  7.16  be provided separately for each month.  If a public pension plan 
  7.17  files a report under this paragraph, it must continue reporting 
  7.18  under this paragraph even if asset values drop below $1,000,000 
  7.19  in market value in a subsequent year, unless paragraph (e) or 
  7.20  (f) applies. 
  7.21     (e) For public pension plans required to invest assets 
  7.22  under section 11A.23, the state board of investment must include 
  7.23  monthly information under paragraph (a), clauses (2) and (4), as 
  7.24  it applies to retirement assets for active employees, and as it 
  7.25  applies to the Minnesota postretirement investment fund under 
  7.26  section 11A.18, and for both funds combined. 
  7.27     (f) For public pension plans investing under section 11A.17 
  7.28  and fully invested through the state board of investment, the 
  7.29  state board of investment must report monthly information 
  7.30  required in paragraph (a), clauses (2) and (4), for each public 
  7.31  retirement plan.  The board of any fully invested public pension 
  7.32  plan retains responsibility for submitting investment policy 
  7.33  statements and subsequent revisions as required under paragraph 
  7.34  (b). 
  7.35     (g) Any public pension fund may include computed 
  7.36  time-weighted rates of return with the report, in addition to 
  8.1   information required under paragraphs (a) to (f), as 
  8.2   applicable.  If returns are supplied, the individual who 
  8.3   computed the returns must certify that the returns are net of 
  8.4   all costs and fees, including investment management fees, and 
  8.5   that the procedures used to compute the returns are consistent 
  8.6   with bank administration institute studies of investment 
  8.7   performance measurement and association of investment management 
  8.8   and research presentation standards. 
  8.9      Subd. 3.  [ADDITIONAL ASSET CLASS DATA RETENTION 
  8.10  REQUIREMENTS.] The state board of investment on behalf of plans 
  8.11  for which it is the investment authority and each public pension 
  8.12  plan subject to subdivision 2 must collect and retain as part of 
  8.13  its permanent records the following information: 
  8.14     (1) the total market value of each significant asset class 
  8.15  or type of investment; and 
  8.16     (2) the amount and date of each asset class injection and 
  8.17  withdrawal. 
  8.18     If the public pension plan is required to report for a 
  8.19  given year under subdivision 2, paragraph (c), the information 
  8.20  for that year under this subdivision must be retained separately 
  8.21  for each quarter.  If the public pension plan is required to 
  8.22  report under subdivision 2, paragraph (d), the information under 
  8.23  this subdivision must be retained separately for each month.  
  8.24  For each public pension plan for which the state board of 
  8.25  investment is the investment authority under this section, the 
  8.26  state board of investment must retain the information required 
  8.27  by this subdivision separately for each month.  Information that 
  8.28  is required to be collected and retained for any given year or 
  8.29  years under this subdivision must be submitted to the office of 
  8.30  the state auditor if the office of the state auditor requests in 
  8.31  writing that the information be submitted by a public pension 
  8.32  plan or plans, or be submitted by the state board of investment 
  8.33  for any plan or plans for which the state board of investment is 
  8.34  the investment authority under this section.  If the state 
  8.35  auditor requests information under this subdivision, the 
  8.36  information is considered to be part of the report required 
  9.1   under this section.  Information required to be collected and 
  9.2   retained under this subdivision must also be transmitted to the 
  9.3   legislative commission on pensions and retirement if that 
  9.4   commission submits a written request for the information.  All 
  9.5   data submitted or retained under this section are public data 
  9.6   under chapter 13. 
  9.7      Subd. 4.  [ALTERNATIVE REPORTING; CERTAIN PLANS.] In lieu 
  9.8   of the requirements in subdivisions 2 and 3, the applicable 
  9.9   administration for the individual retirement account plans under 
  9.10  chapters 354B and 354D and for the University of Minnesota 
  9.11  faculty retirement plan shall submit computed time-weighted 
  9.12  rates of return to the office of the state auditor.  These 
  9.13  time-weighted rates of return are to cover the most recent 
  9.14  complete calendar year and are to be computed for each 
  9.15  investment option available to plan members.  To the extent 
  9.16  feasible, the returns are to be computed net of all costs, fees, 
  9.17  and charges, so that the computed return reflects the net 
  9.18  time-weighted return available to the investor.  If this is not 
  9.19  practical, the existence of any remaining cost, fee, or charge 
  9.20  which could further lower the net return must be disclosed.  The 
  9.21  procedures used to compute the returns must be consistent with 
  9.22  bank administration institute studies of investment performance 
  9.23  measurement and association of investment management and 
  9.24  research presentation standards or, if applicable, securities 
  9.25  exchange commission requirements.  The individual who computes 
  9.26  the returns must certify that the supplied returns comply with 
  9.27  this subdivision.  The applicable plan administrator must also 
  9.28  submit, with the return information, the total amounts invested 
  9.29  by the plan members, in aggregate, in each investment option as 
  9.30  of the last day of the calendar year. 
  9.31     Subd. 3. 5.  [PENALTY FOR NONCOMPLIANCE.] Failure to comply 
  9.32  with the reporting requirements of this section shall result in 
  9.33  a withholding of all state aid or state appropriation to which 
  9.34  the pension plan may otherwise be directly or indirectly 
  9.35  entitled until the pension plan has complied with the reporting 
  9.36  requirements.  The state auditor shall instruct the 
 10.1   commissioners of revenue and finance to withhold state aid or 
 10.2   state appropriation from any pension plan that fails to comply 
 10.3   with the reporting requirements contained in this section, until 
 10.4   the pension plan has complied with the reporting 
 10.5   requirements.  The state auditor may waive the withholding of 
 10.6   state aid or state appropriations if the state auditor 
 10.7   determines in writing that compliance would create an excessive 
 10.8   hardship. 
 10.9      The state auditor shall agree to waive the withholding of 
 10.10  all state aid required by this subdivision for a volunteer 
 10.11  firefighters' relief association governed by sections 69.77 or 
 10.12  69.771 to 69.775 if: 
 10.13     (1) the relief association certifies to the state auditor 
 10.14  that the financial records necessary to comply with this 
 10.15  reporting requirement for the fiscal years of the pension fund 
 10.16  ending during calendar years 1991 to 1993 no longer exist; or 
 10.17     (2) the state auditor determines that reconstructing 
 10.18  historical financial data for the fiscal years of the pension 
 10.19  fund ending during calendar years 1991 to 1993 would create an 
 10.20  excessive hardship for the relief association. 
 10.21     Subd. 4. 6.  [INVESTMENT DISCLOSURE REPORT.] Using the 
 10.22  information provided under subdivision 2, the state auditor 
 10.23  shall compute time-weighted rates of return for each pension 
 10.24  fund, net of all costs and fees, and prepare an annual report to 
 10.25  the legislature on the components of investment performance 
 10.26  resulting from stages in the investment decision making process 
 10.27  of various the public pension plans subject to this section.  
 10.28  The state auditor may contract with a qualified consultant or 
 10.29  consulting firm to perform the analysis and prepare the report 
 10.30  required under this subdivision. subdivision 2.  The report 
 10.31  shall include, for each plan subject to subdivision 2, a 
 10.32  calculation of the total portfolio rate of return and market 
 10.33  value available from index-matching investments assuming the 
 10.34  target asset mix indicated in the written statement of 
 10.35  investment policy and the injection and withdrawal information.  
 10.36  These will be compared to the actual total portfolio market 
 11.1   value and rate of return.  The report may also include an 
 11.2   analysis of information collected under subdivision 4 and, if 
 11.3   applicable, subdivision 3.  The state auditor may contract with 
 11.4   a qualified consultant or consulting firm to perform the 
 11.5   analysis and prepare the report required under this subdivision. 
 11.6      Subd. 5. 7.  [EXPENSE OF REPORT.] All expenses incurred 
 11.7   relating to the investment disclosure report described in 
 11.8   subdivision 4 must be borne by the office of the state auditor 
 11.9   and may not be charged back to the entities described in 
 11.10  subdivision 1. 
 11.11     Subd. 8.  [TIMING OF REPORTS.] (a) For salaried firefighter 
 11.12  relief associations, police relief associations, and volunteer 
 11.13  firefighter relief associations required to report under this 
 11.14  section, the information must be submitted by the due date for 
 11.15  reports required under section 69.051, subdivision 1 or 1a, as 
 11.16  applicable. 
 11.17     (b) For the Minneapolis teachers retirement fund 
 11.18  association, the St. Paul teachers retirement fund association, 
 11.19  the Duluth teachers retirement fund association, the Minneapolis 
 11.20  employees retirement fund, and the University of Minnesota 
 11.21  faculty supplemental retirement plan, the information required 
 11.22  under this section must be submitted as part of the report 
 11.23  required under section 356.20. 
 11.24     (c) The state board of investment, on behalf of pension 
 11.25  funds specified in subdivision 2, paragraphs (e) and (f), and 
 11.26  applicable administrators for the University of Minnesota 
 11.27  faculty retirement plan and the individual retirement account 
 11.28  plans under chapters 354B and 354D, must report information 
 11.29  required under this section by June 1 of each year. 
 11.30     Sec. 6.  Minnesota Statutes 1996, section 424A.02, 
 11.31  subdivision 10, is amended to read: 
 11.32     Subd. 10.  [LOCAL APPROVAL OF BYLAW AMENDMENTS; FILING 
 11.33  REQUIREMENTS.] (a) Each relief association to which this section 
 11.34  applies shall file a revised copy of its governing bylaws with 
 11.35  the commissioner of commerce state auditor upon the adoption of 
 11.36  any amendment to its governing bylaws by the relief association 
 12.1   or upon the approval of any amendment to its governing bylaws 
 12.2   granted by the governing body of each municipality served by the 
 12.3   fire department to which the relief association is directly 
 12.4   associated.  Failure of the relief association to file a copy of 
 12.5   the bylaws or any bylaw amendments with the commissioner of 
 12.6   commerce state auditor shall disqualify the municipality from 
 12.7   the distribution of any future fire state aid until this filing 
 12.8   requirement has been completed.  
 12.9      (b) If the special fund of the relief association does not 
 12.10  have a surplus over full funding pursuant to section 69.772, 
 12.11  subdivision 3, clause (2), subclause (e), or 69.773, subdivision 
 12.12  4, and if the municipality is required to provide financial 
 12.13  support to the special fund of the relief association pursuant 
 12.14  to section 69.772 or 69.773, no bylaw amendment which would 
 12.15  affect the amount of, the manner of payment of, or the 
 12.16  conditions for qualification for service pensions or ancillary 
 12.17  benefits or disbursements other than administrative expenses 
 12.18  authorized pursuant to section 69.80 payable from the special 
 12.19  fund of the relief association shall be effective until it has 
 12.20  been ratified by the governing body or bodies of the appropriate 
 12.21  municipalities.  If the municipality is not required to provide 
 12.22  financial support to the special fund pursuant to this section, 
 12.23  the relief association may adopt or amend without municipal 
 12.24  ratification its articles of incorporation or bylaws which 
 12.25  increase or otherwise affect the service pensions or ancillary 
 12.26  benefits payable from the special fund so long as the changes do 
 12.27  not cause the amount of the resulting increase in the accrued 
 12.28  liability of the special fund to exceed 90 percent of the amount 
 12.29  of the prior surplus over full funding and the changes do not 
 12.30  result in the financial requirements of the special fund 
 12.31  exceeding the expected amount of the future fire state aid to be 
 12.32  received by the relief association.  
 12.33     (c) If the relief association pays only a lump sum pension, 
 12.34  the financial requirements are to be determined by the board of 
 12.35  trustees following the preparation of an estimate of the 
 12.36  expected increase in the accrued liability and annual accruing 
 13.1   liability of the relief association attributable to the change.  
 13.2   If the relief association pays a monthly benefit service 
 13.3   pension, the financial requirements are to be determined by the 
 13.4   board of trustees following either an updated actuarial 
 13.5   valuation including the proposed change or an estimate of the 
 13.6   expected actuarial impact of the proposed change prepared by the 
 13.7   actuary of the relief association.  If a relief association 
 13.8   adopts or amends its articles of incorporation or bylaws without 
 13.9   municipal ratification pursuant to this subdivision, and, 
 13.10  subsequent to the amendment or adoption, the financial 
 13.11  requirements of the special fund pursuant to this section are 
 13.12  such so as to require financial support from the municipality, 
 13.13  the provision which was implemented without municipal 
 13.14  ratification shall no longer be effective without municipal 
 13.15  ratification, and any service pensions or ancillary benefits 
 13.16  payable after that date shall be paid only in accordance with 
 13.17  the articles of incorporation or bylaws as amended or adopted 
 13.18  with municipal ratification.  
 13.19     Sec. 7.  [REPEALER.] 
 13.20     Minnesota Statutes, section 356.218, is repealed. 
 13.21     Sec. 8.  [EFFECTIVE DATE.] 
 13.22     Sections 1 to 7 are effective January 1, 1998, except that 
 13.23  no penalty for noncompliance with section 5 may be assessed on 
 13.24  account of any failure to comply with reporting requirements of 
 13.25  that section prior to January 1, 1999.