HF 1987

as introduced - 87th Legislature (2011 - 2012) Posted on 01/30/2012 01:57pm

A bill for an act
relating to retirement; Teachers Retirement Association and other plans; revising
Teachers Retirement Association post-retirement adjustment initial eligibility
procedure; recodifying Teachers Retirement Association aid provisions; creating
new Teachers Retirement Association contribution and aid payment deficiency
recovery procedures; revising federal code compliance provisions applicable
to all plans; making other changes of an administrative nature; amending
Minnesota Statutes 2010, sections 126C.41, subdivision 3; 352.91, subdivision
3d; 354.51, subdivision 5; 354A.12, subdivision 3c; 356.415, subdivision 1d;
356.611, subdivisions 3, 3a, 4, by adding a subdivision; 423A.02, subdivision 3;
Minnesota Statutes 2011 Supplement, section 356.215, subdivision 8; proposing
coding for new law in Minnesota Statutes, chapter 354; repealing Minnesota
Statutes 2010, sections 128D.18; 354A.12, subdivision 3b.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

ADMINISTRATIVE REVISIONS

Section 1.

Minnesota Statutes 2010, section 352.91, subdivision 3d, is amended to read:

Subd. 3d.

Other correctional personnel.

(a) "Covered correctional service" means
service by a state employee in one of the employment positions at a correctional facility or
at the Minnesota Security Hospital specified in paragraph (b) if at least 75 percent of the
employee's working time is spent in direct contact with inmates or patients and the fact of
this direct contact is certified to the executive director by the appropriate commissioner.

(b) The employment positions are:

(1) automotive mechanic;

(2) baker;

(3) central services administrative specialist, intermediate;

(4) central services administrative specialist, principal;

(5) chaplain;

(6) chief cook;

(7) cook;

(8) cook coordinator;

(9) deleted text begin corrections deleted text end new text begin clinical new text end program therapist 1;

(10) deleted text begin corrections deleted text end new text begin clinical new text end program therapist 2;

(11) deleted text begin corrections deleted text end new text begin clinical new text end program therapist 3;

(12) deleted text begin corrections deleted text end new text begin clinical new text end program therapist 4;

(13) corrections inmate program coordinator;

(14) corrections transitions program coordinator;

(15) corrections security caseworker;

(16) corrections security caseworker career;

(17) corrections teaching assistant;

(18) delivery van driver;

(19) dentist;

(20) electrician supervisor;

(21) general maintenance worker lead;

(22) general repair worker;

(23) library/information research services specialist;

(24) library/information research services specialist senior;

(25) library technician;

(26) painter lead;

(27) plant maintenance engineer lead;

(28) plumber supervisor;

(29) psychologist 1;

(30) psychologist 3;

(31) recreation therapist;

(32) recreation therapist coordinator;

(33) recreation program assistant;

(34) recreation therapist senior;

(35) sports medicine specialist;

(36) work therapy assistant;

(37) work therapy program coordinator; and

(38) work therapy technician.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2011 Supplement, section 356.215, subdivision 8, is
amended to read:

Subd. 8.

Interest and salary assumptions.

(a) The actuarial valuation must use
the applicable following preretirement interest assumption and the applicable following
postretirement interest assumption:

plan	preretirement interest rate assumption	postretirement interest rate assumption
general state employees retirement plan	8.5%	6.0%
correctional state employees retirement plan	8.5	6.0
State Patrol retirement plan	8.5	6.0
legislators retirement plan	8.5	6.0
elective state officers retirement plan	8.5	6.0
judges retirement plan	8.5	6.0
general public employees retirement plan	8.5	6.0
public employees police and fire retirement plan	8.5	6.0
local government correctional service retirement plan	8.5	6.0
teachers retirement plan	8.5	6.0
Duluth teachers retirement plan	8.5	8.5
St. Paul teachers retirement plan	8.5	8.5
Fairmont Police Relief Association	5.0	5.0
Virginia Fire Department Relief Association	5.0	5.0
Bloomington Fire Department Relief Association	6.0	6.0
local monthly benefit volunteer firefighters relief associations	5.0	5.0

(b) Before July 1, 2010, the actuarial valuation must use the applicable following
single rate future salary increase assumption, the applicable following modified single
rate future salary increase assumption, or the applicable following graded rate future
salary increase assumption:

(1) single rate future salary increase assumption

plan	future salary increase assumption
legislators retirement plan		5.0%
judges retirement plan		4.0
Fairmont Police Relief Association		3.5
Virginia Fire Department Relief Association		3.5
Bloomington Fire Department Relief Association		4.0

(2) age-related select and ultimate future salary increase assumption or graded rate
future salary increase assumption

plan	future salary increase assumption
correctional state employees retirement plan	assumption D
State Patrol retirement plan	assumption C
local government correctional service retirement plan	assumption C
Duluth teachers retirement plan	assumption A
St. Paul teachers retirement plan	assumption B

new text begin For plans other than the Duluth teachers
retirement plan, new text end the select calculation
is: during the designated select period, a
designated percentage rate is multiplied by
the result of the designated integer minus T,
where T is the number of completed years of
service, and is added to the applicable future
salary increase assumption. deleted text begin The designated
select period is five years and the designated
integer is five for the general state employees
retirement plan. deleted text end The designated select period
is ten years and the designated integer is ten
for all deleted text begin other deleted text end retirement plans covered by
this clause. The designated percentage rate
is: (1) 0.2 percent for the correctional state
employees retirement plan, the State Patrol
retirement plan, and the local government
correctional service retirement plan; new text begin and new text end (2)
deleted text begin 0.6 percent for the general state employees
retirement plan; and (3) deleted text end 0.3 percent for the
deleted text begin teachers retirement plan, the Duluth Teachers
Retirement Fund Association, and the deleted text end St.
Paul Teachers Retirement Fund Association.
The select calculation for the Duluth Teachers
Retirement Fund Association is 8.00 percent
per year for service years one through seven,
7.25 percent per year for service years seven
and eight, and 6.50 percent per year for
service years eight and nine.

The ultimate future salary increase assumption is:

age	A	B	C	D
16	8.00%	6.90%	7.7500%	7.2500%
17	8.00	6.90	7.7500	7.2500
18	8.00	6.90	7.7500	7.2500
19	8.00	6.90	7.7500	7.2500
20	6.90	6.90	7.7500	7.2500
21	6.90	6.90	7.1454	6.6454
22	6.90	6.90	7.0725	6.5725
23	6.85	6.85	7.0544	6.5544
24	6.80	6.80	7.0363	6.5363
25	6.75	6.75	7.0000	6.5000
26	6.70	6.70	7.0000	6.5000
27	6.65	6.65	7.0000	6.5000
28	6.60	6.60	7.0000	6.5000
29	6.55	6.55	7.0000	6.5000
30	6.50	6.50	7.0000	6.5000
31	6.45	6.45	7.0000	6.5000
32	6.40	6.40	7.0000	6.5000
33	6.35	6.35	7.0000	6.5000
34	6.30	6.30	7.0000	6.5000
35	6.25	6.25	7.0000	6.5000
36	6.20	6.20	6.9019	6.4019
37	6.15	6.15	6.8074	6.3074
38	6.10	6.10	6.7125	6.2125
39	6.05	6.05	6.6054	6.1054
40	6.00	6.00	6.5000	6.0000
41	5.90	5.95	6.3540	5.8540
42	5.80	5.90	6.2087	5.7087
43	5.70	5.85	6.0622	5.5622
44	5.60	5.80	5.9048	5.4078
45	5.50	5.75	5.7500	5.2500
46	5.40	5.70	5.6940	5.1940
47	5.30	5.65	5.6375	5.1375
48	5.20	5.60	5.5822	5.0822
49	5.10	5.55	5.5404	5.0404
50	5.00	5.50	5.5000	5.0000
51	4.90	5.45	5.4384	4.9384
52	4.80	5.40	5.3776	4.8776
53	4.70	5.35	5.3167	4.8167
54	4.60	5.30	5.2826	4.7826
55	4.50	5.25	5.2500	4.7500
56	4.40	5.20	5.2500	4.7500
57	4.30	5.15	5.2500	4.7500
58	4.20	5.10	5.2500	4.7500
59	4.10	5.05	5.2500	4.7500
60	4.00	5.00	5.2500	4.7500
61	3.90	5.00	5.2500	4.7500
62	3.80	5.00	5.2500	4.7500
63	3.70	5.00	5.2500	4.7500
64	3.60	5.00	5.2500	4.7500
65	3.50	5.00	5.2500	4.7500
66	3.50	5.00	5.2500	4.7500
67	3.50	5.00	5.2500	4.7500
68	3.50	5.00	5.2500	4.7500
69	3.50	5.00	5.2500	4.7500
70	3.50	5.00	5.2500	4.7500

(3) service-related ultimate future salary increase assumption

general state employees retirement plan of the Minnesota State Retirement System	assumption A
general employees retirement plan of the Public Employees Retirement Association	assumption B
Teachers Retirement Association	assumption C
public employees police and fire retirement plan	assumption D

service length	A	B	C	D
1	10.75%	12.25%	12.00%	13.00%
2	8.35	9.15	9.00	11.00
3	7.15	7.75	8.00	9.00
4	6.45	6.85	7.50	8.00
5	5.95	6.25	7.25	6.50
6	5.55	5.75	7.00	6.10
7	5.25	5.45	6.85	5.80
8	4.95	5.15	6.70	5.60
9	4.75	4.85	6.55	5.40
10	4.65	4.65	6.40	5.30
11	4.45	4.45	6.25	5.20
12	4.35	4.35	6.00	5.10
13	4.25	4.15	5.75	5.00
14	4.05	4.05	5.50	4.90
15	3.95	3.95	5.25	4.80
16	3.85	3.85	5.00	4.80
17	3.75	3.75	4.75	4.80
18	3.75	3.75	4.50	4.80
19	3.75	3.75	4.25	4.80
20	3.75	3.75	4.00	4.80
21	3.75	3.75	3.90	4.70
22	3.75	3.75	3.80	4.60
23	3.75	3.75	3.70	4.50
24	3.75	3.75	3.60	4.50
25	3.75	3.75	3.50	4.50
26	3.75	3.75	3.50	4.50
27	3.75	3.75	3.50	4.50
28	3.75	3.75	3.50	4.50
29	3.75	3.75	3.50	4.50
30 or more	3.75	3.75	3.50	4.50

(c) Before July 2, 2010, the actuarial valuation must use the applicable following
payroll growth assumption for calculating the amortization requirement for the unfunded
actuarial accrued liability where the amortization retirement is calculated as a level
percentage of an increasing payroll:

plan	payroll growth assumption
general state employees retirement plan of the Minnesota State Retirement System	3.75%
correctional state employees retirement plan	4.50
State Patrol retirement plan	4.50
legislators retirement plan	4.50
judges retirement plan	4.00
general employees retirement plan of the Public Employees Retirement Association	3.75
public employees police and fire retirement plan	3.75
local government correctional service retirement plan	4.50
teachers retirement plan	3.75
Duluth teachers retirement plan	4.50
St. Paul teachers retirement plan	5.00

(d) After July 1, 2010, the assumptions set forth in paragraphs (b) and (c) continue to
apply, unless a different salary assumption or a different payroll increase assumption:

(1) has been proposed by the governing board of the applicable retirement plan;

(2) is accompanied by the concurring recommendation of the actuary retained under
section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the
most recent actuarial valuation report if section 356.214 does not apply; and

(3) has been approved or deemed approved under subdivision 18.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2010, section 356.415, subdivision 1d, is amended to read:

Subd. 1d.

Teachers Retirement Association annual postretirement adjustments.

(a) Retirement annuity, disability benefit, or survivor benefit recipients of the Teachers
Retirement Association are entitled to a postretirement adjustment annually on January
1, as follows:

(1) for January 1, 2011, and January 1, 2012, no postretirement increase is payable;

(2) for January 1, 2013, and each successive January 1 until funding stability is
restored, a postretirement increase of two percent must be applied each year, effective
on January 1, to the monthly annuity or benefit amount of each annuitant or benefit
recipient who has been receiving an annuity or a benefit for at least 18 full months prior
to the January 1 increase;

(3) for January 1, 2013, and each successive January 1 until funding stability is
restored, for each annuitant or benefit recipient who has been receiving an annuity or a
benefit for at least six full months new text begin before the January 1 increase new text end , an annual postretirement
increase of 1/12 of two percent for each month the person has been receiving an annuity or
benefit must be applied, effective January 1, deleted text begin following the year in deleted text end new text begin for new text end which the person has
been retired for new text begin at least six months but new text end less than deleted text begin 12 deleted text end new text begin 18 new text end months;

(4) for each January 1 following the restoration of funding stability, a postretirement
increase of 2.5 percent must be applied each year, effective January 1, to the monthly
annuity or benefit amount of each annuitant or benefit recipient who has been receiving an
annuity or a benefit for at least 18 full months prior to the January 1 increase; and

(5) for each January 1 following the restoration of funding stability, for each
annuitant or benefit recipient who has been receiving an annuity or a benefit for at least six
full months new text begin before the January 1 increase new text end , an annual postretirement increase of 1/12 of
2.5 percent for each month the person has been receiving an annuity or benefit must be
applied, effective January 1, deleted text begin following the year in deleted text end new text begin for new text end which the person has been retired
for new text begin at least six months but new text end less than deleted text begin 12 deleted text end new text begin 18 new text end months.

(b) Funding stability is restored when the market value of assets of the Teachers
Retirement Association equals or exceeds 90 percent of the actuarial accrued liabilities of
the Teachers Retirement Association in the most recent prior actuarial valuation prepared
under section 356.215 and the standards for actuarial work by the approved actuary
retained by the Teachers Retirement Association under section 356.214.

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

(d) The retirement annuity payable to a person who retires before becoming eligible
for Social Security benefits and who has elected the optional payment as provided in
section 354.35 must be treated as the sum of a period-certain retirement annuity and a life
retirement annuity for the purposes of any postretirement adjustment. The period-certain
retirement annuity plus the life retirement annuity must be the annuity amount payable
until age 62, 65, or normal retirement age, as selected by the member at retirement, for an
annuity amount payable under section 354.35. A postretirement adjustment granted on
the period-certain retirement annuity must terminate when the period-certain retirement
annuity terminates.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2010, section 356.611, subdivision 3, is amended to read:

Subd. 3.

Maximum benefit limitations.

deleted text begin A member's deleted text end new text begin An annuitant's new text end annual benefit,
if necessary, must be reduced to the extent required by section 415(b) of the federal
Internal Revenue Code, as adjusted by the United States secretary of the treasury under
section 415(d) of the new text begin federal new text end Internal Revenue Code for any applicable increases in the
cost of living new text begin , including applicable increases in the cost of living new text end after the member's
termination of employment. deleted text begin For purposes of section 415 of the federal Internal Revenue
Code, the limitation year of a pension plan covered by this section must be the fiscal year
or calendar year of that plan, whichever is applicable. deleted text end new text begin If an annuitant participated in more
than one pension plan maintained by the same employer, the benefits under each plan must
be reduced proportionately, if necessary, to satisfy the applicable limitation.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2010, section 356.611, subdivision 3a, is amended to read:

Subd. 3a.

Maximum annual addition limitation new text begin , defined contribution plans new text end .

The
annual additions on behalf of a member to deleted text begin the deleted text end new text begin a defined contribution new text end plan deleted text begin established
under chapter 352D or 353D deleted text end for any limitation year deleted text begin beginning after December 31, 2001, deleted text end
shall not exceed the deleted text begin lesser of 100 percent of the member's compensation, as defined for
purposes of deleted text end new text begin applicable limitation on annual additions under new text end section 415(c) of the new text begin federal
new text end Internal Revenue Code deleted text begin ; or $40,000 deleted text end , as adjusted by the United States secretary of the
treasury under section 415(d) of the new text begin federal new text end Internal Revenue Code.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

Minnesota Statutes 2010, section 356.611, subdivision 4, is amended to read:

Subd. 4.

Compensation.

deleted text begin (a) deleted text end For purposes of this section, compensation means a
member's compensation actually paid or made available for any limitation year including
new text begin all new text end items new text begin of remuneration new text end described in federal treasury regulation section 1.415 (c)-2(b)
and excluding new text begin all new text end items new text begin of remuneration new text end described in federal treasury regulation section
1.415 (c)-2(c). new text begin Compensation for pension plan purposes for any limitation year shall not
exceed the applicable federal compensation limit described in subdivision 2.
new text end

deleted text begin (b) Compensation for any period includes:
deleted text end

deleted text begin (1) any elective deferral as defined in section 402(g)(3) of the federal Internal
Revenue Code;
deleted text end

deleted text begin (2) any elective amounts that are not includable in a member's gross income by
reason of sections 125 or 457 of the federal Internal Revenue Code; and
deleted text end

deleted text begin (3) any elective amounts that are not includable in a member's gross income by
reason of section 132(f)(4) of the federal Internal Revenue Code.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7.

Minnesota Statutes 2010, section 356.611, is amended by adding a subdivision
to read:

new text begin Subd. 5. new text end

new text begin Limitation year. new text end

new text begin Unless otherwise specifically provided, for purposes of
section 415 of the federal Internal Revenue Code, the limitation year of a pension plan
covered by this section is the calendar year or fiscal year, whichever is applicable.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 2

AID PROVISION RECODIFICATION; ADDING SHORTAGE
RECOVERY PROCEDURE

Section 1.

Minnesota Statutes 2010, section 126C.41, subdivision 3, is amended to read:

Subd. 3.

Retirement levies.

(a) In 1991 and each year thereafter, a district to which
this subdivision applies may levy an additional amount required for contributions to
the general employees retirement plan of the Public Employees Retirement Association
as the successor of the Minneapolis Employees Retirement Fund as a result of the
maximum dollar amount limitation on state contributions to that plan imposed under
section 353.505. The additional levy must not exceed the most recent amount certified by
the executive director of the Public Employees Retirement Association as the district's
share of the contribution requirement in excess of the maximum state contribution under
section 353.505.

(b) For taxes payable in 1994 and thereafter, Special School District No. 1,
Minneapolis, and Independent School District No. 625, St. Paul, may levy for the increase
in the employer retirement fund contributions, under Laws 1992, chapter 598, article 5,
section 1.

(c) If the employer retirement fund contributions under section 354A.12, subdivision
2a, are increased for fiscal year 1994 or later fiscal years, Special School District No. 1,
Minneapolis, and Independent School District No. 625, St. Paul, may levy in payable
1994 or later an amount equal to the amount derived by applying the net increase in
the employer retirement fund contribution rate of the respective teacher retirement fund
association between fiscal year 1993 and the fiscal year beginning in the year after the
levy is certified to the total covered payroll of the applicable teacher retirement fund
association. If an applicable school district levies under this paragraph, they may not
levy under paragraph (b).

(d) In addition to the levy authorized under paragraph (c), Special School District
No. 1, Minneapolis, may also levy payable in 1997 or later an amount equal to the
contributions under section deleted text begin 423A.02 deleted text end new text begin 354.435 new text end , subdivision deleted text begin 3 deleted text end new text begin 2 new text end , and may also levy in
payable 1994 or later an amount equal to the state aid contribution under section deleted text begin 354A.12 deleted text end new text begin
354.435 new text end , subdivision deleted text begin 3b deleted text end new text begin 1 new text end . Independent School District No. 625, St. Paul, may levy
payable in 1997 or later an amount equal to the supplemental contributions under section
423A.02, subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

new text begin [354.435] ADDITIONAL CONTRIBUTIONS BY SPECIAL SCHOOL
DISTRICT NO. 1 AND CITY OF MINNEAPOLIS.
new text end

new text begin Subdivision 1. new text end

new text begin Special direct state matching aid. new text end

new text begin (a) Special School District No. 1,
Minneapolis, and the city of Minneapolis must make additional employer contributions
to the Teachers Retirement Association in the amounts specified in paragraph (b). These
contributions can be made from any available source. If made in whole or in part by a
levy, the levy may be classified as that of a special taxing district for purposes of sections
275.065 and 276.04, and for all other property tax purposes.
new text end

new text begin (b) Each fiscal year $1,250,000 must be contributed by Special School District
No. 1, Minneapolis, and $1,250,000 must be contributed by the city of Minneapolis to
the Teachers Retirement Association and the state shall match this total by paying to
the Teachers Retirement Association $2,500,000. The superintendent of Special School
District No. 1, Minneapolis, the mayor of the city of Minneapolis, and the executive
director of the Teachers Retirement Association shall jointly certify to the commissioner
of management and budget the total amount that has been contributed by Special School
District No. 1, Minneapolis, and by the city of Minneapolis to the Teachers Retirement
Association. Any certification to the commissioner of management and budget must
be made quarterly. If the certifications for a fiscal year exceed the maximum annual
direct state matching aid amount in any quarter, the amount of direct state matching aid
payable to the Teachers Retirement Association must be limited to the balance of the
maximum annual direct state matching aid amount available. The amount required under
this paragraph, subject to the maximum direct state matching aid amount, is appropriated
annually to the commissioner of management and budget.
new text end

new text begin (c) The commissioner of management and budget may prescribe the form of the
certifications required under paragraph (b).
new text end

new text begin Subd. 2. new text end

new text begin Additional contributions. new text end

new text begin In addition to any other required contributions,
on or before June 30 each fiscal year, Special School District No. 1, Minneapolis, and the
city of Minneapolis must each make an additional contribution to the Teachers Retirement
Association of $1,000,000.
new text end

new text begin Subd. 3. new text end

new text begin Procedure for recovery of deficient or delinquent amounts. new text end

new text begin If Special
School District No. 1, Minneapolis, or the city of Minneapolis fails to pay the full amount
required under subdivision 1, paragraph (b), or subdivision 2, in a timely manner, the
executive director is authorized to use section 354.512, or any other process in law to
ensure full payment is obtained.
new text end

new text begin Subd. 4. new text end

new text begin Expiration; repealer. new text end

new text begin This section expires and is repealed effective the
first day of the fiscal year next following the fiscal year in which the Teachers Retirement
Association has no unfunded actuarial accrued liability as determined by the actuarial
valuation prepared under section 356.215, by the approved actuary retained under section
356.214.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2010, section 354.51, subdivision 5, is amended to read:

Subd. 5.

Payment of shortages.

(a) Except as provided in paragraph (b), in the
event that full required member contributions are not deducted from the salary of a
teacher, payment must be made as follows:

(1) Payment of shortages in member deductions on salary earned after June 30,
1957, and before July 1, 1981, may be made any time before retirement. Payment must
include interest at an annual rate of 8.5 percent compounded annually from the end of the
fiscal year in which the shortage occurred to the end of the month in which payment is
made and the interest must be credited to the fund. If payment of a shortage in deductions
is not made, the formula service credit of the member must be prorated under section
354.05, subdivision 25, clause (3).

(2) Payment of shortages in member deductions on salary earned after June 30,
1981, are the sole obligation of the employing unit and are payable by the employing unit
upon notification by the executive director of the shortage with interest at an annual rate of
8.5 percent compounded annually from the end of the fiscal year in which the shortage
occurred to the end of the month in which payment is made and the interest must be
credited to the fund. Effective July 1, 1986, the employing unit shall also pay the employer
contributions as specified in section 354.42, subdivisions 3 and 5 for the shortages. If the
shortage payment is not paid by the employing unit within 60 days of notification, the
executive director deleted text begin shall deleted text end new text begin may new text end certify the amount of the shortage deleted text begin payment deleted text end to the applicable
county auditor, who shall spread a levy in the amount of the shortage payment over the
taxable property of the taxing district of the employing unit if the employing unit is
supported by property taxes deleted text begin , or to the commissioner of management and budget, who shall
deduct the amount from any state aid or appropriation amount applicable to the employing
unit if the employing unit is not supported by property taxes deleted text end .

(3) Payment may not be made for shortages in member deductions on salary earned
before July 1, 1957, for shortages in member deductions on salary paid or payable under
paragraph (b), or for shortages in member deductions for persons employed by the
Minnesota State Colleges and Universities system in a faculty position or in an eligible
unclassified administrative position and whose employment was less than 25 percent
of a full academic year, exclusive of the summer session, for the applicable institution
that exceeds the most recent 36 months.

(b) For a person who is employed by the Minnesota State Colleges and Universities
system in a faculty position or in an eligible unclassified administrative position and
whose employment was less than 25 percent of a full academic year, exclusive of the
summer session, for the applicable institution, upon the person's election under section
354B.21 of retirement coverage under this chapter, the shortage in member deductions
on the salary for employment by the Minnesota State Colleges and Universities system
institution of less than 25 percent of a full academic year, exclusive of the summer session,
for the applicable institution for the most recent 36 months and the associated employer
contributions must be paid by the Minnesota State Colleges and Universities system
institution, plus annual compound interest at the rate of 8.5 percent from the end of the
fiscal year in which the shortage occurred to the end of the month in which the Teachers
Retirement Association coverage election is made. deleted text begin If the shortage payment is not made by
the institution within 60 days of notification, the executive director shall certify the amount
of the shortage payment to the commissioner of management and budget, who shall deduct
the amount from any state appropriation to the system. deleted text end An individual electing coverage
under this paragraph shall repay the amount of the shortage in member deductions, plus
interest, through deduction from salary or compensation payments within the first year of
employment after the election under section 354B.21, subject to the limitations in section
16D.16. The Minnesota State Colleges and Universities system may use any means
available to recover amounts which were not recovered through deductions from salary or
compensation payments. No payment of the shortage in member deductions under this
paragraph may be made for a period longer than the most recent 36 months.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

new text begin [354.512] RECOVERY OF DEFICIENCIES.
new text end

new text begin In addition to any other remedies permitted under law, if an employing unit or
other entity required by law to make any form of payment to the Teachers Retirement
Association fails to make full payment within 60 days of notification, the executive
director is authorized to certify the amount of deficiency to the commissioner of
management and budget, who shall deduct the amount from any state aid or appropriation
applicable to the employing unit or entity, and transmit the withheld aid or appropriation
to the executive director for deposit in the fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2010, section 354A.12, subdivision 3c, is amended to read:

Subd. 3c.

Termination of supplemental contributions and direct matching and
state aid.

deleted text begin The supplemental contributions payable to the Minneapolis Teachers Retirement
Fund Association by Special School District No. 1 and the city of Minneapolis under
section 423A.02, subdivision 3, must be paid to the Teachers Retirement Association and
must continue until the current assets of the fund equal or exceed the actuarial accrued
liability of the fund as determined in the most recent actuarial report for the fund by
the actuary retained under section 356.214, or 2037, whichever occurs earlier. deleted text end The
supplemental contributions payable to the St. Paul Teachers Retirement Fund Association
by Independent School District No. 625 under section 423A.02, subdivision 3, or the
direct state aid under subdivision 3a to the St. Paul Teachers Retirement Fund Association
must continue until the current assets of the fund equal or exceed the actuarial accrued
liability of the fund as determined in the most recent actuarial report for the fund by the
actuary retained under section 356.214 or until 2037, whichever occurs earlier.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

Minnesota Statutes 2010, section 423A.02, subdivision 3, is amended to read:

Subd. 3.

Reallocation of amortization or supplementary amortization state
aid.

(a) Seventy percent of the difference between $5,720,000 and the current year
amortization aid and supplemental amortization aid distributed under subdivisions 1
and 1a that is not distributed for any reason to a municipality for use by a local police
or salaried fire relief association must be distributed by the commissioner of revenue
according to this paragraph. The commissioner shall distribute 50 percent of the amounts
derived under this paragraph to the Teachers Retirement Association, ten percent to the
Duluth Teachers Retirement Fund Association, and 40 percent to the St. Paul Teachers
Retirement Fund Association to fund the unfunded actuarial accrued liabilities of the
respective funds. These payments shall be made on or before June 30 each fiscal year. If
the St. Paul Teachers Retirement Fund Association becomes fully funded, its eligibility
for this aid ceases. Amounts remaining in the undistributed balance account at the end of
the biennium if aid eligibility ceases cancel to the general fund.

(b) In order to receive amortization and supplementary amortization aid under
paragraph (a), new text begin prior to June 30 new text end Independent School District No. 625, St. Paul, must make
deleted text begin contributions deleted text end new text begin an additional contribution of $800,000 each year new text end to the St. Paul Teachers
Retirement Fund Association deleted text begin in accordance with the following schedule: deleted text end new text begin .
new text end

	deleted text begin Fiscal Year deleted text end		deleted text begin Amount deleted text end
	deleted text begin 1996 deleted text end	deleted text begin $ deleted text end	deleted text begin 0 deleted text end
	deleted text begin 1997 deleted text end	deleted text begin $ deleted text end	deleted text begin 0 deleted text end
	deleted text begin 1998 deleted text end	deleted text begin $ deleted text end	deleted text begin 200,000 deleted text end
	deleted text begin 1999 deleted text end	deleted text begin $ deleted text end	deleted text begin 400,000 deleted text end
	deleted text begin 2000 deleted text end	deleted text begin $ deleted text end	deleted text begin 600,000 deleted text end
	deleted text begin 2001 and thereafter deleted text end	deleted text begin $ deleted text end	deleted text begin 800,000 deleted text end

deleted text begin (c) Special School District No. 1, Minneapolis, and the city of Minneapolis must
each make contributions to the Teachers Retirement Association in accordance with the
following schedule:
deleted text end

	deleted text begin Fiscal Year deleted text end	deleted text begin City amount deleted text end			deleted text begin School district amount deleted text end
	deleted text begin 1996 deleted text end	deleted text begin $ deleted text end	deleted text begin 0 deleted text end		deleted text begin $ deleted text end	deleted text begin 0 deleted text end
	deleted text begin 1997 deleted text end	deleted text begin $ deleted text end	deleted text begin 0 deleted text end		deleted text begin $ deleted text end	deleted text begin 0 deleted text end
	deleted text begin 1998 deleted text end	deleted text begin $ deleted text end	deleted text begin 250,000 deleted text end		deleted text begin $ deleted text end	deleted text begin 250,000 deleted text end
	deleted text begin 1999 deleted text end	deleted text begin $ deleted text end	deleted text begin 400,000 deleted text end		deleted text begin $ deleted text end	deleted text begin 400,000 deleted text end
	deleted text begin 2000 deleted text end	deleted text begin $ deleted text end	deleted text begin 550,000 deleted text end		deleted text begin $ deleted text end	deleted text begin 550,000 deleted text end
	deleted text begin 2001 deleted text end	deleted text begin $ deleted text end	deleted text begin 700,000 deleted text end		deleted text begin $ deleted text end	deleted text begin 700,000 deleted text end
	deleted text begin 2002 deleted text end	deleted text begin $ deleted text end	deleted text begin 850,000 deleted text end		deleted text begin $ deleted text end	deleted text begin 850,000 deleted text end
	deleted text begin 2003 and thereafter deleted text end	deleted text begin $ deleted text end	deleted text begin 1,000,000 deleted text end		deleted text begin $ deleted text end	deleted text begin 1,000,000 deleted text end

deleted text begin (d) deleted text end new text begin (c) new text end Thirty percent of the difference between $5,720,000 and the current year
amortization aid and supplemental amortization aid under subdivisions 1 and 1a that is not
distributed for any reason to a municipality for use by a local police or salaried firefighter
relief association must be distributed under section 69.021, subdivision 7, paragraph (d),
as additional funding to support a minimum fire state aid amount for volunteer firefighter
relief associations.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7. new text begin RECOVERY OF PRIOR DEFICIENCIES.
new text end

new text begin Subdivision 1. new text end

new text begin Authorization. new text end

new text begin Due to a determination by the Office of the
Legislative Auditor, Financial Audit Division, that the city of Minneapolis has failed to
pay, beginning in 1998, the full amounts required under Minnesota Statutes 2010, section
354A.12, subdivision 3b, and Minnesota Statutes 2010, section 423A.02, subdivision 3,
and earlier versions of these provisions, to the Minneapolis Teachers Retirement Fund
Association or to its successor organization, the Teachers Retirement Association, the
executive director of the Teachers Retirement Association is authorized to obtain payment
of the deficiency under procedures specified in this section.
new text end

new text begin Subd. 2. new text end

new text begin Deficient amount. new text end

new text begin The amount of the deficiency is the shortage amount as
determined by the Office of the Legislative Auditor, $727,070, plus additional shortage, if
any, by the city of Minneapolis that has occurred since the auditor's determination.
new text end

new text begin Subd. 3. new text end

new text begin Recovery procedure. new text end

new text begin The executive director of the Teachers Retirement
Association is authorized to certify the deficiency amount to the commissioner of
management and budget, who shall deduct the amount of the deficiency from any state
aid for the city of Minneapolis, and transmit the withheld aid to the executive director for
deposit in the Teachers Retirement Association pension fund.
new text end

new text begin Subd. 4. new text end

new text begin Interest. new text end

new text begin If interest is not already included in the auditor's determined
amount, the executive director of the Teachers Retirement Association is authorized
to add, to the amount of the deficiency determined under subdivision 2 and certified
under subdivision 3, interest at the preretirement interest rate specified for the Teachers
Retirement Association in Minnesota Statutes, section 356.215, expressed in monthly
terms and compounded annually, from the first of the month following the date each
underpayment occurred until the first of the month following the date that the withheld
aid is transmitted to the Teachers Retirement Association.
new text end

new text begin Subd. 5. new text end

new text begin Expiration. new text end

new text begin Authority for the executive director of the Teachers
Retirement Association to certify shortages for collection under this section expires two
years from the date of enactment.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2010, sections 128D.18; and 354A.12, subdivision 3b, new text end new text begin are
repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end