as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
Engrossments | ||
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Introduction | Posted on 02/11/2002 |
1.1 A bill for an act 1.2 relating to retirement; retirement systems, generally; 1.3 reorganizing and revising various general retirement 1.4 provisions; instructing the revisor of statutes; 1.5 amending Minnesota Statutes 2000, sections 69.29; 1.6 356.001; 356.20, subdivisions 1, 2, 3, 4, 4a; 356.215; 1.7 356.216; 356.217; 356.219; 356.22; 356.23; 356.24, 1.8 subdivisions 1b, 1c, 2; 356.245; 356.25; 356.30; 1.9 356.302; 356.303; 356.32; 356.40; 356.41; 356.50; 1.10 356.55, as amended; 356.551; 356.611; 356.65, 1.11 subdivision 2; 356.87; Minnesota Statutes 2001 1.12 Supplement, sections 356.24, subdivision 1; 356.555; 1.13 356.62; 356.65, subdivision 1; proposing coding for 1.14 new law in Minnesota Statutes, chapter 356; proposing 1.15 coding for new law as Minnesota Statutes, chapter 1.16 356B; repealing Minnesota Statutes 2000, sections 1.17 356.19; 356.305; 356.306; 356.31; 356.325; 356.35; 1.18 356.36; 356.37; 356.371, subdivisions 2, 3; 356.372; 1.19 356.38; 356.39; 356.45; 356.451; 356.452; 356.453; 1.20 356.454; 356.455; 356.615; 356.71; 356.80; 356.81; 1.21 356.86; 356.865; 356.88; 356.89; Minnesota Statutes 1.22 2001 Supplement, sections 356.371, subdivision 1; 1.23 356.866; Laws 1997, chapter 233, article 1, section 58. 1.24 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.25 ARTICLE 1 1.26 REORGANIZATION AND RECODIFICATION 1.27 PUBLIC RETIREMENT PLAN PURPOSE 1.28 Section 1. Minnesota Statutes 2000, section 356.001, is 1.29 amended to read: 1.30 356.001 [PURPOSE OF PUBLIC PLANS.] 1.31 Subdivision 1. [EXCLUSIVE BENEFIT OF MEMBERS AND 1.32 BENEFICIARIES.] (a) The public plans and funds specified in 1.33 subdivision 4 are established to provide for the retirement of 1.34 their members and to provide funds for the beneficiaries of 2.1 members in the event of death of a member. 2.2 (b) The public plans and funds are established andshall2.3 must be maintained for the exclusive benefit of the members and 2.4 the beneficiaries of the members. Except as provided in 2.5 subdivisions 2 and 3, no part of the moneys of the plans and 2.6 fundsshallmay revert to the plan or fund or be used for or 2.7 diverted to purposes other than the exclusive benefit of the 2.8 members or their beneficiaries. 2.9 Subd. 2. [ALLOWABLE EXPENSES.] The necessary, reasonable, 2.10 and direct expenses of maintaining, protecting, and 2.11 administering the public plan or fund, as authorized in the laws 2.12 governing the plan or fund,shallmust be considered as 2.13 expenditures for the exclusive benefit of the members or their 2.14 beneficiaries. 2.15 Subd. 3. [EFFECT OF AMENDMENTS OR TERMINATION.] (a) If a 2.16 public plan or fundasdefined in subdivision 4 is terminated or 2.17 the plan or fund provisions are amended, no part of the moneys 2.18 held in the plan or fundshallmay be used for or diverted to 2.19 any purpose other than the exclusive benefit of the members or 2.20 their beneficiaries, except as provided in this subdivision. 2.21 (b) If a plan or fund is terminated, all affected members 2.22 have a nonforfeitable interest in their benefits that were 2.23 accrued and funded to date. The value of the accrued benefits 2.24 to be credited to the account of each affected membershallmust 2.25 be calculated as of the date of termination and the funding 2.26 ratio of the plan or fund must be applied to the accrued benefit 2.27 of each affected member. 2.28 (c) The board of trustees of the plan or fund shallthen, 2.29 as soon as administratively feasible following the termination, 2.30 pay each eligible member or beneficiary on behalf of a member 2.31 the amount in the member's account in a lump sum. In the case 2.32 of a member whose whereabouts is unknown, the board shall notify 2.33 the member at the last known address by certified mail with 2.34 return receipt requested advising the member of the member's 2.35 right to a pending distribution. If the member cannot be 2.36 located in this manner, the board shall establish a custodial 3.1 account for the member's benefit in a federally insured bank, 3.2 savings association, or credit union in which the member's 3.3 account balanceshallmust be deposited. If the board receives 3.4 proof of death of a member that is satisfactory to the board, 3.5 the account balanceshallmust be paid to the beneficiary of the 3.6 member. 3.7 Subd. 4. [COVERED PLANS AND FUNDS.] This section applies 3.8 to all public pension and retirement plans and funds established 3.9pursuant tounder the laws of the state of Minnesota that 3.10 receive contributions from moneys derived from taxation. 3.11 Subd. 5. [CONSTRUCTION.] Nothing contained in this section 3.12shallmay be construed to authorize, or otherwise imply, a 3.13 legislative policy or intent favoring the termination of any 3.14 plan or fund to which this section applies. 3.15 PUBLIC PENSION PLAN ACTUARIAL, FINANCIAL, 3.16 AND INVESTMENT REPORTING 3.17 Sec. 2. Minnesota Statutes 2000, section 356.20, 3.18 subdivision 1, is amended to read: 3.19 Subdivision 1. [REPORT REQUIRED.] (a) The governing or 3.20 managing board or administrative officials of the public pension 3.21 and retirement funds enumerated in subdivision 2 shall annually 3.22 prepare and file a financial report following the close of each 3.23 fiscal year. 3.24 (b) This requirementshallalsoapplyapplies to any plan 3.25 or fund which may be a successor to any organization so 3.26 enumerated or to any newly formed retirement plan, fund or 3.27 association operating under the control or supervision of any 3.28 public employee group, governmental unit, or institution 3.29 receiving a portion of its support through legislative 3.30 appropriations. 3.31 (c) The reportshallmust be prepared under the supervision 3.32 and at the direction of the management of each fund andshall3.33 must be signed by the presiding officer of the managing board of 3.34 the fund and the chief administrative official of the fund. 3.35 Sec. 3. Minnesota Statutes 2000, section 356.20, 3.36 subdivision 2, is amended to read: 4.1 Subd. 2. [COVERED PUBLIC PENSION PLANS AND FUNDS.] This 4.2 section applies to the following public pension plans: 4.3 (1) the general state employees retirementfund.plan of 4.4 the Minnesota state retirement system; 4.5 (2) the general employees retirement plan of the public 4.6 employees retirementfund.association; 4.7 (3) the teachers retirement association.; 4.8 (4) the state patrol retirementfund.plan; 4.9 (5) the Minneapolis teachers retirement fund association.; 4.10 (6) the St. Paul teachers retirement fund association.; 4.11 (7) the Duluth teachers retirement fund association.; 4.12 (8) the Minneapolis employees retirement fund.; 4.13 (9) the University of Minnesota faculty retirement plan.; 4.14 (10) the University of Minnesota faculty supplemental 4.15 retirement plan.; 4.16 (11) the judges retirement fund.; 4.17 (12)Anya police or firefighter's relief association 4.18enumerateddescribed in section 69.77, subdivision 1a, or 4.19 69.771, subdivision 1.; 4.20 (13) the public employees police and firefund.plan of the 4.21 public employees retirement association; 4.22 (14) the correctional state employees retirement plan of 4.23 the Minnesota state retirement systemcorrectional officers4.24retirement fund.; and 4.25 (15)public employeesthe local government correctional 4.26 service retirement plan of the public employees retirement 4.27 association. 4.28 Sec. 4. Minnesota Statutes 2000, section 356.20, 4.29 subdivision 3, is amended to read: 4.30 Subd. 3. [FILING REQUIREMENT.] The financial report is a 4.31 public record. A copy of the report or a synopsis of the report 4.32 containing the information required by this sectionshallmust 4.33 be distributed annually to each member of the fund and to the 4.34 governing body of each governmental subdivision of the state 4.35 which makes employers contributions thereto or in whose behalf 4.36 taxes are levied for the employers' contribution. A signed copy 5.1 of the reportshallmust be delivered to the executive director 5.2 of the legislative commission on pensions and retirement and to 5.3 the legislative reference library not later than six months 5.4 after the close of each fiscal year or one month following the 5.5 completion and delivery to the retirement fund of the actuarial 5.6 valuation report of the fund by the actuary retained by the 5.7 legislative commission on pensions and retirement, if 5.8 applicable, whichever is later. 5.9 Sec. 5. Minnesota Statutes 2000, section 356.20, 5.10 subdivision 4, is amended to read: 5.11 Subd. 4. [CONTENTS OF FINANCIAL REPORT.] (a) The financial 5.12 report required by this section must contain financial 5.13 statements and disclosures that indicate the financial 5.14 operations and position of the retirement plan and fund. The 5.15 report must conform with generally accepted governmental 5.16 accounting principles, applied on a consistent basis. The 5.17 report must be audited. The report must include, as part of its 5.18 exhibits or footnotes, an actuarial disclosure item based on the 5.19 actuarial valuation calculations prepared by the 5.20 commission-retained actuary or by the actuary retained by the 5.21 retirement fund or plan, if applicable, according to applicable 5.22 actuarial requirements enumerated in section 356.215, and 5.23 specified in the most recent standards for actuarial work 5.24 adopted by the legislative commission on pensions and 5.25 retirement. The accrued assets, the accrued liabilities, 5.26 including accrued reserves, and the unfunded actuarial accrued 5.27 liability of the fund or plan must be disclosed. The disclosure 5.28 item must contain a declaration by the actuary retained by the 5.29 legislative commission on pensions and retirement or the actuary 5.30 retained by the fund or plan, whichever applies, specifying that 5.31 the required reserves for any retirement, disability, or 5.32 survivor benefits provided under a benefit formula are computed 5.33 in accordance with the entry age actuarial cost method and with 5.34 the most recent applicable standards for actuarial work adopted 5.35 by the legislative commission on pensions and retirement. 5.36(a)(b) Assets of the fund or plan contained in the 6.1 disclosure item must include the following statement of the 6.2 actuarial value of current assets as defined in section 356.215, 6.3 subdivision 1: 6.4 Value Value 6.5 at cost at market 6.6 Cash, cash equivalents, and 6.7 short-term securities ......... ......... 6.8 Accounts receivable ......... ......... 6.9 Accrued investment income ......... ......... 6.10 Fixed income investments ......... ......... 6.11 Equity investments other 6.12 than real estate ......... ......... 6.13 Real estate investments ......... ......... 6.14 Equipment ......... ......... 6.15 Equity in the Minnesota 6.16 postretirement investment 6.17 fund ......... ......... 6.18 Other ......... ......... 6.19 6.20 Total assets 6.21 Value at cost ......... 6.22 Value at market ......... 6.23 Value of current assets ......... 6.24(b)(c) The unfunded actuarial accrued liability of the 6.25 fund or plan contained in the disclosure item must include the 6.26 following measures of unfunded actuarial accrued liability, 6.27 using the value of current assets: 6.28 (1) unfunded actuarial accrued liability, determined by 6.29 subtracting the current assets and the present value of future 6.30 normal costs from the total current and expected future benefit 6.31 obligations; and 6.32 (2) unfunded pension benefit obligation, determined by 6.33 subtracting the current assets from the actuarial present value 6.34 of credited projected benefits. 6.35 If the current assets of the fund or plan exceed the 6.36 actuarial accrued liabilities, the excess must be disclosed and 7.1 indicated as a surplus. 7.2(c)(d) The pension benefit obligations schedule included 7.3 in the disclosure must contain the following information on the 7.4 benefit obligations: 7.5 (1) The pension benefit obligation, determined as the 7.6 actuarial present value of credited projected benefits on 7.7 account of service rendered to date, separately identified as 7.8 follows: 7.9 (i) For annuitants 7.10 Retirement annuities 7.11 Disability benefits 7.12 Surviving spouse and child benefits 7.13 (ii) For former members without vested rights 7.14 (iii) For deferred annuitants' benefits, including 7.15 any augmentation 7.16 (iv) For active employees 7.17 Accumulated employee contributions, 7.18 including allocated investment income 7.19 Employer-financed benefits vested 7.20 Employer-financed benefits nonvested 7.21 Total pension benefit obligation; and 7.22 (2) If there are additional benefits not appropriately 7.23 covered by the foregoing items of benefit obligations, a 7.24 separate identification of the obligation. 7.25(d)(e) Any additional statements or exhibits or more 7.26 detailed or subdivided itemization of a disclosure item that 7.27 will enable the management of the fund to portray a true 7.28 interpretation of the fund's financial condition must be 7.29 included in the additional statements or exhibits. 7.30 Sec. 6. Minnesota Statutes 2000, section 356.20, 7.31 subdivision 4a, is amended to read: 7.32 Subd. 4a. [FINANCIAL REPORT FOR POLICE OR FIREFIGHTERS 7.33 RELIEF ASSOCIATION.] For any police or firefighter's relief 7.34 association referred to in subdivision 2, clause (12), a 7.35 financial report duly filedpursuant toand meeting the 7.36 requirements of section 69.051shallmust be deemed to have met 8.1 the requirements of subdivision 4. 8.2 Sec. 7. Minnesota Statutes 2000, section 356.215, as 8.3 amended by Laws 2001, First Special Session chapter 10, article 8.4 11, section 18, is amended to read: 8.5 356.215 [ACTUARIAL VALUATIONS AND EXPERIENCE STUDIES.] 8.6 Subdivision 1. [DEFINITIONS.] (a) For the purposes of 8.7 sections 3.85 and 356.20 to 356.23, each of the terms in the 8.8 following paragraphs have the meaning given. 8.9 (b) "Actuarial valuation" means a set of calculations 8.10 prepared by the actuary retained by the legislative commission 8.11 on pensions and retirement if so required under section 3.85, or 8.12 otherwise, by an approved actuary, to determine the normal cost 8.13 and the accrued actuarial liabilities of a benefit plan, 8.14 according to the entry age actuarial cost method and based upon 8.15 stated assumptions including, but not limited to rates of 8.16 interest, mortality, salary increase, disability, withdrawal, 8.17 and retirement and to determine the payment necessary to 8.18 amortize over a stated period any unfunded accrued actuarial 8.19 liability disclosed as a result of the actuarial valuation of 8.20 the benefit plan. 8.21 (c) "Approved actuary" means a person who is regularly 8.22 engaged in the business of providing actuarial services and who 8.23 has at least 15 years of service to major public employee 8.24 pension or retirement funds or who is a fellow in the society of 8.25 actuaries. 8.26 (d) "Entry age actuarial cost method" means an actuarial 8.27 cost method under which the actuarial present value of the 8.28 projected benefits of each individual currently covered by the 8.29 benefit plan and included in the actuarial valuation is 8.30 allocated on a level basis over the service of the individual, 8.31 if the benefit plan is governed by section 69.773, or over the 8.32 earnings of the individual, if the benefit plan is governed by 8.33 any other law, between the entry age and the assumed exit age, 8.34 with the portion ofthisthe actuarial present value which is 8.35 allocated to the valuation year to be the normal cost and the 8.36 portion ofthisthe actuarial present value not provided for at 9.1 the valuation date by the actuarial present value of future 9.2 normal costs to be the actuarial accrued liability, with 9.3 aggregation in the calculation process to be the sum of the 9.4 calculated result for each covered individual and with 9.5 recognition given to any different benefit formulas which may 9.6 apply to various periods of service. 9.7 (e) "Experience study" means a report providing experience 9.8 data and an actuarial analysis of the adequacy of the actuarial 9.9 assumptions on which actuarial valuations are based. 9.10 (f) "Current assets" means: 9.11 (1)for the July 1, 1999, actuarial valuation, the value of9.12all assets at cost, including realized capital gains or losses,9.13plus one-third of any unrealized capital gains or losses;9.14(2) for the July 1, 2000, actuarial valuation, the market9.15value of all assets as of June 30, 2000, reduced by:9.16(i) 60 percent of the difference between the market value9.17of all assets as of June 30, 1999, and the actuarial value of9.18assets used in the July 1, 1999, actuarial valuation, and9.19(ii) 80 percent of the difference between the actual net9.20change in the market value of assets between June 30, 1999, and9.21June 30, 2000, and the computed increase in the market value of9.22assets between June 30, 1999, and June 30, 2000, if the assets9.23had increased at the percentage preretirement interest rate9.24assumption used in the July 1, 1999, actuarial valuation;9.25(3)for the July 1, 2001, actuarial valuation, the market 9.26 value of all assets as of June 30, 2001, reduced by: 9.27 (i) 30 percent of the difference between the market value 9.28 of all assets as of June 30, 1999, and the actuarial value of 9.29 assets used in the July 1, 1999, actuarial valuation; 9.30 (ii) 60 percent of the difference between the actual net 9.31 change in the market value of assets between June 30, 1999, and 9.32 June 30, 2000, and the computed increase in the market value of 9.33 assets between June 30, 1999, and June 30, 2000, if the assets 9.34 had increased at the percentage preretirement interest rate 9.35 assumption used in the July 1, 1999, actuarial valuation; and 9.36 (iii) 80 percent of the difference between the actual net 10.1 change in the market value of assets between June 30, 2000, and 10.2 June 30, 2001, and the computed increase in the market value of 10.3 assets between June 30, 2000, and June 30, 2001, if the assets 10.4 had increased at the percentage preretirement interest rate 10.5 assumption used in the July 1, 2000, actuarial valuation; 10.6(4)(2) for the July 1, 2002, actuarial valuation, the 10.7 market value of all assets as of June 30, 2002, reduced by: 10.8 (i) ten percent of the difference between the market value 10.9 of all assets as of June 30, 1999, and the actuarial value of 10.10 assets used in the July 1, 1999, actuarial valuation; 10.11 (ii) 40 percent of the difference between the actual net 10.12 change in the market value of assets between June 30, 1999, and 10.13 June 30, 2000, and the computed increase in the market value of 10.14 assets between June 30, 1999, and June 30, 2000, if the assets 10.15 had increased at the percentage preretirement interest rate 10.16 assumption used in the July 1, 1999, actuarial valuation; 10.17 (iii) 60 percent of the difference between the actual net 10.18 change in the market value of assets between June 30, 2000, and 10.19 June 30, 2001, and the computed increase in the market value of 10.20 assets between June 30, 2000, and June 30, 2001, if the assets 10.21 had increased at the percentage preretirement interest rate 10.22 assumption used in the July 1, 2000, actuarial valuation; and 10.23 (iv) 80 percent of the difference between the actual net 10.24 change in the market value of assets between June 30, 2001, and 10.25 June 30, 2002, and the computed increase in the market value of 10.26 assets between June 30, 2001, and June 30, 2002, if the assets 10.27 had increased at the percentage preretirement interest rate 10.28 assumption used in the July 1, 2001, actuarial valuation; or 10.29(5)(3) for any actuarial valuation after July 1, 2002, the 10.30 market value of all assets as of the preceding June 30, reduced 10.31 by: 10.32 (i) 20 percent of the difference between the actual net 10.33 change in the market value of assets between the June 30 that 10.34 occurred three years earlier and the June 30 that occurred four 10.35 years earlier and the computed increase in the market value of 10.36 assets over that fiscal year period if the assets had increased 11.1 at the percentage preretirement interest rate assumption used in 11.2 the actuarial valuation for the July 1 that occurred four years 11.3 earlier; 11.4 (ii) 40 percent of the difference between the actual net 11.5 change in the market value of assets between the June 30 that 11.6 occurred two years earlier and the June 30 that occurred three 11.7 years earlier and the computed increase in the market value of 11.8 assets over that fiscal year period if the assets had increased 11.9 at the percentage preretirement interest rate assumption used in 11.10 the actuarial valuation for the July 1 that occurred three years 11.11 earlier; 11.12 (iii) 60 percent of the difference between the actual net 11.13 change in the market value of assets between the June 30 that 11.14 occurred one year earlier and the June 30 that occurred two 11.15 years earlier and the computed increase in the market value of 11.16 assets over that fiscal year period if the assets had increased 11.17 at the percentage preretirement interest rate assumption used in 11.18 the actuarial valuation for the July 1 that occurred two years 11.19 earlier; and 11.20 (iv) 80 percent of the difference between the actual net 11.21 change in the market value of assets between the immediately 11.22 prior June 30 and the June 30 that occurred one year earlier and 11.23 the computed increase in the market value of assets over that 11.24 fiscal year period if the assets had increased at the percentage 11.25 preretirement interest rate assumption used in the actuarial 11.26 valuation for the July 1 that occurred one year earlier. 11.27 (g) "Unfunded actuarial accrued liability" means the total 11.28 current and expected future benefit obligations, reduced by the 11.29 sum of current assets and the present value of future normal 11.30 costs. 11.31 (h) "Pension benefit obligation" means the actuarial 11.32 present value of credited projected benefits, determined as the 11.33 actuarial present value of benefits estimated to be payable in 11.34 the future as a result of employee service attributing an equal 11.35 benefit amount, including the effect of projected salary 11.36 increases and any step rate benefit accrual rate differences, to 12.1 each year of credited and expected future employee service. 12.2 Subd. 2. [REQUIREMENTS.] (a) It is the policy of the 12.3 legislature that it is necessary and appropriate to determine 12.4 annually the financial status of tax supported retirement and 12.5 pension plans for public employees. To achieve this goal: 12.6 (1) the legislative commission on pensions and retirement 12.7 shall have prepared by the actuary retained by the commission 12.8 annual actuarial valuations of the retirement plans enumerated 12.9 in section 3.85, subdivision 11, paragraph (b), and quadrennial 12.10 experience studies of the retirement plans enumerated in section 12.11 3.85, subdivision 11, paragraph (b), clauses (1), (2), and (7); 12.12 and 12.13 (2) the commissioner of finance may have prepared by the 12.14 actuary retained by the commission, two years after each set of 12.15 quadrennial experience studies, quadrennial projection 12.16 valuations of at least one of the retirement plans enumerated in 12.17 section 3.85, subdivision 11, paragraph (b), for which the 12.18 commissioner determines that the analysis may be beneficial. 12.19 (b) The governing or managing board or administrative 12.20 officials of each public pension and retirement fund or plan 12.21 enumerated in section 356.20, subdivision 2, clauses (9), (10), 12.22 and (12), shall have prepared by an approved actuary annual 12.23 actuarial valuations of their respective funds as provided in 12.24 this section. This requirement also applies to any fund or plan 12.25 that is the successor to any organization enumerated in section 12.26 356.20, subdivision 2, or to the governing or managing board or 12.27 administrative officials of any newly formed retirement fund, 12.28 plan, or association operating under the control or supervision 12.29 of any public employee group, governmental unit, or institution 12.30 receiving a portion of its support through legislative 12.31 appropriations, and any local police or fire fundcoming within12.32the provisions ofto which section 356.216 applies. 12.33 Subd. 2a. [PROJECTION VALUATION REQUIREMENTS.] (a) A 12.34 quadrennial projection valuationrequiredauthorized under 12.35 subdivision 2 is intended to serve as an additional analytical 12.36 tool with which policy makers may assess the future funding 13.1 status of public plans through forecasting and testing various 13.2 potential outcomes over time if certain plan assumptions or 13.3 valuation methods were to be modified. 13.4 (b) In consultation with the retirement fund directors, the 13.5 state economist, the state demographer, the commissioner of 13.6 finance, and the commissioner of employee relations, the actuary 13.7 retained by the legislative commission on pensions and 13.8 retirement shall perform the quadrennial projection valuations 13.9 on behalf of the commissioner of finance, testing future 13.10 implications for plan funding by modifying assumptions and 13.11 methods currently in place. The commission-retained actuary 13.12 shall provide advice to the commissioner as to the periods over 13.13 which such projections should be made, the nature and scope of 13.14 the scenarios to be analyzed, and the measures of funding status 13.15 to be employed, and shall report the results of these analyses 13.16 in the same manner as for quadrennial experience studies. 13.17 Subd. 3. [REPORTS.] (a) The actuarial valuations required 13.18 annually must be made as of the beginning of each fiscal year. 13.19 (b) Two copies of the valuation must be delivered to the 13.20 executive director of the legislative commission on pensions and 13.21 retirement, to the commissioner of finance and to the 13.22 legislative reference library, not later than the first day of 13.23 the sixth month occurring after the end of the previous fiscal 13.24 year. 13.25 (c) Two copies of a quadrennial experience study must be 13.26 filed with the executive director of the legislative commission 13.27 on pensions and retirement, with the commissioner of finance, 13.28 and with the legislative reference library, not later than the 13.29 first day of the 11th month occurring after the end of the last 13.30 fiscal year of the four-year period which the experience study 13.31 covers. 13.32 (d) For actuarial valuations and experience studies 13.33 prepared at the direction of the legislative commission on 13.34 pensions and retirement, two copies of the document must be 13.35 delivered to the governing or managing board or administrative 13.36 officials of the applicable public pension and retirement fund 14.1 or plan. 14.2 Subd. 4. [ACTUARIAL VALUATION; CONTENTS.] (a) The 14.3 actuarial valuation must be made in conformity with the 14.4 requirements of the definition contained in subdivision 1 and 14.5 the most recent standards for actuarial work adopted by the 14.6 legislative commission on pensions and retirement. 14.7 (b) The actuarial valuation must measure all aspects of the 14.8 benefit plan of the fund in accordance with changes in benefit 14.9 plans, if any, and salaries reasonably anticipated to be in 14.10 force during the ensuing fiscal year. The actuarial valuation 14.11 must be prepared in accordance with the entry age actuarial cost 14.12 method. The actuarial valuation required under this section 14.13 must include the information required in subdivisions4a5 to4k14.14 15. 14.15 Subd.4a5. [NORMAL COST.] For a fund providing benefits 14.16 in whole or in part under a defined benefit plan, the actuarial 14.17 valuation must indicate the level normal cost of the benefits 14.18 providedbyunder the laws governing the fund as of the date of 14.19 the valuation, calculated in accordance with the entry age 14.20 actuarial cost method. The normal cost must be expressed as a 14.21 level percentage of the present value of future payrolls of the 14.22 active participants of the fund as of the date of the valuation. 14.23 Subd.4b6. [ACCRUED LIABILITY.] For a fund providing 14.24 benefits under a defined benefit plan, the actuarial valuation 14.25 must contain an exhibit indicating the actuarial accrued 14.26 liabilities of the fund. This figure is the present value of 14.27 future benefits,reduced by the present value of future normal 14.28 costs, calculated in accordance with the entry age actuarial 14.29 cost method. 14.30 Subd.4c7. [DEFINED CONTRIBUTION PLAN ACCUMULATIONS.] For 14.31 each fund providing benefits underthea money purchase or 14.32 defined contribution plan, the actuarial valuationshallmust 14.33 contain an exhibit indicating the member contributions 14.34 accumulated at interest, as apportioned to members accounts, to 14.35 the date of the valuation. These accumulationsshallmust be 14.36 separately tabulated in a manner which properly reflects any 15.1 differences in money purchase or defined contribution annuity 15.2 rates which may apply. 15.3 Subd.4d8. [INTEREST AND SALARY ASSUMPTIONS.] (a) The 15.4 actuarial valuation must use the applicable following 15.5 preretirement interest assumption and the applicable following 15.6 postretirement interest assumption: 15.7 preretirement postretirement 15.8 interest rate interest rate 15.9 plan assumption assumption 15.10 general state employees 15.11 retirement plan 8.5% 6.0% 15.12 correctional state employees 15.13 retirement plan 8.5 6.0 15.14 state patrol retirement plan 8.5 6.0 15.15 legislators retirement plan 8.5 6.0 15.16 elective state officers 15.17 retirement plan 8.5 6.0 15.18 judges retirement plan 8.5 6.0 15.19 general public employees 15.20 retirement plan 8.5 6.0 15.21 public employees police and fire 15.22 retirement plan 8.5 6.0 15.23 local government correctional 15.24 service retirement plan 8.5 6.0 15.25 teachers retirement plan 8.5 6.0 15.26 Minneapolis employees 15.27 retirement plan 6.0 5.0 15.28 Duluth teachers retirement plan 8.5 8.5 15.29 Minneapolis teachers retirement 15.30 plan 8.5 8.5 15.31 St. Paul teachers retirement 15.32 plan 8.5 8.5 15.33 Minneapolis police relief 15.34 association 6.0 6.0 15.35 other local police relief 15.36 associations 5.0 5.0 15.37 Minneapolis fire department 15.38 relief association 6.0 6.0 15.39 other local salaried firefighters 15.40 relief associations 5.0 5.0 15.41 local monthly benefit volunteer 15.42 firefighters relief associations 5.0 5.0 15.43 (b) The actuarial valuation must use the applicable 15.44 following single rate future salary increase assumption, the 15.45 applicable following modified single rate future salary increase 15.46 assumption, or the applicable following graded rate future 15.47 salary increase assumption: 15.48 (1) single rate future salary increase assumption 15.49 future salary 15.50 plan increase assumption 15.51 legislators retirement plan 5.0% 15.52 elective state officers retirement 15.53 plan 5.0 15.54 judges retirement plan 5.0 15.55 Minneapolis police relief association 4.0 15.56 other local police relief associations 3.5 15.57 Minneapolis fire department relief 15.58 association 4.0 16.1 other local salaried firefighters relief 16.2 associations 3.5 16.3 (2) modified single rate future salary increase assumption 16.4 future salary 16.5 plan increase assumption 16.6 Minneapolis employees prior calendar year amount 16.7 retirement plan increased by 1.0198 percent 16.8 to prior fiscal year date 16.9 and by 4.0 percent annually 16.10 for each future year 16.11 (3) select and ultimate future salary increase assumption 16.12 or graded rate future salary increase assumption 16.13 future salary 16.14 plan increase assumption 16.15 general state employees select calculation and 16.16 retirement plan assumption A 16.17 correctional state employees 16.18 retirement plan assumption H 16.19 state patrol retirement plan assumption H 16.20 general public employees select calculation and 16.21 retirement plan assumption B 16.22 public employees police and fire 16.23 fund retirement plan assumption C 16.24 local government correctional service 16.25 retirement plan assumption H 16.26 teachers retirement plan assumption D 16.27 Duluth teachers retirement plan assumption E 16.28 Minneapolis teachers retirement plan assumption F 16.29 St. Paul teachers retirement plan assumption G 16.30 16.31 select calculation: 16.32 during the ten-year select period, 0.2 percent is 16.33 multiplied by the result of ten minus T, where T is 16.34 the number of completed years of service, and is added 16.35 to the applicable future salary increase assumption. 16.36 16.37 future salary increase assumption: 16.38 16.39 age A B C D E F G H 16.40 16 6.95% 6.95% 11.50% 8.20% 8.00% 7.50% 7.25% 7.7500 16.41 17 6.90 6.90 11.50 8.15 8.00 7.50 7.25 7.7500 16.42 18 6.85 6.85 11.50 8.10 8.00 7.50 7.25 7.7500 16.43 19 6.80 6.80 11.50 8.05 8.00 7.50 7.25 7.7500 16.44 20 6.75 6.75 11.50 8.00 8.00 7.50 7.25 7.7500 16.45 21 6.70 6.70 11.50 7.95 8.00 7.50 7.25 7.1454 16.46 22 6.65 6.65 11.00 7.90 8.00 7.50 7.25 7.0725 16.47 24 6.66 6.55 10.00 7.80 7.80 7.30 7.20 7.0363 16.48 25 6.50 6.50 9.50 7.75 7.70 7.20 7.15 7.0000 16.49 26 6.45 6.45 9.20 7.70 7.60 7.10 7.10 7.0000 16.50 27 6.40 6.40 8.90 7.65 7.50 7.00 7.05 7.0000 16.51 28 6.35 6.35 8.60 7.60 7.40 6.90 7.00 7.0000 16.52 29 6.30 6.30 8.30 7.55 7.30 6.80 6.95 7.0000 16.53 30 6.25 6.30 8.00 7.50 7.20 6.70 6.90 7.0000 16.54 31 6.20 6.25 7.80 7.45 7.10 6.60 6.85 7.0000 16.55 32 6.15 6.21 7.60 7.40 7.00 6.50 6.80 7.0000 16.56 33 6.10 6.17 7.40 7.30 6.90 6.40 6.75 7.0000 16.57 34 6.05 6.09 7.20 7.10 6.80 6.30 6.70 7.0000 16.58 35 6.00 6.05 7.00 7.00 6.70 6.20 6.65 7.0000 16.59 36 6.95 6.01 6.80 6.85 6.60 6.10 6.60 6.9019 16.60 37 5.90 5.97 6.60 6.70 6.50 6.00 6.55 6.8074 16.61 38 5.85 5.93 6.40 6.55 6.40 5.90 6.50 6.7125 16.62 39 5.80 5.89 6.20 6.40 6.30 5.80 6.40 6.6054 16.63 40 5.75 5.85 6.00 6.25 6.20 5.70 6.30 6.5000 16.64 41 5.70 5.81 5.90 6.10 6.10 5.60 6.20 6.3540 16.65 42 5.65 5.77 5.80 5.95 6.00 5.50 6.10 6.2087 16.66 43 5.60 5.73 5.70 5.80 5.90 5.45 6.00 6.0622 17.1 44 5.55 5.69 5.60 5.65 5.80 5.40 5.90 5.9048 17.2 45 5.50 5.65 5.50 5.50 5.70 5.35 5.80 5.7500 17.3 46 5.45 5.62 5.45 5.45 5.60 5.30 5.70 5.6940 17.4 47 5.40 5.59 5.40 5.40 5.50 5.25 5.65 5.6375 17.5 48 5.35 5.56 5.35 5.35 5.45 5.20 5.60 5.5822 17.6 49 5.30 5.53 5.30 5.30 5.40 5.15 5.55 5.5404 17.7 50 5.25 5.50 5.25 5.25 5.35 5.10 5.50 5.5000 17.8 51 5.20 5.45 5.25 5.20 5.30 5.05 5.45 5.4384 17.9 52 5.15 5.40 5.25 5.15 5.25 5.00 5.40 5.3776 17.10 53 5.10 5.35 5.25 5.10 5.25 5.00 5.35 5.3167 17.11 54 5.05 5.30 5.25 5.05 5.25 5.00 5.30 5.2826 17.12 55 5.00 5.25 5.25 5.00 5.25 5.00 5.25 5.2500 17.13 56 5.00 5.20 5.25 5.00 5.25 5.00 5.25 5.2500 17.14 57 5.00 5.15 5.25 5.00 5.25 5.00 5.25 5.2500 17.15 58 5.00 5.10 5.25 5.00 5.25 5.00 5.25 5.2500 17.16 59 5.00 5.05 5.25 5.00 5.25 5.00 5.25 5.2500 17.17 60 5.00 5.00 5.25 5.00 5.25 5.00 5.25 5.2500 17.18 61 5.00 5.00 5.25 5.00 5.25 5.00 5.25 5.2500 17.19 62 5.00 5.00 5.25 5.00 5.25 5.00 5.25 5.2500 17.20 63 5.00 5.00 5.25 5.00 5.25 5.00 5.25 5.2500 17.21 64 5.00 5.00 5.25 5.00 5.25 5.00 5.25 5.2500 17.22 65 5.00 5.00 5.25 5.00 5.25 5.00 5.25 5.2500 17.23 66 5.00 5.00 5.25 5.00 5.25 5.00 5.25 5.2500 17.24 67 5.00 5.00 5.25 5.00 5.25 5.00 5.25 5.2500 17.25 68 5.00 5.00 5.25 5.00 5.25 5.00 5.25 5.2500 17.26 69 5.00 5.00 5.25 5.00 5.25 5.00 5.25 5.2500 17.27 70 5.00 5.00 5.25 5.00 5.25 5.00 5.25 5.2500 17.28 71 5.00 5.00 5.00 17.29 (c) The actuarial valuation must use the applicable 17.30 following payroll growth assumption for calculating the 17.31 amortization requirement for the unfunded actuarial accrued 17.32 liability where the amortization retirement is calculated as a 17.33 level percentage of an increasing payroll: 17.34 payroll growth 17.35 plan assumption 17.36 general state employees retirement plan 5.00% 17.37 correctional state employees retirement plan 5.00 17.38 state patrol retirement plan 5.00 17.39 legislators retirement plan 5.00 17.40 elective state officers retirement plan 5.00 17.41 judges retirement plan 5.00 17.42 general public employees retirement plan 6.00 17.43 public employees police and fire 17.44 retirement plan 6.00 17.45 local government correctional service 17.46 retirement plan 6.00 17.47 teachers retirement plan 5.00 17.48 Duluth teachers retirement plan 5.00 17.49 Minneapolis teachers retirement plan 5.00 17.50 St. Paul teachers retirement plan 5.00 17.52 Subd.4e9. [OTHER ASSUMPTIONS.] The actuarial valuation 17.53 must use assumptions concerning mortality, disability, 17.54 retirement, withdrawal, retirement age, and any other relevant 17.55 demographic or economic factor. These assumptions must be set 17.56 at levels consistent with those determined in the most recent 17.57 quadrennial experience study completed under subdivision 5, if 17.58 required, or representative of the best estimate of future 18.1 experience, if a quadrennial experience study is not required. 18.2 The actuarial valuation must contain an exhibit indicating any 18.3 actuarial assumptions used in preparing the valuation report. 18.4 Subd.4f10. [PUBLIC SECTOR ACCOUNTING DISCLOSURE 18.5 INFORMATION.] The actuarial valuation must contain those 18.6 actuarial calculations that are necessary to allow the 18.7 retirement plan administration or participating employing units 18.8 to prepare the pension-related portions of annual financial 18.9 reporting that meet generally accepted accounting principles for 18.10 the public sector. 18.11 Subd.4g11. [AMORTIZATION CONTRIBUTIONS.] (a) In addition 18.12 to the exhibit indicating the level normal cost, the actuarial 18.13 valuation must contain an exhibit indicating the additional 18.14 annual contribution sufficient to amortize the unfunded 18.15 actuarial accrued liability. For funds governed by chapters 3A, 18.16 352, 352B, 352C, 353, 354, 354A, and 490, the additional 18.17 contribution must be calculated on a level percentage of covered 18.18 payroll basis by the established date for full funding in effect 18.19 when the valuation is prepared. For funds governed by chapter 18.20 3A, sections 352.90 through 352.951, chapters 352B, 352C, 18.21 sections 353.63 through 353.68, and chapters 353C, 354A, and 18.22 490, the level percent additional contribution must be 18.23 calculated assuming annual payroll growth of 6.5 percent. For 18.24 funds governed by sections 352.01 through 352.86 and chapter 18.25 354, the level percent additional contribution must be 18.26 calculated assuming an annual payroll growth of five percent. 18.27 For the fund governed by sections 353.01 through 353.46, the 18.28 level percent additional contribution must be calculated 18.29 assuming an annual payroll growth of six percent. For all other 18.30 funds, the additional annual contribution must be calculated on 18.31 a level annual dollar amount basis. 18.32 (b) For any fund other than the Minneapolis employees 18.33 retirement fund and the public employees retirement association 18.34 general plan, if there has not been a change in the actuarial 18.35 assumptions used for calculating the actuarial accrued liability 18.36 of the fund, a change in the benefit plan governing annuities 19.1 and benefits payable from the fund, a change in the actuarial 19.2 cost method used in calculating the actuarial accrued liability 19.3 of all or a portion of the fund, or a combination of the three, 19.4 which change or changes by itself or by themselves without 19.5 inclusion of any other items of increase or decrease produce a 19.6 net increase in the unfunded actuarial accrued liability of the 19.7 fund, the established date for full funding is the first 19.8 actuarial valuation date occurring after June 1, 2020. 19.9 (c) For any fund or plan other than the Minneapolis 19.10 employees retirement fund and the public employees retirement 19.11 association general plan, if there has been a change in any or 19.12 all of the actuarial assumptions used for calculating the 19.13 actuarial accrued liability of the fund, a change in the benefit 19.14 plan governing annuities and benefits payable from the fund, a 19.15 change in the actuarial cost method used in calculating the 19.16 actuarial accrued liability of all or a portion of the fund, or 19.17 a combination of the three, and the change or changes, by itself 19.18 or by themselves and without inclusion of any other items of 19.19 increase or decrease, produce a net increase in the unfunded 19.20 actuarial accrued liability in the fund, the established date 19.21 for full funding must be determined using the following 19.22 procedure: 19.23 (i) the unfunded actuarial accrued liability of the fund 19.24 must be determined in accordance with the plan provisions 19.25 governing annuities and retirement benefits and the actuarial 19.26 assumptions in effect before an applicable change; 19.27 (ii) the level annual dollar contribution or level 19.28 percentage, whichever is applicable, needed to amortize the 19.29 unfunded actuarial accrued liability amount determined under 19.30 item (i) by the established date for full funding in effect 19.31 before the change must be calculated using the interest 19.32 assumption specified in subdivision 4d in effect before the 19.33 change; 19.34 (iii) the unfunded actuarial accrued liability of the fund 19.35 must be determined in accordance with any new plan provisions 19.36 governing annuities and benefits payable from the fund and any 20.1 new actuarial assumptions and the remaining plan provisions 20.2 governing annuities and benefits payable from the fund and 20.3 actuarial assumptions in effect before the change; 20.4 (iv) the level annual dollar contribution or level 20.5 percentage, whichever is applicable, needed to amortize the 20.6 difference between the unfunded actuarial accrued liability 20.7 amount calculated under item (i) and the unfunded actuarial 20.8 accrued liability amount calculated under item (iii) over a 20.9 period of 30 years from the end of the plan year in which the 20.10 applicable change is effective must be calculated using the 20.11 applicable interest assumption specified in subdivision 4d in 20.12 effect after any applicable change; 20.13 (v) the level annual dollar or level percentage 20.14 amortization contribution under item (iv) must be added to the 20.15 level annual dollar amortization contribution or level 20.16 percentage calculated under item (ii); 20.17 (vi) the period in which the unfunded actuarial accrued 20.18 liability amount determined in item (iii) is amortized by the 20.19 total level annual dollar or level percentage amortization 20.20 contribution computed under item (v) must be calculated using 20.21 the interest assumption specified in subdivision 4d in effect 20.22 after any applicable change, rounded to the nearest integral 20.23 number of years, but not to exceed 30 years from the end of the 20.24 plan year in which the determination of the established date for 20.25 full funding using the procedure set forth in this clause is 20.26 made and not to be less than the period of years beginning in 20.27 the plan year in which the determination of the established date 20.28 for full funding using the procedure set forth in this clause is 20.29 made and ending by the date for full funding in effect before 20.30 the change; and 20.31 (vii) the period determined under item (vi) must be added 20.32 to the date as of which the actuarial valuation was prepared and 20.33 the date obtained is the new established date for full funding. 20.34 (d) For the Minneapolis employees retirement fund, the 20.35 established date for full funding is June 30, 2020. 20.36 (e) For the general employees retirement plan of the public 21.1 employees retirement associationgeneral plan, the established 21.2 date for full funding is June 30, 2031. 21.3 (f) For the retirement plans for which the annual actuarial 21.4 valuation indicates an excess of valuation assets over the 21.5 actuarial accrued liability, the valuation assets in excess of 21.6 the actuarial accrued liability must be recognized as a 21.7 reduction in the current contribution requirements by an amount 21.8 equal to the amortization of the excess expressed as a level 21.9 percentage of pay over a 30-year period beginning anew with each 21.10 annual actuarial valuation of the plan. 21.11 Subd.4h12. [ACTUARIAL GAINS AND LOSSES.] The actuarial 21.12 valuation must contain an exhibit consisting of an analysis by 21.13 the actuary explaining the net increase or decrease in the 21.14 unfunded actuarial accrued liability since the last valuation. 21.15 The explanation must subdivide the net increase or decrease in 21.16 the unfunded actuarial accrued liability into at least the 21.17 following parts: 21.18(a)(1) increases or decreases in the unfunded actuarial 21.19 accrued liability because of changes in benefits; 21.20(b)(2) increases and decreases in the unfunded actuarial 21.21 accrued liability because of changes in actuarial assumptions; 21.22(c)(3) increases or decreases in the unfunded actuarial 21.23 accrued liability attributable to actuarial gains or losses 21.24 resulting from any experience deviations from the assumptions on 21.25 which the valuation is based, as follows: 21.26 (i) actual investment earnings; 21.27 (ii) actual postretirement mortality rates; 21.28 (iii) actual salary increase rates; and 21.29 (iv) the remainder of the increase or decrease not 21.30 attributable to any separate source; 21.31(d)(4) increases or decreases in unfunded actuarial 21.32 accrued liability because of other reasons, including the effect 21.33 of any amortization contribution paid or additional amortization 21.34 contribution previously calculated but unpaid; and 21.35(e)(5) increases or decreases in unfunded actuarial 21.36 accrued liability because of changes in eligibility requirements 22.1 or groups included in the membership of the fund. 22.2 Subd.4i13. [MEMBERSHIP TABULATION.] (a) The actuarial 22.3 valuation must contain a tabulation of active membership and 22.4 annuitants in the fund. If the membership of a fund is under 22.5 more than one general benefit program, a separate tabulation 22.6 must be made for each general benefit program. 22.7 (b) The tabulations must be prepared by the administration 22.8 of the pension fund and must contain the following information: 22.9 (1) Active members Number 22.10 As of last valuation date 22.11 New entrants 22.12 Total 22.13 Separations from active service 22.14 Refund of contributions 22.15 Separation with deferred annuity 22.16 Separation with neither refund 22.17 nor deferred annuity 22.18 Disability 22.19 Death 22.20 Retirement with service annuity 22.21 Total separations 22.22 As of current valuation date 22.23 (2) Annuitants Number 22.24 As of last valuation date 22.25 New entrants 22.26 Total 22.27 Terminations 22.28 Deaths 22.29 Other 22.30 Total terminations 22.31 As of current valuation date 22.32 (c) The tabulation required under paragraph (b), clause 22.33 (2), must be made separately for each of the following classes 22.34 of benefit recipients: 22.35 (1) service retirement annuitants; 22.36 (2) disability benefit recipients; 23.1 (3) survivor benefit recipients; and 23.2 (4) deferred annuitants. 23.3 Subd.4j14. [ADMINISTRATIVE EXPENSES.] (a) The actuarial 23.4 valuation must indicate the administrative expenses of the fund, 23.5 expressed both in dollars and as a percentage of covered payroll. 23.6 (b) Administrative expenses are the costs incurred by the 23.7 retirement plans in the course of operating the plan, excluding 23.8 investment expenses. Investment expenses include all expenses 23.9 incurred for the retention of professional external investment 23.10 managers and professional investment consultants, custodian bank 23.11 fees, investment transaction costs, and the costs incurred by 23.12 the retirement plans to manage investment portfolios or assets 23.13 internally. Investment expenses must be deducted from the 23.14 investment return used in the actuarial valuation, and must not 23.15 be included in administrative expenses when calculating the 23.16 allowance for expenses. 23.17 Subd.4k15. [BENEFIT PLAN SUMMARY.] The actuarial 23.18 valuation must contain a summary of the principal provisions of 23.19 the benefit plan upon which the valuation is based. 23.20 Subd.516. [QUADRENNIAL EXPERIENCE STUDY; CONTENTS.] A 23.21 quadrennial experience study, if required, must contain an 23.22actuarialanalysis by the approved actuary of the experience of 23.23 the fund and a comparison of the experience with the actuarial 23.24 assumptions on which the most recent actuarial valuation of the 23.25 retirement fund was based. 23.26 Subd.617. [ACTUARIAL SERVICES BY APPROVED ACTUARIES.] 23.27 (a) The actuarial valuation or quadrennial experience study must 23.28 be made and any actuarial consulting services for a retirement 23.29 fund or plan must be provided by an approved actuary. The 23.30 actuarial valuation or quadrennial experience study must include 23.31 a signed written declaration that it has been prepared according 23.32 to sections 356.20 to 356.23 and according to the most recent 23.33 standards for actuarial work adopted by the legislative 23.34 commission on pensions and retirement. 23.35 (b) Actuarial valuations,or experience studies prepared by 23.36 an approved actuary retained by a retirement fund or plan must 24.1 be submitted to the legislative commission on pensions and 24.2 retirement within ten days of the submission of the document to 24.3 the retirement fund or plan. 24.4 Subd.718. [ESTABLISHMENT OF ACTUARIAL ASSUMPTIONS.] (a) 24.5 The actuarial assumptions used for the preparation of actuarial 24.6 valuations under this section that are other than those set 24.7 forth in this section may be changed only with the approval of 24.8 the legislative commission on pensions and retirement. 24.9 (b) A change in the applicable actuarial assumptions may be 24.10 proposed by the governing board of the applicable pension fund 24.11 or relief association, by the actuary retained by the 24.12 legislative commission on pensions and retirement, by the 24.13 actuarial advisor to a pension fund governed by chapter 352, 24.14 353, 354, or 354A, or by the actuary retained by a local police 24.15 or firefighters relief association governed by sections 69.77 or 24.16 69.771 to 69.776, if one is retained. 24.17 Sec. 8. Minnesota Statutes 2000, section 356.216, is 24.18 amended to read: 24.19 356.216 [CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL POLICE 24.20 AND FIRE FUNDS.] 24.21 (a) The provisions of section 356.215governingthat govern 24.22 the contents of actuarial valuationsshallmust apply to any 24.23 local police or fire pension fund or relief association required 24.24 to make an actuarial report under this section, except as 24.25 follows: 24.26 (1) in calculating normal cost and other requirements, if 24.27 required to be expressed as a level percentage of covered 24.28 payroll, the salaries used in computing covered payrollshall24.29 must be the maximum rate of salaryfromon which retirement and 24.30 survivorship credits and amounts of benefits are determined and 24.31 from which any member contributions are calculated and deducted; 24.32 (2) in lieu of the amortization date specified in section 24.33 356.215, subdivision4g11, the appropriate amortization target 24.34 date specified in section 69.77, subdivision 2b, or 69.773, 24.35 subdivision 4, clause (c),shallmust be used in calculating any 24.36 required amortization contribution; 25.1 (3) in addition to the tabulation of active members and 25.2 annuitants provided for in section 356.215, subdivision4i13, 25.3 the member contributions for active members for the calendar 25.4 year and the prospective annual retirement annuities under the 25.5 benefit plan for active membersshallmust be reported; 25.6 (4) actuarial valuations requiredpursuant tounder section 25.7 69.773, subdivision 2,shallmust be made at least every four 25.8 years and actuarial valuations requiredpursuant tounder 25.9 section 69.77 shall be made annually;and25.10 (5) the actuarial balance sheet showing accrued assets 25.11 valued at market value if the actuarial valuation is required to 25.12 be prepared at least every four years or valued as current 25.13 assets under section 356.215, subdivision 1, clause (6), or 25.14 paragraph (b), whichever applies, if the actuarial valuation is 25.15 required to be prepared annually, actuarial accrued liabilities, 25.16 and the unfunded actuarial accrued liabilityshallmust include 25.17 the following required reserves: 25.18(a)(i) For active members 25.19 1. Retirement benefits 25.20 2. Disability benefits 25.21 3. Refund liability due to death or withdrawal 25.22 4. Survivors' benefits 25.23(b)(ii) For deferred annuitants' benefits 25.24(c)(iii) For former members without vested rights 25.25(d)(iv) For annuitants 25.26 1. Retirement annuities 25.27 2. Disability annuities 25.28 3. Surviving spouses' annuities 25.29 4. Surviving children's annuities 25.30 In addition to those required reserves, separate items 25.31shallmust be shown for additional benefits, if any, which may 25.32 not be appropriately included in the reserves listed above.; and 25.33 (6) actuarial valuationsshall beare due by the first day 25.34 of the seventh month after the end of the fiscal year which the 25.35 actuarial valuation covers. 25.36 (b) For a relief association in a city of the first class 26.1 with a population of more than 300,000, the following provisions 26.2 additionally apply: 26.3 (1) in calculating the actuarial balance sheet, unfunded 26.4 actuarial accrued liability, and amortization contribution of 26.5 the relief association, "current assets" means the value of all 26.6 assets at cost, including realized capital gains and losses, 26.7 plus or minus, whichever applies, the average value of total 26.8 unrealized capital gains or losses for the most recent 26.9 three-year period ending with the end of the plan year 26.10 immediately preceding the actuarial valuation report 26.11 transmission date; and 26.12 (2) in calculating the applicable portions of the actuarial 26.13 valuation, an annual preretirement interest assumption of six 26.14 percent, an annual postretirement interest assumption of six 26.15 percent, and an annual salary increase assumption of four 26.16 percent must be used. 26.17 Sec. 9. Minnesota Statutes 2000, section 356.217, is 26.18 amended to read: 26.19 356.217 [MODIFICATIONS IN ACTUARIAL SERVICES.] 26.20 (a) The cost of any requested benefit projections prepared 26.21 by the commission-retained actuary relating to the Minnesota 26.22 postretirement investment fund for the state board of investment 26.23 is payable by the state board of investment. 26.24 (b) Actuarial valuations under section 356.215, for July 1, 26.25 1991, and thereafter, are not required to have an individual 26.26 commentary section. The commentary section, if omitted from the 26.27 individual plan actuarialvaluationvaluations, must be included 26.28 in an appropriate generalized format as part of the report to 26.29 the legislature under section 3.85, subdivision 11. 26.30 (c) Actuarial valuations under section 356.215, for July 1, 26.31 1991, and thereafter, are not required to contain separate 26.32 actuarial valuation results for basic and coordinated programs 26.33 unless each program has a membership of at least ten percent of 26.34 the total membership of the fund. Actuarial valuations under 26.35 section 356.215, for July 1, 1991, and thereafter, are not 26.36 required to contain cash flow forecasts. 27.1 (d) Actuarial valuations of the public employees police and 27.2 fire fund local consolidation accounts for July 1, 1991, and 27.3 thereafter, are not required to contain separate tabulations or 27.4 summaries of active member, service retirement, disability 27.5 retirement, and survivor data for each local consolidation 27.6 account. 27.7 (e) The commission-retained actuary is: 27.8 (1) required to publish experience findings for those 27.9 retirement plans for which experience findings are required only 27.10 on a quadrennial basis for the four-year period ending June 30, 27.11 1992, and every four years thereafter; 27.12 (2) not required to prepare a separate experience analysis 27.13 or publish separate experience findings for basic and 27.14 coordinated programs if separate actuarial valuation results for 27.15 the programs are not required; and 27.16 (3) not required to calculate investment rate of return 27.17 experience results on any basis other than current asset value 27.18 as defined in section 356.215, subdivision 1, clause (6). 27.19 Sec. 10. Minnesota Statutes 2000, section 356.219, is 27.20 amended to read: 27.21 356.219 [DISCLOSURE OF PUBLIC PENSION PLAN INVESTMENT 27.22 PORTFOLIO AND PERFORMANCE INFORMATION.] 27.23 Subdivision 1. [REPORT REQUIRED.] (a) Except as indicated 27.24 in subdivision 4, the state board of investment, on behalf of 27.25 the public pension funds and programs for which it is the 27.26 investment authority, and any Minnesota public pension plan that 27.27 is not fully invested through the state board of investment, 27.28 including a local police or firefighters' relief association 27.29 governed by sections 69.77 or 69.771 to 69.775, shall report the 27.30 information specified in subdivision 3 to the state auditor. 27.31 The state auditor may prescribe a form or forms for the purposes 27.32 of the reporting requirements contained in this section. 27.33 (b) A local police or firefighters' relief association 27.34 governed by section 69.77 or sections 69.771 to 69.775 is fully 27.35 invested during a given calendar year for purposes of this 27.36 section if all assets of the applicable pension plan beyond 28.1 sufficient cash equivalent investments to cover six months 28.2 expected expenses are invested under section 11A.17. The board 28.3 of any fully invested public pension plan remains responsible 28.4 for submitting investment policy statements and subsequent 28.5 revisions as required by subdivision 3, paragraph (a). 28.6 (c) For purposes of this section, the state board of 28.7 investment is considered to be the investment authority for any 28.8 Minnesota public pension fund required to be invested by the 28.9 state board of investment under section 11A.23, or for any 28.10 Minnesota public pension fund authorized to invest in the 28.11 supplemental investment fund under section 11A.17 and which is 28.12 fully invested by the state board of investment. 28.13 Subd. 2. [ASSET CLASS DEFINITION.] (a) For purposes of 28.14 this section, "asset class" means any of the following asset 28.15 groupings as authorized in applicable law, bylaws, or articles 28.16 of incorporation: 28.17 (1) cash and any cash equivalent investments with 28.18 maturities of one year or less when issued; 28.19 (2) debt securities with maturities greater than one year 28.20 when issued, including but not limited to mortgage participation 28.21 certificates and pools, asset backed securities, guaranteed 28.22 investment contracts, and authorized government and corporate 28.23 obligations of corporations organized under laws of the United 28.24 States or any state, or the Dominion of Canada or its provinces; 28.25 (3) stocks or convertible issues of any corporation 28.26 organized under laws of the United States or any state, or the 28.27 Dominion of Canada or its provinces, or any corporation listed 28.28 on the New York Stock Exchange or the American Stock Exchange; 28.29 (4) international stocks or convertible issues; 28.30 (5) international debt securities; and 28.31 (6) real estate and venture capital. 28.32 (b) If the pension plan is investing under section 69.77, 28.33 subdivision 2g, section 69.775, or any other applicable law, in 28.34 open-end investment companies registered under the federal 28.35 Investment Company Act of 1940, or in the Minnesota supplemental 28.36 investment fund under section 11A.17, this investment must be 29.1 included under an asset class indicated in paragraph (a), 29.2 clauses (1) through (6), as appropriate. If the investment 29.3 vehicle includes underlying securities from more than one asset 29.4 class as indicated by paragraph (a), clauses (1) through (6), 29.5 the investment may be treated as a separate asset class. 29.6 Subd. 3. [CONTENT OF REPORTS.] (a) The report required by 29.7 subdivision 1 must include a written statement of the investment 29.8 policy in effect on June 30, 1997, if that statement has not 29.9 been previously submitted. Following that date, subsequent 29.10 reports must include investment policy changes and the effective 29.11 date of each policy change rather than a complete statement of 29.12 investment policy, unless the state auditor requests submission 29.13 of a complete current statement. The report must also include 29.14 the information required by the following paragraphs, as 29.15 applicable. 29.16 (b) If a public pension plan has a total market value of 29.17 $10,000,000 or more as of the beginning of the calendar year, 29.18 the report required by subdivision 1 must include the market 29.19 value of the total portfolio and the market value of each 29.20 investment account, investment portfolio, or asset class 29.21 included in the pension fund as of the beginning of the calendar 29.22 year and for each month, and the amount and date of each 29.23 injection and withdrawal to the total portfolio and to each 29.24 investment account, investment portfolio, or asset class. If a 29.25 public pension plan once files a report under this paragraph, it 29.26 must continue reporting under this paragraph for any subsequent 29.27 year in which the public pension plan is not fully invested as 29.28 specified in subdivision 1, paragraph (b), even if asset values 29.29 drop below $10,000,000 in market value inathat subsequent year. 29.30 (c) For public pension plans to which paragraph (b) 29.31 applies, the report required by subdivision 1 must also include 29.32 a calculation of the total time-weighted rate of return 29.33 available from index-matching investments assuming the asset 29.34 class performance targets and target asset mix indicated in the 29.35 written statement of investment policy. The provided 29.36 information must include a description of indices used in the 30.1 analyses and an explanation of why those indices are 30.2 appropriate. This paragraph does not apply to any fully 30.3 invested plan, as defined by subdivision 1, paragraph (b). 30.4 Reporting by the state board of investment under this paragraph 30.5 is limited to information on the Minnesota public pension plans 30.6 required to be invested by the state board of investment under 30.7 section 11A.23. 30.8 (d) If a public pension plan has a total market value of 30.9 less than $10,000,000 as of the beginning of the calendar year 30.10 and was never required to file under paragraph (b), the report 30.11 required by subdivision 1 must include the amount and date of 30.12 each total portfolio injection and withdrawal. In addition, the 30.13 report must include the market value of the total portfolio as 30.14 of the beginning of the calendar year and for each quarter. 30.15 (e) Any public pension plan reporting under paragraph (b) 30.16 or (d) may include computed time-weighted rates of return with 30.17 the report, in addition to all other required information, as 30.18 applicable. If these returns are supplied, the individual who 30.19 computed the returns must certify that the returns are net of 30.20 all costs and fees, including investment management fees, and 30.21 that the procedures used to compute the returns are consistent 30.22 with bank administration institute studies of investment 30.23 performance measurement and association of investment management 30.24 and research presentation standards. 30.25 (f) For public pension plans reporting under paragraph (d), 30.26 the public pension plan must retain supporting information 30.27 specifying the date and amount of each injection and withdrawal 30.28 to each investment account and investment portfolio. The public 30.29 pension plan must also retain the market value of each 30.30 investment account and investment portfolio at the beginning of 30.31 the calendar year and for each quarter. Information that is 30.32 required to be collected and retained for any given year or 30.33 years under this paragraph must be submitted to the office of 30.34 the state auditor if the office of the state auditor requests in 30.35 writing that the information be submitted by a public pension 30.36 plan or plans, or be submitted by the state board of investment 31.1 for any plan or plans for which the state board of investment is 31.2 the investment authority under this section. If the state 31.3 auditor requests information under this subdivision, and the 31.4 public plan fails to comply, the pension planwill beis subject 31.5 to penalties under subdivision 5, unless penalties are waived by 31.6 the state auditor under that subdivision. 31.7 Subd. 4. [ALTERNATIVE REPORTING; CERTAIN PLANS.] In lieu 31.8 of requirements in subdivision 3, the applicable administration 31.9 for the individual retirement account plans under chapters 354B 31.10 and 354D and for the University of Minnesota faculty retirement 31.11 plan shall submit computed time-weighted rates of return to the 31.12 office of the state auditor. These time-weighted rates of 31.13 return must cover the most recent complete calendar year, and 31.14 must be computed separately for each investment option available 31.15 to plan members. To the extent feasible, the returns must be 31.16 computed net of all investment costs, fees, and charges, so that 31.17 the computed return reflects the net time-weighted return 31.18 available to the investor. If this is not practical, the 31.19 existence of any remaining investment cost, fee, or charge which 31.20 could further lower the net return must be disclosed. The 31.21 procedures used to compute the returns must be consistent with 31.22 bank administration institute studies of investment performance 31.23 measurement and association of investment management and 31.24 research presentation standards, or, if applicable, securities 31.25 exchange commission requirements. The individual who computes 31.26 the returns must certify that the supplied returns comply with 31.27 this subdivision. The applicable plan administrator must also 31.28 submit, with the return information, the total amounts invested 31.29 by the plan members, in aggregate, in each investment option as 31.30 of the last day of the calendar year. 31.31 Subd. 5. [PENALTY FOR NONCOMPLIANCE.] Failure to comply 31.32 with the reporting requirements of this sectionshallmust 31.33 result in a withholding of all state aid or state appropriation 31.34 to which the pension plan may otherwise be directly or 31.35 indirectly entitled until the pension plan has complied with the 31.36 reporting requirements. The state auditor shall instruct the 32.1 commissioners of revenue and finance to withhold any state aid 32.2 or state appropriation from any pension plan that fails to 32.3 comply with the reporting requirements contained in this 32.4 section, until the pension plan has complied with the reporting 32.5 requirements. The state auditor may waive the withholding of 32.6 state aid or state appropriations if the state auditor 32.7 determines in writing that compliance would create an excessive 32.8 hardship for the pension plan. 32.9 Subd. 6. [INVESTMENT DISCLOSURE REPORT.] (a) The state 32.10 auditor shall prepare an annual report to the legislature on the 32.11 investment performance of the various public pension plans 32.12 subject to this section. The content of the report is specified 32.13 in paragraphs (b) to (e). 32.14 (b) For each public pension plan reporting under 32.15 subdivision 3, paragraph (b), the state auditor shall compute 32.16 and report total portfolio and asset class time-weighted rates 32.17 of return, net of all investment costs and fees. 32.18 (c) For each public pension plan reporting under 32.19 subdivision 3, paragraph (d), the state auditor shall compute 32.20 and report total portfolio time-weighted rates of return, net of 32.21 all costs and fees. If the state auditor has requested data for 32.22 a plan under subdivision 3, paragraph (f), the state auditor may 32.23 also compute and report asset class time-weighted rates of 32.24 return, net of all costs and fees. 32.25 (d) The report by the state auditor must include the 32.26 information submitted by the pension plans under subdivision 3, 32.27 paragraph (c), or a synopsis of that information. 32.28 (e) The report by the state auditor may also include a 32.29 presentation of multiyear performance, information collected 32.30 under subdivision 4, and any other information or analysis 32.31 deemed appropriate by the state auditor. 32.32 Subd. 7. [EXPENSE OF REPORT.] All administrative expenses 32.33 incurred relating to the investment report by the state auditor 32.34 described in subdivision 6 must be borne by the office of the 32.35 state auditor and may not be charged back to the entities 32.36 described in subdivisions 1 or 4. 33.1 Subd. 8. [TIMING OF REPORTS.] (a) For salaried firefighter 33.2 relief associations, police relief associations, and volunteer 33.3 firefighter relief associations, the information required under 33.4 this section must be submitted by the due date for reports 33.5 required under section 69.051, subdivision 1 or 1a, as 33.6 applicable. If a relief association satisfies the definition of 33.7 a fully invested plan under subdivision 1, paragraph (b), for 33.8 the calendar year covered by the report required under section 33.9 69.051, subdivision 1 or 1a, as applicable, the chief 33.10 administrative officer of the covered pension plan shall certify 33.11 that compliance on a form prescribed by the state auditor. The 33.12 state auditor shall transmit annually to the state board of 33.13 investment a list or lists of covered pension plans which 33.14 submitted certifications, in order to facilitate reporting by 33.15 the state board of investment under paragraph (c) of this 33.16 subdivision. 33.17 (b) For the Minneapolis teachers retirement fund 33.18 association, the St. Paul teachers retirement fund association, 33.19 the Duluth teachers retirement fund association, the Minneapolis 33.20 employees retirement fund, the University of Minnesota faculty 33.21 supplemental retirement plan, and the applicable administrators 33.22 for the University of Minnesota faculty retirement plan and the 33.23 individual retirement account plans under chapters 354B and 33.24 354D, the information required under this section must be 33.25 submitted to the state auditor by June 1 of each year. 33.26 (c) The state board of investment, on behalf of pension 33.27 funds specified in subdivision 1, paragraph (c), must report 33.28 information required under this section by September 1 of each 33.29 year. 33.30 Sec. 11. Minnesota Statutes 2000, section 356.22, is 33.31 amended to read: 33.32 356.22 [INTERPRETATION.] 33.33 Subdivision 1. [PROVISION OF ADDITIONAL VALUATIONS.] No 33.34 provision in sections 356.20 to 356.23shallmay be construedto33.35 in any way to limit any of the enumerated pension and retirement 33.36 funds from furnishing additional actuarial valuations or 34.1 experience studies, or additional data and actuarial 34.2 calculations, as may be requested by the legislature or any 34.3 standing committee or by the legislative commission on pensions 34.4 and retirement. 34.5 Subd. 2. [ACCELERATED AMORTIZATION.] No provision in 34.6 sections 356.20 to 356.23shallmay be construed to preclude any 34.7 public pension and retirement fund enumerated in section 356.20, 34.8 subdivision 2, from requesting, or the legislature from 34.9 providing for, the amortization of any unfunded actuarial 34.10 accrued liability in a shorter period of time than by the 34.11 established date for full funding as determinedpursuant to34.12 under section 356.215, subdivision4g11. 34.13 Subd. 3. [ADDITIONAL REQUIRED VALUATIONS.] The legislature 34.14 or any committee or commissionthereof now in existence or34.15hereafter createdwhich has assigned to it the subject of public 34.16 pensions or public retirement plans may require actuarial 34.17 valuations and experience studies in conformity with the 34.18 provisions of sections 356.20 to 356.23 from any public pension 34.19 and retirement plan or fund, whether enumerated in sections 34.20 356.20 to 356.23 or otherwise. 34.21 Sec. 12. Minnesota Statutes 2000, section 356.23, is 34.22 amended to read: 34.23 356.23 [SUPPLEMENTAL VALUATIONS; ALTERNATIVE REPORTS AND 34.24 VALUATIONS.] 34.25 Subdivision 1. [SUPPLEMENTAL ACTUARIAL VALUATIONS.] Any 34.26 supplemental actuarial valuations prepared on behalf of any 34.27 governing or managing board of any pension and retirement fund 34.28 enumerated in section 356.20, subdivision 2, by an approved 34.29 actuary,shallmust be prepared in accordance with the 34.30 applicable provisions of sections 356.20 to 356.23 and with the 34.31 standards adopted by the legislative commission on pensions and 34.32 retirement. Any pension and retirement fund which prepares an 34.33 alternative actuarial valuation under subdivision 2shallalso 34.34 must have a supplemental actuarial valuation prepared. 34.35 Subd. 2. [ALTERNATIVE REPORTS AND VALUATIONS.] In addition 34.36 to the financial reports and actuarial valuations required by 35.1 sections 356.20 to 356.23, the governing or managing board of 35.2 any fund concerned may submit alternative reports and actuarial 35.3 valuations for distribution to the legislature, any of its 35.4 committees, or the legislative commission on pensions and 35.5 retirement on a different basis or on different assumptions than 35.6 are specified in sections 356.20 to 356.23. The assumptions and 35.7 basis of any alternative reports and valuationsshallmust be 35.8 clearly stated in the document. 35.9 LIMITATIONS ON SUPPLEMENTAL AND 35.10 LOCAL RETIREMENT PLANS 35.11 Sec. 13. Minnesota Statutes 2001 Supplement, section 35.12 356.24, subdivision 1, is amended to read: 35.13 Subdivision 1. [RESTRICTION; EXCEPTIONS.] It is unlawful 35.14 for a school district or other governmental subdivision or state 35.15 agency to levy taxes for, or to contribute public funds to a 35.16 supplemental pension or deferred compensation plan that is 35.17 established, maintained, and operated in addition to a primary 35.18 pension program for the benefit of the governmental subdivision 35.19 employees other than: 35.20 (1) to a supplemental pension plan that was established, 35.21 maintained, and operated before May 6, 1971; 35.22 (2) to a plan that provides solely for group health, 35.23 hospital, disability, or death benefits; 35.24 (3) to the individual retirement account plan established 35.25 by chapter 354B; 35.26 (4) to a plan that provides solely for severance pay under 35.27 section 465.72 to a retiring or terminating employee; 35.28 (5) for employees other than personnel employed by the 35.29 board of trustees of the Minnesota state colleges and 35.30 universities and covered under the higher education supplemental 35.31 retirement plan under chapter 354C, if the supplemental plan 35.32 coverage is provided for in a personnel policy of the public 35.33 employer or in the collective bargaining agreement between the 35.34 public employer and the exclusive representative of public 35.35 employees in an appropriate unit, in an amount matching employee 35.36 contributions on a dollar for dollar basis, but not to exceed an 36.1 employer contribution of $2,000 a year per employee; 36.2 (i) to the state of Minnesota deferred compensation plan 36.3 under section 352.96; or 36.4 (ii) in payment of the applicable portion of the 36.5 contribution made to any investment eligible under section 36.6 403(b) of the Internal Revenue Code, if the employing unit has 36.7 complied with any applicable pension plan provisions of the 36.8 Internal Revenue Code with respect to the tax-sheltered annuity 36.9 program during the preceding calendar year; 36.10 (6) for personnel employed by the board of trustees of the 36.11 Minnesota state colleges and universities and not covered by 36.12 clause (5), to the supplemental retirement plan under chapter 36.13 354C, if the supplemental plan coverage is provided for in a 36.14 personnel policy or in the collective bargaining agreement of 36.15 the public employer with the exclusive representative of the 36.16 covered employees in an appropriate unit, in an amount matching 36.17 employee contributions on a dollar for dollar basis, but not to 36.18 exceed an employer contribution of $2,700 a year for each 36.19 employee; 36.20 (7) to a supplemental plan or to a governmental trust to 36.21 save for postretirement health care expenses qualified for 36.22 tax-preferred treatment under the Internal Revenue Code, if the 36.23 supplemental plan coverage is provided for in a personnel policy 36.24 or in the collective bargaining agreement of a public employer 36.25 with the exclusive representative of the covered employees in an 36.26 appropriate unit; or 36.27 (8) to the laborer's national industrial pension fund for 36.28 the employees of a governmental subdivision who are covered by a 36.29 collective bargaining agreement that provides for coverage by 36.30 that fund and that sets forth a fund contribution rate, but not 36.31 to exceed an employer contribution of $2,000 per year per 36.32 employee. 36.33 Sec. 14. Minnesota Statutes 2000, section 356.24, 36.34 subdivision 1b, is amended to read: 36.35 Subd. 1b. [VENDOR RESTRICTIONS.] A personnel policy for 36.36 unrepresented employees, or a collective bargaining agreement 37.1 for represented employees, or a school board for school district 37.2 employees may establish limits on the number of vendors of plans 37.3 covered by the exceptions set forth in subdivision 1 that it 37.4 will utilize and conditions under whichthethose vendors may 37.5 contact employees both during working hours and after working 37.6 hours. 37.7 Sec. 15. Minnesota Statutes 2000, section 356.24, 37.8 subdivision 1c, is amended to read: 37.9 Subd. 1c. [STATE BOARD OF INVESTMENT REVIEW.] (a) Any 37.10 insurance company, mutual fund company, or similar company 37.11 providing investments eligible under section 403(b) of the 37.12 Internal Revenue Code and eligible to receive employer 37.13 contributions under this section may request the state board of 37.14 investment, in conjunction with the department of commerce, to 37.15 review the financial standing of the company, the 37.16 competitiveness of its investment options and returns, and the 37.17 level of all charges and fees impacting those returns. 37.18 (b) The state board of investment may establish a fee for 37.19 each review. The state board of investment must maintain and 37.20 have available a list of all reviewed companies. 37.21 (c) In reviewing companies under this section, the state 37.22 board of investment must not be considered to be acting as a 37.23 fiduciary or to be engaged in a fiduciary activity under chapter 37.24 356A or common law. 37.25 Sec. 16. Minnesota Statutes 2000, section 356.24, 37.26 subdivision 2, is amended to read: 37.27 Subd. 2. [LIMIT ON CERTAIN CONTRIBUTIONS OR BENEFIT 37.28 CHANGES.] No change in benefits or employer contributions in a 37.29 supplemental pension plan to which this section applies that 37.30 occurs after May 6, 1971, is effective without prior legislative 37.31 authorization. 37.32 Sec. 17. Minnesota Statutes 2000, section 356.245, is 37.33 amended to read: 37.34 356.245 [LOCAL ELECTED OFFICIALS.] 37.35 An elected official who is covered by section 353.01, 37.36 subdivision 2a, is eligible to participate in the state of 38.1 Minnesota deferred compensation plan under section 356.24.A38.2 The applicable local governmental unit may make the matching 38.3 employer contributions authorized by that section on the part of 38.4 a participating elected official. 38.5 Sec. 18. Minnesota Statutes 2000, section 356.25, is 38.6 amended to read: 38.7 356.25 [LOCAL GOVERNMENTAL PENSION FUND PROHIBITIONS; 38.8 EXCLUSIONS.] 38.9 Notwithstanding any other provision of law or charter to 38.10 the contrary, no city, county, public agency or instrumentality, 38.11 or other political subdivisionshallmay, after August 1, 1975, 38.12 establish for any of its employeesanya local pension plan or 38.13 fund financed in whole or in part from public funds, other than 38.14 a volunteer firefighter's relief association that is established 38.15pursuant tounder chapter 424A and is governed by sections 38.16 69.771 to 69.776. 38.17 PUBLIC RETIREMENT PLAN PORTABILITY MECHANISMS 38.18 Sec. 19. Minnesota Statutes 2000, section 356.30, is 38.19 amended to read: 38.20 356.30 [COMBINED SERVICE ANNUITY.] 38.21 Subdivision 1. [ELIGIBILITY; COMPUTATION OF ANNUITY.] (a) 38.22 Notwithstanding any provisions of the laws governing the 38.23 retirement plans enumerated in subdivision 3, a person who has 38.24 met the qualifications of paragraph (b) may elect to receive a 38.25 retirement annuity from each retirement plan in which the person 38.26 has at least one-half year of allowable service, based on the 38.27 allowable service in each plan, subject to the provisions of 38.28 paragraph (c). 38.29 (b) A person may receive, upon retirement, a retirement 38.30 annuity from each retirement plan in which the person has at 38.31 least one-half year of allowable service, and augmentation of a 38.32 deferred annuity calculated under the laws governing each public 38.33 pension plan or fund named in subdivision 3, from the date the 38.34 person terminated all public service if: 38.35 (1) the person has allowable service totaling an amount 38.36 that allows the person to receive an annuity in any two or more 39.1 of the enumerated plans; and 39.2 (2) the person has not begun to receive an annuity from any 39.3 enumerated plan or the person has made application for benefits 39.4 from each applicable plan and the effective dates of the 39.5 retirement annuity with each plan under which the person chooses 39.6 to receive an annuity are within a one-year period. 39.7 (c) The retirement annuity from each plan must be based 39.8 upon the allowable service, accrual rates, and average salary in 39.9 the applicable plan except as further specified or modified in 39.10 the following clauses: 39.11 (1) the laws governing annuities must be the law in effect 39.12 on the date of termination from the last period of public 39.13 service under a covered retirement plan with which the person 39.14 earned a minimum of one-half year of allowable service credit 39.15 during that employment; 39.16 (2) the "average salary" on which the annuity from each 39.17 covered plan in which the employee has credit in a formula plan 39.18shallmust be based on the employee's highest five successive 39.19 years of covered salary during the entire service in covered 39.20 plans; 39.21 (3) accrual rates to be used by each plan must be those 39.22 percentages prescribed by each plan's formula as continued for 39.23 the respective years of allowable service from one plan to the 39.24 next, recognizing all previous allowable service with the other 39.25 covered plans; 39.26 (4) allowable service in all the plans must be combined in 39.27 determining eligibility for and the application of each plan's 39.28 provisions in respect to reduction in the annuity amount for 39.29 retirement prior to normal retirement age; and 39.30 (5) the annuity amount payable for any allowable service 39.31 under a nonformula plan of a covered plan must not be affected, 39.32 but such service and covered salary must be used in the above 39.33 calculation. 39.34 (d) This section does not apply to any person whose final 39.35 termination from the last public service under a covered planis39.36prior towas before May 1, 1975. 40.1 (e) For the purpose of computing annuities under this 40.2 section, the accrual rates used by any covered plan, except the 40.3 public employees police and fire plan, the judges' retirement 40.4 fund, and the state patrol retirement plan, must not exceed the 40.5 percent specified in section356.19356.315, subdivision 4, per 40.6 year of service for any year of service or fraction thereof. 40.7 The formula percentage used by the judges' retirement fund must 40.8 not exceed thepercentpercentage rate specified in section 40.9356.19356.315, subdivision 8, per year of service for any year 40.10 of service or fraction thereof. The accrual rate used by the 40.11 public employees police and fire plan and the state patrol 40.12 retirement plan must not exceed thepercentpercentage rate 40.13 specified in section356.19356.315, subdivision 6, per year of 40.14 service for any year of service or fraction thereof. The 40.15 accrual rate or rates used by the legislators retirement plan 40.16 and the elective state officers retirement plan must not exceed 40.17 2.5 percent, but this limit does not apply to the adjustment 40.18 provided under section 3A.02, subdivision 1, paragraph (c), or 40.19 352C.031, paragraph (b). 40.20 (f) Any period of time for which a person has credit in 40.21 more than one of the covered plans must be used only once for 40.22 the purpose of determining total allowable service. 40.23 (g) If the period of duplicated service credit is more than 40.24 one-half year, or the person has credit for more than one-half 40.25 year, with each of the plans, each plan must apply its formula 40.26 to a prorated service credit for the period of duplicated 40.27 service based on a fraction of the salary on which deductions 40.28 were paid to that fund for the period divided by the total 40.29 salary on which deductions were paid to all plans for the period. 40.30 (h) If the period of duplicated service credit is less than 40.31 one-half year, or when added to other service credit with that 40.32 plan is less than one-half year, the service credit must be 40.33 ignored and a refund of contributions made to the person in 40.34 accord with that plan's refund provisions. 40.35 Subd. 2. [REPAYMENT OF REFUNDS.] A person who has service 40.36 credit in one of thefundsretirement plans enumerated in 41.1 subdivision 3 and who is employed or was formerly employed in a 41.2 position covered by one of thesefundscovered plans but also 41.3 has received a refund from any other of thesefundscovered 41.4 plans, may repay the refund to the respectivefundplan under 41.5 terms and conditions that are consistent with the laws governing 41.6 the otherfundplan, except that the person need not be a 41.7 currently contributing member of thefundplan to which the 41.8 refund is repaid at the time the repayment is made. Unless 41.9 otherwise provided by statute, the repayment of a refund under 41.10 this subdivision may only be made within six months following 41.11 termination of employment from a position covered by one of the 41.12fundscovered plans enumerated in subdivision 3 or before the 41.13 date of retirement from the fund to which the refund is repaid, 41.14 whichever is earlier. 41.15 Subd. 2a. [PURCHASES OF PRIOR SERVICE.] If a purchase of 41.16 prior service is made under the provisions of Laws 1988, chapter 41.17 709, article 3, or any similar special or general law provision 41.18 which allows a purchase of service credit in any of thefunds41.19 retirement plans enumerated in subdivision 3, the amount of 41.20 required reserves calculated as prescribed in Laws 1988, chapter 41.21 709, article 3, must be paid to eachfundplan based on the 41.22 amount of benefit increase payable from thatfundplan as a 41.23 result of the purchase of prior service. 41.24 Subd. 3. [COVEREDFUNDSPLANS.] This section applies to 41.25 the following retirementfundsplans: 41.26 (1) the general state employees retirementfundplan of the 41.27 Minnesota state retirement system, establishedpursuant tounder 41.28 chapter 352; 41.29 (2) the correctional state employees retirementprogramof 41.30 the Minnesota state retirement system, establishedpursuant to41.31 under chapter 352; 41.32 (3) the unclassified employees retirementplanprogram, 41.33 establishedpursuant tounder chapter 352D; 41.34 (4) the state patrol retirementfundplan, established 41.35pursuant tounder chapter 352B; 41.36 (5) the legislators retirement plan, establishedpursuant42.1tounder chapter 3A; 42.2 (6) the elective state officers' retirement plan, 42.3 establishedpursuant tounder chapter 352C; 42.4 (7) the general employees retirement plan of the public 42.5 employees retirement association, establishedpursuant tounder 42.6 chapter 353; 42.7 (8) the public employees police and firefundplan of the 42.8 public employees retirement association, establishedpursuant to42.9 under chapter 353; 42.10 (9)public employeesthe local government correctional 42.11 service retirement plan of the public employees retirement 42.12 association, establishedpursuant tounder chapter 353E; 42.13 (10) the teachers retirement association, established 42.14pursuant tounder chapter 354; 42.15 (11) the Minneapolis employees retirement fund, established 42.16pursuant tounder chapter 422A; 42.17 (12) the Minneapolis teachers retirement fund association, 42.18 establishedpursuant tounder chapter 354A; 42.19 (13) the St. Paul teachers retirement fund association, 42.20 establishedpursuant tounder chapter 354A; 42.21 (14) the Duluth teachers retirement fund association, 42.22 establishedpursuant tounder chapter 354A; and 42.23 (15) the judges' retirement fund, established by sections 42.24 490.121 to 490.132. 42.25 Sec. 20. Minnesota Statutes 2000, section 356.302, is 42.26 amended to read: 42.27 356.302 [DISABILITY BENEFIT WITH COMBINED SERVICE.] 42.28 Subdivision 1. [DEFINITIONS.] (a) The terms used in this 42.29 section are defined in this subdivision. 42.30 (b) "Average salary" means the highest average of covered 42.31 salary for the appropriate period of credited service that is 42.32 required for the calculation of a disability benefit by the 42.33 covered retirement plan and that is drawn from any period of 42.34 credited service and successive years of covered salary in a 42.35 covered retirement plan. 42.36 (c) "Covered retirement plan" or "plan" means a retirement 43.1 plan listed in subdivision 7. 43.2 (d) "Duty-related" means a disabling illness or injury that 43.3 occurred while the person was actively engaged in employment 43.4 duties or that arose out of the person's active employment 43.5 duties. 43.6 (e) "General employee retirement plan" means a covered 43.7 retirement plan listed in subdivision 7, clauses (1) to (8) and 43.8 (13). 43.9 (f) "Occupationally disabled" means the condition of having 43.10 a medically determinable physical or mental impairment that 43.11 makes a person unable to satisfactorily perform the minimum 43.12 requirements of the person's employment position or a 43.13 substantially similar employment position. 43.14 (g) "Public safety employee retirement plan" means a 43.15 covered retirement plan listed in subdivision 7, clauses (9) to 43.16(11)(12). 43.17 (h) "Totally and permanently disabled" means the condition 43.18 of having a medically determinable physical or mental impairment 43.19 that makes a person unable to engage in any substantial gainful 43.20 activity and that is expected to continue or has continued for a 43.21 period of at least one year or that is expected to result 43.22 directly in the person's death. 43.23 Subd. 2. [ENTITLEMENT.] Notwithstanding any provision of 43.24 law to the contrary governing any covered retirement plan, a 43.25 member of a covered retirement plan may receive a combined 43.26 service disability benefit from each covered retirement plan in 43.27 which the person has credit for at least one-half year of 43.28 allowable service if that person meets the applicable qualifying 43.29 conditions. Subdivision 3 applies to a member of a general 43.30 employee retirement plan. Subdivision 4 applies to a member of 43.31 a public safety employee retirement plan. Subdivision 5 applies 43.32 to a member of a covered retirement plan with both general 43.33 employee and public safety employee retirement plan service. 43.34 Subd. 3. [GENERAL EMPLOYEE PLAN ELIGIBILITY REQUIREMENTS.] 43.35 A disabled member of a covered retirement plan who has credit 43.36 for allowable service in a combination of general employee 44.1 retirement plans is entitled to a combined service disability 44.2 benefit if the member: 44.3 (1) is less than 65 years of age on the date of the 44.4 application for the disability benefit; 44.5 (2) has become totally and permanently disabled; 44.6 (3) has credit for allowable service in any combination of 44.7 general employee retirement plans totaling at least three years; 44.8 (4) has credit for at least one-half year of allowable 44.9 service with the current general employee retirement plan before 44.10 the commencement of the disability; 44.11 (5) has at least three continuous years of allowable 44.12 service credit by the general employee retirement plan or has at 44.13 least a total of three years of allowable service credit by a 44.14 combination of general employee retirement plans in a 72-month 44.15 period during which no interruption of allowable service credit 44.16 from a termination of employment exceeded 29 days; and 44.17 (6)iswas not receiving a retirement annuity or disability 44.18 benefit from any covered general employee retirement plan at the 44.19 time of the commencement of the disability. 44.20 Subd. 4. [PUBLIC SAFETY PLAN ELIGIBILITY REQUIREMENTS.] A 44.21 disabled member of a covered retirement plan who has credit for 44.22 allowable service in a combination of public safety employee 44.23 retirement plans is entitled to a combined service disability 44.24 benefit if the member: 44.25 (1) has become occupationally disabled; 44.26 (2) has credit for allowable service in any combination of 44.27 public safety employee retirement plans totaling at least one 44.28 year if the disability is duty-related or totaling at least 44.29 three years if the disability is not duty-related; 44.30 (3) has credit for at least one-half year of allowable 44.31 service with the current public safety employee retirement plan 44.32 before the commencement of the disability; and 44.33 (4)iswas not receiving a retirement annuity or disability 44.34 benefit from any covered public safety employee retirement plan 44.35 at the time of the commencement of the disability. 44.36 Subd. 5. [GENERAL AND PUBLIC SAFETY PLAN ELIGIBILITY 45.1 REQUIREMENTS.] A disabled member of a covered retirement plan 45.2 who has credit for allowable service in a combination of both a 45.3 public safety employee retirementplansplan and general 45.4 employee retirementplansplan must meet the qualifying 45.5 requirements in subdivisions 3 and 4 to receive a combined 45.6 service disability benefit from the applicable general employee 45.7 and public safety employee retirement plans, except that the 45.8 person need only be a member of a covered retirement plan at the 45.9 time of the commencement of the disability and that the minimum 45.10 allowable service requirements of subdivisions 3, clauses (3) 45.11 and (5), and 4, clauses (3) and (4), may be met in any 45.12 combination of covered retirement plans. 45.13 Subd. 6. [COMBINED SERVICE DISABILITY BENEFIT 45.14 COMPUTATION.] (a) The combined service disability benefit from 45.15 each covered retirement plan must be based on the allowable 45.16 service in each retirement plan, except as specified in 45.17 paragraphs (b) to (f). 45.18 (b) The disability benefit must be governed by the law in 45.19 effect for each covered retirement plan on the date of the 45.20 commencement of the member's most recent qualifying disability 45.21 as a member of a covered retirement plan. 45.22 (c) All plans must base the disability benefit on the same 45.23 average salary figure to the extent practicable. 45.24 (d) If the method of the covered retirement plan used to 45.25 compute a disability benefit varies based on the length of 45.26 allowable service credit, the benefit accrual formula 45.27 percentages used by the plan must recognize the allowable 45.28 service credit in the plan as a continuation of any previous 45.29 allowable service credit with other covered retirement plans. 45.30 (e) If the covered retirement plan is a defined benefit or 45.31 formula plan and the method used to compute a disability benefit 45.32 does not vary based on the length of allowable service credit, 45.33 the portion of the specified benefit amount from the plan must 45.34 bear the same proportion to the total specified benefit amount 45.35 as the allowable service credit in that plan bears to the total 45.36 allowable service credit in all covered retirement plans. If 46.1 the covered retirement plan is a defined contribution or 46.2 nonformula plan, the disability benefit amount for allowable 46.3 service under the plan is not affected, but the service and 46.4 covered salary under the plan must be used as applicable in 46.5 calculations by other covered retirement plans. 46.6 (f) A period for which a person has allowable service 46.7 credit in more than one covered retirement plan must be used 46.8 only once in determining the total allowable service credit for 46.9 calculating the combined service disability benefit, with any 46.10 period of duplicated service credit handledunderas provided in 46.11 section 356.30, subdivision 1, clause (3), items (i) and (j). 46.12 (g) If a person is entitled to a minimum benefit payable 46.13 from one of the public pension plansnamedenumerated in section 46.14 356.30, subdivision 3, the person may receive additional credit 46.15 for only those years of service in another covered pension plan 46.16 that, when added to the years of service in the pension plan 46.17 that is paying the minimum benefit, exceed the years of service 46.18 on which the minimum benefit is based. 46.19 (h) A partially employed recipient of a disability benefit 46.20 must have any current reemployment income plus the total 46.21 disabilitypaymentpayments from all planslistedenumerated in 46.22 subdivision 7 added together, and then compared to their final 46.23 salary rate as a public employee. If current income plus the 46.24 total disability payments exceed the final salary of the person 46.25 at the time of retirement, then disability benefit payments from 46.26 all the planswillmust be reduced on a prorated basis relative 46.27 to the years of service in each fund so that earnings plus 46.28 benefit payments do not exceedtheirthe final salary rate. 46.29 Subd. 7. [COVERED RETIREMENT PLANS.] This section applies 46.30 to the following retirement plans: 46.31 (1) the general state employees retirementfundplan of the 46.32 Minnesota state retirement system, established by chapter 352; 46.33 (2) the unclassified state employees retirementplan46.34 program of the Minnesota state retirement system, established by 46.35 chapter 352D; 46.36 (3) the general employees retirement plan of the public 47.1 employees retirement association, established by chapter 353; 47.2 (4) the teachers retirement association, established by 47.3 chapter 354; 47.4 (5) the Duluth teachers retirement fund association, 47.5 established by chapter 354A; 47.6 (6) the Minneapolis teachers retirement fund association, 47.7 established by chapter 354A; 47.8 (7) the St. Paul teachers retirement fund association, 47.9 established by chapter 354A; 47.10 (8) the Minneapolis employees retirement fund, established 47.11 by chapter 422A; 47.12 (9) the state correctional employees retirement plan of the 47.13 Minnesota state retirement system, established by chapter 352; 47.14 (10) the state patrol retirementfundplan, established by 47.15 chapter 352B; 47.16 (11) the public employees police and firefundplan of the 47.17 public employees retirement association, established by chapter 47.18 353; 47.19 (12)public employeesthe local government correctional 47.20 service retirement plan of the public employees retirement 47.21 association, established by chapter 353E; and 47.22 (13) the judges' retirementfundplan, established by 47.23 sections 490.121 to 490.132. 47.24 Sec. 21. Minnesota Statutes 2000, section 356.303, is 47.25 amended to read: 47.26 356.303 [SURVIVOR BENEFIT WITH COMBINED SERVICE.] 47.27 Subdivision 1. [DEFINITIONS.] (a) The terms used in this 47.28 section are defined in this subdivision. 47.29 (b) "Average salary" means the highest average of covered 47.30 salary for the appropriate period of credited service that is 47.31 required for the calculation of a survivor annuity or a survivor 47.32 benefit, whichever applies, by the covered retirement plan and 47.33 that is drawn from any period of credited service and covered 47.34 salary in a covered retirement plan. 47.35 (c) "Covered retirement plan" or "plan" means a retirement 47.36 planlistedenumerated in subdivision 4. 48.1 (d) "Deceased member" means a person who on the date of 48.2 death was an active member of a covered retirement plan and who 48.3 has reached the minimum age, if any, that is required by the 48.4 covered retirement plan as part of qualifying for a survivor 48.5 annuity or survivor benefit. 48.6 (e) "Surviving child" means a child of a deceased member 48.7 (1) who is unmarried,; (2) who has not reached age 18, or, if a 48.8 full-time student, who has not reached a higher age as specified 48.9inby the applicable covered retirement plan,; and (3) if 48.10 specified by that plan, who was actually dependent on the 48.11 deceased member for a specified proportion of support before the 48.12 deceased member's death. "Surviving child" includes a natural 48.13 child, an adopted child, or a child of a deceased member who is 48.14 conceived during the member's lifetime and who is born after the 48.15 member's death. 48.16 (f) "Surviving spouse" means the legally married husband or 48.17 wife, whichever applies, of the deceased member who was residing 48.18 with the deceased member on the date of death and who, if 48.19 specified by the applicable covered retirement plan, had been 48.20 married to the deceased member for a specified period of time 48.21 before the death of the deceased member. 48.22 (g) "Survivor annuity" means the entitlement to a future 48.23 amount payable to a survivor as the remainder interest of an 48.24 optional annuity form implied by law as having been chosen by a 48.25 deceased member before the date of death and effective on the 48.26 date of death or provided automatically. 48.27 (h) "Survivor benefit" means an entitlement to a future 48.28 amount payable to a survivor that is not included in the 48.29 definition of a survivor annuity. 48.30 Subd. 2. [ENTITLEMENT; ELIGIBILITY.] Notwithstanding 48.31 any provision of law to the contrary governing a covered 48.32 retirement plan, a person who is the survivor of a deceased 48.33 member of a covered retirement plan may receive a combined 48.34 service survivor benefit from each covered retirement plan in 48.35 which the deceased member had credit for at least one-half year 48.36 of allowable service if the deceased member: 49.1 (1) had credit for sufficient allowable service in any 49.2 combination of covered retirement plans to meet any minimum 49.3 allowable service credit requirement of the covered retirement 49.4 fund for qualification for a survivor benefit or annuity; 49.5 (2) had credit for at least one-half year of allowable 49.6 service with the most recent covered retirement plan before the 49.7 date of death and was an active member of that covered 49.8 retirement plan on the date of death; and 49.9 (3) was not receiving a retirement annuity from any covered 49.10 retirement plan on the date of death. 49.11 Subd. 3. [COMBINED SERVICE SURVIVOR BENEFIT COMPUTATION.] 49.12 (a) The combined service survivor annuity or survivor benefit 49.13 from each covered retirement plan must be based on the allowable 49.14 service in each covered retirement plan, except as provided by 49.15 paragraphs (b) to (f). 49.16 (b) The survivor annuity or survivor benefit must be 49.17 governed by the law in effect for each covered retirement plan 49.18 on the date of the death of the deceased member. 49.19 (c) All plans must base the survivor annuity or survivor 49.20 benefit on the same average salary figure if the annuity or 49.21 benefit is salary related. 49.22 (d) If the method of the covered retirement plan used to 49.23 compute a survivor benefit or annuity varies based on the length 49.24 of allowable service credit, the benefit accrual formula 49.25 percentages used by the plan must recognize the allowable 49.26 service credit in the plan as a continuation of any previous 49.27 allowable service credit with other covered retirement plans. 49.28 (e) If the covered retirement plan is a defined benefit or 49.29 formula plan and the method used to compute a survivor benefit 49.30 or annuity does not vary based on the length of allowable 49.31 service credit, the portion of the specified benefit or annuity 49.32 amount from the covered retirement plan must bear the same 49.33 proportion to the total specified benefit or annuity amount as 49.34 the allowable service credit in that plan bears to the total 49.35 allowable service credit in all covered retirement plans. If 49.36 the covered retirement plan is a defined contribution or 50.1 nonformula plan, the survivor benefit amount for allowable 50.2 service under the plan is not affected, but the service and 50.3 covered salary under the plan must be used in calculations by 50.4 other covered retirement plans. 50.5 (f) A period for which aperson hasdeceased member had 50.6 allowable service credit in more than one covered retirement 50.7 plan must be used only once in determining the total allowable 50.8 service credit for calculating the combined service survivor 50.9 annuity or survivor benefit. A period of duplicated service 50.10 credit must be handled as provided in section 356.30, 50.11 subdivision 1, clause (3), items (i) and (j). 50.12 (g) If a person is entitled to a minimum benefit payable 50.13 from a public pension plan named in section 356.30, subdivision 50.14 3, the person may receive additional credit for only those years 50.15 of service in another covered pension plan that, when added to 50.16 the years of service in the pension plan that is paying the 50.17 minimum benefit, exceed the years of service on which the 50.18 minimum benefit is based. 50.19 Subd. 4. [COVERED RETIREMENT PLANS.] This section applies 50.20 to the following retirement plans: 50.21 (1) the legislators retirement plan, established by chapter 50.22 3A; 50.23 (2) the general state employees retirementfundplan of the 50.24 Minnesota state retirement system, established by chapter 352; 50.25 (3) the correctional state employees retirement plan of the 50.26 Minnesota state retirement system, established by chapter 352; 50.27 (4) the state patrol retirementfundplan, established by 50.28 chapter 352B; 50.29 (5) the elective state officers retirement plan, 50.30 established by chapter 352C; 50.31 (6) the unclassified state employees retirementplan50.32 program, established by chapter 352D; 50.33 (7) the general employees retirement plan of the public 50.34 employees retirement association, established by chapter 353; 50.35 (8) the public employees police and firefundplan of the 50.36 public employees retirement association, established by chapter 51.1 353; 51.2 (9)public employeesthe local government correctional 51.3 service retirement plan of the public employees retirement 51.4 association, established by chapter 353E; 51.5 (10) the teachers retirement association, established by 51.6 chapter 354; 51.7 (11) the Duluth teachers retirement fund association, 51.8 established by chapter 354A; 51.9 (12) the Minneapolis teachers retirement fund association, 51.10 established by chapter 354A; 51.11 (13) the St. Paul teachers retirement fund association, 51.12 established by chapter 354A; 51.13 (14) the Minneapolis employees retirement fund, established 51.14 by chapter 422A; and 51.15 (15) the judges' retirement fund, established by sections 51.16 490.121 to 490.132. 51.17 RETIREMENT ANNUITIES 51.18 Sec. 22. [356.315] [RETIREMENT BENEFIT FORMULA 51.19 PERCENTAGES.] 51.20 Subdivision 1. [COORDINATED PLAN MEMBERS.] The applicable 51.21 benefit accrual rate is 1.2 percent. 51.22 Subd. 2. [COORDINATED PLAN MEMBERS.] The applicable 51.23 benefit accrual rate is 1.7 percent. 51.24 Subd. 2a. [COORDINATED MEMBERS.] The applicable benefit 51.25 accrual rate is 2.0 percent. 51.26 Subd. 3. [BASIC PLAN MEMBERS.] The applicable benefit 51.27 accrual rate is 2.2 percent. 51.28 Subd. 4. [BASIC PLAN MEMBERS.] The applicable benefit 51.29 accrual rate is 2.7 percent. 51.30 Subd. 5. [CORRECTIONAL PLAN MEMBERS.] The applicable 51.31 benefit accrual rate is 2.4 percent. 51.32 Subd. 5a. [LOCAL GOVERNMENT CORRECTIONAL SERVICE PLAN.] 51.33 The applicable benefit accrual rate is 1.9 percent. 51.34 Subd. 6. [STATE TROOPERS PLAN AND POLICE AND FIRE PLAN 51.35 MEMBERS.] The applicable benefit accrual rate is 3.0 percent. 51.36 Subd. 7. [JUDGES PLAN.] The applicable benefit accrual 52.1 rate is 2.7 percent. 52.2 Subd. 8. [JUDGES PLAN.] The applicable benefit accrual 52.3 rate is 3.2 percent. 52.4 Subd. 9. [FUTURE BENEFIT ACCRUAL RATE INCREASES.] After 52.5 January 2, 1998, benefit accrual rate increases under this 52.6 section must apply only to allowable service or formula service 52.7 rendered after the effective date of the benefit accrual rate 52.8 increase. 52.9 Sec. 23. Minnesota Statutes 2000, section 356.32, is 52.10 amended to read: 52.11 356.32 [PROPORTIONATE ANNUITY AT AGE 65.] 52.12 Subdivision 1. [PROPORTIONATE RETIREMENT ANNUITY.] (a) 52.13 Notwithstanding any provision to the contrary of the laws 52.14 governing any of the retirement fundsreferred toenumerated in 52.15 subdivision 2, any person who is an active member of any 52.16 applicable fund, who has credit for at least one year but less 52.17 than ten years of allowable service in one or more of 52.18 theapplicable fundscovered plans, and who terminates active 52.19 servicepursuant tounder a mandatory retirement law or policy 52.20 or at age 65 or older, or at the normal retirement age if this 52.21 age is not age 65, for any reasonshall beis entitled upon 52.22 making written application on the form prescribed byexecutive52.23director or executive secretarythe chief administrative officer 52.24 of thefundplan to a proportionate retirement annuity from each 52.25applicable fundcovered plan in which the person has allowable 52.26 service credit. 52.27 (b) The proportionate annuityshallmust be calculated 52.28 under the applicable laws governing annuities based upon 52.29 allowable service credit at the time of retirement and the 52.30 person's average salary for the highest five successive years of 52.31 allowable service or the average salary for the entire period of 52.32 allowable service if less than five years. 52.33 (c) Nothing in this sectionshall preventprevents the 52.34 imposition of the appropriate early retirement reduction of an 52.35 annuity which commencesprior tobefore the normal retirement 52.36 age. 53.1 Subd. 2. [COVEREDFUNDSRETIREMENT PLANS.] The provisions 53.2 of this sectionshallapply to the following retirement 53.3fundsplans: 53.4 (1) the general state employees retirementfundplan of the 53.5 Minnesota state retirement system, establishedpursuant tounder 53.6 chapter 352; 53.7 (2) the correctional state employees retirementprogram53.8 plan of the Minnesota state retirement system, established 53.9pursuant tounder chapter 352; 53.10 (3) the state patrol retirement fund, establishedpursuant53.11tounder chapter 352B; 53.12 (4) the general employees retirement plan of the public 53.13 employees retirementfundassociation, establishedpursuant to53.14 under chapter 353; 53.15 (5) the public employees police and firefundplan of the 53.16 public employees retirement association, establishedpursuant to53.17 under chapter 353; 53.18 (6) the teachers retirement association, established 53.19pursuant tounder chapter 354; 53.20 (7) the Minneapolis employees retirement fund, established 53.21pursuant tounder chapter 422A; 53.22 (8) the Duluth teachers retirement fund association, 53.23 establishedpursuant tounder chapter 354A; 53.24 (9) the Minneapolis teachers retirement fund association, 53.25 establishedpursuant tounder chapter 354A; and 53.26 (10) the St. Paul teachers retirement fund association, 53.27 establishedpursuant tounder chapter 354A. 53.28 Sec. 24. Minnesota Statutes 2000, section 356.40, is 53.29 amended to read: 53.30 356.40 [DATE FOR PAYMENT OF ANNUITIES AND BENEFITS.] 53.31 Notwithstanding any law to the contrary, all annuities and 53.32 benefits payable on and after December 1, 1977 by a covered 53.33 retirement fund, as defined in section 356.30, subdivision 3, 53.34shallmust be paid in advance for each month during the first 53.35 week of that month. The bylaws ofmunicipallocal retirement 53.36 fundsshallmust be amended accordingly. In no event, 54.1 however,shallmay this sectionauthorize more than one payment54.2in any one month where the law governing the applicable54.3retirement fund as of June 30, 1977 already provides for the54.4full payment or accrual of annuities and benefits in advance for54.5each month or as of the first day of the month, nor shall it54.6 authorize the payment of both a retirement annuity and a 54.7 surviving spouse's benefit in one month where the law governing 54.8 the applicable retirement fund provides for the payment of the 54.9 retired member's retirement annuity to the surviving spouse for 54.10 the month in which the retired member dies. 54.11 Sec. 25. [356.403] [NORMAL RETIREMENT AGE; SAVINGS 54.12 CLAUSE.] 54.13 The intent of the legislature in sections 352.01, 54.14 subdivision 25; 353.01, subdivision 37; 354.05, subdivision 38; 54.15 and 354A.011, subdivision 15a, is to create a normal retirement 54.16 age for persons first covered by those sections after May 16, 54.17 1989, that is the same as the retirement age in the federal 54.18 Social Security law, including future amendments to that law. 54.19 If a court determines that the legislature may not incorporate 54.20 by reference the future changes in federal Social Security law, 54.21 the legislature reserves the right to amend the appropriate 54.22 sections to make the normal retirement conform to the retirement 54.23 age in the federal Social Security law. No person first covered 54.24 by any of those sections after May 16, 1989, has a right to a 54.25 normal retirement age that is less than the retirement age in 54.26 the federal Social Security law. 54.27 Sec. 26. [356.405] [COMBINED PAYMENT OF RETIREMENT 54.28 ANNUITIES.] 54.29 (a) The public employees retirement association and the 54.30 Minnesota state retirement system are permitted to combine 54.31 payments to retirees. The total payment must be equal to the 54.32 amount that is payable if payments were kept separate. The 54.33 retiree must agree, in writing, to have the payment combined. 54.34 (b) Each plan must calculate the benefit amounts under the 54.35 laws governing the plan and the required reserves and future 54.36 mortality losses or gains must be paid or accrued to the plan 55.1 from which the service was earned. Each plan must account for 55.2 its portion of the payment separately, and there may be no 55.3 additional actuarial liabilities realized by either plan. 55.4 (c) The plan making the payment would be responsible for 55.5 issuing one payment, making address changes, tax withholding 55.6 changes, and other administrative functions needed to process 55.7 the payment. 55.8 SURVIVOR BENEFITS 55.9 Sec. 27. [356.406] [LOSS OF ENTITLEMENT TO BENEFITS FOR 55.10 SURVIVOR CAUSING DEATH OF PENSION PLAN MEMBER.] 55.11 Subdivision 1. [DEFINITIONS.] (a) Each of the words or 55.12 terms defined in this subdivision has the meaning indicated. 55.13 (b) "Public pension plan" means any retirement plan or fund 55.14 enumerated in section 356.20, subdivision 2, or 356.30, 55.15 subdivision 3, any relief association governed by section 69.77 55.16 or sections 69.771 to 69.775, any retirement plan governed by 55.17 chapter 354B or 354C, the Hennepin county supplemental 55.18 retirement plan governed by sections 383B.46 to 383B.52, or any 55.19 housing and redevelopment authority retirement plan. 55.20 (c) "Public pension plan member" means a person who is a 55.21 participant covered by a public pension plan, a former 55.22 participant of a public pension plan who has sufficient service 55.23 to be entitled to receive a future retirement annuity or service 55.24 pension, a recipient of a retirement annuity, service pension, 55.25 or disability benefit from a public pension plan, or a former 55.26 participant of a public pension plan who has member or employee 55.27 contributions to the person's credit in the public pension plan. 55.28 (d) "Survivor" means the surviving spouse, a former spouse, 55.29 a surviving child, a joint annuitant, a designated recipient of 55.30 a second or remainder portion of an optional annuity form, a 55.31 beneficiary, or the estate of a deceased public pension plan 55.32 member, as those terms are commonly understood or defined in the 55.33 benefit plan document of the public pension plan. 55.34 (e) "Survivor benefit" means a surviving spouse benefit, 55.35 surviving child benefit, second or remainder portion of an 55.36 optional annuity form, a death benefit, a funeral benefit, or a 56.1 refund of member or employee contributions payable on account of 56.2 the death of a public pension plan member as provided for in the 56.3 benefit plan document of the public pension plan. 56.4 Subd. 2. [SUSPENSION OF SURVIVOR BENEFITS UPON FELONY 56.5 CHARGE.] During the pendency of a charge of a survivor of a 56.6 felony that caused the death of a public pension plan member, of 56.7 criminal liability for a death by wrongful act felony, or of 56.8 conspiracy to commit a death by wrongful act felony, the 56.9 entitlement of that survivor to receive a survivor benefit is 56.10 suspended. 56.11 Subd. 3. [FORFEITURE OF SURVIVOR BENEFITS UPON FELONY 56.12 CONVICTION.] On final conviction of a survivor of a felony that 56.13 caused the death of a public pension plan member, of criminal 56.14 liability for a death by wrongful act felony, or of conspiracy 56.15 to commit a death by wrongful act felony, the entitlement of 56.16 that survivor to receive a survivor benefit is forfeited, 56.17 including entitlement for any previously suspended survivor 56.18 benefits under subdivision 2. 56.19 Subd. 4. [SUSPENSION OR FORFEITURE ACTIONS SEPARATE.] The 56.20 charge of one survivor under subdivision 2 or the conviction of 56.21 one survivor under subdivision 3 does not affect the entitlement 56.22 of another survivor to a survivor benefit. 56.23 Subd. 5. [RECOVERY OF CERTAIN BENEFITS.] If monthly 56.24 benefits or a refund or balance of a participant or former 56.25 participant's account have already been paid to an individual 56.26 who is later charged or convicted as described under this 56.27 section, the executive director or chief administrative officer 56.28 of the public pension plan shall attempt to recover the amounts 56.29 paid. Payment may be made to the next beneficiary or survivor 56.30 only in an amount equal to the amount recovered and in the 56.31 amount of any future payments that would legally accrue to 56.32 another survivor under the applicable laws of the retirement 56.33 plan. 56.34 Subd. 6. [DISPOSITION OF FORFEITED SURVIVOR BENEFITS.] If 56.35 the benefit plan document governing the public pension plan does 56.36 not provide for the disposition of forfeited benefits, survivor 57.1 benefits forfeited under this section must be deposited in the 57.2 general fund of the state. 57.3 Sec. 28. [356.407] [RESTORATION OF SURVIVOR BENEFITS.] 57.4 Subdivision 1. [RESTORATION UPON TERMINATION OF 57.5 REMARRIAGE.] Notwithstanding any provision to the contrary of 57.6 the laws governing any of the retirement plans enumerated in 57.7 subdivision 2, any person who was receiving a surviving spouse's 57.8 benefit from any of those plans and whose benefit terminated 57.9 solely because of remarriage is, if the remarriage terminates 57.10 for any reason, again entitled upon reapplication to a surviving 57.11 spouse's benefit; provided, however, that the person is not 57.12 entitled to retroactive payments for the period of remarriage. 57.13 The benefit resumes at the level which the person would have 57.14 been receiving if there had been no remarriage. This section 57.15 applies prospectively to any person who first becomes entitled 57.16 to receive a surviving spouse's benefit on or after May 18, 57.17 1975, and also applies retroactively to any person who first 57.18 became entitled to receive a surviving spouse's benefit before 57.19 May 18, 1975; provided, however, that no person is entitled to 57.20 retroactive payments for any period of time before May 18, 1975. 57.21 Subd. 2. [COVERED FUNDS.] The provisions of this section 57.22 apply to the following retirement funds: 57.23 (1) the general employees retirement plan of the public 57.24 employees retirement association established under chapter 353; 57.25 (2) the public employees police and fire plan of the public 57.26 employees retirement association established under chapter 353; 57.27 (3) the state patrol retirement plan established under 57.28 chapter 352B; 57.29 (4) the legislators retirement plan established under 57.30 chapter 3A; 57.31 (5) the elective state officers retirement plan established 57.32 under chapter 352C; 57.33 (6) the teachers retirement association established under 57.34 chapter 354; and 57.35 (7) the Minneapolis employees retirement fund established 57.36 under chapter 422A. 58.1 POSTRETIREMENT INCREASES 58.2 Sec. 29. Minnesota Statutes 2000, section 356.41, is 58.3 amended to read: 58.4 356.41 [BENEFIT ADJUSTMENTS FOR CERTAIN DISABILITY AND 58.5 SURVIVOR BENEFITS.] 58.6 Disability benefits payable to a disabilitant, if not 58.7 otherwise included in the participation in the Minnesota 58.8 postretirement investment fund, and survivor benefits payable to 58.9 a survivor from any public pensionfundplan which participates 58.10 in the Minnesota postretirement investment fundshallmust be 58.11 adjusted in the same manner, at the same times and in the same 58.12 amounts as are benefits payable from the Minnesota 58.13 postretirement investment fund to eligible benefit recipients of 58.14 that public pensionfundplan. If a disability benefit is not 58.15 included in the participation in the Minnesota postretirement 58.16 investment fund, the disability benefit is recomputed as a 58.17 retirement annuity and the recipient would have been eligible 58.18 for an adjustmentpursuant tounder this section if the 58.19 disability benefit was not recomputed, the recipientwill58.20continue to beremains eligible for the adjustmentpursuant to58.21 under this section after the recomputation. For the survivor of 58.22 a deceased annuitant who receives a survivor benefit 58.23 calculatedpursuant tounder a prior law rather than the second 58.24 portion of a joint and survivor annuity, any period of receipt 58.25 of a retirement annuity by the annuitantshallmust be utilized 58.26 in determining the period of receipt for eligibility to receive 58.27 an adjustmentpursuant tounder this section. No recipient 58.28shall,however,beis entitled to more than one adjustment 58.29pursuant tounder this section or section 11A.18 applicable to 58.30 one benefit at one time by reason of this section. 58.31 Sec. 30. [356.42] [POSTRETIREMENT ADJUSTMENT; LUMP SUM 58.32 PAYMENTS.] 58.33 Subdivision 1. [ENTITLEMENT.] A person who is receiving a 58.34 retirement annuity, a disability benefit, or a surviving 58.35 spouse's annuity or benefit from a retirement fund specified in 58.36 subdivision 3, clauses (1) to (8), is entitled to receive a 59.1 postretirement adjustment from the applicable retirement fund in 59.2 the amount specified in subdivision 2, if the annuity or benefit 59.3 was computed under: 59.4 (1) the laws in effect before June 1, 1973, if the person 59.5 is receiving an annuity or benefit from the retirement fund 59.6 specified in subdivision 3, clause (4); 59.7 (2) the laws in effect before July 1, 1973, if the person 59.8 is receiving an annuity or benefit from a retirement fund 59.9 specified in subdivision 3, clause (1), (2), (3), or (5); 59.10 (3) the metropolitan transit commission transit operating 59.11 division employees retirement fund plan document in effect on or 59.12 before December 31, 1977, if the person is receiving a 59.13 retirement annuity, a disability benefit, or a surviving 59.14 spouse's annuity or benefit from the retirement fund specified 59.15 in subdivision 3, clause (5); 59.16 (4) the laws in effect before May 1, 1974, and before any 59.17 adjustment under Laws 1987, chapter 372, article 3, if the 59.18 person is receiving an annuity or benefit from the retirement 59.19 fund specified in subdivision 3, clause (6); 59.20 (5) the laws in effect before January 1, 1970, if the 59.21 person is receiving an annuity or benefit from the retirement 59.22 fund specified in subdivision 3, clause (7); or 59.23 (6) the laws in effect before June 30, 1971, if the person 59.24 is receiving an annuity or benefit from the retirement fund 59.25 specified in subdivision 3, clause (8). 59.26 Subd. 2. [AMOUNT OF POSTRETIREMENT ADJUSTMENT; PAYMENT.] 59.27 (a) For any person receiving an annuity or benefit on November 59.28 30, 1989, and entitled to receive a postretirement adjustment 59.29 under subdivision 1, the postretirement adjustment is a lump sum 59.30 payment calculated under paragraph (b) or (c). 59.31 (b) For coordinated plan annuity or benefit recipients, the 59.32 postretirement adjustment in 1989 is $25 for each full year of 59.33 allowable service credited to the person by the respective 59.34 retirement fund. In 1990 and each following year, the 59.35 postretirement adjustment is the amount payable in the preceding 59.36 year increased by the same percentage applied to regular 60.1 annuities paid from the postretirement fund or, for the 60.2 retirement funds specified in subdivision 3, clauses (6), (7), 60.3 and (8), by the same percentage applied under the articles of 60.4 incorporation and bylaws of these funds. 60.5 (c) For basic plan annuity or benefit recipients, the 60.6 postretirement adjustment in 1989 is the greater of: 60.7 (1) $25 for each full year of allowable service credited to 60.8 the person by the respective retirement fund; or 60.9 (2) the difference between: 60.10 (i) the product of $400 times the number of full years of 60.11 allowable service credited to the person by the respective 60.12 retirement fund; and 60.13 (ii) the sum of the benefits payable to the person from any 60.14 Minnesota public employee pension plan, and cash benefits 60.15 payable to the person from the Social Security Administration. 60.16 In 1990 and each following year, each eligible basic plan 60.17 annuity or benefit recipient shall receive the amount received 60.18 in the preceding year increased by the same percentage applied 60.19 to regular annuities paid from the postretirement fund or, for 60.20 the retirement funds specified in subdivision 3, clauses (6), 60.21 (7), and (8), by the same percentage applied under the articles 60.22 of incorporation and bylaws of these funds. 60.23 (d) The postretirement adjustment provided for in this 60.24 section must be paid on December 1 to those persons receiving an 60.25 annuity or benefit on the preceding November 30. This section 60.26 does not authorize the payment of a postretirement adjustment to 60.27 an estate if the annuity or benefit recipient dies before the 60.28 November 30 eligibility date. The postretirement adjustment 60.29 provided for in this section must be paid automatically unless 60.30 the intended recipient files a written notice with the 60.31 retirement fund requesting that the postretirement adjustment 60.32 not be paid or returns the amount of adjustment to the 60.33 retirement fund. Written notice of the waiver of the 60.34 postretirement adjustment is irrevocable for the year during 60.35 which it was made. 60.36 Subd. 3. [COVERED RETIREMENT PLANS.] The postretirement 61.1 adjustment provided in this section applies to the following 61.2 retirement funds: 61.3 (1) the general employees retirement plans of the public 61.4 employees retirement association; 61.5 (2) the public employees police and fire plan of the public 61.6 employees retirement association; 61.7 (3) the teachers retirement association; 61.8 (4) the state patrol retirement plan; 61.9 (5) the state employees retirement plan of the Minnesota 61.10 state retirement system; 61.11 (6) the Minneapolis teachers retirement fund association 61.12 established under chapter 354A; 61.13 (7) the St. Paul teachers retirement fund association 61.14 established under chapter 354A; and 61.15 (8) the Duluth teachers retirement fund association 61.16 established under chapter 354A. 61.17 Sec. 31. [356.43] [SUPPLEMENTAL BENEFIT; LUMP SUM 61.18 PAYMENTS; MINNEAPOLIS EMPLOYEES RETIREMENT FUND.] 61.19 Subdivision 1. [ENTITLEMENT.] Any person who is receiving 61.20 either an annuity that was computed under the laws in effect 61.21 before March 5, 1974, or a "$2 bill and annuity" annuity from 61.22 the Minneapolis employees retirement fund is entitled to receive 61.23 a supplemental benefit lump sum payment from the retirement fund 61.24 in the amount specified in subdivision 2. 61.25 Subd. 2. [AMOUNT OF PAYMENT.] (a) For any person receiving 61.26 an annuity or benefit on November 30, 1991, and entitled to 61.27 receive a supplemental benefit lump sum payment under 61.28 subdivision 1, the payment is $28 for each full year of 61.29 allowable service credited to the person by the retirement fund. 61.30 In 1992 and each following year, each eligible benefit 61.31 recipient is entitled to receive the amount received in the 61.32 preceding year increased by the same percentage applied on the 61.33 most recent January 1 to regular annuities paid from the 61.34 Minneapolis employees retirement fund. 61.35 (b) The payment provided for in this section is payable on 61.36 December 1, 1991, to those persons receiving an annuity or 62.1 benefit on November 30, 1991. In subsequent years, the payment 62.2 must be made on December 1 to those persons receiving an annuity 62.3 or benefit on the preceding November 30. This section does not 62.4 authorize payment to an estate if the annuity or benefit 62.5 recipient dies before the November 30 eligibility date. The 62.6 payment provided for in this section must be paid automatically 62.7 unless the intended recipient files a written notice with the 62.8 retirement fund requesting that it not be paid. 62.9 Subd. 3. [STATE APPROPRIATION.] Payments under this 62.10 section are the responsibility of the Minneapolis employees 62.11 retirement fund. A separate state aid is provided toward the 62.12 level dollar amortized cost of the payments. For state fiscal 62.13 years 1992 to 2001 inclusive, there is appropriated annually 62.14 $550,000 from the general fund to the commissioner of finance to 62.15 be added, in quarterly installments, to the annual state 62.16 contribution amount determined under section 422A.101, 62.17 subdivision 3. After fiscal year 2001, any difference between 62.18 the cumulative benefit amounts actually paid under this section 62.19 after fiscal year 1991 and the amounts paid to the retirement 62.20 fund by the state under this subdivision, plus investment 62.21 earnings on the aid, shall be included by the retirement fund 62.22 board and the actuary retained by the legislative commission on 62.23 pensions and retirement in determining the financial 62.24 requirements of the fund and contributions under section 62.25 422A.101. 62.26 Sec. 32. [356.431] [CONVERSION OF LUMP-SUM POSTRETIREMENT 62.27 AND SUPPLEMENTAL PAYMENT TO AN INCREASED MONTHLY ANNUITY.] 62.28 Subdivision 1. [LUMP-SUM POSTRETIREMENT PAYMENT 62.29 CONVERSION.] For benefits paid after December 31, 2001, to 62.30 eligible persons under sections 356.42 and 356.43, the amount of 62.31 the most recent lump-sum benefit payable to an eligible 62.32 recipient under sections 356.86 and 356.865, must be divided by 62.33 12. The result must be added to the monthly annuity or benefit 62.34 otherwise payable to an eligible recipient, must become a 62.35 permanent part of the benefit recipient's pension, and must be 62.36 included in any pension benefit subject to future increases. 63.1 Subd. 2. [TRANSFER OF REQUIRED RESERVES TO MINNESOTA 63.2 POSTRETIREMENT INVESTMENT FUND.] Public employee retirement 63.3 funds participating in the state board of investment 63.4 postretirement investment fund shall transfer the required 63.5 reserves for the postretirement conversion under subdivision 1 63.6 to the postretirement investment fund by January 31, 2002. 63.7 REFUNDS 63.8 Sec. 33. [356.44] [PARTIAL PAYMENT OF PENSION PLAN 63.9 REFUND.] 63.10 (a) Notwithstanding any provision of law to the contrary, a 63.11 member of a pension plan listed in section 356.30, subdivision 63.12 3, with at least two years of forfeited service taken from a 63.13 single pension plan may repay a portion of all refunds. A 63.14 partial refund repayment must comply with this section. 63.15 (b) The minimum portion of a refund repayment is one-third 63.16 of the total service credit period of all refunds taken from a 63.17 single plan. 63.18 (c) The cost of the partial refund repayment is the product 63.19 of the cost of the total repayment multiplied by the ratio of 63.20 the restored service credit to the total forfeited service 63.21 credit. The total repayment amount includes interest at the 63.22 annual rate of 8.5 percent, compounded annually, from the refund 63.23 date to the date repayment is received. 63.24 (d) The restored service credit is allocated based on the 63.25 relationship the restored service bears to the total service 63.26 credit period for all refunds taken from a single pension plan. 63.27 (e) This section does not authorize a public pension plan 63.28 member to repay a refund if the law governing the plan does not 63.29 authorize the repayment of a refund of member contributions. 63.30 Sec. 34. [356.441] [REPAYMENT OF REFUNDS.] 63.31 Repayment of a refund and interest on that refund permitted 63.32 under laws governing any public pension plan in Minnesota may be 63.33 made with funds distributed from a plan qualified under the 63.34 federal Internal Revenue Code of 1986, section 401(a), as 63.35 amended through December 31, 1988, or an annuity qualified under 63.36 the federal Internal Revenue Code of 1986, section 403(a). 64.1 Repayment may also be made with funds distributed from an 64.2 individual retirement account used solely to receive a 64.3 nontaxable rollover from that type of a plan or annuity. The 64.4 repaid refund must be separately accounted for as member 64.5 contributions not previously taxed. Before accepting any 64.6 transfers to which this section applies, the executive director 64.7 must require the member to provide written documentation to 64.8 demonstrate that the amounts to be transferred are eligible for 64.9 a tax-free rollover and qualify for that treatment under the 64.10 federal Internal Revenue Code of 1986. 64.11 OPTIONAL ANNUITY FORMS 64.12 Sec. 35. [356.46] [APPLICATION FOR RETIREMENT ANNUITY; 64.13 PROCEDURE FOR ELECTING ANNUITY FORM.] 64.14 Subdivision 1. [DEFINITIONS.] As used in this section, 64.15 each of the following terms shall have the meaning given. 64.16 (a) "Annuity form" means the payment procedure and duration 64.17 of a retirement annuity or disability benefit available to a 64.18 member of a public pension fund, based on the period over which 64.19 a retirement annuity or disability benefit is payable, 64.20 determined by the number of persons to whom the retirement 64.21 annuity or disability benefit is payable, and the amount of the 64.22 retirement annuity or disability benefit which is payable to 64.23 each person. 64.24 (b) "Joint and survivor optional annuity" means an optional 64.25 annuity form which provides a retirement annuity or disability 64.26 benefit to a retired member and the spouse of the member on a 64.27 joint basis during the lifetime of the retired member and all or 64.28 a portion of the original retirement annuity or disability 64.29 benefit amount to the surviving spouse in the event of the death 64.30 of the retired member. 64.31 (c) "Optional annuity form" means an annuity form which is 64.32 elected by a member and is not provided automatically as the 64.33 standard annuity form of the public pension plan. 64.34 (d) "Public pension plan" means a public pension plan as 64.35 defined pursuant to section 356.615, paragraph (b). 64.36 (e) "Retirement annuity" means a series of monthly payments 65.1 to which a former or retired member of a public pension fund is 65.2 entitled on account of attaining a specified age and acquiring 65.3 credit for a specified period of service, which includes a 65.4 retirement annuity, retirement allowance, or service pension. 65.5 (f) "Disability benefit" means a series of monthly payments 65.6 to which a former or disabled member of a public pension fund is 65.7 entitled on account of a physical or mental inability to engage 65.8 in specified employment. 65.9 Subd. 2. [PROVISION OF INFORMATION ON ANNUITY FORMS.] 65.10 Every public pension plan which provides for an annuity form 65.11 other than a single life retirement annuity as an option which 65.12 can be elected by an active, disabled, or retiring member shall 65.13 provide as a part of, or accompanying the annuity application 65.14 form, a written statement summarizing the optional annuity forms 65.15 which are available, a general indication of the consequences of 65.16 selecting one annuity form over another, a calculation of the 65.17 actuarial reduction in the amount of the retirement annuity 65.18 which would be required for each optional annuity form, and the 65.19 procedure to be followed to obtain more information from the 65.20 public pension fund concerning the optional annuity forms 65.21 provided by the plan. 65.22 Subd. 3. [REQUIREMENT OF NOTICE TO MEMBER'S SPOUSE.] (a) 65.23 If a public pension plan provides optional retirement annuity 65.24 forms which include a joint and survivor optional retirement 65.25 annuity form potentially applicable to the surviving spouse of a 65.26 member, the executive director of the public pension plan shall 65.27 send a copy of the written statement required by subdivision 2 65.28 to the spouse of the member before the member's election of an 65.29 optional retirement annuity. 65.30 (b) Following the election of a retirement annuity by the 65.31 member, a copy of the completed retirement annuity application 65.32 and retirement annuity beneficiary form, if applicable, must be 65.33 sent by the public pension plan to the spouse of the retiring 65.34 member. A signed acknowledgment must be required from the 65.35 spouse confirming receipt of a copy of the completed retirement 65.36 annuity application and retirement annuity beneficiary form 66.1 unless the spouse's signature confirming the receipt is on the 66.2 annuity application form. If the required signed acknowledgment 66.3 is not received from the spouse within 30 days, the public 66.4 pension plan must send another copy of the completed retirement 66.5 annuity application and retirement annuity beneficiary form, if 66.6 applicable, to the spouse by certified mail with restricted 66.7 delivery. 66.8 Sec. 36. [356.465] [SUPPLEMENTAL NEEDS TRUST AS OPTIONAL 66.9 ANNUITY FORM RECIPIENT.] 66.10 Subdivision 1. [INCLUSION AS RECIPIENT.] Notwithstanding 66.11 any provision to the contrary of the laws, articles of 66.12 incorporation, or bylaws governing a covered retirement plan 66.13 specified in subdivision 3, a retiring member may designate a 66.14 qualified supplemental needs trust under subdivision 2 as the 66.15 remainder recipient on an optional retirement annuity form for a 66.16 period not to exceed the lifetime of the beneficiary of the 66.17 supplemental needs trust. 66.18 Subd. 2. [DEFINITION OF QUALIFIED SUPPLEMENTAL NEEDS 66.19 TRUST.] A qualified supplemental needs trust is a trust that: 66.20 (1) was established on or after July 1, 1992; 66.21 (2) was established solely for the benefit of one person 66.22 who has a disability under federal Social Security 66.23 Administration supplemental security income or retirement, 66.24 survivors, and disability insurance disability determination 66.25 standards and who was determined as such before the creation of 66.26 the trust; 66.27 (3) is funded, in whole or in part, by the primary 66.28 recipient of the optional annuity form and, unless the trust is 66.29 a Zebley trust, is not funded by the beneficiary, the 66.30 beneficiary's spouse, or a person who is required to pay a sum 66.31 to or for the trust beneficiary under the terms of litigation or 66.32 a litigation settlement; 66.33 (4) is established to cover reasonable living expenses and 66.34 other basic needs of the disabilitant, in whole or in part, in 66.35 instances when public assistance does not provide sufficiently 66.36 for these needs; 67.1 (5) is not permitted to make disbursement to replace or 67.2 reduce public assistance otherwise available; 67.3 (6) is irrevocable; 67.4 (7) terminates upon the death of the disabled person for 67.5 whose benefit it was established; and 67.6 (8) is determined by the executive director to be a trust 67.7 that contains excluded assets for purposes of the qualification 67.8 for public entitlement benefits under the applicable federal and 67.9 state laws and regulations. 67.10 Subd. 3. [COVERED RETIREMENT PLANS.] The provisions of 67.11 this section apply to the following retirement plans: 67.12 (1) the general state employees retirement plan of the 67.13 Minnesota state retirement system established under chapter 352; 67.14 (2) the correctional state employees retirement plan of the 67.15 Minnesota state retirement system established under chapter 352; 67.16 (3) the state patrol retirement plan established under 67.17 chapter 352B; 67.18 (4) the legislators retirement plan established under 67.19 chapter 3A; 67.20 (5) the judges retirement plan established under chapter 67.21 490; 67.22 (6) the general employees retirement plan of the public 67.23 employees retirement association established under chapter 353; 67.24 (7) the public employees police and fire plan of the public 67.25 employees retirement association established under chapter 353; 67.26 (8) the teachers retirement plan established under chapter 67.27 354; 67.28 (9) the Duluth teachers retirement fund association 67.29 established under chapter 354A; 67.30 (10) the St. Paul teachers retirement fund association 67.31 established under chapter 354A; 67.32 (11) the Minneapolis teachers retirement fund association 67.33 established under chapter 354A; 67.34 (12) the Minneapolis employees retirement plan established 67.35 under chapter 422A; 67.36 (13) the Minneapolis firefighters relief association 68.1 established under chapter 69; 68.2 (14) the Minneapolis police relief association established 68.3 under chapter 423B; and 68.4 (15) the local government correctional service retirement 68.5 plan of the public employees retirement association established 68.6 under chapter 353E. 68.7 REEMPLOYED ANNUITANT EARNINGS DISPOSITION 68.8 Sec. 37. [356.47] [DISPOSITION OF AMOUNT IN EXCESS OF 68.9 REEMPLOYED ANNUITANT EARNINGS LIMITATIONS.] 68.10 Subdivision 1. [APPLICATION.] This section applies to the 68.11 balance of annual retirement annuities on the amount of 68.12 retirement annuity reductions after reemployed annuitant 68.13 earnings limitations for retirement plans governed by section 68.14 352.115, subdivision 10; 353.37; 354.44, subdivision 5; or 68.15 354A.31, subdivision 3. 68.16 Subd. 2. [RECORDKEEPING; REPORTING.] The chief 68.17 administrative officer of each retirement plan shall keep 68.18 records for each reemployed annuitant of the amount of the 68.19 annuity reduction. This amount must be reported to each member 68.20 at least once each year. 68.21 Subd. 3. [PAYMENT.] (a) Upon the retired member attaining 68.22 the age of 65 years or upon the first day of the month next 68.23 following the month occurring one year after the termination of 68.24 the reemployment that gave rise to the limitation, whichever is 68.25 later, and the filing of a written application, the retired 68.26 member is entitled to the payment, in a lump sum, of the value 68.27 of the person's amount under subdivision 2, plus interest at the 68.28 compound annual rate of six percent from the date that the 68.29 amount was deducted from the retirement annuity to the date of 68.30 payment. 68.31 (b) The written application must be on a form prescribed by 68.32 the chief administrative officer of the applicable retirement 68.33 plan. 68.34 (c) If the retired member dies before the payment provided 68.35 for in paragraph (a) is made, the amount is payable, upon 68.36 written application, to the deceased person's surviving spouse, 69.1 or if none, to the deceased person's designated beneficiary, or 69.2 if none, to the deceased person's estate. 69.3 MARRIAGE DISSOLUTION RETIREMENT 69.4 COVERAGE INFORMATION 69.5 Sec. 38. [356.49] [PROVISION OF INFORMATION IN THE EVENT 69.6 OF MARRIAGE DISSOLUTION.] 69.7 Subdivision 1. [INFORMATION FOR A PENDING MARRIAGE 69.8 DISSOLUTION.] (a) Upon receipt of a written request by a person 69.9 with access to the data under subdivision 3 who cites this 69.10 statute, a public or private pension plan administrator must 69.11 provide the court and the parties to a marriage dissolution 69.12 action involving a plan member or former plan member with 69.13 information regarding pension benefits or rights of the plan 69.14 member or former plan member. The pension plan shall provide 69.15 this information upon the request of the court or a party to the 69.16 action without requiring a signed authorization from the plan 69.17 member or former plan member. 69.18 (b) The information must include the pension benefits or 69.19 rights of the plan member or former plan member as of the first 69.20 day of the month following the date of the request, or as of the 69.21 end of the previous fiscal year for the plan, and as of the date 69.22 of valuation of marital assets under section 518.58, if the 69.23 person requesting the information specifies that date. The 69.24 information must include the accrued service credit of the 69.25 person, the credited salary of the person for the most current 69.26 five-year period, a summary of the benefit plan, and any other 69.27 information relevant to the calculation of the present value of 69.28 the benefits or rights. 69.29 Subd. 2. [INFORMATION FOR AN EXISTING DISSOLUTION DECREE.] 69.30 If a marriage dissolution decree rendered by a court of 69.31 competent jurisdiction prior to August 1, 1987, provided a 69.32 procedure for the distribution of future pension plan payments, 69.33 upon request the applicable pension plan administrator shall 69.34 provide on a timely basis to the court and the parties to the 69.35 action the required information to implement that procedure 69.36 without requiring a signed authorization from the plan member or 70.1 former plan member. 70.2 Subd. 3. [ACCESS TO DATA.] Notwithstanding any provision 70.3 of chapter 13 to the contrary, an administrator may release 70.4 private or confidential data on individuals to the court, the 70.5 parties to a marriage dissolution, their attorneys, and an 70.6 actuary appointed under section 518.582, to the extent necessary 70.7 to comply with this section, but only if the administrator has 70.8 received a copy of the legal petition showing that an action for 70.9 marriage dissolution has commenced and a copy of the affidavit 70.10 of service showing that the petition has been served on the 70.11 responding party to the action. 70.12 SERVICE AND SALARY CREDIT UPON 70.13 WRONGFUL DISCHARGE 70.14 Sec. 39. Minnesota Statutes 2000, section 356.50, is 70.15 amended to read: 70.16 356.50 [SERVICE AND SALARY CREDIT FROM BACK PAY AWARDS IN 70.17 THE EVENT OF WRONGFUL DISCHARGE.] 70.18 (a) A person who is wrongfully discharged from public 70.19 employment that gave rise to coverage by a public employee 70.20 pension planlistedenumerated in section 356.30, subdivision 3, 70.21 is entitled to obtain allowable service credit from the 70.22 applicable public employee pension plan for the applicable 70.23 period caused by the wrongful discharge. 70.24 (b) A person is wrongfully discharged for purposes of this 70.25 section if: 70.26 (1) the person has been determined by a court of competent 70.27 jurisdiction or an arbitrator in binding arbitration to have 70.28 been wrongfully discharged from public employment; 70.29 (2) the person received an award of back pay with respect 70.30 to that discharge; and 70.31 (3) the award does not include any amount for any lost or 70.32 interrupted public pension plan coverage. 70.33(b)(c) To obtain the public pension plan allowable service 70.34 credit, the person shall pay the required member contribution 70.35 amount. The required member contribution amount is the member 70.36 contribution rate or rates in effect for the pension plan during 71.1 the period of service covered by the back pay award, applied to 71.2 the unpaid gross salary amounts of the back pay award including 71.3 reemployment insurance, workers' compensation or wages from 71.4 other sources which reduced the back award. No contributions 71.5 shall be made under this clause for compensation covered by a 71.6 public pension plan listed in section 356.30, subdivision 3, for 71.7 employment during the removal period. The person shall pay the 71.8 required member contribution amount within 60 days of the date 71.9 of receipt of the back pay award, within 60 days of April 14, 71.10 1992, or within 60 days of a billing from the retirement fund, 71.11 whichever is later. 71.12(c)(d) The public employer who wrongfully discharged the 71.13 public employee must pay an employer contribution on the back 71.14 pay award. The employer contribution must be based on the 71.15 employer contribution rate or rates in effect for the pension 71.16 plan during the period of service covered by the back pay award, 71.17 applied to the salary amount on which the member contribution 71.18 amount was determined under paragraph(b)(c). Interest on both 71.19 the required member and employer contribution amount must be 71.20 paid by the employer at the annual compound rate of 8.5 percent 71.21 per year, expressed monthly, between the date the contribution 71.22 amount would have been paid to the date of actual payment. The 71.23 employer payment must be made within 30 days of the payment 71.24 under paragraph(b)(c). 71.25 Sec. 40. Minnesota Statutes 2000, section 356.55, as 71.26 amended by Laws 2001, First Special Session chapter 10, article 71.27 6, section 16, is amended to read: 71.28 356.55 [PRIOR SERVICE CREDIT PURCHASE PAYMENT AMOUNT 71.29 DETERMINATION PROCEDURE.] 71.30 Subdivision 1. [APPLICATION.] (a) Unless the prior service 71.31 credit purchase authorization special law or general statute 71.32 provision explicitly specifies a different purchase payment 71.33 amount determination procedure, this section governs the 71.34 determination of the prior service credit purchase payment 71.35 amount of any prior service credit purchase. 71.36 (b) The purchase payment amount determination procedure 72.1 must recognize any service credit accrued to the purchaser in a 72.2 pension planlistedenumerated in section 356.30, subdivision 3. 72.3 (c) Any service credit in a Minnesota defined benefit 72.4 public employee pension plan available to be reinstated by the 72.5 purchaser through the repayment of a refund of member or 72.6 employee contributions previously received must be repaid in 72.7 full before any purchase of prior service credit payment is made 72.8 under this section. 72.9 Subd. 2. [DETERMINATION.] (a) Unless the prior service 72.10 credit purchase minimum purchase payment amount determined under 72.11 paragraph (d) is greater, the prior service credit purchase 72.12 amount is the result obtained by subtracting the amount 72.13 determined under paragraph (c) from the amount determined under 72.14 paragraph (b). 72.15 (b) The present value of the unreduced single life 72.16 retirement annuity, with the purchase of the additional service 72.17 credit included, must be calculated as follows: 72.18 (1) the age at first eligibility for an unreduced single 72.19 life retirement annuity, including the purchase of the 72.20 additional service credit, must be determined; 72.21 (2) the length of total service credit, including the 72.22 period of the purchase of the additional service credit, at the 72.23 age determined under clause (1) must be determined; 72.24 (3) the highest five successive years average salary at the 72.25 age determined under clause (1), assuming five percent annual 72.26 compounding salary increases from the most current annual salary 72.27 amount at the age determined under clause (1), must be 72.28 determined; 72.29 (4) using the benefit accrual rate or rates applicable to 72.30 the prospective purchaser of the service credit based on the 72.31 prospective purchaser's actual date of entry into covered 72.32 service, the length of service determined under clause (2), and 72.33 the final average salary determined under clause (3), the annual 72.34 unreduced single life retirement annuity amount must be 72.35 determined; 72.36 (5) the actuarial present value of the projected annual 73.1 unreduced single life retirement annuity amount determined under 73.2 clause (4) at the age determined under clause (1), using the 73.3 same actuarial factor that the plan would use to determine 73.4 actuarial equivalence for optional annuity forms and related 73.5 purposes, must be determined; and 73.6 (6) the discounted value of the amount determined under 73.7 clause (5) to the date of the prospective purchase, using an 73.8 interest rate of 8.5 percent and no mortality probability 73.9 decrement, must be determined. 73.10 (c) The present value of the unreduced single life 73.11 retirement annuity, without the purchase of the additional 73.12 service credit included, must be calculated as follows: 73.13 (1) the age at first eligibility for an unreduced single 73.14 life retirement annuity, not including the purchase of 73.15 additional service credit, must be determined; 73.16 (2) the length of accrued service credit, without the 73.17 period of the purchase of the additional service credit, at the 73.18 age determined under clause (1), must be determined; 73.19 (3) the highest five successive years average salary at the 73.20 age determined under clause (1), assuming five percent annual 73.21 compounding salary increases from the most current annual salary 73.22 amount to the age determined under clause (1), must be 73.23 determined; 73.24 (4) using the benefit accrual rate or rates applicable to 73.25 the prospective purchaser of the service credit based on the 73.26 prospective purchaser's actual date of entry into covered 73.27 service the length of service credit determined under clause 73.28 (2), and the final average salary determined under clause (3), 73.29 the annual unreduced single life retirement annuity amount must 73.30 be determined; 73.31 (5) the actuarial present value of the projected annual 73.32 unreduced single life retirement annuity amount determined under 73.33 clause (4) at the age determined under clause (1), using the 73.34 same actuarial factor that the plan would use to determine 73.35 actuarial equivalence for optional annuity forms and related 73.36 purposes, must be determined; 74.1 (6) the discounted value of the amount determined under 74.2 clause (5) to the date of the prospective purchase, using an 74.3 interest rate of 8.5 percent and no mortality probability 74.4 decrement, must be determined; and 74.5 (7) the net value of the discounted value determined under 74.6 clause (6), must be determined by applying a service ratio, 74.7 where the numerator is the total length of credited service 74.8 determined under paragraph (b), clause (2), reduced by the 74.9 period of the additional service credit proposed to be 74.10 purchased, and where the denominator is the total length of 74.11 service credit determined under clause (2). 74.12 (d) The minimum prior service credit purchase payment 74.13 amount is the amount determined by multiplying the most current 74.14 annual salary of the prospective purchaser by the combined 74.15 current employee, employer, and any additional employer 74.16 contribution rates for the applicable pension plan and by 74.17 multiplying that result by the number of years of service or 74.18 fractions of years of service of the potential service credit 74.19 purchase. 74.20 Subd. 3. [SOURCE OF DETERMINATION.] The prior service 74.21 credit purchase payment amounts under subdivision 2 must be 74.22 calculated by the chief administrative officer of the public 74.23 pension plan using a prior service credit purchase payment 74.24 amount determination process that has been verified for accuracy 74.25 and consistency under this section by the commission-retained 74.26 actuary. That verification must be in writing and must occur 74.27 before the first prior service credit purchase for the plan 74.28 under this section is accepted and every five years thereafter 74.29 or whenever the preretirement interest rate, postretirement 74.30 interest rate, payroll growth, or mortality actuarial assumption 74.31 for the applicable pension plan is modified under section 74.32 356.215, whichever occurs first. 74.33 Subd. 4. [PRIOR SERVICE CREDIT PURCHASE PROCESSING FEE.] A 74.34 public pension plan may establish a fee to be charged to the 74.35 prospective purchaser for processing a prior service credit 74.36 purchase application and the prior service credit purchase 75.1 payment amount calculation. The fee must be established by the 75.2 governing board of the pension plan and must be uniform for 75.3 comparable service credit purchase situations or actuarial 75.4 calculation requests. The prior service credit purchase 75.5 processing fee structure must be published by the chief 75.6 administrative officer of the applicable retirement plan in the 75.7 State Register. 75.8 Subd. 5. [PAYMENT RESPONSIBILITY; EMPLOYER OPTION.] Unless 75.9 the prior service credit purchase authorization special law or 75.10 general statute provision explicitly specifies otherwise, the 75.11 prior service credit purchase payment amount determined under 75.12 subdivision 2 is payable by the purchaser, but. However, the 75.13 former employer of the purchaser or the current employer of the 75.14 purchaser may, at its discretion, pay all or a portion of the 75.15 purchase payment amount in excess of an amount equal to the 75.16 employee contribution rate or rates in effect during the prior 75.17 service period applied to the actual salary rates in effect 75.18 during the prior service period, plus annual compound interest 75.19 at the rate of 8.5 percent from the date on which the 75.20 contributions would have been made if made contemporaneous with 75.21 the service period to the date on which the payment is actually 75.22 made. 75.23 Subd. 6. [REPORT ON PRIOR SERVICE CREDIT PURCHASES.] (a) 75.24 As part of the regular data reporting provided to the consulting 75.25 actuary retained by the legislative commission on pensions and 75.26 retirement annually, the chief administrative officer of each 75.27 public pension plan that has accepted a prior service credit 75.28 purchase payment under this section shall report for any 75.29 purchase, the purchaser, the purchaser's employer, the age of 75.30 the purchaser, the period of the purchase, the purchaser's 75.31 prepurchase accrued service credit, the purchaser's postpurchase 75.32 accrued service credit, the purchaser's prior service credit 75.33 payment, the prior service credit payment made by the 75.34 purchaser's employer, and the amount of the additional benefit 75.35 or annuity purchased. 75.36 (b) As a supplemental report to the regular annual 76.1 actuarial valuation for the applicable public pension plan 76.2 prepared by the consulting actuary retained by the legislative 76.3 commission on pensions and retirement,there must bethe actuary 76.4 shall provide a comparison for each purchase showing the total 76.5 prior service credit payment received from all sources and the 76.6 increased public pension plan actuarial accrued liability 76.7 resulting from each purchase. 76.8 Subd. 7. [EXPIRATION OF PURCHASE PAYMENT DETERMINATION 76.9 PROCEDURE.] (a) This section expires and is repealed on July 1, 76.10 2003. 76.11 (b) Authority for any public pension plan to accept a prior 76.12 service credit payment that is calculated in a timely fashion 76.13 under this section expires on October 1, 2003. 76.14 Sec. 41. Minnesota Statutes 2000, section 356.551, is 76.15 amended to read: 76.16 356.551 [POST JULY 1,20012003, PRIOR SERVICE CREDIT 76.17 PURCHASE PAYMENT AMOUNT DETERMINATION PROCEDURE.] 76.18(a)Subdivision 1. [APPLICATION.] Unless the prior service 76.19 credit purchase authorization special law or general statute 76.20 provision explicitly specifies a different purchase payment 76.21 amount determination procedure, and if section 356.55 has 76.22 expired, this section governs the determination of the prior 76.23 service credit purchase payment amount of any prior service 76.24 credit purchase. 76.25(b)Subd. 2. [DETERMINATION.] The prior service credit 76.26 purchase amount is an amount equal to the actuarial present 76.27 value, on the date of payment, as calculated by the chief 76.28 administrative officer of the pension plan and reviewed by the 76.29 actuary retained by the legislative commission on pensions and 76.30 retirement, of the amount of the additional retirement annuity 76.31 obtained by the acquisition of the additional service credit in 76.32 this section. Calculation of this amount must be made using the 76.33 preretirement interest rate applicable to the public pension 76.34 plan specified in section 356.215, subdivision 4d, and the 76.35 mortality table adopted for the public pension plan. The 76.36 calculation must assume continuous future service in the public 77.1 pension plan until, and retirement at, the age at which the 77.2 minimum requirements of the fund for normal retirement or 77.3 retirement with an annuity unreduced for retirement at an early 77.4 age, including section 356.30, are met with the additional 77.5 service credit purchased. The calculation must also assume a 77.6 full-time equivalent salary, or actual salary, whichever is 77.7 greater, and a future salary history that includes annual salary 77.8 increases at the applicable salary increase rate for the plan 77.9 specified in section 356.215, subdivision 4d. Payment must be 77.10 made in one lump sum within one year of the prior service credit 77.11 authorization. Payment of the amount calculated under this 77.12 section must be made by the applicable eligible person. 77.13 However, the current employer or the prior employer may, at its 77.14 discretion, pay all or any portion of the payment amount that 77.15 exceeds an amount equal to the employee contribution rates in 77.16 effect during the period or periods of prior service applied to 77.17 the actual salary rates in effect during the period or periods 77.18 of prior service, plus interest at the rate of 8.5 percent a 77.19 year compounded annually from the date on which the 77.20 contributions would otherwise have been made to the date on 77.21 which the payment is made. If the employer agrees to payments 77.22 under thisparagraphsubdivision, the purchaser must make the 77.23 employee payments required under thisparagraphsubdivision 77.24 within 290 days of the prior service credit authorization. If 77.25 that employee payment is made, the employer payment under 77.26 thisparagraphsubdivision must be remitted to the chief 77.27 administrative officer of the public pension plan within 60 days 77.28 of receipt by the chief administrative officer of the employee 77.29 payments specified under thisparagraphsubdivision. 77.30(c)Subd. 3. [DOCUMENTATION.] The prospective purchaser 77.31 must provide any relevant documentation required by the chief 77.32 administrative officer of the public pension plan to determine 77.33 eligibility for the prior service credit under this section. 77.34(d)Subd. 4. [PAYMENT PRECONDITION FOR CREDIT GRANT.] 77.35 Service credit for the purchase period must be granted by the 77.36 public pension plan to the purchaser upon receipt of the 78.1 purchase payment amount specified inparagraph (b)subdivision 2. 78.2 Sec. 42. Minnesota Statutes 2001 Supplement, section 78.3 356.555, is amended to read: 78.4 356.555 [PARENTAL OR FAMILY LEAVE SERVICE CREDIT PURCHASE.] 78.5 Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZATION.] 78.6 (a) Notwithstanding any provision to the contrary of the laws 78.7 governing a covered pension plan enumerated in subdivision 4, a 78.8 member of the pension plan who has at least three years of 78.9 allowable service covered by the applicable pension plan and who 78.10 was granted by the employer a parental leave of absence as 78.11 defined in paragraph (b), or who was granted by the employer a 78.12 family leave of absence as defined in paragraph (c), or who had 78.13 a parental or family-related break in employment, as defined in 78.14 paragraph (d), for which the person did not previously receive 78.15 service credit or for which the person did not receive or 78.16 purchase service credit from another defined benefit public 78.17 employee pension plan, is entitled to purchase the actual period 78.18 of the leave or of the break in service, up to five years, of 78.19 allowable service credit in the applicable retirement plan. The 78.20 purchase payment amount is governed by section 356.55. 78.21 (b) For purposes of this section, a parental leave of 78.22 absence is a temporary period of interruption of or separation 78.23 from active employment for the purposes of handling maternity or 78.24 paternity duties that has been approved by the employing unit 78.25 and that includes the right of reinstatement to employment. 78.26 (c) For purposes of this section, a family leave of absence 78.27 is a family leave under United States Code, title 42, section 78.28 12631, as amended. 78.29 (d) For purposes of this section, a parental or 78.30 family-related break in employment is a period following a 78.31 termination of active employment primarily for the purpose of 78.32 the birth of a child, the adoption of a child, or the provision 78.33 of care to a near relative or in-law, after which the person 78.34 returned to the prior employing unit or to an employing unit 78.35 covered by the same pension plan that provided retirement 78.36 coverage immediately prior to the termination of employment. 79.1 Subd. 2. [APPLICATION AND DOCUMENTATION.] (a) A person who 79.2 desires to purchase service credit under subdivision 1 must 79.3 apply for the service credit purchase with the chief 79.4 administrative officer of the enumerated pension plan. 79.5 (b) The application must include all necessary 79.6 documentation of the qualifications of the person to make the 79.7 purchase, signed written permission to allow the chief 79.8 administrative officer to request and receive necessary 79.9 verification of all applicable facts and eligibility 79.10 requirements, and any other relevant information that the chief 79.11 administrative officer may require. 79.12 Subd. 3. [SERVICE CREDIT GRANT.] Allowable and formula 79.13 service credit in the applicable enumerated pension plan for the 79.14 purchase period must be granted to the purchaser upon receipt of 79.15 the purchase payment amount calculated under section 356.55. 79.16 Payment of the purchase amount must be made before the person 79.17 retires. 79.18 Subd. 4. [COVERED PENSION PLANS.] This section applies to 79.19 the following pension plans: 79.20 (1) the general state employees retirement plan governed by 79.21 chapter 352; 79.22 (2) the correctional state employees retirement plan 79.23 governed by chapter 352; 79.24 (3) the general public employees retirement plan governed 79.25 by chapter 353; 79.26 (4) the public employees police and fire plan governed by 79.27 chapter 353; 79.28 (5) the teachers retirement plan governed by chapter 354; 79.29 (6) the Minneapolis teachers retirement fund association 79.30 governed by chapter 354A; 79.31 (7) the Saint Paul teachers retirement fund association 79.32 governed by chapter 354A; 79.33 (8) the Duluth teachers retirement fund association 79.34 governed by chapter 354A; 79.35 (9) the Minneapolis employees retirement plan governed by 79.36 chapter 422A; 80.1 (10) the Minneapolis police relief association governed by 80.2 chapter 423B; and 80.3 (11) the Minneapolis fire department relief association 80.4 governed by sections 69.25 to 69.53 and augmented by Laws 1959, 80.5 chapters 213, 491, and 568, and other special local legislation. 80.6 COVERED SALARY LIMITATION 80.7 Sec. 43. Minnesota Statutes 2000, section 356.611, is 80.8 amended to read: 80.9 356.611 [LIMITATION ON PUBLIC EMPLOYEE SALARIES FOR PENSION 80.10 PURPOSES.] 80.11 Subdivision 1. [STATE SALARY LIMITATIONS.] (a) 80.12 Notwithstanding any provision of law, bylaws, articles of 80.13 incorporation, retirement and disability allowance plan 80.14 agreements, or retirement plan contracts to the contrary, the 80.15 covered salary for pension purposes for a plan participant of a 80.16 covered retirement fundunderenumerated in section 356.30, 80.17 subdivision 3, may not exceed 95 percent of the salary 80.18 established for the governor under section 15A.082 at the time 80.19 the person received the salary. 80.20 (b) This section does not apply to a salary paid: 80.21 (1) to the governor; 80.22 (2) to an employee of a political subdivision in a position 80.23 that is excluded from the limit as specified under section 80.24 43A.17, subdivision 9; or 80.25 (3) to a state employee in a position for which the 80.26 commissioner of employee relations has approved a salary rate 80.27 that exceeds 95 percent of the governor's salary. 80.28 (c) The limited covered salary determined under this 80.29 section must be used in determining employee and employer 80.30 contributions and in determining retirement annuities and other 80.31 benefits under the respective covered retirement fund and under 80.32 this chapter. 80.33 Subd. 2. [FEDERAL COMPENSATION LIMITS.] For members first 80.34 contributing to a covered pension plancovered underenumerated 80.35 in section 356.30, subdivision 3, on or after July 1, 1995, 80.36 compensation in excess of the limitation set forth in Internal 81.1 Revenue Code 401(a)(17)shallmay not be included for 81.2 contribution and benefit computation purposes. The compensation 81.3 limit set forth in Internal Revenue Code 401(a)(17) on June 30, 81.4 1993,shall applyapplies to members first contributing before 81.5 July 1, 1995. 81.6 MEMBER CONTRIBUTION EMPLOYER PICK-UP 81.7 Sec. 44. Minnesota Statutes 2001 Supplement, section 81.8 356.62, is amended to read: 81.9 356.62 [PAYMENT OF EMPLOYEE CONTRIBUTION.] 81.10 (a) For purposes of any public pension plan, as defined in 81.11 section 365.615, paragraph (b), each employer shall pick up the 81.12 employee contributions required pursuant to law or the pension 81.13 plan for all salary payable after December 31, 1982. If the 81.14 United States Treasury department rules thatpursuant tounder 81.15 section 414(h) of the Internal Revenue Code of 1986, as amended 81.16 through December 31, 1992, that these picked up contributions 81.17 are not includable in the employee's adjusted gross income until 81.18 they are distributed or made available, then these picked up 81.19 contributionsshallmust be treated as employer contributions in 81.20 determining tax treatmentpursuant tounder the Internal Revenue 81.21 Code of 1986, as amended through December 31, 1992, and the 81.22 employer shall discontinue withholding federal income taxes on 81.23 the amount of these contributions. The employer shall pay these 81.24 picked up contributions from the same source of funds as is used 81.25 to pay the salary of the employee. The employer shall pick up 81.26 these employee contributions by a reduction in the cash salary 81.27 of the employee. 81.28 (b) Employee contributions that are picked upshallmust be 81.29 treated for all purposes of the public pension plan in the same 81.30 manner and to the same extent as employee contributions that 81.31 were made prior to the date on which the employee contributions 81.32 pick up began. The amount of the employee contributions that 81.33 are picked upshallmust be included in the salary upon which 81.34 retirement coverage is credited and retirement and survivor's 81.35 benefits are determined. For purposes of this section, 81.36 "employee" means any person covered by a public pension plan. 82.1 For purposes of this section, "employee contributions" include 82.2 any sums deducted from the employee's salary or wages or 82.3 otherwise paid in lieu thereof, regardless of whether they are 82.4 denominated contributions by the public pension plan. 82.5 (c) For any calendar year in which withholding has been 82.6 reducedpursuant tounder this section, the employing unit shall 82.7 supply each employee and the commissioner of revenue with an 82.8 information return indicating the amount of the employer's 82.9 picked-up contributions for the calendar year that were not 82.10 subject to withholding. This returnshallmust be provided to 82.11 the employee not later than January 31 of the succeeding 82.12 calendar year. The commissioner of revenue shall prescribe the 82.13 form of the return and the provisions of section 289A.12shall82.14 apply to the extent not inconsistent with the provisions of this 82.15 section. 82.16 PENSION ASSET AND INVESTMENT 82.17 LIMITATIONS 82.18 Sec. 45. [356.63] [LIMITATION ON USE OF PUBLIC PENSION 82.19 PLAN ASSETS.] 82.20 (a) Money held by or credited to a public pension plan as 82.21 assets, including employer and employee contributions, state 82.22 aid, appropriations from the state or a governmental 82.23 subdivision, and accrued earnings on investments, constitutes a 82.24 dedicated fund. The dedicated fund may be used exclusively to 82.25 pay retirement annuities, service pensions, disability benefits, 82.26 survivor benefits, refunds of contributions, or other benefits 82.27 provided under the benefit plan document or documents governing 82.28 the public pension plan, and to pay reasonable administrative 82.29 expenses approved by the governing board of the public pension 82.30 plan or by another appropriate authority. No assets of a public 82.31 pension plan may be loaned or transferred to the state or a 82.32 governmental subdivision or be used to amortize an unfunded 82.33 actuarial accrued liability in another public pension plan or 82.34 fund, whether or not the plan providing the assets consolidates 82.35 or has consolidated with the plan receiving the assets. Nothing 82.36 in this section prohibits a public pension plan or the state 83.1 board of investment from investing the assets of a plan as 83.2 authorized by law, including the investment of the assets of 83.3 public pension plans by the state board of investment in a 83.4 commingled investment fund. 83.5 (b) A public pension plan for purposes of this section 83.6 means a pension plan or fund specified in section 356.20, 83.7 subdivision 2, or 356.30, subdivision 3, or a retirement or 83.8 pension plan or fund, including a supplemental retirement plan 83.9 or fund, established, maintained, or supported by a governmental 83.10 subdivision or public body whose revenues are derived from 83.11 taxation, fees, assessments, or other public sources. 83.12 Sec. 46. [356.64] [REAL ESTATE INVESTMENTS.] 83.13 (a) Notwithstanding any law to the contrary, any public 83.14 pension plan whose assets are not invested by the state board of 83.15 investment may invest its funds in Minnesota situs nonfarm real 83.16 estate ownership interests or loans secured by mortgages or 83.17 deeds of trust if the investment is consistent with section 83.18 356A.04. 83.19 (b) Except to the extent authorized in the case of the 83.20 Minneapolis employees retirement fund under section 422A.05, 83.21 subdivision 2c, paragraph (a), an investment otherwise 83.22 authorized by this section must also comply with the 83.23 requirements and limitations of section 11A.24, subdivision 6. 83.24 ABANDONED PENSION FUND AMOUNTS 83.25 Sec. 47. Minnesota Statutes 2001 Supplement, section 83.26 356.65, subdivision 1, is amended to read: 83.27 Subdivision 1. [DEFINITIONS.] For purposes of this 83.28 section, unless the context clearly indicates otherwise, each of 83.29 the following termsshall havehas themeaningsmeaning given to 83.30themit: 83.31 (a) "Public pension fund" means any public pension plan as 83.32 defined in section 356.615, paragraph (b), and any Minnesota 83.33 volunteer firefighters relief association which is established 83.34pursuant tounder chapter 424A and governedpursuant tounder 83.35 sections 69.771 to 69.776. 83.36 (b) "Unclaimed public pension fund amounts" means any 84.1 amounts representing accumulated member contributions, any 84.2 outstanding unpaid annuity, service pension or other retirement 84.3 benefit payments, including those made on warrants issued by the 84.4 commissioner of finance, which have been issued and delivered 84.5 for more than six months prior to the date of the end of the 84.6 fiscal year applicable to the public pension fund, and any 84.7 applicable interest to the credit of: 84.8 (1) an inactive or former member of a public pension fund 84.9 who is not entitled to a defined retirement annuity and who has 84.10 not applied for a refund of those amounts within five years 84.11 after the last member contribution was made; or 84.12 (2) a deceased inactive or former member of a public 84.13 pension fund if no survivor is entitled to a survivor benefit 84.14 and no survivor, designated beneficiary or legal representative 84.15 of the estate has applied for a refund of those amounts within 84.16 five years after the date of death of the inactive or former 84.17 member. 84.18 Sec. 48. Minnesota Statutes 2000, section 356.65, 84.19 subdivision 2, is amended to read: 84.20 Subd. 2. [DISPOSITION OF ABANDONED AMOUNTS.] Any unclaimed 84.21 public pension fund amounts existing in any public pension 84.22 fundshall beare presumed to be abandoned, butshallare not 84.23besubject to the provisions of sections 345.31 to 345.60. 84.24 Unless the benefit plan of the public pension fund specifically 84.25 provides for a different disposition of unclaimed or abandoned 84.26 funds or amounts, any unclaimed public pension fund 84.27 amountsshallcancel andshallmust be credited to the public 84.28 pension fund. If the unclaimed public pension fund amount 84.29 exceeds $25 and the inactive or former member again becomes a 84.30 member of the applicable public pensionfundplan or applies for 84.31 a retirement annuitypursuant tounder section 3A.12, 352.72, 84.32 352B.30, 352C.051, 353.71, 354.60, 356.30, or 422A.16, 84.33 subdivision 8, whicheveris applicable,applies, the canceled 84.34 amountshallmust be restored to the credit of the person. 84.35 HEALTH INSURANCE WITHHOLDING 84.36 Sec. 49. Minnesota Statutes 2000, section 356.87, is 85.1 amended to read: 85.2 356.87 [HEALTH INSURANCE WITHHOLDING.] 85.3 (a) Upon authorization of a person entitled to receive a 85.4 retirement annuity, disability benefit or survivor benefit, the 85.5 executive director of a public pension fundlistedenumerated in 85.6 section 356.20, subdivision 2, shall withhold health insurance 85.7 premium amounts from the retirement annuity, disability benefit 85.8 or survivor benefit, and shall pay the premium amounts to the 85.9 public employees insurance program. 85.10 (b) The public employees insurance program shall reimburse 85.11 a public pension fund for the administrative expense of 85.12 withholding the premium amounts and shall assume liability for 85.13 the failure of a public pension fund to properly withhold the 85.14 premium amounts. 85.15 RETIREMENT PLAN 85.16 ADMINISTRATION 85.17 Sec. 50. [356B.05] [PUBLIC PENSION ADMINISTRATION 85.18 LEGISLATION.] 85.19 (a) Proposed administrative legislation recommended by or 85.20 on behalf of the Minnesota state retirement system, the public 85.21 employees retirement association, the teachers retirement 85.22 association, the Minneapolis employees retirement fund, or a 85.23 first class city teachers retirement fund association must be 85.24 presented to the legislative commission on pensions and 85.25 retirement, the state and local governmental operations 85.26 committee of the senate, and the governmental operations and 85.27 veterans affairs policy committee of the house of 85.28 representatives on or before October 1 of each year in order for 85.29 the proposed administrative legislation to be acted upon during 85.30 the upcoming legislative session. The executive director or the 85.31 deputy executive director of the legislative commission on 85.32 pensions and retirement shall provide written comments on the 85.33 proposed provisions to the public pension plans by November 15 85.34 of each year. 85.35 (b) Proposed administrative legislation recommended by or 85.36 on behalf of a public employee pension plan or system under 86.1 paragraph (a) must address provisions: 86.2 (1) authorizing allowable service credit for leaves of 86.3 absence and related circumstances; 86.4 (2) governing offsets or deductions from the amount of 86.5 disability benefits; 86.6 (3) authorizing the purchase of allowable service credit 86.7 for prior uncredited periods; 86.8 (4) governing subsequent employment earnings by reemployed 86.9 annuitants; and 86.10 (5) authorizing retroactive effect for retirement annuity 86.11 or benefit applications. 86.12 (c) Where possible and desirable, taking into account the 86.13 differences among the public pension plans in existing law and 86.14 the unique characteristics of the individual public pension fund 86.15 memberships, uniform provisions relating to paragraph (b) for 86.16 all applicable public pension plans must be presented for 86.17 consideration during the legislative session. Supporting 86.18 documentation setting forth the policy rationale for each set of 86.19 uniform provisions must accompany the proposed administrative 86.20 legislation. 86.21 Sec. 51. [356B.10] [PUBLIC PENSION FACILITIES.] 86.22 Subdivision 1. [DEFINITIONS.] (a) The definitions in this 86.23 subdivision apply to this section. 86.24 (b) "Boards" mean the board of directors of the Minnesota 86.25 state retirement system, the board of trustees of the public 86.26 employees retirement association, and the board of trustees of 86.27 the teachers retirement association. 86.28 (c) "Commissioner" means the commissioner of administration. 86.29 Subd. 2. [BUILDING; RELATED FACILITIES.] (a) The 86.30 commissioner of administration may provide a building and 86.31 related facilities to be jointly occupied by the board of 86.32 directors of the Minnesota state retirement system, the board of 86.33 trustees of the public employees retirement association, and the 86.34 board of trustees of the teachers retirement association for the 86.35 administration of their public pension systems. 86.36 (b) Design of the facilities is not subject to section 87.1 16B.33. The competitive acquisition process set forth in 87.2 chapter 16C does not apply if the process set forth in 87.3 subdivision 3 is followed. 87.4 (c) The boards and the commissioner must submit the plans 87.5 for a public pension facility under this section to the chair of 87.6 the house ways and means committee and to the chair of the 87.7 senate state government finance committee for their approval 87.8 before the plans are implemented. 87.9 Subd. 3. [CONTRACTING PROCEDURES.] (a) The commissioner 87.10 may enter into a contract for facilities with a contractor to 87.11 furnish the architectural, engineering, and related services as 87.12 well as the labor, materials, supplies, equipment, and related 87.13 construction services on the basis of a request for 87.14 qualifications and competitive responses received through a 87.15 request for proposals process that must include the items listed 87.16 in paragraphs (b) to (i). 87.17 (b) Before issuing a request for qualifications and a 87.18 request for proposals, the commissioner, with the assistance of 87.19 the boards, shall prepare performance criteria and 87.20 specifications that include: 87.21 (1) a general floor plan or layout indicating the general 87.22 dimensions of the public building and space requirements; 87.23 (2) design criteria for the exterior and site area; 87.24 (3) performance specifications for all building systems and 87.25 components to ensure quality and cost efficiencies; 87.26 (4) conceptual floor plans for systems space; 87.27 (5) preferred types of interior finishes, styles of 87.28 windows, lighting and outlets, doors, and features such as 87.29 built-in counters and telephone wiring; 87.30 (6) mechanical and electrical requirements; 87.31 (7) special interior features required; and 87.32 (8) a completion schedule. 87.33 (c) The commissioner shall first solicit statements of 87.34 qualifications from eligible contractors and select more than 87.35 one qualified contractor based upon experience, technical 87.36 competence, past performance, capability to perform, and other 88.1 appropriate facts. Contractors selected under this process must 88.2 be, employ, or have as a partner, member, coventurer, or 88.3 subcontractor, persons licensed and registered under chapter 326 88.4 to provide the services required to design and complete the 88.5 project. The commissioner does not have to select any of the 88.6 respondents if none reasonably fulfill the criteria set forth in 88.7 this paragraph. 88.8 (d) The contractors selected shall be asked to respond to a 88.9 request for proposals. Responses must include site plans, 88.10 design concept, elevation, statement of material to be used, 88.11 floor layouts, a detailed development budget, and a total cost 88.12 to complete the project. The proposal must indicate that the 88.13 contractor obtained at least two proposals from subcontractors 88.14 for each item of work and must set forth how the subcontractors 88.15 were selected. The commissioner, with the assistance of the 88.16 boards, shall evaluate the proposals based upon design, cost, 88.17 quality, aesthetics, and the best overall value to the state 88.18 pension funds. The commissioner need not select any of the 88.19 proposals submitted and reserves the right to reject any and all 88.20 proposals, and may terminate the process or revise the request 88.21 for proposals and solicit new proposals if the commissioner 88.22 determines that the best interests of the pension funds would be 88.23 better served by doing so. Proposals submitted are nonpublic 88.24 data until the contract is awarded. 88.25 (e) The contractor selected must comply with sections 88.26 574.26 to 574.261. Before executing a final contract, the 88.27 contractor selected shall certify a firm construction price and 88.28 completion date. 88.29 (f) The commissioner may consider building sites in the 88.30 city of St. Paul and surrounding suburbs. 88.31 (g) Any land, building, or facility leased, constructed, or 88.32 acquired and any leasehold interest acquired under this section 88.33 must be held by the state in trust for the three retirement 88.34 systems as tenants in common. Each retirement system fund must 88.35 consider its interest as a fixed asset of its pension fund in 88.36 accordance with governmental accounting standards. 89.1 (h) The commissioner may lease to another governmental 89.2 subdivision any portion of the funds' building and lands that is 89.3 not required for their direct use upon terms and conditions they 89.4 deem to be in the best interest of the pension funds. Any 89.5 income accruing from the rentals must be separately accounted 89.6 for and utilized to offset ongoing administrative expenses and 89.7 any excess must be carried forward for future administrative 89.8 expenses. The commissioner may also enter into lease agreements 89.9 for the establishment of satellite offices should the boards 89.10 find them to be necessary in order to assure their members 89.11 reasonable access to their services. The commissioner may lease 89.12 under section 16B.24 any portion of the facilities not required 89.13 for the direct use of the boards. 89.14 (i) The boards shall formulate and adopt a written working 89.15 agreement that sets forth the nature of each retirement system's 89.16 ownership interest, the duties and obligations of each system 89.17 toward the construction, operation, and maintenance costs of its 89.18 facilities, and identifies one retirement fund to serve as 89.19 manager for operating and maintenance purposes. The boards may 89.20 contract with independent third parties for maintenance-related 89.21 activities, services, and supplies, and may use the services of 89.22 the department of administration where economically feasible to 89.23 do so. If the boards cannot agree or resolve a dispute about 89.24 operations or maintenance of the facilities, they may request 89.25 the commissioner of administration to appoint a representative 89.26 from the department's real estate management division to serve 89.27 as arbitrator of the dispute with authority to issue a written 89.28 resolution of the dispute. 89.29 Subd. 4. [REVENUE BONDS.] The commissioner of finance, on 89.30 request of the governor, may sell and issue revenue bonds in an 89.31 aggregate principal amount up to $38,000,000 to achieve the 89.32 purposes described in subdivisions 1 and 2, plus the amount 89.33 needed to pay issuance costs and interest costs and to establish 89.34 necessary reserves to secure the bonds. The commissioner of 89.35 finance may issue bonds for the purpose of refunding bonds 89.36 issued under this subdivision. The bonds may be sold and issued 90.1 on terms and in a manner the commissioner of finance determines 90.2 to be in the best interests of the state. The proceeds of the 90.3 bonds must be credited to a bond proceeds account in the pension 90.4 building fund which the commissioner of finance must create in 90.5 the state treasury. 90.6 Subd. 5. [SECURITY.] The boards may pledge any or all 90.7 assets of the boards as security for the bonds. The bonds and 90.8 the interest on them must be paid solely from and secured by all 90.9 assets of the boards pledged and appropriated for these purposes 90.10 to the debt service fund created in subdivision 6 and any 90.11 investment income on it and any reserve established for this 90.12 purpose. The bonds are not public debt, and the full faith, 90.13 credit, and taxing powers of the state are not pledged for their 90.14 payment. The bonds and the interest on them must not be paid, 90.15 directly or indirectly, in whole or in part, from a tax of 90.16 statewide application on any class of property, income, 90.17 transaction, or privilege. 90.18 Subd. 6. [DEBT SERVICE FUND.] There is established in the 90.19 state treasury a separate and special pension building debt 90.20 service fund. Money in the funds managed by the boards is 90.21 appropriated to the boards for transfer to the pension building 90.22 debt service fund. Money appropriated and transferred to the 90.23 fund and investment income on it on hand or required to be 90.24 transferred to the fund must be used and is irrevocably 90.25 appropriated to pay when due the principal of and interest on 90.26 the bonds authorized in subdivision 4. 90.27 Subd. 7. [COVENANTS; AGREEMENTS.] The commissioner of 90.28 finance may, for and on behalf of the state, enter into 90.29 covenants and agreements not inconsistent with subdivisions 1 to 90.30 6 as may be necessary or desirable to facilitate the sale and 90.31 issuance of the bonds on terms favorable to the state, 90.32 including, but not limited to, covenants and agreements relating 90.33 to the payment of and security for the bonds, tax exemption, and 90.34 disclosure of information required by federal and state 90.35 securities laws. The covenants and agreements of the 90.36 commissioner of finance constitute an enforceable contract of 91.1 the state and the state pledges and agrees with the holders of 91.2 any bonds that the state will not limit or alter the rights 91.3 vested in the commissioner of finance to fulfill the terms of 91.4 the covenants or agreements made with the holders of the bonds, 91.5 or in any way impair the rights and remedies of the holders 91.6 until the bonds, together with the interest on them, with 91.7 interest on any unpaid installments of interest, and all costs 91.8 and expenses in connection with any action or proceeding by or 91.9 on behalf of the holders, are fully met and discharged. The 91.10 commissioner of finance may include this pledge and agreement of 91.11 the state in any covenant or agreement with the holders of the 91.12 bonds. Sections 16A.672 and 16A.675 apply to the bonds. 91.13 Sec. 52. [CROSS-REFERENCE CHANGES.] 91.14 In the next and subsequent editions of Minnesota Statutes, 91.15 the revisor of statutes shall, in each section indicated in 91.16 column A, replace the cross-reference specified in column B with 91.17 the cross-reference set forth in column C: 91.18 column A column B column C 91.19 3.751, subd. 1 356.89 356B.10 91.20 3A.02, subd. 1 356.215, subd. 4d 356.215, subd. 8 91.21 3A.02, subd. 4 356.215, subd. 4d 356.215, subd. 8 91.22 3A.11, subd. 1 356.215, subd. 4d 356.215, subd. 8 91.23 11A.18, subd. 6 356.215, subd. 4d 356.215, subd. 8 91.24 11A.18, subd. 9 356.215, subd. 4d 356.215, subd. 8 91.25 11A.18, subd. 11 356.215, subd. 4d 356.215, subd. 8 91.26 13.631, subd. 2 356.80 356.49 91.27 69.77, subd. 2b 356.215, subds. 4 356.215, subds. 4 to 15 91.28 to 4k 91.29 69.77, subd. 2b 356.215, subd. 4d 356.215, subd. 8 91.30 69.773, subd. 2 356.215, subd. 4d 356.215, subd. 8 91.31 69.773, subd. 4 356.215, subd. 4d 356.215, subd. 8 91.32 352.01, subd. 12 356.215, subd. 4d 356.215, subd. 8 91.33 352.115, subd. 3 356.119, subd. 1 356.315, subd. 1 91.34 352.115, subd. 3 356.119, subd. 2 356.315, subd. 2 91.35 352.115, subd. 10 356.58 356.47 91.36 352.119, subd. 2 356.215, subd. 4d 356.215, subd. 8 92.1 352.72, subd. 2 356.215, subd. 4d 356.215, subd. 8 92.2 352.87, subd. 3 356.119, subd. 2a 356.315, subd. 2a 92.3 352.91, subd. 5 356.215, subd. 4d 356.215, subd. 8 92.4 352.93, subd. 2 356.119, subd. 5 356.315, subd. 5 92.5 352.95, subd. 1 356.119, subd. 5 356.315, subd. 5 92.6 352B.08, subd. 2 356.119, subd. 6 356.315, subd. 6 92.7 352B.08, subd. 3 356.215, subd. 4d 356.215, subd. 8 92.8 352B.10, subd. 1 356.119, subd. 6 356.315, subd. 6 92.9 352B.26, subd. 3 356.215, subd. 4d 356.215, subd. 8 92.10 352B.30, subd. 4 356.215, subd. 4d 356.215, subd. 8 92.11 352C.031, subd. 4 356.215, subd. 4d 356.215, subd. 8 92.12 352C.033 356.215, subd. 4d 356.215, subd. 8 92.13 353.01, subd. 14 356.215, subd. 4d 356.215, subd. 8 92.14 353.03, subd. 3 356.215, subd. 4, 356.215, subd. 8 92.15 clause (4) 92.16 353.271, subd. 2 356.215, subd. 4d 356.215, subd. 8 92.17 353.29, subd. 3 356.119, subd. 3 356.315, subd. 3 92.18 353.29, subd. 3 356.119, subd. 4 356.315, subd. 4 92.19 353.29, subd. 3 356.119, subd. 1 356.315, subd. 1 92.20 353.29, subd. 3 356.119, subd. 2 356.315, subd. 2 92.21 353.29, subd. 4 356.371, subd. 3 356.46, subd. 3 92.22 353.37, subd. 3a 356.58 356.47 92.23 353.651, subd. 3 356.119, subd. 6 356.315, subd. 6 92.24 353.656, subd. 1 356.119, subd. 6 356.315, subd. 6 92.25 353.665, subd. 8 356.215, subd. 4d 356.215, subd. 8 92.26 353.71, subd. 2 356.215, subd. 4d 356.215, subd. 8 92.27 353A.08, subd. 1 356.215, subd. 4d 356.215, subd. 8 92.28 353A.08, subd. 2 356.215, subd. 4d 356.215, subd. 8 92.29 353A.09, subd. 2 356.215, subd. 4d 356.215, subd. 8 92.30 353A.09, subd. 5 356.215, subd. 4d 356.215, subd. 8 92.31 353E.04, subd. 3 356.119, subd. 5a 356.315, subd. 5a 92.32 353E.06, subd. 1 356.119, subd. 5a 356.315, subd. 5a 92.33 354.05, subd. 7 356.215, subd. 4d 356.215, subd. 8 92.34 354.07, subd. 1 356.215, subd. 4d 356.215, subd. 8 92.35 354.44, subd. 2 356.215, subd. 4d 356.215, subd. 8 92.36 354.44, subd. 5 356.58 356.47 93.1 354.44, subd. 6 356.119, subd. 1 356.315, subd. 1 93.2 354.44, subd. 6 356.119, subd. 2 356.315, subd. 2 93.3 354.44, subd. 6 356.119, subd. 3 356.315, subd. 3 93.4 354.44 356.119 356.315 93.5 354.45, subd. 2 356.215, subd. 4d 356.215, subd. 8 93.6 354.48, subd. 3 356.215, subd. 4d 356.215, subd. 8 93.7 354.55, subd. 11 356.215, subd. 4d 356.215, subd. 8 93.8 354.63, subd. 2 356.215, subd. 4d 356.215, subd. 8 93.9 354A.011, subd. 3 356.215, subd. 4d 356.215, subd. 8 93.10 354A.026 356.215, subd. 4g 356.215, subd. 11 93.11 354A.105 356.215, subd. 4d 356.215, subd. 8 93.12 354A.12, subd. 1a 356.215, subd. 4d 356.215, subd. 8 93.13 354A.31, subd. 1a 356.371, subd. 3 356.46, subd. 3 93.14 354A.31, subd. 3 356.58 356.47 93.15 354A.31, subd. 4 356.119, subd. 1 356.315, subd. 1 93.16 354A.31, subd. 4 356.119, subd. 2 356.315, subd. 2 93.17 354A.31, subd. 4a 356.119, subd. 1 356.315, subd. 1 93.18 354A.31, subd. 4a 356.119, subd. 2 356.315, subd. 2 93.19 354A.34 356.215, subd. 4d 356.215, subd. 8 93.20 422A.01, subd. 6 356.215, subd. 4d 356.215, subd. 8 93.21 422A.06, subd. 5 356.215, subd. 4d 356.215, subd. 8 93.22 422A.08, subd. 5a 356.215, subd. 4d 356.215, subd. 8 93.23 422A.101, subd. 3 356.865 356.43 93.24 422A.15, subd. 2 356.215, subd. 4d 356.215, subd. 8 93.25 422A.15, subd. 3 356.215, subd. 4d 356.215, subd. 8 93.26 422A.16, subd. 2 356.215, subd. 4d 356.215, subd. 8 93.27 422A.17 356.215, subd. 4d 356.215, subd. 8 93.28 422A.23, subd. 12 356.215, subd. 4d 356.215, subd. 8 93.29 423A.02, subd. 1 356.215, subd. 4, 356.215, subd. 8 93.30 clause (4) 93.31 490.121, subd. 20 356.215, subd. 4d 356.215, subd. 8 93.32 490.121, subd. 22 356.119, subd. 7 356.315, subd. 7 93.33 490.124, subd. 1 356.119, subd. 7 356.315, subd. 7 93.34 490.124, subd. 1 356.119, subd. 8 356.315, subd. 8 93.35 490.124, subd. 5 356.215, subd. 4d 356.215, subd. 8 93.36 Sec. 53. [REPEALER.] 94.1 Subdivision 1. [REPEALER OF OBSOLETE 94.2 PROVISIONS.] Minnesota Statutes 2000, sections 356.325; 356.35; 94.3 356.36; 356.37; 356.38; 356.39; 356.45; 356.451; 356.452; 94.4 356.453; 356.454; and 356.455, are repealed. 94.5 Subd. 2. [REPEALER OF PROVISIONS REORGANIZED.] (a) 94.6 Minnesota Statutes 2000, sections 356.19; 356.305; 356.306; 94.7 356.31; 356.371, subdivisions 2 and 3; 356.372; 356.615; 356.71; 94.8 356.80; 356.81; 356.86; 356.865; 356.88; and 356.89, are 94.9 repealed. 94.10 (b) Minnesota Statutes 2001 Supplement, sections 356.371, 94.11 subdivision 1; and 356.866, are repealed. 94.12 Subd. 3. [REPEALER TO RESOLVE REVISOR NOTE.] Laws 1997, 94.13 chapter 233, article 1, section 58, is repealed. 94.14 Sec. 54. [EFFECTIVE DATE.] 94.15 Sections 1 to 53 are effective July 1, 2002. 94.16 ARTICLE 2 94.17 CONFORMING CHANGES 94.18 Section 1. Minnesota Statutes 2000, section 69.29, is 94.19 amended to read: 94.20 69.29 [EXCLUSION FROM MEMBERSHIP.] 94.21 Each firefighters' relief association may exclude all 94.22 applicants for membership who are not physically and mentally 94.23 sound so as to prevent unwarranted risks for the association. 94.24 Additional requirements for entrance fees and annual dues for 94.25 membership in the association may from time to time be 94.26 prescribed in the bylaws of the association. Each firefighters' 94.27 relief association may exclude from active membership all 94.28 members who reach 65 years of age regardless of the provisions 94.29 of sections 197.455 to 197.48. When such members who have 94.30 reached 65 years of age have been so excluded from active 94.31 membership in the relief association, they shall be retired and 94.32 receive a service pension as provided in this chapter. 94.33The St. Paul and Duluth firefighters' relief associations94.34shall exclude and the Minneapolis firefighters' relief94.35association shall exclude or shall consider as a provisional94.36member of the relief association pursuant to section 356.451, as95.1specified by the city council of the city of Minneapolis, all95.2applicants for membership and all present members who are95.3employed in subsidized on-the-job training, work experience or95.4public service employment as enrollees under the federal95.5Comprehensive Employment and Training Act from and after March95.630, 1978 unless the applicant or member has as of the later of95.7the date of application for membership or March 30, 197895.8sufficient service credit in the relief association to meet the95.9minimum vesting requirements for a deferred service pension, or95.10the city of the first class agrees in writing to make the total95.11required employer contributions on account of that individual95.12from revenue sources other than funds provided under the federal95.13Comprehensive Employment and Training Act, or the applicant or95.14member agrees in writing to make the required employer95.15contributions in addition to the member contribution.95.16 Sec. 2. [EFFECTIVE DATE.] 95.17 Section 1 is effective July 1, 2002.