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HF 618

as introduced - 88th Legislature (2013 - 2014) Posted on 02/14/2013 02:01pm

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to retirement; Public Employees Retirement Association plans; modifying
the trigger for increasing or lowering annual postretirement adjustments for all
plans; modifying duty disability definitions and clarifying disability application
requirements for the public employees police and fire and local government
correctional retirement plans; revising vesting, increasing plan employee and
employer contributions, increasing the reduction for early retirement clarifying
survivor benefit provisions, and delaying the first annual postretirement
adjustment for the public employees police and fire retirement plan; amending
Minnesota Statutes 2012, sections 353.01, subdivisions 41, 47; 353.031,
subdivision 4; 353.65, subdivisions 2, 3; 353.651, subdivisions 3, 4; 353.657,
subdivisions 2a, 3a; 353E.001, subdivision 1; 356.415, subdivisions 1b, 1c.

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

Section 1.

Minnesota Statutes 2012, section 353.01, subdivision 41, is amended to read:


Subd. 41.

Duty disability.

"Duty disability," physical or psychological, means a
condition that is expected to prevent a member, for a period of not less than 12 months,
from performing the normal duties of the position held by a person who is a member of the
public employees police and fire new text beginretirement new text endplan, and that is the direct result of an injury
incurred during, or a disease arising out of, the performance of deleted text beginnormal duties or the actual
performance of less frequent
deleted text end new text begininherently dangerous new text enddutiesdeleted text begin, either of which are specific to
protecting the property and personal safety of others and that present inherent dangers
deleted text end that
are specific to the positions covered by the public employees police and fire new text beginretirement new text endplan.

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2012, section 353.01, subdivision 47, is amended to read:


Subd. 47.

Vesting.

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

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

(1) a public employee who first became a member new text beginof the association new text endbefore July
1, 2010, is new text begin100 percent new text endvested when the person has accrued credit for not less than three
years of allowable service as defined under subdivision 16; and

(2) a public employee who first becomes a member new text beginof the association new text endafter June 30,
2010, is new text begin100 percent new text endvested when the person has accrued credit for not less than five years
of allowable service as defined under subdivision 16.

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

(1) a public employee who first became a member new text beginof the association new text endbefore July
1, 2010, is new text begin100 percent new text endvested when the person has accrued credit for not less than three
years of allowable service as defined under subdivision 16; and

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

(i) 50 percent after five years;

(ii) 60 percent after six years;

(iii) 70 percent after seven years;

(iv) 80 percent after eight years;

(v) 90 percent after nine years; and

(vi) 100 percent after ten years.

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

new text begin (1) a public employee who first became a member of the association before July
1, 2010, is 100 percent vested when the person has accrued credit for not less than three
years of allowable service as defined under subdivision 16;
new text end

new text begin (2) a public employee who first becomes a member of the association after June 30,
2010, and before July 1, 2014, is vested at the following percentages when the person has
accrued credited allowable service as defined under subdivision 16, as follows:
new text end

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

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

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

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

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

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

new text begin (3) a public employee who first becomes a member of the association after June
30, 2014, is vested at the following percentages when the person has accrued credited
allowable service as defined under subdivision 16, as follows:
new text end

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

new text begin (ii) 55 percent after 11 years;
new text end

new text begin (iii) 60 percent after 12 years;
new text end

new text begin (iv) 65 percent after 13 years;
new text end

new text begin (v) 70 percent after 14 years;
new text end

new text begin (vi) 75 percent after 15 years;
new text end

new text begin (vii) 80 percent after 16 years;
new text end

new text begin (viii) 85 percent after 17 years;
new text end

new text begin (ix) 90 percent after 18 years;
new text end

new text begin (x) 95 percent after 19 years; and
new text end

new text begin (xi) 100 percent after 20 or more years.
new text end

Sec. 3.

Minnesota Statutes 2012, section 353.031, subdivision 4, is amended to read:


Subd. 4.

Additional requirements; eligibility for police and fire or local
government correctional service new text beginretirement new text endplan disability benefits.

(a) If an
application for disability benefits is filed within two years of the date of the injury or the
onset of the illness that gave rise to the disability application, the application must be
supported by evidence that the applicant is unable to perform the duties of the position
held by the applicant on the date of the injury or the onset of the illness causing the
disability. The employer must provide evidence indicating whether the applicant is able or
unable to perform the duties of the position held on the date of the injury or onset of the
illness causing the disability deleted text beginand the specificationsdeleted text endnew text begin, a clear explanationnew text end of any duties that
the individual can or cannot performnew text begin, and an explanation of why the employer may or may
not authorize continued employment to the applicant in the current or some other position
new text end.

(b) If an application for disability benefits is filed more than two years after the
date of injury or the onset of an illness causing the disability, the application must be
supported by evidence that the applicant is unable to perform the deleted text beginmost recentdeleted text end duties that
deleted text beginaredeleted text end new text beginwere new text endexpected to be performed by the applicant during the 90 days deleted text beginbeforedeleted text end new text beginpreceding
new text endthe deleted text beginfiling ofdeleted text end new text beginlast day new text endthe deleted text beginapplicationdeleted text endnew text begin applicant performed services for the employernew text end. The
employer must provide evidence of the duties that deleted text beginaredeleted text end new text beginwere new text endexpected to be performed by
the applicant during the 90 days deleted text beginbeforedeleted text end new text beginpreceding new text endthe deleted text beginfiling ofdeleted text end new text beginlast day new text endthe deleted text beginapplication
deleted text endnew text begin applicant performed servicesnew text end, whether the applicant can or cannot perform those duties
overall, deleted text beginand the specificationsdeleted text end new text begina clear explanation new text endof any duties that the applicant can
or cannot performnew text begin, and an explanation of why the employer may or may not authorize
continued employment to the applicant in the current or some other position
new text end.

(c) Any report supporting a claim to disability benefits under section 353.656 or
353E.06 must specifically relate the disability to its cause; and for any claim to duty
disability from an injury or illness arising out of an act of duty, the report must new text beginstate the
specific act of duty giving rise to the claim, and
new text endrelate the cause of disability to new text begininherently
dangerous duties
new text endspecific deleted text begintasks or functions required to be performed by the employee in
fulfilling the employee's duty-related acts which must be specific
deleted text end to the deleted text begininherent dangers of
the
deleted text end positions deleted text begineligible for membership indeleted text end new text begincovered by new text endthe new text beginpublic employees new text endpolice and fire
deleted text beginfunddeleted text end new text beginplan new text endand the local government correctional service retirement plan. Any report that
does not relate the cause of disability to specific deleted text beginacts or functionsdeleted text end new text begininherently dangerous
duties
new text endperformed by the employee may not be relied upon as evidence to support eligibility
for benefits and may be disregarded in the executive director's decision-making process.

(d) Any application for duty disability must be supported by a first report of injury as
defined in section 176.231.

(e) If a member who has applied for and been approved for disability benefits before
the termination of service does not terminate service or is not placed on an authorized
leave of absence as certified by the governmental subdivision within 45 days following
the date on which the application is approved, the application shall be canceled. If an
approved application for disability benefits has been canceled, a subsequent application
for disability benefits may not be filed on the basis of the same medical condition for a
minimum of one year from the date on which the previous application was canceled.

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2012, section 353.65, subdivision 2, is amended to read:


Subd. 2.

Employee contribution.

(a) For members other than members who were
active members of the former Minneapolis Firefighters Relief Association on December
29, 2011, or for members other than members who were active members of the former
Minneapolis Police Relief Association on December 29, 2011, the employee contribution
is deleted text begin9.4 percentdeleted text end new text beginan amount equal to the following percentage new text endof the new text begintotal new text endsalary of deleted text beginthedeleted text end new text begineach
new text endmember deleted text beginin calendar year 2010 and isdeleted text endnew text begin, as follows:new text end 9.6 percent deleted text beginof the salary of the member
in each
deleted text end new text beginbefore new text endcalendar year deleted text beginafter 2010deleted text endnew text begin 2014; 10.2 percent in calendar year 2014; and 10.8
percent in calendar year 2015 and thereafter
new text end.

(b) For members who were active members of the former Minneapolis Firefighters
Relief Association on December 29, 2011, the employee contribution is an amount
equal to eight percent of the monthly unit value under section 353.01, subdivision 10a,
multiplied by 80 and expressed as a biweekly amount for each member. The employee
contribution made by a member with at least 25 years of service credit as an active
member of the former Minneapolis Firefighters Relief Association must be deposited in
the postretirement health care savings account established under section 352.98.

(c) For members who were active members of the former Minneapolis Police Relief
Association on December 29, 2011, the employee contribution is an amount equal to eight
percent of the monthly unit value under section 353.01, subdivision 10b, multiplied by 80
and expressed as a biweekly amount for each member. The employee contribution made
by a member with at least 25 years of service credit as an active member of the former
Minneapolis Police Relief Association must be deposited in the postretirement health care
savings account established under section 352.98.

(d) Contributions under this section must be made by deduction from salary in
the manner provided in subdivision 4. Where any portion of a member's salary is paid
from other than public funds, the member's employee contribution is based on the total
salary received from all sources.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2012, section 353.65, subdivision 3, is amended to read:


Subd. 3.

Employer contribution.

(a) With respect to members other than members
who were active members of the former Minneapolis Firefighters Relief Association on
December 29, 2011, or for members other than members who were active members of
the former Minneapolis Police Relief Association on December 29, 2011, the employer
contribution is deleted text begin14.1 percentdeleted text end new text beginan amount equal to the following percentage new text endof the new text begintotal new text endsalary
of deleted text beginthedeleted text end new text begineach new text endmember deleted text beginin calendar year 2010 and isdeleted text endnew text begin, as follows:new text end 14.4 percent deleted text beginof the salary of
the member in each
deleted text end new text beginbefore new text endcalendar year deleted text beginafter 2010deleted text endnew text begin 2014; 15.3 percent in calendar year
2014; and 16.2 percent in calendar year 2015 and thereafter
new text end.

(b) With respect to members who were active members of the former Minneapolis
Firefighters Relief Association on December 29, 2011, the employer contribution is an
amount equal to the amount of the member contributions under subdivision 2, paragraph
(b).

(c) With respect to members who were active members of the former Minneapolis
Police Relief Association on December 29, 2011, the employer contribution is an amount
equal to the amount of the member contributions under subdivision 2, paragraph (c).

(d) Contributions under this subdivision must be made from funds available to the
employing subdivision by the means and in the manner provided in section 353.28.

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2012, section 353.651, subdivision 3, is amended to read:


Subd. 3.

Retirement annuity formula.

new text begin(a) new text endThe average salary as defined in
section 353.01, subdivision 17a, multiplied by the percent specified in section 356.315,
subdivision 6
, deleted text beginper yeardeleted text end new text beginmultiplied by years new text endof allowable servicenew text begin, multiplied by the
applicable vesting percentage indicated in section 353.01, subdivision 47,
new text end determines the
amount of the normal retirement annuity. If the member has earned allowable service
for performing services other than those of a police officer or firefighter, the annuity
representing that service must be computed under sections 353.29 and 353.30.

new text begin (b) For a member first enrolled in the public employees police and fire retirement
plan after June 30, 2014, the average salary as defined in section 353.01, subdivision 17a,
paragraph (a), includes salary for all years for which contributions have been reported to
the public employees police and fire retirement plan, but allowable service included in
the calculation is limited to 33 years and the normal retirement annuity must not exceed
99 percent of the average salary.
new text end

new text begin (c) When the annuity begins for members of the public employees police and fire
retirement plan enrolled after June 30, 2014, a prorated share of the contributions for
allowable service exceeding 33 years must be refunded to the member. The prorated
share of the contributions to be refunded is determined by multiplying the accumulated
deductions paid by the member to the public employees police and fire retirement plan by
a percentage determined using the number of months of service in excess of 396 as the
numerator and the total number of months of allowable service on which contributions
were reported as the denominator. Interest as defined in section 353.34, subdivision 2,
is to be applied to the prorated share of contributions from the first of the 397th month
of allowable service reported to the public employees police and fire retirement plan to
the first of the month the annuity begins.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2012, section 353.651, subdivision 4, is amended to read:


Subd. 4.

Early retirement.

(a) A person who becomes a new text beginpublic employees new text endpolice
and fire new text beginretirement new text endplan member after June 30, 2007, or a former member who is reinstated
as a member of the plan after that date, who is at least 50 years of age and deleted text beginwhodeleted text end is new text beginat least
partially
new text endvested under section 353.01, subdivision 47, upon the termination of public
service new text beginbefore July 1, 2014, new text endis entitled upon application to a retirement annuity equal to
the normal annuity calculated under subdivision 3, reduced by two-tenths of one percent
for each month that the member is under age 55 at the time of retirement.

(b) Upon the termination of public servicenew text begin before July 1, 2014new text end, any new text beginpublic employees
new text endpolice and fire new text beginretirement new text endplan member new text beginwho first became a member of the plan before July
1, 2007, and who is
new text endnot specified in paragraph (a), upon attaining at least 50 years of age
with at least three years of allowable service is entitled upon application to a retirement
annuity equal to the normal annuity calculated under subdivision 3, reduced by one-tenth
of one percent for each month that the member is under age 55 at the time of retirement.

new text begin (c) A person who is a member of the public employees police and fire retirement
plan on or after July 1, 2014, who is at least 50 years old and is at least partially vested
under section 353.01, subdivision 47, and whose benefit effective date is after July 1,
2014, and on or before July 1, 2019, is entitled upon application to a retirement annuity
equal to the normal annuity calculated under subdivision 3, reduced for each month the
member is under age 55 at the time of retirement by applying a blended monthly rate
that is equivalent to the sum of:
new text end

new text begin (1) one-sixtieth of the annual rate of five percent, prorated for each month the
person's benefit effective date is after July 1, 2014; and
new text end

new text begin (2) one-sixtieth of the annual rate provided under paragraph (a) or (b), whichever
applies, for each month the person's benefit effective date is before July 1, 2019.
new text end

new text begin (d) A person who is a member of the public employees police and fire retirement
plan on or after July 1, 2014, who is at least 50 years old and is at least partially vested
under section 353.01, subdivision 47, whose benefit effective date is after July 1, 2019, is
entitled, upon application, to a retirement annuity equal to the normal annuity calculated
under subdivision 3, reduced by five percent annually, prorated for each month that the
member is under age 55.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2012, section 353.657, subdivision 2a, is amended to read:


Subd. 2a.

Death while eligible survivor benefit.

(a) If a member or former member
who has attained the age of at least 50 years and either who is vested under section
353.01, subdivision 47, or who has credit for at least 30 years of allowable service,
regardless of age attained, dies before the annuity or disability benefit becomes payable,
notwithstanding any designation of beneficiary to the contrary, the surviving spouse may
elect to receive a death while eligible survivor benefit.

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

(c) The benefit may be elected instead of a refund with interest under section 353.32,
subdivision 1
, or surviving spouse benefits otherwise payable under subdivisions 1 and
2. The benefit must be an annuity equal to the 100 percent joint and survivor annuity
which the member could have qualified for on the date of death, computed as provided in
sections 353.651, deleted text beginsubdivisions 2 anddeleted text end new text beginsubdivision new text end3, and 353.30, subdivision 3.

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

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

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

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 9.

Minnesota Statutes 2012, section 353.657, subdivision 3a, is amended to read:


Subd. 3a.

Maximum and minimum family benefits.

(a) The maximum monthly
benefit per family must not exceed the following percentages of the member's average
monthly salary as specified in subdivision 3:

(1) 80 percent, if the member's death was a line of duty death; or

(2) 70 percent, if the member's death was not a line of duty death or occurred while
the member was receiving a disability benefit that accrued before July 1, 2007.

(b) The minimum monthly benefit per family, including the joint and survivor
optional annuity under subdivision 2a, and section 353.656, subdivision 1a, must not be
less than the following percentage of the member's average monthly salary as specified in
subdivision 3:

(1) 60 percent, if the death was a line of duty death; or

(2) 50 percent, if the death was not a line of duty death or occurred while the member
was receiving a disability benefit that accrued before July 1, 2007.

(c) If the maximum under paragraph (a) is exceeded, the monthly benefit of the
joint annuitantnew text begin, surviving spouse, and dependent children, as applicable,new text end must new text begineach new text endbe
reduced deleted text beginto the amount necessarydeleted text end new text beginproportionately new text endso that the total family benefit does
not exceed the applicable maximum. The joint and survivor optional annuitynew text begin, surviving
spouse, or dependent children benefit, as applicable,
new text end must be restored, plus applicable
postretirement adjustments under Minnesota Statutes 2008, section 356.41 or section
356.415, as the dependent child or children become no longer dependent under section
353.01, subdivision 15new text begin, or in the event of the death of the joint and survivor annuity
recipient or the surviving spouse
new text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2012, section 353E.001, subdivision 1, is amended to read:


Subdivision 1.

Duty disability.

"Duty disability," physical or psychological, means
a condition that is expected to prevent a member, for a period of not less than 12 months,
from performing the normal duties of a local government correctional service employee as
defined under section 353E.02 and that is the direct result of an injury incurred during, or
a disease arising out of, the performance of deleted text beginnormal duties or the actual performance of
less frequent
deleted text end new text begininherently dangerous new text enddutiesdeleted text begin, either of which are specific to protecting the
property and personal safety of others and that present inherent dangers
deleted text end that are specific to
the positions covered by the local government correctional service retirement plan.

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Minnesota Statutes 2012, section 356.415, subdivision 1b, is amended to read:


Subd. 1b.

Annual postretirement adjustments; PERA; general employees
retirement plan and local government correctional retirement plan.

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

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

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

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

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

(b) Funding stability is restored when the market value of assets of the applicable
retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities of the
applicable plan in the new text begintwo new text endmost recent deleted text beginpriordeleted text end new text beginconsecutive new text endactuarial deleted text beginvaluationdeleted text end new text beginvaluations
new text endprepared under section 356.215 and the standards for actuarial work by the approved
actuary retained by the Public Employees Retirement Association under section 356.214.

(c) deleted text beginIf, after applying the increase as provided for in paragraph (a), clauses (3)
and (4), the market value of the applicable retirement plan is determined in the next
subsequent actuarial valuation prepared under section 356.215 to be less than 90 percent
of the actuarial accrued liability of any of the applicable Public Employees Retirement
Association plans,
deleted text endnew text begin After having met the definition of funding stability under paragraph
(b),
new text end the increase provided in paragraph (a), clauses (1) and (2), deleted text beginaredeleted text end new text beginrather than an increase
under subdivision 1, is again
new text endto be applied deleted text beginas of the next successive January until funding
stability is again restored.
deleted text endnew text begin in a subsequent year or years if the market value of assets of
the applicable plan equals or is less than:
new text end

new text begin (1) 85 percent of the actuarial accrued liabilities of the applicable plan for two
consecutive actuarial valuations; or
new text end

new text begin (2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most
recent actuarial valuation.
new text end

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

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2012, section 356.415, subdivision 1c, is amended to read:


Subd. 1c.

Annual postretirement adjustments; PERA-police and fire.

(a)
Retirement annuity, disability benefit, or survivor benefit recipients of the public
employees police and fire retirement plan are entitled to a postretirement adjustment
annually on January 1, new text beginuntil funding stability is restored, new text endas follows:

(1) for deleted text beginJanuary 1, 2011, and for January 1, 2012, fordeleted text end each annuitant or benefit
recipient new text beginwhose annuity or benefit effective date is on or before June 1, 2014, new text endwho has
been receiving the annuity or benefit for at least 12 full months as of the immediate
preceding June 30, an amount equal to one percent in each year;new text begin or
new text end

(2) for deleted text beginJanuary 1, 2011, and for January 1, 2012, fordeleted text end each annuitant or benefit
recipient new text beginwhose annuity or benefit effective date is on or before June 1, 2014, new text endwho has
been receiving the annuity or benefit for at least one full monthnew text begin, but not less than 11
months,
new text end as of the immediate preceding June 30, an amount equal to 1/12 of one percent deleted text beginin
each year
deleted text endnew text begin for each month of annuity or benefit receiptnew text end;new text begin and
new text end

(3) for deleted text beginJanuary 1, 2013, and each successive January 1 that follows the loss of
funding stability as defined under paragraph (b) until funding stability as defined under
paragraph (b) is again restored, for
deleted text end each annuitant or benefit recipient new text beginwhose annuity
or benefit effective date is after June 1, 2014,
new text endwho deleted text beginhasdeleted text end new text beginwill have new text endbeen receiving deleted text beginthedeleted text end new text beginan
new text endannuity or benefit for at least deleted text begin12deleted text end new text begin36 new text endfull months as of the immediate preceding June 30,
an amount equal to deleted text beginthe percentage increase in the Consumer Price Index for urban wage
earners and clerical workers all items index published by the Bureau of Labor Statistics of
the United States Department of Labor between the immediate preceding June 30 and the
June 30 occurring 12 months previous, but not to exceed 1.5
deleted text end new text beginone new text endpercent;new text begin or
new text end

(4) for deleted text beginJanuary 1, 2013, and each successive January 1 that follows the loss of funding
stability as defined under paragraph (b) until funding stability as defined under paragraph
(b) is again restored, for
deleted text end each annuitant or benefit recipient new text beginwhose annuity or benefit
effective date is after June 1, 2014,
new text endwho has been receiving the annuity or benefit for at
least deleted text beginonedeleted text end new text begin25 new text endfull deleted text beginmonthdeleted text end new text beginmonths, but less than 36 months new text endas of the immediate preceding June
30, an amount equal to 1/12 of deleted text beginthe percentage increase in the Consumer Price Index for
urban wage earners and clerical workers all items index published by the Bureau of Labor
Statistics of the United States Department of Labor between the immediate preceding June
30 and the June 30 occurring 12 months previous for each full month of annuity or benefit
receipt, but not to exceed 1/12 of 1.5
deleted text end new text beginone new text endpercent for each full month of annuity or benefit
receiptnew text begin during the fiscal year in which the annuity or benefit was effectivenew text enddeleted text begin;deleted text endnew text begin.
new text end

deleted text begin (5) fordeleted text end new text begin(b) Retirement annuity, disability benefit, or survivor benefit recipients of
the public employees police and fire retirement plan are entitled to a postretirement
adjustment annually on
new text endeach January 1 following the restoration of funding stability as
defined under paragraph deleted text begin(b)deleted text end new text begin(c) new text endand during the continuation of funding stability as defined
under paragraph deleted text begin(b)deleted text endnew text begin (c)new text end, new text beginas follows:
new text end

new text begin (1) new text endfor each annuitant or benefit recipient who has been receiving the annuity or
benefit for at least deleted text begin12deleted text end new text begin36 new text endfull months as of the immediate preceding June 30, an amount
equal to the percentage increase in the Consumer Price Index for urban wage earners and
clerical workers all items index published by the Bureau of Labor Statistics of the United
States Department of Labor between the immediate preceding June 30 and the June 30
occurring 12 months previous, but not to exceed 2.5 percent; and

deleted text begin (6) for each January 1 following the restoration of funding stability as defined under
paragraph (b) and during the continuation of funding stability as defined under paragraph
(b),
deleted text end new text begin(2) new text endfor each annuitant or benefit recipient who has been receiving the annuity or benefit
for at least deleted text beginonedeleted text end new text begin25 new text endfull deleted text beginmonthdeleted text end new text beginmonths, but less than 36 full months, new text endas of the immediate
preceding June 30, an amount equal to 1/12 of the percentage increase in the Consumer
Price Index for urban wage earners and clerical workers all items index published by
the Bureau of Labor Statistics of the United States Department of Labor between the
immediate preceding June 30 and the June 30 occurring 12 months previous for each full
month of annuity or benefit receiptnew text begin during the fiscal year in which the annuity or benefit
was effective
new text end, but not to exceed 1/12 of 2.5 percent for each full month of annuity or
benefit receiptnew text begin during the fiscal year in which the annuity or benefit was effectivenew text end.

deleted text begin (b)deleted text end new text begin(c) new text endFunding stability is restored when the market value of assets of the public
employees police and fire retirement plan equals or exceeds 90 percent of the actuarial
accrued liabilities of the applicable plan in the new text begintwo new text endmost recent deleted text beginpriordeleted text end new text beginconsecutive new text endactuarial
deleted text beginvaluationdeleted text end new text beginvaluations new text endprepared under section 356.215 and under the standards for actuarial
work of the Legislative Commission on Pensions and Retirement by the approved actuary
retained by the Public Employees Retirement Association under section 356.214.

new text begin (d) After having met the definition of funding stability under paragraph (c), a full
or prorated increase, as provided in paragraph (a), clauses (1), (2), (3), or (4), whichever
applies, rather than adjustments under paragraph (b), is again applied in a subsequent year
or years if the market value of assets of the public employees police and fire retirement
plan equals or is less than:
new text end

new text begin (1) 85 percent of the actuarial accrued liabilities of the applicable plan for two
consecutive actuarial valuations; or
new text end

new text begin (2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most
recent actuarial valuation.
new text end

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

new text begin EFFECTIVE DATE. new text end

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