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HF 3281

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

KEY: stricken = removed, old language.
underscored = added, new language.
1.1A bill for an act
1.2relating to retirement; various retirement plans; increasing certain contribution
1.3rates; suspending certain post-retirement adjustments; reducing certain
1.4postretirement adjustment increase rates; reducing interest rates on refunds;
1.5reducing deferred annuity augmentation rates; eliminating interest on reemployed
1.6annuitant earnings limitation deferred accounts; increasing certain vesting
1.7requirements; increasing certain early retirement reduction rates; reducing
1.8certain benefit accrual rates; extending certain amortization periods; making
1.9changes of an administrative nature for retirement plans administered by the
1.10Minnesota State Retirement Association; revising insurance withholding for
1.11certain retired public employees; authorizing state patrol plan service credit for
1.12leave procedures; addressing plan coverage errors and omitted contributions;
1.13revising unlawful discharge annuity repayment requirements; requiring
1.14employment unit accommodation of daily valuation of investment accounts;
1.15eliminating administrative fee maximum for the unclassified state employees
1.16retirement program; making changes of an administrative nature in the general
1.17employees retirement plan of the Public Employees Retirement Association, the
1.18public employees police and fire retirement plan, and the defined contribution
1.19retirement plan; making various administrative modifications in the voluntary
1.20statewide lump-sum volunteer firefighter retirement plan of the Public Employees
1.21Retirement Association; revising purchase of salary credit procedures in certain
1.22partial salary situations; adding new partial salary credit purchase authority for
1.23partial paid medical leaves and budgetary leaves; redefining TRA allowable
1.24service credit; defining annual base salary; requiring base salary reporting by
1.25TRA-covered employing units; making changes of an administrative nature in the
1.26Minnesota State Colleges and Universities System individual retirement account
1.27plan; setting deadline dates for actuarial reporting; extending and revising an
1.28early retirement incentive program; permitting the court-ordered revocation of
1.29an optional annuity election in certain marriage dissolutions; transfer of the
1.30administrative functions of the Minneapolis Employees Retirement Fund to the
1.31Public Employees Retirement Association; creation of MERF consolidation
1.32account within the Public Employees Retirement Association; making various
1.33technical corrections relating to volunteer fire relief associations; revising
1.34break-in-service return to firefighting authorizations; authorizing Minnesota
1.35deferred compensation plan service pension transfers; revising payout defaults
1.36in survivor benefits; authorizing corrections of certain special fund deposits;
1.37requiring a retirement fund investment authority study; authorizing certain
1.38bylaw amendments; making technical changes; appropriating money;amending
1.39Minnesota Statutes 2008, sections 3A.02, subdivision 4; 3A.07; 11A.04;
2.111A.23, subdivision 4; 13D.01, subdivision 1; 43A.17, subdivision 9; 43A.316,
2.2subdivision 8; 69.021, subdivision 10; 69.051, subdivision 3; 126C.41,
2.3subdivision 3; 256D.21; 352.01, subdivision 2a; 352.03, subdivision 4; 352.04,
2.4subdivision 9; 352.113, subdivision 1; 352.115, subdivisions 1, 10; 352.12,
2.5subdivision 2; 352.22, subdivisions 2, 3; 352.72, subdivisions 1, 2; 352.91, by
2.6adding a subdivision; 352.93, subdivisions 1, 2a, 3a; 352.931, subdivision 1;
2.7352.965, subdivisions 1, 2, 6; 352B.02, as amended; 352B.08, subdivisions 1, 2a;
2.8352B.11, subdivision 2b; 352B.30, subdivisions 1, 2; 352D.015, subdivisions 4,
2.99, by adding a subdivision; 352D.02, subdivisions 1, 1c, 2, 3; 352D.03; 352D.04,
2.10subdivisions 1, 2; 352D.05, subdivisions 3, 4; 352D.06, subdivision 3; 352D.065,
2.11subdivision 3; 352D.09, subdivisions 3, 7; 352F.07; 353.01, subdivisions 2b, 2d,
2.12by adding subdivisions; 353.0161, subdivision 2; 353.03, subdivision 1; 353.05;
2.13353.27, as amended; 353.29, subdivision 1; 353.30, subdivision 1c; 353.32,
2.14subdivisions 1, 1a; 353.34, subdivisions 1, 2, 3, 6; 353.37, subdivisions 1, 2, 3,
2.153a, 4, 5; 353.46, subdivisions 2, 6; 353.64, subdivision 7; 353.651, subdivisions
2.161, 4; 353.657, subdivisions 1, 2a; 353.71, subdivisions 1, 2, 4; 353.86,
2.17subdivisions 1, 2; 353.87, subdivisions 1, 2; 353.88; 353D.01, subdivision 2;
2.18353D.03, subdivision 1; 353D.04, subdivisions 1, 2; 353E.04, subdivisions 1,
2.194; 353E.07, subdivisions 1, 2; 353F.025, subdivisions 1, 2; 353F.03; 354.05, by
2.20adding a subdivision; 354.07, subdivision 5; 354.091; 354.42, subdivisions 3, 7,
2.21by adding subdivisions; 354.52, subdivision 6, by adding a subdivision; 354.66,
2.22subdivision 3; 354.71; 354A.011, subdivision 27; 354A.12, subdivisions 1, 3c,
2.23by adding a subdivision; 354A.27, subdivisions 5, 6, by adding a subdivision;
2.24354A.31, subdivision 1; 354A.35, subdivision 1; 354A.37, subdivisions 2, 3, 4;
2.25354A.39; 354B.25, subdivisions 1, 3; 354C.14; 355.095, subdivision 1; 356.214,
2.26subdivision 1; 356.215, subdivisions 3, 8; 356.24, subdivision 1; 356.30,
2.27subdivisions 1, 3; 356.302, subdivisions 1, 3, 4, 5, 7; 356.303, subdivisions
2.282, 4; 356.315, subdivision 5; 356.351, subdivision 1; 356.407, subdivision 2;
2.29356.431, subdivision 1; 356.465, subdivision 3; 356.47, subdivision 3; 356.50,
2.30subdivision 4; 356.64; 356.65, subdivision 2; 356.91; 356.96, subdivisions 2,
2.313, 7, 8; 356A.06, subdivision 8; 422A.101, subdivision 3; 422A.26; 473.511,
2.32subdivision 3; 473.606, subdivision 5; 475.52, subdivision 6; 490.123, by
2.33adding a subdivision; 518.58, subdivisions 3, 4; Minnesota Statutes 2009
2.34Supplement, sections 6.67; 69.011, subdivision 1; 69.031, subdivision 5; 69.772,
2.35subdivision 6; 69.773, subdivision 6; 352.01, subdivision 2b; 352.75, subdivision
2.364; 352.95, subdivision 2; 352B.011, subdivision 3; 353.01, subdivisions 2,
2.372a, 16; 353.06; 353.27, subdivisions 2, 3, 7; 353.33, subdivision 1; 353.371,
2.38subdivision 4; 353.65, subdivisions 2, 3; 353F.02, subdivision 4; 353G.05,
2.39subdivision 2; 353G.06, subdivision 1; 353G.08; 353G.09, subdivision 3;
2.40353G.11, subdivision 1, by adding a subdivision; 354.42, subdivision 2; 354.47,
2.41subdivision 1; 354.49, subdivision 2; 354.52, subdivision 4b; 354.55, subdivision
2.4211; 354A.12, subdivision 2a; 356.20, subdivision 2; 356.215, subdivision 11;
2.43356.32, subdivision 2; 356.351, subdivision 2; 356.401, subdivision 3; 356.415,
2.44subdivisions 1, 2, by adding subdivisions; 356.96, subdivisions 1, 5; 423A.02,
2.45subdivision 3; 424A.01, subdivisions 1, 6; 424A.015, by adding a subdivision;
2.46424A.016, subdivisions 4, 7; 424A.02, subdivisions 9, 10; 424A.05, subdivision
2.473, by adding a subdivision; 424A.08; 480.181, subdivision 2; Laws 2009, chapter
2.48169, article 4, section 49; article 5, section 2; proposing coding for new law in
2.49Minnesota Statutes, chapters 352B; 353; 353G; 356; repealing Minnesota Statutes
2.502008, sections 13.63, subdivision 1; 69.011, subdivision 2a; 352.91, subdivision
2.515; 353.01, subdivision 40; 353.46, subdivision 1a; 353.88; 353D.03, subdivision
2.522; 353D.12; 354A.27, subdivision 1; 354C.15; 356.43; 422A.01, subdivisions 1,
2.532, 3, 4, 4a, 5, 6, 7, 8, 9, 10, 11, 12, 13a, 17, 18; 422A.02; 422A.03; 422A.04;
2.54422A.05, subdivisions 1, 2a, 2b, 2c, 2d, 2e, 2f, 5, 6, 8; 422A.06, subdivisions 1,
2.552, 3, 5, 6, 7; 422A.08, subdivision 1; 422A.09; 422A.10; 422A.101, subdivisions
2.561, 1a, 2, 2a; 422A.11; 422A.12; 422A.13; 422A.14, subdivision 1; 422A.15;
2.57422A.151; 422A.155; 422A.156; 422A.16, subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 9,
2.5810; 422A.17; 422A.18, subdivisions 1, 2, 3, 4, 5, 7; 422A.19; 422A.20; 422A.21;
3.1422A.22, subdivisions 1, 3, 4, 6; 422A.23, subdivisions 1, 2, 5, 6, 7, 8, 9, 10,
3.211, 12; 422A.231; 422A.24; 422A.25; Minnesota Statutes 2009 Supplement,
3.3sections 422A.06, subdivision 8; 422A.08, subdivision 5; 424A.001, subdivision
3.46; Laws 2009, chapter 169, article 10, section 32.
3.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

3.6ARTICLE 1
3.7FINANCIAL SUSTAINABILITY PROVISIONS

3.8    Section 1. Minnesota Statutes 2008, section 3A.02, subdivision 4, is amended to read:
3.9    Subd. 4. Deferred annuities augmentation. (a) The deferred retirement allowance
3.10of any former legislator must be augmented as provided herein.
3.11    (b) The required reserves applicable to the deferred retirement allowance,
3.12determined as of the date the benefit begins to accrue using an appropriate mortality table
3.13and an interest assumption of six percent, must be augmented from the first of the month
3.14following the termination of active service, or July 1, 1973, whichever is later, to the first
3.15day of the month in which the allowance begins to accrue, at the following annually
3.16compounded rate or rates:
3.17(1) five percent until January 1, 1981;
3.18(2) three percent from January 1, 1981, or from the first day of the month following
3.19the termination of active service, whichever is later, until January 1 of the year in which
3.20the former legislator attains age 55 or until January 1, 2012, whichever is earlier; and
3.21(3) five percent from the period end date under clause (2) to until the effective date
3.22of retirement or until January 1, 2012, whichever is earlier; and
3.23(4) two percent after December 31, 2011.
3.24EFFECTIVE DATE.This section is effective the day following final enactment.

3.25    Sec. 2. Minnesota Statutes 2008, section 352.113, subdivision 1, is amended to read:
3.26    Subdivision 1. Age and service requirements. (a) An employee covered by the
3.27system, who is less than normal retirement age and who becomes totally and permanently
3.28disabled after three or more years of allowable service if employed before July 1, 2010, or
3.29after five or more years of allowable service if employed after June 30, 2010, is entitled to
3.30a disability benefit in an amount provided in subdivision 3.
3.31(b) If the disabled employee's state service has terminated at any time, the employee
3.32must have at least two years of allowable service after last becoming a state employee
3.33covered by the system.
4.1(c) Refunds may be repaid under section 352.23 before the effective accrual date of
4.2the disability benefit under subdivision 2.
4.3EFFECTIVE DATE.This section is effective the day following final enactment.

4.4    Sec. 3. Minnesota Statutes 2008, section 352.115, subdivision 1, is amended to read:
4.5    Subdivision 1. Age and service requirements. After separation from state service,
4.6any employee (1) who has attained the age of at least 55 years and who is entitled to
4.7credit for at least three years allowable service if employed before July 1, 2010, or after
4.8five or more years of allowable service if employed after June 30, 2010, or (2) who has
4.9received credit for at least 30 years allowable service regardless of age, is entitled upon
4.10application to a retirement annuity.
4.11EFFECTIVE DATE.This section is effective the day following final enactment.

4.12    Sec. 4. Minnesota Statutes 2008, section 352.12, subdivision 2, is amended to read:
4.13    Subd. 2. Surviving spouse benefit. (a) If an employee or former employee has
4.14credit for at least three years allowable service if the employee was employed before July
4.151, 2010, or for at least five years of allowable service if the employee was employed
4.16after June 30, 2010, and dies before an annuity or disability benefit has become payable,
4.17notwithstanding any designation of beneficiary to the contrary, the surviving spouse of the
4.18employee may elect to receive, in lieu of the refund with interest under subdivision 1, an
4.19annuity equal to the joint and 100 percent survivor annuity which the employee or former
4.20employee could have qualified for on the date of death.
4.21    (b) If the employee was under age 55 and has credit for at least 30 years of allowable
4.22service on the date of death, the surviving spouse may elect to receive a 100 percent joint
4.23and survivor annuity based on the age of the employee and surviving spouse on the date
4.24of death. The annuity is payable using the full early retirement reduction under section
4.25352.116, subdivision 1 , paragraph (a), to age 55 and one-half of the early retirement
4.26reduction from age 55 to the age payment begins.
4.27    (c) If the employee was under age 55 and has credit for at least three years of
4.28allowable service credit on the date of death if the employee was employed before July 1,
4.292010, or for at least five years of allowable service if the employee was employed after
4.30June 30, 2010, but did not yet qualify for retirement, the surviving spouse may elect
4.31to receive a 100 percent joint and survivor annuity based on the age of the employee
4.32and surviving spouse at the time of death. The annuity is payable using the full early
5.1retirement reduction under section 352.116, subdivision 1 or 1a, to age 55 and one-half of
5.2the early retirement reduction from age 55 to the age payment begins.
5.3    (d) The surviving spouse eligible for benefits under paragraph (a) may apply for the
5.4annuity at any time after the date on which the employee or former employee would
5.5have attained the required age for retirement based on the allowable service earned.
5.6The surviving spouse eligible for surviving spouse benefits under paragraph (b) or (c)
5.7may apply for the annuity at any time after the employee's death. The annuity must be
5.8computed under sections 352.115, subdivisions 1, 2, and 3, and 352.116, subdivisions 1,
5.91a, and 3
. Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply to a deferred
5.10annuity or surviving spouse benefit payable under this subdivision. The annuity must cease
5.11with the last payment received by the surviving spouse in the lifetime of the surviving
5.12spouse, or upon expiration of a term certain benefit payment to a surviving spouse under
5.13subdivision 2a. An amount equal to the excess, if any, of the accumulated contributions
5.14credited to the account of the deceased employee in excess of the total of the benefits paid
5.15and payable to the surviving spouse must be paid to the deceased employee's or former
5.16employee's last designated beneficiary or, if none, as specified under subdivision 1.
5.17    (e) Any employee or former employee may request in writing, with the signed
5.18consent of the spouse, that this subdivision not apply and that payment be made only to a
5.19designated beneficiary as otherwise provided by this chapter.
5.20EFFECTIVE DATE.This section is effective the day following final enactment.

5.21    Sec. 5. Minnesota Statutes 2008, section 352.22, subdivision 2, is amended to read:
5.22    Subd. 2. Amount of refund. Except as provided in subdivision 3, the refund
5.23payable to a person who ceased to be a state employee by reason of a termination of state
5.24service is an amount equal to employee accumulated contributions plus interest at the rate
5.25of six percent per year compounded daily from the date that the contribution was made
5.26until June 30, 2011, or until the date on which the refund is paid, whichever is earlier, and
5.27at the rate of four percent per year compounded daily from the date that the contribution
5.28was made or from July 1, 2011, whichever is later, until the date on which the refund is
5.29paid. Included with the refund is any interest paid as part of repayment of a past refund,
5.30plus interest thereon from the date of repayment.
5.31EFFECTIVE DATE.This section is effective the day following final enactment.

5.32    Sec. 6. Minnesota Statutes 2008, section 352.22, subdivision 3, is amended to read:
6.1    Subd. 3. Deferred annuity. (a) An employee who has at least three years of
6.2allowable service if employed before July 1, 2010, or who has at least five years of
6.3allowable service if employed after June 30, 2010, when termination occurs may elect
6.4to leave the accumulated contributions in the fund and thereby be entitled to a deferred
6.5retirement annuity. The annuity must be computed under the law in effect when state
6.6service terminated, on the basis of the allowable service credited to the person before
6.7the termination of service.
6.8(b) An employee on layoff or on leave of absence without pay, except a leave of
6.9absence for health reasons, and who does not return to state service must have an annuity,
6.10deferred annuity, or other benefit to which the employee may become entitled computed
6.11under the law in effect on the employee's last working day.
6.12(c) No application for a deferred annuity may be made more than 60 days before
6.13the time the former employee reaches the required age for entitlement to the payment of
6.14the annuity. The deferred annuity begins to accrue no earlier than 60 days before the date
6.15the application is filed in the office of the system, but not (1) before the date on which
6.16the employee reaches the required age for entitlement to the annuity nor (2) before the
6.17day following the termination of state service in a position which is not covered by the
6.18retirement system.
6.19(d) Application for the accumulated contributions left on deposit with the fund may
6.20be made at any time following the date of the termination of service.
6.21EFFECTIVE DATE.This section is effective the day following final enactment.

6.22    Sec. 7. Minnesota Statutes 2008, section 352.72, subdivision 1, is amended to read:
6.23    Subdivision 1. Entitlement to annuity. (a) Any person who has been an employee
6.24covered by a retirement system listed in paragraph (b) is entitled when qualified to an
6.25annuity from each fund if total allowable service in all funds or in any two of these funds
6.26totals three or more years if employed before July 1, 2010, or totals five or more years
6.27if employed after June 30, 2010.
6.28(b) This section applies to the Minnesota State Retirement System, the Public
6.29Employees Retirement Association including the Public Employees Retirement
6.30Association police and fire fund, the Teachers Retirement Association, the State Patrol
6.31Retirement Association, or any other public employee retirement system in the state with
6.32a similar provision, except as noted in paragraph (c).
6.33(c) This section does not apply to other funds providing benefits for police officers
6.34or firefighters.
7.1(d) No portion of the allowable service upon which the retirement annuity from
7.2one fund is based shall be again used in the computation for benefits from another fund.
7.3No refund may have been taken from any one of these funds since service entitling the
7.4employee to coverage under the system or the employee's membership in any of the
7.5associations last terminated. The annuity from each fund must be determined by the
7.6appropriate provisions of the law except that the requirement that a person must have at
7.7least three a specific number of years of allowable service in the respective system or
7.8association does not apply for the purposes of this section if the combined service in two
7.9or more of these funds equals three or more years at least the longest period of allowable
7.10service of any of the applicable retirement plans.
7.11EFFECTIVE DATE.This section is effective the day following final enactment.

7.12    Sec. 8. Minnesota Statutes 2008, section 352.72, subdivision 2, is amended to read:
7.13    Subd. 2. Computation of deferred annuity. (a) The deferred annuity, if any,
7.14accruing under subdivision 1, or section 352.22, subdivision 3, must be computed as
7.15provided in section 352.22, subdivision 3, on the basis of allowable service before
7.16termination of state service and augmented as provided herein. The required reserves
7.17applicable to a deferred annuity or to an annuity for which a former employee was eligible
7.18but had not applied or to any deferred segment of an annuity must be determined as of
7.19the date the benefit begins to accrue and augmented by interest compounded annually
7.20from the first day of the month following the month in which the employee ceased to be
7.21a state employee, or July 1, 1971, whichever is later, to the first day of the month in
7.22which the annuity begins to accrue. The rates of interest used for this purpose must be
7.23five percent compounded annually until January 1, 1981, and three percent compounded
7.24annually thereafter until January 1 of the year following the year in which the former
7.25employee attains age 55 or until January 1, 2012, whichever is earlier, and from that date
7.26the January 1 next following the attainment of age 55 to the effective date of retirement or
7.27until January 1, 2012, whichever is earlier, the rate is five percent compounded annually if
7.28the employee became an employee before July 1, 2006, and at 2.5 percent compounded
7.29annually until January 1, 2012, if the employee becomes an employee after June 30, 2006,
7.30and two percent compounded annually after December 31, 2011, irrespective of when the
7.31employee became a state employee. If a person has more than one period of uninterrupted
7.32service, the required reserves related to each period must be augmented by interest under
7.33this subdivision. The sum of the augmented required reserves so determined is the present
7.34value of the annuity. "Uninterrupted service" for the purpose of this subdivision means
7.35periods of covered employment during which the employee has not been separated from
8.1state service for more than two years. If a person repays a refund, the service restored by
8.2the repayment must be considered continuous with the next period of service for which the
8.3employee has credit with this system. The formula percentages used for each period of
8.4uninterrupted service must be those applicable to a new employee. The mortality table
8.5and interest assumption used to compute the annuity must be those in effect when the
8.6employee files application for annuity. This section does not reduce the annuity otherwise
8.7payable under this chapter.
8.8(b) The retirement annuity or disability benefit of, or the survivor benefit payable on
8.9behalf of, a former state employee who terminated service before July 1, 1997, which is
8.10not first payable until after June 30, 1997, must be increased on an actuarial equivalent
8.11basis to reflect the change in the postretirement interest rate actuarial assumption under
8.12section 356.215, subdivision 8, from five percent to six percent under a calculation
8.13procedure and the tables adopted by the board and approved by the actuary retained under
8.14section 356.214.
8.15EFFECTIVE DATE.This section is effective the day following final enactment.

8.16    Sec. 9. Minnesota Statutes 2009 Supplement, section 352.75, subdivision 4, is
8.17amended to read:
8.18    Subd. 4. Existing deferred retirees. Any former member of the former
8.19Metropolitan Transit Commission-Transit Operating Division employees retirement
8.20fund is entitled to a retirement annuity from the Minnesota State Retirement System if
8.21the employee:
8.22(1) is not an active employee of the Transit Operating Division of the former
8.23Metropolitan Transit Commission on July 1, 1978; (2) has at least ten years of active
8.24continuous service with the Transit Operating Division of the former Metropolitan
8.25Transit Commission as defined by the former Metropolitan Transit Commission-Transit
8.26Operating Division employees retirement plan document in effect on December 31, 1977;
8.27(3) has not received a refund of contributions; (4) has not retired or begun receiving an
8.28annuity or benefit from the former Metropolitan Transit Commission-Transit Operating
8.29Division employees retirement fund; (5) is at least 55 years old; and (6) submits a valid
8.30application for a retirement annuity to the executive director of the Minnesota State
8.31Retirement System.
8.32The person is entitled to a retirement annuity in an amount equal to the normal
8.33old age retirement allowance calculated under the former Metropolitan Transit
8.34Commission-Transit Operating Division employees retirement fund plan document in
8.35effect on December 31, 1977, subject to an early retirement reduction or adjustment in
9.1amount on account of retirement before the normal retirement age specified in that former
9.2Metropolitan Transit Commission-Transit Operating Division employees retirement fund
9.3plan document.
9.4The deferred retirement annuity of any person to whom this subdivision applies
9.5must be augmented. The required reserves applicable to the deferred retirement annuity,
9.6determined as of the date the allowance begins to accrue using an appropriate mortality
9.7table and an interest assumption of five percent, must be augmented by interest at the
9.8rate of five percent per year compounded annually from January 1, 1978, to January 1,
9.91981, and three percent per year compounded annually from January 1, 1981, until the
9.10date that the annuity begins to accrue or June 30, 2011, whichever is earlier, and two
9.11percent after June 30, 2011, to the first day of the month in which the annuity begins to
9.12accrue. After the commencement of the retirement annuity, the annuity is eligible for
9.13postretirement adjustments under section 356.415. On applying for a retirement annuity
9.14under this subdivision, the person is entitled to elect a joint and survivor optional annuity
9.15under section 352.116, subdivision 3.
9.16EFFECTIVE DATE.This section is effective the day following final enactment.

9.17    Sec. 10. Minnesota Statutes 2008, section 352.93, subdivision 1, is amended to read:
9.18    Subdivision 1. Basis of annuity; when to apply. After separation from state
9.19service, an employee covered under section 352.91 who has reached age 55 years and has
9.20credit for at least three years of covered correctional service or a combination of covered
9.21correctional service and general state employees state retirement plan allowable service
9.22if first employed as a state employee before July 1, 2010, or has credit for at least ten
9.23years of covered correctional service or a combination of covered correctional service
9.24and general state employees retirement plan allowable service if first employed as a state
9.25employee after June 30, 2010, is entitled upon application to a retirement annuity under
9.26this section, based only on covered correctional employees' service. Application may be
9.27made no earlier than 60 days before the date the employee is eligible to retire by reason of
9.28both age and service requirements.
9.29EFFECTIVE DATE.This section is effective the day following final enactment.

9.30    Sec. 11. Minnesota Statutes 2008, section 352.93, subdivision 2a, is amended to read:
9.31    Subd. 2a. Early retirement. Any covered correctional employee who becomes at
9.32least 50 years old and who has at least three years of allowable service if first employed
9.33as a correctional state employee before July 1, 2010, or has credit for at least ten years
10.1of allowable service if first employed as a correctional state employee after June 30,
10.22010, is entitled upon application to a reduced retirement annuity equal to the annuity
10.3calculated under subdivision 2, reduced by two-tenths of one percent for each month that
10.4the correctional employee is under age 55 at the time of retirement if first employed as
10.5a correctional state employee before July 1, 2010, and if retired before July 1, 2015, or
10.6reduced by 0.417 percent for each month that the correctional employee is under age 55
10.7at the time of retirement if first employed as a correctional state employee after June 30,
10.82010, or if first employed as a correctional state employee before July 1, 2010, and if
10.9retired after June 30, 2015.
10.10EFFECTIVE DATE.This section is effective the day following final enactment.

10.11    Sec. 12. Minnesota Statutes 2008, section 352.93, subdivision 3a, is amended to read:
10.12    Subd. 3a. Optional annuities. The board may establish optional annuity forms to
10.13pay a higher amount from the date of retirement until an employee is first eligible to draw
10.14Social Security benefits, reaches age 65, or up to reaches the age the employee is eligible
10.15to receive unreduced Social Security benefits, at which time the monthly benefits must be
10.16reduced. The optional annuity forms must be actuarially equivalent to the normal single
10.17life annuity form provided in subdivision 2. The optional annuity forms must be approved
10.18certified as actuarially equivalent by the actuary retained under section 356.214.
10.19EFFECTIVE DATE.This section is effective the day following final enactment.

10.20    Sec. 13. Minnesota Statutes 2008, section 352.931, subdivision 1, is amended to read:
10.21    Subdivision 1. Surviving spouse benefit. (a) If the correctional employee was at
10.22least age 50, has credit for at least three years of allowable service if first employed as
10.23a correctional state employee before July 1, 2010, or has credit for at least ten years of
10.24allowable service if first employed as a correctional state employee after June 30, 2010,
10.25and dies before an annuity or disability benefit has become payable, notwithstanding any
10.26designation of beneficiary to the contrary, the surviving spouse of the employee may
10.27elect to receive, in lieu of the refund under section 352.12, subdivision 1, an annuity for
10.28life equal to the joint and 100 percent survivor annuity which the employee could have
10.29qualified for had the employee terminated service on the date of death. The election
10.30may be made at any time after the date of death of the employee. The surviving spouse
10.31benefit begins to accrue as of the first of the month next following the date on which
10.32the application for the benefit was filed.
11.1    (b) If the employee was under age 50, dies, and had credit for at least three years
11.2of allowable service credit on the date of death if first employed as a correctional state
11.3employee before July 1, 2010, or had credit for at least ten years of allowable service on
11.4the date of death if first employed as a correctional state employee after June 30, 2010, but
11.5did not yet qualify for retirement, the surviving spouse may elect to receive a 100 percent
11.6joint and survivor annuity based on the age of the employee and surviving spouse at the
11.7time of death. The annuity is payable using the early retirement reduction under section
11.8352.93, subdivision 2a , to age 50, and one-half of the early retirement reduction from age
11.950 to the age payment begins. The surviving spouse eligible for surviving spouse benefits
11.10under this paragraph may apply for the annuity at any time after the employee's death.
11.11Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply to a deferred annuity or
11.12surviving spouse benefit payable under this subdivision.
11.13    (c) The annuity must cease with the last payment received by the surviving spouse
11.14in the lifetime of the surviving spouse. Any employee may request in writing, with the
11.15signed consent of the spouse, that this subdivision not apply and that payment be made
11.16only to a designated beneficiary as otherwise provided by this chapter.
11.17EFFECTIVE DATE.This section is effective the day following final enactment.

11.18    Sec. 14. Minnesota Statutes 2009 Supplement, section 352.95, subdivision 2, is
11.19amended to read:
11.20    Subd. 2. Regular disability; computation of benefit. A covered correctional
11.21employee who was hired before July 1, 2009, after rendering at least one year of covered
11.22correctional service, or a covered correctional employee who was first hired after June
11.2330, 2009, after rendering at least three years of covered correctional plan service if first
11.24employed as a correctional state employee before July 1, 2010, or after rendering at least
11.25ten years of covered correctional plan service if first employed as a correctional state
11.26employee after June 30, 2010, and who is determined to have a regular disability, physical
11.27or psychological, as defined under section 352.01, subdivision 17c, is entitled to a regular
11.28disability benefit. The regular disability benefit must be based on covered correctional
11.29service only. The regular disability benefit must be computed as provided in section
11.30352.93, subdivisions 1 and 2 . The regular disability benefit of a covered correctional
11.31employee who was first hired before July 1, 2009, and who is determined to have a regular
11.32disability, physical or psychological, under this subdivision must be computed as though
11.33the employee had at least 15 years of covered correctional service.
11.34EFFECTIVE DATE.This section is effective the day following final enactment.

12.1    Sec. 15. Minnesota Statutes 2008, section 352B.02, as amended by Laws 2009, chapter
12.2101, article 2, section 109; and Laws 2009, chapter 169, article 1, section 23; article 2,
12.3section 16; and article 4, sections 3 and 4, is amended to read:
12.4352B.02 STATE PATROL RETIREMENT FUND.
12.5    Subdivision 1. Fund created; membership. A State Patrol retirement fund
12.6is established. Its membership consists of all persons defined in section 352B.011,
12.7subdivision 10
.
12.8    Subd. 1a. Member contributions. (a) The member contribution is 10.40 percent
12.9the following percentage of the member's salary.:
12.10
12.11
(1) before the first day of the first pay
period beginning after July 1, 2011
10.40 percent
12.12
12.13
(2) on or after the first day of the first
pay period beginning after July 1, 2011
11.20 percent
12.14(b) These contributions must be made by deduction from salary as provided in
12.15section 352.04, subdivision 4.
12.16    Subd. 1b. Salary deductions. Member contribution amounts must be deducted each
12.17pay period by the department head, who shall have the total amount of the deductions paid
12.18to the commissioner of management and budget for deposit in the State Patrol retirement
12.19fund, and have a detailed report of all deductions made each pay period to the executive
12.20director of the Minnesota State Retirement System.
12.21    Subd. 1c. Employer contributions. (a) In addition to member contributions,
12.22department heads shall pay a sum equal to 15.60 percent the specified percentage of the
12.23salary upon which deductions were made, which constitutes the employer contribution
12.24to the fund. as follows:
12.25
12.26
(1) before the first day of the first pay
period beginning after July 1, 2011
15.60 percent
12.27
12.28
(2) on or after the first day of the first
pay period beginning after July 1, 2011
16.80 percent
12.29(b) Department contributions must be paid out of money appropriated to departments
12.30for this purpose.
12.31    Subd. 1d. Additional employer contributions. (a) In addition to the regular
12.32employer contribution under subdivision 1c, department heads shall pay a sum equal to
12.33ten percent of the salary upon which member contribution deductions were made, which is
12.34the additional employer contribution to the fund.
12.35(b) Department additional employer contributions must be paid from departmental
12.36appropriations or revenue.
13.1    Subd. 1d 1e. Fund revenue and expenses. The amounts provided for in this section
13.2must be credited to the State Patrol retirement fund. All money received must be deposited
13.3by the commissioner of management and budget in the State Patrol retirement fund. The
13.4fund must be used to pay the administrative expenses of the retirement fund, and the
13.5benefits and annuities provided in this chapter.
13.6    Subd. 1e 1f. Audit; regular actuarial valuation; supplemental valuations. (a)
13.7The legislative auditor shall audit the fund.
13.8(b) Any actuarial valuation of the fund required under section 356.215 must be
13.9prepared by the actuary retained under section 356.214.
13.10(c) Any approved actuary retained by the executive director under section 352.03,
13.11subdivision 6
, may perform actuarial valuations and experience studies to supplement
13.12those performed by the actuary retained under section 356.214. Any supplemental
13.13actuarial valuation or experience studies must be filed with the executive director of the
13.14Legislative Commission on Pensions and Retirement.
13.15EFFECTIVE DATE.This section is effective the day following final enactment.

13.16    Sec. 16. Minnesota Statutes 2008, section 352B.08, subdivision 1, is amended to read:
13.17    Subdivision 1. Eligibility; when to apply; accrual. (a) Every member who is
13.18credited with three or more years of allowable service if first employed before July 1,
13.192010, or with at least five years of allowable service if first employed after June 30, 2010,
13.20is entitled to separate from state service and upon becoming 50 years old, is entitled to
13.21receive a life annuity, upon separation from state service.
13.22(b) Members shall must apply for an annuity in a form and manner prescribed by the
13.23executive director.
13.24(c) No application may be made more than 90 days before the date the member is
13.25eligible to retire by reason of both age and service requirements.
13.26(d) An annuity begins to accrue no earlier than 180 days before the date the
13.27application is filed with the executive director.
13.28EFFECTIVE DATE.This section is effective the day following final enactment.

13.29    Sec. 17. Minnesota Statutes 2008, section 352B.08, subdivision 2a, is amended to read:
13.30    Subd. 2a. Early retirement. Any member who has become at least 50 years old and
13.31who has at least three years of allowable service if first employed before July 1, 2010, or
13.32who has at least five years of allowable service if first employed after June 30, 2010, is
13.33entitled upon application to a reduced retirement annuity equal to the annuity calculated
14.1under subdivision 2, reduced by one-tenth of one percent for each month that the member
14.2is under age 55 at the time of retirement if first employed before July 1, 2010, or reduced
14.3by two-tenths of one percent for each month that the member is under age 55 at the time of
14.4retirement if first employed after June 30, 2010.
14.5EFFECTIVE DATE.This section is effective the day following final enactment.

14.6    Sec. 18. Minnesota Statutes 2008, section 352B.11, subdivision 2b, is amended to read:
14.7    Subd. 2b. Surviving spouse benefit eligibility. (a) If an active member with three or
14.8more years of allowable service if first employed before July 1, 2010, or with at least five
14.9years of allowable service if first employed after June 30, 2010, dies before attaining age
14.1055, the surviving spouse is entitled to the benefit specified in subdivision 2c, paragraph (b).
14.11(b) If an active member with less than three years of allowable service if first
14.12employed before July 1, 2010, or with fewer than five years of allowable service if first
14.13employed after June 30, 2010, dies at any age, the surviving spouse is entitled to receive
14.14the benefit specified in subdivision 2c, paragraph (c).
14.15(c) If an active member with three or more years of allowable service if first
14.16employed before July 1, 2010, or with at least five years of allowable service if first
14.17employed after June 30, 2010, dies on or after attaining exact age 55, the surviving spouse
14.18is entitled to receive the benefits specified in subdivision 2c, paragraph (d).
14.19(d) If a disabilitant dies while receiving a disability benefit under section 352B.10 or
14.20before the benefit under that section commenced, and an optional annuity was not elected
14.21under section 352B.10, subdivision 5, the surviving spouse is entitled to receive the benefit
14.22specified in subdivision 2c, paragraph (b).
14.23(e) If a former member with three or more years of allowable service if first
14.24employed before July 1, 2010, or with at least five years of allowable service if first
14.25employed after June 30, 2010, who terminated from service and has not received a refund
14.26or commenced receipt of any other benefit provided by this chapter, dies, the surviving
14.27spouse is entitled to receive the benefit specified in subdivision 2c, paragraph (e).
14.28(f) If a former member with less than three years of allowable service if first
14.29employed before July 1, 2010, or with fewer than five years of allowable service if first
14.30employed after June 30, 2010, who terminated from service and has not received a refund
14.31or commenced receipt of any other benefit, if applicable, provided by this chapter, dies, the
14.32surviving spouse is entitled to receive the refund specified in subdivision 2c, paragraph (f).
14.33EFFECTIVE DATE.This section is effective the day following final enactment.

15.1    Sec. 19. Minnesota Statutes 2008, section 352B.30, subdivision 1, is amended to read:
15.2    Subdivision 1. Entitlement to annuity. Any person who has been an employee
15.3covered by the Minnesota State Retirement System, or a member of the Public Employees
15.4Retirement Association including the Public Employees Retirement Association Police
15.5and Fire Fund, or the Teachers Retirement Association, or the State Patrol retirement fund,
15.6or any other public employee retirement system in Minnesota having a like provision but
15.7excluding all other funds providing benefits for police or firefighters is entitled when
15.8qualified to an annuity from each fund if total allowable service in all funds or in any two
15.9of these funds totals three or more the number of years of allowable service required by
15.10the applicable retirement plan with the longest vesting period for the person. No part of
15.11the allowable service upon which the retirement annuity from one fund is based may
15.12again be used in the computation for benefits from another fund. The member must not
15.13have taken a refund from any one of these funds since service entitling the member to
15.14coverage under the system or membership in any of the associations last terminated.
15.15The annuity from each fund must be determined by the appropriate law except that the
15.16requirement that a person must have at least three a specific number of years allowable
15.17service in the respective system or association does not apply for the purposes of this
15.18section if the combined service in two or more of these funds equals three or more the
15.19number of years of allowable service required by the applicable retirement plan with
15.20the longest vesting period for the person.
15.21EFFECTIVE DATE.This section is effective the day following final enactment.

15.22    Sec. 20. Minnesota Statutes 2008, section 352B.30, subdivision 2, is amended to read:
15.23    Subd. 2. Computation of deferred annuity. Deferred annuities must be computed
15.24according to this chapter on the basis of allowable service before termination of service
15.25and augmented as provided in this chapter. The required reserves applicable to a deferred
15.26annuity must be augmented by interest compounded annually from the first day of the
15.27month following the month in which the member terminated service, or July 1, 1971,
15.28whichever is later, to the first day of the month in which the annuity begins to accrue. The
15.29rates of interest used for this purpose shall must be five percent per year compounded
15.30annually until January 1, 1981, and after that date three percent per year compounded
15.31annually after January 1, 1981, until January 1, 2012, if the employee became an employee
15.32before July 1, 2006, and at 2.5 percent compounded annually if the employee becomes
15.33an employee after June 30, 2006, and two percent per year compounded annually after
15.34December 31, 2011, irrespective of when the employee was first employed. The mortality
16.1table and interest assumption used to compute the annuity shall must be those in effect
16.2when the member files application for annuity.
16.3EFFECTIVE DATE.This section is effective the day following final enactment.

16.4    Sec. 21. Minnesota Statutes 2008, section 352F.07, is amended to read:
16.5352F.07 EFFECT ON REFUND.
16.6Notwithstanding any provision of chapter 352 to the contrary, terminated hospital
16.7employees may receive a refund of employee accumulated contributions plus interest
16.8at the rate of six percent per year compounded annually in accordance with Minnesota
16.9Statutes 1994, section 352.22, subdivision 2, at any time after the transfer of employment
16.10to Fairview, University of Minnesota Physicians, or University Affiliated Family
16.11Physicians. If a terminated hospital employee has received a refund from a pension plan
16.12enumerated in section 356.30, subdivision 3, the person may not repay that refund unless
16.13the person again becomes a member of one of those enumerated plans and complies
16.14with section 356.30, subdivision 2.
16.15EFFECTIVE DATE.This section is effective the day following final enactment.

16.16    Sec. 22. Minnesota Statutes 2008, section 353.01, is amended by adding a subdivision
16.17to read:
16.18    Subd. 47. Vesting. (a) "Vesting" means obtaining a nonforfeitable entitlement
16.19to an annuity or benefit from a retirement plan administered by the Public Employees
16.20Retirement Association by having credit for sufficient allowable service under paragraph
16.21(b) or (c), whichever applies.
16.22(b) For purposes of qualifying for an annuity or benefit as a basic or coordinated plan
16.23member of the general employees retirement plan of the Public Employees Retirement
16.24Association:
16.25(1) a member who first became a public employee before July 1, 2010, is vested
16.26when the person has accrued credit for not less than three years of allowable service as
16.27defined under subdivision 16; and
16.28(2) a member who first becomes a public employee after June 30, 2010, is vested
16.29when the person has accrued credit for not less than five years of allowable service
16.30as defined under subdivision 16.
16.31(c) For purposes of qualifying for an annuity or benefit as a member of the police
16.32and fire plan or a member of the local government correctional employees retirement plan:
17.1(1) a member who first became a public employee before July 1, 2010, is vested
17.2when the person has accrued credit for not less than three years of allowable service as
17.3defined under subdivision 16; and
17.4(2) a member who first becomes a public employee after June 30, 2010, is vested
17.5at the following percentages when the person has accrued credited allowable service as
17.6defined under subdivision 16, as follows:
17.7(i) 50 percent after five years;
17.8(ii) 60 percent after six years;
17.9(iii) 70 percent after seven years;
17.10(iv) 80 percent after eight years;
17.11(v) 90 percent after nine years; and
17.12(vi) 100 percent after ten years.
17.13EFFECTIVE DATE.This section is effective the day following final enactment.

17.14    Sec. 23. Minnesota Statutes 2009 Supplement, section 353.27, subdivision 2, is
17.15amended to read:
17.16    Subd. 2. Employee contribution. (a) For a basic member, the employee
17.17contribution is 9.10 percent of salary. For a coordinated member, the employee
17.18contribution is six percent the following percentage of salary plus any contribution rate
17.19adjustment under subdivision 3b.:
17.20
Effective before January 1, 2011
6.00
17.21
Effective after December 31, 2010
6.25
17.22(b) These contributions must be made by deduction from salary as defined in section
17.23353.01, subdivision 10 , in the manner provided in subdivision 4. If any portion of a
17.24member's salary is paid from other than public funds, the member's employee contribution
17.25must be based on the total salary received by the member from all sources.
17.26EFFECTIVE DATE.This section is effective the day following final enactment.

17.27    Sec. 24. Minnesota Statutes 2009 Supplement, section 353.27, subdivision 3, is
17.28amended to read:
17.29    Subd. 3. Employer contribution. (a) For a basic member, the employer
17.30contribution is 9.10 percent of salary. For a coordinated member, the employer
17.31contribution is six percent the following percentage of salary plus any contribution rate
17.32adjustment under subdivision 3b.:
18.1
Effective before January 1, 2011
6.00
18.2
Effective after December 31, 2010
6.25
18.3(b) This contribution must be made from funds available to the employing
18.4subdivision by the means and in the manner provided in section 353.28.
18.5EFFECTIVE DATE.This section is effective the day following final enactment.

18.6    Sec. 25. Minnesota Statutes 2008, section 353.27, subdivision 3b, is amended to read:
18.7    Subd. 3b. Change in employee and employer contributions in certain instances.
18.8(a) For purposes of this section,:
18.9(1) a contribution sufficiency exists if the total of the employee contribution under
18.10subdivision 2, the employer contribution under subdivision 3, the additional employer
18.11contribution under subdivision 3a, and any additional contribution previously imposed
18.12under this subdivision exceeds the total of the normal cost, the administrative expenses,
18.13and the amortization contribution of the retirement plan as reported in the most recent
18.14actuarial valuation of the retirement plan prepared by the actuary retained under section
18.15356.214 and prepared under section 356.215 and the standards for actuarial work of the
18.16Legislative Commission on Pensions and Retirement. For purposes of this section,; and
18.17(2) a contribution deficiency exists if the total of the employee contributions under
18.18subdivision 2, the employer contributions under subdivision 3, the additional employer
18.19contribution under subdivision 3a, and any additional contribution previously imposed
18.20under this subdivision is less than the total of the normal cost, the administrative expenses,
18.21and the amortization contribution of the retirement plan as reported in the most recent
18.22actuarial valuation of the retirement plan prepared by the actuary retained under section
18.23356.214 and prepared under section 356.215 and the standards for actuarial work of the
18.24Legislative Commission on Pensions and Retirement.
18.25(b) Employee and employer contributions under subdivisions 2 and 3 must be
18.26adjusted:
18.27(1) if, on or after July 1, 2010, the regular actuarial valuations valuation of the
18.28general employees retirement plan of the Public Employees Retirement Association under
18.29section 356.215 indicate indicates that there is a contribution sufficiency under paragraph
18.30(a) equal to or greater than 0.5 one percent of covered payroll and that the sufficiency
18.31has existed for at least two consecutive years, the coordinated program employee and
18.32employer contribution rates must be decreased as determined under paragraph (c) to a
18.33level such that the sufficiency equals is no more greater than 0.25 one percent of covered
18.34payroll based on the most recent actuarial valuation; or
19.1(2) if, on or after July 1, 2010, the regular actuarial valuations valuation of the
19.2general employees retirement plan of the Public Employees Retirement Association under
19.3section 356.215 indicate indicates that there is a contribution deficiency equal to or greater
19.4than 0.5 percent of covered payroll and that the deficiency has existed for at least two
19.5consecutive years, the coordinated program employee and employer contribution rates
19.6must be increased as determined under paragraph (c) (d) to a level such that no deficiency
19.7exists based on the most recent actuarial valuation.
19.8(c) The contribution rate increase or decrease must be determined by the executive
19.9director of the Public Employees Retirement Association, must be reported to the chair
19.10and the executive director of the Legislative Commission on Pensions and Retirement
19.11on or before the next February 1, and, if the Legislative Commission on Pensions and
19.12Retirement does not recommend against the rate change or does not recommend a
19.13modification in the rate change, is effective on the next July 1 following the determination
19.14by the executive director that a contribution deficiency or sufficiency has existed for
19.15two consecutive fiscal years based on the most recent actuarial valuations under section
19.16356.215. If the actuarially required contribution exceeds or is less than the total support
19.17provided by the combined employee and employer contribution rates under subdivisions
19.182, 3, and 3a, by more than 0.5 one percent of covered payroll, the coordinated program
19.19employee and employer contribution rates under subdivisions 2 and 3 must be adjusted
19.20decreased incrementally over one or more years by no more than 0.25 percent of pay each
19.21for employee and employer matching contribution rates to a level such that there remains
19.22a contribution sufficiency of no more than 0.25 at least one percent of covered payroll. No
19.23contribution rate decrease may be made until at least two years have elapsed since any
19.24adjustment under this subdivision has been fully implemented.
19.25(d) No If the actuarially required contribution exceeds the total support provided
19.26by the combined employee and employer contribution rates under subdivisions 2, 3, and
19.273a, the employee and matching employer contribution rates must be increased equally to
19.28eliminate that contribution deficiency. If the contribution deficiency is:
19.29(1) less than two percent, the incremental adjustment increase may exceed be up
19.30to 0.25 percent for either the coordinated program employee and matching employer
19.31contribution rates per year in which any adjustment is implemented. A contribution rate
19.32adjustment under this subdivision must not be made until at least two years have passed
19.33since fully implementing a previous adjustment under this subdivision.;
19.34(2) greater than 1.99 percent and less than 4.01 percent, the incremental increase
19.35may be up to 0.5 percent for the employee and matching employer contribution rates; or
20.1(3) greater than four percent, the incremental increase may be up to 0.75 percent for
20.2the employee and matching employer contribution.
20.3(e) Any recommended adjustment to the contribution rates must be reported
20.4to the chair and the executive director of the Legislative Commission on Pensions
20.5and Retirement by January 15 following receipt of the most recent annual actuarial
20.6valuation prepared under section 356.215. If the Legislative Commission on Pensions
20.7and Retirement does not recommend against the rate change or does not recommend a
20.8modification in the rate change, the recommended adjustment becomes effective on the
20.9first day of the first full payroll period in the fiscal year following receipt of the most
20.10recent actuarial valuation that gave rise to the adjustment.
20.11(f) A contribution sufficiency of up to one percent of covered payroll must be held in
20.12reserve to be used to offset any future actuarially required contributions that are more than
20.13the total combined employee and employer contributions under subdivisions 2, 3, and 3a.
20.14(g) Before any reduction in contributions to eliminate a sufficiency in excess of one
20.15percent of covered pay may be recommended, the executive director must review any
20.16need for a change in actuarial assumptions, as recommended by the actuary retained under
20.17section 356.214 in the most recent experience study of the general employees retirement
20.18plan prepared under section 356.215 and the standards for actuarial work promulgated by
20.19the Legislative Commission on Pensions and Retirement that may result in an increase
20.20in the actuarially required contribution and must report to the Legislative Commission
20.21on Pensions and Retirement any recommendation by the board to use the sufficiency
20.22exceeding one percent of covered payroll to offset the impact of an actuarial assumption
20.23change recommended by the actuary retained under section 356.214, subdivision 1, and
20.24reviewed by the actuary retained by the commission under section 356.214, subdivision 4.
20.25(h) No contribution sufficiency in excess of one percent of covered pay may be
20.26proposed to be used to increase benefits, and no benefit increase may be proposed that
20.27would initiate an automatic adjustment to increase contributions under this subdivision.
20.28Any proposed benefit improvement must include a recommendation, prepared by the
20.29actuary retained under section 356.214, subdivision 1, and reviewed by the actuary
20.30retained by the Legislative Commission on Pensions and Retirement as provided under
20.31section 356.214, subdivision 4, on how the benefit modification will be funded.
20.32EFFECTIVE DATE.This section is effective the day following final enactment.

20.33    Sec. 26. Minnesota Statutes 2008, section 353.29, subdivision 1, is amended to read:
20.34    Subdivision 1. Age and allowable service requirements. Upon termination of
20.35membership, a person who has attained normal retirement age and who received credit for
21.1not less than three years of allowable service is vested under section 353.01, subdivision
21.247, is entitled upon application to a retirement annuity. The retirement annuity is known
21.3as the "normal" retirement annuity.
21.4EFFECTIVE DATE.This section is effective the day following final enactment.

21.5    Sec. 27. Minnesota Statutes 2008, section 353.30, subdivision 1c, is amended to read:
21.6    Subd. 1c. Pre-July 1, 1989, members: early retirement. Upon termination of
21.7public service, a person who first became a public employee or a member of a pension
21.8fund listed in section 356.30, subdivision 3, before July 1, 1989, who has become at least
21.955 years old but not normal retirement age, and has received credit for at least three years
21.10of allowable service is vested under section 353.01, subdivision 47, is entitled, upon
21.11application, to a retirement annuity in an amount equal to the normal annuity provided in
21.12section 353.29, subdivision 3, paragraph (a), reduced by one-quarter of one percent for
21.13each month that the member is under normal retirement age at the time of retirement.
21.14EFFECTIVE DATE.This section is effective the day following final enactment.

21.15    Sec. 28. Minnesota Statutes 2008, section 353.32, subdivision 1, is amended to read:
21.16    Subdivision 1. Before retirement. If a member or former member who terminated
21.17public service dies before retirement or before receiving any retirement annuity and no
21.18other payment of any kind is or may become payable to any person, a refund shall be paid
21.19is payable to the designated beneficiary or, if there be none, to the surviving spouse,
21.20or, if none, to the legal representative of the decedent's estate. Such The refund shall
21.21must be in an amount equal to accumulated deductions plus annual compound interest
21.22thereon at the rate of six percent per annum compounded annually specified in section
21.23353.34, subdivision 2, and less the sum of any disability or survivor benefits, if any, that
21.24may have been paid by the fund; provided that a survivor who has a right to benefits
21.25pursuant to under section 353.31 may waive such benefits in writing, except such benefits
21.26for a dependent child under the age of 18 years may only be waived pursuant to under an
21.27order of the district court.
21.28EFFECTIVE DATE.This section is effective the day following final enactment.

21.29    Sec. 29. Minnesota Statutes 2008, section 353.32, subdivision 1a, is amended to read:
21.30    Subd. 1a. Surviving spouse optional annuity. (a) If a member or former member
21.31who has credit for not less than three years of allowable service is vested under section
21.32353.01, subdivision 47, and who dies before the annuity or disability benefit begins to
22.1accrue under section 353.29, subdivision 7, or 353.33, subdivision 2, notwithstanding any
22.2designation of beneficiary to the contrary, the surviving spouse may elect to receive,
22.3instead of a refund with interest under subdivision 1, or surviving spouse benefits otherwise
22.4payable under section 353.31, an annuity equal to a 100 percent joint and survivor annuity
22.5computed consistent with section 353.30, subdivision 1a, 1c, or 5, whichever is applicable.
22.6    (b) If a member first became a public employee or a member of a pension fund listed
22.7in section 356.30, subdivision 3, before July 1, 1989, and has credit for at least 30 years
22.8of allowable service on the date of death, the surviving spouse may elect to receive a
22.9100 percent joint and survivor annuity computed using section 353.30, subdivision 1b,
22.10except that the early retirement reduction under that provision will be applied from age
22.1162 back to age 55 and one-half of the early retirement reduction from age 55 back to
22.12the age payment begins.
22.13    (c) If a member who was under age 55 and has credit for at least three years of
22.14allowable service who is vested under section 353.01, subdivision 47, dies, but did not
22.15qualify for retirement on the date of death, the surviving spouse may elect to receive a
22.16100 percent joint and survivor annuity computed using section 353.30, subdivision 1c or
22.175, as applicable, except that the early retirement reduction specified in the applicable
22.18subdivision will be applied to age 55 and one-half of the early retirement reduction from
22.19age 55 back to the age payment begins.
22.20    (d) Notwithstanding the definition of surviving spouse in section 353.01, subdivision
22.2120
, a former spouse of the member, if any, is entitled to a portion of the monthly surviving
22.22spouse optional annuity if stipulated under the terms of a marriage dissolution decree filed
22.23with the association. If there is no surviving spouse or child or children, a former spouse
22.24may be entitled to a lump-sum refund payment under subdivision 1, if provided for in a
22.25marriage dissolution decree, but not a monthly surviving spouse optional annuity, despite
22.26the terms of a marriage dissolution decree filed with the association.
22.27    (e) The surviving spouse eligible for surviving spouse benefits under paragraph (a)
22.28may apply for the annuity at any time after the date on which the deceased employee
22.29would have attained the required age for retirement based on the employee's allowable
22.30service. The surviving spouse eligible for surviving spouse benefits under paragraph (b) or
22.31(c) may apply for an annuity any time after the member's death.
22.32    (f) Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred
22.33annuity or surviving spouse benefit payable under this subdivision.
22.34    (g) An amount equal to any excess of the accumulated contributions that were
22.35credited to the account of the deceased employee over and above the total of the annuities
22.36paid and payable to the surviving spouse must be paid to the surviving spouse's estate.
23.1    (h) A member may specify in writing, with the signed consent of the spouse, that
23.2this subdivision does not apply and that payment may be made only to the designated
23.3beneficiary as otherwise provided by this chapter. The waiver of a surviving spouse
23.4annuity under this section does not make a dependent child eligible for benefits under
23.5subdivision 1c.
23.6    (i) If the deceased member or former member first became a public employee or a
23.7member of a public pension plan listed in section 356.30, subdivision 3, on or after July
23.81, 1989, a survivor annuity computed under paragraph (a) or (c) must be computed as
23.9specified in section 353.30, subdivision 5, except for the revised early retirement reduction
23.10specified in paragraph (c), if paragraph (c) is the applicable provision.
23.11    (j) For any survivor annuity determined under this subdivision, the payment is to be
23.12based on the total allowable service that the member had accrued as of the date of death
23.13and the age of the member and surviving spouse on that date.
23.14EFFECTIVE DATE.This section is effective the day following final enactment.

23.15    Sec. 30. Minnesota Statutes 2009 Supplement, section 353.33, subdivision 1, is
23.16amended to read:
23.17    Subdivision 1. Age, service, and salary requirements. (a) A coordinated or
23.18basic member who has at least three years of allowable service is vested under section
23.19353.01, subdivision 47, and who becomes totally and permanently disabled before normal
23.20retirement age, upon application as defined under section 353.031, is entitled to a disability
23.21benefit in an amount determined under subdivision 3.
23.22(b) If the disabled person's public service has terminated at any time, at least two of
23.23the required three years of allowable service required to be vested under section 353.01,
23.24subdivision 47, must have been rendered after last becoming an active member.
23.25EFFECTIVE DATE.This section is effective the day following final enactment.

23.26    Sec. 31. Minnesota Statutes 2008, section 353.34, subdivision 1, is amended to read:
23.27    Subdivision 1. Refund or deferred annuity. (a) A former member is entitled to
23.28either a refund of accumulated employee deductions under subdivision 2, or to a deferred
23.29annuity under subdivision 3. Application for a refund may not be made before the date of
23.30termination of public service. Except as specified in paragraph (b), a refund must be paid
23.31within 120 days following receipt of the application unless the applicant has again become
23.32a public employee required to be covered by the association.
24.1(b) If an individual was placed on layoff under section 353.01, subdivision 12 or 12c,
24.2a refund is not payable before termination of service under section 353.01, subdivision 11a.
24.3(c) An individual who terminates public service covered by the Public Employees
24.4Retirement Association general employees retirement plan, the Public Employees
24.5Retirement Association police and fire retirement plan, or the public employees local
24.6government corrections correctional service retirement plan, and who is employed by a
24.7different employer and who becomes an active member covered by one of the other two
24.8plans, may receive a refund of employee contributions plus six percent annual compound
24.9interest compounded annually from the plan from which the member terminated service at
24.10the applicable rate specified in subdivision 2.
24.11EFFECTIVE DATE.This section is effective the day following final enactment.

24.12    Sec. 32. Minnesota Statutes 2008, section 353.34, subdivision 2, is amended to read:
24.13    Subd. 2. Refund with interest. (a) Except as provided in subdivision 1, any person
24.14who ceases to be a public employee shall is entitled to receive a refund in an amount equal
24.15to accumulated deductions with annual compound interest to the first day of the month
24.16in which the refund is processed at the rate of six percent compounded annually based
24.17on fiscal year balances.
24.18(b) For a person who ceases to be a public employee before July 1, 2011, the refund
24.19interest is at the rate of six percent to June 30, 2011, and at the rate of four percent after
24.20June 30, 2011. For a person who ceases to be a public employee after July 1, 2011, the
24.21refund interest is at the rate of four percent.
24.22(c) If a person repays a refund and subsequently applies for another refund, the
24.23repayment amount, including interest, is added to the fiscal year balance in which the
24.24repayment was made.
24.25EFFECTIVE DATE.This section is effective the day following final enactment.

24.26    Sec. 33. Minnesota Statutes 2008, section 353.34, subdivision 3, is amended to read:
24.27    Subd. 3. Deferred annuity; eligibility; computation. (a) A member with at least
24.28three years of allowable service who is vested under section 353.01, subdivision 47, when
24.29termination of public service or termination of membership occurs has the option of
24.30leaving the accumulated deductions in the fund and being entitled to a deferred retirement
24.31annuity commencing at normal retirement age or to a deferred early retirement annuity
24.32under section 353.30, subdivision 1a, 1b, 1c, or 5.
25.1(b) The deferred annuity must be computed under section 353.29, subdivision 3, on
25.2the basis of the law in effect on the date of termination of public service or termination of
25.3membership, whichever is earlier, and must be augmented as provided in section 353.71,
25.4subdivision 2
.
25.5(c) A former member qualified to apply for a deferred retirement annuity may
25.6revoke this option at any time before the commencement of deferred annuity payments
25.7by making application for a refund. The person is entitled to a refund of accumulated
25.8member contributions within 30 days following date of receipt of the application by the
25.9executive director.
25.10EFFECTIVE DATE.This section is effective the day following final enactment.

25.11    Sec. 34. Minnesota Statutes 2009 Supplement, section 353.65, subdivision 2, is
25.12amended to read:
25.13    Subd. 2. Employee contribution. The employee contribution is 9.4 percent of the
25.14salary of the member in calendar year 2010 and is 9.6 percent of the salary of the member
25.15in each calendar year after 2010. This contribution must be made by deduction from
25.16salary in the manner provided in subdivision 4. Where any portion of a member's salary
25.17is paid from other than public funds, the member's employee contribution is based on
25.18the total salary received from all sources.
25.19EFFECTIVE DATE.This section is effective the day following final enactment.

25.20    Sec. 35. Minnesota Statutes 2009 Supplement, section 353.65, subdivision 3, is
25.21amended to read:
25.22    Subd. 3. Employer contribution. The employer contribution is 14.1 percent of the
25.23salary of the member in calendar year 2010 and is 14.4 percent of the salary of the member
25.24in each calendar year after 2010. This contribution must be made from funds available to
25.25the employing subdivision by the means and in the manner provided in section 353.28.
25.26EFFECTIVE DATE.This section is effective the day following final enactment.

25.27    Sec. 36. Minnesota Statutes 2008, section 353.651, subdivision 1, is amended to read:
25.28    Subdivision 1. Age and allowable service requirements. Upon separation from
25.29public service, any police officer or firefighter member who has attained the age of at
25.30least 55 years and who received credit for not less than three years of allowable service
25.31is vested under section 353.01, subdivision 47, is entitled upon application to a retirement
25.32annuity. Such retirement annuity is, known as the "normal" retirement annuity.
26.1EFFECTIVE DATE.This section is effective the day following final enactment.

26.2    Sec. 37. Minnesota Statutes 2008, section 353.651, subdivision 4, is amended to read:
26.3    Subd. 4. Early retirement. (a) A person who becomes a police and fire plan
26.4member after June 30, 2007, or a former member who is reinstated as a member of the
26.5plan after that date, who is at least 50 years of age with at least three years of allowable
26.6service and who is vested under section 353.01, subdivision 47, upon the termination of
26.7public service is entitled upon application to a retirement annuity equal to the normal
26.8annuity calculated under subdivision 3, reduced by two-tenths of one percent for each
26.9month that the member is under age 55 at the time of retirement.
26.10    (b) Upon the termination of public service, any police and fire plan member not
26.11specified in paragraph (a), upon attaining at least 50 years of age with at least three years
26.12of allowable service is entitled upon application to a retirement annuity equal to the
26.13normal annuity calculated under subdivision 3, reduced by one-tenth of one percent for
26.14each month that the member is under age 55 at the time of retirement.
26.15EFFECTIVE DATE.This section is effective the day following final enactment.

26.16    Sec. 38. Minnesota Statutes 2008, section 353.657, subdivision 1, is amended to read:
26.17    Subdivision 1. Generally. (a) In the event that a member of the police and fire
26.18fund dies from any cause before retirement or before becoming disabled and receiving
26.19disability benefits, the association shall grant survivor benefits to a surviving spouse, as
26.20defined in section 353.01, subdivision 20, and to a dependent child or children, as defined
26.21in section 353.01, subdivision 15, except that if the death is not a line of duty death, the
26.22member must have accrued at least three years of credited service be vested under section
26.23353.01, subdivision 47.
26.24    (b) Notwithstanding the definition of surviving spouse, a former spouse of the
26.25member, if any, is entitled to a portion of the monthly surviving spouse benefit if
26.26stipulated under the terms of a marriage dissolution decree filed with the association. If
26.27there is no surviving spouse or child or children, a former spouse may be entitled to
26.28a lump-sum refund payment under section 353.32, subdivision 1, if provided for in a
26.29marriage dissolution decree but not a monthly surviving spouse benefit despite the terms
26.30of a marriage dissolution decree filed with the association.
26.31    (c) The spouse and child or children are entitled to monthly benefits as provided in
26.32subdivisions 2 to 4.
26.33EFFECTIVE DATE.This section is effective the day following final enactment.

27.1    Sec. 39. Minnesota Statutes 2008, section 353.657, subdivision 2a, is amended to read:
27.2    Subd. 2a. Death while eligible survivor benefit. (a) If a member or former member
27.3who has attained the age of at least 50 years and has credit for not less than three years
27.4allowable service either who is vested under section 353.01, subdivision 47, or who has
27.5credit for at least 30 years of allowable service, regardless of age attained, dies before
27.6the annuity or disability benefit becomes payable, notwithstanding any designation of
27.7beneficiary to the contrary, the surviving spouse may elect to receive a death while
27.8eligible survivor benefit.
27.9    (b) Notwithstanding the definition of surviving spouse in section 353.01, subdivision
27.1020
, a former spouse of the member, if any, is entitled to a portion of the death while
27.11eligible survivor benefit if stipulated under the terms of a marriage dissolution decree
27.12filed with the association. If there is no surviving spouse or child or children, a former
27.13spouse may be entitled to a lump-sum refund payment under section 353.32, subdivision
27.141
, if provided for in a marriage dissolution decree but not a death while eligible survivor
27.15benefit despite the terms of a marriage dissolution decree filed with the association.
27.16    (c) The benefit may be elected instead of a refund with interest under section 353.32,
27.17subdivision 1
, or surviving spouse benefits otherwise payable under subdivisions 1 and
27.182. The benefit must be an annuity equal to the 100 percent joint and survivor annuity
27.19which the member could have qualified for on the date of death, computed as provided in
27.20sections 353.651, subdivisions 2 and 3, and 353.30, subdivision 3.
27.21    (d) The surviving spouse may apply for the annuity at any time after the date
27.22on which the deceased employee would have attained the required age for retirement
27.23based on the employee's allowable service. Sections 353.34, subdivision 3, and 353.71,
27.24subdivision 2
, apply to a deferred annuity payable under this subdivision.
27.25    (e) No payment accrues beyond the end of the month in which entitlement to
27.26such annuity has terminated. An amount equal to the excess, if any, of the accumulated
27.27contributions which were credited to the account of the deceased employee over and
27.28above the total of the annuities paid and payable to the surviving spouse must be paid to
27.29the deceased member's last designated beneficiary or, if none, to the legal representative of
27.30the estate of such deceased member.
27.31    (f) Any member may request in writing, with the signed consent of the spouse, that
27.32this subdivision not apply and that payment be made only to the designated beneficiary, as
27.33otherwise provided by this chapter.
27.34    (g) For a member who is employed as a full-time firefighter by the Department of
27.35Military Affairs of the state of Minnesota, allowable service as a full-time state Military
28.1Affairs Department firefighter credited by the Minnesota State Retirement System may be
28.2used in meeting the minimum allowable service requirement of this subdivision.
28.3EFFECTIVE DATE.This section is effective the day following final enactment.

28.4    Sec. 40. Minnesota Statutes 2008, section 353.71, subdivision 1, is amended to read:
28.5    Subdivision 1. Eligibility. Any person who has been a member of a defined benefit
28.6retirement plan administered by the Public Employees Retirement Association, or a
28.7retirement plan administered by the Minnesota State Retirement System, or the Teachers
28.8Retirement Association, or any other public retirement system in the state of Minnesota
28.9having a like provision, except a fund retirement plan providing benefits for police officers
28.10or firefighters governed by sections 69.77 or 69.771 to 69.776, shall be is entitled, when
28.11qualified, to an annuity from each fund retirement plan if the total allowable service in all
28.12funds retirement plans or in any two of these funds retirement plans totals three or more
28.13years the number of years of allowable service required to receive a normal retirement
28.14annuity for that retirement plan, provided that no portion of the allowable service upon
28.15which the retirement annuity from one fund retirement plan is based is again used in the
28.16computation for benefits from another fund retirement plan and provided further that the
28.17person has not taken a refund from any one of these funds retirement plans since the
28.18person's membership in that association or system last terminated. The annuity from
28.19each fund shall must be determined by the appropriate provisions of the law except that
28.20the requirement that a person must have at least three years a specific minimum period
28.21of allowable service in the respective association or system shall does not apply for the
28.22purposes of this section provided if the combined service in two or more of these funds
28.23retirement plans equals three or more the number of years of allowable service required to
28.24receive a normal retirement annuity for that retirement plan.
28.25EFFECTIVE DATE.This section is effective the day following final enactment.

28.26    Sec. 41. Minnesota Statutes 2008, section 353.71, subdivision 2, is amended to read:
28.27    Subd. 2. Deferred annuity computation; augmentation. (a) The deferred annuity
28.28accruing under subdivision 1, or under sections 353.34, subdivision 3, and 353.68,
28.29subdivision 4
, must be computed on the basis of allowable service prior to the termination
28.30of public service and augmented as provided in this paragraph subdivision. The required
28.31reserves applicable to a deferred annuity, or to any deferred segment of an annuity must
28.32be determined as of the first day of the month following the month in which the former
28.33member ceased to be a public employee, or July 1, 1971, whichever is later. These
29.1(b) For a person who became a public employee before July 1, 2006, whose period
29.2of deferral began after June 30, 1971, and who terminated public employment before
29.3January 1, 2012, the required reserves of the deferred annuity must be augmented at
29.4the following applicable rate of or rates:
29.5(1) five percent annually compounded annually annual compound interest until
29.6January 1, 1981, and at the rate of;
29.7(2) three percent thereafter annual compound interest after January 1, 1981, or until
29.8the earlier of December 31, 2011, or after the date of the termination of public service or
29.9the termination of membership, whichever is later, until January 1 of the year following
29.10the year in which the former member attains age 55 and;
29.11(3) five percent annual compound interest from that date to the effective date of
29.12retirement, the rate is five percent compounded annually if the employee became an
29.13employee before July 1, 2006, and at 2.5 percent compounded annually if the employee
29.14becomes an January 1 of the year following the year in which the former member attains
29.15age 55, or until December 31, 2011, whichever is earlier; and
29.16(4) one percent annual compound interest from January 1, 2012.
29.17(c) For a person who became a public employee after June 30, 2006, and who
29.18terminated public employment before January 1, 2012, the required reserves of the
29.19deferred annuity must be augmented at 2.5 percent annual compound interest from the date
29.20of termination of public service or termination of membership, whichever is earlier, until
29.21December 31, 2011, and one percent annual compound interest after December 31, 2011.
29.22(d) For a person who terminates public employment after December 31, 2011, the
29.23required reserves of the deferred annuity must not be augmented.
29.24(e) If a person has more than one period of uninterrupted service, the required
29.25reserves related to each period must be augmented as specified in this paragraph. The sum
29.26of the augmented required reserves is the present value of the annuity. Uninterrupted
29.27service for the purpose of this subdivision means periods of covered employment during
29.28which the employee has not been separated from public service for more than two years.
29.29If a person repays a refund, the restored service must be considered as continuous with the
29.30next period of service for which the employee has credit with this association. This section
29.31must not reduce the annuity otherwise payable under this chapter. This paragraph applies
29.32to individuals who become deferred annuitants on or after July 1, 1971. For a member
29.33who became a deferred annuitant before July 1, 1971, the paragraph applies from July 1,
29.341971, if the former active member applies for an annuity after July 1, 1973.
29.35(b) (f) The retirement annuity or disability benefit of, or the survivor benefit payable
29.36on behalf of, a former member who terminated service before July 1, 1997, or the
30.1survivor benefit payable on behalf of a basic or police and fire member who was receiving
30.2disability benefits before July 1, 1997, which is first payable after June 30, 1997, must
30.3be increased on an actuarial equivalent basis to reflect the change in the postretirement
30.4interest rate actuarial assumption under section 356.215, subdivision 8, from five percent
30.5to six percent under a calculation procedure and tables adopted by the board and approved
30.6by the actuary retained under section 356.214.
30.7EFFECTIVE DATE.This section is effective the day following final enactment.

30.8    Sec. 42. Minnesota Statutes 2008, section 353E.04, subdivision 1, is amended to read:
30.9    Subdivision 1. Eligibility requirements. After termination of public employment,
30.10an employee covered under section 353E.02 who has attained the age of at least 55 years
30.11and has credit for not less than three years of coverage who is vested under section
30.12353.01, subdivision 47, in the local government correctional service plan is entitled, upon
30.13application, to a normal retirement annuity. Instead of a normal retirement annuity, a
30.14retiring employee may elect to receive the optional annuity provided in section 353.30,
30.15subdivision 3
.
30.16EFFECTIVE DATE.This section is effective the day following final enactment.

30.17    Sec. 43. Minnesota Statutes 2008, section 353E.04, subdivision 4, is amended to read:
30.18    Subd. 4. Early retirement. An employee covered under section 353E.02 who has
30.19attained the age of at least 50 years and has credit for not less than three years of coverage
30.20who is vested under section 353.01, subdivision 47, in the local government correctional
30.21service plan is entitled, upon application, to a reduced retirement annuity equal to the
30.22annuity calculated under subdivision 3, reduced so that the reduced annuity is the actuarial
30.23equivalent of the annuity that would be payable if the employee deferred receipt of the
30.24annuity from the day the annuity begins to accrue until age 55.
30.25EFFECTIVE DATE.This section is effective the day following final enactment.

30.26    Sec. 44. Minnesota Statutes 2008, section 353E.07, subdivision 1, is amended to read:
30.27    Subdivision 1. Member at least age 50. If a member or former member of the local
30.28government correctional service retirement plan who has attained the age of at least 50
30.29years and has credit for not less than three years of allowable service who is vested under
30.30section 353.01, subdivision 47, dies before the annuity or disability benefit has become
30.31payable, notwithstanding any designation of beneficiary to the contrary, the surviving
30.32spouse may elect to receive, in lieu of a refund with interest provided in section 353.32,
31.1subdivision 1
, a surviving spouse annuity equal to the 100 percent joint and survivor
31.2annuity for which the member could have qualified had the member terminated service
31.3on the date of death.
31.4EFFECTIVE DATE.This section is effective the day following final enactment.

31.5    Sec. 45. Minnesota Statutes 2008, section 353E.07, subdivision 2, is amended to read:
31.6    Subd. 2. Member not yet age 50. If the member was under age 50, dies, and had
31.7credit for not less than three years of allowable service was vested under section 353.01,
31.8subdivision 47, on the date of death but did not yet qualify for retirement, the surviving
31.9spouse may elect to receive a 100 percent joint and survivor annuity based on the age
31.10of the employee and the surviving spouse at the time of death. The annuity is payable
31.11using the early retirement reduction under section 353E.04, subdivision 4, to age 50 and
31.12one-half the early retirement reduction from age 50 to the age payment begins. Sections
31.13353.34, subdivision 3 , and 353.71, subdivision 2, apply to a deferred annuity or surviving
31.14spouse benefit payable under this subdivision.
31.15EFFECTIVE DATE.This section is effective the day following final enactment.

31.16    Sec. 46. Minnesota Statutes 2008, section 353F.03, is amended to read:
31.17353F.03 VESTING RULE FOR CERTAIN EMPLOYEES.
31.18Notwithstanding any provision of chapter 353 to the contrary, a terminated medical
31.19facility or other public employing unit employee is eligible to receive a retirement annuity
31.20under section 353.29 of the edition of Minnesota Statutes published in the year before the
31.21year in which the privatization occurred, without regard to the requirement for three years
31.22of allowable service specified in section 353.01, subdivision 47.
31.23EFFECTIVE DATE.This section is effective the day following final enactment.

31.24    Sec. 47. Minnesota Statutes 2009 Supplement, section 354.42, subdivision 2, is
31.25amended to read:
31.26    Subd. 2. Employee contribution. (a) For a basic member, the employee
31.27contribution to the fund is 9.0 percent the following percentage of the member's salary.:
31.28
before July 1, 2011
9.0 percent
31.29
from July 1, 2011, until June 30, 2012
9.5 percent
31.30
from July 1, 2012, until June 30, 2013
10.0 percent
31.31
from July 1, 2013, until June 30, 2014
10.5 percent
31.32
after June 30, 2014
11.0 percent
32.1(b) For a coordinated member, the employee contribution is 5.5 percent the following
32.2percentage of the member's salary.:
32.3
before July 1, 2011
5.5 percent
32.4
from July 1, 2011, until June 30, 2012
6.0 percent
32.5
from July 1, 2012, until June 30, 2013
6.5 percent
32.6
from July 1, 2013, until June 30, 2014
7.0 percent
32.7
after June 30, 2014
7.5 percent
32.8(c) When an employee contribution rate changes for a fiscal year, the new
32.9contribution rate is effective for the entire salary paid for each employer unit with the
32.10first payroll cycle reported.
32.11(d) After June 30, 2015, if a contribution rate revision is required under subdivisions
32.124a, 4b, and 4c, the employee contributions under paragraphs (a) and (b) must be adjusted
32.13accordingly.
32.14(b) (e) This contribution must be made by deduction from salary. Where any portion
32.15of a member's salary is paid from other than public funds, the member's employee
32.16contribution must be based on the entire salary received.
32.17EFFECTIVE DATE.This section is effective the day following final enactment.

32.18    Sec. 48. Minnesota Statutes 2008, section 354.42, subdivision 3, is amended to read:
32.19    Subd. 3. Employer. (a) The regular employer contribution to the fund by Special
32.20School District No. 1, Minneapolis, after July 1, 2006, and before July 1, 2007, is an
32.21amount equal to 5.0 percent of the salary of each of its teachers who is a coordinated
32.22member and 9.0 percent of the salary of each of its teachers who is a basic member. After
32.23July 1, 2007, the regular employer contribution to the fund by Special School District No.
32.241, Minneapolis, is an amount equal to 5.5 percent the applicable following percentage of
32.25salary of each coordinated member and 9.5 percent the applicable following percentage
32.26of salary of each basic member.:
32.27
Period
Coordinated Member
Basic Member
32.28
before July 1, 2011
5.5 percent
9.5 percent
32.29
from July 1, 2011, until June 30, 2012
6.0 percent
10.0 percent
32.30
from July 1, 2012, until June 30, 2013
6.5 percent
10.5 percent
32.31
from July 1, 2013, until June 30, 2014
7.0 percent
11.0 percent
32.32
after June 30, 2014
7.5 percent
11.5 percent
32.33 The additional employer contribution to the fund by Special School District No. 1,
32.34Minneapolis, after July 1, 2006, is an amount equal to 3.64 percent of the salary of each
32.35teacher who is a coordinated member or is a basic member.
33.1(b) The employer contribution to the fund for every other employer is an amount
33.2equal to 5.0 percent the applicable following percentage of the salary of each coordinated
33.3member and 9.0 percent the applicable following percentage of the salary of each basic
33.4member before July 1, 2007, and 5.5 percent of the salary of each coordinated member
33.5and 9.5 percent of the salary of each basic member after June 30, 2007.:
33.6
Period
Coordinated Member
Basic Member
33.7
before July 1, 2011
5.5 percent
9.5 percent
33.8
from July 1, 2011, until June 30, 2012
6.0 percent
10.0 percent
33.9
from July 1, 2012, until June 30, 2013
6.5 percent
10.5 percent
33.10
from July 1, 2013, until June 30, 2014
7.0 percent
11.0 percent
33.11
after June 30, 2014
7.5 percent
11.5 percent
33.12(c) When an employer contribution rate changes for a fiscal year, the new
33.13contribution rate is effective for the entire salary paid for each employer unit with the
33.14first payroll cycle reported.
33.15(d) After June 30, 2015, if a contribution rate revision is made under subdivisions
33.164a, 4b, and 4c, the employer contributions under paragraphs (a) and (b) must be adjusted
33.17accordingly.
33.18EFFECTIVE DATE.This section is effective the day following final enactment.

33.19    Sec. 49. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision
33.20to read:
33.21    Subd. 4a. Determination. (a) For purposes of this section, a contribution
33.22sufficiency exists if the total of the employee contributions, the employer contributions,
33.23and any additional employer contributions, if applicable, exceeds the total of the normal
33.24cost, the administrative expenses, and the amortization contribution of the retirement plan
33.25as reported in the most recent actuarial valuation of the retirement plan prepared by the
33.26approved actuary retained under section 356.214 and prepared under section 356.215
33.27and the standards for actuarial work of the Legislative Commission on Pensions and
33.28Retirement.
33.29(b) For purposes of this section, a contribution deficiency exists if the total of
33.30the employee contributions, the employer contributions, and any additional employer
33.31contributions are less than the total of the normal cost, the administrative expenses, and
33.32the amortization contribution of the retirement plan as reported in the most recent actuarial
33.33valuation of the retirement plan prepared by the approved actuary retained under section
33.34356.214 and prepared under section 356.215 and the standards for actuarial work of the
33.35Legislative Commission on Pensions and Retirement.
34.1EFFECTIVE DATE.This section is effective the day following final enactment.

34.2    Sec. 50. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision
34.3to read:
34.4    Subd. 4b. Contribution rate revision. Notwithstanding the contribution rate
34.5provisions under subdivisions 2 and 3, the employee and employer contribution rates
34.6may be adjusted as follows:
34.7(1) if, after June 30, 2015, the regular actuarial valuation of the plan under section
34.8356.215 indicates that there is a contribution sufficiency under subdivision 4a equal to
34.9or greater than one percent of covered payroll and the sufficiency has existed for at least
34.10two consecutive years, the employee and employer contribution rates for the plan may
34.11each be decreased to a level such that the sufficiency equals no more than one percent of
34.12covered payroll based on the most recent actuarial valuation; or
34.13(2) if, after June 30, 2015, the regular valuation of the plan under section 356.215
34.14indicates that there is a deficiency equal to or greater than 0.25 percent of covered payroll
34.15and the deficiency has existed for at least two consecutive years, the employee and
34.16employer contribution rates for the applicable plan may each be increased by:
34.17(i) 0.25 percent if the deficiency is less than 2.00 percent of covered payroll;
34.18(ii) 0.5 percent if the deficiency is equal to or greater than 2.00 percent of covered
34.19payroll and less than or equal to four percent; and
34.20(iii) 0.75 percent if the deficiency is greater than four percent.
34.21EFFECTIVE DATE.This section is effective the day following final enactment.

34.22    Sec. 51. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision
34.23to read:
34.24    Subd. 4c. Contribution sufficiency measures. (a) A contribution sufficiency of up
34.25to one percent of covered payroll must be held in reserve to be used to offset any future
34.26actuarially required contributions that are more than the total combined employee and
34.27employer contributions being collected.
34.28(b) Before any reduction in contributions to eliminate a sufficiency in excess of one
34.29percent of covered pay may be recommended, the executive director must review any
34.30need for a change in actuarial assumptions, as recommended by the actuary retained
34.31under section 356.214 in the most recent experience study of the retirement plan, that
34.32may result in an increase in the actuarially required contribution and must report to the
34.33Legislative Commission on Pensions and Retirement any recommendation by the board
34.34to use the sufficiency exceeding one percent of covered payroll to offset the impact of
35.1an actuarial assumption change recommended by the actuary retained under section
35.2356.214, subdivision 1, and reviewed by the actuary retained by the commission under
35.3section 356.214, subdivision 4.
35.4(c) A contribution sufficiency in excess of one percent of covered pay must not be
35.5used to increase benefits, and a benefit increase must not be proposed that would initiate
35.6an automatic adjustment under this section to increase contributions. A proposed benefit
35.7improvement must include a recommendation, prepared by the actuary retained under
35.8section 356.214, subdivision 1, and reviewed by the actuary retained by the Legislative
35.9Commission on Pensions and Retirement, as provided under section 356.214, subdivision
35.104, on the manner in which the benefit modification is to be funded.
35.11EFFECTIVE DATE.This section is effective the day following final enactment.

35.12    Sec. 52. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision
35.13to read:
35.14    Subd. 4d. Reporting; commission review. A contribution rate increase or decrease
35.15under subdivision 4b, as determined by the executive director of the Teachers Retirement
35.16Association, must be reported to the chair and the executive director of the Legislative
35.17Commission on Pensions and Retirement on or before the next February 1 and, if the
35.18Legislative Commission on Pensions and Retirement does not recommend against the rate
35.19change or does not recommend a modification in the rate change, is effective on the next
35.20July 1 following the determination by the executive director that a contribution deficiency
35.21or sufficiency exists based on the most recent actuarial valuation under section 356.215.
35.22EFFECTIVE DATE.This section is effective the day following final enactment.

35.23    Sec. 53. Minnesota Statutes 2009 Supplement, section 354.47, subdivision 1, is
35.24amended to read:
35.25    Subdivision 1. Death before retirement. (a) If a member dies before retirement
35.26and is covered under section 354.44, subdivision 2, and neither an optional annuity, nor a
35.27reversionary annuity, nor a benefit under section 354.46, subdivision 1, is payable to the
35.28survivors if the member was a basic member, then the surviving spouse, or if there is no
35.29surviving spouse, the designated beneficiary is entitled to an amount equal to the member's
35.30accumulated deductions with interest credited to the account of the member to the date of
35.31death of the member. If the designated beneficiary is a minor, interest must be credited to
35.32the date the beneficiary reaches legal age, or the date of receipt, whichever is earlier.
36.1(b) If a member dies before retirement and is covered under section 354.44,
36.2subdivision 6
, and neither an optional annuity, nor reversionary annuity, nor the benefit
36.3described in section 354.46, subdivision 1, is payable to the survivors if the member
36.4was a basic member, then the surviving spouse, or if there is no surviving spouse, then
36.5the designated beneficiary is entitled to an amount equal to the member's accumulated
36.6deductions credited to the account of the member as of June 30, 1957, and from July 1,
36.71957, to the date of death of the member, the member's accumulated deductions plus six
36.8percent interest compounded annually. a refund equal to the accumulated deductions
36.9credited to the member's account plus interest compounded annually until the member's
36.10date of death using the following interest rates:
36.11(1) before July 1, 1957, no interest accrues;
36.12(2) July 1, 1957, to June 30, 2011, six percent; and
36.13(3) after June 30, 2011, four percent.
36.14(c) If the designated beneficiary under paragraph (b) is a minor, any interest credited
36.15under that paragraph must be credited to the date the beneficiary reaches legal age, or
36.16the date of receipt, whichever is earlier.
36.17(d) The amount of any refund payable under this subdivision must be reduced by
36.18any permanent disability payment under section 354.48 received by the member.
36.19EFFECTIVE DATE.This section is effective the day following final enactment.

36.20    Sec. 54. Minnesota Statutes 2009 Supplement, section 354.49, subdivision 2, is
36.21amended to read:
36.22    Subd. 2. Calculation. (a) Except as provided in section 354.44, subdivision 1,
36.23any person who ceases to be a member by reason of termination of teaching service, is
36.24entitled to receive a refund in an amount equal to the accumulated deductions credited
36.25to the account as of June 30, 1957, and after July 1, 1957, the accumulated deductions
36.26with interest at the rate of six percent per annum compounded annually. plus interest
36.27compounded annually using the following interest rates:
36.28(1) before July 1, 1957, no interest accrues;
36.29(2) July 1, 1957, to June 30, 2011, six percent; and
36.30(3) after June 30, 2011, four percent.
36.31For the purpose of this subdivision, interest must be computed on fiscal year end
36.32balances to the first day of the month in which the refund is issued.
36.33(b) If the person has received permanent disability payments under section 354.48,
36.34the refund amount must be reduced by the amount of those payments.
37.1EFFECTIVE DATE.This section is effective the day following final enactment.

37.2    Sec. 55. Minnesota Statutes 2009 Supplement, section 354.55, subdivision 11, is
37.3amended to read:
37.4    Subd. 11. Deferred annuity; augmentation. (a) Any person covered under section
37.5354.44, subdivision 6 , who ceases to render teaching service, may leave the person's
37.6accumulated deductions in the fund for the purpose of receiving a deferred annuity
37.7at retirement.
37.8(b) The amount of the deferred retirement annuity is determined by section 354.44,
37.9subdivision 6
, and augmented as provided in this subdivision. The required reserves for
37.10the annuity which had accrued when the member ceased to render teaching service must
37.11be augmented, as further specified in this subdivision, by the applicable interest rate
37.12compounded annually from the first day of the month following the month during which
37.13the member ceased to render teaching service to the effective date of retirement.
37.14(c) No augmentation is not creditable if the deferral period is less than three months
37.15or if deferral commenced before July 1, 1971.
37.16(d) For persons who became covered employees before July 1, 2006, with a deferral
37.17period commencing after June 30, 1971, the annuity must be augmented using as follows:
37.18(1) five percent interest compounded annually until January 1, 1981, and;
37.19(2) three percent interest compounded annually thereafter from January 1, 1981, until
37.20January 1 of the year following the year in which the deferred annuitant attains age 55.;
37.21 From that date (3) five percent interest compounded annually from the date
37.22established in clause (2) to the effective date of retirement, the rate is five percent
37.23compounded annually. or until June 30, 2012, whichever is earlier; and
37.24(4) two percent interest compounded annually after June 30, 2012.
37.25(e) For persons who become covered employees after June 30, 2006, the interest
37.26rate used to augment the deferred annuity is 2.5 percent interest compounded annually
37.27until June 30, 2012, or until the effective date of retirement, whichever is earlier, and two
37.28percent interest compounded annually after June 30, 2012.
37.29(f) If a person has more than one period of uninterrupted service, a separate average
37.30salary determined under section 354.44, subdivision 6, must be used for each period
37.31and the required reserves related to each period must be augmented as specified in this
37.32subdivision. The sum of the augmented required reserves is the present value of the
37.33annuity. For the purposes of this subdivision, "period of uninterrupted service" means a
37.34period of covered teaching service during which the member has not been separated from
37.35active service for more than one fiscal year.
38.1(g) If a person repays a refund, the service restored by the repayment must be
38.2considered as continuous with the next period of service for which the person has
38.3allowable service credit in the Teachers Retirement Association.
38.4(h) If a person does not render teaching service in any one fiscal year or more
38.5consecutive fiscal years and then resumes teaching service, the formula percentages used
38.6from the date of the resumption of teaching service must be those applicable to new
38.7members.
38.8(i) The mortality table and interest rate actuarial assumption used to compute the
38.9annuity must be the applicable mortality table established by the board under section
38.10354.07, subdivision 1 , and the interest rate actuarial assumption under section 356.215 in
38.11effect when the member retires.
38.12(j) In no case may the annuity payable under this subdivision be less than the amount
38.13of annuity payable under section 354.44, subdivision 6.
38.14(k) The requirements and provisions for retirement before normal retirement age
38.15contained in section 354.44, subdivision 6, also apply to an employee fulfilling the
38.16requirements with a combination of service as provided in section 354.60.
38.17(l) The augmentation provided by this subdivision applies to the benefit provided
38.18in section 354.46, subdivision 2.
38.19(m) The augmentation provided by this subdivision does not apply to any period
38.20in which a person is on an approved leave of absence from an employer unit covered
38.21by the provisions of this chapter.
38.22(n) The retirement annuity or disability benefit of, or the survivor benefit payable on
38.23behalf of, a former teacher who terminated service before July 1, 1997, which is not first
38.24payable until after June 30, 1997, must be increased on an actuarial equivalent basis to
38.25reflect the change in the postretirement interest rate actuarial assumption under section
38.26356.215, subdivision 8 , from five percent to six percent under a calculation procedure and
38.27tables adopted by the board as recommended by an approved actuary and approved by the
38.28actuary retained under section 356.214.
38.29EFFECTIVE DATE.This section is effective the day following final enactment.

38.30    Sec. 56. Minnesota Statutes 2008, section 354A.12, subdivision 1, is amended to read:
38.31    Subdivision 1. Employee contributions. (a) The contribution required to be paid
38.32by each member of a teachers retirement fund association shall not be less than is the
38.33percentage of total salary specified below for the applicable association and program:
38.34
Association and Program
Percentage of Total Salary
38.35
Duluth Teachers Retirement Fund Association
39.1
old law and new law
39.2
coordinated programs
5.5 percent
39.3
before July 1, 2011
5.5 percent
39.4
effective July 1, 2011
6.0 percent
39.5
effective July 1, 2012
6.5 percent
39.6
St. Paul Teachers Retirement Fund Association
39.7
basic program before July 1, 2010
8 percent
39.8
basic program after June 30, 2010
8.5 percent
39.9
basic program after June 30, 2011
9.0 percent
39.10
coordinated program before July 1, 2010
5.5 percent
39.11
coordinated program after June 30, 2010
6.0 percent
39.12
coordinated program after June 30, 2011
6.5 percent
39.13(b) Contributions shall be made by deduction from salary and must be remitted
39.14directly to the respective teachers retirement fund association at least once each month.
39.15(c) When an employee contribution rate changes for a fiscal year, the new
39.16contribution rate is effective for the entire salary paid by the employer with the first
39.17payroll cycle reported.
39.18EFFECTIVE DATE.This section is effective July 1, 2010.

39.19    Sec. 57. Minnesota Statutes 2009 Supplement, section 354A.12, subdivision 2a,
39.20is amended to read:
39.21    Subd. 2a. Employer regular and additional contributions. (a) The employing
39.22units shall make the following employer contributions to teachers retirement fund
39.23associations:
39.24(1) for any coordinated member of one of the following teachers retirement fund
39.25associations in a city of the first class, the employing unit shall make a regular employer
39.26contribution to the respective retirement fund association in an amount equal to the
39.27designated percentage of the salary of the coordinated member as provided below:
39.28
Duluth Teachers Retirement Fund Association
4.50 percent
39.29
before July 1, 2011
5.79 percent
39.30
effective July 1, 2011
6.29 percent
39.31
effective July 1, 2012
6.79 percent
39.32
39.33
St. Paul Teachers Retirement Fund Association
before July 1, 2010
4.50 percent
39.34
after June 30, 2010
5.0 percent
39.35
after June 30, 2011
5.5 percent
39.36
after June 30, 2013
6.5 percent
39.37(2) for any basic member of the St. Paul Teachers Retirement Fund Association, the
39.38employing unit shall make a regular employer contribution to the respective retirement
40.1fund in an amount equal to 8.00 percent of the salary of the basic member; according to
40.2the schedule below:
40.3
before July 1, 2010
8.0 percent of the salary of the basic member
40.4
before July 1, 2011
8.5 percent of the salary of the basic member
40.5
before July 1, 2012
9.0 percent of the salary of the basic member
40.6
before July 1, 2013
9.5 percent of the salary of the basic member
40.7
before July 1, 2014
10.0 percent of the salary of the basic member
40.8(3) for a basic member of the St. Paul Teachers Retirement Fund Association, the
40.9employing unit shall make an additional employer contribution to the respective fund in
40.10an amount equal to 3.64 percent of the salary of the basic member;
40.11(4) for a coordinated member of a teachers retirement fund association in a city of
40.12the first class the St. Paul Teachers Retirement Fund Association, the employing unit shall
40.13make an additional employer contribution to the respective fund in an amount equal to the
40.14applicable percentage of the coordinated member's salary, as provided below:
40.15
40.16
Duluth Teachers Retirement
Fund Association
1.29 percent
40.17
40.18
St. Paul Teachers Retirement
Fund Association
3.84 percent
40.19(b) The regular and additional employer contributions must be remitted directly to
40.20the respective teachers retirement fund association at least once each month. Delinquent
40.21amounts are payable with interest under the procedure in subdivision 1a.
40.22(c) Payments of regular and additional employer contributions for school district
40.23or technical college employees who are paid from normal operating funds must be made
40.24from the appropriate fund of the district or technical college.
40.25(d) When an employer contribution rate changes for a fiscal year, the new
40.26contribution rate is effective for the entire salary paid by the employer with the first
40.27payroll cycle reported.
40.28EFFECTIVE DATE.This section is effective July 1, 2010.

40.29    Sec. 58. Minnesota Statutes 2008, section 354A.12, subdivision 3c, is amended to read:
40.30    Subd. 3c. Termination of supplemental contributions and direct matching
40.31and state aid. (a) The supplemental contributions payable to the Minneapolis Teachers
40.32Retirement Fund Association by Special School District No. 1 and the city of Minneapolis
40.33under section 423A.02, subdivision 3, must be paid to the Teachers Retirement
40.34Association and must continue until the current assets of the fund equal or exceed the
40.35actuarial accrued liability of the fund as determined in the most recent actuarial report
40.36for the fund by the actuary retained under section 356.214, or 2037, whichever occurs
41.1earlier. The supplemental contributions payable to the St. Paul Teachers Retirement Fund
41.2Association by Independent School District No. 625 under section 423A.02, subdivision
41.33
, or the direct state aid under subdivision 3a to the St. Paul Teachers Retirement Fund
41.4Association terminate at the end of the fiscal year in which the accrued liability funding
41.5ratio for that fund, as determined in the most recent actuarial report for that fund by the
41.6actuary retained under section 356.214, equals or exceeds the accrued liability funding
41.7ratio for the Teachers Retirement Association, as determined in the most recent actuarial
41.8report for the Teachers Retirement Association by the actuary retained under section
41.9356.214. must continue until the current assets of the fund equal or exceed the actuarial
41.10accrued liability of the fund as determined in the most recent actuarial report for the fund
41.11by the actuary retained under section 356.214 or until 2037, whichever occurs earlier.
41.12    (b) If the St. Paul Teachers Retirement Fund Association is funded at an amount
41.13equal to or greater than the funding ratio applicable to the Teachers Retirement
41.14Association, then any future state aid under subdivision 3a is payable to the Teachers
41.15Retirement Association.
41.16EFFECTIVE DATE.This section is effective July 1, 2010.

41.17    Sec. 59. Minnesota Statutes 2008, section 354A.27, subdivision 5, is amended to read:
41.18    Subd. 5. Calculation Eligibility for and payment of postretirement adjustments.
41.19(a) Annually, after June 30, the board of trustees of the Duluth Teachers Retirement Fund
41.20Association determines the amount of any postretirement adjustment using the procedures
41.21in this subdivision and subdivision 6 or 7, whichever is applicable.
41.22(b) Each person who has been receiving an annuity or benefit under the articles
41.23of incorporation, bylaws, or under this section for at least 12 months as of the date of
41.24the postretirement adjustment shall be eligible for a postretirement adjustment. The
41.25postretirement adjustment shall be payable each January 1. The postretirement adjustment
41.26shall be equal to two percent of a permanent percentage increase as specified under
41.27subdivision 6 or 7, whichever is applicable, applied to the annuity or benefit to which the
41.28person is entitled one month prior to the payment of the postretirement adjustment.
41.29EFFECTIVE DATE.This section is effective July 1, 2010.

41.30    Sec. 60. Minnesota Statutes 2008, section 354A.27, subdivision 6, is amended to read:
41.31    Subd. 6. Additional increase Calculation of postretirement adjustments;
41.32transitional provision. (a) In addition to the postretirement increases granted under
42.1subdivision 5, an additional percentage increase must be computed and paid under this
42.2subdivision.
42.3(b) The board of trustees shall determine the number of annuitants or benefit
42.4recipients who have been receiving an annuity or benefit for at least 12 months as of the
42.5current June 30. These recipients are entitled to receive the surplus investment earnings
42.6additional postretirement increase.
42.7(c) Annually, as of each June 30, the board shall determine the five-year annualized
42.8rate of return attributable to the assets of the Duluth Teachers Retirement Fund Association
42.9under the formula or formulas specified in section 11A.04, clause (11).
42.10(d) The board shall determine the amount of excess five-year annualized rate of
42.11return over the preretirement interest assumption as specified in section 356.215.
42.12(e) The additional percentage increase must be determined by multiplying the
42.13quantity one minus the rate of contribution deficiency, as specified in the most recent
42.14actuarial report of the actuary retained under section 356.214, times the rate of return
42.15excess as determined in paragraph (d).
42.16(f) The additional increase is payable to all eligible annuitants or benefit recipients
42.17on the following January 1.
42.18(a) For purposes of computing postretirement adjustments after the effective date
42.19of this section for eligible benefit recipients of the Duluth Teachers Retirement Fund
42.20Association, the funding ratio of the plan, as determined by dividing the market value of
42.21assets by the actuarial accrued liability as reported in the most recent actuarial valuation
42.22prepared under sections 356.214 and 356.215, determines the postretirement increase
42.23as follows:
42.24
Funding Ratio
Postretirement Increase
42.25
less than 80 percent
0 percent
42.26
42.27
at least 80 percent but less than 90
percent
1 percent
42.28
at least 90 percent
2 percent
42.29(b) If the funding ratio of the plan based on actuarial value, rather than market value,
42.30is at least 90 percent as reported in the most recent actuarial valuation prepared under
42.31sections 356.214 and 356.215, this subdivision expires and subsequent postretirement
42.32increases must be paid as specified under subdivision 7.
42.33EFFECTIVE DATE.This section is effective July 1, 2010.

42.34    Sec. 61. Minnesota Statutes 2008, section 354A.27, is amended by adding a
42.35subdivision to read:
43.1    Subd. 7. Calculation of postretirement adjustments. (a) This subdivision applies
43.2if subdivision 6 has expired.
43.3(b) A percentage adjustment must be computed and paid under this subdivision to
43.4eligible persons under subdivision 5. This adjustment is determined by reference to the
43.5Consumer Price Index for urban wage earners and clerical workers all items index as
43.6reported by the Bureau of Labor Statistics within the United States Department of Labor
43.7each year as part of the determination of annual cost-of-living adjustments to recipients
43.8of federal old-age, survivors, and disability insurance. For calculations of cost-of-living
43.9adjustments under paragraph (c), the term "average third quarter Consumer Price Index
43.10value" means the sum of the monthly index values as initially reported by the Bureau of
43.11Labor Statistics for the months of July, August, and September, divided by 3.
43.12(c) Before January 1 of each year, the executive director must calculate the amount
43.13of the cost-of-living adjustment by dividing the most recent average third quarter index
43.14value by the same average third quarter index value from the previous year, subtract one
43.15from the resulting quotient, and express the result as a percentage amount, which must be
43.16rounded to the nearest one-tenth of one percent.
43.17(d) The amount calculated under paragraph (c) is the full cost-of-living adjustment
43.18to be applied as a permanent increase to the regular payment of each eligible member
43.19on January 1 of the next calendar year. For any eligible member whose effective date
43.20of benefit commencement occurred during the calendar year before the cost-of-living
43.21adjustment is applied, the full increase amount must be prorated on the basis of whole
43.22calendar quarters in benefit payment status in the calendar year prior to the January 1 on
43.23which the cost-of-living adjustment is applied, calculated to the third decimal place.
43.24(e) The adjustment must not be less than zero nor greater than five percent.
43.25(f) If the funding ratio of the plan as determined in the most recent actuarial
43.26valuation using the actuarial value of assets is less than 80 percent there will be no
43.27postretirement adjustment the following January 1.
43.28EFFECTIVE DATE.This section is effective July 1, 2010.

43.29    Sec. 62. Minnesota Statutes 2008, section 354A.31, subdivision 1, is amended to read:
43.30    Subdivision 1. Age and service requirements. Any coordinated member or former
43.31coordinated member of the St. Paul Teachers Retirement Fund Association who has
43.32ceased to render teaching service for the school district in which the teachers retirement
43.33fund association exists and who has either attained the age of at least 55 years with not
43.34less than three years of allowable service credit or received credit for not less than 30
43.35years of allowable service regardless of age, shall be entitled upon written application to a
44.1retirement annuity. Any coordinated member or former coordinated member of the Duluth
44.2Teachers Retirement Fund Association who has ceased to render teaching service for the
44.3school district in which the teacher retirement fund association exists and who has either
44.4attained the age of at least 55 years with not less than three years of allowable service
44.5credit if the member became an employee before July 1, 2010, or not less than five years
44.6of allowable service credit if the member became an employee after June 30, 2010, or
44.7received service credit for not less than 30 years of allowable service regardless of age,
44.8shall be entitled upon written application to a retirement annuity.
44.9EFFECTIVE DATE.This section is effective July 1, 2010.

44.10    Sec. 63. Minnesota Statutes 2008, section 354A.35, subdivision 1, is amended to read:
44.11    Subdivision 1. Death before retirement; refund. If a coordinated member
44.12or former coordinated member dies prior to retirement or prior to the receipt of any
44.13retirement annuity or other benefit payment which is or may be payable and a surviving
44.14spouse optional annuity is not payable pursuant to subdivision 2, a refund shall be paid to
44.15the person's surviving spouse, or if there is none, to the person's designated beneficiary,
44.16or if there is none, to the legal representative of the person's estate. For a coordinated
44.17member or former coordinated member of the St. Paul Teachers Retirement Fund
44.18Association, the refund shall be in an amount equal to the person's accumulated employee
44.19contributions plus interest at the rate of six percent per annum compounded annually. For
44.20a coordinated member or former coordinated member of the Duluth Teachers Retirement
44.21Fund Association, the refund shall be in an amount equal to the person's accumulated
44.22employee contributions plus interest at the rate of six percent per annum compounded
44.23annually to July 1, 2010, and four percent per annum compounded annually thereafter.
44.24EFFECTIVE DATE.This section is effective July 1, 2010.

44.25    Sec. 64. Minnesota Statutes 2008, section 354A.37, subdivision 2, is amended to read:
44.26    Subd. 2. Eligibility for deferred retirement annuity. (a) Any coordinated member
44.27who ceases to render teaching services for the school district in which the teachers
44.28retirement fund association is located, with sufficient allowable service credit to meet
44.29the minimum service requirements specified in section 354A.31, subdivision 1, shall be
44.30entitled to a deferred retirement annuity in lieu of a refund pursuant to subdivision 1. The
44.31deferred retirement annuity shall be computed pursuant to section 354A.31 and shall be
44.32augmented as provided in this subdivision. The deferred annuity shall commence upon
45.1application after the person on deferred status attains at least the minimum age specified in
45.2section 354A.31, subdivision 1.
45.3(b) The monthly annuity amount that had accrued when the member ceased to
45.4render teaching service must be augmented from the first day of the month following the
45.5month during which the member ceased to render teaching service to the effective date
45.6of retirement. There is no augmentation if this period is less than three months. For a
45.7member of the St. Paul Teachers Retirement Fund Association, the rate of augmentation
45.8is three percent compounded annually until January 1 of the year following the year in
45.9which the former member attains age 55, and five percent compounded annually after that
45.10date to the effective date of retirement if the employee became an employee before July
45.111, 2006, and at 2.5 percent compounded annually if the employee becomes an employee
45.12after June 30, 2006. For a member of the Duluth Teachers Retirement Fund Association,
45.13the rate of augmentation is three percent compounded annually until January 1 of the year
45.14following the year in which the former member attains age 55, five percent compounded
45.15annually after that date to July 1, 2012, and two percent compounded annually after that
45.16date to the effective date of retirement if the employee became an employee before
45.17July 1, 2006, and at 2.5 percent compounded annually to July 1, 2012, and two percent
45.18compounded annually after that date to the effective date of retirement if the employee
45.19becomes an employee after June 30, 2006. If a person has more than one period of
45.20uninterrupted service, a separate average salary determined under section 354A.31 must
45.21be used for each period, and the monthly annuity amount related to each period must be
45.22augmented as provided in this subdivision. The sum of the augmented monthly annuity
45.23amounts determines the total deferred annuity payable. If a person repays a refund, the
45.24service restored by the repayment must be considered as continuous with the next period
45.25of service for which the person has credit with the fund. If a person does not render
45.26teaching services in any one fiscal year or more consecutive fiscal years and then resumes
45.27teaching service, the formula percentages used from the date of resumption of teaching
45.28service are those applicable to new members. The mortality table and interest assumption
45.29used to compute the annuity are the table established by the fund to compute other
45.30annuities, and the interest assumption under section 356.215 in effect when the member
45.31retires. A period of uninterrupted service for the purpose of this subdivision means a
45.32period of covered teaching service during which the member has not been separated from
45.33active service for more than one fiscal year.
45.34(c) The augmentation provided by this subdivision applies to the benefit provided
45.35in section 354A.35, subdivision 2. The augmentation provided by this subdivision does
46.1not apply to any period in which a person is on an approved leave of absence from an
46.2employer unit.
46.3EFFECTIVE DATE.This section is effective July 1, 2010.

46.4    Sec. 65. Minnesota Statutes 2008, section 354A.37, subdivision 3, is amended to read:
46.5    Subd. 3. Computation of refund amount. A former coordinated member of the
46.6St. Paul Teachers Retirement Fund Association who qualifies for a refund pursuant to
46.7under subdivision 1 shall receive a refund equal to the amount of the former coordinated
46.8member's accumulated employee contributions with interest at the rate of six percent per
46.9annum compounded annually. A former coordinated member of the Duluth Teachers
46.10Retirement Fund Association who qualifies for a refund under subdivision 1 shall receive
46.11a refund equal to the amount of the former coordinated member's accumulated employee
46.12contributions with interest at the rate of six percent per annum compounded annually to
46.13July 1, 2010, and four percent per annum compounded annually thereafter.
46.14EFFECTIVE DATE.This section is effective July 1, 2010.

46.15    Sec. 66. Minnesota Statutes 2008, section 354A.37, subdivision 4, is amended to read:
46.16    Subd. 4. Certain refunds at normal retirement age. Any coordinated member
46.17who has attained the normal retirement age with less than ten years of allowable service
46.18credit and has terminated active teaching service shall be entitled to a refund in lieu of
46.19a proportionate annuity pursuant to section 356.32. The refund for a member of the St.
46.20Paul Teachers Retirement Fund Association shall be equal to the coordinated member's
46.21accumulated employee contributions plus interest at the rate of six percent compounded
46.22annually. The refund for a member of the Duluth Teachers Retirement Fund Association
46.23shall be equal to the coordinated member's accumulated employee contributions plus
46.24interest at the rate of six percent compounded annually to July 1, 2010, and four percent
46.25per annum compounded annually thereafter.
46.26EFFECTIVE DATE.This section is effective July 1, 2010.

46.27    Sec. 67. Minnesota Statutes 2008, section 356.215, subdivision 8, is amended to read:
46.28    Subd. 8. Interest and salary assumptions. (a) The actuarial valuation must use
46.29the applicable following preretirement interest assumption and the applicable following
46.30postretirement interest assumption:
47.1
47.2
47.3
plan
preretirement
interest rate
assumption
postretirement
interest rate
assumption
47.4
general state employees retirement plan
8.5%
6.0%
47.5
correctional state employees retirement plan
8.5
6.0
47.6
State Patrol retirement plan
8.5
6.0
47.7
legislators retirement plan
8.5
6.0
47.8
elective state officers retirement plan
8.5
6.0
47.9
judges retirement plan
8.5
6.0
47.10
general public employees retirement plan
8.5
6.0
47.11
public employees police and fire retirement plan
8.5
6.0
47.12
47.13
local government correctional service retirement
plan
8.5
6.0
47.14
teachers retirement plan
8.5
6.0
47.15
Minneapolis employees retirement plan
6.0
5.0
47.16
Duluth teachers retirement plan
8.5
8.5
47.17
St. Paul teachers retirement plan
8.5
8.5
47.18
Minneapolis Police Relief Association
6.0
6.0
47.19
Fairmont Police Relief Association
5.0
5.0
47.20
Minneapolis Fire Department Relief Association
6.0
6.0
47.21
Virginia Fire Department Relief Association
5.0
5.0
47.22
Bloomington Fire Department Relief Association
6.0
6.0
47.23
47.24
local monthly benefit volunteer firefighters relief
associations
5.0
5.0
47.25    (b) Before July 1, 2010, the actuarial valuation must use the applicable following
47.26single rate future salary increase assumption, the applicable following modified single
47.27rate future salary increase assumption, or the applicable following graded rate future
47.28salary increase assumption:
47.29    (1) single rate future salary increase assumption
47.30
47.31
plan
future salary
increase assumption
47.32
legislators retirement plan
5.0%
47.33
judges retirement plan
4.0
47.34
Minneapolis Police Relief Association
4.0
47.35
Fairmont Police Relief Association
3.5
47.36
47.37
Minneapolis Fire Department Relief
Association
4.0
47.38
Virginia Fire Department Relief Association
3.5
47.39
47.40
Bloomington Fire Department Relief
Association
4.0
47.41    (2) modified single rate future salary increase assumption
48.1
48.2
plan
future salary
increase assumption
48.3
48.4
48.5
48.6
Minneapolis employees
retirement plan
the prior calendar year amount increased
first by 1.0198 percent to prior fiscal year
date and then increased by 4.0 percent
annually for each future year
48.7    (3) age-related select and ultimate future salary increase assumption or graded rate
48.8future salary increase assumption
48.9
48.10
plan
future salary
increase assumption
48.11
48.12
general state employees retirement plan
select calculation and
assumption A
48.13
correctional state employees retirement plan
assumption H G
48.14
State Patrol retirement plan
assumption G F
48.15
48.16
general public employees retirement plan
select calculation and
assumption B
48.17
public employees police and fire fund retirement plan
assumption C B
48.18
local government correctional service retirement plan
assumption G F
48.19
teachers retirement plan
assumption D C
48.20
Duluth teachers retirement plan
assumption E D
48.21
St. Paul teachers retirement plan
assumption F E
48.22The select calculation is: during the
48.23designated select period, a designated
48.24percentage rate is multiplied by the result of
48.25the designated integer minus T, where T is the
48.26number of completed years of service, and is
48.27added to the applicable future salary increase
48.28assumption. The designated select period is
48.29five years and the designated integer is five
48.30for the general state employees retirement
48.31plan and the general public employees
48.32retirement plan. The designated select period
48.33is ten years and the designated integer is ten
48.34for all other retirement plans covered by
48.35this clause. The designated percentage rate
48.36is: (1) 0.2 percent for the correctional state
48.37employees retirement plan, the State Patrol
48.38retirement plan, the public employees police
48.39and fire plan, and the local government
48.40correctional service plan; (2) 0.6 percent
49.1for the general state employees retirement
49.2plan and the general public employees
49.3retirement plan; and (3) 0.3 percent for the
49.4teachers retirement plan, the Duluth Teachers
49.5Retirement Fund Association, and the St.
49.6Paul Teachers Retirement Fund Association.
49.7The select calculation for the Duluth Teachers
49.8Retirement Fund Association is 8.00 percent
49.9per year for service years one through seven,
49.107.25 percent per year for service years seven
49.11and eight, and 6.50 percent per year for
49.12service years eight and nine.
49.13    The ultimate future salary increase assumption is:
49.14
age
A
B
CB
DC
ED
FE
GF
HG
49.15
16
5.95%
5.95%
11.00%
7.70%
8.00%
6.90%
7.7500%
7.2500%
49.16
17
5.90
5.90
11.00
7.65
8.00
6.90
7.7500
7.2500
49.17
18
5.85
5.85
11.00
7.60
8.00
6.90
7.7500
7.2500
49.18
19
5.80
5.80
11.00
7.55
8.00
6.90
7.7500
7.2500
49.19
20
5.75
5.40
11.00
5.50
6.90
6.90
7.7500
7.2500
49.20
21
5.75
5.40
11.00
5.50
6.90
6.90
7.1454
6.6454
49.21
22
5.75
5.40
10.50
5.50
6.90
6.90
7.0725
6.5725
49.22
23
5.75
5.40
10.00
5.50
6.85
6.85
7.0544
6.5544
49.23
24
5.75
5.40
9.50
5.50
6.80
6.80
7.0363
6.5363
49.24
25
5.75
5.40
9.00
5.50
6.75
6.75
7.0000
6.5000
49.25
26
5.75
5.36
8.70
5.50
6.70
6.70
7.0000
6.5000
49.26
27
5.75
5.32
8.40
5.50
6.65
6.65
7.0000
6.5000
49.27
28
5.75
5.28
8.10
5.50
6.60
6.60
7.0000
6.5000
49.28
29
5.75
5.24
7.80
5.50
6.55
6.55
7.0000
6.5000
49.29
30
5.75
5.20
7.50
5.50
6.50
6.50
7.0000
6.5000
49.30
31
5.75
5.16
7.30
5.50
6.45
6.45
7.0000
6.5000
49.31
32
5.75
5.12
7.10
5.50
6.40
6.40
7.0000
6.5000
49.32
33
5.75
5.08
6.90
5.50
6.35
6.35
7.0000
6.5000
49.33
34
5.75
5.04
6.70
5.50
6.30
6.30
7.0000
6.5000
49.34
35
5.75
5.00
6.50
5.50
6.25
6.25
7.0000
6.5000
49.35
36
5.75
4.96
6.30
5.50
6.20
6.20
6.9019
6.4019
49.36
37
5.75
4.92
6.10
5.50
6.15
6.15
6.8074
6.3074
49.37
38
5.75
4.88
5.90
5.40
6.10
6.10
6.7125
6.2125
49.38
39
5.75
4.84
5.70
5.30
6.05
6.05
6.6054
6.1054
49.39
40
5.75
4.80
5.50
5.20
6.00
6.00
6.5000
6.0000
49.40
41
5.75
4.76
5.40
5.10
5.90
5.95
6.3540
5.8540
49.41
42
5.75
4.72
5.30
5.00
5.80
5.90
6.2087
5.7087
50.1
43
5.65
4.68
5.20
4.90
5.70
5.85
6.0622
5.5622
50.2
44
5.55
4.64
5.10
4.80
5.60
5.80
5.9048
5.4078
50.3
45
5.45
4.60
5.00
4.70
5.50
5.75
5.7500
5.2500
50.4
46
5.35
4.56
4.95
4.60
5.40
5.70
5.6940
5.1940
50.5
47
5.25
4.52
4.90
4.50
5.30
5.65
5.6375
5.1375
50.6
48
5.15
4.48
4.85
4.50
5.20
5.60
5.5822
5.0822
50.7
49
5.05
4.44
4.80
4.50
5.10
5.55
5.5404
5.0404
50.8
50
4.95
4.40
4.75
4.50
5.00
5.50
5.5000
5.0000
50.9
51
4.85
4.36
4.75
4.50
4.90
5.45
5.4384
4.9384
50.10
52
4.75
4.32
4.75
4.50
4.80
5.40
5.3776
4.8776
50.11
53
4.65
4.28
4.75
4.50
4.70
5.35
5.3167
4.8167
50.12
54
4.55
4.24
4.75
4.50
4.60
5.30
5.2826
4.7826
50.13
55
4.45
4.20
4.75
4.50
4.50
5.25
5.2500
4.7500
50.14
56
4.35
4.16
4.75
4.50
4.40
5.20
5.2500
4.7500
50.15
57
4.25
4.12
4.75
4.50
4.30
5.15
5.2500
4.7500
50.16
58
4.25
4.08
4.75
4.60
4.20
5.10
5.2500
4.7500
50.17
59
4.25
4.04
4.75
4.70
4.10
5.05
5.2500
4.7500
50.18
60
4.25
4.00
4.75
4.80
4.00
5.00
5.2500
4.7500
50.19
61
4.25
4.00
4.75
4.90
3.90
5.00
5.2500
4.7500
50.20
62
4.25
4.00
4.75
5.00
3.80
5.00
5.2500
4.7500
50.21
63
4.25
4.00
4.75
5.10
3.70
5.00
5.2500
4.7500
50.22
64
4.25
4.00
4.75
5.20
3.60
5.00
5.2500
4.7500
50.23
65
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
50.24
66
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
50.25
67
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
50.26
68
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
50.27
69
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
50.28
70
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
50.29
71
4.25
4.00
5.20
50.30(4) service-related ultimate future salary increase assumption
50.31
50.32
service length
general employees retirement plan of the Public
Employees Retirement Association
50.33
1
12.03%
50.34
2
8.90
50.35
3
7.46
50.36
4
6.58
50.37
5
5.97
50.38
6
5.52
50.39
7
5.16
50.40
8
4.87
50.41
9
4.63
50.42
10
4.42
50.43
11
4.24
51.1
12
4.08
51.2
13
3.94
51.3
14
3.82
51.4
15
3.70
51.5
16
3.60
51.6
17
3.51
51.7
18
3.50
51.8
19
3.50
51.9
20
3.50
51.10
21
3.50
51.11
22
3.50
51.12
23
3.50
51.13
24
3.50
51.14
25
3.50
51.15
26
3.50
51.16
27
3.50
51.17
28
3.50
51.18
29
3.50
51.19
30 or more
3.50
51.20    (c) Before July 2, 2010, the actuarial valuation must use the applicable following
51.21payroll growth assumption for calculating the amortization requirement for the unfunded
51.22actuarial accrued liability where the amortization retirement is calculated as a level
51.23percentage of an increasing payroll:
51.24
51.25
plan
payroll growth
assumption
51.26
general state employees retirement plan
4.50%
51.27
correctional state employees retirement plan
4.50
51.28
State Patrol retirement plan
4.50
51.29
legislators retirement plan
4.50
51.30
judges retirement plan
4.00
51.31
51.32
general public employees retirement plan of the
Public Employees Retirement Association
4.504.00
51.33
public employees police and fire retirement plan
4.50
51.34
51.35
local government correctional service retirement
plan
4.50
51.36
teachers retirement plan
4.50
51.37
Duluth teachers retirement plan
4.50
51.38
St. Paul teachers retirement plan
5.00
51.39    (d) After July 1, 2010, the assumptions set forth in paragraphs (b) and (c) continue to
51.40apply, unless a different salary assumption or a different payroll increase assumption:
51.41    (1) has been proposed by the governing board of the applicable retirement plan;
52.1    (2) is accompanied by the concurring recommendation of the actuary retained under
52.2section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the
52.3most recent actuarial valuation report if section 356.214 does not apply; and
52.4    (3) has been approved or deemed approved under subdivision 18.
52.5EFFECTIVE DATE.This section is effective the day following final enactment.

52.6    Sec. 68. Minnesota Statutes 2009 Supplement, section 356.215, subdivision 11,
52.7is amended to read:
52.8    Subd. 11. Amortization contributions. (a) In addition to the exhibit indicating
52.9the level normal cost, the actuarial valuation of the retirement plan must contain an
52.10exhibit for financial reporting purposes indicating the additional annual contribution
52.11sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit
52.12for contribution determination purposes indicating the additional contribution sufficient
52.13to amortize the unfunded actuarial accrued liability. For the retirement plans listed in
52.14subdivision 8, paragraph (c), the additional contribution must be calculated on a level
52.15percentage of covered payroll basis by the established date for full funding in effect when
52.16the valuation is prepared, assuming annual payroll growth at the applicable percentage
52.17rate set forth in subdivision 8, paragraph (c). For all other retirement plans, the additional
52.18annual contribution must be calculated on a level annual dollar amount basis.
52.19    (b) For any retirement plan other than the Minneapolis Employees Retirement Fund,
52.20the general employees retirement plan of the Public Employees Retirement Association,
52.21the general state employees retirement plan of the Minnesota State Retirement System,
52.22and the St. Paul Teachers Retirement Fund Association, if there has not been a change in
52.23the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a
52.24change in the benefit plan governing annuities and benefits payable from the fund, a
52.25change in the actuarial cost method used in calculating the actuarial accrued liability of all
52.26or a portion of the fund, or a combination of the three, which change or changes by itself
52.27or by themselves without inclusion of any other items of increase or decrease produce a
52.28net increase in the unfunded actuarial accrued liability of the fund, the established date for
52.29full funding is the first actuarial valuation date occurring after June 1, 2020.
52.30    (c) For any retirement plan other than the Minneapolis Employees Retirement
52.31Fund and the general employees retirement plan of the Public Employees Retirement
52.32Association, if there has been a change in any or all of the actuarial assumptions used
52.33for calculating the actuarial accrued liability of the fund, a change in the benefit plan
52.34governing annuities and benefits payable from the fund, a change in the actuarial cost
52.35method used in calculating the actuarial accrued liability of all or a portion of the fund,
53.1or a combination of the three, and the change or changes, by itself or by themselves and
53.2without inclusion of any other items of increase or decrease, produce a net increase in the
53.3unfunded actuarial accrued liability in the fund, the established date for full funding must
53.4be determined using the following procedure:
53.5    (i) the unfunded actuarial accrued liability of the fund must be determined in
53.6accordance with the plan provisions governing annuities and retirement benefits and the
53.7actuarial assumptions in effect before an applicable change;
53.8    (ii) the level annual dollar contribution or level percentage, whichever is applicable,
53.9needed to amortize the unfunded actuarial accrued liability amount determined under item
53.10(i) by the established date for full funding in effect before the change must be calculated
53.11using the interest assumption specified in subdivision 8 in effect before the change;
53.12    (iii) the unfunded actuarial accrued liability of the fund must be determined in
53.13accordance with any new plan provisions governing annuities and benefits payable from
53.14the fund and any new actuarial assumptions and the remaining plan provisions governing
53.15annuities and benefits payable from the fund and actuarial assumptions in effect before
53.16the change;
53.17    (iv) the level annual dollar contribution or level percentage, whichever is applicable,
53.18needed to amortize the difference between the unfunded actuarial accrued liability amount
53.19calculated under item (i) and the unfunded actuarial accrued liability amount calculated
53.20under item (iii) over a period of 30 years from the end of the plan year in which the
53.21applicable change is effective must be calculated using the applicable interest assumption
53.22specified in subdivision 8 in effect after any applicable change;
53.23    (v) the level annual dollar or level percentage amortization contribution under item
53.24(iv) must be added to the level annual dollar amortization contribution or level percentage
53.25calculated under item (ii);
53.26    (vi) the period in which the unfunded actuarial accrued liability amount determined
53.27in item (iii) is amortized by the total level annual dollar or level percentage amortization
53.28contribution computed under item (v) must be calculated using the interest assumption
53.29specified in subdivision 8 in effect after any applicable change, rounded to the nearest
53.30integral number of years, but not to exceed 30 years from the end of the plan year in
53.31which the determination of the established date for full funding using the procedure set
53.32forth in this clause is made and not to be less than the period of years beginning in the
53.33plan year in which the determination of the established date for full funding using the
53.34procedure set forth in this clause is made and ending by the date for full funding in effect
53.35before the change; and
54.1    (vii) the period determined under item (vi) must be added to the date as of which
54.2the actuarial valuation was prepared and the date obtained is the new established date
54.3for full funding.
54.4    (d) For the Minneapolis Employees Retirement Fund, the established date for full
54.5funding is June 30, 2020.
54.6    (e) For the general employees retirement plan of the Public Employees Retirement
54.7Association, the established date for full funding is June 30, 2031.
54.8    (f) For the Teachers Retirement Association, the established date for full funding is
54.9June 30, 2037.
54.10    (g) For the correctional state employees retirement plan of the Minnesota State
54.11Retirement System, the established date for full funding is June 30, 2038.
54.12    (h) For the judges retirement plan, the established date for full funding is June
54.1330, 2038.
54.14    (i) For the public employees police and fire retirement plan, the established date
54.15for full funding is June 30, 2038.
54.16    (j) For the St. Paul Teachers Retirement Fund Association, the established date for
54.17full funding is June 30 of the 25th year from the valuation date. In addition to other
54.18requirements of this chapter, the annual actuarial valuation shall contain an exhibit
54.19indicating the funded ratio and the deficiency or sufficiency in annual contributions when
54.20comparing liabilities to the market value of the assets of the fund as of the close of the
54.21most recent fiscal year.
54.22    (k) For the general state employees retirement plan of the Minnesota State
54.23Retirement System, the established date for full funding is June 30, 2040.
54.24(l) For the retirement plans for which the annual actuarial valuation indicates an
54.25excess of valuation assets over the actuarial accrued liability, the valuation assets in
54.26excess of the actuarial accrued liability must be recognized as a reduction in the current
54.27contribution requirements by an amount equal to the amortization of the excess expressed
54.28as a level percentage of pay over a 30-year period beginning anew with each annual
54.29actuarial valuation of the plan.
54.30EFFECTIVE DATE.This section is effective the day following final enactment.

54.31    Sec. 69. Minnesota Statutes 2008, section 356.30, subdivision 1, is amended to read:
54.32    Subdivision 1. Eligibility; computation of annuity. (a) Notwithstanding any
54.33provisions of the laws governing the retirement plans enumerated in subdivision 3, a
54.34person who has met the qualifications of paragraph (b) may elect to receive a retirement
54.35annuity from each enumerated retirement plan in which the person has at least one-half
55.1year of allowable service, based on the allowable service in each plan, subject to the
55.2provisions of paragraph (c).
55.3(b) A person may receive, upon retirement, a retirement annuity from each
55.4enumerated retirement plan in which the person has at least one-half year of allowable
55.5service, and augmentation of a deferred annuity calculated at the appropriate rate under
55.6the laws governing each public pension plan or fund named in subdivision 3, based on
55.7the date of the person's initial entry into public employment from the date the person
55.8terminated all public service if:
55.9(1) the person has allowable service totaling an amount that allows the person to
55.10receive an annuity in any two or more of the enumerated plans;
55.11(2) the person has sufficient allowable service in total that equals or exceeds the
55.12applicable service credit vesting requirement of the retirement plan with the longest
55.13applicable service credit vesting requirement; and
55.14(2) (3) the person has not begun to receive an annuity from any enumerated plan or
55.15the person has made application for benefits from each applicable plan and the effective
55.16dates of the retirement annuity with each plan under which the person chooses to receive
55.17an annuity are within a one-year period.
55.18(c) The retirement annuity from each plan must be based upon the allowable service,
55.19accrual rates, and average salary in the applicable plan except as further specified or
55.20modified in the following clauses:
55.21(1) the laws governing annuities must be the law in effect on the date of termination
55.22from the last period of public service under a covered retirement plan with which the
55.23person earned a minimum of one-half year of allowable service credit during that
55.24employment;
55.25(2) the "average salary" on which the annuity from each covered plan in which
55.26the employee has credit in a formula plan must be based on the employee's highest five
55.27successive years of covered salary during the entire service in covered plans;
55.28(3) the accrual rates to be used by each plan must be those percentages prescribed by
55.29each plan's formula as continued for the respective years of allowable service from one
55.30plan to the next, recognizing all previous allowable service with the other covered plans;
55.31(4) the allowable service in all the plans must be combined in determining eligibility
55.32for and the application of each plan's provisions in respect to reduction in the annuity
55.33amount for retirement prior to normal retirement age; and
55.34(5) the annuity amount payable for any allowable service under a nonformula plan
55.35of a covered plan must not be affected, but such service and covered salary must be used
55.36in the above calculation.
56.1(d) This section does not apply to any person whose final termination from the last
56.2public service under a covered plan was before May 1, 1975.
56.3(e) For the purpose of computing annuities under this section, the accrual rates
56.4used by any covered plan, except the public employees police and fire plan, the judges
56.5retirement fund, and the State Patrol retirement plan, must not exceed the percent specified
56.6in section 356.315, subdivision 4, per year of service for any year of service or fraction
56.7thereof. The formula percentage used by the judges retirement fund must not exceed the
56.8percentage rate specified in section 356.315, subdivision 8, per year of service for any
56.9year of service or fraction thereof. The accrual rate used by the public employees police
56.10and fire plan and the State Patrol retirement plan must not exceed the percentage rate
56.11specified in section 356.315, subdivision 6, per year of service for any year of service or
56.12fraction thereof. The accrual rate or rates used by the legislators retirement plan must not
56.13exceed 2.5 percent, but this limit does not apply to the adjustment provided under section
56.143A.02, subdivision 1 , paragraph (c).
56.15(f) Any period of time for which a person has credit in more than one of the covered
56.16plans must be used only once for the purpose of determining total allowable service.
56.17(g) If the period of duplicated service credit is more than one-half year, or the person
56.18has credit for more than one-half year, with each of the plans, each plan must apply its
56.19formula to a prorated service credit for the period of duplicated service based on a fraction
56.20of the salary on which deductions were paid to that fund for the period divided by the total
56.21salary on which deductions were paid to all plans for the period.
56.22(h) If the period of duplicated service credit is less than one-half year, or when
56.23added to other service credit with that plan is less than one-half year, the service credit
56.24must be ignored and a refund of contributions made to the person in accord with that
56.25plan's refund provisions.
56.26EFFECTIVE DATE.This section is effective the day following final enactment.

56.27    Sec. 70. Minnesota Statutes 2008, section 356.302, subdivision 3, is amended to read:
56.28    Subd. 3. General employee plan eligibility requirements. A disabled member
56.29of a covered retirement plan who has credit for allowable service in a combination of
56.30general employee retirement plans is entitled to a combined service disability benefit
56.31if the member:
56.32(1) is less than the normal retirement age on the date of the application for the
56.33disability benefit;
56.34(2) has become totally and permanently disabled;
57.1(3) has credit for allowable service in any combination of general employee
57.2retirement plans totaling at least three years the number of years required by the applicable
57.3retirement plan with the longest service credit requirement for disability benefit receipt;
57.4(4) has credit for at least one-half year of allowable service with the current general
57.5employee retirement plan before the commencement of the disability;
57.6(5) has at least three continuous years of allowable service credit by the general
57.7employee retirement plan or has at least a total of three years of allowable service credit
57.8by a combination of general employee retirement plans in a 72-month period during
57.9which no interruption of allowable service credit from a termination of employment
57.10exceeded 29 days; and
57.11(6) was not receiving a retirement annuity or disability benefit from any covered
57.12general employee retirement plan at the time of the commencement of the disability.
57.13EFFECTIVE DATE.This section is effective the day following final enactment.

57.14    Sec. 71. Minnesota Statutes 2008, section 356.302, subdivision 4, is amended to read:
57.15    Subd. 4. Public safety plan eligibility requirements. A disabled member of a
57.16covered retirement plan who has credit for allowable service in a combination of public
57.17safety employee retirement plans is entitled to a combined service disability benefit if the
57.18member:
57.19(1) has become occupationally disabled;
57.20(2) has credit for allowable service in any combination of public safety employee
57.21retirement plans totaling at least one year the minimum period of service credit required by
57.22the applicable retirement plan with the longest service credit eligibility requirement for the
57.23receipt of a duty-related disability benefit if the disability is duty-related or totaling at least
57.24three years the minimum period of service credit required by the applicable retirement
57.25plan with the longest service credit eligibility requirement for a disability benefit that is
57.26not duty-related if the disability is not duty-related;
57.27(3) has credit for at least one-half year of allowable service with the current public
57.28safety employee retirement plan before the commencement of the disability; and
57.29(4) was not receiving a retirement annuity or disability benefit from any covered
57.30public safety employee retirement plan at the time of the commencement of the disability.
57.31EFFECTIVE DATE.This section is effective the day following final enactment.

57.32    Sec. 72. Minnesota Statutes 2008, section 356.302, subdivision 5, is amended to read:
58.1    Subd. 5. General and public safety plan eligibility requirements. A disabled
58.2member of a covered retirement plan who has credit for allowable service in a combination
58.3of both a public safety employee retirement plan and general employee retirement plan
58.4must meet the qualifying requirements in subdivisions 3 and 4 to receive a combined
58.5service disability benefit from the applicable general employee and public safety
58.6employee retirement plans, except that the person need only be a member of a covered
58.7retirement plan at the time of the commencement of the disability, that the person must
58.8have allowable service credit for the applicable retirement plan with the longest service
58.9credit eligibility requirement for the receipt of a disability benefit, and that the minimum
58.10allowable service requirements of subdivisions 3, clauses (3) and (5), and 4, clauses (3)
58.11and (4), may be met in any combination of covered retirement plans.
58.12EFFECTIVE DATE.This section is effective the day following final enactment.

58.13    Sec. 73. Minnesota Statutes 2008, section 356.303, subdivision 2, is amended to read:
58.14    Subd. 2. Entitlement; eligibility. Notwithstanding any provision of law to the
58.15contrary governing a covered retirement plan, a person who is the survivor of a deceased
58.16member of a covered retirement plan may receive a combined service survivor benefit
58.17from each covered retirement plan in which the deceased member had credit for at least
58.18one-half year of allowable service if the deceased member:
58.19(1) had credit for sufficient allowable service in any combination of covered
58.20retirement plans to meet any the minimum allowable service credit requirement of the
58.21applicable covered retirement fund with the longest allowable service credit requirement
58.22for qualification for a survivor benefit or annuity;
58.23(2) had credit for at least one-half year of allowable service with the most recent
58.24covered retirement plan before the date of death and was an active member of that covered
58.25retirement plan on the date of death; and
58.26(3) was not receiving a retirement annuity from any covered retirement plan on the
58.27date of death.
58.28EFFECTIVE DATE.This section is effective the day following final enactment.

58.29    Sec. 74. Minnesota Statutes 2008, section 356.315, subdivision 5, is amended to read:
58.30    Subd. 5. Correctional plan members. The applicable benefit accrual rate is 2.4
58.31percent if employed as a correctional state employee before July 1, 2010, or 2.2 percent if
58.32employed as a correctional state employee after June 30, 2010.
58.33EFFECTIVE DATE.This section is effective the day following final enactment.

59.1    Sec. 75. Minnesota Statutes 2009 Supplement, section 356.415, subdivision 1, is
59.2amended to read:
59.3    Subdivision 1. Annual postretirement adjustments; generally. (a) Except as
59.4otherwise provided in subdivision 1a, 1b, 1c, or 1d, retirement annuity, disability benefit,
59.5or survivor benefit recipients of a covered retirement plan are entitled to a postretirement
59.6adjustment annually on January 1, as follows:
59.7(1) a postretirement increase of 2.5 percent must be applied each year, effective
59.8January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has
59.9been receiving an annuity or a benefit for at least 12 full months prior to the January 1
59.10increase; and
59.11(2) for each annuitant or benefit recipient who has been receiving an annuity or a
59.12benefit amount for at least one full month, an annual postretirement increase of 1/12 of 2.5
59.13percent for each month that the person has been receiving an annuity or benefit must be
59.14applied, effective on January 1 following the calendar year in which the person has been
59.15retired for less than 12 months.
59.16(b) The increases provided by this section subdivision commence on January 1, 2010.
59.17(c) An increase in annuity or benefit payments under this section must be made
59.18automatically unless written notice is filed by the annuitant or benefit recipient with the
59.19executive director of the covered retirement plan requesting that the increase not be made.
59.20(d) The retirement annuity payable to a person who retires before becoming eligible
59.21for Social Security benefits and who has elected the optional payment as provided in
59.22section 353.29, subdivision 6, or 354.35 must be treated as the sum of a period certain
59.23retirement annuity and a life retirement annuity for the purposes of any postretirement
59.24adjustment. The period certain retirement annuity plus the life retirement annuity must be
59.25the annuity amount payable until age 62 for section 353.29, subdivision 6, or age 62, 65,
59.26or normal retirement age, as selected by the member at retirement, for an annuity amount
59.27payable under section 354.35. A postretirement adjustment granted on the period certain
59.28retirement annuity must terminate when the period certain retirement annuity terminates.
59.29EFFECTIVE DATE.This section is effective the day following final enactment.

59.30    Sec. 76. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding
59.31a subdivision to read:
59.32    Subd. 1a. Annual postretirement adjustments; Minnesota State Retirement
59.33System plans. (a) Retirement annuity, disability benefit, or survivor benefit recipients
59.34of the legislators retirement plan, the general state employees retirement plan, the
59.35correctional state employees retirement plan, the State Patrol retirement plan, the elected
60.1state officers retirement plan, the unclassified state employees retirement program, and the
60.2judges retirement plan are entitled to a postretirement adjustment annually on January
60.31, as follows:
60.4(1) a postretirement increase of two percent must be applied each year, effective on
60.5January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who
60.6has been receiving an annuity or a benefit for at least 18 full months before the January 1
60.7increase; and
60.8(2) for each annuitant or benefit recipient who has been receiving an annuity or
60.9a benefit for at least six full months, an annual postretirement increase of 1/12 of two
60.10percent for each month that the person has been receiving an annuity or benefit must be
60.11applied, effective January 1, following the calendar year in which the person has been
60.12retired for at least six months, but has been retired for less than 18 months.
60.13(b) The increases provided by this subdivision commence on January 1, 2011.
60.14Increases under this subdivision for the general state employees retirement plan, the
60.15correctional state employees retirement plan, the State Patrol retirement plan, or the judges
60.16retirement plan terminate on December 31 of the calendar year in which the actuarial
60.17valuation prepared by the approved actuary under sections 356.214 and 356.215 and the
60.18standards for actuarial work promulgated by the Legislative Commission on Pensions
60.19and Retirement indicates that the market value of assets of the retirement plan equals or
60.20exceeds 90 percent of the actuarial accrued liability of the retirement plan and increases
60.21under subdivision 1 recommence after that date. Increases under this subdivision for
60.22the legislators retirement plan or the elected state officers retirement plan terminate
60.23on December 31 of the calendar year in which the actuarial valuation prepared by the
60.24approved actuary under sections 356.214 and 356.215 and the standards for actuarial work
60.25promulgated by the Legislative Commission on Pensions and Retirement indicates that the
60.26market value of assets of the general state employees retirement plan equals or exceeds
60.2790 percent of the actuarial accrued liability of the retirement plan and increases under
60.28subdivision 1 recommence after that date.
60.29(c) An increase in annuity or benefit payments under this subdivision must be made
60.30automatically unless written notice is filed by the annuitant or benefit recipient with the
60.31executive director of the applicable covered retirement plan requesting that the increase
60.32not be made.
60.33EFFECTIVE DATE.This section is effective the day following final enactment.

60.34    Sec. 77. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding
60.35a subdivision to read:
61.1    Subd. 1b. Annual postretirement adjustments; PERA; general employees
61.2retirement plan and local government correctional retirement plan. (a) Retirement
61.3annuity, disability benefit, or survivor benefit recipients of the general employees
61.4retirement plan of the Public Employees Retirement Association and the local government
61.5correctional service retirement plan are entitled to a postretirement adjustment annually
61.6on January 1, as follows:
61.7(1) for January 1, 2011, and each successive January 1 until funding stability is
61.8restored for the applicable retirement plan, a postretirement increase of one percent must
61.9be applied each year, effective on January 1, to the monthly annuity or benefit amount of
61.10each annuitant or benefit recipient who has been receiving an annuity or benefit for at least
61.1112 full months as of the current June 30;
61.12(2) for January 1, 2011, and each successive January 1 until funding stability is
61.13restored for the applicable retirement plan, for each annuitant or benefit recipient who has
61.14been receiving an annuity or a benefit for at least one full month, but less than 12 full
61.15months as of the current June 30, an annual postretirement increase of 1/12 of one percent
61.16for each month the person has been receiving an annuity or benefit must be applied;
61.17(3) for each January 1 following the restoration of funding stability for the applicable
61.18retirement plan, a postretirement increase of 2.5 percent must be applied each year,
61.19effective January 1, to the monthly annuity or benefit amount of each annuitant or benefit
61.20recipient who has been receiving an annuity or benefit for at least 12 full months as of
61.21the current June 30; and
61.22(4) for each January 1 following restoration of funding stability for the applicable
61.23retirement plan, for each annuity or benefit recipient who has been receiving an annuity or
61.24a benefit for at least one full month, but less than 12 full months as of the current June
61.2530, an annual postretirement increase of 1/12 of 2.5 percent for each month the person
61.26has been receiving an annuity or benefit must be applied.
61.27(b) Funding stability is restored when the market value of assets of the applicable
61.28retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities of the
61.29applicable plan in the most recent prior actuarial valuation prepared under section 356.215
61.30and the standards for actuarial work by the approved actuary retained by the Public
61.31Employees Retirement Association under section 356.214.
61.32(c) If, after applying the increase as provided for in paragraph (a), clauses (3)
61.33and (4), the market value of the applicable retirement plan is determined in the next
61.34subsequent actuarial valuation prepared under section 356.215 to be less than 90 percent
61.35of the actuarial accrued liability of any of the applicable Public Employees Retirement
62.1Association plans, the increase provided in paragraph (a), clauses (1) and (2), are to be
62.2applied as of the next successive January until funding stability is again restored.
62.3(d) An increase in annuity or benefit payments under this section must be made
62.4automatically unless written notice is filed by the annuitant or benefit recipient with the
62.5executive director of the Public Employees Retirement Association requesting that the
62.6increase not be made.
62.7(e) The retirement annuity payable to a person who retires before becoming eligible
62.8for Social Security benefits and who has elected the optional payment, as provided in
62.9section 353.29, subdivision 6, must be treated as the sum of a period-certain retirement
62.10annuity and a life retirement annuity for the purposes of any postretirement adjustment.
62.11The period-certain retirement annuity plus the life retirement annuity must be the
62.12annuity amount payable until age 62 for section 353.29, subdivision 6. A postretirement
62.13adjustment granted on the period-certain retirement annuity must terminate when the
62.14period-certain retirement annuity terminates.
62.15EFFECTIVE DATE.This section is effective the day following final enactment.

62.16    Sec. 78. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding
62.17a subdivision to read:
62.18    Subd. 1c. Annual postretirement adjustments; PERA-P&F. (a) Retirement
62.19annuity, disability benefit, or survivor benefit recipients of the public employees police
62.20and fire retirement plan are entitled to a postretirement adjustment annually on January
62.211, as follows:
62.22(1) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit
62.23recipient who has been receiving the annuity or benefit for at least 12 full months as of the
62.24immediate preceding June 30, an amount equal to one percent in each year;
62.25(2) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit
62.26recipient who has been receiving the annuity or benefit for at least one full month as of the
62.27immediate preceding June 30, an amount equal to 1/12 of one percent in each year;
62.28(3) for January 1, 2013, and each successive January 1 that follows the loss of
62.29funding stability as defined under paragraph (b) until funding stability as defined under
62.30paragraph (b) is again restored, for each annuitant or benefit recipient who has been
62.31receiving the annuity or benefit for at least 12 full months as of the immediate preceding
62.32June 30, an amount equal to the percentage increase in the Consumer Price Index for
62.33urban wage earners and clerical workers all items index published by the Bureau of Labor
62.34Statistics of the United States Department of Labor between the immediate preceding June
62.3530 and the June 30 occurring 12 months previous, but not to exceed 1.5 percent;
63.1(4) for January 1, 2013, and each successive January 1 that follows the loss of
63.2funding stability as defined under paragraph (b) until funding stability as defined under
63.3paragraph (b) is again restored, for each annuitant or benefit recipient who has been
63.4receiving the annuity or benefit for at least one full month as of the immediate preceding
63.5June 30, an amount equal to 1/12 of the percentage increase in the Consumer Price Index
63.6for urban wage earners and clerical workers all items index published by the Bureau
63.7of Labor Statistics of the United States Department of Labor between the immediate
63.8preceding June 30 and the June 30 occurring 12 months previous for each full month of
63.9annuity or benefit receipt, but not to exceed 1/12 of 1.5 percent for each full month of
63.10annuity or benefit receipt;
63.11(5) for each January 1 following the restoration of funding stability as defined under
63.12paragraph (b) and during the continuation of funding stability as defined under paragraph
63.13(b), for each annuitant or benefit recipient who has been receiving the annuity or benefit
63.14for at least 12 full months as of the immediate preceding June 30, an amount equal to the
63.15percentage increase in the Consumer Price Index for urban wage earners and clerical
63.16workers all items index published by the Bureau of Labor Statistics of the United States
63.17Department of Labor between the immediate preceding June 30 and the June 30 occurring
63.1812 months previous, but not to exceed 2.5 percent; and
63.19(6) for each January 1 following the restoration of funding stability as defined under
63.20paragraph (b) and during the continuation of funding stability as defined under paragraph
63.21(b), for each annuitant or benefit recipient who has been receiving the annuity or benefit
63.22for at least one full month as of the immediate preceding June 30, an amount equal to
63.231/12 of the percentage increase in the Consumer Price Index for urban wage earners and
63.24clerical workers all items index published by the Bureau of Labor Statistics of the United
63.25States Department of Labor between the immediate preceding June 30 and the June 30
63.26occurring 12 months previous for each full month of annuity or benefit receipt, but not to
63.27exceed 1/12 of 2.5 percent for each full month of annuity or benefit receipt.
63.28(b) Funding stability is restored when the market value of assets of the public
63.29employees police and fire retirement plan equals or exceeds 90 percent of the actuarial
63.30accrued liabilities of the applicable plan in the most recent prior actuarial valuation
63.31prepared under section 356.215 and under the standards for actuarial work of the
63.32Legislative Commission on Pensions and Retirement by the approved actuary retained by
63.33the Public Employees Retirement Association under section 356.214.
63.34(c) An increase in annuity or benefit payments under this section must be made
63.35automatically unless written notice is filed by the annuitant or benefit recipient with the
64.1executive director of the Public Employees Retirement Association requesting that the
64.2increase not be made.
64.3EFFECTIVE DATE.This section is effective the day following final enactment.

64.4    Sec. 79. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding
64.5a subdivision to read:
64.6    Subd. 1d. Teachers Retirement Association annual postretirement adjustments.
64.7(a) Retirement annuity, disability benefit, or survivor benefit recipients of the Teachers
64.8Retirement Association are entitled to a postretirement adjustment annually on January
64.91, as follows:
64.10(1) for January 1, 2011, and January 1, 2012, no postretirement increase is payable;
64.11(2) for January 1, 2013, and each successive January 1 until funding stability is
64.12restored, a postretirement increase of two percent must be applied each year, effective on
64.13January 1, to the monthly annuity or benefit amount of each annuitant or benefit recipient
64.14who has been receiving an annuity or a benefit for at least 18 full months prior to the
64.15January 1 increase;
64.16(3) for January 1, 2013, and each successive January 1 until funding stability is
64.17restored, for each annuitant or benefit recipient who has been receiving an annuity or
64.18a benefit for at least six full months, an annual postretirement increase of 1/12 of two
64.19percent for each month the person has been receiving an annuity or benefit must be
64.20applied, effective January 1, following the year in which the person has been retired
64.21for less than 12 months;
64.22(4) for each January 1 following the restoration of funding stability, a postretirement
64.23increase of 2.5 percent must be applied each year, effective January 1, to the monthly
64.24annuity or benefit amount of each annuitant or benefit recipient who has been receiving an
64.25annuity or a benefit for at least 18 full months prior to the January 1 increase; and
64.26(5) for each January 1 following the restoration of funding stability, for each
64.27annuitant or benefit recipient who has been receiving an annuity or a benefit for at least
64.28six full months, an annual postretirement increase of 1/12 of 2.5 percent for each month
64.29the person has been receiving an annuity or benefit must be applied, effective January 1,
64.30following the year in which the person has been retired for less than 12 months.
64.31(b) Funding stability is restored when the market value of assets of the Teachers
64.32Retirement Association equals or exceeds 90 percent of the actuarial accrued liabilities of
64.33the Teachers Retirement Association in the most recent prior actuarial valuation prepared
64.34under section 356.215 and the standards for actuarial work by the approved actuary
64.35retained by the Teachers Retirement Association under section 356.214.
65.1(c) An increase in annuity or benefit payments under this section must be made
65.2automatically unless written notice is filed by the annuitant or benefit recipient with the
65.3executive director of the Teachers Retirement Association requesting that the increase
65.4not be made.
65.5(d) The retirement annuity payable to a person who retires before becoming eligible
65.6for Social Security benefits and who has elected the optional payment as provided in
65.7section 354.35 must be treated as the sum of a period-certain retirement annuity and a life
65.8retirement annuity for the purposes of any postretirement adjustment. The period-certain
65.9retirement annuity plus the life retirement annuity must be the annuity amount payable
65.10until age 62, 65, or normal retirement age, as selected by the member at retirement, for an
65.11annuity amount payable under section 354.35. A postretirement adjustment granted on
65.12the period-certain retirement annuity must terminate when the period-certain retirement
65.13annuity terminates.
65.14EFFECTIVE DATE.This section is effective the day following final enactment.

65.15    Sec. 80. Minnesota Statutes 2008, section 356.47, subdivision 3, is amended to read:
65.16    Subd. 3. Payment. (a) Beginning one year after the reemployment withholding
65.17period ends relating to the reemployment that gave rise to the limitation, and the filing of a
65.18written application, the retired member is entitled to the payment, in a lump sum, of the
65.19value of the person's amount under subdivision 2, plus annual compound interest at. For
65.20the general state employees retirement plan, the correctional state employees retirement
65.21plan, the general employees retirement plan of the Public Employees Retirement
65.22Association, the public employees police and fire retirement plan, the local government
65.23correctional employees retirement plan, and the teachers retirement plan, the annual
65.24interest rate is six percent from the date on which the amount was deducted from the
65.25retirement annuity to the date of payment or until January 1, 2011, whichever is earlier, and
65.26no interest after January 1, 2011. For the Duluth Teachers Retirement Fund Association,
65.27the annual interest is six percent from the date on which the amount was deducted from the
65.28retirement annuity to the date of payment or until June 30, 2010, whichever is earlier, and
65.29no interest after June 30, 2010. For the St. Paul Teachers Retirement Fund Association,
65.30the annual interest is the compound annual rate of six percent from the date that the
65.31amount was deducted from the retirement annuity to the date of payment.
65.32    (b) The written application must be on a form prescribed by the chief administrative
65.33officer of the applicable retirement plan.
65.34    (c) If the retired member dies before the payment provided for in paragraph (a) is
65.35made, the amount is payable, upon written application, to the deceased person's surviving
66.1spouse, or if none, to the deceased person's designated beneficiary, or if none, to the
66.2deceased person's estate.
66.3    (d) In lieu of the direct payment of the person's amount under subdivision 2, on
66.4or after the payment date under paragraph (a), if the federal Internal Revenue Code so
66.5permits, the retired member may elect to have all or any portion of the payment amount
66.6under this section paid in the form of a direct rollover to an eligible retirement plan as
66.7defined in section 402(c) of the federal Internal Revenue Code that is specified by the
66.8retired member. If the retired member dies with a balance remaining payable under this
66.9section, the surviving spouse of the retired member, or if none, the deceased person's
66.10designated beneficiary, or if none, the administrator of the deceased person's estate may
66.11elect a direct rollover under this paragraph.
66.12EFFECTIVE DATE.This section is effective the day following final enactment.

66.13    Sec. 81. Minnesota Statutes 2009 Supplement, section 423A.02, subdivision 3, is
66.14amended to read:
66.15    Subd. 3. Reallocation of amortization or supplementary amortization state
66.16aid. (a) Seventy percent of the difference between $5,720,000 and the current year
66.17amortization aid and supplemental amortization aid distributed under subdivisions 1
66.18and 1a that is not distributed for any reason to a municipality for use by a local police
66.19or salaried fire relief association must be distributed by the commissioner of revenue
66.20according to this paragraph. The commissioner shall distribute 50 percent of the amounts
66.21derived under this paragraph to the Teachers Retirement Association, ten percent to the
66.22Duluth Teachers Retirement Fund Association, and 40 percent to the St. Paul Teachers
66.23Retirement Fund Association to fund the unfunded actuarial accrued liabilities of the
66.24respective funds. These payments shall be made on or before June 30 each fiscal year. If
66.25the St. Paul Teachers Retirement Fund Association becomes fully funded, its eligibility
66.26for this aid ceases. Amounts remaining in the undistributed balance account at the end of
66.27the biennium if aid eligibility ceases cancel to the general fund.
66.28    (b) In order to receive amortization and supplementary amortization aid under
66.29paragraph (a), Independent School District No. 625, St. Paul, must make contributions
66.30to the St. Paul Teachers Retirement Fund Association in accordance with the following
66.31schedule:
66.32
Fiscal Year
Amount
66.33
1996
$
0
66.34
1997
$
0
66.35
1998
$
200,000
67.1
1999
$
400,000
67.2
2000
$
600,000
67.3
2001 and thereafter
$
800,000
67.4    (c) Special School District No. 1, Minneapolis, and the city of Minneapolis must
67.5each make contributions to the Teachers Retirement Association in accordance with the
67.6following schedule:
67.7
67.8
Fiscal Year
City amount
School district
amount
67.9
1996
$
0
$
0
67.10
1997
$
0
$
0
67.11
1998
$
250,000
$
250,000
67.12
1999
$
400,000
$
400,000
67.13
2000
$
550,000
$
550,000
67.14
2001
$
700,000
$
700,000
67.15
2002
$
850,000
$
850,000
67.16
2003 and thereafter
$
1,000,000
$
1,000,000
67.17    (d) Money contributed under paragraph (a) and either paragraph (b) or (c), as
67.18applicable, must be credited to a separate account in the applicable teachers retirement
67.19fund and may not be used in determining any benefit increases. The separate account
67.20terminates for a fund when the aid payments to the fund under paragraph (a) cease.
67.21    (e) (d) Thirty percent of the difference between $5,720,000 and the current year
67.22amortization aid and supplemental amortization aid under subdivisions 1 and 1a that is not
67.23distributed for any reason to a municipality for use by a local police or salaried firefighter
67.24relief association must be distributed under section 69.021, subdivision 7, paragraph (d),
67.25as additional funding to support a minimum fire state aid amount for volunteer firefighter
67.26relief associations.
67.27EFFECTIVE DATE.This section is effective the day following final enactment.

67.28    Sec. 82. LOCAL RETIREMENT FUND INVESTMENT AUTHORITIES
67.29STUDY.
67.30A study group consisting of representatives from pension plans subject to Minnesota
67.31Statutes, section 356A.06, subdivision 6 or 7, shall be convened by the state auditor to
67.32study investment-related provisions, authorities, and limitations under Minnesota Statutes,
67.33chapter 356A, and related sections of other chapters. Administrative support for the
67.34study group shall be provided by the state auditor. The study group shall prepare a
67.35report to include an assessment of the effectiveness of current statutory prescriptions,
67.36options for change, and recommendations for consideration by the governor and the
68.1legislature during the 2011 legislative session. The report will be provided no later than
68.2January 15, 2011, to the executive director of the Legislative Commission on Pensions and
68.3Retirement, the chair and ranking minority caucus member of the senate State and Local
68.4Government Operations and Oversight Committee, and the chair and ranking minority
68.5caucus member of the house State and Local Government Operations Reform, Technology
68.6and Elections Committee.
68.7EFFECTIVE DATE.This section is effective the day following final enactment.

68.8    Sec. 83. BYLAW AUTHORIZATION.
68.9Consistent with the requirements of Minnesota Statutes, section 354A.12,
68.10subdivision 4, the board of the Duluth Teachers Retirement Fund Association is authorized
68.11to revise the bylaws or articles of incorporation so that the requirements of this act apply
68.12to the old law coordinated program.
68.13EFFECTIVE DATE.This section is effective the day following final enactment.

68.14    Sec. 84. REPEALER.
68.15Minnesota Statutes 2008, section 354A.27, subdivision 1, is repealed.
68.16EFFECTIVE DATE.This section is effective July 1, 2010.

68.17ARTICLE 2
68.18MSRS ADMINISTRATIVE PROVISIONS

68.19    Section 1. Minnesota Statutes 2008, section 352.01, subdivision 2a, is amended to read:
68.20    Subd. 2a. Included employees. (a) "State employee" includes:
68.21    (1) employees of the Minnesota Historical Society;
68.22    (2) employees of the State Horticultural Society;
68.23    (3) employees of the Minnesota Crop Improvement Association;
68.24    (4) employees of the adjutant general who whose salaries are paid from federal funds
68.25and who are not covered by any federal civilian employees retirement system;
68.26    (5) employees of the Minnesota State Colleges and Universities who are employed
68.27under the university or college activities program;
68.28    (6) currently contributing employees covered by the system who are temporarily
68.29employed by the legislature during a legislative session or any currently contributing
68.30employee employed for any special service as defined in subdivision 2b, clause (8);
69.1    (7) employees of the legislature who are appointed without a limit on the duration
69.2of their employment and persons employed or designated by the legislature or by a
69.3legislative committee or commission or other competent authority to conduct a special
69.4inquiry, investigation, examination, or installation;
69.5    (8) trainees who are employed on a full-time established training program
69.6performing the duties of the classified position for which they will be eligible to receive
69.7immediate appointment at the completion of the training period;
69.8    (9) employees of the Minnesota Safety Council;
69.9    (10) any employees who are on authorized leave of absence from the Transit
69.10Operating Division of the former Metropolitan Transit Commission and who are employed
69.11by the labor organization which is the exclusive bargaining agent representing employees
69.12of the Transit Operating Division;
69.13    (11) employees of the Metropolitan Council, Metropolitan Parks and Open Space
69.14Commission, Metropolitan Sports Facilities Commission, or Metropolitan Mosquito
69.15Control Commission, or Metropolitan Radio Board unless excluded under subdivision 2b
69.16or are covered by another public pension fund or plan under section 473.415, subdivision 3;
69.17    (12) judges of the Tax Court;
69.18    (13) personnel who were employed on June 30, 1992, by the University of
69.19Minnesota in the management, operation, or maintenance of its heating plant facilities,
69.20whose employment transfers to an employer assuming operation of the heating plant
69.21facilities, so long as the person is employed at the University of Minnesota heating plant
69.22by that employer or by its successor organization;
69.23    (14) personnel who are employed as seasonal help employees in the classified or
69.24unclassified service employed by the Department of Revenue;
69.25    (15) persons who are employed by the Department of Commerce as a peace officer
69.26in the Insurance Fraud Prevention Division under section 45.0135 who have attained the
69.27mandatory retirement age specified in section 43A.34, subdivision 4;
69.28    (16) employees of the University of Minnesota unless excluded under subdivision
69.292b, clause (3);
69.30    (17) employees of the Middle Management Association whose employment began
69.31after July 1, 2007, and to whom section 352.029 does not apply; and
69.32    (18) employees of the Minnesota Government Engineers Council to whom section
69.33352.029 does not apply.
69.34    (b) Employees specified in paragraph (a), clause (13), are included employees under
69.35paragraph (a) if employer and employee contributions are made in a timely manner in the
69.36amounts required by section 352.04. Employee contributions must be deducted from
70.1salary. Employer contributions are the sole obligation of the employer assuming operation
70.2of the University of Minnesota heating plant facilities or any successor organizations to
70.3that employer.
70.4EFFECTIVE DATE.This section is effective the day following final enactment.

70.5    Sec. 2. Minnesota Statutes 2008, section 352.03, subdivision 4, is amended to read:
70.6    Subd. 4. Duties and powers of board of directors. (a) The board shall:
70.7    (1) elect a chair;
70.8    (2) appoint an executive director;
70.9    (3) establish rules to administer this chapter and chapters 3A, 352B, 352C, 352D,
70.10and 490 and transact the business of the system, subject to the limitations of law;
70.11    (4) consider and dispose of, or take any other action the board of directors deems
70.12appropriate concerning, denials of applications for annuities or disability benefits under
70.13this chapter, chapter 3A, 352B, 352C, 352D, or 490, and complaints of employees and
70.14others pertaining to the retirement of employees and the operation of the system;
70.15    (5) oversee the administration of the state deferred compensation plan established
70.16in section 352.965; and
70.17    (6) oversee the administration of the health care savings plan established in section
70.18352.98 .
70.19    (b) The board shall advise the director on any matters relating to the system and
70.20carrying out functions and purposes of this chapter. The board's advice shall control.
70.21EFFECTIVE DATE.This section is effective the day following final enactment.

70.22    Sec. 3. Minnesota Statutes 2008, section 352.04, subdivision 9, is amended to read:
70.23    Subd. 9. Erroneous deductions, canceled warrants. (a) Deductions taken from the
70.24salary of an employee for the retirement fund in error excess of required amounts must,
70.25upon discovery and verification by the department making the deduction, be refunded to
70.26the employee.
70.27(b) If a deduction for the retirement fund is taken from a salary warrant or check,
70.28and the check is canceled or the amount of the warrant or check returned to the funds of
70.29the department making the payment, the sum deducted, or the part of it required to adjust
70.30the deductions, must be refunded to the department or institution if the department applies
70.31for the refund on a form furnished by the director. The department's payments must
70.32likewise be refunded to the department.
71.1(c) Employee deductions and employer contributions taken in error may be directly
71.2transferred, without interest, to another Minnesota public employee retirement plan by
71.3which the employee is actually covered.
71.4For purposes of this subdivision, a Minnesota public pension plan means a plan
71.5specified in section 356.30, subdivision 3, or the plan governed by chapter 354B.
71.6(c) If erroneous employee deductions and employer contributions are caused by an
71.7error in plan coverage involving the plan and any other plans specified in section 356.99,
71.8that section applies. If the employee should have been covered by the plan governed by
71.9chapter 352D, 353D, 354B, or 354D, the employee deductions and employer contributions
71.10taken in error must be directly transferred to the applicable employee's account in the
71.11correct retirement plan, with interest at the rate of 0.71 percent per month, compounded
71.12annually, from the first day of the month following the month in which coverage should
71.13have commenced in the correct defined contribution plan until the end of the month in
71.14which the transfer occurs.
71.15EFFECTIVE DATE.This section is effective July 1, 2010.

71.16    Sec. 4. Minnesota Statutes 2008, section 352.115, subdivision 10, is amended to read:
71.17    Subd. 10. Reemployment of annuitant. (a) Except for salary or wages received
71.18as a temporary employee of the legislature during a legislative session, if any retired
71.19employee again becomes entitled to receive salary or wages from the state, or any
71.20employer who employs state employees as that term is defined in section 352.01,
71.21subdivision 2
, other than salary or wages received as a temporary employee of the
71.22legislature during a legislative session in a position covered by this chapter, the annuity or
71.23retirement allowance shall must cease when the retired employee has earned an amount
71.24equal to the annual maximum earnings allowable for that age for the continued receipt of
71.25full benefit amounts monthly under the federal old age, survivors, and disability insurance
71.26program as set by the secretary of health and human services under United States Code,
71.27title 42, section 403, in any calendar year. If the retired employee has not yet reached the
71.28minimum age for the receipt of Social Security benefits, the maximum earnings for the
71.29retired employee shall be are equal to the annual maximum earnings allowable for the
71.30minimum age for the receipt of Social Security benefits.
71.31(b) The balance of the annual retirement annuity after cessation must be handled or
71.32disposed of as provided in section 356.47.
71.33(c) The annuity must be resumed when state service ends, or, if the retired employee
71.34is still employed at the beginning of the next calendar year, at the beginning of that
71.35calendar year, and payment must again end when the retired employee has earned the
72.1applicable reemployment earnings maximum specified in this subdivision. If the retired
72.2employee is granted a sick leave without pay, but not otherwise, the annuity or retirement
72.3allowance must be resumed during the period of sick leave.
72.4(d) No payroll deductions for the retirement fund may be made from the earnings of
72.5a reemployed retired employee.
72.6(e) No change shall may be made in the monthly amount of an annuity or retirement
72.7allowance because of the reemployment of an annuitant.
72.8(f) If a reemployed annuitant whose annuity is suspended under paragraph (a)
72.9is having insurance premium amounts withheld under section 356.87, subdivision 2,
72.10insurance premium amounts must continue to be withheld and transferred from the
72.11suspended portion of the annuity. The balance of the annual retirement annuity after
72.12cessation, after deduction of the insurance premium amounts, must be treated as specified
72.13in paragraph (b).
72.14EFFECTIVE DATE.This section is effective January 1, 2010.

72.15    Sec. 5. Minnesota Statutes 2008, section 352.91, is amended by adding a subdivision
72.16to read:
72.17    Subd. 6. Correction of plan coverage errors. If erroneous employee deductions
72.18and employer contributions are caused by an error in plan coverage involving the
72.19correctional state employees retirement plan and any other plan specified in section
72.20356.99, that section applies.
72.21EFFECTIVE DATE.This section is effective July 1, 2010.

72.22    Sec. 6. Minnesota Statutes 2008, section 352.965, subdivision 1, is amended to read:
72.23    Subdivision 1. Establishment. (a) The Minnesota state deferred compensation plan
72.24is established. For purposes of this section, "plan" means the Minnesota state deferred
72.25compensation plan, unless the context clearly indicates otherwise. The Minnesota State
72.26Retirement System shall administer the plan.
72.27    (b) The purpose of the plan is to provide a means for a public employee to contribute
72.28a portion of the employee's compensation to a tax-deferred investment account. The plan
72.29is an eligible tax-deferred compensation plan under section 457(b) of the Internal Revenue
72.30Code, United States Code, title 26, section 457(b), and the applicable regulations under
72.31Code of Federal Regulations, title 26, parts 1.457-3 to 1.457-10.
73.1    (c) The board of directors of the Minnesota State Retirement System is the plan
73.2trustee and plan sponsor. The board's executive director is the plan administrator. Fiduciary
73.3activities of the plan must be undertaken in a manner consistent with chapter 356A.
73.4    (d) The executive director, with the approval of the board of directors, shall
73.5adopt and amend, as required to maintain tax-qualified status, a written plan document
73.6specifying the material terms and conditions for eligibility, benefits, applicable limitations,
73.7and the time and form under which benefit distributions can be made. With the approval
73.8of the board of directors, the executive director may also establish policies and procedures
73.9necessary for the administration of the deferred compensation plan.
73.10    (e) The plan document shall must include provisions that are necessary to cause the
73.11plan to be an eligible deferred compensation plan within the meaning of section 457(b) of
73.12the Internal Revenue Code. The plan document may provide additional administrative and
73.13substantive provisions consistent with state law, provided that those provisions will do
73.14not cause the plan to fail to be an eligible deferred compensation plan within the meaning
73.15of section 457(b) of the Internal Revenue Code and may include provisions for certain
73.16optional features and services.
73.17    (f) The board of directors may authorize the executive director to establish and
73.18administer a Roth 457 plan if authorized by the Internal Revenue Code or a Roth
73.19individual retirement account as defined under section 408A of the Internal Revenue Code.
73.20    (g) All amounts contributed to the deferred compensation plan and all earnings
73.21on those amounts must be held in trust, in custodial accounts, or in qualifying annuity
73.22contracts for the exclusive benefit of the plan participants and beneficiaries, as required by
73.23section 457(g) of the Internal Revenue Code and in accordance with sections 356.001 and
73.24356A.06, subdivision 1 .
73.25    (h) The information and data maintained in the accounts of the participants and
73.26beneficiaries are private data and shall must not be disclosed to anyone other than the
73.27participant or beneficiary pursuant to a court order or pursuant to under section 356.49.
73.28    (i) The plan document is not subject to the rule adoption process under the
73.29Administrative Procedures Act, including section 14.386, but must conform with
73.30applicable federal and state laws.
73.31EFFECTIVE DATE.This section is effective the day following final enactment.

73.32    Sec. 7. Minnesota Statutes 2008, section 352.965, subdivision 2, is amended to read:
73.33    Subd. 2. Right to participate in deferred compensation plan. (a) At the request
73.34of an officer or employee of the state, an officer or employee of a political subdivision, or
73.35an employee covered by a retirement fund in section 356.20, subdivision 2, the appointing
74.1authority shall defer the payment of part of the compensation of the public officer or
74.2employee through payroll deduction.
74.3(b) The amount to be deferred must be as provided in a written an agreement
74.4between the officer or employee and the public employer plan sponsor. The agreement
74.5must be in a form specified by the executive director of the Minnesota State Retirement
74.6System and must be consistent with the requirements for an eligible plan under federal
74.7and state tax laws, regulations, and rulings.
74.8EFFECTIVE DATE.This section is effective the day following final enactment.

74.9    Sec. 8. Minnesota Statutes 2009 Supplement, section 352B.011, subdivision 3, is
74.10amended to read:
74.11    Subd. 3. Allowable service. (a) "Allowable service" means:
74.12(1) service in a month during which a member is paid a salary from which a member
74.13contribution is deducted, deposited, and credited in the State Patrol retirement fund;
74.14(2) for members defined in subdivision 10, clause (1), service in any month for
74.15which payments have been made to the State Patrol retirement fund under law; and
74.16(3) for members defined in subdivision 10, clauses (2) and (3), service for which
74.17payments have been made to the State Patrol retirement fund under law, service for which
74.18payments were made to the State Police officers retirement fund under law after June
74.1930, 1961, and all prior service which was credited to a member for service on or before
74.20June 30, 1961.;
74.21(4) any period of authorized leave of absence without pay that does not exceed one
74.22year and for which the employee obtains credit by payment to the fund under section
74.23352B.013; and
74.24(5) eligible periods of uniformed service for which the member obtained service
74.25credit by payment under section 352B.086 to the fund.
74.26(b) Allowable service also includes any period of absence from duty by a member
74.27who, by reason of injury incurred in the performance of duty, is temporarily disabled and
74.28for which disability the state is liable under the workers' compensation law, until the date
74.29authorized by the executive director for commencement of payment of a disability benefit
74.30or until the date of a return to employment.
74.31EFFECTIVE DATE.This section is effective the day following final enactment.

74.32    Sec. 9. [352B.013] AUTHORIZED LEAVE OF ABSENCE SERVICE CREDIT
74.33PURCHASE PROCEDURE.
75.1    Subdivision 1. Application. This section specifies the procedure for purchasing
75.2service credit in the State Patrol retirement plan for authorized leaves of absence under
75.3section 352B.011, subdivision 3, unless an alternative payment procedure is specified in
75.4law for a particular form of leave or break in service.
75.5    Subd. 2. Purchase procedure. (a) An employee covered by the plan specified in
75.6this chapter may purchase credit for allowable service in the plan for a period specified
75.7in subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c),
75.8whichever applies. The employing unit, at its option, may pay the employer portion of the
75.9amount specified in paragraph (b) on behalf of its employees.
75.10(b) If payment is received by the executive director within one year from the date
75.11the employee returned to work following the authorized leave, the payment amount is
75.12equal to the employee and employer contribution rates specified in section 352B.02 at the
75.13end of the leave period multiplied by the employee's hourly rate of salary on the date of
75.14return from the leave of absence and by the days and months of the leave of absence for
75.15which the employee is eligible for allowable service credit. The payment must include
75.16compound interest at a monthly rate of 0.71 percent from the last day of the leave period
75.17until the last day of the month in which payment is received. If payment is received by the
75.18executive director after one year from the date the employee returned to work following
75.19the authorized leave, the payment amount is the amount determined under section
75.20356.551. Payment under this paragraph must be made before the date of termination from
75.21public employment covered under this chapter.
75.22(c) If the employee terminates employment covered by this chapter during the leave
75.23or following the leave rather than returning to covered employment, payment must
75.24be received by the executive director within 30 days after the termination date. The
75.25payment amount is equal to the employee and employer contribution rates specified in
75.26section 352B.02 on the day prior to the termination date, multiplied by the employee's
75.27hourly rate of salary on that date and by the days and months of the leave of absence
75.28prior to termination.
75.29EFFECTIVE DATE.This section is effective the day following final enactment.

75.30    Sec. 10. Minnesota Statutes 2008, section 352B.02, is amended by adding a
75.31subdivision to read:
75.32    Subd. 3. Correction of plan coverage errors. If erroneous employee deductions
75.33and employer contributions are caused by an error in plan coverage involving the State
75.34Patrol retirement plan and any other plan specified in section 356.99, that section applies.
76.1EFFECTIVE DATE.This section is effective July 1, 2010.

76.2    Sec. 11. Minnesota Statutes 2008, section 353.27, subdivision 7a, is amended to read:
76.3    Subd. 7a. Deductions or contributions transmitted by error. (a) If employee
76.4deductions and employer contributions were erroneously transmitted to the association,
76.5but should have been transmitted to another Minnesota public pension a plan covered by
76.6chapter 352D, 353D, 354B, or 354D, the executive director shall transfer the erroneous
76.7employee deductions and employer contributions to the appropriate retirement fund or
76.8individual account, as applicable, without interest. The time limitations specified in
76.9subdivisions 7 and 12 do not apply. The transfer to the applicable defined contribution
76.10plan account must include interest at the rate of 0.71 percent per month, compounded
76.11annually, from the first day of the month following the month in which coverage should
76.12have commenced in the defined contribution plan until the end of the month in which
76.13the transfer occurs.
76.14(b) For purposes of this subdivision, a Minnesota public pension plan means a
76.15plan specified in section 356.30, subdivision 3, or the plans governed by chapters 353D
76.16and 354B.
76.17(c) (b) A potential transfer under paragraph (a) that is reasonably determined to
76.18cause the plan to fail to be a qualified plan under section 401(a) of the federal Internal
76.19Revenue Code, as amended, must not be made by the executive director of the association.
76.20Within 30 days after being notified by the Public Employees Retirement Association of
76.21an unmade potential transfer under this paragraph, the employer of the affected person
76.22must transmit an amount representing the applicable salary deductions and employer
76.23contributions, without interest, to the retirement fund of the appropriate Minnesota public
76.24pension plan, or to the applicable individual account if the proper coverage is by a defined
76.25contribution plan. The association must provide the employing unit a credit for the amount
76.26of the erroneous salary deductions and employer contributions against future contributions
76.27from the employer. If the employing unit receives a credit under this paragraph, the
76.28employing unit is responsible for refunding to the applicable employee any amount that
76.29had been erroneously deducted from the person's salary.
76.30(c) If erroneous employee deductions and employer contributions reflect a plan
76.31coverage error involving any Public Employees Retirement Association plan specified in
76.32section 356.99 and any other plan specified in that section, section 356.99 applies.
76.33EFFECTIVE DATE.This section is effective July 1, 2010.

76.34    Sec. 12. Minnesota Statutes 2008, section 353.37, subdivision 3a, is amended to read:
77.1    Subd. 3a. Disposition of suspension or reduction amount. (a) The balance of
77.2the annual retirement annuity after suspension or the amount of the retirement annuity
77.3reduction must be handled or disposed of as provided in section 356.47.
77.4(b) If a reemployed annuitant whose annuity is suspended is having insurance
77.5premium amounts withheld under section 356.87, subdivision 2, insurance premium
77.6amounts must continue to be withheld and transferred from the suspended portion of the
77.7annuity. The balance of the annual retirement annuity after cessation, after deduction of
77.8the insurance premium amounts, must be treated as specified in paragraph (a).
77.9EFFECTIVE DATE.This section is effective January 1, 2010.

77.10    Sec. 13. Minnesota Statutes 2008, section 354.42, subdivision 7, is amended to read:
77.11    Subd. 7. Erroneous salary deductions or direct payments. (a) Any deductions
77.12taken from the salary of an employee for the retirement fund in error excess of amounts
77.13required must be refunded to the employee upon the discovery of the error and after the
77.14verification of the error by the employing unit making the deduction. The corresponding
77.15excess employer contribution and excess additional employer contribution amounts
77.16attributable to the erroneous salary deduction must be refunded to the employing unit.
77.17(b) If salary deductions and employer contributions were erroneously transmitted
77.18to the retirement fund and should have been transmitted to another Minnesota public
77.19pension the plan covered by chapter 352D, 353D, 354B, or 354D, the executive director
77.20must transfer these salary deductions and employer contributions to the account of the
77.21appropriate public pension fund without interest. For purposes of this paragraph, a
77.22Minnesota public pension plan means a plan specified in section 356.30, subdivision 3,
77.23or the plan governed by chapter 354B. person under the applicable plan. The transfer to
77.24the applicable defined contribution plan account must include interest at the rate of 0.71
77.25percent per month, compounded annually, from the first day of the month following the
77.26month in which coverage should have commenced in the defined contribution plan until
77.27the end of the month in which the transfer occurs.
77.28(c) A potential transfer under paragraph (b) that would cause the plan to fail to
77.29be a qualified plan under section 401(a) of the Internal Revenue Code, as amended,
77.30must not be made by the executive director. Within 30 days after being notified by the
77.31Teachers Retirement Association of an unmade potential transfer under this paragraph,
77.32the employer of the affected person must transmit an amount representing the applicable
77.33salary deductions and employer contributions, without interest, to the retirement fund of
77.34the appropriate Minnesota public pension plan fund account of the applicable person under
77.35the appropriate plan. The retirement association must provide a credit for the amount of
78.1the erroneous salary deductions and employer contributions against future contributions
78.2from the employer.
78.3(d) If a salary warrant or check from which a deduction for the retirement fund was
78.4taken has been canceled or the amount of the warrant or if a check has been returned to
78.5the funds of the employing unit making the payment, a refund of the amount deducted,
78.6or any portion of it that is required to adjust the salary deductions, must be made to the
78.7employing unit.
78.8(e) Erroneous direct payments of member-paid contributions or erroneous salary
78.9deductions that were not refunded during the regular payroll cycle processing must be
78.10refunded to the member, plus interest computed using the rate and method specified in
78.11section 354.49, subdivision 2.
78.12(f) Any refund under this subdivision that would cause the plan to fail to be a
78.13qualified plan under section 401(a) of the Internal Revenue Code, as amended, may not
78.14be refunded and instead must be credited against future contributions payable by the
78.15employer. The employer is responsible for refunding to the applicable employee any
78.16amount that was erroneously deducted from the salary of the employee, with interest as
78.17specified in paragraph (e).
78.18(g) If erroneous employee deductions and employer contributions are caused by an
78.19error in plan coverage involving the plan and any other plan specified in section 356.99,
78.20that section applies.
78.21EFFECTIVE DATE.This section is effective July 1, 2010.

78.22    Sec. 14. Minnesota Statutes 2008, section 354A.12, is amended by adding a
78.23subdivision to read:
78.24    Subd. 6a. Erroneous salary deductions or direct payments. If erroneous
78.25employee deductions and employer contributions reflect a plan coverage error involving
78.26any plan covered by this chapter and any plan specified in section 356.99, that section
78.27applies.
78.28EFFECTIVE DATE.This section is effective July 1, 2010.

78.29    Sec. 15. Minnesota Statutes 2008, section 356.24, subdivision 1, is amended to read:
78.30    Subdivision 1. Restriction; exceptions. (a) It is unlawful for a school district
78.31or other governmental subdivision or state agency to levy taxes for, or to contribute
78.32public funds to a supplemental pension or deferred compensation plan that is established,
79.1maintained, and operated in addition to a primary pension program for the benefit of the
79.2governmental subdivision employees other than:
79.3    (1) to a supplemental pension plan that was established, maintained, and operated
79.4before May 6, 1971;
79.5    (2) to a plan that provides solely for group health, hospital, disability, or death
79.6benefits;
79.7    (3) to the individual retirement account plan established by chapter 354B;
79.8    (4) to a plan that provides solely for severance pay under section 465.72 to a retiring
79.9or terminating employee;
79.10    (5) for employees other than personnel employed by the Board of Trustees of the
79.11Minnesota State Colleges and Universities and covered under the Higher Education
79.12Supplemental Retirement Plan under chapter 354C, but including city managers covered
79.13by an alternative retirement arrangement under section 353.028, subdivision 3, paragraph
79.14(a), or by the defined contribution plan of the Public Employees Retirement Association
79.15under section 353.028, subdivision 3, paragraph (b), if the supplemental plan coverage is
79.16provided for in a personnel policy of the public employer or in the collective bargaining
79.17agreement between the public employer and the exclusive representative of public
79.18employees in an appropriate unit or in the individual employment contract between a city
79.19and a city manager, and if for each available investment all fees and historic rates of return
79.20for the prior one-, three-, five-, and ten-year periods, or since inception, are disclosed in an
79.21easily comprehended document not to exceed two pages, in an amount matching employee
79.22contributions on a dollar for dollar basis, but not to exceed an employer contribution of
79.23one-half of the available elective deferral permitted per year per employee, under the
79.24Internal Revenue Code:
79.25    (i) to the state of Minnesota deferred compensation plan under section 352.965;
79.26    (ii) in payment of the applicable portion of the contribution made to any investment
79.27eligible under section 403(b) of the Internal Revenue Code, if the employing unit has
79.28complied with any applicable pension plan provisions of the Internal Revenue Code with
79.29respect to the tax-sheltered annuity program during the preceding calendar year; or
79.30    (iii) any other deferred compensation plan offered by the employer under section
79.31457 of the Internal Revenue Code;
79.32    (6) for personnel employed by the Board of Trustees of the Minnesota State Colleges
79.33and Universities and not covered by clause (5), to the supplemental retirement plan under
79.34chapter 354C, if the supplemental plan coverage is provided for in a personnel policy
79.35or in the collective bargaining agreement of the public employer with the exclusive
79.36representative of the covered employees in an appropriate unit, in an amount matching
80.1employee contributions on a dollar for dollar basis, but not to exceed an employer
80.2contribution of $2,700 a year for each employee;
80.3    (7) to a supplemental plan or to a governmental trust to save for postretirement
80.4health care expenses qualified for tax-preferred treatment under the Internal Revenue
80.5Code, if the supplemental plan coverage is provided for in a personnel policy or in the
80.6collective bargaining agreement of a public employer with the exclusive representative of
80.7the covered employees in an appropriate unit;
80.8    (8) to the laborers national industrial pension fund or to a laborers local pension
80.9fund for the employees of a governmental subdivision who are covered by a collective
80.10bargaining agreement that provides for coverage by that fund and that sets forth a fund
80.11contribution rate, but not to exceed an employer contribution of $5,000 per year per
80.12employee;
80.13    (9) to the plumbers and pipefitters national pension fund or to a plumbers and
80.14pipefitters local pension fund for the employees of a governmental subdivision who are
80.15covered by a collective bargaining agreement that provides for coverage by that fund and
80.16that sets forth a fund contribution rate, but not to exceed an employer contribution of
80.17$5,000 per year per employee;
80.18    (10) to the international union of operating engineers pension fund for the employees
80.19of a governmental subdivision who are covered by a collective bargaining agreement that
80.20provides for coverage by that fund and that sets forth a fund contribution rate, but not to
80.21exceed an employer contribution of $5,000 per year per employee;
80.22    (11) to a supplemental plan organized and operated under the federal Internal
80.23Revenue Code, as amended, that is wholly and solely funded by the employee's
80.24accumulated sick leave, accumulated vacation leave, and accumulated severance pay;
80.25    (12) to the International Association of Machinists national pension fund for the
80.26employees of a governmental subdivision who are covered by a collective bargaining
80.27agreement that provides for coverage by that fund and that sets forth a fund contribution
80.28rate, but not to exceed an employer contribution of $5,000 per year per employee; or
80.29    (13) for employees of United Hospital District, Blue Earth, to the state of Minnesota
80.30deferred compensation program, if the employee makes a contribution, in an amount that
80.31does not exceed the total percentage of covered salary under section 353.27, subdivisions
80.323 and 3a.
80.33    (b) No governmental subdivision may make a contribution to a deferred
80.34compensation plan operating under section 457 of the Internal Revenue Code for volunteer
80.35or emergency on-call firefighters in lieu of providing retirement coverage under the federal
80.36Old Age, Survivors, and Disability Insurance Program.
81.1EFFECTIVE DATE.This section is effective the day following final enactment.

81.2    Sec. 16. Minnesota Statutes 2008, section 356.50, subdivision 4, is amended to read:
81.3    Subd. 4. Annuity repayment. Notwithstanding subdivisions 1 and 2, if after being
81.4discharged, the person commences receipt of an annuity from the applicable plan, and it is
81.5later determined that the person was wrongfully discharged, the person shall repay the
81.6annuity received in a lump sum within 60 days of receipt of the back pay award. If the
81.7annuity is not repaid, the person is not entitled to reinstatement in the applicable plan as
81.8an active member, the person is not authorized to make payments under subdivision 2,
81.9paragraph (a), and, for subsequent employment with the employer, the person shall be
81.10treated as a reemployed annuitant.
81.11EFFECTIVE DATE.This section is effective the day following final enactment.
81.12CORRECTION OF PLAN COVERAGE ERRORS

81.13    Sec. 17. [356.99] CORRECTION OF ERRONEOUS DEFINED BENEFIT PLAN
81.14COVERAGE.
81.15    Subdivision 1. Definitions. (a) For purposes of this section, the terms in paragraphs
81.16(b) to (e) have the meanings given them.
81.17(b) "Chief administrative officer" means the person selected or elected by the
81.18governing board of a covered pension plan with primary responsibility to administer the
81.19covered pension plan, or that person's designee or representative.
81.20(c) "Covered pension plan" means a plan enumerated in section 356.30, subdivision
81.213, except clauses (3), (5), (6), and (11).
81.22(d) "Governing board" means the governing board of the Minnesota State Retirement
81.23System, the Public Employees Retirement Association, the Teachers Retirement
81.24Association, the Duluth Teachers Retirement Fund Association, or the St. Paul Teachers
81.25Retirement Fund Association.
81.26(e) "Member" means an active plan member in a covered pension plan.
81.27    Subd. 2. Treatment of terminated employee coverage error. Any person
81.28who terminated the erroneously covered service before a chief administrative officer
81.29determined the covered pension plan coverage was in error retains the coverage with the
81.30plan that originally credited the service.
81.31    Subd. 3. Active employee correction of prospective service coverage. Upon
81.32determination by a chief administrative officer that a member is covered by the wrong
81.33pension plan, the employer must stop remitting the erroneous employee deductions and
82.1employer contributions and report the employee to the correct covered pension plan for all
82.2subsequent service.
82.3    Subd. 4. Active employee treatment of past service. Any plan member, with past
82.4service credited in an erroneous plan, retains the coverage for that past service with the
82.5plan that originally credited that service if the reporting error began earlier than two
82.6fiscal years prior to the current fiscal year in which the error was determined by the chief
82.7administrative officer. If the reporting error began within two fiscal years prior to the
82.8current fiscal year, the pension plan coverage for that past service must be corrected as
82.9provided in subdivision 5.
82.10    Subd. 5. Past service transfer procedure. (a) For cases under subdivision 4
82.11requiring correction of prior service coverage, on behalf of the applicable member the
82.12chief administrative officer of the covered pension plan fund that has received erroneous
82.13employee deductions and employer contributions must transfer to the appropriate covered
82.14retirement plan fund an amount which is the lesser of all contributions made by or on
82.15behalf of the member for the period of erroneous membership, or the specific amount
82.16requested by the chief administrative officer of the other covered pension plan which
82.17represents the employee deductions and employer contributions that would have been
82.18made had the member been properly reported.
82.19(b) If excess employee deductions remain in the member's account after the transfer
82.20of funds, the remaining erroneous amount must be refunded to the person with interest
82.21at the rate provided under the general refund law of the applicable covered pension
82.22plan. The chief administrative officer must also return any remaining excess employer
82.23contributions by providing to the employer a credit against future contributions payable by
82.24that employer.
82.25(c) If the contributions transferred to the correct covered pension plan fund are less
82.26than the amounts required for the period being corrected, the chief administrative officer
82.27of the correct covered pension plan fund must collect the remaining employee deductions
82.28and employer contributions from the employer under laws for recovering deficient
82.29contributions applicable to the correct covered pension plan, except that no interest is
82.30chargeable if the additional amounts due under this paragraph are received by the chief
82.31administrative officer within 30 days of notifying the employer of the amount due.
82.32(d) A potential transfer under this section that would cause a plan to fail to be a
82.33qualified plan under section 401(a) of the Internal Revenue Code, as amended, must not be
82.34made. Within 30 days after being notified by a chief administrative officer of an unmade
82.35potential transfer under this section, the employer of the member must transmit an amount
82.36representing the applicable salary deductions and employer contributions, without interest,
83.1to the fund of the appropriate covered pension plan. The chief administrative officer of the
83.2covered pension plan which erroneously provided coverage must provide to the employer
83.3a credit for the amount of the erroneous salary deductions and employer contributions
83.4against future contributions from that employer.
83.5(e) Upon transfer of the required assets, or payment from the employer under
83.6paragraph (d), whichever is applicable, allowable service and salary credit for the period
83.7being transferred is forfeited in the erroneous plan and is granted in the correct plan.
83.8EFFECTIVE DATE.This section is effective July 1, 2010.

83.9    Sec. 18. Minnesota Statutes 2008, section 490.123, is amended by adding a subdivision
83.10to read:
83.11    Subd. 4. Correction of contribution errors. (a) If erroneous employee deductions
83.12and employer contributions are caused by an error in plan coverage involving the judges
83.13retirement plan and any other plan specified in section 356.99, that section applies.
83.14(b) The provisions of section 352.04, subdivisions 8 and 9, apply to the judges'
83.15retirement plan, except that if employee deductions or contributions are erroneously
83.16transmitted to the judges' retirement fund for service rendered after the service credit limit
83.17under section 490.121, subdivision 22, has been attained, consistent with section 352D.04,
83.18subdivision 2, no employer contributions may be transferred.
83.19EFFECTIVE DATE.This section is effective July 1, 2010.

83.20    Sec. 19. REPEALER.
83.21Minnesota Statutes 2008, sections 352.91, subdivision 5; and 353.88, are repealed.
83.22EFFECTIVE DATE.This section is effective July 1, 2010.

83.23ARTICLE 3
83.24MINNESOTA STATE DEFERRED COMPENSATION PLAN AMENDMENTS

83.25    Section 1. Minnesota Statutes 2008, section 352.965, subdivision 6, is amended to read:
83.26    Subd. 6. Plan administrative expenses. (a) The reasonable and necessary
83.27administrative expenses of the deferred compensation plan may be charged to plan
83.28participants in the form of an annual fee, an asset-based fee, a percentage of the
83.29contributions to the plan, or a combination thereof, as set forth in the plan document. The
83.30executive director of the system at the direction of the board of directors shall establish
83.31procedures to carry out this section including allocation of administrative costs of the plan
84.1to participants. Processes and procedures shall be set forth in the plan document. Fees
84.2cannot be charged on contributions and investment returns attributable to contributions
84.3made to the Minnesota supplemental investment funds before July 1, 1992.
84.4    (b) The plan document must conform to federal and state tax laws, regulations, and
84.5rulings, and is not subject to the Administrative Procedure Act.
84.6    (c) The executive director may contract with a third party to perform administrative
84.7and record keeping functions. The executive director may solicit bids and negotiate such
84.8contracts. Participating employers must provide the necessary data to the third-party
84.9record keeper as determined by the executive director. The third-party record keeper and
84.10the Minnesota State Retirement System shall follow the data privacy provisions under
84.11chapter 13. The third-party record keeper may not solicit participants for any product or
84.12services not related to the deferred compensation plan.
84.13    (d) The board of directors may authorize a third-party investment consultant
84.14to provide investment information and advice, provided that if the offering of such
84.15information and advice is consistent with the investment advice requirements applicable
84.16to private plans under Title VI, subtitle A, of the Pension Protection Act of 2006, Public
84.17Law 109-280, section 601.
84.18EFFECTIVE DATE.This section is effective July 1, 2010.

84.19ARTICLE 4
84.20MSRS UNCLASSIFIED STATE EMPLOYEES RETIREMENT
84.21PROGRAM AMENDMENTS

84.22    Section 1. Minnesota Statutes 2008, section 3A.07, is amended to read:
84.233A.07 APPLICATION.
84.24    (a) Except as provided in paragraph (b) or (d), this chapter applies to members
84.25of the legislature in service after July 1, 1965, who otherwise meet the requirements
84.26of this chapter.
84.27    (b) Members of the legislature who were elected for the first time after June 30,
84.281997, or members of the legislature who were elected before July 1, 1997, and who, after
84.29July 1, 1998, elect not to be members of the plan established by this chapter are covered
84.30by the unclassified employees retirement program governed by chapter 352D.
84.31    (c) The post-July 1, 1998, coverage election under paragraph (b) is irrevocable
84.32and must be made on a form prescribed by the director. The second chance referendum
84.33election under Laws 2002, chapter 392, article 15, also is irrevocable.
85.1(d) Members of the legislature who are covered by the retirement plan governed by
85.2this chapter on July 1, 2010, may, on or before the end of the member's seventh year of
85.3legislative service or January 1, 2011, whichever is later, elect to have future retirement
85.4coverage by either the general state employees retirement plan governed by chapter 352
85.5or the unclassified state employees retirement program governed by chapter 352D. The
85.6election must be made on a form prescribed by the director and is irrevocable.

85.7    Sec. 2. Minnesota Statutes 2008, section 352.01, subdivision 2a, is amended to read:
85.8    Subd. 2a. Included employees. (a) "State employee" includes:
85.9    (1) employees of the Minnesota Historical Society;
85.10    (2) employees of the State Horticultural Society;
85.11    (3) employees of the Minnesota Crop Improvement Association;
85.12    (4) employees of the adjutant general who are paid from federal funds and who are
85.13not covered by any federal civilian employees retirement system;
85.14    (5) employees of the Minnesota State Colleges and Universities employed under the
85.15university or college activities program;
85.16    (6) currently contributing employees covered by the system who are temporarily
85.17employed by the legislature during a legislative session or any currently contributing
85.18employee employed for any special service as defined in subdivision 2b, clause (8);
85.19    (7) employees of the legislature appointed without a limit on the duration of their
85.20employment and persons employed or designated by the legislature or by a legislative
85.21committee or commission or other competent authority to conduct a special inquiry,
85.22investigation, examination, or installation;
85.23    (8) trainees who are employed on a full-time established training program
85.24performing the duties of the classified position for which they will be eligible to receive
85.25immediate appointment at the completion of the training period;
85.26    (9) employees of the Minnesota Safety Council;
85.27    (10) any employees on authorized leave of absence from the Transit Operating
85.28Division of the former Metropolitan Transit Commission who are employed by the
85.29labor organization which is the exclusive bargaining agent representing employees of
85.30the Transit Operating Division;
85.31    (11) employees of the Metropolitan Council, Metropolitan Parks and Open Space
85.32Commission, Metropolitan Sports Facilities Commission, Metropolitan Mosquito Control
85.33Commission, or Metropolitan Radio Board unless excluded or covered by another public
85.34pension fund or plan under section 473.415, subdivision 3;
85.35    (12) judges of the Tax Court;
86.1    (13) personnel employed on June 30, 1992, by the University of Minnesota in the
86.2management, operation, or maintenance of its heating plant facilities, whose employment
86.3transfers to an employer assuming operation of the heating plant facilities, so long as the
86.4person is employed at the University of Minnesota heating plant by that employer or by its
86.5successor organization;
86.6    (14) seasonal help in the classified service employed by the Department of Revenue;
86.7    (15) persons employed by the Department of Commerce as a peace officer in
86.8the Insurance Fraud Prevention Division under section 45.0135 who have attained the
86.9mandatory retirement age specified in section 43A.34, subdivision 4;
86.10    (16) employees of the University of Minnesota unless excluded under subdivision
86.112b, clause (3);
86.12    (17) employees of the Middle Management Association whose employment began
86.13after July 1, 2007, and to whom section 352.029 does not apply; and
86.14    (18) employees of the Minnesota Government Engineers Council to whom section
86.15352.029 does not apply.; and
86.16(19) employees who have elected to transfer past service to the general employees
86.17retirement plan under section 352D.02, subdivision 1d, paragraph (a), or who have not
86.18elected to transfer to the unclassified program under section 352D.02, subdivision 1d,
86.19paragraph (b).
86.20    (b) Employees specified in paragraph (a), clause (13), are included employees under
86.21paragraph (a) if employer and employee contributions are made in a timely manner in the
86.22amounts required by section 352.04. Employee contributions must be deducted from
86.23salary. Employer contributions are the sole obligation of the employer assuming operation
86.24of the University of Minnesota heating plant facilities or any successor organizations to
86.25that employer.
86.26EFFECTIVE DATE.This section is effective June 30, 2010.

86.27    Sec. 3. Minnesota Statutes 2009 Supplement, section 352.01, subdivision 2b, is
86.28amended to read:
86.29    Subd. 2b. Excluded employees. "State employee" does not include:
86.30    (1) students who are employed by the University of Minnesota, or the state colleges
86.31and universities, unless approved for coverage by the Board of Regents of the University
86.32of Minnesota or the Board of Trustees of the Minnesota State Colleges and Universities,
86.33whichever is applicable;
86.34    (2) employees who are eligible for membership in the state Teachers Retirement
86.35Association, except employees of the Department of Education who have chosen or may
87.1choose to be covered by the general state employees retirement plan of the Minnesota
87.2State Retirement System instead of the Teachers Retirement Association;
87.3    (3) employees of the University of Minnesota who are excluded from coverage by
87.4action of the Board of Regents;
87.5    (4) officers and enlisted personnel in the National Guard and the naval militia who
87.6are assigned to permanent peacetime duty and who under federal law are or are required to
87.7be members of a federal retirement system;
87.8    (5) election officers;
87.9    (6) persons who are engaged in public work for the state but who are employed
87.10by contractors when the performance of the contract is authorized by the legislature or
87.11other competent authority;
87.12    (7) officers and employees of the senate, or of the house of representatives, or of a
87.13legislative committee or commission who are temporarily employed;
87.14    (8) receivers, jurors, notaries public, and court employees who are not in the judicial
87.15branch as defined in section 43A.02, subdivision 25, except referees and adjusters
87.16employed by the Department of Labor and Industry;
87.17    (9) patient and inmate help who perform services in state charitable, penal, and
87.18correctional institutions including the Minnesota Veterans Home;
87.19    (10) persons who are employed for professional services where the service is
87.20incidental to their regular professional duties and whose compensation is paid on a per
87.21diem basis;
87.22    (11) employees of the Sibley House Association;
87.23    (12) the members of any state board or commission who serve the state intermittently
87.24and are paid on a per diem basis; the secretary, secretary-treasurer, and treasurer of those
87.25boards if their compensation is $5,000 or less per year, or, if they are legally prohibited
87.26from serving more than three years; and the board of managers of the State Agricultural
87.27Society and its treasurer unless the treasurer is also its full-time secretary;
87.28    (13) state troopers and persons who are described in section 352B.011, subdivision
87.2910
, clauses (2) to (8);
87.30    (14) temporary employees of the Minnesota State Fair who are employed on or
87.31after July 1 for a period not to extend beyond October 15 of that year; and persons who
87.32are employed at any time by the state fair administration for special events held on the
87.33fairgrounds;
87.34    (15) emergency employees who are in the classified service; except that if an
87.35emergency employee, within the same pay period, becomes a provisional or probationary
88.1employee on other than a temporary basis, the employee must be considered a "state
88.2employee" retroactively to the beginning of the pay period;
88.3    (16) temporary employees in the classified service, and temporary employees in the
88.4unclassified service who are appointed for a definite period of not more than six months
88.5and who are employed less than six months in any one-year period;
88.6    (17) interns who are hired for six months or less and trainee employees, except
88.7those listed in subdivision 2a, clause (8);
88.8    (18) persons whose compensation is paid on a fee basis or as an independent
88.9contractor;
88.10    (19) state employees who are employed by the Board of Trustees of the Minnesota
88.11State Colleges and Universities in unclassified positions enumerated in section 43A.08,
88.12subdivision 1
, clause (9);
88.13    (20) state employees who in any year have credit for 12 months service as teachers
88.14in the public schools of the state and as teachers are members of the Teachers Retirement
88.15Association or a retirement system in St. Paul, Minneapolis, or Duluth, except for
88.16incidental employment as a state employee that is not covered by one of the teacher
88.17retirement associations or systems;
88.18    (21) employees of the adjutant general who are employed on an unlimited
88.19intermittent or temporary basis in the classified or unclassified service for the support of
88.20Army and Air National Guard training facilities;
88.21    (22) chaplains and nuns who are excluded from coverage under the federal Old
88.22Age, Survivors, Disability, and Health Insurance Program for the performance of service
88.23as specified in United States Code, title 42, section 410(a)(8)(A), as amended, if no
88.24irrevocable election of coverage has been made under section 3121(r) of the Internal
88.25Revenue Code of 1986, as amended through December 31, 1992;
88.26    (23) examination monitors who are employed by departments, agencies,
88.27commissions, and boards to conduct examinations required by law;
88.28    (24) persons who are appointed to serve as members of fact-finding commissions or
88.29adjustment panels, arbitrators, or labor referees under chapter 179;
88.30    (25) temporary employees who are employed for limited periods under any state or
88.31federal program for training or rehabilitation, including persons who are employed for
88.32limited periods from areas of economic distress, but not including skilled and supervisory
88.33personnel and persons having civil service status covered by the system;
88.34    (26) full-time students who are employed by the Minnesota Historical Society
88.35intermittently during part of the year and full-time during the summer months;
89.1    (27) temporary employees who are appointed for not more than six months, of
89.2the Metropolitan Council and of any of its statutory boards, if the board members are
89.3appointed by the Metropolitan Council;
89.4    (28) persons who are employed in positions designated by the Department of
89.5Management and Budget as student workers;
89.6    (29) members of trades who are employed by the successor to the Metropolitan
89.7Waste Control Commission, who have trade union pension plan coverage under a
89.8collective bargaining agreement, and who are first employed after June 1, 1977;
89.9    (30) off-duty peace officers while employed by the Metropolitan Council;
89.10    (31) persons who are employed as full-time police officers by the Metropolitan
89.11Council and as police officers are members of the public employees police and fire fund;
89.12    (32) persons who are employed as full-time firefighters by the Department of Military
89.13Affairs and as firefighters are members of the public employees police and fire fund;
89.14    (33) foreign citizens with who are employed under a work permit of less than three
89.15years, or an H-1b/JV visa valid for less than three years of employment, unless notice of
89.16extension is supplied which allows them to work for three or more years as of the date
89.17that the extension is granted, in which case they are eligible for coverage from the date
89.18extended; and
89.19    (34) persons who are employed by the Board of Trustees of the Minnesota State
89.20Colleges and Universities and who elected to remain members of the Public Employees
89.21Retirement Association or the Minneapolis Employees Retirement Fund, whichever
89.22applies, under Minnesota Statutes 1994, section 136C.75.; and
89.23(35) employees who have elected to transfer service to the unclassified program
89.24under section 352D.02, subdivision 1d, paragraph (b).
89.25EFFECTIVE DATE.This section is effective June 30, 2010.

89.26    Sec. 4. Minnesota Statutes 2008, section 352D.015, subdivision 4, is amended to read:
89.27    Subd. 4. General fund. "General fund" means the general state employees
89.28retirement fund except the moneys for the unclassified program under chapter 352.
89.29EFFECTIVE DATE.This section is effective June 30, 2010.

89.30    Sec. 5. Minnesota Statutes 2008, section 352D.015, is amended by adding a
89.31subdivision to read:
89.32    Subd. 4a. General employees retirement plan. "General employees retirement
89.33plan" means the general state employees retirement plan under chapter 352.
90.1EFFECTIVE DATE.This section is effective June 30, 2010.

90.2    Sec. 6. Minnesota Statutes 2008, section 352D.015, subdivision 9, is amended to read:
90.3    Subd. 9. Value. "Value" means cash value at the end of the month following receipt
90.4of an application. If no application is required, "value" means the cash value at the end
90.5of the month in which the event necessitating the transfer occurs the market value of the
90.6account at the end of the United States investment market day.
90.7EFFECTIVE DATE.This section is effective July 1, 2010.

90.8    Sec. 7. Minnesota Statutes 2008, section 352D.02, subdivision 1, is amended to read:
90.9    Subdivision 1. Coverage. (a) Employees enumerated in paragraph (b), clause
90.10(1), are participants in the unclassified program under this chapter. Persons referenced
90.11in paragraph (b), clause (15), are participants in the unclassified program under this
90.12chapter for judicial employment in excess of the service credit limit in section 490.121,
90.13subdivision 22. Employees enumerated in paragraph (c) (b), clauses (2), (3), (4), (6) to
90.14(14), and (16) to (18), clauses (2) to (14) and (16) to (18), if they are in the unclassified
90.15service of the state or Metropolitan Council and are eligible for coverage under the general
90.16state employees retirement plan under chapter 352, are participants in the unclassified
90.17program under this chapter unless the employee gives notice to the executive director of
90.18the Minnesota State Retirement System within one year following the commencement
90.19of employment in the unclassified service that the employee desires coverage under the
90.20general state employees retirement plan. For the purposes of this chapter, an employee
90.21who does not file notice with the executive director is deemed to have exercised the option
90.22to participate in the unclassified program.
90.23    (b) Persons referenced in paragraph (c), clause (5), are participants in the unclassified
90.24program under this chapter unless the person was eligible to elect different coverage under
90.25section 3A.07 and elected retirement coverage by the applicable alternative retirement
90.26plan. Persons referenced in paragraph (c), clause (15), are participants in the unclassified
90.27program under this chapter for judicial employment in excess of the service credit limit in
90.28section 490.121, subdivision 22.
90.29    (c) (b) Enumerated employees and referenced persons are:
90.30    (1) the governor, the lieutenant governor, the secretary of state, the state auditor,
90.31and the attorney general;
90.32    (2) an employee in the Office of the Governor, Lieutenant Governor, Secretary
90.33of State, State Auditor, Attorney General;
90.34    (3) an employee of the State Board of Investment;
91.1    (4) the head of a department, division, or agency created by statute in the unclassified
91.2service, an acting department head subsequently appointed to the position, or an employee
91.3enumerated in section 15A.0815 or 15A.083, subdivision 4;
91.4    (5) a member of the legislature;
91.5    (6) a full-time unclassified employee of the legislature or a commission or agency of
91.6the legislature who is appointed without a limit on the duration of the employment or a
91.7temporary legislative employee having shares in the supplemental retirement fund as a
91.8result of former employment covered by this chapter, whether or not eligible for coverage
91.9under the Minnesota State Retirement System;
91.10    (7) a person who is employed in a position established under section 43A.08,
91.11subdivision 1
, clause (3), or in a position authorized under a statute creating or establishing
91.12a department or agency of the state, which is at the deputy or assistant head of department
91.13or agency or director level;
91.14    (8) the regional administrator, or executive director of the Metropolitan Council,
91.15general counsel, division directors, operations managers, and other positions as designated
91.16by the council, all of which may not exceed 27 positions at the council and the chair;
91.17    (9) the executive director, associate executive director, and not to exceed nine
91.18positions of the Minnesota Office of Higher Education in the unclassified service, as
91.19designated by the Minnesota Office of Higher Education before January 1, 1992, or
91.20subsequently redesignated with the approval of the board of directors of the Minnesota
91.21State Retirement System, unless the person has elected coverage by the individual
91.22retirement account plan under chapter 354B;
91.23    (10) the clerk of the appellate courts appointed under article VI, section 2, of the
91.24Constitution of the state of Minnesota, the state court administrator and judicial district
91.25administrators;
91.26    (11) the chief executive officers of correctional facilities operated by the Department
91.27of Corrections and of hospitals and nursing homes operated by the Department of Human
91.28Services;
91.29    (12) an employee whose principal employment is at the state ceremonial house;
91.30    (13) an employee of the Agricultural Utilization Research Institute;
91.31    (14) an employee of the State Lottery who is covered by the managerial plan
91.32established under section 43A.18, subdivision 3;
91.33    (15) a judge who has exceeded the service credit limit in section 490.121,
91.34subdivision 22
;
91.35    (16) an employee of Enterprise Minnesota, Inc.;
92.1    (17) a person employed by the Minnesota State Colleges and Universities as faculty
92.2or in an eligible unclassified administrative position as defined in section 354B.20,
92.3subdivision 6, who was employed by the former state university or the former community
92.4college system before May 1, 1995, and elected unclassified program coverage prior to
92.5May 1, 1995; and
92.6    (18) a person employed by the Minnesota State Colleges and Universities who
92.7was employed in state service before July 1, 1995, who subsequently is employed in an
92.8eligible unclassified administrative position as defined in section 354B.20, subdivision
92.96, and who elects coverage by the unclassified program.

92.10    Sec. 8. Minnesota Statutes 2008, section 352D.02, subdivision 1c, is amended to read:
92.11    Subd. 1c. Transfer of contributions. An employee covered by the regular general
92.12employees retirement plan who is subsequently employed as a full-time unclassified
92.13employee of the legislature or any commission or agency of the legislature without a
92.14limit on the duration of the employment may elect to transfer accumulated employee and
92.15matching employer contributions, as provided in section 352D.03.
92.16EFFECTIVE DATE.This section is effective June 30, 2010.

92.17    Sec. 9. Minnesota Statutes 2008, section 352D.02, subdivision 2, is amended to read:
92.18    Subd. 2. Coverage upon employment change. A person becoming a participant
92.19in the unclassified program prior to July 1, 2010, by virtue of employment in a position
92.20specified in subdivision 1, clause (4), and remaining in the unclassified service shall
92.21remain a participant in the program even though the position the person occupies is
92.22deleted from any of the sections referenced in subdivision 1, clause (4), by subsequent
92.23amendment, except that a person shall is not be eligible to elect the unclassified program
92.24after separation from unclassified service if on the return of the person to service, that
92.25position is not specified in subdivision 1, clause (4). Any person employed in a position
92.26specified in subdivision 1 shall cease to participate in the unclassified program in the event
92.27that the position is placed in the classified service.
92.28EFFECTIVE DATE.This section is effective June 30, 2010.

92.29    Sec. 10. Minnesota Statutes 2008, section 352D.02, subdivision 3, is amended to read:
92.30    Subd. 3. Transfer to general employees retirement plan. (a) An employee
92.31referred to in subdivision 1, paragraph (b), clauses (2) to (4), (6) to (14), and (16) to
92.32(18), who is credited with employee shares in the unclassified program, after acquiring
93.1and who has credit for ten years of allowable service and, not later than one month
93.2following the termination of covered employment, may elect to terminate participation
93.3in the unclassified program and be covered by the general employees retirement plan by
93.4filing a written election with the executive director. if the employee was employed before
93.5July 1, 2010, and has at least ten years of allowable service as of the date of the election or
93.6if the employee was employed after June 30, 2010, and has no more than seven years of
93.7allowable service as of the date of the election.
93.8(b) A person referred to in subdivision 1, paragraph (b), clause (5), who is credited
93.9with employee shares in the unclassified program, and who has credit for allowable
93.10service, prior to the termination of service, may elect to terminate participation in the
93.11unclassified program and be covered by the general employees retirement plan by filing
93.12a written election with the executive director if the person first became covered by the
93.13unclassified program after June 30, 2010, and has no more than seven years of allowable
93.14service or if the person first became covered by the unclassified program before July 1,
93.152010, and makes the election to transfer on or before January 1, 2011.
93.16(c) If the transfer election is made, the executive director shall then redeem the
93.17employee's total shares and shall credit to the employee's account in the general employees
93.18retirement plan the amount of contributions that would have been so credited had the
93.19employee been covered by the general employees retirement plan during the employee's
93.20entire covered employment or elective state service. The balance of money so redeemed
93.21and not credited to the employee's account shall must be transferred to the general
93.22employees retirement plan retirement fund, except that (1) the employee contribution paid
93.23to the unclassified program must be compared to (2) the employee contributions that
93.24would have been paid to the general employees retirement plan for the comparable period,
93.25if the individual had been covered by that plan. If clause (1) is greater than clause (2),
93.26the difference must be refunded to the employee as provided in section 352.22. If clause
93.27(2) is greater than clause (1), the difference must be paid by the employee within six
93.28months of electing general employees retirement plan coverage or before the effective
93.29date of the annuity, whichever is sooner.
93.30    (b) (d) An election under paragraph (a) or (b) to transfer coverage to the general
93.31employees retirement plan is irrevocable during any period of covered employment.
93.32(e) A person referenced in subdivision 1, paragraph (b), clause (1) or (15), who is
93.33credited with employee shares in the unclassified program is not permitted to terminate
93.34participation in the unclassified program and be covered by the general employees
93.35retirement plan.
93.36EFFECTIVE DATE.This section is effective June 30, 2010.

94.1    Sec. 11. Minnesota Statutes 2008, section 352D.03, is amended to read:
94.2352D.03 TRANSFER OF ASSETS.
94.3Unless an eligible employee enumerated in section 352D.02, subdivision 1, has
94.4elected coverage under the individual retirement account plan under chapter 354B, a
94.5sum of money representing the assets credited to each employee exercising the option
94.6contained in section 352D.02, plus an equal employer contribution together with interest
94.7for an employee exercising an option under section 352D.02, an amount equal to the
94.8employee and employer contributions for the employment period at the applicable
94.9preretirement interest actuarial assumption rate during this period plus six percent interest,
94.10compounded annually, must be used for the purchase of shares on behalf of each employee
94.11in the accounts of the supplemental retirement fund established by section 11A.17.
94.12EFFECTIVE DATE.This section is effective June 30, 2010.

94.13    Sec. 12. Minnesota Statutes 2008, section 352D.04, subdivision 1, is amended to read:
94.14    Subdivision 1. Investment options. (a) A person exercising an option to participate
94.15in the retirement program provided by this chapter may elect to purchase shares in one or
94.16a combination of the income share account, the growth share account, the international
94.17share account, the money market account, the bond market account, the fixed interest
94.18account, or the common stock index account established in section 11A.17. The person
94.19may elect to participate in one or more of the investment accounts in the fund by
94.20specifying, on a form provided in a manner prescribed by the executive director, the
94.21percentage of the person's contributions provided in subdivision 2 to be used to purchase
94.22shares in each of the accounts.
94.23(b) A participant may indicate in writing on forms provided, in a manner prescribed
94.24by the Minnesota State Retirement System a choice of options executive director, choose
94.25their investment allocation for subsequent purchases of shares. Until a different written
94.26indication is made by the participant, the executive director shall purchase shares in the
94.27supplemental fund as selected by the participant. If no initial option is chosen, 100 percent
94.28income shares must be purchased for a participant. A change in choice of investment
94.29option is effective no later than the first pay date first occurring after 30 days following the
94.30receipt of the request for a change at the end of the most recent United States investment
94.31market day.
94.32(c) Shares in the fixed interest account attributable to any guaranteed investment
94.33contract as of July 1, 1994, may not be withdrawn from the fund or transferred to another
94.34account until the guaranteed investment contract has expired, unless the participant
95.1qualifies for withdrawal under section 352D.05 or for benefit payments under sections
95.2352D.06 to 352D.075.
95.3(d) (c) A participant or former participant may also change the investment options
95.4selected for all or a portion of the participant's shares previously purchased in accounts,
95.5subject to the provisions of paragraph (c) concerning the fixed interest account. Changes
95.6in investment options for the participant's shares must be effected as soon as cash flow to
95.7an account practically permits, but not later than six months after the requested change
95.8trading restrictions imposed on the investment option.
95.9EFFECTIVE DATE.This section is effective July 1, 2010.

95.10    Sec. 13. Minnesota Statutes 2008, section 352D.04, subdivision 2, is amended to read:
95.11     Subd. 2. Contribution rates. (a) The money used to purchase shares under this
95.12section is the employee and employer contributions provided in this subdivision.
95.13     (b) The employee contribution is an amount equal to four the percent of salary
95.14specified in section 352.04, subdivision 2, or 352.045, subdivision 3.
95.15     (c) The employer contribution is an amount equal to six percent of salary.
95.16     (d) For members of the legislature, the contributions under this subdivision also must
95.17be made on per diem payments received during a regular or special legislative session, but
95.18may not be made on per diem payments received outside of a regular or special legislative
95.19session, on the additional compensation attributable to a leadership position under section
95.203.099 , subdivision 3, living expense payments under section 3.101, or special session
95.21living expense payments under section 3.103.
95.22    (e) For a judge who is a member of the unclassified plan under section 352D.02,
95.23subdivision 1, paragraph (c), clause (16), the employee contribution rate is eight percent
95.24of salary, and there is no employer contribution.
95.25(f) These contributions must be made in the manner provided in section 352.04,
95.26subdivisions 4, 5, and 6.
95.27EFFECTIVE DATE.This section is effective the first day of the first full pay
95.28period beginning after July 1, 2010.

95.29    Sec. 14. Minnesota Statutes 2008, section 352D.05, subdivision 3, is amended to read:
95.30    Subd. 3. Full or partial withdrawal. After termination of covered employment
95.31or at any time thereafter, a participant is entitled, upon application, to withdraw the cash
95.32value of the participant's total shares or leave such shares on deposit with the supplemental
95.33retirement fund. The account is valued at the end of the month in which most recent
96.1United States investment market day following receipt of the application for withdrawal is
96.2made. Shares not withdrawn remain on deposit with the supplemental retirement fund
96.3until the former participant becomes at least 55 years old, and applies for an annuity under
96.4section 352D.06, subdivision 1.
96.5EFFECTIVE DATE.This section is effective July 1, 2010.

96.6    Sec. 15. Minnesota Statutes 2008, section 352D.05, subdivision 4, is amended to read:
96.7    Subd. 4. Repayment of refund. (a) A participant in the unclassified program may
96.8repay regular refunds taken under section 352.22, as provided in section 352.23.
96.9(b) A participant in the unclassified program or an employee covered by the general
96.10employees retirement plan who has withdrawn the value of the total shares may repay
96.11the refund taken and thereupon restore the service credit, rights and benefits forfeited by
96.12paying into the fund the amount refunded plus interest at an annual rate of 8.5 percent
96.13compounded annually from the date that the refund was taken until the date that the refund
96.14is repaid. If the participant had withdrawn only the employee shares as permitted under
96.15prior laws, repayment must be pro rata.
96.16(c) Except as provided in section 356.441, the repayment of a refund under this
96.17section must be made in a lump sum.
96.18EFFECTIVE DATE.This section is effective June 30, 2010.

96.19    Sec. 16. Minnesota Statutes 2008, section 352D.06, subdivision 3, is amended to read:
96.20    Subd. 3. Accrual date. An annuity under this section accrues the first day of the
96.21first full month after an application is received or the day following termination of state
96.22service, whichever is later. The account must be valued and redeemed on the later of the
96.23end of the month of termination of covered employment, or the end of the month of receipt
96.24of the annuity application for the purpose of computing the annuity day following receipt
96.25of the application or the day following termination, whichever is later. The benefit must be
96.26based on the value of the account the day following receipt of the application or the date of
96.27termination, whichever is later, plus any contributions and interest received after that date.
96.28EFFECTIVE DATE.This section is effective July 1, 2010.

96.29    Sec. 17. Minnesota Statutes 2008, section 352D.065, subdivision 3, is amended to read:
96.30    Subd. 3. Annuity payment. The annuity payable under this section shall begin
96.31begins to accrue the first day of the month following the date of disability receipt of the
96.32application or the day after termination, whichever is later, plus any contributions and
97.1interest received after that date, and shall must be based on the participant's age when the
97.2annuity begins to accrue. The shares shall must be valued as of the end of the month
97.3following authorization of payments day on which the benefit accrues.
97.4EFFECTIVE DATE.This section is effective July 1, 2010.

97.5    Sec. 18. Minnesota Statutes 2008, section 352D.09, subdivision 3, is amended to read:
97.6    Subd. 3. Prospectus. (a) The executive director shall annually distribute make
97.7available by electronic means to each participant the prospectus prepared by the
97.8supplemental fund, by July 1 or when received from such fund, whichever is later, to
97.9each participant in covered employment.
97.10(b) Any participant may contact the Minnesota State Retirement System and request
97.11a copy of the prospectus.
97.12EFFECTIVE DATE.This section is effective July 1, 2010.

97.13    Sec. 19. Minnesota Statutes 2008, section 352D.09, subdivision 7, is amended to read:
97.14    Subd. 7. Administrative fees. The board of directors shall establish a budget and
97.15charge participants a reasonable fee to pay the administrative expenses of the unclassified
97.16program. Fees cannot may not be charged on contributions and investment returns
97.17attributable to contributions made before July 1, 1992. Annual total fees charged for plan
97.18administration cannot exceed 10/100 of one percent of the contributions and investment
97.19returns attributable to contributions made on or after July 1, 1992.
97.20EFFECTIVE DATE.This section is effective July 1, 2010.

97.21ARTICLE 5
97.22PUBLIC EMPLOYEES RETIREMENT ASSOCIATION
97.23ADMINISTRATIVE PROVISIONS

97.24    Section 1. Minnesota Statutes 2009 Supplement, section 353.01, subdivision 2, is
97.25amended to read:
97.26    Subd. 2. Public employee. "Public employee" means a governmental employee
97.27or a public officer performing personal services for a governmental subdivision defined
97.28in subdivision 6, whose salary is paid, in whole or in part, from revenue derived from
97.29taxation, fees, assessments, or from other sources. For purposes of membership in the
97.30association, the term includes the classes of persons described or listed in subdivision
97.312a and excludes the classes of persons listed in subdivision 2b. The term also includes
98.1persons who elect association membership under subdivision 2d, paragraph (a), and
98.2persons for whom the applicable governmental subdivision had elected association
98.3membership under subdivision 2d, paragraph (b). The term excludes the classes of persons
98.4listed in subdivision 2b for purposes of membership in the association.
98.5EFFECTIVE DATE.This section is effective July 1, 2010.

98.6    Sec. 2. Minnesota Statutes 2009 Supplement, section 353.01, subdivision 2a, is
98.7amended to read:
98.8    Subd. 2a. Included employees; mandatory membership. (a) Public employees
98.9whose salary from employment in one or more positions within one governmental
98.10subdivision exceeds $425 in any month shall participate as members of the association.
98.11If the salary is less than $425 in a subsequent month, the employee retains membership
98.12eligibility. Eligible Public employees shall whose salary exceeds $425 in any month and
98.13who are not specifically excluded under subdivision 2b or who have not been provided
98.14an option to participate under subdivision 2d, whether individually or by action of the
98.15governmental subdivision, must participate as members of the association with retirement
98.16coverage by the public employees retirement plan or the public employees police and
98.17fire retirement plan under this chapter, or the local government correctional employees
98.18retirement plan under chapter 353E, whichever applies,. Membership commences as a
98.19condition of their employment on the first day of their employment unless they or on the
98.20first day that the eligibility criteria are met, whichever is later. Public employees include
98.21but are not limited to:
98.22    (1) are specifically excluded under subdivision 2b;
98.23    (2) do not exercise their option to elect retirement coverage in the association as
98.24provided in subdivision 2d, paragraph (a); or
98.25    (3) are employees of the governmental subdivisions listed in subdivision 2d,
98.26paragraph (b), where the governmental subdivision has not elected to participate as a
98.27governmental subdivision covered by the association.
98.28(1) persons whose salary meets the threshold in this paragraph from employment in
98.29one or more positions within one governmental subdivision;
98.30(2) elected county sheriffs;
98.31(3) persons who are appointed, employed, or contracted to perform governmental
98.32functions that by law or local ordinance are required of a public officer, including, but
98.33not limited to:
98.34(i) town and city clerk or treasurer;
98.35(ii) county auditor, treasurer, or recorder;
99.1(iii) city manager as defined in section 353.028 who does not exercise the option
99.2provided under subdivision 2d; or
99.3(iv) emergency management director, as provided under section 12.25;
99.4(4) physicians under section 353D.01, subdivision 2, who do not elect public
99.5employees defined contribution plan coverage under section 353D.02, subdivision 2;
99.6(5) full-time employees of the Dakota County Agricultural Society; and
99.7(6) employees of the Minneapolis Firefighters Relief Association or Minneapolis
99.8Police Relief Association who are not excluded employees under subdivision 2b due
99.9to coverage by the relief association pension plan and who elected general employee
99.10retirement plan coverage before August 20, 2009.
99.11    (b) A public employee or elected official who was a member of the association on
99.12June 30, 2002, based on employment that qualified for membership coverage by the public
99.13employees retirement plan or the public employees police and fire plan under this chapter,
99.14or the local government correctional employees retirement plan under chapter 353E as of
99.15June 30, 2002, retains that membership for the duration of the person's employment in that
99.16position or incumbency in elected office. Except as provided in subdivision 28, the person
99.17shall participate as a member until the employee or elected official terminates public
99.18employment under subdivision 11a or terminates membership under subdivision 11b.
99.19    (c) Public employees under paragraph (a) include:
99.20(1) physicians under section 353D.01, subdivision 2, who do not elect public
99.21employees defined contribution plan coverage under section 353D.02, subdivision 2;
99.22(2) full-time employees of the Dakota County Agricultural Society; and
99.23(3) employees of the Minneapolis Firefighters Relief Association or Minneapolis
99.24Police Relief Association who are not excluded employees under subdivision 2b due to
99.25coverage by the relief association pension plan and who elect Public Employee Retirement
99.26Association general plan coverage under Laws 2009, chapter 169, article 12, section 10.
99.27(c) If the salary of an included public employee is less than $425 in any subsequent
99.28month, the member retains membership eligibility.
99.29EFFECTIVE DATE.This section is effective July 1, 2010, except that the
99.30amendment to paragraph (a), clause (3), applies to any person first appointed, elected, or
99.31contracted after June 30, 2010.

99.32    Sec. 3. Minnesota Statutes 2008, section 353.01, subdivision 2b, is amended to read:
99.33    Subd. 2b. Excluded employees. (a) The following public employees are not eligible
99.34to participate as members of the association with retirement coverage by the public general
100.1employees retirement plan, the local government correctional employees retirement plan
100.2under chapter 353E, or the public employees police and fire retirement plan:
100.3    (1) persons whose salary from one governmental subdivision never exceeds $425 in
100.4a month;
100.5(2) public officers, other than county sheriffs, who are elected to a governing body,
100.6city mayors, or persons who are appointed to fill a vacancy in an elective office of a
100.7governing body, whose term of office commences on or after July 1, 2002, for the service
100.8to be rendered in that elective position;
100.9    (2) (3) election officers or election judges;
100.10    (3) (4) patient and inmate personnel who perform services for a governmental
100.11subdivision;
100.12    (4) (5) except as otherwise specified in subdivision 12a, employees who are hired
100.13for a temporary position as defined under subdivision 12a, and employees who resign
100.14from a nontemporary position and accept a temporary position within 30 days in the
100.15same governmental subdivision;
100.16    (5) (6) employees who are employed by reason of work emergency caused by fire,
100.17flood, storm, or similar disaster;
100.18    (6) (7) employees who by virtue of their employment in one governmental
100.19subdivision are required by law to be a member of and to contribute to any of the plans or
100.20funds administered by the Minnesota State Retirement System, the Teachers Retirement
100.21Association, the Duluth Teachers Retirement Fund Association, the St. Paul Teachers
100.22Retirement Fund Association, the Minneapolis Employees Retirement Fund, or any police
100.23or firefighters relief association governed by section 69.77 that has not consolidated
100.24with the Public Employees Retirement Association, or any local police or firefighters
100.25consolidation account who have not elected the type of benefit coverage provided by the
100.26public employees police and fire fund under sections 353A.01 to 353A.10, or any persons
100.27covered by section 353.665, subdivision 4, 5, or 6, who have not elected public employees
100.28police and fire plan benefit coverage. This clause must not be construed to prevent a person
100.29from being a member of and contributing to the Public Employees Retirement Association
100.30and also belonging to and contributing to another public pension plan or fund for other
100.31service occurring during the same period of time. A person who meets the definition of
100.32"public employee" in subdivision 2 by virtue of other service occurring during the same
100.33period of time becomes a member of the association unless contributions are made to
100.34another public retirement fund on the salary based on the other service or to the Teachers
100.35Retirement Association by a teacher as defined in section 354.05, subdivision 2;
101.1    (7) (8) persons who are members of a religious order and are excluded from coverage
101.2under the federal Old Age, Survivors, Disability, and Health Insurance Program for the
101.3performance of service as specified in United States Code, title 42, section 410(a)(8)(A),
101.4as amended through January 1, 1987, if no irrevocable election of coverage has been made
101.5under section 3121(r) of the Internal Revenue Code of 1954, as amended;
101.6    (8) (9) employees of a governmental subdivision who have not reached the age of
101.723 and are enrolled on a full-time basis to attend or are attending classes on a full-time
101.8basis at an accredited school, college, or university in an undergraduate, graduate, or
101.9professional-technical program, or a public or charter high school;
101.10    (9) (10) resident physicians, medical interns, and pharmacist residents and
101.11pharmacist interns who are serving in a degree or residency program in public hospitals
101.12or clinics;
101.13    (10) (11) students who are serving in an internship or residency program sponsored
101.14by an accredited educational institution;
101.15    (11) (12) persons who hold a part-time adult supplementary technical college license
101.16who render part-time teaching service in a technical college;
101.17    (12) (13) except for employees of Hennepin County or Hennepin Healthcare System,
101.18Inc., foreign citizens working for who are employed by a governmental subdivision with
101.19under a work permit of less than three years, or an H-1b visa valid initially issued or
101.20extended for a combined period less than three years of employment. Upon notice to the
101.21association that the work permit or visa extends extension of the employment beyond the
101.22three-year period, the foreign citizens must be reported for membership from the date of
101.23the extension beginning the first of the month thereafter provided the monthly earnings
101.24threshold as provided under subdivision 2a is met;
101.25    (13) (14) public hospital employees who elected not to participate as members
101.26of the association before 1972 and who did not elect to participate from July 1, 1988,
101.27to October 1, 1988;
101.28    (14) (15) except as provided in section 353.86, volunteer ambulance service
101.29personnel, as defined in subdivision 35, but persons who serve as volunteer ambulance
101.30service personnel may still qualify as public employees under subdivision 2 and may be
101.31members of the Public Employees Retirement Association and participants in the public
101.32general employees retirement fund plan or the public employees police and fire fund plan,
101.33whichever applies, on the basis of compensation received from public employment service
101.34other than service as volunteer ambulance service personnel;
101.35    (15) (16) except as provided in section 353.87, volunteer firefighters, as defined
101.36in subdivision 36, engaging in activities undertaken as part of volunteer firefighter
102.1duties; provided that, but a person who is a volunteer firefighter may still qualify as a
102.2public employee under subdivision 2 and may be a member of the Public Employees
102.3Retirement Association and a participant in the public general employees retirement
102.4fund plan or the public employees police and fire fund plan, whichever applies, on the
102.5basis of compensation received from public employment activities other than those as a
102.6volunteer firefighter;
102.7    (16) (17) pipefitters and associated trades personnel employed by Independent
102.8School District No. 625, St. Paul, with coverage under a collective bargaining agreement
102.9by the pipefitters local 455 pension plan who were either first employed after May 1,
102.101997, or, if first employed before May 2, 1997, elected to be excluded under Laws 1997,
102.11chapter 241, article 2, section 12;
102.12    (17) (18) electrical workers, plumbers, carpenters, and associated trades personnel
102.13who are employed by Independent School District No. 625, St. Paul, or the city of St.
102.14Paul, who have retirement coverage under a collective bargaining agreement by the
102.15Electrical Workers Local 110 pension plan, the United Association Plumbers Local 34
102.16pension plan, or the pension plan applicable to Carpenters Local 87 pension plan who
102.17were either first employed after May 1, 2000, or, if first employed before May 2, 2000,
102.18elected to be excluded under Laws 2000, chapter 461, article 7, section 5;
102.19    (18) (19) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers,
102.20painters, allied tradesworkers, and plasterers who are employed by the city of St. Paul
102.21or Independent School District No. 625, St. Paul, with coverage under a collective
102.22bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan,
102.23the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324
102.24pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities
102.25Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if
102.26first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special
102.27Session chapter 10, article 10, section 6;
102.28    (19) (20) plumbers who are employed by the Metropolitan Airports Commission,
102.29with coverage under a collective bargaining agreement by the Plumbers Local 34 pension
102.30plan, who either were first employed after May 1, 2001, or if first employed before May 2,
102.312001, elected to be excluded under Laws 2001, First Special Session chapter 10, article
102.3210, section 6;
102.33    (20) (21) employees who are hired after June 30, 2002, to fill seasonal positions
102.34under subdivision 12b which are limited in duration by the employer to 185 consecutive
102.35calendar days or less in each year of employment with the governmental subdivision;
103.1    (21) (22) persons who are provided supported employment or work-study positions
103.2by a governmental subdivision and who participate in an employment or industries
103.3program maintained for the benefit of these persons where the governmental subdivision
103.4limits the position's duration to three years or less, including persons participating in a
103.5federal or state subsidized on-the-job training, work experience, senior citizen, youth, or
103.6unemployment relief program where the training or work experience is not provided as a
103.7part of, or for, future permanent public employment;
103.8    (22) (23) independent contractors and the employees of independent contractors; and
103.9    (23) (24) reemployed annuitants of the association during the course of that
103.10reemployment.; and
103.11(25) persons appointed to serve on a board or commission of a governmental
103.12subdivision or an instrumentality thereof.
103.13(b) Any person performing the duties of a public officer in a position defined in
103.14subdivision 2a, paragraph (a), clause (3), is not an independent contractor and is not an
103.15employee of an independent contractor.
103.16EFFECTIVE DATE.This section is effective July 1, 2010, except that clause (25)
103.17is effective for persons first appointed after June 30, 2010.

103.18    Sec. 4. Minnesota Statutes 2008, section 353.01, subdivision 2d, is amended to read:
103.19    Subd. 2d. Optional membership. (a) Membership in the association is optional
103.20by action of the individual employee for the following public employees who meet the
103.21conditions set forth in subdivision 2a:
103.22(1) members of the coordinated plan who are also employees of labor organizations
103.23as defined in section 353.017, subdivision 1, for their employment by the labor
103.24organization only, if they elect to have membership under section 353.017, subdivision 2;
103.25(2) persons who are elected or persons who are appointed to elected positions other
103.26than local governing body elected positions who elect to participate by filing a written
103.27election for membership;
103.28(3) members of the association who are appointed by the governor to be a state
103.29department head and who elect not to be covered by the general state employees retirement
103.30plan of the Minnesota State Retirement System under section 352.021;
103.31(4) city managers as defined in section 353.028, subdivision 1, who do not elect to be
103.32excluded from membership in the association under section 353.028, subdivision 2; and
103.33(5) employees of the Port Authority of the city of St. Paul on January 1, 2003,
103.34who were at least age 45 on that date, and who elected to participate by filing a written
103.35election for membership.
104.1(b) Membership in the association is optional by action of the governmental
104.2subdivision for the employees of the following governmental subdivisions under the
104.3conditions specified:
104.4(1) the Minnesota Association of Townships if the board of that association, at its
104.5option, certifies to the executive director that its employees who meet the conditions set
104.6forth in subdivision 2a are to be included for purposes of retirement coverage, in which
104.7case the status of the association as a participating employer is permanent;
104.8(2) a county historical society if the county in which the historical society is located,
104.9at its option, certifies to the executive director that the employees of the historical society
104.10who meet the conditions set forth in subdivision 2a are to be considered county employees
104.11for purposes of retirement coverage under this chapter. The status as a county employee
104.12must be accorded to all similarly situated county historical society employees and, once
104.13established, must continue as long as a person is an employee of the county historical
104.14society; and
104.15(3) Hennepin Healthcare System, Inc., a public corporation, with respect to
104.16employees other than paramedics, emergency medical technicians, and protection officers,
104.17if the corporate board establishes alternative retirement plans for certain classes of
104.18employees of the corporation and certifies to the association the applicable employees to
104.19be excluded from future retirement coverage.
104.20(c) For employees who are covered by paragraph (a), clause (1), (2), or (3), or
104.21covered by paragraph (b), clause (1) or (2), if the necessary membership election is
104.22not made, the employee is excluded from retirement coverage under this chapter. For
104.23employees who are covered by paragraph (a), clause (4), if the necessary election is not
104.24made, the employee must become a member and have retirement coverage under the
104.25applicable provisions of this chapter. For employees specified in paragraph (b), clause
104.26(3), membership continues until the exclusion option is exercised for the designated class
104.27of employee.
104.28(d) The option to become a member, once exercised under this subdivision, may not
104.29be withdrawn until the termination of public service as defined under subdivision 11a.
104.30EFFECTIVE DATE.This section is effective July 1, 2010.

104.31    Sec. 5. Minnesota Statutes 2009 Supplement, section 353.01, subdivision 16, is
104.32amended to read:
104.33    Subd. 16. Allowable service; limits and computation. (a) "Allowable service"
104.34means:
105.1    (1) service during years of actual membership in the course of which employee
105.2deductions were withheld from salary and contributions were made at the applicable rates
105.3under section 353.27, 353.65, or 353E.03;
105.4(2) periods of service covered by payments in lieu of salary deductions under
105.5sections 353.27, subdivision 12, and 353.35;
105.6    (3) service in years during which the public employee was not a member but for
105.7which the member later elected, while a member, to obtain credit by making payments to
105.8the fund as permitted by any law then in effect;
105.9    (4) a period of authorized leave of absence with pay from which deductions for
105.10employee contributions are made, deposited, and credited to the fund;
105.11    (5) a period of authorized personal, parental, or medical leave of absence without
105.12pay, including a leave of absence covered under the federal Family Medical Leave Act,
105.13that does not exceed one year, and for which a member obtained service credit for each
105.14month in the leave period by payment under section 353.0161 to the fund made in place of
105.15salary deductions. An employee must return to public service and render a minimum of
105.16three months of allowable service in order to be eligible to make payment under section
105.17353.0161 for a subsequent authorized leave of absence without pay. Upon payment, the
105.18employee must be granted allowable service credit for the purchased period;
105.19    (6) a periodic, repetitive leave that is offered to all employees of a governmental
105.20subdivision. The leave program may not exceed 208 hours per annual normal work cycle
105.21as certified to the association by the employer. A participating member obtains service
105.22credit by making employee contributions in an amount or amounts based on the member's
105.23average salary, excluding overtime pay, that would have been paid if the leave had not
105.24been taken. The employer shall pay the employer and additional employer contributions
105.25on behalf of the participating member. The employee and the employer are responsible
105.26to pay interest on their respective shares at the rate of 8.5 percent a year, compounded
105.27annually, from the end of the normal cycle until full payment is made. An employer shall
105.28also make the employer and additional employer contributions, plus 8.5 percent interest,
105.29compounded annually, on behalf of an employee who makes employee contributions but
105.30terminates public service. The employee contributions must be made within one year
105.31after the end of the annual normal working cycle or within 30 days after termination of
105.32public service, whichever is sooner. The executive director shall prescribe the manner and
105.33forms to be used by a governmental subdivision in administering a periodic, repetitive
105.34leave. Upon payment, the member must be granted allowable service credit for the
105.35purchased period;
106.1    (7) an authorized temporary or seasonal layoff under subdivision 12, limited to three
106.2months allowable service per authorized temporary or seasonal layoff in one calendar year.
106.3An employee who has received the maximum service credit allowed for an authorized
106.4temporary or seasonal layoff must return to public service and must obtain a minimum of
106.5three months of allowable service subsequent to the layoff in order to receive allowable
106.6service for a subsequent authorized temporary or seasonal layoff;
106.7    (8) a period during which a member is absent from employment by a governmental
106.8subdivision by reason of service in the uniformed services, as defined in United States
106.9Code, title 38, section 4303(13), if the member returns to public service with the same
106.10governmental subdivision upon discharge from service in the uniformed service within the
106.11time frames required under United States Code, title 38, section 4312(e), provided that
106.12the member did not separate from uniformed service with a dishonorable or bad conduct
106.13discharge or under other than honorable conditions. The service is must be credited if the
106.14member pays into the fund equivalent employee contributions based upon the contribution
106.15rate or rates in effect at the time that the uniformed service was performed multiplied
106.16by the full and fractional years being purchased and applied to the annual salary rate.
106.17The annual salary rate is the average annual salary, excluding overtime pay, during the
106.18purchase period that the member would have received if the member had continued to
106.19be employed in covered employment rather than to provide uniformed service, or, if
106.20the determination of that rate is not reasonably certain, the annual salary rate is the
106.21member's average salary rate, excluding overtime pay, during the 12-month period of
106.22covered employment rendered immediately preceding the period of the uniformed service.
106.23Payment of the member equivalent contributions must be made during a period that begins
106.24with the date on which the individual returns to public employment and that is three times
106.25the length of the military leave period, or within five years of the date of discharge from
106.26the military service, whichever is less. If the determined payment period is less than
106.27one year, the contributions required under this clause to receive service credit may be
106.28made within one year of the discharge date. Payment may not be accepted following 30
106.29days after termination of public service under subdivision 11a. If the member equivalent
106.30contributions provided for in this clause are not paid in full, the member's allowable
106.31service credit must be prorated by multiplying the full and fractional number of years of
106.32uniformed service eligible for purchase by the ratio obtained by dividing the total member
106.33contributions received by the total member contributions otherwise required under this
106.34clause. The equivalent employer contribution, and, if applicable, the equivalent additional
106.35employer contribution must be paid by the governmental subdivision employing the
106.36member if the member makes the equivalent employee contributions. The employer
107.1payments must be made from funds available to the employing unit, using the employer
107.2and additional employer contribution rate or rates in effect at the time that the uniformed
107.3service was performed, applied to the same annual salary rate or rates used to compute the
107.4equivalent member contribution. The governmental subdivision involved may appropriate
107.5money for those payments. The amount of service credit obtainable under this section may
107.6not exceed five years unless a longer purchase period is required under United States Code,
107.7title 38, section 4312. The employing unit shall pay interest on all equivalent member and
107.8employer contribution amounts payable under this clause. Interest must be computed at a
107.9rate of 8.5 percent compounded annually from the end of each fiscal year of the leave or the
107.10break in service to the end of the month in which the payment is received. Upon payment,
107.11the employee must be granted allowable service credit for the purchased period; or
107.12(9) a period specified under subdivision 40.
107.13    (b) For calculating benefits under sections 353.30, 353.31, 353.32, and 353.33 for
107.14state officers and employees displaced by the Community Corrections Act, chapter 401,
107.15and transferred into county service under section 401.04, "allowable service" means the
107.16combined years of allowable service as defined in paragraph (a), clauses (1) to (6), and
107.17section 352.01, subdivision 11.
107.18    (c) For a public employee who has prior service covered by a local police or
107.19firefighters relief association that has consolidated with the Public Employees Retirement
107.20Association or to which section 353.665 applies, and who has elected the type of benefit
107.21coverage provided by the public employees police and fire fund either under section
107.22353A.08 following the consolidation or under section 353.665, subdivision 4, "applicable
107.23service" is a period of service credited by the local police or firefighters relief association
107.24as of the effective date of the consolidation based on law and on bylaw provisions
107.25governing the relief association on the date of the initiation of the consolidation procedure.
107.26    (d) No member may receive more than 12 months of allowable service credit in a
107.27year either for vesting purposes or for benefit calculation purposes.
107.28    (e) MS 2002 [Expired]
107.29EFFECTIVE DATE.This section is effective the day following final enactment.

107.30    Sec. 6. Minnesota Statutes 2008, section 353.0161, subdivision 2, is amended to read:
107.31    Subd. 2. Purchase procedure. (a) An employee covered by a plan specified in
107.32subdivision 1 may purchase credit for allowable service in that plan for a period specified
107.33in subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c),
107.34whichever applies. The employing unit, at its option, may pay the employer portion of the
107.35amount specified in paragraph (b) on behalf of its employees.
108.1    (b) If payment is received by the executive director within one year from the date the
108.2member returned to work following the authorized leave, or within 30 days after the date
108.3of termination of public service if the member did not return to work, the payment amount
108.4is equal to the employee and employer contribution rates specified in law for the applicable
108.5plan at the end of the leave period, or at termination of public service, whichever is earlier,
108.6multiplied by the employee's average monthly salary, excluding overtime, upon which
108.7deductions were paid during the six months, or portion thereof, before the commencement
108.8of the leave of absence and by the number of months of the leave of absence for which
108.9the employee wants allowable service credit. Payments made under this paragraph must
108.10include compound interest at a monthly rate of 0.71 percent from the last day of the leave
108.11period until the last day of the month in which payment is received.
108.12    (c) If payment is received by the executive director after one year, the payment
108.13amount is the amount determined under section 356.551. Payment under this paragraph
108.14must be made before the date the person terminates public service under section 353.01,
108.15subdivision 11a.
108.16EFFECTIVE DATE.This section is effective the day following final enactment.

108.17    Sec. 7. [353.0162] REDUCED SALARY PERIODS SALARY CREDIT
108.18PURCHASE.
108.19(a) A member may purchase additional salary credit for a period specified in this
108.20section.
108.21(b) The applicable period is a period during which the member is receiving a reduced
108.22salary from the employer while the member is:
108.23(1) receiving temporary workers' compensation payments related to the member's
108.24service to the public employer;
108.25(2) on an authorized medical leave of absence; or
108.26(3) on an authorized partial paid leave of absence as a result of a budgetary or salary
108.27savings program offered or mandated by a governmental subdivision.
108.28(c) The differential salary amount is the difference between the average monthly
108.29salary received by the member during the period of reduced salary under this section and
108.30the average monthly salary of the member, excluding overtime, on which contributions
108.31to the applicable plan were made during the period of the last six months of covered
108.32employment occurring immediately before the period of reduced salary, applied to the
108.33member's normal employment period, measured in hours or otherwise, as applicable.
108.34(d) To receive eligible salary credit, the member shall pay an amount equal to:
109.1(1) the applicable employee contribution rate under section 353.27, subdivision
109.22
; 353.65, subdivision 2; or 353E.03, subdivision 1, as applicable, multiplied by the
109.3differential salary amount;
109.4(2) plus an employer equivalent payment equal to the applicable employer
109.5contribution rate in section 353.27, subdivision 3; 353.65, subdivision 3; or 353E.03,
109.6subdivision 2
, as applicable, multiplied by the differential salary amount;
109.7(3) plus, if applicable, an equivalent employer additional amount equal to the
109.8additional employer contribution rate in section 353.27, subdivision 3a, multiplied by the
109.9differential salary amount.
109.10(e) The employer, by appropriate action of its governing body and documented in its
109.11official records, may pay the employer equivalent contributions and, as applicable, the
109.12equivalent employer additional contributions on behalf of the member.
109.13(f) Payment under this section must include interest on the contribution amount
109.14or amounts, whichever applies, at an 8.5 percent annual rate, prorated for applicable
109.15months from the date on which the period of reduced salary specified under this section
109.16terminates to the date on which the payment or payments are received by the executive
109.17director. Payment under this section must be completed within the earlier of 30 days from
109.18termination of public service by the employee under section 353.01, subdivision 11a, or
109.19one year after the termination of the period specified in paragraph (b), as further restricted
109.20under this section.
109.21(g) The period for which additional allowable salary credit may be purchased is
109.22limited to the period during which the person receives temporary workers' compensation
109.23payments or for those business years in which the governmental subdivision offers or
109.24mandates a budget or salary savings program, as certified to the executive director by a
109.25resolution of the governing body of the governmental subdivision. For an authorized
109.26medical leave of absence, the period for which allowable salary credit may be purchased
109.27may not exceed 12 consecutive months of authorized medical leave.
109.28(h) To purchase salary credit for a subsequent period of temporary workers'
109.29compensation benefits or subsequent authorized medical leave of absence, the member
109.30must return to public service and render a minimum of three months of allowable service.
109.31EFFECTIVE DATE.This section is effective July 1, 2010. Purchase of reduced
109.32salary credit may be made for a period mandated or offered by a governmental subdivision
109.33for purposes of budget or salary savings on or after July 1, 2009.

109.34    Sec. 8. Minnesota Statutes 2008, section 353.03, subdivision 1, is amended to read:
110.1    Subdivision 1. Management; composition; election. (a) The management of the
110.2public employees retirement fund is vested in an 11-member board of trustees consisting
110.3of ten members and the state auditor. The state auditor may designate a deputy auditor
110.4with expertise in pension matters as the auditor's representative on the board. The
110.5governor shall appoint five trustees to four-year terms, one of whom shall be designated to
110.6represent school boards, one to represent cities, one to represent counties, one who is a
110.7retired annuitant, and one who is a public member knowledgeable in pension matters. The
110.8membership of the association, including recipients of retirement annuities and disability
110.9and survivor benefits, shall elect five trustees for terms of four years, one of whom must
110.10be a member of the police and fire fund and one of whom must be a former member who
110.11met the definition of public employee under section 353.01, subdivisions 2 and 2a, for at
110.12least five years prior to terminating membership and who is receiving a retirement annuity
110.13or a member who receives a disability benefit. Terms expire on January 31 of the fourth
110.14year, and positions are vacant until newly elected members are seated. Except as provided
110.15in this subdivision, trustees elected by the membership of the association must be public
110.16employees and members of the association.
110.17(b) For seven days beginning October 1 of each year preceding a year in which
110.18an election is held, the association shall accept at its office filings in person or by mail
110.19of candidates for the board of trustees. A candidate shall submit at the time of filing a
110.20nominating petition signed by 25 or more members of the association. No name may
110.21be withdrawn from nomination by the nominee after October 15. At the request of a
110.22candidate for an elected position on the board of trustees, the board shall mail provide
110.23a statement of up to 300 words prepared by the candidate to all persons eligible to vote
110.24in the election of the candidate. The board may adopt policies, subject to review and
110.25approval by the secretary of state under paragraph (e), and procedures to govern the form
110.26and length of these statements, and the timing of mailings, and deadlines for submitting
110.27materials to be mailed. The secretary of state shall resolve disputes between the board and
110.28a candidate concerning application of these policies to a particular statement distributed to
110.29the eligible voters.
110.30(c) By January 10 of each year in which elections are to be held, the board shall
110.31distribute by mail to the members ballots listing eligible voters the instructions and
110.32materials necessary to vote for the candidates seeking terms on the board of trustees.
110.33Eligible voters are the members, retirees, and other benefit recipients. No member voter
110.34may vote for more than one candidate for each board position to be filled. A ballot
110.35indicating a vote for more than one person for any position is void. No special marking
110.36may be used on the ballot to indicate incumbents. Ballots Votes cast by using paper ballots
111.1mailed to the association must be postmarked no later than January 31. Votes cast by using
111.2telephone or other electronic means authorized under the board's procedures must be
111.3entered by the end of the day on January 31. The ballot envelopes must be so designated
111.4and the ballots must be counted in a manner that ensures design of the voting response
111.5media must ensure that each voter's vote is secret.
111.6(d) A candidate who receives contributions or, who makes expenditures in excess
111.7of $100, or who has given implicit or explicit consent for any other person to receive
111.8contributions or make expenditures in excess of $100 for the purpose of bringing about the
111.9candidate's election, shall file a report with the campaign finance and public disclosure
111.10board disclosing the source and amount of all contributions to the candidate's campaign.
111.11The campaign finance and public disclosure board shall prescribe forms governing these
111.12disclosures. Expenditures and contributions have the meaning defined in section 10A.01.
111.13These terms do not include the mailing any distribution made by the association board on
111.14behalf of the candidate. A candidate shall file a report within 30 days from the day that the
111.15results of the election are announced. The Campaign Finance and Public Disclosure Board
111.16shall maintain these reports and make them available for public inspection in the same
111.17manner as the board maintains and makes available other reports filed with it.
111.18(e) The secretary of state shall review and approve comment on the procedures
111.19defined by the board of trustees for conducting the elections specified in this subdivision,
111.20including board policies adopted under paragraph (b).
111.21(f) The board of trustees and the executive director shall undertake their activities
111.22consistent with chapter 356A.
111.23EFFECTIVE DATE.This section is effective the day following final enactment.

111.24    Sec. 9. Minnesota Statutes 2008, section 353.27, subdivision 4, is amended to read:
111.25    Subd. 4. Employer reporting requirements; contributions; member status.
111.26(a) A representative authorized by the head of each department shall deduct employee
111.27contributions from the salary of each public employee who qualifies for membership
111.28under this chapter and or chapter 353D or 353E at the rate under section 353.27, 353.65,
111.29353D.03, or 353E.03, whichever is applicable, that is in effect on the date the salary is
111.30paid. The employer representative must also remit payment in a manner prescribed by
111.31the executive director for the aggregate amount of the employee contributions, and the
111.32required employer contributions and the additional employer contributions to be received
111.33by the association within 14 calendar days after each pay date. If the payment is less than
111.34the amount required, the employer must pay the shortage amount to the association and
111.35collect reimbursement of any employee contribution shortage paid on behalf of a member
112.1through subsequent payroll withholdings from the wages of the employee. Payment of
112.2shortages in employee contributions and associated employer contributions, if applicable,
112.3must include interest at the rate specified in section 353.28, subdivision 5, if not received
112.4within 30 days following the date the amount was initially due under this section.
112.5(b) The head of each department or the person's designee shall submit for each pay
112.6period submit to the association a salary deduction report in the format prescribed by the
112.7executive director. The report must be received by the association within 14 calendar days
112.8after each pay date or the employer may be assessed a fine of $5 per calendar day until
112.9the association receives the required data. Data required to be submitted as part of salary
112.10deduction reporting must include, but are not limited to:
112.11(1) the legal names and Social Security numbers of employees who are members;
112.12(2) the amount of each employee's salary deduction;
112.13(3) the amount of salary defined in section 353.01, subdivision 10, earned in the
112.14pay period from which each deduction was made and the salary amount earned by a
112.15reemployed annuitant under section 353.37, subdivision 1, or 353.371, subdivision 1, or
112.16by a disabled member under section 353.33, subdivision 7 or 7a;
112.17(4) the beginning and ending dates of the payroll period covered and the date of
112.18actual payment; and
112.19(5) adjustments or corrections covering past pay periods as authorized by the
112.20executive director.
112.21(b) (c) Employers must furnish the data required for enrollment for each new
112.22or reinstated employee who qualifies for membership in the format prescribed by the
112.23executive director. The required enrollment data on new employees members must be
112.24submitted to the association prior to or concurrent with the submission of the initial
112.25employee salary deduction. Also, the employer shall also report to the association all
112.26member employment status changes, such as leaves of absence, terminations, and death,
112.27and shall report the effective dates of those changes, on an ongoing basis for the payroll
112.28cycle in which they occur. If an employer fails to comply with the reporting requirements
112.29under this paragraph, the executive director may assess a fine of $25 for each failure if the
112.30association staff has notified the employer of the noncompliance and attempted to obtain
112.31the missing data or form from the employer for a period of more than three months.
112.32(d) The employer shall furnish data, forms, and reports as may be required by
112.33the executive director for proper administration of the retirement system. Before
112.34implementing new or different computerized reporting requirements, the executive
112.35director shall give appropriate advance notice to governmental subdivisions to allow time
112.36for system modifications.
113.1(c) (e) Notwithstanding paragraph (a), the association may provide for less frequent
113.2reporting and payments for small employers.
113.3(f) The executive director may establish reporting procedures and methods as
113.4required to review compliance by employers with the salary and contribution reporting
113.5requirements in this chapter. A review of the payroll records of a participating employer
113.6may be conducted by the association on a periodic basis or as a result of concerns known
113.7to exist within a governmental subdivision. An employer under review must extract
113.8requested data and provide records to the association after receiving reasonable advanced
113.9notice. Failure to provide requested information or materials will result in the employer
113.10being liable to the association for any expenses associated with a field audit, which may
113.11include staff salaries, administrative expenses, and travel expenses.
113.12EFFECTIVE DATE.This section is effective the day following final enactment.

113.13    Sec. 10. Minnesota Statutes 2009 Supplement, section 353.27, subdivision 7, is
113.14amended to read:
113.15    Subd. 7. Adjustment for erroneous receipts or disbursements. (a) Except
113.16as provided in paragraph (b), erroneous employee deductions and erroneous employer
113.17contributions and additional employer contributions for a person, who otherwise does not
113.18qualify for membership under this chapter, are considered:
113.19(1) valid if the initial erroneous deduction began before January 1, 1990. Upon
113.20determination of the error by the association, the person may continue membership in the
113.21association while employed in the same position for which erroneous deductions were
113.22taken, or file a written election to terminate membership and apply for a refund upon
113.23termination of public service or defer an annuity under section 353.34; or
113.24(2) invalid, if the initial erroneous employee deduction began on or after January 1,
113.251990. Upon determination of the error, the association shall refund all erroneous employee
113.26deductions and all erroneous employer contributions as specified in paragraph (e). No
113.27person may claim a right to continued or past membership in the association based on
113.28erroneous deductions which began on or after January 1, 1990.
113.29(b) Erroneous deductions taken from the salary of a person who did not qualify for
113.30membership in the association by virtue of concurrent employment before July 1, 1978,
113.31which required contributions to another retirement fund or relief association established
113.32for the benefit of officers and employees of a governmental subdivision, are invalid. Upon
113.33discovery of the error, the association shall remove allowable service credit for all invalid
113.34service if forfeited and, upon termination of public service, the association shall refund all
113.35erroneous employee deductions to the person, with interest as determined under section
114.1353.34, subdivision 2 , and all erroneous employer contributions without interest to the
114.2employer. This paragraph has both retroactive and prospective application.
114.3(c) Adjustments to correct employer contributions and employee deductions taken
114.4in error from amounts which are not salary under section 353.01, subdivision 10, must
114.5be made as specified in paragraph (e). The period of adjustment must be limited to the
114.6fiscal year in which the error is discovered by the association and the immediate two
114.7preceding fiscal years.
114.8(d) If there is evidence of fraud or other misconduct on the part of the employee or
114.9the employer, the board of trustees may authorize adjustments to the account of a member
114.10or former member to correct erroneous employee deductions and employer contributions
114.11on invalid salary and the recovery of any overpayments for a period longer than provided
114.12for under paragraph (c).
114.13(e) Upon discovery of the receipt of erroneous employee deductions and employer
114.14contributions under paragraph (a), clause (2), or paragraph (c), the association must require
114.15the employer to discontinue the erroneous employee deductions and erroneous employer
114.16contributions reported on behalf of a member. Upon discontinuation, the association must:
114.17(1) for a member, provide a refund or credit to the employer in the amount of the
114.18invalid employee deductions with interest on the invalid employee deductions at the rate
114.19specified under section 353.34, subdivision 2, from the received date of each invalid salary
114.20transaction through the date the credit or refund is made; and the employer must pay the
114.21refunded employee deductions plus interest to the member;
114.22(2) for a former member who:
114.23(i) is not receiving a retirement annuity or benefit, return the erroneous employee
114.24deductions to the former member through a refund with interest at the rate specified under
114.25section 353.34, subdivision 2, from the received date of each invalid salary transaction
114.26through the date the credit or refund is made; or
114.27(ii) is receiving a retirement annuity or disability benefit, or a person who is
114.28receiving an optional annuity or survivor benefit, for whom it has been determined an
114.29overpayment must be recovered, adjust the payment amount and recover the overpayments
114.30as provided under this section; and
114.31(3) return the invalid employer contributions reported on behalf of a member or
114.32former member to the employer by providing a credit against future contributions payable
114.33by the employer.
114.34(f) In the event that a salary warrant or check from which a deduction for the
114.35retirement fund was taken has been canceled or the amount of the warrant or check
114.36returned to the funds of the department making the payment, a refund of the sum
115.1deducted, or any portion of it that is required to adjust the deductions, must be made
115.2to the department or institution.
115.3(g) If the accrual date of any retirement annuity, survivor benefit, or disability benefit
115.4is within the limitation period specified in paragraph (c), and an overpayment has resulted
115.5by using invalid service or salary, or due to any erroneous calculation procedure, the
115.6association must recalculate the annuity or benefit payable and recover any overpayment
115.7as provided under subdivision 7b.
115.8(h) Notwithstanding the provisions of this subdivision, the association may apply
115.9the Revenue Procedures defined in the federal Internal Revenue Service Employee Plans
115.10Compliance Resolution System and not issue a refund of erroneous employee deductions
115.11and employer contributions or not recover a small overpayment of benefits if the cost to
115.12correct the error would exceed the amount of the member refund or overpayment.
115.13(i) Any fees or penalties assessed by the federal Internal Revenue Service for any
115.14failure by an employer to follow the statutory requirements for reporting eligible members
115.15and salary must be paid by the employer.
115.16EFFECTIVE DATE.This section is effective the day following final enactment.

115.17    Sec. 11. Minnesota Statutes 2008, section 353.27, subdivision 10, is amended to read:
115.18    Subd. 10. Employer exclusion reports. (a) The head of a department shall annually
115.19furnish the executive director with an exclusion report listing only those employees in
115.20potentially PERA-eligible positions who were not reported as members of the association
115.21and who worked during the school year for school employees and calendar year for
115.22nonschool employees. The department head must certify the accuracy and completeness
115.23of the exclusion report to the association. The executive director shall prescribe the
115.24manner and forms, including standardized exclusion codes, to be used by a governmental
115.25subdivision in preparing and filing exclusion reports. Also, the executive director shall
115.26also check the exclusion report to ascertain whether any omissions have been made by a
115.27department head in the reporting of new public employees for membership. The executive
115.28director may delegate an association employee under section 353.03, subdivision 3a,
115.29paragraph (b), clause (5), to conduct a field audit to review the payroll records of a
115.30governmental subdivision.
115.31(b) If an employer fails to comply with the reporting requirements under this
115.32subdivision, the executive director may assess a fine of $25 for each failure if the
115.33association staff has notified the employer of the noncompliance and attempted to obtain
115.34the missing data or form from the employer for a period of more than three months.
116.1EFFECTIVE DATE.This section is effective the day following final enactment.

116.2    Sec. 12. Minnesota Statutes 2009 Supplement, section 353.371, subdivision 4, is
116.3amended to read:
116.4    Subd. 4. Duration. Postretirement option employment shall may be for an initial
116.5period not to exceed one year. At the end of the initial period, the governing body has sole
116.6discretion to determine if the offer of a postretirement option position will be renewed,
116.7renewed with modifications, or terminated. Postretirement option employment may be
116.8renewed annually, but may not be renewed after the individual attains retirement age as
116.9defined in United States Code, title 42, section 416(l) no more than four renewals may
116.10occur.
116.11EFFECTIVE DATE.This section is effective the day following final enactment.

116.12    Sec. 13. Minnesota Statutes 2008, section 353D.01, subdivision 2, is amended to read:
116.13    Subd. 2. Eligibility. (a) Eligibility to participate in the defined contribution plan
116.14is available to:
116.15(1) elected local government officials of a governmental subdivision who elect to
116.16participate in the plan under section 353D.02, subdivision 1, and who, for the elected
116.17service rendered to a governmental subdivision, are not members of the Public Employees
116.18Retirement Association within the meaning of section 353.01, subdivision 7;
116.19(2) physicians who, if they did not elect to participate in the plan under section
116.20353D.02, subdivision 2 , would meet the definition of member under section 353.01,
116.21subdivision 7
;
116.22(3) basic and advanced life-support emergency medical service personnel who
116.23are employed by any public ambulance service that elects to participate under section
116.24353D.02, subdivision 3 ;
116.25(4) members of a municipal rescue squad associated with the city of Litchfield
116.26in Meeker County, or of a county rescue squad associated with Kandiyohi County, if
116.27an independent nonprofit rescue squad corporation, incorporated under chapter 317A,
116.28performing emergency management services, and if not affiliated with a fire department
116.29or ambulance service and if its members are not eligible for membership in that fire
116.30department's or ambulance service's relief association or comparable pension plan;
116.31(5) employees of the Port Authority of the city of St. Paul who elect to participate in
116.32the plan under section 353D.02, subdivision 5, and who are not members of the Public
116.33Employees Retirement Association under section 353.01, subdivision 7;
117.1(6) city managers who elected to be excluded from the general employees retirement
117.2plan of the Public Employees Retirement Association under section 353.028 and who
117.3elected to participate in the public employees defined contribution plan under section
117.4353.028 , subdivision 3, paragraph (b); and
117.5(7) volunteer or emergency on-call firefighters serving in a municipal fire department
117.6or an independent nonprofit firefighting corporation who are not covered by the public
117.7employees police and fire retirement plan and who are not covered by a volunteer
117.8firefighters relief association and who elect to participate in the public employees defined
117.9contribution plan.;
117.10(8) elected county sheriffs who are former members of the police and fire plan and
117.11who are receiving a retirement annuity as provided under section 353.651; and
117.12(9) persons who are excluded from membership under section 353.01, subdivision
117.132b, paragraph (a), clause (25).
117.14(b) For purposes of this chapter, an elected local government official includes
117.15a person appointed to fill a vacancy in an elective office. Service as an elected local
117.16government official only includes service for the governmental subdivision for which the
117.17official was elected by the public at large. Service as an elected local government official
117.18ceases and eligibility to participate terminates when the person ceases to be an elected
117.19official. An elected local government official does not include an elected county sheriff
117.20who must be a member of the police and fire plan as provided under chapter 353.
117.21(c) Individuals otherwise eligible to participate in the plan under this subdivision
117.22who are currently covered by a public or private pension plan because of their employment
117.23or provision of services are not eligible to participate in the public employees defined
117.24contribution plan.
117.25(d) A former participant is a person who has terminated eligible employment or
117.26service and has not withdrawn the value of the person's individual account.
117.27EFFECTIVE DATE.This section is effective July 1, 2010.

117.28    Sec. 14. Minnesota Statutes 2008, section 353D.03, subdivision 1, is amended to read:
117.29    Subdivision 1. Local government official contribution Contributions for eligible
117.30participants. An (a) The following classes of eligible elected local government official
117.31participants who elects elect to participate in the public employees defined contribution
117.32plan under section 353D.02 shall contribute an amount equal to five percent of salary as
117.33defined in section 353.01, subdivision 10. A participating:
117.34(1) elected local government official's officials;
117.35(2) physicians; and
118.1(3) persons who are excluded from membership under section 353.01, subdivision
118.22b, clause (25).
118.3(b) A participant's governmental subdivision shall contribute a matching amount.
118.4EFFECTIVE DATE.This section is effective July 1, 2010.

118.5    Sec. 15. Minnesota Statutes 2008, section 353D.04, subdivision 1, is amended to read:
118.6    Subdivision 1. Crediting of account contributions to participant accounts. (a)
118.7Contributions made by or on behalf of a participating elected local government official or
118.8physician participant under section 353D.03, subdivisions 1, 5, and 6, paragraph (a), must
118.9be remitted to the Public Employees Retirement Association and credited to the individual
118.10account established for the participant. Ambulance service
118.11(b) Contributions as provided under section 353D.03, subdivisions 3, and 6,
118.12paragraph (b), must be remitted on a regular basis to the association together with any
118.13member contributions paid or withheld. Those contributions must be credited to the
118.14individual account of each participating member.
118.15EFFECTIVE DATE.This section is effective July 1, 2010.

118.16    Sec. 16. Minnesota Statutes 2008, section 353D.04, subdivision 2, is amended to read:
118.17    Subd. 2. Authority to adopt policies correcting erroneous contributions. The
118.18executive director may adopt policies and procedures regarding deductions taken totally
118.19or partially in error by the employer from the salary of an elected official.
118.20EFFECTIVE DATE.This section is effective July 1, 2010.

118.21    Sec. 17. Minnesota Statutes 2009 Supplement, section 353F.02, subdivision 4, is
118.22amended to read:
118.23    Subd. 4. Medical facility. "Medical facility" means:
118.24    (1) Bridges Medical Services;
118.25    (2) the City of Cannon Falls Hospital;
118.26    (3) the Chris Jenson Health and Rehabilitation Center in St. Louis County;
118.27(4) Clearwater County Memorial Hospital doing business as Clearwater Health
118.28Services in Bagley;
118.29    (4) (5) the Dassel Lakeside Community Home;
118.30(6) the Douglas County Hospital, with respect to the Mental Health Unit;
118.31    (5) (7) the Fair Oaks Lodge, Wadena;
118.32    (6) (8) the Glencoe Area Health Center;
119.1    (7) (9) Hutchinson Area Health Care;
119.2    (8) (10) the Lakefield Nursing Home;
119.3    (9) (11) the Lakeview Nursing Home in Gaylord;
119.4    (10) (12) the Luverne Public Hospital;
119.5    (11) (13) the Oakland Park Nursing Home;
119.6    (12) (14) the RenVilla Nursing Home;
119.7    (13) (15) the Rice Memorial Hospital in Willmar, with respect to the Department
119.8of Radiology and the Department of Radiation/Oncology;
119.9(14) (16) the St. Peter Community Health Care Center;
119.10    (15) (17) the Waconia-Ridgeview Medical Center;
119.11(16) (18) the Weiner Memorial Medical Center, Inc.; and
119.12(19) the Wheaton Community Hospital; and
119.13(17) (20) the Worthington Regional Hospital.
119.14EFFECTIVE DATE.This section is effective the day following final enactment.

119.15    Sec. 18. Minnesota Statutes 2008, section 353F.025, subdivision 1, is amended to read:
119.16    Subdivision 1. Eligibility determination. (a) The chief clerical officer of a
119.17governmental subdivision may submit a resolution from the governing body to the
119.18executive director of the Public Employees Retirement Association which supports
119.19providing coverage under this chapter for employees of that governmental subdivision
119.20who are privatized, and which states that the governing body will pay for actuarial
119.21calculations, as further specified in paragraph (c).
119.22    (b) The governing body must also provide a copy of any applicable purchase or
119.23lease agreement and any other information requested by the executive director to allow the
119.24executive director to verify that under the proposed employer change, the new employer
119.25does not qualify as a governmental subdivision under section 353.01, subdivision 6,
119.26making the employees ineligible for continued coverage as active members of the general
119.27employees retirement plan of the Public Employees Retirement Association.
119.28    (c) Following receipt of a resolution and a determination by the executive director
119.29that the new employer is not a governmental subdivision, the executive director shall
119.30direct the consulting actuary retained under section 356.214 to determine whether the
119.31general employees retirement plan of the Public Employees Retirement Association, if
119.32coverage under this chapter is provided, is expected to receive a net gain or a net loss if
119.33privatization occurs, by determining whether. A net gain is expected if the actuarial
119.34liability of the special benefit coverage provided under this chapter, if extended to the
119.35applicable employees under the privatization, is less than the actuarial gain otherwise to
120.1accrue to the plan. A net loss is expected if the actuarial accrued liability of the special
120.2benefit coverage provided under this chapter, if extended to the applicable employees
120.3under the privatization, is more than the actuarial gain otherwise to accrue to the plan. The
120.4date of the actuarial calculations used to make this determination must be within one year
120.5of the effective date, as defined in section 353F.02, subdivision 3.
120.6EFFECTIVE DATE.This section is effective the day following final enactment.

120.7    Sec. 19. Minnesota Statutes 2008, section 353F.025, subdivision 2, is amended to read:
120.8    Subd. 2. Recommendation to legislature. (a) If the actuarial calculations under
120.9subdivision 1, paragraph (c), indicate that a net gain to the general employees retirement
120.10plan of the Public Employees Retirement Association is expected due to the privatization,
120.11or if paragraph (c) applies, the executive director shall forward a recommendation and
120.12supporting documentation to the chair of the Legislative Commission on Pensions and
120.13Retirement, the chair of the Governmental Operations, Reform, Technology and Elections
120.14Committee of the house of representatives, the chair of the State and Local Government
120.15Operations and Oversight Committee of the senate, and the executive director of the
120.16Legislative Commission on Pensions and Retirement. The recommendation must be in
120.17the form of an addition to the definition of "medical facility" under section 353F.02,
120.18subdivision 4
, or to "other public employing unit" under section 353F.02, subdivision 5,
120.19whichever is applicable. The recommendation must be forwarded to the legislature before
120.20January 15 for the recommendation to be considered in that year's legislative session. The
120.21recommendation may be included as part of public pension administrative legislation
120.22under section 356B.05.
120.23    (b) If a medical facility or other public employing unit listed under section 353F.02,
120.24subdivision 4 or 5, fails to privatize within one year of the final enactment date of the
120.25legislation adding the entity to the applicable definition, its inclusion under this chapter is
120.26voided, and the executive director shall include in the subsequent proposed legislation
120.27under paragraph (a) a recommendation that the applicable entity be stricken from the
120.28definition.
120.29(c) If the calculations under subdivision 1, paragraph (c), indicate a net loss, the
120.30executive director shall forward a recommendation that the privatization be included as an
120.31addition under paragraph (a) if the chief clerical officer of the applicable governmental
120.32subdivision submits a resolution from the governing body specifying that a lump sum
120.33payment will be made to the executive director equal to the net loss, plus interest. The
120.34interest must be computed using the applicable preretirement interest rate assumption
120.35under section 356.215, subdivision 8, expressed as a monthly rate, from the date of the
121.1actuarial valuation from which the actuarial accrued liability data was used to determine
121.2the net loss in the actuarial study under subdivision 1, to the date of payment, with annual
121.3compounding. Payment must be made on or after the effective date defined under section
121.4353F.02.
121.5EFFECTIVE DATE.This section is effective the day following final enactment.

121.6    Sec. 20. Minnesota Statutes 2008, section 356.96, subdivision 2, is amended to read:
121.7    Subd. 2. Right to review. A determination made by the administration chief
121.8administrative officer of a covered pension plan regarding a person's eligibility, benefits,
121.9or other rights under the plan with which the person does not agree is subject to review
121.10under this section.
121.11EFFECTIVE DATE.This section is effective the day following final enactment.

121.12    Sec. 21. Minnesota Statutes 2008, section 356.96, subdivision 3, is amended to read:
121.13    Subd. 3. Notice of determination. If the applicable chief administrative officer
121.14denies an application or a written request, modifies a benefit, or terminates a benefit
121.15of a person claiming a right or potential rights under a covered pension plan, the chief
121.16administrative officer shall notify that person through a written notice containing:
121.17    (1) a statement of the reasons for the determination;
121.18    (2) a notice that the person may petition the governing board of the covered pension
121.19plan for a review of the determination and that a person's petition for review must be filed
121.20in the administrative office of the covered pension plan within 60 days of the receipt
121.21of the written notice of the determination;
121.22    (3) a statement indicating that a failure to petition for review within 60 days
121.23precludes the person from contesting in any other administrative review or court procedure
121.24the issues determined by the chief administrative officer;
121.25    (4) a statement indicating that all relevant materials, documents, affidavits, and other
121.26records that the person wishes to be reviewed in support of the petition must be filed with
121.27and received in the administrative office of the covered pension plan at least 30 15 days
121.28before the date of the hearing under subdivision 10; and
121.29    (5) a copy summary of this section, including all filing requirements and deadlines.
121.30EFFECTIVE DATE.This section is effective the day following final enactment.

121.31    Sec. 22. Minnesota Statutes 2009 Supplement, section 356.96, subdivision 5, is
121.32amended to read:
122.1    Subd. 5. Petition for review. (a) A person who claims a right under subdivision 2
122.2may petition for a review of that decision by the governing board of the covered pension
122.3plan.
122.4    (b) A petition under this section must be sent to the chief administrative officer by
122.5mail and must be postmarked no later than 60 days after the person received the notice
122.6required by subdivision 3. The petition must include the person's statement of the reason
122.7or reasons that the person believes the decision of the chief administrative officer should
122.8be reversed or modified. The petition may include all documentation and written materials
122.9that the petitioner deems to be relevant. In developing a record for review by the board
122.10when a decision is appealed, the executive director chief administrative officer may direct
122.11that the applicant participate in a fact-finding session conducted by an administrative law
122.12judge assigned by the Office of Administrative Hearings and, as applicable, participate in
122.13a vocational assessment conducted by a qualified rehabilitation counselor on contract with
122.14the applicable retirement system.
122.15EFFECTIVE DATE.This section is effective the day following final enactment.

122.16    Sec. 23. Minnesota Statutes 2008, section 356.96, subdivision 7, is amended to read:
122.17    Subd. 7. Notice of hearing. (a) After receiving a petition, and not less than 30
122.18calendar days from the date of the next regular board meeting, the chief administrative
122.19officer must schedule a timely review of the petition before the governing board of the
122.20covered pension plan. The review must be scheduled to take into consideration any
122.21necessary accommodations to allow the petitioner to participate in the governing board's
122.22review.
122.23    (b) Not less than 15 30 calendar days before the scheduled hearing date, the chief
122.24administrative officer must provide by mail to the petitioner an acknowledgment of the
122.25receipt of the person's petition and a follow-up notice of the time and place of the meeting
122.26at which the governing board is scheduled to consider the petition and must provide a copy
122.27of all relevant documents, evidence, summaries, and recommendations assembled by or
122.28on behalf of the plan administration to be considered by the governing board.
122.29    (c) Except as provided in subdivision 8, paragraph (c), All documents and materials
122.30that the petitioner wishes to be part of the record for review must be filed with the chief
122.31administrative officer and must be received in the offices of the covered pension plan
122.32at least 30 15 days before the date of the meeting at which the petition is scheduled to
122.33be heard.
122.34    (d) A petitioner, may request a continuance of a scheduled hearing if the request
122.35is received by the chief administrative officer within ten calendar days of the scheduled
123.1date of the applicable board meeting, may request a continuance on a scheduled petition.
123.2The chief administrative officer must reschedule the review within 60 days of the date
123.3of the continuance request a reasonable time. Only one continuance may be granted to
123.4any petitioner.
123.5EFFECTIVE DATE.This section is effective the day following final enactment.

123.6    Sec. 24. Minnesota Statutes 2008, section 356.96, subdivision 8, is amended to read:
123.7    Subd. 8. Record for review. (a) All evidence, including all records, documents, and
123.8affidavits in the possession of the covered pension plan of which the covered pension plan
123.9desires to avail itself and be considered by the governing board, and all evidence which the
123.10petitioner wishes to present to the governing board, including any evidence which would
123.11otherwise be classified by law as "private," must be made part of the hearing record.
123.12    (b) Not later than The chief administrative officer must provide a copy of the record
123.13to each member of the governing board at least seven days before the scheduled hearing
123.14date, the chief administrative officer must provide a copy of the record to each member
123.15of the governing board.
123.16    (c) At least five days before the hearing, the petitioner may submit to the chief
123.17administrative officer, for submission to the governing board, Any additional document,
123.18affidavit, or other relevant information that was not initially submitted with the petition
123.19the petitioner requests be part of the record may be admitted with the consent of the
123.20governing board.
123.21EFFECTIVE DATE.This section is effective the day following final enactment.

123.22    Sec. 25. Laws 2009, chapter 169, article 4, section 49, is amended to read:
123.23    Sec. 49. CITY OF DULUTH AND DULUTH AIRPORT AUTHORITY AND
123.24CITY OF VIRGINIA; CORRECTING ERRONEOUS EMPLOYEE DEDUCTIONS,
123.25EMPLOYER CONTRIBUTIONS AND ADJUSTING OVERPAID BENEFITS.
123.26    Subdivision 1. Application. Notwithstanding any provisions of Minnesota Statutes,
123.27section 353.27, subdivisions 7 and 7b, or Minnesota Statutes 2008, chapters 353 and
123.28356, to the contrary, this section establishes the procedures by which the executive
123.29director of the Public Employees Retirement Association shall adjust erroneous employee
123.30deductions and employer contributions paid on behalf of active employees and former
123.31members by the city of Duluth and, by the Duluth Airport Authority, and by the city
123.32of Virginia on amounts determined by the executive director to be invalid salary under
123.33Minnesota Statutes, section 353.01, subdivision 10, reported between January 1, 1997,
124.1and October 23, 2008, and for adjusting benefits that were paid to former members and
124.2their beneficiaries based upon invalid salary amounts.
124.3    Subd. 2. Refunds of employee deductions. (a) The executive director shall refund
124.4to active employees or former members who are not receiving retirement annuities or
124.5benefits all erroneous employee deductions identified by the city of Duluth or, by the
124.6Duluth Airport Authority, or by the city of Virginia as deductions taken from amounts
124.7determined to be invalid salary. The refunds must include interest at the rate specified in
124.8Minnesota Statutes, section 353.34, subdivision 2, from the date each invalid employee
124.9deduction was received through the date each refund is paid.
124.10(b) The refund payment for active employees must be sent to the applicable
124.11governmental subdivision which must pay the refunded employee deductions plus interest
124.12to the active home addresses of the members who are employees of the city of Duluth
124.13or, who are employees of the Duluth Airport Authority, or who are employees of the city
124.14of Virginia, as applicable.
124.15(c) Refunds to former members must be mailed by the executive director of the
124.16Public Employees Retirement Association to the former member's last known address.
124.17    Subd. 3. Benefit adjustments. (a) For a former member who is receiving a
124.18retirement annuity or disability benefit, or for a person receiving an optional annuity or
124.19survivor benefit, the executive director must:
124.20(1) adjust the annuity or benefit payment to the correct monthly benefit amount
124.21payable by reducing the average salary under Minnesota Statutes, section 353.01,
124.22subdivision 17a
, by the invalid salary amounts;
124.23(2) determine the amount of the overpaid benefits paid from the effective date of
124.24the annuity or benefit payment to the first of the month in which the monthly benefit
124.25amount is corrected;
124.26(3) calculate the amount of employee deductions taken in error on invalid salary,
124.27including interest at the rate specified in Minnesota Statutes, section 353.34, subdivision 2,
124.28from the date each invalid employee deduction was received through the date the annuity
124.29or benefit is adjusted as provided under clause (1); and
124.30(4) determine the net amount of overpaid benefits by reducing the amount of the
124.31overpaid annuity or benefit as determined in clause (2) by the amount of the erroneous
124.32employee deductions with interest as determined in clause (3).
124.33(b) If a former member's erroneous employee deductions plus interest determined
124.34under this section exceeds the amount of the person's overpaid benefits, the balance must
124.35be refunded to the person to whom the annuity or benefit is being paid.
125.1(c) The executive director shall recover the net amount of all overpaid annuities or
125.2benefits as provided under subdivision 4.
125.3    Subd. 4. Employer credits and obligations. (a) The executive director shall
125.4provide a credit without interest to the city of Duluth and, to the Duluth Airport Authority,
125.5and to the city of Virginia, as applicable, for the amount of that governmental subdivision's
125.6erroneous employer contributions. The credit must first be used to offset the net amount of
125.7the overpaid retirement annuities and the disability and survivor benefits that remains after
125.8applying the amount of erroneous employee deductions with interest as provided under
125.9subdivision 3, paragraph (a), clause (4). The remaining erroneous employer contributions,
125.10if any, must be credited against future employer contributions required to be paid by
125.11the applicable governmental subdivision. If the overpaid benefits exceed the employer
125.12contribution credit, the balance of the overpaid benefits is the obligation of the city of
125.13Duluth or, the Duluth Airport Authority, or the city of Virginia, whichever is applicable.
125.14(b) The Public Employees Retirement Association board of trustees shall determine
125.15the period of time and manner for the collection of overpaid retirement annuities and
125.16benefits, if any, from the city of Duluth and, the Duluth Airport Authority, and the city of
125.17Virginia.
125.18EFFECTIVE DATE.This section is effective the day following final enactment.

125.19    Sec. 26. Laws 2009, chapter 169, article 4, section 49, the effective date, is amended to
125.20read:
125.21EFFECTIVE DATE.(a) This section is effective for the city of Duluth the day after
125.22the Duluth city council and the chief clerical officer of the city of Duluth timely complete
125.23their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, for
125.24members who are, and former members who were, employees of the city of Duluth.
125.25(b) This section is effective for the Duluth Airport Authority the day after the Duluth
125.26Airport Authority and the chief clerical officer of the Duluth Airport Authority timely
125.27complete their compliance with Minnesota Statutes, section 645.021, subdivisions 2
125.28and 3, for members who are, and former members who were, employees of the Duluth
125.29Airport Authority.
125.30(c) This section is effective for the city of Virginia the day after the Virginia
125.31city council and the chief clerical officer of the city of Virginia timely complete their
125.32compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, for members
125.33who are, and former members who were, employees of the city of Virginia. If this section
125.34becomes effective for the city of Virginia, it applies retroactively from June 23, 2009.
126.1EFFECTIVE DATE.This section is effective the day following final enactment.

126.2    Sec. 27. Laws 2009, chapter 169, article 5, section 2, the effective date, is amended to
126.3read:
126.4EFFECTIVE DATE.This section is effective the day following final enactment
126.5and expires on June 30, 2011 2014. Individuals must not be appointed to a postretirement
126.6option position after that date.
126.7EFFECTIVE DATE.This section is effective the day following final enactment.

126.8    Sec. 28. REPEALER.
126.9(a) Minnesota Statutes 2008, section 353.01, subdivision 40, is repealed effective
126.10July 1, 2010.
126.11(b) Minnesota Statutes 2008, sections 353.46, subdivision 1a; and 353D.03,
126.12subdivision 2, are repealed the day following final enactment.
126.13(c) Minnesota Statutes 2008, section 353D.12, is repealed effective July 1, 2011.

126.14ARTICLE 6
126.15VOLUNTARY STATEWIDE LUMP-SUM VOLUNTEER FIREFIGHTER
126.16RETIREMENT PLAN

126.17    Section 1. Minnesota Statutes 2008, section 69.051, subdivision 3, is amended to read:
126.18    Subd. 3. Report by certain municipalities. (a) Each municipality which has
126.19an organized fire department but which does not have a firefighters' relief association
126.20governed by section 69.77 or sections 69.771 to 69.775 and which is not exempted
126.21under paragraph (b) shall annually prepare a detailed financial report of the receipts and
126.22disbursements by the municipality for fire protection service during the preceding calendar
126.23year, on a form prescribed by the state auditor. The financial report shall must contain any
126.24information which the state auditor deems necessary to disclose the sources of receipts
126.25and the purpose of disbursements for fire protection service. The financial report shall
126.26must be signed by the municipal clerk or clerk-treasurer of the municipality. The financial
126.27report shall must be filed by the municipal clerk or clerk-treasurer with the state auditor on
126.28or before July 1 annually. The state auditor shall forward one copy to the county auditor of
126.29the county wherein the municipality is located. The municipality shall not qualify initially
126.30to receive, or be entitled subsequently to retain, state aid pursuant to under this chapter if
126.31the financial reporting requirement or the applicable requirements of this chapter or any
126.32other statute or special law have not been complied with or are not fulfilled.
127.1(b) Each municipality that has an organized fire department and provides retirement
127.2coverage to its firefighters through the voluntary statewide lump-sum volunteer firefighter
127.3retirement plan under chapter 353G qualifies to have fire state aid transmitted to and
127.4retained in the statewide lump-sum volunteer firefighter retirement fund without filing
127.5a detailed financial report if the executive director of the Public Employees Retirement
127.6Association certifies compliance by the municipality with the requirements of sections
127.7353G.04 and 353G.08, paragraph (e), and by the applicable fire chief with the requirements
127.8of section 353G.07.
127.9EFFECTIVE DATE.This section is effective retroactively from January 1, 2010.

127.10    Sec. 2. Minnesota Statutes 2009 Supplement, section 353G.05, subdivision 2, is
127.11amended to read:
127.12    Subd. 2. Election of coverage. (a) The process for electing coverage of volunteer
127.13firefighters by the retirement plan is initiated by a request to the executive director for a
127.14cost analysis of the prospective retirement coverage.
127.15(b) If the volunteer firefighters are currently covered by a volunteer firefighters' relief
127.16association governed by chapter 424A, the cost analysis of the prospective retirement
127.17coverage must be requested jointly by the secretary of the volunteer firefighters' relief
127.18association, following approval of the request by the board of the volunteer firefighters'
127.19relief association, and the chief administrative officer of the entity associated with the
127.20relief association, following approval of the request by the governing body of the entity
127.21associated with the relief association. If the relief association is associated with more than
127.22one entity, the chief administrative officer of each associated entity must execute the
127.23request. If the volunteer firefighters are not currently covered by a volunteer firefighters'
127.24relief association, the cost analysis of the prospective retirement coverage must be
127.25requested by the chief administrative officer of the entity operating the fire department.
127.26The request must be made in writing and must be made on a form prescribed by the
127.27executive director.
127.28(c) The cost analysis of the prospective retirement coverage by the statewide
127.29retirement plan must be based on the service pension amount under section 353G.11
127.30closest to the service pension amount provided by the volunteer firefighters' relief
127.31association, if there is one the relief association is a lump-sum defined benefit plan, or
127.32the amount equal to 95 percent of the most current average account balance per relief
127.33association member if the relief association is a defined contribution plan, or to the
127.34lowest service pension amount under section 353G.11 if there is no volunteer firefighters'
127.35relief association, rounded up, and any other service pension amount designated by
128.1the requester or requesters. The cost analysis must be prepared using a mathematical
128.2procedure certified as accurate by an approved actuary retained by the Public Employees
128.3Retirement Association.
128.4(d) If a cost analysis is requested and a volunteer firefighters' relief association exists
128.5that has filed the information required under section 69.051 in a timely fashion, upon
128.6request by the executive director, the state auditor shall provide the most recent data
128.7available on the financial condition of the volunteer firefighters' relief association, the most
128.8recent firefighter demographic data available, and a copy of the current relief association
128.9bylaws. If a cost analysis is requested, but no volunteer firefighters' relief association
128.10exists, the chief administrative officer of the entity operating the fire department shall
128.11provide the demographic information on the volunteer firefighters serving as members
128.12of the fire department requested by the executive director.
128.13(e) If a cost analysis is requested, the executive director of the State Board of
128.14Investment shall review the investment portfolio of the relief association, if applicable,
128.15for compliance with the applicable provisions of chapter 11A and for appropriateness
128.16for retention under the established investment objectives and investment policies of the
128.17State Board of Investment. If the prospective retirement coverage change is approved
128.18under paragraph (f), the State Board of Investment may require that the relief association
128.19liquidate any investment security or other asset which the executive director of the State
128.20Board of Investment has determined to be an ineligible or inappropriate investment for
128.21retention by the State Board of Investment. The security or asset liquidation must occur
128.22before the effective date of the transfer of retirement plan coverage. If requested to do
128.23so by the chief administrative officer of the relief association, the executive director of
128.24the State Board of Investment shall provide advice about the best means to conduct the
128.25liquidation.
128.26(f) Upon receipt of the cost analysis, the governing body of the municipality
128.27or independent nonprofit firefighting corporation associated with the fire department
128.28shall either approve or disapprove the retirement coverage change within 90 days. If
128.29the retirement coverage change is not acted upon within 90 days, it is deemed to be
128.30disapproved. If the retirement coverage change is approved by the applicable governing
128.31body, coverage by the voluntary statewide lump-sum volunteer firefighter retirement plan
128.32is effective on the next following January 1.
128.33EFFECTIVE DATE.This section is effective retroactively from January 1, 2010.

128.34    Sec. 3. Minnesota Statutes 2009 Supplement, section 353G.06, subdivision 1, is
128.35amended to read:
129.1    Subdivision 1. Special fund disestablishment. (a) On the date immediately prior
129.2to the effective date of the coverage change, the special fund of the applicable volunteer
129.3firefighters' relief association, if one exists, ceases to exist as a pension fund of the
129.4association and legal title to the assets of the special fund transfers to the State Board of
129.5Investment, with the beneficial title to the assets of the special fund remaining in the
129.6applicable volunteer firefighters.
129.7(b) If the market value of the special fund of the volunteer firefighters' relief
129.8association for which retirement coverage changed under this chapter declines in the
129.9interval between the date of the most recent financial report or statement, and the special
129.10fund disestablishment date, the applicable municipality shall transfer an additional amount
129.11to the State Board of Investment equal to that decline. If more than one municipality is
129.12responsible for the direct management of the fire department, the municipalities shall
129.13allocate the additional transfer amount among the various applicable municipalities
129.14one-half in proportion to the population of each municipality and one-half in proportion
129.15to the market value of each municipality.
129.16EFFECTIVE DATE.This section is effective retroactively from January 1, 2010.

129.17    Sec. 4. Minnesota Statutes 2009 Supplement, section 353G.08, is amended to read:
129.18353G.08 RETIREMENT PLAN FUNDING; DISBURSEMENTS.
129.19    Subdivision 1. Annual funding requirements. (a) Annually, the executive director
129.20shall determine the funding requirements of each account in the voluntary statewide
129.21lump-sum volunteer firefighter retirement plan on or before August 1. The funding
129.22requirements as directed under this section, must be determined using a mathematical
129.23procedure developed and certified as accurate by an approved actuary retained by the
129.24Public Employees Retirement Association and based on present value factors using a six
129.25percent interest rate, without any decrement assumptions. The funding requirements
129.26must be certified to the entity or entities associated with the fire department whose active
129.27firefighters are covered by the retirement plan.
129.28(b) The overall funding balance of each account for the current calendar year must
129.29be determined in the following manner:
129.30(1) The total accrued liability for all active and deferred members of the account as
129.31of December 31 of the current year must be calculated based on the good time service
129.32credit of active and deferred members as of that date.
129.33(2) The total present assets of the account projected to December 31 of the current
129.34year, including receipts by and disbursements from the account anticipated to occur on or
130.1before December 31, must be calculated. To the extent possible, the market value of assets
130.2must be utilized in making this calculation.
130.3(3) The amount of the total present assets calculated under clause (2) must be
130.4subtracted from the amount of the total accrued liability calculated under clause (1). If the
130.5amount of total present assets exceeds the amount of the total accrued liability, then the
130.6account is considered to have a surplus over full funding. If the amount of the total present
130.7assets is less than the amount of the total accrued liability, then the account is considered
130.8to have a deficit from full funding. If the amount of total present assets is equal to the
130.9amount of the total accrued liability, then the special fund is considered to be fully funded.
130.10(c) The financial requirements of each account for the following calendar year must
130.11be determined in the following manner:
130.12(1) The total accrued liability for all active and deferred members of the account
130.13as of December 31 of the calendar year next following the current calendar year must be
130.14calculated based on the good time service used in the calculation under paragraph (b),
130.15clause (1), increased by one year.
130.16(2) The increase in the total accrued liability of the account for the following calendar
130.17year over the total accrued liability of the account for the current year must be calculated.
130.18(3) The amount of anticipated future administrative expenses of the account must be
130.19calculated by multiplying the dollar amount of the administrative expenses for the most
130.20recent prior calendar year by the factor of 1.035.
130.21(4) If the account is fully funded, the financial requirement of the account for the
130.22following calendar year is the total of the amounts calculated under clauses (2) and (3).
130.23(5) If the account has a deficit from full funding, the financial requirement of the
130.24account for the following calendar year is the total of the amounts calculated under clauses
130.25(2) and (3) plus an amount equal to one-tenth of the amount of the deficit from full
130.26funding of the account.
130.27(6) If the account has a surplus over full funding, the financial requirement of
130.28the account for the following calendar year is the financial requirement of the account
130.29calculated as though the account was fully funded under clause (4) and, if the account has
130.30also had a surplus over full funding during the prior two years, additionally reduced by an
130.31amount equal to one-tenth of the amount of the surplus over full funding of the account.
130.32(d) The required contribution of the entity or entities associated with the fire
130.33department whose active firefighters are covered by the retirement plan is the annual
130.34financial requirements of the account of the retirement plan under paragraph (c) reduced
130.35by the amount of any fire state aid payable under sections 69.011 to 69.051 reasonably
130.36anticipated to be received by the retirement plan attributable to the entity or entities during
131.1the following calendar year, and an amount of interest on the assets projected to be
131.2received during the following calendar year calculated at the rate of six percent per annum.
131.3The required contribution must be allocated between the entities if more than one entity
131.4is involved. A reasonable amount of anticipated fire state aid is an amount that does not
131.5exceed the fire state aid actually received in the prior year multiplied by the factor 1.035.
131.6(e) The required contribution calculated in paragraph (d) must be paid to the
131.7retirement plan on or before December 31 of the year for which it was calculated. If
131.8the contribution is not received by the retirement plan by December 31, it is payable
131.9with interest at an annual compound rate of six percent from the date due until the date
131.10payment is received by the retirement plan. If the entity does not pay the full amount of
131.11the required contribution, the executive director shall collect the unpaid amount under
131.12section 353.28, subdivision 6.
131.13    Subd. 2. Cash flow funding requirement. If the executive director determines that
131.14an account in the voluntary statewide lump-sum volunteer firefighter retirement plan has
131.15insufficient assets to meet the service pensions determined payable from the account,
131.16the executive director shall certify the amount of the potential service pension shortfall
131.17to the municipality or municipalities and the municipality or municipalities shall make
131.18an additional employer contribution to the account within ten days of the certification.
131.19If more than one municipality is associated with the account, unless the municipalities
131.20agree to a different allocation, the municipalities shall allocate the additional employer
131.21contribution one-half in proportion to the population of each municipality and one-half in
131.22proportion to the market value of the property of each municipality.
131.23    Subd. 3. Authorized account disbursements. (f) The assets of the retirement
131.24fund may only be disbursed for:
131.25(1) the administrative expenses of the retirement plan;
131.26(2) the investment expenses of the retirement fund;
131.27(3) the service pensions payable under section 353G.10, 353G.11, 353G.14, or
131.28353G.15 ; and
131.29(4) the survivor benefits payable under section 353G.12; and
131.30(5) the disability benefit coverage insurance premiums under section 353G.115.
131.31EFFECTIVE DATE.This section is effective retroactively from January 1, 2010.

131.32    Sec. 5. Minnesota Statutes 2009 Supplement, section 353G.09, subdivision 3, is
131.33amended to read:
132.1    Subd. 3. Alternative pension eligibility and computation. (a) An active member
132.2of the retirement plan is entitled to an alternative lump-sum service pension from the
132.3retirement plan if the person:
132.4(1) has separated from active service with the fire department for at least 30 days;
132.5(2) has attained the age of at least 50 years or the age for receipt of a service pension
132.6under the benefit plan of the applicable former volunteer firefighters' relief association
132.7as of the date immediately prior to the election of the retirement coverage change,
132.8whichever is later;
132.9(3) has completed at least five years of active service with the fire department and at
132.10least five years in total as a member of the applicable former volunteer firefighters' relief
132.11association or of the retirement plan, but has not rendered at least five years of good time
132.12service credit as a member of the retirement plan; and
132.13(4) applies in a manner prescribed by the executive director for the service pension.
132.14(b) If retirement coverage prior to statewide retirement plan coverage was provided
132.15by a defined benefit plan volunteer firefighters relief association, the alternative lump-sum
132.16service pension is the service pension amount specified in the bylaws of the applicable
132.17former volunteer firefighters' relief association either as of the date immediately prior to
132.18the election of the retirement coverage change or as of the date immediately before the
132.19termination of firefighting services, whichever is earlier, multiplied by the total number
132.20of years of service as a member of that volunteer firefighters' relief association and as
132.21a member of the retirement plan. If retirement coverage prior to statewide retirement
132.22plan coverage was provided by a defined contribution plan volunteer firefighters relief
132.23association, the alternative lump-sum service pension is an amount equal to the person's
132.24account balance as of the date immediately prior to the date on which statewide retirement
132.25plan coverage was first provided to the person plus six percent annual compound interest
132.26from that date until the date immediately prior to the date of retirement.
132.27EFFECTIVE DATE.This section is effective retroactively from January 1, 2010.

132.28    Sec. 6. Minnesota Statutes 2009 Supplement, section 353G.11, subdivision 1, is
132.29amended to read:
132.30    Subdivision 1. Levels. The retirement plan provides the following levels of service
132.31pension amounts to be selected at the election of coverage, or, if fully funded, thereafter:
132.32
Level A
$500 per year of good time service credit
132.33
Level B
$750 $600 per year of good time service credit
132.34
Level C
$700 per year of good time service credit
132.35
Level D
$800 per year of good time service credit
133.1
Level E
$900 per year of good time service credit
133.2
Level CF
$1,000 per year of good time service credit
133.3
Level G
$1,250 per year of good time service credit
133.4
Level DH
$1,500 per year of good time service credit
133.5
Level EI
$2,000 per year of good time service credit
133.6
Level FJ
$2,500 per year of good time service credit
133.7
Level GK
$3,000 per year of good time service credit
133.8
Level HL
$3,500 per year of good time service credit
133.9
Level IM
$4,000 per year of good time service credit
133.10
Level JN
$4,500 per year of good time service credit
133.11
Level KO
$5,000 per year of good time service credit
133.12
Level LP
$5,500 per year of good time service credit
133.13
Level MQ
$6,000 per year of good time service credit
133.14
Level NR
$6,500 per year of good time service credit
133.15
Level OS
$7,000 per year of good time service credit
133.16
Level PT
$7,500 per year of good time service credit
133.17EFFECTIVE DATE.This section is effective July 1, 2010.

133.18    Sec. 7. Minnesota Statutes 2009 Supplement, section 353G.11, is amended by adding a
133.19subdivision to read:
133.20    Subd. 1a. Continuation of prior service pension levels. If a municipality or
133.21independent nonprofit firefighting corporation elects to be covered by the retirement
133.22plan prior to January 1, 2010, and selects the $750 per year of good time service credit
133.23service pension amount effective for January 1, 2010, that level continues for the volunteer
133.24firefighters of that municipality or independent nonprofit firefighting corporation until a
133.25different service pension amount is selected under subdivision 2 after January 1, 2010.
133.26EFFECTIVE DATE.This section is effective July 1, 2010.

133.27    Sec. 8. [353G.115] DISABILITY BENEFIT COVERAGE; AUTHORITY FOR
133.28CASUALTY INSURANCE.
133.29(a) Except as provided in paragraph (b), no disability benefit is payable from the
133.30statewide retirement plan.
133.31(b) If the board approves the arrangement, disability coverage for statewide
133.32retirement plan members may be provided through a group disability insurance policy
133.33obtained from an insurance company licensed to do business in this state. The voluntary
133.34statewide lump-sum volunteer retirement plan is authorized to pay the premium for the
133.35disability insurance authorized by this paragraph. The proportional amount of the total
134.1annual disability insurance premium must be added to the required contribution amount
134.2determined under section 353G.08.
134.3EFFECTIVE DATE.This section is effective retroactively from January 1, 2010.

134.4    Sec. 9. Minnesota Statutes 2009 Supplement, section 424A.08, is amended to read:
134.5424A.08 MUNICIPALITY WITHOUT RELIEF ASSOCIATION;
134.6AUTHORIZED DISBURSEMENTS.
134.7(a) Any qualified municipality which is entitled to receive fire state aid but which
134.8has no volunteer firefighters' relief association directly associated with its fire department
134.9and which has no full-time firefighters with retirement coverage by the public employees
134.10police and fire retirement plan shall deposit the fire state aid in a special account
134.11established for that purpose in the municipal treasury. Disbursement from the special
134.12account may not be made for any purpose except:
134.13(1) payment of the fees, dues and assessments to the Minnesota State Fire
134.14Department Association and to the state Volunteer Firefighters' Benefit Association in
134.15order to entitle its firefighters to membership in and the benefits of these state associations;
134.16(2) payment of the cost of purchasing and maintaining needed equipment for the
134.17fire department; and
134.18(3) payment of the cost of construction, acquisition, repair, or maintenance of
134.19buildings or other premises to house the equipment of the fire department.
134.20(b) A qualified municipality which is entitled to receive fire state aid, which has no
134.21volunteer firefighters' relief association directly associated with its fire department, which
134.22does not participate in the voluntary statewide lump-sum volunteer firefighter retirement
134.23plan under chapter 353G, and which has full-time firefighters with retirement coverage
134.24by the public employees police and fire retirement plan may disburse the fire state aid as
134.25provided in paragraph (a), for the payment of the employer contribution requirement with
134.26respect to firefighters covered by the public employees police and fire retirement plan under
134.27section 353.65, subdivision 3, or for a combination of the two types of disbursements.
134.28(c) A municipality that has no volunteer firefighters' relief association directly
134.29associated with it and that participates in the voluntary statewide lump-sum volunteer
134.30firefighter retirement plan under chapter 353G shall transmit any fire state aid that it
134.31receives to the voluntary statewide lump-sum volunteer firefighter retirement fund.
134.32EFFECTIVE DATE.This section is effective retroactively from January 1, 2010.

135.1ARTICLE 7
135.2TEACHERS RETIREMENT ASSOCIATION SERVICE CREDIT
135.3PROCEDURE REVISIONS

135.4    Section 1. Minnesota Statutes 2008, section 354.05, is amended by adding a
135.5subdivision to read:
135.6    Subd. 41. Annual base salary. (a) "Annual base salary" means:
135.7(1) for an independent school district or educational cooperative, the lowest full-time
135.8Bachelor of Arts (BA) base contract salary for the previous fiscal year for that employing
135.9unit;
135.10(2) for a charter school, the lowest starting annual salary for a full-time licensed
135.11teacher employed during the previous fiscal year for that employing unit; and
135.12(3) for a state agency or professional organization, the lowest starting annual salary
135.13for a full-time Teachers Retirement Association covered position for the previous fiscal
135.14year for that employing unit.
135.15(b) If there is no previous fiscal year data because an employer unit is new and
135.16paragraph (c) does not apply, the annual base salary for the first year of operation will be
135.17as provided in paragraph (a), except that the base contract salary for the current fiscal year,
135.18rather than the previous fiscal year, must be used.
135.19(c) For a new employer unit created as a result of a merger or consolidation, the
135.20annual base salary must be the lowest annual base salary as specified in paragraph (a) for
135.21any of the employer units involved in the merger or consolidation.
135.22EFFECTIVE DATE.This section is effective July 1, 2012.

135.23    Sec. 2. Minnesota Statutes 2008, section 354.07, subdivision 5, is amended to read:
135.24    Subd. 5. Records; accounts; interest. The board shall keep a record of the
135.25receipts and disbursements of the fund and a separate account with each member of
135.26the association. The board shall also keep separate accounts for annuity payments, for
135.27employer contributions and all other necessary accounts and reserves. It shall determine
135.28annually the annual interest earnings of the fund which shall include realized capital gains
135.29and losses. Any amount in the capital reserve account on July 1, 1973, shall be transferred
135.30to the employer contribution's account. The annual interest earnings shall be apportioned
135.31and credited to the separate members' accounts except those covered under the provisions
135.32of section 354.44, subdivision 6 or 7. The rate to be used in this distribution computed to
135.33the last full quarter percent shall be determined by dividing the interest earnings by the
135.34total invested assets of the fund. The excess of the annual interest earnings in the excess
136.1earnings reserve which was not credited to the various accounts shall be credited to the
136.2gross interest earnings for the next succeeding year.

136.3    Sec. 3. Minnesota Statutes 2008, section 354.091, is amended to read:
136.4354.091 SERVICE CREDIT.
136.5    Subdivision 1. Definition; monthly base salary. For purposes of this section,
136.6"monthly base salary" means the annual base salary, as defined in section 354.05,
136.7subdivision 41, divided by 12.
136.8    Subd. 2. Service credit annual limit. (a) In computing service credit, No teacher
136.9may receive credit for more than one year of teaching service for any fiscal year.
136.10Additionally, in crediting allowable service:
136.11(1) if a teacher teaches less than five hours in a day, service credit must be given for
136.12the fractional part of the day as the term of service performed bears to five hours;
136.13(2) if a teacher teaches five or more hours in a day, service credit must be given for
136.14only one day;
136.15(3) if a teacher teaches at least 170 full days in any fiscal year, service credit must be
136.16given for a full year of teaching service; and
136.17(4) if a teacher teaches for only a fractional part of the year, service credit must be
136.18given for such fractional part of the year in the same relationship as the period of service
136.19performed bears to 170 days.
136.20(b) A teacher must receive a full year of service credit based on the number of days
136.21in the employer's full school year if that school year is less than 170 days. Teaching
136.22service performed before July 1, 1961, must be computed under the law in effect at the
136.23time it was performed.
136.24(c) A teacher must not lose or gain retirement service credit as a result of the
136.25employer converting to a flexible or alternate work schedule. If the employer converts
136.26to a flexible or alternate work schedule, the forms for reporting teaching service and the
136.27procedures for determining service credit must be determined by the executive director
136.28with the approval of the board of trustees.
136.29    Subd. 3. Service credit calculation. (a) Except as specified in subdivisions 4 and
136.305, service credit must be calculated monthly by dividing the teacher's monthly salary by
136.31the monthly base salary for the teacher's employing unit and multiplying the result by
136.3211.1 percent.
136.33(b) For purposes of computing service credit, salary must be allocated to each
136.34calendar month based on the pay period begin and end dates. If the pay period covers
137.1more than one calendar month, the salary must be allocated based on the number of days
137.2in each calendar month.
137.3(c) A teacher may not receive more than 11.1 percent of a year's service credit in
137.4a calendar month.
137.5(d) Annual service credit must be calculated by adding the allowable monthly
137.6service credit for all 12 months of the fiscal year, with the result rounded to two decimal
137.7places, subject to the annual limit specified in subdivision 2.
137.8    Subd. 4. Service credit determination for Minnesota State Colleges and
137.9Universities system teachers. (d) For all services rendered on or after July 1, 2003,
137.10service credit for all members employed by the Minnesota State Colleges and Universities
137.11system must be determined:
137.12(1) for full-time employees, by the definition of full-time employment contained in
137.13the collective bargaining agreement for those units listed in section 179A.10, subdivision
137.142
, or contained in the applicable personnel or salary plan for those positions designated in
137.15section 179A.10, subdivision 1; and
137.16(2) for part-time employees, by the appropriate proration of full-time equivalency
137.17based on the provisions contained in the collective bargaining agreement for those units
137.18listed in section 179A.10, subdivision 2, or contained in the applicable personnel or salary
137.19plan for those positions designated in section 179A.10, subdivision 1, and the applicable
137.20procedures of the Minnesota State Colleges and Universities system; and.
137.21(3) in no case may a member receive more than one year of service credit for any
137.22fiscal year.
137.23    Subd. 5. Service credit procedure, nontraditional schedules. For employer units
137.24that have nontraditional work schedules or pay schedules, the procedure for determining
137.25service credit must be specified by the executive director with the approval of the board of
137.26trustees.
137.27EFFECTIVE DATE.This section is effective for teaching service performed after
137.28June 30, 2012.

137.29    Sec. 4. Minnesota Statutes 2009 Supplement, section 354.52, subdivision 4b, is
137.30amended to read:
137.31    Subd. 4b. Payroll cycle reporting requirements. An employing unit shall provide
137.32the following data to the association for payroll warrants on an ongoing basis within 14
137.33calendar days after the date of the payroll warrant in a format prescribed by the executive
137.34director:
137.35(1) association member number;
138.1(2) employer-assigned employee number;
138.2(3) Social Security number;
138.3(4) amount of each salary deduction;
138.4(5) amount of salary as defined in section 354.05, subdivision 35, from which each
138.5deduction was made;
138.6(6) reason for payment;
138.7(7) service credit;
138.8(8) (7) the beginning and ending dates of the payroll period covered and the date
138.9of actual payment;
138.10(9) (8) fiscal year of salary earnings;
138.11(10) (9) total remittance amount including employee, employer, and additional
138.12employer contributions;
138.13(11) (10) reemployed annuitant salary under section 354.44, subdivision 5; and
138.14(12) (11) other information as may be required by the executive director.
138.15EFFECTIVE DATE.This section is effective July 1, 2012.

138.16    Sec. 5. Minnesota Statutes 2008, section 354.52, is amended by adding a subdivision
138.17to read:
138.18    Subd. 4d. Annual base salary reporting. An employing unit must provide the
138.19following data to the association on or before June 30 of each fiscal year:
138.20(1) annual base salary, as defined in section 354.05, subdivision 41; and
138.21(2) beginning and ending dates for the regular school work year.
138.22EFFECTIVE DATE.This section is effective July 1, 2011.

138.23    Sec. 6. Minnesota Statutes 2008, section 354.52, subdivision 6, is amended to read:
138.24    Subd. 6. Noncompliance consequences. (a) An employing unit that does not
138.25comply with the reporting requirements under subdivision 2a, 4a, or 4b, or 4d, must pay a
138.26fine of $5 per calendar day until the association receives the required data.
138.27(b) If the annual base salary required to be reported under subdivision 4d has not
138.28been settled or determined as of June 16, the fine commences if the annual base salary has
138.29not been reported to the association within 14 days following the settlement date.
138.30EFFECTIVE DATE.This section is effective July 1, 2011.

138.31    Sec. 7. Minnesota Statutes 2008, section 354.66, subdivision 3, is amended to read:
139.1    Subd. 3. Part-time teaching position, defined. (a) For purposes of this section,
139.2the term "part-time teaching position" means a teaching position within the district in
139.3which the teacher is employed for at least 50 full days or a fractional equivalent thereof as
139.4prescribed in section 354.091, and for which the teacher is compensated in for an amount
139.5of at least 30 percent, but not exceeding 80 percent of the compensation established by the
139.6board for a full-time teacher with identical education and experience with the employing
139.7unit.
139.8(b) For a teacher to which subdivision 1c, paragraph (b), applies, the term "part-time
139.9teaching position" means a teaching position within the district in which the teacher is
139.10employed for at least 25 full days or a fractional equivalent thereof as prescribed in section
139.11354.091, and for which the teacher is compensated in for an amount of at least 15 percent,
139.12but not exceeding 40 percent of the compensation established by the board for a full-time
139.13teacher, with identical education and experience with the employing unit.
139.14EFFECTIVE DATE.This section is effective for service provided after June 30,
139.152012.

139.16ARTICLE 8
139.17MNSCU IRAP ADMINISTRATIVE PROVISIONS

139.18    Section 1. Minnesota Statutes 2008, section 11A.04, is amended to read:
139.1911A.04 DUTIES AND POWERS.
139.20The state board shall:
139.21(1) Act as trustees for each fund for which it invests or manages money in
139.22accordance with the standard of care set forth in section 11A.09 if state assets are involved
139.23and in accordance with chapter 356A if pension assets are involved.
139.24(2) Formulate policies and procedures deemed necessary and appropriate to carry
139.25out its functions. Procedures adopted by the board must allow fund beneficiaries and
139.26members of the public to become informed of proposed board actions. Procedures and
139.27policies of the board are not subject to the Administrative Procedure Act.
139.28(3) Employ an executive director as provided in section 11A.07.
139.29(4) Employ investment advisors and consultants as it deems necessary.
139.30(5) Prescribe policies concerning personal investments of all employees of the board
139.31to prevent conflicts of interest.
139.32(6) Maintain a record of its proceedings.
139.33(7) As it deems necessary, establish advisory committees subject to section 15.059 to
139.34assist the board in carrying out its duties.
140.1(8) Not permit state funds to be used for the underwriting or direct purchase of
140.2municipal securities from the issuer or the issuer's agent.
140.3(9) Direct the commissioner of management and budget to sell property other than
140.4money that has escheated to the state when the board determines that sale of the property
140.5is in the best interest of the state. Escheated property must be sold to the highest bidder in
140.6the manner and upon terms and conditions prescribed by the board.
140.7(10) Undertake any other activities necessary to implement the duties and powers
140.8set forth in this section.
140.9(11) Establish a formula or formulas to measure management performance and
140.10return on investment. Public pension funds in the state shall utilize the formula or
140.11formulas developed by the state board.
140.12(12) Except as otherwise provided in article XI, section 8, of the Constitution of the
140.13state of Minnesota, employ, at its discretion, qualified private firms to invest and manage
140.14the assets of funds over which the state board has investment management responsibility.
140.15There is annually appropriated to the state board, from the assets of the funds for which
140.16the state board utilizes a private investment manager, sums sufficient to pay the costs of
140.17employing private firms. Each year, by January 15, the board shall report to the governor
140.18and legislature on the cost and the investment performance of each investment manager
140.19employed by the board.
140.20(13) Adopt an investment policy statement that includes investment objectives, asset
140.21allocation, and the investment management structure for the retirement fund assets under
140.22its control. The statement may be revised at the discretion of the state board. The state
140.23board shall seek the advice of the council regarding its investment policy statement.
140.24Adoption of the statement is not subject to chapter 14.
140.25(14) Adopt a compensation plan setting the terms and conditions of employment for
140.26unclassified board employees who are not covered by a collective bargaining agreement.
140.27(15) Contract, as necessary, with the board of trustees of the Minnesota State
140.28Universities and Colleges System for the provision of investment review and selection
140.29services under section 354B.25, subdivision 3, and arrange for the receipt of payment
140.30for those services.
140.31There is annually appropriated to the state board, from the assets of the funds for
140.32which the state board provides investment services, sums sufficient to pay the costs of
140.33all necessary expenses for the administration of the board. These sums will be deposited
140.34in the State Board of Investment operating account, which must be established by the
140.35commissioner of management and budget.

141.1    Sec. 2. Minnesota Statutes 2008, section 354B.25, subdivision 1, is amended to read:
141.2    Subdivision 1. General governance. The individual retirement account plan is the
141.3administrative responsibility of the Board of Trustees of the Minnesota State Colleges
141.4and Universities. The Board of Trustees of the Minnesota State Colleges and Universities
141.5may administer the plan directly or may contract out for administrative services with a
141.6qualified third-party plan administrative entity and may contract out for investment review
141.7and selection service.
141.8EFFECTIVE DATE.This section is effective the day following final enactment.

141.9    Sec. 3. Minnesota Statutes 2008, section 354B.25, subdivision 3, is amended to read:
141.10    Subd. 3. Selection of financial institutions. (a) The investment options provided
141.11under subdivision 2 must be selected by the board. The board may contract with the State
141.12Board of Investment or with a third party to provide the investment review and selection
141.13services. The board must not contract with a third party to provide the investment option
141.14review and selection services if the third party markets, offers, or has other material
141.15interest in investment products. The board must require any third party contracted to
141.16provide investment review and selection services to disclose to the board any contracts
141.17for services and any financial relationships it has with vendors under consideration to
141.18provide investment products under the plan.
141.19In making its selection, at a minimum, the State board of Investment shall consider
141.20the following:
141.21(1) the experience and ability of the financial institution to provide benefits and
141.22products that are suited to meet the needs of plan participants;
141.23(2) the relationship of those benefits and products provided by the financial
141.24institution to their cost;
141.25(3) the financial strength and stability of the financial institution; and
141.26(4) the fees and expenses associated with the investment products in comparison to
141.27other products of similar risk and rates of return.
141.28(b) After selecting a financial institution, the State board of Investment must
141.29periodically review each financial institution and the offered products. The periodic
141.30review must occur at least every three years. In making its review, the State board of
141.31Investment may retain appropriate consulting services to assist it in its periodic review,
141.32establish a budget for the cost of the periodic review process, and charge a proportional
141.33share of these costs to the reviewed financial institution.
141.34(c) Contracts with financial institutions under this section must be executed by the
141.35board and must be approved by the State Board of Investment before execution.
142.1(d) The State Board of Investment shall also establish policies and procedures under
142.2section 11A.04, clause (2), to carry out the provisions of this subdivision.
142.3EFFECTIVE DATE.This section is effective the day following final enactment.

142.4    Sec. 4. Minnesota Statutes 2008, section 354C.14, is amended to read:
142.5354C.14 INVESTMENT OF DEDUCTIONS AND CONTRIBUTIONS.
142.6(a) The Board of Trustees of the Minnesota State Colleges and Universities shall
142.7invest the deductions and contributions under section 354C.12, after deduction of
142.8administrative expenses under section 354C.12, subdivision 4, in annuity contracts or
142.9custodial accounts from financial institutions selected by the State Board of Investment
142.10under section 354B.25, subdivision 3.
142.11(b) The retirement contributions and death benefits provided by annuity contracts or
142.12custodial accounts purchased by the Board of Trustees of the Minnesota State Colleges
142.13and Universities are owned by the supplemental retirement plan and must be paid in
142.14accordance with those annuity contracts or custodial account agreements.
142.15EFFECTIVE DATE.This section is effective the day following final enactment.

142.16    Sec. 5. REPEALER.
142.17Minnesota Statutes 2008, section 354C.15, is repealed.
142.18EFFECTIVE DATE.This section is effective the day following final enactment.

142.19ARTICLE 9
142.20ACTUARIAL VALUATION REPORTING DEADLINE DATES

142.21    Section 1. Minnesota Statutes 2008, section 356.215, subdivision 3, is amended to read:
142.22    Subd. 3. Reports. (a) The actuarial valuations required annually must be made as of
142.23the beginning of each fiscal year.
142.24    (b) Two copies of the completed valuation must be delivered to the executive
142.25director of the Legislative Commission on Pensions and Retirement, to the commissioner
142.26of management and budget, and to the Legislative Reference Library. The copies of the
142.27actuarial valuation must be filed with the executive director of the Legislative Commission
142.28on Pensions and Retirement, the commissioner of management and budget, and the
142.29Legislative Reference Library no later than the last day of the sixth month occurring
142.30after the end of the previous fiscal year.
143.1    (c) Two copies of a quadrennial experience study must be filed with the
143.2executive director of the Legislative Commission on Pensions and Retirement, with the
143.3commissioner of management and budget, and with the Legislative Reference Library, not
143.4later than the first last day of the 11th 12th month occurring after the end of the last fiscal
143.5year of the four-year period which the experience study covers.
143.6    (d) For actuarial valuations and experience studies prepared at the direction of
143.7the Legislative Commission on Pensions and Retirement, two copies one copy of the
143.8document must be delivered to the governing or managing board or administrative officials
143.9of the applicable public pension and retirement fund or plan.
143.10EFFECTIVE DATE.This section is effective July 1, 2010.

143.11ARTICLE 10
143.12EARLY RETIREMENT INCENTIVE MODIFICATIONS

143.13    Section 1. Minnesota Statutes 2008, section 356.351, subdivision 1, is amended to read:
143.14    Subdivision 1. Eligibility. (a) An eligible appointing authority may offer the early
143.15retirement incentive in this section to an employee who:
143.16    (1) has at least 15 years of allowable service in one or more of the funds listed
143.17in section 356.30, subdivision 3, or has at least 15 years of coverage by the individual
143.18retirement account plan governed by chapter 354B employment as indicated in the
143.19personnel records of the applicable employing unit and upon retirement is immediately
143.20eligible for a retirement annuity or benefit from one or more of these funds retirement plan
143.21governed by chapter 354B, or section 356.30;
143.22    (2) terminates service after the effective date of this section, and before July 15,
143.232009 October 1, 2012; and
143.24    (3) is not in receipt of a public retirement plan retirement annuity, retirement
143.25allowance, or service pension during the month preceding the termination of qualified
143.26employment.; and
143.27(4) has not been eligible to receive a retirement annuity for a period longer than
143.28ten years.
143.29    (b) An eligible appointing authority is any Minnesota governmental employing unit
143.30which employs one or more employees with retirement coverage by a retirement plan
143.31listed in section 356.30 by virtue of that employment.
143.32    (c) An elected official is not eligible to receive an incentive under this section.
144.1(d) Employees of the Minnesota State Colleges and Universities System who
144.2participate in the incentive program under section 136F.481 are not eligible for the
144.3incentive under this section.
144.4EFFECTIVE DATE.This section is effective the day following final enactment.

144.5    Sec. 2. Minnesota Statutes 2009 Supplement, section 356.351, subdivision 2, is
144.6amended to read:
144.7    Subd. 2. Incentive. (a) For an employee who is eligible under subdivision 1, if for
144.8whom an early retirement incentive is approved under paragraph (b), and who terminates
144.9employment as provided for in the agreement, the employer may provide an amount up to
144.10$17,000, to an employee who terminates service, to:
144.11(1) a severance amount in lieu of and not to exceed the maximum amount of regular
144.12state-provided unemployment compensation for that particular person if the person had
144.13been laid off; and
144.14(2) an additional severance amount not to exceed the amount of the employer's
144.15contribution for health insurance, dental insurance, and basic life insurance that would
144.16have been payable to the particular person under the applicable collective bargaining
144.17agreement or personnel policy at the time of termination.
144.18(b) The severance amounts under paragraph (a) must be used:
144.19    (1) unless the appointing authority has designated the use under clause (2) or the use
144.20under clause (3) for the initial retirement incentive applicable to that employing entity
144.21under Laws 2007, chapter 134, after May 26, 2007, for deposit in the employee's account
144.22in the health care savings plan established by section 352.98;
144.23    (2) notwithstanding section 352.01, subdivision 11, or 354.05, subdivision 13,
144.24whichever applies, if the appointing authority has designated the use under this clause
144.25for the initial retirement incentive applicable to that employing entity under Laws 2007,
144.26chapter 134, after May 26, 2007, for purchase of service credit for unperformed service
144.27sufficient to enable the employee to retire under section 352.116, subdivision 1, paragraph
144.28(b); 353.30; 354.44, subdivision 6, paragraph (b), or 354A.31, subdivision 6, paragraph
144.29(b), whichever applies; or
144.30    (3) if the appointing authority has designated the use under this clause for the initial
144.31retirement incentive applicable to the employing entity under Laws 2007, chapter 134,
144.32after May 26, 2007, for purchase of a lifetime annuity or an annuity for a specific number
144.33of years from the applicable retirement plan to provide additional benefits, as provided in
144.34paragraph (d).
145.1    (b) (c) Approval to provide the incentive must be obtained from the commissioner
145.2of finance if the eligible employee is a state employee and must be obtained from the
145.3applicable governing board with respect to any other employing entity. An employee is
145.4eligible for the payment under paragraph (a) (b), clause (2), if the employee uses money
145.5from a deferred compensation account that, combined with the payment under paragraph
145.6(a) (b), clause (2), would be sufficient to purchase enough service credit to qualify for
145.7retirement under section 352.116, subdivision 1, paragraph (b); 353.30, subdivision 1a;
145.8354.44, subdivision 6 , paragraph (b), or 354A.31, subdivision 6, paragraph (b), whichever
145.9applies.
145.10    (c) (d) The cost to purchase service credit under paragraph (a) (b), clause (2), must
145.11be made in accordance with section 356.551.
145.12    (d) The (e) An annuity purchase under paragraph (a) (b), clause (3), must be made
145.13using annuity factors, as determined by the actuary retained under section 356.214,
145.14derived from the applicable factors used by the applicable retirement plan to calculate
145.15optional annuity forms. The purchased annuity must be the actuarial equivalent of the
145.16incentive amount.
145.17EFFECTIVE DATE.This section is effective the day following final enactment.

145.18ARTICLE 11
145.19OPTIONAL ANNUITY REVOCATION FOLLOWING CERTAIN
145.20MARRIAGE DISSOLUTIONS

145.21    Section 1. [356.48] REVOCATION OF OPTIONAL ANNUITY DUE TO
145.22MARRIAGE DISSOLUTION OR ANNULMENT.
145.23    Subdivision 1. Covered plans. This section applies to the following retirement
145.24plans:
145.25(1) the general state employees retirement plan of the Minnesota State Retirement
145.26System established under chapter 352;
145.27(2) the correctional state employees retirement plan of the Minnesota State
145.28Retirement System established under chapter 352;
145.29(3) the State Patrol retirement plan established under chapter 352B;
145.30(4) the unclassified state employees retirement program of the Minnesota State
145.31Retirement System established under chapter 352D;
145.32(5) the general employee retirement plan of the Public Employees Retirement
145.33Association established under chapter 353;
146.1(6) the public employees police and fire retirement plan established under chapter
146.2353;
146.3(7) the local government correctional employees retirement plan of the Public
146.4Employees Retirement Association established under chapter 353E;
146.5(8) the Teachers Retirement Association established under chapter 354; and
146.6(9) the uniform judicial retirement plan established under chapter 490.
146.7    Subd. 2. Treatment. (a) The treatment specified in this section applies if, after
146.8the accrual date of an annuity or benefit from an applicable plan or plans, a marriage
146.9dissolution decree or annulment decree is rendered that specifies that the designation
146.10of an optional annuity must be revoked and if the other requirements specified in this
146.11section are satisfied.
146.12(b) Notwithstanding any law to the contrary, if the applicable pension plan or plans
146.13have provisions of law that revise the monthly benefit amount payable to the primary
146.14annuitant upon the death of the individual named as the optional joint annuitant, the
146.15monthly benefit amount must be recomputed as though the individual that had been named
146.16as the optional joint annuitant died on the date a certified copy of the marriage dissolution
146.17or annulment decree is received by the chief administrative officer. Payment of any benefit
146.18adjustment under this section is prospective only.
146.19    Subd. 3. Restrictions. (a) This section does not apply if the marriage dissolution
146.20decree or annulment decree is not consistent with the requirements under section 518.58.
146.21(b) The pension plan benefit recipient must not designate, and the court may not
146.22require that the member designate, a subsequent optional annuity beneficiary.
146.23(c) This section does not apply if more than one surviving individual was named as
146.24an optional joint annuitant.
146.25    Subd. 4. Submission of documentation. To receive the treatment provided in
146.26this section, an eligible retiree or disabilitant must provide, to the chief administrative
146.27officer of the applicable pension plan, a certified copy of the marriage dissolution or
146.28annulment decree. The retiree or disabilitant and the joint annuitant must also submit a
146.29form, prescribed by the chief administrative officer of the applicable pension plan and
146.30signed by both individuals, requesting the annuity bounce back as provided in subdivision
146.312. The individuals must also provide any other documentation the chief administrative
146.32officer may request.
146.33EFFECTIVE DATE.This section is effective the day following final enactment and
146.34applies retroactively to any marriage dissolution decree or annulment decree requiring the
146.35revocation of an optional annuity form granted at any time prior to the date of enactment.

147.1    Sec. 2. Minnesota Statutes 2008, section 518.58, subdivision 3, is amended to read:
147.2    Subd. 3. Sale or distribution while proceeding pending. (a) If the court finds
147.3that it is necessary to preserve the marital assets of the parties, the court may order the
147.4sale of the homestead of the parties or the sale of other marital assets, as the individual
147.5circumstances may require, during the pendency of a proceeding for a dissolution of
147.6marriage or an annulment. If the court orders a sale, it may further provide for the
147.7disposition of the funds received from the sale during the pendency of the proceeding.
147.8If liquid or readily liquidated marital property other than property representing vested
147.9pension benefits or rights is available, the court, so far as possible, shall divide the property
147.10representing vested pension benefits or rights by the disposition of an equivalent amount
147.11of the liquid or readily liquidated property.
147.12(b) The court may order a partial distribution of marital assets during the pendency
147.13of a proceeding for a dissolution of marriage or an annulment for good cause shown or
147.14upon the request of both parties, provided that the court shall fully protect the interests
147.15of the other party.
147.16EFFECTIVE DATE.This section is effective the day following final enactment.

147.17    Sec. 3. Minnesota Statutes 2008, section 518.58, subdivision 4, is amended to read:
147.18    Subd. 4. Pension plans. (a) The division of marital property that represents pension
147.19plan benefits or rights in the form of future pension plan payments:
147.20    (1) is payable only to the extent of the amount of the pension plan benefit payable
147.21under the terms of the plan;
147.22    (2) is not payable for a period that exceeds the time that pension plan benefits are
147.23payable to the pension plan benefit recipient;
147.24    (3) is not payable in a lump-sum amount from defined benefit pension plan assets
147.25attributable in any fashion to a spouse with the status of an active member, deferred
147.26retiree, or benefit recipient of a pension plan;
147.27    (4) if the former spouse to whom the payments are to be made dies prior to the end
147.28of the specified payment period with the right to any remaining payments accruing to an
147.29estate or to more than one survivor, is payable only to a trustee on behalf of the estate or
147.30the group of survivors for subsequent apportionment by the trustee; and
147.31    (5) in the case of defined benefit public pension plan benefits or rights, may not
147.32commence until the public plan member submits a valid application for a public pension
147.33plan benefit and the benefit becomes payable.
147.34    (b) The individual retirement account plans established under chapter 354B may
147.35provide in its plan document, if published and made generally available, for an alternative
148.1marital property division or distribution of individual retirement account plan assets. If an
148.2alternative division or distribution procedure is provided, it applies in place of paragraph
148.3(a), clause (5).
148.4(c) If liquid or readily liquidated marital property other than property representing
148.5vested pension benefits or rights is available, the court, so far as possible, shall divide the
148.6property representing vested pension benefits or rights by the disposition of an equivalent
148.7amount of the liquid or readily liquidated property.
148.8(d) If sufficient liquid or readily liquidated marital property other than property
148.9representing vested pension benefits or rights is not available, the court may order the
148.10revocation of the designation of an optional annuity beneficiary in pension plans specified
148.11in section 356.48 or in any other pension plan in which plan-governing law or governing
148.12documents allow revocation of an optional annuity in marital dissolution or annulment
148.13situations.
148.14EFFECTIVE DATE.(a) This section is effective the day following final enactment.
148.15(b) This section applies retroactively, for plans specified in section 365.48, to any
148.16marriage dissolution decree or annulment decree requiring the revocation of an optional
148.17annuity form granted at any time prior to the date of enactment.

148.18ARTICLE 12
148.19ADMINISTRATIVE CONSOLIDATION OF THE MINNEAPOLIS
148.20EMPLOYEES RETIREMENT FUND INTO THE PUBLIC EMPLOYEES
148.21RETIREMENT ASSOCIATION

148.22    Section 1. Minnesota Statutes 2009 Supplement, section 353.01, subdivision 2a,
148.23is amended to read:
148.24    Subd. 2a. Included employees. (a) Public employees whose salary from
148.25employment in one or more positions within one governmental subdivision exceeds $425
148.26in any month shall participate as members of the association. If the salary is less than
148.27$425 in a subsequent month, the employee retains membership eligibility. Eligible public
148.28employees shall participate as members of the association with retirement coverage by
148.29the public general employees retirement plan or under this chapter, the public employees
148.30police and fire retirement plan under this chapter, or the local government correctional
148.31employees retirement plan under chapter 353E, whichever applies, as a condition of their
148.32employment on the first day of employment unless they:
148.33    (1) are specifically excluded under subdivision 2b;
148.34    (2) do not exercise their option to elect retirement coverage in the association as
148.35provided in subdivision 2d, paragraph (a); or
149.1    (3) are employees of the governmental subdivisions listed in subdivision 2d,
149.2paragraph (b), where the governmental subdivision has not elected to participate as a
149.3governmental subdivision covered by the association.
149.4    (b) A public employee who was a member of the association on June 30, 2002,
149.5based on employment that qualified for membership coverage by the public employees
149.6retirement plan or the public employees police and fire plan under this chapter, or the
149.7local government correctional employees retirement plan under chapter 353E as of June
149.830, 2002, retains that membership for the duration of the person's employment in that
149.9position or incumbency in elected office. Except as provided in subdivision 28, the person
149.10shall participate as a member until the employee or elected official terminates public
149.11employment under subdivision 11a or terminates membership under subdivision 11b.
149.12    (c) Public employees under paragraph (a) include:
149.13(1) physicians under section 353D.01, subdivision 2, who do not elect public
149.14employees defined contribution plan coverage under section 353D.02, subdivision 2;
149.15(2) full-time employees of the Dakota County Agricultural Society; and
149.16(3) employees of the Minneapolis Firefighters Relief Association or Minneapolis
149.17Police Relief Association who are not excluded employees under subdivision 2b due to
149.18coverage by the relief association pension plan and who elect Public Employee Retirement
149.19Association general plan coverage under Laws 2009, chapter 169, article 12, section 10.
149.20(d) For the purpose of participation in the MERF division of the general employees
149.21retirement plan, public employees include employees who were members of the former
149.22Minneapolis Employees Retirement Fund on June 29, 2010, and who participate as
149.23members of the MERF division of the association.

149.24    Sec. 2. Minnesota Statutes 2008, section 353.01, subdivision 2b, is amended to read:
149.25    Subd. 2b. Excluded employees. The following public employees are not eligible to
149.26participate as members of the association with retirement coverage by the public general
149.27employees retirement plan, the local government correctional employees retirement plan
149.28under chapter 353E, or the public employees police and fire retirement plan:
149.29    (1) public officers, other than county sheriffs, who are elected to a governing body,
149.30or persons who are appointed to fill a vacancy in an elective office of a governing body,
149.31whose term of office commences on or after July 1, 2002, for the service to be rendered
149.32in that elective position;
149.33    (2) election officers or election judges;
149.34    (3) patient and inmate personnel who perform services for a governmental
149.35subdivision;
150.1    (4) except as otherwise specified in subdivision 12a, employees who are hired for
150.2a temporary position as defined under subdivision 12a, and employees who resign from
150.3a nontemporary position and accept a temporary position within 30 days in the same
150.4governmental subdivision;
150.5    (5) employees who are employed by reason of work emergency caused by fire,
150.6flood, storm, or similar disaster;
150.7    (6) employees who by virtue of their employment in one governmental subdivision
150.8are required by law to be a member of and to contribute to any of the plans or funds
150.9administered by the Minnesota State Retirement System, the Teachers Retirement
150.10Association, the Duluth Teachers Retirement Fund Association, the St. Paul Teachers
150.11Retirement Fund Association, the Minneapolis Employees Retirement Fund, or any police
150.12or firefighters relief association governed by section 69.77 that has not consolidated
150.13with the Public Employees Retirement Association, or any local police or firefighters
150.14consolidation account who have not elected the type of benefit coverage provided by the
150.15public employees police and fire fund under sections 353A.01 to 353A.10, or any persons
150.16covered by section 353.665, subdivision 4, 5, or 6, who have not elected public employees
150.17police and fire plan benefit coverage. This clause must not be construed to prevent a person
150.18from being a member of and contributing to the Public Employees Retirement Association
150.19and also belonging to and contributing to another public pension plan or fund for other
150.20service occurring during the same period of time. A person who meets the definition of
150.21"public employee" in subdivision 2 by virtue of other service occurring during the same
150.22period of time becomes a member of the association unless contributions are made to
150.23another public retirement fund on the salary based on the other service or to the Teachers
150.24Retirement Association by a teacher as defined in section 354.05, subdivision 2;
150.25    (7) persons who are members of a religious order and are excluded from coverage
150.26under the federal Old Age, Survivors, Disability, and Health Insurance Program for the
150.27performance of service as specified in United States Code, title 42, section 410(a)(8)(A),
150.28as amended through January 1, 1987, if no irrevocable election of coverage has been made
150.29under section 3121(r) of the Internal Revenue Code of 1954, as amended;
150.30    (8) employees of a governmental subdivision who have not reached the age of
150.3123 and are enrolled on a full-time basis to attend or are attending classes on a full-time
150.32basis at an accredited school, college, or university in an undergraduate, graduate, or
150.33professional-technical program, or a public or charter high school;
150.34    (9) resident physicians, medical interns, and pharmacist residents and pharmacist
150.35interns who are serving in a degree or residency program in public hospitals or clinics;
151.1    (10) students who are serving in an internship or residency program sponsored
151.2by an accredited educational institution;
151.3    (11) persons who hold a part-time adult supplementary technical college license who
151.4render part-time teaching service in a technical college;
151.5    (12) except for employees of Hennepin County or Hennepin Healthcare System,
151.6Inc., foreign citizens working for a governmental subdivision with a work permit of less
151.7than three years, or an H-1b visa valid for less than three years of employment. Upon
151.8notice to the association that the work permit or visa extends beyond the three-year period,
151.9the foreign citizens must be reported for membership from the date of the extension;
151.10    (13) public hospital employees who elected not to participate as members of the
151.11association before 1972 and who did not elect to participate from July 1, 1988, to October
151.121, 1988;
151.13    (14) except as provided in section 353.86, volunteer ambulance service personnel,
151.14as defined in subdivision 35, but persons who serve as volunteer ambulance service
151.15personnel may still qualify as public employees under subdivision 2 and may be members
151.16of the Public Employees Retirement Association and participants in the public general
151.17employees retirement fund or the public employees police and fire fund, whichever
151.18applies, on the basis of compensation received from public employment service other than
151.19service as volunteer ambulance service personnel;
151.20    (15) except as provided in section 353.87, volunteer firefighters, as defined in
151.21subdivision 36, engaging in activities undertaken as part of volunteer firefighter duties;
151.22provided that a person who is a volunteer firefighter may still qualify as a public
151.23employee under subdivision 2 and may be a member of the Public Employees Retirement
151.24Association and a participant in the public general employees retirement fund or the public
151.25employees police and fire fund, whichever applies, on the basis of compensation received
151.26from public employment activities other than those as a volunteer firefighter;
151.27    (16) pipefitters and associated trades personnel employed by Independent School
151.28District No. 625, St. Paul, with coverage under a collective bargaining agreement by the
151.29pipefitters local 455 pension plan who were either first employed after May 1, 1997, or,
151.30if first employed before May 2, 1997, elected to be excluded under Laws 1997, chapter
151.31241, article 2, section 12;
151.32    (17) electrical workers, plumbers, carpenters, and associated trades personnel
151.33employed by Independent School District No. 625, St. Paul, or the city of St. Paul,
151.34who have retirement coverage under a collective bargaining agreement by the Electrical
151.35Workers Local 110 pension plan, the United Association Plumbers Local 34 pension plan,
151.36or the Carpenters Local 87 pension plan who were either first employed after May 1,
152.12000, or, if first employed before May 2, 2000, elected to be excluded under Laws 2000,
152.2chapter 461, article 7, section 5;
152.3    (18) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers,
152.4painters, allied tradesworkers, and plasterers employed by the city of St. Paul or
152.5Independent School District No. 625, St. Paul, with coverage under a collective
152.6bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan,
152.7the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324
152.8pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities
152.9Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if
152.10first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special
152.11Session chapter 10, article 10, section 6;
152.12    (19) plumbers employed by the Metropolitan Airports Commission, with coverage
152.13under a collective bargaining agreement by the Plumbers Local 34 pension plan, who either
152.14were first employed after May 1, 2001, or if first employed before May 2, 2001, elected to
152.15be excluded under Laws 2001, First Special Session chapter 10, article 10, section 6;
152.16    (20) employees who are hired after June 30, 2002, to fill seasonal positions under
152.17subdivision 12b which are limited in duration by the employer to 185 consecutive calendar
152.18days or less in each year of employment with the governmental subdivision;
152.19    (21) persons who are provided supported employment or work-study positions
152.20by a governmental subdivision and who participate in an employment or industries
152.21program maintained for the benefit of these persons where the governmental subdivision
152.22limits the position's duration to three years or less, including persons participating in a
152.23federal or state subsidized on-the-job training, work experience, senior citizen, youth, or
152.24unemployment relief program where the training or work experience is not provided as a
152.25part of, or for, future permanent public employment;
152.26    (22) independent contractors and the employees of independent contractors; and
152.27    (23) reemployed annuitants of the association during the course of that
152.28reemployment.

152.29    Sec. 3. Minnesota Statutes 2008, section 353.01, is amended by adding a subdivision
152.30to read:
152.31    Subd. 47. MERF division. "MERF division" means the separate retirement plan
152.32within the general employees retirement plan of the Public Employees Retirement
152.33Association containing the applicable provisions of Minnesota Statutes 2008, chapter
152.34422A.

153.1    Sec. 4. Minnesota Statutes 2008, section 353.01, is amended by adding a subdivision
153.2to read:
153.3    Subd. 48. MERF division account. "MERF division account" means the separate
153.4account within the retirement fund of the general employees retirement fund of the
153.5Public Employees Retirement Association in which the actuarial liabilities of the former
153.6Minneapolis Employees Retirement Fund are held, and in which the assets of the former
153.7Minneapolis Employees Retirement Fund are credited.

153.8    Sec. 5. Minnesota Statutes 2008, section 353.05, is amended to read:
153.9353.05 CUSTODIAN OF FUNDS.
153.10The commissioner of management and budget shall be ex officio treasurer of the
153.11retirement funds of the association, including the MERF division, and the general bond of
153.12the commissioner of management and budget to the state shall must be so conditioned
153.13as to cover all liability for acts as treasurer of these funds. All moneys money of the
153.14association received by the commissioner of management and budget shall must be set
153.15aside in the state treasury to the credit of the proper fund or account. The commissioner
153.16of management and budget shall transmit monthly to the executive director a detailed
153.17statement of all amounts so received and credited to the fund funds, including the MERF
153.18division. Payments out of the fund shall funds, including the MERF division, may only
153.19be made only on warrants issued by the commissioner of management and budget, upon
153.20abstracts signed by the executive director; provided that abstracts for investment may be
153.21signed by the secretary executive director of the State Board of Investment.

153.22    Sec. 6. Minnesota Statutes 2009 Supplement, section 353.06, is amended to read:
153.23353.06 STATE BOARD OF INVESTMENT TO INVEST FUNDS.
153.24The executive director shall from time to time certify to the State Board of
153.25Investment for investment such portions of the retirement fund funds of the association,
153.26including the MERF division, as in its the director's judgment may not be required for
153.27immediate use. The State Board of Investment shall thereupon invest and reinvest the sum
153.28so certified, or transferred, in such securities as are duly authorized as legal investments
153.29for state employees retirement fund under section 11A.24 and shall have has authority to
153.30sell, convey, and exchange such securities and invest and reinvest the securities when it
153.31deems it desirable to do so and shall sell securities upon request of the board of trustees
153.32executive director when such funds are needed for its purposes. All of the provisions
153.33regarding accounting procedures and restrictions and conditions for the purchase and
153.34sale of securities under chapter 11A must apply to the accounting, purchase and sale of
154.1securities for the funds of the Public Employees Retirement fund Association, including
154.2the MERF division.

154.3    Sec. 7. Minnesota Statutes 2008, section 353.27, as amended by Laws 2009, chapter
154.4169, article 1, section 32, and article 4, sections 9, 10, 11, and 12, is amended to read:
154.5353.27 PUBLIC GENERAL EMPLOYEES RETIREMENT FUND.
154.6    Subdivision 1. Income; disbursements. There is a special fund known as the
154.7"public general employees retirement fund," the "retirement fund," or the "fund," which
154.8must include all the assets of the general employees retirement plan of the association.
154.9This fund must be credited with all contributions, all interest and all other income of the
154.10general employees retirement plan of the Public Employees Retirement Association that
154.11are authorized by law. From this fund there is appropriated the payments authorized by
154.12this chapter sections 353.01 to 353.46 in the amounts and at such time provided herein,
154.13including the expenses of administering the general employees retirement plan and fund.
154.14    Subd. 1a. MERF division account established; revenue and disbursements. The
154.15MERF division account is established as a special account. The MERF division account
154.16includes all of the assets of the former Minneapolis Employees Retirement Fund that
154.17were transferred to the administration of the Public Employees Retirement Association
154.18under section 353.50. The special account is credited with the contributions under
154.19section 353.50, subdivision 7, state aid under sections 356.43 and 422A.101, subdivision
154.203, investment performance on the special account assets, and all other income of the
154.21MERF division authorized by law. The payments of annuities and benefits authorized by
154.22Minnesota Statutes 2008, chapter 422A, in the amounts and at the times provided in
154.23that chapter, and the administrative expenses of the MERF division are appropriated
154.24from the special account.
154.25    Subd. 2. General employees retirement plan; employee contribution. (a) For
154.26a basic member of the general employees retirement plan of the Public Employees
154.27Retirement Association, the employee contribution is 9.10 percent of salary. For a
154.28coordinated member of the general employees retirement plan of the Public Employees
154.29Retirement Association, the employee contribution is six percent of salary plus any
154.30contribution rate adjustment under subdivision 3b.
154.31(b) These contributions must be made by deduction from salary as defined in section
154.32353.01, subdivision 10 , in the manner provided in subdivision 4. If any portion of a
154.33member's salary is paid from other than public funds, the member's employee contribution
154.34must be based on the total salary received by the member from all sources.
155.1    Subd. 3. General employees retirement plan; employer contribution. (a) For
155.2a basic member of the general employees retirement plan of the Public Employees
155.3Retirement Association, the employer contribution is 9.10 percent of salary. For a
155.4coordinated member of the general employees retirement plan of the Public Employees
155.5Retirement Association, the employer contribution is six percent of salary plus any
155.6contribution rate adjustment under subdivision 3b.
155.7(b) This contribution must be made from funds available to the employing
155.8subdivision by the means and in the manner provided in section 353.28.
155.9    Subd. 3a. Additional employer contribution. (a) An additional employer
155.10contribution to the general employees retirement fund of the Public Employees Retirement
155.11Association must be made equal to the following applicable percentage of the total salary
155.12amount for "basic members" and for "coordinated members":
155.13
Basic Program
Coordinated Program
155.14
Effective before January 1, 2006
2.68
.43
155.15
Effective January 1, 2006
2.68
.50
155.16
Effective January 1, 2009
2.68
.75
155.17
Effective January 1, 2010
2.68
1.00
155.18These contributions must be made from funds available to the employing subdivision
155.19by the means and in the manner provided in section 353.28.
155.20(b) The coordinated program contribution rates set forth in paragraph (a) effective
155.21for January 1, 2009, or January 1, 2010, must not be implemented if, following receipt of
155.22the July 1, 2008, or July 1, 2009, annual actuarial valuation reports report under section
155.23356.215 , respectively, the actuarially required contributions are equal to or less than the
155.24total rates under this section in effect as of January 1, 2008.
155.25(c) This subdivision is repealed once the actuarial value of the assets of the general
155.26employees retirement plan of the Public Employees Retirement Association equal or
155.27exceed the actuarial accrued liability of the plan as determined by the actuary retained
155.28under sections 356.214 and 356.215. The repeal is effective on the first day of the first full
155.29pay period occurring after March 31 of the calendar year following the issuance of the
155.30actuarial valuation upon which the repeal is based.
155.31    Subd. 3b. Change in employee and employer contributions in certain instances.
155.32(a) For purposes of this section, a contribution sufficiency exists if the total of the
155.33employee contribution under subdivision 2, the employer contribution under subdivision
155.343, the additional employer contribution under subdivision 3a, and any additional
155.35contribution previously imposed under this subdivision exceeds the total of the normal
155.36cost, the administrative expenses, and the amortization contribution of the general
155.37employees retirement plan as reported in the most recent actuarial valuation of the
156.1retirement plan prepared by the actuary retained under section 356.214 and prepared under
156.2section 356.215 and the standards for actuarial work of the Legislative Commission on
156.3Pensions and Retirement. For purposes of this section, a contribution deficiency exists if
156.4the total of the employee contributions under subdivision 2, the employer contributions
156.5under subdivision 3, the additional employer contribution under subdivision 3a, and any
156.6additional contribution previously imposed under this subdivision is less than the total
156.7of the normal cost, the administrative expenses, and the amortization contribution of the
156.8general employees retirement plan as reported in the most recent actuarial valuation of the
156.9retirement plan prepared by the actuary retained under section 356.214 and prepared under
156.10section 356.215 and the standards for actuarial work of the Legislative Commission on
156.11Pensions and Retirement.
156.12(b) Employee and employer contributions to the general employees retirement plan
156.13under subdivisions 2 and 3 must be adjusted:
156.14(1) if, after July 1, 2010, the regular actuarial valuations of the general employees
156.15retirement plan of the Public Employees Retirement Association under section 356.215
156.16indicate that there is a contribution sufficiency under paragraph (a) equal to or greater
156.17than 0.5 percent of covered payroll for two consecutive years, the coordinated program
156.18employee and employer contribution rates must be decreased as determined under
156.19paragraph (c) to a level such that the sufficiency equals no more than 0.25 percent of
156.20covered payroll based on the most recent actuarial valuation; or
156.21(2) if, after July 1, 2010, the regular actuarial valuations of the general employees
156.22retirement plan of the Public Employees Retirement Association under section 356.215
156.23indicate that there is a deficiency equal to or greater than 0.5 percent of covered payroll for
156.24two consecutive years, the coordinated program employee and employer contribution rates
156.25must be increased as determined under paragraph (c) to a level such that no deficiency
156.26exists based on the most recent actuarial valuation.
156.27(c) The general employees retirement plan contribution rate increase or decrease
156.28must be determined by the executive director of the Public Employees Retirement
156.29Association, must be reported to the chair and the executive director of the Legislative
156.30Commission on Pensions and Retirement on or before the next February 1, and, if the
156.31Legislative Commission on Pensions and Retirement does not recommend against the rate
156.32change or does not recommend a modification in the rate change, is effective on the
156.33next July 1 following the determination by the executive director that a contribution
156.34deficiency or sufficiency has existed for two consecutive fiscal years based on the most
156.35recent actuarial valuations under section 356.215. If the actuarially required contribution
156.36of the general employees retirement plan exceeds or is less than the total support provided
157.1by the combined employee and employer contribution rates by more than 0.5 percent of
157.2covered payroll, the general employees retirement plan coordinated program employee
157.3and employer contribution rates must be adjusted incrementally over one or more years to
157.4a level such that there remains a contribution sufficiency of no more than 0.25 percent
157.5of covered payroll.
157.6(d) No incremental adjustment may exceed 0.25 percent for either the general
157.7employees retirement plan coordinated program employee and employer contribution rates
157.8per year in which any adjustment is implemented. A general employees retirement plan
157.9contribution rate adjustment under this subdivision must not be made until at least two
157.10years have passed since fully implementing a previous adjustment under this subdivision.
157.11(e) The general employees retirement plan contribution sufficiency or deficiency
157.12determination under paragraphs (a) to (d) must be made without the inclusion of the
157.13contributions to, the funded condition of, or the actuarial funding requirements of the
157.14MERF division.
157.15    Subd. 4. Employer reporting requirements; contributions; member status.
157.16(a) A representative authorized by the head of each department shall deduct employee
157.17contributions from the salary of each employee who qualifies for membership in the
157.18general employees retirement plan of the Public Employees Retirement Association or in
157.19the public employees police and fire retirement plan under this chapter and remit payment
157.20in a manner prescribed by the executive director for the aggregate amount of the employee
157.21contributions, the employer contributions and the additional employer contributions to be
157.22received within 14 calendar days. The head of each department or the person's designee
157.23shall for each pay period submit to the association a salary deduction report in the format
157.24prescribed by the executive director. Data required to be submitted as part of salary
157.25deduction reporting must include, but are not limited to:
157.26(1) the legal names and Social Security numbers of employees who are members;
157.27(2) the amount of each employee's salary deduction;
157.28(3) the amount of salary from which each deduction was made;
157.29(4) the beginning and ending dates of the payroll period covered and the date of
157.30actual payment; and
157.31(5) adjustments or corrections covering past pay periods.
157.32(b) Employers must furnish the data required for enrollment for each new employee
157.33who qualifies for membership in the general employees retirement plan of the Public
157.34Employees Retirement Association or in the public employees police and fire retirement
157.35plan in the format prescribed by the executive director. The required enrollment data
157.36on new employees must be submitted to the association prior to or concurrent with the
158.1submission of the initial employee salary deduction. The employer shall also report
158.2to the association all member employment status changes, such as leaves of absence,
158.3terminations, and death, and shall report the effective dates of those changes, on an
158.4ongoing basis for the payroll cycle in which they occur. The employer shall furnish data,
158.5forms, and reports as may be required by the executive director for proper administration
158.6of the retirement system. Before implementing new or different computerized reporting
158.7requirements, the executive director shall give appropriate advance notice to governmental
158.8subdivisions to allow time for system modifications.
158.9(c) Notwithstanding paragraph (a), the association executive director may provide
158.10for less frequent reporting and payments for small employers.
158.11    Subd. 7. Adjustment for erroneous receipts or disbursements. (a) Except
158.12as provided in paragraph (b), erroneous employee deductions and erroneous employer
158.13contributions and additional employer contributions to the general employees retirement
158.14plan of the Public Employees Retirement Association or to the public employees police
158.15and fire retirement plan for a person, who otherwise does not qualify for membership
158.16under this chapter, are considered:
158.17(1) valid if the initial erroneous deduction began before January 1, 1990. Upon
158.18determination of the error by the association, the person may continue membership in the
158.19association while employed in the same position for which erroneous deductions were
158.20taken, or file a written election to terminate membership and apply for a refund upon
158.21termination of public service or defer an annuity under section 353.34; or
158.22(2) invalid, if the initial erroneous employee deduction began on or after January 1,
158.231990. Upon determination of the error, the association shall refund all erroneous employee
158.24deductions and all erroneous employer contributions as specified in paragraph (e). No
158.25person may claim a right to continued or past membership in the association based on
158.26erroneous deductions which began on or after January 1, 1990.
158.27(b) Erroneous deductions taken from the salary of a person who did not qualify for
158.28membership in the general employees retirement plan of the Public Employees Retirement
158.29Association or in the public employees police and fire retirement plan by virtue of
158.30concurrent employment before July 1, 1978, which required contributions to another
158.31retirement fund or relief association established for the benefit of officers and employees
158.32of a governmental subdivision, are invalid. Upon discovery of the error, the association
158.33shall remove all invalid service and, upon termination of public service, the association
158.34shall refund all erroneous employee deductions to the person, with interest as determined
158.35under section 353.34, subdivision 2, and all erroneous employer contributions without
158.36interest to the employer. This paragraph has both retroactive and prospective application.
159.1(c) Adjustments to correct employer contributions and employee deductions taken
159.2in error from amounts which are not salary under section 353.01, subdivision 10, must
159.3be made as specified in paragraph (e). The period of adjustment must be limited to the
159.4fiscal year in which the error is discovered by the association and the immediate two
159.5preceding fiscal years.
159.6(d) If there is evidence of fraud or other misconduct on the part of the employee or
159.7the employer, the board of trustees may authorize adjustments to the account of a member
159.8or former member to correct erroneous employee deductions and employer contributions
159.9on invalid salary and the recovery of any overpayments for a period longer than provided
159.10for under paragraph (c).
159.11(e) Upon discovery of the receipt of erroneous employee deductions and employer
159.12contributions under paragraph (a), clause (2), or paragraph (c), the association must require
159.13the employer to discontinue the erroneous employee deductions and erroneous employer
159.14contributions reported on behalf of a member. Upon discontinuation, the association must:
159.15(1) for a member, provide a refund or credit to the employer in the amount of the
159.16invalid employee deductions with interest on the invalid employee deductions at the rate
159.17specified under section 353.34, subdivision 2, from the received date of each invalid salary
159.18transaction through the date the credit or refund is made; and the employer must pay the
159.19refunded employee deductions plus interest to the member;
159.20(2) for a former member who:
159.21(i) is not receiving a retirement annuity or benefit, return the erroneous employee
159.22deductions to the former member through a refund with interest at the rate specified under
159.23section 353.34, subdivision 2, from the received date of each invalid salary transaction
159.24through the date the credit or refund is made; or
159.25(ii) is receiving a retirement annuity or disability benefit, or a person who is
159.26receiving an optional annuity or survivor benefit, for whom it has been determined an
159.27overpayment must be recovered, adjust the payment amount and recover the overpayments
159.28as provided under this section; and
159.29(3) return the invalid employer contributions reported on behalf of a member or
159.30former member to the employer by providing a credit against future contributions payable
159.31by the employer.
159.32(f) In the event that a salary warrant or check from which a deduction for the
159.33retirement fund was taken has been canceled or the amount of the warrant or check
159.34returned to the funds of the department making the payment, a refund of the sum
159.35deducted, or any portion of it that is required to adjust the deductions, must be made
159.36to the department or institution.
160.1(g) If the accrual date of any retirement annuity, survivor benefit, or disability benefit
160.2is within the limitation period specified in paragraph (c), and an overpayment has resulted
160.3by using invalid service or salary, or due to any erroneous calculation procedure, the
160.4association must recalculate the annuity or benefit payable and recover any overpayment
160.5as provided under subdivision 7b.
160.6(h) Notwithstanding the provisions of this subdivision, the association may apply
160.7the Revenue Procedures defined in the federal Internal Revenue Service Employee Plans
160.8Compliance Resolution System and not issue a refund of erroneous employee deductions
160.9and employer contributions or not recover a small overpayment of benefits if the cost to
160.10correct the error would exceed the amount of the member refund or overpayment.
160.11(i) Any fees or penalties assessed by the federal Internal Revenue Service for any
160.12failure by an employer to follow the statutory requirements for reporting eligible members
160.13and salary must be paid by the employer.
160.14    Subd. 7a. Deductions or contributions transmitted by error. (a) If employee
160.15deductions and employer contributions under this section, section 353.50, 353.65, or
160.16353E.03 were erroneously transmitted to the association, but should have been transmitted
160.17to another Minnesota public pension plan, the executive director shall transfer the
160.18erroneous employee deductions and employer contributions to the appropriate retirement
160.19fund or individual account, as applicable, without interest. The time limitations specified
160.20in subdivisions 7 and 12 do not apply.
160.21(b) For purposes of this subdivision, a Minnesota public pension plan means a
160.22plan specified in section 356.30, subdivision 3, or the plans governed by chapters 353D
160.23and 354B.
160.24(c) A potential transfer under paragraph (a) that is reasonably determined to cause
160.25the plan to fail to be a qualified plan under section 401(a) of the federal Internal Revenue
160.26Code, as amended, must not be made by the executive director of the association. Within
160.2730 days after being notified by the Public Employees Retirement Association of an
160.28unmade potential transfer under this paragraph, the employer of the affected person
160.29must transmit an amount representing the applicable salary deductions and employer
160.30contributions, without interest, to the retirement fund of the appropriate Minnesota public
160.31pension plan, or to the applicable individual account if the proper coverage is by a defined
160.32contribution plan. The association must provide the employing unit a credit for the amount
160.33of the erroneous salary deductions and employer contributions against future contributions
160.34from the employer. If the employing unit receives a credit under this paragraph, the
160.35employing unit is responsible for refunding to the applicable employee any amount that
160.36had been erroneously deducted from the person's salary.
161.1    Subd. 7b. Recovery of overpayments. (a) In the event the executive director
161.2determines that an overpaid annuity or benefit that from the general employees retirement
161.3plan of the Public Employees Retirement Association, the public employees police and
161.4fire retirement plan, or the local government correctional employees retirement plan is
161.5the result of invalid salary included in the average salary used to calculate the payment
161.6amount must be recovered, the association must determine the amount of the employee
161.7deductions taken in error on the invalid salary, with interest determined in the manner
161.8provided for a former member under subdivision 7, paragraph (e), clause (2), item (i),
161.9and must subtract that amount from the total annuity or benefit overpayment, and the
161.10remaining balance of the overpaid annuity or benefit, if any, must be recovered.
161.11(b) If the invalid employee deductions plus interest exceed the amount of the
161.12overpaid benefits, the balance must be refunded to the person to whom the benefit or
161.13annuity is being paid.
161.14(c) Any invalid employer contributions reported on the invalid salary must be
161.15credited to the employer as provided in subdivision 7, paragraph (e).
161.16(d) If a member or former member, who is receiving a retirement annuity or
161.17disability benefit for which an overpayment is being recovered, dies before recovery of
161.18the overpayment is completed and a joint and survivor optional annuity is payable, the
161.19remaining balance of the overpaid annuity or benefit must continue to be recovered from
161.20the payment to the optional annuity beneficiary.
161.21(e) If the association finds that a refund has been overpaid to a former member,
161.22beneficiary or other person, the amount of the overpayment must be recovered for the
161.23benefit of the respective retirement fund or account.
161.24(f) The board of trustees shall adopt policies directing the period of time and manner
161.25for the collection of any overpaid retirement or optional annuity, and survivor or disability
161.26benefit, or a refund that the executive director determines must be recovered as provided
161.27under this section.
161.28    Subd. 7c. Limitation on additional plan coverage. No deductions for any plan
161.29under this chapter or chapter 353E may be taken from the salary of a person who is
161.30employed by a governmental subdivision under section 353.01, subdivision 6, and who is
161.31receiving disability benefit payments from any plan under this chapter or chapter 353E
161.32unless the person waives the right to further disability benefit payments.
161.33    Subd. 8. District court reporters; salary deductions. Deductions from the salary
161.34of a district court reporter in a judicial district consisting of two or more counties shall
161.35must be made by the auditor of the county in which the bond and official oath of such
161.36district court reporter are filed, from the portion of salary paid by such county.
162.1    Subd. 9. Fee officers; contributions; obligations of employers. Any appointed or
162.2elected officer of a governmental subdivision who was or is a "public employee" within
162.3the meaning of section 353.01 and was or is a member of the fund general employees
162.4retirement plan of the Public Employees Retirement Association and whose salary
162.5was or is paid in whole or in part from revenue derived by fees and assessments, shall
162.6pay employee contribution in the amount, at the time, and in the manner provided in
162.7subdivisions 2 and 4. This subdivision shall does not apply to district court reporters.
162.8The employer contribution as provided in subdivision 3, and the additional employer
162.9contribution as provided in subdivision 3a, with respect to such service shall must be
162.10paid by the governmental subdivision. This subdivision shall have has both retroactive
162.11and prospective application as to all such members; and every employing governmental
162.12subdivision is deemed liable, retroactively and prospectively, for all employer and
162.13additional employer contributions for every such member of the general employees
162.14retirement plan in its employ. Delinquencies under this section shall be are governed
162.15in all respects by section 353.28.
162.16    Subd. 10. Employer exclusion reports. The head of a department shall annually
162.17furnish the executive director with an exclusion report listing only those employees in
162.18potentially PERA-eligible PERA general employees retirement plan-eligible positions
162.19who were not reported as members of the association general employees retirement plan
162.20and who worked during the school year for school employees and calendar year for
162.21nonschool employees. The department head must certify the accuracy and completeness
162.22of the exclusion report to the association. The executive director shall prescribe the
162.23manner and forms, including standardized exclusion codes, to be used by a governmental
162.24subdivision in preparing and filing exclusion reports. The executive director shall also
162.25check the exclusion report to ascertain whether any omissions have been made by a
162.26department head in the reporting of new public employees for membership. The executive
162.27director may delegate an association employee under section 353.03, subdivision 3a,
162.28paragraph (b), clause (5), to conduct a field audit to review the payroll records of a
162.29governmental subdivision.
162.30    Subd. 11. Employers; required to furnish requested information. (a) All
162.31governmental subdivisions shall furnish promptly such other information relative to the
162.32employment status of all employees or former employees, including, but not limited to,
162.33payroll abstracts pertaining to all past and present employees, as may be requested by the
162.34executive director, including schedules of salaries applicable to various categories of
162.35employment.
163.1(b) In the event payroll abstract records have been lost or destroyed, for whatever
163.2reason or in whatever manner, so that such schedules of salaries cannot be furnished
163.3therefrom, the employing governmental subdivision, in lieu thereof, shall furnish to the
163.4association an estimate of the earnings of any employee or former employee for any
163.5period as may be requested by the executive director. If the association is provided a
163.6schedule of estimated earnings, the executive director is authorized to use the same as a
163.7basis for making whatever computations might be necessary for determining obligations
163.8of the employee and employer to the general employees retirement fund plan, the public
163.9employees police and fire retirement plan, or the local government correctional employees
163.10retirement plan. If estimates are not furnished by the employer at the request of the
163.11executive director, the executive director may estimate the obligations of the employee
163.12and employer to the general employees retirement fund, the public employees police and
163.13fire retirement plan, or the local government correctional employees retirement plan based
163.14upon those records that are in its possession.
163.15    Subd. 12. Omitted salary deductions; obligations. (a) In the case of omission
163.16of required deductions for the general employees retirement plan, the public employees
163.17police and fire retirement plan, or the local government correctional employees retirement
163.18plan from the salary of an employee, the department head or designee shall immediately,
163.19upon discovery, report the employee for membership and deduct the employee deductions
163.20under subdivision 4 during the current pay period or during the pay period immediately
163.21following the discovery of the omission. Payment for the omitted obligations may only be
163.22made in accordance with reporting procedures and methods established by the executive
163.23director.
163.24(b) When the entire omission period of an employee does not exceed 60 days, the
163.25governmental subdivision may report and submit payment of the omitted employee
163.26deductions and the omitted employer contributions through the reporting processes under
163.27subdivision 4.
163.28(c) When the omission period of an employee exceeds 60 days, the governmental
163.29subdivision shall furnish to the association sufficient data and documentation upon which
163.30the obligation for omitted employee and employer contributions can be calculated.
163.31The omitted employee deductions must be deducted from the employee's subsequent
163.32salary payment or payments and remitted to the association for deposit in the applicable
163.33retirement fund. The employee shall pay omitted employee deductions due for the 60
163.34days prior to the end of the last pay period in the omission period during which salary
163.35was earned. The employer shall pay any remaining omitted employee deductions and any
163.36omitted employer contributions, plus cumulative interest at an annual rate of 8.5 percent
164.1compounded annually, from the date or dates each omitted employee contribution was
164.2first payable.
164.3(d) An employer shall not hold an employee liable for omitted employee deductions
164.4beyond the pay period dates under paragraph (c), nor attempt to recover from the employee
164.5those employee deductions paid by the employer on behalf of the employee. Omitted
164.6deductions due under paragraph (c) which are not paid by the employee constitute a
164.7liability of the employer that failed to deduct the omitted deductions from the employee's
164.8salary. The employer shall make payment with interest at an annual rate of 8.5 percent
164.9compounded annually. Omitted employee deductions are no longer due if an employee
164.10terminates public service before making payment of omitted employee deductions to
164.11the association, but the employer remains liable to pay omitted employer contributions
164.12plus interest at an annual rate of 8.5 percent compounded annually from the date the
164.13contributions were first payable.
164.14(e) The association may not commence action for the recovery of omitted employee
164.15deductions and employer contributions after the expiration of three calendar years after
164.16the calendar year in which the contributions and deductions were omitted. Except as
164.17provided under paragraph (b), no payment may be made or accepted unless the association
164.18has already commenced action for recovery of omitted deductions. An action for recovery
164.19commences on the date of the mailing of any written correspondence from the association
164.20requesting information from the governmental subdivision upon which to determine
164.21whether or not omitted deductions occurred.
164.22    Subd. 12a. Terminated employees: omitted deductions. A terminated employee
164.23who was a member of the general employees retirement plan of the Public Employees
164.24Retirement Association, the public employees police and fire retirement plan, or the local
164.25government correctional employees retirement plan and who has a period of employment
164.26in which previously omitted employer contributions were made under subdivision 12
164.27but for whom no, or only partial, omitted employee contributions have been made, or
164.28a member who had prior coverage in the association for which previously omitted
164.29employer contributions were made under subdivision 12 but who terminated service
164.30before required omitted employee deductions could be withheld from salary, may pay the
164.31omitted employee deductions for the period on which omitted employer contributions
164.32were previously paid plus interest at an annual rate of 8.5 percent compounded annually.
164.33A terminated employee may pay the omitted employee deductions plus interest within six
164.34months of an initial notification from the association of eligibility to pay those omitted
164.35deductions. If a terminated employee is reemployed in a position covered under a public
164.36pension fund under section 356.30, subdivision 3, and elects to pay omitted employee
165.1deductions, payment must be made no later than six months after a subsequent termination
165.2of public service.
165.3    Subd. 12b. Terminated employees: immediate eligibility. If deductions were
165.4omitted from salary adjustments or final salary of a terminated employee who was a
165.5member of the general employees retirement plan, the public employees police and fire
165.6retirement plan, or the local government correctional employees retirement plan and who
165.7is immediately eligible to draw a monthly benefit, the employer shall pay the omitted
165.8employer and employer additional contributions plus interest on both the employer and
165.9employee amounts due at an annual rate of 8.5 percent compounded annually. The
165.10employee shall pay the employee deductions within six months of an initial notification
165.11from the association of eligibility to pay omitted deductions or the employee forfeits
165.12the right to make the payment.
165.13    Subd. 13. Certain warrants canceled. A warrant payable from the general
165.14employees retirement fund, the public employees police and fire retirement fund, or the
165.15local government correctional retirement fund remaining unpaid for a period of six
165.16months must be canceled into the applicable retirement fund and not canceled into the
165.17state's general fund.
165.18    Subd. 14. Periods before initial coverage date. (a) If an entity is determined to
165.19be a governmental subdivision due to receipt of a written notice of eligibility from the
165.20association with respect to the general employees retirement plan, the public employees
165.21police and fire retirement plan, or the local government correctional retirement plan, that
165.22employer and its employees are subject to the requirements of subdivision 12, effective
165.23retroactively to the date that the executive director of the association determines that
165.24the entity first met the definition of a governmental subdivision, if that date predates
165.25the notice of eligibility.
165.26    (b) If the retroactive time period under paragraph (a) exceeds three years, an
165.27employee is authorized to purchase service credit in the applicable Public Employees
165.28Retirement Association plan for the portion of the period in excess of three years, by
165.29making payment under section 356.551. Notwithstanding any provision of section
165.30356.551, subdivision 2 , to the contrary, regarding time limits on purchases, payment of a
165.31service credit purchase amount may be made anytime before the termination of public
165.32service.
165.33    (c) This subdivision does not apply if the applicable employment under paragraph
165.34(a) included coverage by any public or private defined benefit or defined contribution
165.35retirement plan, other than a volunteer firefighters relief association. If this paragraph
166.1applies, an individual is prohibited from purchasing service credit from a Public Employees
166.2Retirement Association plan for any period or periods specified in paragraph (a).

166.3    Sec. 8. Minnesota Statutes 2008, section 353.34, subdivision 1, is amended to read:
166.4    Subdivision 1. Refund or deferred annuity. (a) A former member is entitled
166.5to a refund of accumulated employee deductions under subdivision 2, or to a deferred
166.6annuity under subdivision 3. Application for a refund may not be made before the date of
166.7termination of public service. Except as specified in paragraph (b), a refund must be paid
166.8within 120 days following receipt of the application unless the applicant has again become
166.9a public employee required to be covered by the association.
166.10(b) If an individual was placed on layoff under section 353.01, subdivision 12 or 12c,
166.11a refund is not payable before termination of service under section 353.01, subdivision 11a.
166.12(c) An individual who terminates public service covered by the Public Employees
166.13Retirement Association general employees retirement plan, the MERF division, the
166.14Public Employees Retirement Association police and fire retirement plan, or the public
166.15employees local government corrections service retirement plan, and who is employed
166.16by a different employer and who becomes an active member covered by one of the other
166.17two plans, may receive a refund of employee contributions plus six percent interest
166.18compounded annually from the plan from which the member terminated service.

166.19    Sec. 9. Minnesota Statutes 2008, section 353.34, subdivision 6, is amended to read:
166.20    Subd. 6. Additions to fund. The board of trustees may credit to the general
166.21employees retirement fund any moneys money received in the form of contributions,
166.22donations, gifts, appropriations, bequests, or otherwise.

166.23    Sec. 10. Minnesota Statutes 2008, section 353.37, subdivision 1, is amended to read:
166.24    Subdivision 1. Salary maximums. (a) The annuity of a person otherwise eligible
166.25for an annuity under this chapter from the general employees retirement plan of the Public
166.26Employees Retirement Association, the public employees police and fire retirement plan,
166.27or the local government correctional employees retirement plan must be suspended under
166.28subdivision 2 or reduced under subdivision 3, whichever results in the higher annual
166.29annuity amount, if the person reenters public service as a nonelective employee of a
166.30governmental subdivision in a position covered by this chapter or returns to work as an
166.31employee of a labor organization that represents public employees who are association
166.32members under this chapter and salary for the reemployment service exceeds the annual
166.33maximum earnings allowable for that age for the continued receipt of full benefit amounts
167.1monthly under the federal Old Age, Survivors and Disability Insurance Program as set by
167.2the secretary of health and human services under United States Code, title 42, section 403,
167.3in any calendar year. If the person has not yet reached the minimum age for the receipt
167.4of Social Security benefits, the maximum salary for the person is equal to the annual
167.5maximum earnings allowable for the minimum age for the receipt of Social Security
167.6benefits.
167.7(b) The provisions of paragraph (a) do not apply to the members of the MERF
167.8division.

167.9    Sec. 11. Minnesota Statutes 2008, section 353.37, subdivision 2, is amended to read:
167.10    Subd. 2. Suspension of annuity. (a) The association shall suspend the annuity on
167.11the first of the month after the month in which the salary of the reemployed annuitant
167.12described in subdivision 1, paragraph (a), exceeds the maximums set in subdivision 1,
167.13paragraph (a), based only on those months in which the annuitant is actually employed
167.14in nonelective public service in a position covered under this chapter or employment
167.15with a labor organization that represents public employees who are association members
167.16of a retirement plan under this chapter or chapter 353E.
167.17(b) An annuitant who is elected to public office after retirement may hold that office
167.18and receive an annuity otherwise payable from a retirement plan administered by the
167.19association.

167.20    Sec. 12. Minnesota Statutes 2008, section 353.37, subdivision 3, is amended to read:
167.21    Subd. 3. Reduction of annuity. (a) The association shall reduce the amount
167.22of the annuity of a person who has not reached the retirement age by one-half of the
167.23amount in excess of the applicable reemployment income maximum under subdivision
167.241, paragraph (a).
167.25(b) There is no reduction upon reemployment, regardless of income, for a person
167.26who has reached the retirement age.

167.27    Sec. 13. Minnesota Statutes 2008, section 353.37, subdivision 4, is amended to read:
167.28    Subd. 4. Resumption of annuity. The association shall resume paying a full
167.29annuity to the reemployed annuitant described in subdivision 1, paragraph (a), at the
167.30start of each calendar year until the salary exceeds the maximums under subdivision 1,
167.31paragraph (a), or on the first of the month following the termination of the employment
167.32which resulted in the suspension of the annuity. The executive director may adopt policies
167.33regarding the suspension and reduction of annuities under this section.

168.1    Sec. 14. Minnesota Statutes 2008, section 353.37, subdivision 5, is amended to read:
168.2    Subd. 5. Effect on annuity. Except as provided under this section, public service
168.3performed by an annuitant described in subdivision 1, paragraph (a), subsequent to
168.4retirement under this chapter from the general employees retirement plan, the public
168.5employees police and fire retirement plan, or the local government correctional employees
168.6retirement plan does not increase or decrease the amount of an annuity. The annuitant shall
168.7not make any further contributions to the association's a defined benefit plan administered
168.8by the association by reason of this subsequent public service.

168.9    Sec. 15. Minnesota Statutes 2008, section 353.46, subdivision 2, is amended to read:
168.10    Subd. 2. Rights of deferred annuitant. The right entitlement of a deferred
168.11annuitant or other former member of the general employees retirement plan of the
168.12Public Employees Retirement Association, the Minneapolis Employees Retirement Fund
168.13division, the public employees police and fire retirement plan, or the local government
168.14correctional employees retirement plan to receive an annuity under the law in effect at the
168.15time such the person terminated public service is herein preserved; provided, however,.
168.16The provisions of section 353.71, subdivision 2, as amended by Laws 1973, chapter 753
168.17shall, apply to a deferred annuitant or other former member who first begins receiving an
168.18annuity after July 1, 1973.

168.19    Sec. 16. Minnesota Statutes 2008, section 353.46, subdivision 6, is amended to read:
168.20    Subd. 6. Computation of benefits for certain coordinated members. Any
168.21coordinated member of the general employees retirement plan of the Public Employees
168.22Retirement Association who prior to, before July 1, 1979, was a member of the former
168.23coordinated program of the former Minneapolis Municipal Employees Retirement
168.24Fund and who prior to, before July 1, 1978, was a member of the basic program of the
168.25Minneapolis Municipal Employees Retirement Fund shall:
168.26(1) be is entitled to receive a retirement annuity when otherwise qualified, the
168.27calculation of which shall must utilize the formula accrual rates specified in section
168.28422A.15, subdivision 1 , for that portion of credited service which was rendered prior to
168.29before July 1, 1978, and the formula accrual rates specified in section 353.29, subdivision
168.303
, for the remainder of credited service, both applied to the average salary as specified
168.31in section 353.29, subdivision 2 353.01, subdivision 17a. The formula accrual rates to
168.32be used in calculating the retirement annuity shall must recognize the service after July
168.331, 1978, as a member of the former coordinated program of the former Minneapolis
168.34Municipal Employees Retirement Fund and after July 1, 1979, as a member of the
169.1general employees retirement plan of the Public Employees Retirement Association as
169.2a continuation of service rendered prior to before July 1, 1978. The annuity amount
169.3attributable to service as a member of the basic program of the former Minneapolis
169.4Municipal Employees Retirement Fund shall be is payable by from the Minneapolis
169.5Employees Retirement Fund MERF division and the annuity amount attributable to all
169.6other service shall be is payable by from the general employees retirement fund of the
169.7Public Employees Retirement Association; .
169.8(2) retain eligibility when otherwise qualified for a disability benefit from the
169.9Minneapolis Employees Retirement Fund until July 1, 1982, notwithstanding coverage
169.10by the Public Employees Retirement Association, if the member has or would, without
169.11the transfer of retirement coverage from the basic program of the Minneapolis Municipal
169.12Employees Retirement Fund to the coordinated program of the Minneapolis Municipal
169.13Employees Retirement Fund or from the coordinated program of the Minneapolis
169.14Municipal Employees Retirement Fund to the public employees retirement fund, have
169.15sufficient credited service prior to January 1, 1983, to meet the minimum service
169.16requirements for a disability benefit pursuant to section 422A.18. The disability benefit
169.17amount attributable to service as a member of the basic program of the Minneapolis
169.18Municipal Employees Retirement Fund shall be payable by the Minneapolis Employees
169.19Retirement Fund and the disability benefit amount attributable to all other service shall be
169.20payable by the Public Employees Retirement Association.

169.21    Sec. 17. [353.50] MERF CONSOLIDATION ACCOUNT; ESTABLISHMENT
169.22AND OPERATION.
169.23    Subdivision 1. Administrative consolidation. (a) Notwithstanding any provision
169.24of this chapter or chapter 422A to the contrary, the administration of the Minneapolis
169.25Employees Retirement Fund as the MERF division is transferred to the Public Employees
169.26Retirement Association board of trustees. The assets, service credit, and benefit liabilities
169.27of the Minneapolis Employees Retirement Fund transfer to the MERF division account
169.28within the general employees retirement plan of the Public Employees Retirement
169.29Association established by section 353.27, subdivision 1a, on July 1, 2010.
169.30(b) The creation of the MERF division must not be construed to alter the Social
169.31Security or Medicare coverage of any member of the former Minneapolis Employees
169.32Retirement Fund on June 29, 2010, while the person is employed in a position covered
169.33under the MERF division of the Public Employees Retirement Association.
169.34    Subd. 2. Membership transfer. Effective June 30, 2010, the active, inactive, and
169.35retired members of the Minneapolis Employees Retirement Fund are transferred to the
170.1MERF division administered by the Public Employees Retirement Association and are no
170.2longer members of the Minneapolis Employees Retirement Fund.
170.3    Subd. 3. Service credit and benefit liability transfer. (a) All allowable service
170.4credit and salary credit of the members of the Minneapolis Employees Retirement Fund
170.5as specified in the records of the Minneapolis Employees Retirement Fund through June
170.630, 2010, are transferred to the MERF division of the Public Employees Retirement
170.7Association and are credited by the MERF division. Annuities or benefits of persons
170.8who are active members of the former Minneapolis Employees Retirement Fund on
170.9June 30, 2010, must be calculated under Minnesota Statutes 2008, sections 422A.11;
170.10422A.12; 422A.13; 422A.14; 422A.15; 422A.151; 422A.155; 422A.156; 422A.16;
170.11422A.17; 422A.18; 422A.19; 422A.20; and 422A.23, but are only eligible for automatic
170.12postretirement adjustments after December 31, 2010, under section 356.415.
170.13(b) The liability for the payment of annuities and benefits of the Minneapolis
170.14Employees Retirement Fund retirees and benefit recipients as specified in the records
170.15of the Minneapolis Employees Retirement Fund on June 29, 2010, is transferred to the
170.16MERF division of the Public Employees Retirement Association on June 30, 2010.
170.17    Subd. 4. Records transfer. On June 30, 2010, the executive director of the
170.18Minneapolis Employees Retirement Fund shall transfer all records and documents relating
170.19to the Minneapolis Employees Retirement Fund and its benefit plan to the executive
170.20director of the Public Employees Retirement Association. To the extent possible, original
170.21copies of all records and documents must be transferred.
170.22    Subd. 5. Transfer of title to assets. On June 30, 2010, legal title to the assets of
170.23the Minneapolis Employees Retirement Fund transfers to the State Board of Investment
170.24and the assets must be invested under section 11A.14, as assets of the MERF division of
170.25the Public Employees Retirement Association. The MERF division is the successor in
170.26interest to all claims that the former Minneapolis Employees Retirement Fund may have
170.27or may assert against any person and is the successor in interest to all claims which could
170.28have been asserted against the former Minneapolis Employees Retirement Fund, but the
170.29MERF division is not liable for any claim against the former Minneapolis Employees
170.30Retirement Fund, its former governing board, or its former administrative staff acting in a
170.31fiduciary capacity under chapter 356A or under common law, which is founded upon a
170.32claim of breach of fiduciary duty, but where the act or acts constituting the claimed breach
170.33were not undertaken in good faith, the Public Employees Retirement Association may
170.34assert any applicable defense to any claim in any judicial or administrative proceeding
170.35that the former Minneapolis Employees Retirement Fund, its former board, or its
170.36former administrative staff would otherwise have been entitled to assert, and the Public
171.1Employees Retirement Association may assert any applicable defense that it has in its
171.2capacity as a statewide agency.
171.3    Subd. 6. Benefits. (a) The annuities and benefits of, or attributable to, retired,
171.4disabled, deferred, or inactive Minneapolis Employees Retirement Fund members
171.5with that status as of June 30, 2010, with the exception of post-December 31, 2010,
171.6postretirement adjustments, which are governed by paragraph (b), as calculated under
171.7Minnesota Statutes 2008, sections 422A.11; 422A.12; 422A.13; 422A.14; 422A.15;
171.8422A.151; 422A.155; 422A.156; 422A.16; 422A.17; 422A.18; 422A.19; 422A.20; and
171.9422A.23, continue in force after the administrative consolidation under this article.
171.10(b) After December 31, 2010, annuities and benefits from the MERF division are
171.11eligible for annual automatic postretirement adjustments solely under section 356.415.
171.12    Subd. 7. MERF division account contributions. (a) After June 30, 2010, the
171.13member and employer contributions to the MERF division account are governed by this
171.14subdivision.
171.15(b) An active member covered by the MERF division must make an employee
171.16contribution of 9.75 percent of the total salary of the member as defined in section 353.01,
171.17subdivision 10. The employee contribution must be made by payroll deduction by the
171.18member's employing unit under section 353.27, subdivision 4, and is subject to the
171.19provisions of section 353.27, subdivisions 7, 7a, 7b, 12, 12a, and 12b.
171.20(c) The employer regular contribution to the MERF division account with respect
171.21to an active MERF division member is 9.75 percent of the total salary of the member as
171.22defined in section 353.01, subdivision 10.
171.23(d) The employer additional contribution to the MERF division account with respect
171.24to an active member of the MERF division is 2.68 percent of the total salary of the member
171.25as defined in section 353.01, subdivision 10, plus the employing unit's share of $3,900,000
171.26that the employing unit paid or is payable to the former Minneapolis Employees
171.27Retirement Fund under Minnesota Statutes 2008, section 422A.101, subdivision 1a, 2,
171.28or 2a, during calendar year 2009, as was certified by the former executive director of the
171.29former Minneapolis Employees Retirement Fund.
171.30(e) Annually after June 30, 2012, The employer supplemental contribution to
171.31the MERF division account by the city of Minneapolis, Special School District No. 1,
171.32Minneapolis, a Minneapolis-owned public utility, improvement, or municipal activity,
171.33Hennepin county, the Metropolitan Council, the Metropolitan Airports Commission,
171.34and the Minnesota State Colleges and Universities system is the amount by which the
171.35total actuarial required contribution determined under section 356.215 by the approved
171.36actuary retained by the Public Employees Retirement Association in the most recent
172.1actuarial valuation of the MERF division and based on a June 30, 2031, amortization
172.2date, after subtracting the contributions under paragraphs (b), (c), and (d), exceeds
172.3$........ Unless the various employing units agree to a different allocation and file that
172.4agreement with the executive director by August 15 for the following calendar year,
172.5each employing unit's share of the total employer supplemental contribution amount
172.6is equal to its percentage share of the total amount allocated under Minnesota Statutes
172.72008, section 422A.101, subdivision 3, payable for calendar year 2009. The initial total
172.8actuarial required contribution after June 30, 2012, must be calculated using the mortality
172.9assumption change recommended on September 30, 2009, for the Minneapolis Employees
172.10Retirement Fund by the approved consulting actuary retained by the Minneapolis
172.11Employees Retirement Fund board.
172.12(f) Notwithstanding any provision of paragraph (c), (d), or (e) to the contrary, as of
172.13August 1 annually, if the amount of the retirement annuities and benefits paid from the
172.14MERF division account during the preceding fiscal year, multiplied by the factor of 1.035,
172.15exceeds the market value of the assets of the MERF division account on the preceding
172.16June 30, plus state aid of $9,000,000 or $......., whichever applies, plus the amounts
172.17payable under paragraphs (b), (c), (d), and (e) during the preceding fiscal year, multiplied
172.18by the factor of 1.035, the balance calculated is a special additional employer contribution.
172.19The special additional employer contribution under this paragraph is payable in addition
172.20to any employer contribution required under paragraphs (c), (d), and (e), and is payable
172.21on or before the following June 30. The special additional employer contribution under
172.22this paragraph must be allocated between the city of Minneapolis, Special School District
172.23No. 1, Minneapolis, any Minneapolis-owned public utility, improvement, or municipal
172.24activity, the Minnesota State Colleges and Universities system, Hennepin County, the
172.25Metropolitan Council, and the Metropolitan Airports Commission in proportion to their
172.26share of the actuarial accrued liability of the former Minneapolis Employees Retirement
172.27Fund as of July 1, 2009, as calculated by the approved actuary retained under section
172.28356.214 as part of the actuarial valuation prepared as of July 1, 2009, under section
172.29356.215 and the Standards for Actuarial Work adopted by the Legislative Commission on
172.30Pensions and Retirement.
172.31(g) The employer contributions under paragraphs (c), (d), and (e) must be paid as
172.32provided in section 353.28.
172.33(h) Contributions under this subdivision are subject to the provisions of section
172.34353.27, subdivisions 4, 7, 7a, 7b, 11, 12, 12a, 12b, 13, and 14.
172.35    Subd. 7a. Minneapolis Municipal Retirement Association dues. If authorized
172.36by an annuitant or retirement benefit recipient in writing on a form prescribed by the
173.1executive director of the Public Employees Retirement Association, the executive director
173.2shall deduct the dues for the Minneapolis Municipal Retirement Association from the
173.3person's annuity or retirement benefit. This dues deduction authority expires upon the
173.4eventual full consolidation of the MERF account under subdivision 8.
173.5    Subd. 8. Eventual full consolidation. (a) Once the fiscal year end market value
173.6of assets of the MERF division account equals or exceeds 80 percent of the actuarial
173.7accrued liability of the MERF division as calculated by the approved actuary retained by
173.8the Public Employees Retirement Association under section 356.215 and the Standards
173.9for Actuarial Work adopted by the Legislative Commission on Pensions and Retirement,
173.10the MERF division must be merged with the general employees retirement plan of the
173.11Public Employees Retirement Association and the MERF division account ceases as a
173.12separate account within the general employees retirement fund of the Public Employees
173.13Retirement Association.
173.14(b) If the market value of the MERF division account is less than 100 percent of the
173.15actuarial accrued liability of the MERF division under paragraph (a), the total employer
173.16contribution of employing units referenced in subdivision 7, paragraph (e), for the period
173.17after the full consolidation and June 30, 2031, to amortize on a level annual dollar payment
173.18the remaining unfunded actuarial accrued liability of the former MERF division account
173.19on the full consolidation date by June 30, 2031, shall be calculated by the consulting
173.20actuary retained under section 356.214 using the applicable postretirement interest rate
173.21actuarial assumption for the general employees retirement plan under section 356.215.
173.22The actuarial accrued liability of the MERF division must be calculated using the healthy
173.23retired life mortality assumption applicable to the general employees retirement plan.
173.24(c) The merger shall occur as of the first day of the first month after the date on
173.25which the triggering actuarial valuation report is filed with the executive director of the
173.26Legislative Commission on Pensions and Retirement.
173.27(d) The executive director of the Public Employees Retirement Association shall
173.28prepare proposed legislation fully implementing the merger and updating the applicable
173.29provisions of chapters 353 and 356 and transmit the proposed legislation to the executive
173.30director of the Legislative Commission on Pensions and Retirement by the following
173.31February 15.
173.32    Subd. 9. Merger of former MERF membership groups into PERA-general.
173.33If provided for in an agreement between the board of trustees of the Public Employees
173.34Retirement Association and the governing board of an employing unit formerly with
173.35retirement coverage provided for its employees by the former Minneapolis Employees
173.36Retirement Fund, an employing unit may transfer sufficient assets to the general
174.1employees retirement fund to cover the anticipated actuarial accrued liability for its
174.2current or former employees that is in excess of MERF division account assets attributable
174.3to those employees, have those employees be considered full members of the general
174.4employees retirement plan, and be relieved of any further contribution obligation to the
174.5general employees retirement plan for those employees under this section. Any agreement
174.6under this subdivision and any actuarial valuation report related to a merger under this
174.7subdivision must be submitted to the executive director of the Legislative Commission on
174.8Pensions and Retirement for comment prior to the final execution.

174.9    Sec. 18. Minnesota Statutes 2008, section 353.64, subdivision 7, is amended to read:
174.10    Subd. 7. Pension coverage for certain public safety employees of the
174.11Metropolitan Airports Commission. Any person first employed as either a full-time
174.12firefighter or a full-time police officer by the Metropolitan Airports Commission after June
174.1330, 1978, who is not eligible for coverage under the agreement signed between the state
174.14and the secretary of the federal Department of Health and Human Services making the
174.15provisions of the federal Old Age, Survivors, and Disability Insurance Act applicable to
174.16municipal employees because that position is excluded from application pursuant to under
174.17Title 42, United States Code, Sections 418 (d) (5) (A) and 418 (d) (8) (D) and section
174.18355.07 , shall not be a member of the Minneapolis Employees Retirement Fund but shall
174.19be is a member of the public employees police and fire fund and shall be is deemed to be a
174.20firefighter or a police officer within the meaning of this section. The Metropolitan Airports
174.21Commission shall make the employer contribution required pursuant to under section
174.22353.65, subdivision 3 , with respect to each of its firefighters or police officers covered
174.23by the public employees police and fire fund and shall meet the employers recording and
174.24reporting requirements set forth in section 353.65, subdivision 4.

174.25    Sec. 19. Minnesota Statutes 2008, section 356.215, subdivision 8, is amended to read:
174.26    Subd. 8. Interest and salary assumptions. (a) The actuarial valuation must use
174.27the applicable following preretirement interest assumption and the applicable following
174.28postretirement interest assumption:
174.29
174.30
174.31
plan
preretirement
interest rate
assumption
postretirement
interest rate
assumption
174.32
general state employees retirement plan
8.5%
6.0%
174.33
correctional state employees retirement plan
8.5
6.0
174.34
State Patrol retirement plan
8.5
6.0
174.35
legislators retirement plan
8.5
6.0
174.36
elective state officers retirement plan
8.5
6.0
175.1
judges retirement plan
8.5
6.0
175.2
general public employees retirement plan
8.5
6.0
175.3
public employees police and fire retirement plan
8.5
6.0
175.4
175.5
local government correctional service retirement
plan
8.5
6.0
175.6
teachers retirement plan
8.5
6.0
175.7
Minneapolis employees retirement plan
6.0
5.0
175.8
Duluth teachers retirement plan
8.5
8.5
175.9
St. Paul teachers retirement plan
8.5
8.5
175.10
Minneapolis Police Relief Association
6.0
6.0
175.11
Fairmont Police Relief Association
5.0
5.0
175.12
Minneapolis Fire Department Relief Association
6.0
6.0
175.13
Virginia Fire Department Relief Association
5.0
5.0
175.14
Bloomington Fire Department Relief Association
6.0
6.0
175.15
175.16
local monthly benefit volunteer firefighters relief
associations
5.0
5.0
175.17    (b) Before July 1, 2010, the actuarial valuation must use the applicable following
175.18single rate future salary increase assumption, the applicable following modified single
175.19rate future salary increase assumption, or the applicable following graded rate future
175.20salary increase assumption:
175.21    (1) single rate future salary increase assumption
175.22
175.23
plan
future salary
increase assumption
175.24
legislators retirement plan
5.0%
175.25
judges retirement plan
4.0
175.26
Minneapolis Police Relief Association
4.0
175.27
Fairmont Police Relief Association
3.5
175.28
175.29
Minneapolis Fire Department Relief
Association
4.0
175.30
Virginia Fire Department Relief Association
3.5
175.31
175.32
Bloomington Fire Department Relief
Association
4.0
175.33    (2) modified single rate future salary increase assumption
175.34
175.35
plan
future salary
increase assumption
175.36
175.37
175.38
175.39
Minneapolis employees
retirement plan
the prior calendar year amount increased
first by 1.0198 percent to prior fiscal year
date and then increased by 4.0 percent
annually for each future year
175.40    (3) (2) select and ultimate future salary increase assumption or graded rate future
175.41salary increase assumption
176.1
176.2
plan
future salary
increase assumption
176.3
176.4
general state employees retirement plan
select calculation and
assumption A
176.5
correctional state employees retirement plan
assumption H
176.6
State Patrol retirement plan
assumption G
176.7
176.8
general public employees retirement plan
select calculation and
assumption B
176.9
public employees police and fire fund retirement plan
assumption C
176.10
local government correctional service retirement plan
assumption G
176.11
teachers retirement plan
assumption D
176.12
Duluth teachers retirement plan
assumption E
176.13
St. Paul teachers retirement plan
assumption F
176.14The select calculation is: during the
176.15designated select period, a designated
176.16percentage rate is multiplied by the result of
176.17the designated integer minus T, where T is the
176.18number of completed years of service, and is
176.19added to the applicable future salary increase
176.20assumption. The designated select period is
176.21five years and the designated integer is five
176.22for the general state employees retirement
176.23plan and the general public employees
176.24retirement plan. The designated select period
176.25is ten years and the designated integer is ten
176.26for all other retirement plans covered by
176.27this clause. The designated percentage rate
176.28is: (1) 0.2 percent for the correctional state
176.29employees retirement plan, the State Patrol
176.30retirement plan, the public employees police
176.31and fire plan, and the local government
176.32correctional service plan; (2) 0.6 percent
176.33for the general state employees retirement
176.34plan and the general public employees
176.35retirement plan; and (3) 0.3 percent for the
176.36teachers retirement plan, the Duluth Teachers
176.37Retirement Fund Association, and the St.
176.38Paul Teachers Retirement Fund Association.
177.1The select calculation for the Duluth Teachers
177.2Retirement Fund Association is 8.00 percent
177.3per year for service years one through seven,
177.47.25 percent per year for service years seven
177.5and eight, and 6.50 percent per year for
177.6service years eight and nine.
177.7    The ultimate future salary increase assumption is:
177.8
age
A
B
C
D
E
F
G
H
177.9
16
5.95%
5.95%
11.00%
7.70%
8.00%
6.90%
7.7500%
7.2500%
177.10
17
5.90
5.90
11.00
7.65
8.00
6.90
7.7500
7.2500
177.11
18
5.85
5.85
11.00
7.60
8.00
6.90
7.7500
7.2500
177.12
19
5.80
5.80
11.00
7.55
8.00
6.90
7.7500
7.2500
177.13
20
5.75
5.40
11.00
5.50
6.90
6.90
7.7500
7.2500
177.14
21
5.75
5.40
11.00
5.50
6.90
6.90
7.1454
6.6454
177.15
22
5.75
5.40
10.50
5.50
6.90
6.90
7.0725
6.5725
177.16
23
5.75
5.40
10.00
5.50
6.85
6.85
7.0544
6.5544
177.17
24
5.75
5.40
9.50
5.50
6.80
6.80
7.0363
6.5363
177.18
25
5.75
5.40
9.00
5.50
6.75
6.75
7.0000
6.5000
177.19
26
5.75
5.36
8.70
5.50
6.70
6.70
7.0000
6.5000
177.20
27
5.75
5.32
8.40
5.50
6.65
6.65
7.0000
6.5000
177.21
28
5.75
5.28
8.10
5.50
6.60
6.60
7.0000
6.5000
177.22
29
5.75
5.24
7.80
5.50
6.55
6.55
7.0000
6.5000
177.23
30
5.75
5.20
7.50
5.50
6.50
6.50
7.0000
6.5000
177.24
31
5.75
5.16
7.30
5.50
6.45
6.45
7.0000
6.5000
177.25
32
5.75
5.12
7.10
5.50
6.40
6.40
7.0000
6.5000
177.26
33
5.75
5.08
6.90
5.50
6.35
6.35
7.0000
6.5000
177.27
34
5.75
5.04
6.70
5.50
6.30
6.30
7.0000
6.5000