as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am
Engrossments | ||
---|---|---|
Introduction | Posted on 08/14/1998 |
1.1 A bill for an act 1.2 relating to retirement; adding governor's appointees 1.3 to the pension commission; changing responsibilities 1.4 of the pension commission; adding pension policy 1.5 review responsibilities to the department of finance 1.6 and the department of employee relations; adding 1.7 actuarial audit responsibilities to the office of the 1.8 legislative auditor; amending Minnesota Statutes 1994, 1.9 sections 3.85, subdivisions 1, 3, 7, and 11; 6.72, 1.10 subdivision 1; 11A.18, subdivisions 9 and 11; 16A.055, 1.11 subdivision 5; 16A.11, subdivision 1, and by adding a 1.12 subdivision; 69.051, subdivision 4; 69.77, subdivision 1.13 2h; 69.773, subdivision 2; 352.01, subdivision 12; 1.14 352.03, subdivision 6; 352.04, subdivision 3; 352.91, 1.15 subdivision 4; 352.92, subdivision 2; 352B.02, 1.16 subdivisions 1c and 1e; 353.03, subdivision 3a; 1.17 353.271, subdivision 2; 353A.02, subdivision 8; 1.18 353A.04, subdivision 7; 353A.05, subdivision 1; 1.19 353A.06; 353A.07, subdivision 6; 353A.09, subdivision 1.20 2; 353B.14; 353C.05, subdivision 3; 354.06, 1.21 subdivision 2a; 354.42, subdivision 5; 354A.011, 1.22 subdivision 3a; 354A.021, subdivision 7; 354A.12, 1.23 subdivisions 2b, 3c, and 4; 354A.28, subdivision 9; 1.24 354A.41, subdivision 2; 356.20, subdivisions 3 and 4; 1.25 356.215, subdivisions 1, 2, 3, 4, 6, and 7; 356.217; 1.26 356.218, subdivisions 1 and 3; 356.22, subdivision 1; 1.27 356.23; 356.88; 422A.01, subdivision 6; 422A.04, 1.28 subdivision 3; 422A.06, subdivisions 2 and 8; 1.29 422A.101, subdivisions 1, 1a, 2, 2a, and 3; 422A.15, 1.30 subdivisions 2 and 3; 422A.23, subdivision 6; 423A.03; 1.31 423A.07; 423A.17; 423A.171; 423A.18; 423A.19, 1.32 subdivision 4; 423B.15, subdivisions 2 and 5; and 1.33 490.124, subdivision 11; Minnesota Statutes 1995 1.34 Supplement, sections 3.85, subdivisions 5 and 12; 1.35 354.05, subdivision 7; and 354A.27, subdivision 6; 1.36 proposing coding for new law in Minnesota Statutes, 1.37 chapter 3. 1.38 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.39 Section 1. Minnesota Statutes 1994, section 3.85, 1.40 subdivision 1, is amended to read: 1.41 Subdivision 1. [CREATION.] Thelegislativecommission on 2.1 pensions and retirement is created to study and investigate 2.2 public retirement systems. 2.3 Sec. 2. Minnesota Statutes 1994, section 3.85, subdivision 2.4 3, is amended to read: 2.5 Subd. 3. [MEMBERSHIP.] The commission consists of five 2.6 members of the senate appointed by the subcommittee on 2.7 committees of the committee on rules and administrationand, 2.8 five members of the house of representatives appointed by the 2.9 speaker, and five members appointed by the governor. Members 2.10 shall be appointed at the commencement of each regular session 2.11 of the legislature for a two-year term beginning January 16 of 2.12 the first year of the regular session. Vacancies that occur 2.13 while the legislature is in session shall be filled like regular 2.14 appointments. If the legislature is not in session, senate 2.15 vacancies shall be filled by the last subcommittee on committees 2.16 of the senate committee on rules and administration or other 2.17 appointing authority designated by the senate rules, and house 2.18 vacancies shall be filled by the last speaker of the house, or 2.19 if the speaker is not available, by the last chair of the house 2.20 rules committee. 2.21 Sec. 3. Minnesota Statutes 1995 Supplement, section 3.85, 2.22 subdivision 5, is amended to read: 2.23 Subd. 5. [STAFF.] The legislative coordinating commission 2.24 may employprofessional and technicalassistants as it deems 2.25 necessary to perform the duties prescribed inthis section2.26 subdivision 2 (f) and contract with an actuarial consulting firm 2.27 for work requiring actuarial expertise. Coordination of the 2.28 work of the commission on pensions and retirement shall annually 2.29 rotate among the directors of house and senate research. 2.30 Sec. 4. Minnesota Statutes 1994, section 3.85, subdivision 2.31 7, is amended to read: 2.32 Subd. 7. [LEGISLATIVE BILLS FURNISHED.] The secretary of 2.33 the senate and the chief clerk of the house shall provide the 2.34 commission, the commissioner of employee relations, and the 2.35 commissioner of finance with a copy of each bill introduced in 2.36 the legislature concerning retirement and pensions. 3.1 Sec. 5. Minnesota Statutes 1994, section 3.85, subdivision 3.2 11, is amended to read: 3.3 Subd. 11. [VALUATIONS AND REPORTS TO LEGISLATURE.](a) The3.4commission shall contract with an established actuarial3.5consulting firm to conduct annual actuarial valuations for the3.6retirement plans named in paragraph (b). The contract must3.7include provisions for performing cost analyses of proposals for3.8changes in benefit and funding policies.3.9(b) The contract for actuarial valuation must include the3.10following retirement plans:3.11(1) the teachers retirement plan, teachers retirement3.12association;3.13(2) the general state employees retirement plan, Minnesota3.14state retirement system;3.15(3) the correctional employees retirement plan, Minnesota3.16state retirement system;3.17(4) the state patrol retirement plan, Minnesota state3.18retirement system;3.19(5) the judges retirement plan, Minnesota state retirement3.20system;3.21(6) the Minneapolis employees retirement plan, Minneapolis3.22employees retirement fund;3.23(7) the public employees retirement plan, public employees3.24retirement association;3.25(8) the public employees police and fire plan, public3.26employees retirement association;3.27(9) the Duluth teachers retirement plan, Duluth teachers3.28retirement fund association;3.29(10) the Minneapolis teachers retirement plan, Minneapolis3.30teachers retirement fund association;3.31(11) the St. Paul teachers retirement plan, St. Paul3.32teachers retirement fund association;3.33(12) the legislators retirement plan, Minnesota state3.34retirement system;3.35(13) the elective state officers retirement plan, Minnesota3.36state retirement system; and4.1(14) the public employees local government correctional4.2service retirement plan, public employees retirement4.3association, if there are any participants in that plan.4.4(c) The contract must specify completion of annual4.5actuarial valuation calculations on a fiscal year basis with4.6their contents as specified in section 356.215, and the4.7standards for actuarial work adopted by the commission.4.8The contract must specify completion of annual experience4.9data collection and processing and a quadrennial published4.10experience study for the plans listed in paragraph (b), clauses4.11(1), (2), and (7), as provided for in the standards for4.12actuarial work adopted by the commission. The experience data4.13collection, processing, and analysis must evaluate the following:4.14(1) individual salary progression;4.15(2) rate of return on investments based on current asset4.16value;4.17(3) payroll growth;4.18(4) mortality;4.19(5) retirement age;4.20(6) withdrawal; and4.21(7) disablement.4.22(d)(a) The actuary retained by the commission shall 4.23 annually prepare a report to the legislature, including the 4.24 commentary ontheactuarial valuation calculationsfor the plans4.25named in paragraph (b)prepared by the funds and summarizing the 4.26 results of the actuarial valuation calculations. The 4.27 commission-retained actuary shall include with the reportthe4.28actuary'srecommendations concerning the appropriateness of the 4.29 support rates to achieve proper funding of the retirement funds 4.30 by the required funding dates. The commission-retained actuary 4.31 shall, as part of thereview quadrennial published 4.32 experiencestudy, includestudies and make recommendations to 4.33 the legislature on the appropriateness of the actuarial 4.34 valuation assumptions required for evaluation in the study. 4.35(e)(b) If the actuarial gain and loss analysis in the 4.36 actuarial valuation calculations indicates a persistent pattern 5.1 of sizable gains or losses,as directed by the commission,the 5.2 actuaryretained by the commissionshall recommend that the 5.3 actuary retained by the fund prepare a special experience 5.4 studyfor a plan listed in paragraph (b), clause (3), (4), (5),5.5(6), (8), (9), (10), (11), (12), (13), or (14),in the manner 5.6 provided for in the standards for actuarial work adopted by the 5.7 commission. 5.8(f)(c) The term of the contract between the commission and 5.9 the actuary retained by the commission is two years, plus not to 5.10 exceed two one-year extensions before competitive bidding. The 5.11 contract is subject to competitive bidding procedures as 5.12 specified by the commission. 5.13 Sec. 6. Minnesota Statutes 1995 Supplement, section 3.85, 5.14 subdivision 12, is amended to read: 5.15 Subd. 12. [ALLOCATION OF ACTUARIAL COST.](a) The5.16commission shall assess each retirement plan specified in5.17subdivision 11, paragraph (b), the compensation paid to the5.18actuary retained by the commission for the actuarial valuation5.19calculations and quadrennial experience studies. The assessment5.20is 100 percent of the amount of contract compensation for the5.21actuarial consulting firm retained by the commission for5.22actuarial valuation calculations, including the public employees5.23police and fire plan consolidation accounts of the public5.24employees retirement association, annual experience data5.25collection and processing, and quadrennial experience studies.5.26The portion of the total assessment payable by each5.27retirement system or pension plan must be determined as follows:5.28(1) Each pension plan specified in subdivision 11,5.29paragraph (b), clauses (1) to (14), must pay the following5.30indexed amount based on its total active, deferred, inactive,5.31and benefit recipient membership:5.32up to 2,000 members, inclusive$2.55 per member5.332,001 through 10,000 members$1.13 per member5.34over 10,000 members$0.11 per member5.35The amount specified is applicable for the assessment of5.36the July 1, 1991, to June 30, 1992, fiscal year actuarial6.1compensation amounts. For the July 1, 1992, to June 30, 1993,6.2fiscal year and subsequent fiscal year actuarial compensation6.3amounts, the amount specified must be increased at the same6.4percentage increase rate as the implicit price deflator for6.5state and local government purchases of goods and services for6.6the 12-month period ending with the first quarter of the6.7calendar year following the completion date for the actuarial6.8valuation calculations, as published by the federal Department6.9of Commerce, and rounded upward to the nearest full cent.6.10(2) The total per-member portion of the allocation must be6.11determined, and that total per-member amount must be subtracted6.12from the total amount for allocation. Of the remainder dollar6.13amount, the following per-retirement system and per-pension plan6.14charges must be determined and the charges must be paid by the6.15system or plan:6.16(i) 37.87 percent is the total additional per-retirement6.17system charge, of which one-seventh must be paid by each6.18retirement system specified in subdivision 11, paragraph (b),6.19clauses (1), (2), (6), (7), (9), (10), and (11).6.20(ii) 62.13 percent is the total additional per-pension plan6.21charge, of which one-thirteenth must be paid by each pension6.22plan specified in subdivision 11, paragraph (b), clauses (1) to6.23(13), if there are not any participants in the plan specified in6.24subdivision 11, paragraph (b), clause (14), or of which6.25one-fourteenth must be paid by each pension plan specified in6.26subdivision 11, paragraph (b), clauses (1) to (14), if there are6.27participants in the plan specified in subdivision 11, paragraph6.28(b), clause (14).6.29(b) The assessment must be made following the completion of6.30the actuarial valuation calculations and the experience6.31analysis. The amount of the assessment is appropriated from the6.32retirement fund applicable to the retirement plan. Receipts6.33from assessments must be deposited in the state treasury and6.34credited to the general fund.6.35 (a) The commission may assess a retirement plan the 6.36 compensation paid to the actuary retained by the commission in a 7.1 manner that reflects the amount of time devoted by the actuary 7.2 to issues related to the specific plan. The total assessment 7.3 for all plans is 100 percent of the amount of contract 7.4 compensation for the actuarial consulting firm. 7.5 (b) The assessment must be made following the completion of 7.6 the actuaries work on issues for a plan. The amount of the 7.7 assessment is appropriated from the retirement fund applicable 7.8 to the retirement plan. Receipts from assessments must be 7.9 deposited in the state treasury and credited to the general fund. 7.10 Sec. 7. [3.9721] [DUTIES RELATED TO PENSION AND RETIREMENT 7.11 FUNDING; LIABILITY ASSESSMENT.] 7.12 Subdivision 1. [VALUATIONS AND REPORTS TO LEGISLATURE.] (a) 7.13 The legislative auditor shall contract with an established 7.14 actuarial consulting firm to periodically conduct audits of the 7.15 actuarial valuations, experience studies, and estimates of 7.16 proposed law liabilities, costs, and actuarial equivalents 7.17 submitted by the retirement plans named in paragraph (b). 7.18 (b) Included retirement plans are the: 7.19 (1) teachers retirement plan, teachers retirement 7.20 association; 7.21 (2) general state employees retirement plan, Minnesota 7.22 state retirement system; 7.23 (3) correctional employees retirement plan, Minnesota state 7.24 retirement system; 7.25 (4) state patrol retirement plan, Minnesota state 7.26 retirement system; 7.27 (5) judges retirement plan, Minnesota state retirement 7.28 system; 7.29 (6) Minneapolis employees retirement plan, Minneapolis 7.30 employees retirement fund; 7.31 (7) public employees retirement plan, public employees 7.32 retirement association; 7.33 (8) public employees police and fire plan, public employees 7.34 retirement association; 7.35 (9) Duluth teachers retirement plan, Duluth teachers 7.36 retirement fund association; 8.1 (10) Minneapolis teachers retirement plan, Minneapolis 8.2 teachers retirement fund association; 8.3 (11) St. Paul teachers retirement plan, St. Paul teachers 8.4 retirement fund association; 8.5 (12) legislators retirement plan, Minnesota state 8.6 retirement system; 8.7 (13) elective state officers retirement plan, Minnesota 8.8 state retirement system; and 8.9 (14) public employees local government correctional service 8.10 retirement plan, public employees retirement association, if 8.11 there are any participants in that plan. 8.12 (c) The retirement plans listed in paragraph (b) have 8.13 responsibility for annually completing actuarial valuation 8.14 calculations on a fiscal year basis with their contents as 8.15 specified in section 356.215 and the standards for actuarial 8.16 work adopted by the commission on pensions and retirement. 8.17 (d) The retirement plans listed in paragraph (b) also have 8.18 responsibility for annual experience data collection and 8.19 processing a quadrennial published experience study, as provided 8.20 for in the standards for actuarial work adopted by the 8.21 commission on pensions and retirement. The experience data 8.22 collection, processing, and analysis must evaluate the following: 8.23 (1) individual salary progression; 8.24 (2) rate of return on investments based on current asset 8.25 value; 8.26 (3) payroll growth; 8.27 (4) mortality; 8.28 (5) retirement age; 8.29 (6) withdrawal; and 8.30 (7) disablement. 8.31 Subd. 3. [ALLOCATION OF ACTUARIAL COST.] (a) The 8.32 commission shall assess a retirement plan specified in 8.33 subdivision 2, paragraph (b), the compensation paid to the 8.34 actuary retained by the commission for the actuarial audits in a 8.35 manner that reflects the amount of time devoted by the actuary 8.36 to issues related to the specific plan. The total assessment 9.1 for all plans is 100 percent of the amount of contract 9.2 compensation for the actuarial consulting firm for actuarial 9.3 audits. 9.4 (b) The assessment must be made following the completion of 9.5 the actuaries work on issues for a plan. The amount of the 9.6 assessment is appropriated to the legislative auditor from the 9.7 retirement fund applicable to the retirement plan. 9.8 Sec. 8. Minnesota Statutes 1994, section 6.72, subdivision 9.9 1, is amended to read: 9.10 Subdivision 1. [REPORTING REQUIREMENTS.] Commencing 9.11 November 15, 1981 and every two years thereafter, the state 9.12 auditor shall report to the legislature on the general financial 9.13 condition of the various volunteer firefighters' relief 9.14 associations in the state as of December 31 of the year 9.15 preceding the filing of the report. Two copies of the report 9.16 shall be filed with theexecutive director of the legislative9.17 commission on pensions and retirement and ten copies of the 9.18 report shall be filed with the director of the legislative 9.19 reference library. 9.20 Sec. 9. Minnesota Statutes 1994, section 11A.18, 9.21 subdivision 9, is amended to read: 9.22 Subd. 9. [CALCULATION OF POSTRETIREMENT ADJUSTMENT.] (a) 9.23 Annually, following June 30, the state board shall use the 9.24 procedures in paragraphs (b), (c), and (d) to determine whether 9.25 a postretirement adjustment is payable and to determine the 9.26 amount of any postretirement adjustment. 9.27 (b) If the Consumer Price Index for urban wage earners and 9.28 clerical workers all items index published by the Bureau of 9.29 Labor Statistics of the United States Department of Labor 9.30 increases from June 30 of the preceding year to June 30 of the 9.31 current year, the state board shall certify the percentage 9.32 increase. The amount certified may not exceed the lesser of the 9.33 difference between the preretirement interest assumption and 9.34 postretirement interest assumption in section 356.215, 9.35 subdivision 4d, paragraph (a), or 3.5 percent. 9.36 (c) In addition to any percentage increase certified under 10.1 paragraph (b), the board shall use the following procedures to 10.2 determine if a postretirement adjustment is payable under this 10.3 paragraph: 10.4 (1) The state board shall determine the market value of the 10.5 fund on June 30 of that year; 10.6 (2) The amount of reserves required for the annuity or 10.7 benefit payable to an annuitant and benefit recipient of the 10.8 participating public pension plans or funds shall be determined 10.9 by thecommission-retainedactuary as of the current June 30. 10.10 An annuitant or benefit recipient who has been receiving an 10.11 annuity or benefit for at least 12 full months as of the current 10.12 June 30 is eligible to receive a full postretirement 10.13 adjustment. An annuitant or benefit recipient who has been 10.14 receiving an annuity or benefit for at least one full month, but 10.15 less than 12 full months as of the current June 30, is eligible 10.16 to receive a partial postretirement adjustment. Each fund shall 10.17 report separately the amount of the reserves for those 10.18 annuitants and benefit recipients who are eligible to receive a 10.19 full postretirement benefit adjustment. This amount is known as 10.20 "eligible reserves." Each fund shall also report separately the 10.21 amount of the reserves for those annuitants and benefit 10.22 recipients who are not eligible to receive a postretirement 10.23 adjustment. This amount is known as "noneligible reserves." 10.24 For an annuitant or benefit recipient who is eligible to receive 10.25 a partial postretirement adjustment, each fund shall report 10.26 separately as additional "eligible reserves" an amount that 10.27 bears the same ratio to the total reserves required for the 10.28 annuitant or benefit recipient as the number of full months of 10.29 annuity or benefit receipt as of the current June 30 bears to 12 10.30 full months. The remainder of the annuitant's or benefit 10.31 recipient's reserves shall be separately reported as additional 10.32 "noneligible reserves." The amount of "eligible" and 10.33 "noneligible" required reserves shall be certified to the board 10.34 by thecommission-retainedactuary as soon as is practical 10.35 following the current June 30; 10.36 (3) The state board shall determine the percentage increase 11.1 certified under paragraph (b) multiplied by the eligible 11.2 required reserves, as adjusted for mortality gains and losses 11.3 under subdivision 11, determined under clause (2); 11.4 (4) The state board shall add the amount of reserves 11.5 required for the annuities or benefits payable to annuitants and 11.6 benefit recipients of the participating public pension plans or 11.7 funds as of the current June 30 to the amount determined under 11.8 clause (3); 11.9 (5) The state board shall subtract the amount determined 11.10 under clause (4) from the market value of the fund determined 11.11 under clause (1); 11.12 (6) The state board shall adjust the amount determined 11.13 under clause (5) by the cumulative current balance determined 11.14 pursuant to clause (8) and any negative balance carried forward 11.15 under clause (9); 11.16 (7) A positive amount resulting from the calculations in 11.17 clauses (1) to (6) is the excess market value. A negative 11.18 amount is the negative balance; 11.19 (8) The state board shall allocate one-fifth of the excess 11.20 market value or one-fifth of the negative balance to each of 11.21 five consecutive years, beginning with the fiscal year ending 11.22 the current June 30; and 11.23 (9) To calculate the postretirement adjustment under this 11.24 paragraph based on investment performance for a fiscal year, the 11.25 state board shall add together all excess market value allocated 11.26 to that year and subtract from the sum all negative balances 11.27 allocated to that year. If this calculation results in a 11.28 negative number, the entire negative balance must be carried 11.29 forward and allocated to the next year. If the resulting amount 11.30 is positive, a postretirement adjustment is payable under this 11.31 paragraph. The board shall express a positive amount as a 11.32 percentage of the total eligible required reserves certified to 11.33 the board under clause (2). 11.34 (d) The state board shall determine the amount of any 11.35 postretirement adjustment which is payable using the following 11.36 procedure: 12.1 (1) The total "eligible" required reserves as of the first 12.2 of January next following the end of the fiscal year for the 12.3 annuitants and benefit recipients eligible to receive a full or 12.4 partial postretirement adjustment as determined by clause (2) 12.5 shall be certified to the state board by thecommission-retained12.6 actuary. The total "eligible" required reserves shall be 12.7 determined by thecommission-retainedactuary on the assumption 12.8 that all annuitants and benefit recipients eligible to receive a 12.9 full or partial postretirement adjustment will be alive on the 12.10 January 1 in question; and 12.11 (2) The state board shall add the percentage certified 12.12 under paragraph (b) to any positive percentage calculated under 12.13 paragraph (c). The board shall not subtract from the percentage 12.14 certified under paragraph (b) any negative amount calculated 12.15 under paragraph (c). The sum of these percentages shall be 12.16 carried to five decimal places and shall be certified to each 12.17 participating public pension fund or plan as the full 12.18 postretirement adjustment percentage. 12.19 (e) A retirement annuity payable in the event of retirement 12.20 before becoming eligible for social security benefits as 12.21 provided in section 352.116, subdivision 3; 353.29, subdivision 12.22 6; or 354.35 must be treated as the sum of a period certain 12.23 retirement annuity and a life retirement annuity for the 12.24 purposes of any postretirement adjustment. The period certain 12.25 retirement annuity plus the life retirement annuity shall be the 12.26 annuity amount payable until age 62 or 65, whichever applies. A 12.27 postretirement adjustment granted on the period certain 12.28 retirement annuity must terminate when the period certain 12.29 retirement annuity terminates. 12.30 Sec. 10. Minnesota Statutes 1994, section 11A.18, 12.31 subdivision 11, is amended to read: 12.32 Subd. 11. [ADJUSTMENT FOR MORTALITY GAINS AND LOSSES.] As 12.33 of June 30 annually, thecommission-retainedactuary shall 12.34 calculate the amount of required reserves representing any 12.35 mortality gains and any mortality losses incurred by each 12.36 participating public pension fund or plan during the fiscal year 13.1 and report the results of those calculations to the applicable 13.2 participating public pension fund or plan. The actuary shall 13.3 report separately the amount of the reserves for annuitants and 13.4 benefit recipients who are eligible for a postretirement benefit 13.5 adjustment and the amount of reserves for annuitants and benefit 13.6 recipients who are not eligible for a postretirement benefit 13.7 adjustment. If the net amount of required reserves represents a 13.8 mortality gain, the participating public pension fund or plan 13.9 shall certify that amount to the state board, which shall sell 13.10 sufficient securities or transfer sufficient available cash to 13.11 equal the amount of money certified. If the amount of required 13.12 reserves represents a mortality loss, the participating public 13.13 pension fund or plan shall transfer to the state board an amount 13.14 equal to the amount of the net mortality loss. The amount of 13.15 the transfers shall be determined before any postretirement 13.16 benefit adjustments have been made. All transfers resulting 13.17 from mortality adjustments shall be completed annually by 13.18 December 31 for the preceding June 30. Interest shall be 13.19 charged or credited on any transfers after December 31 based 13.20 upon the preretirement interest assumption for the participating 13.21 plan or fund as specified in section 356.215, subdivision 4d, 13.22 stated as a monthly rate. Book values of the assets of the fund 13.23 for the purposes of subdivision 9 shall be determined only after 13.24 all adjustments for mortality gains and losses for the fiscal 13.25 year have been made. 13.26 Sec. 11. Minnesota Statutes 1994, section 16A.055, 13.27 subdivision 5, is amended to read: 13.28 Subd. 5. [RETIREMENT FUND REPORTING.] The commissioner may 13.29 not require a public retirement fund to usefinanciala method 13.30 of finance or actuarial reporting practices or 13.31 proceduresdifferent from those required by sectionthat do not 13.32 provide the information required by section 356.20 or 356.215. 13.33 However, the commissioner of finance may require a public 13.34 retirement fund to report additional information related to the 13.35 long-term liabilities or financing of the fund. 13.36 Sec. 12. Minnesota Statutes 1994, section 16A.11, 14.1 subdivision 1, is amended to read: 14.2 Subdivision 1. [WHEN.] The governor shall submit a 14.3three-partfour-part budget to the legislature. Parts one and 14.4 two, the budget message and detailed operating budget, must be 14.5 submitted by the fourth Tuesday in January in each odd-numbered 14.6 year. Part three, the detailed recommendations as to capital 14.7 expenditure, must be submitted as follows: agency capital 14.8 budget requests by June 15 of each odd-numbered year; 14.9 preliminary governor's recommendations by September 1 of each 14.10 odd-numbered year; and final recommendations by February 1 of 14.11 each even-numbered year. Part four, the detailed 14.12 recommendations as to pension and retirement policy for all 14.13 public employee pension and retirement programs in the state 14.14 must be submitted as follows: retirement plan proposals by June 14.15 15 of each odd-numbered year; preliminary department of employee 14.16 relations and department of finance recommendations by September 14.17 1 of each odd-numbered year; and final recommendations by 14.18 February 1 of each even-numbered year. 14.19 Sec. 13. Minnesota Statutes 1994, section 16A.11, is 14.20 amended by adding a subdivision to read: 14.21 Subd. 3c. [PART FOUR: DETAILED PENSIONS AND RETIREMENT 14.22 PROPOSALS REVIEW.] The detailed pensions and retirement proposal 14.23 review must include an evaluation of pension and retirement 14.24 proposals. Prior to conducting the evaluation, the commissioner 14.25 of finance in cooperation with the commissioner of employee 14.26 relations shall establish criteria for evaluating the proposals. 14.27 Sec. 14. Minnesota Statutes 1994, section 69.051, 14.28 subdivision 4, is amended to read: 14.29 Subd. 4. [NOTIFICATION BY COMMISSIONER AND STATE AUDITOR.] 14.30 The state auditor in performing an audit or examination shall 14.31 notify thelegislative commission on pensions and14.32retirementattorney general if the audit or examination reveals 14.33 malfeasance, misfeasance, or nonfeasance in office. 14.34 The commissioner shall notify thelegislative commission on14.35pensions and retirementattorney general if the state auditor 14.36 has not filed the required financial compliance reports by July 15.1 1. 15.2 Sec. 15. Minnesota Statutes 1994, section 69.77, 15.3 subdivision 2h, is amended to read: 15.4 Subd. 2h. [ACTUARIAL VALUATION REQUIRED.] The association 15.5 shall obtain an actuarial valuation showing the condition of the 15.6 special fund of the relief association pursuant to sections 15.7 356.215 and 356.216 and any applicable standards for actuarial 15.8 work established by thelegislativecommission on pensions and 15.9 retirement as of December 31 of every year. A copy of the 15.10 actuarial valuation shall be filed with the director of the 15.11 legislative reference library, the governing body of the 15.12 municipality in which the association is organized, the 15.13executive director of the legislativecommission on pensions and 15.14 retirement, and the state auditor, not later than July 1 of the 15.15 following year. 15.16 Sec. 16. Minnesota Statutes 1994, section 69.773, 15.17 subdivision 2, is amended to read: 15.18 Subd. 2. [DETERMINATION OF ACTUARIAL CONDITION AND FUNDING 15.19 COSTS.] A relief association to which this section applies shall 15.20 obtain an actuarial valuation showing the condition of the 15.21 special fund of the relief association as of December 31, 1978, 15.22 and at least as of December 31 every four years thereafter. The 15.23 valuation shall be prepared in accordance with the provisions of 15.24 sections 356.215, subdivision 4d, and 356.216 and any applicable 15.25 standards for actuarial work established by thelegislative15.26 commission on pensions and retirement, except that the figure 15.27 for normal cost shall be expressed as a level dollar amount, and 15.28 the amortization contribution shall be the level dollar amount 15.29 calculated to amortize any current unfunded accrued liability by 15.30 at least the date of full funding specified in subdivision 4, 15.31 clause (b). Each valuation shall be filed with the governing 15.32 body of the municipality in which the relief association is 15.33 located and with the state auditor, not later than July 1 of the 15.34 year next following the date as of which the actuarial valuation 15.35 is prepared. Any relief association which is operating under a 15.36 special law which requires that actuarial valuations be obtained 16.1 at least every four years and be prepared in accordance with 16.2 applicable actuarial standards set forth in statute may continue 16.3 to have actuarial valuations made according to the time schedule 16.4 set forth in the special legislation subject to the provisions 16.5 of subdivision 3. 16.6 Sec. 17. Minnesota Statutes 1994, section 352.01, 16.7 subdivision 12, is amended to read: 16.8 Subd. 12. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 16.9 means the condition of one annuity or benefit having an equal 16.10 actuarial present value as another annuity or benefit, 16.11 determined as of a given date at a specified age with each 16.12 actuarial present value based on the appropriate mortality table 16.13 adopted by the board of directors based on the experience of the 16.14 fund as recommended by the actuary retained by thelegislative16.15 commission on pensions and retirement and using the applicable 16.16 preretirement or postretirement interest rate assumption 16.17 specified in section 356.215, subdivision 4d. 16.18 Sec. 18. Minnesota Statutes 1994, section 352.03, 16.19 subdivision 6, is amended to read: 16.20 Subd. 6. [DUTIES AND POWERS OF EXECUTIVE DIRECTOR.] The 16.21 management of the system is vested in the director, who is the 16.22 executive and administrative head of the system. The director 16.23 shall be advisor to the board on matters pertaining to the 16.24 system and shall also act as the secretary of the board. The 16.25 director shall: 16.26 (1) attend meetings of the board; 16.27 (2) prepare and recommend to the board appropriate rules to 16.28 carry out this chapter; 16.29 (3) establish and maintain an adequate system of records 16.30 and accounts following recognized accounting principles and 16.31 controls; 16.32 (4) designate an assistant director with the approval of 16.33 the board; 16.34 (5) appoint any employees, both permanent and temporary, 16.35 that are necessary to carry out the provisions of this chapter; 16.36 (6) organize the work of the system as the director deems 17.1 necessary to fulfill the functions of the system, and define the 17.2 duties of its employees and delegate to them any powers or 17.3 duties, subject to the control of the director and under 17.4 conditions the director may prescribe. Appointments to exercise 17.5 delegated power must be by written order and shall be filed with 17.6 the secretary of state; 17.7 (7) with the advice and consent of the board, contract for 17.8 the services of an approved actuary, professional management 17.9 services, and any other consulting services as necessary and fix 17.10 the compensation for those services. The contracts are not 17.11 subject to competitive bidding under chapter 16B. Any approved 17.12 actuary retained by the executive director shall function as the 17.13 actuarial advisor of the board and the executive director, and17.14may perform actuarial valuations and experience studies to17.15supplement those performed by the actuary retained by the17.16legislative commission on pensions and retirement. Any 17.17supplementalactuarial valuations or experience studies shall be 17.18 filed with theexecutive director of the legislativecommission 17.19 on pensions and retirement. Professional management services 17.20 may not be contracted for more often than once in six years. 17.21 Copies of professional management survey reports must be 17.22 transmitted to the secretary of the senate, the chief clerk of 17.23 the house of representatives, and the legislative reference 17.24 library as provided by section 3.195, to theexecutive director17.25of thecommission and to the legislative auditor at the time as 17.26 reports are furnished to the board. Only management firms 17.27 experienced in conducting management surveys of federal, state, 17.28 or local public retirement systems are qualified to contract 17.29 with the director; 17.30 (8) with the advice and consent of the board provide 17.31 in-service training for the employees of the system; 17.32 (9) make refunds of accumulated contributions to former 17.33 state employees and to the designated beneficiary, surviving 17.34 spouse, legal representative, or next of kin of deceased state 17.35 employees or deceased former state employees, as provided in 17.36 this chapter; 18.1 (10) determine the amount of the annuities and disability 18.2 benefits of employees covered by the system and authorize 18.3 payment of the annuities and benefits beginning as of the dates 18.4 on which the annuities and benefits begin to accrue, in 18.5 accordance with the provisions of this chapter; 18.6 (11) pay annuities, refunds, survivor benefits, salaries, 18.7 and necessary operating expenses of the system; 18.8 (12) certify funds available for investment to the state 18.9 board of investment; 18.10 (13) with the advice and approval of the board request the 18.11 state board of investment to sell securities when the director 18.12 determines that funds are needed for the system; 18.13 (14) prepare and submit to the board and the legislature an 18.14 annual financial report covering the operation of the system, as 18.15 required by section 356.20; 18.16 (15) prepare and submit biennial and annual budgets to the 18.17 board and with the approval of the board submit the budgets to 18.18 the department of finance; and 18.19 (16) with the approval of the board, perform other duties 18.20 required to administer the retirement and other provisions of 18.21 this chapter and to do its business. 18.22 Sec. 19. Minnesota Statutes 1994, section 352.04, 18.23 subdivision 3, is amended to read: 18.24 Subd. 3. [EMPLOYER CONTRIBUTION.] (a) The employer 18.25 contribution to the fund must be equal to 4.2 percent of salary. 18.26 (b) By January 1 of each year, the board of directors shall 18.27 report to thelegislativecommission on pensions and retirement, 18.28 the chair of the committee on appropriations of the house of 18.29 representatives, and the chair of the committee on finance of 18.30 the senate on the amount raised by the employer and employee 18.31 contribution rates in effect and whether the total amount is 18.32 less than, the same as, or more than the actuarial requirement 18.33 determined under section 356.215. 18.34(c) If the legislative commission on pensions and18.35retirement, based on the most recent valuation performed by its18.36actuary, determines that the total amount raised by the employer19.1and employee contributions under subdivision 2 and paragraph (b)19.2is less than the actuarial requirements determined under section19.3356.215, the employer and employee rates must be increased by19.4equal amounts as necessary to meet the actuarial requirements.19.5The employee rate may not exceed 4.15 percent of salary and the19.6employer rate may not exceed 4.29 percent of salary. The19.7increases are effective on the next January 1 following the19.8determination by the commission. The executive director of the19.9Minnesota state retirement system shall notify employing units19.10of any increases under this paragraph.19.11 Sec. 20. Minnesota Statutes 1994, section 352.91, 19.12 subdivision 4, is amended to read: 19.13 Subd. 4. Upon the recommendation of the commissioner of 19.14 corrections or the commissioner of human services, whichever is 19.15 the appropriate employing authority, with the approval of the 19.16 legislative advisory committee and with notification to and 19.17 receipt of comments from thelegislativecommission on pensions 19.18 and retirement, the commissioner of employee relations may 19.19 certify additional civil service classifications at state 19.20 correctional or security hospital facilities to the executive 19.21 director of the Minnesota state retirement system as positions 19.22 rendering covered correctional service. The commissioner of 19.23 corrections and the commissioner of human services must 19.24 establish, in writing, a set of criteria upon which to base a 19.25 recommendation for certifying additional civil service 19.26 classifications as rendering covered correctional service. 19.27 Sec. 21. Minnesota Statutes 1994, section 352.92, 19.28 subdivision 2, is amended to read: 19.29 Subd. 2. [EMPLOYER CONTRIBUTIONS.] (a) In lieu of employer 19.30 contributions payable under section 352.04, subdivision 3, the 19.31 employer shall contribute for covered correctional employees an 19.32 amount equal to 6.27 percent of salary. 19.33 (b) By January 1 of each year, the board of directors shall 19.34 report to the legislative auditor, the commission on pensions 19.35 and retirement, the chair of the committee on appropriations of 19.36 the house of representatives, and the chair of the committee on 20.1 finance of the senate on the amount raised by the employer and 20.2 employee contribution rates in effect and whether the total 20.3 amount is less than, the same as, or more than the actuarial 20.4 requirement determined under section 356.215. 20.5 Sec. 22. Minnesota Statutes 1994, section 352B.02, 20.6 subdivision 1c, is amended to read: 20.7 Subd. 1c. [EMPLOYER CONTRIBUTIONS.] (a) In addition to 20.8 member contributions, department heads shall pay a sum equal to 20.9 14.88 percent of the salary upon which deductions were made, 20.10 which shall constitute the employer contribution to the fund. 20.11 Department contributions must be paid out of money appropriated 20.12 to departments for this purpose. 20.13 (b) By January 1 of each year, the board of directors shall 20.14 report to thelegislativecommission on pensions and retirement, 20.15 the legislative auditor, the chair of the committee on 20.16 appropriations of the house of representatives, and the chair of 20.17 the committee on finance of the senate on the amount raised by 20.18 the employer and employee contribution rates in effect and 20.19 whether the total amount is less than, the same as, or more than 20.20 the actuarial requirement determined under section 356.215. 20.21 Sec. 23. Minnesota Statutes 1994, section 352B.02, 20.22 subdivision 1e, is amended to read: 20.23 Subd. 1e. [AUDIT; ACTUARIAL VALUATION.] The legislative 20.24 auditor shall audit the fund.Any actuarial valuation of the20.25fund required under section 356.215 shall be prepared by the20.26actuary retained by the legislative commission on pensions and20.27retirement.Any approved actuary retained by the executive 20.28 director under section 352.03, subdivision 6, may perform 20.29 actuarial valuations and experience studiesto supplement those20.30performed by the commission-retained actuary. Any supplemental 20.31 actuarial valuation or experience studies shall be filed with 20.32 theexecutive director of thelegislative auditor and the 20.33 commission on pensions and retirement. 20.34 Sec. 24. Minnesota Statutes 1994, section 353.03, 20.35 subdivision 3a, is amended to read: 20.36 Subd. 3a. [EXECUTIVE DIRECTOR.] (a) [APPOINTMENT.] The 21.1 board shall appoint, with the advice and consent of the senate, 21.2 an executive director on the basis of education, experience in 21.3 the retirement field, and leadership ability. The executive 21.4 director shall have had at least five years' experience in an 21.5 executive level management position, which has included 21.6 responsibility for pensions, deferred compensation, or employee 21.7 benefits. The executive director serves at the pleasure of the 21.8 board. The salary of the executive director is as provided by 21.9 section 15A.081, subdivision 1. 21.10 (b) [DUTIES.] The management of the association is vested 21.11 in the executive director who shall be the executive and 21.12 administrative head of the association. The executive director 21.13 shall act as adviser to the board on all matters pertaining to 21.14 the association and shall also act as the secretary of the 21.15 board. The executive director shall: 21.16 (1) attend all meetings of the board; 21.17 (2) prepare and recommend to the board appropriate rules to 21.18 carry out the provisions of this chapter; 21.19 (3) establish and maintain an adequate system of records 21.20 and accounts following recognized accounting principles and 21.21 controls; 21.22 (4) designate, with the approval of the board, up to two 21.23 persons who shall serve in the unclassified service and whose 21.24 salary is set in accordance with section 43A.18, subdivision 3, 21.25 appoint a confidential secretary in the unclassified service, 21.26 and appoint employees to carry out this chapter, who are subject 21.27 to chapters 43A and 179A in the same manner as are executive 21.28 branch employees; 21.29 (5) organize the work of the association as the director 21.30 deems necessary to fulfill the functions of the association, and 21.31 define the duties of its employees and delegate to them any 21.32 powers or duties, subject to the control of, and under such 21.33 conditions as, the executive director may prescribe; 21.34 (6) with the approval of the board, contract for the 21.35 services of an approved actuary, professional management 21.36 services, and any other consulting services as necessary to 22.1 fulfill the purposes of this chapter. All contracts are subject 22.2 to chapter 16B. The commissioner of administration shall not 22.3 approve, and the association shall not enter into, any contract 22.4 to provide lobbying services or legislative advocacy of any 22.5 kind. Any approved actuary retained by the executive director 22.6 shall function as the actuarial advisor of the board and the 22.7 executive director and may perform actuarial valuations and 22.8 experience studiesto supplement those performed by the actuary22.9retained by the legislative commission on pensions and22.10retirement. Anysupplementalactuarial valuations or experience 22.11 studies shall be filed with theexecutive director of the22.12 legislative auditor and the commission on pensions and 22.13 retirement. Copies of professional management survey reports 22.14 shall be transmitted to the secretary of the senate, the chief 22.15 clerk of the house of representatives, and the legislative 22.16 reference library as provided by section 3.195, to theexecutive22.17director of thecommission on pensions and retirement and to the 22.18 legislative auditor at the same time as reports are furnished to 22.19 the board. Only management firms experienced in conducting 22.20 management surveys of federal, state, or local public retirement 22.21 systems shall be qualified to contract with the director 22.22 hereunder; 22.23 (7) with the approval of the board provide in-service 22.24 training for the employees of the association; 22.25 (8) make refunds of accumulated contributions to former 22.26 members and to the designated beneficiary, surviving spouse, 22.27 legal representative or next of kin of deceased members or 22.28 deceased former members, as provided in this chapter; 22.29 (9) determine the amount of the annuities and disability 22.30 benefits of members covered by the association and authorize 22.31 payment of the annuities and benefits beginning as of the dates 22.32 on which the annuities and benefits begin to accrue, in 22.33 accordance with the provisions of this chapter; 22.34 (10) pay annuities, refunds, survivor benefits, salaries, 22.35 and necessary operating expenses of the association; 22.36 (11) prepare and submit to the board and the legislature an 23.1 annual financial report covering the operation of the 23.2 association, as required by section 356.20; 23.3 (12) prepare and submit biennial and annual budgets to the 23.4 board for its approval and submit the approved budgets to the 23.5 department of finance for approval by the commissioner; 23.6 (13) reduce all or part of the accrued interest payable 23.7 under section 353.27, subdivisions 12, 12a, and 12b, or 353.28, 23.8 subdivision 5, upon receipt of proof by the association of an 23.9 unreasonable processing delay or other extenuating circumstances 23.10 of the employing unit. The executive director shall prescribe 23.11 and submit for approval by the board the conditions under which 23.12 such interest may be reduced; and 23.13 (14) with the approval of the board, perform such other 23.14 duties as may be required for the administration of the 23.15 association and the other provisions of this chapter and for the 23.16 transaction of its business. 23.17 Sec. 25. Minnesota Statutes 1994, section 353.271, 23.18 subdivision 2, is amended to read: 23.19 Subd. 2. [VALUATION OF ASSETS; ADJUSTMENT OF BENEFITS.] 23.20 (1) The required reserves for retirement annuities payable as 23.21 provided in this chapter other than those payable from the 23.22 various local relief association consolidation accounts, as 23.23 determined in accordance with the appropriate mortality table 23.24 adopted by the board of trustees based on the experience of the 23.25 fund as recommended by the actuary retained by thelegislative23.26 commission on pensions and retirement, and using the 23.27 postretirement interest assumption specified in section 356.215, 23.28 subdivision 4d, shall be transferred to the Minnesota 23.29 postretirement investment fund as of the last business day of 23.30 the month in which the retirement annuity begins. 23.31 (2) Annuity payments other than those payable from the 23.32 various local relief association consolidation accounts shall be 23.33 adjusted in accordance with the provisions of section 11A.18. 23.34 (3) Notwithstanding section 356.18, increases in payments 23.35 pursuant to this section or from the various local relief 23.36 association consolidation accounts, if applicable, will be made 24.1 automatically unless the intended recipient files written notice 24.2 with the executive director of the public employees retirement 24.3 association requesting that the increase shall not be made. 24.4 Sec. 26. Minnesota Statutes 1994, section 353A.02, 24.5 subdivision 8, is amended to read: 24.6 Subd. 8. [COMMISSION.] "Commission" means thelegislative24.7 commission on pensions and retirement established by section 24.8 3.85. 24.9 Sec. 27. Minnesota Statutes 1994, section 353A.04, 24.10 subdivision 7, is amended to read: 24.11 Subd. 7. [CERTIFICATION OF APPROVAL.] If a consolidation 24.12 action is approved, the chief administrative officer of the 24.13 municipality shall notify the executive director of the public 24.14 employees retirement association, the executive director of the 24.15 state board,the executive director ofthe commission, the 24.16 commissioner of finance, the secretary of state, and the state 24.17 auditor of the approval. The notification to the state auditor 24.18 shall also contain a certification by the chief administrative 24.19 officer of the municipality and by the secretary of the relief 24.20 association that there was compliance with the procedures set 24.21 forth in this section in approving that consolidation action and 24.22 shall include a copy of any relevant documentation. 24.23 Sec. 28. Minnesota Statutes 1994, section 353A.05, 24.24 subdivision 1, is amended to read: 24.25 Subdivision 1. [COMMISSION ACTIONS.] Upon initiation of 24.26 consolidation as provided in section 353A.04, theexecutive24.27director of thecommission shall direct the actuary retained by 24.28 the commission toundertakecoordinate the preparation of the 24.29 actuarial calculations necessary to complete the consolidation. 24.30 These actuarial calculations shall include for each active 24.31 member, each deferred former member, each retired member, and 24.32 each current beneficiary the computation of the present value of 24.33 future benefits, the future normal costs, if any, and the 24.34 actuarial accrued liability on the basis of the existing relief 24.35 association benefit plan and on the basis of the public 24.36 employees police and fire fund benefit plan. These actuarial 25.1 calculations shall also include for the total active, deferred, 25.2 retired, and benefit recipient membership the sum of the present 25.3 value of future benefits, the future normal costs, if any, and 25.4 the actuarial accrued liability on the basis of the existing 25.5 relief association benefit plan, on the basis of the public 25.6 employees police and fire fund benefit plan, and on the basis of 25.7 the benefit plan which produced the largest present value of 25.8 future benefits for each person. The actuarial calculations 25.9 shall be prepared using the entry age actuarial cost method for 25.10 all components of the benefit plan and using the actuarial 25.11 assumptions applicable to the fund for the most recent actuarial 25.12 valuation prepared under section 356.215, except that the 25.13 actuarial calculations on the basis of the existing relief 25.14 association benefit plan shall be prepared using an interest 25.15 rate actuarial assumption during the postretirement period which 25.16 is in the same amount as the interest rate actuarial assumption 25.17 applicable to the preretirement period. The actuarial 25.18 calculations shall include the computation of the present value 25.19 of the initial postretirement adjustment anticipated by the 25.20 executive director of the state board as payable after the 25.21 effective date of the consolidation from the Minnesota 25.22 postretirement investment fund under section 11A.18. 25.23 The chief administrative officer of the relief association 25.24 shall, upon request, provide in a timely manner to theexecutive25.25director of the commission and to the actuary retained by the25.26 commission the most current available information or documents, 25.27 whichever applies, regarding the demographics of the active, 25.28 deferred, retired, and benefit recipient membership of the 25.29 relief association, the financial condition of the relief 25.30 association, and the existing benefit plan of the relief 25.31 association. 25.32 Upon completion of the actuarial calculations required by 25.33 this subdivision, the actuary retained by the commission shall 25.34 issue a report in the form of an appropriate summary of the 25.35 actuarial calculations and shall provide a copy of that report 25.36 to theexecutive director of thecommission, the executive 26.1 director of the public employees retirement association, the 26.2 chief administrative officer of the relief association, the 26.3 chief administrative officer of the municipality in which the 26.4 relief association is located, the state auditor, and the 26.5 legislative auditor. 26.6 Sec. 29. Minnesota Statutes 1994, section 353A.06, is 26.7 amended to read: 26.8 353A.06 [FINALIZATION OF CONSOLIDATION.] 26.9 Subdivision 1. [NOTICE OF FINAL APPROVAL.] Upon final 26.10 approval by the governing body of the municipality, the chief 26.11 administrative officer of the municipality shall provide notice 26.12 of the local action to the chief administrative officer of the 26.13 relief association, the executive director of the state board, 26.14 theexecutive director of thecommission, the legislative 26.15 auditor, the executive director of the public employees 26.16 retirement association, the commissioner of finance, the 26.17 secretary of state, and the state auditor. The board of 26.18 trustees of the public employees retirement association, at its 26.19 next regularly scheduled meeting, shall set the effective date 26.20 for the consolidation and notify the persons under this 26.21 subdivision who are to receive notice from the municipality. 26.22 Subd. 2. [INFORMATION REQUIRED.] Upon final approval of 26.23 consolidation by the municipality under section 353A.04, the 26.24 executive director of the public employees retirement 26.25 association shall request from the relief association and the 26.26 municipality the information necessary to allow the association 26.27 to complete the consolidation. The information, at a minimum, 26.28 must include all data required to be provided by theexecutive26.29director of the commission and the actuary retained by the26.30 commission under section 353A.05, subdivision 1. The chief 26.31 administrative officer of the relief association and the chief 26.32 administrative officer of the municipality shall provide the 26.33 requested information in a timely manner. The data must be 26.34 reported on forms or in a manner prescribed by the executive 26.35 director of the association. The data must be current as of the 26.36 effective date of the consolidation with the association. The 27.1 chief administrative officer of the municipality and the chief 27.2 administrative officer of the relief association shall certify 27.3 the accuracy of the data reported to the association. The 27.4 executive director may rely on that data without undertaking any 27.5 affirmative duty to verify the data. 27.6 Sec. 30. Minnesota Statutes 1994, section 353A.07, 27.7 subdivision 6, is amended to read: 27.8 Subd. 6. [POSTCONSOLIDATION BYLAW AMENDMENTS.] Following 27.9 the effective date of consolidation, if the relief association 27.10 continues in the form of the general fund, the board of the 27.11 relief association shall adopt the appropriate amendments to its 27.12 bylaws and articles of incorporation to reflect its change in 27.13 status and operation. The amendments shall be effective upon 27.14 filing the applicable amendments with theexecutive director of27.15thecommission and with the state auditor and shall not require 27.16 municipal ratification as provided in section 69.77, subdivision 27.17 2a. 27.18 Sec. 31. Minnesota Statutes 1994, section 353A.09, 27.19 subdivision 2, is amended to read: 27.20 Subd. 2. [INITIAL ALLOCATION OF ASSETS UPON 27.21 CONSOLIDATION.] As soon as is practicable following the 27.22 effective date of consolidation, the executive director of the 27.23 public employees retirement association shall transfer from the 27.24 individual local relief association consolidation accounts to 27.25 the Minnesota postretirement investment fund assets of that 27.26 account equal to the required reserves for service pensions 27.27 payable to persons electing coverage by the public employees 27.28 police and fire fund benefit plan under section 353A.08 and any 27.29 potential survivor benefit payable on account of those persons 27.30 as determined in accordance with the appropriate mortality table 27.31 adopted by the board of the public employees retirement 27.32 association based on the experience of the consolidating relief 27.33 association or consolidating relief associations as recommended 27.34 by the actuary retained by thelegislativecommission on 27.35 pensions and retirement and using the applicable interest 27.36 assumption specified in section 356.215, subdivision 4d. A 28.1 transfer may be made only from the individual account for an 28.2 electing person's municipality. The executive director may not 28.3 transfer assets between individual local consolidation accounts, 28.4 nor may the executive director transfer assets from the public 28.5 employees retirement association to the Minnesota postretirement 28.6 fund or to a local consolidation account to cover liabilities of 28.7 an individual local consolidation account. If there are 28.8 insufficient assets in a local consolidation account to provide 28.9 for the transfer of assets to the Minnesota postretirement 28.10 investment fund or to provide for benefit payments, the 28.11 municipality shall immediately provide the local consolidation 28.12 account with the assets necessary to make the transfer or 28.13 benefit payments. 28.14 Sec. 32. Minnesota Statutes 1994, section 353B.14, is 28.15 amended to read: 28.16 353B.14 [DISPUTE OVER BENEFIT AMOUNTS OR PLAN PROVISIONS.] 28.17 In the event of any dispute by or on behalf of any former 28.18 member of a consolidating relief association after the effective 28.19 date of consolidation over the amount of a benefit to which the 28.20 person may be entitled, the proper interpretation of a provision 28.21 of sections 353B.01 to 353B.14, or the conformity of the 28.22 provisions of sections 353B.01 to 353B.14 to the provisions of 28.23 the benefit plan of the consolidating relief association in 28.24 effect immediately before the date on which the consolidation 28.25 process was initiated, the dispute shall be submitted in writing 28.26 to thelegislativecommission on pensions and retirement by the 28.27 person who is a party to the dispute or by the executive 28.28 director of the public employees retirement association. The 28.29legislativecommission on pensions and retirement shall review 28.30 the dispute as part of its deliberations on proposed or pending 28.31 retirement legislation and shall makeitsa recommendation on 28.32 the resolution of the dispute, if any, to the appropriate 28.33 committees of the senate and house of representatives with 28.34 jurisdiction over public employee pension matters in the form of 28.35 the necessary legislation amending the provisions of sections 28.36 353B.01 to 353B.14, which legislation shall include 29.1 retroactivity of any increase in a benefit amount or any omitted 29.2 benefit amount to the date on which the benefit subject to 29.3 dispute accrued or would have accrued. 29.4 Sec. 33. Minnesota Statutes 1994, section 353C.05, 29.5 subdivision 3, is amended to read: 29.6 Subd. 3. [ADJUSTMENT IN CONTRIBUTION RATES.] Beginning 29.7 with the first full pay period after the most recent actuarial 29.8 valuation of the local government correctional service 29.9 retirement plan prepared by the actuaryretained by the29.10legislative commission on pensions and retirement is filed with29.11the executive director of the public employees retirement29.12association, the member contribution rate is a percentage that 29.13 equals one-half of the calculated total actuarial requirement of 29.14 the plan, and the employer contribution rate is the balance of 29.15 the calculated total actuarial requirement of the plan. 29.16 Sec. 34. Minnesota Statutes 1995 Supplement, section 29.17 354.05, subdivision 7, is amended to read: 29.18 Subd. 7. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 29.19 means the condition of one annuity or benefit having an equal 29.20 actuarial present value as another annuity or benefit, 29.21 determined as of a given date with each actuarial present value 29.22 based on the appropriate mortality table adopted by the board of 29.23 trustees based on the experience of the association as 29.24 recommended by the actuary retained by thelegislative29.25 commission on pensions and retirement and using the applicable 29.26 preretirement or postretirement interest rate assumption 29.27 specified in section 356.215, subdivision 4d. 29.28 Sec. 35. Minnesota Statutes 1994, section 354.06, 29.29 subdivision 2a, is amended to read: 29.30 Subd. 2a. [DUTIES OF EXECUTIVE DIRECTOR.] The management 29.31 of the association is vested in the executive director who shall 29.32 be the executive and administrative head of the association. 29.33 The executive director shall act as advisor to the board on all 29.34 matters pertaining to the association and shall also act as the 29.35 secretary of the board. The executive director shall: 29.36 (1) attend all meetings of the board; 30.1 (2) prepare and recommend to the board appropriate rules to 30.2 carry out the provisions of this chapter; 30.3 (3) establish and maintain an adequate system of records 30.4 and accounts following recognized accounting principles and 30.5 controls; 30.6 (4) designate an assistant executive director in the 30.7 unclassified service and two assistant executive directors in 30.8 the classified service with the approval of the board, and 30.9 appoint such employees, both permanent and temporary, as are 30.10 necessary to carry out the provisions of this chapter; 30.11 (5) organize the work of the association as the director 30.12 deems necessary to fulfill the functions of the association, and 30.13 define the duties of its employees and delegate to them any 30.14 powers or duties, subject to the director's control and under 30.15 such conditions as the director may prescribe; 30.16 (6) with the approval of the board, contract and set the 30.17 compensation for the services of an approved actuary, 30.18 professional management services, and any other consulting 30.19 services. These contracts are not subject to the competitive 30.20 bidding procedure prescribed by chapter 16B. An approved 30.21 actuary retained by the executive director shall function as the 30.22 actuarial advisor of the board and the executive director and 30.23 may perform actuarial valuations and experience studiesto30.24supplement those performed by the actuary retained by the30.25legislative commission on pensions and retirement. Any 30.26supplementalactuarial valuations or experience studies shall be 30.27 filed with theexecutive director of the legislativecommission 30.28 on pensions and retirement and the legislative auditor. Copies 30.29 of professional management survey reports must be transmitted to 30.30 the secretary of the senate, the chief clerk of the house of 30.31 representatives, and the legislative reference library as 30.32 provided by section 3.195, to theexecutive director of the30.33 commission and to the legislative auditor at the same time as 30.34 reports are furnished to the board. Only management firms 30.35 experienced in conducting management surveys of federal, state, 30.36 or local public retirement systems are qualified to contract 31.1 with the executive director; 31.2 (7) with the approval of the board, provide in-service 31.3 training for the employees of the association; 31.4 (8) make refunds of accumulated contributions to former 31.5 members and to the designated beneficiary, surviving spouse, 31.6 legal representative, or next of kin of deceased members or 31.7 deceased former members, under this chapter; 31.8 (9) determine the amount of the annuities and disability 31.9 benefits of members covered by the association and authorize 31.10 payment of the annuities and benefits beginning as of the dates 31.11 on which the annuities and benefits begin to accrue, under this 31.12 chapter; 31.13 (10) pay annuities, refunds, survivor benefits, salaries, 31.14 and necessary operating expenses of the association; 31.15 (11) prepare and submit to the board and the legislature an 31.16 annual financial report covering the operation of the 31.17 association, as required by section 356.20; 31.18 (12) certify funds available for investment to the state 31.19 board of investment; 31.20 (13) with the advice and approval of the board, request the 31.21 state board of investment to sell securities on determining that 31.22 funds are needed for the purposes of the association; 31.23 (14) prepare and submit biennial and annual budgets to the 31.24 board and with the approval of the board submit those budgets to 31.25 the department of finance; and 31.26 (15) with the approval of the board, perform such other 31.27 duties as may be required for the administration of the 31.28 association and the other provisions of this chapter and for the 31.29 transaction of its business. The executive director may: 31.30 (i) reduce all or part of the accrued interest and fines 31.31 payable by an employing unit for reporting requirements under 31.32 section 354.52, based on an evaluation of any extenuating 31.33 circumstances of the employing unit; 31.34 (ii) assign association employees to conduct field audits 31.35 of an employing unit to ensure compliance with the provisions of 31.36 this chapter; and 32.1 (iii) recover overpayments, if not repaid to the 32.2 association, by suspending or reducing the payment of a 32.3 retirement annuity, refund, disability benefit, survivor 32.4 benefit, or optional annuity under this chapter until the 32.5 overpayment, plus interest, has been recovered. 32.6 Sec. 36. Minnesota Statutes 1994, section 354.42, 32.7 subdivision 5, is amended to read: 32.8 Subd. 5. [ADDITIONAL EMPLOYER CONTRIBUTION.] To amortize 32.9 the unfunded actuarial accrued liability computed under the 32.10 entry age actuarial cost methodand disclosed under the annual32.11actuarial valuations prepared by the commission-retained actuary32.12under section 356.215, an additional employer contribution shall 32.13 be made in the amount of 3.64 percent of the salary of each 32.14 member. 32.15 This contribution must be made in the manner provided in 32.16 section 354.52, subdivision 4. 32.17 By January 1 of each year, the board of directors shall 32.18 report to thelegislativecommission on pensions and retirement, 32.19 the legislative auditor, the chair of the committee on 32.20 appropriations of the house of representatives, and the chair of 32.21 the committee on finance of the senate on the amount raised by 32.22 the additional employer contribution rate in effect and whether 32.23 that amount is less than, the same as, or more than the required 32.24 amortization contribution determined under section 356.215. 32.25 Sec. 37. Minnesota Statutes 1994, section 354A.011, 32.26 subdivision 3a, is amended to read: 32.27 Subd. 3a. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 32.28 means the condition of one annuity or benefit having an equal 32.29 actuarial present value as another annuity or benefit, 32.30 determined as of a given date with each actuarial present value 32.31 based on the appropriate mortality table adopted by the 32.32 appropriate board of trustees based on the experience of that 32.33 retirement fund association as recommended by the actuary 32.34 retained by thelegislativecommission on pensions and 32.35 retirement and using the applicable preretirement or 32.36 postretirement interest rate assumption specified in section 33.1 356.215, subdivision 4d. 33.2 Sec. 38. Minnesota Statutes 1994, section 354A.021, 33.3 subdivision 7, is amended to read: 33.4 Subd. 7. [ACTUARIAL CONSULTANT.] The board of trustees or 33.5 directors of each teachers retirement fund association may 33.6 contract for the services of an approved actuary and fix the 33.7 reasonable compensation for those services. Any approved 33.8 actuary retained by the board shall function as the actuarial 33.9 advisor to the board and may perform actuarial valuations and 33.10 experience studiesto supplement those performed by the actuary33.11retained by the legislative commission on pensions and33.12retirement. Anysupplementalactuarial valuations or experience 33.13 studies shall be filed with theexecutive director of the33.14 legislativecommission on pensions and retirementauditor, and 33.15 the commission on pensions and retirement. 33.16 Sec. 39. Minnesota Statutes 1994, section 354A.12, 33.17 subdivision 2b, is amended to read: 33.18 Subd. 2b. [REPORT ON CONTRIBUTION INSUFFICIENCIES.] By 33.19 January 1 of each year, the executive secretary or director of 33.20 each first class city teachers retirement fund association shall 33.21 report to the chair of thelegislativecommission on pensions 33.22 and retirement, the chair of the committee on ways and means of 33.23 the house of representatives, and the chair of the committee on 33.24 finance of the senate on the amount raised by the additional 33.25 employer contribution rates then in effect and the sufficiency 33.26 of the total statutory support when compared to the total 33.27 required contributions determined under section 356.215. 33.28 Sec. 40. Minnesota Statutes 1994, section 354A.12, 33.29 subdivision 3c, is amended to read: 33.30 Subd. 3c. [TERMINATION OF DIRECT STATE MATCHING AID.] (a) 33.31 The direct state aid under subdivision 3a to the St. Paul 33.32 teachers retirement association and the direct state aid under 33.33 subdivision 3b to the Minneapolis teachers retirement fund 33.34 association terminates for the respective fund at the end of the 33.35 fiscal year in which the accrued liability funding ratio for 33.36 that fund, as determined in the most recent actuarial report for 34.1 that fundby the actuary retained by the legislative commission34.2on pensions and retirement, equals or exceeds the accrued 34.3 liability funding ratio for the teachers retirement association, 34.4 as determined in the most recent actuarial report for the 34.5 teachers retirement associationby the actuary retained by the34.6legislative commission on pensions and retirement. 34.7 (b) If the state aid is terminated for the St. Paul 34.8 teachers retirement fund association or the Minneapolis teachers 34.9 retirement fund association under paragraph (a), it may not 34.10 again be received by that fund. 34.11 Sec. 41. Minnesota Statutes 1994, section 354A.12, 34.12 subdivision 4, is amended to read: 34.13 Subd. 4. [LIMITATION ON CERTAIN ARTICLES OF INCORPORATION 34.14 OR BYLAW AMENDMENTS.] No amendment to the bylaws or articles of 34.15 incorporation of a teachers retirement fund association in a 34.16 city of the first class affecting benefits, contributions or 34.17 actuarial assumptions shall be made without approval by the 34.18 legislature. Approval shall be deemed granted and the amendment 34.19 shall become effective only upon enactment of special or general 34.20 legislation detailing the substance of the amendment and upon 34.21 submission of the text of the proposed amendment to the articles 34.22 of incorporation or bylaws by the teachers retirement fund 34.23 association involved to thelegislativecommission on pensions 34.24 and retirement and the legislative auditor prior to the 34.25 effective date of the amendment. Notwithstanding any provision 34.26 of the articles of incorporation or bylaws to the contrary, 34.27 amendments may be adopted at an annual meeting or at a special 34.28 meeting called for that purpose, without further local approval. 34.29 Sec. 42. Minnesota Statutes 1995 Supplement, section 34.30 354A.27, subdivision 6, is amended to read: 34.31 Subd. 6. [ADDITIONAL INCREASE.] (a) In addition to the 34.32 postretirement increases granted under subdivision 5, an 34.33 additional percentage increase must be computed and paid under 34.34 this subdivision. 34.35 (b) The board of trustees shall determine the number of 34.36 annuitants or benefit recipients who have been receiving an 35.1 annuity or benefit for at least 12 months as of the current June 35.2 30. These recipients are entitled to receive the surplus 35.3 investment earnings additional postretirement increase. 35.4 (c) Annually, as of each June 30, the board shall determine 35.5 the five-year annualized rate of return attributable to the 35.6 assets of the Duluth teachers retirement fund association under 35.7 the formula or formulas specified in section 11A.04, clause (11). 35.8 (d) The board shall determine the amount of excess 35.9 five-year annualized rate of return over the preretirement 35.10 interest assumption as specified in section 356.215. 35.11 (e) The additional percentage increase must be determined 35.12 by multiplying the quantity one minus the rate of contribution 35.13 deficiency, as specified in the most recent actuarial reportof35.14the actuary retained by the legislative commission on pensions35.15and retirement, times the rate of return excess as determined in 35.16 paragraph (d). 35.17 (f) The additional increase is payable to all eligible 35.18 annuitants or benefit recipients on the following January 1. 35.19 Sec. 43. Minnesota Statutes 1994, section 354A.28, 35.20 subdivision 9, is amended to read: 35.21 Subd. 9. [ADDITIONAL INCREASE.] (a) In addition to the 35.22 postretirement increases granted under subdivision 8, an 35.23 additional percentage increase must be computed and paid under 35.24 this subdivision. 35.25 (b) The board of trustees shall determine the number of 35.26 annuities or benefit recipients who have been receiving an 35.27 annuity or benefit for at least 12 months as of the current June 35.28 30. These recipients are entitled to receive the surplus 35.29 investment earnings additional postretirement increase. 35.30 (c) Annually, on June 30, the board of trustees of the 35.31 teachers retirement fund association shall determine the amount 35.32 of reserves in the annuity reserve fund as specified in 35.33 subdivision 6. 35.34 (d) Annually, on June 30, the board of trustees of the 35.35 Minneapolis teachers retirement fund association shall determine 35.36 the five-year annualized rate of return attributable to the 36.1 assets in the annuity reserve fund under the formula or formulas 36.2 specified in section 11A.04, clause (11). 36.3 (e) The board of trustees shall determine the amount of 36.4 excess five-year annualized rate of return over the 36.5 preretirement interest assumption as specified in section 36.6 356.215. 36.7 (f) The additional increase must be determined by 36.8 multiplying the quantity one minus the rate of contribution 36.9 deficiency, as specified in the most recent actuarial reportof36.10the actuary retained by the legislative commission on pensions36.11and retirement, times the rate of return excess as determined in 36.12 paragraph (e). 36.13 (g) The additional increase is payable to all eligible 36.14 annuitants or benefit recipients on January 1 following the June 36.15 30 determination date under paragraphs (c) and (d). 36.16 Sec. 44. Minnesota Statutes 1994, section 354A.41, 36.17 subdivision 2, is amended to read: 36.18 Subd. 2. [ACTUARIAL VALUATIONS.] In any actuarial 36.19 valuation of the Minneapolis teachers retirement fund 36.20 association, the St. Paul teachers retirement fund association, 36.21 or the Duluth teachers retirement fund association under section 36.22 356.215prepared by the commission-retained actuary or36.23supplemental actuarial valuation prepared by an approved actuary36.24retained by the teachers retirement fund association, there 36.25 shall be included a finding of the condition of the fund showing 36.26 separately the basic and coordinated programs or the old law 36.27 coordinated and new law coordinated programs, as appropriate. 36.28 The finding shall include the level normal cost and the 36.29 applicable employee and employer contribution rates for each 36.30 program. 36.31 Sec. 45. Minnesota Statutes 1994, section 356.20, 36.32 subdivision 3, is amended to read: 36.33 Subd. 3. [FILING REQUIREMENT.] The financial report is a 36.34 public record. A copy of the report or a synopsis of the report 36.35 containing the information required by this section shall be 36.36 distributed annually to each member of the fund and to the 37.1 governing body of each governmental subdivision of the state 37.2 which makes employers contributions thereto or in whose behalf 37.3 taxes are levied for the employers' contribution. A signed copy 37.4 of the report shall be delivered to theexecutive director of37.5the legislativecommission on pensions and retirement and to the 37.6 legislative reference library not later than six months after 37.7 the close of each fiscal year or one month following the 37.8 completion and delivery to the retirement fund of the actuarial 37.9 valuation report of the fundby the actuary retained by the37.10legislative commission on pensions and retirement, if 37.11 applicable, whichever is later. 37.12 Sec. 46. Minnesota Statutes 1994, section 356.20, 37.13 subdivision 4, is amended to read: 37.14 Subd. 4. [CONTENTS OF FINANCIAL REPORT.] The financial 37.15 report required by this section must contain financial 37.16 statements and disclosures that indicate the financial 37.17 operations and position of the retirement plan and fund. The 37.18 report must conform with generally accepted governmental 37.19 accounting principles, applied on a consistent basis. The 37.20 report must be audited. The report must include, as part of its 37.21 exhibits or footnotes, an actuarial disclosure item based on the 37.22 actuarial valuation calculationsprepared by the37.23commission-retained actuary or by the actuary retained by the37.24retirement fund or plan, if applicable,according to applicable 37.25 actuarial requirements enumerated in section 356.215, and 37.26 specified in the most recent standards for actuarial work 37.27 adopted by thelegislativecommission on pensions and 37.28 retirement. The accrued assets, the accrued liabilities, 37.29 including accrued reserves, and the unfunded actuarial accrued 37.30 liability of the fund or plan must be disclosed. The disclosure 37.31 item must contain a declaration by the actuaryretained by the37.32legislative commission on pensions and retirement or the actuary37.33retained by the fund or plan, whichever applies,preparing the 37.34 report specifying that the required reserves for any retirement, 37.35 disability, or survivor benefits provided under a benefit 37.36 formula are computed in accordance with the entry age actuarial 38.1 cost method and with the most recent applicable standards for 38.2 actuarial work adopted by thelegislativecommission on pensions 38.3 and retirement. 38.4 (a) Assets of the fund or plan contained in the disclosure 38.5 item must include the following statement of the actuarial value 38.6 of current assets as defined in section 356.215, subdivision 1: 38.7 Value Value 38.8 at cost at market 38.9 Cash, cash equivalents, and 38.10 short-term securities ......... ......... 38.11 Accounts receivable ......... ......... 38.12 Accrued investment income ......... ......... 38.13 Fixed income investments ......... ......... 38.14 Equity investments other 38.15 than real estate ......... ......... 38.16 Real estate investments ......... ......... 38.17 Equipment ......... ......... 38.18 Equity in the Minnesota 38.19 postretirement investment 38.20 fund ......... ......... 38.21 Other ......... ......... 38.22 38.23 Total assets 38.24 Value at cost ......... 38.25 Value at market ......... 38.26 Value of current assets ......... 38.27 (b) The unfunded actuarial accrued liability of the fund or 38.28 plan contained in the disclosure item must include the following 38.29 measures of unfunded actuarial accrued liability, using the 38.30 value of current assets: 38.31 (1) unfunded actuarial accrued liability, determined by 38.32 subtracting the current assets and the present value of future 38.33 normal costs from the total current and expected future benefit 38.34 obligations; and 38.35 (2) unfunded pension benefit obligation, determined by 38.36 subtracting the current assets from the actuarial present value 39.1 of credited projected benefits. 39.2 If the current assets of the fund or plan exceed the 39.3 actuarial accrued liabilities, the excess must be disclosed and 39.4 indicated as a surplus. 39.5 (c) The pension benefit obligations schedule included in 39.6 the disclosure must contain the following information on the 39.7 benefit obligations: 39.8 (1) The pension benefit obligation, determined as the 39.9 actuarial present value of credited projected benefits on 39.10 account of service rendered to date, separately identified as 39.11 follows: 39.12 (i) For annuitants 39.13 Retirement annuities 39.14 Disability benefits 39.15 Surviving spouse and child benefits 39.16 (ii) For former members without vested rights 39.17 (iii) For deferred annuitants' benefits, including 39.18 any augmentation 39.19 (iv) For active employees 39.20 Accumulated employee contributions, 39.21 including allocated investment income 39.22 Employer-financed benefits vested 39.23 Employer-financed benefits nonvested 39.24 Total pension benefit obligation; 39.25 (2) If there are additional benefits not appropriately 39.26 covered by the foregoing items of benefit obligations, a 39.27 separate identification of the obligation. 39.28 (d) Any additional statements or exhibits or more detailed 39.29 or subdivided itemization of a disclosure item that will enable 39.30 the management of the fund to portray a true interpretation of 39.31 the fund's financial condition must be included in the 39.32 additional statements or exhibits. 39.33 Sec. 47. Minnesota Statutes 1994, section 356.215, 39.34 subdivision 1, is amended to read: 39.35 Subdivision 1. [DEFINITIONS.] For the purposes of sections 39.36 3.85 and 356.20 to 356.23, each of the following terms have the 40.1 meaning given: 40.2 (1) "Actuarial valuation" means a set of calculations 40.3 preparedby the actuary retained by the legislative commission40.4on pensions and retirement if so required under section 3.85, or40.5otherwise, by an approved actuary,to determine the normal cost 40.6 and the accrued actuarial liabilities of a benefit plan, 40.7 according to the entry age actuarial cost method and based upon 40.8 stated assumptions including, but not limited to rates of 40.9 interest, mortality, salary increase, disability, withdrawal, 40.10 and retirement and to determine the payment necessary to 40.11 amortize over a stated period any unfunded accrued actuarial 40.12 liability disclosed as a result of the actuarial valuation of 40.13 the benefit plan. 40.14 (2) "Approved actuary" means a person who is regularly 40.15 engaged in the business of providing actuarial services and who 40.16 has at least 15 years of service to major public employee 40.17 pension or retirement funds or who is a fellow in the society of 40.18 actuaries. 40.19 (3) "Entry age actuarial cost method" means an actuarial 40.20 cost method under which the actuarial present value of the 40.21 projected benefits of each individual currently covered by the 40.22 benefit plan and included in the actuarial valuation is 40.23 allocated on a level basis over the service of the individual if 40.24 the benefit plan is governed by section 69.773 or over the 40.25 earnings of the individual if the benefit plan is governed by 40.26 any other law between the entry age and the assumed exit age, 40.27 with the portion of this actuarial present value which is 40.28 allocated to the valuation year to be the normal cost and the 40.29 portion of this actuarial present value not provided for at the 40.30 valuation date by the actuarial present value of future normal 40.31 costs to be the actuarial accrued liability, with aggregation in 40.32 the calculation process to be the sum of the calculated result 40.33 for each covered individual and with recognition given to any 40.34 different benefit formulas which may apply to various periods of 40.35 service. 40.36 (4) "Experience study" means a report providing experience 41.1 data and an actuarial analysis of the adequacy of the actuarial 41.2 assumptions on which actuarial valuations are based. 41.3 (5) "Current assets" means the value of all assets at cost, 41.4 including realized capital gains or losses, plus one-third of 41.5 any unrealized capital gains or losses. 41.6 (6) "Unfunded actuarial accrued liability" means the total 41.7 current and expected future benefit obligations, reduced by the 41.8 sum of current assets and the present value of future normal 41.9 costs. 41.10 (7) "Pension benefit obligation" means the actuarial 41.11 present value of credited projected benefits, determined as the 41.12 actuarial present value of benefits estimated to be payable in 41.13 the future as a result of employee service attributing an equal 41.14 benefit amount, including the effect of projected salary 41.15 increases and any step rate benefit accrual rate differences, to 41.16 each year of credited and expected future employee service. 41.17 Sec. 48. Minnesota Statutes 1994, section 356.215, 41.18 subdivision 2, is amended to read: 41.19 Subd. 2. [REQUIREMENTS.] It is the policy of the 41.20 legislature that it is necessary and appropriate to determine 41.21 annually the financial status of tax supported retirement and 41.22 pension plans for public employees. To achieve this goal, the 41.23legislative commission on pensions and retirement shall have41.24prepared by the actuary retained by the commission annual41.25actuarial valuations of theretirement plans enumerated in 41.26 section 3.85, subdivision 11, paragraph (b),and quadrennial41.27experience studies of the retirement plans enumerated in section41.283.85, subdivision 11, paragraph (b), clauses (1), (2), and (7).41.29The governing or managing board or administrative officials of41.30each public pension and retirement fund or plan enumerated in41.31section 356.20, subdivision 2, clauses (9), (10), and (12),41.32 shall have prepared by an approved actuary annual actuarial 41.33 valuations of their respective funds and quadrennial experience 41.34 studies as provided in this section. This requirement also 41.35 applies to any fund that is the successor to any organization 41.36 enumerated in section 356.20, subdivision 2, or to the governing 42.1 or managing board or administrative officials of any newly 42.2 formed retirement fund or association operating under the 42.3 control or supervision of any public employee group, 42.4 governmental unit, or institution receiving a portion of its 42.5 support through legislative appropriations, and any local police 42.6 or fire fund coming within the provisions of section 356.216. 42.7 Sec. 49. Minnesota Statutes 1994, section 356.215, 42.8 subdivision 3, is amended to read: 42.9 Subd. 3. [REPORTS.] The actuarial valuations required 42.10 annually must be made as of the beginning of each fiscal year. 42.11 Two copies of the valuation must be delivered to theexecutive42.12director of the legislativecommission on pensions and 42.13 retirement, the legislative auditor, to the commissioner of 42.14 finance and to the legislative reference library, not later than 42.15 the first day of the sixth month occurring after the end of the 42.16 previous fiscal year. Two copies of a quadrennial experience 42.17 study must be filed with theexecutive director of the42.18legislativecommission on pensions and retirement, with the 42.19 commissioner of finance, and with the legislative reference 42.20 library, not later than the first day of the 11th month 42.21 occurring after the end of the last fiscal year of the four-year 42.22 period which the experience study covers. For any actuarial 42.23 valuations and experience studiesprepared at the direction of42.24the legislative commission on pensions and retirement, two 42.25 copies of the document must be delivered to the governing or 42.26 managing board or administrative officials of the applicable 42.27 public pension and retirement fund or plan. 42.28 Sec. 50. Minnesota Statutes 1994, section 356.215, 42.29 subdivision 4, is amended to read: 42.30 Subd. 4. [ACTUARIAL VALUATION; CONTENTS.] The actuarial 42.31 valuation must be made in conformity with the requirements of 42.32 the definition contained in subdivision 1 and the most recent 42.33 standards for actuarial work adopted by thelegislative42.34 commission on pensions and retirement. The actuarial valuation 42.35 must measure all aspects of the benefit plan of the fund in 42.36 accordance with changes in benefit plans, if any, and salaries 43.1 reasonably anticipated to be in force during the ensuing fiscal 43.2 year. The actuarial valuation must be prepared in accordance 43.3 with the entry age actuarial cost method. 43.4 The actuarial valuation required under this section must 43.5 include the information required in subdivisions 4a to 4k. 43.6 Sec. 51. Minnesota Statutes 1994, section 356.215, 43.7 subdivision 6, is amended to read: 43.8 Subd. 6. [ACTUARIAL SERVICES BY APPROVED ACTUARIES.] (a) 43.9 The actuarial valuation or quadrennial experience study must be 43.10 made and any actuarial consulting services for a retirement fund 43.11 or plan must be provided by an approved actuary. The actuarial 43.12 valuation or quadrennial experience study must include a 43.13 declaration that it has been prepared according to sections 43.14 356.20 to 356.23 and the most recent standards for actuarial 43.15 work adopted by thelegislativecommission on pensions and 43.16 retirement. 43.17 (b) Actuarial valuations, or experience studiesprepared by43.18an actuary retained by a retirement fund or planmust be 43.19 submitted to thelegislativecommission on pensions and 43.20 retirement within ten days of the submission of the document to 43.21 the retirement fund or plan. 43.22 Sec. 52. Minnesota Statutes 1994, section 356.215, 43.23 subdivision 7, is amended to read: 43.24 Subd. 7. [ESTABLISHMENT OF ACTUARIAL ASSUMPTIONS.] 43.25 Actuarial assumptions used for actuarial valuations under this 43.26 section that are other than those set forth in this section may 43.27 be changed only with the approval of thelegislativecommission 43.28 on pensions and retirement. A change in the applicable 43.29 actuarial assumptions may be proposed by the governing board of 43.30 the applicable pension fund or relief association, by the 43.31 actuary retained by thelegislativecommission on pensions and 43.32 retirement, by the actuarial advisor to a pension fund governed 43.33 by chapter 352, 353, 354, or 354A, or by the actuary retained by 43.34 a local police or firefighters relief association governed by 43.35 sections 69.77 or 69.771 to 69.776, if one is retained. 43.36 Sec. 53. Minnesota Statutes 1994, section 356.217, is 44.1 amended to read: 44.2 356.217 [MODIFICATIONS IN ACTUARIAL SERVICES.] 44.3 (a)The actuary retained by the legislative commission on44.4pensions and retirement is not required to prepare actuarial44.5valuations of the public employees local government correctional44.6employees retirement plan unless the plan is implemented by a44.7county under section 353C.04.44.8(b)The cost of any requested benefit projections bythe44.9commission-retainedan actuary relating to the Minnesota 44.10 postretirement investment fund for the state board of investment 44.11 is payable by the state board of investment. 44.12(c)(b) Actuarial valuations under section 356.215, for 44.13 July 1, 1991, and thereafter, are not required to have an 44.14 individual commentary section. The commentary section, if 44.15 omitted from the individual plan actuarial valuation, must be 44.16 included in an appropriate generalized format as part of the 44.17 report to the legislature under section 3.85, subdivision 11. 44.18(d)(c) Actuarial valuations under section 356.215, for 44.19 July 1, 1991, and thereafter, are not required to contain 44.20 separate actuarial valuation results for basic and coordinated 44.21 programs unless each program has a membership of at least ten 44.22 percent of the total membership of the fund. Actuarial 44.23 valuations under section 356.215, for July 1, 1991, and 44.24 thereafter, are not required to contain cash flow forecasts. 44.25(e)(d) Actuarial valuations of the public employees police 44.26 and fire fund local consolidation accounts for July 1, 1991, and 44.27 thereafter, are not required to contain separate tabulations or 44.28 summaries of active member, service retirement, disability 44.29 retirement, and survivor data for each local consolidation 44.30 account. 44.31(f) The commission-retained actuary is:44.32(1) required to publish experience findings for plans for44.33which experience findings are required only on a quadrennial44.34basis for the four-year period ending June 30, 1992, and every44.35four years thereafter;44.36(2) not required to prepare a separate experience analysis45.1or publish separate experience findings for basic and45.2coordinated programs if separate actuarial valuation results for45.3the programs are not required; and45.4(3) not required to calculate investment rate of return45.5experience results on any basis other than current asset value45.6as defined in section 356.215, subdivision 1, clause (6).45.7 Sec. 54. Minnesota Statutes 1994, section 356.218, 45.8 subdivision 1, is amended to read: 45.9 Subdivision 1. [REPORT REQUIRED.] (a) Unless paragraph (c) 45.10 applies, the chief administrative officer of a public pension 45.11 plan with an associated pension fund or investment fund 45.12 specified in subdivision 2 shall annually prepare and file an 45.13 investment performance report meeting the contents requirements 45.14 of subdivision 3. The report must be filed with or distributed 45.15 as specified in paragraph (b) by April 1 each year and must 45.16 cover the previous calendar year. The report must be prepared 45.17 under the supervision or at the direction of the chief 45.18 administrative officer and must be signed by that officer. The 45.19 investment performance report is a public record. 45.20 (b) A copy of the report or a synopsis of the report must 45.21 be distributed to each member of the pension plan and must be 45.22 filed with the chief administrative officer of each employing 45.23 unit making employer contributions to the pension plan. A copy 45.24 of the report also must be filed with theexecutive director of45.25the legislativecommission on pensions and retirement and the 45.26 legislative auditor. 45.27 (c) This section does not apply to the state board of 45.28 investment. This section also does not apply to a public 45.29 pension plan if all assets of the pension fund or investment 45.30 fund attributable to the public pension plan are invested by the 45.31 state board of investment under chapters 11A and 356A and if the 45.32 executive director of the state board of investment makes public 45.33 in an annual report or in other documents the fiscal year 45.34 investment performance results of the pension fund or investment 45.35 fund attributable to the pension plan that substantially meet 45.36 the requirements of subdivision 3 for that fiscal year period. 46.1 Sec. 55. Minnesota Statutes 1994, section 356.218, 46.2 subdivision 3, is amended to read: 46.3 Subd. 3. [CONTENTS OF THE INVESTMENT PERFORMANCE REPORT.] 46.4 (a) The investment performance report required by this section 46.5 must contain the time-weighted total rate of return results for 46.6 each quarter and annually for each significant asset class or 46.7 type of investment and for the portfolio as a whole. 46.8 (b) The time-weighted rate of return results must be 46.9 computed using market values and the applicable procedure, as 46.10 follows: 46.11 (1) by the formula or formulas prescribed by the state 46.12 board of investment under section 11A.04, clause (11); or 46.13 (2) by dividing the total investment gain or loss for the 46.14 quarter by average assets for the quarter, if: 46.15 (i) the total investment gain or loss for the quarter is 46.16 computed by subtracting the beginning market value for the 46.17 quarter and the net contributions for the quarter from the 46.18 ending market value for the quarter; 46.19 (ii) the measure of average assets to be used is the 46.20 beginning market value for the quarter plus one-half the net 46.21 contributions for the quarter; and 46.22 (iii) the resulting quarterly returns for each significant 46.23 asset class and for the portfolio as a whole must be used to 46.24 create annual time-weighted returns according to the same 46.25 procedures for developing annual time-weighted returns from 46.26 quarterly returns, as used in the formula specified by the state 46.27 board of investment under section 11A.04, clause (11). 46.28 (c) The person performing the calculations shall certify 46.29 conformance to the applicable procedure. 46.30 (d) The investment performance report may also include any 46.31 additional investment performance or investment related 46.32 information that the chief administrative officer considers 46.33 necessary to provide an adequate summary of the performance of 46.34 the portfolio. The additional information must be clearly 46.35 indicated as a supplement to the information required by this 46.36 subdivision. 47.1 (e) Theexecutive director of the legislativecommission on 47.3 pensions and retirement shall prescribe the forms on which the 47.4 report must be submitted and may prescribe other directions for 47.5 submitting the report. 47.6 Sec. 56. Minnesota Statutes 1994, section 356.22, 47.7 subdivision 1, is amended to read: 47.8 Subdivision 1. No provision in sections 356.20 to 356.23 47.9 shall be construed to in any way limit any of the enumerated 47.10 pension and retirement funds from furnishing additional 47.11 actuarial valuations or experience studies, or data and 47.12 calculations, as may be requested by the legislature or any 47.13 standing committee or thelegislativecommission on pensions and 47.14 retirement. 47.15 Sec. 57. Minnesota Statutes 1994, section 356.23, is 47.16 amended to read: 47.17 356.23 [SUPPLEMENTAL VALUATIONS; ALTERNATIVE REPORTS AND 47.18 VALUATIONS.] 47.19 Subdivision 1. [SUPPLEMENTAL ACTUARIAL VALUATIONS.] Any 47.20 supplemental actuarial valuations prepared on behalf of any 47.21 governing or managing board of any pension and retirement fund 47.22 enumerated in section 356.20, subdivision 2, by an approved 47.23 actuary, shall be prepared in accordance with the applicable 47.24 provisions of sections 356.20 to 356.23 and the standards 47.25 adopted by thelegislativecommission on pensions and 47.26 retirement. Any pension and retirement fund which prepares an 47.27 alternative actuarial valuation under subdivision 2 shall also 47.28 have a supplemental actuarial valuation prepared. 47.29 Subd. 2. [ALTERNATIVE REPORTS AND VALUATIONS.] In addition 47.30 to the financial reports and actuarial valuations required by 47.31 sections 356.20 to 356.23, the governing or managing board of 47.32 any fund concerned may submit alternative reports and valuations 47.33 for distribution to the legislature, any of its committees, the 47.34 legislative auditor, or thelegislativecommission on pensions 47.35 and retirement on a different basis or on different assumptions 47.36 than are specified in sections 356.20 to 356.23. The 47.37 assumptions and basis of any alternative reports and valuations 48.1 shall be clearly stated in the document. 48.2 Sec. 58. Minnesota Statutes 1994, section 356.88, is 48.3 amended to read: 48.4 356.88 [PUBLIC PENSION ADMINISTRATION LEGISLATION.] 48.5Subdivision 1. [DUE DATES.](a) Proposed administrative 48.6 legislation recommended by or on behalf of the Minnesota state 48.7 retirement system, the public employees retirement association, 48.8 the teachers retirement association, the Minneapolis employees 48.9 retirement fund, or a first class city teachers retirement fund 48.10 association must be presented to thelegislativecommission on 48.11 pensions and retirement, the commissioners of finance and 48.12 employee relations, the governmental operations and reform 48.13 committee of the senate, and the governmental operations and 48.14 gaming committee of the house of representatives on or before 48.15OctoberAugust 1 of each year in order for the proposed 48.16 administrative legislation to be acted upon during the upcoming 48.17 legislative session. Theexecutive director or the deputy48.18executive director of the legislative commission on pensions and48.19retirementcommissioners of finance and employee relations shall 48.20 provide written comments on the proposed provisions to the 48.21 public pension plans byNovemberOctober 15 of each year. 48.22 (b) Proposed administrative legislation recommended by or 48.23 on behalf of a public employee pension plan or system under 48.24 paragraph (a) must address provisions: 48.25 (1) authorizing allowable service credit for leaves of 48.26 absence and related circumstances; 48.27 (2) governing offsets or deductions from the amount of 48.28 disability benefits; 48.29 (3) authorizing the purchase of allowable service credit 48.30 for prior uncredited periods; 48.31 (4) governing subsequent employment earnings by reemployed 48.32 annuitants; and 48.33 (5) authorizing retroactive effect for retirement annuity 48.34 or benefit applications. 48.35 (c) Where possible and desirable, taking into account the 48.36 differences among the public pension plans in existing law and 49.1 the unique characteristics of the individual public pension fund 49.2 memberships, uniform provisions relating to paragraph (b) for 49.3 all applicable public pension plans must be presented for 49.4 consideration during the legislative session. Supporting 49.5 documentation setting forth the policy rationale for each set of 49.6 uniform provisions must accompany the proposed administrative 49.7 legislation. 49.8Subd. 2. [SALARY STUDY ADVISORY COMMITTEE.] In an effort49.9to treat public employees in a fair and equitable manner and to49.10protect the financial integrity of the public pension plans, the49.11legislative commission on pensions and retirement shall49.12establish an advisory committee to study the definitions of49.13salary in chapters 353, 354, and 354A to determine the high-five49.14average consecutive years of salary component for the formula49.15used to calculate retirement annuities and disability benefits.49.16The advisory committee must be composed of at least three49.17executive directors and executive secretaries of the seven49.18public pension plans, and the chair, vice-chair, and executive49.19director of the pension commission.49.20The advisory committee shall report its findings and49.21recommendations to the pension commission by February 15, 1995.49.22 Sec. 59. Minnesota Statutes 1994, section 422A.01, 49.23 subdivision 6, is amended to read: 49.24 Subd. 6. [PRESENT VALUE.] "Present worth" or "present 49.25 value" means that the present amount of money if increased at 49.26 the applicable postretirement or preretirement interest rate 49.27 assumption specified in section 356.215, subdivision 4d, and 49.28 based on the mortality table adopted by the board of trustees 49.29 based on the experience of the fund as recommended by the 49.30 actuary retained by thelegislativecommission on pensions and 49.31 retirement will at retirement equal the actuarial accrued 49.32 liability of the annuity already earned. 49.33 Sec. 60. Minnesota Statutes 1994, section 422A.04, 49.34 subdivision 3, is amended to read: 49.35 Subd. 3. [EXPERIENCE DATA AND MORTALITY TABLES.] The board 49.36 shall prepare and keep any needful tables, records, and accounts 50.1 required for carrying out the provisions of sections 422A.01 to 50.2 422A.25, including data showing the mortality and disability 50.3 experience of the officers and employees of the service and the 50.4 date of withdrawal from service, and any other information that 50.5 may serve as a guide for future actuarial valuations and 50.6 adjustments in the actuarial assumptions for the retirement 50.7 fund. Mortality tables shall be adopted and may be modified 50.8 from time to time by the board based on the experience of the 50.9 fund as recommended by the actuary retained by thelegislative50.10 commission on pensions and retirement as a basis of calculation 50.11 for retirement allowances, with any recommendation by the 50.12 actuary retained as a part of the permanent records of the board. 50.13 Sec. 61. Minnesota Statutes 1994, section 422A.06, 50.14 subdivision 2, is amended to read: 50.15 Subd. 2. [ACTUARIAL VALUATION REQUIRED.] As of July 1 of 50.16 each year, an actuarial valuation of the retirement fund shall 50.17 be prepared by thecommission-retained actuaryboard and filed 50.18 in conformance with the provisions and requirements of sections 50.19 356.215 to 356.23. Experience studies shall be prepared at 50.20 those times required by statute, required by the standards for 50.21 actuarial work adopted by thelegislativecommission on pensions 50.22 and retirement or ordered by the board. 50.23 The board may contract for the services of an approved 50.24 actuary and fix the reasonable compensation for those services. 50.25 Any approved actuary retained by the board shall function as the 50.26 actuarial advisor to the board and may perform actuarial 50.27 valuations and experience studiesto supplement those performed50.28by the actuary retained by the legislative commission on50.29pensions and retirement. Anysupplementalactuarial valuations 50.30 or experience studies shall be filed with theexecutive director50.31of the legislativecommission on pensions and retirement. 50.32 Sec. 62. Minnesota Statutes 1994, section 422A.06, 50.33 subdivision 8, is amended to read: 50.34 Subd. 8. [RETIREMENT BENEFIT FUND.] The retirement benefit 50.35 fund shall consist of amounts held for payment of retirement 50.36 allowances for members retired pursuant to this chapter. Assets 51.1 equal to the required reserves for retirement allowances 51.2 pursuant to this chapter determined in accordance with the 51.3 appropriate mortality table adopted by the board of trustees 51.4 based on the experience of the fund as recommended by the 51.5 commission-retained actuary shall be transferred from the 51.6 deposit accumulation fund to the retirement benefit fund as of 51.7 the last business day of the month in which the retirement 51.8 allowance begins. The income from investments of these assets 51.9 shall be allocated to this fund. There shall be paid from this 51.10 fund the retirement annuities authorized by law. A required 51.11 reserve calculation for the retirement benefit fund must be made 51.12 by the actuaryretained by the legislative commission on51.13pensions and retirement and must be certified to the retirement51.14board by the commission-retained actuary. The retirement 51.15 benefit fund shall be governed by the applicable laws governing 51.16 the accounting and audit procedures, investment, actuarial 51.17 requirements, calculation and payment of postretirement benefit 51.18 adjustments, discharge of any deficiency in the assets of the 51.19 fund when compared to the actuarially determined required 51.20 reserves, and other applicable operations and procedures 51.21 regarding the Minnesota postretirement investment fund 51.22 established pursuant to section 11A.18, and any legal or 51.23 administrative interpretations of those laws of the state board 51.24 of investment, the legal advisor to the board of investment and 51.25 the executive director of the state board of investment. If a 51.26 deferred yield adjustment account is established for the 51.27 Minnesota postretirement investment fund under section 11A.18, 51.28 subdivision 5, the retirement board shall also establish and 51.29 maintain a deferred yield adjustment account within this fund. 51.30 Annually, following the calculation of any postretirement 51.31 adjustment payable from the retirement benefit fund, the board 51.32 of trustees shall submit a report to theexecutive director of51.33the legislativecommission on pensions and retirement and to the 51.34 commissioner of finance indicating the amount of any 51.35 postretirement adjustment and the underlying calculations on 51.36 which that postretirement adjustment amount is based, including 52.1 the amount of dividends, the amount of interest, and the amount 52.2 of net realized capital gains or losses utilized in the 52.3 calculations. 52.4 Sec. 63. Minnesota Statutes 1994, section 422A.101, 52.5 subdivision 1, is amended to read: 52.6 Subdivision 1. [FINANCIAL REQUIREMENTS OF FUND.] Prior to 52.7 July 31 annually, the retirement board, in consultation with the 52.8 commission-retained actuary, shall prepare an itemized statement 52.9 of the financial requirements of the fund for the succeeding 52.10 fiscal year. A copy of the statement shall be submitted to the 52.11 city council, the board of estimate and taxation of the city, 52.12 the managing board or chief administrative officer of each city 52.13 owned public utility, improvement project or municipal activity 52.14 supported in whole or in part by revenues other than real estate 52.15 taxes, public corporation, or unit of metropolitan government 52.16 employing members of the fund, the board of special school 52.17 district No. 1, and the state commissioner of finance prior to 52.18 July 31 annually. The statement shall be itemized and shall 52.19 include the following: 52.20 (1) an estimate of the administrative expenses of the fund 52.21 for the following year, including the amount necessary to 52.22 amortize through June 30, 2020, the annual costs that are 52.23 determined by the retirement board to be related to investment 52.24 activities of the deposit accumulation fund other than actual 52.25 investment transaction amounts; 52.26 (2) an estimate of the normal cost of the fund expressed as 52.27 a dollar amount, which shall be determined by applying the 52.28 normal cost of the fund as reported in the most recent actuarial 52.29 valuationprepared by the commission-retained actuaryand 52.30 expressed as a percentage of covered payroll to the estimated 52.31 total covered payroll of all employees covered by the fund for 52.32 the following year; 52.33 (3) an estimate of the contribution required to amortize on 52.34 a level annual dollar basis the unfunded actuarial accrued 52.35 liability of the fund by June 30, 2020, using an interest rate 52.36 of six percent compounded annually as reported in the most 53.1 recent actuarial valuation,prepared by the commission-retained53.2actuaryexpressed as a dollar amount. In determining the amount 53.3 of the unfunded actuarial accrued liability of the fund, all 53.4 assets other than the assets of the retirement benefit fund 53.5 shall be valued as current assets as defined under section 53.6 356.215, subdivision 1, clause (6), and the assets of the 53.7 retirement benefit fund shall be valued equal to the actuarially 53.8 determined required reserves for benefits payable from that 53.9 fund; 53.10 (4) the amount of any deficiency in the actual amount of 53.11 any employer contribution provided for in this section when 53.12 compared to the required contribution amount certified for the 53.13 previous year, plus interest on the amount at the rate of six 53.14 percent per annum. 53.15 Sec. 64. Minnesota Statutes 1994, section 422A.101, 53.16 subdivision 1a, is amended to read: 53.17 Subd. 1a. [CITY CONTRIBUTIONS.] Prior to August 31 of each 53.18 year, the retirement board shall prepare an itemized statement 53.19 of the financial requirements of the fund payable by the city 53.20 for the succeeding fiscal year, and a copy of the statement 53.21 shall be submitted to the board of estimate and taxation and to 53.22 the city council by September 15. The financial requirements of 53.23 the fund payable by the city shall be calculated as follows: 53.24 (a) a regular employer contribution of an amount equal to 53.25 the percentage rounded to the nearest two decimal places of the 53.26 salaries and wages of all employees covered by the retirement 53.27 fund which equals the difference between the level normal cost 53.28 plus administrative cost as reported in the annual actuarial 53.29 valuationprepared by the commission-retained actuaryand the 53.30 employee contributions provided for in section 422A.10 less any 53.31 amounts contributed toward the payment of the balance of the 53.32 normal cost not paid by employee contributions by any city owned 53.33 public utility, improvement project, other municipal activities 53.34 supported in whole or in part by revenues other than real estate 53.35 taxes, any public corporation, any employing unit of 53.36 metropolitan government, or by special school district No. 1 54.1 pursuant to subdivision 2; 54.2 (b) an additional employer contribution of an amount equal 54.3 to the percent specified in section 353.27, subdivision 3a, 54.4 clause (a), multiplied by the salaries and wages of all 54.5 employees covered by the retirement fund less any amounts 54.6 contributed toward amortization of the unfunded actuarial 54.7 accrued liability by June 30, 2020, attributable to their 54.8 respective covered employees by any city owned public utility, 54.9 improvement project, other municipal activities supported in 54.10 whole or in part by revenues other than real estate taxes, any 54.11 public corporation, any employing unit of metropolitan 54.12 government, or by special school district No. 1 pursuant to 54.13 subdivision 2; and 54.14 (c) a proportional share of an additional employer 54.15 amortization contribution of an amount equal to $3,900,000 54.16 annually until June 30, 2020, based upon the share of the fund's 54.17 unfunded actuarial accrued liability attributed to the city as 54.18 disclosed in the annual actuarial valuationprepared by the54.19commission-retained actuary. 54.20 The city council shall, in addition to other taxes levied 54.21 by the city, annually levy a tax equal to the amount of the 54.22 financial requirements of the fund which are payable by the 54.23 city. The tax, when levied, shall be extended upon the county 54.24 lists and shall be collected and enforced in the same manner as 54.25 other taxes levied by the city. If the city does not levy a tax 54.26 sufficient to meet the requirements of this subdivision, the 54.27 retirement board shall submit the tax levy statement directly to 54.28 the county auditor, who shall levy the tax. The tax, when 54.29 levied, shall be extended upon the county lists and shall be 54.30 collected and paid into the city treasury to the credit of the 54.31 retirement fund. Any amount to the credit of the retirement 54.32 fund shall constitute a special fund and shall be used only for 54.33 the payment of obligations authorized pursuant to this chapter. 54.34 Sec. 65. Minnesota Statutes 1994, section 422A.101, 54.35 subdivision 2, is amended to read: 54.36 Subd. 2. [CONTRIBUTIONS BY OR FOR CITY-OWNED PUBLIC 55.1 UTILITIES, IMPROVEMENTS, OR MUNICIPAL ACTIVITIES.] Contributions 55.2 by or for any city-owned public utility, improvement project, 55.3 and other municipal activities supported in whole or in part by 55.4 revenues other than real estate taxes, any public corporation, 55.5 any employing unit of metropolitan government, special school 55.6 district No. 1, or Hennepin county, on account of any employee 55.7 covered by the fund, shall be calculated as follows: 55.8 (a) a regular employer contribution of an amount equal to 55.9 the percentage rounded to the nearest two decimal places of the 55.10 salaries and wages of all employees of the employing unit 55.11 covered by the retirement fund which equals the difference 55.12 between the level normal cost plus administrative cost reported 55.13 in the annual actuarial valuationprepared by the55.14commission-retained actuaryand the employee contributions 55.15 provided for in section 422A.10; 55.16 (b) an additional employer contribution of an amount equal 55.17 to the percent specified in section 353.27, subdivision 3a, 55.18 clause (a), multiplied by the salaries and wages of all 55.19 employees of the employing unit covered by the retirement fund; 55.20 (c) a proportional share of an additional employer 55.21 amortization contribution of an amount equal to $3,900,000 55.22 annually until June 30, 2020, based upon the share of the fund's 55.23 unfunded actuarial accrued liability attributed to the employer 55.24 as disclosed in the annual actuarial valuationprepared by the55.25commission-retained actuary. 55.26 The city council or any board or commission may, by proper 55.27 action, provide for the inclusion of the cost of the retirement 55.28 contributions for employees of any city-owned public utility or 55.29 for persons employed in any improvement project or other 55.30 municipal activity supported in whole or in part by revenues 55.31 other than taxes who are covered by the retirement fund in the 55.32 cost of operating the utility, improvement project, or municipal 55.33 activity. The cost of retirement contributions for these 55.34 employees shall be determined by the retirement board and the 55.35 respective governing bodies having jurisdiction over the 55.36 financing of these operating costs. 56.1 The cost of the employer contributions on behalf of 56.2 employees of special school district No. 1 who are covered by 56.3 the retirement fund shall be the obligation of the school 56.4 district. Contributions by the school district to the 56.5 retirement fund or any other public pension or retirement fund 56.6 of which its employees are members must be remitted to the fund 56.7 each month. An amount due and not transmitted begins to accrue 56.8 interest at the rate of six percent compounded annually 15 days 56.9 after the date due. The retirement board shall prepare an 56.10 itemized statement of the financial requirements of the fund 56.11 payable by the school district, which shall be submitted prior 56.12 to September 15. Contributions by the school district shall be 56.13 made at times designated by the retirement board. The school 56.14 district may levy for its contribution to the retirement fund 56.15 only to the extent permitted pursuant to section 124.916, 56.16 subdivision 3. 56.17 The cost of the employer contributions on behalf of 56.18 elective officers or other employees of Hennepin county who are 56.19 covered by the retirement fund pursuant to section 422A.09, 56.20 subdivision 3, clause (2), 422A.22, subdivision 2, or 488A.115, 56.21 or Laws 1973, chapter 380, section 3, Laws 1975, chapter 402, 56.22 section 2, or any other applicable law shall be the obligation 56.23 of Hennepin county. The retirement board shall prepare an 56.24 itemized statement of the financial requirements of the fund 56.25 payable by Hennepin county, which shall be submitted prior to 56.26 September 15. Contributions by Hennepin county shall be made at 56.27 times designated by the retirement board. Hennepin county may 56.28 levy for its contribution to the retirement fund. 56.29 Sec. 66. Minnesota Statutes 1994, section 422A.101, 56.30 subdivision 2a, is amended to read: 56.31 Subd. 2a. [CONTRIBUTIONS BY METROPOLITAN AIRPORTS 56.32 COMMISSION AND METROPOLITAN COUNCIL.] The metropolitan airports 56.33 commission and the metropolitan council shall pay to the 56.34 Minneapolis employees retirement fund annually in installments 56.35 as specified in subdivision 3 the share of the additional 56.36 support rate required for full amortization of the unfunded 57.1 actuarial accrued liabilities by June 30, 2020, that is 57.2 attributable to employees of airport commission or former 57.3 metropolitan waste control commission who are members of the 57.4 fund. The amount of the payment shall be determined as if the 57.5 airport commission and metropolitan council's employer 57.6 contributions determined under subdivision 2 had also included a 57.7 proportionate share of a $1,000,000 annual employer amortization 57.8 contribution. The amount of this $1,000,000 annual employer 57.9 amortization contribution that would have been allocated to the 57.10 commission or council would have been based on the share of the 57.11 fund's unfunded actuarial accrued liability attributed to the 57.12 commission or council compared to the total unfunded actuarial 57.13 accrued liability attributed to all employers under subdivisions 57.14 1a and 2. The determinations required under this subdivision 57.15 must be based on the most recent actuarial valuationprepared by57.16the actuary retained by the legislative commission on pensions57.17and retirement. 57.18 Sec. 67. Minnesota Statutes 1994, section 422A.101, 57.19 subdivision 3, is amended to read: 57.20 Subd. 3. [STATE CONTRIBUTIONS.] (a) The state shall pay to 57.21 the Minneapolis employees retirement fund annually an amount 57.22 equal to the financial requirements of the Minneapolis employees 57.23 retirement fund reported in the actuarial valuation of the fund 57.24 preparedby the commission-retained actuarypursuant to section 57.25 356.215 for the most recent year but based on a target date for 57.26 full amortization of the unfunded actuarial accrued liabilities 57.27 by June 30, 2020, less the amount of employee contributions 57.28 required pursuant to section 422A.10, and the amount of employer 57.29 contributions required pursuant to subdivisions 1a, 2, and 2a. 57.30 Payments shall be made in four equal installments, occurring on 57.31 March 15, July 15, September 15, and November 15 annually. The 57.32 annual state contribution under this subdivision may not exceed 57.33 $10,455,000 plus the cost of the annual supplemental benefit 57.34 determined under section 356.865. 57.35 (b) If the amount determined under paragraph (a) exceeds 57.36 the limitation on the state payment in paragraph (a), the excess 58.1 must be allocated to and paid to the fund by the employers 58.2 identified in subdivisions 1a and 2, other than units of 58.3 metropolitan government. Each employer's share of the excess is 58.4 proportionate to the employer's share of the fund's unfunded 58.5 actuarial accrued liability as disclosed in the annual actuarial 58.6 valuationprepared by the actuary retained by the legislative58.7commission on pensions and retirementcompared to the total 58.8 unfunded actuarial accrued liability attributed to all employers 58.9 identified in subdivisions 1a and 2, other than units of 58.10 metropolitan government. Payments must be made in equal 58.11 installments as set forth in paragraph (a). 58.12 Sec. 68. Minnesota Statutes 1994, section 422A.15, 58.13 subdivision 2, is amended to read: 58.14 Subd. 2. [WITHDRAWAL OF VOLUNTARY CONTRIBUTIONS.] 58.15 Voluntary additions to the employee's deposits made by the 58.16 employee under section 422A.10 may be withdrawn by the retiring 58.17 employee or, with the approval of the retirement board, applied 58.18 to the purchase of an additional annuity computed and determined 58.19 under a procedure specified by the actuary retained by the 58.20legislativecommission on pensions and retirement utilizing the 58.21 appropriate mortality table established by the board of trustees 58.22 based on the experience of the fund as recommended by the 58.23 commission-retained actuary and using the applicable 58.24 postretirement interest rate assumption specified in section 58.25 356.215, subdivision 4d. 58.26 Sec. 69. Minnesota Statutes 1994, section 422A.15, 58.27 subdivision 3, is amended to read: 58.28 Subd. 3. [OPTIONAL DEFINED CONTRIBUTION ANNUITY.] In lieu 58.29 of the formula pension and annuity, a person who was a 58.30 contributing member on April 28, 1973, who is eligible to retire 58.31 and who ceases to be employed and who qualifies for retirement 58.32 shall have the option of electing to receive a retirement 58.33 allowance known as "the $2 bill and annuity." 58.34 If a member of the contributing class makes the election 58.35 provided for in this section, the member shall receive a minimum 58.36 pension of $2 per month for each year of service. The pension 59.1 shall be the actuarial equivalent of the accumulated amounts of 59.2 the annual installments as may be fixed and designated by law 59.3 throughout the period of service of the retiring employee, not 59.4 to exceed 25 years, accumulated to the date of retirement at six 59.5 percent compound interest, and such extra credit to be provided 59.6 by the city as will produce the minimum pension of $2 per month 59.7 for each year of service. The pension shall be in addition to 59.8 the annuity. The annuity shall be in the actuarial equivalent 59.9 of the net accumulated contributions to the credit of the 59.10 retiring employee, calculated at the date of retirement. For 59.11 the purposes of this chapter, the "service allowance" for 59.12 members of the contributing class shall consist of an "annuity" 59.13 and a "pension." 59.14 The pension provided for herein shall be the actuarial 59.15 equivalent of the accumulated annual installments of $2 per 59.16 month for each year of service. The sum of $2 shall be computed 59.17 as a single life annuity and subject to the option selections 59.18 provided for in section 422A.17. The pension and annuity 59.19 provided for in this subdivision shall be first paid from the 59.20 contributing member's own contributions and normal earned 59.21 credits, plus interest, until those credits are exhausted. 59.22 The retirement allowance provided under this subdivision or 59.23 any optional annuity form of the retirement allowance shall be 59.24 computed and determined under a procedure specified by the 59.25 commission-retained actuary utilizing the appropriate mortality 59.26 table established by the board of trustees based on the 59.27 experience of the fund as recommended by the actuary retained by 59.28 thelegislativecommission on pensions and retirement and using 59.29 the applicable postretirement interest rate assumption specified 59.30 in section 356.215, subdivision 4d. 59.31 Sec. 70. Minnesota Statutes 1994, section 422A.23, 59.32 subdivision 6, is amended to read: 59.33 Subd. 6. [SURVIVOR BENEFIT EMPLOYEE CONTRIBUTION.] The 59.34 retirement board shall create a reserve account for survivor's 59.35 benefits from which shall be paid on an actuarial basis all 59.36 survivor benefits due and payable. At the end of each fiscal 60.1 year, as part of the annual actuarial valuation of the fund 60.2prepared by the commission-retained actuary, a determination of 60.3 the normal cost of the benefits payable from the survivor's 60.4 benefit account shall be made and the board shall reduce or 60.5 increase the employee contribution rate of one-fourth of one 60.6 percent if and when it is determined based on the annual 60.7 actuarial valuation that the member contribution rate is in 60.8 excess of or is less than the amount necessary to pay for 50 60.9 percent of the calculated normal cost of the survivor benefits 60.10 provided in this section. 60.11 Sec. 71. Minnesota Statutes 1994, section 423A.03, is 60.12 amended to read: 60.13 423A.03 [TEMPORARY PROVISION; APPLICATION TO CERTAIN 60.14 MUNICIPALITIES.] 60.15 Any municipality in which is located a local police or 60.16 salaried firefighters' relief association which is governed by 60.17 section 69.77, and in which all newly hired police officers or 60.18 firefighters, whichever is applicable, after a certain date are 60.19 required by special law to have their retirement coverage 60.20 provided by the public employees police and fire fund 60.21 established pursuant to chapter 353, and not by the local police 60.22 or firefighters' relief association, may have made applicable 60.23 any other provisions of section 423A.01, by adopting by majority 60.24 vote of the governing body, a resolution implementing those 60.25 provisions of section 423A.01 which are not present in or which 60.26 are in substantial conflict with the applicable special law 60.27 modifying retirement coverage for new police officers or 60.28 firefighters, whichever is applicable, other than the date of 60.29 the modification in retirement coverage. Prior to becoming 60.30 effective, a copy of the municipal resolution shall be filed 60.31 with the secretary of state, the commissioner of finance, the 60.32 commissioner of commerce and theexecutive director of the60.33legislativecommission on pensions and retirement. To be deemed 60.34 an implementing municipal resolution within the meaning of this 60.35 section, the municipal resolution shall either refer to this 60.36 section and the applicable subdivisions of section 423A.01 or 61.1 shall describe in summary form the modifications to be 61.2 implemented. 61.3 Sec. 72. Minnesota Statutes 1994, section 423A.07, is 61.4 amended to read: 61.5 423A.07 [ADDITIONS TO BOARD.] 61.6 Notwithstanding any other law, each local police and 61.7 salaried firefighters' relief association may amend its bylaws 61.8 and its articles of incorporation, as necessary, to provide for 61.9 the inclusion of retirees on its board. 61.10 Upon adoption of the amendments, the relief association 61.11 must file a copy of the amended bylaws with theexecutive61.12director of the legislativecommission on pensions and 61.13 retirement. A relief association amending its articles of 61.14 incorporation must comply with any statutory requirements 61.15 pertaining to the filing of amended articles of incorporation. 61.16 Sec. 73. Minnesota Statutes 1994, section 423A.17, is 61.17 amended to read: 61.18 423A.17 [CONTINUATION OF SURVIVING SPOUSE BENEFITS UPON 61.19 REMARRIAGE.] 61.20 (a) Notwithstanding a provision of section 69.48; 423.387, 61.21 subdivision 1; 423.58, subdivision 1; 423.810, subdivision 1; or 61.22 424.24, subdivision 1, or other law, article of incorporation, 61.23 or bylaw governing a local police or salaried firefighters 61.24 relief association to the contrary, the governing body of a 61.25 municipality may mandate the applicable local police or salaried 61.26 firefighters relief association to provide that a surviving 61.27 spouse benefit is payable for the life of the surviving spouse 61.28 and remains payable even in the event of the remarriage of the 61.29 surviving spouse. 61.30 (b) If the surviving spouse benefit change described in 61.31 paragraph (a) is made, the change applies to a surviving spouse 61.32 benefit payable on the effective date of the change and to the 61.33 potential surviving spouses of all active, deferred, or retired 61.34 members of the relief association who have that status on the 61.35 effective date of the change. 61.36 (c) In addition, if the surviving spouse benefit change 62.1 described in paragraph (a) is made a person who formerly was 62.2 receiving surviving spouse benefits from the relief association 62.3 and who had those benefits discontinued by virtue of the 62.4 remarriage is entitled, upon application, to a resumption of the 62.5 surviving spouse benefit, beginning with the last day of the 62.6 month following receipt of the application by the secretary of 62.7 the relief association. Nothing in this section authorizes the 62.8 payment of a benefit amount to an estate. 62.9 (d) The change must be made by a municipal resolution 62.10 adopted by a majority vote of the municipality. The resolution 62.11 must be filed by the secretary of the relief association with 62.12 theexecutive director of the legislativecommission on pensions 62.13 and retirement, the state auditor, and the secretary of state. 62.14 Sec. 74. Minnesota Statutes 1994, section 423A.171, is 62.15 amended to read: 62.16 423A.171 [BYLAW AMENDMENTS.] 62.17 (a) Notwithstanding a provision of section 69.48; 423.387, 62.18 subdivision 1; 423.58, subdivision 1; 423.810, subdivision 1; 62.19 423B.10; or 424.24, subdivision 1, or other law governing a 62.20 local police or salaried firefighters' relief association to the 62.21 contrary, the board of trustees of a local relief association 62.22 governed by section 69.77 or its successor board under chapter 62.23 353A or 353B, with municipal approval as provided in section 62.24 69.77, subdivision 2i, may amend the bylaws of the relief 62.25 association to provide that a surviving spouse benefit is 62.26 payable to a surviving spouse who married a deferred or retired 62.27 member after the member's retirement, provided the marriage 62.28 occurred at least five years before the death of the member. 62.29 (b) If the surviving spouse benefit change described in 62.30 paragraph (a) is made, the change applies to a surviving spouse 62.31 benefit payable on the effective date of the change and to the 62.32 potential surviving spouses of all deferred or retired members 62.33 of the relief association who have that status on the effective 62.34 date of the change. 62.35 (c) The bylaw amendment is not effective until a certified 62.36 copy of the amendment and the municipal approval has been filed 63.1 by the municipal clerk with theexecutive director of the63.2legislativecommission on pensions and retirement, the state 63.3 auditor, and the secretary of state. 63.4 (d) Notwithstanding the provisions of section 353B.11, a 63.5 surviving spouse benefit change made under this section for a 63.6 relief association that has consolidated with the public 63.7 employees retirement association is effective upon approval by 63.8 the public employees retirement association and the municipality 63.9 pursuant to paragraph (c). 63.10 Sec. 75. Minnesota Statutes 1994, section 423A.18, is 63.11 amended to read: 63.12 423A.18 [MEMBER CONTRIBUTION REFUND TO BENEFICIARY UPON 63.13 DEATH; AUTHORITY TO IMPLEMENT BENEFIT.] 63.14 (a) Notwithstanding any law to the contrary, for a local 63.15 police or salaried firefighters relief association that 63.16 implements the provision with municipal approval as provided in 63.17 paragraph (c), if an active, deferred, or retired member of the 63.18 relief association dies and no survivor benefit is payable, the 63.19 designated beneficiary of the decedent or, if none, the legal 63.20 representative of the estate of the decedent is entitled, upon 63.21 application, to a refund. 63.22 (b) The refund under paragraph (a) is an amount equal to 63.23 the member contributions to the credit of the decedent, plus 63.24 interest on those contributions at an annual compound rate of 63.25 five percent from the first day of the month following the date 63.26 of the contribution to the first day of the month following the 63.27 date of death of the decedent, reduced by the sum of any service 63.28 pension or disability benefit previously paid by the fund to the 63.29 decedent. 63.30 (c) The benefit under this section must be implemented by 63.31 an amendment to the bylaws of the relief association, with 63.32 municipal approval as provided in section 69.77, subdivision 63.33 2i. The bylaw amendment is not effective until a certified copy 63.34 of the amendment and the municipal approval has been filed by 63.35 the municipal clerk with theexecutive director of the63.36legislativecommission on pensions and retirement, the state 64.1 auditor, and the secretary of state. 64.2 Sec. 76. Minnesota Statutes 1994, section 423A.19, 64.3 subdivision 4, is amended to read: 64.4 Subd. 4. [IMPLEMENTATION.] The reduced vesting requirement 64.5 must be implemented by a local relief association through an 64.6 amendment to the bylaws of the relief association with approval 64.7 by the governing body of the municipality as required by section 64.8 69.77, subdivision 2i. The bylaw amendment may not be effective 64.9 until a certified copy of it and the municipal approval has been 64.10 filed by the municipal clerk with theexecutive director of the64.11legislativecommission on pensions and retirement, the state 64.12 auditor, and the secretary of state. 64.13 Sec. 77. Minnesota Statutes 1994, section 423B.15, 64.14 subdivision 2, is amended to read: 64.15 Subd. 2. [DETERMINATION OF EXCESS INVESTMENT INCOME.] The 64.16 board of trustees of the relief association shall determine by 64.17 May 1 of each year whether or not the fund has excess investment 64.18 income. The amount of excess investment income, if any, must be 64.19 stated as a dollar amount and reported by the chief 64.20 administrative officer of the relief association to the mayor 64.21 and governing body of the city, the state auditor, the 64.22 commissioner of finance, and theexecutive director of the64.23legislativecommission on pensions and retirement. The dollar 64.24 amount of excess investment income up to one percent of the 64.25 assets of the fund must be applied for the purpose specified in 64.26 subdivision 3. Excess investment income must not be considered 64.27 as income to or assets of the fund for actuarial valuations of 64.28 the fund for that year under sections 69.77, 356.215, and 64.29 356.216 and the provisions of this section except to offset the 64.30 annual postretirement payment. Additional investment income is 64.31 any realized or unrealized investment income other than the 64.32 excess investment income and must be included in the actuarial 64.33 valuations performed under sections 69.77, 356.215, and 356.216 64.34 and the provisions of this section. 64.35 Sec. 78. Minnesota Statutes 1994, section 423B.15, 64.36 subdivision 5, is amended to read: 65.1 Subd. 5. [REPORT ON ANNUAL POSTRETIREMENT PAYMENT.] The 65.2 chief administrative officer of the relief association shall 65.3 prepare a report on the amount of all postretirement payments 65.4 made under this section and the manner in which those payments 65.5 were determined. That report must be submitted to the state 65.6 auditor, theexecutive director of the legislativecommission on 65.7 pensions and retirement, and the city clerk of the city. 65.8 Sec. 79. Minnesota Statutes 1994, section 490.124, 65.9 subdivision 11, is amended to read: 65.10 Subd. 11. [OPTIONAL ANNUITIES.] No survivor or death 65.11 benefits may be paid in connection with the death of a judge who 65.12 retires after December 31, 1973, except as otherwise provided in 65.13 sections 490.121 to 490.132. Except as provided in subdivision 65.14 10, a judge may elect to receive, instead of the normal 65.15 retirement annuity, an optional retirement annuity in the form 65.16 of an annuity payable for a period certain and for life after 65.17 that period, a joint and survivor annuity without reinstatement 65.18 in the event of the designated beneficiary predeceasing the 65.19 retired judge, or a joint and survivor annuity with 65.20 reinstatement in the event of the designated beneficiary 65.21 predeceasing the retired judge. An optional retirement annuity 65.22 must be actuarially equivalent to a single-life annuity with no 65.23 term certain and must be established by the board of directors 65.24 of the Minnesota state retirement system. In establishing these 65.25 optional retirement annuity forms, the board shall obtain the 65.26 written recommendation of the actuary retained by the 65.27legislativecommission on pensions and retirement. The 65.28 recommendations must be a part of the permanent records of the 65.29 board. required by section 356.20 or 356.215.