HF 2094

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to retirement; various retirement plans;
updating language usage and style in various
provisions, clarifying various provisions; correcting
cross-references in various provisions; amending
Minnesota Statutes 2004, sections 69.011, subdivision
2b; 69.021, subdivisions 5, 11; 69.33; 69.773,
subdivision 4; 352.01, subdivisions 4, 5, 21, 23;
352.021, subdivisions 1, 2, 3, 4; 352.04, subdivisions
1, 12; 352.041, subdivisions 1, 2, 3, 5; 352.22,
subdivision 10; 352B.01, subdivisions 1, 2, 3;
352B.02, subdivision 1e; 352D.01; 352D.015,
subdivisions 3, 4; 352D.03; 352D.05, subdivision 4;
352D.085, subdivision 1; 352D.09, subdivision 5;
352D.12; 353.01, subdivisions 32, 33; 353.025;
353.026; 353.027; 353.028; 353.14; 353.27, subdivision
11; 353.271; 353.31, subdivision 1c; 353.32,
subdivision 9; 353.33, subdivision 12; 354.091;
354.33, subdivision 5; 354.39; 354.41, subdivision 2;
354.42, by adding a subdivision; 354.44, subdivision
2; 354A.021, subdivision 5; 354A.31, subdivision 5;
356A.06, subdivision 7; 422A.01, subdivision 11;
422A.06, subdivision 7; 422A.10, subdivisions 1, 2;
422A.22, subdivisions 1, 3, 4, 6; 422A.231; repealing
Minnesota Statutes 2004, sections 352.119, subdivision
1; 353.34, subdivision 3b; 353.36, subdivisions 2, 2a,
2b, 2c; 353.46, subdivision 4; 353.663; 353.74;
353.75; 354.59; 422A.22, subdivisions 2, 5; 422A.221.

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

Section 1.

Minnesota Statutes 2004, section 69.011,
subdivision 2b, is amended to read:

Subd. 2b.

Departments of natural resources and public
safety.

(a) deleted text begin On or before July 1, 1997, the commissioner of
natural resources shall certify one-half of the number of peace
officers as defined in subdivision 1, clause (g), employed by
the Enforcement Division during calendar year 1996 and the
commissioner of public safety shall certify one-half of the
number of peace officers as defined in subdivision 1, clause
(g), employed by the Bureau of Criminal Apprehension, the
Gambling Enforcement Division, and the State Patrol Division
during calendar year 1996.
deleted text end

deleted text begin (b) On or before March 15, 1998, the commissioner of
natural resources shall certify seven-tenths of the number of
peace officers as defined in subdivision 1, clause (g), employed
by the Enforcement Division and the commissioner of public
safety shall certify seven-tenths of the number of peace
officers as defined in subdivision 1, clause (g), employed by
the Bureau of Criminal Apprehension, the Gambling Enforcement
Division, and the State Patrol Division.
deleted text end

deleted text begin (c) deleted text end On or before deleted text begin March 15, 1999, and annually on or before
deleted text end new text begin each new text end March 15 deleted text begin thereafter deleted text end , the commissioner of natural resources
shall certify the number of peace officers as defined in
subdivision 1, clause (g), employed by the Enforcement Division
and the commissioner of public safety shall certify the number
of peace officers as defined in subdivision 1, clause (g),
employed by the Bureau of Criminal Apprehension, the Gambling
Enforcement Division, and the State Patrol Division.

deleted text begin (d) deleted text end new text begin (b) new text end The certification must be on a form prescribed by
the commissioner. Peace officers certified under this paragraph
must be included in the total certifications under subdivision 2.

Sec. 2.

Minnesota Statutes 2004, section 69.021,
subdivision 5, is amended to read:

Subd. 5.

Calculation of state aid.

(a) The amount of
fire state aid available for apportionment, before the addition
of the minimum fire state aid allocation amount under
subdivision 7, is equal to 107 percent of the amount of premium
taxes paid to the state upon the fire, lightning, sprinkler
leakage, and extended coverage premiums reported to the
commissioner by insurers on the Minnesota Firetown Premium
Report. This amount deleted text begin shall deleted text end new text begin must new text end be reduced by the amount
required to pay the state auditor's costs and expenses of the
audits or exams of the firefighters relief associations.

The total amount for apportionment in respect to fire state
aid must not be less than two percent of the premiums reported
to the commissioner by insurers on the Minnesota Firetown
Premium Report after subtracting the following amounts:

(1) the amount required to pay the state auditor's costs
and expenses of the audits or exams of the firefighters relief
associations; and

(2) one percent of the premiums reported by town and
farmers' mutual insurance companies and mutual property and
casualty companies with total assets of $5,000,000 or less.

(b) The total amount for apportionment as police state aid
is equal to 104 percent of the amount of premium taxes paid to
the state on the premiums reported to the commissioner by
insurers on the Minnesota Aid to Police Premium Report, reduced
by the amount required to pay the costs and expenses of the
state auditor for audits or exams of police relief
associations. The total amount for apportionment in respect to
the police state aid program must not be less than two percent
of the amount of premiums reported to the commissioner by
insurers on the Minnesota Aid to Police Premium Report after
subtracting the amount required to pay the state auditor's cost
and expenses of the audits or exams of the police relief
associations.

(c) The commissioner shall calculate the percentage of
increase or decrease reflected in the apportionment over or
under the previous year's available state aid using the same
premiums as a basis for comparison.

(d) deleted text begin The amount for apportionment in respect to peace
officer state aid under paragraph (b) must be further reduced by
$1,779,000 in fiscal year 1999, $2,077,000 in fiscal year 2000,
and $2,404,000 in fiscal year 2001. These reductions in this
paragraph cancel to the general fund.
deleted text end

deleted text begin (e) deleted text end In addition to the amount for apportionment of police
state aid under paragraph (b), each year $100,000 deleted text begin shall deleted text end new text begin must new text end be
apportioned for police state aid. An amount sufficient to pay
this increase is annually appropriated from the general fund.

Sec. 3.

Minnesota Statutes 2004, section 69.021,
subdivision 11, is amended to read:

Subd. 11.

Excess police state-aid holding account.

(a)
The excess police state-aid holding account is established in
the general fund. The excess police state-aid holding account
must be administered by the commissioner.

(b) Excess police state aid determined according to
subdivision 10, must be deposited in the excess police state-aid
holding account.

(c) From the balance in the excess police state-aid holding
account, $900,000 is appropriated to and must be transferred
annually to the ambulance service personnel longevity award and
incentive suspense account established by section 144E.42,
subdivision 2.

(d) If a police officer stress reduction program is created
by law and money is appropriated for that program, an amount
equal to that appropriation must be transferred new text begin to the
administrator of that program new text end from the balance in the excess
police state-aid holding account.

(e) On October 1, deleted text begin 1997, and deleted text end annually deleted text begin on each subsequent
October 1, deleted text end one-half of the balance of the excess police
state-aid holding account remaining after the deductions under
paragraphs (c) and (d) is appropriated for additional
amortization aid under section 423A.02, subdivision 1b.

(f) Annually, the remaining balance in the excess police
state-aid holding account, after the deductions under paragraphs
(c), (d), and (e), cancels to the general fund.

Sec. 4.

Minnesota Statutes 2004, section 69.33, is amended
to read:

69.33 NAMES OF ASSOCIATIONS REPORTED TO INSURANCE
COMPANIES.

The commissioner shall enclose in the annual statement
blank new text begin that is new text end sent to all fire insurance companies doing
business in this state a blank form containing the names of deleted text begin all
firefighters' relief associations in deleted text end all cities of the first
class deleted text begin and the names of the cities deleted text end and require these companies,
at the time of making their annual statements to the
commissioner, to state on these blanks the amount of premiums
received by them upon properties insured within the corporate
limits of the cities named thereon during the year ending
December 31st last past. Thereafter, before July first each
year, the commissioner shall certify to the commissioner of
finance the information thus obtained, together with the amount
of the tax for the benefit of the deleted text begin relief association deleted text end new text begin pension
plans covering firefighters in cities of the first class new text end paid in
such year by these companies upon these insurance premiums.

Sec. 5.

Minnesota Statutes 2004, section 69.773,
subdivision 4, is amended to read:

Subd. 4.

Financial requirements of special fund.

deleted text begin Prior
to deleted text end new text begin Before new text end August 1 of each year, the officers of the relief
association shall determine the financial requirements of the
special fund of the relief association in accordance with the
requirements of this subdivision. The financial requirements of
the relief association deleted text begin shall deleted text end new text begin must new text end be based on the most recent
actuarial valuation of the special fund prepared in accordance
with subdivision 2. If the relief association has an unfunded
actuarial accrued liability as reported in the most recent
actuarial valuation, the financial requirements deleted text begin shall deleted text end new text begin must new text end be
determined by adding the figures calculated deleted text begin pursuant to deleted text end new text begin under
new text end clauses (a), (b), and (c). If the relief association does not
have an unfunded actuarial accrued liability as reported in the
most recent actuarial valuation, the financial requirements
deleted text begin shall deleted text end new text begin must new text end be an amount equal to the figure calculated deleted text begin pursuant
to deleted text end new text begin under new text end clauses (a) and (b), reduced by an amount equal to
one-tenth of the amount of any assets in excess of the actuarial
accrued liability of the relief association. The determination
of whether or not the relief association has an unfunded
actuarial accrued liability deleted text begin shall deleted text end new text begin must new text end be based on the current
market value of assets for which a market value is readily
ascertainable and the cost or book value, whichever is
applicable, for assets for which no market value is readily
ascertainable.

(a) The normal level cost requirement for the following
year, expressed as a dollar amount, deleted text begin shall be deleted text end new text begin is new text end the figure for
the normal level cost of the relief association as reported in
the actuarial valuation.

(b) The amount of anticipated future administrative
expenses of the special fund deleted text begin shall deleted text end new text begin must new text end be calculated by
multiplying the dollar amount of the administrative expenses of
the special fund for the most recent year by the factor of 1.035.

(c) The amortization contribution requirement to retire the
current unfunded actuarial accrued liability by the established
date for full funding deleted text begin shall be deleted text end new text begin is new text end the figure for the
amortization contribution as reported in the actuarial
valuation. deleted text begin If there has not been a change in the actuarial
assumptions used for calculating the actuarial accrued liability
of the special fund, a change in the bylaws of the relief
association governing the service pensions, retirement benefits,
or both payable from the special fund or a change in the
actuarial cost method used to value all or a portion of the
special fund which change or changes, which by themselves
without inclusion of any other items of increase or decrease,
produce a net increase in the unfunded actuarial accrued
liability of the special fund since December 31, 1970, the
established date for full funding shall be December 31, 1990.
deleted text end If there has been a change in the actuarial assumptions used for
calculating the actuarial accrued liability of the special fund,
a change in the bylaws of the relief association governing the
service pensions, retirement benefits, or both payable from the
special fund or a change in the actuarial cost method used to
value all or a portion of the special fund and the change or
changes, by themselves and without inclusion of any other items
of increase or decrease, produce a net increase in the unfunded
actuarial accrued liability of the special fund deleted text begin since December
31, 1970, but prior to January 1, 1979, the established date for
full funding shall be December 31, 1998, and if there has been a
change since December 31, 1978 deleted text end , the established date for full
funding deleted text begin shall deleted text end new text begin must new text end be determined using the following procedure:

(i) the unfunded actuarial accrued liability of the special
fund deleted text begin shall deleted text end new text begin must new text end be determined in accordance with the provisions
governing service pensions, retirement benefits, and actuarial
assumptions in effect before an applicable change;

(ii) the level annual dollar contribution needed to
amortize this unfunded actuarial accrued liability amount by the
date for full funding in effect deleted text begin prior to deleted text end new text begin before new text end the change deleted text begin shall
deleted text end new text begin must new text end be calculated using the interest assumption specified in
section 356.215, subdivision 8, in effect before any applicable
change;

(iii) the unfunded actuarial accrued liability of the
special fund deleted text begin shall deleted text end new text begin must new text end be determined in accordance with any new
provisions governing service pensions, retirement benefits, and
actuarial assumptions and the remaining provisions governing
service pensions, retirement benefits, and actuarial assumptions
in effect before an applicable change;

(iv) the level annual dollar contribution needed to
amortize the difference between the unfunded actuarial accrued
liability amount calculated deleted text begin pursuant to deleted text end new text begin under new text end subclause (i) and
the unfunded actuarial accrued liability amount
calculated deleted text begin pursuant to deleted text end new text begin under new text end subclause (iii) over a period of 20
years starting December 31 of the year in which the change is
effective deleted text begin shall deleted text end new text begin must new text end be calculated using the interest assumption
specified in section 356.215, subdivision 8, in effect after any
applicable change;

(v) the annual amortization contribution calculated
deleted text begin pursuant to deleted text end new text begin under new text end subclause (iv) deleted text begin shall deleted text end new text begin must new text end be added to the
annual amortization contribution calculated deleted text begin pursuant to deleted text end new text begin under
new text end subclause (ii);

(vi) the period in which the unfunded actuarial accrued
liability amount determined in subclause (iii) will be amortized
by the total annual amortization contribution computed deleted text begin pursuant
to deleted text end new text begin under new text end subclause (v) deleted text begin shall deleted text end new text begin must new text end be calculated using the
interest assumption specified in section 356.215, subdivision 8,
in effect after any applicable change, rounded to the nearest
integral number of years, but which deleted text begin shall deleted text end new text begin does new text end not exceed a
period of 20 years from the end of the year in which the
determination of the date for full funding using this procedure
is made and which deleted text begin shall deleted text end new text begin is new text end not deleted text begin be deleted text end less than the period of years
beginning in the year in which the determination of the date for
full funding using this procedure is made and ending by the date
for full funding in effect before the change;

(vii) the period determined deleted text begin pursuant to deleted text end new text begin under new text end subclause (vi)
deleted text begin shall deleted text end new text begin must new text end be added to the date as of which the actuarial
valuation was prepared and the resulting date deleted text begin shall be deleted text end new text begin is new text end the
new date for full funding.

Sec. 6.

Minnesota Statutes 2004, section 352.01,
subdivision 4, is amended to read:

Subd. 4.

Accumulated contributions.

"Accumulated
contributions" means the total, exclusive of interest, of (1)
the sums deducted from the salary of an employee, (2) the amount
of payments, including assessments, paid by the employee in lieu
of salary deductions and all other payments made under deleted text begin Laws
1929, chapter 191, as amended, deleted text end new text begin this chapter new text end and credited to the
employee's individual account in the retirement fund.

Sec. 7.

Minnesota Statutes 2004, section 352.01,
subdivision 5, is amended to read:

Subd. 5.

Retirement fund.

new text begin (a) "Retirement fund" means
the general state employees retirement fund created by section
352.04, subdivision 1, with respect to the general state
employees retirement plan or the correctional state employees
retirement fund created by section 352.911, subdivision 1, with
respect to the correctional state employees retirement plan.
new text end

new text begin (b) new text end deleted text begin " deleted text end The retirement fund deleted text begin " deleted text end includes the aggregate of
accumulated contributions of employees new text begin covered by the applicable
plan new text end , and all other funds paid into the state treasury or
received by the director under deleted text begin Laws 1929, chapter 191, as
amended deleted text end new text begin this chapter new text end , together with all income and profits from
the money and interest on it, including contributions on the
part of the federal government, the state, and state departments.

Sec. 8.

Minnesota Statutes 2004, section 352.01,
subdivision 21, is amended to read:

Subd. 21.

Accrued annuities.

new text begin (a) new text end In this chapter and
chapters 3A, 352B, 352C, and 490, "accrued annuity" means an
annuity that had become payable to a retired employee in the
lifetime of the employee.

new text begin (b) new text end An annuity or benefit authorized as provided in this
chapter and chapters 3A, 352B, 352C, and 490 becomes payable on
the first day of each calendar month for that calendar month and
deleted text begin is to deleted text end new text begin must new text end be paid on the first day of each calendar month
deleted text begin beginning with benefits payable on and after December 1, 1977 deleted text end .

new text begin (c) new text end Notwithstanding any provision to the contrary in this
chapter and chapters 3A, 352B, 352C, and 490, benefit payment
authorized as "payable for life" is payable for the entire month
in which death occurs, and the benefit payment for the month of
death is payable to the surviving spouse or other beneficiary
only if the annuitant dies before negotiating the new text begin benefit new text end check.

Sec. 9.

Minnesota Statutes 2004, section 352.01,
subdivision 23, is amended to read:

Subd. 23.

Coverage or covered by the system.

"Coverage"
or "covered by the system" means that new text begin a new text end state deleted text begin employees deleted text end new text begin employee
new text end who deleted text begin serve deleted text end new text begin serves new text end the state of Minnesota and deleted text begin make deleted text end new text begin makes new text end the
required employee contributions to the retirement fund deleted text begin will deleted text end new text begin is,
new text end by reason of these contributions deleted text begin become deleted text end new text begin , new text end entitled to either (1)
a retirement annuity, or (2) a disability benefit, or (3) a
refund of accumulated contributions, as provided in this chapter.

Sec. 10.

Minnesota Statutes 2004, section 352.021,
subdivision 1, is amended to read:

Subdivision 1.

Establishment.

new text begin (a) new text end There is established
the new text begin general state employees retirement plan of the new text end Minnesota
State Retirement System for state employees.

new text begin (b) new text end The deleted text begin system deleted text end new text begin general state employees retirement plan new text end is a
continuation of the State Employees Retirement Association.

new text begin (c) new text end Any person who was a member of the State Employees
Retirement Association on June 30, 1967, is covered by
the deleted text begin system deleted text end new text begin general state employees retirement plan new text end and is
entitled to all benefits provided by the deleted text begin system deleted text end new text begin plan new text end upon
fulfilling the age, service, contribution, and other
requirements of this chapter.

Sec. 11.

Minnesota Statutes 2004, section 352.021,
subdivision 2, is amended to read:

Subd. 2.

State employees covered.

Every person who deleted text begin is a
state employee, as defined in section 352.01, on July 1, 1967,
or deleted text end becomes a state employee deleted text begin after that date deleted text end new text begin as defined in
section 352.01 new text end is covered by the deleted text begin system deleted text end new text begin general state employees
retirement plan new text end . Acceptance of state employment or continuance
in state service is deemed new text begin to be new text end consent to have deductions made
from salary for deposit to the credit of the account of the
state employee in the retirement fund.

Sec. 12.

Minnesota Statutes 2004, section 352.021,
subdivision 3, is amended to read:

Subd. 3.

Optional exemptions.

Any person who is
appointed by the governor or lieutenant governor may request
exemption from coverage new text begin by the general state employees
retirement plan new text end under this chapter if the appointee is not deleted text begin so
deleted text end covered deleted text begin at deleted text end new text begin by the plan on new text end the date of appointment. To qualify
for this exemption new text begin , a written new text end request must be made within 90
days from the date of entering upon the duties of the position
to which new text begin the person is new text end appointed. After new text begin making new text end the request, a
person requesting new text begin the new text end exemption is not entitled to coverage new text begin by
the general state employees retirement plan new text end while employed in
the position that entitled that person to new text begin an new text end exemption from
coverage.

Sec. 13.

Minnesota Statutes 2004, section 352.021,
subdivision 4, is amended to read:

Subd. 4.

Reentering service after refund.

When a former
employee who has withdrawn accumulated contributions reenters
employment in a position entitled to coverage under the
deleted text begin system deleted text end new text begin general state employees retirement plan new text end , the employee
deleted text begin shall deleted text end new text begin must new text end be covered by the deleted text begin system deleted text end new text begin plan new text end on the same basis as a
new employee and is not entitled to credit for any former
service. The annuity rights forfeited when taking a refund can
only be restored as provided in this chapter.

Sec. 14.

Minnesota Statutes 2004, section 352.04,
subdivision 1, is amended to read:

Subdivision 1.

Fund created.

(a) There is created a
special fund to be known as the new text begin general new text end state employees
retirement fund. In that fund deleted text begin there shall be deposited
employees deleted text end new text begin , employee new text end contributions, deleted text begin employers deleted text end new text begin employer
new text end contributions, and other amounts authorized by law new text begin must be
deposited new text end .

(b) deleted text begin Effective July 1, 1969, deleted text end new text begin The general state employees
retirement plan of new text end the Minnesota State Retirement System deleted text begin shall
deleted text end new text begin must new text end participate in the Minnesota postretirement investment fund.
deleted text begin In that fund there shall be deposited deleted text end The amounts provided in
section 352.119 new text begin must be deposited in the Minnesota
postretirement investment fund new text end .

Sec. 15.

Minnesota Statutes 2004, section 352.04,
subdivision 12, is amended to read:

Subd. 12.

Fund disbursement restricted.

The new text begin general
new text end state employees retirement fund and the participation in the
Minnesota postretirement investment fund must be disbursed only
for the purposes provided by law. The expenses of the system
and any benefits provided by law, other than benefits payable
from the Minnesota postretirement investment fund, must be paid
from the new text begin general new text end state employees retirement fund. The
retirement allowances, retirement annuities, and disability
benefits, as well as refunds of any sum remaining to the credit
of a deceased retired employee or a disabled employee must be
paid only from the new text begin general new text end state employees retirement fund after
the needs have been certified and the amounts withdrawn from the
participation in the Minnesota postretirement investment fund
under section 11A.18. The amounts necessary to make the
payments from the new text begin general new text end state employees retirement fund and
the participation in the Minnesota postretirement investment
fund are annually appropriated from these funds for those
purposes.

Sec. 16.

Minnesota Statutes 2004, section 352.041,
subdivision 1, is amended to read:

Subdivision 1.

Allowable service credit.

deleted text begin Any deleted text end new text begin (a) An
new text end employee covered by the deleted text begin system deleted text end new text begin general state employees
retirement plan new text end who is given a leave of absence for employment
by a political subdivision of the state deleted text begin shall deleted text end new text begin remains a member
of the plan and must new text end continue to pay new text begin member contributions new text end into
the new text begin general new text end state employees retirement fund for the period of
leave.

new text begin (b) new text end Upon payment new text begin of member contributions, new text end the employee must
be given allowable service credit as a state employee on the
records of the deleted text begin system deleted text end new text begin retirement plan new text end as though the employee had
received salary from the state during the leave. Payments into
the retirement fund deleted text begin shall deleted text end new text begin must new text end be at the rate required in
section 352.04, subdivision 2, and must be based upon the salary
received from the political subdivision deleted text begin subject to the maximum
amount, if any deleted text end .

Sec. 17.

Minnesota Statutes 2004, section 352.041,
subdivision 2, is amended to read:

Subd. 2.

Employee contributions, procedure.

The officer
or employee new text begin who is new text end authorized by law to pay salaries to
employees of the political subdivision new text begin which is new text end employing a
state employee deleted text begin shall have deleted text end new text begin must deduct new text end employee contributions
deleted text begin deducted deleted text end new text begin for the general state employees retirement plan under
section 352.04, subdivision 2, new text end from the salary of each employee
who is on leave of absence from state service on each payroll
abstract and deleted text begin shall deleted text end new text begin must new text end pay the sum to the director new text begin following
the conclusion of new text end each pay period.

Sec. 18.

Minnesota Statutes 2004, section 352.041,
subdivision 3, is amended to read:

Subd. 3.

Employer contributions, procedure.

The officer
or employee new text begin who is new text end authorized by law to pay salaries to
employees of the political subdivision new text begin which is new text end employing a
state employee covered by the deleted text begin system shall deleted text end new text begin general state
employees retirement plan new text end also new text begin must new text end have employer contributions
made to the new text begin general new text end state employees retirement fund deleted text begin on deleted text end new text begin following
the conclusion of new text end each payroll abstract in the amount required
by section 352.04, subdivision 3. These contributions deleted text begin are to
deleted text end new text begin must new text end be charged new text begin to the political subdivision new text end as an
administrative cost.

Sec. 19.

Minnesota Statutes 2004, section 352.041,
subdivision 5, is amended to read:

Subd. 5.

Employer contributions, leaves of absence; tax
levies.

new text begin (a) new text end Every political subdivision new text begin which is new text end employing a
state employee covered by the system on leave of absence from
state service for employment by a political subdivision of the
state shall pay into the state employees retirement fund the
amount of the employer contribution required by law for state
employees covered by the system new text begin under section 352.04,
subdivision 3 new text end .

new text begin (b) new text end Employing political subdivisions deleted text begin , except deleted text end new text begin other than
new text end school districts deleted text begin , deleted text end may levy taxes necessary for the payment of
employer contributions without limitation as to rate or amount.
The levy of the taxes does not reduce the amount of other
taxes deleted text begin to deleted text end new text begin that may new text end be levied by political subdivisions deleted text begin ,
except deleted text end new text begin other than new text end school districts deleted text begin , deleted text end which are subject to any
limitation.

Sec. 20.

Minnesota Statutes 2004, section 352.22,
subdivision 10, is amended to read:

Subd. 10.

Other refunds.

Former employees covered by the
system are entitled to apply for refunds if they are or become
members of the State Patrol retirement fund, the state Teachers
Retirement Association, or employees of the University of
Minnesota excluded from coverage under the system by action of
the Board of Regents; deleted text begin or labor service employees, excluded from
coverage under section 352.01, subdivision 2b, clause (25); deleted text end or
employees of the adjutant general who under federal law
effectually elect membership in a federal retirement system; or
officers or employees of the senate or house of representatives,
excluded from coverage under section 352.01, subdivision 2b,
clause deleted text begin (8) deleted text end new text begin (7) new text end . The refunds must include accumulated
contributions plus interest as provided in subdivision 2. These
employees may apply new text begin for a refund once new text end 30 days or more new text begin have
elapsed new text end after their coverage ceases, even if they continue in
state service but in positions not covered by this chapter.

Sec. 21.

Minnesota Statutes 2004, section 352B.01,
subdivision 1, is amended to read:

Subdivision 1.

Scope.

In this chapter, new text begin each of new text end the terms
defined in this section deleted text begin have deleted text end new text begin has new text end the deleted text begin meanings deleted text end new text begin meaning new text end given
deleted text begin them deleted text end new text begin to it new text end .

Sec. 22.

Minnesota Statutes 2004, section 352B.01,
subdivision 2, is amended to read:

Subd. 2.

Member.

"Member" means:

(1) a State Patrol member currently employed deleted text begin after June 30,
1943, deleted text end under section 299D.03 by the state, who is a peace officer
under section 626.84, and whose salary or compensation is paid
out of state funds;

(2) a conservation officer employed under section 97A.201,
currently employed by the state, whose salary or compensation is
paid out of state funds;

(3) a crime bureau officer who was employed by the crime
bureau and was a member of the Highway Patrolmen's retirement
fund on July 1, 1978, whether or not that person has the power
of arrest by warrant after that date, or who is employed as
police personnel, with powers of arrest by warrant under section
299C.04, and who is currently employed by the state, and whose
salary or compensation is paid out of state funds;

(4) a person who is employed by the state in the Department
of Public Safety in a data processing management position with
salary or compensation paid from state funds, who was a crime
bureau officer covered by the State Patrol retirement plan on
August 15, 1987, and who was initially hired in the data
processing management position within the department during
September 1987, or January 1988, with membership continuing for
the duration of the person's employment in that position,
whether or not the person has the power of arrest by warrant
after August 15, 1987;

(5) a public safety employee deleted text begin defined as deleted text end new text begin who is new text end a peace
officer deleted text begin in deleted text end new text begin under new text end section 626.84, subdivision 1, paragraph (c),
and new text begin who is new text end employed deleted text begin with deleted text end new text begin by new text end the Division of Alcohol and Gambling
Enforcement under section 299L.01; and

(6) a Fugitive Apprehension Unit officer after October 31,
2000, new text begin who is new text end employed by the Office of Special Investigations of
the Department of Corrections new text begin and new text end who is a peace officer under
section 626.84.

Sec. 23.

Minnesota Statutes 2004, section 352B.01,
subdivision 3, is amended to read:

Subd. 3.

Allowable service.

(a) "Allowable service"
means:

(1) for members defined in subdivision 2, clause deleted text begin (a) deleted text end new text begin (1) new text end ,
deleted text begin monthly deleted text end service deleted text begin is granted for deleted text end new text begin in new text end any month for which payments
have been made to the State Patrol retirement fund, and

(2) for members defined in subdivision 2, clauses deleted text begin (b) deleted text end new text begin (2)
new text end and deleted text begin (c) deleted text end new text begin (3) new text end , service for which payments have been made to the
State Patrol retirement fund, service for which payments were
made to the State Police officers retirement fund after June 30,
1961, and all prior service which was credited to a member for
service on or before June 30, 1961.

(b) Allowable service also includes any period of absence
from duty by a member who, by reason of injury incurred in the
performance of duty, is temporarily disabled and for which
disability the state is liable under the workers' compensation
law, until the date authorized by the executive director for
commencement of payment of a disability benefit or return to
employment.

(c) MS 2002 (Expired)

new text begin (c) Allowable service means service in a month during which
a member is paid a salary from which a member contribution is
deducted, deposited, and credited in the State Patrol retirement
plan.
new text end

Sec. 24.

Minnesota Statutes 2004, section 352B.02,
subdivision 1e, is amended to read:

Subd. 1e.

Audit; actuarial valuation.

The legislative
auditor shall audit the fund. Any actuarial valuation of the
fund required under section 356.215 must be prepared by the
actuary retained under section 356.214. Any approved actuary
retained by the executive director under section 352.03,
subdivision 6, may perform actuarial valuations and experience
studies to supplement those performed by the deleted text begin commission-retained
deleted text end actuary new text begin retained under section 356.214 new text end . Any supplemental
actuarial valuation or experience studies shall be filed with
the executive director of the Legislative Commission on Pensions
and Retirement.

Sec. 25.

Minnesota Statutes 2004, section 352D.01, is
amended to read:

352D.01 ESTABLISHMENT.

There is hereby established within the Minnesota State
Retirement System a retirement program for certain public
employees to be known as the Minnesota unclassified employees
retirement program deleted text begin , which shall be deleted text end new text begin . The program must be
new text end administered by the Minnesota State Retirement System.

Sec. 26.

Minnesota Statutes 2004, section 352D.015,
subdivision 3, is amended to read:

Subd. 3.

Supplemental new text begin investment new text end fund.

"Supplemental
new text begin investment new text end fund" means the fund established and governed by
section 11A.17.

Sec. 27.

Minnesota Statutes 2004, section 352D.015,
subdivision 4, is amended to read:

Subd. 4.

General fund.

"General fund" means the new text begin general
new text end state employees retirement fund except the moneys for the
unclassified program.

Sec. 28.

Minnesota Statutes 2004, section 352D.03, is
amended to read:

352D.03 TRANSFER OF ASSETS.

Unless an eligible employee enumerated in section 352D.02,
subdivision 1 deleted text begin or 1a deleted text end , has elected coverage under the individual
retirement account plan under chapter 354B, a sum of money
representing the assets credited to each employee exercising the
option contained in section 352D.02, plus an equal employer
contribution together with interest for the employment period at
the deleted text begin actuarially assumed rates deleted text end new text begin rate of 8.5 percent new text end during this
period, compounded annually, deleted text begin shall deleted text end new text begin must new text end be used for the purchase
of shares on behalf of each employee in the accounts of the
supplemental retirement fund established by section 11A.17. deleted text begin Any
employer's contribution to amortize the deficit in the state
employee's retirement fund shall not, however, be used for the
purchase of shares.
deleted text end

Sec. 29.

Minnesota Statutes 2004, section 352D.05,
subdivision 4, is amended to read:

Subd. 4.

Repayment of refund.

new text begin (a) new text end A participant in the
unclassified program may repay regular refunds taken deleted text begin pursuant to
deleted text end new text begin under new text end section 352.22, as provided in section 352.23.

new text begin (b) new text end A participant in the unclassified program or an
employee covered by the general plan who has withdrawn the value
of the total shares may repay the refund taken and thereupon
restore the service credit, rights and benefits forfeited by
paying into the fund the amount refunded plus interest at an
annual rate of 8.5 percent compounded annually from the date
that the refund was taken until the date that the refund is
repaid. If the participant had withdrawn only the employee
shares as permitted under prior laws, repayment deleted text begin shall deleted text end new text begin must new text end be
pro rata. deleted text begin Payment shall
deleted text end

new text begin (c) Except as provided in section 356.441, the repayment of
a refund under this section must new text end be made in a lump sum.

Sec. 30.

Minnesota Statutes 2004, section 352D.085,
subdivision 1, is amended to read:

Subdivision 1.

Combined service.

new text begin Except as provided in
section 356.30, 356.302, or 356.303, new text end service under the
unclassified program for which the employee has been credited
with employee shares may be used for the limited purpose of
qualifying for benefits under sections 352.115, 352.72,
subdivision 1, 352.113, 354.44, 354.45, 354.48, and 354.60 deleted text begin ;
provided such deleted text end new text begin . The new text end service new text begin also new text end may not be used to qualify for
a disability benefit under section 352.113 or 354.48 if a
participant was under the unclassified program at the time of
the disability deleted text begin , and provided further that deleted text end new text begin . Also, new text end the years of
service and salary paid while the participant was in the
unclassified program deleted text begin shall deleted text end new text begin may new text end not be used in determining the
amount of benefits.

Sec. 31.

Minnesota Statutes 2004, section 352D.09,
subdivision 5, is amended to read:

Subd. 5.

Unclaimed benefits.

If the beneficiary,
surviving spouse or estate has not made application for benefits
within ten years after the date of new text begin the new text end death of a participant new text begin ,
new text end the value of the shares deleted text begin shall be deleted text end new text begin is new text end appropriated to the deleted text begin regular
deleted text end new text begin general state employees retirement new text end fund and new text begin the new text end provisions of
section 352.12, subdivision 12 deleted text begin shall deleted text end new text begin , new text end govern. If a former
participant fails to make a claim for benefits within five years
after new text begin the new text end termination of covered service or by age 70, whichever
is later, the value of the shares deleted text begin shall be deleted text end new text begin is new text end appropriated to
the general new text begin state new text end employees retirement fund and the provisions
of section 352.22, subdivision 8, deleted text begin shall deleted text end apply.

Sec. 32.

Minnesota Statutes 2004, section 352D.12, is
amended to read:

352D.12 TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.

(a) An employee who is a participant in the unclassified
program and who has prior service credit in a covered plan under
deleted text begin chapters 3A, deleted text end new text begin chapter new text end 352, deleted text begin 352C, deleted text end 353, 354, 354A, deleted text begin and deleted text end new text begin or new text end 422A
may, within the time limits specified in this section, elect to
transfer to the unclassified program prior service contributions
to one or more of those plans. deleted text begin Participants with six or more
years of prior service credit in a plan governed by chapter 3A
or 352C on July 1, 1998, may not transfer prior service
contributions. Participants with less than six years of prior
service credit in a plan governed by chapter 3A or 352C on July
1, 1998, must be contributing to the unclassified plan on or
after January 5, 1999, in order to transfer prior contributions.
deleted text end

(b) For participants with prior service credit in a plan
governed by chapter 352, 353, 354, 354A, or 422A, "prior service
contributions" means the accumulated employee and equal employer
contributions with interest at an annual rate of 8.5 percent
compounded annually, based on fiscal year balances. deleted text begin For
participants with less than six years of service credit as of
July 1, 1998, and with prior service credit in a plan governed
by chapter 3A or 352C, "prior service contributions" means an
amount equal to twice the amount of the accumulated member
contributions plus annual compound interest at the rate of 8.5
percent, computed on fiscal year balances.
deleted text end

(c) If a participant has taken a refund from a retirement
plan listed in this section, the participant may repay the
refund to that plan, notwithstanding any restrictions on
repayment to that plan, plus 8.5 percent interest compounded
annually and have the accumulated employee and equal employer
contributions transferred to the unclassified program with
interest at an annual rate of 8.5 percent compounded annually
based on fiscal year balances. If a person repays a refund and
subsequently elects to have the money transferred to the
unclassified program, the repayment amount, including interest,
is added to the fiscal year balance in the year which the
repayment was made.

(d) A participant electing to transfer prior service
contributions credited to a retirement plan governed by chapter
352, 353, 354, 354A, or 422A as provided under this section must
complete deleted text begin the deleted text end new text begin a written new text end application for the transfer and repay
any refund within one year of the commencement of the employee's
participation in the unclassified program. deleted text begin A participant
electing to transfer prior service contributions credited to a
retirement plan governed by chapter 3A or 352C as provided under
this section must complete the application for the transfer and
repay any refund between January 5, 1999, and June 1, 1999, if
the employee commenced participation in the unclassified program
before January 5, 1999, or within one year of the commencement
of the employee's participation in the unclassified program if
the employee commenced participation in the unclassified program
after January 4, 1999.
deleted text end

Sec. 33.

Minnesota Statutes 2004, section 353.01,
subdivision 32, is amended to read:

Subd. 32.

Coordinated member.

"Coordinated member" means
deleted text begin any deleted text end new text begin a new text end public employee, including deleted text begin any deleted text end new text begin a new text end public hospital employee,
new text begin who is new text end covered by deleted text begin any deleted text end new text begin an new text end agreement or modification made between
the state and the Secretary of Health deleted text begin , Education deleted text end and deleted text begin Welfare
deleted text end new text begin Human Services new text end , making the provisions of the federal Old Age,
Survivors and Disability Insurance Act applicable to the member
if new text begin the new text end membership eligibility criteria are met under this
chapter. A coordinated member also is a former basic member who
has a complete and continuous separation for at least 30 days
from employment as a public employee meeting the requirements
specified in subdivision 28, paragraphs (a) and (b), and who
reenters public service as a public employee and meets the
membership eligibility criteria under this chapter.

Sec. 34.

Minnesota Statutes 2004, section 353.01,
subdivision 33, is amended to read:

Subd. 33.

Basic member.

"Basic member" means deleted text begin any deleted text end new text begin a
new text end public employee, including deleted text begin any deleted text end new text begin a new text end public hospital employee, new text begin who
is new text end not covered by any agreement or modification made between the
state and the Secretary of Health deleted text begin , Education deleted text end and deleted text begin Welfare deleted text end new text begin Human
Services new text end .

Sec. 35.

Minnesota Statutes 2004, section 353.025, is
amended to read:

353.025 RANGE ASSOCIATION OF MUNICIPALITIES AND SCHOOLS.

deleted text begin From and after January 1, 1982, deleted text end Employees of the Range
Association of Municipalities and Schools deleted text begin hereinafter referred
to as the association, shall become deleted text end new text begin are new text end coordinated members of
the new text begin general employees retirement plan of the new text end Public Employees
Retirement Association unless specifically exempt under section
353.01, subdivision 2b deleted text begin , and deleted text end new text begin . new text end The new text begin Range new text end Association deleted text begin shall be
deemed to be deleted text end new text begin of Municipalities and Schools is new text end a governmental
subdivision for the purposes of this chapter.

Sec. 36.

Minnesota Statutes 2004, section 353.026, is
amended to read:

353.026 COVERAGE FOR CERTAIN MUNICIPAL AND SCHOOL DISTRICT
EMPLOYEES.

Any person who was employed by the city of Minneapolis,
Special School District No. 1, or public corporation as defined
in section 422A.01, subdivision 9, on or after July 1, 1978 new text begin , new text end and
deleted text begin prior to deleted text end new text begin before new text end July 1, 1979, and who was excluded from
retirement coverage by the coordinated program of the
Minneapolis municipal employees retirement fund deleted text begin pursuant to
deleted text end new text begin under new text end section 422A.09, subdivision 3, deleted text begin shall be deleted text end new text begin is new text end entitled to
retirement coverage by the new text begin general employees retirement plan of
the new text end Public Employees Retirement Association unless specifically
excluded deleted text begin pursuant to deleted text end new text begin under new text end section 353.01, subdivision 2b, from
and after May 19, 1981.

Sec. 37.

Minnesota Statutes 2004, section 353.027, is
amended to read:

353.027 RETENTION OF COVERAGE FOR CERTAIN MUNICIPAL COURT
EMPLOYEES.

Any person employed on January 1, 1975, by a municipal
court established deleted text begin pursuant to deleted text end new text begin under new text end Minnesota Statutes 1957,
section 488.03 new text begin , new text end and located in the cities of New Brighton,
Roseville, Maplewood, North Saint Paul, White Bear Lake new text begin , new text end or St.
Paul deleted text begin shall be deleted text end new text begin is new text end eligible for membership in the new text begin general
employees retirement plan of the new text end Public Employees Retirement
Association and deleted text begin shall retain deleted text end new text begin retains new text end any rights or benefits the
person had attained as a member of the new text begin general employees
retirement plan of the new text end association on January 1, 1975, so long
as the person remains an employee of the municipal court of
Ramsey County.

Sec. 38.

Minnesota Statutes 2004, section 353.028, is
amended to read:

353.028 CITY MANAGERS; ELECTION; DEFERRED COMPENSATION.

Subdivision 1.

Definitions.

new text begin (a) new text end For purposes of this
section new text begin , each of the terms in this subdivision has the meaning
indicated.
new text end

new text begin (b) new text end "City manager" means (1) a person new text begin who is new text end duly appointed
to and new text begin is new text end holding the position of city manager in a Plan B
statutory city or in a home rule city operating under the
"council-manager" form of government, or (2) a person new text begin who is
new text end appointed to and new text begin is new text end holding the position of chief administrative
officer of a home rule charter city or a statutory city deleted text begin pursuant
to deleted text end new text begin under new text end a charter provision, ordinance, or resolution
establishing such a position and prescribing its duties and
responsibilities.

new text begin (c) new text end "Governing body" means the city council of the city
employing the city manager.

new text begin (d) new text end "Election" means the election described in subdivision
2.

Subd. 2.

Election.

(a) A city manager may elect to be
excluded from membership in the new text begin general employees retirement
plan of the Public Employees Retirement new text end Association. The
election of exclusion must be made within six months following
the commencement of employment, new text begin must be made new text end in writing on a
form prescribed by the executive director, and must be approved
by a resolution deleted text begin of deleted text end new text begin adopted by new text end the governing body of the city.
The election of exclusion is not effective until it is filed
with the executive director. Membership of a city manager in
the deleted text begin association deleted text end new text begin general employees retirement plan new text end ceases on the
date the written election is received by the executive director
or upon a later date specified. Employee and employer
contributions made on behalf of a person exercising the option
to be excluded from membership under this section must be
refunded in accordance with section 353.27, subdivision 7.

(b) A city manager who has elected exclusion under this
subdivision may elect to revoke that action by filing a written
notice with the executive director. The notice must be on a
form prescribed by the executive director and must be approved
by a resolution of the governing body of the city. Membership
of the city manager in the association resumes prospectively
from the date of the first day of the pay period for which
contributions were deducted or, if pay period coverage dates are
not provided, the date on which the notice of revocation or
contributions are received in the office of the association,
provided that the notice of revocation is received by the
association within 60 days of the receipt of contributions.

(c) An election under paragraph (b) is irrevocable. Any
election under paragraph (a) or (b) must include a statement
that the individual will not seek authorization to purchase
service credit for any period of excluded service.

Subd. 3.

Deferred compensation; city contribution.

If an
election of exclusion is made, and if the city manager and the
governing body of the city new text begin additionally new text end agree in writing that
the additional compensation is to be deferred and deleted text begin shall deleted text end new text begin is to new text end be
contributed on behalf of the city manager to a deferred
compensation program which meets the requirements of section 457
of the Internal Revenue Code of deleted text begin 1954 deleted text end new text begin 1986 new text end , as amended deleted text begin through
December 31, 1980 deleted text end , the governing body may compensate the city
manager, in addition to the salary allowed under any limitation
imposed on salaries by law or charter, in an amount equal to the
employer contribution which would be required by section 353.27,
subdivision 3, if the city manager were a member of the
deleted text begin association deleted text end new text begin general employees retirement plan new text end .

Subd. 4.

Refunds; deferred annuity.

A city manager who
makes an election to be excluded from membership is entitled to
a refund of accumulated deductions or, if otherwise qualified, a
deferred annuity deleted text begin in the manner provided by deleted text end new text begin under new text end section 353.34,
at the option of the manager.

Subd. 5.

Election; other employment.

If a city manager
who has made an election to be excluded new text begin subsequently new text end accepts
employment in another governmental subdivision or new text begin subsequently
new text end accepts employment other than as a city manager in the same
city, the election deleted text begin shall be deemed to have been deleted text end new text begin is new text end rescinded on
the effective date of employment.

Sec. 39.

Minnesota Statutes 2004, section 353.14, is
amended to read:

353.14 BENEFITS FROM OTHER FUNDS.

No annuity or benefit provided by this chapter deleted text begin shall deleted text end new text begin may new text end be
affected, diminished, or impaired by any pension, benefit, or
annuity which any member or survivor is entitled to receive from
a tax supported public retirement new text begin plan or new text end system authorized by
any other law deleted text begin , for deleted text end new text begin based on service that is new text end different service
new text begin than the service new text end for which the member or survivor is entitled to
receive benefit or annuity from new text begin a retirement plan administered
by new text end the Public Employees Retirement Association.

Sec. 40.

Minnesota Statutes 2004, section 353.27,
subdivision 11, is amended to read:

Subd. 11.

Employers; required to furnish requested
information.

new text begin (a) new text end All governmental subdivisions shall furnish
promptly such other information relative to the employment
status of all employees or former employees, including new text begin , new text end but not
limited to new text begin , new text end payroll abstracts pertaining to all past and present
employees, as may be requested by the deleted text begin association or its
deleted text end executive director, including schedules of salaries applicable
to various categories of employment.

new text begin (b) new text end In the event payroll abstract records have been lost or
destroyed, for whatever reason or in whatever manner, so that
such schedules of salaries cannot be furnished therefrom, the
employing governmental subdivision, in lieu thereof, shall
furnish to the association an estimate of the earnings of any
employee or former employee for any period as may be requested
by the deleted text begin association or its deleted text end executive director. deleted text begin Should deleted text end new text begin If new text end the
association deleted text begin receive such schedules deleted text end new text begin is provided a schedule new text end of
estimated earnings, the executive director is deleted text begin hereby deleted text end authorized
to use the same as a basis for making whatever computations
might be necessary for determining obligations of the employee
and employer to the retirement fund. If estimates are not
furnished by the employer deleted text begin pursuant to deleted text end new text begin at new text end the request of the
deleted text begin association or its deleted text end executive director, the deleted text begin association deleted text end new text begin executive
director new text end may estimate the obligations of the employee and
employer to the retirement fund based upon deleted text begin such deleted text end new text begin those new text end records deleted text begin as
deleted text end new text begin that new text end are in its possession. deleted text begin Where payroll abstracts have been
lost or destroyed, the governmental agency need not furnish any
information pertaining to employment prior to July 1, 1963. The
association shall make no estimate of any obligation of any
employee, former employee, or employer covering employment prior
to July 1, 1963.
deleted text end

Sec. 41.

Minnesota Statutes 2004, section 353.271, is
amended to read:

353.271 PARTICIPATION IN MINNESOTA POSTRETIREMENT
INVESTMENT FUND.

Subdivision 1.

Authorization.

The new text begin general employees
retirement plan of the new text end Public Employees Retirement Association,
deleted text begin including deleted text end the public employees police and fire deleted text begin fund but
excluding the various local relief association consolidation
accounts, is deleted text end new text begin retirement plan, and the local government
correctional service retirement plan are new text end authorized to
participate in the Minnesota postretirement investment fund.
There deleted text begin shall be deleted text end new text begin is new text end one general participation in the Minnesota
postretirement investment fund for deleted text begin all purposes by deleted text end new text begin each plan of
new text end the Public Employees Retirement deleted text begin fund and one general
participation in the Minnesota postretirement investment fund
for all purposes by the public employees police and fire
fund deleted text end new text begin Association new text end .

Subd. 2.

Valuation of assets; adjustment of benefits.

deleted text begin (1) deleted text end new text begin (a) new text end The required reserves for retirement annuities payable
as provided in this chapter other than those payable from the
various local relief association consolidation accounts, as
determined in accordance with the appropriate mortality table
adopted by the board of trustees based on the experience of the
fund as recommended by the actuary retained deleted text begin by the Legislative
Commission on Pensions and Retirement deleted text end new text begin under section 356.214, and
approved under section 356.215, subdivision 18 new text end , and using the
postretirement interest assumption specified in section 356.215,
subdivision 8, deleted text begin shall deleted text end new text begin must new text end be transferred to the Minnesota
postretirement investment fund as of the last business day of
the month in which the retirement annuity begins.

deleted text begin (2) deleted text end new text begin (b) new text end Annuity payments deleted text begin other than those payable from the
various local relief association consolidation accounts
shall deleted text end new text begin must new text end be adjusted in accordance with the provisions of
section 11A.18.

deleted text begin (3) deleted text end new text begin (c) new text end Increases in payments deleted text begin pursuant to deleted text end new text begin under new text end this
section deleted text begin or from the various local relief association
consolidation accounts, if applicable, will deleted text end new text begin must new text end be made
automatically unless the intended recipient files written notice
with the executive director of the Public Employees Retirement
Association requesting that the increase deleted text begin shall deleted text end not be made.

Sec. 42.

Minnesota Statutes 2004, section 353.31,
subdivision 1c, is amended to read:

Subd. 1c.

Coordinated members.

Except for benefits
provided under section 353.32, deleted text begin subdivisions 1 and 1a, deleted text end no
survivor benefits are payable to the surviving spouse or
dependent children of a deceased coordinated member.

Sec. 43.

Minnesota Statutes 2004, section 353.32,
subdivision 9, is amended to read:

Subd. 9.

Payment to a minor.

If a member or former
member dies having named as beneficiary a person who is a minor
at the time of the application for refund, the board may make
new text begin the new text end payment deleted text begin (a) deleted text end new text begin (1) new text end directly to the minor, deleted text begin (b) deleted text end new text begin (2) new text end to deleted text begin any
deleted text end new text begin a new text end person who has legally qualified and is acting as guardian of
the minor's person or property in any jurisdiction, or deleted text begin (c) deleted text end new text begin (3)
new text end to either parent of the minor or to deleted text begin any deleted text end new text begin an new text end adult person with
whom the minor may at the time be living deleted text begin , provided only that deleted text end new text begin .
new text end The parent or other person to whom any amount is to be
paid deleted text begin shall have advised deleted text end new text begin must advise new text end the board in writing that
the amount will be held or used in trust for the benefit of such
minor. Any annuity or disability benefit payable at the time of
death of an annuitant or recipient of a disability benefit,
which is payable to a beneficiary who is a minor, may be paid in
the same manner. deleted text begin Such deleted text end new text begin The new text end payment deleted text begin shall be deleted text end new text begin is new text end a bar to recovery
by any other person or persons.

Sec. 44.

Minnesota Statutes 2004, section 353.33,
subdivision 12, is amended to read:

Subd. 12.

Basic disability survivor benefits.

If a basic
member who is receiving a disability benefit under subdivision 3:

deleted text begin (a) deleted text end new text begin (1) new text end dies before attaining age 65 or within five years
of the effective date of the disability, whichever is later, the
surviving spouse deleted text begin shall deleted text end new text begin is entitled to new text end receive a survivor benefit
under section 353.31, unless the surviving spouse elected to
receive a refund under section 353.32, subdivision 1 deleted text begin . deleted text end new text begin ;
new text end

deleted text begin (b) deleted text end new text begin (2) new text end is living at age 65 or five years after the
effective date of the disability, whichever is later, the basic
member may continue to receive a normal disability benefit, or
elect a joint and survivor optional annuity under section
353.31, subdivision 1b. The election of the joint and survivor
optional annuity must occur within 90 days of new text begin attaining new text end age 65
or new text begin of reaching new text end the five-year anniversary of the effective date
of the disability benefit, whichever is later. The optional
annuity takes effect on the first new text begin day new text end of the month following the
month in which the person attains age 65 or reaches the
five-year anniversary of the effective date of the disability
benefit, whichever is later deleted text begin . deleted text end new text begin ; or
new text end

deleted text begin (c) deleted text end new text begin (3) new text end if there is a dependent child or children under
deleted text begin paragraph (a) or (b) deleted text end new text begin clause (1) or (2) new text end , the deleted text begin association shall
grant deleted text end new text begin dependent child is entitled to new text end a dependent child benefit
under section 353.31, subdivision 1b, paragraph (b).

Sec. 45.

Minnesota Statutes 2004, section 354.091, is
amended to read:

354.091 SERVICE CREDIT.

(a) In computing service credit, no teacher deleted text begin shall deleted text end new text begin may
new text end receive credit for more than one year of teaching service for
any fiscal year. deleted text begin Commencing July 1, 1961 deleted text end new text begin Additionally, in
crediting allowable service new text end :

(1) if a teacher teaches less than five hours in a day,
service credit must be given for the fractional part of the day
as the term of service performed bears to five hours;

(2) if a teacher teaches five or more hours in a day,
service credit must be given for only one day;

(3) if a teacher teaches at least 170 full days in any
fiscal year, service credit must be given for a full year of
teaching service; and

(4) if a teacher teaches for only a fractional part of the
year, service credit must be given for such fractional part of
the year new text begin in the same relationship new text end as the period of service
performed bears to 170 days.

(b) A teacher deleted text begin shall deleted text end new text begin must new text end receive a full year of service
credit based on the number of days in the employer's full school
year if deleted text begin it deleted text end new text begin that school year new text end is less than 170 days. Teaching
service performed before July 1, 1961, must be computed under
the law in effect at the time it was performed.

(c) A teacher must not lose or gain retirement service
credit as a result of the employer converting to a flexible or
alternate work schedule. If the employer converts to a flexible
or alternate work schedule, the forms for reporting new text begin teaching
service new text end and the procedures for determining service credit must
be determined by the executive director with the approval of the
board of trustees.

(d) For all services rendered on or after July 1, 2003,
service credit for all members employed by the Minnesota State
Colleges and Universities system must be determined:

(1) for full-time employees, by the definition of full-time
employment contained in the collective bargaining agreement for
those units listed in section 179A.10, subdivision 2, or
contained in the applicable personnel or salary plan for those
positions designated in section 179A.10, subdivision 1;

(2) for part-time employees, by the appropriate proration
of full-time equivalency based on the provisions contained in
the collective bargaining agreement for those units listed in
section 179A.10, subdivision 2, or contained in the applicable
personnel or salary plan for those positions designated in
section 179A.10, subdivision 1, and the applicable procedures of
the Minnesota State Colleges and Universities system; and

(3) in no case may a member receive more than one year of
service credit for any fiscal year.

Sec. 46.

Minnesota Statutes 2004, section 354.33,
subdivision 5, is amended to read:

Subd. 5.

Retirees not eligible for federal benefits.

Notwithstanding the provisions of section 354.55, subdivision 3,
when any person retires after July 1, 1973 new text begin , new text end who deleted text begin (a) deleted text end new text begin (1) new text end has ten
or more years of allowable service, and deleted text begin (b) deleted text end new text begin (2) new text end does not have
any retroactive Social Security coverage by reason of the
person's position in the retirement system, and deleted text begin (c) deleted text end new text begin (3) new text end does not
qualify for new text begin federal new text end old age and survivor primary benefits at the
time of retirement, the annuity deleted text begin shall deleted text end new text begin must new text end be computed under
section 354.44, subdivision 2 new text begin , new text end of the law in effect on June 30,
1969, except that accumulations after June 30, 1957, deleted text begin shall deleted text end new text begin must
new text end be calculated using the same mortality table and interest
assumption new text begin as are new text end used to transfer the required reserves to the
Minnesota postretirement investment fund.

Sec. 47.

Minnesota Statutes 2004, section 354.39, is
amended to read:

354.39 EFFECTIVE DATE; APPLICATION.

deleted text begin After July 1, 1971, any deleted text end new text begin A new text end member of the Teachers Retirement
Association new text begin who is new text end employed in a new state university deleted text begin and deleted text end new text begin or any
new text end other new deleted text begin institutions deleted text end new text begin institution new text end of higher learning not
included in any agreement or modification made between the state
and the new text begin federal new text end Secretary of Health deleted text begin , Education deleted text end and deleted text begin Welfare deleted text end new text begin Human
Services new text end , making the provisions of the federal Old Age deleted text begin and deleted text end new text begin ,
new text end Survivors new text begin and Disability new text end Insurance Act applicable to such
members, deleted text begin shall deleted text end new text begin must new text end be covered under the provisions of this
chapter applicable to coordinated members.

Sec. 48.

Minnesota Statutes 2004, section 354.41,
subdivision 2, is amended to read:

Subd. 2.

Teachers.

Every teacher deleted text begin after June 30, 1957, deleted text end in
deleted text begin the service or entering deleted text end the service of the state or new text begin one of new text end its
governmental deleted text begin subdivision deleted text end new text begin subdivisions new text end as a teacher, except
persons deleted text begin specially deleted text end new text begin specifically new text end excluded, deleted text begin shall deleted text end new text begin must new text end become a
member of the association by the acceptance of such employment.

Sec. 49.

Minnesota Statutes 2004, section 354.42, is
amended by adding a subdivision to read:

new text begin Subd. 1a. new text end

new text begin Teachers retirement fund. new text end

new text begin (a) Within the
Teachers Retirement Association and the state treasury is
created a special retirement fund, which must include all the
assets of the Teachers Retirement Association and all revenue of
the association. The fund is the continuation of the fund
established under Laws 1931, chapter 406, section 2,
notwithstanding the repeal of Minnesota Statutes 1973, section
354.42, subdivision 1, by Laws 1974, chapter 289, section 59.
new text end

new text begin (b) The teachers retirement fund must be credited with all
employee and employer contributions, all investment revenue and
gains, and all other income authorized by law.
new text end

new text begin (c) From the teachers retirement fund is appropriated the
payments of annuities and benefits authorized by this chapter,
the transfers to the Minnesota postretirement investment fund,
and the reasonable and necessary expenses of administering the
fund and the association.
new text end

Sec. 50.

Minnesota Statutes 2004, section 354.44,
subdivision 2, is amended to read:

Subd. 2.

Computation of money purchase annuity.

new text begin (a) new text end The
amount of retirement annuity is an amount equal to double the
annuity which could be purchased by the member's accumulated
deductions plus interest thereon. The annuity deleted text begin shall deleted text end new text begin must new text end be
determined by the member's age, sex, double the amount of
accumulated deductions, double the new text begin amount of new text end interest earned on
the accumulated deductions, and the appropriate mortality tables
and interest rates. To determine the amount of the annuity for
a basic member, the accumulated deductions deleted text begin prior to deleted text end new text begin before new text end July
1, 1957, and the accumulated deductions deleted text begin subsequent to deleted text end new text begin after new text end July
1, 1957, deleted text begin shall deleted text end new text begin must new text end be considered separately.

deleted text begin (1) deleted text end new text begin (b) new text end For service rendered deleted text begin prior to deleted text end new text begin before new text end July 1, 1957,
the accumulated deductions for deleted text begin any deleted text end new text begin a new text end member deleted text begin shall deleted text end new text begin must new text end be
carried forward at a fixed amount which is shown credited to the
member's account as of that date. That fixed amount deleted text begin shall deleted text end new text begin must
new text end also include any payments in lieu of salary deductions which deleted text begin are
to be made in the future and are deleted text end new text begin were new text end actually so made deleted text begin pursuant
to deleted text end new text begin under new text end an agreement executed between the member and the board
as authorized by section 354.50 or any other authorized payments
made by the member to the fund. The annuity granted with
respect to the period deleted text begin shall deleted text end new text begin must new text end be determined as follows:

deleted text begin (a) deleted text end new text begin (1) new text end the fixed amount of the accumulated deductions for
the period including the interest credited on the amount as
earned up to July 1, 1957 deleted text begin . deleted text end new text begin ; and
new text end

deleted text begin (b) deleted text end new text begin (2) new text end annuity purchase rates based on the applicable
mortality table established by the board and the interest rate
assumption in effect deleted text begin prior to deleted text end new text begin before new text end July 1, 1957, in the case
of basic members and an annuity purchase rate based on an
appropriate annuity table of mortality established by the board
as provided in section 354.07, subdivision 1, and using the
applicable postretirement interest rate assumption specified in
section 356.215, subdivision 8, in the case of coordinated
members.

deleted text begin (2) deleted text end new text begin (c) new text end For service rendered deleted text begin subsequent to deleted text end new text begin after new text end July 1,
1957, the accumulated deductions for deleted text begin any deleted text end new text begin a new text end member deleted text begin shall deleted text end new text begin must
new text end consist of the amounts actually credited to the member's account
by reason of salary deductions. The annuity granted with
respect to the period deleted text begin shall deleted text end new text begin must new text end be determined by the following:

deleted text begin (a) deleted text end new text begin (1) new text end accumulated deductions for the period;

deleted text begin (b) deleted text end new text begin (2) new text end interest credited on these accumulated deductions
from July 1, 1957, to the date of retirement;

deleted text begin (c) deleted text end new text begin (3) new text end interest credited on accumulated deductions
including prior credited interest provided in paragraph deleted text begin (1) deleted text end new text begin (b)
new text end from July 1, 1957, to the date of retirement;

deleted text begin (d) deleted text end new text begin (4) new text end after the amount available for an annuity granted
with respect to the person is determined in accordance with the
provisions of this subdivision, an additional amount equal to 20
percent of the sum of clause deleted text begin (2)(a) deleted text end new text begin (1) new text end plus interest credited
to deleted text begin members deleted text end new text begin a member's new text end account from July 1, 1957, to date of
retirement is to be added. This added amount is not to be
doubled as provided for other amounts determined in this
subdivision; new text begin and
new text end

deleted text begin (e) deleted text end new text begin (5) the new text end annuity purchase rate based on an appropriate
annuity table of mortality established by the board as provided
in section 354.07, subdivision 1, and using the applicable
postretirement interest rate assumption specified in section
356.215, subdivision 8.

Sec. 51.

Minnesota Statutes 2004, section 354A.021,
subdivision 5, is amended to read:

Subd. 5.

Tax sheltered annuity program and fund.

deleted text begin Any deleted text end new text begin A
new text end teachers retirement fund association may establish a tax
sheltered annuity program and fund meeting the requirements of
section 403(b) of the Internal Revenue Code of 1986, as amended
deleted text begin through December 31, 1992 deleted text end , which deleted text begin shall deleted text end new text begin must new text end include all assets
which were acquired for the specific purpose of being credited
to the program and fund and to which deleted text begin shall deleted text end new text begin must new text end be credited all
employee contributions deleted text begin , deleted text end and employer contributions new text begin , new text end if
negotiated under a collective bargaining agreement, designated
for this purpose and all interest income attributable to the
assets of the program and fund.

Sec. 52.

Minnesota Statutes 2004, section 354A.31,
subdivision 5, is amended to read:

Subd. 5.

Unreduced normal retirement annuity.

Upon
retirement at normal retirement age with at least three years of
service credit, a coordinated member deleted text begin shall be deleted text end new text begin is new text end entitled to a
normal retirement annuity calculated deleted text begin pursuant to deleted text end new text begin under
new text end subdivision 4 new text begin or 4a, whichever applies new text end .

Sec. 53.

Minnesota Statutes 2004, section 356A.06,
subdivision 7, is amended to read:

Subd. 7.

Expanded list of authorized investment
securities.

(a) [AUTHORITY.] Except to the extent otherwise
authorized by law or bylaws, a covered pension plan not
described by subdivision 6, paragraph (a), may invest its assets
only in accordance with this subdivision.

(b) [SECURITIES GENERALLY.] The covered pension plan has
the authority to purchase, sell, lend, or exchange the
securities specified in paragraphs (c) to (g), including puts
and call options and future contracts traded on a contract
market regulated by a governmental agency or by a financial
institution regulated by a governmental agency. These
securities may be owned as units in commingled trusts that own
the securities described in paragraphs (c) to (g).

(c) [GOVERNMENT OBLIGATIONS.] The covered pension plan may
invest funds in governmental bonds, notes, bills, mortgages, and
other evidences of indebtedness provided the issue is backed by
the full faith and credit of the issuer or the issue is rated
among the top four quality rating categories by a nationally
recognized rating agency. The obligations in which funds may be
invested under this paragraph include guaranteed or insured
issues of (1) the United States, its agencies, its
instrumentalities, or organizations created and regulated by an
act of Congress; (2) Canada and its provinces, provided the
principal and interest is payable in United States dollars; (3)
the states and their municipalities, political subdivisions,
agencies, or instrumentalities; (4) the International Bank for
Reconstruction and Development, the Inter-American Development
Bank, the Asian Development Bank, the African Development Bank,
or any other United States government sponsored organization of
which the United States is a member, provided the principal and
interest is payable in United States dollars.

(d) [CORPORATE OBLIGATIONS.] The covered pension plan may
invest funds in bonds, notes, debentures, transportation
equipment obligations, or any other longer term evidences of
indebtedness issued or guaranteed by a corporation organized
under the laws of the United States or any state thereof, or the
Dominion of Canada or any province thereof if they conform to
the following provisions:

(1) the principal and interest of obligations of
corporations incorporated or organized under the laws of the
Dominion of Canada or any province thereof must be payable in
United States dollars; and

(2) obligations must be rated among the top four quality
categories by a nationally recognized rating agency.

(e) [OTHER OBLIGATIONS.] (1) The covered pension plan may
invest funds in bankers acceptances, certificates of deposit,
deposit notes, commercial paper, mortgage participation
certificates and pools, asset backed securities, repurchase
agreements and reverse repurchase agreements, guaranteed
investment contracts, savings accounts, and guaranty fund
certificates, surplus notes, or debentures of domestic mutual
insurance companies if they conform to the following provisions:

(i) bankers acceptances and deposit notes of United States
banks are limited to those issued by banks rated in the highest
four quality categories by a nationally recognized rating
agency;

(ii) certificates of deposit are limited to those issued by
(A) United States banks and savings institutions that are rated
in the highest four quality categories by a nationally
recognized rating agency or whose certificates of deposit are
fully insured by federal agencies; or (B) credit unions in
amounts up to the limit of insurance coverage provided by the
National Credit Union Administration;

(iii) commercial paper is limited to those issued by United
States corporations or their Canadian subsidiaries and rated in
the highest two quality categories by a nationally recognized
rating agency;

(iv) mortgage participation or pass through certificates
evidencing interests in pools of first mortgages or trust deeds
on improved real estate located in the United States where the
loan to value ratio for each loan as calculated in accordance
with section 61A.28, subdivision 3, does not exceed 80 percent
for fully amortizable residential properties and in all other
respects meets the requirements of section 61A.28, subdivision
3;

(v) collateral for repurchase agreements and reverse
repurchase agreements is limited to letters of credit and
securities authorized in this section;

(vi) guaranteed investment contracts are limited to those
issued by insurance companies or banks rated in the top four
quality categories by a nationally recognized rating agency or
to alternative guaranteed investment contracts where the
underlying assets comply with the requirements of this
subdivision;

(vii) savings accounts are limited to those fully insured
by federal agencies; and

(viii) asset backed securities must be rated in the top
four quality categories by a nationally recognized rating agency.

(2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do
not apply to certificates of deposit and collateralization
agreements executed by the covered pension plan under clause
(1), item (ii).

(3) In addition to investments authorized by clause (1),
item (iv), the covered pension plan may purchase from the
Minnesota Housing Finance Agency all or any part of a pool of
residential mortgages, not in default, that has previously been
financed by the issuance of bonds or notes of the agency. The
covered pension plan may also enter into a commitment with the
agency, at the time of any issue of bonds or notes, to purchase
at a specified future date, not exceeding 12 years from the date
of the issue, the amount of mortgage loans then outstanding and
not in default that have been made or purchased from the
proceeds of the bonds or notes. The covered pension plan may
charge reasonable fees for any such commitment and may agree to
purchase the mortgage loans at a price sufficient to produce a
yield to the covered pension plan comparable, in its judgment,
to the yield available on similar mortgage loans at the date of
the bonds or notes. The covered pension plan may also enter
into agreements with the agency for the investment of any
portion of the funds of the agency. The agreement must cover
the period of the investment, withdrawal privileges, and any
guaranteed rate of return.

(f) [CORPORATE STOCKS.] The covered pension plan may
invest funds in stocks or convertible issues of any corporation
organized under the laws of the United States or the states
thereof, the Dominion of Canada or its provinces, or any
corporation listed on the New York Stock Exchange or the
American Stock Exchange, if they conform to the following
provisions:

(1) the aggregate value of corporate stock investments, as
adjusted for realized profits and losses, must not exceed 85
percent of the market or book value, whichever is less, of a
fund, less the aggregate value of investments according to
deleted text begin subdivision 6 deleted text end new text begin paragraph (g) new text end ;

(2) investments must not exceed five percent of the total
outstanding shares of any one corporation.

(g) [OTHER INVESTMENTS.] (1) In addition to the
investments authorized in paragraphs (b) to (f), and subject to
the provisions in clause (2), the covered pension plan may
invest funds in:

(i) venture capital investment businesses through
participation in limited partnerships and corporations;

(ii) real estate ownership interests or loans secured by
mortgages or deeds of trust through investment in limited
partnerships, bank sponsored collective funds, trusts, and
insurance company commingled accounts, including separate
accounts;

(iii) regional and mutual funds through bank sponsored
collective funds and open-end investment companies registered
under the Federal Investment Company Act of 1940;

(iv) resource investments through limited partnerships,
private placements, and corporations; and

(v) international securities.

(2) The investments authorized in clause (1) must conform
to the following provisions:

(i) the aggregate value of all investments made according
to clause (1) may not exceed 35 percent of the market value of
the fund for which the covered pension plan is investing;

(ii) there must be at least four unrelated owners of the
investment other than the state board for investments made under
clause (1), item (i), (ii), (iii), or (iv);

(iii) covered pension plan participation in an investment
vehicle is limited to 20 percent thereof for investments made
under clause (1), item (i), (ii), (iii), or (iv); and

(iv) covered pension plan participation in a limited
partnership does not include a general partnership interest or
other interest involving general liability. The covered pension
plan may not engage in any activity as a limited partner which
creates general liability.

Sec. 54.

Minnesota Statutes 2004, section 422A.01,
subdivision 11, is amended to read:

Subd. 11.

Employee.

"Employee" means deleted text begin any deleted text end new text begin a new text end person new text begin who is
new text end not exempted from the contributing class deleted text begin pursuant to deleted text end new text begin under
new text end section 422A.09, subdivision 3, who deleted text begin is deleted text end new text begin was new text end employed new text begin before July
1, 1979, new text end by and paid, in whole or in part, by the city or any of
its boards, departments, or commissions, operated as a
department of city government or independently if financed in
whole or in part by city funds, including deleted text begin any deleted text end new text begin a new text end person new text begin who was
new text end employed by a public corporation as herein defined, deleted text begin and
including any deleted text end new text begin a new text end person new text begin who was new text end employed new text begin before July 1, 1979, new text end by
Special School District No. 1, new text begin and new text end who is not a member of any
other retirement system, and deleted text begin also including any deleted text end new text begin a new text end person who is
employed new text begin before July 1, 1973, new text end by the county of Hennepin, who was
entitled by law to elect and has elected to retain membership in
the deleted text begin municipal deleted text end new text begin Minneapolis new text end Employees Retirement Fund and who
makes any required member contributions to the fund new text begin and who
remains so employed new text end .

Sec. 55.

Minnesota Statutes 2004, section 422A.06,
subdivision 7, is amended to read:

Subd. 7.

Disability benefit fund.

(a) deleted text begin The required
reserves for disability allowances which become effective after
December 31, 1973, shall be transferred from the deposit
accumulation fund to the deleted text end new text begin A new text end disability benefit fund new text begin is
established, containing the required reserves for disability
allowances under this chapter new text end . A proportionate share of income
from investments deleted text begin shall deleted text end new text begin must new text end be allocated to this fund.
There deleted text begin shall deleted text end new text begin must new text end be paid from this fund the disability
allowances deleted text begin which become effective after December 31, 1973
deleted text end new text begin payable under this chapter new text end .

(b) In the event of new text begin the new text end termination of any disability
allowance for any reason other than the death of the recipient,
the balance of the required reserves for the disability
allowance as of the date of new text begin the new text end termination deleted text begin shall deleted text end new text begin must new text end be
transferred from the disability benefit fund to the deposit
accumulation fund.

(c) At the end of each fiscal year, as part of the annual
actuarial valuation, a determination deleted text begin shall deleted text end new text begin must new text end be made of the
required reserves for all disability allowances being paid from
the disability benefit fund. Any excess of assets over
actuarial required reserves in the disability benefit fund deleted text begin shall
deleted text end new text begin must new text end be transferred to the deposit accumulation fund. Any
excess of actuarial reserves over assets in the disability
benefit fund deleted text begin shall deleted text end new text begin must new text end be funded by a transfer of the
appropriate amount of assets from the deposit accumulation fund.

Sec. 56.

Minnesota Statutes 2004, section 422A.10,
subdivision 1, is amended to read:

Subdivision 1.

new text begin member new text end contribution deleted text begin rate deleted text end new text begin ; deductions new text end .

new text begin (a)
new text end There deleted text begin shall deleted text end new text begin must new text end be deducted and withheld from the basic salary,
pay or compensation of each employee in the contributing class deleted text begin ,
prior to January 1, 1980 an amount equal to 7-1/4 percent, after
December 31, 1979 but prior to January 1, 1981 an amount equal
to 8-1/4 percent and after December 31, 1980 deleted text end an amount equal to
9-1/4 percent of such salary, pay or compensation, except as
hereinafter provided.

new text begin (b) new text end The retirement board may increase the percentage rate
of contribution to the retirement fund of any employee or
employees for the purpose of establishing and maintaining on an
actuarial basis a plan of insurance, survivors' benefits, or
other type of benefit or benefits, the cost of which deleted text begin shall deleted text end new text begin must
new text end be paid out of such extra percentage so authorized and deducted
from the employee's compensation, except as hereinafter
provided. Any plan or plans so established and placed in
operation may be amended from time to time, or may be abandoned,
but if abandoned, any surplus remaining from the operation of a
plan deleted text begin shall deleted text end new text begin must new text end be the property of the fund, and deleted text begin shall deleted text end new text begin must new text end be
credited to the reserve for loss in investment account.

Sec. 57.

Minnesota Statutes 2004, section 422A.10,
subdivision 2, is amended to read:

Subd. 2.

deleted text begin consent to deductions deleted text end new text begin mandatory member
contributions new text end .

Every employee to whom deleted text begin sections 422A.01 to
422A.25 deleted text end new text begin this chapter new text end applies deleted text begin who shall continue in the service
after the passage of Laws 1919, chapter 522, as well as every
person to whom sections 422A.01 to 422A.25 applies who may
hereafter be appointed to a position or place, shall be deleted text end new text begin is
new text end deemed to consent and agree to the deductions made and provided
for herein, and payment with such reductions, for service, deleted text begin shall
be deleted text end new text begin are new text end a full and complete discharge and acquittance of all
claims and demands for all services rendered by such person
during the period covered by such payment; except the person's
claim to the benefits to which the person may be entitled under
the provisions of deleted text begin sections 422A.01 to 422A.25 deleted text end new text begin this chapter new text end .

Sec. 58.

Minnesota Statutes 2004, section 422A.22,
subdivision 1, is amended to read:

Subdivision 1.

Retention; transfer.

new text begin (a) new text end If an employee
to whom deleted text begin sections 422A.01 to 422A.25 deleted text end new text begin this chapter new text end applies becomes
absolutely separated from deleted text begin the deleted text end new text begin active new text end service deleted text begin prior to deleted text end new text begin before
new text end attaining the minimum retirement age established in section
422A.13, new text begin the employee is entitled to a refund of new text end the net
accumulated amount of deduction from salary, pay, or
compensation, made for the purpose of accumulating a fund from
which to pay retirement allowances, deleted text begin shall be returned to such
employee, deleted text end with interest new text begin at the annual compound rate of six
percent new text end .

new text begin (b) new text end Any contributing employee who separates from a
department, board or commission of the city whose employees are
covered by a fund organized under deleted text begin sections 422A.01 to 422A.25
deleted text end new text begin this chapter new text end , and becomes an employee of a department or board
of the same city, whose employees are covered by a retirement
fund or relief association by whatever name known, organized
under any other law and supported in whole or in part by taxes
on the same city, deleted text begin shall have deleted text end new text begin has new text end the option of:

(1) retaining their membership in the fund organized under
deleted text begin sections 422A.01 to 422A.25 deleted text end new text begin this chapter new text end , regardless of the
provisions of any law, rule, bylaw or other action requiring
membership in any other retirement fund or relief association
however organized deleted text begin . deleted text end new text begin ; or
new text end

(2) transferring to the fund or association covering the
employees of the department or board to which they are
transferring, providing they are eligible for membership therein.

new text begin (c) new text end Any contributing employee who elects to transfer to
another fund or association as deleted text begin herein deleted text end provided new text begin in paragraph (b),
clause (2) new text end , deleted text begin shall deleted text end new text begin must new text end make such election within one year from
the date of separation from the city service covered by this
fund. If the contributing employee elects to transfer to
another fund deleted text begin as herein provided deleted text end , new text begin the employee is entitled to new text end a
refund of the net accumulated contributions made by such
employee to the fund organized under deleted text begin sections 422A.01 to
422A.25, shall be returned to the employee deleted text end new text begin this chapter new text end with
interest new text begin at the annual compound rate of six percent new text end .

Sec. 59.

Minnesota Statutes 2004, section 422A.22,
subdivision 3, is amended to read:

Subd. 3.

Limitation on eligibility.

No employee of the
city deleted text begin shall be deleted text end new text begin is new text end eligible to be a member of new text begin , new text end or receive benefits
from new text begin , new text end more than one new text begin retirement plan or new text end fund of the city for the
same new text begin period of new text end service.

Sec. 60.

Minnesota Statutes 2004, section 422A.22,
subdivision 4, is amended to read:

Subd. 4.

Death-while-active refund.

(a) Upon the death
of an active member deleted text begin prior to deleted text end new text begin before the employee's new text end termination
of new text begin active new text end service, deleted text begin there shall be paid to deleted text end the beneficiary or
beneficiaries designated by the member on a form specified by
the executive director and filed with the retirement board deleted text begin , deleted text end new text begin are
entitled to receive new text end the net accumulated employee deductions from
salary, pay, or compensation, including interest new text begin under
subdivision 1, paragraph (a), new text end compounded annually to the date of
the member's death. The amount must not include any
contributions made by the employee or on the employee's behalf,
or any interest or investment earnings on those contributions,
which were allocated to the survivor benefit fund under section
422A.06, subdivision 6.

(b) If the employee fails to make a designation, or if the
beneficiary or beneficiaries designated by the employee
predeceases the employee, deleted text begin the benefit specified in paragraph (a)
must be paid to deleted text end the deceased employee's estate new text begin is entitled to
the benefit specified in paragraph (a) new text end .

(c) A benefit payable under this subdivision is in addition
to any applicable survivor benefit under section 422A.23.

Sec. 61.

Minnesota Statutes 2004, section 422A.22,
subdivision 6, is amended to read:

Subd. 6.

Refund; municipal employees retirement fund.

deleted text begin Any deleted text end new text begin A new text end person who has received a refund from the deleted text begin municipal
deleted text end new text begin Minneapolis new text end Employees Retirement Fund, and who is a member of a
public retirement system included in section 422A.16,
subdivision 8, may repay such refund with interest new text begin at a compound
annual rate of 8.5 percent new text end to the deleted text begin municipal deleted text end new text begin Minneapolis
new text end Employees Retirement Fund. If a refund is repaid to the fund
and new text begin if new text end more than one refund has been received from the fund, all
refunds must be repaid. Repayment deleted text begin shall deleted text end new text begin must new text end be made as
provided in deleted text begin sections 422A.01 to 422A.25 deleted text end new text begin this chapter new text end .

Sec. 62.

Minnesota Statutes 2004, section 422A.231, is
amended to read:

422A.231 COST ALLOCATION.

(a) Notwithstanding any law to the contrary, all current
and future contribution requirements due to this article are
payable by the participating contributing employing units other
than the state new text begin of Minnesota new text end .

(b) In each actuarial valuation of the retirement fund, the
actuary retained deleted text begin by the Legislative Commission on Pensions and
Retirement deleted text end new text begin under section 356.214 new text end shall include an exhibit on the
impact of the benefit increases contained in this article on the
survivor benefit fund. The actuary shall calculate the expected
change in the present value of the future benefits payable from
the survivor benefit fund attributable to this article, using
the actuarial method and assumptions applicable to the
Minneapolis Employees Retirement Fund, from the prior actuarial
valuation and shall compare that result with the actual change
in the present value of future benefits payable from the
survivor benefit fund attributable to this article from the
prior actuarial valuation.

(c) The executive director shall assess each participating
employer, other than the state new text begin of Minnesota new text end , its proportional
share of the net increase amount calculated under paragraph
(b). The assessment must be made on the first business day of
the following February, plus compound interest at an annual rate
of six percent on the amount from the actuarial valuation date
to the date of payment.

Sec. 63. new text begin REVISOR'S INSTRUCTION.
new text end

new text begin In the next edition and subsequent editions of Minnesota
Statutes, the revisor of statutes shall replace the reference to
"sections 422A.01 to 422A.25" with the reference to "this
chapter" wherever the reference appears in Minnesota Statutes,
chapter 422A.
new text end

Sec. 64. new text begin REPEALER.
new text end

new text begin (a) Minnesota Statutes 2004, section 352.119, subdivision
1, is repealed.
new text end

new text begin (b) Minnesota Statutes 2004, sections 353.34, subdivision
3b; 353.36, subdivisions 2, 2a, 2b, and 2c; 353.46, subdivision
4; 353.663; 353.74; and 353.75, are repealed.
new text end

new text begin (c) Minnesota Statutes 2004, section 354.59, is repealed.
new text end

new text begin (d) Minnesota Statutes 2004, sections 422A.22, subdivisions
2 and 5; and 422A.221, are repealed.
new text end

Sec. 65. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 64 are effective July 1, 2005.
new text end