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Capital IconMinnesota Legislature

HF 1100

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:43am

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to retirement; authorizing the consolidation of the Minneapolis
Employees Retirement Fund with the general employees retirement plan of the
Public Employees Retirement Association; adjusting contribution requirements;
making conforming changes; amending Minnesota Statutes 2008, sections
6.67; 13D.01, subdivision 1; 43A.17, subdivision 9; 43A.316, subdivision 8;
69.011, subdivision 1; 69.021, subdivision 10; 69.031, subdivision 5; 126C.41,
subdivision 3; 256D.21; 352.01, subdivision 2b; 353.01, subdivisions 2a, 2b,
10, 16; 353.0161, subdivision 1; 353.026; 353.27, subdivisions 2, 3, 3a, 3b, by
adding a subdivision; 353.29, subdivisions 1, 3, by adding a subdivision; 353.30,
subdivision 5; 353.31, subdivisions 1, 1a; 353.32, subdivision 1a; 353.33,
subdivisions 1, 3, 12; 353.34, subdivision 3; 353.37, by adding a subdivision;
353.46, subdivision 6; 353.64, subdivision 7; 354.71; 354A.011, subdivision 27;
354A.39; 356.20, subdivision 2; 356.214, subdivision 1; 356.215, subdivisions 8,
11; 356.30, subdivision 3; 356.302, subdivisions 1, 7; 356.303, subdivision 4;
356.32, subdivision 2; 356.401, subdivision 3; 356.407, subdivision 2; 356.431,
subdivision 1; 356.465, subdivision 3; 356.64; 356.65, subdivision 2; 356.91;
356.96, subdivision 1; 422A.101, subdivision 3; 422A.26; 473.511, subdivision
3; 473.606, subdivision 5; 475.52, subdivision 6; 480.181, subdivision 2;
proposing coding for new law in Minnesota Statutes, chapter 353; repealing
Minnesota Statutes 2008, sections 13.63, subdivision 1; 69.011, subdivision 2a;
356.43; 422A.01, subdivisions 1, 2, 3, 4, 4a, 5, 6, 7, 8, 9, 10, 11, 12, 13, 13a, 17,
18; 422A.02; 422A.03; 422A.04; 422A.05, subdivisions 1, 2a, 2b, 2c, 2d, 2e, 2f,
5, 6, 8; 422A.06; 422A.08, subdivisions 1, 5, 5a; 422A.09; 422A.10; 422A.101,
subdivisions 1, 1a, 2, 2a; 422A.11; 422A.12; 422A.13; 422A.14, subdivision 1;
422A.15; 422A.151; 422A.155; 422A.156; 422A.16, subdivisions 1, 2, 3, 4, 5, 6,
7, 8, 9, 10; 422A.17; 422A.18, subdivisions 1, 2, 3, 4, 5, 7; 422A.19; 422A.20;
422A.21; 422A.22, subdivisions 1, 3, 4, 6; 422A.23, subdivisions 1, 2, 5, 6, 7, 8,
9, 10, 11, 12; 422A.231; 422A.24; 422A.25.

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

Section 1.

Minnesota Statutes 2008, section 6.67, is amended to read:


6.67 PUBLIC ACCOUNTANTS; REPORT OF POSSIBLE MISCONDUCT.

Whenever a public accountant in the course of auditing the books and affairs of a
county, city, town, school district, other public corporation, or local public pension plan
governed by section 69.77, sections 69.771 to 69.775, or chapter 354A, deleted text begin422A,deleted text end 423B,
423C, or 424A, discovers evidence pointing to nonfeasance, misfeasance, or malfeasance,
on the part of an officer or employee in the conduct of duties and affairs, the public
accountant shall promptly make a report of such discovery to the state auditor and the
county attorney of the county in which the governmental unit is situated and the public
accountant shall also furnish a copy of the report of audit upon completion to said officers.
The county attorney shall act on such report in the same manner as required by law for
reports made to the county attorney by the state auditor.

Sec. 2.

Minnesota Statutes 2008, section 13D.01, subdivision 1, is amended to read:


Subdivision 1.

In executive branch, local government.

All meetings, including
executive sessions, must be open to the public

(a) of a state

(1) agency,

(2) board,

(3) commission, or

(4) department,

when required or permitted by law to transact public business in a meeting;

(b) of the governing body of a

(1) school district however organized,

(2) unorganized territory,

(3) county,

(4) statutory or home rule charter city,

(5) town, or

(6) other public body;

(c) of any

(1) committee,

(2) subcommittee,

(3) board,

(4) department, or

(5) commission,

of a public body; and

(d) of the governing body or a committee of:

(1) a statewide public pension plan defined in section 356A.01, subdivision 24; or

(2) a local public pension plan governed by section 69.77, sections 69.771 to 69.775,
or chapter 354Adeleted text begin, 422A,deleted text end or 423B.

Sec. 3.

Minnesota Statutes 2008, section 43A.17, subdivision 9, is amended to read:


Subd. 9.

Political subdivision compensation limit.

(a) The salary and the value of
all other forms of compensation of a person employed by a political subdivision of this
state, excluding a school district, deleted text beginor employed under section 422A.03deleted text end may not exceed 110
percent of the salary of the governor as set under section 15A.082, except as provided
in this subdivision. For purposes of this subdivision, "political subdivision of this state"
includes a statutory or home rule charter city, county, town, metropolitan or regional
agency, or other political subdivision, but does not include a hospital, clinic, or health
maintenance organization owned by such a governmental unit.

(b) Beginning in 2006, the limit in paragraph (a) shall be adjusted annually in
January. The limit shall equal the limit for the prior year increased by the percentage
increase, if any, in the Consumer Price Index for all-urban consumers from October of the
second prior year to October of the immediately prior year.

(c) Deferred compensation and payroll allocations to purchase an individual annuity
contract for an employee are included in determining the employee's salary. Other forms
of compensation which shall be included to determine an employee's total compensation
are all other direct and indirect items of compensation which are not specifically excluded
by this subdivision. Other forms of compensation which shall not be included in a
determination of an employee's total compensation for the purposes of this subdivision are:

(1) employee benefits that are also provided for the majority of all other full-time
employees of the political subdivision, vacation and sick leave allowances, health and
dental insurance, disability insurance, term life insurance, and pension benefits or like
benefits the cost of which is borne by the employee or which is not subject to tax as
income under the Internal Revenue Code of 1986;

(2) dues paid to organizations that are of a civic, professional, educational, or
governmental nature; and

(3) reimbursement for actual expenses incurred by the employee which the
governing body determines to be directly related to the performance of job responsibilities,
including any relocation expenses paid during the initial year of employment.

The value of other forms of compensation shall be the annual cost to the political
subdivision for the provision of the compensation.

(d) The salary of a medical doctor or doctor of osteopathy occupying a position that
the governing body of the political subdivision has determined requires an M.D. or D.O.
degree is excluded from the limitation in this subdivision.

(e) The commissioner may increase the limitation in this subdivision for a position
that the commissioner has determined requires special expertise necessitating a higher
salary to attract or retain a qualified person. The commissioner shall review each
proposed increase giving due consideration to salary rates paid to other persons with
similar responsibilities in the state and nation. The commissioner may not increase the
limitation until the commissioner has presented the proposed increase to the Legislative
Coordinating Commission and received the commission's recommendation on it. The
recommendation is advisory only. If the commission does not give its recommendation
on a proposed increase within 30 days from its receipt of the proposal, the commission
is deemed to have made no recommendation. If the commissioner grants or granted an
increase under this paragraph, the new limitation shall be adjusted beginning in August
2005 and in each subsequent calendar year in January by the percentage increase equal to
the percentage increase, if any, in the Consumer Price Index for all-urban consumers from
October of the second prior year to October of the immediately prior year.

Sec. 4.

Minnesota Statutes 2008, section 43A.316, subdivision 8, is amended to read:


Subd. 8.

Continuation of coverage.

(a) A former employee of an employer
participating in the program who is receiving a public pension disability benefit or an
annuity or has met the age and service requirements necessary to receive an annuity under
chapter 353, 353C, 354, 354A, 356, deleted text begin422A,deleted text end 423, 423A, or 424, and the former employee's
dependents, are eligible to participate in the program. This participation is at the person's
expense unless a collective bargaining agreement or personnel policy provides otherwise.
Premiums for these participants must be established by the commissioner.

The commissioner may provide policy exclusions for preexisting conditions
only when there is a break in coverage between a participant's coverage under the
employment-based group insurance program and the participant's coverage under this
section. An employer shall notify an employee of the option to participate under this
paragraph no later than the effective date of retirement. The retired employee or the
employer of a participating group on behalf of a current or retired employee shall notify
the commissioner within 30 days of the effective date of retirement of intent to participate
in the program according to the rules established by the commissioner.

(b) The spouse of a deceased employee or former employee may purchase the
benefits provided at premiums established by the commissioner if the spouse was a
dependent under the employee's or former employee's coverage under this section at the
time of the death. The spouse remains eligible to participate in the program as long as
the group that included the deceased employee or former employee participates in the
program. Coverage under this clause must be coordinated with relevant insurance benefits
provided through the federally sponsored Medicare program.

(c) The program benefits must continue in the event of strike permitted by section
179A.18, if the exclusive representative chooses to have coverage continue and the
employee pays the total monthly premiums when due.

(d) A participant who discontinues coverage may not reenroll.

Persons participating under these paragraphs shall make appropriate premium
payments in the time and manner established by the commissioner.

Sec. 5.

Minnesota Statutes 2008, section 69.011, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

Unless the language or context clearly indicates that a
different meaning is intended, the following words and terms shall for the purposes of this
chapter and chapters 423, 423A, 424 and 424A have the meanings ascribed to them:

(a) "Commissioner" means the commissioner of revenue.

(b) "Municipality" means:

(1) a home rule charter or statutory city;

(2) an organized town;

(3) a park district subject to chapter 398;

(4) the University of Minnesota;

(5) for purposes of the fire state aid program only, an American Indian tribal
government entity located within a federally recognized American Indian reservation;

(6) for purposes of the police state aid program only, an American Indian tribal
government with a tribal police department which exercises state arrest powers under
section 626.90, 626.91, 626.92, or 626.93;

(7) for purposes of the police state aid program only, the Metropolitan Airports
Commission deleted text beginwith respect to peace officers covered under chapter 422Adeleted text end; and

(8) for purposes of the police state aid program only, the Department of Natural
Resources and the Department of Public Safety with respect to peace officers covered
under chapter 352B.

(c) "Minnesota Firetown Premium Report" means a form prescribed by the
commissioner containing space for reporting by insurers of fire, lightning, sprinkler
leakage and extended coverage premiums received upon risks located or to be performed
in this state less return premiums and dividends.

(d) "Firetown" means the area serviced by any municipality having a qualified fire
department or a qualified incorporated fire department having a subsidiary volunteer
firefighters' relief association.

(e) "Market value" means latest available market value of all property in a taxing
jurisdiction, whether the property is subject to taxation, or exempt from ad valorem
taxation obtained from information which appears on abstracts filed with the commissioner
of revenue or equalized by the State Board of Equalization.

(f) "Minnesota Aid to Police Premium Report" means a form prescribed by the
commissioner for reporting by each fire and casualty insurer of all premiums received
upon direct business received by it in this state, or by its agents for it, in cash or otherwise,
during the preceding calendar year, with reference to insurance written for insuring against
the perils contained in auto insurance coverages as reported in the Minnesota business
schedule of the annual financial statement which each insurer is required to file with
the commissioner in accordance with the governing laws or rules less return premiums
and dividends.

(g) "Peace officer" means any person:

(1) whose primary source of income derived from wages is from direct employment
by a municipality or county as a law enforcement officer on a full-time basis of not less
than 30 hours per week;

(2) who has been employed for a minimum of six months prior to December 31
preceding the date of the current year's certification under subdivision 2, clause (b);

(3) who is sworn to enforce the general criminal laws of the state and local
ordinances;

(4) who is licensed by the Peace Officers Standards and Training Board and is
authorized to arrest with a warrant; and

(5) who is a member of a local police relief association to which section 69.77
applies, the State Patrol retirement plandeleted text begin,deleted text end new text beginor new text endthe public employees police and fire funddeleted text begin, or
the Minneapolis Employees Retirement Fund
deleted text end.

(h) "Full-time equivalent number of peace officers providing contract service" means
the integral or fractional number of peace officers which would be necessary to provide
the contract service if all peace officers providing service were employed on a full-time
basis as defined by the employing unit and the municipality receiving the contract service.

(i) "Retirement benefits other than a service pension" means any disbursement
authorized under section 424A.05, subdivision 3, clauses (2) and (3).

(j) "Municipal clerk, municipal clerk-treasurer, or county auditor" means the person
who was elected or appointed to the specified position or, in the absence of the person,
another person who is designated by the applicable governing body. In a park district,
the clerk is the secretary of the board of park district commissioners. In the case of the
University of Minnesota, the clerk is that official designated by the Board of Regents.
For the Metropolitan Airports Commission, the clerk is the person designated by the
commission. For the Department of Natural Resources or the Department of Public Safety,
the clerk is the respective commissioner. For a tribal police department which exercises
state arrest powers under section 626.90, 626.91, 626.92, or 626.93, the clerk is the person
designated by the applicable American Indian tribal government.

Sec. 6.

Minnesota Statutes 2008, section 69.021, subdivision 10, is amended to read:


Subd. 10.

Reduction in police state aid apportionment.

(a) The commissioner of
revenue shall reduce the apportionment of police state aid under subdivisions 5, paragraph
(b), 6, and 7a, for eligible employer units by any excess police state aid.

(b) "Excess police state aid" is:

(1) for counties and for municipalities in which police retirement coverage is
provided wholly by the public employees police and fire fund and all police officers are
members of the plan governed by sections 353.63 to 353.657, the amount in excess of the
employer's total prior calendar year obligation as defined in paragraph (c), as certified by
the executive director of the Public Employees Retirement Association;

(2) for municipalities in which police retirement coverage is provided in part by the
public employees police and fire fund governed by sections 353.63 to 353.657 and in
part by a local police consolidation account governed by chapter 353A, and established
before March 2, 1999, for which the municipality declined merger under section 353.665,
subdivision 1
, or established after March 1, 1999, the amount in excess of the employer's
total prior calendar year obligation as defined in paragraph (c), plus the amount of the
employer's total prior calendar year obligation under section 353A.09, subdivision 5,
paragraphs (a) and (b), as certified by the executive director of the Public Employees
Retirement Association;

(3) for municipalities in which police retirement coverage is provided by the public
employees police and fire plan governed by sections 353.63 to 353.657, in which police
retirement coverage was provided by a police consolidation account under chapter
353A before July 1, 1999, and for which the municipality has an additional municipal
contribution under section 353.665, subdivision 8, paragraph (b), the amount in excess of
the employer's total prior calendar year obligation as defined in paragraph (c), plus the
amount of any additional municipal contribution under section 353.665, subdivision 8,
paragraph (b), until the year 2010, as certified by the executive director of the Public
Employees Retirement Association;

(4) for municipalities in which police retirement coverage is provided in part by the
public employees police and fire fund governed by sections 353.63 to 353.657 and in part
by a local police relief association governed by sections 69.77 and 423A.01, the amount
in excess of the employer's total prior calendar year obligation as defined in paragraph
(c), as certified by the executive director of the public employees retirement association,
plus the amount of the financial requirements of the relief association certified to the
applicable municipality during the prior calendar year under section 69.77, subdivisions 4
and 5
, reduced by the amount of member contributions deducted from the covered salary
of the relief association during the prior calendar year under section 69.77, subdivision 3,
as certified by the chief administrative officer of the applicable municipality;

(5) for the Metropolitan Airports Commission, deleted text beginif there are police officers hired
before July 1, 1978, with retirement coverage by the Minneapolis Employees Retirement
Fund remaining,
deleted text end the amount in excess of the commission's total prior calendar year
obligation as defined in paragraph (c), as certified by the executive director of the Public
Employees Retirement Associationdeleted text begin, plus the amount determined by expressing the
commission's total prior calendar year contribution to the Minneapolis Employees
Retirement Fund under section 422A.101, subdivisions 2 and 2a, as a percentage of
the commission's total prior calendar year covered payroll for commission employees
covered by the Minneapolis Employees Retirement Fund and applying that percentage
to the commission's total prior calendar year covered payroll for commission police
officers covered by the Minneapolis Employees Retirement Fund, as certified by the chief
administrative officer of the Metropolitan Airports Commission
deleted text end; and

(6) for the Department of Natural Resources and for the Department of Public
Safety, the amount in excess of the employer's total prior calendar year obligation under
section 352B.02, subdivision 1c, for plan members who are peace officers under section
69.011, subdivision 1, clause (g), as certified by the executive director of the Minnesota
State Retirement System.

(c) The employer's total prior calendar year obligation with respect to the public
employees police and fire plan is the total prior calendar year obligation under section
353.65, subdivision 3, for police officers as defined in section 353.64, subdivision 2,
and the actual total prior calendar year obligation under section 353.65, subdivision 3,
for firefighters, as defined in section 353.64, subdivision 3, but not to exceed for those
firefighters the applicable following amounts:

Municipality
Maximum Amount
Albert Lea
$54,157.01
Anoka
10,399.31
Apple Valley
5,442.44
Austin
49,864.73
Bemidji
27,671.38
Brooklyn Center
6,605.92
Brooklyn Park
24,002.26
Burnsville
15,956.00
Cloquet
4,260.49
Coon Rapids
39,920.00
Cottage Grove
8,588.48
Crystal
5,855.00
East Grand Forks
51,009.88
Edina
32,251.00
Elk River
5,216.55
Ely
13,584.16
Eveleth
16,288.27
Fergus Falls
6,742.00
Fridley
33,420.64
Golden Valley
11,744.61
Hastings
16,561.00
Hopkins
4,324.23
International Falls
14,400.69
Lakeville
782.35
Lino Lakes
5,324.00
Little Falls
7,889.41
Maple Grove
6,707.54
Maplewood
8,476.69
Minnetonka
10,403.00
Montevideo
1,307.66
Moorhead
68,069.26
New Hope
6,739.72
North St. Paul
4,241.14
Northfield
770.63
Owatonna
37,292.67
Plymouth
6,754.71
Red Wing
3,504.01
Richfield
53,757.96
deleted text begin Rosemont deleted text end new text begin Rosemount
new text end
1,712.55
Roseville
9,854.51
St. Anthony
33,055.00
St. Louis Park
53,643.11
Thief River Falls
28,365.04
Virginia
31,164.46
Waseca
11,135.17
West St. Paul
15,707.20
White Bear Lake
6,521.04
Woodbury
3,613.00
any other municipality
0.00

(d) The total amount of excess police state aid must be deposited in the excess
police state-aid account in the general fund, administered and distributed as provided
in subdivision 11.

Sec. 7.

Minnesota Statutes 2008, section 69.031, subdivision 5, is amended to read:


Subd. 5.

Deposit of state aid.

(a) The municipal treasurer shall, within 30 days
after receipt, transmit the fire state aid to the treasurer of the duly incorporated firefighters'
relief association if there is one organized and the association has filed a financial report
with the municipality. If the relief association has not filed a financial report with the
municipality, the municipal treasurer shall delay transmission of the fire state aid to the
relief association until the complete financial report is filed. If there is no relief association
organized, or if the association has dissolved, or has been removed as trustees of state aid,
then the treasurer of the municipality shall deposit the money in the municipal treasury as
provided for in section 424A.08 and the money may be disbursed only for the purposes
and in the manner set forth in that section.

(b) The municipal treasurer, upon receipt of the police state aid, shall disburse the
police state aid in the following manner:

(1) For a municipality in which a local police relief association exists and all peace
officers are members of the association, the total state aid must be transmitted to the
treasurer of the relief association within 30 days of the date of receipt, and the treasurer
of the relief association shall immediately deposit the total state aid in the special fund
of the relief association;

(2) For a municipality in which police retirement coverage is provided by the public
employees police and fire fund and all peace officers are members of the fund, including
municipalities covered by section 353.665, the total state aid must be applied toward the
municipality's employer contribution to the public employees police and fire fund under
sections 353.65, subdivision 3, and 353.665, subdivision 8, paragraph (b), if applicable; or

(3) For a municipality other than a city of the first class with a population of more
than 300,000 in which both a police relief association exists and police retirement
coverage is provided in part by the public employees police and fire fund, the municipality
may elect at its option to transmit the total state aid to the treasurer of the relief association
as provided in clause (1), to use the total state aid to apply toward the municipality's
employer contribution to the public employees police and fire fund subject to all the
provisions set forth in clause (2), or to allot the total state aid proportionately to be
transmitted to the police relief association as provided in this subdivision and to apply
toward the municipality's employer contribution to the public employees police and fire
fund subject to the provisions of clause (2) on the basis of the respective number of active
full-time peace officers, as defined in section 69.011, subdivision 1, clause (g).

For a city of the first class with a population of more than 300,000, in addition, the
city may elect to allot the appropriate portion of the total police state aid to apply toward
the employer contribution of the city to the public employees police and fire fund based
on the covered salary of police officers covered by the fund each payroll period and to
transmit the balance to the police relief association; or

(4) For a municipality in which police retirement coverage is provided in part by
the public employees police and fire fund and in part by a local police consolidation
account governed by chapter 353A and established before March 2, 1999, for which the
municipality declined merger under section 353.665, subdivision 1, or established after
March 1, 1999, the total police state aid must be applied towards the municipality's total
employer contribution to the public employees police and fire fund and to the local police
consolidation account under sections 353.65, subdivision 3, and 353A.09, subdivision 5.

(c) The county treasurer, upon receipt of the police state aid for the county, shall
apply the total state aid toward the county's employer contribution to the public employees
police and fire fund under section 353.65, subdivision 3.

(d) The designated Metropolitan Airports Commission official, upon receipt of the
police state aid for the Metropolitan Airports Commission, shall apply the total police
state aid first toward the commission's employer contribution for deleted text beginpolice officers to the
Minneapolis Employees Retirement Fund under section 422A.101, subdivision 2a, and, if
there is any amount of police state aid remaining, shall apply that remainder toward the
commission's employer contribution for
deleted text end police officers to the public employees police and
fire plan under section 353.65, subdivision 3.

(e) The police state aid apportioned to the Departments of Public Safety and Natural
Resources under section 69.021, subdivision 7a, is appropriated to the commissioner of
finance for transfer to the funds and accounts from which the salaries of peace officers
certified under section 69.011, subdivision deleted text begin2adeleted text endnew text begin 2bnew text end, are paid. The commissioner of revenue
shall certify to the commissioners of public safety, natural resources, and finance the
amounts to be transferred from the appropriation for police state aid. The commissioners
of public safety and natural resources shall certify to the commissioner of finance the
amounts to be credited to each of the funds and accounts from which the peace officers
employed by their respective departments are paid. Each commissioner must allocate the
police state aid first for employer contributions for employees funded from the general
fund and then for employer contributions for employees funded from other funds. For
peace officers whose salaries are paid from the general fund, the amounts transferred from
the appropriation for police state aid must be canceled to the general fund.

Sec. 8.

Minnesota Statutes 2008, section 126C.41, subdivision 3, is amended to read:


Subd. 3.

Retirement levies.

(a) In 1991 and each year thereafter, a district to which
this subdivision applies may levy an additional amount required for contributions to the
new text begin general employees retirement plan of the Public Employees Retirement Association as the
successor of the
new text endMinneapolis Employees Retirement Fund as a result of the maximum
dollar amount limitation on state contributions to deleted text beginthe funddeleted text end new text beginthat plan new text endimposed under
section 422A.101, subdivision 3. The additional levy must not exceed the most recent
amount certified by the deleted text beginboard of the Minneapolis Employees Retirement Funddeleted text end new text beginexecutive
director of the Public Employees Retirement Association
new text endas the district's share of the
contribution requirement in excess of the maximum state contribution under section
422A.101, subdivision 3.

(b) For taxes payable in 1994 and thereafter, Special School District No. 1,
Minneapolis, and Independent School District No. 625, St. Paul, may levy for the increase
in the employer retirement fund contributions, under Laws 1992, chapter 598, article 5,
section 1.

(c) If the employer retirement fund contributions under section 354A.12, subdivision
2a
, are increased for fiscal year 1994 or later fiscal years, Special School District No. 1,
Minneapolis, and Independent School District No. 625, St. Paul, may levy in payable
1994 or later an amount equal to the amount derived by applying the net increase in
the employer retirement fund contribution rate of the respective teacher retirement fund
association between fiscal year 1993 and the fiscal year beginning in the year after the
levy is certified to the total covered payroll of the applicable teacher retirement fund
association. If an applicable school district levies under this paragraph, they may not
levy under paragraph (b).

(d) In addition to the levy authorized under paragraph (c), Special School District
No. 1, Minneapolis, may also levy payable in 1997 or later an amount equal to the
contributions under section 423A.02, subdivision 3, and may also levy in payable 1994
or later an amount equal to the state aid contribution under section 354A.12, subdivision
3b
. Independent School District No. 625, St. Paul, may levy payable in 1997 or later an
amount equal to the supplemental contributions under section 423A.02, subdivision 3.

Sec. 9.

Minnesota Statutes 2008, section 256D.21, is amended to read:


256D.21 CONTINUATION OF BENEFITS; FORMER MINNEAPOLIS
EMPLOYEES.

Subdivision 1.

Continuation of benefits.

Each employee of the city of Minneapolis
who is transferred to and employed by the county under the provisions of section 256D.20
and who is a contributing member of a retirement system organized under the provisions
of chapter 422A, deleted text beginshall continue to bedeleted text end new text beginis new text enda member of deleted text beginthat systemdeleted text end new text beginthe general employees
retirement plan of the Public Employees Retirement Association
new text endand new text beginis new text endentitled to all of
the new text beginapplicable new text endbenefits conferred deleted text begintherebydeleted text end new text beginby new text endand subject to all the restrictions of deleted text beginchapter
422A, unless the member applies to cancel membership within six months after January 1,
1974
deleted text endnew text begin sections 353.01 to 353.46, 353.67, and 353.71new text end.

Subd. 2.

City obligation.

The cost to the public of that portion of the retirement
allowances or other benefits accrued while any such employee was in the service of the
city of Minneapolis shall remain an obligation of the city and a tax shall be levied and
collected by it to discharge its obligation as provided deleted text beginby chapter 422Adeleted text endnew text begin in sections 353.27,
subdivisions 3 and 3a, and 353.47, subdivision 6
new text end.

Subd. 3.

County obligation.

The cost to the public of the retirement allowances or
other benefits accruing to employees so transferred to and employed by the county shall
be the obligation of and paid by the county deleted text beginat such time as the retirement board shall fix
and determine in accordance with chapter 422A
deleted text endnew text begin in sections 353.27, subdivisions 3 and
3a, and 353.47, subdivision 6
new text end. The county shall pay to the deleted text beginmunicipaldeleted text end new text begingeneral employees
new text endretirement fund deleted text beginan amount certified to the county auditor of the county by the retirement
board as the cost of the retirement allowances and other benefits accruing and owing to
such county employees
deleted text endnew text begin of the Public Employees Retirement Association those amountsnew text end.
The cost to the public of the retirement deleted text beginallowances as herein provided shalldeleted text end new text begincoverage
under this section must
new text endbe paid from the county revenue fund by the county auditor deleted text beginupon
receipt of certification from the retirement board as herein provided
deleted text end, and the county board
is authorized to levy and collect such taxes as may be necessary to pay such costs.

Sec. 10.

Minnesota Statutes 2008, section 352.01, subdivision 2b, is amended to read:


Subd. 2b.

Excluded employees.

"State employee" does not include:

(1) students employed by the University of Minnesota, or the state colleges and
universities, unless approved for coverage by the Board of Regents of the University of
Minnesota or the Board of Trustees of the Minnesota State Colleges and Universities,
whichever is applicable;

(2) employees who are eligible for membership in the state Teachers Retirement
Association, except employees of the Department of Education who have chosen or may
choose to be covered by the general state employees retirement plan of the Minnesota
State Retirement System instead of the Teachers Retirement Association;

(3) employees of the University of Minnesota who are excluded from coverage by
action of the Board of Regents;

(4) officers and enlisted personnel in the National Guard and the naval militia who
are assigned to permanent peacetime duty and who under federal law are or are required to
be members of a federal retirement system;

(5) election officers;

(6) persons who are engaged in public work for the state but who are employed
by contractors when the performance of the contract is authorized by the legislature or
other competent authority;

(7) officers and employees of the senate, or of the house of representatives, or of a
legislative committee or commission who are temporarily employed;

(8) receivers, jurors, notaries public, and court employees who are not in the judicial
branch as defined in section 43A.02, subdivision 25, except referees and adjusters
employed by the Department of Labor and Industry;

(9) patient and inmate help in state charitable, penal, and correctional institutions
including the Minnesota Veterans Home;

(10) persons who are employed for professional services where the service is
incidental to their regular professional duties and whose compensation is paid on a per
diem basis;

(11) employees of the Sibley House Association;

(12) the members of any state board or commission who serve the state intermittently
and are paid on a per diem basis; the secretary, secretary-treasurer, and treasurer of those
boards if their compensation is $5,000 or less per year, or, if they are legally prohibited
from serving more than three years; and the board of managers of the State Agricultural
Society and its treasurer unless the treasurer is also its full-time secretary;

(13) state troopers and persons who are described in section 352B.01, subdivision 2,
clauses (2) to (6);

(14) temporary employees of the Minnesota State Fair who are employed on or
after July 1 for a period not to extend beyond October 15 of that year; and persons who
are employed at any time by the state fair administration for special events held on the
fairgrounds;

(15) emergency employees who are in the classified service; except that if an
emergency employee, within the same pay period, becomes a provisional or probationary
employee on other than a temporary basis, the employee shall be considered a "state
employee" retroactively to the beginning of the pay period;

(16) temporary employees in the classified service, and temporary employees in the
unclassified service who are appointed for a definite period of not more than six months
and who are employed less than six months in any one-year period;

(17) interns hired for six months or less and trainee employees, except those listed in
subdivision 2a, clause (8);

(18) persons whose compensation is paid on a fee basis or as an independent
contractor;

(19) state employees who are employed by the Board of Trustees of the Minnesota
State Colleges and Universities in unclassified positions enumerated in section 43A.08,
subdivision 1
, clause (9);

(20) state employees who in any year have credit for 12 months service as teachers
in the public schools of the state and as teachers are members of the Teachers Retirement
Association or a retirement system in St. Paul, Minneapolis, or Duluth, except for
incidental employment as a state employee that is not covered by one of the teacher
retirement associations or systems;

(21) employees of the adjutant general who are employed on an unlimited
intermittent or temporary basis in the classified or unclassified service for the support of
Army and Air National Guard training facilities;

(22) chaplains and nuns who are excluded from coverage under the federal Old
Age, Survivors, Disability, and Health Insurance Program for the performance of service
as specified in United States Code, title 42, section 410(a)(8)(A), as amended, if no
irrevocable election of coverage has been made under section 3121(r) of the Internal
Revenue Code of 1986, as amended through December 31, 1992;

(23) examination monitors who are employed by departments, agencies,
commissions, and boards to conduct examinations required by law;

(24) persons who are appointed to serve as members of fact-finding commissions or
adjustment panels, arbitrators, or labor referees under chapter 179;

(25) temporary employees who are employed for limited periods under any state or
federal program for training or rehabilitation, including persons who are employed for
limited periods from areas of economic distress, but not including skilled and supervisory
personnel and persons having civil service status covered by the system;

(26) full-time students who are employed by the Minnesota Historical Society
intermittently during part of the year and full-time during the summer months;

(27) temporary employees who are appointed for not more than six months, of
the Metropolitan Council and of any of its statutory boards, if the board members are
appointed by the Metropolitan Council;

(28) persons who are employed in positions designated by the Department of
Finance as student workers;

(29) members of trades who are employed by the successor to the Metropolitan
Waste Control Commission, who have trade union pension plan coverage under a
collective bargaining agreement, and who are first employed after June 1, 1977;

(30) off-duty peace officers while employed by the Metropolitan Council;

(31) persons who are employed as full-time police officers by the Metropolitan
Council and as police officers are members of the public employees police and fire fund;

(32) persons who are employed as full-time firefighters by the Department of Military
Affairs and as firefighters are members of the public employees police and fire fund;

(33) foreign citizens with a work permit of less than three years, or an H-1b/JV visa
valid for less than three years of employment, unless notice of extension is supplied which
allows them to work for three or more years as of the date the extension is granted, in
which case they are eligible for coverage from the date extended; and

(34) persons who are employed by the Board of Trustees of the Minnesota State
Colleges and Universities and who elected to remain members of the Public Employees
Retirement Association or new text beginof new text endthe new text beginformer new text endMinneapolis Employees Retirement Fund,
whichever applies, under Minnesota Statutes 1994, section 136C.75.

Sec. 11.

Minnesota Statutes 2008, section 353.01, subdivision 2a, is amended to read:


Subd. 2a.

Included employees.

(a) Public employees whose salary from
employment in one or more positions within one governmental subdivision exceeds $425
in any month shall participate as members of the association. If the salary is less than
$425 in a subsequent month, the employee retains membership eligibility. Eligible public
employees shall participate as members of the association with retirement coverage by
the public employees retirement plan or the public employees police and fire retirement
plan under this chapter, or the local government correctional employees retirement plan
under chapter 353E, whichever applies, as a condition of their employment on the first
day of employment unless they:

(1) are specifically excluded under subdivision 2b;

(2) do not exercise their option to elect retirement coverage in the association as
provided in subdivision 2d, paragraph (a); or

(3) are employees of the governmental subdivisions listed in subdivision 2d,
paragraph (b), where the governmental subdivision has not elected to participate as a
governmental subdivision covered by the association.

(b) A public employee who was a member of the association on June 30, 2002,
based on employment that qualified for membership coverage by the public employees
retirement plan or the public employees police and fire plan under this chapter, or the
local government correctional employees retirement plan under chapter 353E as of June
30, 2002, retains that membership for the duration of the person's employment in that
position or incumbency in elected office. Except as provided in subdivision 28, the person
shall participate as a member until the employee or elected official terminates public
employment under subdivision 11a or terminates membership under subdivision 11b.

(c) Public employees under paragraph (a) include physicians under section 353D.01,
subdivision 2, who do not elect public employees defined contribution plan coverage
under section 353D.02, subdivision 2.

new text begin (d) Employees who were members of the Minneapolis Employees Retirement Fund
on July 1, 2008, and on June 29, 2010, shall participate as members of the association.
new text end

Sec. 12.

Minnesota Statutes 2008, section 353.01, subdivision 2b, is amended to read:


Subd. 2b.

Excluded employees.

The following public employees are not eligible
to participate as members of the association with retirement coverage by the public
employees retirement plan, the local government correctional employees retirement plan
under chapter 353E, or the public employees police and fire retirement plan:

(1) public officers, other than county sheriffs, who are elected to a governing body,
or persons who are appointed to fill a vacancy in an elective office of a governing body,
whose term of office commences on or after July 1, 2002, for the service to be rendered
in that elective position;

(2) election officers or election judges;

(3) patient and inmate personnel who perform services for a governmental
subdivision;

(4) except as otherwise specified in subdivision 12a, employees who are hired for
a temporary position as defined under subdivision 12a, and employees who resign from
a nontemporary position and accept a temporary position within 30 days in the same
governmental subdivision;

(5) employees who are employed by reason of work emergency caused by fire,
flood, storm, or similar disaster;

(6) employees who by virtue of their employment in one governmental subdivision
are required by law to be a member of and to contribute to any of the plans or funds
administered by the Minnesota State Retirement System, the Teachers Retirement
Association, the Duluth Teachers Retirement Fund Association, the St. Paul Teachers
Retirement Fund Association, deleted text beginthe Minneapolis Employees Retirement Fund,deleted text end or any police
or firefighters relief association governed by section 69.77 that has not consolidated
with the Public Employees Retirement Association, or any local police or firefighters
consolidation account who have not elected the type of benefit coverage provided by the
public employees police and fire fund under sections 353A.01 to 353A.10, or any persons
covered by section 353.665, subdivision 4, 5, or 6, who have not elected public employees
police and fire plan benefit coverage. This clause must not be construed to prevent a person
from being a member of and contributing to the Public Employees Retirement Association
and also belonging to and contributing to another public pension plan or fund for other
service occurring during the same period of time. A person who meets the definition of
"public employee" in subdivision 2 by virtue of other service occurring during the same
period of time becomes a member of the association unless contributions are made to
another public retirement fund on the salary based on the other service or to the Teachers
Retirement Association by a teacher as defined in section 354.05, subdivision 2;

(7) persons who are members of a religious order and are excluded from coverage
under the federal Old Age, Survivors, Disability, and Health Insurance Program for the
performance of service as specified in United States Code, title 42, section 410(a)(8)(A),
as amended through January 1, 1987, if no irrevocable election of coverage has been made
under section 3121(r) of the Internal Revenue Code of 1954, as amended;

(8) employees of a governmental subdivision who have not reached the age of
23 and are enrolled on a full-time basis to attend or are attending classes on a full-time
basis at an accredited school, college, or university in an undergraduate, graduate, or
professional-technical program, or a public or charter high school;

(9) resident physicians, medical interns, and pharmacist residents and pharmacist
interns who are serving in a degree or residency program in public hospitals or clinics;

(10) students who are serving in an internship or residency program sponsored
by an accredited educational institution;

(11) persons who hold a part-time adult supplementary technical college license who
render part-time teaching service in a technical college;

(12) except for employees of Hennepin County or Hennepin Healthcare System,
Inc., foreign citizens working for a governmental subdivision with a work permit of less
than three years, or an H-1b visa valid for less than three years of employment. Upon
notice to the association that the work permit or visa extends beyond the three-year period,
the foreign citizens must be reported for membership from the date of the extension;

(13) public hospital employees who elected not to participate as members of the
association before 1972 and who did not elect to participate from July 1, 1988, to October
1, 1988;

(14) except as provided in section 353.86, volunteer ambulance service personnel,
as defined in subdivision 35, but persons who serve as volunteer ambulance service
personnel may still qualify as public employees under subdivision 2 and may be members
of the Public Employees Retirement Association and participants in the public employees
retirement fund or the public employees police and fire fund, whichever applies, on the
basis of compensation received from public employment service other than service as
volunteer ambulance service personnel;

(15) except as provided in section 353.87, volunteer firefighters, as defined in
subdivision 36, engaging in activities undertaken as part of volunteer firefighter duties;
provided that a person who is a volunteer firefighter may still qualify as a public
employee under subdivision 2 and may be a member of the Public Employees Retirement
Association and a participant in the public employees retirement fund or the public
employees police and fire fund, whichever applies, on the basis of compensation received
from public employment activities other than those as a volunteer firefighter;

(16) pipefitters and associated trades personnel employed by Independent School
District No. 625, St. Paul, with coverage under a collective bargaining agreement by the
pipefitters local 455 pension plan who were either first employed after May 1, 1997, or,
if first employed before May 2, 1997, elected to be excluded under Laws 1997, chapter
241, article 2, section 12;

(17) electrical workers, plumbers, carpenters, and associated trades personnel
employed by Independent School District No. 625, St. Paul, or the city of St. Paul,
who have retirement coverage under a collective bargaining agreement by the Electrical
Workers Local 110 pension plan, the United Association Plumbers Local 34 pension plan,
or the Carpenters Local 87 pension plan who were either first employed after May 1,
2000, or, if first employed before May 2, 2000, elected to be excluded under Laws 2000,
chapter 461, article 7, section 5;

(18) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers,
painters, allied tradesworkers, and plasterers employed by the city of St. Paul or
Independent School District No. 625, St. Paul, with coverage under a collective
bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan,
the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324
pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities
Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if
first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special
Session chapter 10, article 10, section 6;

(19) plumbers employed by the Metropolitan Airports Commission, with coverage
under a collective bargaining agreement by the Plumbers Local 34 pension plan, who either
were first employed after May 1, 2001, or if first employed before May 2, 2001, elected to
be excluded under Laws 2001, First Special Session chapter 10, article 10, section 6;

(20) employees who are hired after June 30, 2002, to fill seasonal positions under
subdivision 12b which are limited in duration by the employer to 185 consecutive calendar
days or less in each year of employment with the governmental subdivision;

(21) persons who are provided supported employment or work-study positions
by a governmental subdivision and who participate in an employment or industries
program maintained for the benefit of these persons where the governmental subdivision
limits the position's duration to three years or less, including persons participating in a
federal or state subsidized on-the-job training, work experience, senior citizen, youth, or
unemployment relief program where the training or work experience is not provided as a
part of, or for, future permanent public employment;

(22) independent contractors and the employees of independent contractors; and

(23) reemployed annuitants of the association during the course of that
reemployment.

Sec. 13.

Minnesota Statutes 2008, section 353.01, subdivision 10, is amended to read:


Subd. 10.

Salary.

(a) Subject to the limitations of section 356.611, "salary" means:

(1) the periodic compensation of a public employee, before deductions for deferred
compensation, supplemental retirement plans, or other voluntary salary reduction
programs, and also means "wages" and includes net income from fees;

(2) for a public employee who is covered by a supplemental retirement plan under
section 356.24, subdivision 1, clause (8), (9), or (10), which require all plan contributions
be made by the employer, the contribution to the applicable supplemental retirement plan
when an agreement between the parties establishes that the contribution will either result
in a mandatory reduction of employees' wages through payroll withholdings, or be made
in lieu of an amount that would otherwise be paid as wages; deleted text beginand
deleted text end

(3) for a public employee who has prior service covered by a local police or
firefighters relief association that has consolidated with the Public Employees Retirement
Association or to which section 353.665 applies and who has elected coverage either
under the public employees police and fire fund benefit plan under section 353A.08
following the consolidation or under section 353.665, subdivision 4, the rate of salary
upon which member contributions to the special fund of the relief association were made
prior to the effective date of the consolidation as specified by law and by bylaw provisions
governing the relief association on the date of the initiation of the consolidation procedure
and the actual periodic compensation of the public employee after the effective date of
consolidationdeleted text begin.deleted text endnew text begin; and
new text end

new text begin (4) for a public employee who has prior service covered by the Minneapolis
Employees Retirement Fund under Minnesota Statutes 2008, chapter 422A, the amount
or amounts credited as salary as reflected in the records of the Minneapolis Employees
Retirement Fund for salary received before July 1, 2010.
new text end

(b) Salary does not mean:

(1) the fees paid to district court reporters, unused annual vacation or sick leave
payments, in lump-sum or periodic payments, severance payments, reimbursement of
expenses, lump-sum settlements not attached to a specific earnings period, or workers'
compensation payments;

(2) employer-paid amounts used by an employee toward the cost of insurance
coverage, employer-paid fringe benefits, flexible spending accounts, cafeteria plans, health
care expense accounts, day care expenses, or any payments in lieu of any employer-paid
group insurance coverage, including the difference between single and family rates that
may be paid to a member with single coverage and certain amounts determined by the
executive director to be ineligible;

(3) the amount equal to that which the employing governmental subdivision would
otherwise pay toward single or family insurance coverage for a covered employee when,
through a contract or agreement with some but not all employees, the employer:

(i) discontinues, or for new hires does not provide, payment toward the cost of the
employee's selected insurance coverages under a group plan offered by the employer;

(ii) makes the employee solely responsible for all contributions toward the cost of
the employee's selected insurance coverages under a group plan offered by the employer,
including any amount the employer makes toward other employees' selected insurance
coverages under a group plan offered by the employer; and

(iii) provides increased salary rates for employees who do not have any
employer-paid group insurance coverages;

(4) except as provided in section 353.86 or 353.87, compensation of any kind paid to
volunteer ambulance service personnel or volunteer firefighters, as defined in subdivision
35 or 36;

(5) the amount of compensation that exceeds the limitation provided in section
356.611; and

(6) amounts paid by a federal or state grant for which the grant specifically
prohibits grant proceeds from being used to make pension plan contributions, unless the
contributions to the plan are made from sources other than the federal or state grant.

(c) Amounts provided to an employee by the employer through a grievance
proceeding or a legal settlement are salary only if the settlement is reviewed by the
executive director and the amounts are determined by the executive director to be
consistent with paragraph (a) and prior determinations.

Sec. 14.

Minnesota Statutes 2008, section 353.01, subdivision 16, is amended to read:


Subd. 16.

Allowable service; limits and computation.

(a) "Allowable service"
means:

(1) service during years of actual membership in the course of which employee
contributions were madedeleted text begin,deleted text endnew text begin;
new text end

new text begin (2) service duringnew text end periods covered by payments in lieu of salary deductions under
section 353.35;

deleted text begin (2)deleted text end new text begin(3) new text endservice in years during which the public employee was not a member but for
which the member later elected, while a member, to obtain credit by making payments to
the fund as permitted by any law then in effect;

deleted text begin (3)deleted text end new text begin(4) new text enda period of authorized leave of absence with pay from which deductions for
employee contributions are made, deposited, and credited to the fund;

deleted text begin (4)deleted text end new text begin(5) new text enda period of authorized personal, parental, or medical leave of absence without
pay, including a leave of absence covered under the federal Family Medical Leave Act,
that does not exceed one year, and for which a member obtained service credit for each
month in the leave period by payment under section 353.0161 to the fund made in place of
salary deductions. An employee must return to public service and render a minimum of
three months of allowable service in order to be eligible to make payment under section
353.0161 for a subsequent authorized leave of absence without pay. Upon payment, the
employee must be granted allowable service credit for the purchased period;

deleted text begin (5)deleted text end new text begin(6) new text enda periodic, repetitive leave that is offered to all employees of a governmental
subdivision. The leave program may not exceed 208 hours per annual normal work
cycle as certified to the association by the employer. A participating member obtains
service credit by making employee contributions in an amount or amounts based on the
member's average salary that would have been paid if the leave had not been taken. The
employer shall pay the employer and additional employer contributions on behalf of the
participating member. The employee and the employer are responsible to pay interest on
their respective shares at the rate of 8.5 percent a year, compounded annually, from the
end of the normal cycle until full payment is made. An employer shall also make the
employer and additional employer contributions, plus 8.5 percent interest, compounded
annually, on behalf of an employee who makes employee contributions but terminates
public service. The employee contributions must be made within one year after the end of
the annual normal working cycle or within 20 days after termination of public service,
whichever is sooner. The executive director shall prescribe the manner and forms to be
used by a governmental subdivision in administering a periodic, repetitive leave. Upon
payment, the member must be granted allowable service credit for the purchased period;

deleted text begin (6)deleted text end new text begin(7) new text endan authorized temporary or seasonal layoff under subdivision 12, limited
to three months allowable service per authorized temporary or seasonal layoff in one
calendar year. An employee who has received the maximum service credit allowed for an
authorized temporary or seasonal layoff must return to public service and must obtain a
minimum of three months of allowable service subsequent to the layoff in order to receive
allowable service for a subsequent authorized temporary or seasonal layoff; or

deleted text begin (7)deleted text end new text begin(8) new text enda period during which a member is absent from employment by a
governmental subdivision by reason of service in the uniformed services, as defined in
United States Code, title 38, section 4303(13), if the member returns to public service
upon discharge from service in the uniformed service within the time frames required
under United States Code, title 38, section 4312(e), provided that the member did not
separate from uniformed service with a dishonorable or bad conduct discharge or under
other than honorable conditions. The service is credited if the member pays into the fund
equivalent employee contributions based upon the contribution rate or rates in effect at
the time that the uniformed service was performed multiplied by the full and fractional
years being purchased and applied to the annual salary rate. The annual salary rate is the
average annual salary during the purchase period that the member would have received
if the member had continued to be employed in covered employment rather than to
provide uniformed service, or, if the determination of that rate is not reasonably certain,
the annual salary rate is the member's average salary rate during the 12-month period of
covered employment rendered immediately preceding the period of the uniformed service.
Payment of the member equivalent contributions must be made during a period that begins
with the date on which the individual returns to public employment and that is three times
the length of the military leave period, or within five years of the date of discharge from
the military service, whichever is less. If the determined payment period is less than
one year, the contributions required under this clause to receive service credit may be
made within one year of the discharge date. Payment may not be accepted following 20
days after termination of public service under subdivision 11a. If the member equivalent
contributions provided for in this clause are not paid in full, the member's allowable
service credit must be prorated by multiplying the full and fractional number of years of
uniformed service eligible for purchase by the ratio obtained by dividing the total member
contributions received by the total member contributions otherwise required under this
clause. The equivalent employer contribution, and, if applicable, the equivalent additional
employer contribution must be paid by the governmental subdivision employing the
member if the member makes the equivalent employee contributions. The employer
payments must be made from funds available to the employing unit, using the employer
and additional employer contribution rate or rates in effect at the time that the uniformed
service was performed, applied to the same annual salary rate or rates used to compute the
equivalent member contribution. The governmental subdivision involved may appropriate
money for those payments. The amount of service credit obtainable under this section may
not exceed five years unless a longer purchase period is required under United States Code,
title 38, section 4312. The employing unit shall pay interest on all equivalent member and
employer contribution amounts payable under this clause. Interest must be computed at
a rate of 8.5 percent compounded annually from the end of each fiscal year of the leave
or the break in service to the end of the month in which the payment is received. Upon
payment, the employee must be granted allowable service credit for the purchased period.

(b) For calculating benefits under sections 353.30, 353.31, 353.32, and 353.33 for
state officers and employees displaced by the Community Corrections Act, chapter 401,
and transferred into county service under section 401.04, "allowable service" means the
combined years of allowable service as defined in paragraph (a), clauses (1) to deleted text begin(6)deleted text endnew text begin (7)new text end, and
section 352.01, subdivision 11.

(c) For a public employee who has prior service covered by a local police or
firefighters relief association that has consolidated with the Public Employees Retirement
Association or to which section 353.665 applies, and who has elected the type of benefit
coverage provided by the public employees police and fire fund either under section
353A.08 following the consolidation or under section 353.665, subdivision 4, "applicable
service" is a period of service credited by the local police or firefighters relief association
as of the effective date of the consolidation based on law and on bylaw provisions
governing the relief association on the date of the initiation of the consolidation procedure.

(d) deleted text beginNo member may receive more than 12 months of allowable service credit
in a year either for vesting purposes or for benefit calculation purposes.
deleted text endnew text begin For a member
who was previously a member of the former Minneapolis Employees Retirement Fund,
"allowable service" is service credited by the prior Minneapolis Employees Retirement
Fund on or before June 30, 2010, as reflected in the transferred records of that retirement
plan, and service credited under paragraph (a), clause (1), (4), (5), or (8), for the period
after the effective date of consolidation under section 353.47, subdivision 7.
new text end

(e) MS 2002 [Expired]

new text begin (f) No member may receive more than 12 months of allowable service credit in a
year either for vesting purposes or for benefit calculation purposes.
new text end

Sec. 15.

Minnesota Statutes 2008, section 353.0161, subdivision 1, is amended to read:


Subdivision 1.

Application.

This section applies to employees covered by any plan
specified in this chapter or chapter 353E for any period of authorized leave of absence
specified in section 353.01, subdivision 16, paragraph (a), clause deleted text begin(4)deleted text endnew text begin (5)new text end, for which the
employee obtains credit for allowable service by making payment as specified in this
section to the applicable fund.

Sec. 16.

Minnesota Statutes 2008, section 353.026, is amended to read:


353.026 COVERAGE FOR CERTAIN MUNICIPAL AND SCHOOL
DISTRICT EMPLOYEES.

Any person who was employed by the city of Minneapolis, Special School District
No. 1, or public corporation as defined in new text beginMinnesota Statutes 2008, new text endsection 422A.01,
subdivision 9
, on or after July 1, 1978, and before July 1, 1979, and who was excluded
from retirement coverage by the coordinated program of the Minneapolis municipal
employees retirement fund under new text beginMinnesota Statutes 2008, new text endsection 422A.09, subdivision
3
, is entitled to retirement coverage by the general employees retirement plan of the Public
Employees Retirement Association unless specifically excluded under section 353.01,
subdivision 2b
, from and after May 19, 1981.

Sec. 17.

Minnesota Statutes 2008, section 353.27, subdivision 2, is amended to read:


Subd. 2.

Employee contribution.

(a) The employee contribution new text beginto the general
employees retirement plan
new text endis the following applicable percentage of the total salary
amount for a "basic membernew text begin,new text end"new text begin other than a member who previously was a member of the
former Minneapolis Employees Retirement Fund,
new text end and for a "coordinated member":

Basic Program
Coordinated Program
Effective before January 1, 2006
9.10
5.10
Effective January 1, 2006
9.10
5.50
Effective January 1, 2007
9.10
5.75
Effective January 1, 2008
9.10
6.00 plus any contribution
rate adjustment under
subdivision 3b

(b) new text beginThe employee contribution to the general employees retirement plan is 9.60
percent of the total salary for a basic member who previously was a member of the former
Minneapolis Employees Retirement Fund.
new text end

new text begin (c) new text endThese contributions must be made by deduction from salary as defined in section
353.01, subdivision 10, in the manner provided in subdivision 4. If any portion of a
member's salary is paid from other than public funds, the member's employee contribution
must be based on the total salary received by the member from all sources.

Sec. 18.

Minnesota Statutes 2008, section 353.27, subdivision 3, is amended to read:


Subd. 3.

Employer contribution.

(a) The employer contribution new text beginto the general
employees retirement plan with respect to all members other than employees who were
members of the Minneapolis Employees Retirement Fund on the day before the effective
date of the consolidation of the Minneapolis Employees Retirement Fund with the general
employees retirement plan under section 353.47, subdivision 7,
new text endis the following applicable
percentage of the total salary amount for "basic members" and for "coordinated members":

Basic Program
Coordinated Program
Effective before January 1, 2006
9.10
5.10
Effective January 1, 2006
9.10
5.50
Effective January 1, 2007
9.10
5.75
Effective January 1, 2008
9.10
6.00 plus any contribution
rate adjustment under
subdivision 3b

(b) new text beginThe employee contribution of an employer of an employee as defined in
Minnesota Statutes 2008, section 422A.01, subdivision 11, with respect to members who
were members of the Minneapolis Employees Retirement Fund on June 29, 2010, is 9.60
percent of the total salary amount of those members, payable each payroll period.
new text end

new text begin (c) new text endThis contribution must be made from funds available to the employing
subdivision by the means and in the manner provided in section 353.28.

Sec. 19.

Minnesota Statutes 2008, section 353.27, subdivision 3a, is amended to read:


Subd. 3a.

Additional employer contribution.

(a) An additional employer
contribution new text beginto the general employees retirement plan of any governmental subdivision
new text endmust be made new text beginin an amount new text endequal to the following applicable percentage of the total salary
amount for "basic members" and for "coordinated members":

Basic Program
Coordinated Program
Effective before January 1, 2006
2.68
.43
Effective January 1, 2006
2.68
.50
Effective January 1, 2009
2.68
.75
Effective January 1, 2010
2.68
1.00

These contributions must be made from funds available to the employing subdivision
by the means and in the manner provided in section 353.28.

(b) The coordinated program contribution rates set forth in paragraph (a) effective
for January 1, 2009, or January 1, 2010, must not be implemented if, following receipt of
the July 1, 2008, or July 1, 2009, annual actuarial valuation reports under section 356.215,
respectively, the actuarially required contributions are equal to or less than the total rates
under this section in effect as of January 1, 2008.

(c) This subdivision is repealed once the actuarial value of the assets of the plan
equal or exceed the actuarial accrued liability of the plan as determined by the actuary
retained under sections 356.214 and 356.215. The repeal is effective on the first day of the
first full pay period occurring after March 31 of the calendar year following the issuance
of the actuarial valuation upon which the repeal is based.

Sec. 20.

Minnesota Statutes 2008, section 353.27, subdivision 3b, is amended to read:


Subd. 3b.

Change in employee and employer contributions in certain instances.

(a) For purposes of this section, a contribution sufficiency exists if the total of the
employee contribution new text beginrates new text endunder subdivision 2, the employer contribution new text beginrates new text endunder
subdivision 3, the additional employer contribution new text beginrates new text endunder subdivision 3a, new text beginthe
state aid with respect to the former Minneapolis Employees Retirement Fund under
section 422A.101, subdivision 3, expressed as a percentage of covered payroll, the
special employer contribution rate under subdivision 3c,
new text endand any additional contribution
previously imposed under this subdivision exceeds the total of the normal costnew text begin ratenew text end,
the administrative deleted text beginexpensesdeleted text endnew text begin expense ratenew text end, and the amortization contribution new text beginrate new text endof the
retirement plan as reported in the most recent actuarial valuation of the retirement plan
prepared by the actuary retained under section 356.214 and prepared under section
356.215 and the standards for actuarial work of the Legislative Commission on Pensions
and Retirement. For purposes of this section, a contribution deficiency exists if the total of
the new text beginrates of the new text endemployee contributions under subdivision 2, the employer contributions
under subdivision 3, the additional employer contribution under subdivision 3a, new text beginthe state
aid with respect to the former Minneapolis Employees Retirement Fund under section
422A.101, subdivision 3, expressed as a percentage of covered payroll, the special
employer contribution under subdivision 3c,
new text endand any additional contribution previously
imposed under this subdivision is less than the total of the normal cost, the administrative
expenses, and the amortization contribution of the retirement plan as reported in the most
recent actuarial valuation of the retirement plan prepared by the actuary retained under
section 356.214 and prepared under section 356.215 and the standards for actuarial work
of the Legislative Commission on Pensions and Retirement.

(b) Employee and employer contributions under subdivisions 2 and 3 must be
adjusted:

(1) if, after July 1, 2010, the regular actuarial valuations of the general employees
retirement plan of the Public Employees Retirement Association under section 356.215
indicate that there is a contribution sufficiency under paragraph (a) equal to or greater
than 0.5 percent of covered payroll for two consecutive years, the coordinated program
employee and employer contribution rates must be decreased as determined under
paragraph (c) to a level such that the sufficiency equals no more than 0.25 percent of
covered payroll based on the most recent actuarial valuation; or

(2) if, after July 1, 2010, the regular actuarial valuations of the general employees
retirement plan of the Public Employees Retirement Association under section 356.215
indicate that there is a deficiency equal to or greater than 0.5 percent of covered payroll for
two consecutive years, the coordinated program employee and employer contribution rates
must be increased as determined under paragraph (c) to a level such that no deficiency
exists based on the most recent actuarial valuation.

(c) The contribution rate increase or decrease must be determined by the executive
director of the Public Employees Retirement Association, must be reported to the chair
and the executive director of the Legislative Commission on Pensions and Retirement
on or before the next February 1, and, if the Legislative Commission on Pensions and
Retirement does not recommend against the rate change or does not recommend a
modification in the rate change, is effective on the next July 1 following the determination
by the executive director that a contribution deficiency or sufficiency has existed for
two consecutive fiscal years based on the most recent actuarial valuations under section
356.215. If the actuarially required contribution exceeds or is less than the total support
provided by the combined employee and employer contribution rates by more than 0.5
percent of covered payroll, the coordinated program employee and employer contribution
rates must be adjusted incrementally over one or more years to a level such that there
remains a contribution sufficiency of no more than 0.25 percent of covered payroll.

(d) No incremental adjustment may exceed 0.25 percent for either the coordinated
program employee and employer contribution rates per year in which any adjustment is
implemented. A contribution rate adjustment under this subdivision must not be made
until at least two years have passed since fully implementing a previous adjustment under
this subdivision.

Sec. 21.

Minnesota Statutes 2008, section 353.27, is amended by adding a subdivision
to read:


new text begin Subd. 3c. new text end

new text begin Special former MERF employer contribution. new text end

new text begin In addition to the
employer contribution under subdivision 3, paragraph (b), an employer of an employee
as defined in Minnesota Statutes 2008, section 422A.01, subdivision 11, shall pay its
proportional share of a total special employer contribution of $......., payable annually until
all of the employer's employees who were former Minneapolis Employees Retirement
Fund members retire, or June 30, 2020, whichever occurs earlier. The proportional share
must be determined by the executive director based on the relationship of the total salaries
paid by the employing unit to former members of the former Minneapolis Employees
Retirement Fund to the total salaries paid by all employing units to former Minneapolis
Employees Retirement Fund members as of the prior June 30.
new text end

Sec. 22.

Minnesota Statutes 2008, section 353.29, subdivision 1, is amended to read:


Subdivision 1.

Age and allowable service requirements.

new text begin(a) new text endUpon termination
of membership, a person new text beginother than an employee who was a member of the former
Minneapolis Employees Retirement Fund on June 29, 2010,
new text endwho has attained normal
retirement age and who received credit for not less than three years of allowable service is
entitled upon application to a retirement annuitynew text begin under subdivision 3new text end.

new text begin (b) Upon termination of membership, a person who was a member of the former
Minneapolis Employees Retirement Fund on June 29, 2010, who has attained the age of
at least 60 years and has credit for not less than ten years of allowable service or who
has credit for at least 30 years of allowable service is entitled, upon application, to a
retirement annuity under subdivision 3a.
new text end

new text begin (c)new text end The retirement annuity is known as the "normal" retirement annuity.

Sec. 23.

Minnesota Statutes 2008, section 353.29, subdivision 3, is amended to read:


Subd. 3.

new text beginGeneral new text endretirement annuity formula.

(a) This paragraph, in conjunction
with section 353.30, subdivisions 1a, 1b, and 1c, applies to any member new text beginunder subdivision
1, paragraph (a),
new text endwho first became a public employee or a member of a pension fund listed
in section 356.30, subdivision 3, before July 1, 1989, unless paragraph (b), in conjunction
with section 353.30, subdivision 5, produces a higher annuity amount, in which case
paragraph (b) will apply. The average salary as defined in section 353.01, subdivision 17a,
multiplied by the percent specified in section 356.315, subdivision 3, for each year of
allowable service for the first ten years and thereafter by the percent specified in section
356.315, subdivision 4, per year of allowable service and completed months less than a
full year for a basic member, and the percent specified in section 356.315, subdivision
1
, for each year of allowable service for the first ten years and thereafter by the percent
specified in section 356.315, subdivision 2, per year of allowable service and completed
months less than a full year for a coordinated member deleted text beginshall determinedeleted text end new text begindetermines new text endthe
amount of the normal retirement annuity.

(b) This paragraph applies to a member new text beginunder subdivision 1, paragraph (a), new text endwho has
become at least 55 years old and first became a public employee after June 30, 1989, and
to any other member whose annuity amount, when calculated under this paragraph and
in conjunction with section 353.30, subdivision 5, is higher than it is when calculated
under paragraph (a), in conjunction with section 353.30, subdivisions 1a, 1b, and 1c.
The average salary, as defined in section 353.01, subdivision 17a, multiplied by the
percent specified in section 356.315, subdivision 4, for each year of allowable service and
completed months less than a full year for a basic member and the percent specified in
section 356.315, subdivision 2, per year of allowable service and completed months
less than a full year for a coordinated member, deleted text beginshall determinedeleted text end new text begindetermines new text endthe amount
of the normal retirement annuity.

Sec. 24.

Minnesota Statutes 2008, section 353.29, is amended by adding a subdivision
to read:


new text begin Subd. 3a. new text end

new text begin Alternative retirement annuity formula in certain cases. new text end

new text begin A member
under subdivision 1, paragraph (b), is entitled to a normal retirement annuity in an amount
equal to 2.0 percent of average salary per year of allowable service, multiplied by the
number of years of allowable service credited to the member for each of the first ten years
of allowable service and 2.5 percent of average salary per year of allowable service,
multiplied by the number of years of allowable service in excess of ten years credited to
the member for each of the first ten years of allowable service and 2.5 percent of average
salary per year of allowable service, multiplied by the number of years of allowable
service in excess of ten years credited to the member, and adjusted in amount to have the
same actuarial present value as the annuity would have had if eligible for an automatic
annual postretirement adjustment under Minnesota Statutes 2008, section 422A.06,
subdivision 8, subject to a 3.5 percent maximum annual postretirement adjustment rather
than the postretirement adjustment under section 11A.181, subdivision 3.
new text end

Sec. 25.

Minnesota Statutes 2008, section 353.30, subdivision 5, is amended to read:


Subd. 5.

Actuarial reduction for early retirement.

new text begin(a) Except as provided in
paragraph (b),
new text endthis subdivision applies to a member who has become at least 55 years old
and first became a public employee after June 30, 1989, and to any other member who
has become at least 55 years old and whose annuity is higher when calculated under
section 353.29, subdivision 3, paragraph (b), in conjunction with this subdivision than
when calculated under section 353.29, subdivision 3, paragraph (a), in conjunction with
subdivision 1, 1a, 1b, or 1c. An employee who retires before normal retirement age shall
be paid the retirement annuity provided in section 353.29, subdivision 3, paragraph (b),
reduced so that the reduced annuity is the actuarial equivalent of the annuity that would be
payable to the employee if the employee deferred receipt of the annuity and the annuity
amount were augmented at an annual rate of three percent compounded annually from the
day the annuity begins to accrue until the normal retirement age if the employee became
an employee before July 1, 2006, and at 2.5 percent compounded annually from the day
the annuity begins to accrue until the normal retirement age if the employee initially
becomes an employee after June 30, 2006.

new text begin (b) A member under section 353.29, subdivision 1, paragraph (b), is not eligible
to receive a retirement annuity earlier than age 60 unless the person has 30 years of
allowable service and, if the person has 30 years of allowable service, no reduction for
early retirement is applicable.
new text end

Sec. 26.

Minnesota Statutes 2008, section 353.31, subdivision 1, is amended to read:


Subdivision 1.

Benefits for surviving spouse and dependent children; before
retirement.

new text begin(a) new text endUpon the death of a basic member before retirement or upon the death of a
basic member who was disabled and receiving disability benefits under section 353.33
at the time of death who has had at least 18 months of credited allowable service, new text beginwho
in either case was not a member of the former Minneapolis Employees Retirement Fund
on June 29, 2010,
new text endthe surviving spouse and dependent child or children of the member,
as defined in section 353.01, subdivisions 15 and 20, are entitled to receive the monthly
benefit provided below:

deleted text begin(a)deleted text end new text begin(1) new text endSurviving spouse
50 percent of the member's monthly average
salary in effect over the last full six months
of allowable service preceding the month in
which death occurred
deleted text begin(b)deleted text end new text begin(2) new text endEach dependent child
10 percent of the member's monthly average
salary in effect over the last full six months
of allowable service preceding the month in
which death occurred

Notwithstanding the definition of surviving spouse under section 353.01, subdivision 20,
a former spouse of the member, if any, is entitled to a portion of the monthly surviving
spouse benefit if stipulated under the terms of a marriage dissolution decree that is 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 monthly surviving spouse benefit
even if required by the decree.

new text begin (b) Upon the death of a member who was a member of the former Minneapolis
Employees Retirement Fund on June 29, 2010, the surviving spouse or surviving child or
children are entitled to survivor benefits under this paragraph. With at least 18 months of
allowable service and less than 20 years of allowable service by the deceased member,
the survivor benefit is 30 percent of the member's average salary for the six months of
allowable service preceding the member's death for the surviving spouse and ten percent
of the member's average salary for the six months of allowable service preceding the
member's death for a surviving child, with a surviving family maximum of 50 percent
of the member's average salary for the six months of allowable service preceding the
member's death. With at least 20 years of allowable service by the deceased member,
the survivor benefit is an annuity that is the actuarial equivalent of a single life annuity
payable as of the date of death under section 353.29, subdivision 3a, without reference to
age or service vesting requirements, if the decedent was an active member, or increased
additionally by the applicable deferred annuities augmentation rate or rates for any deferral
period if the decedent was a deferred member, payable to the surviving spouse if there is
one, or to a dependent surviving child of the member if there is no surviving spouse. The
computed survivor benefit under this paragraph also must be adjusted to have the same
actuarial present value as the benefit would have had if eligible for an automatic annual
postretirement adjustment under Minnesota Statutes 2006, section 422A.06, subdivision
8, subject to a 3.5 percent maximum annual postretirement adjustment rather than the
postretirement adjustment under section 11A.181, subdivision 3.
new text end

Sec. 27.

Minnesota Statutes 2008, section 353.31, subdivision 1a, is amended to read:


Subd. 1a.

Maximum family benefit.

new text begin(a) new text endPayments for the benefit of a dependent
child or children, as defined in section 353.01, subdivision 15, must be made to the
surviving parent, or to the legal guardian of the child.

new text begin (b)new text end The maximum monthly benefit for a family new text beginreceiving a benefit under subdivision
1, paragraph (a),
new text endmust not exceed an amount equal to 70 percent of the member's specified
average monthly salary, and the minimum benefit for a family including a 100 percent
joint and survivor annuity under subdivision 1b, must not be less than 50 percent of the
basic member's specified average monthly salary.

Sec. 28.

Minnesota Statutes 2008, section 353.32, subdivision 1a, is amended to read:


Subd. 1a.

Surviving spouse optional annuity.

(a) new text beginThis subdivision applies to
the surviving spouse of a person who was not a member of the former Minneapolis
Employees Retirement Fund on June 29, 2010.
new text end

new text begin (b) new text endIf a member or former member who has credit for not less than three years of
allowable service and dies before the annuity or disability benefit begins to accrue under
section 353.29, subdivision 7, or 353.33, subdivision 2, notwithstanding any designation
of beneficiary to the contrary, the surviving spouse may elect to receive, instead of a refund
with interest under subdivision 1, or surviving spouse benefits otherwise payable under
section 353.31, an annuity equal to a 100 percent joint and survivor annuity computed
consistent with section 353.30, subdivision 1a, 1c, or 5, whichever is applicable.

deleted text begin (b)deleted text end new text begin(c) new text endIf a member first became a public employee or a member of a pension fund
listed in section 356.30, subdivision 3, before July 1, 1989, and has credit for at least 30
years of allowable service on the date of death, the surviving spouse may elect to receive a
100 percent joint and survivor annuity computed using section 353.30, subdivision 1b,
except that the early retirement reduction under that provision will be applied from age
62 back to age 55 and one-half of the early retirement reduction from age 55 back to
the age payment begins.

deleted text begin (c)deleted text end new text begin(d) new text endIf a member who was under age 55 and has credit for at least three years
of allowable service dies, but did not qualify for retirement on the date of death, the
surviving spouse may elect to receive a 100 percent joint and survivor annuity computed
using section 353.30, subdivision 1c or 5, as applicable, except that the early retirement
reduction specified in the applicable subdivision will be applied to age 55 and one-half of
the early retirement reduction from age 55 back to the age payment begins.

deleted text begin (d)deleted text end new text begin(e) new text endNotwithstanding 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
monthly surviving spouse optional annuity 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
subdivision 1, if provided for in a marriage dissolution decree, but not a monthly surviving
spouse optional annuity, despite the terms of a marriage dissolution decree filed with
the association.

deleted text begin (e)deleted text end new text begin(f) new text endThe surviving spouse eligible for surviving spouse benefits under paragraph
(a) 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. The surviving spouse eligible for surviving spouse benefits under paragraph deleted text begin(b)deleted text end
new text begin (c) new text endor deleted text begin(c)deleted text end new text begin(d) new text endmay apply for an annuity any time after the member's death.

deleted text begin (f)deleted text end new text begin(g) new text endSections 353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred
annuity or surviving spouse benefit payable under this subdivision.

deleted text begin (g)deleted text end new text begin(h) new text endAn amount equal to any excess of the accumulated contributions that 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 surviving spouse's estate.

deleted text begin (h)deleted text end new text begin(i) new text endA member may specify in writing, with the signed consent of the spouse, that
this subdivision does not apply and that payment may be made only to the designated
beneficiary as otherwise provided by this chapter. The waiver of a surviving spouse
annuity under this section does not make a dependent child eligible for benefits under
subdivision 1c.

deleted text begin (i)deleted text end new text begin(j) new text endIf the deceased member or former member first became a public employee or a
member of a public pension plan listed in section 356.30, subdivision 3, on or after July 1,
1989, a survivor annuity computed under paragraph deleted text begin(a)deleted text end new text begin(b) new text endor deleted text begin(c)deleted text end new text begin(d) new text endmust be computed as
specified in section 353.30, subdivision 5, except for the revised early retirement reduction
specified in paragraph deleted text begin(c)deleted text endnew text begin (d)new text end, if paragraph deleted text begin(c)deleted text end new text begin(d) new text endis the applicable provision.

deleted text begin (j)deleted text end new text begin(k) new text endFor any survivor annuity determined under this subdivision, the payment is to
be based on the total allowable service that the member had accrued as of the date of death
and the age of the member and surviving spouse on that date.

Sec. 29.

Minnesota Statutes 2008, section 353.33, subdivision 1, is amended to read:


Subdivision 1.

Age, service, and salary requirements.

new text begin(a) new text endA coordinated member
who has at least three years of allowable service and becomes totally and permanently
disabled before normal retirement age, and a basic member new text beginother than a basic member
covered by paragraph (b)
new text endwho has at least three years of allowable service and who
becomes totally and permanently disabled, upon application as defined under section
353.031, is entitled to a disability benefit in an amount determined under subdivision 3.
If the disabled person's public service has terminated at any time, at least two of the
required three years of allowable service must have been rendered after last becoming
an active member.

new text begin (b) A basic member who was a member of the former Minneapolis Employees
Retirement Fund on June 29, 2010, and who was disabled as a result of injury or illness
connected with the performance of employment duties with any allowable service or
who was disabled not as a result of injury or illness connected with the performance of
employment duties with at least five years of allowable service is entitled to a disability
benefit.
new text end

Sec. 30.

Minnesota Statutes 2008, section 353.33, subdivision 3, is amended to read:


Subd. 3.

Computation of benefits.

(a) deleted text beginThisdeleted text end new text beginExcept as provided in paragraph (b),
the
new text enddisability benefit is an amount equal to the normal annuity payable to a member who
has reached normal retirement age with the same number of years of allowable service
and the same average salary, as provided in section 353.01, subdivision 17a, and section
353.29, subdivision 3.

(b) new text beginFor a disabled member under subdivision 1, paragraph (b), the disability benefit
is 50 percent of average salary or an amount equal to 2.0 percent of average salary per
year of allowable service for the first ten years of allowable service and to 2.5 percent of
average salary per year of allowable service in excess of the first ten years of allowable
service, including assumed service between the date of disability and the person's earliest
determinable normal retirement age. The computed disability benefit under this paragraph
also must be adjusted to have the same actuarial present value as the benefit would
have if eligible for an annual postretirement adjustment under Minnesota Statutes 2006,
section 422A.06, subdivision 8, subject to a 3.5 percent maximum annual postretirement
adjustment rather than the postretirement adjustment under section 11A.181, subdivision 3.
new text end

new text begin (c) new text endA basic member deleted text beginshalldeleted text end new text beginunder paragraph (a) is entitled to new text endreceive a supplementary
monthly benefit of $25 to age 65 or the five-year anniversary of the effective date of
the disability benefit, whichever is later.

deleted text begin (c)deleted text end new text begin(d) new text endIf the disability benefits under deleted text beginthis subdivisiondeleted text end new text beginparagraphs (a) and (c) new text endexceed
the average salary as defined in section 353.01, subdivision 17a, the disability benefits
must be reduced to an amount equal to the average salary.

Sec. 31.

Minnesota Statutes 2008, section 353.33, subdivision 12, is amended to read:


Subd. 12.

Basic disability survivor benefits.

If a basic member who is receiving a
disability benefit under subdivision 3new text begin, paragraph (a)new text end:

(1) dies before attaining age 65 or within five years of the effective date of the
disability, whichever is later, the surviving spouse is entitled to receive a survivor benefit
under section 353.31, unless the surviving spouse elected to receive a refund under section
353.32, subdivision 1;

(2) is living at age 65 or five years after the effective date of the disability, whichever
is later, the basic member may continue to receive a normal disability benefit, or elect a
joint and survivor optional annuity under section 353.31, subdivision 1b. The election of
the joint and survivor optional annuity must occur within 90 days of attaining age 65 or of
reaching the five-year anniversary of the effective date of the disability benefit, whichever
is later. The optional annuity takes effect on the first day of the month following the month
in which the person attains age 65 or reaches the five-year anniversary of the effective date
of the disability benefit, whichever is later; or

(3) if there is a dependent child or children under clause (1) or (2), the dependent
child is entitled to a dependent child benefit under section 353.31, subdivision 1b,
paragraph (b).

Sec. 32.

Minnesota Statutes 2008, section 353.34, subdivision 3, is amended to read:


Subd. 3.

Deferred annuity; eligibility; computation.

A member with at least
three years of allowable service when termination of public service or termination of
membership occurs has the option of leaving the accumulated deductions in the fund and
being entitled to a deferred retirement annuity commencing at normal retirement age or
to a deferred early retirement annuity under section 353.30, subdivision 1a, 1b, 1c, or 5.
The deferred annuity must be computed under section 353.29, subdivision 3new text begin or 3anew text end, on the
basis of the law in effect on the date of termination of public service or termination of
membership, whichever is earlier, and must be augmented as provided in section 353.71,
subdivision 2
. A former member qualified to apply for a deferred retirement annuity may
revoke this option at any time before the commencement of deferred annuity payments
by making application for a refund. The person is entitled to a refund of accumulated
member contributions within 30 days following date of receipt of the application by the
executive director.

Sec. 33.

Minnesota Statutes 2008, section 353.37, is amended by adding a subdivision
to read:


new text begin Subd. 6. new text end

new text begin Application in certain instances. new text end

new text begin (a) A person who retired under the
provisions of Minnesota Statutes 2008, chapter 422A, on or before June 30, 2010,
whichever is earlier, is not subject to the provisions of this section for subsequent
reemployment by a governmental subdivision.
new text end

new text begin (b) A person who retired under the provisions of section 353.29, subdivision 1,
paragraph (b), 353.31, subdivision 1, paragraph (b), or 353.33, subdivision 1, paragraph
(b), after the effective date of the consolidation under section 353.47, subdivision 7, is
subject to this section for subsequent reemployment by a governmental subdivision.
new text end

Sec. 34.

Minnesota Statutes 2008, section 353.46, subdivision 6, is amended to read:


Subd. 6.

Computation of benefits for certain coordinated members.

Any
coordinated member who deleted text beginprior todeleted text end new text beginbefore new text endJuly 1, 1979new text begin,new text end was a member of the coordinated
program of the new text beginformer new text endMinneapolis Municipal Employees Retirement Fund and who deleted text beginprior
to
deleted text end new text beginbefore new text endJuly 1, 1978new text begin,new text end was a member of the basic program of the new text beginformer new text endMinneapolis
Municipal Employees Retirement Fund deleted text beginshall:
deleted text end

deleted text begin (1) bedeleted text end new text beginis new text endentitled to receive a retirement annuity when otherwise qualified, the
calculation of which deleted text beginshalldeleted text end new text beginmust new text endutilize the formula accrual rates specified in new text beginMinnesota
Statutes 2008,
new text endsection 422A.15, subdivision 1, for that portion of credited service which
was rendered deleted text beginprior todeleted text end new text beginbefore new text endJuly 1, 1978, and the formula accrual rates specified in
section deleted text begin353.29, subdivision 3deleted text endnew text begin 356.315, subdivision 2new text end, for the remainder of credited service,
both applied to the average salary as specified in section deleted text begin353.29, subdivision 2deleted text endnew text begin 353.01,
subdivision 17a
new text end. The formula accrual rates to be used in calculating the retirement annuity
deleted text begin shalldeleted text end new text beginmust new text endrecognize the service after July 1, 1978new text begin,new text end as a member of the coordinated
program of the new text beginformer new text endMinneapolis Municipal Employees Retirement Fund and after July
1, 1979new text begin,new text end as a member of the new text begincoordinated program of the general employees retirement plan
of the
new text endPublic Employees Retirement Association as a continuation of service rendered
deleted text begin prior todeleted text end new text beginbefore new text endJuly 1, 1978. The annuity deleted text beginamount attributable to service as a member of the
basic program of the Minneapolis Municipal Employees Retirement Fund shall be payable
by the Minneapolis Employees Retirement Fund and the annuity amount attributable to
all other service shall be
deleted text end new text beginis new text endpayable deleted text beginbydeleted text end new text beginfrom the general employees retirement plan of new text endthe
Public Employees Retirement Associationdeleted text begin;deleted text endnew text begin.new text end

deleted text begin (2) retain eligibility when otherwise qualified for a disability benefit from the
Minneapolis Employees Retirement Fund until July 1, 1982, notwithstanding coverage
by the Public Employees Retirement Association, if the member has or would, without
the transfer of retirement coverage from the basic program of the Minneapolis Municipal
Employees Retirement Fund to the coordinated program of the Minneapolis Municipal
Employees Retirement Fund or from the coordinated program of the Minneapolis
Municipal Employees Retirement Fund to the public employees retirement fund, have
sufficient credited service prior to January 1, 1983, to meet the minimum service
requirements for a disability benefit pursuant to section 422A.18. The disability benefit
amount attributable to service as a member of the basic program of the Minneapolis
Municipal Employees Retirement Fund shall be payable by the Minneapolis Employees
Retirement Fund and the disability benefit amount attributable to all other service shall be
payable by the Public Employees Retirement Association.
deleted text end

Sec. 35.

new text begin [353.47] CONSOLIDATION OF MINNEAPOLIS EMPLOYEES
RETIREMENT FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Membership transfer. new text end

new text begin Effective as of June 30, 2010, under
subdivision 7, active, inactive, and retired members of the Minneapolis Employees
Retirement Fund are transferred to the general employees retirement plan of the Public
Employees Retirement Association and are no longer members of the Minneapolis
Employees Retirement Fund.
new text end

new text begin Subd. 2. new text end

new text begin Service credit and benefit liability transfer. new text end

new text begin (a) All allowable service
credit and salary credit of the members of the Minneapolis Employees Retirement Fund as
specified in the records of the Minneapolis Employees Retirement Fund through June 30,
2010, is transferred to the general employees retirement plan of the Public Employees
Retirement Association and is credited by the general employees retirement plan under
section 353.01, subdivisions 10 and 16, on June 30, 2010.
new text end

new text begin (b) The liability for the payment of annuities and benefits of the Minneapolis
Employees Retirement Fund retirees and benefit recipients as specified in the records of
the Minneapolis Employees Retirement Fund is transferred to the general employees
retirement plan of the Public Employees Retirement Association on July 1, 2010.
new text end

new text begin Subd. 3. new text end

new text begin Transfer of records. new text end

new text begin On June 30, 2010, the executive director of the
Minneapolis Employees Retirement Fund shall transfer all records and documents relating
to the Minneapolis Employees Retirement Fund to the executive director of the Public
Employees Retirement Association. To the extent possible, original copies of all records
and documents must be transferred.
new text end

new text begin Subd. 4. new text end

new text begin Transfer of title to assets. new text end

new text begin On July 1, 2010, legal title to the assets of the
Minneapolis Employees Retirement Fund transfers to the State Board of Investment and
the assets must be invested under section 11A.14, as assets of the general employees
retirement plan of the Public Employees Retirement Association. The general employees
retirement plan of the Public Employees Retirement Association is the successor in
interest to all claims that the Minneapolis Employees Retirement Fund may have or any
assets, but the general employees retirement plan is not liable for any claim against the
Minneapolis Employees Retirement Fund, its governing board, or its administrative staff
acting in a fiduciary capacity under chapter 356A or under common law, which is founded
upon a claim of breach of fiduciary duty, but where the act or acts constituting the claimed
breach were not undertaken in good faith, the general employees retirement plan may
assert any applicable defense to any claim in any judicial or administrative proceeding that
the Minneapolis Employees Retirement Fund, its board, or its administrative staff would
otherwise have been entitled to assert, and the general employees retirement plan may
assert any applicable defense that it has in its capacity as a statewide agency.
new text end

new text begin Subd. 5. new text end

new text begin Benefits. new text end

new text begin The annuities and benefits of or attributable to retired, disabled,
deferred, or inactive Minneapolis Employees Retirement Fund members with that status
as of June 30, 2010, continue after consolidation, adjusted with an additional annuity or
benefit amount with an actuarial present value, calculated using the mortality table of
the general employees retirement plan of the Public Employees Retirement Association
and an interest rate of 8.5 percent, equal to the difference between the actuarial present
value of the person's annuity or benefit, calculated on the same basis, with automatic
annual postretirement adjustments based on increases in the federal Consumer Price
Index, subject to a 3.5 percent annual maximum, and the actuarial present value of the
person's annuity or benefit, calculated on the same basis, with 2.5 percent annual automatic
postretirement adjustments.
new text end

new text begin Subd. 6. new text end

new text begin Additional asset transfer or annual payments. new text end

new text begin (a) As of June 30, 2010,
the approved actuary retained by the Public Employees Retirement Association shall
determine the amount of any additional asset requirement of the general employees
retirement plan of the Public Employees Retirement Association by virtue of or as a result
of the consolidation of the Minneapolis Employees Retirement Fund.
new text end

new text begin (b) The additional asset amount is the amount of assets needed to bring the assets
of the Minneapolis Employees Retirement Fund, at fair market value as of June 30,
2009, attributable to active members equal to the present value of future benefits for
those members as of July 1, 2009, reduced by the present value of the future normal
cost for those active members as of July 1, 2009, and the assets of the Minneapolis
Employees Retirement Fund, at fair market value as of June 30, 2009, attributable to
retired members equal to the present value of future benefits for those retired members,
reduced by the present value of the state aid to the Minneapolis Employees Retirement
Fund under section 422A.101, subdivision 3, reduced by the present value of the employer
contributions payable by the city of Minneapolis under section 353.27, subdivision 3,
paragraph (b), reduced by the present value of the additional employer contribution
payable by the city of Minneapolis under section 353.27, subdivision 3a, for active former
Minneapolis Employees Retirement Fund members, and reduced by the present value of
the special former Minneapolis Employees Retirement Fund employer contribution under
section 353.27, subdivision 3c.
new text end

new text begin (c) Unless a different allocation of the additional asset amount is agreed upon by the
city of Minneapolis and the state, the additional asset amount must be paid by the city of
Minneapolis. The additional asset may be paid in a lump sum on or before September 30,
2010, or in ten equal annual installments, payable on December 31 annually, plus interest
on the unpaid balance at an annual compound interest rate of 8.5 percent from June 30,
2010, or most recent prior payment, whichever applies, to the date of the applicable
payment. Any alternative allocation agreement under this paragraph must be in the form
of a written agreement executed by the mayor of Minneapolis and by the governor and
must be accompanied by a resolution approving the agreement by the city council of the
city of Minneapolis and by an approval resolution adopted by the Legislative Advisory
Commission. Any alternative agreement and accompanying resolutions must be filed with
the secretary of state. If Minneapolis is obligated to pay some or all of the additional
asset amount and if the finance director of Minneapolis determines that employing units
other than Minneapolis with former active Minneapolis Employees Retirement Fund
members owe a portion of that lump sum payment, the finance director shall bill those
employing units for their proportional share of the lump sum payment or of the annual
installment payment.
new text end

new text begin Subd. 7. new text end

new text begin Effective date of consolidation. new text end

new text begin The effective date of the consolidation
of the Minneapolis Employees Retirement Fund with the general employees retirement
plan is June 30, 2010.
new text end

Sec. 36.

Minnesota Statutes 2008, section 353.64, subdivision 7, is amended to read:


Subd. 7.

Pension coverage for deleted text begincertaindeleted text end public safety employees of deleted text beginthedeleted text end
Metropolitan Airports Commission.

Any person first employed as either a full-time
firefighter or a full-time police officer by the Metropolitan Airports Commission deleted text beginafter June
30, 1978
deleted text end, who is not eligible for coverage under the agreement signed between the state
and the secretary of the federal Department of Health and Human Services making the
provisions of the federal Old Age, Survivors, and Disability Insurance Act applicable to
municipal employees because that position is excluded from application deleted text beginpursuant todeleted text end new text beginunder
new text endTitle 42, United States Code, Sections 418 (d) (5) (A) and 418 (d) (8) (D) and section
355.07, deleted text beginshall not be a member of the Minneapolis Employees Retirement Fund but shall
be
deleted text end new text beginis new text enda member of the public employees police and fire fund and deleted text beginshall bedeleted text end new text beginis new text enddeemed to be a
firefighter or a police officer within the meaning of this section. The Metropolitan Airports
Commission shall make the employer contribution required deleted text beginpursuant todeleted text end new text beginunder new text endsection
353.65, subdivision 3, with respect to each of its firefighters or police officers covered
by the public employees police and fire fund and shall meet the employers recording and
reporting requirements set forth in section 353.65, subdivision 4.

Sec. 37.

Minnesota Statutes 2008, section 354.71, is amended to read:


354.71 MINNEAPOLIS EMPLOYEES RETIREMENT FUND STATE AID
REDEDICATED.

Subdivision 1.

Appropriation.

The positive difference, if any, between the actual
state aid deleted text beginpaiddeleted text end new text beginpayable new text endto the new text begingeneral employees retirement plan of the Public Employees
Retirement Association with respect to the consolidated former
new text endMinneapolis Employees
Retirement Fund under section 422A.101, subdivision 3, and $8,065,000 annually is
appropriated from the general fund to the commissioner of finance for deposit in the
Teachers Retirement Association to offset all or a portion of the current and future
unfunded actuarial accrued liability of the Minneapolis Teachers Retirement Fund
Association.

Subd. 2.

Financial requirements.

The appropriation in subdivision 1 is available
to the extent that financial requirements deleted text beginofdeleted text end new text beginwith respect to new text endthe new text beginconsolidated former
new text endMinneapolis Employees Retirement Fund under section 422A.101, subdivision 3, have
been satisfied.

Sec. 38.

Minnesota Statutes 2008, section 354A.011, subdivision 27, is amended to
read:


Subd. 27.

Teacher.

(a) "Teacher" means any person who renders service for a public
school district, other than a charter school, located in the corporate limits of Duluth or
St. Paul, as any of the following:

(1) a full-time employee in a position for which a valid license from the state
Department of Education is required;

(2) an employee of the teachers retirement fund association located in the city of
the first class deleted text beginunless the employee has exercised the option pursuant to Laws 1955,
chapter 10, section 1, to retain membership in the Minneapolis Employees Retirement
Fund established pursuant to chapter 422A
deleted text end;

(3) a part-time employee in a position for which a valid license from the state
Department of Education is required; or

(4) a part-time employee in a position for which a valid license from the state
Department of Education is required who also renders other nonteaching services for the
school district, unless the board of trustees of the teachers retirement fund association
determines that the combined employment is on the whole so substantially dissimilar to
teaching service that the service may not be covered by the association.

(b) The term does not mean any person who renders service in the school district
as any of the following:

(1) an independent contractor or the employee of an independent contractor;

(2) an employee who is a full-time teacher covered by the Teachers Retirement
Association or by another teachers retirement fund association established pursuant to this
chapter or chapter 354;

(3) an employee exempt from licensure pursuant to section 122A.30;

(4) an employee who is a teacher in a technical college located in a city of the first
class unless the person elects coverage by the applicable first class city teacher retirement
fund association under section 354B.21, subdivision 2;

(5) a teacher employed by a charter school, irrespective of the location of the
school; or

(6) an employee who is a part-time teacher in a technical college in a city of the first
class and who has elected coverage by the applicable first class city teacher retirement
fund association under section 354B.21, subdivision 2, but (i) the teaching service is
incidental to the regular nonteaching occupation of the person; (ii) the applicable technical
college stipulates annually in advance that the part-time teaching service will not exceed
300 hours in a fiscal year; and (iii) the part-time teaching actually does not exceed 300
hours in the fiscal year to which the certification applies.

Sec. 39.

Minnesota Statutes 2008, section 354A.39, is amended to read:


354A.39 SERVICE IN OTHER PUBLIC RETIREMENT FUNDS; ANNUITY.

Any person who has been a member of the Minnesota State Retirement System, the
Public Employees Retirement Association including the Public Employees Retirement
Association Police and Fire Fund, the Teachers Retirement Association, the Minnesota
State Patrol Retirement Association, the legislators retirement plan, the constitutional
officers retirement plan, deleted text beginthe Minneapolis Employees Retirement Fund,deleted text end the Duluth
Teachers Retirement Fund Association new law coordinated program, the St. Paul
Teachers Retirement Fund Association coordinated program, or any other public employee
retirement system in the state of Minnesota having a like provision but excluding all other
funds providing retirement benefits for police officers or firefighters shall be entitled
when qualified to an annuity from each fund if the person's total allowable service in all
of the funds or in any two or more of the funds totals three or more years, provided that
no portion of the allowable service upon which the retirement annuity from one fund is
based is used again in the computation for a retirement annuity from another fund and
provided further that the person has not taken a refund from any of funds or associations
since the person's membership in the fund or association has terminated. The annuity
from each fund or association shall be determined by the appropriate provisions of the
law governing each fund or association, except that the requirement that a person must
have at least three years of allowable service in the respective fund or association shall not
apply for the purposes of this section, provided that the aggregate service in two or more
of these funds equals three or more years.

Sec. 40.

Minnesota Statutes 2008, section 356.20, subdivision 2, is amended to read:


Subd. 2.

Covered public pension plans and funds.

This section applies to the
following public pension plans:

(1) the general state employees retirement plan of the Minnesota State Retirement
System;

(2) the general employees retirement plan of the Public Employees Retirement
Association;

(3) the Teachers Retirement Association;

(4) the State Patrol retirement plan;

(5) the St. Paul Teachers Retirement Fund Association;

(6) the Duluth Teachers Retirement Fund Association;

deleted text begin (7) the Minneapolis Employees Retirement Fund;
deleted text end

deleted text begin (8)deleted text end new text begin(7) new text endthe University of Minnesota faculty retirement plan;

deleted text begin (9)deleted text end new text begin(8) new text endthe University of Minnesota faculty supplemental retirement plan;

deleted text begin (10)deleted text end new text begin(9) new text endthe judges retirement fund;

deleted text begin (11)deleted text end new text begin(10) new text enda police or firefighter's relief association specified or described in section
69.77, subdivision 1a;

deleted text begin (12)deleted text end new text begin(11) new text enda volunteer firefighter relief association governed by section 69.771,
subdivision 1
;

deleted text begin (13)deleted text end new text begin(12) new text endthe public employees police and fire plan of the Public Employees
Retirement Association;

deleted text begin (14)deleted text end new text begin(13) new text endthe correctional state employees retirement plan of the Minnesota State
Retirement System; and

deleted text begin (15)deleted text end new text begin(14) new text endthe local government correctional service retirement plan of the Public
Employees Retirement Association.

Sec. 41.

Minnesota Statutes 2008, section 356.214, subdivision 1, is amended to read:


Subdivision 1.

Actuary retention.

(a) The governing board or managing or
administrative official of each public pension plan and retirement fund or plan enumerated
in paragraph (b) shall contract with an established actuarial consulting firm to conduct
annual actuarial valuations and related services. The principal from the actuarial
consulting firm on the contract must be an approved actuary under section 356.215,
subdivision 1
, paragraph (c).

(b) Actuarial services must include the preparation of actuarial valuations and
related actuarial work for the following retirement plans:

(1) the teachers retirement plan, Teachers Retirement Association;

(2) the general state employees retirement plan, Minnesota State Retirement System;

(3) the correctional employees retirement plan, Minnesota State Retirement System;

(4) the State Patrol retirement plan, Minnesota State Retirement System;

(5) the judges retirement plan, Minnesota State Retirement System;

deleted text begin (6) the Minneapolis employees retirement plan, Minneapolis Employees Retirement
Fund;
deleted text end

deleted text begin (7)deleted text end new text begin(6) new text endthe public employees retirement plan, Public Employees Retirement
Association;

deleted text begin (8)deleted text end new text begin(7) new text endthe public employees police and fire plan, Public Employees Retirement
Association;

deleted text begin (9)deleted text end new text begin(8) new text endthe Duluth teachers retirement plan, Duluth Teachers Retirement Fund
Association;

deleted text begin (10)deleted text end new text begin(9) new text endthe St. Paul teachers retirement plan, St. Paul Teachers Retirement Fund
Association;

deleted text begin (11)deleted text end new text begin(10) new text endthe legislators retirement plan, Minnesota State Retirement System;

deleted text begin (12)deleted text end new text begin(11) new text endthe elective state officers retirement plan, Minnesota State Retirement
System; and

deleted text begin (13)deleted text end new text begin(12) new text endlocal government correctional service retirement plan, Public Employees
Retirement Association.

(c) The contracts must require completion of the annual actuarial valuation
calculations on a fiscal year basis, with the contents of the actuarial valuation calculations
as specified in section 356.215, and in conformity with the standards for actuarial work
adopted by the Legislative Commission on Pensions and Retirement.

The contracts must require completion of annual experience data collection and
processing and a quadrennial published experience study for the plans listed in paragraph
(b), clauses (1), (2), and deleted text begin(7)deleted text endnew text begin (6)new text end, as provided for in the standards for actuarial work
adopted by the commission. The experience data collection, processing, and analysis
must evaluate the following:

(1) individual salary progression;

(2) the rate of return on investments based on the current asset value;

(3) payroll growth;

(4) mortality;

(5) retirement age;

(6) withdrawal; and

(7) disablement.

(d) The actuary shall annually prepare a report to the governing or managing board
or administrative official and the legislature, summarizing the results of the actuarial
valuation calculations. The actuary shall include with the report any recommendations
concerning the appropriateness of the support rates to achieve proper funding of
the retirement plans by the required funding dates. The actuary shall, as part of the
quadrennial experience study, include recommendations on the appropriateness of the
actuarial valuation assumptions required for evaluation in the study.

(e) If the actuarial gain and loss analysis in the actuarial valuation calculations
indicates a persistent pattern of sizable gains or losses, the governing or managing board
or administrative official shall direct the actuary to prepare a special experience study
for a plan listed in paragraph (b), clause (3), (4), (5), deleted text begin(6)deleted text endnew text begin (7)new text end, (8), (9), (10), (11), deleted text begin(12),deleted text end
or deleted text begin(13)deleted text endnew text begin (12)new text end, in the manner provided for in the standards for actuarial work adopted by
the commission.

Sec. 42.

Minnesota Statutes 2008, section 356.215, subdivision 8, is amended to read:


Subd. 8.

Interest and salary assumptions.

(a) The actuarial valuation must use
the applicable following preretirement interest assumption and the applicable following
postretirement interest assumption:

plan
preretirement
interest rate
assumption
postretirement
interest rate
assumption
general state employees retirement plan
8.5%
6.0%
correctional state employees retirement plan
8.5
6.0
State Patrol retirement plan
8.5
6.0
legislators retirement plan
8.5
6.0
elective state officers retirement plan
8.5
6.0
judges retirement plan
8.5
6.0
general public employees retirement plan
8.5
6.0
public employees police and fire retirement plan
8.5
6.0
local government correctional service retirement
plan
8.5
6.0
teachers retirement plan
8.5
6.0
deleted text begin Minneapolis employees retirement plan
deleted text end
deleted text begin 6.0
deleted text end
deleted text begin 5.0
deleted text end
Duluth teachers retirement plan
8.5
8.5
St. Paul teachers retirement plan
8.5
8.5
Minneapolis Police Relief Association
6.0
6.0
Fairmont Police Relief Association
5.0
5.0
Minneapolis Fire Department Relief Association
6.0
6.0
Virginia Fire Department Relief Association
5.0
5.0
Bloomington Fire Department Relief Association
6.0
6.0
local monthly benefit volunteer firefighters relief
associations
5.0
5.0

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

(1) single rate future salary increase assumption

plan
future salary
increase assumption
legislators retirement plan
5.0%
judges retirement plan
4.0
Minneapolis Police Relief Association
4.0
Fairmont Police Relief Association
3.5
Minneapolis Fire Department Relief
Association
4.0
Virginia Fire Department Relief Association
3.5
Bloomington Fire Department Relief
Association
4.0

deleted text begin (2) modified single rate future salary increase assumption
deleted text end

deleted text begin plan
deleted text end
deleted text begin future salary
increase assumption
deleted text end
deleted text begin Minneapolis employees
retirement plan
deleted text end
deleted text begin 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
deleted text end

deleted text begin (3)deleted text end new text begin(2) new text endselect and ultimate future salary increase assumption or graded rate future
salary increase assumption

plan
future salary
increase assumption
general state employees retirement plan
select calculation and
assumption A
correctional state employees retirement plan
assumption H
State Patrol retirement plan
assumption G
general public employees retirement plan
select calculation and
assumption B
public employees police and fire fund retirement plan
assumption C
local government correctional service retirement plan
assumption G
teachers retirement plan
assumption D
Duluth teachers retirement plan
assumption E
St. Paul teachers retirement plan
assumption F

The select calculation is: during the
designated select period, a designated
percentage rate is multiplied by the result of
the designated integer minus T, where T is the
number of completed years of service, and is
added to the applicable future salary increase
assumption. The designated select period is
five years and the designated integer is five
for the general state employees retirement
plan and the general public employees
retirement plan. The designated select period
is ten years and the designated integer is ten
for all other retirement plans covered by
this clause. The designated percentage rate
is: (1) 0.2 percent for the correctional state
employees retirement plan, the State Patrol
retirement plan, the public employees police
and fire plan, and the local government
correctional service plan; (2) 0.6 percent
for the general state employees retirement
plan and the general public employees
retirement plan; and (3) 0.3 percent for the
teachers retirement plan, the Duluth Teachers
Retirement Fund Association, and the St.
Paul Teachers Retirement Fund Association.
The select calculation for the Duluth Teachers
Retirement Fund Association is 8.00 percent
per year for service years one through seven,
7.25 percent per year for service years seven
and eight, and 6.50 percent per year for
service years eight and nine.

The ultimate future salary increase assumption is:

age
A
B
C
D
E
F
G
H
16
5.95%
5.95%
11.00%
7.70%
8.00%
6.90%
7.7500%
7.2500%
17
5.90
5.90
11.00
7.65
8.00
6.90
7.7500
7.2500
18
5.85
5.85
11.00
7.60
8.00
6.90
7.7500
7.2500
19
5.80
5.80
11.00
7.55
8.00
6.90
7.7500
7.2500
20
5.75
5.40
11.00
5.50
6.90
6.90
7.7500
7.2500
21
5.75
5.40
11.00
5.50
6.90
6.90
7.1454
6.6454
22
5.75
5.40
10.50
5.50
6.90
6.90
7.0725
6.5725
23
5.75
5.40
10.00
5.50
6.85
6.85
7.0544
6.5544
24
5.75
5.40
9.50
5.50
6.80
6.80
7.0363
6.5363
25
5.75
5.40
9.00
5.50
6.75
6.75
7.0000
6.5000
26
5.75
5.36
8.70
5.50
6.70
6.70
7.0000
6.5000
27
5.75
5.32
8.40
5.50
6.65
6.65
7.0000
6.5000
28
5.75
5.28
8.10
5.50
6.60
6.60
7.0000
6.5000
29
5.75
5.24
7.80
5.50
6.55
6.55
7.0000
6.5000
30
5.75
5.20
7.50
5.50
6.50
6.50
7.0000
6.5000
31
5.75
5.16
7.30
5.50
6.45
6.45
7.0000
6.5000
32
5.75
5.12
7.10
5.50
6.40
6.40
7.0000
6.5000
33
5.75
5.08
6.90
5.50
6.35
6.35
7.0000
6.5000
34
5.75
5.04
6.70
5.50
6.30
6.30
7.0000
6.5000
35
5.75
5.00
6.50
5.50
6.25
6.25
7.0000
6.5000
36
5.75
4.96
6.30
5.50
6.20
6.20
6.9019
6.4019
37
5.75
4.92
6.10
5.50
6.15
6.15
6.8074
6.3074
38
5.75
4.88
5.90
5.40
6.10
6.10
6.7125
6.2125
39
5.75
4.84
5.70
5.30
6.05
6.05
6.6054
6.1054
40
5.75
4.80
5.50
5.20
6.00
6.00
6.5000
6.0000
41
5.75
4.76
5.40
5.10
5.90
5.95
6.3540
5.8540
42
5.75
4.72
5.30
5.00
5.80
5.90
6.2087
5.7087
43
5.65
4.68
5.20
4.90
5.70
5.85
6.0622
5.5622
44
5.55
4.64
5.10
4.80
5.60
5.80
5.9048
5.4078
45
5.45
4.60
5.00
4.70
5.50
5.75
5.7500
5.2500
46
5.35
4.56
4.95
4.60
5.40
5.70
5.6940
5.1940
47
5.25
4.52
4.90
4.50
5.30
5.65
5.6375
5.1375
48
5.15
4.48
4.85
4.50
5.20
5.60
5.5822
5.0822
49
5.05
4.44
4.80
4.50
5.10
5.55
5.5404
5.0404
50
4.95
4.40
4.75
4.50
5.00
5.50
5.5000
5.0000
51
4.85
4.36
4.75
4.50
4.90
5.45
5.4384
4.9384
52
4.75
4.32
4.75
4.50
4.80
5.40
5.3776
4.8776
53
4.65
4.28
4.75
4.50
4.70
5.35
5.3167
4.8167
54
4.55
4.24
4.75
4.50
4.60
5.30
5.2826
4.7826
55
4.45
4.20
4.75
4.50
4.50
5.25
5.2500
4.7500
56
4.35
4.16
4.75
4.50
4.40
5.20
5.2500
4.7500
57
4.25
4.12
4.75
4.50
4.30
5.15
5.2500
4.7500
58
4.25
4.08
4.75
4.60
4.20
5.10
5.2500
4.7500
59
4.25
4.04
4.75
4.70
4.10
5.05
5.2500
4.7500
60
4.25
4.00
4.75
4.80
4.00
5.00
5.2500
4.7500
61
4.25
4.00
4.75
4.90
3.90
5.00
5.2500
4.7500
62
4.25
4.00
4.75
5.00
3.80
5.00
5.2500
4.7500
63
4.25
4.00
4.75
5.10
3.70
5.00
5.2500
4.7500
64
4.25
4.00
4.75
5.20
3.60
5.00
5.2500
4.7500
65
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
66
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
67
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
68
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
69
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
70
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
71
4.25
4.00
5.20

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

plan
payroll growth
assumption
general state employees retirement plan
4.50%
correctional state employees retirement plan
4.50
State Patrol retirement plan
4.50
legislators retirement plan
4.50
judges retirement plan
4.00
general public employees retirement plan
4.50
public employees police and fire retirement plan
4.50
local government correctional service retirement
plan
4.50
teachers retirement plan
4.50
Duluth teachers retirement plan
4.50
St. Paul teachers retirement plan
5.00

(d) After July 1, 2010, the assumptions set forth in paragraphs (b) and (c) continue to
apply, unless a different salary assumption or a different payroll increase assumption:

(1) has been proposed by the governing board of the applicable retirement plan;

(2) is accompanied by the concurring recommendation of the actuary retained under
section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the
most recent actuarial valuation report if section 356.214 does not apply; and

(3) has been approved or deemed approved under subdivision 18.

Sec. 43.

Minnesota Statutes 2008, section 356.215, subdivision 11, is amended to read:


Subd. 11.

Amortization contributions.

(a) In addition to the exhibit indicating
the level normal cost, the actuarial valuation of the retirement plan must contain an
exhibit for financial reporting purposes indicating the additional annual contribution
sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit
for contribution determination purposes indicating the additional contribution sufficient
to amortize the unfunded actuarial accrued liability. For the retirement plans listed in
subdivision 8, paragraph (c), the additional contribution must be calculated on a level
percentage of covered payroll basis by the established date for full funding in effect when
the valuation is prepared, assuming annual payroll growth at the applicable percentage
rate set forth in subdivision 8, paragraph (c). For all other retirement plans, the additional
annual contribution must be calculated on a level annual dollar amount basis.

(b) For any retirement plan other than the deleted text beginMinneapolis Employees Retirement Fund,
the
deleted text end general employees retirement plan of the Public Employees Retirement Associationdeleted text begin,deleted text end
and the St. Paul Teachers Retirement Fund Association, if there has not been a change in
the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a
change in the benefit plan governing annuities and benefits payable from the fund, a
change in the actuarial cost method used in calculating the actuarial accrued liability of all
or a portion of the fund, or a combination of the three, which change or changes by itself
or by themselves without inclusion of any other items of increase or decrease produce a
net increase in the unfunded actuarial accrued liability of the fund, the established date for
full funding is the first actuarial valuation date occurring after June 1, 2020.

(c) For any retirement plan other than the deleted text beginMinneapolis Employees Retirement
Fund and the
deleted text end general employees retirement plan of the Public Employees Retirement
Association, if there has been a change in any or all of the actuarial assumptions used
for calculating the actuarial accrued liability of the fund, a change in the benefit plan
governing annuities and benefits payable from the fund, a change in the actuarial cost
method used in calculating the actuarial accrued liability of all or a portion of the fund,
or a combination of the three, and the change or changes, by itself or by themselves and
without inclusion of any other items of increase or decrease, produce a net increase in the
unfunded actuarial accrued liability in the fund, the established date for full funding must
be determined using the following procedure:

(i) the unfunded actuarial accrued liability of the fund must be determined in
accordance with the plan provisions governing annuities and retirement benefits and the
actuarial assumptions in effect before an applicable change;

(ii) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the unfunded actuarial accrued liability amount determined under item
(i) by the established date for full funding in effect before the change must be calculated
using the interest assumption specified in subdivision 8 in effect before the change;

(iii) the unfunded actuarial accrued liability of the fund must be determined in
accordance with any new plan provisions governing annuities and benefits payable from
the fund and any new actuarial assumptions and the remaining plan provisions governing
annuities and benefits payable from the fund and actuarial assumptions in effect before
the change;

(iv) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the difference between the unfunded actuarial accrued liability amount
calculated under item (i) and the unfunded actuarial accrued liability amount calculated
under item (iii) over a period of 30 years from the end of the plan year in which the
applicable change is effective must be calculated using the applicable interest assumption
specified in subdivision 8 in effect after any applicable change;

(v) the level annual dollar or level percentage amortization contribution under item
(iv) must be added to the level annual dollar amortization contribution or level percentage
calculated under item (ii);

(vi) the period in which the unfunded actuarial accrued liability amount determined
in item (iii) is amortized by the total level annual dollar or level percentage amortization
contribution computed under item (v) must be calculated using the interest assumption
specified in subdivision 8 in effect after any applicable change, rounded to the nearest
integral number of years, but not to exceed 30 years from the end of the plan year in
which the determination of the established date for full funding using the procedure set
forth in this clause is made and not to be less than the period of years beginning in the
plan year in which the determination of the established date for full funding using the
procedure set forth in this clause is made and ending by the date for full funding in effect
before the change; and

(vii) the period determined under item (vi) must be added to the date as of which
the actuarial valuation was prepared and the date obtained is the new established date
for full funding.

deleted text begin (d) For the Minneapolis Employees Retirement Fund, the established date for full
funding is June 30, 2020.
deleted text end

deleted text begin (e)deleted text end new text begin(d) new text endFor the general employees retirement plan of the Public Employees
Retirement Association, the established date for full funding is June 30, 2031.

deleted text begin (f)deleted text end new text begin(e) new text endFor the Teachers Retirement Association, the established date for full funding
is June 30, 2037.

deleted text begin (g)deleted text end new text begin(f) new text endFor the correctional state employees retirement plan of the Minnesota State
Retirement System, the established date for full funding is June 30, 2038.

deleted text begin (h)deleted text end new text begin(g) new text endFor the judges retirement plan, the established date for full funding is June
30, 2038.

deleted text begin (i)deleted text end new text begin(h) new text endFor the public employees police and fire retirement plan, the established date
for full funding is June 30, 2038.

deleted text begin (j)deleted text end new text begin(i) new text endFor the St. Paul Teachers Retirement Fund Association, the established
date for full funding is June 30 of the 25th year from the valuation date. In addition to
other requirements of this chapter, the annual actuarial valuation shall contain an exhibit
indicating the funded ratio and the deficiency or sufficiency in annual contributions when
comparing liabilities to the market value of the assets of the fund as of the close of the
most recent fiscal year.

deleted text begin (k)deleted text end new text begin(j) new text endFor the retirement plans for which the annual actuarial valuation indicates
an excess of valuation assets over the actuarial accrued liability, the valuation assets in
excess of the actuarial accrued liability must be recognized as a reduction in the current
contribution requirements by an amount equal to the amortization of the excess expressed
as a level percentage of pay over a 30-year period beginning anew with each annual
actuarial valuation of the plan.

deleted text begin (l)deleted text end new text begin(k) new text endIn addition to calculating the unfunded actuarial accrued liability of the
retirement plan for financial reporting purposes under paragraphs (a) to deleted text begin(j)deleted text endnew text begin (i)new text end, the actuarial
valuation of the retirement plan must also include a calculation of the unfunded actuarial
accrued liability of the retirement plan for purposes of determining the amortization
contribution sufficient to amortize the unfunded actuarial liability of the Minnesota Post
Retirement Investment Fund. For this exhibit, the calculation must be the unfunded
actuarial accrued liability net of the postretirement adjustment liability funded from
the investment performance of the Minnesota Post Retirement Investment Fund or the
retirement benefit fund.

Sec. 44.

Minnesota Statutes 2008, section 356.30, subdivision 3, is amended to read:


Subd. 3.

Covered plans.

This section applies to the following retirement plans:

(1) the general state employees retirement plan of the Minnesota State Retirement
System, established under chapter 352;

(2) the correctional state employees retirement plan of the Minnesota State
Retirement System, established under chapter 352;

(3) the unclassified employees retirement program, established under chapter 352D;

(4) the State Patrol retirement plan, established under chapter 352B;

(5) the legislators retirement plan, established under chapter 3A;

(6) the elective state officers retirement plan, established under chapter 352C;

(7) the general employees retirement plan of the Public Employees Retirement
Association, established under chapter 353;

(8) the public employees police and fire retirement plan of the Public Employees
Retirement Association, established under chapter 353;

(9) the local government correctional service retirement plan of the Public
Employees Retirement Association, established under chapter 353E;

(10) the Teachers Retirement Association, established under chapter 354;

deleted text begin (11) the Minneapolis Employees Retirement Fund, established under chapter 422A;
deleted text end

deleted text begin (12)deleted text end new text begin(11) new text endthe St. Paul Teachers Retirement Fund Association, established under
chapter 354A;

deleted text begin (13)deleted text end new text begin(12) new text endthe Duluth Teachers Retirement Fund Association, established under
chapter 354A; and

deleted text begin (14)deleted text end new text begin(13) new text endthe judges retirement fund, established by chapter 490.

Sec. 45.

Minnesota Statutes 2008, section 356.302, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(a) The terms used in this section are defined in this
subdivision.

(b) "Average salary" means the highest average of covered salary for the appropriate
period of credited service that is required for the calculation of a disability benefit by
the covered retirement plan and that is drawn from any period of credited service and
successive years of covered salary in a covered retirement plan.

(c) "Covered retirement plan" or "plan" means a retirement plan listed in subdivision
7.

(d) "Duty-related" means a disabling illness or injury that occurred while the person
was actively engaged in employment duties or that arose out of the person's active
employment duties.

(e) "General employee retirement plan" means a covered retirement plan listed in
subdivision 7, clauses (1) to deleted text begin(8)deleted text end new text begin(6) new text endand deleted text begin(13)deleted text endnew text begin (12)new text end.

(f) "Occupationally disabled" means the condition of having a medically
determinable physical or mental impairment that makes a person unable to satisfactorily
perform the minimum requirements of the person's employment position or a substantially
similar employment position.

(g) "Public safety employee retirement plan" means a covered retirement plan listed
in subdivision 7, clauses deleted text begin(9)deleted text end new text begin(7) new text endto deleted text begin(12)deleted text endnew text begin (11)new text end.

(h) "Totally and permanently disabled" means the condition of having a medically
determinable physical or mental impairment that makes a person unable to engage in any
substantial gainful activity and that is expected to continue or has continued for a period
of at least one year or that is expected to result directly in the person's death.

Sec. 46.

Minnesota Statutes 2008, section 356.302, subdivision 7, is amended to read:


Subd. 7.

Covered retirement plans.

This section applies to the following
retirement plans:

(1) the general state employees retirement plan of the Minnesota State Retirement
System, established by chapter 352;

(2) the unclassified state employees retirement program of the Minnesota State
Retirement System, established by chapter 352D;

(3) the general employees retirement plan of the Public Employees Retirement
Association, established by chapter 353;

(4) the Teachers Retirement Association, established by chapter 354;

(5) the Duluth Teachers Retirement Fund Association, established by chapter 354A;

(6) the St. Paul Teachers Retirement Fund Association, established by chapter 354A;

deleted text begin (7) the Minneapolis Employees Retirement Fund, established by chapter 422A;
deleted text end

deleted text begin (8)deleted text end new text begin(7) new text endthe state correctional employees retirement plan of the Minnesota State
Retirement System, established by chapter 352;

deleted text begin (9)deleted text end new text begin(8) new text endthe State Patrol retirement plan, established by chapter 352B;

deleted text begin (10)deleted text end new text begin(9) new text endthe public employees police and fire plan of the Public Employees
Retirement Association, established by chapter 353;

deleted text begin (11)deleted text end new text begin(10) new text endthe local government correctional service retirement plan of the Public
Employees Retirement Association, established by chapter 353E; and

deleted text begin (12)deleted text end new text begin(11) new text endthe judges retirement plan, established by chapter 490.

Sec. 47.

Minnesota Statutes 2008, section 356.303, subdivision 4, is amended to read:


Subd. 4.

Covered retirement plans.

This section applies to the following
retirement plans:

(1) the legislators retirement plan, established by chapter 3A;

(2) the general state employees retirement plan of the Minnesota State Retirement
System, established by chapter 352;

(3) the correctional state employees retirement plan of the Minnesota State
Retirement System, established by chapter 352;

(4) the State Patrol retirement plan, established by chapter 352B;

(5) the elective state officers retirement plan, established by chapter 352C;

(6) the unclassified state employees retirement program, established by chapter
352D;

(7) the general employees retirement plan of the Public Employees Retirement
Association, established by chapter 353;

(8) the public employees police and fire plan of the Public Employees Retirement
Association, established by chapter 353;

(9) the local government correctional service retirement plan of the Public
Employees Retirement Association, established by chapter 353E;

(10) the Teachers Retirement Association, established by chapter 354;

(11) the Duluth Teachers Retirement Fund Association, established by chapter 354A;

(12) the St. Paul Teachers Retirement Fund Association, established by chapter
354A;new text begin and
new text end

deleted text begin (13) the Minneapolis Employees Retirement Fund, established by chapter 422A; and
deleted text end

deleted text begin (14)deleted text end new text begin(13) new text endthe judges retirement fund, established by chapter 490.

Sec. 48.

Minnesota Statutes 2008, section 356.32, subdivision 2, is amended to read:


Subd. 2.

Covered retirement plans.

The provisions of this section apply to the
following retirement plans:

(1) the general state employees retirement plan of the Minnesota State Retirement
System, established under chapter 352;

(2) the correctional state employees retirement plan of the Minnesota State
Retirement System, established under chapter 352;

(3) the State Patrol retirement plan, established under chapter 352B;

(4) the general employees retirement plan of the Public Employees Retirement
Association, established under chapter 353;

(5) the public employees police and fire plan of the Public Employees Retirement
Association, established under chapter 353;

(6) the Teachers Retirement Association, established under chapter 354;

deleted text begin (7) the Minneapolis Employees Retirement Fund, established under chapter 422A;
deleted text end

deleted text begin (8)deleted text end new text begin(7) new text endthe Duluth Teachers Retirement Fund Association, established under chapter
354A;new text begin and
new text end

deleted text begin (9) the Minneapolis Teachers Retirement Fund Association, established under
chapter 354A; and
deleted text end

deleted text begin (10)deleted text end new text begin(8) new text endthe St. Paul Teachers Retirement Fund Association, established under
chapter 354A.

Sec. 49.

Minnesota Statutes 2008, section 356.401, subdivision 3, is amended to read:


Subd. 3.

Covered retirement plans.

The provisions of this section apply to the
following retirement plans:

(1) the legislators retirement plan, established by chapter 3A;

(2) the general state employees retirement plan of the Minnesota State Retirement
System, established by chapter 352;

(3) the correctional state employees retirement plan of the Minnesota State
Retirement System, established by chapter 352;

(4) the State Patrol retirement plan, established by chapter 352B;

(5) the elective state officers retirement plan, established by chapter 352C;

(6) the unclassified state employees retirement program, established by chapter
352D;

(7) the general employees retirement plan of the Public Employees Retirement
Association, established by chapter 353;

(8) the public employees police and fire plan of the Public Employees Retirement
Association, established by chapter 353;

(9) the public employees defined contribution plan, established by chapter 353D;

(10) the local government correctional service retirement plan of the Public
Employees Retirement Association, established by chapter 353E;

(11) the Teachers Retirement Association, established by chapter 354;

(12) the Duluth Teachers Retirement Fund Association, established by chapter 354A;

deleted text begin (13) the Minneapolis Teachers Retirement Fund Association, established by chapter
354A;
deleted text end

deleted text begin (14)deleted text end new text begin(13) new text endthe St. Paul Teachers Retirement Fund Association, established by chapter
354A;

deleted text begin (15)deleted text end new text begin(14) new text endthe individual retirement account plan, established by chapter 354B;

deleted text begin (16)deleted text end new text begin(15) new text endthe higher education supplemental retirement plan, established by chapter
354C;

deleted text begin (17) the Minneapolis Employees Retirement Fund, established by chapter 422A;
deleted text end

deleted text begin (18)deleted text end new text begin(16) new text endthe Minneapolis Police Relief Association, established by chapter 423B;

deleted text begin (19)deleted text end new text begin(17) new text endthe Minneapolis Firefighters Relief Association, established by chapter
423C; and

deleted text begin (20)deleted text end new text begin(18) new text endthe judges retirement fund, established by chapter 490.

Sec. 50.

Minnesota Statutes 2008, section 356.407, subdivision 2, is amended to read:


Subd. 2.

Covered funds.

The provisions of this section apply to the following
retirement funds:

(1) the general employees retirement plan of the Public Employees Retirement
Association established under chapter 353;

(2) the public employees police and fire plan of the Public Employees Retirement
Association established under chapter 353;

(3) the State Patrol retirement plan established under chapter 352B;

(4) the legislators retirement plan established under chapter 3A;

(5) the elective state officers retirement plan established under chapter 352C;new text begin and
new text end

(6) the Teachers Retirement Association established under chapter 354deleted text begin; anddeleted text endnew text begin.
new text end

deleted text begin (7) the Minneapolis Employees Retirement Fund established under chapter 422A.
deleted text end

Sec. 51.

Minnesota Statutes 2008, section 356.431, subdivision 1, is amended to read:


Subdivision 1.

Lump-sum postretirement payment conversion.

For benefits paid
after December 31, 2001, to eligible persons under deleted text beginsectionsdeleted text end new text beginsection new text end356.42 deleted text beginand 356.43deleted text end,
the amount of the most recent lump-sum benefit payable to an eligible recipient under
deleted text begin sectionsdeleted text end new text beginsection new text end356.42 deleted text beginand 356.43deleted text end must be divided by 12. The result must be added to
the monthly annuity or benefit otherwise payable to an eligible recipient, must become a
permanent part of the benefit recipient's pension, and must be included in any pension
benefit subject to future increases.

Sec. 52.

Minnesota Statutes 2008, section 356.465, subdivision 3, is amended to read:


Subd. 3.

Covered retirement plans.

The provisions of this section apply to the
following retirement plans:

(1) the general state employees retirement plan of the Minnesota State Retirement
System established under chapter 352;

(2) the correctional state employees retirement plan of the Minnesota State
Retirement System established under chapter 352;

(3) the State Patrol retirement plan established under chapter 352B;

(4) the legislators retirement plan established under chapter 3A;

(5) the judges retirement plan established under chapter 490;

(6) the general employees retirement plan of the Public Employees Retirement
Association established under chapter 353;

(7) the public employees police and fire plan of the Public Employees Retirement
Association established under chapter 353;

(8) the teachers retirement plan established under chapter 354;

(9) the Duluth Teachers Retirement Fund Association established under chapter
354A;

(10) the St. Paul Teachers Retirement Fund Association established under chapter
354A;

deleted text begin (11) the Minneapolis Employees Retirement Fund established under chapter 422A;
deleted text end

deleted text begin (12)deleted text end new text begin(11) new text endthe Minneapolis Firefighters Relief Association established under chapter
423C;

deleted text begin (13)deleted text end new text begin(12) new text endthe Minneapolis Police Relief Association established under chapter
423B; and

deleted text begin (14)deleted text end new text begin(13) new text endthe local government correctional service retirement plan of the Public
Employees Retirement Association established under chapter 353E.

Sec. 53.

Minnesota Statutes 2008, section 356.64, is amended to read:


356.64 REAL ESTATE INVESTMENTS.

(a) Notwithstanding any law to the contrary, any public pension plan whose assets
are not invested by the State Board of Investment may invest its funds in Minnesota situs
nonfarm real estate ownership interests or loans secured by mortgages or deeds of trust if
the investment is consistent with section 356A.04.

(b) deleted text beginExcept to the extent authorized in the case of the Minneapolis Employees
Retirement Fund under section 422A.05, subdivision 2c, paragraph (a),
deleted text end An investment
otherwise authorized by this section must also comply with the requirements and
limitations of section 11A.24, subdivision 6.

Sec. 54.

Minnesota Statutes 2008, section 356.65, subdivision 2, is amended to read:


Subd. 2.

Disposition of abandoned amounts.

Any unclaimed public pension
fund amounts existing in any public pension fund are presumed to be abandoned, but are
not subject to the provisions of sections 345.31 to 345.60. Unless the benefit plan of
the public pension fund specifically provides for a different disposition of unclaimed or
abandoned funds or amounts, any unclaimed public pension fund amounts cancel and
must be credited to the public pension fund. If the unclaimed public pension fund amount
exceeds $25 and the inactive or former member again becomes a member of the applicable
public pension plan or applies for a retirement annuity under section 3A.12, 352.72,
352B.30, 353.71, 354.60, new text beginor new text end356.30, deleted text beginor 422A.16, subdivision 8,deleted text end whichever applies, the
canceled amount must be restored to the credit of the person.

Sec. 55.

Minnesota Statutes 2008, section 356.91, is amended to read:


356.91 VOLUNTARY MEMBERSHIP DUES DEDUCTION.

(a) Upon written authorization of a person receiving an annuity from a public
pension fund administered by the Minnesota State Retirement Systemdeleted text begin,deleted text end new text beginor new text endthe Public
Employees Retirement Association, deleted text beginor the Minneapolis Employees Retirement Fund,deleted text end the
executive director of the public pension fund may deduct from the retirement annuity an
amount requested by the annuitant to be paid as dues to any labor organization that is an
exclusive bargaining agent representing public employees or an organization representing
retired public employees of which the annuitant is a member and shall pay the amount to
the organization so designated by the annuitant.

(b) A pension fund and the plan fiduciaries which authorize or administer deductions
of dues payments under paragraph (a) are not liable for failure to properly deduct or
transmit the dues amounts, provided that the fund and the fiduciaries have acted in good
faith.

(c) The deductions under paragraph (a) may occur no more frequently than two
times per year and may not be used for political purposes.

(d) Any labor organization specified in paragraph (a) shall reimburse the public
pension fund for the administrative expense of withholding premium amounts.

Sec. 56.

Minnesota Statutes 2008, section 356.96, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(a) Unless the language or context clearly indicates that
a different meaning is intended, for the purpose of this section, the terms in paragraphs
(b) to (e) have the meanings given them.

(b) "Chief administrative officer" means the executive director of a covered pension
plan or the executive director's designee or representative.

(c) "Covered pension plan" means a plan enumerated in section 356.20, subdivision
2, clauses (1) to (4), deleted text begin(10)deleted text endnew text begin (9)new text end, and deleted text begin(13)deleted text endnew text begin (12)new text end to deleted text begin(15)deleted text endnew text begin (14)new text end, but does not mean the
deferred compensation plan administered under sections 352.965 and 352.97 or to the
postretirement health care savings plan administered under section 352.98.

(d) "Governing board" means the Board of Trustees of the Public Employees
Retirement Association, the Board of Trustees of the Teachers Retirement Association, or
the Board of Directors of the Minnesota State Retirement System.

(e) "Person" includes an active, retired, deferred, or nonvested inactive participant in
a covered pension plan or a beneficiary of a participant, or an individual who has applied
to be a participant or who is or may be a survivor of a participant, or a state agency or
other governmental unit that employs active participants in a covered pension plan.

Sec. 57.

Minnesota Statutes 2008, section 422A.101, subdivision 3, is amended to read:


Subd. 3.

State contributions.

(a) Subject to the limitation deleted text beginset forthdeleted text end in paragraph
(c), the state shall pay to the new text begingeneral employees retirement plan of the Public Employees
Retirement Association with respect to the former
new text endMinneapolis Employees Retirement
Fund annually an amount equal to the amount calculated under paragraph (b).

(b) The payment amount is an amount equal to the financial requirements of the
Minneapolis Employees Retirement Fund reported in the actuarial valuation of the fund
deleted text begin prepared by the actuary retained under section 356.214 consistent with section 356.215 for
the most recent year but
deleted text end new text beginas of July 1, 2009, new text endbased on a target date for full amortization of
the unfunded actuarial accrued liabilities by June 30, 2020, less the amount of employee
contributions new text beginthat would have been new text endrequired under new text beginMinnesota Statutes 2008, new text endsection
422A.10, and the amount of employer contributions new text beginthat would have been new text endrequired under
new text begin Minnesota Statutes 2008, section 422A.101, new text endsubdivisions 1a, 2, and 2a. Payments deleted text beginshalldeleted text end
new text begin must new text endbe made September 15 annually.

(c) The annual state contribution under this subdivision may not exceed $9,000,000,
plus the cost of the annual supplemental benefit determined under new text beginMinnesota Statutes
2008,
new text endsection 356.43.

(d) If the amount determined under paragraph (b) exceeds $9,000,000, the excess
must be allocated to and paid to the fund by the employers identified in subdivisions 1a
and 2, other than units of metropolitan government. Each employer's share of the excess is
proportionate to the employer's share of the fund's unfunded actuarial accrued liability as
disclosed in the new text beginJuly 1, 2009, new text endannual actuarial valuation prepared by the actuary retained
under section 356.214 compared to the total unfunded actuarial accrued liability attributed
to all employers identified in new text beginMinnesota Statutes 2008, section 422A.101, new text endsubdivisions
1a and 2, other than units of metropolitan government. Payments must be made in equal
installments as set forth in paragraph (b).

new text begin (e) State contributions under this section end on September 15, 2020, or on the
September 1 following the first date on which the current assets of the general employees
retirement plan of the Public Employees Retirement Association equal or exceed
the actuarial accrued liability of the general employees retirement plan of the Public
Employees Retirement Association, whichever is earlier.
new text end

Sec. 58.

Minnesota Statutes 2008, section 422A.26, is amended to read:


422A.26 COVERAGE BY THE PUBLIC EMPLOYEES RETIREMENT
ASSOCIATION.

Notwithstanding deleted text beginsection 422A.09, ordeleted text end any deleted text beginotherdeleted text end law to the contrary, any person
whose employment by, or assumption of a position as an appointed or elected officer
of, the city of Minneapolis, any of the boards, departments, or commissions operated
as a department of the city of Minneapolis or independently if financed in whole or in
part by funds of the city of Minneapolis, the Metropolitan Airports Commission, the
new text begin former new text endMinneapolis Employees Retirement Fund, or Special School District Number 1 if
the person is not a member of the deleted text beginMinneapolisdeleted text end Teachers Retirement deleted text beginFunddeleted text end Association
by virtue of that employment or position, deleted text begininitially commences on or after July 1, 1979
shall be
deleted text end new text beginis new text enda member of the new text begingeneral employees retirement plan of the new text endPublic Employees
Retirement Association unless excluded from membership deleted text beginpursuant todeleted text end new text beginunder new text endsection
353.01, subdivision 2b. deleted text beginIn no event shall there be any new members of the contributing
class of the Minneapolis employees fund on or after July 1, 1979.
deleted text end

Sec. 59.

Minnesota Statutes 2008, section 473.511, subdivision 3, is amended to read:


Subd. 3.

Existing sanitary districts, joint sewer boards.

Effective January 1,
1971, the corporate existence of the Minneapolis-St. Paul Sanitary District, the North
Suburban Sanitary Sewer District, and any joint board created by agreement among local
government units pursuant to section 471.59, to provide interceptors and treatment works
for such local government units, shall terminate. All persons regularly employed by
such sanitary districts and joint boards on that date or on any earlier date on which the
former waste control commission pursuant to subdivisions 1 and 2 assumed ownership
and control of any interceptors or treatment works owned or operated by such sanitary
districts and joint boards, and who are employees of the commission on July 1, 1994, shall
be employees of the councildeleted text begin, and may at their option become members of the Minnesota
State Retirement System or may continue as members of a public retirement association
under chapter 422A or any other law, to which they belonged before such date, and shall
retain all pension rights which they may have under such latter laws, and all other rights
to which they are entitled by contract or law
deleted text end. Members of trades who are employed by
the former Metropolitan Waste Control Commission, who have trade union pension
coverage pursuant to a collective bargaining agreement, and who elected exclusion from
coverage pursuant to section 473.512, or who are first employed after July 1, 1977, shall
not be covered by the Minnesota State Retirement System. The council shall make the
employer's contributions to pension funds of its employees. Such employees shall perform
such duties as may be prescribed by the council. All funds of such sanitary districts and
joint boards then on hand, and all subsequent collections of taxes, special assessments or
service charges levied or imposed by or for such sanitary districts or joint boards shall
be transferred to the council. The local government units otherwise entitled to such
cash, taxes, assessments or service charges shall be credited with such amounts, and
such credits shall be offset against any amounts to be paid by them to the council as
provided in section 473.517. The former Metropolitan Waste Control Commission, and
on July 1, 1994, the council shall succeed to and become vested by action of law with
all right, title and interest in and to any property, real or personal, owned or operated
by such sanitary districts and joint boards. Prior to that date the proper officers of such
sanitary districts and joint boards, or the former Metropolitan Waste Control Commission,
shall execute and deliver to the council all deeds, conveyances, bills of sale, and other
documents or instruments required to vest in the council good and marketable title to all
such real or personal property; provided that vesting of the title shall occur by operation
of law and failure to execute and deliver the documents shall not affect the vesting of
title in the former Metropolitan Waste Control Commission or the council on the dates
indicated in this subdivision. The council shall become obligated to pay or assume all
bonded or other debt and contract obligations incurred by the former Metropolitan Waste
Control Commission, or by such sanitary districts and joint boards, or incurred by local
government units for the acquisition or betterment of any interceptors or treatment works
owned or operated by such sanitary districts or joint boards.

Sec. 60.

Minnesota Statutes 2008, section 473.606, subdivision 5, is amended to read:


Subd. 5.

Employees, others, affirmative action; prevailing wage.

The corporation
shall have the power to appoint engineers and other consultants, attorneys, and such other
officers, agents, and employees as it may see fit, who shall perform such duties and receive
such compensation as the corporation may determine, and be removable at the pleasure of
the corporation. The corporation shall adopt an affirmative action plan, which shall be
submitted to the appropriate agency or office of the state for review and approval. The plan
shall include a yearly progress report to the agency or office. deleted text beginOfficers and employees of
the corporation who cannot qualify and participate in the municipal employees retirement
fund under chapter 422A, shall be separated from service at the retirement age applicable
to officers or employees of the state of Minnesota in the classified service of the state civil
service as provided in section 43A.34, or as the same may from time to time be amended,
regardless of the provisions of the Veteran's Preference Act.
deleted text end Whenever the corporation
performs any work within the limits of a city of the first class, or establishes a minimum
wage for skilled or unskilled labor in the specifications or any contract for work within
one of the cities, the rate of pay to such skilled and unskilled labor shall be the prevailing
rate of wage for such labor in that city.

Sec. 61.

Minnesota Statutes 2008, section 475.52, subdivision 6, is amended to read:


Subd. 6.

Certain purposes.

Any municipality may issue bonds for paying
judgments against it; for refunding outstanding bonds; for funding floating indebtedness;
for funding actuarial liabilities to pay postemployment benefits to employees or officers
after their termination of service; or for funding all or part of the municipality's current
and future unfunded liability for a pension or retirement fund or plan referred to in
section 356.20, subdivision 2, as those liabilities are most recently computed pursuant
to sections 356.215 and 356.216. The board of trustees or directors of a deleted text beginpension fund ordeleted text end
relief association referred to in section 69.77 deleted text beginor chapter 422Adeleted text end must consent and must
be a party to any contract made under this section with respect to the fund held by it
for the benefit of and in trust for its members. For purposes of this section, the term
"postemployment benefits" means benefits giving rise to a liability under Statement No.
45 of the Governmental Accounting Standards Board.

Sec. 62.

Minnesota Statutes 2008, section 480.181, subdivision 2, is amended to read:


Subd. 2.

Election to retain insurance and benefits; retirement.

(a) Before a
person is transferred to state employment under this section, the person may elect to do
either or both of the following:

(1) keep life insurance; hospital, medical, and dental insurance; and vacation and
sick leave benefits and accumulated time provided by the county instead of receiving
benefits from the state under the judicial branch personnel rules; or

(2) remain a member of the new text begingeneral employees retirement plan of the new text endPublic
Employees Retirement Association deleted text beginor the Minneapolis employees retirement funddeleted text end instead
of joining the new text begingeneral state employees retirement plan of the new text endMinnesota State Retirement
System.

Employees who make an election under clause (1) remain on the county payroll,
but the state shall reimburse the county on a quarterly basis for the salary and cost of the
benefits provided by the county. The state shall make the employer contribution to the
new text begin general employees retirement plan of the new text endPublic Employees Retirement Association deleted text beginor
the employer contribution under section 422A.101, subdivision 1a, to the Minneapolis
Employees Retirement Fund
deleted text end on behalf of employees who make an election under clause
(2).

(b) An employee who makes an election under paragraph (a), clause (1), may revoke
the election, once, at any time, but if the employee revokes the election, the employee
cannot make another election. An employee who makes an election under paragraph (a),
clause (2), may revoke the election at any time within six months after the person becomes
a state employee. Once an employee revokes this election, the employee cannot make
another election.

(c) The Supreme Court, after consultation with the Judicial Council, the
commissioner of employee relations, and the executive directors of the Public Employees
Retirement Association and the Minnesota State Retirement Association, shall adopt
procedures for making elections under this section.

(d) The Supreme Court shall notify all affected employees of the options available
under this section. The executive directors of the Public Employees Retirement
Association and the Minnesota State Retirement System shall provide counseling to
affected employees on the effect of making an election to remain deleted text begina memberdeleted text end new text beginmembers new text endof
the new text begingeneral employees retirement plan of the new text endPublic Employees Retirement Association.

Sec. 63. new text beginTRANSFER OF MERF EMPLOYEES; EMPLOYMENT
PREFERENCE.
new text end

new text begin (a) Full-time employees of the Minneapolis Employees Retirement Fund first
employed before June 30, 2008, and employed full-time by the Minneapolis Employees
Retirement Fund on June 29, 2010, are transferred to employment by the city of
Minneapolis on July 1, 2010, and retain their same level of compensation, if so employed,
for a period of 12 months.
new text end

new text begin (b) After the expiration of the full compensation level period under paragraph (a),
a person described in paragraph (a) has a civil service employment preference with the
city of Minneapolis or with Special School District No. 1, Minneapolis, comparable
to a veteran's employment preference for employment in a position that is determined
appropriate by the chief human resources official of the employing unit based on the
person's education and employment experience. The preference is in effect for a period of
48 months following the expiration of the full compensation level period in paragraph (a).
new text end

new text begin (c) If a person described in paragraph (a) is employed by an employing unit other
than the city of Minneapolis or Special School District No. 1, Minneapolis, before the
expiration of the preference period in paragraph (b), the provisions of paragraphs (a) and
(b) are no longer applicable to the person.
new text end

Sec. 64. new text beginREVISOR'S INSTRUCTION.
new text end

new text begin In the next and future editions of Minnesota Statutes, the revisor of statutes shall
renumber Minnesota Statutes, section 422A.26, as Minnesota Statutes, section 353.855.
The revisor of statutes shall make conforming changes in Minnesota Statutes and
Minnesota Rules consistent with the renumbering.
new text end

Sec. 65. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, sections 13.63, subdivision 1; 69.011, subdivision 2a;
356.43; 422A.01, subdivisions 1, 2, 3, 4, 4a, 5, 6, 7, 8, 9, 10, 11, 12, 13, 13a, 17, and
18; 422A.02; 422A.03; 422A.04; 422A.05, subdivisions 1, 2a, 2b, 2c, 2d, 2e, 2f, 5,
6, and 8; 422A.06; 422A.08, subdivisions 1, 5, and 5a; 422A.09; 422A.10; 422A.101,
subdivisions 1, 1a, 2, and 2a; 422A.11; 422A.12; 422A.13; 422A.14, subdivision 1;
422A.15; 422A.151; 422A.155; 422A.156; 422A.16, subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 9,
and 10; 422A.17; 422A.18, subdivisions 1, 2, 3, 4, 5, and 7; 422A.19; 422A.20; 422A.21;
422A.22, subdivisions 1, 3, 4, and 6; 422A.23, subdivisions 1, 2, 5, 6, 7, 8, 9, 10, 11, and
12; 422A.231; 422A.24; and 422A.25,
new text end new text begin are repealed.
new text end

Sec. 66. new text beginEFFECTIVE DATE.
new text end

new text begin (a) Section 35 is effective July 1, 2009.
new text end

new text begin (b) Sections 1 to 34 and 36 to 65 are effective July 1, 2010.
new text end