as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to retirement; retirement coverage for 1.3 teachers employed by independent school district No. 1.4 625; providing for a choice about future teacher 1.5 retirement coverage by the board of education of 1.6 independent school district No. 625; amending 1.7 Minnesota Statutes 1996, sections 3.85, subdivisions 1.8 11, and 12; 16A.06, subdivision 9; 353.01, subdivision 1.9 2b; 354.05, subdivisions 2, and 13; 354A.011, 1.10 subdivisions 7, 8, 11, and 15a; 354A.021, subdivision 1.11 1; 354A.08; 354A.092; 354A.093; 354A.095; 354A.096; 1.12 354A.12, subdivisions 1, 2, 2a, 3a, 3c, and 3d; 1.13 354A.23, subdivision 2; 354A.30; 354A.31, subdivision 1.14 4; 354A.32, subdivision 1; 354A.36, subdivision 3; 1.15 354A.39; 354A.40, subdivision 1; 354A.41; 356.20, 1.16 subdivision 2; 356.215, subdivision 2; 356.30, 1.17 subdivision 3; 356.302, subdivision 7; 356.303, 1.18 subdivision 4; 356.32, subdivision 2; 356.35, 1.19 subdivisions 2 and 5; 356.36, subdivision 1; 356.86, 1.20 subdivisions 1, 2, and 3; and 423A.02, subdivision 3; 1.21 Laws 1965, chapter 705, section 1, subdivision 4; Laws 1.22 1989, chapter 319, article 13, section 94; Laws 1990, 1.23 chapter 570, article 7, section 4; Laws 1992, chapter 1.24 598, article 6, section 18; Laws 1993, chapter 336, 1.25 article 2, section 2; Laws 1994, chapter 542, section 1.26 5; and Laws 1995, chapter 252, article 1, section 16, 1.27 as amended; proposing coding for new law in Minnesota 1.28 Statutes, chapter 354A; repealing Minnesota Statutes 1.29 1996, sections 354A.23, subdivision 2; 355.201; 1.30 355.202; 355.203; 355.204; 355.205; 355.206; 355.207; 1.31 355.208; and 355.209; Laws 1976, chapter 238, section 1.32 14; Laws 1977, chapter 429, sections 60 and 61; Laws 1.33 1979, chapter 109; Laws 1981, chapter 157; Laws 1985, 1.34 chapter 259, section 3; Laws 1987, chapter 372, 1.35 article 7, section 6; Laws 1988, chapter 709, article 1.36 8, section 8; Laws 1990, chapter 570, article 7, 1.37 section 3; Laws 1991, chapter 67; Laws 1993, chapter 1.38 336, article 3, section 1; and Laws 1994, chapter 565, 1.39 article 1, section 2. 1.40 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.41 ARTICLE 1 1.42 DETERMINATION OF THE MECHANISM 2.1 FOR THE PROVISION OF RETIREMENT 2.2 COVERAGE FOR CERTAIN FIRST CLASS 2.3 CITY SCHOOL DISTRICT TEACHERS 2.4 Section 1. [SCHOOL BOARD CONSIDERATION OF FUTURE TEACHER 2.5 RETIREMENT COVERAGE MECHANISM.] 2.6 Subdivision 1. [POLICY AND INTENT.] (a) The legislature 2.7 recognizes that the retirement coverage for most general or 2.8 nonpublic safety employees is provided through statewide public 2.9 pension plans and funds rather than through single employer 2.10 local public pension plans and funds. The legislature also 2.11 recognizes the substantial financial and oversight 2.12 responsibilities that a local public pension plan and fund 2.13 imposes on the applicable employing unit. 2.14 (b) Through this legislation, the legislature is providing 2.15 to independent school district No. 625 the opportunity to 2.16 thoroughly examine and consider the issue of the appropriate and 2.17 optimum mechanism to provide public pension coverage to St. Paul 2.18 public school system teachers. Through this legislation, the 2.19 legislature is also providing independent school district No. 2.20 625 with the means to effect the provision of retirement 2.21 coverage through the statewide teachers retirement association 2.22 instead of the St. Paul teachers retirement fund association or 2.23 to stabilize the future financial conditions of the St. Paul 2.24 teachers retirement fund association in the event that the local 2.25 pension plan is retained as the mechanism for providing 2.26 retirement coverage to St. Paul school district teaching 2.27 employees. 2.28 Subd. 2. [CONSIDERATION OF RETIREMENT COVERAGE MECHANISM 2.29 ISSUE.] During the period July 1, 1997, to November 30, 1997, 2.30 the board of education for independent school district No. 625 2.31 shall schedule and hold a set of public hearings sufficient to 2.32 ascertain the views of the active and retired St. Paul school 2.33 system teachers and the taxpayers of independent school district 2.34 No. 625 about the retirement coverage provided by and the 2.35 financing of the St. Paul teachers retirement fund association 2.36 and its comparison to the statewide teachers retirement 3.1 association. 3.2 Subd. 3. [DECISION ON FUTURE TEACHER RETIREMENT COVERAGE 3.3 MECHANISM.] (a) On or before December 15, 1997, the board of 3.4 education for independent school district No. 625 shall decide 3.5 on the future teacher retirement coverage mechanism for teachers 3.6 employed by this district. 3.7 (b) The board of education may decide to retain the St. 3.8 Paul teachers retirement fund association as the future 3.9 retirement coverage mechanism for teachers employed by the 3.10 district or the board of education may decide to utilize the 3.11 statewide teachers retirement association as the future 3.12 retirement coverage mechanism for teachers employed by this 3.13 district. 3.14 (c) If the board of education elects to retain the St. Paul 3.15 teachers retirement fund association, article 2 applies to the 3.16 future retirement coverage of teachers employed by independent 3.17 school district No. 625. If the board of education elects to 3.18 utilize the statewide teachers retirement association, articles 3.19 3 and 4 apply to the future retirement coverage of teachers 3.20 employed by independent school district No. 625. If the board 3.21 of education fails to make an election under this subdivision, 3.22 the administrative responsibilities, with respect to the St. 3.23 Paul teachers retirement fund association benefit plan and fund, 3.24 transfer from the board of trustees and secretary-treasurer of 3.25 the St. Paul teachers retirement fund association to the board 3.26 of trustees and executive director of the statewide teacher 3.27 retirement association as of June 30, 1998. 3.28 Subd. 4. [NOTIFICATION REQUIREMENT.] (a) Upon making its 3.29 decision required under subdivision 3, the board of education 3.30 for independent school district No. 625 must notify the 3.31 following of its decision: 3.32 (1) the commissioner of finance; 3.33 (2) the state auditor; 3.34 (3) the executive director of the legislative commission on 3.35 pensions and retirement; 3.36 (4) the secretary of state; 4.1 (5) the executive director of the state board of 4.2 investment; 4.3 (6) the executive secretary of the St. Paul teachers 4.4 retirement fund association; and 4.5 (7) the executive director of the statewide teachers 4.6 retirement association. 4.7 (b) Notification required under paragraph (a) must be made 4.8 on or before January 1, 1998. A failure to provide timely 4.9 notification to the commissioner of finance must be deemed to be 4.10 a failure to make a decision under subdivision 3, paragraph (c). 4.11 Sec. 2. [EFFECTIVE DATE.] 4.12 Section 1 is effective on the day following final enactment. 4.13 ARTICLE 2 4.14 RETENTION OF THE ST. PAUL TEACHERS 4.15 RETIREMENT FUND ASSOCIATION FOR 4.16 FUTURE TEACHER RETIREMENT COVERAGE 4.17 Section 1. [APPLICATION.] 4.18 This article applies if the board of education of 4.19 independent school district No. 625 elects to retain the St. 4.20 Paul teachers retirement fund association as the future teacher 4.21 retirement coverage mechanism for its teachers under article 1, 4.22 section 1, subdivision 3. 4.23 Sec. 2. [354A.024] [ST. PAUL TEACHERS RETIREMENT FUND 4.24 ASSOCIATION GOVERNING BOARD.] 4.25 Subdivision 1. [APPLICATION.] Notwithstanding any 4.26 provision of chapter 317A, section 354A.021, article V, of the 4.27 restated articles of incorporation of the teachers retirement 4.28 fund association of St. Paul effective July 1, 1978, as amended, 4.29 or articles II, sections 4 and 5; III, section 1; and V, section 4.30 1, of the restated bylaws of the teachers retirement fund 4.31 association of St. Paul effective July 1, 1978, as amended, to 4.32 the contrary, relative to the St. Paul teachers retirement fund 4.33 association, this section governs the membership composition of 4.34 its board of trustees, the terms in office of board members, 4.35 board member eligibility, electorate composition and 4.36 eligibility, and election procedures. 5.1 Subd. 2. [BOARD OF TRUSTEES COMPOSITION.] The management 5.2 of the St. Paul teachers retirement fund association is vested 5.3 in a board of 13 trustees. The board membership is composed of 5.4 four ex officio board members, one of whom is the then current 5.5 chair of the board of education of independent school district 5.6 No. 625, one of whom is the then current vice-chair of the board 5.7 of education of independent school district No. 625, one of whom 5.8 is a member of the board of education of independent school 5.9 district No. 625 as selected by a majority vote of the school 5.10 board, and one of whom is the superintendent of independent 5.11 school district No. 625, and of nine trustees elected by and 5.12 from the members of the St. Paul teachers retirement fund 5.13 association as provided in subdivision 4. 5.14 Subd. 3. [BOARD OF TRUSTEES TERMS.] (a) The term of an ex 5.15 officio board member is coincidental with that person's term of 5.16 office giving rise to the ex officio membership. 5.17 (b) The term of an elected member of the board is three 5.18 years and until the successor has been elected and qualified. 5.19 The term begins and ends on the third Thursday in the month of 5.20 January of the applicable year. The terms of the various 5.21 elected members of the board must be evenly staggered. 5.22 Subd. 4. [BOARD MEMBER REPRESENTATION.] (a) Of the nine 5.23 trustees elected by and from the members of the St. Paul 5.24 teachers retirement fund association, six board members must be 5.25 active members of the fund and three board members must be fund 5.26 retirement annuitants, disabilitants, or surviving spouse 5.27 benefit recipients. 5.28 (b) Two active member board positions and one annuity or 5.29 benefit recipient board position must be filled at each board of 5.30 trustee election. 5.31 (c) Only active members may vote for the elected board 5.32 member positions representing active members and only retirement 5.33 annuitants, disabilitants, and surviving spouse benefit 5.34 recipients may vote for the elected board member positions 5.35 representing annuity or benefit recipients. 5.36 (d) If an elected board member changes membership group 6.1 status before the end of the person's term, the person must 6.2 resign from the board of trustees. However, the person may be a 6.3 candidate for the appropriate membership group board position in 6.4 a subsequent election. 6.5 (e) If there is a vacancy in an elected board member 6.6 position, the vacancy must be filled by a special election held 6.7 for that purpose. The special election must be conducted in a 6.8 manner consistent with this section, and, if not inconsistent 6.9 with this section, article IV of the bylaws of the St. Paul 6.10 teachers retirement fund association in effect on the date of 6.11 enactment. 6.12 Subd. 5. [ELECTIONS BY MAIL BALLOT.] (a) Voting for 6.13 elected board members must be conducted using paper ballots, 6.14 which must be mailed by the chief administrative officers of the 6.15 fund to eligible members and which must be returned by mail. 6.16 (b) Return envelopes for ballots may not have the postage 6.17 paid by the fund unless all return envelopes for ballots are so 6.18 treated. Return envelopes for ballots may not have the postage 6.19 paid by any candidate for a board member position or paid on 6.20 behalf of any candidate for a board member position. 6.21 (c) The ballot for a regular election must be provided to 6.22 eligible members by November 1 and must be returned with a 6.23 postmark no later than midnight of the Friday of the third week 6.24 of November. In the event of a vacancy in an elected board 6.25 member position, the ballot for a special election must be 6.26 provided to eligible members within three weeks after the 6.27 vacancy and must be returned by eligible voting members with a 6.28 postmark no later than midnight of the Friday of the fourth full 6.29 week following the vacancy. 6.30 Subd. 6. [SECRETARY-TREASURER NOT TO BE BOARD MEMBER.] (a) 6.31 Effective on January 19, 1998, the person who holds the position 6.32 of secretary of the St. Paul teachers retirement fund 6.33 association and the person who holds the position of treasurer 6.34 of the St. Paul teachers retirement fund association or the 6.35 person who holds the combined position of secretary-treasurer of 6.36 the St. Paul teachers retirement fund association may not also 7.1 be an elected board member of the fund association. 7.2 (b) The chief administrative officer of the St. Paul 7.3 teachers retirement fund association must be known as the 7.4 executive director of the fund. 7.5 Subd. 7. [QUORUM REQUIREMENT.] The board of trustees may 7.6 not take any action unless a minimum of seven trustees are in 7.7 attendance at the meeting, including at least three ex officio 7.8 board members. 7.9 Subd. 8. [ARTICLE AND BYLAW AMENDMENTS AUTHORIZED.] At the 7.10 next annual meeting of the St. Paul teachers retirement fund 7.11 association or at a special meeting of the association called by 7.12 the board of trustees for that purpose, the association may 7.13 consider and adopt any amendments to its articles of 7.14 incorporation or bylaws needed to conform or implement this 7.15 section. 7.16 Subd. 9. [APPLICATION; EFFECTIVE DATE.] This section is 7.17 effective January 1, 1998, without any requirement that the 7.18 provision be approved at an annual or special membership meeting 7.19 of the association. 7.20 Sec. 3. Minnesota Statutes 1996, section 354A.08, is 7.21 amended to read: 7.22 354A.08 [AUTHORIZED INVESTMENTS.] 7.23 (a) A teachers retirement fund association other than the 7.24 St. Paul teachers retirement fund association may receive, hold, 7.25 and dispose of real estate or personal property acquired by it, 7.26 whether the acquisition was by purchase, or any other lawful 7.27 means, as provided in this chapter or in the association's 7.28 articles of incorporation. In addition to other authorized real 7.29 estate investments, an association may also invest funds in 7.30 Minnesota situs nonfarm real estate ownership interests or loans 7.31 secured by mortgages or deeds of trust. 7.32 (b) The St. Paul teachers retirement fund association must 7.33 invest the assets of its retirement fund solely in a manner 7.34 consistent with sections 356A.04 and 356A.06, subdivisions 1, 2, 7.35 3, 4, 5, 7, 8, and 9. Investments required before January 1, 7.36 1998, which are not consistent with those provisions must be 8.1 liquidated on or before January 1, 1998. 8.2 Sec. 4. Minnesota Statutes 1996, section 354A.12, 8.3 subdivision 1, is amended to read: 8.4 Subdivision 1. [EMPLOYEE CONTRIBUTIONS.] (a) The 8.5 contribution required to be paid by each member of a teachers 8.6 retirement fund associationshall not be less thanis the 8.7 percentage of total salary specified below for the applicable 8.8 association and program: 8.9 Association and Program Percentage of 8.10 Total Salary 8.11 Duluth teachers retirement 8.12 association 8.13 old law and new law 8.14 coordinated programs 5.5 percent 8.15 Minneapolis teachers retirement 8.16 association 8.17 basic program 8.5 percent 8.18 coordinated program 4.5 percent 8.19 St. Paul teachers retirement 8.20 association 8.21 basic program810.5 percent 8.22 coordinated program4.56.5 percent 8.23 (b) Contributionsshallmust be made by deduction from 8.24 salary by the applicable school district and must be remitted by 8.25 the applicable school district directly to the respective 8.26 teachers retirement fund association at least once each 8.27 month for each teacher retirement fund association other than 8.28 the St. Paul teachers retirement fund association and within 8.29 seven days of the end of the payroll period for the St. Paul 8.30 teachers retirement fund association. 8.31 Sec. 5. Minnesota Statutes 1996, section 354A.12, 8.32 subdivision 2, is amended to read: 8.33 Subd. 2. [RETIREMENT CONTRIBUTION LEVY DISALLOWED.] (a) 8.34 Except as provided in subdivision 3b and in section 423A.02, 8.35 subdivision 3, with respect to the city of Minneapolis and 8.36 special school district No. 1and in section 423A.02,9.1subdivision 3, with respect to independent school district No.9.2625, notwithstanding any law to the contrary, levies for 9.3 teachers retirement fund associations in cities of the first 9.4 class other than the St. Paul teachers retirement fund 9.5 association, including levies for any employer social security 9.6 taxes for teachers covered by the Duluth teachers retirement 9.7 fund association or the Minneapolis teachers retirement fund 9.8 associationor the St. Paul teachers retirement fund9.9association,are disallowed. 9.10 (b) Independent school district No. 625 shall annually 9.11 impose a levy on the taxable property of the district in an 9.12 amount equal to the additional employer contribution required 9.13 under subdivision 2a, paragraph (a), clause (6). 9.14 Sec. 6. Minnesota Statutes 1996, section 354A.12, 9.15 subdivision 2a, is amended to read: 9.16 Subd. 2a. [EMPLOYER REGULAR AND ADDITIONAL CONTRIBUTION 9.17 RATES.] (a) The employing unitsshallmust make the following 9.18 employer contributions to teachers retirement fund associations: 9.19 (1) for any coordinated member of a teachers retirement 9.20 fund association in a city of the first class, the employing 9.21 unitshallmust pay the employer social security taxes in 9.22 accordance with section 355.46, subdivision 3, clause (b); 9.23 (2) for any coordinated member of one of the following 9.24 teachers retirement fund associations in a city of the first 9.25 class, the employing unitshallmust make a regular employer 9.26 contribution to the respective retirement fund association in an 9.27 amount equal to the designated percentage of the salary of the 9.28 coordinated member as provided below: 9.29 Duluth teachers retirement 9.30 fund association 4.50 percent 9.31 Minneapolis teachers retirement 9.32 fund association 4.50 percent 9.33 St. Paul teachers retirement 9.34 fund association 4.50 percent; 9.35 (3) for any basic member of one of the following teachers 9.36 retirement fund associations in a city of the first class, the 10.1 employing unitshallmust make a regular employer contribution 10.2 to the respective retirement fund in an amount equal to the 10.3 designated percentage of the salary of the basic member as 10.4 provided below: 10.5 Minneapolis teachers retirement 10.6 fund association 8.50 percent 10.7 St. Paul teachers retirement 10.8 fund association 8.00 percent 10.9 (4) for a basic member of a teachers retirement fund 10.10 association in a city of the first class, the employing unit 10.11shallmust make an additional employer contribution to the 10.12 respective fund in an amount equal to the designated percentage 10.13 of the salary of the basic member, as provided below: 10.14 Minneapolis teachers retirement 10.15 fund association 10.16July 1, 1993 - June 30, 19944.85 percent10.17July 1, 1994, and thereafter3.64 percent 10.18 St. Paul teachers retirement 10.19 fund association 10.20July 1, 1993 - June 30, 19954.63 percent10.21July 1, 1995, and thereafter3.64 percent 10.22 (5) for a coordinated member of a teachers retirement fund 10.23 association in a city of the first class, the employing unit 10.24shallmust make an additional employer contribution to the 10.25 respective fund in an amount equal to the applicable percentage 10.26 of the coordinated member's salary, as provided below: 10.27 Duluth teachers retirement 10.28 fund association 1.29 percent 10.29 Minneapolis teachers retirement 10.30 fund association 10.31July 1, 1993 - June 30, 19940.50 percent10.32July 1, 1994, and thereafter3.64 percent 10.33 St. Paul teachers retirement 10.34 fund association 10.35July 1, 1993 - June 30, 19940.50 percent10.36July 1, 1994 - June 30, 19951.50 percent11.1July 1, 1995, and thereafter3.64 percent 11.2 (6) with respect to any member of the St. Paul teachers 11.3 retirement fund association, independent school district No. 625 11.4 must make an additional employer contribution to the St. Paul 11.5 teachers retirement fund association beyond the contributions 11.6 required under clauses (4) and (5) in an amount equal to the 11.7 percentage of covered pay indicated as the contribution 11.8 deficiency in the actuarial valuation of the association 11.9 prepared under section 356.215 by the consulting actuary 11.10 retained by the legislative commission on pensions and 11.11 retirement as of the first day of the fiscal year immediately 11.12 prior to the current fiscal year. 11.13 (b) The regular and additional employer contributions must 11.14 be remitted directly to the respective teachers retirement fund 11.15 association at least once each month. For the St. Paul teachers 11.16 retirement fund association, the regular and additional 11.17 contribution must be remitted directly to the retirement fund 11.18 association within seven days of the end of each payroll 11.19 period. Delinquent amounts are payable with interest under the 11.20 procedure in subdivision 1a. 11.21 (c) Payments of regular and additional employer 11.22 contributions for school district or technical college employees 11.23 who are paid from normal operating funds must be made from the 11.24 appropriate fund of the district or technical college. 11.25 Sec. 7. Minnesota Statutes 1996, section 354A.12, 11.26 subdivision 3d, is amended to read: 11.27 Subd. 3d. [SUPPLEMENTAL ADMINISTRATIVE EXPENSE 11.28 ASSESSMENT.] (a) The active and retired membership of the 11.29 Minneapolis teachers retirement fund association and of the St. 11.30 Paul teachers retirement fund association is responsible for 11.31 defraying supplemental administrative expenses other than 11.32 investment expenses of the respective teacher retirement fund 11.33 association. 11.34 (b) Investment expenses of the teachers retirement fund 11.35 association are those expenses incurred by or on behalf of the 11.36 retirement fund in connection with the investment of the assets 12.1 of the retirement fund other than investment security 12.2 transaction costs. Other administrative expenses are all 12.3 expenses incurred by or on behalf of the retirement fund for all 12.4 other retirement fund functions other than the investment of 12.5 retirement fund assets. Investment and other administrative 12.6 expenses must be accounted for using generally accepted 12.7 accounting principles and in a manner consistent with the 12.8 comprehensive annual financial report of the teachers retirement 12.9 fund association for the immediately previous fiscal year under 12.10 section 356.20. For the St. Paul teachers retirement fund 12.11 association, investment expenses also are limited to those 12.12 expenses that are directly paid from the investment income of 12.13 the retirement fund or from the invested assets of the 12.14 retirement fund. 12.15 (c) Supplemental administrative expenses other than 12.16 investment expenses of a first class city teacher retirement 12.17 fund association are those expenses for the fiscal year that 12.18 exceed the amount computed by applying the most recent 12.19 percentage of pay administrative expense amount, other than 12.20 investment expenses, for the teachers retirement association 12.21 governed by chapter 354 to the covered payroll of the respective 12.22 teachers retirement fund association for the fiscal year. 12.23 (d) The board of trustees of each first class city teachers 12.24 retirement fund association shall allocate the total dollar 12.25 amount of supplemental administrative expenses other than 12.26 investment expenses among the various active and retired 12.27 membership groups of the teachers retirement fund association 12.28 and shall assess the various membership groups their respective 12.29 share of the supplemental administrative expenses other than 12.30 investment expenses, in amounts determined by the board of 12.31 trustees. The supplemental administrative expense assessments 12.32 must be paid by the membership group in a manner determined by 12.33 the board of trustees of the respective teachers retirement 12.34 association. Supplemental administrative expenses payable by 12.35 the active members of the pension plan must be picked up by the 12.36 employer in accordance with section 356.62. 13.1 (e) With respect to the St. Paul teachers retirement fund 13.2 association, the supplemental administrative expense assessment 13.3 must be fully disclosed to the various active and retired 13.4 membership groups of the teachers retirement fund association. 13.5 The chief administrative officer of the St. Paul teachers 13.6 retirement fund association shall prepare a supplemental 13.7 administrative expense assessment disclosure notice, which must 13.8 include the following: 13.9 (1) the total amount of administrative expenses of the St. 13.10 Paul teachers retirement fund association, the amount of the 13.11 investment expenses of the St. Paul teachers retirement fund 13.12 association, and the net remaining amount of administrative 13.13 expenses of the St. Paul teachers retirement fund association; 13.14 (2) the amount of administrative expenses for the St. Paul 13.15 teachers retirement fund association that would be equivalent to 13.16 the teachers retirement association noninvestment administrative 13.17 expense level described in paragraph (c); 13.18 (3) the total amount of supplemental administrative 13.19 expenses required for assessment calculated under paragraph (c); 13.20 (4) the portion of the total amount of the supplemental 13.21 administrative expense assessment allocated to each membership 13.22 group and the rationale for that allocation; 13.23 (5) the manner of collecting the supplemental 13.24 administrative expense assessment from each membership group, 13.25 the number of assessment payments required during the year, and 13.26 the amount of each payment or the procedure used to determine 13.27 each payment; and 13.28 (6) any other information that the chief administrative 13.29 officer determines is necessary to fairly portray the manner in 13.30 which the supplemental administrative expense assessment was 13.31 determined and allocated. 13.32 (f) The disclosure notice must be provided annually in the 13.33 annual report of the association. 13.34 (g) The supplemental administrative expense assessments 13.35 must be deposited in the applicable teachers retirement fund 13.36 upon receipt. 14.1 (h) Any omitted active membership group assessments that 14.2 remain undeducted and unpaid to the teachers retirement fund 14.3 association for 90 days must be paid by the respective school 14.4 district. The school district may recover any omitted active 14.5 membership group assessment amounts that it has previously 14.6 paid. The teachers retirement fund association shall deduct any 14.7 omitted retired membership group assessment amounts from the 14.8 benefits next payable after the discovery of the omitted amounts. 14.9 Sec. 9. Minnesota Statutes 1996, section 354A.23, 14.10 subdivision 2, is amended to read: 14.11 Subd. 2. [ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION 14.12 BASIC PROGRAM.] There is established within the St. Paul 14.13 teachers retirement fund association a basic program whichshall14.14beis a continuation of the retirement program in existence 14.15prior tobefore July 1, 1978, to provide retirement coverage for 14.16 teachers who are not covered by any agreement or modification 14.17 made between the state and the federal Secretary of Health,14.18EducationandWelfareHuman Services making the provisions of 14.19 the federal old age, survivors and disability insurance act 14.20 applicable to certain teachers covered by the teachers 14.21 retirement fund association. The provisions governing the basic 14.22 programshallmust be theapplicableportions ofthischapter,14.23the articles of incorporation and bylaws in effect as of March14.2431, 1976, the amendments to the articles of incorporation and14.25bylaws adopted subsequent to legislative approval contained in14.26Laws 1976, chapter 238, section 14, and Laws 1977, chapter 429,14.27section 60, the provisions of Laws 1977, chapter 429, section14.2861, and any applicable amendments to the articles of14.29incorporation or bylaws adopted subsequent to July 1, 1979 in14.30accordance with the provisions of section 354A.12, subdivision 414.31 354 applicable to the basic program of the statewide teachers 14.32 retirement association, including annual postretirement 14.33 adjustments in a compounding percentage amount equal to those 14.34 provided under section 11A.18. 14.35 Sec. 10. Minnesota Statutes 1996, section 354A.30, is 14.36 amended to read: 15.1 354A.30 [MINNEAPOLIS AND ST. PAUL TEACHERS RETIREMENT FUND 15.2 ASSOCIATIONS; COORDINATEDPROGRAMPROGRAMS.] 15.3 Subdivision 1. [COORDINATED PROGRAMS GENERALLY.] There is 15.4 established a coordinated program within the Minneapolis 15.5 teachers retirement fund association and a coordinated program 15.6 within the St. Paul teachers retirement fund association to 15.7 provide retirement coverage for teachers who are covered by an 15.8 agreement or modification made between the state and the federal 15.9 Secretary of Health, EducationandWelfareHuman Services making 15.10 the provisions of the federal Old Age, Survivors and Disability 15.11 Insurance Act applicable to certain teachers covered by the 15.12 applicable teachers retirement fund association. 15.13 Subd. 2. [MINNEAPOLIS TEACHER COORDINATED PROGRAM.] The 15.14 provisions governing the Minneapolis teachers retirement fund 15.15 association coordinated program shall be sections 354A.31 to 15.16 354A.41 and any other applicable provisions of this chapter. 15.17 Subd. 3. [ST. PAUL TEACHER COORDINATED PROGRAM.] The 15.18 provisions governing the St. Paul teachers retirement fund 15.19 association coordinated program must be the portions of chapter 15.20 354 applicable to the coordinated program of the statewide 15.21 teachers retirement association, including annual postretirement 15.22 adjustments in a compounding percentage amount equal to those 15.23 provided under section 11A.18. 15.24 Sec. 11. Minnesota Statutes 1996, section 354A.31, 15.25 subdivision 4, is amended to read: 15.26 Subd. 4. [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT 15.27 ANNUITY; MINNEAPOLISAND ST. PAUL FUNDSTEACHERS RETIREMENT FUND 15.28 ASSOCIATION.] (a) This subdivision applies to the 15.29 coordinatedprogramsprogram of the Minneapolis teachers 15.30 retirement fund associationand the St. Paul teachers retirement15.31fund association. 15.32 (b) The normal coordinated retirement annuity shall be an 15.33 amount equal to a retiring coordinated member's average salary 15.34 multiplied by the retirement annuity formula percentage. 15.35 Average salary for purposes of this section shall mean an amount 15.36 equal to the average salary upon which contributions were made 16.1 for the highest five successive years of service credit, but 16.2 which shall not in any event include any more than the 16.3 equivalent of 60 monthly salary payments. Average salary must 16.4 be based upon all years of service credit if this service credit 16.5 is less than five years. 16.6 (c) This paragraph, in conjunction with subdivision 6, 16.7 applies to a person who first became a member or a member in a 16.8 pension fund listed in section 356.30, subdivision 3, before 16.9 July 1, 1989, unless paragraph (d), in conjunction with 16.10 subdivision 7, produces a higher annuity amount, in which case 16.11 paragraph (d) will apply. The retirement annuity formula 16.12 percentage for purposes of this paragraph is one percent per 16.13 year for each year of coordinated service for the first ten 16.14 years and 1.5 percent for each year of coordinated service 16.15 thereafter. 16.16 (d) This paragraph applies to a person who has become at 16.17 least 55 years old and who first becomes a member after June 30, 16.18 1989, and to any other member who has become at least 55 years 16.19 old and whose annuity amount, when calculated under this 16.20 paragraph and in conjunction with subdivision 7 is higher than 16.21 it is when calculated under paragraph (c), in conjunction with 16.22 the provisions of subdivision 6. The retirement annuity formula 16.23 percentage for purposes of this paragraph is 1.5 percent for 16.24 each year of coordinated service. 16.25 Sec. 12. Minnesota Statutes 1996, section 354A.36, 16.26 subdivision 3, is amended to read: 16.27 Subd. 3. [COMPUTATION OF DISABILITY BENEFIT.] The 16.28 coordinated permanent disability benefit is an amount equal to 16.29 the normal coordinated retirement annuity computed under section 16.30 354A.31, subdivision 4 or 5, whichever applies, based on 16.31 allowable service credited to the date of disability but without 16.32 any reduction for the commencement of the benefit prior to the 16.33 attainment of normal retirement age or age 62 with at least 30 16.34 years of service credit as specified in section 354A.31, 16.35 subdivision 6. 16.36 Sec. 13. [REPEALER.] 17.1 Laws 1994, chapter 565, article 1, section 2, is repealed. 17.2 Sec. 14. [EFFECTIVE DATE.] 17.3 Sections 1 to 13 are effective on the day following the 17.4 election by the board of education of independent school 17.5 district No. 625 to have future retirement coverage for its 17.6 teachers provided by the St. Paul teachers retirement fund 17.7 association. 17.8 ARTICLE 3 17.9 CONSOLIDATION OF THE ST. PAUL TEACHERS 17.10 RETIREMENT FUND ASSOCIATION WITH 17.11 THE STATEWIDE TEACHERS RETIREMENT ASSOCIATION 17.12 Section 1. [APPLICATION.] 17.13 This article applies if the board of education of 17.14 independent school district No. 625 elects to utilize the 17.15 statewide teachers retirement association to provide future 17.16 retirement coverage of its teachers under article 1, section 1, 17.17 subdivision 3. 17.18 Sec. 2. [CONSOLIDATION OF ST. PAUL TEACHERS RETIREMENT 17.19 PLAN INTO TEACHERS RETIREMENT FUND.] 17.20 Notwithstanding any provision of law to the contrary, as of 17.21 July 1, 1998, the St. Paul teachers retirement fund association 17.22 must consolidate with the teachers retirement fund as provided 17.23 in this article. 17.24 Sec. 3. [TRANSFER OF PENSION PLAN COVERAGE.] 17.25 Subdivision 1. [CURRENT TEACHERS.] (a) As of July 1, 1998, 17.26 all teachers employed by independent school district No. 625 17.27 during the 1997-1998 school year and all teachers on authorized 17.28 leaves of absence from independent school district No. 625 as of 17.29 July 1, 1998, cease to be active members of the St. Paul 17.30 teachers retirement fund association and cease to have any 17.31 further accrual of service credit, rights, or benefits under 17.32 that retirement benefit plan and fund. 17.33 (b) From and after July 1, 1998, the teachers specified in 17.34 paragraph (a) are members of the teachers retirement association 17.35 governed by Minnesota Statutes, chapter 354, unless specifically 17.36 excluded under Minnesota Statutes, section 354.05, subdivision 18.1 2, and must have their past service as a teacher employed by 18.2 independent school district No. 625, as indicated in the records 18.3 of the St. Paul teachers retirement fund association as of June 18.4 30, 1998, credited as allowable and formula service credit in 18.5 the teachers retirement fund under Minnesota Statutes, section 18.6 354.05, subdivisions 13 and 25. 18.7 (c) If a teacher described in paragraph (a) was a basic 18.8 program member of the St. Paul teachers retirement fund 18.9 association on June 30, 1998, and becomes totally and 18.10 permanently disabled after July 1, 1998, the disabled teacher is 18.11 entitled to a disability benefit during the course of the 18.12 disability in an amount equal to the greater of: 18.13 (1) the disability benefit specified in Minnesota Statutes, 18.14 section 354.48; or 18.15 (2)(i) until the month next following the month in which 18.16 the person attains age 65, 75 percent of the teacher's annual 18.17 contract salary for the teacher's last full year of service 18.18 before the disability, reduced by the amount of any benefits 18.19 received from the federal Old Age, Survivors, Disability, and 18.20 Health Insurance Program and the amount of any benefits received 18.21 under Minnesota Statutes, chapter 176; and 18.22 (ii) after the month in which the person attains age 65, 18.23 the service pension that the disabled teacher would have been 18.24 eligible to receive under the St. Paul teachers retirement fund 18.25 association benefit plan in effect on June 30, 1996, excluding 18.26 Laws 1985, chapter 259, section 3, computed on the average 18.27 salary and the length of service credit that the disabled 18.28 teacher would have had if the teacher had continued service in 18.29 the person's most recent predisability teaching position during 18.30 the period of disability. 18.31 Subd. 2. [FORMER TEACHERS AND INACTIVE FUND MEMBERS.] (a) 18.32 As of July 1, 1998, inactive members of the St. Paul teachers 18.33 retirement fund association, who have not previously taken a 18.34 refund of their accumulated member contributions, retain credit 18.35 for their past service as a teacher employed by independent 18.36 school district No. 625, as indicated in the records of the 19.1 association as of June 30, 1998, and are entitled to receive a 19.2 retirement annuity from the teachers retirement association, if 19.3 otherwise eligible, upon submission of a valid application, upon 19.4 attaining at least the earliest retirement age applicable to the 19.5 person under the St. Paul teachers retirement fund association 19.6 governing plan law and documents in effect when the person's 19.7 active teaching service for independent school district No. 625 19.8 terminated, in an amount computed under the governing plan law 19.9 and documents, excluding Laws 1985, chapter 259, section 3. 19.10 Entitlement to the annuity is forfeited upon an application for 19.11 and payment of a refund of accumulated member contributions. 19.12 (b) Persons who were formerly employed as teachers by 19.13 independent school district No. 625 and who previously took a 19.14 refund of accumulated member contributions, if otherwise 19.15 eligible to repay the refund, upon repayment, are entitled to 19.16 have their past service credited by the St. Paul teachers 19.17 retirement fund association as indicated in the records of the 19.18 association as of June 30, 1998, and are entitled to receive a 19.19 retirement annuity from the teachers retirement association as 19.20 provided in paragraph (a). 19.21 Subd. 3. [NEW EMPLOYEES.] Persons first employed as a 19.22 teacher by independent school district No. 625 on or after July 19.23 1, 1998, are members of the teachers retirement fund under 19.24 Minnesota Statutes, chapter 354, unless specifically excluded 19.25 under Minnesota Statutes, section 354.05, subdivision 2. 19.26 Subd. 4. [EXISTING RETIRED MEMBERS AND BENEFIT 19.27 RECIPIENTS.] (a) As of July 1, 1998, the liability for the 19.28 payment of all service pensions and retirement annuities, 19.29 disability benefits, membership annuities, survivor benefits, 19.30 family benefits, and refunds of accumulated member contributions 19.31 for retired members and other benefit recipients of the St. Paul 19.32 teachers retirement fund association, as provided in the 19.33 retirement association governing plan law and documents in 19.34 effect when the person's active teaching service for independent 19.35 school district No. 625 terminated, but excluding Laws 1985, 19.36 chapter 259, section 3, is transferred to the teachers 20.1 retirement association. 20.2 (b) The required actuarial reserves for all service 20.3 pensions, including any applicable basic program deceased 20.4 retired member survivor benefit, and retirement annuities in 20.5 effect on June 30, 1998, and recomputed under section 5, must be 20.6 determined using a five percent postretirement interest 20.7 assumption and the teachers retirement association mortality 20.8 table and must be transferred as soon as practicable after July 20.9 1, 1998, to the Minnesota postretirement investment fund under 20.10 Minnesota Statutes, section 11A.18. Interest on late transfers 20.11 is payable as provided in Minnesota Statutes, section 11A.18, 20.12 subdivision 6, paragraph (b). All persons who began receiving a 20.13 service pension or retirement annuity from the St. Paul teachers 20.14 retirement fund association before June 1, 1998, are eligible 20.15 for a full or partial postretirement adjustment, whichever 20.16 applies, on January 1, 1999, as provided in Minnesota Statutes, 20.17 section 11A.18, subdivision 9. 20.18 Subd. 5. [EXISTING DEFERRED MEMBERS.] (a) A former member 20.19 of the St. Paul teachers retirement fund association as of July 20.20 1, 1998, is entitled to receive a retirement annuity from the 20.21 teachers retirement association if the person: 20.22 (1) met the association's minimum period of service vesting 20.23 requirement in effect when active teaching service with 20.24 independent school district No. 625 terminated; 20.25 (2) either has not received a refund of accumulated member 20.26 contributions or has repaid a previously received refund under 20.27 any applicable law before July 1, 1998; and 20.28 (3) has not begun receiving a retirement annuity or service 20.29 pension from the St. Paul teachers retirement fund association 20.30 as of July 1, 1998. 20.31 (b) The retirement annuity is payable, upon submission of a 20.32 valid application, upon attaining at least the earliest 20.33 retirement age applicable to the person under the St. Paul 20.34 teachers retirement fund association governing plan law and 20.35 documents in effect when the person's active teaching service 20.36 for independent school district No. 625 terminated, in an amount 21.1 computed under the governing plan law and documents, excluding 21.2 Laws 1985, chapter 259, section 3. As of the date on which the 21.3 retirement annuity begins, the required reserves for the 21.4 annuity, including any applicable deferred annuities 21.5 augmentation, must be transferred to the Minnesota 21.6 postretirement investment fund as provided in subdivision 4 and 21.7 Minnesota Statutes, section 354.63. Interest on late transfers 21.8 is payable as provided in Minnesota Statutes, section 11A.18, 21.9 subdivision 6, paragraph (b). A deferred retiree under this 21.10 subdivision is not eligible to elect an optional annuity form 21.11 under Minnesota Statutes, section 354.45, but may elect an 21.12 optional annuity form under the St. Paul teachers retirement 21.13 fund association governing plan law and documents in effect on 21.14 June 30, 1996. 21.15 Sec. 4. [TERMINATION OF ST. PAUL TEACHERS RETIREMENT FUND 21.16 AND ASSOCIATION.] 21.17 Subdivision 1. [TRANSFER OF ASSETS.] (a) On June 30, 1998, 21.18 the board of trustees and the executive secretary of the St. 21.19 Paul teachers retirement fund association shall execute the 21.20 documents, effective July 1, 1998, necessary to transfer the 21.21 legal title to the entire assets of the fund and association to 21.22 the teachers retirement association. 21.23 (b) Except for real estate investments in which the St. 21.24 Paul teachers retirement fund association has a direct equity 21.25 position, for real estate loans that do not comply with 21.26 Minnesota Statutes, section 11A.24, subdivision 4, clause (4), 21.27 or subdivision 6, paragraphs (a), clause (2), and (b), and for 21.28 real estate-related participation loan receivables, the assets 21.29 of the St. Paul teachers retirement fund association may be 21.30 transferred from the St. Paul teachers retirement fund 21.31 association to the teachers retirement association as investment 21.32 securities, where applicable, rather than as cash. The assets 21.33 that are ineligible for transfer as investment securities must 21.34 be sold at fair market value by the St. Paul teachers retirement 21.35 fund association before June 30, 1998, and the proceeds of that 21.36 sale transferred to the teachers retirement association. If an 22.1 asset required for sale is not sold before June 30, 1998, or if 22.2 the market value of an asset required for sale was written down 22.3 to less than 20 percent of its original cost value since July 1, 22.4 1988, ownership of the asset transfers to independent school 22.5 district No. 625 on June 30, 1998, and the district shall 22.6 transfer cash to the teachers retirement association on July 1, 22.7 1998, equal to the value of the asset either at original cost or 22.8 at market value as of June 30, 1994, whichever is greater. 22.9 (c) Any accounts payable from the St. Paul teachers 22.10 retirement fund association also must be transferred to the 22.11 teachers retirement association. The teachers retirement 22.12 association is the successor in interest to all claims for and 22.13 against the St. Paul teachers retirement fund association with 22.14 respect to the fund, except any claim against the St. Paul 22.15 teachers retirement fund association or any person connected 22.16 with the fund association in a fiduciary capacity, based on any 22.17 act or acts by that person not done in good faith and 22.18 constituting a breach of the person's obligation as a fiduciary 22.19 under Minnesota Statutes, chapter 356A, or common law. As the 22.20 successor in interest, the teachers retirement association may 22.21 assert any applicable defense in any legal proceeding that the 22.22 St. Paul teachers retirement fund association would otherwise 22.23 have been entitled to assert. 22.24 (d) If any St. Paul teachers retirement fund association 22.25 assets transferred as securities are not authorized investments 22.26 under Minnesota Statutes, sections 11A.09, 11A.24, and 356A.06, 22.27 subdivision 7, the securities may be retained by the state board 22.28 of investment until June 30, 1999. 22.29 (e) Notwithstanding any provision of Minnesota Statutes, 22.30 sections 11A.18 and 354.63, to the contrary, the transfers to 22.31 the Minnesota postretirement investment fund under section 3, 22.32 subdivision 4, may be made from appropriate transferred 22.33 investment securities, cash, or a combination, at the discretion 22.34 of the state board of investment. 22.35 Subd. 2. [TRANSFER OF RECORDS.] On July 1, 1998, the 22.36 executive secretary of the St. Paul teachers retirement fund 23.1 association must transfer to the teachers retirement association 23.2 all records and documents relating to the retirement fund and 23.3 association. 23.4 Subd. 3. [TERMINATION OF RETIREMENT FUND AND 23.5 ASSOCIATION.] (a) As of July 1, 1998, following the transfer of 23.6 liabilities, assets, and records to the teachers retirement 23.7 association, the St. Paul teachers retirement fund association 23.8 ceases to exist as a legal entity. 23.9 (b) In winding up the affairs of the St. Paul teachers 23.10 retirement fund association, the executive secretary shall 23.11 notify in writing the secretary of the federal Department of the 23.12 Treasury, the Minnesota state auditor, and the Minnesota 23.13 secretary of state of the termination of the fund and the 23.14 association and of the transfer of pension coverage and 23.15 obligations of the former fund and association to the statewide 23.16 teachers retirement association. 23.17 Subd. 4. [REMAINING CONTRACTUAL OBLIGATIONS.] Between the 23.18 date of enactment of this act and June 30, 1998, the board and 23.19 the executive secretary of the St. Paul teachers retirement fund 23.20 association shall undertake all appropriate steps to terminate 23.21 any obligation of the retirement fund association under contract 23.22 to vendors, consultants, and other third parties in existence on 23.23 or before June 30, 1998. For any contract that cannot be 23.24 terminated or concluded by June 30, 1998, the executive director 23.25 of the teachers retirement association shall undertake to 23.26 negotiate a mutually agreeable settlement with the other party 23.27 or parties to the contract. Any contract settlement costs 23.28 incurred by the teachers retirement association resulting from 23.29 these negotiations must be reimbursed by independent school 23.30 district No. 625 within 30 days of the certification of the 23.31 amount to the chief administrative officer of independent school 23.32 district No. 625 by the executive director of the teachers 23.33 retirement association. 23.34 Sec. 5. [RECOMPUTATION OF RETIREMENT BENEFITS.] 23.35 (a) The service pension, retirement annuity, disability 23.36 benefit, or survivor benefit of each retiree or benefit 24.1 recipient having that status as of June 30, 1998, must be 24.2 recomputed under this section. 24.3 (b) The recomputed monthly pension, annuity, or benefit is 24.4 the sum of the following: 24.5 (1) the amount of the person's St. Paul teachers retirement 24.6 fund association monthly pension, annuity, or benefit payable 24.7 for the month of June 1998, including any optional payment 24.8 schedule benefit amount under Minnesota Statutes, section 24.9 356.86, subdivision 4, or Laws 1991, chapter 67, section 1, 24.10 subdivision 3, and including any additional annuity amount under 24.11 Laws 1990, chapter 570, article 7, section 4; 24.12 (2) 1/12 of any lump sum postretirement adjustment paid by 24.13 the St. Paul teachers retirement fund association under 24.14 Minnesota Statutes, section 356.86, on December 1, 1996, if the 24.15 optional payment schedule under Minnesota Statutes, section 24.16 356.86, subdivision 4, is not applicable; 24.17 (3) 1/12 of any lump sum postretirement adjustment paid by 24.18 the St. Paul teachers retirement fund association under Laws 24.19 1991, chapter 67, on December 1, 1996, if the optional payment 24.20 schedule under Laws 1991, chapter 67, section 1, subdivision 3, 24.21 is not applicable; and 24.22 (4) unless the person elected an additional annuity amount 24.23 under Laws 1990, chapter 570, article 7, section 4, 1/12 of the 24.24 most recent lump sum investment-related postretirement bonus 24.25 payment paid by the St. Paul teachers retirement fund 24.26 association before July 1, 1998, to the person, or if the person 24.27 had less than three years of pension, annuity, or benefit 24.28 receipt, 33.3 percent for a person with one year of receipt or 24.29 66.7 percent for a person with two years of receipt, whichever 24.30 applies, of the lump sum bonus payment to a bonus recipient 24.31 initially qualifying for the most recent lump sum 24.32 investment-related postretirement bonus payment before July 1, 24.33 1998, who had an equivalent length of active St. Paul teachers 24.34 retirement fund association service credit to the person, 24.35 rounded to the nearest full year. 24.36 Sec. 6. [DISPOSITION OF CERTAIN RETIREMENT FUND 25.1 EMPLOYEES.] 25.2 Any employee of the St. Paul teachers retirement fund 25.3 association on June 30, 1998, is eligible for an employment 25.4 preference for subsequent employment by the teachers retirement 25.5 association, by the state of Minnesota, or by independent school 25.6 district No. 625. The employment preference is an increase in 25.7 any employment rating system used for evaluating and ranking 25.8 employment candidates, whether civil service or otherwise, in an 25.9 amount equal to one percent of the person's pre-preference 25.10 evaluation result or ranking per full year of employment by the 25.11 St. Paul teachers retirement fund association, not to exceed 25.12 five years of employment. The preference may be used by an 25.13 eligible employee once. The preference may only be used if the 25.14 person meets the minimum employment evaluation or ranking 25.15 criteria of that employing utility without regard to the 25.16 preference. If the employing entity fills the employment 25.17 position for which a former St. Paul teachers retirement fund 25.18 association employee has applied and does not employ the 25.19 applicant utilizing the preference, the employing entity must 25.20 notify the applicant in writing of the reason or reasons for not 25.21 employing the applicant. 25.22 Sec. 7. [EFFECTIVE DATE.] 25.23 Sections 1 to 6 are effective on the day following the 25.24 election by the board of education of independent school 25.25 district No. 625 to have future retirement coverage for its 25.26 teachers provided by the statewide teachers retirement 25.27 association. 25.28 ARTICLE 4 25.29 CONFORMING AMENDMENTS; ST. PAUL TEACHERS RETIREMENT 25.30 FUND ASSOCIATION - STATEWIDE TEACHERS RETIREMENT 25.31 ASSOCIATION CONSOLIDATION 25.32 Section 1. Minnesota Statutes 1996, section 3.85, 25.33 subdivision 11, is amended to read: 25.34 Subd. 11. [VALUATIONS AND REPORTS TO LEGISLATURE.] (a) The 25.35 commission shall contract with an established actuarial 25.36 consulting firm to conduct annual actuarial valuations for the 26.1 retirement plans named in paragraph (b). The contract must 26.2 include provisions for performing cost analyses of proposals for 26.3 changes in benefit and funding policies. 26.4 (b) The contract for actuarial valuation must include the 26.5 following retirement plans: 26.6 (1) the teachers retirement plan, teachers retirement 26.7 association; 26.8 (2) the general state employees retirement plan, Minnesota 26.9 state retirement system; 26.10 (3) the correctional employees retirement plan, Minnesota 26.11 state retirement system; 26.12 (4) the state patrol retirement plan, Minnesota state 26.13 retirement system; 26.14 (5) the judges retirement plan, Minnesota state retirement 26.15 system; 26.16 (6) the Minneapolis employees retirement plan, Minneapolis 26.17 employees retirement fund; 26.18 (7) the public employees retirement plan, public employees 26.19 retirement association; 26.20 (8) the public employees police and fire plan, public 26.21 employees retirement association; 26.22 (9) the Duluth teachers retirement plan, Duluth teachers 26.23 retirement fund association; 26.24 (10) the Minneapolis teachers retirement plan, Minneapolis 26.25 teachers retirement fund association; 26.26 (11)the St. Paul teachers retirement plan, St. Paul26.27teachers retirement fund association;26.28(12)the legislators retirement plan, Minnesota state 26.29 retirement system; 26.30(13)(12) the elective state officers retirement plan, 26.31 Minnesota state retirement system; and 26.32(14)(13) the public employees local government 26.33 correctional service retirement plan, public employees 26.34 retirement association, if there are any participants in that 26.35 plan. 26.36 (c) The contract must specify completion of annual 27.1 actuarial valuation calculations on a fiscal year basis with 27.2 their contents as specified in section 356.215, and the 27.3 standards for actuarial work adopted by the commission. 27.4 The contract must specify completion of annual experience 27.5 data collection and processing and a quadrennial published 27.6 experience study for the plans listed in paragraph (b), clauses 27.7 (1), (2), and (7), as provided for in the standards for 27.8 actuarial work adopted by the commission. The experience data 27.9 collection, processing, and analysis must evaluate the following: 27.10 (1) individual salary progression; 27.11 (2) rate of return on investments based on current asset 27.12 value; 27.13 (3) payroll growth; 27.14 (4) mortality; 27.15 (5) retirement age; 27.16 (6) withdrawal; and 27.17 (7) disablement. 27.18 (d) The actuary retained by the commission shall annually 27.19 prepare a report to the legislature, including the commentary on 27.20 the actuarial valuation calculations for the plans named in 27.21 paragraph (b) and summarizing the results of the actuarial 27.22 valuation calculations. The commission-retained actuary shall 27.23 include with the report the actuary's recommendations concerning 27.24 the appropriateness of the support rates to achieve proper 27.25 funding of the retirement funds by the required funding dates. 27.26 The commission-retained actuary shall, as part of the 27.27 quadrennial published experience study, include recommendations 27.28 to the legislature on the appropriateness of the actuarial 27.29 valuation assumptions required for evaluation in the study. 27.30 (e) If the actuarial gain and loss analysis in the 27.31 actuarial valuation calculations indicates a persistent pattern 27.32 of sizable gains or losses, as directed by the commission, the 27.33 actuary retained by the commission shall prepare a special 27.34 experience study for a plan listed in paragraph (b), clause (3), 27.35 (4), (5), (6), (8), (9), (10), (11), (12), or (13), or (14), in 27.36 the manner provided for in the standards for actuarial work 28.1 adopted by the commission. 28.2 (f) The term of the contract between the commission and the 28.3 actuary retained by the commission is two years, plus not to 28.4 exceed two one-year extensions before competitive bidding. The 28.5 contract is subject to competitive bidding procedures as 28.6 specified by the commission. 28.7 Sec. 2. Minnesota Statutes 1996, section 3.85, subdivision 28.8 12, is amended to read: 28.9 Subd. 12. [ALLOCATION OF ACTUARIAL COST.] (a) The 28.10 commission shall assess each retirement plan specified in 28.11 subdivision 11, paragraph (b), the compensation paid to the 28.12 actuary retained by the commission for the actuarial valuation 28.13 calculations and quadrennial experience studies. The assessment 28.14 is 100 percent of the amount of contract compensation for the 28.15 actuarial consulting firm retained by the commission for 28.16 actuarial valuation calculations, including the public employees 28.17 police and fire plan consolidation accounts of the public 28.18 employees retirement association, annual experience data 28.19 collection and processing, and quadrennial experience studies. 28.20 The portion of the total assessment payable by each 28.21 retirement system or pension plan must be determined as follows: 28.22 (1) Each pension plan specified in subdivision 11, 28.23 paragraph (b), clauses (1) to(14)(13), must pay the following 28.24 indexed amount based on its total active, deferred, inactive, 28.25 and benefit recipient membership: 28.26 up to 2,000 members, inclusive $2.55 per member 28.27 2,001 through 10,000 members $1.13 per member 28.28 over 10,000 members $0.11 per member 28.29 The amount specified is applicable for the assessment of 28.30 the July 1, 1991, to June 30, 1992, fiscal year actuarial 28.31 compensation amounts. For the July 1, 1992, to June 30, 1993, 28.32 fiscal year and subsequent fiscal year actuarial compensation 28.33 amounts, the amount specified must be increased at the same 28.34 percentage increase rate as the implicit price deflator for 28.35 state and local government purchases of goods and services for 28.36 the 12-month period ending with the first quarter of the 29.1 calendar year following the completion date for the actuarial 29.2 valuation calculations, as published by the federal Department 29.3 of Commerce, and rounded upward to the nearest full cent. 29.4 (2) The total per-member portion of the allocation must be 29.5 determined, and that total per-member amount must be subtracted 29.6 from the total amount for allocation. Of the remainder dollar 29.7 amount, the following per-retirement system and per-pension plan 29.8 charges must be determined and the charges must be paid by the 29.9 system or plan: 29.10 (i) 37.87 percent is the total additional per-retirement 29.11 system charge, of whichone-seventhone-sixth must be paid by 29.12 each retirement system specified in subdivision 11, paragraph 29.13 (b), clauses (1), (2), (6), (7), (9), and (10), and (11). 29.14 (ii) 62.13 percent is the total additional per-pension plan 29.15 charge, of whichone-thirteenth1/12 must be paid by each 29.16 pension plan specified in subdivision 11, paragraph (b), clauses 29.17 (1) to(13)(12), if there are not any participants in the plan 29.18 specified in subdivision 11, paragraph (b), clause(14)(13), or 29.19 of whichone-fourteenth1/13 must be paid by each pension plan 29.20 specified in subdivision 11, paragraph (b), clauses (1) 29.21 to(14)(13), if there are participants in the plan specified in 29.22 subdivision 11, paragraph (b), clause(14)(13). 29.23 (b) The assessment must be made following the completion of 29.24 the actuarial valuation calculations and the experience 29.25 analysis. The amount of the assessment is appropriated from the 29.26 retirement fund applicable to the retirement plan. Receipts 29.27 from assessments must be deposited in the state treasury and 29.28 credited to the general fund. 29.29 Sec. 3. Minnesota Statutes 1996, section 16A.06, 29.30 subdivision 9, is amended to read: 29.31 Subd. 9. [FIRST CLASS CITY TEACHER RETIREMENT FUNDS AIDS 29.32 REPORTING.] Each year, on or before April 15, the commissioner 29.33 of finance shall report to the chairs of the senate finance 29.34 committee and the house ways and means committee on expenditures 29.35 for state aids to the Minneapolisand Saint Paulteacher 29.36 retirement fundassociationsassociation and the statewide 30.1 teachers retirement association under sections 354A.12 and 30.2 423A.02, subdivision 3. This report shall include the amounts 30.3 expended in the most recent fiscal year and estimates of 30.4 expected expenditures for the current and next fiscal year. 30.5 Sec. 4. Minnesota Statutes 1996, section 353.01, 30.6 subdivision 2b, is amended to read: 30.7 Subd. 2b. [EXCLUDED EMPLOYEES.] The following public 30.8 employees shall not participate as members of the association: 30.9 (1) elected public officers, or persons appointed to fill a 30.10 vacancy in an elective office, who do not elect to participate 30.11 in the association by filing an application for membership; 30.12 (2) election officers; 30.13 (3) patient and inmate personnel who perform services in 30.14 charitable, penal, or correctional institutions of a 30.15 governmental subdivision; 30.16 (4) employees who are hired for a temporary position under 30.17 subdivision 12a, and employees who resign from a nontemporary 30.18 position and accept a temporary position within 30 days in the 30.19 same governmental subdivision, but not those employees who are 30.20 hired for an unlimited period but are serving a probationary 30.21 period. If the period of employment extends beyond six 30.22 consecutive months and the employee earns more than $425 from 30.23 one governmental subdivision in any one calendar month, the 30.24 department head shall report the employee for membership and 30.25 require employee deductions be made on behalf of the employee 30.26 under section 353.27, subdivision 4. 30.27 Membership eligibility of an employee who resigns or is 30.28 dismissed from a temporary position and within 30 days accepts 30.29 another temporary position in the same governmental subdivision 30.30 is determined on the total length of employment rather than on 30.31 each separate position. Membership eligibility of an employee 30.32 who holds concurrent temporary and nontemporary positions in one 30.33 governmental subdivision is determined by the length of 30.34 employment and salary of each separate position; 30.35 (5) employees whose actual salary from one governmental 30.36 subdivision does not exceed $425 per month, or whose annual 31.1 salary from one governmental subdivision does not exceed a 31.2 stipulation prepared in advance, in writing, that the salary 31.3 must not exceed $5,100 per calendar year or per school year for 31.4 school employees for employment expected to be of a full year's 31.5 duration or more than the prorated portion of $5,100 per 31.6 employment period for employment expected to be of less than a 31.7 full year's duration; 31.8 (6) employees who are employed by reason of work emergency 31.9 caused by fire, flood, storm, or similar disaster; 31.10 (7) employees who by virtue of their employment in one 31.11 governmental subdivision are required by law to be a member of 31.12 and to contribute to any of the plans or funds administered by 31.13 the Minnesota state retirement system, the teachers retirement 31.14 association, the Duluth teachers retirement fund association, 31.15 the Minneapolis teachers retirement association,the St. Paul31.16teachers retirement fund association,the Minneapolis employees 31.17 retirement fund, or any police or firefighters relief 31.18 association governed by section 69.77 that has not consolidated 31.19 with the public employees retirement association, or any police 31.20 or firefighters relief association that has consolidated with 31.21 the public employees retirement association but whose members 31.22 have not elected the type of benefit coverage provided by the 31.23 public employees police and fire fund under sections 353A.01 to 31.24 353A.10. This clause must not be construed to prevent a person 31.25 from being a member of and contributing to the public employees 31.26 retirement association and also belonging to and contributing to 31.27 another public pension fund for other service occurring during 31.28 the same period of time. A person who meets the definition of 31.29 "public employee" in subdivision 2 by virtue of other service 31.30 occurring during the same period of time becomes a member of the 31.31 association unless contributions are made to another public 31.32 retirement fund on the salary based on the other service or to 31.33 the teachers retirement association by a teacher as defined in 31.34 section 354.05, subdivision 2; 31.35 (8) persons who are excluded from coverage under the 31.36 federal Old Age, Survivors, Disability, and Health Insurance 32.1 Program for the performance of service as specified in United 32.2 States Code, title 42, section 410(a)(8)(A), as amended through 32.3 January 1, 1987, if no irrevocable election of coverage has been 32.4 made under section 3121(r) of the Internal Revenue Code of 1954, 32.5 as amended; 32.6 (9) full-time students who are enrolled and are regularly 32.7 attending classes at an accredited school, college, or 32.8 university and who are part-time employees as defined by a 32.9 governmental subdivision; 32.10 (10) resident physicians, medical interns, and pharmacist 32.11 residents and pharmacist interns who are serving in a degree or 32.12 residency program in public hospitals; 32.13 (11) students who are serving in an internship or residency 32.14 program sponsored by an accredited educational institution; 32.15 (12) persons who hold a part-time adult supplementary 32.16 technical college license who render part-time teaching service 32.17 in a technical college; 32.18 (13) foreign citizens working for a governmental 32.19 subdivision with a work permit of less than three years, or an 32.20 H-1b visa valid for less than three years of employment. Upon 32.21 notice to the association that the work permit or visa extends 32.22 beyond the three-year period, the foreign citizens are eligible 32.23 for membership from the date of the extension; 32.24 (14) public hospital employees who elected not to 32.25 participate as members of the association before 1972 and who 32.26 did not elect to participate from July 1, 1988 to October 1, 32.27 1988; 32.28 (15) except as provided in section 353.86, volunteer 32.29 ambulance service personnel, as defined in subdivision 35, but 32.30 persons who serve as volunteer ambulance service personnel may 32.31 still qualify as public employees under subdivision 2 and may be 32.32 members of the public employees retirement association and 32.33 participants in the public employees retirement fund or the 32.34 public employees police and fire fund on the basis of 32.35 compensation received from public employment service other than 32.36 service as volunteer ambulance service personnel; and 33.1 (16) except as provided in section 353.87, volunteer 33.2 firefighters, as defined in subdivision 36, engaging in 33.3 activities undertaken as part of volunteer firefighter duties; 33.4 provided that a person who is a volunteer firefighter may still 33.5 qualify as a public employee under subdivision 2 and may be a 33.6 member of the public employees retirement association and a 33.7 participant in the public employees retirement fund or the 33.8 public employees police and fire fund on the basis of 33.9 compensation received from public employment activities other 33.10 than those as a volunteer firefighter. 33.11 Sec. 5. Minnesota Statutes 1996, section 354.05, 33.12 subdivision 2, is amended to read: 33.13 Subd. 2. [TEACHER.] (a) "Teacher" means: 33.14 (1) a person who renders service as a teacher, supervisor, 33.15 principal, superintendent, librarian, nurse, counselor, social 33.16 worker, therapist, or psychologist in the public schools of the 33.17 state located outside of the corporate limits of thecitiescity 33.18 ofthe first class as those cities were so classified on January33.191, 1979Duluth or Minneapolis, or in the state colleges and 33.20 universities system, or in any charitable, penal, or 33.21 correctional institutions of a governmental subdivision, or who 33.22 is engaged in educational administration in connection with the 33.23 state public school system, including the state colleges and 33.24 university system, but excluding the University of Minnesota, 33.25 whether the position be a public office or an employment, not 33.26 including members or officers of any general governing or 33.27 managing board or body; 33.28 (2) an employee of the teachers retirement association 33.29 unless the employee is covered by the Minnesota state retirement 33.30 system by virtue of prior employment by the association; 33.31 (3) a person who renders teaching service on a part-time 33.32 basis and who also renders other services for a single employing 33.33 unit. In such cases, the executive director shall determine 33.34 whether all or none of the combined service is covered by the 33.35 association, however a person whose teaching service comprises 33.36 at least 50 percent of the combined employment salary is a 34.1 member of the association for all services with the single 34.2 employing unit. 34.3 (b) The term does not mean: 34.4 (1) an employee described in section 352D.02, subdivision 34.5 1a, who is hired after the effective date of Laws 1986, chapter 34.6 458; 34.7 (2) a person who works for a school or institution as an 34.8 independent contractor as defined by the Internal Revenue 34.9 Service; 34.10 (3) a person employed in subsidized on-the-job training, 34.11 work experience or public service employment as an enrollee 34.12 under the federal Comprehensive Employment and Training Act from 34.13 and after March 30, 1978, unless the person has, as of the later 34.14 of March 30, 1978, or the date of employment, sufficient service 34.15 credit in the retirement association to meet the minimum vesting 34.16 requirements for a deferred retirement annuity, or the employer 34.17 agrees in writing on forms prescribed by the executive director 34.18 to make the required employer contributions, including any 34.19 employer additional contributions, on account of that person 34.20 from revenue sources other than funds provided under the federal 34.21 Comprehensive Training and Employment Act, or the person agrees 34.22 in writing on forms prescribed by the executive director to make 34.23 the required employer contribution in addition to the required 34.24 employee contribution; 34.25 (4) a person holding a part-time adult supplementary 34.26 technical college license who renders part-time teaching service 34.27 in a technical college if (i) the service is incidental to the 34.28 regular nonteaching occupation of the person; and (ii) the 34.29 applicable technical college stipulates annually in advance that 34.30 the part-time teaching service will not exceed 300 hours in a 34.31 fiscal year and retains the stipulation in its records; and 34.32 (iii) the part-time teaching service actually does not exceed 34.33 300 hours in a fiscal year; or 34.34 (5) a person exempt from licensure pursuant to section 34.35 125.031. 34.36 Sec. 6. Minnesota Statutes 1996, section 354.05, 35.1 subdivision 13, is amended to read: 35.2 Subd. 13. [ALLOWABLE SERVICE.] "Allowable service" means: 35.3 (1) Any service rendered by a teacher for which on or 35.4 before July 1, 1957, the teacher's account in the retirement 35.5 fund was credited by reason of employee contributions in the 35.6 form of salary deductions, payments in lieu of salary 35.7 deductions, or in any other manner authorized by Minnesota 35.8 Statutes 1953, sections 135.01 to 135.13, as amended by Laws 35.9 1955, chapters 361, 549, 550, 611, or 35.10 (2) Any service rendered by a teacher for which on or 35.11 before July 1, 1961, the teacher elected to obtain credit for 35.12 service by making payments to the fund pursuant to Minnesota 35.13 Statutes 1980, section 354.09 and section 354.51, or 35.14 (3) Any service rendered by a teacher after July 1, 1957, 35.15 for any calendar month when the member receives salary from 35.16 which deductions are made, deposited and credited in the fund, 35.17 or 35.18 (4) Any service rendered by a person after July 1, 1957, 35.19 for any calendar month where payments in lieu of salary 35.20 deductions are made, deposited and credited into the fund as 35.21 provided in Minnesota Statutes 1980, section 354.09, subdivision 35.22 4, and section 354.53, or 35.23 (5) Any service rendered by a teacher for which the teacher 35.24 elected to obtain credit for service by making payments to the 35.25 fund pursuant to Minnesota Statutes 1980, section 354.09, 35.26 subdivisions 1 and 4, sections 354.50, 354.51, Minnesota 35.27 Statutes 1957, section 135.41, subdivision 4, Minnesota Statutes 35.28 1971, section 354.09, subdivision 2, or Minnesota Statutes, 1973 35.29 Supplement, section 354.09, subdivision 3, or 35.30 (6) Both service during years of actual membership in the 35.31 course of which contributions were currently made and service in 35.32 years during which the teacher was not a member but for which 35.33 the teacher later elected to obtain credit by making payments to 35.34 the fund as permitted by any law then in effect, or 35.35 (7) Any service rendered where contributions were made and 35.36 no allowable service credit was established because of the 36.1 limitations contained in Minnesota Statutes 1957, section 36.2 135.09, subdivision 2, as determined by the ratio between the 36.3 amounts of money credited to the teacher's account in a fiscal 36.4 year and the maximum retirement contribution allowable for that 36.5 year, or 36.6 (8) Any service rendered by a teacher to whom article 3, 36.7 section 3, subdivision 1, applies before July 1, 1998, that was 36.8 credited by the former St. Paul teachers retirement fund 36.9 association before July 1, 1998, as reflected in records 36.10 transferred from the St. Paul teachers retirement fund 36.11 association under article 3, section 4, subdivision 2. 36.12 Sec. 7. Minnesota Statutes 1996, section 354A.011, 36.13 subdivision 7, is amended to read: 36.14 Subd. 7. [ASSOCIATION.] "Association" or "teachers 36.15 retirement fund association" means theapplicableMinneapolis 36.16 teachers retirement fund association or the St. Paul teachers 36.17 retirement fund association, whichever applies, established 36.18 pursuant to this chapter. 36.19 Sec. 8. Minnesota Statutes 1996, section 354A.011, 36.20 subdivision 8, is amended to read: 36.21 Subd. 8. [BASIC MEMBER.] "Basic member" means any member 36.22 of the Minneapolis teachers retirement fund association who is 36.23 not covered by any agreement or modification made between the 36.24 state and the federal Secretary of Health, Education and Welfare36.25 and Human Services. 36.26 Sec. 9. Minnesota Statutes 1996, section 354A.011, 36.27 subdivision 11, is amended to read: 36.28 Subd. 11. [COORDINATED MEMBER.] "Coordinated member" means 36.29 any member of the Duluth teachers retirement fund association or 36.30 the Minneapolis teachers retirement fund association who is 36.31 covered by any agreement or modification made between the state 36.32 and the federal Secretary of Health, EducationandWelfareHuman 36.33 Services making the provisions of the federal old age, survivors 36.34 and disability insurance act applicable to certain teachers 36.35 except in the case of a member of the Duluth teachers retirement 36.36 fund association, in which it means additionally that the member 37.1 either first became a member prior to July 1, 1981, and elected 37.2 to be covered by the new law coordinated program of the Duluth 37.3 teachers retirement fund association or first became a member on 37.4 or subsequent to July 1, 1981. 37.5 Sec. 10. Minnesota Statutes 1996, section 354A.011, 37.6 subdivision 15a, is amended to read: 37.7 Subd. 15a. [NORMAL RETIREMENT AGE.] "Normal retirement 37.8 age" means age 65 for a person who first became a member of the 37.9 coordinated program of the Minneapolisor St. Paulteachers 37.10 retirement fund association or the new law coordinated program 37.11 of the Duluth teachers retirement fund association or a member 37.12 of a pension fund listed in section 356.30, subdivision 3, 37.13 before July 1, 1989. For a person who first became a member of 37.14 the coordinated program of the Minneapolisor St. Paulteachers 37.15 retirement fund association or the new law coordinated program 37.16 of the Duluth teachers retirement fund association after June 37.17 30, 1989, normal retirement age means the higher of age 65 or 37.18 retirement age, as defined in United States Code, title 42, 37.19 section 416(l), as amended. For a person who is a member of the 37.20 basic program of the Minneapolisor St. Paulteachers retirement 37.21 fund association or the old law coordinated program of the 37.22 Duluth teachers retirement fund association, normal retirement 37.23 age means the age at which a teacher becomes eligible for a 37.24 normal retirement annuity computed upon meeting the age and 37.25 service requirements specified in the applicable provisions of 37.26 the articles of incorporation or bylaws of the respective 37.27 teachers retirement fund association. 37.28 Sec. 11. Minnesota Statutes 1996, section 354A.021, 37.29 subdivision 1, is amended to read: 37.30 Subdivision 1. [ESTABLISHMENT.] There is established a 37.31 teachers retirement fund association ineach ofthecities of37.32the first class which were so classified on January 1, 1979city 37.33 of Duluth and in the city of Minneapolis. The associations 37.34 shall be known respectively as the "Duluth Teachers Retirement 37.35 Fund Association," and the "Minneapolis Teachers Retirement Fund 37.36 Association" and the "St. Paul Teachers Retirement Fund38.1Association." Each association shall be a continuation of the 38.2 teachers retirement fund association with the same corporate 38.3 name established pursuant to the authorization contained in Laws 38.4 1909, chapter 343, section 1. 38.5 Sec. 12. Minnesota Statutes 1996, section 354A.092, is 38.6 amended to read: 38.7 354A.092 [SABBATICAL LEAVE.] 38.8 Any teacher in the coordinated program ofeitherthe 38.9 Minneapolis teachers retirement fund associationor the St.38.10Paul teachers retirement fund associationor any teacher in the 38.11 new law coordinated program of the Duluth teachers retirement 38.12 fund association who is granted a sabbatical leave shall be 38.13 entitled to receive allowable service credit in the applicable 38.14 association for periods of sabbatical leave. To obtain the 38.15 service credit, the teacher on sabbatical leave shall make an 38.16 employee contribution to the applicable association. No teacher 38.17 shall be entitled to receive more than three years of allowable 38.18 service credit pursuant to this section for a period or periods 38.19 of sabbatical leave during any ten consecutive fiscal or 38.20 calendar years, whichever is the applicable plan year for the 38.21 teachers retirement fund association. If the teacher granted a 38.22 sabbatical leave makes the employee contribution for a period of 38.23 sabbatical leave pursuant to this section, the employing unit 38.24 shall make an employer contribution on behalf of the teacher to 38.25 the applicable association for that period of sabbatical leave 38.26 in the manner described in section 354A.12, subdivision 2a. The 38.27 employee and employer contributions shall be in an amount equal 38.28 to the employee and employer contribution rates in effect for 38.29 other active members of the association covered by the same 38.30 program applied to a salary figure equal to the teacher's actual 38.31 covered salary for the plan year immediately preceding the 38.32 sabbatical leave period. Payment of the employee contribution 38.33 authorized pursuant to this section shall be made by the teacher 38.34 on or before June 30 of year next following the year in which 38.35 the sabbatical leave terminated and shall be made without 38.36 interest. For sabbatical leaves taken after June 30, 1986, the 39.1 required employer contributions shall be paid by the employing 39.2 unit within 30 days after notification by the association of the 39.3 amount due. If the employee contributions for the sabbatical 39.4 leave period are less than an amount equal to the applicable 39.5 contribution rate applied to a salary figure equal to the 39.6 teacher's actual covered salary for the plan year immediately 39.7 preceding the sabbatical leave period, service credit shall be 39.8 prorated. The prorated service credit shall be determined by 39.9 the ratio between the amount of the actual payment which was 39.10 made and the full contribution amount payable pursuant to this 39.11 section. 39.12 Sec. 13. Minnesota Statutes 1996, section 354A.093, is 39.13 amended to read: 39.14 354A.093 [MILITARY SERVICE CREDIT.] 39.15 Any teacher in the coordinated program ofeitherthe 39.16 Minneapolis teachers retirement fund associationor the St.39.17Paul teachers retirement fund associationor any teacher in the 39.18 new law coordinated program of the Duluth teachers retirement 39.19 fund association who is granted a leave of absence to enter 39.20 military service and who returns to active teaching service upon 39.21 discharge from military service as provided in section 192.262, 39.22 shall be entitled to receive allowable service credit in the 39.23 applicable association for all or a portion of the period of 39.24 military service but not for any voluntary extension of military 39.25 service beyond the initial period of enlistment, induction or 39.26 call to active duty which occurred at the instance of the 39.27 teacher. If the teacher granted the military service leave of 39.28 absence makes the employee contribution for a period of military 39.29 service leave of absence pursuant to this section, the employing 39.30 unit shall make an employer contribution on behalf of the 39.31 teacher to the applicable association for the period of the 39.32 military service leave of absence in the manner described in 39.33 section 354A.12, subdivision 2a. The employee and employer 39.34 contributions shall be in an amount equal to the employee and 39.35 employer contribution rates in effect for other active members 39.36 of the association covered by the same program applied to a 40.1 salary figure equal to the teacher's annual salary rate at the 40.2 date of return from military service, multiplied by the number 40.3 of years constituting the period of the military service leave 40.4 of absence which the teacher seeks to purchase. Payment shall 40.5 include interest on the amount payable pursuant to this section 40.6 at the rate of six percent compounded annually from the year the 40.7 military service was rendered to the date of payment. If the 40.8 payments made by a teacher pursuant to this section are less 40.9 than an amount equal to the applicable contribution rate applied 40.10 to a salary figure equal to the teacher's annual salary rate at 40.11 the date of return from military service, multiplied by the 40.12 number of years constituting the period of the military service 40.13 leave of absence, service credit shall be prorated. The 40.14 prorated service credit shall be determined by the ratio between 40.15 the amount of the actual payment which was made and the full 40.16 contribution amount payable pursuant to this section. In order 40.17 to be entitled to receive service credit under this section, 40.18 payment shall be made within five years from the date of 40.19 discharge from military service. 40.20 Sec. 14. Minnesota Statutes 1996, section 354A.095, is 40.21 amended to read: 40.22 354A.095 [PARENTAL AND MATERNITY LEAVE.] 40.23 Basic or coordinated members ofthe St. Paul teachers40.24retirement fund association,the Minneapolis teachers retirement 40.25 fund association,and new coordinated members of the Duluth 40.26 teachers retirement fund association,who are granted parental 40.27 or maternity leave of absence by the employing authority, are 40.28 entitled to obtain service credit not to exceed one year for the 40.29 period of leave upon payment to the applicable fund by the end 40.30 of the fiscal year following the fiscal year in which the leave 40.31 of absence terminated. The amount of the payment must include 40.32 the total required employee and employer contributions for the 40.33 period of leave prescribed in section 354A.12. Payment must be 40.34 based on the member's average monthly salary rate upon return to 40.35 teaching service, and is payable without interest. Payment must 40.36 be accompanied by a certified or otherwise adequate copy of the 41.1 resolution or action of the employing authority granting or 41.2 approving the leave. 41.3 Sec. 15. Minnesota Statutes 1996, section 354A.096, is 41.4 amended to read: 41.5 354A.096 [MEDICAL LEAVE.] 41.6 Any teacher in the coordinated program ofeitherthe 41.7 Minneapolis teachers retirement fund associationor the St. Paul41.8teachers retirement fund associationor the new law coordinated 41.9 program of the Duluth teachers retirement fund association who 41.10 is on an authorized medical leave of absence and subsequently 41.11 returns to teaching service is entitled to receive allowable 41.12 service credit, not to exceed one year, for the period of leave, 41.13 upon making the prescribed payment to the fund. This payment 41.14 must include the required employee and employer contributions at 41.15 the rates specified in section 354A.12, subdivisions 1 and 2, as 41.16 applied to the member's average full-time monthly salary rate on 41.17 the date the leave of absence commenced plus annual interest at 41.18 the rate of 8.5 percent per year from the end of the fiscal year 41.19 during which the leave terminates to the end of the month during 41.20 which payment is made. The member must pay the total amount 41.21 required unless the employing unit, at its option, pays the 41.22 employer contributions. The total amount required must be paid 41.23 by the end of the fiscal year following the fiscal year in which 41.24 the leave of absence terminated or before the member retires, 41.25 whichever is earlier. Payment must be accompanied by a copy of 41.26 the resolution or action of the employing authority granting the 41.27 leave and the employing authority, upon granting the leave, must 41.28 certify the leave to the association in a manner specified by 41.29 the executive director. A member may not receive more than one 41.30 year of allowable service credit during any fiscal year by 41.31 making payment under this section. A member may not receive 41.32 disability benefits under section 354A.36 and receive allowable 41.33 service credit under this section for the same period of time. 41.34 Sec. 16. Minnesota Statutes 1996, section 354A.12, 41.35 subdivision 1, is amended to read: 41.36 Subdivision 1. [EMPLOYEE CONTRIBUTIONS.] The contribution 42.1 required to be paid by each member of a teachers retirement fund 42.2 association shall not be less than the percentage of total 42.3 salary specified below for the applicable association and 42.4 program: 42.5 Association and Program Percentage of 42.6 Total Salary 42.7 Duluth teachers retirement 42.8 association 42.9 old law and new law 42.10 coordinated programs 5.5 percent 42.11 Minneapolis teachers retirement 42.12 association 42.13 basic program 8.5 percent 42.14 coordinated program 4.5 percent 42.15St. Paul teachers retirement42.16association42.17basic program8 percent42.18coordinated program4.5 percent. 42.19 Contributions shall be made by deduction from salary and 42.20 must be remitted directly to the respective teachers retirement 42.21 fund association at least once each month. 42.22 Sec. 17. Minnesota Statutes 1996, section 354A.12, 42.23 subdivision 2, is amended to read: 42.24 Subd. 2. [RETIREMENT CONTRIBUTION LEVY DISALLOWED.] Except 42.25 as provided in subdivision 3b and in section 423A.02, 42.26 subdivision 3, with respect to the city of Minneapolis and 42.27 special school district No. 1and in section 423A.02,42.28subdivision 3, with respect to independent school district No.42.29625, notwithstanding any law to the contrary, levies for 42.30 teachers retirement fund associations in cities ofthe first42.31classDuluth and Minneapolis, including levies for any employer 42.32 social security taxes for teachers covered by the Duluth 42.33 teachers retirement fund association or the Minneapolis teachers 42.34 retirement fund associationor the St. Paul teachers retirement42.35fund association, are disallowed. 42.36 Sec. 18. Minnesota Statutes 1996, section 354A.12, 43.1 subdivision 2a, is amended to read: 43.2 Subd. 2a. [EMPLOYER REGULAR AND ADDITIONAL CONTRIBUTION 43.3 RATES.] (a) The employing units shall make the following 43.4 employer contributions to teachers retirement fund associations: 43.5 (1) for any coordinated member of a teachers retirement 43.6 fund association in a city of the first class, the employing 43.7 unit shall pay the employer social security taxes in accordance 43.8 with section 355.46, subdivision 3, clause (b); 43.9 (2) for any coordinated member of one of the following 43.10 teachers retirement fund associations in a city of the first 43.11 class, the employing unit shall make a regular employer 43.12 contribution to the respective retirement fund association in an 43.13 amount equal to the designated percentage of the salary of the 43.14 coordinated member as provided below: 43.15 Duluth teachers retirement 43.16 fund association 4.50 percent 43.17 Minneapolis teachers retirement 43.18 fund association 4.50 percent 43.19St. Paul teachers retirement43.20fund association4.50 percent; 43.21 (3) for any basic memberof oneof thefollowing43.22 Minneapolis teachers retirement fundassociations in a city of43.23the first classassociation, the employing unit shall make a 43.24 regular employer contribution to the respective retirement fund 43.25 in an amount equal tothe designated percentage8.5 percent of 43.26 the salary of the basic memberas provided below:43.27Minneapolis teachers retirement43.28fund association8.50 percent43.29St. Paul teachers retirement43.30fund association8.00 percent; 43.31 (4) for a basic member ofathe Minneapolis teachers 43.32 retirement fund associationin a city of the first class, the 43.33 employing unit shall make an additional employer contribution to 43.34 the respective fund in an amount equal tothe designated43.35percentage3.64 percent of the salary of the basic member, as43.36provided below:44.1Minneapolis teachers retirement44.2fund association44.3July 1, 1993 - June 30, 19944.85 percent44.4July 1, 1994, and thereafter3.64 percent44.5St. Paul teachers retirement44.6fund association44.7July 1, 1993 - June 30, 19954.63 percent44.8July 1, 1995, and thereafter3.64 percent; 44.9 (5) for a coordinated member of a teachers retirement fund 44.10 association in a city of the first class, the employing unit 44.11 shall make an additional employer contribution to the respective 44.12 fund in an amount equal to the applicable percentage of the 44.13 coordinated member's salary, as provided below: 44.14 Duluth teachers retirement 44.15 fund association 1.29 percent 44.16 Minneapolis teachers retirement 44.17 fund association 44.18July 1, 1993 - June 30, 19940.50 percent44.19July 1, 1994, and thereafter3.64 percent 44.20St. Paul teachers retirement44.21fund association44.22July 1, 1993 - June 30, 19940.50 percent44.23July 1, 1994 - June 30, 19951.50 percent44.24July 1, 1995, and thereafter3.64 percent. 44.25 (b) The regular and additional employer contributions must 44.26 be remitted directly to the respective teachers retirement fund 44.27 association at least once each month. Delinquent amounts are 44.28 payable with interest under the procedure in subdivision 1a. 44.29 (c) Payments of regular and additional employer 44.30 contributions for school district or technical college employees 44.31 who are paid from normal operating funds must be made from the 44.32 appropriate fund of the district or technical college. 44.33 Sec. 19. Minnesota Statutes 1996, section 354A.12, 44.34 subdivision 3a, is amended to read: 44.35 Subd. 3a. [SPECIAL DIRECT STATE AID TOST. PAULSTATEWIDE 44.36 TEACHERS RETIREMENTFUNDASSOCIATION.] (a) The state shall pay 45.1 to theSt. Paulstatewide teachers retirementfundassociation 45.2 $500,000 in fiscal year 1994. In each subsequent fiscal year, 45.3 the payment to theSt. Paulstatewide teachers retirementfund45.4 association must be increased at the same rate as the increase 45.5 in the general education revenue formula allowance under section 45.6 124A.22, subdivision 2, in subsequent fiscal years. 45.7 (b) The direct state aid is payable October 1 annually. 45.8 The commissioner of finance shall pay the direct state aid. The 45.9 amount required under this subdivision is appropriated annually 45.10 to the commissioner of finance. 45.11 Sec. 20. Minnesota Statutes 1996, section 354A.12, 45.12 subdivision 3c, is amended to read: 45.13 Subd. 3c. [TERMINATION OF SUPPLEMENTAL CONTRIBUTIONS AND 45.14 DIRECT MATCHING AND STATE AID.] (a) The supplemental 45.15 contributions payable to the Minneapolis teachers retirement 45.16 fund association by special school district No. 1 and the city 45.17 of Minneapolis under section 423A.02, subdivision 3,or to the45.18St. Paul teachers retirement fund association by independent45.19school district No. 625 under section 423A.02, subdivision 3,45.20the direct state aid under subdivision 3a to the St. Paul45.21teachers retirement association,and the direct matching and 45.22 state aid under subdivision 3b to the Minneapolis teachers 45.23 retirement fund association terminates for therespectivefund 45.24 at the end of the fiscal year in which the accrued liability 45.25 funding ratio forthatthe fund, as determined in the most 45.26 recent actuarial report forthatthe fund by the actuary 45.27 retained by the legislative commission on pensions and 45.28 retirement, equals or exceeds the accrued liability funding 45.29 ratio for the teachers retirement association, as determined in 45.30 the most recent actuarial report for the teachers retirement 45.31 association by the actuary retained by the legislative 45.32 commission on pensions and retirement. 45.33 (b) If the direct matching, supplemental, or state aid is 45.34 terminated for theSt. Paul teachers retirement fund association45.35or theMinneapolis teachers retirement fund association under 45.36 paragraph (a), it may not again be received bythatthe fund. 46.1(c) If either the Minneapolis teachers retirement fund46.2association or the St. Paul teachers retirement fund association46.3remain funded at less than the funding ratio applicable to the46.4teachers retirement association when the provisions of paragraph46.5(b) become effective, then any state aid not distributed to that46.6association must be immediately transferred to the other46.7association.46.8 Sec. 21. Minnesota Statutes 1996, section 354A.12, 46.9 subdivision 3d, is amended to read: 46.10 Subd. 3d. [SUPPLEMENTAL ADMINISTRATIVE EXPENSE 46.11 ASSESSMENT.] (a) The active and retired membership of the 46.12 Minneapolis teachers retirement fund associationand of the St.46.13Paul teachers retirement fund associationis responsible for 46.14 defraying supplemental administrative expenses other than 46.15 investment expenses of therespectiveteacher retirement fund 46.16 association. 46.17 (b) Investment expenses of the Minneapolis teachers 46.18 retirement fund association are those expenses incurred by or on 46.19 behalf of the retirement fund in connection with the investment 46.20 of the assets of the retirement fund other than investment 46.21 security transaction costs. Other administrative expenses are 46.22 all expenses incurred by or on behalf of the retirement fund for 46.23 all other retirement fund functions other than the investment of 46.24 retirement fund assets. Investment and other administrative 46.25 expenses must be accounted for using generally accepted 46.26 accounting principles and in a manner consistent with the 46.27 comprehensive annual financial report of the Minneapolis 46.28 teachers retirement fund association for the immediately 46.29 previous fiscal year under section 356.20. 46.30 (c) Supplemental administrative expenses other than 46.31 investment expenses ofa first class city teacherthe 46.32 Minneapolis teachers retirement fund association are those 46.33 expenses for the fiscal year that exceed the amount computed by 46.34 applying the most recent percentage of pay administrative 46.35 expense amount, other than investment expenses, for the teachers 46.36 retirement association governed by chapter 354 to the covered 47.1 payroll of therespectiveMinneapolis teachers retirement fund 47.2 association for the fiscal year. 47.3 (d) The board of trustees ofeach first class citythe 47.4 Minneapolis teachers retirement fund association shall allocate 47.5 the total dollar amount of supplemental administrative expenses 47.6 other than investment expenses among the various active and 47.7 retired membership groups of the Minneapolis teachers retirement 47.8 fund association and shall assess the various membership groups 47.9 their respective share of the supplemental administrative 47.10 expenses other than investment expenses, in amounts determined 47.11 by the board of trustees. The supplemental administrative 47.12 expense assessments must be paid by the membership group in a 47.13 manner determined by the board of trustees of therespective47.14 Minneapolis teachers retirement fund association. Supplemental 47.15 administrative expenses payable by the active members of the 47.16 pension plan must be picked up by the employer in accordance 47.17 with section 356.62. 47.18 (e)With respect to the St. Paul teachers retirement fund47.19association, the supplemental administrative expense assessment47.20must be fully disclosed to the various active and retired47.21membership groups of the teachers retirement fund association.47.22The chief administrative officer of the St. Paul teachers47.23retirement fund association shall prepare a supplemental47.24administrative expense assessment disclosure notice, which must47.25include the following:47.26(1) the total amount of administrative expenses of the St.47.27Paul teachers retirement fund association, the amount of the47.28investment expenses of the St. Paul teachers retirement fund47.29association, and the net remaining amount of administrative47.30expenses of the St. Paul teachers retirement fund association;47.31(2) the amount of administrative expenses for the St. Paul47.32teachers retirement fund association that would be equivalent to47.33the teachers retirement association noninvestment administrative47.34expense level described in paragraph (c);47.35(3) the total amount of supplemental administrative47.36expenses required for assessment calculated under paragraph (c);48.1(4) the portion of the total amount of the supplemental48.2administrative expense assessment allocated to each membership48.3group and the rationale for that allocation;48.4(5) the manner of collecting the supplemental48.5administrative expense assessment from each membership group,48.6the number of assessment payments required during the year, and48.7the amount of each payment or the procedure used to determine48.8each payment; and48.9(6) any other information that the chief administrative48.10officer determines is necessary to fairly portray the manner in48.11which the supplemental administrative expense assessment was48.12determined and allocated.48.13(f) The disclosure notice must be provided annually in the48.14annual report of the association.48.15(g)The supplemental administrative expense assessments 48.16 must be deposited in theapplicableMinneapolis teachers 48.17 retirement fund upon receipt. 48.18(h)(f) Any omitted active membership group assessments 48.19 that remain undeducted and unpaid to the Minneapolis teachers 48.20 retirement fund association for 90 days must be paid by the 48.21 respective school district. The school district may recover any 48.22 omitted active membership group assessment amounts that it has 48.23 previously paid. The Minneapolis teachers retirement fund 48.24 association shall deduct any omitted retired membership group 48.25 assessment amounts from the benefits next payable after the 48.26 discovery of the omitted amounts. 48.27 Sec. 22. Minnesota Statutes 1996, section 354A.30, is 48.28 amended to read: 48.29 354A.30 [MINNEAPOLISAND ST. PAULTEACHERS RETIREMENT 48.30 FUNDASSOCIATIONSASSOCIATION; COORDINATED PROGRAM.] 48.31 There is established a coordinated program within the 48.32 Minneapolis teachers retirement fund associationand a48.33coordinated program within the St. Paul teachers retirement fund48.34associationto provide retirement coverage for teachers who are 48.35 covered by an agreement or modification made between the state 48.36 and the federal Secretary of Health, EducationandWelfareHuman 49.1 Services making the provisions of the federal Old Age, Survivors 49.2 and Disability Insurance Act applicable to certain teachers 49.3 covered by the teachers retirement fund association. The 49.4 provisions governing the coordinated program shall be sections 49.5 354A.31 to 354A.41 and any other applicable provisions of this 49.6 chapter. 49.7 Sec. 23. Minnesota Statutes 1996, section 354A.31, 49.8 subdivision 4, is amended to read: 49.9 Subd. 4. [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT 49.10 ANNUITY; MINNEAPOLISAND ST. PAUL FUNDSTEACHERS RETIREMENT FUND 49.11 ASSOCIATION.] (a) This subdivision applies to the 49.12 coordinatedprogramsprogram of the Minneapolis teachers 49.13 retirement fund associationand the St. Paul teachers retirement49.14fund association. 49.15 (b) The normal coordinated retirement annuity shall be an 49.16 amount equal to a retiring coordinated member's average salary 49.17 multiplied by the retirement annuity formula percentage. 49.18 Average salary for purposes of this section shall mean an amount 49.19 equal to the average salary upon which contributions were made 49.20 for the highest five successive years of service credit, but 49.21 which shall not in any event include any more than the 49.22 equivalent of 60 monthly salary payments. Average salary must 49.23 be based upon all years of service credit if this service credit 49.24 is less than five years. 49.25 (c) This paragraph, in conjunction with subdivision 6, 49.26 applies to a person who first became a member or a member in a 49.27 pension fund listed in section 356.30, subdivision 3, before 49.28 July 1, 1989, unless paragraph (d), in conjunction with 49.29 subdivision 7, produces a higher annuity amount, in which case 49.30 paragraph (d) will apply. The retirement annuity formula 49.31 percentage for purposes of this paragraph is one percent per 49.32 year for each year of coordinated service for the first ten 49.33 years and 1.5 percent for each year of coordinated service 49.34 thereafter. 49.35 (d) This paragraph applies to a person who has become at 49.36 least 55 years old and who first becomes a member after June 30, 50.1 1989, and to any other member who has become at least 55 years 50.2 old and whose annuity amount, when calculated under this 50.3 paragraph and in conjunction with subdivision 7 is higher than 50.4 it is when calculated under paragraph (c), in conjunction with 50.5 the provisions of subdivision 6. The retirement annuity formula 50.6 percentage for purposes of this paragraph is 1.5 percent for 50.7 each year of coordinated service. 50.8 Sec. 24. Minnesota Statutes 1996, section 354A.32, 50.9 subdivision 1, is amended to read: 50.10 Subdivision 1. [OPTIONAL FORMS GENERALLY.] Theboards50.11 board of the Minneapolisand the St. Paulteachers retirement 50.12 fundassociationsassociation shalleachestablish for the 50.13 coordinated program and the board of the Duluth teachers 50.14 retirement fund association shall establish for the new law 50.15 coordinated program an optional retirement annuity which shall 50.16 take the form of a joint and survivor annuity. Each board may 50.17 also in its discretion establish an optional annuity which shall 50.18 take the form of an annuity payable for a period certain and for 50.19 life thereafter. Each board shall also establish an optional 50.20 retirement annuity that guarantees payment of the balance of the 50.21 annuity recipient's accumulated deductions to a designated 50.22 beneficiary upon the death of the annuity recipient. Except as 50.23 provided in subdivision 1a, optional annuity forms shall be the 50.24 actuarial equivalent of the normal forms provided in section 50.25 354A.31. In establishing these optional annuity forms, the 50.26 board shall obtain the written recommendation of the 50.27 commission-retained actuary. The recommendation shall be a part 50.28 of the permanent records of the board. 50.29 Sec. 25. Minnesota Statutes 1996, section 354A.39, is 50.30 amended to read: 50.31 354A.39 [SERVICE IN OTHER PUBLIC RETIREMENT FUNDS; 50.32 ANNUITY.] 50.33 Any person who has been a member of the Minnesota state 50.34 retirement system, the public employees retirement association 50.35 including the public employees retirement association police and 50.36 fire fund, the teachers retirement association, the Minnesota 51.1 state patrol retirement association, the legislators retirement 51.2 plan, the constitutional officers retirement plan, the 51.3 Minneapolis employees retirement fund, the Duluth teachers 51.4 retirement fund association new law coordinated program, the 51.5 Minneapolis teachers retirement fund association coordinated 51.6 program,the St. Paul teachers retirement fund association51.7coordinated program,or any other public employee retirement 51.8 system in the state of Minnesota having a like provision but 51.9 excluding all other funds providing retirement benefits for 51.10 police officers or firefighters shall be entitled when qualified 51.11 to an annuity from each fund if the person's total allowable 51.12 service in all of the funds or in any two or more of the funds 51.13 totals three or more years, provided that no portion of the 51.14 allowable service upon which the retirement annuity from one 51.15 fund is based is used again in the computation for a retirement 51.16 annuity from another fund and provided further that the person 51.17 has not taken a refund from any of funds or associations since 51.18 the person's membership in the fund or association has 51.19 terminated. The annuity from each fund or association shall be 51.20 determined by the appropriate provisions of the law governing 51.21 each fund or association, except that the requirement that a 51.22 person must have at least three years of allowable service in 51.23 the respective fund or association shall not apply for the 51.24 purposes of this section, provided that the aggregate service in 51.25 two or more of these funds equals three or more years. 51.26 Sec. 26. Minnesota Statutes 1996, section 354A.40, 51.27 subdivision 1, is amended to read: 51.28 Subdivision 1. [RETIREMENT ANNUITY.] Any coordinated 51.29 member ofeitherthe Minneapolis teachers retirement fund 51.30 associationor of the St. Paul teachers retirement fund51.31associationwho has credited service prior to July 1, 1978 shall 51.32 be entitled to receive a retirement annuity when otherwise 51.33 qualified, the calculation of which shall utilize the applicable 51.34 retirement annuity formula specified in articles of 51.35 incorporation and bylaws of the Minneapolis teachers retirement 51.36 fund association governing the basic program for that portion of 52.1 credited service which was served prior to July 1, 1978, and the 52.2 retirement annuity formula specified in section 354A.31 for the 52.3 remainder of the member's credited service, both applied to the 52.4 member's average salary as specified in section 354A.31, 52.5 subdivision 4. The formula percentages to be used in 52.6 calculating the coordinated portion of the retirement annuity or 52.7 coordinated service under this section shall recognize the 52.8 coordinated service as a continuation of any service prior to 52.9 July 1, 1978. 52.10 Sec. 27. Minnesota Statutes 1996, section 354A.41, is 52.11 amended to read: 52.12 354A.41 [ADMINISTRATION OF COORDINATED PROGRAM.] 52.13 Subdivision 1. [ADMINISTRATIVE PROVISIONS.] The provisions 52.14 of the articles of incorporation and bylaws of the 52.15 Minneapolisor the St. Paulteachers retirement fund 52.16 association, whichever is applicable,relating to the 52.17 administration of the fund shall govern the administration of 52.18 the coordinated program and the provisions of the articles of 52.19 incorporation and bylaws of the Duluth teachers retirement fund 52.20 association relating to the administration of the fund shall 52.21 govern the administration of the new law coordinated program in 52.22 instances where the administrative provisions are not 52.23 inconsistent with the provisions of sections 354A.31 to 354A.41, 52.24 including but not limited to provisions relating to the 52.25 composition and function of the board of trustees, the 52.26 investment of assets of the teachers retirement fund 52.27 association, and the definition of the plan year. 52.28 Subd. 2. [ACTUARIAL VALUATIONS.] In any actuarial 52.29 valuation of the Minneapolis teachers retirement fund 52.30 association, the St. Paul teachers retirement fund association,52.31 or the Duluth teachers retirement fund association under section 52.32 356.215 prepared by the commission-retained actuary or 52.33 supplemental actuarial valuation prepared by an approved actuary 52.34 retained by the teachers retirement fund association, there 52.35 shall be included a finding of the condition of the fund showing 52.36 separately the basic and coordinated programs or the old law 53.1 coordinated and new law coordinated programs, as appropriate. 53.2 The finding shall include the level normal cost and the 53.3 applicable employee and employer contribution rates for each 53.4 program. 53.5 Sec. 28. Minnesota Statutes 1996, section 356.20, 53.6 subdivision 2, is amended to read: 53.7 Subd. 2. [COVERED PUBLIC PENSION FUNDS.] This section and 53.8 section 356.215 apply to the following retirement plans: 53.9 (1) State employees retirement fund. 53.10 (2) Public employees retirement fund. 53.11 (3) Teachers retirement association. 53.12 (4) State patrol retirement fund. 53.13 (5) Minneapolis teachers retirement fund association. 53.14 (6)St. Paul teachers retirement fund association.53.15(7)Duluth teachers retirement fund association. 53.16(8)(7) Minneapolis employees retirement fund. 53.17(9)(8) University of Minnesota faculty retirement plan. 53.18(10)(9) University of Minnesota faculty supplemental 53.19 retirement plan. 53.20(11)(10) Judges retirement fund. 53.21(12)(11) Any police or firefighter's relief association 53.22 enumerated in section 69.77, subdivision 1a or 69.771, 53.23 subdivision 1. 53.24(13)(12) Public employees police and fire fund. 53.25(14)(13) Minnesota state retirement system correctional 53.26 officers retirement fund. 53.27(15)(14) Public employees local government correctional 53.28 service retirement plan. 53.29 Sec. 29. Minnesota Statutes 1996, section 356.215, 53.30 subdivision 2, is amended to read: 53.31 Subd. 2. [REQUIREMENTS.] It is the policy of the 53.32 legislature that it is necessary and appropriate to determine 53.33 annually the financial status of tax supported retirement and 53.34 pension plans for public employees. To achieve this goal, the 53.35 legislative commission on pensions and retirement shall have 53.36 prepared by the actuary retained by the commission annual 54.1 actuarial valuations of the retirement plans enumerated in 54.2 section 3.85, subdivision 11, paragraph (b), and quadrennial 54.3 experience studies of the retirement plans enumerated in section 54.4 3.85, subdivision 11, paragraph (b), clauses (1), (2), and (7). 54.5 The governing or managing board or administrative officials of 54.6 each public pension and retirement fund or plan enumerated in 54.7 section 356.20, subdivision 2, clauses (8), (9),(10),54.8 and(12)(11), shall have prepared by an approved actuary annual 54.9 actuarial valuations of their respective funds as provided in 54.10 this section. This requirement also applies to any fund that is 54.11 the successor to any organization enumerated in section 356.20, 54.12 subdivision 2, or to the governing or managing board or 54.13 administrative officials of any newly formed retirement fund or 54.14 association operating under the control or supervision of any 54.15 public employee group, governmental unit, or institution 54.16 receiving a portion of its support through legislative 54.17 appropriations, and any local police or fire fund coming within 54.18 the provisions of section 356.216. 54.19 Sec. 30. Minnesota Statutes 1996, section 356.30, 54.20 subdivision 3, is amended to read: 54.21 Subd. 3. [COVERED FUNDS.] This section applies to the 54.22 following retirement funds: 54.23 (1) state employees retirement fund, established pursuant 54.24 to chapter 352; 54.25 (2) correctional employees retirement program, established 54.26 pursuant to chapter 352; 54.27 (3) unclassified employees retirement plan, established 54.28 pursuant to chapter 352D; 54.29 (4) state patrol retirement fund, established pursuant to 54.30 chapter 352B; 54.31 (5) legislators' retirement plan, established pursuant to 54.32 chapter 3A; 54.33 (6) elective state officers' retirement plan, established 54.34 pursuant to chapter 352C; 54.35 (7) public employees retirement association, established 54.36 pursuant to chapter 353; 55.1 (8) public employees police and fire fund, established 55.2 pursuant to chapter 353; 55.3 (9) teachers retirement association, established pursuant 55.4 to chapter 354; 55.5 (10) Minneapolis employees retirement fund, established 55.6 pursuant to chapter 422A; 55.7 (11) Minneapolis teachers retirement fund association, 55.8 established pursuant to chapter 354A; 55.9 (12)St. Paul teachers retirement fund association,55.10established pursuant to chapter 354A;55.11(13)Duluth teachers retirement fund association, 55.12 established pursuant to chapter 354A; 55.13(14)(13) public employees local government correctional 55.14 service retirement plan established by sections 353C.01 to 55.15 353C.10; and 55.16(15)(14) judges' retirement fund, established by sections 55.17 490.121 to 490.132. 55.18 Sec. 31. Minnesota Statutes 1996, section 356.302, 55.19 subdivision 7, is amended to read: 55.20 Subd. 7. [COVERED RETIREMENT PLANS.] This section applies 55.21 to the following retirement plans: 55.22 (1) state employees retirement fund, established by chapter 55.23 352; 55.24 (2) unclassified employees retirement plan, established by 55.25 chapter 352D; 55.26 (3) public employees retirement association, established by 55.27 chapter 353; 55.28 (4) teachers retirement association, established by chapter 55.29 354; 55.30 (5) Duluth teachers retirement fund association, 55.31 established by chapter 354A; 55.32 (6) Minneapolis teachers retirement fund association, 55.33 established by chapter 354A; 55.34 (7)St. Paul teachers retirement fund association,55.35established by chapter 354A;55.36(8)Minneapolis employees retirement fund, established by 56.1 chapter 422A; 56.2(9)(8) correctional employees retirement plan, established 56.3 by chapter 352; 56.4(10)(9) state patrol retirement fund, established by 56.5 chapter 352B; 56.6(11)(10) public employees police and fire fund, 56.7 established by chapter 353; and 56.8(12)(11) judges' retirement fund, established by sections 56.9 490.121 to 490.132. 56.10 Sec. 32. Minnesota Statutes 1996, section 356.303, 56.11 subdivision 4, is amended to read: 56.12 Subd. 4. [COVERED RETIREMENT PLANS.] This section applies 56.13 to the following retirement plans: 56.14 (1) legislators retirement plan, established by chapter 3A; 56.15 (2) state employees retirement fund, established by chapter 56.16 352; 56.17 (3) correctional employees retirement plan, established by 56.18 chapter 352; 56.19 (4) state patrol retirement fund, established by chapter 56.20 352B; 56.21 (5) elective state officers retirement plan, established by 56.22 chapter 352C; 56.23 (6) unclassified employees retirement plan, established by 56.24 chapter 352D; 56.25 (7) public employees retirement association, established by 56.26 chapter 353; 56.27 (8) public employees police and fire fund, established by 56.28 chapter 353; 56.29 (9) teachers retirement association, established by chapter 56.30 354; 56.31 (10) Duluth teachers retirement fund association, 56.32 established by chapter 354A; 56.33 (11) Minneapolis teachers retirement fund association, 56.34 established by chapter 354A; 56.35 (12)St. Paul teachers retirement fund association,56.36established by chapter 354A;57.1(13)Minneapolis employees retirement fund, established by 57.2 chapter 422A; and 57.3(14)(13) judges' retirement fund, established by sections 57.4 490.121 to 490.132. 57.5 Sec. 33. Minnesota Statutes 1996, section 356.32, 57.6 subdivision 2, is amended to read: 57.7 Subd. 2. [COVERED FUNDS.] The provisions of this section 57.8 shall apply to the following retirement funds: 57.9 (1) state employees retirement fund, established pursuant 57.10 to chapter 352; 57.11 (2) correctional employees retirement program, established 57.12 pursuant to chapter 352; 57.13 (3) state patrol retirement fund, established pursuant to 57.14 chapter 352B; 57.15 (4) public employees retirement fund, established pursuant 57.16 to chapter 353; 57.17 (5) public employees police and fire fund, established 57.18 pursuant to chapter 353; 57.19 (6) teachers retirement association, established pursuant 57.20 to chapter 354; 57.21 (7) Minneapolis employees retirement fund, established 57.22 pursuant to chapter 422A; 57.23 (8) Duluth teachers retirement fund association, 57.24 established pursuant to chapter 354A; 57.25 (9) Minneapolis teachers retirement fund association, 57.26 established pursuant to chapter 354A; and 57.27 (10)St. Paul teachers retirement fund association,57.28established pursuant to chapter 354A;57.29(11)public employees local government correctional service 57.30 retirement plan established by sections 353B.01 to 353B.10. 57.31 Sec. 34. Minnesota Statutes 1996, section 356.35, 57.32 subdivision 2, is amended to read: 57.33 Subd. 2. [DETERMINANT DATE.] "Determinant date" means June 57.34 1, 1973, with respect to the state patrol retirement fund; June 57.35 27, 1973, with respect to permanent disability benefits, 57.36 retirement annuities, and retirement allowance options II, III 58.1 and IV paid to surviving spouses pursuant to Minnesota Statutes 58.2 1971, Section 422.08 provided by the Minneapolis employees 58.3 retirement fund; April 25, 1959, with respect to survivor 58.4 benefits paid to surviving spouses of contributing members 58.5 provided by the Minneapolis employees retirement fund;January58.61, 1970, with respect to the St. Paul teachers retirement fund;58.7 July 1, 1971, with respect to the Duluth teachers retirement 58.8 fund; and July 1, 1973, with respect to all other covered 58.9 retirement funds. 58.10 Sec. 35. Minnesota Statutes 1996, section 356.35, 58.11 subdivision 5, is amended to read: 58.12 Subd. 5. [COVERED RETIREMENT PLANS.] "Covered retirement 58.13 fund" means: 58.14 (1) the state patrol retirement fund; 58.15 (2) the public employees police and fire fund; 58.16 (3) the public employees retirement fund; 58.17 (4) the state employees retirement fund; 58.18 (5) the teachers retirement association; 58.19 (6) the Minneapolis employees retirement fund; 58.20 (7) the legislators' retirement plan; or 58.21 (8)the St. Paul teachers retirement fund; or58.22(9)the Duluth teachers retirement fund. 58.23 Sec. 36. Minnesota Statutes 1996, section 356.36, 58.24 subdivision 1, is amended to read: 58.25 Subdivision 1. [ENTITLEMENT.] Except as provided in 58.26 section 356.38, any plan participant who began receiving a 58.27 permanent disability benefit or a retirement annuity prior to 58.28 the determinant date and is receiving a permanent disability 58.29 benefit or a retirement annuity based on laws in effect prior to 58.30 such date from a covered retirement fund or any combination of 58.31 such funds shall receive, beginning with the first monthly 58.32 benefit or annuity accruing after June 30, 1976, an increase in 58.33 the benefit or annuity from each such fund as provided in 58.34 subdivisions 2 and 3. Provided however, that no plan 58.35 participant who is receiving a permanent disability benefit or a 58.36 retirement annuity from the Minneapolis employees retirement 59.1 fund in excess of $300 per month shall be entitled to an 59.2 increase in such benefit or annuity pursuant to Laws 1976, 59.3 chapter 326.Provided further, that no plan participant who is59.4less than 70 years of age and is receiving a permanent59.5disability benefit or a retirement annuity from the St. Paul59.6teachers retirement fund shall be entitled to an increase in the59.7benefit or annuity pursuant to Laws 1976, chapter 326 until the59.8plan participant attains the age of 70 years.59.9 Sec. 37. Minnesota Statutes 1996, section 356.86, 59.10 subdivision 1, is amended to read: 59.11 Subdivision 1. [ENTITLEMENT.] A person who is receiving a 59.12 retirement annuity, a disability benefit, or a surviving 59.13 spouse's annuity or benefit from a retirement fund specified in 59.14 subdivision 3, clauses (1) to (8), is entitled to receive a 59.15 postretirement adjustment from the applicable retirement fund in 59.16 the amount specified in subdivision 2, if the annuity or benefit 59.17 was computed under: 59.18 (1) the laws in effect before June 1, 1973, if the person 59.19 is receiving an annuity or benefit from the retirement fund 59.20 specified in subdivision 3, clause (4); or 59.21 (2) the laws in effect before July 1, 1973, if the person 59.22 is receiving an annuity or benefit from a retirement fund 59.23 specified in subdivision 3, clause (1), (2), (3), or (5); or 59.24 (3) the metropolitan transit commission-transit operating 59.25 division employees retirement fund plan document in effect on or 59.26 before December 31, 1977, if the person is receiving a 59.27 retirement annuity, a disability benefit, or a surviving 59.28 spouse's annuity or benefit from the retirement fund specified 59.29 in subdivision 3, clause (5); or 59.30 (4) the laws in effect before May 1, 1974, and before any 59.31 adjustment under Laws 1987, chapter 372, article 3, if the 59.32 person is receiving an annuity or benefit from the retirement 59.33 fund specified in subdivision 3, clause (6); or 59.34 (5)the laws in effect before January 1, 1970, if the59.35person is receiving an annuity or benefit from the retirement59.36fund specified in subdivision 3, clause (7); or60.1(6)the laws in effect before June 30, 1971, if the person 60.2 is receiving an annuity or benefit from the retirement fund 60.3 specified in subdivision 3, clause (8). 60.4 Sec. 38. Minnesota Statutes 1996, section 356.86, 60.5 subdivision 2, is amended to read: 60.6 Subd. 2. [AMOUNT OF POSTRETIREMENT ADJUSTMENT; PAYMENT.] 60.7 (a) For any person receiving an annuity or benefit on November 60.8 30, 1989, and entitled to receive a postretirement adjustment 60.9 under subdivision 1, the postretirement adjustment is a lump sum 60.10 payment calculated under paragraph (b) or (c). 60.11 (b) For coordinated plan annuity or benefit recipients, the 60.12 postretirement adjustment in 1989 is $25 for each full year of 60.13 allowable service credited to the person by the respective 60.14 retirement fund. In 1990 and each following year, the 60.15 postretirement adjustment is the amount payable in the preceding 60.16 year increased by the same percentage applied to regular 60.17 annuities paid from the postretirement fund or, for the 60.18 retirement funds specified in subdivision 3, clauses 60.19 (6), and (7), and (8), by the same percentage applied under the 60.20 articles of incorporation and bylaws of these funds. 60.21 (c) For basic plan annuity or benefit recipients, the 60.22 postretirement adjustment in 1989 is the greater of: 60.23 (1) $25 for each full year of allowable service credited to 60.24 the person by the respective retirement fund; or 60.25 (2) the difference between: 60.26 (i) the product of $400 times the number of full years of 60.27 allowable service credited to the person by the respective 60.28 retirement fund; and 60.29 (ii) the sum of the benefits payable to the person from any 60.30 Minnesota public employee pension plan, and cash benefits 60.31 payable to the person from the Social Security Administration. 60.32 In 1990 and each following year, each eligible basic plan 60.33 annuity or benefit recipient shall receive the amount received 60.34 in the preceding year increased by the same percentage applied 60.35 to regular annuities paid from the postretirement fund or, for 60.36 the retirement funds specified in subdivision 3, clauses 61.1 (6),and (7),and (8),by the same percentage applied under the 61.2 articles of incorporation and bylaws of these funds. 61.3 (d) The postretirement adjustment provided for in this 61.4 section is payable for those persons receiving an annuity or 61.5 benefit on November 30, 1989, on December 1, 1989. In 61.6 subsequent years, the adjustment must be paid on December 1 to 61.7 those persons receiving an annuity or benefit on the preceding 61.8 November 30. A person who is eligible may elect to participate 61.9 in an optional annuity or benefit receipt schedule under 61.10 subdivision 4. This section does not authorize the payment of a 61.11 postretirement adjustment to an estate if the annuity or benefit 61.12 recipient dies before the November 30 eligibility date. The 61.13 postretirement adjustment provided for in this section must be 61.14 paid automatically unless the intended recipient files a written 61.15 notice with the retirement fund requesting that the 61.16 postretirement adjustment not be paid or returns the amount of 61.17 adjustment to the retirement fund. Written notice of the waiver 61.18 of the postretirement adjustment is irrevocable for the year 61.19 during which it was made. 61.20 Sec. 39. Minnesota Statutes 1996, section 356.86, 61.21 subdivision 3, is amended to read: 61.22 Subd. 3. [COVERED RETIREMENT FUNDS.] The postretirement 61.23 adjustment provided in this section applies to the following 61.24 retirement funds: 61.25 (1) public employees retirement fund; 61.26 (2) public employees police and fire fund; 61.27 (3) teachers retirement association; 61.28 (4) state patrol retirement fund; 61.29 (5) state employees retirement fund of the Minnesota state 61.30 retirement system; 61.31 (6) Minneapolis teachers retirement fund association 61.32 established under chapter 354A; and 61.33 (7)St. Paul teachers retirement fund association,61.34established under chapter 354A; and61.35(8)Duluth teachers retirement fund association established 61.36 under chapter 354A. 62.1 Sec. 40. Minnesota Statutes 1996, section 423A.02, 62.2 subdivision 3, is amended to read: 62.3 Subd. 3. [REALLOCATION OF AMORTIZATION OR SUPPLEMENTARY 62.4 AMORTIZATION STATE AID.] (a) Seventy percent of the difference 62.5 between $5,720,000 and the current year amortization aid or 62.6 supplemental amortization aid distributed under subdivisions 1 62.7 and 1a that is not distributed for any reason to a municipality 62.8 for use by a local police or salaried fire relief association 62.9 must be distributed by the commissioner of revenue according to 62.10 this paragraph. The commissioner shall distribute 70 percent of 62.11 the amounts derived under this paragraph to the Minneapolis 62.12 teachers retirement fund association and 30 percent to theSt.62.13Paulstatewide teachers retirementfundassociation to fund the 62.14 unfunded actuarial accrued liabilities of the respective funds. 62.15 These payments shall be made on or before June 30 each fiscal 62.16 year. The amount required under this paragraph is appropriated 62.17 annually from the general fund to the commissioner of revenue. 62.18If either the Minneapolis teachers retirement fund association62.19or the St. Paul teachers retirement fund association becomes62.20funded at the funding ratio applicable to the teachers62.21retirement association based on the actuarial reports prepared62.22by the actuary for the legislative commission on pensions and62.23retirement, then the commissioner shall distribute that fund's62.24share under this paragraph to the other fund.The appropriation 62.25 under this paragraph terminates whenboth funds become fully62.26fundedthe Minneapolis teachers retirement fund association 62.27 becomes funded at the funding ratio applicable to the teachers 62.28 retirement association based on the actuarial reports prepared 62.29 by the actuary retained by the legislative commission on 62.30 pensions and retirement. Amounts remaining in the undistributed 62.31 balance account at the end of the biennium cancel to the general 62.32 fund. 62.33 (b)In order to receive amortization and supplementary62.34amortization aid under paragraph (a), independent school62.35district No. 625, St. Paul, must make contributions to the St.62.36Paul teachers retirement fund association in accordance with the63.1following schedule:63.2Fiscal YearAmount63.31996$063.41997$063.51998$200,00063.61999$400,00063.72000$600,00063.82001 and thereafter$800,00063.9(c)In order to receive amortization and supplementary 63.10 amortization aid under paragraph (a), special school district No. 63.11 1, Minneapolis, and the city of Minneapolis must each make 63.12 contributions to the Minneapolis teachers retirement fund 63.13 association in accordance with the following schedule: 63.14 Fiscal Year City School district 63.15 amount amount 63.16 1996 $0 $0 63.17 1997 $0 $0 63.18 1998 $250,000 $250,000 63.19 1999 $400,000 $400,000 63.20 2000 $550,000 $550,000 63.21 2001 $700,000 $700,000 63.22 2002 $850,000 $850,000 63.23 2003 and $1,000,000 $1,000,000 63.24 thereafter 63.25(d)(c) Money contributed underparagraphparagraphs (a) 63.26 andeither paragraph(b)or (c), as applicable,must be credited 63.27 to a separate account in theapplicableMinneapolis teachers 63.28 retirement fund and may not be used in determining any benefit 63.29 increases. The separate account terminates for a fund when the 63.30 aid payments to the fund under paragraph (a) cease. 63.31(e)(d) Thirty percent of the difference between $5,720,000 63.32 and the current year amortization aid or supplemental 63.33 amortization aid under subdivisions 1 and 1a that is not 63.34 distributed for any reason to a municipality for use by a local 63.35 police or salaried firefighter relief association must be 63.36 distributed under section 69.021, subdivision 7, paragraph (d), 64.1 as additional funding to support a minimum fire state aid amount 64.2 for volunteer firefighter relief associations. The amount 64.3 required under this paragraph is appropriated annually to the 64.4 commissioner of revenue. 64.5 Sec. 41. Laws 1965, chapter 705, section 1, subdivision 4, 64.6 is amended to read: 64.7 Subd. 4. As of July 1, 1965, the organization, operation, 64.8 maintenance and conduct of the affairs of the converted district 64.9 shall be governed by general laws relating to independent 64.10 districts, except as otherwise provided in Extra Session Laws 64.11 1959, Chapter 71, as amended, and all special laws and charter 64.12 provisions relating only to the converted district are 64.13 repealed.Where an existing pension law is applicable to64.14employees of the special district such law shall continue to be64.15applicable in the same manner and to the same extent to64.16employees of the converted district.General laws applicable to 64.17 independent school districts wholly or partly within cities of 64.18 the first class shall not be applicable to the converted 64.19 district.The provision of the statutes applicable only to64.20teachers retirement fund associations in cities of the first64.21class, limiting the amount of annuity to be paid from public64.22funds, limiting the taxes to be levied to carry out the plan of64.23such associations, and limiting the amount of annuities to be64.24paid to beneficiaries, all as contained in Minnesota Statutes,64.25Section 135.24, shall not be applicable to such converted64.26district, but the statutes applicable to such special district64.27prior to the conversion shall continue to be applicable and the64.28pension plan in operation prior to the conversion shall continue64.29in operation until changed in accordance with law, andThe 64.30 teacher tenure law applicable to the special district shall 64.31 continue to apply to the converted district in the same manner 64.32 and to the same extent to teachers in the converted district; 64.33 provided further, where existing civil service provisions of any 64.34 law or charter are applicable to special district employees, 64.35 such provision shall continue to be applicable in the same 64.36 manner and to the same extent to employees of the converted 65.1 district.Notwithstanding any contrary provision of Extra65.2Session Laws 1959, Chapter 71, as amended, if there was in the65.3special district a teachers retirement fund association65.4operating and existing under the provisions of Laws 1909,65.5Chapter 343, and all acts amendatory thereof, then such teachers65.6retirement fund association shall continue to exist and operate65.7in the converted district under and to be subject to the65.8provisions of Laws 1909, Chapter 343, and all acts amendatory65.9thereof, to the same extent and in the same manner as before the65.10conversion, and, without limiting the generality of the65.11foregoing, such teachers retirement fund association shall65.12continue, after the conversion as before the conversion, to65.13certify to the same authorities the amount necessary to raise by65.14taxation in order to carry out its retirement plan, and it shall65.15continue, after the conversion as before the conversion, to be65.16the duty of said authorities to include in the tax levy for the65.17ensuing year a tax in addition to all other taxes sufficient to65.18produce so much of the sums so certified as said authorities65.19shall approve, and such teachers retirement fund association65.20shall not be subject after the conversion to any limitation on65.21payments to any beneficiary from public funds or on taxes to be65.22levied to carry out the plan of such association to which it was65.23not subject before the conversion.65.24 Sec. 42. Laws 1989, chapter 319, article 13, section 94, 65.25 is amended to read: 65.26 Sec. 94. [FIRST CLASS CITY TEACHER FUNDS.] 65.27 In accordance with Minnesota Statutes, section 354A.12, 65.28 subdivision 4, approval is granted for the teachers retirement 65.29 fund associations in each of the cities of the first class to 65.30 amend their articles of incorporation or bylaws in the manner 65.31 specified in this section. The amendments apply only to basic 65.32 members in the Minneapolis teachers retirement fund association 65.33and the St. Paul teachers retirement fund association,and to 65.34 old law coordinated program members in the Duluth teachers 65.35 retirement fund association. 65.36 (a) For purposes of this paragraph, the retirement formula 66.1 percentages are: 66.2 (1) for Minneapolis teachers retirement fund: 2.25 percent 66.3 for each year of service; and 66.4 (2)for St. Paul teachers retirement fund: 2.0 percent for66.5each year of service; and66.6(3)for Duluth teachers retirement fund old coordinated 66.7 plan: 1.25 percent for each year of service. 66.8 A member whose age plus credited allowable service totals 66.9 90 years, is entitled upon termination of active service and 66.10 application, to a normal retirement annuity provided in the 66.11 articles and bylaws without any reduction in the amount of the 66.12 annuity by reason of early retirement unless the benefit in 66.13 paragraph (b) in conjunction with paragraph (c) produces a 66.14 higher annuity in which case, paragraph (b) applies. A member 66.15 who retires before the normal retirement age shall be provided a 66.16 normal retirement annuity provided in the articles and bylaws, 66.17 reduced by one-fourth of one percent for each month that the 66.18 employee is under normal retirement age at the time of 66.19 retirement unless the benefit in paragraph (b) in conjunction 66.20 with paragraph (c) produces a higher annuity, in which case 66.21 paragraph (b) applies. For the Minneapolis teachers retirement 66.22 association, this paragraph applies only to basic members with 66.23 less than 30 years of service who have attained age 55. For 66.24 Minneapolis teachers retirement fund basic members who were 66.25 first hired after July 1, 1977, and who have 30 or more years of 66.26 service, the early retirement penalty contained in the articles 66.27 and bylaws is repealed. 66.28 (b) This paragraph applies only to a member whose annuity, 66.29 when calculated under this paragraph in conjunction with 66.30 paragraph (c), is higher than when calculated under paragraph 66.31 (a). The average salary, as specified inthe bylaws of St. Paul66.32teachers retirement fund association,the bylaws of Duluth 66.33 teachers retirement fund association,and the bylaws of 66.34 Minneapolis teachers retirement fund association, multiplied by 66.35 2.5 percent for each year of service for basic members of the 66.36 Minneapolis teachers retirement fund association and 1.5 percent 67.1 for each year of service for old coordinated members of Duluth 67.2 teachers retirement fund association, shall determine the amount 67.3 of the retirement annuity to which a member is entitled. 67.4 (c) This paragraph applies only to a member whose annuity 67.5 under paragraph (b) in conjunction with this paragraph is higher 67.6 than when calculated under paragraph (a). A member who retires 67.7 under the formula annuity specified in paragraph (b) before the 67.8 normal retirement age defined in section 354A.011, shall be paid 67.9 the normal annuity provided in paragraph (b) reduced so that the 67.10 reduced annuity is the actuarial equivalent of the annuity that 67.11 would be payable to the employee if the employee deferred 67.12 receipt of the annuity and the annuity amount were augmented at 67.13 an annual rate of three percent compounded annually from the day 67.14 the annuity begins to accrue until the normal retirement age. 67.15 (d) The interest rate to be paid on refunds is six percent 67.16 per annum compounded annually. 67.17 (e) Any joint and survivor annuity option is subject to an 67.18 automatic bounce-back annuity as provided in section 354A.32, 67.19 subdivision 1a. 67.20 (f) A member who is eligible for a deferred retirement 67.21 annuity shall have the annuity augmented as provided in section 67.22 354A.37, subdivision 2. 67.23 (g) Thefirst class cityDuluth teachers retirementfunds,67.24 fund association and the Minneapolis teachers retirement fund 67.25 association may provide optional annuity forms to its retirement 67.26 program which are the actuarial equivalent of its normal 67.27 retirement annuity. For all optional forms, the board shall 67.28 obtain the written recommendation of an approved actuary and the 67.29 recommendation shall be a part of the permanent records of the 67.30 board. 67.31 Sec. 43. Laws 1990, chapter 570, article 7, section 4, is 67.32 amended: 67.33 Sec. 4. [DULUTH TEACHERS RETIREMENT FUNDAND ST. PAUL67.34TEACHERS RETIREMENT FUND:; ALTERNATE METHOD OF PAYING ADDITIONAL 67.35 LUMP SUM AMOUNT.] 67.36 Notwithstanding any provision of the articles or bylaws of 68.1 the Duluth teachers retirement fund associationor St. Paul68.2teachers retirement fund associationto the contrary, approval 68.3 is granted for the Duluth teachers retirement fund 68.4 associationand St. Paul teachers retirement fund associationto 68.5 provide that a lump sum postretirement adjustment that is 68.6 payable may, upon the request of the annuitant or survivor and 68.7 approval of the board of trustees of the fund, be converted to a 68.8 monthly annuity benefit of equivalent actuarial value. The 68.9 amount of the additional annuity shall be determined by: 68.10 (1) the age of the annuitant or survivor on the date of the 68.11 lump sum postretirement adjustment; 68.12 (2) use of an annuity table of mortality established by the 68.13 board of trustees of the association as required by Minnesota 68.14 Statutes, section 356.215; and 68.15 (3) use of the postretirement interest rate assumption 68.16 specified in Minnesota Statutes, section 11A.18. 68.17 Sec. 44. Laws 1992, chapter 598, article 6, section 18, is 68.18 amended to read: 68.19 Sec. 18. [FIRST CLASS CITY TEACHERS PLANS; RETIREE 68.20 RESUMING SERVICE.] 68.21 In accordance with Minnesota Statutes, section 354A.12, 68.22 subdivision 4, the Minneapolis teachers retirement fund 68.23 association, the St. Paul teachers retirement fund association,68.24 and the Duluth teachers retirement fund association may amend 68.25 the articles of incorporation or bylaws of the respective 68.26 association. This authorization is to provide that any person 68.27 who is retired and receiving a basic program formula retirement 68.28 annuity under the articles of incorporation or bylaws of the 68.29 Minneapolis teachers retirement fund associationor the St. Paul68.30teachers retirement fund association, or any person who is 68.31 retired and receiving an old law coordinated program formula 68.32 retirement annuity under the articles of incorporation or bylaws 68.33 of the Duluth retirement fund association, and who has resumed 68.34 teaching service for the school district covered by that same 68.35 retirement fund association, is entitled to continue to receive 68.36 retirement annuity payments. However, the annuity payments must 69.1 be reduced in accordance with Minnesota Statutes, section 69.2 354A.31, subdivision 3, if the person's income from teaching 69.3 service is an amount greater than the maximum earnings allowable 69.4 for that age for the continued receipt of full benefit amounts 69.5 monthly under the federal old age, survivors, and disability 69.6 insurance program as set by the Secretary of Health and Human 69.7 Services under United States Code, title 42, section 403. 69.8 Sec. 45. Laws 1993, chapter 336, article 2, section 2, is 69.9 amended to read: 69.10 Sec. 2. [BYLAW AMENDMENT.] 69.11 Consistent with Minnesota Statutes, section 354A.12, 69.12 subdivision 4, the boards of the Duluth teachers retirement fund 69.13 association,and the Minneapolis teachers retirement fund 69.14 association, and the St. Paul teachers retirement fund69.15associationmay amend the bylaws or articles of incorporation to 69.16 provide that, if an application for retirement is filed with the 69.17 board during the 90-day period immediately following the 69.18 termination of teaching service, the annuity may begin to accrue 69.19 as if the application for retirement has been filed with the 69.20 board on the date teaching service terminated. An annuity may 69.21 not begin to accrue more than one month before the date of final 69.22 salary receipt. 69.23 Sec. 46. Laws 1994, chapter 542, section 5, is amended to 69.24 read: 69.25 Sec. 5. [ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION AND69.26 MINNEAPOLIS TEACHERS RETIREMENT FUND ASSOCIATION BYLAW 69.27 AMENDMENTS.] 69.28 Consistent with Minnesota Statutes, section 354A.12, 69.29 subdivision 4, the board of the Minneapolis teachers retirement 69.30 fund associationand the board of the St. Paul teachers69.31retirement fund associationmay amend the bylaws or articles of 69.32 incorporation to provide that: 69.33 (1) a person receiving a basic program retirement annuity 69.34 under the governing sections in articles of incorporation or 69.35 bylaws and who resumes teaching service forthespecial school 69.36 districtin which the teachers retirement fund association70.1existsNo. 1 is entitled to continue to receive retirement 70.2 annuity payments, except that annuity payments must be reduced 70.3 during the calendar year immediately following the calendar year 70.4 in which the person's income from the teaching service is in an 70.5 amount greater than the annual maximum earnings allowable for 70.6 that age for the continued receipt of full benefit amounts 70.7 monthly under the federal old age, survivors, and disability 70.8 insurance program as set by the Secretary of Health and Human 70.9 Services under United States Code, title 42, section 403; 70.10 (2) the amount of the reduction must be one-third the 70.11 amount in excess of the applicable reemployment income maximum 70.12 and must be deducted from the annuity payable for the calendar 70.13 year immediately following the calendar year in which the excess 70.14 amount was earned; 70.15 (3) if the person has not yet reached the minimum age for 70.16 the receipt of social security benefits, the maximum earnings 70.17 for the person must be equal to the annual maximum earnings 70.18 allowable for the minimum age for the receipt of social security 70.19 benefits; 70.20 (4) if the person is retired for only a fractional part of 70.21 the calendar year during the initial year of retirement, the 70.22 maximum reemployment income must be prorated for that calendar 70.23 year; 70.24 (5) after a person has reached the age of 70, no 70.25 reemployment income maximum is applicable regardless of the 70.26 amount of any compensation received for teaching service forthe70.27 special school districtin which the teachers retirement fund70.28association existsNo. 1; and 70.29 (6) for the purposes of the bylaw amendment, income from 70.30 teaching service includes: (i) all income for services performed 70.31 as a consultant, independent contractor, or income resulting 70.32 from working with the school district in any capacity; and (ii) 70.33 the greater of either the income receive or an amount based on 70.34 the rate paid with respect to an administrative position, 70.35 consultant, or independent contractor inthespecial school 70.36 districtin which the teachers retirement fund association71.1existsNo. 1 and at the same level as the position occupied by 71.2 the person who resumes teaching service. 71.3 Sec. 47. Laws 1995, chapter 252, article 1, section 16, as 71.4 amended by Laws 1996, chapter 438, article 9, section 1, is 71.5 amended to read: 71.6 Sec. 16. [RETROACTIVE PROVISIONS.] 71.7 (a) A teacher who had at least three years of allowable 71.8 service credit under Minnesota Statutes, chapter 354 or 354A, on 71.9 July 1, 1994, and who worked part-time between July 1, 1994, and 71.10 June 30, 1995, may be allowed to make contributions to and 71.11 accrue allowable service credit in the applicable retirement 71.12 fund, as if the teacher had been working full time, as provided 71.13 in Minnesota Statutes, section 354.66, subdivision 4, and 71.14 354A.094, subdivision 4, for service after July 1, 1994, and 71.15 before June 30, 1995. If a teacher described in this paragraph 71.16 wishes to obtain allowable service credit as if the teacher had 71.17 been working full time for th period from July 1, 1994, to June 71.18 30, 1995, the teacher must: 71.19 (1) make a lump sum payment to the applicable pension 71.20 fundwithin 60 days after the effective date of this section71.21before August 2, 1996, with respect to the St. Paul teachers71.22retirement fund association orbefore August 2, 1995,with71.23respect to any other teacher retirement planof the difference 71.24 between the amount of the employer and employee contributions to 71.25 the pension fund that would have been paid if the teacher had 71.26 been working full time, and that amount that was actually paid 71.27 for part-time service during that period; and 71.28 (2) submit to the association a letter or other document 71.29 from the board of the teacher's employing district stating that 71.30 the board would have agreed to the teacher's participation in 71.31 the part-time mobility program during the 1994-1995 school year 71.32 but for the requirement then in effect that the district make 71.33 the full employer contribution to the retirement fund for 71.34 teachers with 20 or more years of service, based on the 71.35 compensation that would have been paid if the teacher had been 71.36 employed on a full-time basis. 72.1 (b) An employer of a teacher covered by paragraph (a) must 72.2 notify the teacher of the option available under paragraph (a) 72.3 in writing before July 3,1996, with respect to the St. Paul72.4teachers retirement fund association, or before July 3,1995 72.5with respect to any other teacher retirement plan. 72.6(c) With respect to the St. Paul teachers retirement fund72.7association, any payment must include compound interest at an72.8annual rate of 8.5 percent from August 3, 1995, to the date on72.9which payment is made.72.10 Sec. 48. [INSTRUCTIONS TO THE REVISOR.] 72.11 In Minnesota Statutes 1997 Supplement and in subsequent 72.12 editions of Minnesota Statutes, the revisor of statutes shall 72.13 remove the reference to the St. Paul teachers retirement fund 72.14 association from the headnote to Minnesota Statutes, section 72.15 354A.23, and from any other headnote. 72.16 Sec. 49. [REPEALER; GENERAL AND SPECIAL LAW; ST. PAUL 72.17 TEACHERS RETIREMENT FUND ASSOCIATION.] 72.18 (a) Minnesota Statutes 1996, sections 354A.23, subdivision 72.19 2; 355.201; 355.202; 355.203; 355.204; 355.205; 355.206; 72.20 355.207; 355.208; and 355.209, are repealed. 72.21 (b) Laws 1976, chapter 238, section 14; Laws 1977, chapter 72.22 429, sections 60 and 61; Laws 1979, chapter 109; Laws 1981, 72.23 chapter 157; Laws 1985, chapter 259, section 3; Laws 1987, 72.24 chapter 372, article 7, section 6; Laws 1988, chapter 709, 72.25 article 8, section 8; Laws 1990, chapter 570, article 7, section 72.26 3; Laws 1991, chapter 67; and Laws 1993, chapter 336, article 3, 72.27 section 1, are repealed. 72.28 Sec. 50. [EFFECTIVE DATE.] 72.29 Sections 1 to 49 are effective July 1, 1998, if the board 72.30 of education of independent school district No. 625 elects to 72.31 have the statewide teachers retirement association provide 72.32 future retirement coverage to its teachers.