Engrossments
Introduction		Posted on 10/12/2017

A bill for an act
relating to labor standards; making changes to Minnesota statewide and major
local public employee retirement plans; increasing contribution rates; adjusting
benefits and contributions; requiring a study on postretirement adjustments;
modifying executive director credentials; modifying annual benefit limitations for
federal tax code compliance; authorizing use of IRS correction procedures;
modifying actuarial assumptions; authorizing the transfer of assets and members
from the voluntary statewide volunteer firefighter retirement plan to a volunteer
firefighter relief association; adopting recommendations of the Volunteer Firefighter
Relief Association Working Group; making changes to volunteer firefighter relief
pensions; establishing a fire state aid work group; modifying various Department
of Human Services and Department of Corrections employment classifications
eligible for correctional retirement coverage; modifying public safety officer death
benefits; authorizing certain service credit purchases, transfers, and elections;
increasing maximum employer contribution to a supplemental laborers pension
fund; authorizing certain additional sources of retirement plan funding; ratifying
certain collective bargaining agreements; providing uniformity for employment
mandates on private employers; making technical and conforming changes;
providing for wage theft prevention; appropriating money; amending Minnesota
Statutes 2016, sections 3A.02, subdivision 4; 3A.03, subdivisions 2, 3; 16A.14,
subdivision 2a; 181.03, subdivision 1; 352.01, subdivisions 2a, 13a; 352.017,
subdivision 2; 352.03, subdivisions 5, 6; 352.04, subdivisions 2, 3, 8, 9; 352.113,
subdivisions 2, 4, 14; 352.116, subdivision 1a; 352.22, subdivisions 2, 3, by adding
subdivisions; 352.23; 352.27; 352.91, subdivisions 3f, 3g, by adding a subdivision;
352.92, subdivisions 1, 2, by adding a subdivision; 352.955, subdivision 3;
352B.013, subdivision 2; 352B.02, subdivisions 1a, 1c; 352B.08, by adding a
subdivision; 352B.085; 352B.086; 352B.11, subdivision 4; 352D.02, subdivisions
1, 3; 352D.04, subdivision 2; 352D.05, subdivision 4; 352D.06, subdivision 1;
352D.085, subdivision 1; 352D.11, subdivision 2; 352D.12; 352F.04, subdivisions
1, 2, by adding a subdivision; 353.01, subdivisions 2b, 10, 16, 43, 47; 353.012;
353.0162; 353.03, subdivision 3; 353.27, subdivisions 3c, 7a, 12, 12a, 12b; 353.28,
subdivision 5; 353.29, subdivisions 4, 7; 353.30, subdivision 3c; 353.32,
subdivisions 1, 4; 353.34, subdivision 2; 353.35, subdivision 1; 353.37, subdivision
1; 353.64, subdivision 10; 353.65, subdivisions 2, 3, by adding a subdivision;
353F.02, subdivision 5a; 353F.025, subdivision 2; 353F.04, subdivision 2; 353F.05;
353F.057; 353F.06; 353F.07; 353G.01, subdivision 9, by adding a subdivision;
353G.02, subdivision 6; 353G.03, subdivision 3; 353G.08, subdivision 3; 353G.11,
subdivision 1; 354.05, subdivision 2, by adding a subdivision; 354.06, subdivisions
2, 2a; 354.095; 354.436, subdivision 3; 354.44, subdivisions 3, 9; 354.45, by adding
a subdivision; 354.46, subdivision 6; 354.48, subdivision 1; 354.50, subdivision
2; 354.51, subdivision 5; 354.512; 354.52, subdivisions 4, 4d; 354.53, subdivision
5; 354.55, subdivision 11; 354.66, subdivision 2; 354.72, subdivision 1; 354A.011,
subdivisions 3a, 29; 354A.093, subdivisions 4, 6; 354A.095; 354A.096; 354A.12,
subdivisions 1, 1a, 2a, 3a, 3c, 7; 354A.29, subdivision 7; 354A.31, subdivisions
3, 7; 354A.34; 354A.35, subdivision 2; 354A.37, subdivisions 2, 3; 354A.38;
356.195, subdivision 2; 356.215, subdivisions 8, 9, 11; 356.24, subdivision 1;
356.30, subdivision 1; 356.32, subdivision 2; 356.415, subdivisions 1, 1a, 1b, 1c,
1d, 1e, 1f, by adding a subdivision; 356.44; 356.47, subdivisions 1, 3; 356.50,
subdivision 2; 356.551, subdivision 2; 356.635, subdivision 10, by adding
subdivisions; 356.96, subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13; 356A.06,
subdivision 7; 423A.02, subdivisions 3, 5; 424A.001, subdivisions 2, 3, 10, by
adding a subdivision; 424A.002, subdivision 1; 424A.01, subdivisions 1, 5, 6, by
adding subdivisions; 424A.015, subdivision 1, by adding a subdivision; 424A.016,
subdivision 2; 424A.02, subdivisions 1, 3, 3a, 7; 424A.04, subdivision 1; 424A.07;
424A.091, subdivision 3; 424A.094, subdivision 3; 424A.10, subdivision 1;
424B.20, subdivision 4; 490.121, subdivisions 4, 25, 26; 490.1211; 490.124,
subdivision 12; proposing coding for new law in Minnesota Statutes, chapters 181;
353F; 353G; 356; 424A; repealing Minnesota Statutes 2016, sections 3A.12;
352.04, subdivision 11; 352.045; 352.72; 352B.30; 353.0161; 353.27, subdivision
3b; 353.34, subdivision 6; 353.71, subdivision 1; 354.42, subdivisions 4a, 4b, 4c,
4d; 354.60; 354A.12, subdivision 2c; 354A.29, subdivisions 8, 9; 354A.39; 356.611,
subdivisions 3, 3a, 4, 5; 356.96, subdivisions 14, 15; 424A.02, subdivision 13.

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

ARTICLE 1

MINNESOTA STATE RETIREMENT SYSTEM BENEFIT AND CONTRIBUTION
CHANGES

Section 1.

Minnesota Statutes 2016, section 3A.02, subdivision 4, is amended to read:

Subd. 4.

Deferred annuities augmentation.

deleted text begin (a)deleted text end The deferred retirement allowance of
any former legislator must be new text begin computed as provided in subdivision 1 on the basis of allowable
service and new text end augmented deleted text begin as provided herein.(b) The required reserves applicable to the deferred
retirement allowance, determined as of the date the benefit begins to accrue using an
appropriate mortality table and an interest assumption of six percent, must be augmenteddeleted text end
new text begin by interest compounded annually new text end from the first of the month following the termination of
active service, or July 1, 1973, whichever is later, to the deleted text begin first day of the month in which the
allowance begins to accruedeleted text end new text begin effective date of retirementnew text end , at the following deleted text begin annually
compoundeddeleted text end rate or rates:

(1) five percent until January 1, 1981;

(2) three percent from January 1, 1981, or from the first day of the month following the
termination of active service, whichever is later, until January 1 of the year in which the
former legislator attains age 55 or until January 1, 2012, whichever is earlier;

(3) five percent from the period end date under clause (2) until the effective date of
retirement or until January 1, 2012, whichever is earlier; deleted text begin and
deleted text end

(4) two percent deleted text begin after December 31, 2011.deleted text end new text begin from January 1, 2012, until December 31,
2017; and
new text end

new text begin (5) after December 31, 2017, the deferred annuity must not be augmented.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 352.116, subdivision 1a, is amended to read:

Subd. 1a.

Actuarial reduction for early retirement.

This subdivision applies to a
person who has become at least 55 years old and first became a covered employee after
June 30, 1989, and to any other covered employee who has become at least 55 years old
and whose annuity is higher when calculated under section 352.115, subdivision 3, paragraph
(b), in conjunction with this subdivision than when calculated under section 352.115,
subdivision 3, paragraph (a), in conjunction with subdivision 1. A covered employee who
retires before the normal retirement age shall be paid the normal retirement annuity provided
in section 352.115, subdivisions 2 and 3, paragraph (b), reduced deleted text begin so thatdeleted text end new text begin as described in
clause (1) or (2), as applicable.
new text end

new text begin (1) For covered employees who retire on or after July 1, 2018, new text end 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 new text begin until normal retirement age new text end and the annuity amount were
augmented at deleted text begin andeleted text end new text begin the applicable new text end annual rate deleted text begin of three percentdeleted text end new text begin ,new text end compounded annuallynew text begin ,new text end from
the day the annuity begins to accrue until the normal retirement agenew text begin . The applicable annual
rate is the rate in effect on the employee's effective date of retirement and shall be considered
as fixed for the employee for the period until the employee reaches normal retirement age.
The applicable annual rates are the following:
new text end

new text begin (i) until June 30, 2018, three percent if the employee became an employee before July
1, 2006, and 2.5 percent if the employee became an employee after June 30, 2006;
new text end

new text begin (ii) a rate that changes each month, beginning July 1, 2018, through June 30, 2023, which
is determined by reducing the rate in item (i) to zero in equal monthly increments over the
five-year period; and
new text end

new text begin (iii) after June 30, 2023, zero percent.
new text end

new text begin After June 30, 2023, actuarial equivalent, for the purpose of determining the reduced annuity
commencing before normal retirement age under this clause, shall not take into account any
augmentation.
new text end

new text begin (2) For covered employees who retire before July 1, 2018, 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 until normal retirement age and the annuity amount were
augmented at an annual rate of three percent, compounded annually, from the day the annuity
begins to accrue until normal retirement agenew text end if the employee became an employee before
July 1, 2006, and at an annual rate of 2.5 percentnew text begin ,new text end compounded annuallynew text begin ,new text end from the day the
annuity begins to accrue until deleted text begin thedeleted text end normal retirement age if the employee deleted text begin initially becomesdeleted text end
new text begin became new text end an employee after June 30, 2006.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 352.22, subdivision 2, is amended to read:

Subd. 2.

Amount of refund.

Except as provided in subdivision 3, the refund payable
to a person who ceased to be a state employee by reason of a termination of state service is
an amount equal to employee accumulated contributions plus interest new text begin until the date on which
the refund is paid, new text end at the deleted text begin rate ofdeleted text end new text begin following rates for the applicable period:
new text end

new text begin (a) new text end six percent per year compounded daily from the date that the contribution was made
until June 30, 2011deleted text begin , or until the date on which the refund is paid, whichever is earlier, and
at the rate ofdeleted text end new text begin ;
new text end

new text begin (b)new text end four percent per year compounded daily from the date that the contribution was made
or deleted text begin fromdeleted text end July 1, 2011, whichever is laterdeleted text begin , until the date on which the refund is paid.deleted text end new text begin until
June 30, 2017; and
new text end

new text begin (c) three percent per year compounded daily from the date that the contribution was
made or July 1, 2017, whichever is later.
new text end

Included with the refund is any interest paid as part of repayment of a past refund, plus
interest thereon from the date of repayment.

Sec. 4.

Minnesota Statutes 2016, section 352.22, is amended by adding a subdivision to
read:

new text begin Subd. 2b. new text end

new text begin Refund repayment. new text end

new text begin Any person who has received a refund from the state
employees retirement plan, and who is a member of any of the retirement plans specified
in section 356.311, paragraph (b), may repay the refund with interest to the state employees
retirement plan. If a refund is repaid to the plan and more than one refund has been received
from the plan, all refunds must be repaid. Repayment must be made as provided in section
352.23, and under terms and conditions consistent with that section as agreed upon with
the director.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 352.22, subdivision 3, is amended to read:

Subd. 3.

Deferred annuity.

(a) An employee who has at least three years of allowable
service if employed before July 1, 2010, or who has at least five years of allowable service
if employed after June 30, 2010, when termination occurs may elect to leave the accumulated
contributions in the fund and thereby be entitled to a deferred retirement annuity. The annuity
must be computed under the law in effect when state service terminated, on the basis of the
allowable service credited to the person before the termination of service.

(b) An employee on layoff or on leave of absence without pay, except a leave of absence
for health reasons, and who does not return to state service must have an annuity, deferred
annuity, or other benefit to which the employee may become entitled computed under the
law in effect on the employee's last working day.

(c) No application for a deferred annuity may be made more than 60 days before the
time the former employee reaches the required age for entitlement to the payment of the
annuity. The deferred annuity begins to accrue no earlier than 60 days before the date the
application is filed in the office of the system, but not (1) before the date on which the
employee reaches the required age for entitlement to the annuity nor (2) before the day
following the termination of state service in a position which is not covered by the retirement
system.

(d) Application for the accumulated contributions left on deposit with the fund may be
made at any time following the date of the termination of service.

(e) Deferred annuities must be augmented as provided in deleted text begin section 352.72, subdivision 2deleted text end new text begin
subdivision 3anew text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 352.22, is amended by adding a subdivision to
read:

new text begin Subd. 3a. new text end

new text begin Computation of deferred annuity. new text end

new text begin (a) The deferred annuity, if any, accruing
under subdivision 3, on the basis of allowable service before termination of state service
and augmented by interest compounded annually from the first day of the month following
the month in which the employee ceased to be a state employee, or July 1, 1971, whichever
is later, to the effective date of retirement.
new text end

new text begin (b) For a person who became a state employee before July 1, 2006, the annuity must be
augmented at the following rate or rates:
new text end

new text begin (1) five percent until January 1, 1981;
new text end

new text begin (2) three percent thereafter until January 1 of the year following the year in which the
former employee attains age 55 or until January 1, 2012, whichever is earlier;
new text end

new text begin (3) five percent from the January 1 next following the attainment of age 55 until
December 31, 2011;
new text end

new text begin (4) two percent from January 1, 2012 , until December 31, 2017; and
new text end

new text begin (5) after December 31, 2017, the deferred annuity must not be augmented.
new text end

new text begin (c) For a person who became a state employee after June 30, 2006, the annuity must be
augmented at the following rate or rates:
new text end

new text begin (1) 2.5 percent until December 31, 2011;
new text end

new text begin (2) two percent from January 1, 2012, until December 31, 2017; and
new text end

new text begin (3) after December 31, 2017, the deferred annuity must not be augmented.
new text end

new text begin (d) The retirement annuity or disability benefit of, or the survivor benefit payable on
behalf of, a former state employee who terminated service before July 1, 1997, which is not
first payable until after June 30, 1997, must be increased on an actuarial equivalent basis
to reflect the change in the postretirement interest rate actuarial assumption under section
356.215, subdivision 8, from five percent to six percent under a calculation procedure and
the tables adopted by the board and approved by the actuary retained under section 356.214.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 7.

Minnesota Statutes 2016, section 352B.08, is amended by adding a subdivision to
read:

new text begin Subd. 2b. new text end

new text begin Computation of deferred annuity. new text end

new text begin (a) Deferred annuities must be computed
according to this chapter on the basis of allowable service before termination of service and
augmented by interest compounded annually from the first day of the month following the
month in which the member terminated service, or July 1, 1971, whichever is later, to the
effective date of retirement.
new text end

new text begin (b) For a person who became an employee before July 1, 2006, the annuity must be
augmented at the following rate or rates:
new text end

new text begin (1) five percent until January 1, 1981;
new text end

new text begin (2) three percent from January 1, 1981, until December 31, 2011;
new text end

new text begin (3) two percent from January 1, 2012, until December 31, 2017; and
new text end

new text begin (4) after December 31, 2017, the deferred annuity must not be augmented.
new text end

new text begin (c) For a person who became an employee after June 30, 2006, the annuity must be
augmented as follows:
new text end

new text begin (1) 2.5 percent until December 31, 2011;
new text end

new text begin (2) two percent from January 1, 2012, until December 31, 2017; and
new text end

new text begin (3) after December 31, 2017, the deferred annuity must not be augmented.
new text end

new text begin (d) The mortality table and interest assumption used to compute the annuity must be
those in effect when the member files application for annuity.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 8.

Minnesota Statutes 2016, section 352D.085, subdivision 1, is amended to read:

Subdivision 1.

Combined service.

Except as provided in section 356.30, 356.302, or
356.303, service under the unclassified program for which the employee has been credited
with employee shares may be used for the limited purpose of qualifying for benefits under
sections 352.115, deleted text begin 352.72, subdivision 1,deleted text end 352.113, 354.44, 354.45, 354.48, and deleted text begin 354.60deleted text end new text begin
356.311new text end . The service also may not be used to qualify for a disability benefit under section
352.113 or 354.48 if a participant was under the unclassified program at the time of the
disability. Also, the years of service and salary paid while the participant was in the
unclassified program may not be used in determining the amount of benefits.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 490.121, subdivision 25, is amended to read:

Subd. 25.

Tier I.

"Tier I" is the benefit program of the retirement plan with a membership
specified by section 490.1221, paragraph (b), and governed by sections 356.415, deleted text begin subdivisions
1 anddeleted text end new text begin subdivision new text end 1f; and 490.121 to 490.133, except as modified in sections 490.121,
subdivision 21f, paragraph (b); 490.1222; 490.123, subdivision 1a, paragraph (b); and
490.124, subdivision 1, paragraphs (c) and (d).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 10.

Minnesota Statutes 2016, section 490.121, subdivision 26, is amended to read:

Subd. 26.

Tier II.

"Tier II" is the benefit program of the retirement plan with a
membership specified by section 490.1221, paragraph (c), and governed by sections 356.415,
deleted text begin subdivisions 1 anddeleted text end new text begin subdivision new text end 1f; 490.121 to 490.133, as modified in section 490.121,
subdivision 21f, paragraph (b); 490.1222; 490.123, subdivision 1a, paragraph (b); and
490.124, subdivision 1, paragraphs (c) and (d).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 11. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, sections 3A.12; 352.045; 352.72; and 352B.30, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

ARTICLE 2

PUBLIC EMPLOYEES RETIREMENT ASSOCIATION CHANGES

Section 1. new text begin PERA BOARD OF TRUSTEES; REFORM PROPOSAL REQUIREMENT.
new text end

new text begin The board of trustees of the Public Employees Retirement Association shall present to
the Legislative Commission on Pensions and Retirement, no later than January 15, 2018, a
package of benefit and sustainability reforms for the general employees retirement plan
consisting of reforms that are similar to the changes made to the other statewide retirement
plans during the 2017 legislative session and any other related reforms that improve the
projected funded ratio of the plan. The package of reforms must be accompanied by the
opinion of the plan's approved actuary under Minnesota Statutes, section 356.215, subdivision
1, paragraph (c), that implementation of the reforms is projected to result in the general
employees retirement plan attaining a ratio of market value of assets to actuarial accrued
liabilities equal to or greater than 90 percent by the end of the amortization period under
Minnesota Statutes, section 356.215, subdivision 11, in effect as of July 1, 2017. For purposes
of determining the initial funding ratio, the beginning asset value as of July 1, 2017, shall
be the market value of assets expected to occur if the assumed investment return for fiscal
year 2017 is met. Subsequent funding ratios should be based on the actuarial accrued liability
determined as of July 1, 2017, and subsequent projected assets and liabilities based on
approved 2017 valuation assumptions. The package of reforms shall be presented for
consideration by the Legislative Commission on Pensions and Retirement and passage by
the legislature during the 2018 legislative session.
new text end

Sec. 2. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, sections 353.27, subdivision 3b; and 353.71, subdivision 1, new text end new text begin
are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

ARTICLE 3

TEACHERS RETIREMENT ASSOCIATION

Section 1.

Minnesota Statutes 2016, section 354.436, subdivision 3, is amended to read:

Subd. 3.

Aid expiration.

The aid amounts specified in this section terminate and this
section expires on the October 1 next following deleted text begin the later of the following dates: (1) whendeleted text end
new text begin the date on which new text end the current assets of the Teachers Retirement Association fund equal or
exceed the actuarial accrued liabilities of the fund as determined in the most recent actuarial
valuation report for the Teachers Retirement Association fund by the actuary retained under
section 356.214deleted text begin ; or (2) when the member and employer contribution rates are first determined
to be eligible for a reduction under section 354.42, subdivisions 4a, 4b, 4c, and 4ddeleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, sections 354.42, subdivisions 4a, 4b, 4c, and 4d; and 354.60, new text end new text begin
are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

ARTICLE 4

ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION BENEFIT AND
CONTRIBUTION CHANGES

Section 1.

Minnesota Statutes 2016, section 354A.011, subdivision 3a, is amended to read:

Subd. 3a.

Actuarial equivalent.

"Actuarial equivalent" means the condition of one
annuity or benefit having an equal actuarial present value as another annuity or benefit,
determined as of a given date with each actuarial present value based on the appropriate
mortality table adopted by the appropriate board of trustees based on the experience of that
retirement fund association as recommended by the actuary retained under section 356.214,
and approved under section 356.215, subdivision 18, and using the applicable deleted text begin preretirement
or postretirement interest ratedeleted text end new text begin investment return new text end assumption specified in section 356.215,
subdivision 8.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 354A.29, subdivision 7, is amended to read:

Subd. 7.

deleted text begin Eligibility for payment ofdeleted text end Postretirement adjustments.

deleted text begin (a) Annually, after
June 30, the board of trustees of the St. Paul Teachers Retirement Fund Association must
determine the amount of any postretirement adjustment using the procedures in this
subdivision and subdivision 8 or 9, whichever is applicable.
deleted text end

deleted text begin (b) On January 1deleted text end new text begin (a) Except as set forth in paragraph (c)new text end , each person who has been
receiving an annuity or benefit under the articles of incorporation, the bylaws, or this chapter,
whose effective date of benefit commencement occurred on or before July 1 of the calendar
year immediately before the adjustment, is eligible to receive deleted text begin adeleted text end new text begin an annual new text end postretirement
deleted text begin increase as specified in subdivision 8 or 9.deleted text end new text begin adjustment, effective as of each January 1, as
follows:
new text end

new text begin (1) there shall be no postretirement adjustment on January 1, 2018, and January 1, 2019;
and
new text end

new text begin (2) the postretirement adjustment shall be one percent on January 1, 2020, and each
January 1 thereafter.
new text end

new text begin (b) The amount determined under paragraph (a), clause (2), is the full postretirement
adjustment to be applied as a permanent increase to the regular payment of each eligible
member on January 1 of the next calendar year. For any eligible member whose effective
date of benefit commencement occurred after January 1 of the calendar year immediately
before the postretirement adjustment is applied, the amount determined under paragraph
(a), clause (2), must be reduced by 50 percent.
new text end

new text begin (c) Each person who retires on or after January 1, 2023, is entitled to an annual
postretirement adjustment, effective as of each January 1, beginning with the year following
the year in which the member attains normal retirement age.
new text end

new text begin (d) Paragraph (c) does not apply to members who retire under section 354A.31,
subdivision 6, paragraph (b).
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2016, section 354A.31, subdivision 7, is amended to read:

Subd. 7.

Reduction for early retirement.

(a) This subdivision applies to a person who
has become at least 55 years old and first becomes a coordinated member after June 30,
1989, and to any other coordinated member who has become at least 55 years old and whose
annuity is higher when calculated using the retirement annuity formula percentage in
subdivision 4, paragraph (d), or subdivision 4a, paragraph (d), as applicable, in conjunction
with this subdivision than when calculated under subdivision 4, paragraph (c), or subdivision
4a, paragraph (c), in conjunction with subdivision 6.new text begin An employee who retires under the
formula annuity before the normal retirement age shall be paid the normal annuity reduced
as described in paragraph (b) if the person retires on or after July 1, 2018, or in paragraph
(c) if the person retires before July 1, 2018, as applicable.
new text end

(b) A coordinated member who retires before the normal retirement age new text begin and on or after
July 1, 2018, new text end is entitled to receive a retirement annuity calculated using the retirement
annuity formula percentage in subdivision 4, paragraph (d), or subdivision 4a, paragraph
(d), whichever applies, new text begin reduced as described in clause (1) or (2), as applicable.
new text end

new text begin (1) If the member retires when the member is younger than age 62 or with fewer than
30 years of service, the annuity must be reduced by an early reduction factor for each year
that the member's age of retirement precedes normal retirement age. The early reduction
factors are four percent per year for ages 55 through 59 and seven percent per year for ages
60 through normal retirement age. The resulting annuity must be further adjusted to take
into account augmentation as if the employee had deferred receipt of the annuity until normal
retirement age and the annuity were augmented at the applicable annual rate, compounded
annually, from the day the annuity begins to accrue until normal retirement age. The
applicable annual rate is the rate in effect on the employee's effective date of retirement and
shall be considered as fixed for the employee. The applicable annual rates are the following:
new text end

new text begin (i) until June 30, 2018, 2.5 percent;
new text end

new text begin (iii) after June 30, 2023, zero percent.
new text end

new text begin After June 30, 2023, the reduced annuity commencing before normal retirement age
under this clause shall not take into account any augmentation.
new text end

new text begin (2) If the member retires when the member is at least age 62 or older and has at least 30
years of service, the member is entitled to receive a retirement annuity calculated using the
retirement annuity formula percentage in subdivision 4, paragraph (d), or subdivision 4a,
paragraph (c), whichever applies, multiplied by the applicable early retirement factor
specified for members "Age 62 or older with 30 years of service" in the table in paragraph
(c).
new text end

new text begin (c) A coordinated member who retires before the normal retirement age and before July
1, 2018, is entitled to receive a retirement annuity calculated using the retirement annuity
formula percentage in subdivision 4, paragraph (d), or subdivision 4a, paragraph (d),
whichever applies, new text end multiplied by the applicable early retirement factor specified below:

	Under age 62	Age 62 or older
	or less than 30 years of service	with 30 years of service

Normal retirement age:	65	66	65	66
Age at retirement
55	0.5376	0.4592
56	0.5745	0.4992
57	0.6092	0.5370
58	0.6419	0.5726
59	0.6726	0.6062
60	0.7354	0.6726
61	0.7947	0.7354
62	0.8507	0.7947	0.8831	0.8389
63	0.9035	0.8507	0.9246	0.8831
64	0.9533	0.9035	0.9635	0.9246
65	1.0000	0.9533	1.0000	0.9635
66		1.0000		1.0000

For normal retirement ages between ages 65 and 66, the early retirement factors must
be determined by linear interpolation between the early retirement factors applicable for
normal retirement ages 65 and 66.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 354A.37, subdivision 2, is amended to read:

Subd. 2.

Eligibility for deferred retirement annuity.

(a) Any coordinated member
who ceases to render teaching services for the school district in which the teachers retirement
fund association is located, with sufficient allowable service credit to meet the minimum
service requirements specified in section 354A.31, subdivision 1, shall be entitled to a
deferred retirement annuity in lieu of a refund under subdivision 1.

new text begin (b)new text end The deferred retirement annuity must be computed under section 354A.31 and shall
be augmented deleted text begin as provided in this subdivisiondeleted text end new text begin by the applicable interest rate compounded
annually from the first day of the month following the month during which the member
ceased to render teaching service to the effective date of retirement. There is no augmentation
if this period is less than three monthsnew text end .

new text begin (c)new text end The deferred annuity commences upon application after the person on deferred status
attains at least the minimum age specified in section 354A.31, subdivision 1.

deleted text begin (b) The monthly annuity amount that had accrued when the member ceased to render
teaching service must be augmented from the first day of the month following the month
during which the member ceased to render teaching service to the effective date of retirement.
There is no augmentation if this period is less than three months. The rate of augmentation
is
deleted text end

new text begin (d) For a person who became a covered employee before July 1, 2006, the annuity must
be augmented as follows:
new text end

new text begin (1) new text end three percent compounded annually until January 1 of the year following the year
in which the former member attains age 55deleted text begin ,deleted text end new text begin or until June 30, 2012, whichever is earlier;
new text end

new text begin (2) new text end five percent deleted text begin compounded annually after that date to July 1deleted text end new text begin from the January 1, next
following the attainment of age 55 or until June 30new text end , 2012deleted text begin , anddeleted text end new text begin ;
new text end

new text begin (3) new text end two percent deleted text begin compounded annually after that date to the effective date of retirement
if the employee became an employee before July 1, 2006, and atdeleted text end new text begin from July 1, 2012, until
June 30, 2018; and
new text end

new text begin (4) after June 30, 2018, the deferred annuity must not be augmented.
new text end

new text begin (e) For a person who became a covered employee after June 30, 2006, the annuity must
be augmented as follows:
new text end

new text begin (1) new text end 2.5 percent deleted text begin compounded annually to July 1, 2012, anddeleted text end new text begin until June 30, 2012;
new text end

new text begin (2) new text end two percent deleted text begin compounded annually after that date to the effective date of retirement
if the employee became an employee after June 30, 2006deleted text end new text begin from July 1, 2012, until June 30,
2018; and
new text end

deleted text begin . If a person has more than one period of uninterrupted service, a separate average salary
determined under section 354A.31 must be used for each period, and the monthly annuity
amount related to each period must be augmented as provided in this subdivision. The sum
of the augmented monthly annuity amounts determines the total deferred annuity payable.
If a person repays a refund, the service restored by the repayment must be considered as
continuous with the next period of service for which the person has credit with the fund. If
a person does not render teaching services in any one fiscal year or more consecutive fiscal
years and then resumes teaching service, the formula percentages used from the date of
resumption of teaching service are those applicable to new members. The mortality table
and interest assumption used to compute the annuity are the table established by the fund
to compute other annuities, and the interest assumption under section 356.215 in effect
when the member retires. A period of uninterrupted service for the purpose of this subdivision
means a period of covered teaching service during which the member has not been separated
from active service for more than one fiscal yeardeleted text end .

new text begin (3) after June 30, 2018, the deferred annuity must not be augmented.
new text end

deleted text begin (c)deleted text end new text begin (f) new text end The augmentation provided by this subdivision applies to the benefit provided in
section 354A.35, subdivision 2.

new text begin (g)new text end The augmentation provided by this subdivision does not apply to any period in which
a person is on an approved leave of absence from an employer unit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 354A.37, subdivision 3, is amended to read:

Subd. 3.

Computation of refund amount.

A former coordinated member who qualifies
for a refund under subdivision 1 is entitled to receive a refund equal to the amount of the
former coordinated member's accumulated employee contributions with interest at the deleted text begin rate
ofdeleted text end new text begin following rates for the applicable period:
new text end

new text begin (a) new text end Six percent per annum compounded annually to July 1, 2011deleted text begin , if the person is a former
member of the St. Paul Teachers Retirement Fund Association, anddeleted text end new text begin ;
new text end

new text begin (b) new text end four percent per annum compounded annually new text begin to July 1, 2017; and
new text end

new text begin (c) three percent per annum compounded annually new text end thereafter.

Sec. 6. new text begin REPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2016, section 354A.29, subdivisions 8 and 9, new text end new text begin are repealed.
new text end

new text begin (b) new text end new text begin Minnesota Statutes 2016, section 354A.39, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Paragraph (a) is effective the day following final enactment.
Paragraph (b) is effective July 1, 2017.
new text end

ARTICLE 5

POSTRETIREMENT ADJUSTMENTS FOR STATEWIDE PLANS
AND GENERAL PROVISIONS

Section 1.

Minnesota Statutes 2016, section 356.215, subdivision 8, is amended to read:

Subd. 8.

deleted text begin Interest and salarydeleted text end new text begin Actuarial new text end assumptions.

(a) The actuarial valuation must
use the applicable following deleted text begin interestdeleted text end new text begin investment return new text end assumption:

(1) select and ultimate deleted text begin interest ratedeleted text end new text begin investment returnnew text end assumption

plan	ultimate deleted text begin interest ratedeleted text end new text begin investment return new text end assumption
teachers retirement plan	8.5%

The select preretirement interest rate assumption for the period through June 30, 2017,
is eight percent.

(2) single rate deleted text begin interest ratedeleted text end new text begin investment returnnew text end assumption

plan	deleted text begin interest ratedeleted text end new text begin investment return new text end assumption
general state employees retirement plan	deleted text begin 8deleted text end new text begin 7.5new text end %
correctional state employees retirement plan	deleted text begin 8 deleted text end new text begin 7.5 new text end
State Patrol retirement plan	deleted text begin 8 deleted text end new text begin 7.5 new text end
legislators retirement plan, and for the constitutional officers calculation of total plan liabilities	0
judges retirement plan	deleted text begin 8 deleted text end new text begin 7.5 new text end
general public employees retirement plan	deleted text begin 8 deleted text end new text begin 7.5 new text end
public employees police and fire retirement plan	deleted text begin 8 deleted text end new text begin 7.5 new text end
local government correctional service retirement plan	deleted text begin 8 deleted text end new text begin 7.5 new text end
St. Paul teachers retirement plan	deleted text begin 8 deleted text end new text begin 7.5 new text end
Bloomington Fire Department Relief Association	6
local monthly benefit volunteer firefighter relief associations	5
monthly benefit retirement plans in the statewide volunteer firefighter retirement plan	6

(b)deleted text begin (1) If funding stability has been attained,deleted text end The new text begin actuarial new text end valuation new text begin for each of the
covered retirement plans listed in section 356.415, subdivision 2, new text end must deleted text begin use adeleted text end new text begin take into account
the new text end postretirement adjustment rate deleted text begin actuarial assumption equal to the postretirement adjustment
ratedeleted text end new text begin or rates applicable to the plan as new text end specified in section deleted text begin 354A.27, subdivision 7;deleted text end 354A.29,
subdivision deleted text begin 9deleted text end new text begin 7new text end ; or 356.415deleted text begin , subdivision 1deleted text end , whichever applies.

deleted text begin (2) If funding stability has not been attained, the valuation must use a select postretirement
adjustment rate actuarial assumption equal to the postretirement adjustment rate specified
in section 354A.27, subdivision 6a; 354A.29, subdivision 8; or 356.415, subdivision 1a,
1b, 1c, 1d, 1e, or 1f, whichever applies, for a period ending when the approved actuary
estimates that the plan will attain the defined funding stability measure, and thereafter an
ultimate postretirement adjustment rate actuarial assumption equal to the postretirement
adjustment rate under section 354A.27, subdivision 7; 354A.29, subdivision 9; or 356.415,
subdivision 1, for the applicable period or periods beginning when funding stability is
projected to be attained.
deleted text end

(c) 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%
judges retirement plan		2.75
Bloomington Fire Department Relief Association		4

(2) age-related future salary increase age-related select and ultimate future salary increase
assumption or graded rate future salary increase assumption

plan	future salary increase assumption
local government correctional service retirement plan	assumption B
St. Paul teachers retirement plan	assumption A

For plans other than the St. Paul teachers
retirement plan and the local government
correctional service retirement plan, 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
ten years and the designated integer is ten for
the local government correctional service
retirement plan and 15 for the St. Paul
Teachers Retirement Fund Association. The
designated percentage rate is 0.2 percent for
the St. Paul Teachers Retirement Fund
Association.

The ultimate future salary increase assumption is:

age	A	B
16	5.9%	8.75%
17	5.9	8.75
18	5.9	8.75
19	5.9	8.75
20	5.9	8.75
21	5.9	8.5
22	5.9	8.25
23	5.85	8
24	5.8	7.75
25	5.75	7.5
26	5.7	7.25
27	5.65	7
28	5.6	6.75
29	5.55	6.5
30	5.5	6.5
31	5.45	6.25
32	5.4	6.25
33	5.35	6.25
34	5.3	6
35	5.25	6
36	5.2	5.75
37	5.15	5.75
38	5.1	5.75
39	5.05	5.5
40	5	5.5
41	4.95	5.5
42	4.9	5.25
43	4.85	5
44	4.8	5
45	4.75	4.75
46	4.7	4.75
47	4.65	4.75
48	4.6	4.75
49	4.55	4.75
50	4.5	4.75
51	4.45	4.75
52	4.4	4.75
53	4.35	4.75
54	4.3	4.75
55	4.25	4.5
56	4.2	4.5
57	4.15	4.25
58	4.1	4
59	4.05	4
60	4	4
61	4	4
62	4	4
63	4	4
64	4	4
65	4	3.75
66	4	3.75
67	4	3.75
68	4	3.75
69	4	3.75
70	4	3.75

(3) service-related ultimate future salary increase assumption

general state employees retirement plan of the Minnesota State Retirement System	assumption A
general employees retirement plan of the Public Employees Retirement Association	assumption B
Teachers Retirement Association	assumption C
public employees police and fire retirement plan	assumption D
State Patrol retirement plan	assumption E
correctional state employees retirement plan of the Minnesota State Retirement System	assumption F

service length	A	B	C	D	E	F
1	10.25%	11.78%	12%	12.75%	7.75%	5.75%
2	7.85	8.65	9	10.75	7.25	5.6
3	6.65	7.21	8	8.75	6.75	5.45
4	5.95	6.33	7.5	7.75	6.5	5.3
5	5.45	5.72	7.25	6.25	6.25	5.15
6	5.05	5.27	7	5.85	6	5
7	4.75	4.91	6.85	5.55	5.75	4.85
8	4.45	4.62	6.7	5.35	5.6	4.7
9	4.25	4.38	6.55	5.15	5.45	4.55
10	4.15	4.17	6.4	5.05	5.3	4.4
11	3.95	3.99	6.25	4.95	5.15	4.3
12	3.85	3.83	6	4.85	5	4.2
13	3.75	3.69	5.75	4.75	4.85	4.1
14	3.55	3.57	5.5	4.65	4.7	4
15	3.45	3.45	5.25	4.55	4.55	3.9
16	3.35	3.35	5	4.55	4.4	3.8
17	3.25	3.26	4.75	4.55	4.25	3.7
18	3.25	3.25	4.5	4.55	4.1	3.6
19	3.25	3.25	4.25	4.55	3.95	3.5
20	3.25	3.25	4	4.55	3.8	3.5
21	3.25	3.25	3.9	4.45	3.75	3.5
22	3.25	3.25	3.8	4.35	3.75	3.5
23	3.25	3.25	3.7	4.25	3.75	3.5
24	3.25	3.25	3.6	4.25	3.75	3.5
25	3.25	3.25	3.5	4.25	3.75	3.5
26	3.25	3.25	3.5	4.25	3.75	3.5
27	3.25	3.25	3.5	4.25	3.75	3.5
28	3.25	3.25	3.5	4.25	3.75	3.5
29	3.25	3.25	3.5	4.25	3.75	3.5
30 or more	3.25	3.25	3.5	4.25	3.75	3.5

(d) 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 of the Minnesota State Retirement System	3.5%
correctional state employees retirement plan	3.5
State Patrol retirement plan	3.5
judges retirement plan	2.75
general employees retirement plan of the Public Employees Retirement Association	3.5
public employees police and fire retirement plan	3.5
local government correctional service retirement plan	3.5
teachers retirement plan	3.75
St. Paul teachers retirement plan	4

(e) The assumptions set forth in paragraphs (c) and (d) 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 356.215, subdivision 9, is amended to read:

Subd. 9.

Other assumptions.

deleted text begin Thedeleted text end new text begin (a) Each plan's new text end actuarial valuation must use
assumptions concerning new text begin base new text end mortalitynew text begin ratesnew text end , disability, retirement, withdrawal, retirement
age, and any other relevant demographic or economic factor. These assumptions must be
set at levels consistent with those determined in the most recent quadrennial experience
study completed under subdivision 16, if required, or deleted text begin representative of the best estimate of
future experiencedeleted text end new text begin as recommended by the plan's approved actuarynew text end , if a quadrennial experience
study is not required.

new text begin (b) The actuarial valuation may use an assumption concerning future mortality
improvement. This assumption may be set at levels consistent with those determined in the
most recent mortality improvement scale published by the Society of Actuaries or as
otherwise recommended by the plan's approved actuary.
new text end

new text begin (c)new text end The actuarial valuation must contain an exhibit indicating deleted text begin anydeleted text end new text begin the new text end actuarial
assumptions used in preparing the valuation report.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, 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), but excluding the legislators retirement plan, 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 (d). For all other retirement
plans and for the legislators retirement plan, the additional annual contribution must be
calculated on a level annual dollar amount basis.

(b) For any retirement plan other than a retirement plan governed by paragraph (d), (e),
(f), (g), (h), (i), or (j), 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, 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.

(d) For the general employees retirement plan of the Public Employees Retirement
Association, the established date for full funding is June 30, deleted text begin 2031deleted text end new text begin 2047new text end .

(e) For the Teachers Retirement Association, the established date for full funding is June
30, 2037.

(f) For the correctional state employees retirement plan new text begin and the State Patrol retirement
plan new text end of the Minnesota State Retirement System, the established date for full funding is June
30, deleted text begin 2038deleted text end new text begin 2047new text end .

(g) For the judges retirement plan, the established date for full funding is June 30, deleted text begin 2038deleted text end new text begin
2047new text end .

(h) For the new text begin local government correctional service retirement plan and the new text end public employees
police and fire retirement plan, the established date for full funding is June 30, deleted text begin 2038deleted text end new text begin 2047new text end .

(i) For the St. Paul Teachers Retirement Fund Association, the established date for full
funding is June 30, deleted text begin 2042. In addition to other requirements of this chapter, the annual
actuarial valuation must 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 yeardeleted text end new text begin 2047new text end .

(j) For the general state employees retirement plan of the Minnesota State Retirement
System, the established date for full funding is June 30, deleted text begin 2040deleted text end new text begin 2047new text end .

(k) For 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 356.30, subdivision 1, is amended to read:

Subdivision 1.

Eligibility; computation of annuity.

(a) Notwithstanding any provisions
of the laws governing the new text begin covered new text end retirement plans deleted text begin enumerateddeleted text end new text begin listed new text end in subdivision 3, a
person deleted text begin who has met the qualifications of paragraph (b)deleted text end may elect to receivenew text begin , upon retirement,new text end
a retirement annuity from each deleted text begin enumerateddeleted text end new text begin covered new text end retirement plandeleted text begin in which the person has
at least one-half year of allowable service, based on the allowable service in each plandeleted text end ,
subject to the provisions of paragraph deleted text begin (c)deleted text end new text begin (b), if the person has:
new text end

new text begin (1) allowable service in any two or more of the covered plans;
new text end

new text begin (2) at least one-half year of allowable service in each covered plan, based on the allowable
service in each plan;
new text end

new text begin (3) total allowable service that equals or exceeds the longest service credit vesting
requirement of the applicable retirement plan; and
new text end

new text begin (4) not begun to receive an annuity from any covered plan or has made application for
benefits from each applicable plan and the retirement annuity effective dates of each plan
are within a one-year periodnew text end .

deleted text begin (b) A person may receive, upon retirement, a retirement annuity from each enumerated
retirement plan in which the person has at least one-half year of allowable service, and
augmentation of a deferred annuity calculated at the appropriate rate under the laws governing
each public pension plan or fund named in subdivision 3, based on the date of the person's
initial entry into public employment from the date the person terminated all public service
if:
deleted text end

deleted text begin (1) the person has allowable service in any two or more of the enumerated plans;
deleted text end

deleted text begin (2) the person has sufficient allowable service in total that equals or exceeds the applicable
service credit vesting requirement of the retirement plan with the longest applicable service
credit vesting requirement; and
deleted text end

deleted text begin (3) the person has not begun to receive an annuity from any enumerated plan or the
person has made application for benefits from each applicable plan and the effective dates
of the retirement annuity with each plan under which the person chooses to receive an
annuity are within a one-year period.
deleted text end

deleted text begin (c)deleted text end new text begin (b) If all requirements in paragraph (a) have been satisfied, new text end the retirement annuity
from each plan must be based upon the allowable service, accrual rates, and average salary
in the applicable plan except as further specified or modified in the following clauses:

(1) the laws governing annuities must be the law in effect on the date of termination
from the last period of public service under a covered retirement plan with which the person
earned a minimum of one-half year of allowable service credit during that employment;

(2) the deleted text begin "deleted text end average salarydeleted text begin " on which the annuity from each covered plan in which the
employee has credit in adeleted text end new text begin used to calculate the annuity for each new text end formula plan must be based
on the employee's highest five successive years of covered salary during the entire service
in covered plans;

(3) the accrual rates deleted text begin to be used bydeleted text end new text begin under new text end each plan must be deleted text begin thosedeleted text end new text begin the new text end percentages
prescribed by each plan's formula deleted text begin as continueddeleted text end new text begin in effect new text end for the respective years of allowable
service from one plan to the next, recognizing all previous allowable service with the other
covered plans;

(4) the allowable service in all the new text begin covered new text end plans must be combined in determining
eligibility for and the application of each plan's provisions deleted text begin indeleted text end new text begin with new text end respect to reduction in
the annuity amount for retirement prior to normal retirement age; and

(5) the annuity amount payable for any allowable service under a nonformula plan deleted text begin ofdeleted text end
new text begin that is new text end a covered plan must not be affected, but such service and covered salary must be
used in the above calculation.

new text begin (c) If a person eligible for an annuity under paragraph (a) from each covered plan, except
the Public Employees Retirement Association and the Teachers Retirement Association,
terminates all public service, the deferred annuity must be augmented from the date of
termination until the earlier of:
new text end

new text begin (1) the effective date of retirement; or
new text end

new text begin (2) December 31, 2017, for the Minnesota State Retirement System or June 30, 2018,
for the St. Paul Teachers Retirement Association.
new text end

new text begin A deferred annuity for all applicable plans, except the Public Employees Retirement
Association and the Teachers Retirement Association, must not be augmented after the
applicable dates under clause (2). The appropriate rate of augmentation is the rate in effect
on the date on which the person entered into public employment and subsequently adjusted
according to the laws governing each covered plan, as applicable. The Public Employees
Retirement Association and the Teachers Retirement Association must augment a deferred
annuity under section 353.74 or 354.55, subdivision 11, whichever applies.
new text end

(d) This section does not apply to any person whose final termination from the last public
service under a covered plan was before May 1, 1975.

(e) For the purpose of computing annuities under this sectiondeleted text begin , the accrual rates used by
any covered plan, except the public employees police and fire plan, the judges retirement
fund, and the State Patrol retirement plan, must not exceed 2.7 percent per year of service
for any year of service or fraction thereof. The formula percentage used bydeleted text end new text begin :
new text end

new text begin (1)new text end the judges retirement fund new text begin accrual rate new text end must not exceed 3.2 percent per year of service
for any year of service or fraction thereofdeleted text begin . The accrual rate used bydeleted text end new text begin ;
new text end

new text begin (2)new text end the public employees police and fire plan and the State Patrol retirement plan new text begin accrual
rate new text end must not exceed 3.0 percent per year of service for any year of service or fraction
thereofdeleted text begin . The accrual rate or rates used bydeleted text end new text begin ;
new text end

new text begin (3)new text end the legislators retirement plan new text begin accrual rate new text end must not exceed 2.5 percent, but this limit
does not apply to the adjustment provided under section 3A.02, subdivision 1, paragraph
(c)new text begin ; and
new text end

new text begin (4) any other covered plan's accrual rate must not exceed 2.7 percent per year of service
for any year of service or fraction thereofnew text end .

(f) Any period of time for which a person has credit in more than one of the covered
plans must be used only once for the purpose of determining total allowable service.

(g) If the period of duplicated service credit is more than one-half year, or the person
has credit for more than one-half year, with each of the plans, each plan must apply its
formula to a prorated service credit for the period of duplicated service based on a fraction
of the salary on which deductions were paid to that fund for the period divided by the total
salary on which deductions were paid to all plans for the period.

(h) If the period of duplicated service credit is less than one-half year, or when added
to other service credit with that plan is less than one-half year, the service credit must be
ignored and a refund of contributions made to the person in accord with that plan's refund
provisions.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

new text begin [356.311] COVERAGE BY MORE THAN ONE PLAN.
new text end

new text begin (a) Any person who has been a member of two or more of the retirement plans listed in
paragraph (b) is entitled, when qualified, to an annuity from each fund if:
new text end

new text begin (1) the person's combined service in any two or more retirement plans equals or exceeds
the vesting requirement of the fund with the longest vesting requirement; and
new text end

new text begin (2) the person has not taken a refund from any of the retirement plans.
new text end

new text begin (b) This section applies to any defined benefit plan administered by the Minnesota State
Retirement System, including the State Patrol Retirement Plan; the Public Employees
Retirement Association, including the public employees police and fire plan; the Teachers
Retirement Association; and the St. Paul Teachers Retirement Fund Association, except as
noted in paragraph (c).
new text end

new text begin (c) This section does not apply to plans providing benefits for police officers or
firefighters under sections 424A.091 to 424A.096 or the Bloomington Fire Department
Relief Association.
new text end

new text begin (d) No portion of the service upon which the retirement annuity from one retirement
plan is based shall be again used in the computation of a retirement annuity from another
plan. The annuity from each plan must be determined under the laws applicable to that plan
except that the requirement that a person meet the vesting requirement in any particular
plan shall not apply, provided the combined service in any two or more plans equals or
exceeds the vesting requirement of the plan with the longest vesting requirement.
new text end

new text begin (e) Any deferred annuity payable under this section shall be subject to augmentation
under the laws applicable to the deferred annuity.
new text end

new text begin (f) Any person to whom an annuity is not payable under this section because the person
took a refund from one of the funds shall be entitled to repay the refund in accordance with
the laws governing the refund. Upon repayment, the person is entitled to annuities under
this section, if the person would otherwise be entitled.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 356.415, subdivision 1, is amended to read:

Subdivision 1.

Annual postretirement adjustments; deleted text begin generallydeleted text end new text begin Minnesota State
Retirement System general state employees retirement plan, legislators retirement
plan, and unclassified state employees retirement programnew text end .

(a) Except as deleted text begin otherwise
provided in subdivision 1a, 1b, 1c, 1d, 1e, or 1fdeleted text end new text begin set forth in paragraph (c)new text end , new text begin recipients of a
new text end retirement annuity, disability benefit, or survivor benefit deleted text begin recipients of a covereddeleted text end new text begin from the
general state employees new text end retirement plannew text begin , the legislators retirement plan, or the unclassified
state employees retirement program new text end are entitled to deleted text begin adeleted text end new text begin an annual new text end postretirement adjustment
deleted text begin annually ondeleted text end new text begin , effective as of eachnew text end January 1, as follows:

(1) new text begin effective January 1, 2018, through December 31, 2022, new text end a postretirement increase of
deleted text begin 2.5deleted text end new text begin one new text end percent must be applied each yeardeleted text begin , effective January 1,deleted text end to the monthly annuity or
benefit of each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least 12 full months as of the June 30 of the calendar year immediately before the
adjustment; deleted text begin and
deleted text end

(2) new text begin effective January 1, 2018, through December 31, 2022, new text end for each annuitant or benefit
recipient who has been receiving an annuity or a benefit amount for at least one full month,
but less than 12 full months as of the June 30 of the calendar year immediately before the
adjustment, an annual postretirement increase of 1/12 of deleted text begin 2.5deleted text end new text begin one new text end percent for each month
that the person has been receiving an annuity or benefit must be appliednew text begin to the monthly
annuity or benefit amount of the annuitant or benefit recipient;
new text end

new text begin (3) effective January 1, 2023, and thereafter, a postretirement increase of 1.5 percent
must be applied each year to the monthly annuity or benefit of each annuitant or benefit
recipient who has been receiving an annuity or a benefit for at least 12 full months as of the
June 30 of the calendar year immediately before the adjustment; and
new text end

new text begin (4) effective January 1, 2023, and thereafter, for each annuitant or benefit recipient who
has been receiving an annuity or a benefit amount for at least one full month, but less than
12 full months as of the June 30 of the calendar year immediately before the adjustment,
an annual postretirement increase of 1/12 of 1.5 percent for each month that the person has
been receiving an annuity or benefit must be applied to the monthly annuity or benefit
amount of the annuitant or benefit recipientnew text end .

(b) An increase in annuity or benefit payments under this deleted text begin sectiondeleted text end new text begin subdivision new text end must be
made automatically unless written notice is filed by the annuitant or benefit recipient with
the executive director of the covered retirement plan requesting that the increase not be
made.

new text begin (c) Members who retire on or after January 1, 2023, under the general state employees
retirement plan, the legislators retirement plan, or the unclassified state employees retirement
program are entitled to an annual postretirement adjustment of the member's retirement
annuity, effective as of each January 1, beginning with the year following the year in which
the member attains normal retirement age, as follows:
new text end

new text begin (1) if a member has been receiving an annuity for at least 12 full months as of the June
30 of the calendar year immediately before the date of the adjustment, a postretirement
increase equal to the percentage specified in paragraph (a), clause (1) or (3), as applicable,
must be applied, effective on January 1, to the member's monthly annuity;
new text end

new text begin (2) if a member has been receiving an annuity for at least one full month, but less than
12 full months as of the June 30 of the calendar year immediately before the date of
adjustment, a postretirement increase of 1/12 of the percentage specified in clause (1) for
each month that the member has been receiving an annuity must be applied, effective on
January 1, to the member's monthly annuity; or
new text end

new text begin (3) if a member has been receiving an annuity for fewer than six months before the date
of adjustment, a postretirement increase shall not be applied until the next January 1 and
the amount of the adjustment shall be the amount determined under clause (2).
new text end

new text begin (d) Paragraph (c) does not apply to members who retire under section 352.116,
subdivision 1, paragraph (c).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 7.

Minnesota Statutes 2016, section 356.415, subdivision 1a, is amended to read:

Subd. 1a.

Annual postretirement adjustments; Minnesota State Retirement System
deleted text begin plans other than State Patroldeleted text end new text begin correctional state employees new text end retirement plan.

(a)
Retirement annuity, disability benefit, or survivor benefit recipients of the deleted text begin legislators
retirement plan, including constitutional officers as specified in chapter 3A, the general
state employees retirement plan, thedeleted text end correctional state employees retirement plandeleted text begin , and the
unclassified state employees retirement programdeleted text end are entitled to deleted text begin adeleted text end new text begin an annual new text end postretirement
adjustment deleted text begin annually ondeleted text end new text begin , effective as of eachnew text end January 1, as follows:

(1) deleted text begin for each successive January 1, if the definition of funding stability under paragraph
(b) has not been met as of the prior July 1 for or with respect to the applicable retirement
plan,deleted text end a postretirement increase of deleted text begin twodeleted text end new text begin 1.5 new text end percent must be applied each yeardeleted text begin , effective on
January 1,deleted text end to the monthly annuity or benefit of each annuitant or benefit recipient who has
been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the
calendar year immediately before the adjustment; and

(2) deleted text begin for each successive January 1, if the definition of funding stability under paragraph
(b) has not been met as of the prior July 1 for or with respect to the applicable retirement
plan,deleted text end for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, an annual postretirement increase of 1/12 of deleted text begin twodeleted text end
new text begin 1.5 new text end percent for each month that the person has been receiving an annuity or benefit must
be appliednew text begin to the monthly annuity or benefit amount of each annuitant or benefit recipientnew text end .

deleted text begin (b) Increases under this subdivision for the general state employees retirement plan or
the correctional state employees retirement plan terminate on December 31 of the calendar
year in which two prior consecutive actuarial valuations prepared by the approved actuary
under sections 356.214 and 356.215 and the standards for actuarial work promulgated by
the Legislative Commission on Pensions and Retirement indicate that the market value of
assets of the retirement plan equals or exceeds 90 percent of the actuarial accrued liability
of the retirement plan and increases under subdivision 1 recommence after that date. Increases
under this subdivision for the legislators retirement plan established under chapter 3A,
including the constitutional officers specified in that chapter, and for the unclassified state
employees retirement program, terminate on December 31 of the calendar year in which
two prior consecutive actuarial valuations prepared by the approved actuary under sections
356.214 and 356.215 and the standards for actuarial work promulgated by the Legislative
Commission on Pensions and Retirement indicate that the market value of assets of the
general state employees retirement plan equals or exceeds 90 percent of the actuarial accrued
liability of the retirement plan and increases under subdivision 1 recommence after that
date.
deleted text end

deleted text begin (c) After having met the definition of funding stability under paragraph (b), the increase
provided in paragraph (a), clauses (1) and (2), rather than an increase under subdivision 1,
for the general state employees retirement plan or the correctional state employees retirement
plan, is again to be applied in a subsequent year or years if the market value of assets of the
applicable plan equals or is less than:
deleted text end

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

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

deleted text begin (d) After having met the definition of funding stability under paragraph (b), the increase
provided in paragraph (a), clauses (1) and (2), rather than an increase under subdivision 1,
for the legislators retirement plan, including the constitutional officers, and for the
unclassified state employees retirement program, is again to be applied in a subsequent year
or years if the market value of assets of the general state employees retirement plan equals
or is less than:
deleted text end

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

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

deleted text begin (e)deleted text end new text begin (b) new text end An increase in annuity or benefit payments under this subdivision must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the applicable covered retirement plan requesting that the increase not
be made.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 8.

Minnesota Statutes 2016, section 356.415, subdivision 1b, is amended to read:

Subd. 1b.

Annual postretirement adjustments; PERA; general employees retirement
plan deleted text begin and local government correctional retirement plandeleted text end .

(a) Retirement annuity, disability
benefit, or survivor benefit recipients of the general employees retirement plan of the Public
Employees Retirement Association deleted text begin and the local government correctional service retirement
plandeleted text end are entitled to deleted text begin adeleted text end new text begin an annual new text end postretirement adjustment deleted text begin annually ondeleted text end new text begin , effective as of eachnew text end
January 1, as follows:

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

(2) deleted text begin for each successive January 1deleted text end until funding stability is restored for the applicable
retirement plan, for each annuitant or benefit recipient who has been receiving an annuity
or a benefit for at least one full month, but less than 12 full months as of the June 30 of the
calendar year immediately before the adjustment, an annual postretirement increase of 1/12
of one percent for each month the person has been receiving an annuity or benefit must be
appliednew text begin to the monthly annuity or benefit amount of each annuitant or benefit recipientnew text end ;

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

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

(b) Funding stability is restored when the market value of assets of the applicable
retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities of the
applicable plan in the two most recent consecutive actuarial valuations prepared under
section 356.215 and the standards for actuarial work by the approved actuary retained by
the Public Employees Retirement Association under section 356.214.

(c) After having met the definition of funding stability under paragraph (b), the increase
provided in paragraph (a), clauses (1) and (2), rather than an increase under deleted text begin subdivision 1,deleted text end
new text begin paragraph (a), clauses (3) and (4),new text end is again to be applied in a subsequent year or years if the
market value of assets of the applicable plan equals or is less than:

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 356.415, subdivision 1c, is amended to read:

Subd. 1c.

Annual postretirement adjustments; PERA-police and fire.

(a) Retirement
annuity, disability benefit, or survivor benefit recipients of the public employees police and
fire retirement plan are entitled to deleted text begin adeleted text end new text begin an annual new text end postretirement adjustment deleted text begin annually ondeleted text end new text begin ,
effective as of each new text end January 1, deleted text begin if the definition of funding stability under paragraph (c) has
not been met,deleted text end as follows:

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

deleted text begin (2) for each annuitant or benefit recipient whose annuity or benefit effective date is on
or before June 1, 2014, who has been receiving the annuity or benefit for at least one full
month, but less than 12 months, as of the immediate preceding June 30, an amount equal
to 1/12 of one percent for each month of annuity or benefit receipt; and
deleted text end

deleted text begin (3)deleted text end new text begin (1) new text end for each annuitant or benefit recipient deleted text begin whose annuity or benefit effective date is
after June 1, 2014,deleted text end who will have been receiving an annuity or benefit for at least 36 full
months as of the immediate preceding June 30, deleted text begin an amount equal todeleted text end new text begin a postretirement increase
of new text end one percentnew text begin must be applied each year to the monthly annuity or benefit amount of the
annuitant or benefit recipientnew text end ; or

deleted text begin (4)deleted text end new text begin (2) new text end for each annuitant or benefit recipient deleted text begin whose annuity or benefit effective date is
after June 1, 2014,deleted text end who has been receiving the annuity or benefit for at least 25 full months,
but less than 36 months as of the immediate preceding June 30, deleted text begin an amount equal todeleted text end new text begin a
postretirement increase of new text end 1/12 of one percent for each full month deleted text begin ofdeleted text end new text begin that the person has
been receiving an new text end annuity or benefit deleted text begin receiptdeleted text end during the fiscal year in which the annuity or
benefit was effectivenew text begin must be applied each year to the monthly annuity or benefit amount
of the annuitant or benefit recipientnew text end .

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

deleted text begin (1) for each annuitant or benefit recipient who has been receiving the annuity or benefit
for at least 36 full months as of the immediate preceding June 30, an amount equal to 2.5
percent; and
deleted text end

deleted text begin (2) for each annuitant or benefit recipient who has been receiving the annuity or benefit
for at least 25 full months, but less than 36 full months, as of the immediate preceding June
30, an amount equal to 1/12 of 2.5 percent for each full month of annuity or benefit receipt
during the fiscal year in which the annuity or benefit was effective.
deleted text end

deleted text begin (c) Funding stability is restored when the market value of assets of the public employees
police and fire retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities
of the applicable plan in the two most recent consecutive actuarial valuations prepared under
section 356.215 and under the standards for actuarial work of the Legislative Commission
on Pensions and Retirement by the approved actuary retained by the Public Employees
Retirement Association under section 356.214.
deleted text end

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

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 10.

Minnesota Statutes 2016, section 356.415, subdivision 1d, is amended to read:

Subd. 1d.

Teachers Retirement Association annual postretirement adjustments.

(a)
Retirement annuity, disability benefit, or survivor benefit recipients of the Teachers
Retirement Association are entitled to a postretirement adjustment annually on January 1,
as follows:

(1) for each January 1 until funding stability is restored, a postretirement increase of
two percent must be applied each year, effective on January 1, to the monthly annuity or
benefit amount of each annuitant or benefit recipient who has been receiving an annuity or
a benefit for at least 12 full months as of the June 30 of the calendar year immediately before
the adjustment;

(2) for each January 1 until funding stability is restored, for each annuitant or benefit
recipient who has been receiving an annuity or a benefit for at least one full month, but less
than 12 full months as of the June 30 of the calendar year immediately before the adjustment,
an annual postretirement increase of 1/12 of two percent for each month the person has been
receiving an annuity or benefit must be applied;

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

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

(b) Funding stability is restored when the market value of assets of the Teachers
Retirement Association equals or exceeds 90 percent of the actuarial accrued liabilities of
the Teachers Retirement Association in the two most recent prior actuarial valuations
prepared under section 356.215 and the standards for actuarial work by the approved actuary
retained by the Teachers Retirement Association under section 356.214.

(c) After having met the definition of funding stability under paragraph (b), the increase
provided in paragraph (a), clauses (1) and (2), rather than an increase under deleted text begin subdivision 1,
or the increase underdeleted text end paragraph (a), clauses (3) and (4), is again to be applied in a subsequent
year or years if the market value of assets of the plan equals or is less than:

(1) 85 percent of the actuarial accrued liabilities of the plan for two consecutive actuarial
valuations; or

(2) 80 percent of the actuarial accrued liabilities of the plan for the most recent actuarial
valuation.

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

(e) The retirement annuity payable to a person who retires before becoming eligible for
Social Security benefits and who has elected the optional payment as provided in section
354.35 must be treated as the sum of a period-certain retirement annuity and a life retirement
annuity for the purposes of any postretirement adjustment. The period-certain retirement
annuity plus the life retirement annuity must be the annuity amount payable until age 62,
65, or normal retirement age, as selected by the member at retirement, for an annuity amount
payable under section 354.35. A postretirement adjustment granted on the period-certain
retirement annuity must terminate when the period-certain retirement annuity terminates.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 11.

Minnesota Statutes 2016, section 356.415, subdivision 1e, is amended to read:

Subd. 1e.

Annual postretirement adjustments; State Patrol retirement plan.

(a)
Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol
retirement plan are entitled to deleted text begin adeleted text end new text begin an annual new text end postretirement adjustment deleted text begin annually ondeleted text end new text begin , effective
as of eachnew text end January 1 deleted text begin if the definition of funding stability under paragraph (b) has not been
metdeleted text end , as follows:

(1) a postretirement increase of one percent must be applied each yeardeleted text begin , effective on
January 1,deleted text end to the monthly annuity or benefit of each annuitant or benefit recipient who has
been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the
calendar year immediately before the adjustment; and

(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, an annual postretirement increase of 1/12 of one
percent for each month that the person has been receiving an annuity or benefit must be
appliednew text begin to the monthly annuity or benefit of each annuitant or benefit recipientnew text end .

deleted text begin (b) Increases under paragraph (a) for the State Patrol retirement plan terminate on
December 31 of the calendar year in which two prior consecutive actuarial valuations for
the plan prepared by the approved actuary under sections 356.214 and 356.215 and the
standards for actuarial work promulgated by the Legislative Commission on Pensions and
Retirement indicates that the market value of assets of the retirement plan equals or exceeds
85 percent of the actuarial accrued liability of the retirement plan. Thereafter, increases
under paragraph (a) become effective again on the December 31 of the calendar year in
which the actuarial valuation, or prior consecutive actuarial valuations for the plan prepared
by the approved actuary under sections 356.214 and 356.215 and the standards for actuarial
work promulgated by the Legislative Commission on Pensions and Retirement indicates
that the market value of the assets of the retirement plan equals or is less than 80 percent
of the actuarial accrued liability of the retirement plan for two years, or equals or is less
than 75 percent of the actuarial accrued liability of the retirement plan for one year and
increases under paragraph (c) commence after that date.
deleted text end

deleted text begin (c) Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol
retirement plan are entitled to a postretirement adjustment annually on January 1, as follows:
deleted text end

deleted text begin (1) a postretirement increase of 1.5 percent must be applied each year, effective on
January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has
been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the
calendar year immediately before the adjustment; and
deleted text end

deleted text begin (2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, an annual postretirement increase of 1/12 of 1.5
percent for each month that the person has been receiving an annuity or benefit must be
applied.
deleted text end

deleted text begin (d) Increases under paragraph (c) for the State Patrol retirement plan terminate on
December 31 of the calendar year in which two prior consecutive actuarial valuations
prepared by the approved actuary under sections 356.214 and 356.215 and the standards
for actuarial work adopted by the Legislative Commission on Pensions and Retirement
indicates that the market value of assets of the retirement plan equals or exceeds 90 percent
of the actuarial accrued liability of the retirement plan and increases under subdivision 1
recommence after that date.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 12.

Minnesota Statutes 2016, section 356.415, subdivision 1f, is amended to read:

Subd. 1f.

Annual postretirement adjustments; Minnesota State Retirement System
judges retirement plan.

deleted text begin (a) The increases provided under this subdivision are in lieu of
increases under subdivision 1 or 1a for retirement annuity, disability benefit, or survivor
benefit recipients of the judges retirement plan.
deleted text end

deleted text begin (b)deleted text end new text begin (a) new text end Retirement annuity, disability benefit, or survivor benefit recipients of the judges
retirement plan are entitled to deleted text begin adeleted text end new text begin an annual new text end postretirement adjustment deleted text begin annually ondeleted text end new text begin , effective
as of eachnew text end January 1deleted text begin ,deleted text end new text begin if the definition of funding stability under paragraph (b) has not been
met, new text end as follows:

(1) a postretirement increase of 1.75 percent must be applied each yeardeleted text begin , effective on
January 1,deleted text end to the monthly annuity or benefit of each annuitant or benefit recipient who has
been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the
calendar year immediately before the adjustment; and

(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, an annual postretirement increase of 1/12 of 1.75
percent for each month that the person has been receiving an annuity or benefit must be
appliednew text begin to the monthly annuity or benefit of each annuitant or benefit recipientnew text end .

deleted text begin (c)deleted text end new text begin (b) new text end Increases under deleted text begin this subdivisiondeleted text end new text begin paragraph (a) new text end terminate on December 31 of the
calendar year in which two prior consecutive actuarial valuations prepared by the approved
actuary under sections 356.214 and 356.215 and the standards for actuarial work promulgated
by the Legislative Commission on Pensions and Retirement indicates that the market value
of assets of the judges retirement plan equals or exceeds 70 percent of the actuarial accrued
liability of the retirement plandeleted text begin .deleted text end new text begin and new text end increases under deleted text begin subdivision 1 or 1a, whichever is
applicable,deleted text end new text begin paragraph (c) new text end begin deleted text begin on the January 1 next followingdeleted text end new text begin after new text end that date.

new text begin (c) Retirement annuity, disability benefit, or survivor benefit recipients of the judges
retirement plan are entitled to a postretirement adjustment annually, effective as of each
January 1 if the definition of funding stability under paragraph (d) has not been met, as
follows:
new text end

new text begin (1) a postretirement increase of two percent must be applied each year to the monthly
annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity
or a benefit for at least 12 full months as of the June 30 of the calendar year immediately
before the adjustment; and
new text end

new text begin (2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, an annual postretirement increase of 1/12 of two
percent for each month that the person has been receiving an annuity or benefit must be
applied to the monthly annuity or benefit amount of the annuitant or benefit recipient.
new text end

new text begin (d) Increases under paragraph (c) terminate on December 31 of the calendar year in
which two prior consecutive actuarial valuations prepared by the approved actuary under
section 356.214 and the standards for actuarial work promulgated by the Legislative
Commission on Pensions and Retirement indicate that the market value of assets of the
judges retirement plan equals or exceeds 90 percent of the actuarial accrued liability of the
retirement plan and increases under paragraph (e) begin after that date.
new text end

new text begin (e) Retirement annuity, disability benefit, or survivor benefit recipients of the judges
retirement plan are entitled to a postretirement adjustment annually, effective as of each
January 1, as follows:
new text end

new text begin (1) a postretirement increase of 2.5 percent must be applied each year to the monthly
annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity
or a benefit for at least 12 full months as of the June 30 of the calendar year immediately
before the adjustment; and
new text end

new text begin (2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, an annual postretirement increase of 1/12 of 2.5
percent for each month that the person has been receiving an annuity or benefit must be
applied to the monthly annuity or benefit amount of the annuitant or benefit recipient.
new text end

deleted text begin (d)deleted text end new text begin (f) new text end An increase in annuity or benefit payments under this subdivision must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the applicable covered retirement plan requesting that the increase not
be made.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 13.

Minnesota Statutes 2016, section 356.415, is amended by adding a subdivision
to read:

new text begin Subd. 1g. new text end

new text begin Annual postretirement adjustments; PERA local government correctional
retirement plan. new text end

new text begin (a) Retirement annuity, disability benefit, or survivor benefit recipients
of the public employees local government correctional service retirement plan are entitled
to an annual postretirement adjustment, effective as of each January 1 as follows:
new text end

new text begin (1) a postretirement increase of 1.5 percent must be applied each year to the monthly
annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity
or a benefit for at least 12 full months as of the June 30 of the calendar year immediately
before the adjustment; and
new text end

new text begin (2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, a postretirement increase of 1/12 of 1.5 percent
for each month that the person has been receiving an annuity or benefit must be applied to
the monthly annuity or benefit amount of the annuitant or benefit recipient.
new text end

new text begin (b) An increase in annuity or benefit payments under this subdivision must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the applicable covered retirement plan requesting that the increase not
be made.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 14. new text begin STUDY.
new text end

new text begin Before December 31, 2020, the Legislative Commission on Pensions and Retirement
must conduct a study of the rates of the postretirement adjustments for the covered plans
as defined in Minnesota Statutes, section 356.415, subdivision 2, and the St. Paul Teachers
Retirement Fund Association, and make recommendations regarding whether they should
be modified and whether a new methodology for determining postretirement adjustment
should be adopted. The Legislative Commission on Pensions and Retirement shall make a
determination based on the study during the 2021 legislative session.
new text end

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 6

INTEREST RATE CONFORMING CHANGES

Section 1.

Minnesota Statutes 2016, section 3A.03, subdivision 2, is amended to read:

Subd. 2.

Refund.

(a) A former member who has made contributions under subdivision
1 and who is no longer a member of the legislature is entitled to receive, upon written
application to the executive director on a form prescribed by the executive director, a refund
from the general fund of all contributions credited to the member's account with interest
computed as provided in section 352.22, subdivision 2.

(b) The refund of contributions as provided in paragraph (a) terminates all rights of a
former member of the legislature and the survivors of the former member under this chapter.

(c) If the former member of the legislature again becomes a member of the legislature
after having taken a refund as provided in paragraph (a), the member is a member of the
unclassified employees retirement program of the Minnesota State Retirement System.

(d) However, the member may reinstate the rights and credit for service previously
forfeited under this chapter if the member repays all refunds taken, plus interest at the deleted text begin rate
of 8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin applicable annual rate or
rates specified in section 356.59, subdivision 2, new text end compounded annuallynew text begin ,new text end from the date on
which the refund was taken to the date on which the refund is repaid.

new text begin (e) A member of the legislature who has received a refund from any of the retirement
plans specified in section 356.311, paragraph (b), may repay the refund to the respective
plan under such terms and conditions consistent with the law governing the retirement plan
if the law governing the plan permits the repayment of refunds. If the total amount to be
repaid, including principal and interest exceeds $2,000, repayment may be made in three
equal installments over a period of 18 months, with the interest accrued during the period
of the repayment added to the final installment.
new text end

deleted text begin (e)deleted text end new text begin (f) new text end No person may be required to apply for or to accept a refund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 352.01, subdivision 13a, is amended to read:

Subd. 13a.

Reduced salary during period of workers' compensation.

An employee
on leave of absence receiving temporary workers' compensation payments and a reduced
salary or no salary from the employer who is entitled to allowable service credit for the
period of absence, may make payment to the fund for the difference between salary received,
if any, and the salary the employee would normally receive if not on leave of absence during
the period. The employee shall pay an amount equal to the employee and employer
contribution rate under section 352.04, subdivisions 2 and 3, on the differential salary amount
for the period of the leave of absence.

The employing department, at its option, may pay the employer amount on behalf of its
employees. Payment made under this subdivision must include interest at the deleted text begin rate of 8.5
percent until June 30, 2015, and eight percent thereafter per yeardeleted text end new text begin applicable annual rate or
rates specified in section 356.59, subdivision 2new text end , and must be completed within one year of
the return from leave of absence.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 352.017, subdivision 2, is amended to read:

Subd. 2.

Purchase procedure.

(a) An employee covered by a plan specified in this
chapter may purchase credit for allowable service in that plan for a period specified in
subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c), whichever
applies. The employing unit, at its option, may pay the employer portion of the amount
specified in paragraph (b) on behalf of its employees.

(b) If payment is received by the executive director within one year from the date the
employee returned to work following the authorized leave, the payment amount is equal to
the employee and employer contribution rates specified in law for the applicable plan at the
end of the leave period multiplied by the employee's hourly rate of salary on the date of
return from the leave of absence and by the days and months of the leave of absence for
which the employee is eligible for allowable service credit. The payment must include
compound interest at the deleted text begin monthly rate of 0.71 percent until June 30, 2015, and 0.667 percent
per month thereafterdeleted text end new text begin applicable monthly rate or rates specified in section 356.59, subdivision
2, new text end from the last day of the leave period until the last day of the month in which payment is
received. If payment is received by the executive director after one year, the payment amount
is the amount determined under section 356.551. Payment under this paragraph must be
made before the date of termination from public employment covered under this chapter.

(c) If the employee terminates employment covered by this chapter during the leave or
following the leave rather than returning to covered employment, payment must be received
by the executive director within 30 days after the termination date. The payment amount is
equal to the employee and employer contribution rates specified in law for the applicable
plan on the day prior to the termination date, multiplied by the employee's hourly rate of
salary on that date and by the days and months of the leave of absence prior to termination.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 352.04, subdivision 8, is amended to read:

Subd. 8.

Department required to pay omitted salary deductions.

(a) If a department
fails to take deductions past due for a period of 60 days or less from an employee's salary
as provided in this section, those deductions must be taken on later payroll abstracts.

(b) If a department fails to take deductions past due for a period in excess of 60 days
from an employee's salary as provided in this section, the department, and not the employee,
must pay on later payroll abstracts the employee and employer contributions and deleted text begin an amount
equivalent to 8.5 percent until June 30, 2015, and eight percent thereafter of the total amount
due in lieu of interest, or if the delay in payment exceeds one year, 8.5 percent until June
30, 2015, and eight percent thereafter compound annualdeleted text end interestnew text begin at the applicable annual
rate or rates specified in section 356.59, subdivision 2, compounded annually, from the date
the employee and employer contributions should have been deducted to the date payment
of the total amount due is paid by the departmentnew text end .

(c) If a department fails to take deductions past due for a period of 60 days or less and
the employee is no longer in state service so that the required deductions cannot be taken
from the salary of the employee, the department must nevertheless pay the required employer
contributions. If any department fails to take deductions past due for a period in excess of
60 days and the employee is no longer in state service, the omitted contributions must be
recovered under paragraph (b).

(d) If an employee from whose salary required deductions were past due for a period of
60 days or less leaves state service before the payment of the omitted deductions and
subsequently returns to state service, the unpaid amount is considered the equivalent of a
refund. The employee accrues no right by reason of the unpaid amount, except that the
employee may pay the amount of omitted deductions as provided in section 352.23.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 352.04, subdivision 9, is amended to read:

Subd. 9.

Erroneous deductions, canceled warrants.

(a) Deductions taken from the
salary of an employee for the retirement fund in excess of required amounts must, upon
discovery and verification by the department making the deduction, be refunded to the
employee.

(b) If a deduction for the retirement fund is taken from a salary warrant or check, and
the check is canceled or the amount of the warrant or check returned to the funds of the
department making the payment, the sum deducted, or the part of it required to adjust the
deductions, must be refunded to the department or institution if the department applies for
the refund on a form furnished by the director. The department's payments must likewise
be refunded to the department.

(c) If erroneous employee deductions and employer contributions are caused by an error
in plan coverage involving the plan and any other plans specified in section 356.99, that
section applies. If the employee should have been covered by the plan governed by chapter
352D, 353D, 354B, or 354D, the employee deductions and employer contributions taken
in error must be directly transferred to the applicable employee's account in the correct
retirement plan, with interest at the deleted text begin rate of 0.71 percent per month until June 30, 2015, and
0.667 percent per month thereafterdeleted text end new text begin applicable monthly rate or rates specified in section
356.59, subdivision 2new text end , compounded annually, from the first day of the month following the
month in which coverage should have commenced in the correct defined contribution plan
until the end of the month in which the transfer occurs.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 352.23, is amended to read:

352.23 TERMINATION OF RIGHTS; REPAYMENT OF REFUND.

(a) When any employee accepts a refund as provided in section 352.22, all existing
allowable service credits and all rights and benefits to which the employee was entitled
before accepting the refund terminate.

(c) Repayment of refunds entitles the employee only to credit for service covered by (1)
salary deductions; (2) payments previously made in lieu of salary deductions as permitted
under law in effect when the payment in lieu of deductions was made; (3) payments made
to obtain credit for service as permitted by laws in effect when payment was made; and (4)
allowable service previously credited while receiving temporary workers' compensation as
provided in section 352.01, subdivision 11, paragraph (a), clause (3).

(d) Payments under this section for repayment of refunds are to be paid with interest at
the deleted text begin rate of 8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin applicable annual
rate or rates specified in section 356.59, subdivision 2, new text end compounded annuallynew text begin ,new text end from the date
the refund was taken until the date the refund is repaid. They may be paid in a lump sum
or by payroll deduction in the manner provided in section 352.04. Payment may be made
in a lump sum up to six months after termination from service.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 7.

Minnesota Statutes 2016, section 352.27, is amended to read:

352.27 CREDIT FOR BREAK IN SERVICE TO PROVIDE UNIFORMED
SERVICE.

(a) An employee who is absent from employment by reason of service in the uniformed
services, as defined in United States Code, title 38, section 4303(13), and who returns to
state service upon discharge from service in the uniformed service within the time frames
required in United States Code, title 38, section 4312(e), may obtain service credit for the
period of the uniformed service as further specified in this section, provided that the employee
did not separate from uniformed service with a dishonorable or bad conduct discharge or
under other than honorable conditions.

(b) The employee may obtain credit by paying into the fund an equivalent employee
contribution 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 employee would have received if the employee 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 employee's
average salary rate during the 12-month period of covered employment rendered immediately
preceding the period of the uniformed service.

(c) The equivalent employer contribution and, if applicable, the equivalent additional
employer contribution provided in this chapter must be paid by the department employing
the employee from funds available to the department at the time and in the manner provided
in this chapter, 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 employee contribution.

(d) If the employee equivalent contributions provided in this section are not paid in full,
the employee'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 employee contribution received by the total employee contribution otherwise
required under this section.

(e) To receive service credit under this section, the contributions specified in this section
must be transmitted to the Minnesota State Retirement System during the period which
begins with the date on which the individual returns to state service and which has a duration
of three times the length of the uniformed service period, but not to exceed five years. If
the determined payment period is less than one year, the contributions required under this
section to receive service credit may be made within one year of the discharge date.

(f) 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.

(g) The employing unit shall pay interest on all equivalent employee and employer
contribution amounts payable under this section. Interest must be deleted text begin computed at the rate of
8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin at the applicable annual rate or
rates specified in section 356.59, subdivision 2, new text end compounded annuallynew text begin ,new text end 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 8.

Minnesota Statutes 2016, section 352.955, subdivision 3, is amended to read:

Subd. 3.

Payment of additional equivalent contributions.

(a) An eligible employee
who is transferred to plan coverage and who elects to transfer past service credit under this
section must pay an additional member contribution for that prior service period. The
additional member contribution is the amount computed under paragraph (b), plus the greater
of the amount computed under paragraph (c), or 40 percent of the unfunded actuarial accrued
liability attributable to the past service credit transfer.

(b) The executive director shall compute, for the most recent 12 months of service credit
eligible for transfer, or for the entire period eligible for transfer if less than 12 months, the
difference between the employee contribution rate or rates for the general state employees
retirement plan and the employee contribution rate or rates for the correctional state
employees retirement plan applied to the eligible employee's salary during that transfer
period, plus compound interest at the new text begin applicable new text end monthly rate deleted text begin of 0.71 percent until June 30,
2015, and 0.667 percent per month thereafterdeleted text end new text begin or rates specified in section 356.59, subdivision
2new text end .

(c) The executive director shall compute, for any service credit being transferred on
behalf of the eligible employee and not included under paragraph (b), the difference between
the employee contribution rate or rates for the general state employees retirement plan and
the employee contribution rate or rates for the correctional state employees retirement plan
applied to the eligible employee's salary during that transfer period, plus compound interest
at the deleted text begin monthly rate of 0.71 percent until June 30, 2015, and 0.667 percent per month thereafterdeleted text end new text begin
applicable monthly rate or rates specified in section 356.59, subdivision 2new text end .

(d) The executive director shall compute an amount using the process specified in
paragraph (b), but based on differences in employer contribution rates between the general
state employees retirement plan and the correctional state employees retirement plan rather
than employee contribution rates.

(e) The executive director shall compute an amount using the process specified in
paragraph (c), but based on differences in employer contribution rates between the general
state employees retirement plan and the correctional state employees retirement plan rather
than employee contribution rates.

(f) The additional equivalent member contribution under this subdivision must be paid
in a lump sum. Payment must accompany the election to transfer the prior service credit.
No transfer election or additional equivalent member contribution payment may be made
by a person or accepted by the executive director after the one year anniversary date of the
effective date of the retirement coverage transfer, or the date on which the eligible employee
terminates state employment, whichever is earlier.

(g) If an eligible employee elects to transfer past service credit under this section and
pays the additional equivalent member contribution amount under paragraph (a), the
applicable department shall pay an additional equivalent employer contribution amount.
The additional employer contribution is the amount computed under paragraph (d), plus the
greater of the amount computed under paragraph (e), or 60 percent of the unfunded actuarial
accrued liability attributable to the past service credit transfer.

(h) The unfunded actuarial accrued liability attributable to the past service credit transfer
is the present value of the benefit obtained by the transfer of the service credit to the
correctional state employees retirement plan reduced by the amount of the asset transfer
under subdivision 4, by the amount of the member contribution equivalent payment computed
under paragraph (b), and by the amount of the employer contribution equivalent payment
computed under paragraph (d).

(i) The additional equivalent employer contribution under this subdivision must be paid
in a lump sum and must be paid within 30 days of the date on which the executive director
of the Minnesota State Retirement System certifies to the applicable department that the
employee paid the additional equivalent member contribution.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 352B.013, subdivision 2, is amended to read:

Subd. 2.

Purchase procedure.

(a) An employee covered by the plan specified in this
chapter may purchase credit for allowable service in the plan for a period specified in
subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c), whichever
applies. The employing unit, at its option, may pay the employer portion of the amount
specified in paragraph (b) on behalf of its employees.

(b) If payment is received by the executive director within one year from the date the
employee returned to work following the authorized leave, the payment amount is equal to
the employee and employer contribution rates specified in section 352B.02 at the end of
the leave period multiplied by the employee's hourly rate of salary on the date of return
from the leave of absence and by the days and months of the leave of absence for which
the employee is eligible for allowable service credit. The payment must include compound
interest at the deleted text begin monthly rate of 0.71 percent until June 30, 2015, and 0.667 percent per month
thereafterdeleted text end new text begin applicable monthly rate or rates specified in section 356.59, subdivision 2, new text end from
the last day of the leave period until the last day of the month in which payment is received.
If payment is received by the executive director after one year from the date the employee
returned to work following the authorized leave, the payment amount is the amount
determined under section 356.551. Payment under this paragraph must be made before the
date of termination from public employment covered under this chapter.

(c) If the employee terminates employment covered by this chapter during the leave or
following the leave rather than returning to covered employment, payment must be received
by the executive director within 30 days after the termination date. The payment amount is
equal to the employee and employer contribution rates specified in section 352B.02 on the
day prior to the termination date, multiplied by the employee's hourly rate of salary on that
date and by the days and months of the leave of absence prior to termination.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 10.

Minnesota Statutes 2016, section 352B.085, is amended to read:

352B.085 SERVICE CREDIT FOR CERTAIN DISABILITY LEAVES OF
ABSENCE.

A member on leave of absence receiving temporary workers' compensation payments
and a reduced salary or no salary from the employer who is entitled to allowable service
credit for the period of absence under section 352B.011, subdivision 3, paragraph (b), may
make payment to the fund for the difference between salary received, if any, and the salary
that the member would normally receive if the member was not on leave of absence during
the period. The member shall pay an amount equal to the member and employer contribution
rate under section 352B.02, subdivisions 1b and 1c, on the differential salary amount for
the period of the leave of absence. The employing department, at its option, may pay the
employer amount on behalf of the member. Payment made under this subdivision must
include interest at the deleted text begin rate of 8.5 percent until June 30, 2015, and eight percent thereafter
per yeardeleted text end new text begin applicable annual rate or rates specified in section 356.59, subdivision 2new text end , and must
be completed within one year of the member's return from the leave of absence.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 11.

Minnesota Statutes 2016, section 352B.086, is amended to read:

352B.086 SERVICE CREDIT FOR UNIFORMED SERVICE.

(a) A member who is absent from employment by reason of service in the uniformed
services, as defined in United States Code, title 38, section 4303(13), and who returns to
state employment in a position covered by the plan upon discharge from service in the
uniformed services within the time frame required in United States Code, title 38, section
4312(e), may obtain service credit for the period of the uniformed service, provided that
the member did not separate from uniformed service with a dishonorable or bad conduct
discharge or under other than honorable conditions.

(b) The member may obtain credit by paying into the fund an equivalent member
contribution based on the member 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 provide employment services to the state 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 purchase period.

(c) The equivalent employer contribution and, if applicable, the equivalent employer
additional contribution, must be paid by the employing unit, using the employer and employer
additional 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.

(d) If the member equivalent contributions provided for in this section 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 section.

(e) To receive allowable service credit under this section, the contributions specified in
this section must be transmitted to the fund during the period which begins with the date
on which the individual returns to state employment covered by the plan and which has a
duration of three times the length of the uniformed service period, but not to exceed five
years. If the determined payment period is calculated to be less than one year, the
contributions required under this section to receive service credit must be transmitted to the
fund within one year from the discharge date.

(f) The amount of allowable 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.

(g) The employing unit shall pay interest on all equivalent member and employer
contribution amounts payable under this section. Interest must be computed at the deleted text begin rate of
8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin applicable annual rate or rates
specified in section 356.59, subdivision 2, new text end compounded annuallynew text begin ,new text end from the end of each
fiscal year of the leave or break in service to the end of the month in which payment is
received.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 12.

Minnesota Statutes 2016, section 352B.11, subdivision 4, is amended to read:

Subd. 4.

Reentry into state servicenew text begin ; refund repaymentnew text end .

new text begin (a) new text end When a former member,
who has become separated from state service that entitled the member to membership and
has received a refund of retirement payments, reenters the state service in a position that
entitles the member to membership, that member shall receive credit for the period of prior
allowable state service if the member repays into the fund the amount of the refund, plus
interest deleted text begin on it at the rate of 8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin at
the applicable annual rate or rates specified in section 356.59, subdivision 2, new text end compounded
annually, at any time before subsequent retirement. Repayment may be made in installments
or in a lump sum.

new text begin (b) A person who has received a refund from the State Patrol retirement fund who is a
member of a public retirement system included in section 356.311 may repay the refund
with interest to the State Patrol retirement fund as provided in paragraph (a).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 13.

Minnesota Statutes 2016, section 352D.05, subdivision 4, is amended to read:

Subd. 4.

Repayment of refund.

(a) A participant in the unclassified program may repay
regular refunds taken under section 352.22, as provided in section 352.23.

(b) A participant in the unclassified program or an employee covered by the general
employees retirement plan who has withdrawn the value of the total shares may repay the
refund taken and thereupon restore the service credit, rights and benefits forfeited by paying
into the fund the amount refunded plus interest at the deleted text begin rate of 8.5 percent until June 30, 2015,
and eight percent thereafterdeleted text end new text begin applicable annual rate or rates specified in section 356.59,
subdivision 2, new text end compounded annuallynew text begin ,new text end from the date that the refund was taken until the date
that the refund is repaid. If the participant had withdrawn only the employee shares as
permitted under prior laws, repayment must be pro rata.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 14.

Minnesota Statutes 2016, section 352D.11, subdivision 2, is amended to read:

Subd. 2.

Payments by employee.

An employee entitled to purchase service credit may
make the purchase by paying to the state retirement system an amount equal to the current
employee contribution rate in effect for the state retirement system applied to the current
or final salary rate multiplied by the months and days of prior temporary, intermittent, or
contract legislative service. Payment shall be made in one lump sum unless the executive
director of the state retirement system agrees to accept payment in installments over a period
of not more than three years from the date of the agreement. Installment payments shall be
charged interest at the deleted text begin rate of 8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end
new text begin applicable annual rate or rates specified in section 356.59, subdivision 2, new text end compounded
annually.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 15.

Minnesota Statutes 2016, section 352D.12, is amended to read:

352D.12 TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.

(a) An employee who is a participant in the unclassified program and who has prior
service credit in a covered plan under chapter 352, 353, 354, 354A, or 422A may, within
the time limits specified in this section, elect to transfer to the unclassified program prior
service contributions to one or more of those plans.

(b) For participants with prior service credit in a plan governed by chapter 352, 353,
354, 354A, or 422A, "prior service contributions" means the accumulated employee and
equal employer contributions with interest at the deleted text begin rate of 8.5 percent until June 30, 2015,
and eight percent thereafterdeleted text end new text begin applicable annual rate or rates specified in section 356.59,
subdivision 2, new text end compounded annually, based on fiscal year balances.

(c) If a participant has taken a refund from a retirement plan listed in this section, the
participant may repay the refund to that plan, notwithstanding any restrictions on repayment
to that plan, deleted text begin plus 8.5 percent interest until June 30, 2015, and eight percent interest thereafterdeleted text end
new text begin with interest at the applicable annual rate or rates specified in section 356.59, subdivision
2, new text end compounded annuallynew text begin ,new text end and have the accumulated employee and equal employer
contributions transferred to the unclassified program with interest at the rate of 8.5 percent
until June 30, 2015, and eight percent thereafter compounded annually based on fiscal year
balances. If a person repays a refund and subsequently elects to have the money transferred
to the unclassified program, the repayment amount, including interest, is added to the fiscal
year balance in the year which the repayment was made.

(d) A participant electing to transfer prior service contributions credited to a retirement
plan governed by chapter 352, 353, 354, 354A, or 422A as provided under this section must
complete a written application for the transfer and repay any refund within one year of the
commencement of the employee's participation in the unclassified program.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 16.

Minnesota Statutes 2016, 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 deductions
were withheld from salary and contributions were made at the applicable rates under section
353.27, 353.65, or 353E.03;

(2) periods of service covered by payments in lieu of salary deductions under sections
353.27, subdivisions 12 and 12a, and 353.35;

(3) service 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;

(4) a period of authorized leave of absence during which the employee receives pay as
specified in subdivision 10, paragraph (a), clause (4) or (5), from which deductions for
employee contributions are made, deposited, and credited to the fund;

(5) a period of authorized leave of absence without pay, or with pay that is not included
in the definition of salary under subdivision 10, paragraph (a), clause (4) or (5), for which
salary deductions are not authorized, and for which a member obtained service credit for
up to 12 months of the authorized leave period by payment under section 353.0161 or
353.0162, to the fund made in place of salary deductions;

(6) a 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, excluding overtime pay, 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 deleted text begin rate of 8.5 percent until June 30, 2015, and eight percent
thereafterdeleted text end new text begin applicable rate or rates specified in section 356.59, subdivision 3new text end , 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 deleted text begin 8.5 percentdeleted text end interest
deleted text begin until June 30, 2015, and eight percent interest thereafterdeleted text end new text begin at the applicable rate or rates
specified in section 356.59, subdivision 3new text end , 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
30 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;

(7) an 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;

(8) a 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 with the same governmental
subdivision 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 must be 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 30 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 the deleted text begin rate of 8.5 percent until June 30, 2015,
and eight percent thereafterdeleted text end new text begin applicable rate or rates specified in section 356.59, subdivision
3new text end , 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; or

(9) a period specified under section 353.0162.

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

(c) For an active member who was an active member of the former Minneapolis
Firefighters Relief Association on December 29, 2011, "allowable service" is the period of
service credited by the Minneapolis Firefighters Relief Association as reflected in the
transferred records of the association up to December 30, 2011, and the period of service
credited under paragraph (a), clause (1), after December 30, 2011. For an active member
who was an active member of the former Minneapolis Police Relief Association on December
29, 2011, "allowable service" is the period of service credited by the Minneapolis Police
Relief Association as reflected in the transferred records of the association up to December
30, 2011, and the period of service credited under paragraph (a), clause (1), after December
30, 2011.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 17.

Minnesota Statutes 2016, section 353.0162, is amended to read:

353.0162 REDUCED SALARY PERIODS SALARY CREDIT PURCHASE.

(a) A member may purchase additional salary credit for a period specified in this section.

(b) The applicable period is a period during which the member is receiving a reduced
salary from the employer while the member is:

(1) receiving temporary workers' compensation payments related to the member's service
to the public employer;

(2) on an authorized leave of absence; or

(3) on an authorized partial paid leave of absence as a result of a budgetary or salary
savings program offered or mandated by a governmental subdivision.

(c) The differential salary amount is the difference between the average monthly salary
received by the member during the period of reduced salary under this section and the
average monthly salary of the member, excluding overtime, on which contributions to the
applicable plan were made during the period of the last six months of covered employment
occurring immediately before the period of reduced salary, applied to the member's normal
employment period, measured in hours or otherwise, as applicable.

(d) To receive eligible salary credit, the member shall pay an amount equal to:

(1) the applicable employee contribution rate under section 353.27, subdivision 2; 353.65,
subdivision 2; or 353E.03, subdivision 1, as applicable, multiplied by the differential salary
amount;

(2) plus an employer equivalent payment equal to the applicable employer contribution
rate in section 353.27, subdivision 3; 353.65, subdivision 3; or 353E.03, subdivision 2, as
applicable, multiplied by the differential salary amount;

(3) plus, if applicable, an equivalent employer additional amount equal to the additional
employer contribution rate in section 353.27, subdivision 3a, multiplied by the differential
salary amount.

(e) The employer, by appropriate action of its governing body and documented in its
official records, may pay the employer equivalent contributions and, as applicable, the
equivalent employer additional contributions on behalf of the member.

(f) Payment under this section must include interest on the contribution amount or
amounts, whichever applies, at deleted text begin an 8.5 percent annual rate until June 30, 2015, and at an
eight percent annual rate thereafterdeleted text end new text begin the applicable rate or rates specified in section 356.59,
subdivision 3, compounded annuallynew text end , prorated for deleted text begin applicabledeleted text end new text begin the number of new text end monthsnew text begin , if less
than 12 months,new text end from the date on which the period of reduced salary specified under this
section terminates to the date on which the payment or payments are received by the
executive director. Payment under this section must be completed within the earlier of 30
days from termination of public service by the employee under section 353.01, subdivision
11a, or one year after the termination of the period specified in paragraph (b), as further
restricted under this section.

(g) The period for which additional allowable salary credit may be purchased is limited
to the period during which the person receives temporary workers' compensation payments
or for those business years in which the governmental subdivision offers or mandates a
budget or salary savings program, as certified to the executive director by a resolution of
the governing body of the governmental subdivision. For an authorized leave of absence,
the period for which allowable salary credit may be purchased may not exceed 12 months
of authorized leave.

(h) To purchase salary credit for a subsequent period of temporary workers' compensation
benefits or subsequent authorized medical leave of absence, the member must return to
public service and render a minimum of three months of allowable service.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 18.

Minnesota Statutes 2016, section 353.27, subdivision 3c, is amended to read:

Subd. 3c.

Former MERF members; member and employer contributions.

(a) For
the period July 1, 2015, through December 31, 2031, the member contributions for former
members of the Minneapolis Employees Retirement Fund and by the former Minneapolis
Employees Retirement Fund-covered employing units are governed by this subdivision.

(b) The member contribution for a public employee who was a member of the former
Minneapolis Employees Retirement Fund on June 29, 2010, is 9.75 percent of the salary of
the employee.

(c) The employer regular contribution with respect to a public employee who was a
member of the former Minneapolis Employees Retirement Fund on June 29, 2010, is 9.75
percent of the salary of the employee.

(d) For calendar years 2015 and 2016, the employer supplemental contribution is the
employing unit's share of $31,000,000. For calendar years 2017 through 2031, the employer
supplemental contribution is the employing unit's share of $21,000,000.

(e) Each employing unit's share under paragraph (d) is the amount determined from an
allocation between each employing unit in the portion equal to the unit's employer
supplemental contribution paid or payable under Minnesota Statutes 2012, section 353.50,
during calendar year 2014.

(f) The employer supplemental contribution amount under paragraph (d) for calendar
year 2015 must be invoiced by the executive director of the Public Employees Retirement
Association by July 1, 2015. The calendar year 2015 payment is payable in a single amount
on or before September 30, 2015. For subsequent calendar years, the employer supplemental
contribution under paragraph (d) must be invoiced on January 31 of each year and is payable
in two parts, with the first half payable on or before July 31 and with the second half payable
on or before December 15. Late payments are payable with deleted text begin compounddeleted text end interestnew text begin , compounded
annually,new text end at the deleted text begin rate of 0.71 percentdeleted text end new text begin applicable rate or rates specified in section 356.59,
subdivision 3, new text end per month for each month or portion of a month that has elapsed after the
due date.

(g) The employer supplemental contribution under paragraph (d) terminates on December
31, 2031.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 19.

Minnesota Statutes 2016, section 353.27, subdivision 7a, is amended to read:

Subd. 7a.

Deductions or contributions transmitted by error.

(a) If employee deductions
and employer contributions under this section, section 353.50, 353.65, or 353E.03 were
erroneously transmitted to the association, but should have been transmitted to a plan covered
by chapter 352D, 353D, 354B, or 354D, the executive director shall transfer the erroneous
employee deductions and employer contributions to the appropriate retirement fund or
individual account, as applicable. The time limitations specified in subdivisions 7 and 12
do not apply. The transfer to the applicable defined contribution plan account must include
interest at the deleted text begin rate of 0.71 percent per month until June 30, 2015, and 0.667 percentdeleted text end new text begin applicable
rate or rates specified in section 356.59, subdivision 3, new text end per month deleted text begin thereafterdeleted text end , compounded
annually, from the first day of the month following the month in which coverage should
have commenced in the defined contribution plan until the end of the month in which the
transfer occurs.

(b) A potential transfer under paragraph (a) that is reasonably determined to cause the
plan to fail to be a qualified plan under section 401(a) of the federal Internal Revenue Code,
as amended, must not be made by the executive director of the association. Within 30 days
after being notified by the Public Employees Retirement Association of an unmade potential
transfer under this paragraph, the employer of the affected person must transmit an amount
representing the applicable salary deductions and employer contributions, without interest,
to the retirement fund of the appropriate Minnesota public pension plan, or to the applicable
individual account if the proper coverage is by a defined contribution plan. The association
must provide the employing unit a credit for the amount of the erroneous salary deductions
and employer contributions against future contributions from the employer. If the employing
unit receives a credit under this paragraph, the employing unit is responsible for refunding
to the applicable employee any amount that had been erroneously deducted from the person's
salary.

(c) If erroneous employee deductions and employer contributions reflect a plan coverage
error involving any Public Employees Retirement Association plan specified in section
356.99 and any other plan specified in that section, section 356.99 applies.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 20.

Minnesota Statutes 2016, section 353.27, subdivision 12, is amended to read:

Subd. 12.

Omitted salary deductions; obligations.

(a) In the case of omission of
required deductions for the general employees retirement plan, the public employees police
and fire retirement plan, or the local government correctional employees retirement plan
from the salary of an employee, the department head or designee shall immediately, upon
discovery, report the employee for membership and deduct the employee deductions under
subdivision 4 during the current pay period or during the pay period immediately following
the discovery of the omission. Payment for the omitted obligations may only be made in
accordance with reporting procedures and methods established by the executive director.

(b) When the entire omission period of an employee does not exceed 60 days, the
governmental subdivision may report and submit payment of the omitted employee
deductions and the omitted employer contributions through the reporting processes under
subdivision 4.

(c) When the omission period of an employee exceeds 60 days, the governmental
subdivision shall furnish to the association sufficient data and documentation upon which
the obligation for omitted employee and employer contributions can be calculated. The
omitted employee deductions must be deducted from the employee's subsequent salary
payment or payments and remitted to the association for deposit in the applicable retirement
fund. The employee shall pay omitted employee deductions due for the 60 days prior to the
end of the last pay period in the omission period during which salary was earned. The
employer shall pay any remaining omitted employee deductions and any omitted employer
contributions, plus cumulative interest at the annual rate of 8.5 percent until June 30, 2015,
and eight percent thereafter compounded annually, from the date or dates each omitted
employee contribution was first payable.

(d) An employer shall not hold an employee liable for omitted employee deductions
beyond the pay period dates under paragraph (c), nor attempt to recover from the employee
those employee deductions paid by the employer on behalf of the employee. Omitted
deductions due under paragraph (c) which are not paid by the employee constitute a liability
of the employer that failed to deduct the omitted deductions from the employee's salary.
The employer shall make payment with interest at the deleted text begin annual rate of 8.5 percent until June
30, 2015, and eight percent thereafterdeleted text end new text begin applicable rate or rates specified in section 356.59,
subdivision 3, new text end compounded annually. Omitted employee deductions are no longer due if an
employee terminates public service before making payment of omitted employee deductions
to the association, but the employer remains liable to pay omitted employer contributions
plus interest at the deleted text begin annual rate of 8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end
new text begin applicable rate or rates specified in section 356.59, subdivision 3, new text end compounded annuallynew text begin ,new text end
from the date the contributions were first payable.

(e) The association may not commence action for the recovery of omitted employee
deductions and employer contributions after the expiration of three calendar years after the
calendar year in which the contributions and deductions were omitted. Except as provided
under paragraph (b), no payment may be made or accepted unless the association has already
commenced action for recovery of omitted deductions. An action for recovery commences
on the date of the mailing of any written correspondence from the association requesting
information from the governmental subdivision upon which to determine whether or not
omitted deductions occurred.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 21.

Minnesota Statutes 2016, section 353.27, subdivision 12a, is amended to read:

Subd. 12a.

Terminated employees: omitted deductions.

A terminated employee who
was a member of the general employees retirement plan of the Public Employees Retirement
Association, the public employees police and fire retirement plan, or the local government
correctional employees retirement plan and who has a period of employment in which
previously omitted employer contributions were made under subdivision 12 but for whom
no, or only partial, omitted employee contributions have been made, or a member who had
prior coverage in the association for which previously omitted employer contributions were
made under subdivision 12 but who terminated service before required omitted employee
deductions could be withheld from salary, may pay the omitted employee deductions for
the period on which omitted employer contributions were previously paid plus interest at
the deleted text begin annual rate of 8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin applicable
rate or rates specified in section 356.59, subdivision 3, new text end compounded annually. A terminated
employee may pay the omitted employee deductions plus interest within six months of an
initial notification from the association of eligibility to pay those omitted deductions. If a
terminated employee is reemployed in a position covered under a public pension fund under
section 356.30, subdivision 3, and elects to pay omitted employee deductions, payment
must be made no later than six months after a subsequent termination of public service.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 22.

Minnesota Statutes 2016, section 353.27, subdivision 12b, is amended to read:

Subd. 12b.

Terminated employees: immediate eligibility.

If deductions were omitted
from salary adjustments or final salary of a terminated employee who was a member of the
general employees retirement plan, the public employees police and fire retirement plan,
or the local government correctional employees retirement plan and who is immediately
eligible to draw a monthly benefit, the employer shall pay the omitted employer and employer
additional contributions plus interest on both the employer and employee amounts due at
deleted text begin an annual rate of 8.5 percentdeleted text end new text begin the applicable rate or rates specified in section 356.59,
subdivision 3, new text end compounded annually. The employee shall pay the employee deductions
within six months of an initial notification from the association of eligibility to pay omitted
deductions or the employee forfeits the right to make the payment.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 23.

Minnesota Statutes 2016, section 353.28, subdivision 5, is amended to read:

Subd. 5.

Interest chargeable on amounts due.

Any amount due under this section or
section 353.27, subdivision 4, is payable with interest at the deleted text begin annual compound rate of 8.5
percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin applicable rate or rates specified
in section 356.59, subdivision 3, compounded annually, new text end from the date due until the date
payment is received by the association, with a minimum interest charge of $10.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 24.

Minnesota Statutes 2016, section 353.35, subdivision 1, is amended to read:

Subdivision 1.

Refund rights.

(a) Except as provided in paragraph (b), when any former
member accepts a refund, all existing service credits and all rights and benefits to which
the person was entitled prior to the acceptance of the refund must terminate.

(b) A refund under section 353.651, subdivision 3, paragraph (c), does not result in a
forfeiture of salary credit for the allowable service credit covered by the refund.

(c) The rights and benefits of a former member must not be restored until the person
returns to active service and acquires at least six months of allowable service credit after
taking the last refund and repays the refund or refunds taken and interest received under
section 353.34, subdivisions 1 and 2, plus interest at the deleted text begin annual rate of 8.5 percent until June
30, 2015, and eight percent thereafterdeleted text end new text begin applicable rate or rates specified in section 356.59,
subdivision 3, new text end compounded annually. If the person elects to restore service credit in a
particular fund from which the person has taken more than one refund, the person must
repay all refunds to that fund. All refunds must be repaid within six months of the last date
of termination of public service.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 25.

Minnesota Statutes 2016, section 354.50, subdivision 2, is amended to read:

Subd. 2.

Interest charge.

If a member desires to repay the refunds, payment shall include
interest at deleted text begin an annual rate of 8.5 percentdeleted text end new text begin the applicable annual rate or rates specified in section
356.59, subdivision 4, new text end compounded annuallynew text begin ,new text end from date of withdrawal to the date payment
is made and shall be credited to the fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 26.

Minnesota Statutes 2016, section 354.51, subdivision 5, is amended to read:

Subd. 5.

Payment of shortages.

(a) Except as provided in paragraph (b), in the event
that full required member contributions are not deducted from the salary of a teacher,
payment of shortages in member deductions on salary earned are the sole obligation of the
employing unit and are payable by the employing unit upon notification by the executive
director of the shortagenew text begin . The amount of the shortage shall be paidnew text end with interest at deleted text begin an annual
rate of 8.5 percentdeleted text end new text begin the applicable annual rate or rates specified in section 356.59, subdivision
4, new text end compounded annuallynew text begin ,new text end from the end of the fiscal year in which the shortage occurred to
the end of the month in which payment is made and the interest must be credited to the
fund. The employing unit shall also pay the employer contributions as specified in section
354.42, subdivisions 3 and 5 for the shortages. If the shortage payment is not paid by the
employing unit within 60 days of notification, and if the executive director does not use the
recovery procedure in section 354.512, the executive director shall certify the amount of
the shortage to the applicable county auditor, who shall spread a levy in the amount of the
shortage payment over the taxable property of the taxing district of the employing unit if
the employing unit is supported by property taxes. Payment may not be made for shortages
in member deductions on salary paid or payable under paragraph (b) or for shortages in
member deductions for persons employed by the Minnesota State Colleges and Universities
system in a faculty position or in an eligible unclassified administrative position and whose
employment was less than 25 percent of a full academic year, exclusive of the summer
session, for the applicable institution that exceeds the most recent 36 months.

(b) For a person who is employed by the Minnesota State Colleges and Universities
system in a faculty position or in an eligible unclassified administrative position and whose
employment was less than 25 percent of a full academic year, exclusive of the summer
session, for the applicable institution, upon the person's election under section 354B.21 of
retirement coverage under this chapter, the shortage in member deductions on the salary
for employment by the Minnesota State Colleges and Universities system institution of less
than 25 percent of a full academic year, exclusive of the summer session, for the applicable
institution for the most recent 36 months and the associated employer contributions must
be paid by the Minnesota State Colleges and Universities system institution, plus deleted text begin annual
compounddeleted text end interest at the deleted text begin rate of 8.5 percentdeleted text end new text begin applicable annual rate or rates specified in
section 356.59, subdivision 4, compounded annually, new text end from the end of the fiscal year in
which the shortage occurred to the end of the month in which the Teachers Retirement
Association coverage election is made. An individual electing coverage under this paragraph
shall repay the amount of the shortage in member deductions, plus interest, through deduction
from salary or compensation payments within the first year of employment after the election
under section 354B.21, subject to the limitations in section 16D.16. The Minnesota State
Colleges and Universities system may use any means available to recover amounts which
were not recovered through deductions from salary or compensation payments. No payment
of the shortage in member deductions under this paragraph may be made for a period longer
than the most recent 36 months.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 27.

Minnesota Statutes 2016, section 354.52, subdivision 4, is amended to read:

Subd. 4.

Reporting and remittance requirements.

An employer shall remit all amounts
due to the association and furnish a statement indicating the amount due and transmitted
with any other information required by the executive director. If an amount due is not
received by the association within 14 calendar days of the payroll warrant, the deleted text begin amount
accrues interest at an annual rate of 8.5 percentdeleted text end new text begin employer shall pay interest on the amount
due at the applicable annual rate or rates specified in section 356.59, subdivision 4,
new text end compounded annuallynew text begin ,new text end from the due date until the amount is received by the association.
All amounts due and other employer obligations not remitted within 60 days of notification
by the association must be certified to the commissioner of management and budget who
shall deduct the amount from any state aid or appropriation amount applicable to the
employing unit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 28.

Minnesota Statutes 2016, section 354.53, subdivision 5, is amended to read:

Subd. 5.

Interest requirements.

The employer shall pay interest on all equivalent
employee and employer contribution amounts payable under this sectiondeleted text begin . Interest must be
computed at a rate of 8.5 percentdeleted text end new text begin at the applicable annual rate or rates specified in section
356.59, subdivision 4, new text end compounded annuallynew text begin ,new text end 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 29.

Minnesota Statutes 2016, section 354A.093, subdivision 6, is amended to read:

Subd. 6.

Interest requirements.

The employer shall pay interest on all equivalent
employee and employer contribution amounts payable under this section. Interest must be
computed at the deleted text begin rate of 8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin applicable
annual rate or rates specified in section 356.59, subdivision 5, new text end compounded annuallynew text begin ,new text end from
the end of each fiscal year of the leave or break in service to the end of the month in which
payment is received.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 30.

Minnesota Statutes 2016, section 354A.096, is amended to read:

354A.096 MEDICAL LEAVE.

Any teacher in the coordinated program of the St. Paul Teachers Retirement Fund
Association who is on an authorized medical leave of absence and subsequently returns to
teaching service is entitled to receive allowable service credit, not to exceed one year, for
the period of leave, upon making the prescribed payment to the fund. This payment must
include the required employee and employer contributions at the rates specified in section
354A.12, subdivisions 1 and 2a, as applied to the member's average full-time monthly salary
rate on the date the leave of absence commenced plus deleted text begin annualdeleted text end interest at the deleted text begin rate of 8.5
percent until June 30, 2015, and eight percent thereafter per yeardeleted text end new text begin applicable annual rate or
rates specified in section 356.59, subdivision 5, compounded annually, new text end from the end of the
fiscal year during which the leave terminates to the end of the month during which payment
is made. The member must pay the total amount required unless the employing unit, at its
option, pays the employer contributions. The total amount required must be paid by the end
of the fiscal year following the fiscal year in which the leave of absence terminated or before
the member retires, whichever is earlier. Payment must be accompanied by a copy of the
resolution or action of the employing authority granting the leave and the employing
authority, upon granting the leave, must certify the leave to the association in a manner
specified by the executive director. A member may not receive more than one year of
allowable service credit during any fiscal year by making payment under this section. A
member may not receive disability benefits under section 354A.36 and receive allowable
service credit under this section for the same period of time.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 31.

Minnesota Statutes 2016, section 354A.12, subdivision 1a, is amended to read:

Subd. 1a.

Obligation for omitted salary deductions.

If the full required contributions
are not deducted from the salary of a teacher, payment of the shortage in such deductions
is the sole obligation of the employing unit during the three-year period following the end
of the fiscal year in which the shortage occurred. The shortage is payable by the employing
unit upon notification of the shortage by the executive director of the applicable retirement
fund association. The employing unit shall also pay any employer contributions related to
the shortage. The amount of the shortage in employee contributions and associated employer
contributions is payable with interest at the deleted text begin preretirement interest assumption for the
retirement fund as specified in section 356.215, subdivision 8, stated as a monthly ratedeleted text end
new text begin applicable annual rate or rates specified in section 356.59, subdivision 5, new text end from the date due
until the date payment is received in the office of the association, new text begin compounded annually,
new text end with a minimum interest charge of $10. If the shortage payment and interest is not paid by
the employing unit within 60 days of notification, the executive director shall certify the
amount of the shortage payment and interest to the commissioner of management and budget,
who shall deduct the amount from any state aid or appropriation amount applicable to the
employing unit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 32.

Minnesota Statutes 2016, section 354A.12, subdivision 7, is amended to read:

Subd. 7.

Recovery of benefit overpayments.

(a) If the executive director discovers,
within the time period specified in subdivision 8 following the payment of a refund or the
accrual date of any retirement annuity, survivor benefit, or disability benefit, that benefit
overpayment has occurred due to using invalid service or salary, or due to any erroneous
calculation procedure, the executive director must recalculate the annuity or benefit payable
and recover any overpayment. The executive director shall recover the overpayment by
requiring direct repayment or by suspending or reducing the payment of a retirement annuity
or other benefit payable under this chapter to the applicable person or the person's estate,
whichever applies, until all outstanding amounts have been recovered. If a benefit
overpayment or improper payment of benefits occurred caused by a failure of the person
to satisfy length of separation requirements for retirement under section 354A.011,
subdivision 21, the executive director shall recover the improper payments by requiring
direct repayment. The repayment must include interest at the deleted text begin rate of 0.71 percent per monthdeleted text end
new text begin applicable annual rate or rates specified in section 356.59, subdivision 5, new text end from the first of
the month in which a monthly benefit amount was paid to the first of the month in which
the amount is repaid, with annual compounding.

(b) In the event the executive director determines that an overpaid annuity or benefit
that is the result of invalid salary included in the average salary used to calculate the payment
amount must be recovered, the executive director must determine the amount of the employee
deductions taken in error on the invalid salary, with interest as determined under 354A.37,
subdivision 3, and must subtract that amount from the total annuity or benefit overpayment,
and the remaining balance of the overpaid annuity or benefit, if any, must be recovered.

(c) If the invalid employee deductions plus interest exceed the amount of the overpaid
benefits, the balance must be refunded to the person to whom the benefit or annuity is being
paid.

(d) Any invalid employer contributions reported on the invalid salary must be credited
against future contributions payable by the employer.

(e) If a member or former member, who is receiving a retirement annuity or disability
benefit for which an overpayment is being recovered, dies before recovery of the overpayment
is completed and an optional annuity or refund is payable, the remaining balance of the
overpaid annuity or benefit must continue to be recovered from the payment to the optional
annuity beneficiary or refund recipient.

(f) The board of trustees shall adopt policies directing the period of time and manner
for the collection of any overpaid retirement or optional annuity, and survivor or disability
benefit, or a refund that the executive director determines must be recovered as provided
under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 33.

Minnesota Statutes 2016, section 354A.34, is amended to read:

354A.34 DISPOSITION OF UNPAID PERIOD CERTAIN FOR LIFE OR
GUARANTEED REFUND OPTIONAL ANNUITIES.

If a retiree from a coordinated program who has elected a period certain and for life
thereafter or a guaranteed refund optional annuity form dies without having a designated
beneficiary who has survived the retiree, any remaining unpaid guaranteed annuity payments
shall be computed at the rate of interest specified in section 356.215, subdivision 8, and
paid in one lump sum to the estate of the retiree. If a retiree from a coordinated program
who has elected a period certain and for life or a guaranteed refund optional annuity form
dies with a designated beneficiary who has survived the retiree but the designated beneficiary
dies without there existing another designated beneficiary, any remaining unpaid guaranteed
annuity payments shall be computed deleted text begin at the rate ofdeleted text end new text begin with new text end interest new text begin at the applicable annual rate
or rates new text end specified in section deleted text begin 356.215, subdivision 8deleted text end new text begin 356.59, subdivision 5new text end , and paid in one
lump sum to the estate of the designated beneficiary.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 34.

Minnesota Statutes 2016, section 356.195, subdivision 2, is amended to read:

Subd. 2.

Purchase procedure for strike periods.

(a) An employee covered by a plan
specified in subdivision 1 may purchase allowable service credit in the applicable plan for
any period of time during which the employee was on a public employee strike without
pay, not to exceed a period of one year, if the employee makes a payment in lieu of salary
deductions as specified in paragraph (b) or (c), whichever applies. The employing unit, at
its option, may pay the employer portion of the amount specified in paragraph (b) on behalf
of its employees.

(b) If payment is received by the applicable pension plan executive director within one
year from the end of the strike, the payment amount is equal to the applicable employee
and employer contribution rates specified in law for the applicable plan during the strike
period, applied to the employee's rate of salary in effect at the conclusion of the strike for
the period of the strike without pay, plus compound interest at the deleted text begin monthly rate of 0.71
percent for any period for the Teachers Retirement Association and at the monthly rate of
0.71 percent until June 30, 2015, and 0.667 percent thereafter for any other retirement plan
listed in section 356.30, subdivision 3deleted text end new text begin applicable monthly rate or rates specified in section
356.59, subdivision 2, 3, 4, or 5, whichever appliesnew text end , from the last day of the strike period
until the date payment is received.

(c) If payment is received by the applicable pension fund director after one year and
before five years from the end of the strike, the payment amount is the amount determined
under section 356.551.

(d) Payments may not be made more than five years after the end of the strike.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 35.

Minnesota Statutes 2016, section 356.44, is amended to read:

356.44 PARTIAL PAYMENT OF PENSION PLAN REFUND.

(a) Notwithstanding any provision of law to the contrary, a member of a pension plan
listed in section 356.30, subdivision 3, with at least two years of forfeited service taken
from a single pension plan, may repay a portion of all refunds. A partial refund repayment
must comply with this section.

(b) The minimum portion of a refund repayment is one-third of the total service credit
period of all refunds taken from a single plan.

(c) The cost of the partial refund repayment is the product of the cost of the total
repayment multiplied by the ratio of the restored service credit to the total forfeited service
credit. The total repayment amount includes interest at the deleted text begin annual rate of 8.5 percent for
any period for the Teachers Retirement Association and is 8.5 percent until June 30, 2015,
and eight percent thereafter for any other retirement plan listed in section 356.30, subdivision
3deleted text end new text begin at the applicable annual rate or rates specified in section 356.59, subdivision 2, 3, 4, or 5,
whichever appliesnew text end , compounded annually, from the refund date to the date repayment is
received.

(d) The restored service credit must be allocated based on the relationship the restored
service bears to the total service credit period for all refunds taken from a single pension
plan.

(e) This section does not authorize a public pension plan member to repay a refund if
the law governing the plan does not authorize the repayment of a refund of member
contributions.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 36.

Minnesota Statutes 2016, section 356.50, subdivision 2, is amended to read:

Subd. 2.

Service credit procedure.

(a) To obtain the public pension plan allowable
service credit, the eligible person under subdivision 1 shall pay the required member
contribution amount. The required member contribution amount is the member contribution
rate or rates in effect for the pension plan during the period of service covered by the back
pay award, applied to the unpaid gross salary amounts of the back pay award including
unemployment insurance, workers' compensation, or wages from other sources which
reduced the back award. No contributions may be made under this clause for compensation
covered by a public pension plan listed in section 356.30, subdivision 3, for employment
during the removal period. The person shall pay the required member contribution amount
within 60 days of the date of receipt of the back pay award or within 60 days of a billing
from the retirement fund, whichever is later.

(b) The public employer who wrongfully discharged the public employee must pay an
employer contribution on the back pay award. The employer contribution must be based
on the employer contribution rate or rates in effect for the pension plan during the period
of service covered by the back pay award, applied to the salary amount on which the member
contribution amount was determined under paragraph (a). deleted text begin Interest on both the required
member and employer contribution amount must be paid by the employer at the annual
compound rate of 8.5 percent for any period for the Teachers Retirement Association and
8.5 percent until June 30, 2015, and eight percent thereafter, for any other retirement plan
listed in section 356.30, subdivision 3, per year, expressed monthlydeleted text end new text begin The employer must pay
compound interest on both the required member and employer contribution amounts at the
applicable monthly rate or rates specified in section 356.59, subdivision 2, 3, 4, or 5,
whichever appliesnew text end , between the date the contribution amount would have been paid to the
date of actual payment. The employer payment must be made within 30 days of the payment
under paragraph (a).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 37.

Minnesota Statutes 2016, section 356.551, subdivision 2, is amended to read:

Subd. 2.

Determination.

(a) Unless the minimum purchase amount set forth in paragraph
(c) applies, the prior service credit purchase amount is an amount equal to the actuarial
present value, on the date of payment, as calculated by the chief administrative officer of
the pension plan and reviewed by the actuary retained under section 356.214, of the amount
of the additional retirement annuity obtained by the acquisition of the additional service
credit in this section.

(b) Calculation of this amount must be made using the preretirement interest rate
applicable to the public pension plan specified in section 356.215, subdivision 8, and the
mortality table adopted for the public pension plan. The calculation must assume continuous
future service in the public pension plan until, and retirement at, the age at which the
minimum requirements of the fund for normal retirement or retirement with an annuity
unreduced for retirement at an early age, including section 356.30, are met with the additional
service credit purchased. The calculation must also assume a full-time equivalent salary, or
actual salary, whichever is greater, and a future salary history that includes annual salary
increases at the applicable salary increase rate for the plan specified in section 356.215,
subdivision deleted text begin 4ddeleted text end new text begin 8new text end .

(c) The prior service credit purchase amount may not be less than the amount determined
by applying, for each year or fraction of a year being purchased, the sum of the employee
contribution rate, the employer contribution rate, and the additional employer contribution
rate, if any, applicable during that period, to the person's annual salary during that period,
or fractional portion of a year's salary, if applicable, plus interest at the deleted text begin annual rate of 8.5
percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin applicable annual rate or rates
specified in section 356.59, subdivision 2, 3, 4, or 5, whichever applies, new text end compounded
annuallynew text begin ,new text end from the end of the year in which contributions would otherwise have been made
to the date on which the payment is received.

(d) Unless otherwise provided by statutes governing a specific plan, payment must be
made in one lump sum within one year of the prior service credit authorization or prior to
the member's effective date of retirement, whichever is earlier. Payment of the amount
calculated under this section must be made by the applicable eligible person.

(e) However, the current employer or the prior employer may, at its discretion, pay all
or any portion of the payment amount that exceeds an amount equal to the employee
contribution rates in effect during the period or periods of prior service applied to the actual
salary rates in effect during the period or periods of prior service, plus interest at the
new text begin applicable annual new text end rate deleted text begin of 8.5 percent a yeardeleted text end new text begin or rates specified in section 356.59, subdivision
2, 3, 4, or 5, whichever applies,new text end compounded annuallynew text begin ,new text end from the date on which the
contributions would otherwise have been made to the date on which the payment is made.
If the employer agrees to payments under this subdivision, the purchaser must make the
employee payments required under this subdivision within 90 days of the prior service credit
authorization. If that employee payment is made, the employer payment under this
subdivision must be remitted to the chief administrative officer of the public pension plan
within 60 days of receipt by the chief administrative officer of the employee payments
specified under this subdivision.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 38.

new text begin [356.59] INTEREST RATES.
new text end

new text begin Subdivision 1. new text end

new text begin Applicable interest rates. new text end

new text begin Whenever the payment of interest is required
with respect to any payment, including refunds, remittances, shortages, contributions, or
repayments, the rate of interest is the rate or rates specified in subdivisions 2 to 5 for each
public retirement plan.
new text end

new text begin Subd. 2. new text end

new text begin Minnesota State Retirement System. new text end

new text begin The interest rates for all retirement plans
administered by the Minnesota State Retirement System are as follows:
new text end

		new text begin Annual new text end		new text begin Monthly new text end
new text begin before July 1, 2015 new text end	new text begin 8.5 percent new text end		new text begin 0.71 percent new text end
new text begin from July 1, 2015, to June 30, 2017 new text end	new text begin 8.0 percent new text end		new text begin 0.667 percent new text end
new text begin after June 30, 2017 new text end	new text begin 7.5 percent new text end		new text begin 0.625 percent new text end

new text begin Subd. 3. new text end

new text begin Public Employees Retirement Association. new text end

new text begin The interest rates for all retirement
plans administered by the Public Employees Retirement Association are as follows:
new text end

	new text begin before July 1, 2015 new text end	new text begin 8.5 percent new text end
	new text begin from July 1, 2015, to June 30, 2017 new text end	new text begin 8.0 percent new text end
	new text begin after June 30, 2017 new text end	new text begin 7.5 percent new text end

new text begin Subd. 4. new text end

new text begin Teachers Retirement Association. new text end

new text begin The interest rates for the retirement plan
administered by the Teachers Retirement Association are as follows:
new text end

			new text begin Annual new text end		new text begin Monthly new text end
	new text begin 8.5 percent new text end		new text begin 0.71 percent new text end

new text begin Subd. 5. new text end

new text begin St. Paul Teachers Retirement Fund Association. new text end

new text begin The interest rates for the
retirement plan administered by the St. Paul Teachers Retirement Fund Association are as
follows:
new text end

		new text begin Annual new text end		new text begin Monthly new text end
new text begin before July 1, 2015 new text end	new text begin 8.5 percent new text end		new text begin 0.71 percent new text end
new text begin from July 1, 2015, to June 30, 2017 new text end	new text begin 8.0 percent new text end		new text begin 0.667 percent new text end
new text begin after June 30, 2017 new text end	new text begin 7.5 percent new text end		new text begin 0.625 percent new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 39.

Minnesota Statutes 2016, section 490.121, subdivision 4, is amended to read:

Subd. 4.

Allowable service.

(a) "Allowable service" means any calendar month, subject
to the service credit limit in subdivision 22, served as a judge at any time, during which the
judge received compensation for that service from the state, municipality, or county,
whichever applies, and for which the judge made any required member contribution. It also
includes any month served as a referee in probate for all referees in probate who were in
office before January 1, 1974.

(b) "Allowable service" also means a period of authorized leave of absence for which
the judge has made a payment in lieu of contributions, not in an amount in excess of the
service credit limit under subdivision 22. To obtain the service credit, the judge shall pay
an amount equal to the normal cost of the judges retirement plan on the date of return from
the leave of absence, as determined in the most recent actuarial report for the plan filed with
the Legislative Commission on Pensions and Retirement, multiplied by the judge's average
monthly salary rate during the authorized leave of absence and multiplied by the number
of months of the authorized leave of absence, plus deleted text begin annual compound interest at the rate of
8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin interest at the applicable annual
rate or rates specified in section 356.59, subdivision 2, compounded annually, new text end from the date
of the termination of the leave to the date on which payment is made. The payment must
be made within one year of the date on which the authorized leave of absence terminated.
Service credit for an authorized leave of absence is in addition to a uniformed service leave
under section 490.1211.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 40.

Minnesota Statutes 2016, section 490.1211, is amended to read:

490.1211 UNIFORMED SERVICE.

(a) A judge who is absent from employment by reason of service in the uniformed
services, as defined in United States Code, title 38, section 4303(13), and who returns to
state employment as a judge upon discharge from service in the uniformed service within
the time frame required in United States Code, title 38, section 4312(e), may obtain service
credit for the period of the uniformed service, provided that the judge did not separate from
uniformed service with a dishonorable or bad conduct discharge or under other than honorable
conditions.

(b) The judge may obtain credit by paying into the fund equivalent member contribution
based on 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 judge would have received if the judge had continued to provide employment
services to the state rather than to provide uniformed service, or if the determination of that
rate is not reasonably certain, the annual salary rate is the judge's average salary rate during
the 12-month period of judicial employment rendered immediately preceding the purchase
period.

(d) If the member equivalent contributions provided for in this section are not paid in
full, the judge'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 section.

(e) To receive allowable service credit under this section, the contributions specified in
this section and section 490.121 must be transmitted to the fund during the period which
begins with the date on which the individual returns to judicial employment and which has
a duration of three times the length of the uniformed service period, but not to exceed five
years. If the determined payment period is calculated to be less than one year, the
contributions required under this section to receive service credit may be within one year
from the discharge date.

(f) The amount of allowable service credit obtainable under this section and section
490.121 may not exceed five years, unless a longer purchase period is required under United
States Code, title 38, section 4312.

(g) The state court administrator shall pay interest on all equivalent member and employer
contribution amounts payable under this section. Interest must be deleted text begin computed at the rate of
8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin at the applicable annual rate or
rates specified in section 356.59, subdivision 2, new text end compounded annuallynew text begin ,new text end from the end of each
fiscal year of the leave or break in service to the end of the month in which payment is
received.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 41.

Minnesota Statutes 2016, section 490.124, subdivision 12, is amended to read:

Subd. 12.

Refund.

(a) A person who ceases to be a judge is entitled to a refund in an
amount that is equal to all of the member's employee contributions to the judges' retirement
fund plus interest computed under section 352.22, subdivision 2.

(b) A refund of contributions under paragraph (a) terminates all service credits and all
rights and benefits of the judge and the judge's survivors under this chapter.

(c) A person who becomes a judge again after taking a refund under paragraph (a) may
reinstate the previously terminated allowable service credit, rights, and benefits by repaying
the total amount of the previously received refund. The refund repayment must include
interest deleted text begin on the total amount previously received at the annual rate of 8.5 percent until June
30, 2015, and eight percent thereafterdeleted text end new text begin at the applicable annual rate or rates specified in
section 356.59, subdivision 2new text end , compounded annually, from the date on which the refund
was received until the date on which the refund is repaid.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

ARTICLE 7

CONTRIBUTION RATES

Section 1.

Minnesota Statutes 2016, section 352.04, subdivision 2, is amended to read:

Subd. 2.

Employee contributions.

(a) The employee contribution to the fund must be
equal to the following percent of salary:

	deleted text begin from July 1, 2010, to June 30, 2014 deleted text end	deleted text begin 5 deleted text end
	from July 1, 2014, deleted text begin and thereafterdeleted text end new text begin to June 30, 2017 new text end	5.5
	new text begin from July 1, 2017, to June 30, 2018 new text end	new text begin 5.75 new text end
	new text begin after June 30, 2018 new text end	new text begin 6 new text end

(b) These contributions must be made by deduction from salary as provided in subdivision
4.

new text begin (c) Contribution increases under paragraph (a) must be paid starting the first day of the
first full pay period after the effective date of the increase.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 352.04, subdivision 3, is amended to read:

Subd. 3.

Employer contributions.

new text begin (a) new text end The employer contribution to the fund must be
equal to the following percent of salary:

	deleted text begin from July 1, 2010, to June 30, 2014 deleted text end	deleted text begin 5 deleted text end
	from July 1, 2014, deleted text begin and thereafterdeleted text end new text begin to June 30, 2017 new text end	5.5
	new text begin from July 1, 2017, to June 30, 2018 new text end	new text begin 5.875 new text end
	new text begin after June 30, 2018 new text end	new text begin 6.25 new text end

new text begin (b) Contribution increases under paragraph (a) must be paid starting the first day of the
first full pay period after the effective date of the increase.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 352.92, subdivision 1, is amended to read:

Subdivision 1.

Employee contributions.

(a) Employee contributions of covered
correctional employees must be in an amount equal to the following percent of salary:

	deleted text begin from July 1, 2010, to June 30, 2014 deleted text end	deleted text begin 8.6 deleted text end
	from July 1, 2014, deleted text begin and thereafterdeleted text end new text begin to June 30, 2017 new text end	9.1
	new text begin after June 30, 2017 new text end	new text begin 9.6 new text end

(b) These contributions must be made by deduction from salary as provided in section
352.04, subdivision 4.

new text begin (c) Contribution increases under paragraph (a) must be paid starting the first day of the
first full pay period after the effective date of the increase.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 352.92, subdivision 2, is amended to read:

Subd. 2.

Employer contributions.

new text begin (a) new text end The employer shall contribute for covered
correctional employees an amount equal to the following percent of salary:

	deleted text begin from July 1, 2010, to June 30, 2014 deleted text end	deleted text begin 12.1 deleted text end
	from July 1, 2014, deleted text begin and thereafterdeleted text end new text begin to June 30, 2017 new text end	12.85
	new text begin after June 30, 2017 new text end	new text begin 14.4 new text end

new text begin (b) Contribution increases under paragraph (a) must be paid starting the first day of the
first full pay period after the effective date of the increase.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 352.92, is amended by adding a subdivision to
read:

new text begin Subd. 2a. new text end

new text begin Supplemental employer contribution. new text end

new text begin (a) Effective July 1, 2018, the employer
shall pay a supplemental contribution. The supplemental contribution shall be 1.45 percent
of salary for covered correctional employees from July 1, 2018, through June 30, 2019;
2.95 percent of salary for covered correctional employees from July 1, 2019, through June
30, 2020; and 4.45 percent of salary for covered correctional employees thereafter. The
supplemental contribution rate of 4.45 percent shall remain in effect until the market value
of the assets of the correctional state employees retirement plan of the Minnesota State
Retirement System equals or exceeds the actuarial accrued liability of the plan as determined
by the actuary retained under section 356.214. The expiration of the supplemental employer
contribution is effective the first day of the first full pay period of the fiscal year immediately
following the issuance of the actuarial valuation upon which the expiration is based.
new text end

new text begin (b) The supplemental contribution under paragraph (a) must be paid starting the first
day of the first full pay period after the effective date.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 352B.02, subdivision 1a, is amended to read:

Subd. 1a.

Member contributions.

(a) The member contribution is the following
percentage of the member's salary:

	deleted text begin (1) before the first day of the first pay period beginning after July 1, 2014 deleted text end	deleted text begin 12.4 percent deleted text end
	deleted text begin (2) on or after the first day of the first pay period beginning afterdeleted text end new text begin from new text end July 1, 2014, to June 30, 2016	13.4 deleted text begin percent deleted text end
	deleted text begin (3) after June 30, 2016 deleted text end new text begin from July 1, 2016, to June 30, 2017 new text end	14.4 deleted text begin percent deleted text end
	new text begin from July 1, 2017, to June 30, 2019 new text end	new text begin 14.9 new text end
	new text begin after June 30, 2019 new text end	new text begin 15.4 new text end

(b) These contributions must be made by deduction from salary as provided in section
352.04, subdivision 4.

new text begin (c) Contribution increases under paragraph (a) must be paid starting the first day of the
first full pay period after the effective date of the increase.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 7.

Minnesota Statutes 2016, section 352B.02, subdivision 1c, is amended to read:

Subd. 1c.

Employer contributionsnew text begin and supplemental employer contributionnew text end .

(a) In
addition to member contributions, department heads shall pay a sum equal to the specified
percentage of the salary upon which deductions were made, which constitutes the employer
contribution to the fund as follows:

	deleted text begin (1) before the first day of the first pay period beginning after July 1, 2014 deleted text end	deleted text begin 18.6 percent deleted text end
	deleted text begin (2) on or after the first day of the first pay period beginning afterdeleted text end new text begin from new text end July 1, 2014, to June 30, 2016	20.1 deleted text begin percent deleted text end
	deleted text begin (3) after June 30, 2016 deleted text end new text begin from July 1, 2016, to June 30, 2017 new text end	21.6 deleted text begin percent deleted text end
	new text begin from July 1, 2017, to June 30, 2018 new text end	new text begin 22.35 new text end
	new text begin after June 30, 2018 new text end	new text begin 23.1 new text end

(b) Department contributions must be paid out of money appropriated to departments
for this purpose.

new text begin (c) Contribution increases under paragraph (a) must be paid starting the first day of the
first full pay period after the effective date of the increase.
new text end

new text begin (d) Effective July 1, 2017, department heads shall pay a supplemental employer
contribution. The supplemental contribution shall be 1.75 percent of the salary upon which
deductions are made from July 1, 2017, through June 30, 2018; three percent of the salary
upon which deductions are made from July 1, 2018, through June 30, 2019; five percent of
the salary which deductions are made from July 1, 2019, through June 30, 2020; and seven
percent of the salary upon which deductions are made thereafter. The supplemental
contribution must be paid starting the first day of the first full pay period after the effective
date. The supplemental contribution rate of seven percent shall remain in effect until the
market value of the assets of the State Patrol retirement plan of the Minnesota State
Retirement System equals or exceeds the actuarial accrued liability of the plan as determined
by the actuary retained under section 356.214. The expiration of the supplemental employer
contribution is effective the first day of the first full pay period of the fiscal year immediately
following the issuance of the actuarial valuation upon which the expiration is based.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 8.

Minnesota Statutes 2016, section 352D.04, subdivision 2, is amended to read:

Subd. 2.

Contribution rates.

(a) The money used to purchase shares under this section
is the employee and employer contributions provided in this subdivision.

(b) The employee contribution is an amount equal to deleted text begin thedeleted text end new text begin 5.5 new text end percent of salary deleted text begin specified
in section 352.04, subdivision 2, or 352.045, subdivision 3adeleted text end .

(d) For members of the legislature, the contributions under this subdivision also must
be made on per diem payments received during a regular or special legislative session, but
may not be made on per diem payments received outside of a regular or special legislative
session, on the additional compensation attributable to a leadership position under section
3.099, subdivision 3, living expense payments under section 3.101, or special session living
expense payments under section 3.103.

(e) For a judge who is a member of the unclassified plan under section 352D.02,
subdivision 1, paragraph (c), clause (16), the employee contribution rate is eight percent of
salary, and there is no employer contribution.

(f) These contributions must be made in the manner provided in section 352.04,
subdivisions 4, 5, and 6.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 353.65, subdivision 2, is amended to read:

Subd. 2.

Employee contribution.

(a) For members other than members who were active
members of the former Minneapolis Firefighters Relief Association on December 29, 2011,
or for members other than members who were active members of the former Minneapolis
Police Relief Association on December 29, 2011, the employee contribution is an amount
equal to the following percentage of the total salary of each member, as follows: deleted text begin 9.6 percent
before calendar year 2014; 10.2 percent in calendar year 2014; and 10.8 percent in calendar
year 2015 and thereafter.
deleted text end

	new text begin before January 1, 2018 new text end	new text begin 10.8 percent new text end
	new text begin from January 1, 2018, through December 31, 2018 new text end	new text begin 11.3 percent new text end
	new text begin from January 1, 2019, and thereafter new text end	new text begin 11.8 percent new text end

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 10.

Minnesota Statutes 2016, section 353.65, subdivision 3, is amended to read:

Subd. 3.

Employer contribution.

(a) With respect to members other than members who
were active members of the former Minneapolis Firefighters Relief Association on December
29, 2011, or for members other than members who were active members of the former
Minneapolis Police Relief Association on December 29, 2011, the employer contribution
is an amount equal to the following percentage of the total salary of each member, as follows:
deleted text begin 14.4 percent before calendar year 2014; 15.3 percent in calendar year 2014; and 16.2 percent
in calendar year 2015 and thereafter.
deleted text end

	new text begin before January 1, 2018 new text end	new text begin 16.2 percent new text end
	new text begin from January 1, 2018, through December 31, 2018 new text end	new text begin 16.95 percent new text end
	new text begin from January 1, 2019, and thereafter new text end	new text begin 17.7 percent new text end

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 11.

Minnesota Statutes 2016, section 354A.12, subdivision 1, is amended to read:

Subdivision 1.

Employee contributions.

(a) The contribution required to be paid by
each member of the St. Paul Teachers Retirement Fund Association is the percentage of
total salary specified below for the applicable association and program:

	Program	Percentage of Total Salary
St. Paul Teachers Retirement Fund Association
	deleted text begin basic program after June 30, 2014 deleted text end	deleted text begin 9 percent deleted text end
	deleted text begin basic program after June 30, 2015 deleted text end	deleted text begin 9.5 percent deleted text end
	basic program after June 30, 2016	10 percent
	new text begin basic program after June 30, 2021 new text end	new text begin 10.25 percent new text end
	deleted text begin coordinated program after June 30, 2014 deleted text end	deleted text begin 6.5 percent deleted text end
	deleted text begin coordinated program after June 30, 2015 deleted text end	deleted text begin 7 percent deleted text end
	coordinated program after June 30, 2016	7.5 percent
	new text begin coordinated program after June 30, 2021 new text end	new text begin 7.75 percent new text end

(b) Contributions must be made by deduction from salary and must be remitted directly
to the St. Paul Teachers Retirement Fund Association at least once each month.

(c) When an employee contribution rate changes for a fiscal year, the new contribution
rate is effective for the entire salary paid by the employer with the first payroll cycle reported.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 12.

Minnesota Statutes 2016, section 354A.12, subdivision 2a, is amended to read:

Subd. 2a.

Employer regular and additional contributions.

(a) The employing units
shall make the following employer contributions to the teachers retirement fund association:

(1) for deleted text begin anydeleted text end new text begin each new text end coordinated member of the St. Paul Teachers Retirement Fund
Association, the employing unit shall make a regular employer contribution to the retirement
fund association in an amount equal to the designated percentage of the salary of the
coordinated member as provided below:

	deleted text begin after June 30, 2014 deleted text end	deleted text begin 5.5 percent deleted text end
	deleted text begin after June 30, 2015 deleted text end	deleted text begin 6 percent deleted text end
	after June 30, 2016	6.25 percent
	after June 30, 2017	deleted text begin 6.5deleted text end new text begin 7 new text end percent
	new text begin after June 30, 2018 new text end	new text begin 7.75 percent new text end
	new text begin after June 30, 2019 new text end	new text begin 8.25 percent new text end
	new text begin after June 30, 2020 new text end	new text begin 9 percent new text end

(2) for deleted text begin anydeleted text end new text begin each new text end basic member of the St. Paul Teachers Retirement Fund Association,
the employing unit shall make a regular employer contribution to the respective retirement
fund in an amount according to the schedule below:

	deleted text begin after June 30, 2014 deleted text end	deleted text begin 9 percent of salary deleted text end
	deleted text begin after June 30, 2015 deleted text end	deleted text begin 9.5 percent of salary deleted text end
	after June 30, 2016	9.75 percent of salary
	after June 30, 2017	deleted text begin 10deleted text end new text begin 10.5 new text end percent of salary
	new text begin after June 30, 2018 new text end	new text begin 11.25 percent of salary new text end
	new text begin after June 30, 2019 new text end	new text begin 11.75 percent of salary new text end
	new text begin after June 30, 2020 new text end	new text begin 12.5 percent of salary new text end

(3) for deleted text begin adeleted text end new text begin each new text end basic member of the St. Paul Teachers Retirement Fund Association, the
employing unit shall make an additional employer contribution to the respective fund in an
amount equal to 3.64 percent of the salary of the basic member;

(4) for deleted text begin adeleted text end new text begin each new text end coordinated member of the St. Paul Teachers Retirement Fund Association,
the employing unit shall make an additional employer contribution to the respective fund
in an amount equal to 3.84 percent of the coordinated member's salary.

(b) The regular and additional employer contributions must be remitted directly to the
St. Paul Teachers Retirement Fund Association at least once each month. Delinquent amounts
are payable with interest under the procedure in subdivision 1a.

(c) Payments of regular and additional employer contributions for school district or
technical college employees who are paid from normal operating funds must be made from
the appropriate fund of the district or technical college.

(d) When an employer contribution rate changes for a fiscal year, the new contribution
rate is effective for the entire salary paid by the employer with the first payroll cycle reported.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

ARTICLE 8

DIRECT STATE AID

Section 1.

Minnesota Statutes 2016, section 353.65, is amended by adding a subdivision
to read:

new text begin Subd. 3b. new text end

new text begin Direct state aid. new text end

new text begin The state shall pay $4,500,000 on October 1, 2017, and
October 1, 2018, to the public employees police and fire retirement plan. By October 1 of
each year after 2018, the state shall pay to the public employees police and fire retirement
plan $9,000,000. The commissioner of management and budget shall pay the aid specified
in this subdivision. The amount required is appropriated annually from the general fund to
the commissioner of management and budget.
new text end

Sec. 2.

Minnesota Statutes 2016, section 354A.12, subdivision 3a, is amended to read:

Subd. 3a.

Direct state aid to first class city teachers retirement fund associations.

(a) The state shall pay $2,827,000 to the St. Paul Teachers Retirement Fund Association.

(b) In addition to other amounts specified in this subdivision, the state shall pay
$7,000,000 as state aid to the St. Paul Teachers Retirement Fund Association.

new text begin (c) In addition to the amounts specified in paragraphs (a) and (b), the state shall pay
$5,000,000 as state aid to the St. Paul Teachers Retirement Fund Association.
new text end

deleted text begin (c)deleted text end new text begin (d) new text end The aid under this subdivision is payable October 1 annually. The commissioner
of management and budget shall pay the aid specified in this subdivision. The amount
required is appropriated annually from the general fund to the commissioner of management
and budget.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

ARTICLE 9

MINNESOTA STATE RETIREMENT SYSTEM
ADMINISTRATIVE PROVISIONS

Section 1.

Minnesota Statutes 2016, section 3A.03, subdivision 2, is amended to read:

Subd. 2.

Refund.

(b) The refund of contributions as provided in paragraph (a) terminates all rights of a
former member of the legislature and the survivors of the former member under this chapter.

(d) However, the member may reinstate the rights and credit for service previously
forfeited under this chapter if the member repays all refunds taken, plus interest at the rate
of 8.5 percent until June 30, 2015, and eight percent thereafter compounded annually from
the date on which the refund was taken to the date on which the refund is repaid.new text begin Repayment
must be made as provided in section 352.23, paragraph (d).
new text end

(e) No person may be required to apply for or to accept a refund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 3A.03, subdivision 3, is amended to read:

Subd. 3.

Legislators retirement fund.

(a) The legislators retirement fund, a special
retirement fund, is created within the state treasury. The legislators retirement fund must
be credited with any investment proceeds on the assets of the retirement fund.

(b) The payment of annuities under section 3A.115, paragraph (b), is appropriated from
the legislators retirement fund.

new text begin (c) The legislators retirement fund may receive transfers of general fund proceeds.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 16A.14, subdivision 2a, is amended to read:

Subd. 2a.

Exceptions.

The allotment and encumbrance system does not apply to:

(1) appropriations for the courts or the legislature;

(2) payment of unemployment benefitsdeleted text begin .deleted text end new text begin ; and
new text end

new text begin (3) transactions within the defined contribution funds administered by the Minnesota
State Retirement System.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 352.01, subdivision 2a, is amended to read:

Subd. 2a.

Included employees.

(a) "State employee" includes:

(1) employees of the Minnesota Historical Society;

(2) employees of the State Horticultural Society;

(3) employees of the Minnesota Crop Improvement Association;

(4) employees of the adjutant general whose salaries are paid from federal funds and
who are not covered by any federal civilian employees retirement system;

(5) employees of the Minnesota State Colleges and Universities who are employed under
the university or college activities program;

(6) currently contributing employees covered by the system who are temporarily
employed by the legislature during a legislative session or any currently contributing
employee employed for any special service as defined in subdivision 2b, clause (6);

(7) employees of the legislature who are appointed without a limit on the duration of
their employment;

(8) trainees who are employed on a full-time established training program performing
the duties of the classified position for which they will be eligible to receive immediate
appointment at the completion of the training period;

(9) employees of the Minnesota Safety Council;

(10) any employees who are on authorized leave of absence from the Transit Operating
Division of the former Metropolitan Transit Commission and who are employed by the
labor organization which is the exclusive bargaining agent representing employees of the
Transit Operating Division;

(11) employees of the Metropolitan Council, Metropolitan Parks and Open Space
Commission, Metropolitan Sports Facilities Commission, or Metropolitan Mosquito Control
Commission unless excluded under subdivision 2b or are covered by another public pension
fund or plan under section 473.415, subdivision 3;

(12) judges of the Tax Court;

(13) personnel who were employed on June 30, 1992, by the University of Minnesota
in the management, operation, or maintenance of its heating plant facilities, whose
employment transfers to an employer assuming operation of the heating plant facilities, so
long as the person is employed at the University of Minnesota heating plant by that employer
or by its successor organization;

(14) personnel who are employed as seasonal employees in the classified or unclassified
service;

(15) persons who are employed by the Department of Commerce as a peace officer in
the Commerce Fraud Bureau under section 45.0135 who have attained the mandatory
retirement age specified in section 43A.34, subdivision 4;

(16) employees of the University of Minnesota unless excluded under subdivision 2b,
clause (3);

(17) employees of the Middle Management Association whose employment began after
July 1, 2007, and to whom section 352.029 does not apply;

(18) employees of the Minnesota Government Engineers Council to whom section
352.029 does not apply;

(19) employees of the Minnesota Sports Facilities Authority;

(20) employees of the Minnesota Association of Professional Employees;

(21) employees of the Minnesota State Retirement System;

(22) employees of the State Agricultural Society;

(23) employees of the Gillette Children's Hospital Board who were employed in the
state unclassified service at the former Gillette Children's Hospital on March 28, 1974; deleted text begin and
deleted text end

(24) if approved for coverage by the Board of Directors of Conservation Corps Minnesota,
employees of Conservation Corps Minnesota so employed on June 30, 2003deleted text begin .deleted text end new text begin ; and
new text end

new text begin (25) employees of the Perpich Center for Arts Education who are covered by the general
state employees retirement plan of the Minnesota State Retirement System as of July 1,
2016.
new text end

(b) Employees specified in paragraph (a), clause (13), are included employees under
paragraph (a) if employer and employee contributions are made in a timely manner in the
amounts required by section 352.04. Employee contributions must be deducted from salary.
Employer contributions are the sole obligation of the employer assuming operation of the
University of Minnesota heating plant facilities or any successor organizations to that
employer.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 352.03, subdivision 5, is amended to read:

Subd. 5.

Executive directordeleted text begin ;deleted text end new text begin , deputy director, andnew text end assistant director.

(a) The new text begin board
shall appoint an new text end executive director, in this chapter called the director, deleted text begin of the system must
be appointed by the boarddeleted text end on the basis of deleted text begin fitnessdeleted text end new text begin educationnew text end , experience in the retirement
field, deleted text begin and leadershipdeleted text end abilitynew text begin to manage and lead system staff, and ability to assist the board
in setting a vision for the systemnew text end . The director must have had at least five years' experience
deleted text begin on the administrative staff of a major retirement systemdeleted text end new text begin in either an executive level
management position or in a position with responsibility for the governance, management,
or administration of a retirement plannew text end .

(b) The executive directornew text begin , deputy director,new text end and assistant director must be in the
unclassified service but appointees may be selected from civil service lists if desired.
Notwithstanding any law to the contrary, the board must set the salary of the executive
director. The salary of the executive director must not exceed the limit for a position listed
in section 15A.0815, subdivision 2. The salary of the new text begin deputy director and new text end assistant director
must be set in accordance with section 43A.18, subdivision 3.

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2016, section 352.03, subdivision 6, is amended to read:

Subd. 6.

Duties and powers of executive director.

The management of the system is
vested in the director, who is the executive and administrative head of the system. new text begin The
director may appoint a deputy director and an assistant director with the approval of the
board. new text end The director shall be advisor to the board on matters pertaining to the system and
shall also act as the secretary of the board. The director shall:

(1) attend meetings of the board;

(2) prepare and recommend to the board appropriate rules to carry out this chapter;

(3) establish and maintain an adequate system of records and accounts following
recognized accounting principles and controls;

deleted text begin (4) designate an assistant director with the approval of the board;
deleted text end

deleted text begin (5)deleted text end new text begin (4) new text end appoint any employees, both permanent and temporary, that are necessary to
carry out the provisions of this chapter;

deleted text begin (6)deleted text end new text begin (5) new text end organize the work of the system as the director deems necessary to fulfill the
functions of the system, and define the duties of its employees and delegate to them any
powers or duties, subject to the control of the director and under conditions the director may
prescribe. Appointments to exercise delegated power must be by written order and shall be
filed with the secretary of state;

deleted text begin (7)deleted text end new text begin (6) new text end with the advice and consent of the board, contract for the services of an approved
actuary, professional management services, and any other consulting services as necessary
and fix the compensation for those services. The contracts are not subject to competitive
bidding under chapter 16C. Any approved actuary retained by the executive director shall
function as the actuarial advisor of the board and the executive director, and may perform
actuarial valuations and experience studies to supplement those performed by the actuary
retained under section 356.214. Any supplemental actuarial valuations or experience studies
shall be filed with the executive director of the Legislative Commission on Pensions and
Retirement. Professional management services may not be contracted for more often than
once in six years. Copies of professional management survey reports must be transmitted
to the secretary of the senate, the chief clerk of the house of representatives, and the
Legislative Reference Library as provided by section 3.195, and to the executive director
of the commission at the time as reports are furnished to the board. Only management firms
experienced in conducting management surveys of federal, state, or local public retirement
systems are qualified to contract with the director;

deleted text begin (8)deleted text end new text begin (7) new text end with the advice and consent of the board provide in-service training for the
employees of the system;

deleted text begin (9)deleted text end new text begin (8) new text end make refunds of accumulated contributions to former state employees and to the
designated beneficiary, surviving spouse, legal representative, or next of kin of deceased
state employees or deceased former state employees, as provided in this chapter;

deleted text begin (10)deleted text end new text begin (9) new text end determine the amount of the annuities and disability benefits of employees
covered by the system and authorize payment of the annuities and benefits beginning as of
the dates on which the annuities and benefits begin to accrue, in accordance with the
provisions of this chapter;

deleted text begin (11)deleted text end new text begin (10) new text end pay annuities, refunds, survivor benefits, salaries, and necessary operating
expenses of the system;

deleted text begin (12)deleted text end new text begin (11) new text end certify funds available for investment to the State Board of Investment;

deleted text begin (13)deleted text end new text begin (12) new text end with the advice and approval of the board request the State Board of Investment
to sell securities when the director determines that funds are needed for the system;

deleted text begin (14)deleted text end new text begin (13) new text end prepare and submit to the board and the legislature an annual financial report
covering the operation of the system, as required by section 356.20;

deleted text begin (15)deleted text end new text begin (14) new text end prepare and submit biennial and annual budgets to the board and with the
approval of the board submit the budgets to the Department of Management and Budget;
and

deleted text begin (16)deleted text end new text begin (15) new text end with the approval of the board, perform other duties required to administer the
retirement and other provisions of this chapter and to do its business.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 7.

Minnesota Statutes 2016, section 352.113, subdivision 4, is amended to read:

Subd. 4.

Medical or psychological examinations; authorization for payment of
benefit.

(a) Any physician, psychologist, chiropractor, deleted text begin ordeleted text end physician assistantnew text begin , or nurse
practitionernew text end providing any service specified in this section must be licensed.

(b) An applicant shall provide a detailed report signed by a physician, and at least one
additional report signed by a physician, deleted text begin chiropractor,deleted text end psychologist, deleted text begin ordeleted text end new text begin chiropractor, new text end physician
assistantnew text begin , or nurse practitionernew text end with evidence to support an application for total and permanent
disability. The reports must include an expert opinion regarding whether the employee is
permanently and totally disabled within the meaning of section 352.01, subdivision 17, and
that the disability arose before the employee was placed on any paid or unpaid leave of
absence or terminated public service.

(c) If there is medical evidence that supports the expectation that at some point the person
applying for the disability benefit will no longer be disabled, the decision granting the
disability benefit may provide for a termination date upon which the total and permanent
disability can be expected to no longer exist. When a termination date is part of the decision
granting benefits, prior to the benefit termination the executive director shall review any
evidence provided by the disabled employee to show that the disabling condition for which
benefits were initially granted continues. If the benefits cease, the disabled employee may
follow the appeal procedures described in section 356.96 or may reapply for disability
benefits using the process described in this subdivision.

(d) Any claim to disability must be supported by a report from the employer indicating
that there is no available work that the employee can perform with the disabling condition
and that all reasonable accommodations have been considered. Upon request of the executive
director, an employer shall provide evidence of the steps the employer has taken to attempt
to provide reasonable accommodations and continued employment to the claimant.

(e) The director shall also obtain written certification from the employer stating whether
the employment has ceased or whether the employee is on sick leave of absence because
of a disability that will prevent further service to the employer and that the employee is not
entitled to compensation from the employer.

(f) The medical adviser shall consider the reports of the deleted text begin physicians, physician assistants,
psychologists, and chiropractorsdeleted text end new text begin physician, psychologist, chiropractor, physician assistant,
or nurse practitioner new text end and any other evidence supplied by the employee or other interested
parties. If the medical adviser finds the employee totally and permanently disabled, the
adviser shall make appropriate recommendation to the director in writing together with the
date from which the employee has been totally disabled. The director shall then determine
if the disability occurred deleted text begin within 18 months of filing the application,deleted text end while still in the
employment of the statedeleted text begin , and the propriety of authorizing payment of a disability benefit as
provided in this sectiondeleted text end new text begin and constitutes a total and permanent disability as defined in section
352.01, subdivision 17new text end .

(g) A terminated employee may apply for a disability benefit within 18 months of
termination as long as the disability occurred while in the employment of the state. The fact
that an employee is placed on leave of absence without compensation because of disability
does not bar that employee from receiving a disability benefit.

new text begin (h) Upon appeal, the board of directors may extend the disability benefit application
deadline in paragraph (g) by an additional 18 months if the terminated employee is
determined by the board of directors to have a cognitive impairment that made it unlikely
that the terminated employee understood that there was an application deadline or that the
terminated employee was able to meet the application deadline.
new text end

deleted text begin (h)deleted text end new text begin (i)new text end Unless the payment of a disability benefit has terminated because the employee
is no longer totally disabled, or because the employee has reached normal retirement age
as provided in this section, the disability benefit must cease with the last payment received
by the disabled employee or which had accrued during the lifetime of the employee unless
there is a spouse surviving. In that event, the surviving spouse is entitled to the disability
benefit for the calendar month in which the disabled employee died.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 8.

Minnesota Statutes 2016, section 352.113, subdivision 14, is amended to read:

Subd. 14.

Disabilitant earnings reports.

Disability benefit recipients must report all
earnings from reemployment and income from workers' compensation to the system annually
by May 15 in a format prescribed by the executive director. new text begin The executive director may
waive the earnings report requirement for any disabled employee who is not required to
undergo regular medical or psychological examinations under subdivision 6. new text end If the form is
not submitted by June 15, benefits must be suspended effective July 1. If the form deemed
acceptable by the executive director is received after the June 15 deadline, benefits shall be
reinstated retroactive to July 1.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 352.23, is amended to read:

352.23 TERMINATION OF RIGHTS; REPAYMENT OF REFUND.

(b) Terminated service credits and rights must not again be restored until the former
employee acquires at least six months of allowable service credit after taking the last refunddeleted text begin .
In that event, the employee may repaydeleted text end new text begin and repays new text end all refunds previously taken from the
retirement fundnew text begin with interest as provided in paragraph (d)new text end .

(d) Payments under this section for repayment of refunds are to be paid with interest at
the rate of 8.5 percent until June 30, 2015, and eight percent thereafter compounded annually
from the date the refund was taken until the date the refund is repaid. deleted text begin Theydeleted text end new text begin Repayment new text end may
be deleted text begin paid in a lump sum or by payroll deduction in the manner provided in section 352.04.
Payment may bedeleted text end made in new text begin partial payments consistent with section 356.44 during employment
or in new text end a lump sum up to six months after termination from service.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 10.

Minnesota Statutes 2016, section 352B.11, subdivision 4, is amended to read:

Subd. 4.

Reentry into state service.

When a former member, who has become separated
from state service that entitled the member to membership and has received a refund of
retirement payments, reenters the state service in a position that entitles the member to
membership, that member shall receive credit for the period of prior allowable state service
if the member repays into the fund the amount of the refund, plus interest on it at the rate
of 8.5 percent until June 30, 2015, and eight percent thereafter compounded annuallydeleted text begin , at
any time before subsequent retirement. Repayment may be made in installments or in a
lump sumdeleted text end .new text begin Repayment must be made as provided in section 352.23, paragraph (d).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 11.

Minnesota Statutes 2016, section 352D.02, subdivision 1, is amended to read:

Subdivision 1.

Coverage.

(a) Employees enumerated in paragraph (c), clauses (2), (3),
(4), (6) to (14), and (16) to (18), if they are in the unclassified service of the state or
Metropolitan Council and are eligible for coverage under the general state employees
retirement plan under chapter 352, are participants in the unclassified program under this
chapter deleted text begin unless the employee gives notice to the executive director of the Minnesota State
Retirement System within one year following the commencement of employment in the
unclassified service that the employee desires coverage under the general state employees
retirement plan. For the purposes of this chapter, an employee who does not file notice with
the executive director is deemed to have exercised the option to participate in the unclassified
programdeleted text end .

(b) Persons referenced in paragraph (c), clause (5), are participants in the unclassified
program under this chapter unless the person was eligible to elect different coverage under
section 3A.07 and elected retirement coverage by the applicable alternative retirement plan.
Persons referenced in paragraph (c), clause (15), are participants in the unclassified program
under this chapter for judicial employment in excess of the service credit limit in section
490.121, subdivision 22.

(1) the governor, the lieutenant governor, the secretary of state, the state auditor, and
the attorney general;

(2) an employee in the Office of the Governor, Lieutenant Governor, Secretary of State,
State Auditor, Attorney General;

(3) an employee of the State Board of Investment;

(4) the head of a department, division, or agency created by statute in the unclassified
service, an acting department head subsequently appointed to the position, or an employee
enumerated in section 15A.0815 or 15A.083, subdivision 4;

(5) a member of the legislature;

(6) an unclassified employee of the legislature or a commission or agency of the
legislature who is appointed without a limit on the duration of the employment or a temporary
legislative employee having shares in the supplemental retirement fund as a result of former
employment covered by this chapter, whether or not eligible for coverage under the
Minnesota State Retirement System;

(7) a person who is employed in a position established under section 43A.08, subdivision
1, clause (3), or in a position authorized under a statute creating or establishing a department
or agency of the state, which is at the deputy or assistant head of department or agency or
director level;

(8) the regional administrator, or executive director of the Metropolitan Council, general
counsel, division directors, operations managers, and other positions as designated by the
council, all of which may not exceed 27 positions at the council and the chair;

(9) the commissioner, deputy commissioner, and not to exceed nine positions of the
Minnesota Office of Higher Education in the unclassified service, as designated by the
Minnesota Office of Higher Education before January 1, 1992, or subsequently redesignated
with the approval of the board of directors of the Minnesota State Retirement System, unless
the person has elected coverage by the individual retirement account plan under chapter
354B;

(10) the clerk of the appellate courts appointed under article VI, section 2, of the
Constitution of the state of Minnesota, the state court administrator and judicial district
administrators;

(11) the chief executive officers of correctional facilities operated by the Department of
Corrections and of hospitals and nursing homes operated by the Department of Human
Services;

(12) an employee whose principal employment is at the state ceremonial house;

(13) an employee of the Agricultural Utilization Research Institute;

(14) an employee of the State Lottery who is covered by the managerial plan established
under section 43A.18, subdivision 3;

(15) a judge who has exceeded the service credit limit in section 490.121, subdivision
22;

(16) an employee of Enterprise Minnesota, Inc.;

(17) a person employed by the Minnesota State Colleges and Universities as faculty or
in an eligible unclassified administrative position as defined in section 354B.20, subdivision
6, who was employed by the former state university or the former community college system
before May 1, 1995, and elected unclassified program coverage prior to May 1, 1995; and

(18) a person employed by the Minnesota State Colleges and Universities who was
employed in state service before July 1, 1995, who subsequently is employed in an eligible
unclassified administrative position as defined in section 354B.20, subdivision 6, and who
elects coverage by the unclassified program.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 12.

Minnesota Statutes 2016, section 352D.02, subdivision 3, is amended to read:

Subd. 3.

Transfer to general employees retirement plan.

(a) deleted text begin If permitted under
paragraph (b), an employeedeleted text end new text begin A person in the unclassified program and new text end referred to in
subdivision 1, paragraph (c), clauses (2) to (4), (6) to (14), and (16) to (18), deleted text begin who is credited
with shares in the unclassified program and has credit for allowable servicedeleted text end may elect to
terminate participation in the unclassified program and be covered by the general new text begin state
new text end employees retirement plandeleted text begin . (b) An employee specified in paragraph (a) is permitted to
terminate participation in the unclassified program and be covered bydeleted text end new text begin if the person files an
election to transfer to new text end the general new text begin state new text end employees retirement plan deleted text begin if the employeedeleted text end new text begin with the
executive director of the Minnesota State Retirement System as provided in paragraph (b)
and the person's current employment or appointmentnew text end :

(1) deleted text begin was employeddeleted text end new text begin began new text end before July 1, 2010, and new text begin the person new text end has at least ten years of
deleted text begin allowable servicedeleted text end new text begin covered employmentnew text end ; or

(2) deleted text begin was first employeddeleted text end new text begin began new text end after June 30, 2010, and new text begin the person new text end has no more than seven
years of allowable servicenew text begin in the unclassified programnew text end .

deleted text begin Thedeleted text end new text begin (b) An new text end election new text begin to transfer new text end must be in writingnew text begin ,new text end on a form provided by the executive
director, and deleted text begin can be made no later than one month following the termination of covered
employment.deleted text end new text begin delivered to the executive director:
new text end

new text begin (1) for persons described in paragraph (a), clause (1), no later than one month following
the termination of covered employment; or
new text end

new text begin (2) for persons described in paragraph (a), clause (2), no later than one month following
the termination of employment in a position covered by the unclassified program.
new text end

new text begin For purposes of this chapter, an employee who does not file an election to transfer with
the executive director is deemed to have exercised the option to participate in the unclassified
program.
new text end

(c) If the transfer election is made, the executive director shall redeem the employee's
total shares and credit to the employee's account in the general employees retirement plan
the amount of contributions that would have been credited had the employee been covered
by the general employees retirement plan during the employee's entire covered employment.
The balance of money redeemed and not credited to the employee's account must be
transferred to the general employees retirement plan, except that the executive director must
determine:

(1) the employee contributions paid to the unclassified program; and

(2) the employee contributions that would have been paid to the general employees
retirement plan for the comparable period, if the individual had been covered by that plan.

If clause (1) is greater than clause (2), the difference must be refunded to the employee
as provided in section 352.22. If clause (2) is greater than clause (1), the difference must
be paid by the employee within six months of electing general employees retirement plan
coverage or before the effective date of the annuity, whichever is sooner.

(d) An election under paragraph (b) to transfer coverage to the general employees
retirement plan is irrevocable during any period of covered employment.

(e) A person referenced in subdivision 1, paragraph (c), clause (1), (5), or (15), who is
credited with employee shares in the unclassified program is not permitted to terminate
participation in the unclassified program and be covered by the general employees retirement
plan.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 13.

Minnesota Statutes 2016, section 352D.05, subdivision 4, is amended to read:

Subd. 4.

Repayment of refund.

(a) A participant in the unclassified program may repay
regular refunds taken under section 352.22, as provided in section 352.23.

(b) A participant in the unclassified program or an employee covered by the general
employees retirement plan who has withdrawn the value of the total shares may repay the
refund taken and thereupon restore the service credit, rights and benefits forfeited by paying
into the fund the amount refunded plus interest at the rate of 8.5 percent until June 30, 2015,
and eight percent thereafter compounded annually from the date that the refund was taken
until the date that the refund is repaid. If the participant had withdrawn only the employee
shares as permitted under prior laws, repayment must be pro rata.

(c) deleted text begin Except as provided in section 356.441, the repayment of a refund under this section
must be made in a lump sumdeleted text end new text begin Repayment must be made as provided in section 352.23,
paragraph (d)new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 14.

Minnesota Statutes 2016, section 490.124, subdivision 12, is amended to read:

Subd. 12.

Refund.

(b) A refund of contributions under paragraph (a) terminates all service credits and all
rights and benefits of the judge and the judge's survivors under this chapter.

(c) A person who becomes a judge again after taking a refund under paragraph (a) may
reinstate the previously terminated allowable service credit, rights, and benefits by repaying
the total amount of the previously received refund. The refund repayment must include
interest on the total amount previously received at the annual rate of 8.5 percent until June
30, 2015, and eight percent thereafter, compounded annually, from the date on which the
refund was received until the date on which the refund is repaid.new text begin Repayment must be made
as provided in section 352.23, paragraph (d).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

ARTICLE 10

PUBLIC EMPLOYEES RETIREMENT ASSOCIATION
ADMINISTRATIVE PROVISIONS

Section 1.

Minnesota Statutes 2016, section 353.01, subdivision 2b, is amended to read:

Subd. 2b.

Excluded employees.

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

(1) persons whose annual salary from one governmental subdivision never exceeds an
amount, stipulated in writing in advance, of $5,100 if the person is not a school district
employee or $3,800 if the person is a school year employee. If annual compensation from
one governmental subdivision to an employee exceeds the stipulated amount in a calendar

SF 3

Bill Text Versions

Current Version - as introduced

ARTICLE 1

MINNESOTA STATE RETIREMENT SYSTEM BENEFIT AND CONTRIBUTION CHANGES

Section 1.

Subd. 4.

Deferred annuities augmentation.

new text begin EFFECTIVE DATE. new text end

Sec. 2.

Subd. 1a.

Actuarial reduction for early retirement.

new text begin EFFECTIVE DATE. new text end

Sec. 3.

Subd. 2.

Amount of refund.

Sec. 4.

new text begin Subd. 2b. new text end

new text begin Refund repayment. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 5.

Subd. 3.

Deferred annuity.

new text begin EFFECTIVE DATE. new text end

Sec. 6.

new text begin Subd. 3a. new text end

new text begin Computation of deferred annuity. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 7.

new text begin Subd. 2b. new text end

new text begin Computation of deferred annuity. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 8.

Subdivision 1.

Combined service.

new text begin EFFECTIVE DATE. new text end

Sec. 9.

Subd. 25.

Tier I.

new text begin EFFECTIVE DATE. new text end

Sec. 10.

Subd. 26.

Tier II.

new text begin EFFECTIVE DATE. new text end

Sec. 11. new text begin REPEALER.new text end

new text begin EFFECTIVE DATE. new text end

ARTICLE 2

PUBLIC EMPLOYEES RETIREMENT ASSOCIATION CHANGES

Section 1. new text begin PERA BOARD OF TRUSTEES; REFORM PROPOSAL REQUIREMENT.new text end

Sec. 2. new text begin REPEALER.new text end

new text begin EFFECTIVE DATE. new text end

ARTICLE 3

TEACHERS RETIREMENT ASSOCIATION

Section 1.

Subd. 3.

Aid expiration.

new text begin EFFECTIVE DATE. new text end

Sec. 2. new text begin REPEALER.new text end

new text begin EFFECTIVE DATE. new text end

ARTICLE 4

ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION BENEFIT AND CONTRIBUTION CHANGES

Section 1.

Subd. 3a.

Actuarial equivalent.

new text begin EFFECTIVE DATE. new text end

Sec. 2.

Subd. 7.

deleted text begin Eligibility for payment ofdeleted text end Postretirement adjustments.

new text begin EFFECTIVE DATE. new text end

Sec. 3.

Subd. 7.

Reduction for early retirement.

new text begin EFFECTIVE DATE. new text end

Sec. 4.

Subd. 2.

Eligibility for deferred retirement annuity.

new text begin EFFECTIVE DATE. new text end

Sec. 5.

Subd. 3.

Computation of refund amount.

MINNESOTA STATE RETIREMENT SYSTEM BENEFIT AND CONTRIBUTION
CHANGES

Sec. 11. new text begin REPEALER.
new text end

Section 1. new text begin PERA BOARD OF TRUSTEES; REFORM PROPOSAL REQUIREMENT.
new text end

Sec. 2. new text begin REPEALER.
new text end

Sec. 2. new text begin REPEALER.
new text end

ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION BENEFIT AND
CONTRIBUTION CHANGES

Sec. 6. new text begin REPEALER.
new text end

POSTRETIREMENT ADJUSTMENTS FOR STATEWIDE PLANS
AND GENERAL PROVISIONS

new text begin [356.311] COVERAGE BY MORE THAN ONE PLAN.
new text end

Annual postretirement adjustments; deleted text begin generallydeleted text end new text begin Minnesota State
Retirement System general state employees retirement plan, legislators retirement
plan, and unclassified state employees retirement programnew text end .

Annual postretirement adjustments; Minnesota State Retirement System
deleted text begin plans other than State Patroldeleted text end new text begin correctional state employees new text end retirement plan.

Annual postretirement adjustments; PERA; general employees retirement
plan deleted text begin and local government correctional retirement plandeleted text end .

Annual postretirement adjustments; Minnesota State Retirement System
judges retirement plan.

new text begin Annual postretirement adjustments; PERA local government correctional
retirement plan. new text end

Sec. 14. new text begin STUDY.
new text end