HF 2952

1st Committee Engrossment - 86th Legislature (2009 - 2010) Posted on 03/19/2013 07:29pm

1.1A bill for an act

1.2relating to retirement; Minnesota State Retirement System; Public Employees
1.3Retirement Association; Teachers Retirement Association; first class city
1.4teacher retirement fund associations; increasing certain contribution rates;
1.5authorizing certain postretirement adjustments; suspending certain postretirement
1.6adjustments; reducing certain postretirement adjustment increase rates;
1.7reducing interest rates on refunds; reducing deferred annuity augmentation
1.8rates; eliminating interest on reemployed annuitant earnings limitation deferred
1.9accounts; increasing certain vesting requirements; increasing certain early
1.10retirement reduction rates; reducing certain benefit accrual rates; extending
1.11certain amortization periods; requiring a retirement fund investment authority
1.12study; authorizing certain bylaw amendments;amending Minnesota Statutes
1.132008, sections 3A.02, subdivision 4; 352.113, subdivision 1; 352.115, subdivision
1.141; 352.12, subdivision 2; 352.22, subdivisions 2, 3; 352.72, subdivisions 1, 2;
1.15352.93, subdivisions 1, 2a, 3a; 352.931, subdivision 1; 352B.02, as amended;
1.16352B.08, subdivisions 1, 2a; 352B.11, subdivision 2b; 352B.30, subdivisions 1,
1.172; 352F.07; 353.01, by adding a subdivision; 353.27, subdivision 3b; 353.29,
1.18subdivision 1; 353.30, subdivision 1c; 353.32, subdivisions 1, 1a; 353.34,
1.19subdivisions 1, 2, 3; 353.651, subdivisions 1, 4; 353.657, subdivisions 1, 2a;
1.20353.71, subdivisions 1, 2; 353E.04, subdivisions 1, 4; 353E.07, subdivisions 1, 2;
1.21353F.03; 354.42, subdivision 3, by adding subdivisions; 354A.12, subdivisions
1.221, 3c; 354A.27, subdivisions 5, 6, by adding a subdivision; 354A.31, subdivision
1.231; 354A.35, subdivision 1; 354A.37, subdivisions 2, 3, 4; 356.215, subdivision
1.248; 356.30, subdivision 1; 356.302, subdivisions 3, 4, 5; 356.303, subdivision
1.252; 356.315, subdivision 5; 356.47, subdivision 3; Minnesota Statutes 2009
1.26Supplement, sections 352.75, subdivision 4; 352.95, subdivision 2; 353.27,
1.27subdivisions 2, 3; 353.33, subdivision 1; 353.65, subdivisions 2, 3; 354.42,
1.28subdivision 2; 354.47, subdivision 1; 354.49, subdivision 2; 354.55, subdivision
1.2911; 354A.12, subdivision 2a; 356.215, subdivision 11; 356.415, subdivision 1,
1.30by adding subdivisions; 423A.02, subdivision 3; repealing Minnesota Statutes
1.312008, section 354A.27, subdivision 1.
1.32BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.33    Section 1. Minnesota Statutes 2008, section 3A.02, subdivision 4, is amended to read:
1.34    Subd. 4. Deferred annuities augmentation. (a) The deferred retirement allowance
1.35of any former legislator must be augmented as provided herein.
2.1    (b) The required reserves applicable to the deferred retirement allowance,
2.2determined as of the date the benefit begins to accrue using an appropriate mortality table
2.3and an interest assumption of six percent, must be augmented from the first of the month
2.4following the termination of active service, or July 1, 1973, whichever is later, to the first
2.5day of the month in which the allowance begins to accrue, at the following annually
2.6compounded rate or rates:
2.7(1) five percent until January 1, 1981;
2.8(2) three percent from January 1, 1981, or from the first day of the month following
2.9the termination of active service, whichever is later, until January 1 of the year in which
2.10the former legislator attains age 55 or until January 1, 2012, whichever is earlier; and
2.11(3) five percent from the period end date under clause (2) to until the effective date
2.12of retirement or until January 1, 2012, whichever is earlier; and
2.13(4) two percent after December 31, 2011.
2.14EFFECTIVE DATE.This section is effective the day following final enactment.

2.15    Sec. 2. Minnesota Statutes 2008, section 352.113, subdivision 1, is amended to read:
2.16    Subdivision 1. Age and service requirements. (a) An employee covered by the
2.17system, who is less than normal retirement age and who becomes totally and permanently
2.18disabled after three or more years of allowable service if employed before July 1, 2010, or
2.19after five or more years of allowable service if employed after June 30, 2010, is entitled to
2.20a disability benefit in an amount provided in subdivision 3.
2.21(b) If the disabled employee's state service has terminated at any time, the employee
2.22must have at least two years of allowable service after last becoming a state employee
2.23covered by the system.
2.24(c) Refunds may be repaid under section 352.23 before the effective accrual date of
2.25the disability benefit under subdivision 2.
2.26EFFECTIVE DATE.This section is effective the day following final enactment.

2.27    Sec. 3. Minnesota Statutes 2008, section 352.115, subdivision 1, is amended to read:
2.28    Subdivision 1. Age and service requirements. After separation from state service,
2.29any employee (1) who has attained the age of at least 55 years and who is entitled to
2.30credit for at least three years allowable service if employed before July 1, 2010, or after
2.31five or more years of allowable service if employed after June 30, 2010, or (2) who has
2.32received credit for at least 30 years allowable service regardless of age, is entitled upon
2.33application to a retirement annuity.
3.1EFFECTIVE DATE.This section is effective the day following final enactment.

3.2    Sec. 4. Minnesota Statutes 2008, section 352.12, subdivision 2, is amended to read:
3.3    Subd. 2. Surviving spouse benefit. (a) If an employee or former employee has
3.4credit for at least three years allowable service if the employee was employed before July
3.51, 2010, or for at least five years of allowable service if the employee was employed
3.6after June 30, 2010, and dies before an annuity or disability benefit has become payable,
3.7notwithstanding any designation of beneficiary to the contrary, the surviving spouse of the
3.8employee may elect to receive, in lieu of the refund with interest under subdivision 1, an
3.9annuity equal to the joint and 100 percent survivor annuity which the employee or former
3.10employee could have qualified for on the date of death.
3.11    (b) If the employee was under age 55 and has credit for at least 30 years of allowable
3.12service on the date of death, the surviving spouse may elect to receive a 100 percent joint
3.13and survivor annuity based on the age of the employee and surviving spouse on the date
3.14of death. The annuity is payable using the full early retirement reduction under section
3.15352.116, subdivision 1 , paragraph (a), to age 55 and one-half of the early retirement
3.16reduction from age 55 to the age payment begins.
3.17    (c) If the employee was under age 55 and has credit for at least three years of
3.18allowable service credit on the date of death if the employee was employed before July 1,
3.192010, or for at least five years of allowable service if the employee was employed after
3.20June 30, 2010, but did not yet qualify for retirement, the surviving spouse may elect
3.21to receive a 100 percent joint and survivor annuity based on the age of the employee
3.22and surviving spouse at the time of death. The annuity is payable using the full early
3.23retirement reduction under section 352.116, subdivision 1 or 1a, to age 55 and one-half of
3.24the early retirement reduction from age 55 to the age payment begins.
3.25    (d) The surviving spouse eligible for benefits under paragraph (a) may apply for the
3.26annuity at any time after the date on which the employee or former employee would
3.27have attained the required age for retirement based on the allowable service earned.
3.28The surviving spouse eligible for surviving spouse benefits under paragraph (b) or (c)
3.29may apply for the annuity at any time after the employee's death. The annuity must be
3.30computed under sections 352.115, subdivisions 1, 2, and 3, and 352.116, subdivisions 1,
3.311a, and 3 . Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply to a deferred
3.32annuity or surviving spouse benefit payable under this subdivision. The annuity must cease
3.33with the last payment received by the surviving spouse in the lifetime of the surviving
3.34spouse, or upon expiration of a term certain benefit payment to a surviving spouse under
3.35subdivision 2a. An amount equal to the excess, if any, of the accumulated contributions
4.1credited to the account of the deceased employee in excess of the total of the benefits paid
4.2and payable to the surviving spouse must be paid to the deceased employee's or former
4.3employee's last designated beneficiary or, if none, as specified under subdivision 1.
4.4    (e) Any employee or former employee may request in writing, with the signed
4.5consent of the spouse, that this subdivision not apply and that payment be made only to a
4.6designated beneficiary as otherwise provided by this chapter.
4.7EFFECTIVE DATE.This section is effective the day following final enactment.

4.8    Sec. 5. Minnesota Statutes 2008, section 352.22, subdivision 2, is amended to read:
4.9    Subd. 2. Amount of refund. Except as provided in subdivision 3, the refund
4.10payable to a person who ceased to be a state employee by reason of a termination of state
4.11service is an amount equal to employee accumulated contributions plus interest at the rate
4.12of six percent per year compounded daily from the date that the contribution was made
4.13until June 30, 2011, or until the date on which the refund is paid, whichever is earlier, and
4.14at the rate of four percent per year compounded daily from the date that the contribution
4.15was made or from July 1, 2011, whichever is later, until the date on which the refund is
4.16paid. Included with the refund is any interest paid as part of repayment of a past refund,
4.17plus interest thereon from the date of repayment.
4.18EFFECTIVE DATE.This section is effective the day following final enactment.

4.19    Sec. 6. Minnesota Statutes 2008, section 352.22, subdivision 3, is amended to read:
4.20    Subd. 3. Deferred annuity. (a) An employee who has at least three years of
4.21allowable service if employed before July 1, 2010, or who has at least five years of
4.22allowable service if employed after June 30, 2010, when termination occurs may elect
4.23to leave the accumulated contributions in the fund and thereby be entitled to a deferred
4.24retirement annuity. The annuity must be computed under the law in effect when state
4.25service terminated, on the basis of the allowable service credited to the person before
4.26the termination of service.
4.27(b) An employee on layoff or on leave of absence without pay, except a leave of
4.28absence for health reasons, and who does not return to state service must have an annuity,
4.29deferred annuity, or other benefit to which the employee may become entitled computed
4.30under the law in effect on the employee's last working day.
4.31(c) No application for a deferred annuity may be made more than 60 days before
4.32the time the former employee reaches the required age for entitlement to the payment of
4.33the annuity. The deferred annuity begins to accrue no earlier than 60 days before the date
5.1the application is filed in the office of the system, but not (1) before the date on which
5.2the employee reaches the required age for entitlement to the annuity nor (2) before the
5.3day following the termination of state service in a position which is not covered by the
5.4retirement system.
5.5(d) Application for the accumulated contributions left on deposit with the fund may
5.6be made at any time following the date of the termination of service.
5.7EFFECTIVE DATE.This section is effective the day following final enactment.

5.8    Sec. 7. Minnesota Statutes 2008, section 352.72, subdivision 1, is amended to read:
5.9    Subdivision 1. Entitlement to annuity. (a) Any person who has been an employee
5.10covered by a retirement system listed in paragraph (b) is entitled when qualified to an
5.11annuity from each fund if total allowable service in all funds or in any two of these funds
5.12totals three or more years if employed before July 1, 2010, or totals five or more years
5.13if employed after June 30, 2010.
5.14(b) This section applies to the Minnesota State Retirement System, the Public
5.15Employees Retirement Association including the Public Employees Retirement
5.16Association police and fire fund, the Teachers Retirement Association, the State Patrol
5.17Retirement Association, or any other public employee retirement system in the state with
5.18a similar provision, except as noted in paragraph (c).
5.19(c) This section does not apply to other funds providing benefits for police officers
5.20or firefighters.
5.21(d) No portion of the allowable service upon which the retirement annuity from
5.22one fund is based shall be again used in the computation for benefits from another fund.
5.23No refund may have been taken from any one of these funds since service entitling the
5.24employee to coverage under the system or the employee's membership in any of the
5.25associations last terminated. The annuity from each fund must be determined by the
5.26appropriate provisions of the law except that the requirement that a person must have at
5.27least three a specific number of years of allowable service in the respective system or
5.28association does not apply for the purposes of this section if the combined service in two
5.29or more of these funds equals three or more years at least the longest period of allowable
5.30service of any of the applicable retirement plans.
5.31EFFECTIVE DATE.This section is effective the day following final enactment.

5.32    Sec. 8. Minnesota Statutes 2008, section 352.72, subdivision 2, is amended to read:
6.1    Subd. 2. Computation of deferred annuity. (a) The deferred annuity, if any,
6.2accruing under subdivision 1, or section 352.22, subdivision 3, must be computed as
6.3provided in section 352.22, subdivision 3, on the basis of allowable service before
6.4termination of state service and augmented as provided herein. The required reserves
6.5applicable to a deferred annuity or to an annuity for which a former employee was eligible
6.6but had not applied or to any deferred segment of an annuity must be determined as of
6.7the date the benefit begins to accrue and augmented by interest compounded annually
6.8from the first day of the month following the month in which the employee ceased to be
6.9a state employee, or July 1, 1971, whichever is later, to the first day of the month in
6.10which the annuity begins to accrue. The rates of interest used for this purpose must be
6.11five percent compounded annually until January 1, 1981, and three percent compounded
6.12annually thereafter until January 1 of the year following the year in which the former
6.13employee attains age 55 or until January 1, 2012, whichever is earlier, and from that date
6.14the January 1 next following the attainment of age 55 to the effective date of retirement or
6.15until January 1, 2012, whichever is earlier, the rate is five percent compounded annually if
6.16the employee became an employee before July 1, 2006, and at 2.5 percent compounded
6.17annually until January 1, 2012, if the employee becomes an employee after June 30, 2006,
6.18and two percent compounded annually after December 31, 2011, irrespective of when the
6.19employee became a state employee. If a person has more than one period of uninterrupted
6.20service, the required reserves related to each period must be augmented by interest under
6.21this subdivision. The sum of the augmented required reserves so determined is the present
6.22value of the annuity. "Uninterrupted service" for the purpose of this subdivision means
6.23periods of covered employment during which the employee has not been separated from
6.24state service for more than two years. If a person repays a refund, the service restored by
6.25the repayment must be considered continuous with the next period of service for which the
6.26employee has credit with this system. The formula percentages used for each period of
6.27uninterrupted service must be those applicable to a new employee. The mortality table
6.28and interest assumption used to compute the annuity must be those in effect when the
6.29employee files application for annuity. This section does not reduce the annuity otherwise
6.30payable under this chapter.
6.31(b) The retirement annuity or disability benefit of, or the survivor benefit payable on
6.32behalf of, a former state employee who terminated service before July 1, 1997, which is
6.33not first payable until after June 30, 1997, must be increased on an actuarial equivalent
6.34basis to reflect the change in the postretirement interest rate actuarial assumption under
6.35section 356.215, subdivision 8, from five percent to six percent under a calculation
7.1procedure and the tables adopted by the board and approved by the actuary retained under
7.2section 356.214.
7.3EFFECTIVE DATE.This section is effective the day following final enactment.

7.4    Sec. 9. Minnesota Statutes 2009 Supplement, section 352.75, subdivision 4, is
7.5amended to read:
7.6    Subd. 4. Existing deferred retirees. Any former member of the former
7.7Metropolitan Transit Commission-Transit Operating Division employees retirement
7.8fund is entitled to a retirement annuity from the Minnesota State Retirement System if
7.9the employee:
7.10(1) is not an active employee of the Transit Operating Division of the former
7.11Metropolitan Transit Commission on July 1, 1978; (2) has at least ten years of active
7.12continuous service with the Transit Operating Division of the former Metropolitan
7.13Transit Commission as defined by the former Metropolitan Transit Commission-Transit
7.14Operating Division employees retirement plan document in effect on December 31, 1977;
7.15(3) has not received a refund of contributions; (4) has not retired or begun receiving an
7.16annuity or benefit from the former Metropolitan Transit Commission-Transit Operating
7.17Division employees retirement fund; (5) is at least 55 years old; and (6) submits a valid
7.18application for a retirement annuity to the executive director of the Minnesota State
7.19Retirement System.
7.20The person is entitled to a retirement annuity in an amount equal to the normal
7.21old age retirement allowance calculated under the former Metropolitan Transit
7.22Commission-Transit Operating Division employees retirement fund plan document in
7.23effect on December 31, 1977, subject to an early retirement reduction or adjustment in
7.24amount on account of retirement before the normal retirement age specified in that former
7.25Metropolitan Transit Commission-Transit Operating Division employees retirement fund
7.26plan document.
7.27The deferred retirement annuity of any person to whom this subdivision applies
7.28must be augmented. The required reserves applicable to the deferred retirement annuity,
7.29determined as of the date the allowance begins to accrue using an appropriate mortality
7.30table and an interest assumption of five percent, must be augmented by interest at the
7.31rate of five percent per year compounded annually from January 1, 1978, to January 1,
7.321981, and three percent per year compounded annually from January 1, 1981, until the
7.33date that the annuity begins to accrue or June 30, 2011, whichever is earlier, and two
7.34percent after June 30, 2011, to the first day of the month in which the annuity begins to
7.35accrue. After the commencement of the retirement annuity, the annuity is eligible for
8.1postretirement adjustments under section 356.415. On applying for a retirement annuity
8.2under this subdivision, the person is entitled to elect a joint and survivor optional annuity
8.3under section 352.116, subdivision 3.
8.4EFFECTIVE DATE.This section is effective the day following final enactment.

8.5    Sec. 10. Minnesota Statutes 2008, section 352.93, subdivision 1, is amended to read:
8.6    Subdivision 1. Basis of annuity; when to apply. After separation from state
8.7service, an employee covered under section 352.91 who has reached age 55 years and has
8.8credit for at least three years of covered correctional service or a combination of covered
8.9correctional service and general state employees state retirement plan allowable service
8.10if first employed as a state employee before July 1, 2010, or has credit for at least ten
8.11years of covered correctional service or a combination of covered correctional service
8.12and general state employees retirement plan allowable service if first employed as a state
8.13employee after June 30, 2010, is entitled upon application to a retirement annuity under
8.14this section, based only on covered correctional employees' service. Application may be
8.15made no earlier than 60 days before the date the employee is eligible to retire by reason of
8.16both age and service requirements.
8.17EFFECTIVE DATE.This section is effective the day following final enactment.

8.18    Sec. 11. Minnesota Statutes 2008, section 352.93, subdivision 2a, is amended to read:
8.19    Subd. 2a. Early retirement. Any covered correctional employee who becomes at
8.20least 50 years old and who has at least three years of allowable service if first employed
8.21as a correctional state employee before July 1, 2010, or has credit for at least ten years
8.22of allowable service if first employed as a correctional state employee after June 30,
8.232010, is entitled upon application to a reduced retirement annuity equal to the annuity
8.24calculated under subdivision 2, reduced by two-tenths of one percent for each month that
8.25the correctional employee is under age 55 at the time of retirement if first employed as
8.26a correctional state employee before July 1, 2010, and if retired before July 1, 2015, or
8.27reduced by 0.417 percent for each month that the correctional employee is under age 55
8.28at the time of retirement if first employed as a correctional state employee after June 30,
8.292010, or if first employed as a correctional state employee before July 1, 2010, and if
8.30retired after June 30, 2015.
8.31EFFECTIVE DATE.This section is effective the day following final enactment.

8.32    Sec. 12. Minnesota Statutes 2008, section 352.93, subdivision 3a, is amended to read:
9.1    Subd. 3a. Optional annuities. The board may establish optional annuity forms to
9.2pay a higher amount from the date of retirement until an employee is first eligible to draw
9.3Social Security benefits, reaches age 65, or up to reaches the age the employee is eligible
9.4to receive unreduced Social Security benefits, at which time the monthly benefits must be
9.5reduced. The optional annuity forms must be actuarially equivalent to the normal single
9.6life annuity form provided in subdivision 2. The optional annuity forms must be approved
9.7certified as actuarially equivalent by the actuary retained under section 356.214.
9.8EFFECTIVE DATE.This section is effective the day following final enactment.

9.9    Sec. 13. Minnesota Statutes 2008, section 352.931, subdivision 1, is amended to read:
9.10    Subdivision 1. Surviving spouse benefit. (a) If the correctional employee was at
9.11least age 50, has credit for at least three years of allowable service if first employed as
9.12a correctional state employee before July 1, 2010, or has credit for at least ten years of
9.13allowable service if first employed as a correctional state employee after June 30, 2010,
9.14and dies before an annuity or disability benefit has become payable, notwithstanding any
9.15designation of beneficiary to the contrary, the surviving spouse of the employee may
9.16elect to receive, in lieu of the refund under section 352.12, subdivision 1, an annuity for
9.17life equal to the joint and 100 percent survivor annuity which the employee could have
9.18qualified for had the employee terminated service on the date of death. The election
9.19may be made at any time after the date of death of the employee. The surviving spouse
9.20benefit begins to accrue as of the first of the month next following the date on which
9.21the application for the benefit was filed.
9.22    (b) If the employee was under age 50, dies, and had credit for at least three years
9.23of allowable service credit on the date of death if first employed as a correctional state
9.24employee before July 1, 2010, or had credit for at least ten years of allowable service on
9.25the date of death if first employed as a correctional state employee after June 30, 2010, but
9.26did not yet qualify for retirement, the surviving spouse may elect to receive a 100 percent
9.27joint and survivor annuity based on the age of the employee and surviving spouse at the
9.28time of death. The annuity is payable using the early retirement reduction under section
9.29352.93, subdivision 2a , to age 50, and one-half of the early retirement reduction from age
9.3050 to the age payment begins. The surviving spouse eligible for surviving spouse benefits
9.31under this paragraph may apply for the annuity at any time after the employee's death.
9.32Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply to a deferred annuity or
9.33surviving spouse benefit payable under this subdivision.
9.34    (c) The annuity must cease with the last payment received by the surviving spouse
9.35in the lifetime of the surviving spouse. Any employee may request in writing, with the
10.1signed consent of the spouse, that this subdivision not apply and that payment be made
10.2only to a designated beneficiary as otherwise provided by this chapter.
10.3EFFECTIVE DATE.This section is effective the day following final enactment.

10.4    Sec. 14. Minnesota Statutes 2009 Supplement, section 352.95, subdivision 2, is
10.5amended to read:
10.6    Subd. 2. Regular disability; computation of benefit. A covered correctional
10.7employee who was hired before July 1, 2009, after rendering at least one year of covered
10.8correctional service, or a covered correctional employee who was first hired after June
10.930, 2009, after rendering at least three years of covered correctional plan service if first
10.10employed as a correctional state employee before July 1, 2010, or after rendering at least
10.11ten years of covered correctional plan service if first employed as a correctional state
10.12employee after June 30, 2010, and who is determined to have a regular disability, physical
10.13or psychological, as defined under section 352.01, subdivision 17c, is entitled to a regular
10.14disability benefit. The regular disability benefit must be based on covered correctional
10.15service only. The regular disability benefit must be computed as provided in section
10.16352.93, subdivisions 1 and 2 . The regular disability benefit of a covered correctional
10.17employee who was first hired before July 1, 2009, and who is determined to have a regular
10.18disability, physical or psychological, under this subdivision must be computed as though
10.19the employee had at least 15 years of covered correctional service.
10.20EFFECTIVE DATE.This section is effective the day following final enactment.

10.21    Sec. 15. Minnesota Statutes 2008, section 352B.02, as amended by Laws 2009, chapter
10.22101, article 2, section 109; and Laws 2009, chapter 169, article 1, section 23; article 2,
10.23section 16; and article 4, sections 3 and 4, is amended to read:
10.24352B.02 STATE PATROL RETIREMENT FUND.
10.25    Subdivision 1. Fund created; membership. A State Patrol retirement fund
10.26is established. Its membership consists of all persons defined in section 352B.011,
10.27subdivision 10 .
10.28    Subd. 1a. Member contributions. (a) The member contribution is 10.40 percent
10.29the following percentage of the member's salary.:

10.30 10.31		(1) before the first day of the first pay period beginning after July 1, 2011	10.40 percent
10.32 10.33		(2) on or after the first day of the first pay period beginning after July 1, 2011	12.40 percent

11.1(b) These contributions must be made by deduction from salary as provided in
11.2section 352.04, subdivision 4.
11.3    Subd. 1b. Salary deductions. Member contribution amounts must be deducted each
11.4pay period by the department head, who shall have the total amount of the deductions paid
11.5to the commissioner of management and budget for deposit in the State Patrol retirement
11.6fund, and have a detailed report of all deductions made each pay period to the executive
11.7director of the Minnesota State Retirement System.
11.8    Subd. 1c. Employer contributions. (a) In addition to member contributions,
11.9department heads shall pay a sum equal to 15.60 percent the specified percentage of the
11.10salary upon which deductions were made, which constitutes the employer contribution
11.11to the fund. as follows:

11.12 11.13		(1) before the first day of the first pay period beginning after July 1, 2011	15.60 percent
11.14 11.15		(2) on or after the first day of the first pay period beginning after July 1, 2011	18.60 percent

11.16(b) Department contributions must be paid out of money appropriated to departments
11.17for this purpose.
11.18    Subd. 1d. Fund revenue and expenses. The amounts provided for in this section
11.19must be credited to the State Patrol retirement fund. All money received must be deposited
11.20by the commissioner of management and budget in the State Patrol retirement fund. The
11.21fund must be used to pay the administrative expenses of the retirement fund, and the
11.22benefits and annuities provided in this chapter.
11.23    Subd. 1e. Audit; regular actuarial valuation; supplemental valuations. (a) The
11.24legislative auditor shall audit the fund.
11.25(b) Any actuarial valuation of the fund required under section 356.215 must be
11.26prepared by the actuary retained under section 356.214.
11.27(c) Any approved actuary retained by the executive director under section 352.03,
11.28subdivision 6 , may perform actuarial valuations and experience studies to supplement
11.29those performed by the actuary retained under section 356.214. Any supplemental
11.30actuarial valuation or experience studies must be filed with the executive director of the
11.31Legislative Commission on Pensions and Retirement.
11.32EFFECTIVE DATE.This section is effective the day following final enactment.

11.33    Sec. 16. Minnesota Statutes 2008, section 352B.08, subdivision 1, is amended to read:
11.34    Subdivision 1. Eligibility; when to apply; accrual. (a) Every member who is
11.35credited with three or more years of allowable service if first employed before July 1,
12.12010, or with at least five years of allowable service if first employed after June 30, 2010,
12.2is entitled to separate from state service and upon becoming 50 years old, is entitled to
12.3receive a life annuity, upon separation from state service.
12.4(b) Members shall must apply for an annuity in a form and manner prescribed by the
12.5executive director.
12.6(c) No application may be made more than 90 days before the date the member is
12.7eligible to retire by reason of both age and service requirements.
12.8(d) An annuity begins to accrue no earlier than 180 days before the date the
12.9application is filed with the executive director.
12.10EFFECTIVE DATE.This section is effective the day following final enactment.

12.11    Sec. 17. Minnesota Statutes 2008, section 352B.08, subdivision 2a, is amended to read:
12.12    Subd. 2a. Early retirement. Any member who has become at least 50 years old and
12.13who has at least three years of allowable service if first employed before July 1, 2010, or
12.14who has at least five years of allowable service if first employed after June 30, 2010, is
12.15entitled upon application to a reduced retirement annuity equal to the annuity calculated
12.16under subdivision 2, reduced by one-tenth of one percent for each month that the member
12.17is under age 55 at the time of retirement if first employed before July 1, 2010, or reduced
12.18by two-tenths of one percent for each month that the member is under age 55 at the time of
12.19retirement if first employed after June 30, 2010.
12.20EFFECTIVE DATE.This section is effective the day following final enactment.

12.21    Sec. 18. Minnesota Statutes 2008, section 352B.11, subdivision 2b, is amended to read:
12.22    Subd. 2b. Surviving spouse benefit eligibility. (a) If an active member with three or
12.23more years of allowable service if first employed before July 1, 2010, or with at least five
12.24years of allowable service if first employed after June 30, 2010, dies before attaining age
12.2555, the surviving spouse is entitled to the benefit specified in subdivision 2c, paragraph (b).
12.26(b) If an active member with less than three years of allowable service if first
12.27employed before July 1, 2010, or with fewer than five years of allowable service if first
12.28employed after June 30, 2010, dies at any age, the surviving spouse is entitled to receive
12.29the benefit specified in subdivision 2c, paragraph (c).
12.30(c) If an active member with three or more years of allowable service if first
12.31employed before July 1, 2010, or with at least five years of allowable service if first
12.32employed after June 30, 2010, dies on or after attaining exact age 55, the surviving spouse
12.33is entitled to receive the benefits specified in subdivision 2c, paragraph (d).
13.1(d) If a disabilitant dies while receiving a disability benefit under section 352B.10 or
13.2before the benefit under that section commenced, and an optional annuity was not elected
13.3under section 352B.10, subdivision 5, the surviving spouse is entitled to receive the benefit
13.4specified in subdivision 2c, paragraph (b).
13.5(e) If a former member with three or more years of allowable service if first
13.6employed before July 1, 2010, or with at least five years of allowable service if first
13.7employed after June 30, 2010, who terminated from service and has not received a refund
13.8or commenced receipt of any other benefit provided by this chapter, dies, the surviving
13.9spouse is entitled to receive the benefit specified in subdivision 2c, paragraph (e).
13.10(f) If a former member with less than three years of allowable service if first
13.11employed before July 1, 2010, or with fewer than five years of allowable service if first
13.12employed after June 30, 2010, who terminated from service and has not received a refund
13.13or commenced receipt of any other benefit, if applicable, provided by this chapter, dies, the
13.14surviving spouse is entitled to receive the refund specified in subdivision 2c, paragraph (f).
13.15EFFECTIVE DATE.This section is effective the day following final enactment.

13.16    Sec. 19. Minnesota Statutes 2008, section 352B.30, subdivision 1, is amended to read:
13.17    Subdivision 1. Entitlement to annuity. Any person who has been an employee
13.18covered by the Minnesota State Retirement System, or a member of the Public Employees
13.19Retirement Association including the Public Employees Retirement Association Police
13.20and Fire Fund, or the Teachers Retirement Association, or the State Patrol retirement fund,
13.21or any other public employee retirement system in Minnesota having a like provision but
13.22excluding all other funds providing benefits for police or firefighters is entitled when
13.23qualified to an annuity from each fund if total allowable service in all funds or in any two
13.24of these funds totals three or more the number of years of allowable service required by
13.25the applicable retirement plan with the longest vesting period for the person. No part of
13.26the allowable service upon which the retirement annuity from one fund is based may
13.27again be used in the computation for benefits from another fund. The member must not
13.28have taken a refund from any one of these funds since service entitling the member to
13.29coverage under the system or membership in any of the associations last terminated.
13.30The annuity from each fund must be determined by the appropriate law except that the
13.31requirement that a person must have at least three a specific number of years allowable
13.32service in the respective system or association does not apply for the purposes of this
13.33section if the combined service in two or more of these funds equals three or more the
13.34number of years of allowable service required by the applicable retirement plan with
13.35the longest vesting period for the person.
14.1EFFECTIVE DATE.This section is effective the day following final enactment.

14.2    Sec. 20. Minnesota Statutes 2008, section 352B.30, subdivision 2, is amended to read:
14.3    Subd. 2. Computation of deferred annuity. Deferred annuities must be computed
14.4according to this chapter on the basis of allowable service before termination of service
14.5and augmented as provided in this chapter. The required reserves applicable to a deferred
14.6annuity must be augmented by interest compounded annually from the first day of the
14.7month following the month in which the member terminated service, or July 1, 1971,
14.8whichever is later, to the first day of the month in which the annuity begins to accrue. The
14.9rates of interest used for this purpose shall must be five percent per year compounded
14.10annually until January 1, 1981, and after that date three percent per year compounded
14.11annually after January 1, 1981, until January 1, 2012, if the employee became an employee
14.12before July 1, 2006, and at 2.5 percent compounded annually if the employee becomes
14.13an employee after June 30, 2006, and two percent per year compounded annually after
14.14December 31, 2011, irrespective of when the employee was first employed. The mortality
14.15table and interest assumption used to compute the annuity shall must be those in effect
14.16when the member files application for annuity.
14.17EFFECTIVE DATE.This section is effective the day following final enactment.

14.18    Sec. 21. Minnesota Statutes 2008, section 352F.07, is amended to read:
14.19352F.07 EFFECT ON REFUND.
14.20Notwithstanding any provision of chapter 352 to the contrary, terminated hospital
14.21employees may receive a refund of employee accumulated contributions plus interest
14.22at the rate of six percent per year compounded annually in accordance with Minnesota
14.23Statutes 1994, section 352.22, subdivision 2, at any time after the transfer of employment
14.24to Fairview, University of Minnesota Physicians, or University Affiliated Family
14.25Physicians. If a terminated hospital employee has received a refund from a pension plan
14.26enumerated in section 356.30, subdivision 3, the person may not repay that refund unless
14.27the person again becomes a member of one of those enumerated plans and complies
14.28with section 356.30, subdivision 2.
14.29EFFECTIVE DATE.This section is effective the day following final enactment.

14.30    Sec. 22. Minnesota Statutes 2008, section 353.01, is amended by adding a subdivision
14.31to read:
15.1    Subd. 47. Vesting. (a) "Vesting" means obtaining a nonforfeitable entitlement
15.2to an annuity or benefit from a retirement plan administered by the Public Employees
15.3Retirement Association by having credit for sufficient allowable service under paragraph
15.4(b) or (c), whichever applies.
15.5(b) For purposes of qualifying for an annuity or benefit as a basic or coordinated plan
15.6member of the general employees retirement plan of the Public Employees Retirement
15.7Association:
15.8(1) a member who first became a public employee before July 1, 2010, is vested
15.9when the person has accrued credit for not less than three years of allowable service as
15.10defined under subdivision 16; and
15.11(2) a member who first becomes a public employee after June 30, 2010, is vested
15.12when the person has accrued credit for not less than five years of allowable service
15.13as defined under subdivision 16.
15.14(c) For purposes of qualifying for an annuity or benefit as a member of the police
15.15and fire plan or a member of the local government correctional employees retirement plan:
15.16(1) a member who first became a public employee before July 1, 2010, is vested
15.17when the person has accrued credit for not less than three years of allowable service as
15.18defined under subdivision 16; and
15.19(2) a member who first becomes a public employee after June 30, 2010, is vested
15.20at the following percentages when the person has accrued credited allowable service as
15.21defined under subdivision 16, as follows:
15.22(i) 50 percent after five years;
15.23(ii) 60 percent after six years;
15.24(iii) 70 percent after seven years;
15.25(iv) 80 percent after eight years;
15.26(v) 90 percent after nine years; and
15.27(vi) 100 percent after ten years.
15.28EFFECTIVE DATE.This section is effective the day following final enactment.

15.29    Sec. 23. Minnesota Statutes 2009 Supplement, section 353.27, subdivision 2, is
15.30amended to read:
15.31    Subd. 2. Employee contribution. (a) For a basic member, the employee
15.32contribution is 9.10 percent of salary. For a coordinated member, the employee
15.33contribution is six percent the following percentage of salary plus any contribution rate
15.34adjustment under subdivision 3b.:

16.1		Effective before January 1, 2011	6.00
16.2		Effective after December 31, 2010	6.25

16.3(b) These contributions must be made by deduction from salary as defined in section
16.4353.01, subdivision 10 , in the manner provided in subdivision 4. If any portion of a
16.5member's salary is paid from other than public funds, the member's employee contribution
16.6must be based on the total salary received by the member from all sources.
16.7EFFECTIVE DATE.This section is effective the day following final enactment.

16.8    Sec. 24. Minnesota Statutes 2009 Supplement, section 353.27, subdivision 3, is
16.9amended to read:
16.10    Subd. 3. Employer contribution. (a) For a basic member, the employer
16.11contribution is 9.10 percent of salary. For a coordinated member, the employer
16.12contribution is six percent the following percentage of salary plus any contribution rate
16.13adjustment under subdivision 3b.:

16.14		Effective before January 1, 2011	6.00
16.15		Effective after December 31, 2010	6.25

16.16(b) This contribution must be made from funds available to the employing
16.17subdivision by the means and in the manner provided in section 353.28.
16.18EFFECTIVE DATE.This section is effective the day following final enactment.

16.19    Sec. 25. Minnesota Statutes 2008, section 353.27, subdivision 3b, is amended to read:
16.20    Subd. 3b. Change in employee and employer contributions in certain instances.
16.21(a) For purposes of this section,:
16.22(1) a contribution sufficiency exists if the total of the employee contribution under
16.23subdivision 2, the employer contribution under subdivision 3, the additional employer
16.24contribution under subdivision 3a, and any additional contribution previously imposed
16.25under this subdivision exceeds the total of the normal cost, the administrative expenses,
16.26and the amortization contribution of the retirement plan as reported in the most recent
16.27actuarial valuation of the retirement plan prepared by the actuary retained under section
16.28356.214 and prepared under section 356.215 and the standards for actuarial work of the
16.29Legislative Commission on Pensions and Retirement. For purposes of this section,; and
16.30(2) a contribution deficiency exists if the total of the employee contributions under
16.31subdivision 2, the employer contributions under subdivision 3, the additional employer
16.32contribution under subdivision 3a, and any additional contribution previously imposed
16.33under this subdivision is less than the total of the normal cost, the administrative expenses,
17.1and the amortization contribution of the retirement plan as reported in the most recent
17.2actuarial valuation of the retirement plan prepared by the actuary retained under section
17.3356.214 and prepared under section 356.215 and the standards for actuarial work of the
17.4Legislative Commission on Pensions and Retirement.
17.5(b) Employee and employer contributions under subdivisions 2 and 3 must be
17.6adjusted:
17.7(1) if, on or after July 1, 2010, the regular actuarial valuations valuation of the
17.8general employees retirement plan of the Public Employees Retirement Association under
17.9section 356.215 indicate indicates that there is a contribution sufficiency under paragraph
17.10(a) equal to or greater than 0.5 one percent of covered payroll and that the sufficiency
17.11has existed for at least two consecutive years, the coordinated program employee and
17.12employer contribution rates must be decreased as determined under paragraph (c) to a
17.13level such that the sufficiency equals is no more greater than 0.25 one percent of covered
17.14payroll based on the most recent actuarial valuation; or
17.15(2) if, on or after July 1, 2010, the regular actuarial valuations valuation of the
17.16general employees retirement plan of the Public Employees Retirement Association under
17.17section 356.215 indicate indicates that there is a contribution deficiency equal to or greater
17.18than 0.5 percent of covered payroll and that the deficiency has existed for at least two
17.19consecutive years, the coordinated program employee and employer contribution rates
17.20must be increased as determined under paragraph (c) (d) to a level such that no deficiency
17.21exists based on the most recent actuarial valuation.
17.22(c) The contribution rate increase or decrease must be determined by the executive
17.23director of the Public Employees Retirement Association, must be reported to the chair
17.24and the executive director of the Legislative Commission on Pensions and Retirement
17.25on or before the next February 1, and, if the Legislative Commission on Pensions and
17.26Retirement does not recommend against the rate change or does not recommend a
17.27modification in the rate change, is effective on the next July 1 following the determination
17.28by the executive director that a contribution deficiency or sufficiency has existed for
17.29two consecutive fiscal years based on the most recent actuarial valuations under section
17.30356.215. If the actuarially required contribution exceeds or is less than the total support
17.31provided by the combined employee and employer contribution rates under subdivisions
17.322, 3, and 3a, by more than 0.5 one percent of covered payroll, the coordinated program
17.33employee and employer contribution rates under subdivisions 2 and 3 must be adjusted
17.34decreased incrementally over one or more years by no more than 0.25 percent of pay each
17.35for employee and employer matching contribution rates to a level such that there remains
17.36a contribution sufficiency of no more than 0.25 at least one percent of covered payroll. No
18.1contribution rate decrease may be made until at least two years have elapsed since any
18.2adjustment under this subdivision has been fully implemented.
18.3(d) No If the actuarially required contribution exceeds the total support provided
18.4by the combined employee and employer contribution rates under subdivisions 2, 3, and
18.53a, the employee and matching employer contribution rates must be increased equally to
18.6eliminate that contribution deficiency. If the contribution deficiency is:
18.7(1) less than two percent, the incremental adjustment increase may exceed be up
18.8to 0.25 percent for either the coordinated program employee and matching employer
18.9contribution rates per year in which any adjustment is implemented. A contribution rate
18.10adjustment under this subdivision must not be made until at least two years have passed
18.11since fully implementing a previous adjustment under this subdivision.;
18.12(2) greater than 1.99 percent and less than 4.01 percent, the incremental increase
18.13may be up to 0.5 percent for the employee and matching employer contribution rates; or
18.14(3) greater than four percent, the incremental increase may be up to 0.75 percent for
18.15the employee and matching employer contribution.
18.16(e) Any recommended adjustment to the contribution rates must be reported
18.17to the chair and the executive director of the Legislative Commission on Pensions
18.18and Retirement by January 15 following receipt of the most recent annual actuarial
18.19valuation prepared under section 356.215. If the Legislative Commission on Pensions
18.20and Retirement does not recommend against the rate change or does not recommend a
18.21modification in the rate change, the recommended adjustment becomes effective on the
18.22first day of the first full payroll period in the fiscal year following receipt of the most
18.23recent actuarial valuation that gave rise to the adjustment.
18.24(f) A contribution sufficiency of up to one percent of covered payroll must be held in
18.25reserve to be used to offset any future actuarially required contributions that are more than
18.26the total combined employee and employer contributions under subdivisions 2, 3, and 3a.
18.27(g) Before any reduction in contributions to eliminate a sufficiency in excess of one
18.28percent of covered pay may be recommended, the executive director must review any
18.29need for a change in actuarial assumptions, as recommended by the actuary retained under
18.30section 356.214 in the most recent experience study of the general employees retirement
18.31plan prepared under section 356.215 and the standards for actuarial work promulgated by
18.32the Legislative Commission on Pensions and Retirement that may result in an increase
18.33in the actuarially required contribution and must report to the Legislative Commission
18.34on Pensions and Retirement any recommendation by the board to use the sufficiency
18.35exceeding one percent of covered payroll to offset the impact of an actuarial assumption
19.1change recommended by the actuary retained under section 356.214, subdivision 1, and
19.2reviewed by the actuary retained by the commission under section 356.214, subdivision 4.
19.3(h) No contribution sufficiency in excess of one percent of covered pay may be
19.4proposed to be used to increase benefits, and no benefit increase may be proposed that
19.5would initiate an automatic adjustment to increase contributions under this subdivision.
19.6Any proposed benefit improvement must include a recommendation, prepared by the
19.7actuary retained under section 356.214, subdivision 1, and reviewed by the actuary
19.8retained by the Legislative Commission on Pensions and Retirement as provided under
19.9section 356.214, subdivision 4, on how the benefit modification will be funded.
19.10EFFECTIVE DATE.This section is effective the day following final enactment.

19.11    Sec. 26. Minnesota Statutes 2008, section 353.29, subdivision 1, is amended to read:
19.12    Subdivision 1. Age and allowable service requirements. Upon termination of
19.13membership, a person who has attained normal retirement age and who received credit for
19.14not less than three years of allowable service is vested under section 353.01, subdivision
19.1547, is entitled upon application to a retirement annuity. The retirement annuity is known
19.16as the "normal" retirement annuity.
19.17EFFECTIVE DATE.This section is effective the day following final enactment.

19.18    Sec. 27. Minnesota Statutes 2008, section 353.30, subdivision 1c, is amended to read:
19.19    Subd. 1c. Pre-July 1, 1989, members: early retirement. Upon termination of
19.20public service, a person who first became a public employee or a member of a pension
19.21fund listed in section 356.30, subdivision 3, before July 1, 1989, who has become at least
19.2255 years old but not normal retirement age, and has received credit for at least three years
19.23of allowable service is vested under section 353.01, subdivision 47, is entitled, upon
19.24application, to a retirement annuity in an amount equal to the normal annuity provided in
19.25section 353.29, subdivision 3, paragraph (a), reduced by one-quarter of one percent for
19.26each month that the member is under normal retirement age at the time of retirement.
19.27EFFECTIVE DATE.This section is effective the day following final enactment.

19.28    Sec. 28. Minnesota Statutes 2008, section 353.32, subdivision 1, is amended to read:
19.29    Subdivision 1. Before retirement. If a member or former member who terminated
19.30public service dies before retirement or before receiving any retirement annuity and no
19.31other payment of any kind is or may become payable to any person, a refund shall be paid
19.32is payable to the designated beneficiary or, if there be none, to the surviving spouse,
20.1or, if none, to the legal representative of the decedent's estate. Such The refund shall
20.2must be in an amount equal to accumulated deductions plus annual compound interest
20.3thereon at the rate of six percent per annum compounded annually specified in section
20.4353.34, subdivision 2, and less the sum of any disability or survivor benefits, if any, that
20.5may have been paid by the fund; provided that a survivor who has a right to benefits
20.6pursuant to under section 353.31 may waive such benefits in writing, except such benefits
20.7for a dependent child under the age of 18 years may only be waived pursuant to under an
20.8order of the district court.
20.9EFFECTIVE DATE.This section is effective the day following final enactment.

20.10    Sec. 29. Minnesota Statutes 2008, section 353.32, subdivision 1a, is amended to read:
20.11    Subd. 1a. Surviving spouse optional annuity. (a) If a member or former member
20.12who has credit for not less than three years of allowable service is vested under section
20.13353.01, subdivision 47, and who dies before the annuity or disability benefit begins to
20.14accrue under section 353.29, subdivision 7, or 353.33, subdivision 2, notwithstanding any
20.15designation of beneficiary to the contrary, the surviving spouse may elect to receive,
20.16instead of a refund with interest under subdivision 1, or surviving spouse benefits otherwise
20.17payable under section 353.31, an annuity equal to a 100 percent joint and survivor annuity
20.18computed consistent with section 353.30, subdivision 1a, 1c, or 5, whichever is applicable.
20.19    (b) If a member first became a public employee or a member of a pension fund listed
20.20in section 356.30, subdivision 3, before July 1, 1989, and has credit for at least 30 years
20.21of allowable service on the date of death, the surviving spouse may elect to receive a
20.22100 percent joint and survivor annuity computed using section 353.30, subdivision 1b,
20.23except that the early retirement reduction under that provision will be applied from age
20.2462 back to age 55 and one-half of the early retirement reduction from age 55 back to
20.25the age payment begins.
20.26    (c) If a member who was under age 55 and has credit for at least three years of
20.27allowable service who is vested under section 353.01, subdivision 47, dies, but did not
20.28qualify for retirement on the date of death, the surviving spouse may elect to receive a
20.29100 percent joint and survivor annuity computed using section 353.30, subdivision 1c or
20.305, as applicable, except that the early retirement reduction specified in the applicable
20.31subdivision will be applied to age 55 and one-half of the early retirement reduction from
20.32age 55 back to the age payment begins.
20.33    (d) Notwithstanding the definition of surviving spouse in section 353.01, subdivision
20.3420 , a former spouse of the member, if any, is entitled to a portion of the monthly surviving
20.35spouse optional annuity if stipulated under the terms of a marriage dissolution decree filed
21.1with the association. If there is no surviving spouse or child or children, a former spouse
21.2may be entitled to a lump-sum refund payment under subdivision 1, if provided for in a
21.3marriage dissolution decree, but not a monthly surviving spouse optional annuity, despite
21.4the terms of a marriage dissolution decree filed with the association.
21.5    (e) The surviving spouse eligible for surviving spouse benefits under paragraph (a)
21.6may apply for the annuity at any time after the date on which the deceased employee
21.7would have attained the required age for retirement based on the employee's allowable
21.8service. The surviving spouse eligible for surviving spouse benefits under paragraph (b) or
21.9(c) may apply for an annuity any time after the member's death.
21.10    (f) Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred
21.11annuity or surviving spouse benefit payable under this subdivision.
21.12    (g) An amount equal to any excess of the accumulated contributions that were
21.13credited to the account of the deceased employee over and above the total of the annuities
21.14paid and payable to the surviving spouse must be paid to the surviving spouse's estate.
21.15    (h) A member may specify in writing, with the signed consent of the spouse, that
21.16this subdivision does not apply and that payment may be made only to the designated
21.17beneficiary as otherwise provided by this chapter. The waiver of a surviving spouse
21.18annuity under this section does not make a dependent child eligible for benefits under
21.19subdivision 1c.
21.20    (i) If the deceased member or former member first became a public employee or a
21.21member of a public pension plan listed in section 356.30, subdivision 3, on or after July
21.221, 1989, a survivor annuity computed under paragraph (a) or (c) must be computed as
21.23specified in section 353.30, subdivision 5, except for the revised early retirement reduction
21.24specified in paragraph (c), if paragraph (c) is the applicable provision.
21.25    (j) For any survivor annuity determined under this subdivision, the payment is to be
21.26based on the total allowable service that the member had accrued as of the date of death
21.27and the age of the member and surviving spouse on that date.
21.28EFFECTIVE DATE.This section is effective the day following final enactment.

21.29    Sec. 30. Minnesota Statutes 2009 Supplement, section 353.33, subdivision 1, is
21.30amended to read:
21.31    Subdivision 1. Age, service, and salary requirements. (a) A coordinated or
21.32basic member who has at least three years of allowable service is vested under section
21.33353.01, subdivision 47, and who becomes totally and permanently disabled before normal
21.34retirement age, upon application as defined under section 353.031, is entitled to a disability
21.35benefit in an amount determined under subdivision 3.
22.1(b) If the disabled person's public service has terminated at any time, at least two of
22.2the required three years of allowable service required to be vested under section 353.01,
22.3subdivision 47, must have been rendered after last becoming an active member.
22.4EFFECTIVE DATE.This section is effective the day following final enactment.

22.5    Sec. 31. Minnesota Statutes 2008, section 353.34, subdivision 1, is amended to read:
22.6    Subdivision 1. Refund or deferred annuity. (a) A former member is entitled to
22.7either a refund of accumulated employee deductions under subdivision 2, or to a deferred
22.8annuity under subdivision 3. Application for a refund may not be made before the date of
22.9termination of public service. Except as specified in paragraph (b), a refund must be paid
22.10within 120 days following receipt of the application unless the applicant has again become
22.11a public employee required to be covered by the association.
22.12(b) If an individual was placed on layoff under section 353.01, subdivision 12 or 12c,
22.13a refund is not payable before termination of service under section 353.01, subdivision 11a.
22.14(c) An individual who terminates public service covered by the Public Employees
22.15Retirement Association general employees retirement plan, the Public Employees
22.16Retirement Association police and fire retirement plan, or the public employees local
22.17government corrections correctional service retirement plan, and who is employed by a
22.18different employer and who becomes an active member covered by one of the other two
22.19plans, may receive a refund of employee contributions plus six percent annual compound
22.20interest compounded annually from the plan from which the member terminated service at
22.21the applicable rate specified in subdivision 2.
22.22EFFECTIVE DATE.This section is effective the day following final enactment.

22.23    Sec. 32. Minnesota Statutes 2008, section 353.34, subdivision 2, is amended to read:
22.24    Subd. 2. Refund with interest. (a) Except as provided in subdivision 1, any person
22.25who ceases to be a public employee shall is entitled to receive a refund in an amount equal
22.26to accumulated deductions with annual compound interest to the first day of the month
22.27in which the refund is processed at the rate of six percent compounded annually based
22.28on fiscal year balances.
22.29(b) For a person who ceases to be a public employee before July 1, 2011, the refund
22.30interest is at the rate of six percent to June 30, 2011, and at the rate of four percent after
22.31June 30, 2011. For a person who ceases to be a public employee after July 1, 2011, the
22.32refund interest is at the rate of four percent.
23.1(c) If a person repays a refund and subsequently applies for another refund, the
23.2repayment amount, including interest, is added to the fiscal year balance in which the
23.3repayment was made.
23.4EFFECTIVE DATE.This section is effective the day following final enactment.

23.5    Sec. 33. Minnesota Statutes 2008, section 353.34, subdivision 3, is amended to read:
23.6    Subd. 3. Deferred annuity; eligibility; computation. (a) A member with at least
23.7three years of allowable service who is vested under section 353.01, subdivision 47, when
23.8termination of public service or termination of membership occurs has the option of
23.9leaving the accumulated deductions in the fund and being entitled to a deferred retirement
23.10annuity commencing at normal retirement age or to a deferred early retirement annuity
23.11under section 353.30, subdivision 1a, 1b, 1c, or 5.
23.12(b) The deferred annuity must be computed under section 353.29, subdivision 3, on
23.13the basis of the law in effect on the date of termination of public service or termination of
23.14membership, whichever is earlier, and must be augmented as provided in section 353.71,
23.15subdivision 2 .
23.16(c) A former member qualified to apply for a deferred retirement annuity may
23.17revoke this option at any time before the commencement of deferred annuity payments
23.18by making application for a refund. The person is entitled to a refund of accumulated
23.19member contributions within 30 days following date of receipt of the application by the
23.20executive director.
23.21EFFECTIVE DATE.This section is effective the day following final enactment.

23.22    Sec. 34. Minnesota Statutes 2009 Supplement, section 353.65, subdivision 2, is
23.23amended to read:
23.24    Subd. 2. Employee contribution. The employee contribution is 9.4 percent of the
23.25salary of the member in calendar year 2010 and is 9.6 percent of the salary of the member
23.26in each calendar year after 2010. This contribution must be made by deduction from
23.27salary in the manner provided in subdivision 4. Where any portion of a member's salary
23.28is paid from other than public funds, the member's employee contribution is based on
23.29the total salary received from all sources.
23.30EFFECTIVE DATE.This section is effective the day following final enactment.

23.31    Sec. 35. Minnesota Statutes 2009 Supplement, section 353.65, subdivision 3, is
23.32amended to read:
24.1    Subd. 3. Employer contribution. The employer contribution is 14.1 percent of the
24.2salary of the member in calendar year 2010 and is 14.4 percent of the salary of the member
24.3in each calendar year after 2010. This contribution must be made from funds available to
24.4the employing subdivision by the means and in the manner provided in section 353.28.
24.5EFFECTIVE DATE.This section is effective the day following final enactment.

24.6    Sec. 36. Minnesota Statutes 2008, section 353.651, subdivision 1, is amended to read:
24.7    Subdivision 1. Age and allowable service requirements. Upon separation from
24.8public service, any police officer or firefighter member who has attained the age of at
24.9least 55 years and who received credit for not less than three years of allowable service
24.10is vested under section 353.01, subdivision 47, is entitled upon application to a retirement
24.11annuity. Such retirement annuity is, known as the "normal" retirement annuity.
24.12EFFECTIVE DATE.This section is effective the day following final enactment.

24.13    Sec. 37. Minnesota Statutes 2008, section 353.651, subdivision 4, is amended to read:
24.14    Subd. 4. Early retirement. (a) A person who becomes a police and fire plan
24.15member after June 30, 2007, or a former member who is reinstated as a member of the
24.16plan after that date, who is at least 50 years of age with at least three years of allowable
24.17service and who is vested under section 353.01, subdivision 47, upon the termination of
24.18public service is entitled upon application to a retirement annuity equal to the normal
24.19annuity calculated under subdivision 3, reduced by two-tenths of one percent for each
24.20month that the member is under age 55 at the time of retirement.
24.21    (b) Upon the termination of public service, any police and fire plan member not
24.22specified in paragraph (a), upon attaining at least 50 years of age with at least three years
24.23of allowable service is entitled upon application to a retirement annuity equal to the
24.24normal annuity calculated under subdivision 3, reduced by one-tenth of one percent for
24.25each month that the member is under age 55 at the time of retirement.
24.26EFFECTIVE DATE.This section is effective the day following final enactment.

24.27    Sec. 38. Minnesota Statutes 2008, section 353.657, subdivision 1, is amended to read:
24.28    Subdivision 1. Generally. (a) In the event that a member of the police and fire
24.29fund dies from any cause before retirement or before becoming disabled and receiving
24.30disability benefits, the association shall grant survivor benefits to a surviving spouse, as
24.31defined in section 353.01, subdivision 20, and to a dependent child or children, as defined
24.32in section 353.01, subdivision 15, except that if the death is not a line of duty death, the
25.1member must have accrued at least three years of credited service be vested under section
25.2353.01, subdivision 47.
25.3    (b) Notwithstanding the definition of surviving spouse, a former spouse of the
25.4member, if any, is entitled to a portion of the monthly surviving spouse benefit if
25.5stipulated under the terms of a marriage dissolution decree filed with the association. If
25.6there is no surviving spouse or child or children, a former spouse may be entitled to
25.7a lump-sum refund payment under section 353.32, subdivision 1, if provided for in a
25.8marriage dissolution decree but not a monthly surviving spouse benefit despite the terms
25.9of a marriage dissolution decree filed with the association.
25.10    (c) The spouse and child or children are entitled to monthly benefits as provided in
25.11subdivisions 2 to 4.
25.12EFFECTIVE DATE.This section is effective the day following final enactment.

25.13    Sec. 39. Minnesota Statutes 2008, section 353.657, subdivision 2a, is amended to read:
25.14    Subd. 2a. Death while eligible survivor benefit. (a) If a member or former member
25.15who has attained the age of at least 50 years and has credit for not less than three years
25.16allowable service either who is vested under section 353.01, subdivision 47, or who has
25.17credit for at least 30 years of allowable service, regardless of age attained, dies before
25.18the annuity or disability benefit becomes payable, notwithstanding any designation of
25.19beneficiary to the contrary, the surviving spouse may elect to receive a death while
25.20eligible survivor benefit.
25.21    (b) Notwithstanding the definition of surviving spouse in section 353.01, subdivision
25.2220 , a former spouse of the member, if any, is entitled to a portion of the death while
25.23eligible survivor benefit if stipulated under the terms of a marriage dissolution decree
25.24filed with the association. If there is no surviving spouse or child or children, a former
25.25spouse may be entitled to a lump-sum refund payment under section 353.32, subdivision
25.261 , if provided for in a marriage dissolution decree but not a death while eligible survivor
25.27benefit despite the terms of a marriage dissolution decree filed with the association.
25.28    (c) The benefit may be elected instead of a refund with interest under section 353.32,
25.29subdivision 1 , or surviving spouse benefits otherwise payable under subdivisions 1 and
25.302. The benefit must be an annuity equal to the 100 percent joint and survivor annuity
25.31which the member could have qualified for on the date of death, computed as provided in
25.32sections 353.651, subdivisions 2 and 3, and 353.30, subdivision 3.
25.33    (d) The surviving spouse may apply for the annuity at any time after the date
25.34on which the deceased employee would have attained the required age for retirement
26.1based on the employee's allowable service. Sections 353.34, subdivision 3, and 353.71,
26.2subdivision 2 , apply to a deferred annuity payable under this subdivision.
26.3    (e) No payment accrues beyond the end of the month in which entitlement to
26.4such annuity has terminated. An amount equal to the excess, if any, of the accumulated
26.5contributions which were credited to the account of the deceased employee over and
26.6above the total of the annuities paid and payable to the surviving spouse must be paid to
26.7the deceased member's last designated beneficiary or, if none, to the legal representative of
26.8the estate of such deceased member.
26.9    (f) Any member may request in writing, with the signed consent of the spouse, that
26.10this subdivision not apply and that payment be made only to the designated beneficiary, as
26.11otherwise provided by this chapter.
26.12    (g) For a member who is employed as a full-time firefighter by the Department of
26.13Military Affairs of the state of Minnesota, allowable service as a full-time state Military
26.14Affairs Department firefighter credited by the Minnesota State Retirement System may be
26.15used in meeting the minimum allowable service requirement of this subdivision.
26.16EFFECTIVE DATE.This section is effective the day following final enactment.

26.17    Sec. 40. Minnesota Statutes 2008, section 353.71, subdivision 1, is amended to read:
26.18    Subdivision 1. Eligibility. Any person who has been a member of a defined benefit
26.19retirement plan administered by the Public Employees Retirement Association, or a
26.20retirement plan administered by the Minnesota State Retirement System, or the Teachers
26.21Retirement Association, or any other public retirement system in the state of Minnesota
26.22having a like provision, except a fund retirement plan providing benefits for police officers
26.23or firefighters governed by sections 69.77 or 69.771 to 69.776, shall be is entitled, when
26.24qualified, to an annuity from each fund retirement plan if the total allowable service in all
26.25funds retirement plans or in any two of these funds retirement plans totals three or more
26.26years the number of years of allowable service required to receive a normal retirement
26.27annuity for that retirement plan, provided that no portion of the allowable service upon
26.28which the retirement annuity from one fund retirement plan is based is again used in the
26.29computation for benefits from another fund retirement plan and provided further that the
26.30person has not taken a refund from any one of these funds retirement plans since the
26.31person's membership in that association or system last terminated. The annuity from
26.32each fund shall must be determined by the appropriate provisions of the law except that
26.33the requirement that a person must have at least three years a specific minimum period
26.34of allowable service in the respective association or system shall does not apply for the
26.35purposes of this section provided if the combined service in two or more of these funds
27.1retirement plans equals three or more the number of years of allowable service required to
27.2receive a normal retirement annuity for that retirement plan.
27.3EFFECTIVE DATE.This section is effective the day following final enactment.

27.4    Sec. 41. Minnesota Statutes 2008, section 353.71, subdivision 2, is amended to read:
27.5    Subd. 2. Deferred annuity computation; augmentation. (a) The deferred annuity
27.6accruing under subdivision 1, or under sections 353.34, subdivision 3, and 353.68,
27.7subdivision 4 , must be computed on the basis of allowable service prior to the termination
27.8of public service and augmented as provided in this paragraph subdivision. The required
27.9reserves applicable to a deferred annuity, or to any deferred segment of an annuity must
27.10be determined as of the first day of the month following the month in which the former
27.11member ceased to be a public employee, or July 1, 1971, whichever is later. These
27.12(b) For a person who became a public employee before July 1, 2006, whose period
27.13of deferral began after June 30, 1971, and who terminated public employment before
27.14January 1, 2012, the required reserves of the deferred annuity must be augmented at
27.15the following applicable rate of or rates:
27.16(1) five percent annually compounded annually annual compound interest until
27.17January 1, 1981, and at the rate of;
27.18(2) three percent thereafter annual compound interest after January 1, 1981, or until
27.19the earlier of December 31, 2011, or after the date of the termination of public service or
27.20the termination of membership, whichever is later, until January 1 of the year following
27.21the year in which the former member attains age 55 and;
27.22(3) five percent annual compound interest from that date to the effective date of
27.23retirement, the rate is five percent compounded annually if the employee became an
27.24employee before July 1, 2006, and at 2.5 percent compounded annually if the employee
27.25becomes an January 1 of the year following the year in which the former member attains
27.26age 55, or until December 31, 2011, whichever is earlier; and
27.27(4) one percent annual compound interest from January 1, 2012.
27.28(c) For a person who became a public employee after June 30, 2006, and who
27.29terminated public employment before January 1, 2012, the required reserves of the
27.30deferred annuity must be augmented at 2.5 percent annual compound interest from the date
27.31of termination of public service or termination of membership, whichever is earlier, until
27.32December 31, 2011, and one percent annual compound interest after December 31, 2011.
27.33(d) For a person who terminates public employment after December 31, 2011, the
27.34required reserves of the deferred annuity must not be augmented.
28.1(e) If a person has more than one period of uninterrupted service, the required
28.2reserves related to each period must be augmented as specified in this paragraph. The sum
28.3of the augmented required reserves is the present value of the annuity. Uninterrupted
28.4service for the purpose of this subdivision means periods of covered employment during
28.5which the employee has not been separated from public service for more than two years.
28.6If a person repays a refund, the restored service must be considered as continuous with the
28.7next period of service for which the employee has credit with this association. This section
28.8must not reduce the annuity otherwise payable under this chapter. This paragraph applies
28.9to individuals who become deferred annuitants on or after July 1, 1971. For a member
28.10who became a deferred annuitant before July 1, 1971, the paragraph applies from July 1,
28.111971, if the former active member applies for an annuity after July 1, 1973.
28.12(b) (f) The retirement annuity or disability benefit of, or the survivor benefit payable
28.13on behalf of, a former member who terminated service before July 1, 1997, or the
28.14survivor benefit payable on behalf of a basic or police and fire member who was receiving
28.15disability benefits before July 1, 1997, which is first payable after June 30, 1997, must
28.16be increased on an actuarial equivalent basis to reflect the change in the postretirement
28.17interest rate actuarial assumption under section 356.215, subdivision 8, from five percent
28.18to six percent under a calculation procedure and tables adopted by the board and approved
28.19by the actuary retained under section 356.214.
28.20EFFECTIVE DATE.This section is effective the day following final enactment.

28.21    Sec. 42. Minnesota Statutes 2008, section 353E.04, subdivision 1, is amended to read:
28.22    Subdivision 1. Eligibility requirements. After termination of public employment,
28.23an employee covered under section 353E.02 who has attained the age of at least 55 years
28.24and has credit for not less than three years of coverage who is vested under section
28.25353.01, subdivision 47, in the local government correctional service plan is entitled, upon
28.26application, to a normal retirement annuity. Instead of a normal retirement annuity, a
28.27retiring employee may elect to receive the optional annuity provided in section 353.30,
28.28subdivision 3 .
28.29EFFECTIVE DATE.This section is effective the day following final enactment.

28.30    Sec. 43. Minnesota Statutes 2008, section 353E.04, subdivision 4, is amended to read:
28.31    Subd. 4. Early retirement. An employee covered under section 353E.02 who has
28.32attained the age of at least 50 years and has credit for not less than three years of coverage
28.33who is vested under section 353.01, subdivision 47, in the local government correctional
29.1service plan is entitled, upon application, to a reduced retirement annuity equal to the
29.2annuity calculated under subdivision 3, reduced so that the reduced annuity is the actuarial
29.3equivalent of the annuity that would be payable if the employee deferred receipt of the
29.4annuity from the day the annuity begins to accrue until age 55.
29.5EFFECTIVE DATE.This section is effective the day following final enactment.

29.6    Sec. 44. Minnesota Statutes 2008, section 353E.07, subdivision 1, is amended to read:
29.7    Subdivision 1. Member at least age 50. If a member or former member of the local
29.8government correctional service retirement plan who has attained the age of at least 50
29.9years and has credit for not less than three years of allowable service who is vested under
29.10section 353.01, subdivision 47, dies before the annuity or disability benefit has become
29.11payable, notwithstanding any designation of beneficiary to the contrary, the surviving
29.12spouse may elect to receive, in lieu of a refund with interest provided in section 353.32,
29.13subdivision 1 , a surviving spouse annuity equal to the 100 percent joint and survivor
29.14annuity for which the member could have qualified had the member terminated service
29.15on the date of death.
29.16EFFECTIVE DATE.This section is effective the day following final enactment.

29.17    Sec. 45. Minnesota Statutes 2008, section 353E.07, subdivision 2, is amended to read:
29.18    Subd. 2. Member not yet age 50. If the member was under age 50, dies, and had
29.19credit for not less than three years of allowable service was vested under section 353.01,
29.20subdivision 47, on the date of death but did not yet qualify for retirement, the surviving
29.21spouse may elect to receive a 100 percent joint and survivor annuity based on the age
29.22of the employee and the surviving spouse at the time of death. The annuity is payable
29.23using the early retirement reduction under section 353E.04, subdivision 4, to age 50 and
29.24one-half the early retirement reduction from age 50 to the age payment begins. Sections
29.25353.34, subdivision 3 , and 353.71, subdivision 2, apply to a deferred annuity or surviving
29.26spouse benefit payable under this subdivision.
29.27EFFECTIVE DATE.This section is effective the day following final enactment.

29.28    Sec. 46. Minnesota Statutes 2008, section 353F.03, is amended to read:
29.29353F.03 VESTING RULE FOR CERTAIN EMPLOYEES.
29.30Notwithstanding any provision of chapter 353 to the contrary, a terminated medical
29.31facility or other public employing unit employee is eligible to receive a retirement annuity
30.1under section 353.29 of the edition of Minnesota Statutes published in the year before the
30.2year in which the privatization occurred, without regard to the requirement for three years
30.3of allowable service specified in section 353.01, subdivision 47.
30.4EFFECTIVE DATE.This section is effective the day following final enactment.

30.5    Sec. 47. Minnesota Statutes 2009 Supplement, section 354.42, subdivision 2, is
30.6amended to read:
30.7    Subd. 2. Employee contribution. (a) For a basic member, the employee
30.8contribution to the fund is 9.0 percent the following percentage of the member's salary.:

30.9		before July 1, 2011	9.0 percent
30.10		from July 1, 2011, until June 30, 2012	9.5 percent
30.11		from July 1, 2012, until June 30, 2013	10.0 percent
30.12		from July 1, 2013, until June 30, 2014	10.5 percent
30.13		after June 30, 2014	11.0 percent

30.14(b) For a coordinated member, the employee contribution is 5.5 percent the following
30.15percentage of the member's salary.:

30.16		before July 1, 2011	5.5 percent
30.17		from July 1, 2011, until June 30, 2012	6.0 percent
30.18		from July 1, 2012, until June 30, 2013	6.5 percent
30.19		from July 1, 2013, until June 30, 2014	7.0 percent
30.20		after June 30, 2014	7.5 percent

30.21(c) When an employee contribution rate changes for a fiscal year, the new
30.22contribution rate is effective for the entire salary paid for each employer unit with the
30.23first payroll cycle reported.
30.24(d) After June 30, 2015, if a contribution rate revision is required under subdivisions
30.254a, 4b, and 4c, the employee contributions under paragraphs (a) and (b) must be adjusted
30.26accordingly.
30.27(b) (e) This contribution must be made by deduction from salary. Where any portion
30.28of a member's salary is paid from other than public funds, the member's employee
30.29contribution must be based on the entire salary received.
30.30EFFECTIVE DATE.This section is effective the day following final enactment.

30.31    Sec. 48. Minnesota Statutes 2008, section 354.42, subdivision 3, is amended to read:
30.32    Subd. 3. Employer. (a) The regular employer contribution to the fund by Special
30.33School District No. 1, Minneapolis, after July 1, 2006, and before July 1, 2007, is an
30.34amount equal to 5.0 percent of the salary of each of its teachers who is a coordinated
31.1member and 9.0 percent of the salary of each of its teachers who is a basic member. After
31.2July 1, 2007, the regular employer contribution to the fund by Special School District No.
31.31, Minneapolis, is an amount equal to 5.5 percent the applicable following percentage of
31.4salary of each coordinated member and 9.5 percent the applicable following percentage
31.5of salary of each basic member.:

31.6		Period	Coordinated Member		Basic Member
31.7		before July 1, 2011		5.5 percent		9.5 percent
31.8		from July 1, 2011, until June 30, 2012		6.0 percent		10.0 percent
31.9		from July 1, 2012, until June 30, 2013		6.5 percent		10.5 percent
31.10		from July 1, 2013, until June 30, 2014		7.0 percent		11.0 percent
31.11		after June 30, 2014		7.5 percent		11.5 percent

31.12 The additional employer contribution to the fund by Special School District No. 1,
31.13Minneapolis, after July 1, 2006, is an amount equal to 3.64 percent of the salary of each
31.14teacher who is a coordinated member or is a basic member.
31.15(b) The employer contribution to the fund for every other employer is an amount
31.16equal to 5.0 percent the applicable following percentage of the salary of each coordinated
31.17member and 9.0 percent the applicable following percentage of the salary of each basic
31.18member before July 1, 2007, and 5.5 percent of the salary of each coordinated member
31.19and 9.5 percent of the salary of each basic member after June 30, 2007.:

31.20		Period	Coordinated Member		Basic Member
31.21		before July 1, 2011		5.5 percent		9.5 percent
31.22		from July 1, 2011, until June 30, 2012		6.0 percent		10.0 percent
31.23		from July 1, 2012, until June 30, 2013		6.5 percent		10.5 percent
31.24		from July 1, 2013, until June 30, 2014		7.0 percent		11.0 percent
31.25		after June 30, 2014		7.5 percent		11.5 percent

31.26(c) When an employer contribution rate changes for a fiscal year, the new
31.27contribution rate is effective for the entire salary paid for each employer unit with the
31.28first payroll cycle reported.
31.29(d) After June 30, 2015, if a contribution rate revision is made under subdivisions
31.304a, 4b, and 4c, the employer contributions under paragraphs (a) and (b) must be adjusted
31.31accordingly.
31.32EFFECTIVE DATE.This section is effective the day following final enactment.

31.33    Sec. 49. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision
31.34to read:
31.35    Subd. 4a. Determination. (a) For purposes of this section, a contribution
31.36sufficiency exists if the total of the employee contributions, the employer contributions,
32.1and any additional employer contributions, if applicable, exceeds the total of the normal
32.2cost, the administrative expenses, and the amortization contribution of the retirement plan
32.3as reported in the most recent actuarial valuation of the retirement plan prepared by the
32.4approved actuary retained under section 356.214 and prepared under section 356.215
32.5and the standards for actuarial work of the Legislative Commission on Pensions and
32.6Retirement.
32.7(b) For purposes of this section, a contribution deficiency exists if the total of
32.8the employee contributions, the employer contributions, and any additional employer
32.9contributions are less than the total of the normal cost, the administrative expenses, and
32.10the amortization contribution of the retirement plan as reported in the most recent actuarial
32.11valuation of the retirement plan prepared by the approved actuary retained under section
32.12356.214 and prepared under section 356.215 and the standards for actuarial work of the
32.13Legislative Commission on Pensions and Retirement.
32.14EFFECTIVE DATE.This section is effective the day following final enactment.

32.15    Sec. 50. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision
32.16to read:
32.17    Subd. 4b. Contribution rate revision. Notwithstanding the contribution rate
32.18provisions under subdivisions 2 and 3, the employee and employer contribution rates
32.19may be adjusted as follows:
32.20(1) if, after June 30, 2015, the regular actuarial valuation of the plan under section
32.21356.215 indicates that there is a contribution sufficiency under subdivision 4a equal to
32.22or greater than one percent of covered payroll and the sufficiency has existed for at least
32.23two consecutive years, the employee and employer contribution rates for the plan may
32.24each be decreased to a level such that the sufficiency equals no more than one percent of
32.25covered payroll based on the most recent actuarial valuation; or
32.26(2) if, after June 30, 2015, the regular valuation of the plan under section 356.215
32.27indicates that there is a deficiency equal to or greater than 0.25 percent of covered payroll
32.28and the deficiency has existed for at least two consecutive years, the employee and
32.29employer contribution rates for the applicable plan may each be increased by:
32.30(i) 0.25 percent if the deficiency is less than 2.00 percent of covered payroll;
32.31(ii) 0.5 percent if the deficiency is equal to or greater than 2.00 percent of covered
32.32payroll and less than or equal to four percent; and
32.33(iii) 0.75 percent if the deficiency is greater than four percent.
32.34EFFECTIVE DATE.This section is effective the day following final enactment.

33.1    Sec. 51. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision
33.2to read:
33.3    Subd. 4c. Contribution sufficiency measures. (a) A contribution sufficiency of up
33.4to one percent of covered payroll must be held in reserve to be used to offset any future
33.5actuarially required contributions that are more than the total combined employee and
33.6employer contributions being collected.
33.7(b) Before any reduction in contributions to eliminate a sufficiency in excess of one
33.8percent of covered pay may be recommended, the executive director must review any
33.9need for a change in actuarial assumptions, as recommended by the actuary retained
33.10under section 356.214 in the most recent experience study of the retirement plan, that
33.11may result in an increase in the actuarially required contribution and must report to the
33.12Legislative Commission on Pensions and Retirement any recommendation by the board
33.13to use the sufficiency exceeding one percent of covered payroll to offset the impact of
33.14an actuarial assumption change recommended by the actuary retained under section
33.15356.214, subdivision 1, and reviewed by the actuary retained by the commission under
33.16section 356.214, subdivision 4.
33.17(c) A contribution sufficiency in excess of one percent of covered pay must not be
33.18used to increase benefits, and a benefit increase must not be proposed that would initiate
33.19an automatic adjustment under this section to increase contributions. A proposed benefit
33.20improvement must include a recommendation, prepared by the actuary retained under
33.21section 356.214, subdivision 1, and reviewed by the actuary retained by the Legislative
33.22Commission on Pensions and Retirement, as provided under section 356.214, subdivision
33.234, on the manner in which the benefit modification is to be funded.
33.24EFFECTIVE DATE.This section is effective the day following final enactment.

33.25    Sec. 52. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision
33.26to read:
33.27    Subd. 4d. Reporting; commission review. A contribution rate increase or decrease
33.28under subdivision 4b, as determined by the executive director of the Teachers Retirement
33.29Association, must be reported to the chair and the executive director of the Legislative
33.30Commission on Pensions and Retirement on or before the next February 1 and, if the
33.31Legislative Commission on Pensions and Retirement does not recommend against the rate
33.32change or does not recommend a modification in the rate change, is effective on the next
33.33July 1 following the determination by the executive director that a contribution deficiency
33.34or sufficiency exists based on the most recent actuarial valuation under section 356.215.
34.1EFFECTIVE DATE.This section is effective the day following final enactment.

34.2    Sec. 53. Minnesota Statutes 2009 Supplement, section 354.47, subdivision 1, is
34.3amended to read:
34.4    Subdivision 1. Death before retirement. (a) If a member dies before retirement
34.5and is covered under section 354.44, subdivision 2, and neither an optional annuity, nor a
34.6reversionary annuity, nor a benefit under section 354.46, subdivision 1, is payable to the
34.7survivors if the member was a basic member, then the surviving spouse, or if there is no
34.8surviving spouse, the designated beneficiary is entitled to an amount equal to the member's
34.9accumulated deductions with interest credited to the account of the member to the date of
34.10death of the member. If the designated beneficiary is a minor, interest must be credited to
34.11the date the beneficiary reaches legal age, or the date of receipt, whichever is earlier.
34.12(b) If a member dies before retirement and is covered under section 354.44,
34.13subdivision 6 , and neither an optional annuity, nor reversionary annuity, nor the benefit
34.14described in section 354.46, subdivision 1, is payable to the survivors if the member
34.15was a basic member, then the surviving spouse, or if there is no surviving spouse, then
34.16the designated beneficiary is entitled to an amount equal to the member's accumulated
34.17deductions credited to the account of the member as of June 30, 1957, and from July 1,
34.181957, to the date of death of the member, the member's accumulated deductions plus six
34.19percent interest compounded annually. a refund equal to the accumulated deductions
34.20credited to the member's account plus interest compounded annually until the member's
34.21date of death using the following interest rates:
34.22(1) before July 1, 1957, no interest accrues;
34.23(2) July 1, 1957, to June 30, 2011, six percent; and
34.24(3) after June 30, 2011, four percent.
34.25(c) If the designated beneficiary under paragraph (b) is a minor, any interest credited
34.26under that paragraph must be credited to the date the beneficiary reaches legal age, or
34.27the date of receipt, whichever is earlier.
34.28(d) The amount of any refund payable under this subdivision must be reduced by
34.29any permanent disability payment under section 354.48 received by the member.
34.30EFFECTIVE DATE.This section is effective the day following final enactment.

34.31    Sec. 54. Minnesota Statutes 2009 Supplement, section 354.49, subdivision 2, is
34.32amended to read:
34.33    Subd. 2. Calculation. (a) Except as provided in section 354.44, subdivision 1,
34.34any person who ceases to be a member by reason of termination of teaching service, is
35.1entitled to receive a refund in an amount equal to the accumulated deductions credited
35.2to the account as of June 30, 1957, and after July 1, 1957, the accumulated deductions
35.3with interest at the rate of six percent per annum compounded annually. plus interest
35.4compounded annually using the following interest rates:
35.5(1) before July 1, 1957, no interest accrues;
35.6(2) July 1, 1957, to June 30, 2011, six percent; and
35.7(3) after June 30, 2011, four percent.
35.8For the purpose of this subdivision, interest must be computed on fiscal year end
35.9balances to the first day of the month in which the refund is issued.
35.10(b) If the person has received permanent disability payments under section 354.48,
35.11the refund amount must be reduced by the amount of those payments.
35.12EFFECTIVE DATE.This section is effective the day following final enactment.

35.13    Sec. 55. Minnesota Statutes 2009 Supplement, section 354.55, subdivision 11, is
35.14amended to read:
35.15    Subd. 11. Deferred annuity; augmentation. (a) Any person covered under section
35.16354.44, subdivision 6 , who ceases to render teaching service, may leave the person's
35.17accumulated deductions in the fund for the purpose of receiving a deferred annuity
35.18at retirement.
35.19(b) The amount of the deferred retirement annuity is determined by section 354.44,
35.20subdivision 6 , and augmented as provided in this subdivision. The required reserves for
35.21the annuity which had accrued when the member ceased to render teaching service must
35.22be augmented, as further specified in this subdivision, by the applicable interest rate
35.23compounded annually from the first day of the month following the month during which
35.24the member ceased to render teaching service to the effective date of retirement.
35.25(c) No augmentation is not creditable if the deferral period is less than three months
35.26or if deferral commenced before July 1, 1971.
35.27(d) For persons who became covered employees before July 1, 2006, with a deferral
35.28period commencing after June 30, 1971, the annuity must be augmented using as follows:
35.29(1) five percent interest compounded annually until January 1, 1981, and;
35.30(2) three percent interest compounded annually thereafter from January 1, 1981, until
35.31January 1 of the year following the year in which the deferred annuitant attains age 55.;
35.32 From that date (3) five percent interest compounded annually from the date
35.33established in clause (2) to the effective date of retirement, the rate is five percent
35.34compounded annually. or until June 30, 2012, whichever is earlier; and
35.35(4) two percent interest compounded annually after June 30, 2012.
36.1(e) For persons who become covered employees after June 30, 2006, the interest
36.2rate used to augment the deferred annuity is 2.5 percent interest compounded annually
36.3until June 30, 2012, or until the effective date of retirement, whichever is earlier, and two
36.4percent interest compounded annually after June 30, 2012.
36.5(f) If a person has more than one period of uninterrupted service, a separate average
36.6salary determined under section 354.44, subdivision 6, must be used for each period
36.7and the required reserves related to each period must be augmented as specified in this
36.8subdivision. The sum of the augmented required reserves is the present value of the
36.9annuity. For the purposes of this subdivision, "period of uninterrupted service" means a
36.10period of covered teaching service during which the member has not been separated from
36.11active service for more than one fiscal year.
36.12(g) If a person repays a refund, the service restored by the repayment must be
36.13considered as continuous with the next period of service for which the person has
36.14allowable service credit in the Teachers Retirement Association.
36.15(h) If a person does not render teaching service in any one fiscal year or more
36.16consecutive fiscal years and then resumes teaching service, the formula percentages used
36.17from the date of the resumption of teaching service must be those applicable to new
36.18members.
36.19(i) The mortality table and interest rate actuarial assumption used to compute the
36.20annuity must be the applicable mortality table established by the board under section
36.21354.07, subdivision 1 , and the interest rate actuarial assumption under section 356.215 in
36.22effect when the member retires.
36.23(j) In no case may the annuity payable under this subdivision be less than the amount
36.24of annuity payable under section 354.44, subdivision 6.
36.25(k) The requirements and provisions for retirement before normal retirement age
36.26contained in section 354.44, subdivision 6, also apply to an employee fulfilling the
36.27requirements with a combination of service as provided in section 354.60.
36.28(l) The augmentation provided by this subdivision applies to the benefit provided
36.29in section 354.46, subdivision 2.
36.30(m) The augmentation provided by this subdivision does not apply to any period
36.31in which a person is on an approved leave of absence from an employer unit covered
36.32by the provisions of this chapter.
36.33(n) The retirement annuity or disability benefit of, or the survivor benefit payable on
36.34behalf of, a former teacher who terminated service before July 1, 1997, which is not first
36.35payable until after June 30, 1997, must be increased on an actuarial equivalent basis to
36.36reflect the change in the postretirement interest rate actuarial assumption under section
37.1356.215, subdivision 8 , from five percent to six percent under a calculation procedure and
37.2tables adopted by the board as recommended by an approved actuary and approved by the
37.3actuary retained under section 356.214.
37.4EFFECTIVE DATE.This section is effective the day following final enactment.

37.5    Sec. 56. Minnesota Statutes 2008, section 354A.12, subdivision 1, is amended to read:
37.6    Subdivision 1. Employee contributions. (a) The contribution required to be paid
37.7by each member of a teachers retirement fund association shall not be less than is the
37.8percentage of total salary specified below for the applicable association and program:

37.9		Association and Program		Percentage of Total Salary
37.10	Duluth Teachers Retirement Fund Association
37.11		old law and new law
37.12		coordinated programs		5.5 percent
37.13		before July 1, 2011		5.5 percent
37.14		effective July 1, 2011		6.0 percent
37.15		effective July 1, 2012		6.5 percent
37.16	St. Paul Teachers Retirement Fund Association
37.17		basic program before July 1, 2010		8 percent
37.18		basic program after June 30, 2010		8.5 percent
37.19		basic program after June 30, 2011		9.0 percent
37.20		coordinated program before July 1, 2010		5.5 percent
37.21		coordinated program after June 30, 2010		6.0 percent
37.22		coordinated program after June 30, 2011		6.5 percent

37.23(b) Contributions shall be made by deduction from salary and must be remitted
37.24directly to the respective teachers retirement fund association at least once each month.
37.25(c) When an employee contribution rate changes for a fiscal year, the new
37.26contribution rate is effective for the entire salary paid by the employer with the first
37.27payroll cycle reported.
37.28EFFECTIVE DATE.This section is effective July 1, 2010.

37.29    Sec. 57. Minnesota Statutes 2009 Supplement, section 354A.12, subdivision 2a,
37.30is amended to read:
37.31    Subd. 2a. Employer regular and additional contributions. (a) The employing
37.32units shall make the following employer contributions to teachers retirement fund
37.33associations:
37.34(1) for any coordinated member of one of the following teachers retirement fund
37.35associations in a city of the first class, the employing unit shall make a regular employer
38.1contribution to the respective retirement fund association in an amount equal to the
38.2designated percentage of the salary of the coordinated member as provided below:

38.3		Duluth Teachers Retirement Fund Association		4.50 percent
38.4		before July 1, 2011		5.79 percent
38.5		effective July 1, 2011		6.29 percent
38.6		effective July 1, 2012		6.79 percent
38.7 38.8		St. Paul Teachers Retirement Fund Association before July 1, 2010		4.50 percent
38.9		after June 30, 2010		5.0 percent
38.10		after June 30, 2011		5.5 percent
38.11		after June 30, 2013		6.5 percent

38.12(2) for any basic member of the St. Paul Teachers Retirement Fund Association, the
38.13employing unit shall make a regular employer contribution to the respective retirement
38.14fund in an amount equal to 8.00 percent of the salary of the basic member; according to
38.15the schedule below:

38.16		before July 1, 2010	8.0 percent of the salary of the basic member
38.17		before July 1, 2011	8.5 percent of the salary of the basic member
38.18		before July 1, 2012	9.0 percent of the salary of the basic member
38.19		before July 1, 2013	9.5 percent of the salary of the basic member
38.20		before July 1, 2014	10.0 percent of the salary of the basic member

38.21(3) for a basic member of the St. Paul Teachers Retirement Fund Association, the
38.22employing unit shall make an additional employer contribution to the respective fund in
38.23an amount equal to 3.64 percent of the salary of the basic member;
38.24(4) for a coordinated member of a teachers retirement fund association in a city of
38.25the first class the St. Paul Teachers Retirement Fund Association, the employing unit shall
38.26make an additional employer contribution to the respective fund in an amount equal to the
38.27applicable percentage of the coordinated member's salary, as provided below:

38.28 38.29		Duluth Teachers Retirement Fund Association		1.29 percent
38.30 38.31		St. Paul Teachers Retirement Fund Association		3.84 percent

38.32(b) The regular and additional employer contributions must be remitted directly to
38.33the respective teachers retirement fund association at least once each month. Delinquent
38.34amounts are payable with interest under the procedure in subdivision 1a.
38.35(c) Payments of regular and additional employer contributions for school district
38.36or technical college employees who are paid from normal operating funds must be made
38.37from the appropriate fund of the district or technical college.
39.1(d) When an employer contribution rate changes for a fiscal year, the new
39.2contribution rate is effective for the entire salary paid by the employer with the first
39.3payroll cycle reported.
39.4EFFECTIVE DATE.This section is effective July 1, 2010.

39.5    Sec. 58. Minnesota Statutes 2008, section 354A.12, subdivision 3c, is amended to read:
39.6    Subd. 3c. Termination of supplemental contributions and direct matching
39.7and state aid. (a) The supplemental contributions payable to the Minneapolis Teachers
39.8Retirement Fund Association by Special School District No. 1 and the city of Minneapolis
39.9under section 423A.02, subdivision 3, must be paid to the Teachers Retirement
39.10Association and must continue until the current assets of the fund equal or exceed the
39.11actuarial accrued liability of the fund as determined in the most recent actuarial report
39.12for the fund by the actuary retained under section 356.214, or 2037, whichever occurs
39.13earlier. The supplemental contributions payable to the St. Paul Teachers Retirement Fund
39.14Association by Independent School District No. 625 under section 423A.02, subdivision
39.153 , or the direct state aid under subdivision 3a to the St. Paul Teachers Retirement Fund
39.16Association terminate at the end of the fiscal year in which the accrued liability funding
39.17ratio for that fund, as determined in the most recent actuarial report for that fund by the
39.18actuary retained under section 356.214, equals or exceeds the accrued liability funding
39.19ratio for the Teachers Retirement Association, as determined in the most recent actuarial
39.20report for the Teachers Retirement Association by the actuary retained under section
39.21356.214. must continue until the current assets of the fund equal or exceed the actuarial
39.22accrued liability of the fund as determined in the most recent actuarial report for the fund
39.23by the actuary retained under section 356.214 or until 2037, whichever occurs earlier.
39.24    (b) If the St. Paul Teachers Retirement Fund Association is funded at an amount
39.25equal to or greater than the funding ratio applicable to the Teachers Retirement
39.26Association, then any future state aid under subdivision 3a is payable to the Teachers
39.27Retirement Association.
39.28EFFECTIVE DATE.This section is effective July 1, 2010.

39.29    Sec. 59. Minnesota Statutes 2008, section 354A.27, subdivision 5, is amended to read:
39.30    Subd. 5. Calculation Eligibility for and payment of postretirement adjustments.
39.31(a) Annually, after June 30, the board of trustees of the Duluth Teachers Retirement Fund
39.32Association determines the amount of any postretirement adjustment using the procedures
39.33in this subdivision and subdivision 6 or 7, whichever is applicable.
40.1(b) Each person who has been receiving an annuity or benefit under the articles
40.2of incorporation, bylaws, or under this section for at least 12 months as of the date of
40.3the postretirement adjustment shall be eligible for a postretirement adjustment. The
40.4postretirement adjustment shall be payable each January 1. The postretirement adjustment
40.5shall be equal to two percent of a permanent percentage increase as specified under
40.6subdivision 6 or 7, whichever is applicable, applied to the annuity or benefit to which the
40.7person is entitled one month prior to the payment of the postretirement adjustment.
40.8EFFECTIVE DATE.This section is effective July 1, 2010.

40.9    Sec. 60. Minnesota Statutes 2008, section 354A.27, subdivision 6, is amended to read:
40.10    Subd. 6. Additional increase Calculation of postretirement adjustments;
40.11transitional provision. (a) In addition to the postretirement increases granted under
40.12subdivision 5, an additional percentage increase must be computed and paid under this
40.13subdivision.
40.14(b) The board of trustees shall determine the number of annuitants or benefit
40.15recipients who have been receiving an annuity or benefit for at least 12 months as of the
40.16current June 30. These recipients are entitled to receive the surplus investment earnings
40.17additional postretirement increase.
40.18(c) Annually, as of each June 30, the board shall determine the five-year annualized
40.19rate of return attributable to the assets of the Duluth Teachers Retirement Fund Association
40.20under the formula or formulas specified in section 11A.04, clause (11).
40.21(d) The board shall determine the amount of excess five-year annualized rate of
40.22return over the preretirement interest assumption as specified in section 356.215.
40.23(e) The additional percentage increase must be determined by multiplying the
40.24quantity one minus the rate of contribution deficiency, as specified in the most recent
40.25actuarial report of the actuary retained under section 356.214, times the rate of return
40.26excess as determined in paragraph (d).
40.27(f) The additional increase is payable to all eligible annuitants or benefit recipients
40.28on the following January 1.
40.29(a) For purposes of computing postretirement adjustments after the effective date
40.30of this section for eligible benefit recipients of the Duluth Teachers Retirement Fund
40.31Association, the funding ratio of the plan, as determined by dividing the market value of
40.32assets by the actuarial accrued liability as reported in the most recent actuarial valuation
40.33prepared under sections 356.214 and 356.215, determines the postretirement increase
40.34as follows:

41.1		Funding Ratio	Postretirement Increase
41.2		less than 80 percent	0 percent
41.3 41.4		at least 80 percent but less than 90 percent	1 percent
41.5		at least 90 percent	2 percent

41.6(b) If the funding ratio of the plan based on actuarial value, rather than market value,
41.7is at least 90 percent as reported in the most recent actuarial valuation prepared under
41.8sections 356.214 and 356.215, this subdivision expires and subsequent postretirement
41.9increases must be paid as specified under subdivision 7.
41.10EFFECTIVE DATE.This section is effective July 1, 2010.

41.11    Sec. 61. Minnesota Statutes 2008, section 354A.27, is amended by adding a
41.12subdivision to read:
41.13    Subd. 7. Calculation of postretirement adjustments. (a) This subdivision applies
41.14if subdivision 6 has expired.
41.15(b) A percentage adjustment must be computed and paid under this subdivision to
41.16eligible persons under subdivision 5. This adjustment is determined by reference to the
41.17Consumer Price Index for urban wage earners and clerical workers all items index as
41.18reported by the Bureau of Labor Statistics within the United States Department of Labor
41.19each year as part of the determination of annual cost-of-living adjustments to recipients
41.20of federal old-age, survivors, and disability insurance. For calculations of cost-of-living
41.21adjustments under paragraph (c), the term "average third quarter Consumer Price Index
41.22value" means the sum of the monthly index values as initially reported by the Bureau of
41.23Labor Statistics for the months of July, August, and September, divided by 3.
41.24(c) Before January 1 of each year, the executive director must calculate the amount
41.25of the cost-of-living adjustment by dividing the most recent average third quarter index
41.26value by the same average third quarter index value from the previous year, subtract one
41.27from the resulting quotient, and express the result as a percentage amount, which must be
41.28rounded to the nearest one-tenth of one percent.
41.29(d) The amount calculated under paragraph (c) is the full cost-of-living adjustment
41.30to be applied as a permanent increase to the regular payment of each eligible member
41.31on January 1 of the next calendar year. For any eligible member whose effective date
41.32of benefit commencement occurred during the calendar year before the cost-of-living
41.33adjustment is applied, the full increase amount must be prorated on the basis of whole
41.34calendar quarters in benefit payment status in the calendar year prior to the January 1 on
41.35which the cost-of-living adjustment is applied, calculated to the third decimal place.
42.1(e) The adjustment must not be less than zero nor greater than five percent.
42.2(f) If the funding ratio of the plan as determined in the most recent actuarial
42.3valuation using the actuarial value of assets is less than 80 percent there will be no
42.4postretirement adjustment the following January 1.
42.5EFFECTIVE DATE.This section is effective July 1, 2010.

42.6    Sec. 62. Minnesota Statutes 2008, section 354A.31, subdivision 1, is amended to read:
42.7    Subdivision 1. Age and service requirements. Any coordinated member or former
42.8coordinated member of the St. Paul Teachers Retirement Fund Association who has
42.9ceased to render teaching service for the school district in which the teachers retirement
42.10fund association exists and who has either attained the age of at least 55 years with not
42.11less than three years of allowable service credit or received credit for not less than 30
42.12years of allowable service regardless of age, shall be entitled upon written application to a
42.13retirement annuity. Any coordinated member or former coordinated member of the Duluth
42.14Teachers Retirement Fund Association who has ceased to render teaching service for the
42.15school district in which the teacher retirement fund association exists and who has either
42.16attained the age of at least 55 years with not less than three years of allowable service
42.17credit if the member became an employee before July 1, 2010, or not less than five years
42.18of allowable service credit if the member became an employee after June 30, 2010, or
42.19received service credit for not less than 30 years of allowable service regardless of age,
42.20shall be entitled upon written application to a retirement annuity.
42.21EFFECTIVE DATE.This section is effective July 1, 2010.

42.22    Sec. 63. Minnesota Statutes 2008, section 354A.35, subdivision 1, is amended to read:
42.23    Subdivision 1. Death before retirement; refund. If a coordinated member
42.24or former coordinated member dies prior to retirement or prior to the receipt of any
42.25retirement annuity or other benefit payment which is or may be payable and a surviving
42.26spouse optional annuity is not payable pursuant to subdivision 2, a refund shall be paid to
42.27the person's surviving spouse, or if there is none, to the person's designated beneficiary,
42.28or if there is none, to the legal representative of the person's estate. For a coordinated
42.29member or former coordinated member of the St. Paul Teachers Retirement Fund
42.30Association, the refund shall be in an amount equal to the person's accumulated employee
42.31contributions plus interest at the rate of six percent per annum compounded annually. For
42.32a coordinated member or former coordinated member of the Duluth Teachers Retirement
42.33Fund Association, the refund shall be in an amount equal to the person's accumulated
43.1employee contributions plus interest at the rate of six percent per annum compounded
43.2annually to July 1, 2010, and four percent per annum compounded annually thereafter.
43.3EFFECTIVE DATE.This section is effective July 1, 2010.

43.4    Sec. 64. Minnesota Statutes 2008, section 354A.37, subdivision 2, is amended to read:
43.5    Subd. 2. Eligibility for deferred retirement annuity. (a) Any coordinated member
43.6who ceases to render teaching services for the school district in which the teachers
43.7retirement fund association is located, with sufficient allowable service credit to meet
43.8the minimum service requirements specified in section 354A.31, subdivision 1, shall be
43.9entitled to a deferred retirement annuity in lieu of a refund pursuant to subdivision 1. The
43.10deferred retirement annuity shall be computed pursuant to section 354A.31 and shall be
43.11augmented as provided in this subdivision. The deferred annuity shall commence upon
43.12application after the person on deferred status attains at least the minimum age specified in
43.13section 354A.31, subdivision 1.
43.14(b) The monthly annuity amount that had accrued when the member ceased to
43.15render teaching service must be augmented from the first day of the month following the
43.16month during which the member ceased to render teaching service to the effective date
43.17of retirement. There is no augmentation if this period is less than three months. For a
43.18member of the St. Paul Teachers Retirement Fund Association, the rate of augmentation
43.19is three percent compounded annually until January 1 of the year following the year in
43.20which the former member attains age 55, and five percent compounded annually after that
43.21date to the effective date of retirement if the employee became an employee before July
43.221, 2006, and at 2.5 percent compounded annually if the employee becomes an employee
43.23after June 30, 2006. For a member of the Duluth Teachers Retirement Fund Association,
43.24the rate of augmentation is three percent compounded annually until January 1 of the year
43.25following the year in which the former member attains age 55, five percent compounded
43.26annually after that date to July 1, 2012, and two percent compounded annually after that
43.27date to the effective date of retirement if the employee became an employee before
43.28July 1, 2006, and at 2.5 percent compounded annually to July 1, 2012, and two percent
43.29compounded annually after that date to the effective date of retirement if the employee
43.30becomes an employee after June 30, 2006. If a person has more than one period of
43.31uninterrupted service, a separate average salary determined under section 354A.31 must
43.32be used for each period, and the monthly annuity amount related to each period must be
43.33augmented as provided in this subdivision. The sum of the augmented monthly annuity
43.34amounts determines the total deferred annuity payable. If a person repays a refund, the
43.35service restored by the repayment must be considered as continuous with the next period
44.1of service for which the person has credit with the fund. If a person does not render
44.2teaching services in any one fiscal year or more consecutive fiscal years and then resumes
44.3teaching service, the formula percentages used from the date of resumption of teaching
44.4service are those applicable to new members. The mortality table and interest assumption
44.5used to compute the annuity are the table established by the fund to compute other
44.6annuities, and the interest assumption under section 356.215 in effect when the member
44.7retires. A period of uninterrupted service for the purpose of this subdivision means a
44.8period of covered teaching service during which the member has not been separated from
44.9active service for more than one fiscal year.
44.10(c) The augmentation provided by this subdivision applies to the benefit provided
44.11in section 354A.35, subdivision 2. The augmentation provided by this subdivision does
44.12not apply to any period in which a person is on an approved leave of absence from an
44.13employer unit.
44.14EFFECTIVE DATE.This section is effective July 1, 2010.

44.15    Sec. 65. Minnesota Statutes 2008, section 354A.37, subdivision 3, is amended to read:
44.16    Subd. 3. Computation of refund amount. A former coordinated member of the
44.17St. Paul Teachers Retirement Fund Association who qualifies for a refund pursuant to
44.18under subdivision 1 shall receive a refund equal to the amount of the former coordinated
44.19member's accumulated employee contributions with interest at the rate of six percent per
44.20annum compounded annually. A former coordinated member of the Duluth Teachers
44.21Retirement Fund Association who qualifies for a refund under subdivision 1 shall receive
44.22a refund equal to the amount of the former coordinated member's accumulated employee
44.23contributions with interest at the rate of six percent per annum compounded annually to
44.24July 1, 2010, and four percent per annum compounded annually thereafter.
44.25EFFECTIVE DATE.This section is effective July 1, 2010.

44.26    Sec. 66. Minnesota Statutes 2008, section 354A.37, subdivision 4, is amended to read:
44.27    Subd. 4. Certain refunds at normal retirement age. Any coordinated member
44.28who has attained the normal retirement age with less than ten years of allowable service
44.29credit and has terminated active teaching service shall be entitled to a refund in lieu of
44.30a proportionate annuity pursuant to section 356.32. The refund for a member of the St.
44.31Paul Teachers Retirement Fund Association shall be equal to the coordinated member's
44.32accumulated employee contributions plus interest at the rate of six percent compounded
44.33annually. The refund for a member of the Duluth Teachers Retirement Fund Association
45.1shall be equal to the coordinated member's accumulated employee contributions plus
45.2interest at the rate of six percent compounded annually to July 1, 2010, and four percent
45.3per annum compounded annually thereafter.
45.4EFFECTIVE DATE.This section is effective July 1, 2010.

45.5    Sec. 67. Minnesota Statutes 2008, section 356.215, subdivision 8, is amended to read:
45.6    Subd. 8. Interest and salary assumptions. (a) The actuarial valuation must use
45.7the applicable following preretirement interest assumption and the applicable following
45.8postretirement interest assumption:

45.9 45.10 45.11	plan	preretirement interest rate assumption		postretirement interest rate assumption
45.12	general state employees retirement plan		8.5%	6.0%
45.13	correctional state employees retirement plan		8.5	6.0
45.14	State Patrol retirement plan		8.5	6.0
45.15	legislators retirement plan		8.5	6.0
45.16	elective state officers retirement plan		8.5	6.0
45.17	judges retirement plan		8.5	6.0
45.18	general public employees retirement plan		8.5	6.0
45.19	public employees police and fire retirement plan		8.5	6.0
45.20 45.21	local government correctional service retirement plan		8.5	6.0
45.22	teachers retirement plan		8.5	6.0
45.23	Minneapolis employees retirement plan		6.0	5.0
45.24	Duluth teachers retirement plan		8.5	8.5
45.25	St. Paul teachers retirement plan		8.5	8.5
45.26	Minneapolis Police Relief Association		6.0	6.0
45.27	Fairmont Police Relief Association		5.0	5.0
45.28	Minneapolis Fire Department Relief Association		6.0	6.0
45.29	Virginia Fire Department Relief Association		5.0	5.0
45.30	Bloomington Fire Department Relief Association		6.0	6.0
45.31 45.32	local monthly benefit volunteer firefighters relief associations		5.0	5.0

45.33    (b) Before July 1, 2010, the actuarial valuation must use the applicable following
45.34single rate future salary increase assumption, the applicable following modified single
45.35rate future salary increase assumption, or the applicable following graded rate future
45.36salary increase assumption:
45.37    (1) single rate future salary increase assumption

46.1 46.2	plan	future salary increase assumption
46.3	legislators retirement plan		5.0%
46.4	judges retirement plan		4.0
46.5	Minneapolis Police Relief Association		4.0
46.6	Fairmont Police Relief Association		3.5
46.7 46.8	Minneapolis Fire Department Relief Association		4.0
46.9	Virginia Fire Department Relief Association		3.5
46.10 46.11	Bloomington Fire Department Relief Association		4.0

46.12    (2) modified single rate future salary increase assumption

46.13 46.14	plan		future salary increase assumption
46.15 46.16 46.17 46.18	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

46.19    (3) age-related select and ultimate future salary increase assumption or graded rate
46.20future salary increase assumption

46.21 46.22	plan	future salary increase assumption
46.23 46.24	general state employees retirement plan	select calculation and assumption A
46.25	correctional state employees retirement plan	assumption H G
46.26	State Patrol retirement plan	assumption G F
46.27 46.28	general public employees retirement plan	select calculation and assumption B
46.29	public employees police and fire fund retirement plan	assumption C B
46.30	local government correctional service retirement plan	assumption G F
46.31	teachers retirement plan	assumption D C
46.32	Duluth teachers retirement plan	assumption E D
46.33	St. Paul teachers retirement plan	assumption F E

46.34The select calculation is: during the
46.35designated select period, a designated
46.36percentage rate is multiplied by the result of
46.37the designated integer minus T, where T is the
46.38number of completed years of service, and is
46.39added to the applicable future salary increase
46.40assumption. The designated select period is
46.41five years and the designated integer is five
46.42for the general state employees retirement
47.1plan and the general public employees
47.2retirement plan. The designated select period
47.3is ten years and the designated integer is ten
47.4for all other retirement plans covered by
47.5this clause. The designated percentage rate
47.6is: (1) 0.2 percent for the correctional state
47.7employees retirement plan, the State Patrol
47.8retirement plan, the public employees police
47.9and fire plan, and the local government
47.10correctional service plan; (2) 0.6 percent
47.11for the general state employees retirement
47.12plan and the general public employees
47.13retirement plan; and (3) 0.3 percent for the
47.14teachers retirement plan, the Duluth Teachers
47.15Retirement Fund Association, and the St.
47.16Paul Teachers Retirement Fund Association.
47.17The select calculation for the Duluth Teachers
47.18Retirement Fund Association is 8.00 percent
47.19per year for service years one through seven,
47.207.25 percent per year for service years seven
47.21and eight, and 6.50 percent per year for
47.22service years eight and nine.
47.23    The ultimate future salary increase assumption is:

47.24	age	A	B	CB	DC	ED	FE	GF	HG
47.25	16	5.95%	5.95%	11.00%	7.70%	8.00%	6.90%	7.7500%	7.2500%
47.26	17	5.90	5.90	11.00	7.65	8.00	6.90	7.7500	7.2500
47.27	18	5.85	5.85	11.00	7.60	8.00	6.90	7.7500	7.2500
47.28	19	5.80	5.80	11.00	7.55	8.00	6.90	7.7500	7.2500
47.29	20	5.75	5.40	11.00	5.50	6.90	6.90	7.7500	7.2500
47.30	21	5.75	5.40	11.00	5.50	6.90	6.90	7.1454	6.6454
47.31	22	5.75	5.40	10.50	5.50	6.90	6.90	7.0725	6.5725
47.32	23	5.75	5.40	10.00	5.50	6.85	6.85	7.0544	6.5544
47.33	24	5.75	5.40	9.50	5.50	6.80	6.80	7.0363	6.5363
47.34	25	5.75	5.40	9.00	5.50	6.75	6.75	7.0000	6.5000
47.35	26	5.75	5.36	8.70	5.50	6.70	6.70	7.0000	6.5000
47.36	27	5.75	5.32	8.40	5.50	6.65	6.65	7.0000	6.5000
47.37	28	5.75	5.28	8.10	5.50	6.60	6.60	7.0000	6.5000
47.38	29	5.75	5.24	7.80	5.50	6.55	6.55	7.0000	6.5000
47.39	30	5.75	5.20	7.50	5.50	6.50	6.50	7.0000	6.5000
48.1	31	5.75	5.16	7.30	5.50	6.45	6.45	7.0000	6.5000
48.2	32	5.75	5.12	7.10	5.50	6.40	6.40	7.0000	6.5000
48.3	33	5.75	5.08	6.90	5.50	6.35	6.35	7.0000	6.5000
48.4	34	5.75	5.04	6.70	5.50	6.30	6.30	7.0000	6.5000
48.5	35	5.75	5.00	6.50	5.50	6.25	6.25	7.0000	6.5000
48.6	36	5.75	4.96	6.30	5.50	6.20	6.20	6.9019	6.4019
48.7	37	5.75	4.92	6.10	5.50	6.15	6.15	6.8074	6.3074
48.8	38	5.75	4.88	5.90	5.40	6.10	6.10	6.7125	6.2125
48.9	39	5.75	4.84	5.70	5.30	6.05	6.05	6.6054	6.1054
48.10	40	5.75	4.80	5.50	5.20	6.00	6.00	6.5000	6.0000
48.11	41	5.75	4.76	5.40	5.10	5.90	5.95	6.3540	5.8540
48.12	42	5.75	4.72	5.30	5.00	5.80	5.90	6.2087	5.7087
48.13	43	5.65	4.68	5.20	4.90	5.70	5.85	6.0622	5.5622
48.14	44	5.55	4.64	5.10	4.80	5.60	5.80	5.9048	5.4078
48.15	45	5.45	4.60	5.00	4.70	5.50	5.75	5.7500	5.2500
48.16	46	5.35	4.56	4.95	4.60	5.40	5.70	5.6940	5.1940
48.17	47	5.25	4.52	4.90	4.50	5.30	5.65	5.6375	5.1375
48.18	48	5.15	4.48	4.85	4.50	5.20	5.60	5.5822	5.0822
48.19	49	5.05	4.44	4.80	4.50	5.10	5.55	5.5404	5.0404
48.20	50	4.95	4.40	4.75	4.50	5.00	5.50	5.5000	5.0000
48.21	51	4.85	4.36	4.75	4.50	4.90	5.45	5.4384	4.9384
48.22	52	4.75	4.32	4.75	4.50	4.80	5.40	5.3776	4.8776
48.23	53	4.65	4.28	4.75	4.50	4.70	5.35	5.3167	4.8167
48.24	54	4.55	4.24	4.75	4.50	4.60	5.30	5.2826	4.7826
48.25	55	4.45	4.20	4.75	4.50	4.50	5.25	5.2500	4.7500
48.26	56	4.35	4.16	4.75	4.50	4.40	5.20	5.2500	4.7500
48.27	57	4.25	4.12	4.75	4.50	4.30	5.15	5.2500	4.7500
48.28	58	4.25	4.08	4.75	4.60	4.20	5.10	5.2500	4.7500
48.29	59	4.25	4.04	4.75	4.70	4.10	5.05	5.2500	4.7500
48.30	60	4.25	4.00	4.75	4.80	4.00	5.00	5.2500	4.7500
48.31	61	4.25	4.00	4.75	4.90	3.90	5.00	5.2500	4.7500
48.32	62	4.25	4.00	4.75	5.00	3.80	5.00	5.2500	4.7500
48.33	63	4.25	4.00	4.75	5.10	3.70	5.00	5.2500	4.7500
48.34	64	4.25	4.00	4.75	5.20	3.60	5.00	5.2500	4.7500
48.35	65	4.25	4.00	4.75	5.20	3.50	5.00	5.2500	4.7500
48.36	66	4.25	4.00	4.75	5.20	3.50	5.00	5.2500	4.7500
48.37	67	4.25	4.00	4.75	5.20	3.50	5.00	5.2500	4.7500
48.38	68	4.25	4.00	4.75	5.20	3.50	5.00	5.2500	4.7500
48.39	69	4.25	4.00	4.75	5.20	3.50	5.00	5.2500	4.7500
48.40	70	4.25	4.00	4.75	5.20	3.50	5.00	5.2500	4.7500
48.41	71	4.25	4.00		5.20

48.42(4) service-related ultimate future salary increase assumption

49.1 49.2	service length	general employees retirement plan of the Public Employees Retirement Association
49.3	1	12.03%
49.4	2	8.90
49.5	3	7.46
49.6	4	6.58
49.7	5	5.97
49.8	6	5.52
49.9	7	5.16
49.10	8	4.87
49.11	9	4.63
49.12	10	4.42
49.13	11	4.24
49.14	12	4.08
49.15	13	3.94
49.16	14	3.82
49.17	15	3.70
49.18	16	3.60
49.19	17	3.51
49.20	18	3.50
49.21	19	3.50
49.22	20	3.50
49.23	21	3.50
49.24	22	3.50
49.25	23	3.50
49.26	24	3.50
49.27	25	3.50
49.28	26	3.50
49.29	27	3.50
49.30	28	3.50
49.31	29	3.50
49.32	30 or more	3.50

49.33    (c) Before July 2, 2010, the actuarial valuation must use the applicable following
49.34payroll growth assumption for calculating the amortization requirement for the unfunded
49.35actuarial accrued liability where the amortization retirement is calculated as a level
49.36percentage of an increasing payroll:

49.37 49.38	plan	payroll growth assumption
49.39	general state employees retirement plan		4.50%
49.40	correctional state employees retirement plan		4.50
49.41	State Patrol retirement plan		4.50
49.42	legislators retirement plan		4.50
50.1	judges retirement plan		4.00
50.2 50.3	general public employees retirement plan of the Public Employees Retirement Association		4.504.00
50.4	public employees police and fire retirement plan		4.50
50.5 50.6	local government correctional service retirement plan		4.50
50.7	teachers retirement plan		4.50
50.8	Duluth teachers retirement plan		4.50
50.9	St. Paul teachers retirement plan		5.00

50.10    (d) After July 1, 2010, the assumptions set forth in paragraphs (b) and (c) continue to
50.11apply, unless a different salary assumption or a different payroll increase assumption:
50.12    (1) has been proposed by the governing board of the applicable retirement plan;
50.13    (2) is accompanied by the concurring recommendation of the actuary retained under
50.14section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the
50.15most recent actuarial valuation report if section 356.214 does not apply; and
50.16    (3) has been approved or deemed approved under subdivision 18.
50.17EFFECTIVE DATE.This section is effective the day following final enactment.

50.18    Sec. 68. Minnesota Statutes 2009 Supplement, section 356.215, subdivision 11,
50.19is amended to read:
50.20    Subd. 11. Amortization contributions. (a) In addition to the exhibit indicating
50.21the level normal cost, the actuarial valuation of the retirement plan must contain an
50.22exhibit for financial reporting purposes indicating the additional annual contribution
50.23sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit
50.24for contribution determination purposes indicating the additional contribution sufficient
50.25to amortize the unfunded actuarial accrued liability. For the retirement plans listed in
50.26subdivision 8, paragraph (c), the additional contribution must be calculated on a level
50.27percentage of covered payroll basis by the established date for full funding in effect when
50.28the valuation is prepared, assuming annual payroll growth at the applicable percentage
50.29rate set forth in subdivision 8, paragraph (c). For all other retirement plans, the additional
50.30annual contribution must be calculated on a level annual dollar amount basis.
50.31    (b) For any retirement plan other than the Minneapolis Employees Retirement Fund,
50.32the general employees retirement plan of the Public Employees Retirement Association,
50.33the general state employees retirement plan of the Minnesota State Retirement System,
50.34and the St. Paul Teachers Retirement Fund Association, if there has not been a change in
50.35the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a
50.36change in the benefit plan governing annuities and benefits payable from the fund, a
51.1change in the actuarial cost method used in calculating the actuarial accrued liability of all
51.2or a portion of the fund, or a combination of the three, which change or changes by itself
51.3or by themselves without inclusion of any other items of increase or decrease produce a
51.4net increase in the unfunded actuarial accrued liability of the fund, the established date for
51.5full funding is the first actuarial valuation date occurring after June 1, 2020.
51.6    (c) For any retirement plan other than the Minneapolis Employees Retirement
51.7Fund and the general employees retirement plan of the Public Employees Retirement
51.8Association, if there has been a change in any or all of the actuarial assumptions used
51.9for calculating the actuarial accrued liability of the fund, a change in the benefit plan
51.10governing annuities and benefits payable from the fund, a change in the actuarial cost
51.11method used in calculating the actuarial accrued liability of all or a portion of the fund,
51.12or a combination of the three, and the change or changes, by itself or by themselves and
51.13without inclusion of any other items of increase or decrease, produce a net increase in the
51.14unfunded actuarial accrued liability in the fund, the established date for full funding must
51.15be determined using the following procedure:
51.16    (i) the unfunded actuarial accrued liability of the fund must be determined in
51.17accordance with the plan provisions governing annuities and retirement benefits and the
51.18actuarial assumptions in effect before an applicable change;
51.19    (ii) the level annual dollar contribution or level percentage, whichever is applicable,
51.20needed to amortize the unfunded actuarial accrued liability amount determined under item
51.21(i) by the established date for full funding in effect before the change must be calculated
51.22using the interest assumption specified in subdivision 8 in effect before the change;
51.23    (iii) the unfunded actuarial accrued liability of the fund must be determined in
51.24accordance with any new plan provisions governing annuities and benefits payable from
51.25the fund and any new actuarial assumptions and the remaining plan provisions governing
51.26annuities and benefits payable from the fund and actuarial assumptions in effect before
51.27the change;
51.28    (iv) the level annual dollar contribution or level percentage, whichever is applicable,
51.29needed to amortize the difference between the unfunded actuarial accrued liability amount
51.30calculated under item (i) and the unfunded actuarial accrued liability amount calculated
51.31under item (iii) over a period of 30 years from the end of the plan year in which the
51.32applicable change is effective must be calculated using the applicable interest assumption
51.33specified in subdivision 8 in effect after any applicable change;
51.34    (v) the level annual dollar or level percentage amortization contribution under item
51.35(iv) must be added to the level annual dollar amortization contribution or level percentage
51.36calculated under item (ii);
52.1    (vi) the period in which the unfunded actuarial accrued liability amount determined
52.2in item (iii) is amortized by the total level annual dollar or level percentage amortization
52.3contribution computed under item (v) must be calculated using the interest assumption
52.4specified in subdivision 8 in effect after any applicable change, rounded to the nearest
52.5integral number of years, but not to exceed 30 years from the end of the plan year in
52.6which the determination of the established date for full funding using the procedure set
52.7forth in this clause is made and not to be less than the period of years beginning in the
52.8plan year in which the determination of the established date for full funding using the
52.9procedure set forth in this clause is made and ending by the date for full funding in effect
52.10before the change; and
52.11    (vii) the period determined under item (vi) must be added to the date as of which
52.12the actuarial valuation was prepared and the date obtained is the new established date
52.13for full funding.
52.14    (d) For the Minneapolis Employees Retirement Fund, the established date for full
52.15funding is June 30, 2020.
52.16    (e) For the general employees retirement plan of the Public Employees Retirement
52.17Association, the established date for full funding is June 30, 2031.
52.18    (f) For the Teachers Retirement Association, the established date for full funding is
52.19June 30, 2037.
52.20    (g) For the correctional state employees retirement plan of the Minnesota State
52.21Retirement System, the established date for full funding is June 30, 2038.
52.22    (h) For the judges retirement plan, the established date for full funding is June
52.2330, 2038.
52.24    (i) For the public employees police and fire retirement plan, the established date
52.25for full funding is June 30, 2038.
52.26    (j) For the St. Paul Teachers Retirement Fund Association, the established date for
52.27full funding is June 30 of the 25th year from the valuation date. In addition to other
52.28requirements of this chapter, the annual actuarial valuation shall contain an exhibit
52.29indicating the funded ratio and the deficiency or sufficiency in annual contributions when
52.30comparing liabilities to the market value of the assets of the fund as of the close of the
52.31most recent fiscal year.
52.32    (k) For the general state employees retirement plan of the Minnesota State
52.33Retirement System, the established date for full funding is June 30, 2040.
52.34(l) For the retirement plans for which the annual actuarial valuation indicates an
52.35excess of valuation assets over the actuarial accrued liability, the valuation assets in
52.36excess of the actuarial accrued liability must be recognized as a reduction in the current
53.1contribution requirements by an amount equal to the amortization of the excess expressed
53.2as a level percentage of pay over a 30-year period beginning anew with each annual
53.3actuarial valuation of the plan.
53.4EFFECTIVE DATE.This section is effective the day following final enactment.

53.5    Sec. 69. Minnesota Statutes 2008, section 356.30, subdivision 1, is amended to read:
53.6    Subdivision 1. Eligibility; computation of annuity. (a) Notwithstanding any
53.7provisions of the laws governing the retirement plans enumerated in subdivision 3, a
53.8person who has met the qualifications of paragraph (b) may elect to receive a retirement
53.9annuity from each enumerated retirement plan in which the person has at least one-half
53.10year of allowable service, based on the allowable service in each plan, subject to the
53.11provisions of paragraph (c).
53.12(b) A person may receive, upon retirement, a retirement annuity from each
53.13enumerated retirement plan in which the person has at least one-half year of allowable
53.14service, and augmentation of a deferred annuity calculated at the appropriate rate under
53.15the laws governing each public pension plan or fund named in subdivision 3, based on
53.16the date of the person's initial entry into public employment from the date the person
53.17terminated all public service if:
53.18(1) the person has allowable service totaling an amount that allows the person to
53.19receive an annuity in any two or more of the enumerated plans;
53.20(2) the person has sufficient allowable service in total that equals or exceeds the
53.21applicable service credit vesting requirement of the retirement plan with the longest
53.22applicable service credit vesting requirement; and
53.23(2) (3) the person has not begun to receive an annuity from any enumerated plan or
53.24the person has made application for benefits from each applicable plan and the effective
53.25dates of the retirement annuity with each plan under which the person chooses to receive
53.26an annuity are within a one-year period.
53.27(c) The retirement annuity from each plan must be based upon the allowable service,
53.28accrual rates, and average salary in the applicable plan except as further specified or
53.29modified in the following clauses:
53.30(1) the laws governing annuities must be the law in effect on the date of termination
53.31from the last period of public service under a covered retirement plan with which the
53.32person earned a minimum of one-half year of allowable service credit during that
53.33employment;
54.1(2) the "average salary" on which the annuity from each covered plan in which
54.2the employee has credit in a formula plan must be based on the employee's highest five
54.3successive years of covered salary during the entire service in covered plans;
54.4(3) the accrual rates to be used by each plan must be those percentages prescribed by
54.5each plan's formula as continued for the respective years of allowable service from one
54.6plan to the next, recognizing all previous allowable service with the other covered plans;
54.7(4) the allowable service in all the plans must be combined in determining eligibility
54.8for and the application of each plan's provisions in respect to reduction in the annuity
54.9amount for retirement prior to normal retirement age; and
54.10(5) the annuity amount payable for any allowable service under a nonformula plan
54.11of a covered plan must not be affected, but such service and covered salary must be used
54.12in the above calculation.
54.13(d) This section does not apply to any person whose final termination from the last
54.14public service under a covered plan was before May 1, 1975.
54.15(e) For the purpose of computing annuities under this section, the accrual rates
54.16used by any covered plan, except the public employees police and fire plan, the judges
54.17retirement fund, and the State Patrol retirement plan, must not exceed the percent specified
54.18in section 356.315, subdivision 4, per year of service for any year of service or fraction
54.19thereof. The formula percentage used by the judges retirement fund must not exceed the
54.20percentage rate specified in section 356.315, subdivision 8, per year of service for any
54.21year of service or fraction thereof. The accrual rate used by the public employees police
54.22and fire plan and the State Patrol retirement plan must not exceed the percentage rate
54.23specified in section 356.315, subdivision 6, per year of service for any year of service or
54.24fraction thereof. The accrual rate or rates used by the legislators retirement plan must not
54.25exceed 2.5 percent, but this limit does not apply to the adjustment provided under section
54.263A.02, subdivision 1 , paragraph (c).
54.27(f) Any period of time for which a person has credit in more than one of the covered
54.28plans must be used only once for the purpose of determining total allowable service.
54.29(g) If the period of duplicated service credit is more than one-half year, or the person
54.30has credit for more than one-half year, with each of the plans, each plan must apply its
54.31formula to a prorated service credit for the period of duplicated service based on a fraction
54.32of the salary on which deductions were paid to that fund for the period divided by the total
54.33salary on which deductions were paid to all plans for the period.
54.34(h) If the period of duplicated service credit is less than one-half year, or when
54.35added to other service credit with that plan is less than one-half year, the service credit
55.1must be ignored and a refund of contributions made to the person in accord with that
55.2plan's refund provisions.
55.3EFFECTIVE DATE.This section is effective the day following final enactment.

55.4    Sec. 70. Minnesota Statutes 2008, section 356.302, subdivision 3, is amended to read:
55.5    Subd. 3. General employee plan eligibility requirements. A disabled member
55.6of a covered retirement plan who has credit for allowable service in a combination of
55.7general employee retirement plans is entitled to a combined service disability benefit
55.8if the member:
55.9(1) is less than the normal retirement age on the date of the application for the
55.10disability benefit;
55.11(2) has become totally and permanently disabled;
55.12(3) has credit for allowable service in any combination of general employee
55.13retirement plans totaling at least three years the number of years required by the applicable
55.14retirement plan with the longest service credit requirement for disability benefit receipt;
55.15(4) has credit for at least one-half year of allowable service with the current general
55.16employee retirement plan before the commencement of the disability;
55.17(5) has at least three continuous years of allowable service credit by the general
55.18employee retirement plan or has at least a total of three years of allowable service credit
55.19by a combination of general employee retirement plans in a 72-month period during
55.20which no interruption of allowable service credit from a termination of employment
55.21exceeded 29 days; and
55.22(6) was not receiving a retirement annuity or disability benefit from any covered
55.23general employee retirement plan at the time of the commencement of the disability.
55.24EFFECTIVE DATE.This section is effective the day following final enactment.

55.25    Sec. 71. Minnesota Statutes 2008, section 356.302, subdivision 4, is amended to read:
55.26    Subd. 4. Public safety plan eligibility requirements. A disabled member of a
55.27covered retirement plan who has credit for allowable service in a combination of public
55.28safety employee retirement plans is entitled to a combined service disability benefit if the
55.29member:
55.30(1) has become occupationally disabled;
55.31(2) has credit for allowable service in any combination of public safety employee
55.32retirement plans totaling at least one year the minimum period of service credit required by
55.33the applicable retirement plan with the longest service credit eligibility requirement for the
56.1receipt of a duty-related disability benefit if the disability is duty-related or totaling at least
56.2three years the minimum period of service credit required by the applicable retirement
56.3plan with the longest service credit eligibility requirement for a disability benefit that is
56.4not duty-related if the disability is not duty-related;
56.5(3) has credit for at least one-half year of allowable service with the current public
56.6safety employee retirement plan before the commencement of the disability; and
56.7(4) was not receiving a retirement annuity or disability benefit from any covered
56.8public safety employee retirement plan at the time of the commencement of the disability.
56.9EFFECTIVE DATE.This section is effective the day following final enactment.

56.10    Sec. 72. Minnesota Statutes 2008, section 356.302, subdivision 5, is amended to read:
56.11    Subd. 5. General and public safety plan eligibility requirements. A disabled
56.12member of a covered retirement plan who has credit for allowable service in a combination
56.13of both a public safety employee retirement plan and general employee retirement plan
56.14must meet the qualifying requirements in subdivisions 3 and 4 to receive a combined
56.15service disability benefit from the applicable general employee and public safety
56.16employee retirement plans, except that the person need only be a member of a covered
56.17retirement plan at the time of the commencement of the disability, that the person must
56.18have allowable service credit for the applicable retirement plan with the longest service
56.19credit eligibility requirement for the receipt of a disability benefit, and that the minimum
56.20allowable service requirements of subdivisions 3, clauses (3) and (5), and 4, clauses (3)
56.21and (4), may be met in any combination of covered retirement plans.
56.22EFFECTIVE DATE.This section is effective the day following final enactment.

56.23    Sec. 73. Minnesota Statutes 2008, section 356.303, subdivision 2, is amended to read:
56.24    Subd. 2. Entitlement; eligibility. Notwithstanding any provision of law to the
56.25contrary governing a covered retirement plan, a person who is the survivor of a deceased
56.26member of a covered retirement plan may receive a combined service survivor benefit
56.27from each covered retirement plan in which the deceased member had credit for at least
56.28one-half year of allowable service if the deceased member:
56.29(1) had credit for sufficient allowable service in any combination of covered
56.30retirement plans to meet any the minimum allowable service credit requirement of the
56.31applicable covered retirement fund with the longest allowable service credit requirement
56.32for qualification for a survivor benefit or annuity;
57.1(2) had credit for at least one-half year of allowable service with the most recent
57.2covered retirement plan before the date of death and was an active member of that covered
57.3retirement plan on the date of death; and
57.4(3) was not receiving a retirement annuity from any covered retirement plan on the
57.5date of death.
57.6EFFECTIVE DATE.This section is effective the day following final enactment.

57.7    Sec. 74. Minnesota Statutes 2008, section 356.315, subdivision 5, is amended to read:
57.8    Subd. 5. Correctional plan members. The applicable benefit accrual rate is 2.4
57.9percent if employed as a correctional state employee before July 1, 2010, or 2.2 percent if
57.10employed as a correctional state employee after June 30, 2010.
57.11EFFECTIVE DATE.This section is effective the day following final enactment.

57.12    Sec. 75. Minnesota Statutes 2009 Supplement, section 356.415, subdivision 1, is
57.13amended to read:
57.14    Subdivision 1. Annual postretirement adjustments; generally. (a) Except as
57.15otherwise provided in subdivision 1a, 1b, 1c, 1d, or 1e, retirement annuity, disability
57.16benefit, or survivor benefit recipients of a covered retirement plan are entitled to a
57.17postretirement adjustment annually on January 1, as follows:
57.18(1) a postretirement increase of 2.5 percent must be applied each year, effective
57.19January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has
57.20been receiving an annuity or a benefit for at least 12 full months prior to the January 1
57.21increase; and
57.22(2) for each annuitant or benefit recipient who has been receiving an annuity or a
57.23benefit amount for at least one full month, an annual postretirement increase of 1/12 of 2.5
57.24percent for each month that the person has been receiving an annuity or benefit must be
57.25applied, effective on January 1 following the calendar year in which the person has been
57.26retired for less than 12 months.
57.27(b) The increases provided by this section subdivision commence on January 1, 2010.
57.28(c) An increase in annuity or benefit payments under this section must be made
57.29automatically unless written notice is filed by the annuitant or benefit recipient with the
57.30executive director of the covered retirement plan requesting that the increase not be made.
57.31(d) The retirement annuity payable to a person who retires before becoming eligible
57.32for Social Security benefits and who has elected the optional payment as provided in
57.33section 353.29, subdivision 6, or 354.35 must be treated as the sum of a period certain
58.1retirement annuity and a life retirement annuity for the purposes of any postretirement
58.2adjustment. The period certain retirement annuity plus the life retirement annuity must be
58.3the annuity amount payable until age 62 for section 353.29, subdivision 6, or age 62, 65,
58.4or normal retirement age, as selected by the member at retirement, for an annuity amount
58.5payable under section 354.35. A postretirement adjustment granted on the period certain
58.6retirement annuity must terminate when the period certain retirement annuity terminates.
58.7EFFECTIVE DATE.This section is effective the day following final enactment.

58.8    Sec. 76. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding
58.9a subdivision to read:
58.10    Subd. 1a. Annual postretirement adjustments; Minnesota State Retirement
58.11System plans other than the State Patrol retirement plan. (a) Retirement annuity,
58.12disability benefit, or survivor benefit recipients of the legislators retirement plan, the
58.13general state employees retirement plan, the correctional state employees retirement plan,
58.14the elected state officers retirement plan, the unclassified state employees retirement
58.15program, and the judges retirement plan are entitled to a postretirement adjustment
58.16annually on January 1, as follows:
58.17(1) a postretirement increase of two percent must be applied each year, effective on
58.18January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who
58.19has been receiving an annuity or a benefit for at least 18 full months before the January 1
58.20increase; and
58.21(2) for each annuitant or benefit recipient who has been receiving an annuity or
58.22a benefit for at least six full months, an annual postretirement increase of 1/12 of two
58.23percent for each month that the person has been receiving an annuity or benefit must be
58.24applied, effective January 1, following the calendar year in which the person has been
58.25retired for at least six months, but has been retired for less than 18 months.
58.26(b) The increases provided by this subdivision commence on January 1, 2011.
58.27Increases under this subdivision for the general state employees retirement plan, the
58.28correctional state employees retirement plan, or the judges retirement plan terminate
58.29on December 31 of the calendar year in which the actuarial valuation prepared by the
58.30approved actuary under sections 356.214 and 356.215 and the standards for actuarial work
58.31promulgated by the Legislative Commission on Pensions and Retirement indicates that the
58.32market value of assets of the retirement plan equals or exceeds 90 percent of the actuarial
58.33accrued liability of the retirement plan and increases under subdivision 1 recommence
58.34after that date. Increases under this subdivision for the legislators retirement plan or the
58.35elected state officers retirement plan terminate on December 31 of the calendar year in
59.1which the actuarial valuation prepared by the approved actuary under sections 356.214 and
59.2356.215 and the standards for actuarial work promulgated by the Legislative Commission
59.3on Pensions and Retirement indicates that the market value of assets of the general state
59.4employees retirement plan equals or exceeds 90 percent of the actuarial accrued liability
59.5of the retirement plan and increases under subdivision 1 recommence after that date.
59.6(c) An increase in annuity or benefit payments under this subdivision must be made
59.7automatically unless written notice is filed by the annuitant or benefit recipient with the
59.8executive director of the applicable covered retirement plan requesting that the increase
59.9not be made.
59.10EFFECTIVE DATE.This section is effective the day following final enactment.

59.11    Sec. 77. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding
59.12a subdivision to read:
59.13    Subd. 1b. Annual postretirement adjustments; general employees retirement
59.14plan and local government correctional retirement plan of the Public Employees
59.15Retirement Association. (a) Retirement annuity, disability benefit, or survivor benefit
59.16recipients of the general employees retirement plan of the Public Employees Retirement
59.17Association and the local government correctional service retirement plan are entitled to a
59.18postretirement adjustment annually on January 1, as follows:
59.19(1) for January 1, 2011, and each successive January 1 until funding stability is
59.20restored for the applicable retirement plan, a postretirement increase of one percent must
59.21be applied each year, effective on January 1, to the monthly annuity or benefit amount of
59.22each annuitant or benefit recipient who has been receiving an annuity or benefit for at least
59.2312 full months as of the current June 30;
59.24(2) for January 1, 2011, and each successive January 1 until funding stability is
59.25restored for the applicable retirement plan, for each annuitant or benefit recipient who has
59.26been receiving an annuity or a benefit for at least one full month, but less than 12 full
59.27months as of the current June 30, an annual postretirement increase of 1/12 of one percent
59.28for each month the person has been receiving an annuity or benefit must be applied;
59.29(3) for each January 1 following the restoration of funding stability for the applicable
59.30retirement plan, a postretirement increase of 2.5 percent must be applied each year,
59.31effective January 1, to the monthly annuity or benefit amount of each annuitant or benefit
59.32recipient who has been receiving an annuity or benefit for at least 12 full months as of
59.33the current June 30; and
59.34(4) for each January 1 following restoration of funding stability for the applicable
59.35retirement plan, for each annuity or benefit recipient who has been receiving an annuity or
60.1a benefit for at least one full month, but less than 12 full months as of the current June
60.230, an annual postretirement increase of 1/12 of 2.5 percent for each month the person
60.3has been receiving an annuity or benefit must be applied.
60.4(b) Funding stability is restored when the market value of assets of the applicable
60.5retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities of the
60.6applicable plan in the most recent prior actuarial valuation prepared under section 356.215
60.7and the standards for actuarial work by the approved actuary retained by the Public
60.8Employees Retirement Association under section 356.214.
60.9(c) If, after applying the increase as provided for in paragraph (a), clauses (3)
60.10and (4), the market value of the applicable retirement plan is determined in the next
60.11subsequent actuarial valuation prepared under section 356.215 to be less than 90 percent
60.12of the actuarial accrued liability of any of the applicable Public Employees Retirement
60.13Association plans, the increase provided in paragraph (a), clauses (1) and (2), are to be
60.14applied as of the next successive January until funding stability is again restored.
60.15(d) An increase in annuity or benefit payments under this section must be made
60.16automatically unless written notice is filed by the annuitant or benefit recipient with the
60.17executive director of the Public Employees Retirement Association requesting that the
60.18increase not be made.
60.19(e) The retirement annuity payable to a person who retires before becoming eligible
60.20for Social Security benefits and who has elected the optional payment, as provided in
60.21section 353.29, subdivision 6, must be treated as the sum of a period-certain retirement
60.22annuity and a life retirement annuity for the purposes of any postretirement adjustment.
60.23The period-certain retirement annuity plus the life retirement annuity must be the
60.24annuity amount payable until age 62 for section 353.29, subdivision 6. A postretirement
60.25adjustment granted on the period-certain retirement annuity must terminate when the
60.26period-certain retirement annuity terminates.
60.27EFFECTIVE DATE.This section is effective the day following final enactment.

60.28    Sec. 78. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding
60.29a subdivision to read:
60.30    Subd. 1c. Annual postretirement adjustments; PERA-P&F. (a) Retirement
60.31annuity, disability benefit, or survivor benefit recipients of the public employees police
60.32and fire retirement plan are entitled to a postretirement adjustment annually on January
60.331, as follows:
61.1(1) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit
61.2recipient who has been receiving the annuity or benefit for at least 12 full months as of the
61.3immediate preceding June 30, an amount equal to one percent in each year;
61.4(2) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit
61.5recipient who has been receiving the annuity or benefit for at least one full month as of the
61.6immediate preceding June 30, an amount equal to 1/12 of one percent in each year;
61.7(3) for January 1, 2013, and each successive January 1 that follows the loss of
61.8funding stability as defined under paragraph (b) until funding stability as defined under
61.9paragraph (b) is again restored, for each annuitant or benefit recipient who has been
61.10receiving the annuity or benefit for at least 12 full months as of the immediate preceding
61.11June 30, an amount equal to the percentage increase in the Consumer Price Index for
61.12urban wage earners and clerical workers all items index published by the Bureau of Labor
61.13Statistics of the United States Department of Labor between the immediate preceding June
61.1430 and the June 30 occurring 12 months previous, but not to exceed 1.5 percent;
61.15(4) for January 1, 2013, and each successive January 1 that follows the loss of
61.16funding stability as defined under paragraph (b) until funding stability as defined under
61.17paragraph (b) is again restored, for each annuitant or benefit recipient who has been
61.18receiving the annuity or benefit for at least one full month as of the immediate preceding
61.19June 30, an amount equal to 1/12 of the percentage increase in the Consumer Price Index
61.20for urban wage earners and clerical workers-all items published by the Bureau of Labor
61.21Statistics of the United States Department of Labor between the immediate preceding
61.22June 30 and the June 30 occurring 12 months previous for each full month of annuity
61.23or benefit receipt, but not to exceed 1/12 of 1.5 percent for each full month of annuity
61.24or benefit receipt;
61.25(5) for each January 1 following the restoration of funding stability as defined
61.26under paragraph (b) and during the continuation of funding stability as defined under
61.27paragraph (b), for each annuitant or benefit recipient who has been receiving the annuity
61.28or benefit for at least 12 full months as of the immediate preceding June 30, an amount
61.29equal to the percentage increase in the Consumer Price Index for urban wage earners and
61.30clerical workers-all items published by the Bureau of Labor Statistics of the United States
61.31Department of Labor between the immediate preceding June 30 and the June 30 occurring
61.3212 months previous, but not to exceed 2.5 percent; and
61.33(6) for each January 1 following the restoration of funding stability as defined under
61.34paragraph (b) and during the continuation of funding stability as defined under paragraph
61.35(b), for each annuitant or benefit recipient who has been receiving the annuity or benefit
61.36for at least one full month as of the immediate preceding June 30, an amount equal to
62.11/12 of the percentage increase in the Consumer Price Index for urban wage earners and
62.2clerical workers-all items published by the Bureau of Labor Statistics of the United States
62.3Department of Labor between the immediate preceding June 30 and the June 30 occurring
62.412 months previous for each full month of annuity or benefit receipt, but not to exceed
62.51/12 of 2.5 percent for each full month of annuity or benefit receipt.
62.6(b) Funding stability is restored when the market value of assets of the public
62.7employees police and fire retirement plan equals or exceeds 90 percent of the actuarial
62.8accrued liabilities of the applicable plan in the most recent prior actuarial valuation
62.9prepared under section 356.215 and under the standards for actuarial work of the
62.10Legislative Commission and Pensions and Retirement by the approved actuary retained by
62.11the Public Employees Retirement Association under section 356.214.
62.12(c) An increase in annuity or benefit payments under this section must be made
62.13automatically unless written notice is filed by the annuitant or benefit recipient with the
62.14executive director of the Public Employees Retirement Association requesting that the
62.15increase not be made.
62.16EFFECTIVE DATE.This section is effective the day following final enactment.

62.17    Sec. 79. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding
62.18a subdivision to read:
62.19    Subd. 1d. Teachers Retirement Association annual postretirement adjustments.
62.20(a) Retirement annuity, disability benefit, or survivor benefit recipients of the Teachers
62.21Retirement Association are entitled to a postretirement adjustment annually on January
62.221, as follows:
62.23(1) for January 1, 2011, and January 1, 2012, no postretirement increase is payable;
62.24(2) for January 1, 2013, and each successive January 1 until funding stability is
62.25restored, a postretirement increase of two percent must be applied each year, effective on
62.26January 1, to the monthly annuity or benefit amount of each annuitant or benefit recipient
62.27who has been receiving an annuity or a benefit for at least 18 full months prior to the
62.28January 1 increase;
62.29(3) for January 1, 2013, and each successive January 1 until funding stability is
62.30restored, for each annuitant or benefit recipient who has been receiving an annuity or
62.31a benefit for at least six full months, an annual postretirement increase of 1/12 of two
62.32percent for each month the person has been receiving an annuity or benefit must be
62.33applied, effective January 1, following the year in which the person has been retired
62.34for less than 12 months;
63.1(4) for each January 1 following the restoration of funding stability, a postretirement
63.2increase of 2.5 percent must be applied each year, effective January 1, to the monthly
63.3annuity or benefit amount of each annuitant or benefit recipient who has been receiving an
63.4annuity or a benefit for at least 18 full months prior to the January 1 increase; and
63.5(5) for each January 1 following the restoration of funding stability, for each
63.6annuitant or benefit recipient who has been receiving an annuity or a benefit for at least
63.7six full months, an annual postretirement increase of 1/12 of 2.5 percent for each month
63.8the person has been receiving an annuity or benefit must be applied, effective January 1,
63.9following the year in which the person has been retired for less than 12 months.
63.10(b) Funding stability is restored when the market value of assets of the Teachers
63.11Retirement Association equals or exceeds 90 percent of the actuarial accrued liabilities of
63.12the Teachers Retirement Association in the most recent prior actuarial valuation prepared
63.13under section 356.215 and the standards for actuarial work by the approved actuary
63.14retained by the Teachers Retirement Association under section 356.214.
63.15(c) An increase in annuity or benefit payments under this section must be made
63.16automatically unless written notice is filed by the annuitant or benefit recipient with the
63.17executive director of the Teachers Retirement Association requesting that the increase
63.18not be made.
63.19(d) The retirement annuity payable to a person who retires before becoming eligible
63.20for Social Security benefits and who has elected the optional payment as provided in
63.21section 354.35 must be treated as the sum of a period-certain retirement annuity and a life
63.22retirement annuity for the purposes of any postretirement adjustment. The period-certain
63.23retirement annuity plus the life retirement annuity must be the annuity amount payable
63.24until age 62, 65, or normal retirement age, as selected by the member at retirement, for an
63.25annuity amount payable under section 354.35. A postretirement adjustment granted on
63.26the period-certain retirement annuity must terminate when the period-certain retirement
63.27annuity terminates.
63.28EFFECTIVE DATE.This section is effective the day following final enactment.

63.29    Sec. 80. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding
63.30a subdivision to read:
63.31    Subd. 1e. Annual postretirement adjustments; State Patrol retirement plan.
63.32(a) Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol
63.33retirement plan are entitled to a postretirement adjustment annually on January 1, as
63.34follows:
64.1(1) a postretirement increase of 1.5 percent must be applied each year, effective on
64.2January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who
64.3has been receiving an annuity or a benefit for at least 18 full months before the January 1
64.4increase; and
64.5(2) for each annuitant or benefit recipient who has been receiving an annuity or a
64.6benefit for at least six full months, an annual postretirement increase of 1/12 of 1.5 percent
64.7for each month that the person has been receiving an annuity or benefit must be applied,
64.8effective January 1, following the calendar year in which the person has been retired for at
64.9least six months, but has been retired for less than 18 months.
64.10(b) The increases provided by this subdivision commence on January 1, 2011.
64.11Increases under this subdivision for the State Patrol retirement plan terminate on December
64.1231 of the calendar year in which the actuarial valuation prepared by the approved actuary
64.13under sections 356.214 and 356.215 and the standards for actuarial work promulgated by
64.14the Legislative Commission on Pensions and Retirement indicates that the market value of
64.15assets of the retirement plan equals or exceeds 90 percent of the actuarial accrued liability
64.16of the retirement plan and increases under subdivision 1 recommence after that date.
64.17(c) An increase in annuity or benefit payments under this subdivision must be made
64.18automatically unless written notice is filed by the annuitant or benefit recipient with the
64.19executive director of the applicable covered retirement plan requesting that the increase
64.20not be made.
64.21EFFECTIVE DATE.This section is effective the day following final enactment.

64.22    Sec. 81. Minnesota Statutes 2008, section 356.47, subdivision 3, is amended to read:
64.23    Subd. 3. Payment. (a) Beginning one year after the reemployment withholding
64.24period ends relating to the reemployment that gave rise to the limitation, and the filing of a
64.25written application, the retired member is entitled to the payment, in a lump sum, of the
64.26value of the person's amount under subdivision 2, plus annual compound interest at. For
64.27the general state employees retirement plan, the correctional state employees retirement
64.28plan, the general employees retirement plan of the Public Employees Retirement
64.29Association, the public employees police and fire retirement plan, the local government
64.30correctional employees retirement plan, and the teachers retirement plan, the annual
64.31interest rate is six percent from the date on which the amount was deducted from the
64.32retirement annuity to the date of payment or until January 1, 2011, whichever is earlier, and
64.33no interest after January 1, 2011. For the Duluth Teachers Retirement Fund Association,
64.34the annual interest is six percent from the date on which the amount was deducted from the
64.35retirement annuity to the date of payment or until June 30, 2010, whichever is earlier, and
65.1no interest after June 30, 2010. For the St. Paul Teachers Retirement Fund Association,
65.2the annual interest is the compound annual rate of six percent from the date that the
65.3amount was deducted from the retirement annuity to the date of payment.
65.4    (b) The written application must be on a form prescribed by the chief administrative
65.5officer of the applicable retirement plan.
65.6    (c) If the retired member dies before the payment provided for in paragraph (a) is
65.7made, the amount is payable, upon written application, to the deceased person's surviving
65.8spouse, or if none, to the deceased person's designated beneficiary, or if none, to the
65.9deceased person's estate.
65.10    (d) In lieu of the direct payment of the person's amount under subdivision 2, on
65.11or after the payment date under paragraph (a), if the federal Internal Revenue Code so
65.12permits, the retired member may elect to have all or any portion of the payment amount
65.13under this section paid in the form of a direct rollover to an eligible retirement plan as
65.14defined in section 402(c) of the federal Internal Revenue Code that is specified by the
65.15retired member. If the retired member dies with a balance remaining payable under this
65.16section, the surviving spouse of the retired member, or if none, the deceased person's
65.17designated beneficiary, or if none, the administrator of the deceased person's estate may
65.18elect a direct rollover under this paragraph.
65.19EFFECTIVE DATE.This section is effective the day following final enactment.

65.20    Sec. 82. Minnesota Statutes 2009 Supplement, section 423A.02, subdivision 3, is
65.21amended to read:
65.22    Subd. 3. Reallocation of amortization or supplementary amortization state
65.23aid. (a) Seventy percent of the difference between $5,720,000 and the current year
65.24amortization aid and supplemental amortization aid distributed under subdivisions 1
65.25and 1a that is not distributed for any reason to a municipality for use by a local police
65.26or salaried fire relief association must be distributed by the commissioner of revenue
65.27according to this paragraph. The commissioner shall distribute 50 percent of the amounts
65.28derived under this paragraph to the Teachers Retirement Association, ten percent to the
65.29Duluth Teachers Retirement Fund Association, and 40 percent to the St. Paul Teachers
65.30Retirement Fund Association to fund the unfunded actuarial accrued liabilities of the
65.31respective funds. These payments shall be made on or before June 30 each fiscal year. If
65.32the St. Paul Teachers Retirement Fund Association becomes fully funded, its eligibility
65.33for this aid ceases. Amounts remaining in the undistributed balance account at the end of
65.34the biennium if aid eligibility ceases cancel to the general fund.
66.1    (b) In order to receive amortization and supplementary amortization aid under
66.2paragraph (a), Independent School District No. 625, St. Paul, must make contributions
66.3to the St. Paul Teachers Retirement Fund Association in accordance with the following
66.4schedule:

66.5		Fiscal Year		Amount
66.6		1996	$	0
66.7		1997	$	0
66.8		1998	$	200,000
66.9		1999	$	400,000
66.10		2000	$	600,000
66.11		2001 and thereafter	$	800,000

66.12    (c) Special School District No. 1, Minneapolis, and the city of Minneapolis must
66.13each make contributions to the Teachers Retirement Association in accordance with the
66.14following schedule:

66.15 66.16		Fiscal Year	City amount			School district amount
66.17		1996	$	0		$	0
66.18		1997	$	0		$	0
66.19		1998	$	250,000		$	250,000
66.20		1999	$	400,000		$	400,000
66.21		2000	$	550,000		$	550,000
66.22		2001	$	700,000		$	700,000
66.23		2002	$	850,000		$	850,000
66.24		2003 and thereafter	$	1,000,000		$	1,000,000

66.25    (d) Money contributed under paragraph (a) and either paragraph (b) or (c), as
66.26applicable, must be credited to a separate account in the applicable teachers retirement
66.27fund and may not be used in determining any benefit increases. The separate account
66.28terminates for a fund when the aid payments to the fund under paragraph (a) cease.
66.29    (e) (d) Thirty percent of the difference between $5,720,000 and the current year
66.30amortization aid and supplemental amortization aid under subdivisions 1 and 1a that is not
66.31distributed for any reason to a municipality for use by a local police or salaried firefighter
66.32relief association must be distributed under section 69.021, subdivision 7, paragraph (d),
66.33as additional funding to support a minimum fire state aid amount for volunteer firefighter
66.34relief associations.
66.35EFFECTIVE DATE.This section is effective the day following final enactment.

66.36    Sec. 83. LOCAL RETIREMENT FUND INVESTMENT AUTHORITIES
66.37STUDY.
67.1A study group consisting of representatives from pension plans subject to Minnesota
67.2Statutes, section 356A.06, subdivision 6 or 7, shall be convened by the state auditor to
67.3study investment-related provisions, authorities, and limitations under Minnesota Statutes,
67.4chapter 356A, and related sections of other chapters. Administrative support for the
67.5study group shall be provided by the state auditor. The study group shall prepare a
67.6report to include an assessment of the effectiveness of current statutory prescriptions,
67.7options for change, and recommendations for consideration by the governor and the
67.8legislature during the 2011 legislative session. The report will be provided no later than
67.9January 15, 2011, to the executive director of the Legislative Commission on Pensions and
67.10Retirement, the chair and ranking minority caucus member of the senate State and Local
67.11Government Operations and Oversight Committee, and the chair and ranking minority
67.12caucus member of the house State and Local Government Operations Reform, Technology
67.13and Elections Committee.
67.14EFFECTIVE DATE.This section is effective the day following final enactment.

67.15    Sec. 84. BYLAW AUTHORIZATION.
67.16Consistent with the requirements of Minnesota Statutes, section 354A.12,
67.17subdivision 4, the board of the Duluth Teachers Retirement Fund Association is authorized
67.18to revise the bylaws or articles of incorporation so that the requirements of this act apply
67.19to the old law coordinated program.
67.20EFFECTIVE DATE.This section is effective the day following final enactment.

67.21    Sec. 85. REPEALER.
67.22Minnesota Statutes 2008, section 354A.27, subdivision 1, is repealed.
67.23EFFECTIVE DATE.This section is effective July 1, 2010.