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Capital IconMinnesota Legislature

HF 2952

1st Engrossment - 86th Legislature (2009 - 2010) Posted on 03/23/2010 12:53pm

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to retirement; Minnesota State Retirement System; Public Employees
Retirement Association; Teachers Retirement Association; first class city
teacher retirement fund associations; increasing certain contribution rates;
suspending certain postretirement adjustments; reducing certain postretirement
adjustment increase rates; reducing interest rates on refunds; reducing deferred
annuity augmentation rates; eliminating interest on reemployed annuitant
earnings limitation deferred accounts; increasing certain vesting requirements;
increasing certain early retirement reduction rates; reducing certain benefit
accrual rates; extending certain amortization periods; requiring a retirement fund
investment authority study; authorizing certain bylaw amendments; amending
Minnesota Statutes 2008, sections 3A.02, subdivision 4; 352.113, subdivision
1; 352.115, subdivision 1; 352.12, subdivision 2; 352.22, subdivisions 2, 3;
352.72, subdivisions 1, 2; 352.93, subdivisions 1, 2a, 3a; 352.931, subdivision
1; 352B.02, as amended; 352B.08, subdivisions 1, 2a; 352B.11, subdivision
2b; 352B.30, subdivisions 1, 2; 352F.07; 353.01, by adding a subdivision;
353.27, subdivision 3b; 353.29, subdivision 1; 353.30, subdivision 1c; 353.32,
subdivisions 1, 1a; 353.34, subdivisions 1, 2, 3; 353.651, subdivisions 1, 4;
353.657, subdivisions 1, 2a; 353.71, subdivisions 1, 2; 353E.04, subdivisions
1, 4; 353E.07, subdivisions 1, 2; 353F.03; 354.42, subdivision 3, by adding
subdivisions; 354A.12, subdivisions 1, 3c; 354A.27, subdivisions 5, 6, by
adding a subdivision; 354A.31, subdivision 1; 354A.35, subdivision 1; 354A.37,
subdivisions 2, 3, 4; 356.215, subdivision 8; 356.30, subdivision 1; 356.302,
subdivisions 3, 4, 5; 356.303, subdivision 2; 356.315, subdivision 5; 356.47,
subdivision 3; Minnesota Statutes 2009 Supplement, sections 352.75, subdivision
4; 352.95, subdivision 2; 353.27, subdivisions 2, 3; 353.33, subdivision 1;
353.65, subdivisions 2, 3; 354.42, subdivision 2; 354.47, subdivision 1; 354.49,
subdivision 2; 354.55, subdivision 11; 354A.12, subdivision 2a; 356.215,
subdivision 11; 356.415, subdivision 1, by adding subdivisions; 423A.02,
subdivision 3; repealing Minnesota Statutes 2008, section 354A.27, subdivision
1.

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

Section 1.

Minnesota Statutes 2008, section 3A.02, subdivision 4, is amended to read:


Subd. 4.

Deferred annuities augmentation.

(a) The deferred retirement allowance
of any former legislator must be augmented as provided herein.

(b) The required reserves applicable to the deferred retirement allowance,
determined as of the date the benefit begins to accrue using an appropriate mortality table
and an interest assumption of six percent, must be augmented from the first of the month
following the termination of active service, or July 1, 1973, whichever is later, to the first
day of the month in which the allowance begins to accrue, at the following annually
compounded rate or rates:

(1) five percent until January 1, 1981;

(2) three percent from January 1, 1981, or from the first day of the month following
the termination of active service, whichever is later, until January 1 of the year in which
the former legislator attains age 55new text begin or until January 1, 2011, whichever is earliernew text end; deleted text beginand
deleted text end

(3) five percent from the period end date under clause (2) deleted text begintodeleted text end new text beginuntil new text endthe effective date
of retirementnew text begin or until January 1, 2011, whichever is earlier; and
new text end

new text begin (4) two percent after December 31, 2010new text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2008, section 352.113, subdivision 1, is amended to read:


Subdivision 1.

Age and service requirements.

new text begin(a) new text endAn employee covered by the
system, who is less than normal retirement age and who becomes totally and permanently
disabled after three or more years of allowable servicenew text begin if employed before July 1, 2010, or
after five or more years of allowable service if employed after June 30, 2010
new text end, is entitled to
a disability benefit in an amount provided in subdivision 3.

new text begin (b)new text end If the disabled employee's state service has terminated at any time, the employee
must have at least two years of allowable service after last becoming a state employee
covered by the system.

new text begin (c)new text end Refunds may be repaid under section 352.23 before the effective accrual date of
the disability benefit under subdivision 2.

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2008, section 352.115, subdivision 1, is amended to read:


Subdivision 1.

Age and service requirements.

After separation from state service,
any employee (1) who has attained the age of at least 55 years and who is entitled to
credit for at least three years allowable servicenew text begin if employed before July 1, 2010, or after
five or more years of allowable service if employed after June 30, 2010
new text end, or (2) who has
received credit for at least 30 years allowable service regardless of age, is entitled upon
application to a retirement annuity.

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2008, section 352.12, subdivision 2, is amended to read:


Subd. 2.

Surviving spouse benefit.

(a) If an employee or former employee has
credit for at least three years allowable service new text beginif the employee was employed before July
1, 2010, or for at least five years of allowable service if the employee was employed
after June 30, 2010,
new text endand dies before an annuity or disability benefit has become payable,
notwithstanding any designation of beneficiary to the contrary, the surviving spouse of the
employee may elect to receive, in lieu of the refund with interest under subdivision 1, an
annuity equal to the joint and 100 percent survivor annuity which the employee or former
employee could have qualified for on the date of death.

(b) If the employee was under age 55 and has credit for at least 30 years of allowable
service on the date of death, the surviving spouse may elect to receive a 100 percent joint
and survivor annuity based on the age of the employee and surviving spouse on the date
of death. The annuity is payable using the full early retirement reduction under section
352.116, subdivision 1, paragraph (a), to age 55 and one-half of the early retirement
reduction from age 55 to the age payment begins.

(c) If the employee was under age 55 and has credit for at least three years of
allowable service credit on the date of death new text beginif the employee was employed before July 1,
2010, or for at least five years of allowable service if the employee was employed after
June 30, 2010,
new text endbut did not yet qualify for retirement, the surviving spouse may elect
to receive a 100 percent joint and survivor annuity based on the age of the employee
and surviving spouse at the time of death. The annuity is payable using the full early
retirement reduction under section 352.116, subdivision 1 or 1a, to age 55 and one-half of
the early retirement reduction from age 55 to the age payment begins.

(d) The surviving spouse eligible for benefits under paragraph (a) may apply for the
annuity at any time after the date on which the employee or former employee would
have attained the required age for retirement based on the allowable service earned.
The surviving spouse eligible for surviving spouse benefits under paragraph (b) or (c)
may apply for the annuity at any time after the employee's death. The annuity must be
computed under sections 352.115, subdivisions 1, 2, and 3, and 352.116, subdivisions 1,
1a, and 3
. Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply to a deferred
annuity or surviving spouse benefit payable under this subdivision. The annuity must cease
with the last payment received by the surviving spouse in the lifetime of the surviving
spouse, or upon expiration of a term certain benefit payment to a surviving spouse under
subdivision 2a. An amount equal to the excess, if any, of the accumulated contributions
credited to the account of the deceased employee in excess of the total of the benefits paid
and payable to the surviving spouse must be paid to the deceased employee's or former
employee's last designated beneficiary or, if none, as specified under subdivision 1.

(e) Any employee or former employee may request in writing, with the signed
consent of the spouse, that this subdivision not apply and that payment be made only to a
designated beneficiary as otherwise provided by this chapter.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2008, section 352.22, subdivision 2, is amended to read:


Subd. 2.

Amount of refund.

Except as provided in subdivision 3, the refund
payable to a person who ceased to be a state employee by reason of a termination of state
service is an amount equal to employee accumulated contributions plus interest at the rate
of six percent per year compounded daily from the date that the contribution was made
until new text beginJune 30, 2011, or until new text endthe date on which the refund is paidnew text begin, whichever is earlier, and
at the rate of four percent per year compounded daily from the date that the contribution
was made or from July 1, 2011, whichever is later, until the date on which the refund is
paid
new text end. Included with the refund is any interest paid as part of repayment of a past refund,
plus interest thereon from the date of repayment.

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2008, section 352.22, subdivision 3, is amended to read:


Subd. 3.

Deferred annuity.

(a) An employee who has at least three years of
allowable service new text beginif employed before July 1, 2010, or who has at least five years of
allowable service if employed after June 30, 2010,
new text endwhen termination occurs may elect
to leave the accumulated contributions in the fund and thereby be entitled to a deferred
retirement annuity. The annuity must be computed under the law in effect when state
service terminated, on the basis of the allowable service credited to the person before
the termination of service.

(b) An employee on layoff or on leave of absence without pay, except a leave of
absence for health reasons, and who does not return to state service must have an annuity,
deferred annuity, or other benefit to which the employee may become entitled computed
under the law in effect on the employee's last working day.

(c) No application for a deferred annuity may be made more than 60 days before
the time the former employee reaches the required age for entitlement to the payment of
the annuity. The deferred annuity begins to accrue no earlier than 60 days before the date
the application is filed in the office of the system, but not (1) before the date on which
the employee reaches the required age for entitlement to the annuity nor (2) before the
day following the termination of state service in a position which is not covered by the
retirement system.

(d) Application for the accumulated contributions left on deposit with the fund may
be made at any time following the date of the termination of service.

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2008, section 352.72, subdivision 1, is amended to read:


Subdivision 1.

Entitlement to annuity.

(a) Any person who has been an employee
covered by a retirement system listed in paragraph (b) is entitled when qualified to an
annuity from each fund if total allowable service in all funds or in any two of these funds
totals three or more yearsnew text begin if employed before July 1, 2010, or totals five or more years
if employed after June 30, 2010
new text end.

(b) This section applies to the Minnesota State Retirement System, the Public
Employees Retirement Association including the Public Employees Retirement
Association police and fire fund, the Teachers Retirement Association, the State Patrol
Retirement Association, or any other public employee retirement system in the state with
a similar provision, except as noted in paragraph (c).

(c) This section does not apply to other funds providing benefits for police officers
or firefighters.

(d) No portion of the allowable service upon which the retirement annuity from
one fund is based shall be again used in the computation for benefits from another fund.
No refund may have been taken from any one of these funds since service entitling the
employee to coverage under the system or the employee's membership in any of the
associations last terminated. The annuity from each fund must be determined by the
appropriate provisions of the law except that the requirement that a person must have at
least deleted text beginthreedeleted text end new text begina specific number of new text endyears new text beginof new text endallowable service in the respective system or
association does not apply for the purposes of this section if the combined service in two
or more of these funds equals deleted text beginthree or more yearsdeleted text endnew text begin at least the longest period of allowable
service of any of the applicable retirement plans
new text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2008, section 352.72, subdivision 2, is amended to read:


Subd. 2.

Computation of deferred annuity.

(a) The deferred annuity, if any,
accruing under subdivision 1, or section 352.22, subdivision 3, must be computed as
provided in section 352.22, subdivision 3, on the basis of allowable service before
termination of state service and augmented as provided herein. The required reserves
applicable to a deferred annuity or to an annuity for which a former employee was eligible
but had not applied or to any deferred segment of an annuity must be determined as of
the date the benefit begins to accrue and augmented by interest compounded annually
from the first day of the month following the month in which the employee ceased to be
a state employee, or July 1, 1971, whichever is later, to the first day of the month in
which the annuity begins to accrue. The rates of interest used for this purpose must be
five percent compounded annually until January 1, 1981, and three percent compounded
annually thereafter until January 1 of the year following the year in which the former
employee attains age 55new text begin or until January 1, 2011, whichever is earliernew text end, and from deleted text beginthat datedeleted text end
new text begin the January 1 next following the attainment of age 55 new text endto the effective date of retirementnew text begin or
until January 1, 2011, whichever is earlier
new text end, deleted text beginthe rate isdeleted text end five percent compounded annually if
the employee became an employee before July 1, 2006, deleted text beginand atdeleted text end 2.5 percent compounded
annually new text beginuntil January 1, 2011, new text endif the employee becomes an employee after June 30, 2006new text begin,
and two percent compounded annually after December 31, 2010, irrespective of when the
employee became a state employee
new text end. If a person has more than one period of uninterrupted
service, the required reserves related to each period must be augmented by interest under
this subdivision. The sum of the augmented required reserves so determined is the present
value of the annuity. "Uninterrupted service" for the purpose of this subdivision means
periods of covered employment during which the employee has not been separated from
state service for more than two years. If a person repays a refund, the service restored by
the repayment must be considered continuous with the next period of service for which the
employee has credit with this system. The formula percentages used for each period of
uninterrupted service must be those applicable to a new employee. The mortality table
and interest assumption used to compute the annuity must be those in effect when the
employee files application for annuity. This section does not reduce the annuity otherwise
payable under this chapter.

(b) The retirement annuity or disability benefit of, or the survivor benefit payable on
behalf of, a former state employee who terminated service before July 1, 1997, which is
not first payable until after June 30, 1997, must be increased on an actuarial equivalent
basis to reflect the change in the postretirement interest rate actuarial assumption under
section 356.215, subdivision 8, from five percent to six percent under a calculation
procedure and the tables adopted by the board and approved by the actuary retained under
section 356.214.

new text begin EFFECTIVE DATE. new text end

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

Sec. 9.

Minnesota Statutes 2009 Supplement, section 352.75, subdivision 4, is
amended to read:


Subd. 4.

Existing deferred retirees.

Any former member of the former
Metropolitan Transit Commission-Transit Operating Division employees retirement
fund is entitled to a retirement annuity from the Minnesota State Retirement System if
the employee:

(1) is not an active employee of the Transit Operating Division of the former
Metropolitan Transit Commission on July 1, 1978; (2) has at least ten years of active
continuous service with the Transit Operating Division of the former Metropolitan
Transit Commission as defined by the former Metropolitan Transit Commission-Transit
Operating Division employees retirement plan document in effect on December 31, 1977;
(3) has not received a refund of contributions; (4) has not retired or begun receiving an
annuity or benefit from the former Metropolitan Transit Commission-Transit Operating
Division employees retirement fund; (5) is at least 55 years old; and (6) submits a valid
application for a retirement annuity to the executive director of the Minnesota State
Retirement System.

The person is entitled to a retirement annuity in an amount equal to the normal
old age retirement allowance calculated under the former Metropolitan Transit
Commission-Transit Operating Division employees retirement fund plan document in
effect on December 31, 1977, subject to an early retirement reduction or adjustment in
amount on account of retirement before the normal retirement age specified in that former
Metropolitan Transit Commission-Transit Operating Division employees retirement fund
plan document.

The deferred retirement annuity of any person to whom this subdivision applies
must be augmented. The required reserves applicable to the deferred retirement annuity,
determined as of the date the allowance begins to accrue using an appropriate mortality
table and an interest assumption of five percent, must be augmented by interest at the
rate of five percent per year compounded annually from January 1, 1978, to January 1,
1981, deleted text beginanddeleted text end three percent per year compounded annually from January 1, 1981, new text beginuntil the
date that the annuity begins to accrue or June 30, 2010, whichever is earlier, and two
percent after June 30, 2010,
new text endto the first day of the month in which the annuity begins to
accrue. After the commencement of the retirement annuity, the annuity is eligible for
postretirement adjustments under section 356.415. On applying for a retirement annuity
under this subdivision, the person is entitled to elect a joint and survivor optional annuity
under section 352.116, subdivision 3.

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2008, section 352.93, subdivision 1, is amended to read:


Subdivision 1.

Basis of annuity; when to apply.

After separation from state
service, an employee covered under section 352.91 who has reached age 55 years and has
credit for at least three years of covered correctional service or a combination of covered
correctional service and general new text beginstate new text endemployees deleted text beginstatedeleted text end retirement plan new text beginallowable new text endservice
new text begin if first employed as a state employee before July 1, 2010, or has credit for at least ten
years of covered correctional service or a combination of covered correctional service
and general state employees retirement plan allowable service if first employed as a state
employee after June 30, 2010,
new text endis entitled upon application to a retirement annuity under
this section, based only on covered correctional employees' service. Application may be
made no earlier than 60 days before the date the employee is eligible to retire by reason of
both age and service requirements.

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Minnesota Statutes 2008, section 352.93, subdivision 2a, is amended to read:


Subd. 2a.

Early retirement.

Any covered correctional employee who becomes at
least 50 years old and who has at least three years of allowable service new text beginif first employed
as a correctional state employee before July 1, 2010, or has credit for at least ten years
of allowable service if first employed as a correctional state employee after June 30,
2010,
new text endis entitled upon application to a reduced retirement annuity equal to the annuity
calculated under subdivision 2, reduced by two-tenths of one percent for each month that
the correctional employee is under age 55 at the time of retirementnew text begin if first employed as
a correctional state employee before July 1, 2010, and if retired before July 1, 2015, or
reduced by 0.417 percent for each month that the correctional employee is under age 55
at the time of retirement if first employed as a correctional state employee after June 30,
2010, or if first employed as a correctional state employee before July 1, 2010, and if
retired after June 30, 2015
new text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2008, section 352.93, subdivision 3a, is amended to read:


Subd. 3a.

Optional annuities.

The board may establish optional annuity forms to
pay a higher amount from the date of retirement until an employee is first eligible to draw
Social Security benefitsnew text begin, reaches age 65,new text end or deleted text beginup todeleted text end new text beginreaches new text endthe age the employee is eligible
to receive unreduced Social Security benefits, at which time the monthly benefits must be
reduced. The optional annuity forms must be actuarially equivalent to the normal single
life annuity form provided in subdivision 2. The optional annuity forms must be deleted text beginapproveddeleted text end
new text begin certified as actuarially equivalent new text endby the actuary retained under section 356.214.

new text begin EFFECTIVE DATE. new text end

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

Sec. 13.

Minnesota Statutes 2008, section 352.931, subdivision 1, is amended to read:


Subdivision 1.

Surviving spouse benefit.

(a) If the correctional employee was at
least age 50, has credit for at least three years of allowable servicenew text begin if first employed as
a correctional state employee before July 1, 2010, or has credit for at least ten years of
allowable service if first employed as a correctional state employee after June 30, 2010
new text end,
and dies before an annuity or disability benefit has become payable, notwithstanding any
designation of beneficiary to the contrary, the surviving spouse of the employee may
elect to receive, in lieu of the refund under section 352.12, subdivision 1, an annuity for
life equal to the joint and 100 percent survivor annuity which the employee could have
qualified for had the employee terminated service on the date of death. The election
may be made at any time after the date of death of the employee. The surviving spouse
benefit begins to accrue as of the first of the month next following the date on which
the application for the benefit was filed.

(b) If the employee was under age 50, dies, and had credit for at least three years
of allowable service deleted text begincreditdeleted text end on the date of death new text beginif first employed as a correctional state
employee before July 1, 2010, or had credit for at least ten years of allowable service on
the date of death if first employed as a correctional state employee after June 30, 2010,
new text endbut
did not yet qualify for retirement, the surviving spouse may elect to receive a 100 percent
joint and survivor annuity based on the age of the employee and surviving spouse at the
time of death. The annuity is payable using the early retirement reduction under section
352.93, subdivision 2a, to age 50, and one-half of the early retirement reduction from age
50 to the age payment begins. The surviving spouse eligible for surviving spouse benefits
under this paragraph may apply for the annuity at any time after the employee's death.
Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply to a deferred annuity or
surviving spouse benefit payable under this subdivision.

(c) The annuity must cease with the last payment received by the surviving spouse
in the lifetime of the surviving spouse. Any employee may request in writing, with the
signed consent of the spouse, that this subdivision not apply and that payment be made
only to a designated beneficiary as otherwise provided by this chapter.

new text begin EFFECTIVE DATE. new text end

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

Sec. 14.

Minnesota Statutes 2009 Supplement, section 352.95, subdivision 2, is
amended to read:


Subd. 2.

Regular disability; computation of benefit.

A covered correctional
employee who was hired before July 1, 2009, after rendering at least one year of covered
correctional service, or a covered correctional employee who was first hired after June
30, 2009, after rendering at least three years of covered correctional plan servicenew text begin if first
employed as a correctional state employee before July 1, 2010, or after rendering at least
ten years of covered correctional plan service if first employed as a correctional state
employee after June 30, 2010
new text end, and who is determined to have a regular disability, physical
or psychological, as defined under section 352.01, subdivision 17c, is entitled to a regular
disability benefit. The regular disability benefit must be based on covered correctional
service only. The regular disability benefit must be computed as provided in section
352.93, subdivisions 1 and 2. The regular disability benefit of a covered correctional
employee who was first hired before July 1, 2009, and who is determined to have a regular
disability, physical or psychological, under this subdivision must be computed as though
the employee had at least 15 years of covered correctional service.

new text begin EFFECTIVE DATE. new text end

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

Sec. 15.

Minnesota Statutes 2008, section 352B.02, as amended by Laws 2009, chapter
101, article 2, section 109; and Laws 2009, chapter 169, article 1, section 23; article 2,
section 16; and article 4, sections 3 and 4, is amended to read:


352B.02 STATE PATROL RETIREMENT FUND.

Subdivision 1.

Fund created; membership.

A State Patrol retirement fund
is established. Its membership consists of all persons defined in section 352B.011,
subdivision 10
.

Subd. 1a.

Member contributions.

(a) The member contribution is deleted text begindeleted text begin10.40deleted text end percentdeleted text endnew text begin
the following percentage
new text end of the member's salarydeleted text begin.deleted text endnew text begin:
new text end

new text begin (1) before the first day of the first pay
period beginning after July 1, 2011
new text end
new text begin 10.40 percent
new text end
new text begin (2) on or after the first day of the first
pay period beginning after July 1, 2011
new text end
new text begin 11.20 percent
new text end

(b) These contributions must be made by deduction from salary as provided in
section 352.04, subdivision 4.

Subd. 1b.

Salary deductions.

Member contribution amounts must be deducted each
pay period by the department head, who shall have the total amount of the deductions paid
to the commissioner of management and budget for deposit in the State Patrol retirement
fund, and have a detailed report of all deductions made each pay period to the executive
director of the Minnesota State Retirement System.

Subd. 1c.

Employer contributions.

(a) In addition to member contributions,
department heads shall pay a sum equal to deleted text begin15.60 percentdeleted text endnew text begin the specified percentagenew text end of the
salary upon which deductions were made, which constitutes the employer contribution
to the funddeleted text begin.deleted text endnew text begin as follows:
new text end

new text begin (1) before the first day of the first pay
period beginning after July 1, 2011
new text end
new text begin 15.60 percent
new text end
new text begin (2) on or after the first day of the first
pay period beginning after July 1, 2011
new text end
new text begin 16.80 percent
new text end

(b) Department contributions must be paid out of money appropriated to departments
for this purpose.

new text begin Subd. 1d. new text end

new text begin Additional employer contributions. new text end

new text begin (a) In addition to the regular
employer contribution under subdivision 1c, department heads shall pay a sum equal to
ten percent of the salary upon which member contribution deductions were made, which is
the additional employer contribution to the fund.
new text end

new text begin (b) Department additional employer contributions must be paid from departmental
appropriations or revenue.
new text end

Subd. deleted text begin1ddeleted text endnew text begin 1enew text end.

Fund revenue and expenses.

The amounts provided for in this section
must be credited to the State Patrol retirement fund. All money received must be deposited
by the commissioner of management and budget in the State Patrol retirement fund. The
fund must be used to pay the administrative expenses of the retirement fund, and the
benefits and annuities provided in this chapter.

Subd. deleted text begin1edeleted text endnew text begin 1fnew text end.

Audit; new text beginregular new text endactuarial valuationnew text begin; supplemental valuationsnew text end.

new text begin(a)
new text endThe legislative auditor shall audit the fund.

new text begin (b)new text end Any actuarial valuation of the fund required under section 356.215 must be
prepared by the actuary retained under section 356.214.

new text begin (c)new text end 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 actuary retained under section 356.214. Any supplemental
actuarial valuation or experience studies must be filed with the executive director of the
Legislative Commission on Pensions and Retirement.

new text begin EFFECTIVE DATE. new text end

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

Sec. 16.

Minnesota Statutes 2008, section 352B.08, subdivision 1, is amended to read:


Subdivision 1.

Eligibility; when to apply; accrual.

new text begin(a) new text endEvery member who is
credited with three or more years of allowable service new text beginif first employed before July 1,
2010, or with at least five years of allowable service if first employed after June 30, 2010,
new text endis entitled to separate from state service and upon becoming 50 years old, is entitled to
receive a life annuity, upon separation from state service.

new text begin (b)new text end Members deleted text beginshalldeleted text end new text beginmust new text endapply for an annuity in a form and manner prescribed by the
executive director.

new text begin (c)new text end No application may be made more than 90 days before the date the member is
eligible to retire by reason of both age and service requirements.

new text begin (d)new text end An annuity begins to accrue no earlier than 180 days before the date the
application is filed with the executive director.

new text begin EFFECTIVE DATE. new text end

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

Sec. 17.

Minnesota Statutes 2008, section 352B.08, subdivision 2a, is amended to read:


Subd. 2a.

Early retirement.

Any member who has become at least 50 years old and
who has at least three years of allowable service new text beginif first employed before July 1, 2010, or
who has at least five years of allowable service if first employed after June 30, 2010,
new text endis
entitled upon application to a reduced retirement annuity equal to the annuity calculated
under subdivision 2, reduced by one-tenth of one percent for each month that the member
is under age 55 at the time of retirementnew text begin if first employed before July 1, 2010, or reduced
by two-tenths of one percent for each month that the member is under age 55 at the time of
retirement if first employed after June 30, 2010
new text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 18.

Minnesota Statutes 2008, section 352B.11, subdivision 2b, is amended to read:


Subd. 2b.

Surviving spouse benefit eligibility.

(a) If an active member with three or
more years of allowable service new text beginif first employed before July 1, 2010, or with at least five
years of allowable service if first employed after June 30, 2010,
new text enddies before attaining age
55, the surviving spouse is entitled to the benefit specified in subdivision 2c, paragraph (b).

(b) If an active member with less than three years of allowable service new text beginif first
employed before July 1, 2010, or with fewer than five years of allowable service if first
employed after June 30, 2010,
new text enddies at any age, the surviving spouse is entitled to receive
the benefit specified in subdivision 2c, paragraph (c).

(c) If an active member with three or more years of allowable service new text beginif first
employed before July 1, 2010, or with at least five years of allowable service if first
employed after June 30, 2010,
new text enddies on or after attaining exact age 55, the surviving spouse
is entitled to receive the benefits specified in subdivision 2c, paragraph (d).

(d) If a disabilitant dies while receiving a disability benefit under section 352B.10 or
before the benefit under that section commenced, and an optional annuity was not elected
under section 352B.10, subdivision 5, the surviving spouse is entitled to receive the benefit
specified in subdivision 2c, paragraph (b).

(e) If a former member with three or more years of allowable servicenew text begin if first
employed before July 1, 2010, or with at least five years of allowable service if first
employed after June 30, 2010
new text end, who terminated from service and has not received a refund
or commenced receipt of any other benefit provided by this chapter, dies, the surviving
spouse is entitled to receive the benefit specified in subdivision 2c, paragraph (e).

(f) If a former member with less than three years of allowable servicenew text begin if first
employed before July 1, 2010, or with fewer than five years of allowable service if first
employed after June 30, 2010
new text end, who terminated from service and has not received a refund
or commenced receipt of any other benefit, if applicable, provided by this chapter, dies, the
surviving spouse is entitled to receive the refund specified in subdivision 2c, paragraph (f).

new text begin EFFECTIVE DATE. new text end

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

Sec. 19.

Minnesota Statutes 2008, section 352B.30, subdivision 1, is amended to read:


Subdivision 1.

Entitlement to annuity.

Any person who has been an employee
covered by the Minnesota State Retirement System, or a member of the Public Employees
Retirement Association including the Public Employees Retirement Association Police
and Fire Fund, or the Teachers Retirement Association, or the State Patrol retirement fund,
or any other public employee retirement system in Minnesota having a like provision but
excluding all other funds providing benefits for police or firefighters is entitled when
qualified to an annuity from each fund if total allowable service in all funds or in any two
of these funds totals deleted text beginthree or moredeleted text end new text beginthe number of new text endyearsnew text begin of allowable service required by
the applicable retirement plan with the longest vesting period for the person
new text end. No part of
the allowable service upon which the retirement annuity from one fund is based may
again be used in the computation for benefits from another fund. The member must not
have taken a refund from any one of these funds since service entitling the member to
coverage under the system or membership in any of the associations last terminated.
The annuity from each fund must be determined by the appropriate law except that the
requirement that a person must have at least deleted text beginthreedeleted text end new text begina specific number of new text endyears allowable
service in the respective system or association does not apply for the purposes of this
section if the combined service in two or more of these funds equals deleted text beginthree or moredeleted text end new text beginthe
number of
new text endyearsnew text begin of allowable service required by the applicable retirement plan with
the longest vesting period for the person
new text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 20.

Minnesota Statutes 2008, section 352B.30, subdivision 2, is amended to read:


Subd. 2.

Computation of deferred annuity.

Deferred annuities must be computed
according to this chapter on the basis of allowable service before termination of service
and augmented as provided in this chapter. The required reserves applicable to a deferred
annuity must be augmented by interest compounded annually from the first day of the
month following the month in which the member terminated service, or July 1, 1971,
whichever is later, to the first day of the month in which the annuity begins to accrue. The
rates of interest used for this purpose deleted text beginshalldeleted text end new text beginmust new text endbe five percent per year compounded
annually until January 1, 1981, deleted text beginand after that datedeleted text end three percent per year compounded
annually new text beginafter January 1, 1981, until January 1, 2011, new text endif the employee became an employee
before July 1, 2006, deleted text beginand atdeleted text end 2.5 percent compounded annually if the employee becomes
an employee after June 30, 2006new text begin, and two percent per year compounded annually after
December 31, 2010, irrespective of when the employee was first employed
new text end. The mortality
table and interest assumption used to compute the annuity deleted text beginshalldeleted text end new text beginmust new text endbe those in effect
when the member files application for annuity.

new text begin EFFECTIVE DATE. new text end

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

Sec. 21.

Minnesota Statutes 2008, section 352F.07, is amended to read:


352F.07 EFFECT ON REFUND.

Notwithstanding any provision of chapter 352 to the contrary, terminated hospital
employees may receive a refund of employee accumulated contributions plus interest
deleted text begin at the rate of six percent per year compounded annuallydeleted text end in accordance with deleted text beginMinnesota
Statutes 1994,
deleted text end section 352.22, subdivision 2, at any time after the transfer of employment
to Fairview, University of Minnesota Physicians, or University Affiliated Family
Physicians. If a terminated hospital employee has received a refund from a pension plan
enumerated in section 356.30, subdivision 3, the person may not repay that refund unless
the person again becomes a member of one of those enumerated plans and complies
with section 356.30, subdivision 2.

new text begin EFFECTIVE DATE. new text end

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

Sec. 22.

Minnesota Statutes 2008, section 353.01, is amended by adding a subdivision
to read:


new text begin Subd. 47. new text end

new text begin Vesting. new text end

new text begin (a) "Vesting" means obtaining a nonforfeitable entitlement
to an annuity or benefit from a retirement plan administered by the Public Employees
Retirement Association by having credit for sufficient allowable service under paragraph
(b) or (c), whichever applies.
new text end

new text begin (b) For purposes of qualifying for an annuity or benefit as a basic or coordinated plan
member of the general employees retirement plan of the Public Employees Retirement
Association:
new text end

new text begin (1) a member who first became a public employee before July 1, 2010, is vested
when the person has accrued credit for not less than three years of allowable service as
defined under subdivision 16; and
new text end

new text begin (2) a member who first becomes a public employee after June 30, 2010, is vested
when the person has accrued credit for not less than five years of allowable service
as defined under subdivision 16.
new text end

new text begin (c) For purposes of qualifying for an annuity or benefit as a member of the police
and fire plan or a member of the local government correctional employees retirement plan:
new text end

new text begin (1) a member who first became a public employee before July 1, 2010, is vested
when the person has accrued credit for not less than three years of allowable service as
defined under subdivision 16; and
new text end

new text begin (2) a member who first becomes a public employee after June 30, 2010, is vested
at the following percentages when the person has accrued credited allowable service as
defined under subdivision 16, as follows:
new text end

new text begin (i) 50 percent after five years;
new text end

new text begin (ii) 60 percent after six years;
new text end

new text begin (iii) 70 percent after seven years;
new text end

new text begin (iv) 80 percent after eight years;
new text end

new text begin (v) 90 percent after nine years; and
new text end

new text begin (vi) 100 percent after ten years.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 23.

Minnesota Statutes 2009 Supplement, section 353.27, subdivision 2, is
amended to read:


Subd. 2.

Employee contribution.

(a) For a basic member, the employee
contribution is 9.10 percent of salary. For a coordinated member, the employee
contribution is deleted text beginsix percentdeleted text end new text beginthe following percentage new text endof salary plus any contribution rate
adjustment under subdivision 3bdeleted text begin.deleted text endnew text begin:
new text end

new text begin Effective before January 1, 2011
new text end
new text begin 6.00
new text end
new text begin Effective after December 31, 2010
new text end
new text begin 6.25
new text end

(b) These contributions must be made by deduction from salary as defined in section
353.01, subdivision 10, in the manner provided in subdivision 4. If any portion of a
member's salary is paid from other than public funds, the member's employee contribution
must be based on the total salary received by the member from all sources.

new text begin EFFECTIVE DATE. new text end

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

Sec. 24.

Minnesota Statutes 2009 Supplement, section 353.27, subdivision 3, is
amended to read:


Subd. 3.

Employer contribution.

(a) For a basic member, the employer
contribution is 9.10 percent of salary. For a coordinated member, the employer
contribution is deleted text beginsix percentdeleted text end new text beginthe following percentage new text endof salary plus any contribution rate
adjustment under subdivision 3bdeleted text begin.deleted text endnew text begin:
new text end

new text begin Effective before January 1, 2011
new text end
new text begin 6.00
new text end
new text begin Effective after December 31, 2010
new text end
new text begin 6.25
new text end

(b) This contribution must be made from funds available to the employing
subdivision by the means and in the manner provided in section 353.28.

new text begin EFFECTIVE DATE. new text end

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

Sec. 25.

Minnesota Statutes 2008, section 353.27, subdivision 3b, is amended to read:


Subd. 3b.

Change in employee and employer contributions in certain instances.

(a) For purposes of this sectiondeleted text begin,deleted text endnew text begin:
new text end

new text begin (1)new text end a contribution sufficiency exists if the total of the employee contribution under
subdivision 2, the employer contribution under subdivision 3, the additional employer
contribution under subdivision 3a, and any additional contribution previously imposed
under this subdivision exceeds the total of the normal cost, the administrative expenses,
and the amortization contribution of the retirement plan as reported in the most recent
actuarial valuation of the retirement plan prepared by the actuary retained under section
356.214 and prepared under section 356.215 and the standards for actuarial work of the
Legislative Commission on Pensions and Retirementdeleted text begin. For purposes of this section,deleted text endnew text begin; and
new text end

new text begin (2)new text end a contribution deficiency exists if the total of the employee contributions under
subdivision 2, the employer contributions under subdivision 3, the additional employer
contribution under subdivision 3a, and any additional contribution previously imposed
under this subdivision is less than the total of the normal cost, the administrative expenses,
and the amortization contribution of the retirement plan as reported in the most recent
actuarial valuation of the retirement plan prepared by the actuary retained under section
356.214 and prepared under section 356.215 and the standards for actuarial work of the
Legislative Commission on Pensions and Retirement.

(b) Employee and employer contributions under subdivisions 2 and 3 must be
adjusted:

(1) if, new text beginon or new text endafter July 1, 2010, the regular actuarial deleted text beginvaluationsdeleted text end new text beginvaluation new text endof the
general employees retirement plan of the Public Employees Retirement Association under
section 356.215 deleted text beginindicatedeleted text end new text beginindicates new text endthat there is a contribution sufficiency under paragraph
(a) deleted text beginequal to ordeleted text end greater than deleted text begin0.5deleted text end new text beginone new text endpercent of covered payroll new text beginand that the sufficiency
has existed
new text endfor new text beginat least new text endtwo consecutive years, the coordinated program employee and
employer contribution rates must be decreased as determined under paragraph (c) to a
level such that the sufficiency deleted text beginequalsdeleted text end new text beginis new text endno deleted text beginmoredeleted text end new text begingreater new text endthan deleted text begin0.25deleted text end new text beginone new text endpercent of covered
payroll based on the most recent actuarial valuation; or

(2) if, new text beginon or new text endafter July 1, 2010, the regular actuarial deleted text beginvaluationsdeleted text end new text beginvaluation new text endof the
general employees retirement plan of the Public Employees Retirement Association under
section 356.215 deleted text beginindicatedeleted text end new text beginindicates new text endthat there is a new text begincontribution new text enddeficiency equal to or greater
than 0.5 percent of covered payroll new text beginand that the deficiency has existed new text endfor new text beginat least new text endtwo
consecutive years, the coordinated program employee and employer contribution rates
must be increased as determined under paragraph deleted text begin(c)deleted text end new text begin(d) new text endto a level such that no deficiency
exists based on the most recent actuarial valuation.

(c) deleted text beginThe contribution rate increase or decrease must be determined by the executive
director of the Public Employees Retirement Association, must be reported to the chair
and the executive director of the Legislative Commission on Pensions and Retirement
on or before the next February 1, and, if the Legislative Commission on Pensions and
Retirement does not recommend against the rate change or does not recommend a
modification in the rate change, is effective on the next July 1 following the determination
by the executive director that a contribution deficiency or sufficiency has existed for
two consecutive fiscal years based on the most recent actuarial valuations under section
356.215.
deleted text end If the actuarially required contribution deleted text beginexceeds ordeleted text end is less than the total support
provided by the combined employee and employer contribution rates new text beginunder subdivisions
2, 3, and 3a,
new text endby more than deleted text begin0.5deleted text end new text beginone new text endpercent of covered payroll, the coordinated program
employee and employer contribution rates new text beginunder subdivisions 2 and 3 new text endmust be deleted text beginadjusteddeleted text end
new text begin decreased new text endincrementally over one or more years new text beginby no more than 0.25 percent of pay each
for employee and employer matching contribution rates
new text endto a level such that there remains
a contribution sufficiency of deleted text beginno more than 0.25deleted text end new text beginat least one new text endpercent of covered payroll.new text begin No
contribution rate decrease may be made until at least two years have elapsed since any
adjustment under this subdivision has been fully implemented.
new text end

(d) deleted text beginNodeleted text end new text beginIf the actuarially required contribution exceeds the total support provided
by the combined employee and employer contribution rates under subdivisions 2, 3, and
3a, the employee and matching employer contribution rates must be increased equally to
eliminate that contribution deficiency. If the contribution deficiency is:
new text end

new text begin (1) less than two percent, the new text endincremental deleted text beginadjustmentdeleted text end new text beginincrease new text endmay deleted text beginexceeddeleted text end new text beginbe up
to
new text end0.25 percent for deleted text begineitherdeleted text end the deleted text begincoordinated programdeleted text end employee and new text beginmatching new text endemployer
contribution rates deleted text beginper year in which any adjustment is implemented. A contribution rate
adjustment under this subdivision must not be made until at least two years have passed
since fully implementing a previous adjustment under this subdivision.
deleted text endnew text begin;
new text end

new text begin (2) greater than 1.99 percent and less than 4.01 percent, the incremental increase
may be up to 0.5 percent for the employee and matching employer contribution rates; or
new text end

new text begin (3) greater than four percent, the incremental increase may be up to 0.75 percent for
the employee and matching employer contribution.
new text end

new text begin (e) Any recommended adjustment to the contribution rates must be reported
to the chair and the executive director of the Legislative Commission on Pensions
and Retirement by January 15 following receipt of the most recent annual actuarial
valuation prepared under section 356.215. If the Legislative Commission on Pensions
and Retirement does not recommend against the rate change or does not recommend a
modification in the rate change, the recommended adjustment becomes effective on the
first day of the first full payroll period in the fiscal year following receipt of the most
recent actuarial valuation that gave rise to the adjustment.
new text end

new text begin (f) A contribution sufficiency of up to one percent of covered payroll must be held in
reserve to be used to offset any future actuarially required contributions that are more than
the total combined employee and employer contributions under subdivisions 2, 3, and 3a.
new text end

new text begin (g) Before any reduction in contributions to eliminate a sufficiency in excess of one
percent of covered pay may be recommended, the executive director must review any
need for a change in actuarial assumptions, as recommended by the actuary retained under
section 356.214 in the most recent experience study of the general employees retirement
plan prepared under section 356.215 and the standards for actuarial work promulgated by
the Legislative Commission on Pensions and Retirement that may result in an increase
in the actuarially required contribution and must report to the Legislative Commission
on Pensions and Retirement any recommendation by the board to use the sufficiency
exceeding one percent of covered payroll to offset the impact of an actuarial assumption
change recommended by the actuary retained under section 356.214, subdivision 1, and
reviewed by the actuary retained by the commission under section 356.214, subdivision 4.
new text end

new text begin (h) No contribution sufficiency in excess of one percent of covered pay may be
proposed to be used to increase benefits, and no benefit increase may be proposed that
would initiate an automatic adjustment to increase contributions under this subdivision.
Any proposed benefit improvement must include a recommendation, prepared by the
actuary retained under section 356.214, subdivision 1, and reviewed by the actuary
retained by the Legislative Commission on Pensions and Retirement as provided under
section 356.214, subdivision 4, on how the benefit modification will be funded.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 26.

Minnesota Statutes 2008, section 353.29, subdivision 1, is amended to read:


Subdivision 1.

Age and allowable service requirements.

Upon termination of
membership, a person who has attained normal retirement age and who deleted text beginreceived credit for
not less than three years of allowable service
deleted text end new text beginis vested under section 353.01, subdivision
47,
new text endis entitled upon application to a retirement annuity. The retirement annuity is known
as the "normal" retirement annuity.

new text begin EFFECTIVE DATE. new text end

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

Sec. 27.

Minnesota Statutes 2008, section 353.30, subdivision 1c, is amended to read:


Subd. 1c.

Pre-July 1, 1989, members: early retirement.

Upon termination of
public service, a person who first became a public employee or a member of a pension
fund listed in section 356.30, subdivision 3, before July 1, 1989, who has become at least
55 years old but not normal retirement age, and deleted text beginhas received credit for at least three years
of allowable service
deleted text end new text beginis vested under section 353.01, subdivision 47, new text endis entitlednew text begin,new text end upon
applicationnew text begin,new text end to a retirement annuity in an amount equal to the normal annuity provided in
section 353.29, subdivision 3, paragraph (a), reduced by one-quarter of one percent for
each month that the member is under normal retirement age at the time of retirement.

new text begin EFFECTIVE DATE. new text end

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

Sec. 28.

Minnesota Statutes 2008, section 353.32, subdivision 1, is amended to read:


Subdivision 1.

Before retirement.

If a member or former member who terminated
public service dies before retirement or before receiving any retirement annuity and no
other payment of any kind is or may become payable to any person, a refund deleted text beginshall be paiddeleted text end
new text begin is payable new text endto the designated beneficiary or, if there be none, to the surviving spouse,
or, if none, to the legal representative of the decedent's estate. deleted text beginSuchdeleted text end new text beginThe new text endrefund deleted text beginshalldeleted text end
new text begin must new text endbe in an amount equal to accumulated deductions plus new text beginannual compound new text endinterest
thereon at the rate deleted text beginof six percent per annum compounded annuallydeleted text end new text beginspecified in section
353.34, subdivision 2, and
new text endless the sum of any disability or survivor benefits, if any, that
may have been paid by the fund; provided that a survivor who has a right to benefits
deleted text begin pursuant todeleted text end new text beginunder new text endsection 353.31 may waive such benefits in writing, except such benefits
for a dependent child under the age of 18 years may only be waived deleted text beginpursuant todeleted text end new text beginunder new text endan
order of the district court.

new text begin EFFECTIVE DATE. new text end

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

Sec. 29.

Minnesota Statutes 2008, section 353.32, subdivision 1a, is amended to read:


Subd. 1a.

Surviving spouse optional annuity.

(a) If a member or former member
who deleted text beginhas credit for not less than three years of allowable servicedeleted text end new text beginis vested under section
353.01, subdivision 47,
new text endand new text beginwho new text enddies before the annuity or disability benefit begins to
accrue under section 353.29, subdivision 7, or 353.33, subdivision 2, notwithstanding any
designation of beneficiary to the contrary, the surviving spouse may elect to receive,
instead of a refund with interest under subdivision 1, or surviving spouse benefits otherwise
payable under section 353.31, an annuity equal to a 100 percent joint and survivor annuity
computed consistent with section 353.30, subdivision 1a, 1c, or 5, whichever is applicable.

(b) If a member first became a public employee or a member of a pension fund listed
in section 356.30, subdivision 3, before July 1, 1989, and has credit for at least 30 years
of allowable service on the date of death, the surviving spouse may elect to receive a
100 percent joint and survivor annuity computed using section 353.30, subdivision 1b,
except that the early retirement reduction under that provision will be applied from age
62 back to age 55 and one-half of the early retirement reduction from age 55 back to
the age payment begins.

(c) If a member who was under age 55 and deleted text beginhas credit for at least three years of
allowable service
deleted text end new text beginwho is vested under section 353.01, subdivision 47, new text enddies, but did not
qualify for retirement on the date of death, the surviving spouse may elect to receive a
100 percent joint and survivor annuity computed using section 353.30, subdivision 1c or
5, as applicable, except that the early retirement reduction specified in the applicable
subdivision will be applied to age 55 and one-half of the early retirement reduction from
age 55 back to the age payment begins.

(d) Notwithstanding the definition of surviving spouse in section 353.01, subdivision
20
, a former spouse of the member, if any, is entitled to a portion of the monthly surviving
spouse optional annuity if stipulated under the terms of a marriage dissolution decree filed
with the association. If there is no surviving spouse or child or children, a former spouse
may be entitled to a lump-sum refund payment under subdivision 1, if provided for in a
marriage dissolution decree, but not a monthly surviving spouse optional annuity, despite
the terms of a marriage dissolution decree filed with the association.

(e) The surviving spouse eligible for surviving spouse benefits under paragraph (a)
may apply for the annuity at any time after the date on which the deceased employee
would have attained the required age for retirement based on the employee's allowable
service. The surviving spouse eligible for surviving spouse benefits under paragraph (b) or
(c) may apply for an annuity any time after the member's death.

(f) Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred
annuity or surviving spouse benefit payable under this subdivision.

(g) An amount equal to any excess of the accumulated contributions that were
credited to the account of the deceased employee over and above the total of the annuities
paid and payable to the surviving spouse must be paid to the surviving spouse's estate.

(h) A member may specify in writing, with the signed consent of the spouse, that
this subdivision does not apply and that payment may be made only to the designated
beneficiary as otherwise provided by this chapter. The waiver of a surviving spouse
annuity under this section does not make a dependent child eligible for benefits under
subdivision 1c.

(i) If the deceased member or former member first became a public employee or a
member of a public pension plan listed in section 356.30, subdivision 3, on or after July
1, 1989, a survivor annuity computed under paragraph (a) or (c) must be computed as
specified in section 353.30, subdivision 5, except for the revised early retirement reduction
specified in paragraph (c), if paragraph (c) is the applicable provision.

(j) For any survivor annuity determined under this subdivision, the payment is to be
based on the total allowable service that the member had accrued as of the date of death
and the age of the member and surviving spouse on that date.

new text begin EFFECTIVE DATE. new text end

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

Sec. 30.

Minnesota Statutes 2009 Supplement, section 353.33, subdivision 1, is
amended to read:


Subdivision 1.

Age, service, and salary requirements.

new text begin(a) new text endA coordinated or
basic member who deleted text beginhas at least three years of allowable servicedeleted text end new text beginis vested under section
353.01, subdivision 47,
new text endand new text beginwho new text endbecomes totally and permanently disabled before normal
retirement age, upon application as defined under section 353.031, is entitled to a disability
benefit in an amount determined under subdivision 3.

new text begin (b)new text end If the disabled person's public service has terminated at any time, at least two of
the deleted text beginrequired threedeleted text end years of allowable service new text beginrequired to be vested under section 353.01,
subdivision 47,
new text endmust have been rendered after last becoming an active member.

new text begin EFFECTIVE DATE. new text end

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

Sec. 31.

Minnesota Statutes 2008, section 353.34, subdivision 1, is amended to read:


Subdivision 1.

Refund or deferred annuity.

(a) A former member is entitled to
new text begin either new text enda refund of accumulated employee deductions under subdivision 2, or to a deferred
annuity under subdivision 3. Application for a refund may not be made before the date of
termination of public service. Except as specified in paragraph (b), a refund must be paid
within 120 days following receipt of the application unless the applicant has again become
a public employee required to be covered by the association.

(b) If an individual was placed on layoff under section 353.01, subdivision 12 or 12c,
a refund is not payable before termination of service under section 353.01, subdivision 11a.

(c) An individual who terminates public service covered by the Public Employees
Retirement Association general employees retirement plan, the Public Employees
Retirement Association police and fire retirement plan, or the public employees local
government deleted text begincorrectionsdeleted text end new text begincorrectional new text endservice retirement plan, and who is employed by a
different employer and who becomes an active member covered by one of the other two
plans, may receive a refund of employee contributions plus deleted text beginsix percentdeleted text end new text beginannual compound
new text endinterest deleted text begincompounded annuallydeleted text end from the plan from which the member terminated servicenew text begin at
the applicable rate specified in subdivision 2
new text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 32.

Minnesota Statutes 2008, section 353.34, subdivision 2, is amended to read:


Subd. 2.

Refund with interest.

new text begin(a) new text endExcept as provided in subdivision 1, any person
who ceases to be a public employee deleted text beginshalldeleted text end new text beginis entitled to new text endreceive a refund in an amount equal
to accumulated deductions with new text beginannual compound new text endinterest to the first day of the month
in which the refund is processed deleted text beginat the rate of six percent compounded annually based
on fiscal year balances
deleted text end.

new text begin (b) For a person who ceases to be a public employee before July 1, 2011, the refund
interest is at the rate of six percent to June 30, 2011, and at the rate of four percent after
June 30, 2011. For a person who ceases to be a public employee after July 1, 2011, the
refund interest is at the rate of four percent.
new text end

new text begin (c)new text end If a person repays a refund and subsequently applies for another refund, the
repayment amount, including interest, is added to the fiscal year balance in which the
repayment was made.

new text begin EFFECTIVE DATE. new text end

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

Sec. 33.

Minnesota Statutes 2008, section 353.34, subdivision 3, is amended to read:


Subd. 3.

Deferred annuity; eligibility; computation.

new text begin(a) new text endA member deleted text beginwith at least
three years of allowable service
deleted text end new text beginwho is vested under section 353.01, subdivision 47, new text endwhen
termination of public service or termination of membership occurs has the option of
leaving the accumulated deductions in the fund and being entitled to a deferred retirement
annuity commencing at normal retirement age or to a deferred early retirement annuity
under section 353.30, subdivision 1a, 1b, 1c, or 5.

new text begin (b)new text end The deferred annuity must be computed under section 353.29, subdivision 3, on
the basis of the law in effect on the date of termination of public service or termination of
membership, whichever is earlier, and must be augmented as provided in section 353.71,
subdivision 2
.

new text begin (c)new text end A former member qualified to apply for a deferred retirement annuity may
revoke this option at any time before the commencement of deferred annuity payments
by making application for a refund. The person is entitled to a refund of accumulated
member contributions within 30 days following date of receipt of the application by the
executive director.

new text begin EFFECTIVE DATE. new text end

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

Sec. 34.

Minnesota Statutes 2009 Supplement, section 353.65, subdivision 2, is
amended to read:


Subd. 2.

Employee contribution.

The employee contribution is 9.4 percent of the
salary of the membernew text begin in calendar year 2010 and is 9.6 percent of the salary of the member
in each calendar year after 2010
new text end. This contribution must be made by deduction from
salary in the manner provided in subdivision 4. Where any portion of a member's salary
is paid from other than public funds, the member's employee contribution is based on
the total salary received from all sources.

new text begin EFFECTIVE DATE. new text end

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

Sec. 35.

Minnesota Statutes 2009 Supplement, section 353.65, subdivision 3, is
amended to read:


Subd. 3.

Employer contribution.

The employer contribution is 14.1 percent of the
salary of the membernew text begin in calendar year 2010 and is 14.4 percent of the salary of the member
in each calendar year after 2010
new text end. This contribution must be made from funds available to
the employing subdivision by the means and in the manner provided in section 353.28.

new text begin EFFECTIVE DATE. new text end

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

Sec. 36.

Minnesota Statutes 2008, section 353.651, subdivision 1, is amended to read:


Subdivision 1.

Age and allowable service requirements.

Upon separation from
public service, any police officer or firefighter member who has attained the age of at
least 55 years and who deleted text beginreceived credit for not less than three years of allowable servicedeleted text end
new text begin is vested under section 353.01, subdivision 47, new text endis entitled upon application to a retirement
annuitydeleted text begin. Such retirement annuity isdeleted text endnew text begin,new text end known as the "normal" retirement annuity.

new text begin EFFECTIVE DATE. new text end

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

Sec. 37.

Minnesota Statutes 2008, section 353.651, subdivision 4, is amended to read:


Subd. 4.

Early retirement.

(a) A person who becomes a police and fire plan
member after June 30, 2007, or a former member who is reinstated as a member of the
plan after that date, who is at least 50 years of age deleted text beginwith at least three years of allowable
service
deleted text endnew text begin and who is vested under section 353.01, subdivision 47new text end, upon the termination of
public service is entitled upon application to a retirement annuity equal to the normal
annuity calculated under subdivision 3, reduced by two-tenths of one percent for each
month that the member is under age 55 at the time of retirement.

(b) Upon the termination of public service, any police and fire plan member not
specified in paragraph (a), upon attaining at least 50 years of age with at least three years
of allowable service is entitled upon application to a retirement annuity equal to the
normal annuity calculated under subdivision 3, reduced by one-tenth of one percent for
each month that the member is under age 55 at the time of retirement.

new text begin EFFECTIVE DATE. new text end

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

Sec. 38.

Minnesota Statutes 2008, section 353.657, subdivision 1, is amended to read:


Subdivision 1.

Generally.

(a) In the event that a member of the police and fire
fund dies from any cause before retirement or before becoming disabled and receiving
disability benefits, the association shall grant survivor benefits to a surviving spouse, as
defined in section 353.01, subdivision 20, and to a dependent child or children, as defined
in section 353.01, subdivision 15, except that if the death is not a line of duty death, the
member must deleted text beginhave accrued at least three years of credited servicedeleted text endnew text begin be vested under section
353.01, subdivision 47
new text end.

(b) Notwithstanding the definition of surviving spouse, a former spouse of the
member, if any, is entitled to a portion of the monthly surviving spouse benefit if
stipulated under the terms of a marriage dissolution decree filed with the association. If
there is no surviving spouse or child or children, a former spouse may be entitled to
a lump-sum refund payment under section 353.32, subdivision 1, if provided for in a
marriage dissolution decree but not a monthly surviving spouse benefit despite the terms
of a marriage dissolution decree filed with the association.

(c) The spouse and child or children are entitled to monthly benefits as provided in
subdivisions 2 to 4.

new text begin EFFECTIVE DATE. new text end

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

Sec. 39.

Minnesota Statutes 2008, section 353.657, subdivision 2a, is amended to read:


Subd. 2a.

Death while eligible survivor benefit.

(a) If a member or former member
who has attained the age of at least 50 years and deleted text beginhas credit for not less than three years
allowable service
deleted text end new text begineither who is vested under section 353.01, subdivision 47, new text endor who has
credit for at least 30 years of allowable service, regardless of age attained, dies before
the annuity or disability benefit becomes payable, notwithstanding any designation of
beneficiary to the contrary, the surviving spouse may elect to receive a death while
eligible survivor benefit.

(b) Notwithstanding the definition of surviving spouse in section 353.01, subdivision
20
, a former spouse of the member, if any, is entitled to a portion of the death while
eligible survivor benefit if stipulated under the terms of a marriage dissolution decree
filed with the association. If there is no surviving spouse or child or children, a former
spouse may be entitled to a lump-sum refund payment under section 353.32, subdivision
1
, if provided for in a marriage dissolution decree but not a death while eligible survivor
benefit despite the terms of a marriage dissolution decree filed with the association.

(c) The benefit may be elected instead of a refund with interest under section 353.32,
subdivision 1
, or surviving spouse benefits otherwise payable under subdivisions 1 and
2. The benefit must be an annuity equal to the 100 percent joint and survivor annuity
which the member could have qualified for on the date of death, computed as provided in
sections 353.651, subdivisions 2 and 3, and 353.30, subdivision 3.

(d) The surviving spouse may apply for the annuity at any time after the date
on which the deceased employee would have attained the required age for retirement
based on the employee's allowable service. Sections 353.34, subdivision 3, and 353.71,
subdivision 2
, apply to a deferred annuity payable under this subdivision.

(e) No payment accrues beyond the end of the month in which entitlement to
such annuity has terminated. An amount equal to the excess, if any, of the accumulated
contributions which were credited to the account of the deceased employee over and
above the total of the annuities paid and payable to the surviving spouse must be paid to
the deceased member's last designated beneficiary or, if none, to the legal representative of
the estate of such deceased member.

(f) Any member may request in writing, with the signed consent of the spouse, that
this subdivision not apply and that payment be made only to the designated beneficiary, as
otherwise provided by this chapter.

(g) For a member who is employed as a full-time firefighter by the Department of
Military Affairs of the state of Minnesota, allowable service as a full-time state Military
Affairs Department firefighter credited by the Minnesota State Retirement System may be
used in meeting the minimum allowable service requirement of this subdivision.

new text begin EFFECTIVE DATE. new text end

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

Sec. 40.

Minnesota Statutes 2008, section 353.71, subdivision 1, is amended to read:


Subdivision 1.

Eligibility.

Any person who has been a member of new text begina defined benefit
retirement plan administered by
new text endthe Public Employees Retirement Association, or new text begina
retirement plan administered by
new text endthe Minnesota State Retirement System, or the Teachers
Retirement Association, or any other public retirement system in the state of Minnesota
having a like provision, except a deleted text beginfunddeleted text end new text beginretirement plan new text endproviding benefits for police officers
or firefighters governed by sections 69.77 or 69.771 to 69.776, deleted text beginshall bedeleted text end new text beginis new text endentitlednew text begin,new text end when
qualifiednew text begin,new text end to an annuity from each deleted text beginfunddeleted text end new text beginretirement plan new text endif the total allowable service in all
deleted text begin fundsdeleted text end new text beginretirement plans new text endor in any two of these deleted text beginfundsdeleted text end new text beginretirement plans new text endtotals deleted text beginthree or more
years
deleted text endnew text begin the number of years of allowable service required to receive a normal retirement
annuity for that retirement plan
new text end, provided new text beginthat new text endno portion of the allowable service upon
which the retirement annuity from one deleted text beginfunddeleted text end new text beginretirement plan new text endis based is again used in the
computation for benefits from another deleted text beginfunddeleted text end new text beginretirement plan new text endand provided further that the
person has not taken a refund from any one of these deleted text beginfundsdeleted text end new text beginretirement plans new text endsince the
person's membership in that association or system last terminated. The annuity from
each fund deleted text beginshalldeleted text end new text beginmust new text endbe determined by the appropriate provisions of the law except that
the requirement that a person must have at least deleted text beginthree yearsdeleted text end new text begina specific minimum period
new text endof allowable service in the respective association or system deleted text beginshalldeleted text end new text begindoes new text endnot apply for the
purposes of this section deleted text beginprovideddeleted text end new text beginif new text endthe combined service in two or more of these deleted text beginfundsdeleted text end
new text begin retirement plans new text endequals deleted text beginthree or moredeleted text end new text beginthe number of new text endyearsnew text begin of allowable service required to
receive a normal retirement annuity for that retirement plan
new text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 41.

Minnesota Statutes 2008, section 353.71, subdivision 2, is amended to read:


Subd. 2.

Deferred annuity computation; augmentation.

(a) The deferred annuity
accruing under subdivision 1, or under sections 353.34, subdivision 3, and 353.68,
subdivision 4
, must be computed on the basis of allowable service prior to the termination
of public service and augmented as provided in this deleted text beginparagraphdeleted text endnew text begin subdivisionnew text end. The required
reserves applicable to a deferred annuity, or to any deferred segment of an annuity must
be determined as of the first day of the month following the month in which the former
member ceased to be a public employee, or July 1, 1971, whichever is later. deleted text beginThese
deleted text end

new text begin (b) For a person who became a public employee before July 1, 2006, whose period
of deferral began after June 30, 1971, and who terminated public employment before
January 1, 2011, the
new text end required reserves new text beginof the deferred annuity new text endmust be augmented at
the new text beginfollowing applicable new text endrate deleted text beginofdeleted text end new text begin or rates:
new text end

new text begin (1) new text endfive percent deleted text beginannually compounded annuallydeleted text end new text beginannual compound interest new text enduntil
January 1, 1981deleted text begin, and at the rate ofdeleted text endnew text begin;
new text end

new text begin (2) new text end three percent deleted text beginthereafterdeleted text end new text beginannual compound interest after January 1, 1981, or until
the earlier of December 31, 2010, or after the date of the termination of public service or
the termination of membership, whichever is later,
new text enduntil January 1 of the year following
the year in which the former member attains age 55 deleted text beginanddeleted text endnew text begin;
new text end

new text begin (3) five percent annual compound interestnew text end from deleted text beginthat date to the effective date of
retirement, the rate is five percent compounded annually if the employee became an
employee before July 1, 2006, and at 2.5 percent compounded annually if the employee
becomes an
deleted text endnew text begin January 1 of the year following the year in which the former member attains
age 55, or until December 31, 2010, whichever is earlier; and
new text end

new text begin (4) one percent annual compound interest from January 1, 2011.
new text end

new text begin (c) For a person who became a publicnew text end employee after June 30, 2006new text begin, and who
terminated public employment before January 1, 2011, the required reserves of the
deferred annuity must be augmented at 2.5 percent annual compound interest from the date
of termination of public service or termination of membership, whichever is earlier, until
December 31, 2010, and one percent annual compound interest after December 31, 2010
new text end.

new text begin (d) For a person who terminates public employment after December 31, 2010, the
required reserves of the deferred annuity must not be augmented.
new text end

new text begin (e)new text end If a person has more than one period of uninterrupted service, the required
reserves related to each period must be augmented as specified in this paragraph. The sum
of the augmented required reserves is the present value of the annuity. Uninterrupted
service for the purpose of this subdivision means periods of covered employment during
which the employee has not been separated from public service for more than two years.
If a person repays a refund, the restored service must be considered as continuous with the
next period of service for which the employee has credit with this association. This section
must not reduce the annuity otherwise payable under this chapter. This paragraph applies
to individuals who become deferred annuitants on or after July 1, 1971. For a member
who became a deferred annuitant before July 1, 1971, the paragraph applies from July 1,
1971, if the former active member applies for an annuity after July 1, 1973.

deleted text begin (b)deleted text end new text begin(f) new text endThe retirement annuity or disability benefit of, or the survivor benefit payable
on behalf of, a former member who terminated service before July 1, 1997, or the
survivor benefit payable on behalf of a basic or police and fire member who was receiving
disability benefits before July 1, 1997, which is first payable after June 30, 1997, must
be increased on an actuarial equivalent basis to reflect the change in the postretirement
interest rate actuarial assumption under section 356.215, subdivision 8, from five percent
to six percent under a calculation procedure and tables adopted by the board and approved
by the actuary retained under section 356.214.

new text begin EFFECTIVE DATE. new text end

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

Sec. 42.

Minnesota Statutes 2008, section 353E.04, subdivision 1, is amended to read:


Subdivision 1.

Eligibility requirements.

After termination of public employment,
an employee covered under section 353E.02 who has attained the age of at least 55 years
and deleted text beginhas credit for not less than three years of coveragedeleted text end new text beginwho is vested under section
353.01, subdivision 47,
new text endin the local government correctional service plan is entitled, upon
application, to a normal retirement annuity. Instead of a normal retirement annuity, a
retiring employee may elect to receive the optional annuity provided in section 353.30,
subdivision 3
.

new text begin EFFECTIVE DATE. new text end

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

Sec. 43.

Minnesota Statutes 2008, section 353E.04, subdivision 4, is amended to read:


Subd. 4.

Early retirement.

An employee covered under section 353E.02 who has
attained the age of at least 50 years and deleted text beginhas credit for not less than three years of coveragedeleted text end
new text begin who is vested under section 353.01, subdivision 47, new text endin the local government correctional
service plan is entitled, upon application, to a reduced retirement annuity equal to the
annuity calculated under subdivision 3, reduced so that the reduced annuity is the actuarial
equivalent of the annuity that would be payable if the employee deferred receipt of the
annuity from the day the annuity begins to accrue until age 55.

new text begin EFFECTIVE DATE. new text end

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

Sec. 44.

Minnesota Statutes 2008, section 353E.07, subdivision 1, is amended to read:


Subdivision 1.

Member at least age 50.

If a member or former member of the local
government correctional service retirement plan who has attained the age of at least 50
years and deleted text beginhas credit for not less than three years of allowable servicedeleted text end new text beginwho is vested under
section 353.01, subdivision 47,
new text enddies before the annuity or disability benefit has become
payable, notwithstanding any designation of beneficiary to the contrary, the surviving
spouse may elect to receive, in lieu of a refund with interest provided in section 353.32,
subdivision 1
, a surviving spouse annuity equal to the 100 percent joint and survivor
annuity for which the member could have qualified had the member terminated service
on the date of death.

new text begin EFFECTIVE DATE. new text end

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

Sec. 45.

Minnesota Statutes 2008, section 353E.07, subdivision 2, is amended to read:


Subd. 2.

Member not yet age 50.

If the member was under age 50, dies, and deleted text beginhad
credit for not less than three years of allowable service
deleted text end new text beginwas vested under section 353.01,
subdivision 47,
new text endon the date of death but did not yet qualify for retirement, the surviving
spouse may elect to receive a 100 percent joint and survivor annuity based on the age
of the employee and the surviving spouse at the time of death. The annuity is payable
using the early retirement reduction under section 353E.04, subdivision 4, to age 50 and
one-half the early retirement reduction from age 50 to the age payment begins. Sections
353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred annuity or surviving
spouse benefit payable under this subdivision.

new text begin EFFECTIVE DATE. new text end

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

Sec. 46.

Minnesota Statutes 2008, section 353F.03, is amended to read:


353F.03 VESTING RULE FOR CERTAIN EMPLOYEES.

Notwithstanding any provision of chapter 353 to the contrary, a terminated medical
facility or other public employing unit employee is eligible to receive a retirement annuity
under section 353.29 of the edition of Minnesota Statutes published in the year before the
year in which the privatization occurred, without regard to the requirement deleted text beginfor three years
of allowable service
deleted text endnew text begin specified in section 353.01, subdivision 47new text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 47.

Minnesota Statutes 2009 Supplement, section 354.42, subdivision 2, is
amended to read:


Subd. 2.

Employee contribution.

(a) For a basic member, the employee
contribution to the fund is deleted text begin9.0 percentdeleted text end new text beginthe following percentage new text endof the member's salarydeleted text begin.deleted text endnew text begin:
new text end

new text begin before July 1, 2011
new text end
new text begin 9.0 percent
new text end
new text begin from July 1, 2011, until June 30, 2012
new text end
new text begin 9.5 percent
new text end
new text begin from July 1, 2012, until June 30, 2013
new text end
new text begin 10.0 percent
new text end
new text begin from July 1, 2013, until June 30, 2014
new text end
new text begin 10.5 percent
new text end
new text begin after June 30, 2014
new text end
new text begin 11.0 percent
new text end

new text begin (b)new text end For a coordinated member, the employee contribution is deleted text begin5.5 percentdeleted text end new text begin the following
percentage
new text endof the member's salarydeleted text begin.deleted text endnew text begin:
new text end

new text begin before July 1, 2011
new text end
new text begin 5.5 percent
new text end
new text begin from July 1, 2011, until June 30, 2012
new text end
new text begin 6.0 percent
new text end
new text begin from July 1, 2012, until June 30, 2013
new text end
new text begin 6.5 percent
new text end
new text begin from July 1, 2013, until June 30, 2014
new text end
new text begin 7.0 percent
new text end
new text begin after June 30, 2014
new text end
new text begin 7.5 percent
new text end

new text begin (c) When an employee contribution rate changes for a fiscal year, the new
contribution rate is effective for the entire salary paid for each employer unit with the
first payroll cycle reported.
new text end

new text begin (d) After June 30, 2015, if a contribution rate revision is required under subdivisions
4a, 4b, and 4c, the employee contributions under paragraphs (a) and (b) must be adjusted
accordingly.
new text end

deleted text begin (b)deleted text end new text begin(e) new text endThis contribution must be made by deduction from salary. Where any portion
of a member's salary is paid from other than public funds, the member's employee
contribution must be based on the entire salary received.

new text begin EFFECTIVE DATE. new text end

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

Sec. 48.

Minnesota Statutes 2008, section 354.42, subdivision 3, is amended to read:


Subd. 3.

Employer.

(a) The deleted text beginregular employer contribution to the fund by Special
School District No. 1, Minneapolis, after July 1, 2006, and before July 1, 2007, is an
amount equal to 5.0 percent of the salary of each of its teachers who is a coordinated
member and 9.0 percent of the salary of each of its teachers who is a basic member. After
July 1, 2007, the
deleted text end regular employer contribution to the fund by Special School District No.
1, Minneapolis, is an amount equal to deleted text begin5.5 percentdeleted text end new text beginthe applicable following percentage new text endof
salary of each coordinated member and deleted text begin9.5 percentdeleted text end new text beginthe applicable following percentage
new text endof salary of each basic memberdeleted text begin.deleted text endnew text begin:
new text end

new text begin Period
new text end
new text begin Coordinated Member
new text end
new text begin Basic Member
new text end
new text begin before July 1, 2011
new text end
new text begin 5.5 percent
new text end
new text begin 9.5 percent
new text end
new text begin from July 1, 2011, until June 30, 2012
new text end
new text begin 6.0 percent
new text end
new text begin 10.0 percent
new text end
new text begin from July 1, 2012, until June 30, 2013
new text end
new text begin 6.5 percent
new text end
new text begin 10.5 percent
new text end
new text begin from July 1, 2013, until June 30, 2014
new text end
new text begin 7.0 percent
new text end
new text begin 11.0 percent
new text end
new text begin after June 30, 2014
new text end
new text begin 7.5 percent
new text end
new text begin 11.5 percent
new text end

The additional employer contribution to the fund by Special School District No. 1,
Minneapolis, deleted text beginafter July 1, 2006,deleted text end is an amount equal to 3.64 percent of the salary of each
teacher who is a coordinated member or is a basic member.

(b) The employer contribution to the fund for every other employer is an amount
equal to deleted text begin5.0 percentdeleted text end new text beginthe applicable following percentage new text endof the salary of each coordinated
member and deleted text begin9.0 percentdeleted text end new text beginthe applicable following percentage new text endof the salary of each basic
member deleted text beginbefore July 1, 2007, and 5.5 percent of the salary of each coordinated member
and 9.5 percent of the salary of each basic member after June 30, 2007.
deleted text endnew text begin:
new text end

new text begin Period
new text end
new text begin Coordinated Member
new text end
new text begin Basic Member
new text end
new text begin before July 1, 2011
new text end
new text begin 5.5 percent
new text end
new text begin 9.5 percent
new text end
new text begin from July 1, 2011, until June 30, 2012
new text end
new text begin 6.0 percent
new text end
new text begin 10.0 percent
new text end
new text begin from July 1, 2012, until June 30, 2013
new text end
new text begin 6.5 percent
new text end
new text begin 10.5 percent
new text end
new text begin from July 1, 2013, until June 30, 2014
new text end
new text begin 7.0 percent
new text end
new text begin 11.0 percent
new text end
new text begin after June 30, 2014
new text end
new text begin 7.5 percent
new text end
new text begin 11.5 percent
new text end

new text begin (c) When an employer contribution rate changes for a fiscal year, the new
contribution rate is effective for the entire salary paid for each employer unit with the
first payroll cycle reported.
new text end

new text begin (d) After June 30, 2015, if a contribution rate revision is made under subdivisions
4a, 4b, and 4c, the employer contributions under paragraphs (a) and (b) must be adjusted
accordingly.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 49.

Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision
to read:


new text begin Subd. 4a. new text end

new text begin Determination. new text end

new text begin (a) For purposes of this section, a contribution
sufficiency exists if the total of the employee contributions, the employer contributions,
and any additional employer contributions, if applicable, exceeds the total of the normal
cost, the administrative expenses, and the amortization contribution of the retirement plan
as reported in the most recent actuarial valuation of the retirement plan prepared by the
approved actuary retained under section 356.214 and prepared under section 356.215
and the standards for actuarial work of the Legislative Commission on Pensions and
Retirement.
new text end

new text begin (b) For purposes of this section, a contribution deficiency exists if the total of
the employee contributions, the employer contributions, and any additional employer
contributions are less than the total of the normal cost, the administrative expenses, and
the amortization contribution of the retirement plan as reported in the most recent actuarial
valuation of the retirement plan prepared by the approved actuary retained under section
356.214 and prepared under section 356.215 and the standards for actuarial work of the
Legislative Commission on Pensions and Retirement.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 50.

Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision
to read:


new text begin Subd. 4b. new text end

new text begin Contribution rate revision. new text end

new text begin Notwithstanding the contribution rate
provisions under subdivisions 2 and 3, the employee and employer contribution rates
may be adjusted as follows:
new text end

new text begin (1) if, after June 30, 2015, the regular actuarial valuation of the plan under section
356.215 indicates that there is a contribution sufficiency under subdivision 4a equal to
or greater than one percent of covered payroll and the sufficiency has existed for at least
two consecutive years, the employee and employer contribution rates for the plan may
each be decreased to a level such that the sufficiency equals no more than one percent of
covered payroll based on the most recent actuarial valuation; or
new text end

new text begin (2) if, after June 30, 2015, the regular valuation of the plan under section 356.215
indicates that there is a deficiency equal to or greater than 0.25 percent of covered payroll
and the deficiency has existed for at least two consecutive years, the employee and
employer contribution rates for the applicable plan may each be increased by:
new text end

new text begin (i) 0.25 percent if the deficiency is less than 2.00 percent of covered payroll;
new text end

new text begin (ii) 0.5 percent if the deficiency is equal to or greater than 2.00 percent of covered
payroll and less than or equal to four percent; and
new text end

new text begin (iii) 0.75 percent if the deficiency is greater than four percent.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 51.

Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision
to read:


new text begin Subd. 4c. new text end

new text begin Contribution sufficiency measures. new text end

new text begin (a) A contribution sufficiency of up
to one percent of covered payroll must be held in reserve to be used to offset any future
actuarially required contributions that are more than the total combined employee and
employer contributions being collected.
new text end

new text begin (b) Before any reduction in contributions to eliminate a sufficiency in excess of one
percent of covered pay may be recommended, the executive director must review any
need for a change in actuarial assumptions, as recommended by the actuary retained
under section 356.214 in the most recent experience study of the retirement plan, that
may result in an increase in the actuarially required contribution and must report to the
Legislative Commission on Pensions and Retirement any recommendation by the board
to use the sufficiency exceeding one percent of covered payroll to offset the impact of
an actuarial assumption change recommended by the actuary retained under section
356.214, subdivision 1, and reviewed by the actuary retained by the commission under
section 356.214, subdivision 4.
new text end

new text begin (c) A contribution sufficiency in excess of one percent of covered pay must not be
used to increase benefits, and a benefit increase must not be proposed that would initiate
an automatic adjustment under this section to increase contributions. A proposed benefit
improvement must include a recommendation, prepared by the actuary retained under
section 356.214, subdivision 1, and reviewed by the actuary retained by the Legislative
Commission on Pensions and Retirement, as provided under section 356.214, subdivision
4, on the manner in which the benefit modification is to be funded.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 52.

Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision
to read:


new text begin Subd. 4d. new text end

new text begin Reporting; commission review. new text end

new text begin A contribution rate increase or decrease
under subdivision 4b, as determined by the executive director of the Teachers Retirement
Association, must be reported to the chair and the executive director of the Legislative
Commission on Pensions and Retirement on or before the next February 1 and, if the
Legislative Commission on Pensions and Retirement does not recommend against the rate
change or does not recommend a modification in the rate change, is effective on the next
July 1 following the determination by the executive director that a contribution deficiency
or sufficiency exists based on the most recent actuarial valuation under section 356.215.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 53.

Minnesota Statutes 2009 Supplement, section 354.47, subdivision 1, is
amended to read:


Subdivision 1.

Death before retirement.

(a) If a member dies before retirement
and is covered under section 354.44, subdivision 2, and neither an optional annuity, nor a
reversionary annuity, nor a benefit under section 354.46, subdivision 1, is payable to the
survivors if the member was a basic member, then the surviving spouse, or if there is no
surviving spouse, the designated beneficiary is entitled to an amount equal to the member's
accumulated deductions with interest credited to the account of the member to the date of
death of the member. If the designated beneficiary is a minor, interest must be credited to
the date the beneficiary reaches legal age, or the date of receipt, whichever is earlier.

(b) If a member dies before retirement and is covered under section 354.44,
subdivision 6
, and neither an optional annuity, nor reversionary annuity, nor the benefit
described in section 354.46, subdivision 1, is payable to the survivors if the member
was a basic member, then the surviving spouse, or if there is no surviving spouse,new text begin then
new text endthe designated beneficiary is entitled to deleted text beginan amount equal to the member's accumulated
deductions credited to the account of the member as of June 30, 1957, and from July 1,
1957, to the date of death of the member, the member's accumulated deductions plus six
percent interest compounded annually.
deleted text end new text begina refund equal to the accumulated deductions
credited to the member's account plus interest compounded annually until the member's
date of death using the following interest rates:
new text end

new text begin (1) before July 1, 1957, no interest accrues;
new text end

new text begin (2) July 1, 1957, to June 30, 2011, six percent; and
new text end

new text begin (3) after June 30, 2011, four percent.
new text end

(c) If the designated beneficiary under paragraph (b) is a minor, any interest credited
under that paragraph must be credited to the date the beneficiary reaches legal age, or
the date of receipt, whichever is earlier.

(d) The amount of any refund payable under this subdivision must be reduced by
any permanent disability payment under section 354.48 received by the member.

new text begin EFFECTIVE DATE. new text end

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

Sec. 54.

Minnesota Statutes 2009 Supplement, section 354.49, subdivision 2, is
amended to read:


Subd. 2.

Calculation.

(a) Except as provided in section 354.44, subdivision 1,
any person who ceases to be a member by reason of termination of teaching service, is
entitled to receive a refund in an amount equal to the accumulated deductions credited
to the account deleted text beginas of June 30, 1957, and after July 1, 1957, the accumulated deductions
with interest at the rate of six percent per annum compounded annually.
deleted text end new text beginplus interest
compounded annually using the following interest rates:
new text end

new text begin (1) before July 1, 1957, no interest accrues;
new text end

new text begin (2) July 1, 1957, to June 30, 2011, six percent; and
new text end

new text begin (3) after June 30, 2011, four percent.
new text end

For the purpose of this subdivision, interest must be computed on fiscal year end
balances to the first day of the month in which the refund is issued.

(b) If the person has received permanent disability payments under section 354.48,
the refund amount must be reduced by the amount of those payments.

new text begin EFFECTIVE DATE. new text end

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

Sec. 55.

Minnesota Statutes 2009 Supplement, section 354.55, subdivision 11, is
amended to read:


Subd. 11.

Deferred annuity; augmentation.

(a) Any person covered under section
354.44, subdivision 6, who ceases to render teaching service, may leave the person's
accumulated deductions in the fund for the purpose of receiving a deferred annuity
at retirement.

(b) The amount of the deferred retirement annuity is determined by section 354.44,
subdivision 6
, and augmented as provided in this subdivision. The required reserves for
the annuity which had accrued when the member ceased to render teaching service must
be augmented, as further specified in this subdivision, by new text beginthe applicable new text endinterest new text beginrate
new text endcompounded annually from the first day of the month following the month during which
the member ceased to render teaching service to the effective date of retirement.

(c) No augmentation is not creditable if the deferral period is less than three months
or if deferral commenced before July 1, 1971.

(d) For persons who became covered employees before July 1, 2006, with a deferral
period commencing after June 30, 1971, the annuity must be augmented deleted text beginusingdeleted text end new text beginas follows:
new text end

new text begin (1) new text endfive percent interest compounded annually until January 1, 1981deleted text begin, anddeleted text endnew text begin;
new text end

new text begin (2)new text end three percent interest compounded annually deleted text beginthereafterdeleted text endnew text begin from January 1, 1981,new text end until
January 1 of the year following the year in which the deferred annuitant attains age 55deleted text begin.deleted text endnew text begin;
new text end

deleted text beginFrom that datedeleted text end new text begin(3) five percent interest compounded annually from the date
established in clause (2)
new text endto the effective date of retirementdeleted text begin, the rate is five percent
compounded annually.
deleted text endnew text begin or until June 30, 2011, whichever is earlier; and
new text end

new text begin (4) two percent interest compounded annually after June 30, 2011.
new text end

(e) For persons who become covered employees after June 30, 2006, the interest
rate used to augment the deferred annuity is 2.5 percent interest compounded annuallynew text begin
until June 30, 2011, or until the effective date of retirement, whichever is earlier, and two
percent interest compounded annually after June 30, 2011
new text end.

(f) If a person has more than one period of uninterrupted service, a separate average
salary determined under section 354.44, subdivision 6, must be used for each period
and the required reserves related to each period must be augmented as specified in this
subdivision. The sum of the augmented required reserves is the present value of the
annuity. For the purposes of this subdivision, "period of uninterrupted service" means a
period of covered teaching service during which the member has not been separated from
active service for more than one fiscal year.

(g) If a person repays a refund, the service restored by the repayment must be
considered as continuous with the next period of service for which the person has
allowable service credit in the Teachers Retirement Association.

(h) If a person does not render teaching service in any one fiscal year or more
consecutive fiscal years and then resumes teaching service, the formula percentages used
from the date of the resumption of teaching service must be those applicable to new
members.

(i) The mortality table and interest new text beginrate actuarial new text endassumption used to compute the
annuity must be the applicable mortality table established by the board under section
354.07, subdivision 1, and the interest rate new text beginactuarial new text endassumption under section 356.215 in
effect when the member retires.

(j) In no case may the annuity payable under this subdivision be less than the amount
of annuity payable under section 354.44, subdivision 6.

(k) The requirements and provisions for retirement before normal retirement age
contained in section 354.44, subdivision 6, also apply to an employee fulfilling the
requirements with a combination of service as provided in section 354.60.

(l) The augmentation provided by this subdivision applies to the benefit provided
in section 354.46, subdivision 2.

(m) The augmentation provided by this subdivision does not apply to any period
in which a person is on an approved leave of absence from an employer unit covered
by the provisions of this chapter.

(n) The retirement annuity or disability benefit of, or the survivor benefit payable on
behalf of, a former teacher who terminated service before July 1, 1997, which is not first
payable until after June 30, 1997, must be increased on an actuarial equivalent basis to
reflect the change in the postretirement interest rate actuarial assumption under section
356.215, subdivision 8, from five percent to six percent under a calculation procedure and
tables adopted by the board as recommended by an approved actuary and approved by the
actuary retained under section 356.214.

new text begin EFFECTIVE DATE. new text end

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

Sec. 56.

Minnesota Statutes 2008, section 354A.12, subdivision 1, is amended to read:


Subdivision 1.

Employee contributions.

new text begin(a) new text endThe contribution required to be paid
by each member of a teachers retirement fund association deleted text beginshall not be less thandeleted text end new text beginis new text endthe
percentage of total salary specified below for the applicable association and program:

Association and Program
Percentage of Total Salary
Duluth Teachers Retirement Fund Association
old law and new law
coordinated programs
deleted text begin 5.5 percent
deleted text end
new text begin before July 1, 2011
new text end
new text begin 5.5 percent
new text end
new text begin effective July 1, 2011
new text end
new text begin 6.0 percent
new text end
new text begin effective July 1, 2012
new text end
new text begin 6.5 percent
new text end
St. Paul Teachers Retirement Fund Association
basic program new text beginbefore July 1, 2010
new text end
8 percent
new text begin basic program after June 30, 2010
new text end
new text begin 8.5 percent
new text end
new text begin basic program after June 30, 2011
new text end
new text begin 9.0 percent
new text end
coordinated programnew text begin before July 1, 2010
new text end
5.5 percent
new text begin coordinated program after June 30, 2010
new text end
new text begin 6.0 percent
new text end
new text begin coordinated program after June 30, 2011
new text end
new text begin 6.5 percent
new text end

new text begin (b) new text endContributions shall be made by deduction from salary and must be remitted
directly to the respective teachers retirement fund association at least once each month.

new text begin (c) When an employee contribution rate changes for a fiscal year, the new
contribution rate is effective for the entire salary paid by the employer with the first
payroll cycle reported.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 57.

Minnesota Statutes 2009 Supplement, section 354A.12, subdivision 2a,
is amended to read:


Subd. 2a.

Employer regular and additional contributions.

(a) The employing
units shall make the following employer contributions to teachers retirement fund
associations:

(1) for any coordinated member of one of the following teachers retirement fund
associations in a city of the first class, the employing unit shall make a regular employer
contribution to the respective retirement fund association in an amount equal to the
designated percentage of the salary of the coordinated member as provided below:

Duluth Teachers Retirement Fund Association
deleted text begin 4.50 percent
deleted text end
new text begin before July 1, 2011
new text end
new text begin 5.79 percent
new text end
new text begin effective July 1, 2011
new text end
new text begin 6.29 percent
new text end
new text begin effective July 1, 2012
new text end
new text begin 6.79 percent
new text end
St. Paul Teachers Retirement Fund Associationnew text begin
before July 1, 2010
new text end
4.50 percent
new text begin after June 30, 2010
new text end
new text begin 5.0 percent
new text end
new text begin after June 30, 2011
new text end
new text begin 5.5 percent
new text end
new text begin after June 30, 2013
new text end
new text begin 6.5 percent
new text end

(2) for any basic member of the St. Paul Teachers Retirement Fund Association, the
employing unit shall make a regular employer contribution to the respective retirement
fund in an amount deleted text beginequal to 8.00 percent of the salary of the basic member;deleted text end new text beginaccording to
the schedule below:
new text end

new text begin before July 1, 2010
new text end
new text begin 8.0 percent of the salary of the basic member
new text end
new text begin before July 1, 2011
new text end
new text begin 8.5 percent of the salary of the basic member
new text end
new text begin before July 1, 2012
new text end
new text begin 9.0 percent of the salary of the basic member
new text end
new text begin before July 1, 2013
new text end
new text begin 9.5 percent of the salary of the basic member
new text end
new text begin before July 1, 2014
new text end
new text begin 10.0 percent of the salary of the basic member
new text end

(3) for a basic member of the St. Paul Teachers Retirement Fund Association, the
employing unit shall make an additional employer contribution to the respective fund in
an amount equal to 3.64 percent of the salary of the basic member;

(4) for a coordinated member of deleted text begina teachers retirement fund association in a city of
the first class
deleted text endnew text begin the St. Paul Teachers Retirement Fund Associationnew text end, the employing unit shall
make an additional employer contribution to the respective fund in an amount equal to the
applicable percentage of the coordinated member's salary, as provided below:

deleted text begin Duluth Teachers Retirement
Fund Association
deleted text end
deleted text begin 1.29 percent
deleted text end
St. Paul Teachers Retirement
Fund Association
3.84 percent

(b) The regular and additional employer contributions must be remitted directly to
the respective teachers retirement fund association at least once each month. Delinquent
amounts are payable with interest under the procedure in subdivision 1a.

(c) Payments of regular and additional employer contributions for school district
or technical college employees who are paid from normal operating funds must be made
from the appropriate fund of the district or technical college.

new text begin (d) When an employer contribution rate changes for a fiscal year, the new
contribution rate is effective for the entire salary paid by the employer with the first
payroll cycle reported.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 58.

Minnesota Statutes 2008, section 354A.12, subdivision 3c, is amended to read:


Subd. 3c.

Termination of supplemental contributions and direct matching
and state aid.

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

deleted text begin (b) If the St. Paul Teachers Retirement Fund Association is funded at an amount
equal to or greater than the funding ratio applicable to the Teachers Retirement
Association, then any future state aid under subdivision 3a is payable to the Teachers
Retirement Association.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 59.

Minnesota Statutes 2008, section 354A.27, subdivision 5, is amended to read:


Subd. 5.

deleted text beginCalculationdeleted text end new text beginEligibility for and payment new text endof postretirement adjustments.

(a) Annually, after June 30, the board of trustees new text beginof the Duluth Teachers Retirement Fund
Association
new text enddetermines the amount of any postretirement adjustment using the procedures
in this subdivision and subdivision 6new text begin or 7, whichever is applicablenew text end.

(b) Each person who has been receiving an annuity or benefit under the articles
of incorporation, bylaws, or under this section for at least 12 months as of the date of
the postretirement adjustment shall be eligible for a postretirement adjustment. The
postretirement adjustment shall be payable each January 1. The postretirement adjustment
shall be deleted text beginequal to two percent ofdeleted text end new text begina permanent percentage increase as specified under
subdivision 6 or 7, whichever is applicable, applied to
new text endthe annuity or benefit to which the
person is entitled one month prior to the payment of the postretirement adjustment.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 60.

Minnesota Statutes 2008, section 354A.27, subdivision 6, is amended to read:


Subd. 6.

deleted text beginAdditional increasedeleted text endnew text begin Calculation of postretirement adjustments;
transitional provision
new text end.

deleted text begin (a) In addition to the postretirement increases granted under
subdivision 5, an additional percentage increase must be computed and paid under this
subdivision.
deleted text end

deleted text begin (b) The board of trustees shall determine the number of annuitants or benefit
recipients who have been receiving an annuity or benefit for at least 12 months as of the
current June 30. These recipients are entitled to receive the surplus investment earnings
additional postretirement increase.
deleted text end

deleted text begin (c) Annually, as of each June 30, the board shall determine the five-year annualized
rate of return attributable to the assets of the Duluth Teachers Retirement Fund Association
under the formula or formulas specified in section 11A.04, clause (11).
deleted text end

deleted text begin (d) The board shall determine the amount of excess five-year annualized rate of
return over the preretirement interest assumption as specified in section 356.215.
deleted text end

deleted text begin (e) The additional percentage increase must be determined by multiplying the
quantity one minus the rate of contribution deficiency, as specified in the most recent
actuarial report of the actuary retained under section 356.214, times the rate of return
excess as determined in paragraph (d).
deleted text end

deleted text begin (f) The additional increase is payable to all eligible annuitants or benefit recipients
on the following January 1.
deleted text end

new text begin (a) For purposes of computing postretirement adjustments after the effective date
of this section for eligible benefit recipients of the Duluth Teachers Retirement Fund
Association, the funding ratio of the plan, as determined by dividing the market value of
assets by the actuarial accrued liability as reported in the most recent actuarial valuation
prepared under sections 356.214 and 356.215, determines the postretirement increase
as follows:
new text end

new text begin Funding Ratio
new text end
new text begin Postretirement Increase
new text end
new text begin less than 80 percent
new text end
new text begin 0 percent
new text end
new text begin at least 80 percent but less than 90
percent
new text end
new text begin 1 percent
new text end
new text begin at least 90 percent
new text end
new text begin 2 percent
new text end

new text begin (b) If the funding ratio of the plan based on actuarial value, rather than market value,
is at least 90 percent as reported in the most recent actuarial valuation prepared under
sections 356.214 and 356.215, this subdivision expires and subsequent postretirement
increases must be paid as specified under subdivision 7.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 61.

Minnesota Statutes 2008, section 354A.27, is amended by adding a
subdivision to read:


new text begin Subd. 7. new text end

new text begin Calculation of postretirement adjustments. new text end

new text begin (a) This subdivision applies
if subdivision 6 has expired.
new text end

new text begin (b) A percentage adjustment must be computed and paid under this subdivision to
eligible persons under subdivision 5. This adjustment is determined by reference to the
Consumer Price Index for urban wage earners and clerical workers all items index as
reported by the Bureau of Labor Statistics within the United States Department of Labor
each year as part of the determination of annual cost-of-living adjustments to recipients
of federal old-age, survivors, and disability insurance. For calculations of cost-of-living
adjustments under paragraph (c), the term "average third quarter Consumer Price Index
value" means the sum of the monthly index values as initially reported by the Bureau of
Labor Statistics for the months of July, August, and September, divided by 3.
new text end

new text begin (c) Before January 1 of each year, the executive director must calculate the amount
of the cost-of-living adjustment by dividing the most recent average third quarter index
value by the same average third quarter index value from the previous year, subtract one
from the resulting quotient, and express the result as a percentage amount, which must be
rounded to the nearest one-tenth of one percent.
new text end

new text begin (d) The amount calculated under paragraph (c) is the full cost-of-living adjustment
to be applied as a permanent increase to the regular payment of each eligible member
on January 1 of the next calendar year. For any eligible member whose effective date
of benefit commencement occurred during the calendar year before the cost-of-living
adjustment is applied, the full increase amount must be prorated on the basis of whole
calendar quarters in benefit payment status in the calendar year prior to the January 1 on
which the cost-of-living adjustment is applied, calculated to the third decimal place.
new text end

new text begin (e) The adjustment must not be less than zero nor greater than five percent.
new text end

new text begin (f) If the funding ratio of the plan as determined in the most recent actuarial
valuation using the actuarial value of assets is less than 80 percent there will be no
postretirement adjustment the following January 1.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 62.

Minnesota Statutes 2008, section 354A.31, subdivision 1, is amended to read:


Subdivision 1.

Age and service requirements.

Any coordinated member or former
coordinated member new text beginof the St. Paul Teachers Retirement Fund Association new text endwho has
ceased to render teaching service for the school district in which the teachers retirement
fund association exists and who has either attained the age of at least 55 years with not
less than three years of allowable service credit or received credit for not less than 30
years of allowable service regardless of age, shall be entitled upon written application to a
retirement annuity.new text begin Any coordinated member or former coordinated member of the Duluth
Teachers Retirement Fund Association who has ceased to render teaching service for the
school district in which the teacher retirement fund association exists and who has either
attained the age of at least 55 years with not less than three years of allowable service
credit if the member became an employee before July 1, 2010, or not less than five years
of allowable service credit if the member became an employee after June 30, 2010, or
received service credit for not less than 30 years of allowable service regardless of age,
shall be entitled upon written application to a retirement annuity.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 63.

Minnesota Statutes 2008, section 354A.35, subdivision 1, is amended to read:


Subdivision 1.

Death before retirement; refund.

If a coordinated member
or former coordinated member dies prior to retirement or prior to the receipt of any
retirement annuity or other benefit payment which is or may be payable and a surviving
spouse optional annuity is not payable pursuant to subdivision 2, a refund shall be paid to
the person's surviving spouse, or if there is none, to the person's designated beneficiary,
or if there is none, to the legal representative of the person's estate. new text beginFor a coordinated
member or former coordinated member of the St. Paul Teachers Retirement Fund
Association,
new text endthe refund shall be in an amount equal to the person's accumulated new text beginemployee
new text endcontributions plus interest at the rate of six percent per annum compounded annually.new text begin For
a coordinated member or former coordinated member of the Duluth Teachers Retirement
Fund Association, the refund shall be in an amount equal to the person's accumulated
employee contributions plus interest at the rate of six percent per annum compounded
annually to July 1, 2010, and four percent per annum compounded annually thereafter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 64.

Minnesota Statutes 2008, section 354A.37, subdivision 2, is amended to read:


Subd. 2.

Eligibility for deferred retirement annuity.

(a) Any coordinated member
who ceases to render teaching services for the school district in which the teachers
retirement fund association is located, with sufficient allowable service credit to meet
the minimum service requirements specified in section 354A.31, subdivision 1, shall be
entitled to a deferred retirement annuity in lieu of a refund pursuant to subdivision 1. The
deferred retirement annuity shall be computed pursuant to section 354A.31 and shall be
augmented as provided in this subdivision. The deferred annuity shall commence upon
application after the person on deferred status attains at least the minimum age specified in
section 354A.31, subdivision 1.

(b) The monthly annuity amount that had accrued when the member ceased to
render teaching service must be augmented from the first day of the month following the
month during which the member ceased to render teaching service to the effective date
of retirement. There is no augmentation if this period is less than three months. new text beginFor a
member of the St. Paul Teachers Retirement Fund Association,
new text endthe rate of augmentation
is three percent compounded annually until January 1 of the year following the year in
which the former member attains age 55, and five percent compounded annually after that
date to the effective date of retirement if the employee became an employee before July
1, 2006, and at 2.5 percent compounded annually if the employee becomes an employee
after June 30, 2006. new text beginFor a member of the Duluth Teachers Retirement Fund Association,
the rate of augmentation is three percent compounded annually until January 1 of the year
following the year in which the former member attains age 55, five percent compounded
annually after that date to July 1, 2010, and two percent compounded annually after that
date to the effective date of retirement if the employee became an employee before
July 1, 2006, and at 2.5 percent compounded annually to July 1, 2010, and two percent
compounded annually after that date to the effective date of retirement if the employee
becomes an employee after June 30, 2006.
new text endIf a person has more than one period of
uninterrupted service, a separate average salary determined under section 354A.31 must
be used for each period, and the monthly annuity amount related to each period must be
augmented as provided in this subdivision. The sum of the augmented monthly annuity
amounts determines the total deferred annuity payable. If a person repays a refund, the
service restored by the repayment must be considered as continuous with the next period
of service for which the person has credit with the fund. If a person does not render
teaching services in any one fiscal year or more consecutive fiscal years and then resumes
teaching service, the formula percentages used from the date of resumption of teaching
service are those applicable to new members. The mortality table and interest assumption
used to compute the annuity are the table established by the fund to compute other
annuities, and the interest assumption under section 356.215 in effect when the member
retires. A period of uninterrupted service for the purpose of this subdivision means a
period of covered teaching service during which the member has not been separated from
active service for more than one fiscal year.

(c) The augmentation provided by this subdivision applies to the benefit provided
in section 354A.35, subdivision 2. The augmentation provided by this subdivision does
not apply to any period in which a person is on an approved leave of absence from an
employer unit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 65.

Minnesota Statutes 2008, section 354A.37, subdivision 3, is amended to read:


Subd. 3.

Computation of refund amount.

A former coordinated member new text beginof the
St. Paul Teachers Retirement Fund Association
new text endwho qualifies for a refund deleted text beginpursuant todeleted text end
new text begin under new text endsubdivision 1 shall receive a refund equal to the amount of the former coordinated
member's accumulated new text beginemployee new text endcontributions with interest at the rate of six percent per
annum compounded annually.new text begin A former coordinated member of the Duluth Teachers
Retirement Fund Association who qualifies for a refund under subdivision 1 shall receive
a refund equal to the amount of the former coordinated member's accumulated employee
contributions with interest at the rate of six percent per annum compounded annually to
July 1, 2010, and four percent per annum compounded annually thereafter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 66.

Minnesota Statutes 2008, section 354A.37, subdivision 4, is amended to read:


Subd. 4.

Certain refunds at normal retirement age.

Any coordinated member
who has attained the normal retirement age with less than ten years of allowable service
credit and has terminated active teaching service shall be entitled to a refund in lieu of
a proportionate annuity pursuant to section 356.32. The refund new text beginfor a member of the St.
Paul Teachers Retirement Fund Association
new text endshall be equal to the coordinated member's
accumulated employee contributions plus interest at the rate of six percent compounded
annually. new text beginThe refund for a member of the Duluth Teachers Retirement Fund Association
shall be equal to the coordinated member's accumulated employee contributions plus
interest at the rate of six percent compounded annually to July 1, 2010, and four percent
per annum compounded annually thereafter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 67.

Minnesota Statutes 2008, section 356.215, subdivision 8, is amended to read:


Subd. 8.

Interest and salary assumptions.

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

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

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

(1) single rate future salary increase assumption

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

(2) modified single rate future salary increase assumption

plan
future salary
increase assumption
Minneapolis employees
retirement plan
the prior calendar year amount increased
first by 1.0198 percent to prior fiscal year
date and then increased by 4.0 percent
annually for each future year

(3) new text beginage-related new text endselect and ultimate future salary increase assumption or graded rate
future salary increase assumption

plan
future salary
increase assumption
general state employees retirement plan
select calculation and
assumption A
correctional state employees retirement plan
assumption deleted text beginHdeleted text endnew text begin G
new text end
State Patrol retirement plan
assumption deleted text beginGdeleted text endnew text begin F
new text end
deleted text begin general public employees retirement plan
deleted text end
deleted text begin select calculation and
assumption B
deleted text end
public employees police and fire fund retirement plan
assumption deleted text beginCdeleted text endnew text begin B
new text end
local government correctional service retirement plan
assumption deleted text beginGdeleted text endnew text begin F
new text end
teachers retirement plan
assumption deleted text beginDdeleted text endnew text begin C
new text end
Duluth teachers retirement plan
assumption deleted text beginEdeleted text endnew text begin D
new text end
St. Paul teachers retirement plan
assumption deleted text beginFdeleted text endnew text begin E
new text end

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

The ultimate future salary increase assumption is:

age
A
deleted text begin B
deleted text end
deleted text begin C deleted text end new text begin B
new text end
deleted text begin D deleted text end new text begin C
new text end
deleted text begin E deleted text end new text begin D
new text end
deleted text begin F deleted text end new text begin E
new text end
deleted text begin G deleted text end new text begin F
new text end
deleted text begin H deleted text end new text begin G
new text end
16
5.95%
deleted text begin 5.95%
deleted text end
11.00%
7.70%
8.00%
6.90%
7.7500%
7.2500%
17
5.90
deleted text begin 5.90
deleted text end
11.00
7.65
8.00
6.90
7.7500
7.2500
18
5.85
deleted text begin 5.85
deleted text end
11.00
7.60
8.00
6.90
7.7500
7.2500
19
5.80
deleted text begin 5.80
deleted text end
11.00
7.55
8.00
6.90
7.7500
7.2500
20
5.75
deleted text begin 5.40
deleted text end
11.00
5.50
6.90
6.90
7.7500
7.2500
21
5.75
deleted text begin 5.40
deleted text end
11.00
5.50
6.90
6.90
7.1454
6.6454
22
5.75
deleted text begin 5.40
deleted text end
10.50
5.50
6.90
6.90
7.0725
6.5725
23
5.75
deleted text begin 5.40
deleted text end
10.00
5.50
6.85
6.85
7.0544
6.5544
24
5.75
deleted text begin 5.40
deleted text end
9.50
5.50
6.80
6.80
7.0363
6.5363
25
5.75
deleted text begin 5.40
deleted text end
9.00
5.50
6.75
6.75
7.0000
6.5000
26
5.75
deleted text begin 5.36
deleted text end
8.70
5.50
6.70
6.70
7.0000
6.5000
27
5.75
deleted text begin 5.32
deleted text end
8.40
5.50
6.65
6.65
7.0000
6.5000
28
5.75
deleted text begin 5.28
deleted text end
8.10
5.50
6.60
6.60
7.0000
6.5000
29
5.75
deleted text begin 5.24
deleted text end
7.80
5.50
6.55
6.55
7.0000
6.5000
30
5.75
deleted text begin 5.20
deleted text end
7.50
5.50
6.50
6.50
7.0000
6.5000
31
5.75
deleted text begin 5.16
deleted text end
7.30
5.50
6.45
6.45
7.0000
6.5000
32
5.75
deleted text begin 5.12
deleted text end
7.10
5.50
6.40
6.40
7.0000
6.5000
33
5.75
deleted text begin 5.08
deleted text end
6.90
5.50
6.35
6.35
7.0000
6.5000
34
5.75
deleted text begin 5.04
deleted text end
6.70
5.50
6.30
6.30
7.0000
6.5000
35
5.75
deleted text begin 5.00
deleted text end
6.50
5.50
6.25
6.25
7.0000
6.5000
36
5.75
deleted text begin 4.96
deleted text end
6.30
5.50
6.20
6.20
6.9019
6.4019
37
5.75
deleted text begin 4.92
deleted text end
6.10
5.50
6.15
6.15
6.8074
6.3074
38
5.75
deleted text begin 4.88
deleted text end
5.90
5.40
6.10
6.10
6.7125
6.2125
39
5.75
deleted text begin 4.84
deleted text end
5.70
5.30
6.05
6.05
6.6054
6.1054
40
5.75
deleted text begin 4.80
deleted text end
5.50
5.20
6.00
6.00
6.5000
6.0000
41
5.75
deleted text begin 4.76
deleted text end
5.40
5.10
5.90
5.95
6.3540
5.8540
42
5.75
deleted text begin 4.72
deleted text end
5.30
5.00
5.80
5.90
6.2087
5.7087
43
5.65
deleted text begin 4.68
deleted text end
5.20
4.90
5.70
5.85
6.0622
5.5622
44
5.55
deleted text begin 4.64
deleted text end
5.10
4.80
5.60
5.80
5.9048
5.4078
45
5.45
deleted text begin 4.60
deleted text end
5.00
4.70
5.50
5.75
5.7500
5.2500
46
5.35
deleted text begin 4.56
deleted text end
4.95
4.60
5.40
5.70
5.6940
5.1940
47
5.25
deleted text begin 4.52
deleted text end
4.90
4.50
5.30
5.65
5.6375
5.1375
48
5.15
deleted text begin 4.48
deleted text end
4.85
4.50
5.20
5.60
5.5822
5.0822
49
5.05
deleted text begin 4.44
deleted text end
4.80
4.50
5.10
5.55
5.5404
5.0404
50
4.95
deleted text begin 4.40
deleted text end
4.75
4.50
5.00
5.50
5.5000
5.0000
51
4.85
deleted text begin 4.36
deleted text end
4.75
4.50
4.90
5.45
5.4384
4.9384
52
4.75
deleted text begin 4.32
deleted text end
4.75
4.50
4.80
5.40
5.3776
4.8776
53
4.65
deleted text begin 4.28
deleted text end
4.75
4.50
4.70
5.35
5.3167
4.8167
54
4.55
deleted text begin 4.24
deleted text end
4.75
4.50
4.60
5.30
5.2826
4.7826
55
4.45
deleted text begin 4.20
deleted text end
4.75
4.50
4.50
5.25
5.2500
4.7500
56
4.35
deleted text begin 4.16
deleted text end
4.75
4.50
4.40
5.20
5.2500
4.7500
57
4.25
deleted text begin 4.12
deleted text end
4.75
4.50
4.30
5.15
5.2500
4.7500
58
4.25
deleted text begin 4.08
deleted text end
4.75
4.60
4.20
5.10
5.2500
4.7500
59
4.25
deleted text begin 4.04
deleted text end
4.75
4.70
4.10
5.05
5.2500
4.7500
60
4.25
deleted text begin 4.00
deleted text end
4.75
4.80
4.00
5.00
5.2500
4.7500
61
4.25
deleted text begin 4.00
deleted text end
4.75
4.90
3.90
5.00
5.2500
4.7500
62
4.25
deleted text begin 4.00
deleted text end
4.75
5.00
3.80
5.00
5.2500
4.7500
63
4.25
deleted text begin 4.00
deleted text end
4.75
5.10
3.70
5.00
5.2500
4.7500
64
4.25
deleted text begin 4.00
deleted text end
4.75
5.20
3.60
5.00
5.2500
4.7500
65
4.25
deleted text begin 4.00
deleted text end
4.75
5.20
3.50
5.00
5.2500
4.7500
66
4.25
deleted text begin 4.00
deleted text end
4.75
5.20
3.50
5.00
5.2500
4.7500
67
4.25
deleted text begin 4.00
deleted text end
4.75
5.20
3.50
5.00
5.2500
4.7500
68
4.25
deleted text begin 4.00
deleted text end
4.75
5.20
3.50
5.00
5.2500
4.7500
69
4.25
deleted text begin 4.00
deleted text end
4.75
5.20
3.50
5.00
5.2500
4.7500
70
4.25
deleted text begin 4.00
deleted text end
4.75
5.20
3.50
5.00
5.2500
4.7500
71
4.25
deleted text begin 4.00
deleted text end
5.20

new text begin (4) service-related ultimate future salary increase assumption
new text end

new text begin service length
new text end
new text begin general employees retirement plan of the Public
Employees Retirement Association
new text end
new text begin 1
new text end
new text begin 12.03%
new text end
new text begin 2
new text end
new text begin 8.90
new text end
new text begin 3
new text end
new text begin 7.46
new text end
new text begin 4
new text end
new text begin 6.58
new text end
new text begin 5
new text end
new text begin 5.97
new text end
new text begin 6
new text end
new text begin 5.52
new text end
new text begin 7
new text end
new text begin 5.16
new text end
new text begin 8
new text end
new text begin 4.87
new text end
new text begin 9
new text end
new text begin 4.63
new text end
new text begin 10
new text end
new text begin 4.42
new text end
new text begin 11
new text end
new text begin 4.24
new text end
new text begin 12
new text end
new text begin 4.08
new text end
new text begin 13
new text end
new text begin 3.94
new text end
new text begin 14
new text end
new text begin 3.82
new text end
new text begin 15
new text end
new text begin 3.70
new text end
new text begin 16
new text end
new text begin 3.60
new text end
new text begin 17
new text end
new text begin 3.51
new text end
new text begin 18
new text end
new text begin 3.50
new text end
new text begin 19
new text end
new text begin 3.50
new text end
new text begin 20
new text end
new text begin 3.50
new text end
new text begin 21
new text end
new text begin 3.50
new text end
new text begin 22
new text end
new text begin 3.50
new text end
new text begin 23
new text end
new text begin 3.50
new text end
new text begin 24
new text end
new text begin 3.50
new text end
new text begin 25
new text end
new text begin 3.50
new text end
new text begin 26
new text end
new text begin 3.50
new text end
new text begin 27
new text end
new text begin 3.50
new text end
new text begin 28
new text end
new text begin 3.50
new text end
new text begin 29
new text end
new text begin 3.50
new text end
new text begin 30 or more
new text end
new text begin 3.50
new text end

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

plan
payroll growth
assumption
general state employees retirement plan
4.50%
correctional state employees retirement plan
4.50
State Patrol retirement plan
4.50
legislators retirement plan
4.50
judges retirement plan
4.00
general deleted text beginpublicdeleted text end employees retirement plannew text begin of the
Public Employees Retirement Association
new text end
deleted text begin 4.50 deleted text end new text begin 4.00
new text end
public employees police and fire retirement plan
4.50
local government correctional service retirement
plan
4.50
teachers retirement plan
4.50
Duluth teachers retirement plan
4.50
St. Paul teachers retirement plan
5.00

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

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

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

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 68.

Minnesota Statutes 2009 Supplement, section 356.215, subdivision 11,
is amended to read:


Subd. 11.

Amortization contributions.

(a) In addition to the exhibit indicating
the level normal cost, the actuarial valuation of the retirement plan must contain an
exhibit for financial reporting purposes indicating the additional annual contribution
sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit
for contribution determination purposes indicating the additional contribution sufficient
to amortize the unfunded actuarial accrued liability. For the retirement plans listed in
subdivision 8, paragraph (c), the additional contribution must be calculated on a level
percentage of covered payroll basis by the established date for full funding in effect when
the valuation is prepared, assuming annual payroll growth at the applicable percentage
rate set forth in subdivision 8, paragraph (c). For all other retirement plans, the additional
annual contribution must be calculated on a level annual dollar amount basis.

(b) For any retirement plan other than the Minneapolis Employees Retirement Fund,
the general employees retirement plan of the Public Employees Retirement Association,
new text begin the general state employees retirement plan of the Minnesota State Retirement System,
new text endand the St. Paul Teachers Retirement Fund Association, if there has not been a change in
the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a
change in the benefit plan governing annuities and benefits payable from the fund, a
change in the actuarial cost method used in calculating the actuarial accrued liability of all
or a portion of the fund, or a combination of the three, which change or changes by itself
or by themselves without inclusion of any other items of increase or decrease produce a
net increase in the unfunded actuarial accrued liability of the fund, the established date for
full funding is the first actuarial valuation date occurring after June 1, 2020.

(c) For any retirement plan other than the Minneapolis Employees Retirement
Fund and the general employees retirement plan of the Public Employees Retirement
Association, if there has been a change in any or all of the actuarial assumptions used
for calculating the actuarial accrued liability of the fund, a change in the benefit plan
governing annuities and benefits payable from the fund, a change in the actuarial cost
method used in calculating the actuarial accrued liability of all or a portion of the fund,
or a combination of the three, and the change or changes, by itself or by themselves and
without inclusion of any other items of increase or decrease, produce a net increase in the
unfunded actuarial accrued liability in the fund, the established date for full funding must
be determined using the following procedure:

(i) the unfunded actuarial accrued liability of the fund must be determined in
accordance with the plan provisions governing annuities and retirement benefits and the
actuarial assumptions in effect before an applicable change;

(ii) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the unfunded actuarial accrued liability amount determined under item
(i) by the established date for full funding in effect before the change must be calculated
using the interest assumption specified in subdivision 8 in effect before the change;

(iii) the unfunded actuarial accrued liability of the fund must be determined in
accordance with any new plan provisions governing annuities and benefits payable from
the fund and any new actuarial assumptions and the remaining plan provisions governing
annuities and benefits payable from the fund and actuarial assumptions in effect before
the change;

(iv) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the difference between the unfunded actuarial accrued liability amount
calculated under item (i) and the unfunded actuarial accrued liability amount calculated
under item (iii) over a period of 30 years from the end of the plan year in which the
applicable change is effective must be calculated using the applicable interest assumption
specified in subdivision 8 in effect after any applicable change;

(v) the level annual dollar or level percentage amortization contribution under item
(iv) must be added to the level annual dollar amortization contribution or level percentage
calculated under item (ii);

(vi) the period in which the unfunded actuarial accrued liability amount determined
in item (iii) is amortized by the total level annual dollar or level percentage amortization
contribution computed under item (v) must be calculated using the interest assumption
specified in subdivision 8 in effect after any applicable change, rounded to the nearest
integral number of years, but not to exceed 30 years from the end of the plan year in
which the determination of the established date for full funding using the procedure set
forth in this clause is made and not to be less than the period of years beginning in the
plan year in which the determination of the established date for full funding using the
procedure set forth in this clause is made and ending by the date for full funding in effect
before the change; and

(vii) the period determined under item (vi) must be added to the date as of which
the actuarial valuation was prepared and the date obtained is the new established date
for full funding.

(d) For the Minneapolis Employees Retirement Fund, the established date for full
funding is June 30, 2020.

(e) For the general employees retirement plan of the Public Employees Retirement
Association, the established date for full funding is June 30, 2031.

(f) For the Teachers Retirement Association, the established date for full funding is
June 30, 2037.

(g) For the correctional state employees retirement plan of the Minnesota State
Retirement System, the established date for full funding is June 30, 2038.

(h) For the judges retirement plan, the established date for full funding is June
30, 2038.

(i) For the public employees police and fire retirement plan, the established date
for full funding is June 30, 2038.

(j) For the St. Paul Teachers Retirement Fund Association, the established date for
full funding is June 30 of the 25th year from the valuation date. In addition to other
requirements of this chapter, the annual actuarial valuation shall contain an exhibit
indicating the funded ratio and the deficiency or sufficiency in annual contributions when
comparing liabilities to the market value of the assets of the fund as of the close of the
most recent fiscal year.

(k) new text beginFor the general state employees retirement plan of the Minnesota State
Retirement System, the established date for full funding is June 30, 2040.
new text end

new text begin (l) new text endnew text beginnew text endFor the retirement plans for which the annual actuarial valuation indicates an
excess of valuation assets over the actuarial accrued liability, the valuation assets in
excess of the actuarial accrued liability must be recognized as a reduction in the current
contribution requirements by an amount equal to the amortization of the excess expressed
as a level percentage of pay over a 30-year period beginning anew with each annual
actuarial valuation of the plan.

new text begin EFFECTIVE DATE. new text end

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

Sec. 69.

Minnesota Statutes 2008, section 356.30, subdivision 1, is amended to read:


Subdivision 1.

Eligibility; computation of annuity.

(a) Notwithstanding any
provisions of the laws governing the retirement plans enumerated in subdivision 3, a
person who has met the qualifications of paragraph (b) may elect to receive a retirement
annuity from each enumerated retirement plan in which the person has at least one-half
year of allowable service, based on the allowable service in each plan, subject to the
provisions of paragraph (c).

(b) A person may receive, upon retirement, a retirement annuity from each
enumerated retirement plan in which the person has at least one-half year of allowable
service, and augmentation of a deferred annuity calculated at the appropriate rate under
the laws governing each public pension plan or fund named in subdivision 3, based on
the date of the person's initial entry into public employment from the date the person
terminated all public service if:

(1) the person has allowable service deleted text begintotaling an amount that allows the person to
receive an annuity
deleted text end in any two or more of the enumerated plans;

new text begin (2) the person has sufficient allowable service in total that equals or exceeds the
applicable service credit vesting requirement of the retirement plan with the longest
applicable service credit vesting requirement;
new text endand

deleted text begin (2)deleted text end new text begin(3) new text endthe person has not begun to receive an annuity from any enumerated plan or
the person has made application for benefits from each applicable plan and the effective
dates of the retirement annuity with each plan under which the person chooses to receive
an annuity are within a one-year period.

(c) The retirement annuity from each plan must be based upon the allowable service,
accrual rates, and average salary in the applicable plan except as further specified or
modified in the following clauses:

(1) the laws governing annuities must be the law in effect on the date of termination
from the last period of public service under a covered retirement plan with which the
person earned a minimum of one-half year of allowable service credit during that
employment;

(2) the "average salary" on which the annuity from each covered plan in which
the employee has credit in a formula plan must be based on the employee's highest five
successive years of covered salary during the entire service in covered plans;

(3) the accrual rates to be used by each plan must be those percentages prescribed by
each plan's formula as continued for the respective years of allowable service from one
plan to the next, recognizing all previous allowable service with the other covered plans;

(4) the allowable service in all the plans must be combined in determining eligibility
for and the application of each plan's provisions in respect to reduction in the annuity
amount for retirement prior to normal retirement age; and

(5) the annuity amount payable for any allowable service under a nonformula plan
of a covered plan must not be affected, but such service and covered salary must be used
in the above calculation.

(d) This section does not apply to any person whose final termination from the last
public service under a covered plan was before May 1, 1975.

(e) For the purpose of computing annuities under this section, the accrual rates
used by any covered plan, except the public employees police and fire plan, the judges
retirement fund, and the State Patrol retirement plan, must not exceed the percent specified
in section 356.315, subdivision 4, per year of service for any year of service or fraction
thereof. The formula percentage used by the judges retirement fund must not exceed the
percentage rate specified in section 356.315, subdivision 8, per year of service for any
year of service or fraction thereof. The accrual rate used by the public employees police
and fire plan and the State Patrol retirement plan must not exceed the percentage rate
specified in section 356.315, subdivision 6, per year of service for any year of service or
fraction thereof. The accrual rate or rates used by the legislators retirement plan must not
exceed 2.5 percent, but this limit does not apply to the adjustment provided under section
3A.02, subdivision 1, paragraph (c).

(f) Any period of time for which a person has credit in more than one of the covered
plans must be used only once for the purpose of determining total allowable service.

(g) If the period of duplicated service credit is more than one-half year, or the person
has credit for more than one-half year, with each of the plans, each plan must apply its
formula to a prorated service credit for the period of duplicated service based on a fraction
of the salary on which deductions were paid to that fund for the period divided by the total
salary on which deductions were paid to all plans for the period.

(h) If the period of duplicated service credit is less than one-half year, or when
added to other service credit with that plan is less than one-half year, the service credit
must be ignored and a refund of contributions made to the person in accord with that
plan's refund provisions.

new text begin EFFECTIVE DATE. new text end

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

Sec. 70.

Minnesota Statutes 2008, section 356.302, subdivision 3, is amended to read:


Subd. 3.

General employee plan eligibility requirements.

A disabled member
of a covered retirement plan who has credit for allowable service in a combination of
general employee retirement plans is entitled to a combined service disability benefit
if the member:

(1) is less than the normal retirement age on the date of the application for the
disability benefit;

(2) has become totally and permanently disabled;

(3) has credit for allowable service in any combination of general employee
retirement plans totaling at least deleted text beginthree yearsdeleted text endnew text begin the number of years required by the applicable
retirement plan with the longest service credit requirement for disability benefit receipt
new text end;

(4) has credit for at least one-half year of allowable service with the current general
employee retirement plan before the commencement of the disability;

(5) has at least three continuous years of allowable service credit by the general
employee retirement plan or has at least a total of three years of allowable service credit
by a combination of general employee retirement plans in a 72-month period during
which no interruption of allowable service credit from a termination of employment
exceeded 29 days; and

(6) was not receiving a retirement annuity or disability benefit from any covered
general employee retirement plan at the time of the commencement of the disability.

new text begin EFFECTIVE DATE. new text end

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

Sec. 71.

Minnesota Statutes 2008, section 356.302, subdivision 4, is amended to read:


Subd. 4.

Public safety plan eligibility requirements.

A disabled member of a
covered retirement plan who has credit for allowable service in a combination of public
safety employee retirement plans is entitled to a combined service disability benefit if the
member:

(1) has become occupationally disabled;

(2) has credit for allowable service in any combination of public safety employee
retirement plans totaling at least deleted text beginone yeardeleted text end new text beginthe minimum period of service credit required by
the applicable retirement plan with the longest service credit eligibility requirement for the
receipt of a duty-related disability benefit
new text endif the disability is duty-related or totaling at least
deleted text begin three yearsdeleted text end new text beginthe minimum period of service credit required by the applicable retirement
plan with the longest service credit eligibility requirement for a disability benefit that is
not duty-related
new text endif the disability is not duty-related;

(3) has credit for at least one-half year of allowable service with the current public
safety employee retirement plan before the commencement of the disability; and

(4) was not receiving a retirement annuity or disability benefit from any covered
public safety employee retirement plan at the time of the commencement of the disability.

new text begin EFFECTIVE DATE. new text end

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

Sec. 72.

Minnesota Statutes 2008, section 356.302, subdivision 5, is amended to read:


Subd. 5.

General and public safety plan eligibility requirements.

A disabled
member of a covered retirement plan who has credit for allowable service in a combination
of both a public safety employee retirement plan and general employee retirement plan
must meet the qualifying requirements in subdivisions 3 and 4 to receive a combined
service disability benefit from the applicable general employee and public safety
employee retirement plans, except that the person need only be a member of a covered
retirement plan at the time of the commencement of the disabilitynew text begin, that the person must
have allowable service credit for the applicable retirement plan with the longest service
credit eligibility requirement for the receipt of a disability benefit,
new text end and that the minimum
allowable service requirements of subdivisions 3, clauses (3) and (5), and 4, clauses (3)
and (4), may be met in any combination of covered retirement plans.

new text begin EFFECTIVE DATE. new text end

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

Sec. 73.

Minnesota Statutes 2008, section 356.303, subdivision 2, is amended to read:


Subd. 2.

Entitlement; eligibility.

Notwithstanding any provision of law to the
contrary governing a covered retirement plan, a person who is the survivor of a deceased
member of a covered retirement plan may receive a combined service survivor benefit
from each covered retirement plan in which the deceased member had credit for at least
one-half year of allowable service if the deceased member:

(1) had credit for sufficient allowable service in any combination of covered
retirement plans to meet deleted text beginanydeleted text end new text beginthe new text endminimum allowable service credit requirement of the
new text begin applicable new text endcovered retirement fund new text beginwith the longest allowable service credit requirement
new text endfor qualification for a survivor benefit or annuity;

(2) had credit for at least one-half year of allowable service with the most recent
covered retirement plan before the date of death and was an active member of that covered
retirement plan on the date of death; and

(3) was not receiving a retirement annuity from any covered retirement plan on the
date of death.

new text begin EFFECTIVE DATE. new text end

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

Sec. 74.

Minnesota Statutes 2008, section 356.315, subdivision 5, is amended to read:


Subd. 5.

Correctional plan members.

The applicable benefit accrual rate is 2.4
percentnew text begin if employed as a correctional state employee before July 1, 2010, or 2.2 percent if
employed as a correctional state employee after June 30, 2010
new text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 75.

Minnesota Statutes 2009 Supplement, section 356.415, subdivision 1, is
amended to read:


Subdivision 1.

Annual postretirement adjustmentsnew text begin; generallynew text end.

(a) new text beginExcept as
otherwise provided in subdivision 1a, 1b, 1c, or 1d,
new text endretirement annuity, disability benefit,
or survivor benefit recipients of a covered retirement plan are entitled to a postretirement
adjustment annually on January 1, as follows:

(1) a postretirement increase of 2.5 percent must be applied each year, effective
January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has
been receiving an annuity or a benefit for at least 12 full months prior to the January 1
increase; and

(2) for each annuitant or benefit recipient who has been receiving an annuity or a
benefit new text beginamount new text endfor at least one full month, an annual postretirement increase of 1/12 of 2.5
percent for each month new text beginthat new text endthe person has been receiving an annuity or benefit must be
applied, effective new text beginon new text endJanuary 1 following the new text begincalendar new text endyear in which the person has been
retired for less than 12 months.

(b) The increases provided by this deleted text beginsectiondeleted text endnew text begin subdivisionnew text end commence on January 1, 2010.

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

(d) The retirement annuity payable to a person who retires before becoming eligible
for Social Security benefits and who has elected the optional payment as provided in
section 353.29, subdivision 6, deleted text beginor 354.35deleted text end must be treated as the sum of a period certain
retirement annuity and a life retirement annuity for the purposes of any postretirement
adjustment. The period certain retirement annuity plus the life retirement annuity must be
the annuity amount payable until age 62 for section 353.29, subdivision 6deleted text begin, or age 62, 65,
or normal retirement age, as selected by the member at retirement, for an annuity amount
payable under section 354.35
deleted text end. A postretirement adjustment granted on the period certain
retirement annuity must terminate when the period certain retirement annuity terminates.

new text begin EFFECTIVE DATE. new text end

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

Sec. 76.

Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding
a subdivision to read:


new text begin Subd. 1a. new text end

new text begin Annual postretirement adjustments; Minnesota State Retirement
System plans.
new text end

new text begin (a) Retirement annuity, disability benefit, or survivor benefit recipients
of the legislators retirement plan, the general state employees retirement plan, the
correctional state employees retirement plan, the State Patrol retirement plan, the elected
state officers retirement plan, the unclassified state employees retirement program, and the
judges retirement plan are entitled to a postretirement adjustment annually on January
1, as follows:
new text end

new text begin (1) a postretirement increase of two percent must be applied each year, effective on
January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who
has been receiving an annuity or a benefit for at least 18 full months before the January 1
increase; and
new text end

new text begin (2) for each annuitant or benefit recipient who has been receiving an annuity or
a benefit for at least six full months, an annual postretirement increase of 1/12 of two
percent for each month that the person has been receiving an annuity or benefit must be
applied, effective January 1, following the calendar year in which the person has been
retired for at least six months, but has been retired for less than 18 months.
new text end

new text begin (b) The increases provided by this subdivision commence on January 1, 2011.
Increases under this subdivision for the general state employees retirement plan, the
correctional state employees retirement plan, the State Patrol retirement plan, or the judges
retirement plan terminate on December 31 of the calendar year in which the actuarial
valuation prepared by the approved actuary under sections 356.214 and 356.215 and the
standards for actuarial work promulgated by the Legislative Commission on Pensions
and Retirement indicates that the market value of assets of the retirement plan equals or
exceeds 90 percent of the actuarial accrued liability of the retirement plan and increases
under subdivision 1 recommence after that date. Increases under this subdivision for
the legislators retirement plan or the elected state officers retirement plan terminate
on December 31 of the calendar year in which the actuarial valuation prepared by the
approved actuary under sections 356.214 and 356.215 and the standards for actuarial work
promulgated by the Legislative Commission on Pensions and Retirement indicates that the
market value of assets of the general state employees retirement plan equals or exceeds
90 percent of the actuarial accrued liability of the retirement plan and increases under
subdivision 1 recommence after that date.
new text end

new text begin (c) An increase in annuity or benefit payments under this subdivision must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the applicable covered retirement plan requesting that the increase
not be made.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 77.

Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding
a subdivision to read:


new text begin Subd. 1b. new text end

new text begin Annual postretirement adjustments; general employees retirement
plan and local government correctional retirement plan of the Public Employees
Retirement Association.
new text end

new text begin (a) Retirement annuity, disability benefit, or survivor benefit
recipients of the general employees retirement plan of the Public Employees Retirement
Association and the local government correctional service retirement plan are entitled to a
postretirement adjustment annually on January 1, as follows:
new text end

new text begin (1) for January 1, 2011, and each successive January 1 until funding stability is
restored for the applicable retirement plan, a postretirement increase of one percent must
be applied each year, effective on January 1, to the monthly annuity or benefit amount of
each annuitant or benefit recipient who has been receiving an annuity or benefit for at least
12 full months as of the current June 30;
new text end

new text begin (2) for January 1, 2011, and each successive January 1 until funding stability is
restored for the applicable retirement plan, for each annuitant or benefit recipient who has
been receiving an annuity or a benefit for at least one full month, but less than 12 full
months as of the current June 30, an annual postretirement increase of 1/12 of one percent
for each month the person has been receiving an annuity or benefit must be applied;
new text end

new text begin (3) for each January 1 following the restoration of funding stability for the applicable
retirement plan, a postretirement increase of 2.5 percent must be applied each year,
effective January 1, to the monthly annuity or benefit amount of each annuitant or benefit
recipient who has been receiving an annuity or benefit for at least 12 full months as of
the current June 30; and
new text end

new text begin (4) for each January 1 following restoration of funding stability for the applicable
retirement plan, for each annuity or benefit recipient who has been receiving an annuity or
a benefit for at least one full month, but less than 12 full months as of the current June
30, an annual postretirement increase of 1/12 of 2.5 percent for each month the person
has been receiving an annuity or benefit must be applied.
new text end

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

new text begin (c) If, after applying the increase as provided for in paragraph (a), clauses (3)
and (4), the market value of the applicable retirement plan is determined in the next
subsequent actuarial valuation prepared under section 356.215 to be less than 90 percent
of the actuarial accrued liability of any of the applicable Public Employees Retirement
Association plans, the increase provided in paragraph (a), clauses (1) and (2), are to be
applied as of the next successive January until funding stability is again restored.
new text end

new text begin (d) An increase in annuity or benefit payments under this section must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the Public Employees Retirement Association requesting that the
increase not be made.
new text end

new text begin (e) The retirement annuity payable to a person who retires before becoming eligible
for Social Security benefits and who has elected the optional payment, as provided in
section 353.29, subdivision 6, must be treated as the sum of a period-certain retirement
annuity and a life retirement annuity for the purposes of any postretirement adjustment.
The period-certain retirement annuity plus the life retirement annuity must be the
annuity amount payable until age 62 for section 353.29, subdivision 6. A postretirement
adjustment granted on the period-certain retirement annuity must terminate when the
period-certain retirement annuity terminates.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 78.

Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding
a subdivision to read:


new text begin Subd. 1c. new text end

new text begin Annual postretirement adjustments; PERA-P&F. new text end

new text begin (a) Retirement
annuity, disability benefit, or survivor benefit recipients of the public employees police
and fire retirement plan are entitled to a postretirement adjustment annually on January
1, as follows:
new text end

new text begin (1) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit
recipient who has been receiving the annuity or benefit for at least 12 full months as of the
immediate preceding June 30, an amount equal to one percent in each year;
new text end

new text begin (2) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit
recipient who has been receiving the annuity or benefit for at least one full month as of the
immediate preceding June 30, an amount equal to 1/12 of one percent in each year;
new text end

new text begin (3) for January 1, 2013, and each successive January 1 that follows the loss of
funding stability as defined under paragraph (b) until funding stability as defined under
paragraph (b) is again restored, for each annuitant or benefit recipient who has been
receiving the annuity or benefit for at least 12 full months as of the immediate preceding
June 30, an amount equal to the percentage increase in the Consumer Price Index for
urban wage earners and clerical workers all items index published by the Bureau of Labor
Statistics of the United States Department of Labor between the immediate preceding June
30 and the June 30 occurring 12 months previous, but not to exceed 1.5 percent;
new text end

new text begin (4) for January 1, 2013, and each successive January 1 that follows the loss of
funding stability as defined under paragraph (b) until funding stability as defined under
paragraph (b) is again restored, for each annuitant or benefit recipient who has been
receiving the annuity or benefit for at least one full month as of the immediate preceding
June 30, an amount equal to 1/12 of the percentage increase in the Consumer Price Index
for urban wage earners and clerical workers-all items published by the Bureau of Labor
Statistics of the United States Department of Labor between the immediate preceding
June 30 and the June 30 occurring 12 months previous for each full month of annuity
or benefit receipt, but not to exceed 1/12 of 1.5 percent for each full month of annuity
or benefit receipt;
new text end

new text begin (5) for each January 1 following the restoration of funding stability as defined
under paragraph (b) and during the continuation of funding stability as defined under
paragraph (b), for each annuitant or benefit recipient who has been receiving the annuity
or benefit for at least 12 full months as of the immediate preceding June 30, an amount
equal to the percentage increase in the Consumer Price Index for urban wage earners and
clerical workers-all items published by the Bureau of Labor Statistics of the United States
Department of Labor between the immediate preceding June 30 and the June 30 occurring
12 months previous, but not to exceed 2.5 percent; and
new text end

new text begin (6) for each January 1 following the restoration of funding stability as defined under
paragraph (b) and during the continuation of funding stability as defined under paragraph
(b), for each annuitant or benefit recipient who has been receiving the annuity or benefit
for at least one full month as of the immediate preceding June 30, an amount equal to
1/12 of the percentage increase in the Consumer Price Index for urban wage earners and
clerical workers-all items published by the Bureau of Labor Statistics of the United States
Department of Labor between the immediate preceding June 30 and the June 30 occurring
12 months previous for each full month of annuity or benefit receipt, but not to exceed
1/12 of 2.5 percent for each full month of annuity or benefit receipt.
new text end

new text begin (b) Funding stability is restored when the market value of assets of the public
employees police and fire retirement plan equals or exceeds 90 percent of the actuarial
accrued liabilities of the applicable plan in the most recent prior actuarial valuation
prepared under section 356.215 and under the standards for actuarial work of the
Legislative Commission and Pensions and Retirement by the approved actuary retained by
the Public Employees Retirement Association under section 356.214.
new text end

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 79.

Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding
a subdivision to read:


new text begin Subd. 1d. new text end

new text begin Teachers Retirement Association annual postretirement adjustments.
new text end

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

new text begin (1) for January 1, 2011, and January 1, 2012, no postretirement increase is payable;
new text end

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

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

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

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

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

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

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 80.

Minnesota Statutes 2008, section 356.47, subdivision 3, is amended to read:


Subd. 3.

Payment.

(a) Beginning one year after the reemployment withholding
period ends relating to the reemployment that gave rise to the limitation, and the filing of a
written application, the retired member is entitled to the payment, in a lump sum, of the
value of the person's amount under subdivision 2, plus new text beginannual compound new text endinterest deleted text beginatdeleted text endnew text begin. For
the general state employees retirement plan, the correctional state employees retirement
plan, the general employees retirement plan of the Public Employees Retirement
Association, the public employees police and fire retirement plan, the local government
correctional employees retirement plan, and the teachers retirement plan, the annual
interest rate is six percent from the date on which the amount was deducted from the
retirement annuity to the date of payment or until January 1, 2011, whichever is earlier, and
no interest after January 1, 2011. For the Duluth Teachers Retirement Fund Association,
the annual interest is six percent from the date on which the amount was deducted from the
retirement annuity to the date of payment or until June 30, 2010, whichever is earlier, and
no interest after June 30, 2010. For the St. Paul Teachers Retirement Fund Association,
the annual interest is
new text end the deleted text begincompound annualdeleted text end rate of six percent from the date that the
amount was deducted from the retirement annuity to the date of payment.

(b) The written application must be on a form prescribed by the chief administrative
officer of the applicable retirement plan.

(c) If the retired member dies before the payment provided for in paragraph (a) is
made, the amount is payable, upon written application, to the deceased person's surviving
spouse, or if none, to the deceased person's designated beneficiary, or if none, to the
deceased person's estate.

(d) In lieu of the direct payment of the person's amount under subdivision 2, on
or after the payment date under paragraph (a), if the federal Internal Revenue Code so
permits, the retired member may elect to have all or any portion of the payment amount
under this section paid in the form of a direct rollover to an eligible retirement plan as
defined in section 402(c) of the federal Internal Revenue Code that is specified by the
retired member. If the retired member dies with a balance remaining payable under this
section, the surviving spouse of the retired member, or if none, the deceased person's
designated beneficiary, or if none, the administrator of the deceased person's estate may
elect a direct rollover under this paragraph.

new text begin EFFECTIVE DATE. new text end

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

Sec. 81.

Minnesota Statutes 2009 Supplement, section 423A.02, subdivision 3, is
amended to read:


Subd. 3.

Reallocation of amortization or supplementary amortization state
aid.

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

(b) In order to receive amortization and supplementary amortization aid under
paragraph (a), Independent School District No. 625, St. Paul, must make contributions
to the St. Paul Teachers Retirement Fund Association in accordance with the following
schedule:

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

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

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

deleted text begin (d) Money contributed under paragraph (a) and either paragraph (b) or (c), as
applicable, must be credited to a separate account in the applicable teachers retirement
fund and may not be used in determining any benefit increases. The separate account
terminates for a fund when the aid payments to the fund under paragraph (a) cease.
deleted text end

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 82. new text beginLOCAL RETIREMENT FUND INVESTMENT AUTHORITIES
STUDY.
new text end

new text begin A study group consisting of representatives from pension plans subject to Minnesota
Statutes, section 356A.06, subdivision 6 or 7, shall be convened by the state auditor to
study investment-related provisions, authorities, and limitations under Minnesota Statutes,
chapter 356A, and related sections of other chapters. Administrative support for the
study group shall be provided by the state auditor. The study group shall prepare a
report to include an assessment of the effectiveness of current statutory prescriptions,
options for change, and recommendations for consideration by the governor and the
legislature during the 2011 legislative session. The report will be provided no later than
January 15, 2011, to the executive director of the Legislative Commission on Pensions and
Retirement, the chair and ranking minority caucus member of the senate State and Local
Government Operations and Oversight Committee, and the chair and ranking minority
caucus member of the house State and Local Government Operations Reform, Technology
and Elections Committee.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 83. new text beginBYLAW AUTHORIZATION.
new text end

new text begin Consistent with the requirements of Minnesota Statutes, section 354A.12,
subdivision 4, the board of the Duluth Teachers Retirement Fund Association is authorized
to revise the bylaws or articles of incorporation so that the requirements of this act apply
to the old law coordinated program.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 84. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, section 354A.27, subdivision 1, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end