2nd Engrossment - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to retirement; providing various benefit 1.3 increases and related modifications; requiring 1.4 collateralization and investment authority statement; 1.5 amending Minnesota Statutes 1994, sections 124.916, 1.6 subdivision 3; 136.90; 352.01, subdivision 13; 1.7 352B.02, subdivision 1a; 352B.08, subdivision 2; 1.8 352B.10, subdivision 1; 353.651, subdivision 4; 1.9 353A.083; 354.445; 354.66, subdivision 4; 354A.094, 1.10 subdivision 4; 354A.12, subdivisions 1, 2, 3b, 3c, and 1.11 by adding a subdivision; 354A.27, subdivision 1, and 1.12 by adding subdivisions; 354A.31, subdivision 4, and by 1.13 adding a subdivision; 354B.05, subdivisions 2, and 3; 1.14 354B.07, subdivisions 1, and 2; 354B.08, subdivision 1.15 2; 356.30, subdivision 1; 356.611; 356A.06, by adding 1.16 subdivisions; 422A.05, by adding a subdivision; 1.17 422A.09, subdivision 2; 422A.101, subdivision 1a; Laws 1.18 1994, chapter 499, section 2; proposing coding for new 1.19 law in Minnesota Statutes, chapters 125; 354A; and 1.20 356; repealing Minnesota Statutes 1994, sections 1.21 3A.10, subdivision 2; 352.021, subdivision 5; and 1.22 354A.27, subdivisions 2, 3, and 4. 1.23 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.24 ARTICLE 1 1.25 STATEWIDE GENERAL EMPLOYEE PENSION PLAN 1.26 BENEFIT AND RELATED MODIFICATIONS 1.27 Section 1. [125.615] [RETURN TO FULL-TIME WORK.] 1.28 A teacher with 20 or more years of allowable service credit 1.29 under chapter 354 or chapter 354A who was assigned to a 1.30 part-time position under section 354.66 or 354A.094 after June 1.31 30, 1994, must be given the option of returning to full-time 1.32 employment if the employer does not make the full employer 1.33 contribution to the applicable pension fund under section 1.34 354.66, subdivision 4, or 354A.094, subdivision 4, after July 1, 2.1 1995. If an employer decides not to make the full employer 2.2 contribution to the pension fund after July 1, 1995, it shall 2.3 notify an affected part-time teacher of that decision in writing 2.4 within 30 days of the employer's decision. A teacher receiving 2.5 this notice who wishes to return to work full-time must notify 2.6 the employer of intent to return to full-time employment within 2.7 30 days of receiving notice from the employer and must return to 2.8 full-time employment by the beginning of the next school year. 2.9 Sec. 2. Minnesota Statutes 1994, section 136.90, is 2.10 amended to read: 2.11 136.90 [EMPLOYER-PAID HEALTH INSURANCE.] 2.12 (a) This section applies to a person who: 2.13 (1) retires from the state university system, technical 2.14 college system or the community college system, or from a 2.15 successor system employing state university, technical college, 2.16 or community college faculty, with at least ten years 2.17 of combined service credit inthea systemfrom which the person2.18retiresunder the jurisdiction of the higher education board; 2.19 (2) was employed on a full-time basis immediately preceding 2.20 retirement as a state university, technical college, or 2.21 community college faculty member or as an unclassified 2.22 administrator in one of these systems; 2.23 (3) begins drawing an annuity from the teachers retirement 2.24 association or a first class city teacher plan; and 2.25 (4) returns to work on not less than a one-third time basis 2.26 and not more than a two-thirds time basis in the system from 2.27 which the person retired under an agreement in which the person 2.28 may not earn a salary of more than $35,000 in a calendar year 2.29 from employment after retirement in the system from which the 2.30 person retired. 2.31 (b) Initial participation, the amount of time worked, and 2.32 the duration of participation under this section must be 2.33 mutually agreed upon by the employer and the employee. The 2.34 employer may require up to one-year notice of intent to 2.35 participate in the program as a condition of participation under 2.36 this section. The employer shall determine the time of year the 3.1 employee shall work. 3.2 (c) For a person eligible under paragraphs (a) and (b), the 3.3 employing board shall make the same employer contribution for 3.4 hospital, medical, and dental benefits as would be made if the 3.5 person were employed full time. 3.6 (d) For work under paragraph (a), a person must receive a 3.7 percentage of the person's salary at the time of retirement that 3.8 is equal to the percentage of time the person works compared to 3.9 full-time work. 3.10 (e) If a collective bargaining agreement covering a person 3.11 provides for an early retirement incentive that is based on age, 3.12 the incentive provided to the person must be based on the 3.13 person's age at the time employment under this section ends. 3.14 However, the salary used to determine the amount of the 3.15 incentive must be the salary that would have been paid if the 3.16 person had been employed full time for the year immediately 3.17 preceding the time employment under this section ends. 3.18 Sec. 3. Minnesota Statutes 1994, section 352.01, 3.19 subdivision 13, is amended to read: 3.20 Subd. 13. [SALARY.] "Salary" meansthe periodicalwages, 3.21 or other periodic compensation paid toanyan employee before 3.22 deductions for deferred compensation, supplemental retirement 3.23 plans, or other voluntary salary reduction programs.It also3.24means wages and includes net income from fees.Lump sum sick 3.25 leave payments, severance payments, lump sum annual leave 3.26 payments and overtime payments made at the time of separation 3.27 from state service, payments in lieu of any employer-paid group 3.28 insurance coverage, including the difference between single and 3.29 family rates that may be paid to an employee with single 3.30 coverage, and payments made as an employer-paid fringe 3.31 benefitand, workers' compensation payments, employer 3.32 contributions to a deferred compensation or tax sheltered 3.33 annuity program, and amounts contributed under a benevolent 3.34 vacation and sick leave donation program are not salary. 3.35 Sec. 4. Minnesota Statutes 1994, section 354.445, is 3.36 amended to read: 4.1 354.445 [NO ANNUITY REDUCTION.] 4.2 (a) The annuity reduction provisions of section 354.44, 4.3 subdivision 5, do not apply to a person who: 4.4 (1) retires from the state university system, technical 4.5 college system or the community college system, or from a 4.6 successor system employing state university, technical college, 4.7 or community college faculty, with at least ten years 4.8 of combined service credit inthe system from which the person4.9retiresa system under the jurisdiction of the higher education 4.10 board; 4.11 (2) was employed on a full-time basis immediately preceding 4.12 retirement as a state university, technical college, or 4.13 community college faculty member or as an unclassified 4.14 administrator in one of these systems; 4.15 (3) begins drawing an annuity from the teachers retirement 4.16 association or from a first class city teacher plan; and 4.17 (4) returns to work on not less than a one-third time basis 4.18 and not more than a two-thirds time basis in the system from 4.19 which the person retired under an agreement in which the person 4.20 may not earn a salary of more than $35,000 in a calendar year 4.21 from employment after retirement in the system from which the 4.22 person retired. 4.23 (b) Initial participation, the amount of time worked, and 4.24 the duration of participation under this section must be 4.25 mutually agreed upon by the employer and the employee. The 4.26 employer may require up to one-year notice of intent to 4.27 participate in the program as a condition of participation under 4.28 this section. The employer shall determine the time of year the 4.29 employee shall work. 4.30 (c) Notwithstanding any law to the contrary, a person 4.31 eligible under paragraphs (a) and (b) may not earn further 4.32 service credit in the teachers retirement association and is not 4.33 eligible to participate in the individual retirement account 4.34 plan or the supplemental retirement plan established in chapter 4.35 354B as a result of service under this section. No employer or 4.36 employee contribution to any of these plans may be made on 5.1 behalf of such a person. 5.2 (d) For a person eligible under paragraphs (a) and (b) who 5.3 earns more than $35,000 in a calendar year from employment after 5.4 retirement in the system from which the person retired, the 5.5 annuity reduction provisions of section 354.44, subdivision 5, 5.6 apply only to income over $35,000. 5.7 Sec. 5. Minnesota Statutes 1994, section 354.66, 5.8 subdivision 4, is amended to read: 5.9 Subd. 4. [RETIREMENT CONTRIBUTIONS.] Notwithstanding any 5.10 provision to the contrary in this chapter relating to the salary 5.11 figure to be used for the determination of contributions or the 5.12 accrual of service credit, a teacher assigned to a part-time 5.13 position under this section shall continue to make employee 5.14 contributions to and to accrue allowable service credit in the 5.15 retirement fund during the period of part-time employment on the 5.16 same basis and in the same amounts as would have been paid and 5.17 accrued if the teacher had been employed on a full-time basis 5.18 provided that, prior to June 30 each year, or within 30 days 5.19 after notification by the association of the amount due, 5.20 whichever is later, the member and the employing board make that 5.21 portion of the required employer contribution to the retirement 5.22 fund, in any proportion which they may agree upon, that is based 5.23 on the difference between the amount of compensation that would 5.24 have been paid if the teacher had been employed on a full-time 5.25 basis and the amount of compensation actually received by the 5.26 teacher for the services rendered in the part-time assignment. 5.27 The employing unit shall make that portion of the required 5.28 employer contributions to the retirement fund on behalf of the 5.29 teacher that is based on the amount of compensation actually 5.30 received by the teacher for the services rendered in the 5.31 part-time assignment in the manner described in section 354.43, 5.32 subdivision 3.If the teacher has 20 years or more of allowable5.33service in the fund or 20 years or more of full-time teaching5.34service, the employer shall make the full employer contribution5.35to the fund based on the compensation that would have been paid5.36if the teacher had been employed on a full-time basis.The 6.1 employee and employer contributions shall be based upon the 6.2 rates of contribution prescribed by section 354.42. Full 6.3 accrual of allowable service credit and employee contributions 6.4 for part-time teaching service pursuant to this section and 6.5 section 354A.094 shall not continue for a period longer than ten 6.6 years. 6.7 Sec. 6. Minnesota Statutes 1994, section 354A.094, 6.8 subdivision 4, is amended to read: 6.9 Subd. 4. [RETIREMENT CONTRIBUTIONS.] Notwithstanding any 6.10 provision to the contrary in this chapter or the articles of 6.11 incorporation or bylaws of an association relating to the salary 6.12 figure to be used for the determination of contributions or the 6.13 accrual of service credit, a teacher assigned to a part-time 6.14 position under this section shall continue to make employee 6.15 contributions to and to accrue allowable service credit in the 6.16 applicable association during the period of part-time employment 6.17 on the same basis and in the same amounts as would have been 6.18 paid and accrued if the teacher had been employed on a full-time 6.19 basis provided that, prior to June 30 each year the member and 6.20 the employing board make that portion of the required employer 6.21 contribution to the applicable association in any proportion 6.22 which they may agree upon, that is based on the difference 6.23 between the amount of compensation that would have been paid if 6.24 the teacher had been employed on a full-time basis and the 6.25 amount of compensation actually received by the teacher for 6.26 services rendered in the part-time assignment. The employer 6.27 contributions to the applicable association on behalf of the 6.28 teacher shall be based on the amount of compensation actually 6.29 received by the teacher for the services rendered in the 6.30 part-time assignment in the manner described in section 354.43, 6.31 subdivision 3.If the teacher has 20 years or more of allowable6.32service in the association or 20 years or more of full-time6.33teaching service, the employer shall make the full employer6.34contribution to the fund, based on the compensation that would6.35have been paid if the teacher had been employed on a full-time6.36basis.The employee and employer contributions shall be based 7.1 upon the rates of contribution prescribed by section 354A.12. 7.2 Full membership, accrual of allowable service credit and 7.3 employee contributions for part-time teaching service by a 7.4 teacher pursuant to this section and section 354.66 shall not 7.5 continue for a period longer than ten years. 7.6 Sec. 7. Minnesota Statutes 1994, section 354B.05, 7.7 subdivision 2, is amended to read: 7.8 Subd. 2. [PURCHASE OF CONTRACTS.] Thestate university7.9board and the community collegehigher education board shall 7.10 arrange for the purchase of annuity contracts, fixed, variable, 7.11 or a combination of fixed and variable, or custodial accounts 7.12 from financial institutions selected by the state board of 7.13 investment under subdivision 3, to provide retirement benefits 7.14 to members of the plan. The contracts or accounts must be 7.15 purchased with contributions under section 354B.04 or money or 7.16 assets otherwise provided by law or by authority of thestate7.17university board or community collegehigher education board and 7.18 acceptable by the financial institutions from which the 7.19 contracts or accounts are purchased. 7.20 Sec. 8. Minnesota Statutes 1994, section 354B.05, 7.21 subdivision 3, is amended to read: 7.22 Subd. 3. [SELECTION OF FINANCIAL INSTITUTIONS.] The 7.23 supplemental investment fund administered by the state board of 7.24 investment is one of the investment options for the plan. The 7.25 state board of investment may select up to five other financial 7.26 institutions to provide annuity products. In making their 7.27 selections, the board shall consider at least these criteria: 7.28 (1) the experience and ability of the financial institution 7.29 to provide retirement and death benefits suited to the needs of 7.30 the covered employees; 7.31 (2) the relationship of the benefits to their cost; and 7.32 (3) the financial strength and stability of the institution. 7.33 The state board of investment must periodically review at 7.34 least every three years each financial institution selected by 7.35 the state board of investment. The state board of investment 7.36 may retain consulting services to assist in the periodic review, 8.1 may establish a budget for its costs in the periodic review 8.2 process, and may charge a proportional share of those costs to 8.3 each financial institution selected by the state board of 8.4 investment. All contracts must be approved by the state board 8.5 of investment before execution by thestate university board and8.6the community collegehigher education board. The state board 8.7 of investment shall also establish policies and procedures under 8.8 section 11A.04, clause (2), to carry out this subdivision. 8.9 The chancellor of thestate university system and the8.10chancellor of the state community collegehigher education 8.11 system shall redeem all shares in the accounts of the Minnesota 8.12 supplemental investment fund held on behalf of personnel in the 8.13 supplemental plan who elect an investment option other than the 8.14 supplemental investment fund, except that shares in the fixed 8.15 interest account attributable to any guaranteed investment 8.16 contract as of July 1, 1994, must not be redeemed until the 8.17 expiration dates for the guaranteed investment contracts. 8.18 Thechancellorschancellor shall transfer the cash realized to 8.19 the financial institutions selected by thestate university8.20board and the community collegeboard under this section354B.05. 8.21 Sec. 9. Minnesota Statutes 1994, section 354B.07, 8.22 subdivision 1, is amended to read: 8.23 Subdivision 1. [ESTABLISHMENT AND ELIGIBILITY.] (a) 8.24 [REGULAR UNCLASSIFIED EMPLOYEES.] The supplemental retirement 8.25 plan for personnel employed by the state university board, the 8.26 state board for community colleges, the higher education board, 8.27 andeffective July 1, 1995,the technical colleges, who are in 8.28 the unclassified service of the state commencing July 1 8.29 following the completion of the second year of their full-time 8.30 contract is governed by this section. Once a person qualifies 8.31 for participation in the supplemental plan, all subsequent 8.32 service by the person as an unclassified employee of the state 8.33 university board, the state board for community colleges, the 8.34 higher education board, or the technical colleges is covered by 8.35 the supplemental plan. 8.36 (b) [CETA UNCLASSIFIED EMPLOYEES.] An unclassified employee 9.1 employed by the state university board or the state board for 9.2 community colleges in subsidized on-the-job training, work 9.3 experience, or public service employment as an enrollee under 9.4 the federal Comprehensive Employment and Training Act is not 9.5 included in the supplemental retirement plan provided for in 9.6 this section after March 30, 1978, unless the unclassified 9.7 employee has as of the later of March 30, 1978, or the date of 9.8 employment sufficient service credit in the retirement fund 9.9 providing primary retirement coverage to meet the minimum 9.10 vesting requirements for a deferred retirement annuity, or the 9.11 board agrees in writing to make the employer contribution 9.12 required by this section on account of that unclassified 9.13 employee from revenue sources other than funds provided under 9.14 the federal Comprehensive Employment and Training Act, or the 9.15 unclassified employee agrees in writing to make the employer 9.16 contribution required by this section in addition to the member 9.17 contribution. 9.18 Sec. 10. Minnesota Statutes 1994, section 354B.07, 9.19 subdivision 2, is amended to read: 9.20 Subd. 2. [REDEMPTIONS.] The chancellor of thestate9.21university system and the chancellor of the state community9.22collegehigher education system shall redeem all shares in the 9.23 accounts of the Minnesota supplemental investment fund held on 9.24 behalf of personnel in the supplemental plan who elect an 9.25 investment option other than the supplemental investment fund, 9.26 except that shares in the fixed interest account attributable to 9.27 any guaranteed investment contract as of July 1, 1994, may not 9.28 be redeemed until the expiration dates for the guaranteed 9.29 investment contracts. Thechancellorschancellor shall transfer 9.30 the cash realized to the financial institutions selected by 9.31 thestate university board and the community collegeboard under 9.32 section 354B.05. 9.33 Sec. 11. Minnesota Statutes 1994, section 354B.08, 9.34 subdivision 2, is amended to read: 9.35 Subd. 2. [ADMINISTRATION.] (a) The chancellor of thestate9.36university system and the chancellor of the state community10.1collegehigher education system shall administer the 10.2 supplemental retirement plan for their employees. 10.3 Thechancellorschancellor shall invest contributions made under 10.4 this section, less amounts used for administrative expenses, as 10.5 authorized by law. The retirement contributions and death 10.6 benefits provided by annuity contracts or custodial accounts 10.7 purchased by thechancellorschancellor are owned by the plan 10.8 and must be paid in accordance with the annuity contracts or 10.9 custodial accounts. 10.10 (b) Effective July 1, 1995, administration of the plan must 10.11 transfer to the higher education board. 10.12 Sec. 12. Minnesota Statutes 1994, section 356.30, 10.13 subdivision 1, is amended to read: 10.14 Subdivision 1. [ELIGIBILITY; COMPUTATION OF ANNUITY.] (1) 10.15 Notwithstanding any provisions to the contrary of the laws 10.16 governing the funds enumerated in subdivision 3, a person who 10.17 has met the qualifications of clause (2) may elect to receive a 10.18 retirement annuity from each fund in which the person has at 10.19 least six months allowable service, based on the allowable 10.20 service in each fund, subject to the provisions of clause (3). 10.21 (2) A person may receive upon retirement a retirement 10.22 annuity from each fund in which the person has at least six 10.23 months allowable service, and augmentation of a deferred annuity 10.24 calculated under the laws governing each public pension plan or 10.25 fund named in subdivision 3, from the date the person terminated 10.26 all public service if: 10.27 (a) the person has allowable service totaling an amount 10.28 that allows the person to receive an annuity in any two or more 10.29 of the enumerated funds; and 10.30 (b) the person has not begun to receive an annuity from any 10.31 enumerated fund or the person has made application for benefits 10.32 from all funds and the effective dates of the retirement annuity 10.33 with each fund under which the person chooses to receive an 10.34 annuity are within a one-year period. 10.35 (3) The retirement annuity from each fund must be based 10.36 upon the allowable service in each fund, except that: 11.1 (a) The laws governing annuities must be the law in effect 11.2 on the date of termination from the last period of public 11.3 service under a covered fund with which the person earned a 11.4 minimum of one-half year of allowable service credit during that 11.5 employment. 11.6 (b) The "average salary" on which the annuity from each 11.7 covered fund in which the employee has credit in a formula plan 11.8 shall be based on the employee's highest five successive years 11.9 of covered salary during the entire service in covered funds. 11.10 (c) The formula percentages to be used by each fund must be 11.11 those percentages prescribed by each fund's formula as continued 11.12 for the respective years of allowable service from one fund to 11.13 the next, recognizing all previous allowable service with the 11.14 other covered funds. 11.15 (d) Allowable service in all the funds must be combined in 11.16 determining eligibility for and the application of each fund's 11.17 provisions in respect to actuarial reduction in the annuity 11.18 amount for retirement prior to normal retirement. 11.19 (e) The annuity amount payable for any allowable service 11.20 under a nonformula plan of a covered fund must not be affected 11.21 but such service and covered salary must be used in the above 11.22 calculation. 11.23 (f) This section shall not apply to any person whose final 11.24 termination from the last public service under a covered fund is 11.25 prior to May 1, 1975. 11.26 (g) For the purpose of computing annuities under this 11.27 section the formula percentages used by any covered fund, except 11.28 the basic program of the teachers retirement association, the 11.29 public employees police and fire fund,mustmay not exceed 2-1/2 11.30 percent per year of service for any year of service or fraction 11.31thereofof a year. The formula percentage used by the public 11.32 employees police and fire fundmustmay not exceed 2.65 percent 11.33 per year of service for any year of service or fractionthereof11.34 of a year. The formula percentage used by the teachers 11.35 retirement association may not exceed 2.63 percent per year of 11.36 basic program service for any year of basic program service or 12.1 fraction of a year. 12.2 (h) Any period of time for which a person has credit in 12.3 more than one of the covered fundsmustmay be used only once 12.4 for the purpose of determining total allowable service. 12.5 (i) If the period of duplicated service credit is more than 12.6 six months, or the person has credit for more than six months 12.7 with each of the funds, each fund shall apply its formula to a 12.8 prorated service credit for the period of duplicated service 12.9 based on a fraction of the salary on which deductions were paid 12.10 to that fund for the period divided by the total salary on which 12.11 deductions were paid to all funds for the period. 12.12 (j) If the period of duplicated service credit is less than 12.13 six months, or when added to other service credit with that fund 12.14 is less than six months, the service credit must be ignored and 12.15 a refund of contributions made to the person in accord with that 12.16 fund's refund provisions. 12.17 Sec. 13. [356.305] [PARTIAL PAYMENT OF PENSION PLAN 12.18 REFUND.] 12.19 (a) Notwithstanding any provision of law to the contrary, a 12.20 member of a pension plan listed in section 356.30, subdivision 12.21 3, with at least two years of forfeited service taken from a 12.22 single pension plan, may repay a portion of all refunds. A 12.23 partial refund repayment must comply with this section. 12.24 (b) The minimum portion of a refund repayment is one-third 12.25 of the total service credit period of all refunds taken from a 12.26 single plan. 12.27 (c) The cost of the partial refund repayment is the product 12.28 of the cost of the total repayment multiplied by the ratio of 12.29 the restored service credit to the total forfeited service 12.30 credit. The total repayment amount includes interest at the 12.31 annual rate of 8.5 percent, compounded annually, from the refund 12.32 date to the date repayment is received. 12.33 (d) The restored service credit is allocated based on the 12.34 relationship the restored service bears to the total service 12.35 credit period for all refunds taken from a single pension plan. 12.36 (e) This section does not authorize a public pension plan 13.1 member to repay a refund if the law governing the plan does not 13.2 authorize the repayment of a refund of member contributions. 13.3 Sec. 14. Minnesota Statutes 1994, section 356.611, is 13.4 amended to read: 13.5 356.611 [LIMITATION ON PUBLIC EMPLOYEE SALARIES FOR PENSION 13.6 PURPOSES.] 13.7 Subdivision 1. [STATE SALARY LIMITATIONS.] (a) 13.8 Notwithstanding any provision of law, bylaws, articlesorof 13.9 incorporation, retirement and disability allowance plan 13.10 agreements, or retirement plan contracts to the contrary, the 13.11 covered salary for pension purposes for a plan participant of a 13.12 covered retirement fund under section 356.30, subdivision 3, may 13.13 not exceed 95 percent of the salary established for the governor 13.14 under section 15A.082 at the time the person received the salary. 13.15 (b) This section does not apply to a salary paid: 13.16 (1) to the governor; 13.17 (2) to an employee of a political subdivision in a position 13.18 that is excluded from the limit as specified under section 13.19 43A.17, subdivision 9; or 13.20 (3) to a state employee in a position for which the 13.21 commissioner of employee relations has approved a salary rate 13.22 that exceeds 95 percent of the governor's salary. 13.23 (c) The limited covered salary determined under this 13.24 section must be used in determining employee and employer 13.25 contributions and in determining retirement annuities and other 13.26 benefits under the respective covered retirement fund and under 13.27 this chapter. 13.28 Subd. 2. [FEDERAL COMPENSATION LIMITS.] For members first 13.29 contributing to a pension plan covered under section 356.30, 13.30 subdivision 3, on or after July 1, 1995, compensation in excess 13.31 of the limitation set forth in section 401(a)(17) of the 13.32 Internal Revenue Code may not be included for contribution and 13.33 benefit computation purposes. The compensation limit set forth 13.34 in section 401(a)(17) of the Internal Revenue Code on June 30, 13.35 1993, applies to members first contributing before July 1, 1995. 13.36 Sec. 15. [RETROACTIVE PROVISIONS.] 14.1 (a) A teacher who had at least three years of allowable 14.2 service credit under Minnesota Statutes, chapter 354 or 354A, on 14.3 July 1, 1994, and who worked part-time between July 1, 1994, and 14.4 June 30, 1995, may be allowed to make contributions to and 14.5 accrue allowable service credit in the applicable retirement 14.6 fund as if the teacher had been working full-time, as provided 14.7 in Minnesota Statutes, sections 354.66, subdivision 4, and 14.8 354A.094, subdivision 4, for service after July 1, 1994, and 14.9 before June 30, 1995. If a teacher described in this paragraph 14.10 wishes to obtain allowable service credit as if the teacher had 14.11 been working full-time for the period from July 1, 1994, to June 14.12 30, 1995, the teacher must: 14.13 (1) make a lump-sum payment to the applicable pension fund 14.14 within 60 days after the effective date of this section of the 14.15 difference between the amount of the employer and employee 14.16 contributions to the pension fund that would have been paid if 14.17 the teacher had been working full-time, and that amount that was 14.18 actually paid for part-time service during that period; and 14.19 (2) submit to the association a letter or other document 14.20 from the board of the teacher's employing district stating that 14.21 the board would have agreed to the teacher's participation in 14.22 the part-time mobility program during the 1994-1995 school year 14.23 but for the requirement then in effect that the district make 14.24 the full employer contribution to the retirement fund for 14.25 teachers with 20 or more years of service, based on the 14.26 compensation that would have been paid if the teacher had been 14.27 employed on a full-time basis. 14.28 (b) An employer of a teacher covered by paragraph (a) shall 14.29 notify the teacher of the option available under paragraph (a) 14.30 in writing within 30 days of the effective date of this section. 14.31 Sec. 16. [EARLY RETIREMENT INCENTIVE.] 14.32 The metropolitan council, a metropolitan agency as defined 14.33 by Minnesota Statutes, section 473.121, subdivision 5a, or the 14.34 Minnesota historical society may offer its eligible employees 14.35 the early retirement incentive provided in sections 16 to 24. 14.36 Sec. 17. [ELIGIBILITY.] 15.1 An employee of a public employer specified in section 16 is 15.2 eligible to receive the early retirement incentive if the 15.3 employee: 15.4 (1) has at least 25 years of combined service credit in any 15.5 covered fund or funds listed in Minnesota Statutes, section 15.6 356.30, subdivision 3, or for purposes of the incentive in 15.7 section 18, subdivision 2 only, is at least 65 years old and has 15.8 at least one year of combined service credit in these covered 15.9 funds; 15.10 (2) upon retirement is immediately eligible for a 15.11 retirement annuity from a defined benefit plan, if the person is 15.12 a member of a defined benefit plan; 15.13 (3) is at least 55 years of age; and 15.14 (4) retires on or after May 23, 1995, and before January 15.15 31, 1996. 15.16 Sec. 18. [EARLY RETIREMENT INCENTIVE.] 15.17 Subdivision 1. [CHOICE.] An eligible employee may not 15.18 choose both the incentive in subdivision 2 and the incentive in 15.19 subdivision 3. The public employers specified in section 16 15.20 that choose to offer the early retirement incentive must offer 15.21 included employees eligible for both incentives a choice between 15.22 the incentive in subdivision 2 or 3. 15.23 Subd. 2. [FORMULA INCREASE OPTION.] For an employee 15.24 covered by a retirement plan established in Minnesota Statutes, 15.25 section 352.115, 352.116, 353.29, or 353.30, or chapter 354 or 15.26 422A, who selects the incentive under this subdivision, the 15.27 multiplier percentage used to calculate the retirement annuity 15.28 must be increased for each year of service credit up to 30 15.29 years. The amount of the increase is: 15.30 (1) .25 for each year of service credit calculated under 15.31 Minnesota Statutes, section 352.115, 352.116, 353.29, or 353.30, 15.32 or chapter 422A; and 15.33 (2) .10 for each year of service credit calculated under 15.34 Minnesota Statutes, chapter 354 or 354A. 15.35 If an employee has more than 30 years of service credit, 15.36 the increased multiplier applies only to the first 30 years. 16.1 Subd. 3. [INSURANCE OPTION.] For an employee who selects 16.2 the incentive under this subdivision, the employer must pay for 16.3 hospital, medical, and dental insurance under the following 16.4 conditions and limitations. An employee is eligible for this 16.5 employer-paid insurance only if the person: 16.6 (1) is eligible for employer-paid insurance under a 16.7 collective bargaining agreement or personnel plan in effect on 16.8 the day before the effective date of sections 16 to 24; 16.9 (2) has at least as many months of service with the current 16.10 employer as the number of months younger than age 65 the person 16.11 is at the time of retirement; and 16.12 (3) is under age 65. 16.13 Sec. 19. [LIMIT ON REHIRING.] 16.14 A public employer may not rehire an employee who retires 16.15 under sections 16 to 24. 16.16 Sec. 20. [RETIREMENT.] 16.17 For purposes of sections 16 to 24, an employee retires when 16.18 the employee terminates active employment and applies for 16.19 retirement benefits. 16.20 Sec. 21. [CONDITIONS; INSURANCE COVERAGE.] 16.21 A retired employee is eligible for single and dependent 16.22 insurance coverages and employer payments to which the employee 16.23 was entitled immediately before retirement, subject to any 16.24 changes in coverage and employer and employee payments through 16.25 collective bargaining or personnel plans for employees in 16.26 positions equivalent to the position from which the employee 16.27 retired. The retired employee is not eligible for employer-paid 16.28 life insurance. Eligibility ceases when the retired employee 16.29 reaches age 65, chooses not to receive the retirement benefits 16.30 for which the employee has applied, or becomes eligible for 16.31 employer-paid health insurance from a new employer. Coverages 16.32 must be coordinated with relevant health insurance benefits 16.33 provided through the federally sponsored Medicare program. 16.34 Sec. 22. [INCLUSION.] 16.35 A public employer that offers incentives under sections 16 16.36 to 24 shall designate the positions or group of positions 17.1 affected by downsizing or restructuring that will qualify for 17.2 participation in its early retirement plan and may exclude 17.3 otherwise eligible employees. 17.4 Sec. 23. [PAYMENT OF COST OF EARLY RETIREMENT INCENTIVE.] 17.5 (a) A public employer referenced in section 16 that offers 17.6 an early retirement incentive under section 18 must make an 17.7 additional employer contribution to the applicable retirement 17.8 plan from which an employee retired under the incentive program. 17.9 (b) The additional employer contribution is an amount equal 17.10 to the difference in the amount of the reserve transfer under 17.11 Minnesota Statutes, section 11A.18, or 422A.06, subdivision 8, 17.12 with the early retirement incentive under section 18, and 17.13 without the early retirement incentive. The additional employer 17.14 contribution must be paid before July 1, 1997. The public 17.15 employer shall also pay compound interest on the additional 17.16 employer contribution at an annual rate of 8.5 percent from the 17.17 effective date of the retirement to the date of the payment of 17.18 the additional employer contribution. 17.19 Sec. 24. [APPLICATION OF OTHER LAWS.] 17.20 Unilateral implementation of sections 16 to 24 by a public 17.21 employer is not an unfair labor practice for purposes of 17.22 Minnesota Statutes, chapter 179A. The requirement in sections 17.23 16 to 24 for an employer to pay health insurance coverage costs 17.24 for certain retired employees is not subject to the limits in 17.25 Minnesota Statutes, section 179A.20, subdivision 2a. 17.26 Sec. 25. [REPEALER.] 17.27 Minnesota Statutes 1994, sections 3A.10, subdivision 2, and 17.28 352.021, subdivision 5, are repealed. 17.29 Sec. 26. [EFFECTIVE DATE.] 17.30 (a) Sections 1, 9, and 14 are effective on July 1, 1995. 17.31 (b) Sections 3 and 15 are effective on the day following 17.32 final enactment. 17.33 (c) Sections 5 and 6 are effective on July 1, 1995, and 17.34 apply to teaching service rendered after that date. 17.35 (d) Section 12 is effective retroactively to May 16, 1994. 17.36 (e) Sections 16 to 24 are effective on the day after final 18.1 enactment. 18.2 (f) Section 25 is effective on July 1, 1995, and is not 18.3 intended to reduce the service credit of a legislator for 18.4 service recorded by the Minnesota state retirement system before 18.5 July 1, 1995. 18.6 ARTICLE 2 18.7 LOCAL GENERAL EMPLOYEE PENSION PLAN 18.8 BENEFIT AND RELATED MODIFICATIONS 18.9 Section 1. Minnesota Statutes 1994, section 124.916, 18.10 subdivision 3, is amended to read: 18.11 Subd. 3. [RETIREMENT LEVIES.] (1) In addition to the 18.12 excess levy authorized in 1976 any district within a city of the 18.13 first class which was authorized in 1975 to make a retirement 18.14 levy under Minnesota Statutes 1974, section 275.127 and chapter 18.15 422A may levy an amount per pupil unit which is equal to the 18.16 amount levied in 1975 payable 1976, under Minnesota Statutes 18.17 1974, section 275.127 and chapter 422A, divided by the number of 18.18 pupil units in the district in 1976-1977. 18.19 (2) In 1979 and each year thereafter, any district which 18.20 qualified in 1976 for an extra levy under clause (1) shall be 18.21 allowed to levy the same amount as levied for retirement in 1978 18.22 under this clause reduced each year by ten percent of the 18.23 difference between the amount levied for retirement in 1971 18.24 under Minnesota Statutes 1971, sections 275.127 and 422.01 to 18.25 422.54 and the amount levied for retirement in 1975 under 18.26 Minnesota Statutes 1974, section 275.127 and chapter 422A. 18.27 (3) In 1991 and each year thereafter, a district to which 18.28 this subdivision applies may levy an additional amount required 18.29 for contributions to the Minneapolis employees retirement fund 18.30 as a result of the maximum dollar amount limitation on state 18.31 contributions to the fund imposed under section 422A.101, 18.32 subdivision 3. The additional levy shall not exceed the most 18.33 recent amount certified by the board of the Minneapolis 18.34 employees retirement fund as the district's share of the 18.35 contribution requirement in excess of the maximum state 18.36 contribution under section 422A.101, subdivision 3. 19.1 (4) For taxes payable in 1994 and thereafter, special 19.2 school district No. 1, Minneapolis, and independent school 19.3 district No. 625, St. Paul, may levy for the increase in the 19.4 employer retirement fund contributions, under Laws 1992, chapter 19.5 598, article 5, section 1. Notwithstanding section 121.904, the 19.6 entire amount of this levy may be recognized as revenue for the 19.7 fiscal year in which the levy is certified. This levy shall not 19.8 be considered in computing the aid reduction under section 19.9 124.155. 19.10 (5) If the employer retirement fund contributions under 19.11 section 354A.12, subdivision 2a, are increased for fiscal year 19.12 1994 or later fiscal years, special school district No. 1, 19.13 Minneapolis, and independent school district No. 625, St. Paul, 19.14 may levy in payable 1994 or later an amount equal to the amount 19.15 derived by applying the net increase in the employer retirement 19.16 fund contribution rate of the respective teacher retirement fund 19.17 association between fiscal year 1993 and the fiscal year 19.18 beginning in the year after the levy is certified to the total 19.19 covered payroll of the applicable teacher retirement fund 19.20 association. Notwithstanding section 121.904, the entire amount 19.21 of this levy may be recognized as revenue for the fiscal year in 19.22 which the levy is certified. This levy shall not be considered 19.23 in computing the aid reduction under section 124.155. If an 19.24 applicable school district levies under this paragraph,theyit 19.25 may not levy under paragraph (4). 19.26 (6) In addition to the levy authorized under paragraph (5), 19.27 special school district No. 1, Minneapolis, may also levy, 19.28 payable in 1996 or later, an amount equal to the supplemental 19.29 contributions under section 354A.12, subdivision 2c, and may 19.30 also levyinpayable in 1994 or later an amount equal to the 19.31 state aid contribution under section 354A.12, subdivision 3b. 19.32 Notwithstanding section 121.904, the entire amount ofthis levy19.33 these levies may be recognized as revenue for the fiscal year in 19.34 which the levy is certified.This levy shallThese levies may 19.35 not be considered in computing the aid reduction under section 19.36 124.155. 20.1 Sec. 2. [354A.026] [DULUTH TEACHERS RETIREMENT FUND 20.2 ASSOCIATION; EXCEPTION TO CERTAIN ACTUARIAL VALUATION 20.3 PROVISIONS.] 20.4 Notwithstanding any provision of section 356.215, 20.5 subdivision 4g, to the contrary, the amortization target date 20.6 for use in determining the amortization contribution requirement 20.7 in any actuarial valuation of the Duluth teachers retirement 20.8 fund association after the date of enactment must be June 30, 20.9 2020. 20.10 Sec. 3. Minnesota Statutes 1994, section 354A.12, 20.11 subdivision 1, is amended to read: 20.12 Subdivision 1. [EMPLOYEE CONTRIBUTIONS.] The contribution 20.13 required to be paid by each member of a teachers retirement fund 20.14 associationshallmay not be less than the percentage of total 20.15 salary specified below for the applicable association and 20.16 program: 20.17 Association and Program Percentage of 20.18 Total Salary 20.19 Duluth teachers retirement 20.20 association 20.21 old law and new law 20.22 coordinated programs4.55.5 percent 20.23 Minneapolis teachers retirement 20.24 association 20.25 basic program 8.5 percent 20.26 coordinated program 4.5 percent 20.27 St. Paul teachers retirement 20.28 association 20.29 basic program 8 percent 20.30 coordinated program 4.5 percent 20.31 Contributions shall be made by deduction from salary and 20.32 must be remitted directly to the respective teachers retirement 20.33 fund association at least once each month. 20.34 Sec. 4. Minnesota Statutes 1994, section 354A.12, 20.35 subdivision 2, is amended to read: 20.36 Subd. 2. [RETIREMENT CONTRIBUTION LEVY DISALLOWED.] Except 21.1 as provided insubdivisionsubdivisions 2c and 3b, paragraph 21.2 (d), with respect to the city of Minneapolis and special school 21.3 district No. 1, notwithstanding any law to the contrary, levies 21.4 for teachers retirement fund associations in cities of the first 21.5 class, including levies for any employer social security taxes 21.6 for teachers covered by the Duluth teachers retirement fund 21.7 association or the Minneapolis teachers retirement fund 21.8 association or the St. Paul teachers retirement fund 21.9 association, are disallowed. 21.10 Sec. 5. Minnesota Statutes 1994, section 354A.12, is 21.11 amended by adding a subdivision to read: 21.12 Subd. 2c. [SCHOOL DISTRICT SUPPLEMENTAL CONTRIBUTIONS TO 21.13 MINNEAPOLIS TEACHERS RETIREMENT FUND ASSOCIATION.] (a) Beginning 21.14 in fiscal year 1996, and annually in subsequent years, special 21.15 school district No. 1 shall pay supplemental contributions in 21.16 the following amounts to the Minneapolis teachers retirement 21.17 fund association to reduce the unfunded actuarial accrued 21.18 liability of the Minneapolis teachers retirement fund 21.19 association according to the actuarial valuation of the fund 21.20 prepared by the commission-retained actuary under section 21.21 356.215: 21.22 (1) an amount equal to the difference between the total 21.23 1995 financial requirements and the total current year financial 21.24 requirements of the Minneapolis employees retirement fund 21.25 payable by the city of Minneapolis under section 422A.101, 21.26 subdivision 1a, determined according to the most recent 21.27 actuarial valuation of the Minneapolis employees retirement fund 21.28 prepared by the actuary retained by the legislative commission 21.29 on pensions and retirement; and 21.30 (2) an amount equal to the difference between the total 21.31 1995 employer contributions and the total current year employer 21.32 contributions payable under section 422A.101, subdivision 2, 21.33 paragraph (c), on behalf of employees of special school district 21.34 No. 1 who are covered by the Minneapolis employees retirement 21.35 fund, determined according to the most recent actuarial 21.36 valuation of the Minneapolis employees retirement fund prepared 22.1 by the actuary retained by the legislative commission on 22.2 pensions and retirement. 22.3 (b) Special school district No. 1 may levy for supplemental 22.4 contributions to the Minneapolis teachers retirement fund 22.5 association under this subdivision only to the extent permitted 22.6 by section 124.916, subdivision 3. 22.7 Sec. 6. Minnesota Statutes 1994, section 354A.12, 22.8 subdivision 3b, is amended to read: 22.9 Subd. 3b. [SPECIAL DIRECTSTATEMATCHING AND STATE AID TO 22.10 THE MINNEAPOLIS TEACHERS RETIREMENT FUND ASSOCIATION.] (a) 22.11 Special school district No. 1 may make an additional employer 22.12 contribution to the Minneapolis teachers retirement fund 22.13 association. The city of Minneapolis may make a contribution to 22.14 the Minneapolis teachers retirement fund association. This 22.15 contribution may be made by a levy of the board of estimate and 22.16 taxation of the city of Minneapolis, and the levy, if made, is 22.17 classified as that of a special taxing district for purposes of 22.18 sections 275.065 and 276.04, and for all other property tax 22.19 purposes. 22.20 (b) For every $1,000 contributed in equal proportion by 22.21 special school district No. 1 and by the city of Minneapolis to 22.22 the Minneapolis teachers retirement fund association under 22.23 paragraph (a), the state shall pay to the Minneapolis teachers 22.24 retirement fund association $1,000, but not to exceed $2,500,000 22.25 in total in fiscal year 1994. The total amount available for 22.26 each subsequent fiscal year must be increased at the same rate 22.27 as the increase in the general education revenue formula 22.28 allowance under section 124A.22, subdivision 2, in subsequent 22.29 fiscal years. The superintendent of special school district No. 22.30 1, the mayor of the city of Minneapolis, and the executive 22.31 director of the Minneapolis teachers retirement fund association 22.32 shall jointly certify to the commissioner of finance the total 22.33 amount that has been contributed by special school district No. 22.34 1 and by the city of Minneapolis to the Minneapolis teachers 22.35 retirement fund association. Any certification to the 22.36 commissioner of education must be made quarterly. If the total 23.1 certifications for a fiscal year exceed the maximum annual 23.2 direct state matching aid amount in any quarter, the amount of 23.3 direct state matching aid payable to the Minneapolis teachers 23.4 retirement fund association must be limited to the balance of 23.5 the maximum annual direct state matching aid amount available. 23.6 The amount required under this paragraph, subject to the maximum 23.7 direct state matching aid amount, is appropriated annually to 23.8 the commissioner of finance. 23.9 (c) The commissioner of finance may prescribe the form of 23.10 the certifications required under paragraph (b). 23.11 (d) In addition to the direct matching aid payable under 23.12 paragraph (b), the state shall pay direct state aid to the 23.13 Minneapolis teachers retirement fund association annually an 23.14 amount equal to the difference between $11,005,000 and the state 23.15 contribution to the Minneapolis employees retirement fund under 23.16 sections 356.865 and 422A.101, subdivision 3, for the current 23.17 fiscal year. Payments under this paragraph must be made in four 23.18 equal installments on March 15, July 15, September 15, and 23.19 November 15 annually. 23.20 Sec. 7. Minnesota Statutes 1994, section 354A.12, 23.21 subdivision 3c, is amended to read: 23.22 Subd. 3c. [TERMINATION OF SUPPLEMENTAL CONTRIBUTIONS AND 23.23 DIRECTSTATEMATCHING AND STATE AID.] (a) The supplemental 23.24 contributions payable to the Minneapolis teachers retirement 23.25 fund association by special school district No. 1 under 23.26 subdivision 2c, the direct state aid under subdivision 3a to the 23.27 St. Paul teachers retirement association, and the direct 23.28 matching and state aid under subdivision 3b to the Minneapolis 23.29 teachers retirement fund association terminates for the 23.30 respective fund at the end of the fiscal year in which the 23.31 accrued liability funding ratio for that fund, as determined in 23.32 the most recent actuarial report for that fund by the actuary 23.33 retained by the legislative commission on pensions and 23.34 retirement, equals or exceeds the accrued liability funding 23.35 ratio for the teachers retirement association, as determined in 23.36 the most recent actuarial report for the teachers retirement 24.1 association by the actuary retained by the legislative 24.2 commission on pensions and retirement. 24.3 (b) If the direct matching or state aid is terminated for 24.4 the St. Paul teachers retirement fund association or the 24.5 Minneapolis teachers retirement fund association under paragraph 24.6 (a), it may not again be received by that fund. 24.7 Sec. 8. Minnesota Statutes 1994, section 354A.27, 24.8 subdivision 1, is amended to read: 24.9 354A.27 [DULUTH TEACHERS RETIREMENT FUND ASSOCIATION;LUMP24.10SUMPOSTRETIREMENT ADJUSTMENT MECHANISM.] 24.11 Subdivision 1. [ELIGIBILITYPOSTRETIREMENT ADJUSTMENT 24.12 MODIFICATION.]A person receiving a retirement annuity,24.13disability benefit, or surviving spouse benefit or annuity from24.14the Duluth teachers retirement fund association who has received24.15the annuity or benefit for at least one year may be entitled to24.16receive a lump sum postretirement adjustment under subdivision24.172, in the discretion of the board of trustees under subdivision24.183.Any postretirement adjustment payable from the Duluth 24.19 teachers retirement fund association must be computed and paid 24.20 according to this section. 24.21 Sec. 9. Minnesota Statutes 1994, section 354A.27, is 24.22 amended by adding a subdivision to read: 24.23 Subd. 5. [CALCULATION OF POSTRETIREMENT ADJUSTMENTS.] (a) 24.24 Annually, after June 30, the board of trustees shall determine 24.25 the amount of any postretirement adjustment using the procedures 24.26 in this subdivision and subdivision 6. 24.27 (b) Each person who has been receiving an annuity or 24.28 benefit under the articles of incorporation, bylaws, or this 24.29 section for at least 12 months as of the date of the 24.30 postretirement adjustment is eligible for a postretirement 24.31 adjustment. The postretirement adjustment is payable each 24.32 January 1. The postretirement adjustment must be equal to two 24.33 percent of the annuity or benefit to which the person is 24.34 entitled one month before the payment of the postretirement 24.35 adjustment. 24.36 Sec. 10. Minnesota Statutes 1994, section 354A.27, is 25.1 amended by adding a subdivision to read: 25.2 Subd. 6. [ADDITIONAL INCREASE.] (a) In addition to the 25.3 postretirement increases granted under subdivision 5, an 25.4 additional percentage increase must be computed and paid under 25.5 this subdivision. 25.6 (b) The board of trustees shall determine the number of 25.7 annuitants or benefit recipients who have been receiving an 25.8 annuity or benefit for at least 12 months as of the current June 25.9 30. These recipients are entitled to receive the surplus 25.10 investment earnings additional postretirement increase. 25.11 (c) Annually, as of each June 30, the board shall determine 25.12 the five-year annualized rate of return attributable to the 25.13 assets of the Duluth teachers retirement fund association under 25.14 the formula or formulas specified in section 11A.04, clause (11). 25.15 (d) The board shall determine the amount of excess 25.16 five-year annualized rate of return over the preretirement 25.17 interest assumption as specified in section 356.215. 25.18 (e) The additional percentage increase must be determined 25.19 by multiplying the quantity one minus the rate of contribution 25.20 deficiency, as specified in the most recent actuarial report of 25.21 the actuary retained by the legislative commission on pensions 25.22 and retirement, times the rate of return excess as determined in 25.23 paragraph (d). 25.24 (f) The additional increase is payable to all eligible 25.25 annuitants or benefit recipients on the following January 1. 25.26 Sec. 11. [354A.281] [MODIFICATION OF MINNEAPOLIS TEACHERS 25.27 RETIREMENT FUND ADJUSTMENT.] 25.28 The additional percentage increase determined under section 25.29 354A.28, subdivision 9, must be reduced by multiplying the 25.30 percentage increase determined under that subdivision by the 25.31 accrued liability funding ratio as determined in the actuarial 25.32 report of the actuary retained by the legislative commission on 25.33 pensions and retirement for the previous July 1. 25.34 Sec. 12. Minnesota Statutes 1994, section 354A.31, 25.35 subdivision 4, is amended to read: 25.36 Subd. 4. [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT 26.1 ANNUITY; MINNEAPOLIS AND ST. PAUL FUNDS.] (a) This subdivision 26.2 applies to the coordinated programs of the Minneapolis teachers 26.3 retirement fund association and the St. Paul teachers retirement 26.4 fund association. 26.5 (b) The normal coordinated retirement annuity shall be an 26.6 amount equal to a retiring coordinated member's average salary 26.7 multiplied by the retirement annuity formula percentage. 26.8 Average salary for purposes of this section shall mean an amount 26.9 equal to the average salary upon which contributions were made 26.10 for the highest five successive years of service credit, but 26.11 which shall not in any event include any more than the 26.12 equivalent of 60 monthly salary payments. Average salary must 26.13 be based upon all years of service credit if this service credit 26.14 is less than five years. 26.15(b)(c) This paragraph, in conjunction with subdivision 6, 26.16 applies to a person who first became a member or a member in a 26.17 pension fund listed in section 356.30, subdivision 3, before 26.18 July 1, 1989, unless paragraph(c)(d), in conjunction with 26.19 subdivision 7, produces a higher annuity amount, in which case 26.20 paragraph(c)(d) will apply. The retirement annuity formula 26.21 percentage for purposes of this paragraph is one percent per 26.22 year for each year of coordinated service for the first ten 26.23 years and 1.5 percent for each year of coordinated service 26.24 thereafter. 26.25(c)(d) This paragraph applies to a person who has become 26.26 at least 55 years old and who first becomes a member after June 26.27 30, 1989, and to any other member who has become at least 55 26.28 years old and whose annuity amount, when calculated under this 26.29 paragraph and in conjunction with subdivision 7 is higher than 26.30 it is when calculated under paragraph(b)(c), in conjunction 26.31 with the provisions of subdivision 6. The retirement annuity 26.32 formula percentage for purposes of this paragraph is 1.5 percent 26.33 for each year of coordinated service. 26.34 Sec. 13. Minnesota Statutes 1994, section 354A.31, is 26.35 amended by adding a subdivision to read: 26.36 Subd. 4a. [COMPUTATION OF THE NORMAL COORDINATED 27.1 RETIREMENT ANNUITY; DULUTH FUND.] (a) This subdivision applies 27.2 to the new law coordinated program of the Duluth teachers 27.3 retirement fund association. 27.4 (b) The normal coordinated retirement annuity is an amount 27.5 equal to a retiring coordinated member's average salary 27.6 multiplied by the retirement annuity formula percentage. 27.7 Average salary for purposes of this section means an amount 27.8 equal to the average salary upon which contributions were made 27.9 for the highest five successive years of service credit, but may 27.10 not in any event include any more than the equivalent of 60 27.11 monthly salary payments. Average salary must be based upon all 27.12 years of service credit if this service credit is less than five 27.13 years. 27.14 (c) This paragraph, in conjunction with subdivision 6, 27.15 applies to a person who first became a member or a member in a 27.16 pension fund listed in section 356.30, subdivision 3, before 27.17 July 1, 1989, unless paragraph (d), in conjunction with 27.18 subdivision 7, produces a higher annuity amount, in which case 27.19 paragraph (d) applies. The retirement annuity formula 27.20 percentage for purposes of this paragraph is 1.13 percent per 27.21 year for each year of coordinated service for the first ten 27.22 years and 1.63 percent for each subsequent year of coordinated 27.23 service. 27.24 (d) This paragraph applies to a person who is at least 55 27.25 years old and who first becomes a member after June 30, 1989, 27.26 and to any other member who is at least 55 years old and whose 27.27 annuity amount, when calculated under this paragraph and in 27.28 conjunction with subdivision 7, is higher than it is when 27.29 calculated under paragraph (c) in conjunction with subdivision 27.30 6. The retirement annuity formula percentage for purposes of 27.31 this paragraph is 1.63 percent for each year of coordinated 27.32 service. 27.33 Sec. 14. Minnesota Statutes 1994, section 422A.05, is 27.34 amended by adding a subdivision to read: 27.35 Subd. 8. [HEALTH INSURANCE.] The retirement board may 27.36 authorize the executive director or the executive director's 28.1 designee to: 28.2 (1) offer the beneficiaries of the fund the option of 28.3 having their health insurance premiums deducted automatically 28.4 from their monthly benefit amounts and paid to a designated 28.5 insurer; and 28.6 (2) provide beneficiaries information about available group 28.7 health insurance plan options. 28.8 The insurer shall reimburse the fund for the administrative 28.9 expense of deducting and paying the premiums. The carrier is 28.10 liable for any failure to withhold and credit the premiums 28.11 correctly. 28.12 Sec. 15. Minnesota Statutes 1994, section 422A.09, 28.13 subdivision 2, is amended to read: 28.14 Subd. 2. The contributing class shall consist of all 28.15 employees not included in the exempt class, who become 28.16 prospective beneficiaries of the fund created by sections 28.17 422A.01 to 422A.25. 28.18 A member of the contributing class who is granted a leave 28.19 of absence without pay by the member's employer to serve as an 28.20 employee or agent of a labor unionprimarilyrepresenting 28.21 members of the contributing class may continue as a member of 28.22 the contributing class during the period of such leave of 28.23 absence by depositing each month with the fund the amount of the 28.24 contribution of the employee as required by sections 422A.01 to 28.25 422A.25 which amount shall be the normal employee contribution. 28.26 The contributions referred to in this subdivision shall be 28.27 based on the salary for the position or its equivalent held by 28.28 the member immediately prior to such leave of absence subject to 28.29 any adjustment thereof during the period of such leave. 28.30 Sec. 16. Minnesota Statutes 1994, section 422A.101, 28.31 subdivision 1a, is amended to read: 28.32 Subd. 1a. [CITY CONTRIBUTIONS.] Prior to August 31 of each 28.33 year, the retirement board shall prepare an itemized statement 28.34 of the financial requirements of the fund payable by the city 28.35 for the succeeding fiscal year, and a copy of the statement 28.36 shall be submitted to the board of estimate and taxation and to 29.1 the city council by September 15. The financial requirements of 29.2 the fund payable by the city shall be calculated as follows: 29.3 (a) a regular employer contribution of an amount equal to 29.4 the percentage rounded to the nearest two decimal places of the 29.5 salaries and wages of all employees covered by the retirement 29.6 fund which equals the difference between the level normal cost 29.7 plus administrative cost as reported in the annual actuarial 29.8 valuation prepared by the commission-retained actuary and the 29.9 employee contributions provided for in section 422A.10 less any 29.10 amounts contributed toward the payment of the balance of the 29.11 normal cost not paid by employee contributions by any city owned 29.12 public utility, improvement project, other municipal activities 29.13 supported in whole or in part by revenues other than real estate 29.14 taxes, any public corporation, any employing unit of 29.15 metropolitan government, or by special school district No. 1 29.16 pursuant to subdivision 2; 29.17 (b) an additional employer contribution of an amount equal 29.18 to the percent specified in section 353.27, subdivision 3a, 29.19 clause (a), multiplied by the salaries and wages of all 29.20 employees covered by the retirement fund less any amounts 29.21 contributed toward amortization of the unfunded actuarial 29.22 accrued liability by June 30, 2020, attributable to their 29.23 respective covered employees by any city owned public utility, 29.24 improvement project, other municipal activities supported in 29.25 whole or in part by revenues other than real estate taxes, any 29.26 public corporation, any employing unit of metropolitan 29.27 government, or by special school district No. 1 pursuant to 29.28 subdivision 2; and 29.29 (c) a proportional share of an additional employer 29.30 amortization contribution of an amount equal to $3,900,000 29.31 annually until June 30, 2020, based upon the share of the fund's 29.32 unfunded actuarial accrued liability attributed to the city as 29.33 disclosed in the annual actuarial valuation prepared by the 29.34 commission-retained actuary. 29.35 The city council shall, in addition to other taxes levied 29.36 by the city, annually levy a tax equal to the amount of the 30.1 financial requirements of the fund which are payable by the city 30.2 for fiscal year 1995. The tax, when levied, shall be extended 30.3 upon the county lists and shall be collected and enforced in the 30.4 same manner as other taxes levied by the city. If the city does 30.5 not levy a tax sufficient to meet the requirements of this 30.6 subdivision, the retirement board shall submit the tax levy 30.7 statement directly to the county auditor, who shall levy the 30.8 tax. The tax, when levied, shall be extended upon the county 30.9 lists and shall be collected and paid into the city treasuryto30.10the credit of the retirement fund. Any amount to the credit of30.11the retirement fund, and shall constitute a special fundand30.12shallto be used only for the payment of obligations authorized 30.13 pursuant to section 354A.12, subdivision 2c, and this chapter. 30.14 In 1996 and succeeding years, the amount of the special fund 30.15 equal to the annual financial requirements of the fund that are 30.16 payable by the city under this subdivision must be credited to 30.17 the retirement fund, and the excess must be paid to special 30.18 school district No. 1. 30.19 Sec. 17. [INITIAL ADJUSTMENT.] 30.20 Subdivision 1. [LUMP-SUM POSTRETIREMENT ADJUSTMENT 30.21 TRANSITION.] For all annuitants and beneficiaries of the 30.22 association who previously received a lump-sum postretirement 30.23 adjustment, before calculation of the first postretirement 30.24 adjustment under sections 8 and 9, the annual retirement annuity 30.25 or benefit must be permanently increased by the amount of the 30.26 previous lump-sum postretirement adjustment. 30.27 Subd. 2. [ANNUITIZED POSTRETIREMENT ADJUSTMENT 30.28 TRANSITION.] For all annuitants and beneficiaries of the 30.29 association who chose to annuitize previous lump-sum 30.30 postretirement adjustments, before calculation of the first 30.31 postretirement adjustment under sections 8 and 9, the annual 30.32 retirement annuity or benefit must include the benefits 30.33 supported by the accumulated annuitized value due to annuitizing 30.34 the previous lump-sum postretirement adjustments. 30.35 Sec. 18. [DULUTH OLD PLAN BYLAWS; AUTHORITY GRANTED TO 30.36 INCREASE FORMULAS.] 31.1 In accordance with Minnesota Statutes, section 354A.12, 31.2 subdivision 4, approval is granted for the Duluth teachers 31.3 retirement fund association to amend its articles of 31.4 incorporation or bylaws by increasing the formula percentage 31.5 used in computing annuities for old law coordinated program 31.6 members in the Duluth teachers retirement fund association to 31.7 1.38 percent for each year of service. 31.8 Sec. 19. [DULUTH OLD PLAN BYLAWS.] 31.9 In accordance with Minnesota Statutes, section 354A.12, 31.10 subdivision 4, the Duluth teachers retirement fund association 31.11 shall amend its articles of incorporation or bylaws to conform 31.12 to sections 3, 8, 9, 10, and 16. 31.13 Sec. 20. [REPEALER.] 31.14 Minnesota Statutes 1994, section 354A.27, subdivisions 2, 31.15 3, and 4, are repealed. 31.16 Sec. 21. [EFFECTIVE DATE.] 31.17 (a) Sections 1, 4, 5, 6, 7, and 15 are effective upon 31.18 approval of those sections by both the Minneapolis city council 31.19 and the board of special school district No. 1, and upon 31.20 compliance with Minnesota Statutes, section 645.021, subdivision 31.21 3, by both groups. 31.22 (b) Section 3 is effective on the first day of the first 31.23 payroll period beginning after July 1, 1995. 31.24 (c) Sections 8, 9, 10, 16, 18, and 19 are effective 31.25 November 1, 1995. 31.26 (d) Sections 12 and 17 are effective May 15, 1995. 31.27 (e) Sections 13 and 14 are effective on the day following 31.28 final enactment. 31.29 (f) Section 11 is effective on the day following final 31.30 enactment and applies to any postretirement adjustment payable 31.31 after that date. 31.32 ARTICLE 3 31.33 PUBLIC SAFETY EMPLOYEE PENSION PLAN 31.34 BENEFIT AND RELATED MODIFICATIONS 31.35 Section 1. Minnesota Statutes 1994, section 352B.02, 31.36 subdivision 1a, is amended to read: 32.1 Subd. 1a. [MEMBER CONTRIBUTIONS.] Each member shall pay a 32.2 sum equal to8.58.92 percent of the member's salary, which 32.3 shall constitute the member contribution to the fund. 32.4 Sec. 2. Minnesota Statutes 1994, section 352B.08, 32.5 subdivision 2, is amended to read: 32.6 Subd. 2. [NORMAL RETIREMENT ANNUITY.] The annuity must be 32.7 paid in monthly installments. The annuity shall be equal to the 32.8 amount determined by multiplying the average monthly salary of 32.9 the member by2-1/22.65 percent for each year and pro rata for 32.10 completed months of service. 32.11 Sec. 3. Minnesota Statutes 1994, section 352B.10, 32.12 subdivision 1, is amended to read: 32.13 Subdivision 1. [INJURIES, PAYMENT AMOUNTS.] Any member who 32.14 becomes disabled and physically or mentally unfit to perform 32.15 duties as a direct result of an injury, sickness, or other 32.16 disability incurred in or arising out of any act of duty, shall 32.17 receive disability benefits while disabled. The benefits must 32.18 be paid in monthly installments equal to the member's average 32.19 monthly salary multiplied by5053 percent, plus an additional 32.202-1/22.65 percent for each year and pro rata for completed 32.21 months of service in excess of 20 years, if any. 32.22 Sec. 4. Minnesota Statutes 1994, section 353.651, 32.23 subdivision 4, is amended to read: 32.24 Subd. 4. [EARLY RETIREMENT.] Any police officer or 32.25 firefighter member who has become at least 50 years old and who 32.26 has at least three years of allowable service is entitled upon 32.27 application to a retirement annuity equal to the normal annuity 32.28 calculated under subdivision 3, reducedso that the reduced32.29annuity is the actuarial equivalent of the annuity that would be32.30payable to the member if the member deferred receipt of the32.31annuity from the day the annuity begins to accrue until the32.32member attains age 55by two-tenths of one percent for each 32.33 month that the member is under age 55 at the time of retirement. 32.34 Sec. 5. Minnesota Statutes 1994, section 353A.083, is 32.35 amended to read: 32.36 353A.083 [PERA-P&F BENEFIT PLAN APPLICABLE TO PRE-1993 33.1 CONSOLIDATIONS.] 33.2 Subdivision 1. [PRE-1993 CONSOLIDATIONS.] For any 33.3 consolidation account in effect on May 24, 1993, the public 33.4 employee police and fire fund benefit plan applicable to 33.5 consolidation account members who have elected or will elect 33.6 that benefit plan coverage under section 353A.08 is the pre-July 33.7 1, 1993, public employees police and fire fund benefit plan 33.8 unless the applicable municipality approves the extension of the 33.9 post-June 30, 1993, public employees police and fire fund 33.10 benefit plan to the consolidation account. 33.11 Subd. 2. [PRE-1995 CONSOLIDATIONS.] For any consolidation 33.12 account in effect on July 1, 1995, the public employee police 33.13 and fire fund benefit plan applicable to consolidation account 33.14 members who have elected or will elect that benefit plan 33.15 coverage under section 353A.08 is the pre-July 1, 1995, public 33.16 employees police and fire fund benefit plan unless the 33.17 applicable municipality approves the extension of the post-June 33.18 30, 1995, public employees police and fire fund benefit plan to 33.19 the consolidation account. 33.20 Sec. 6. Minnesota Statutes 1994, section 356.30, 33.21 subdivision 1, is amended to read: 33.22 Subdivision 1. [ELIGIBILITY; COMPUTATION OF ANNUITY.] (1) 33.23 Notwithstanding any provisions to the contrary of the laws 33.24 governing the funds enumerated in subdivision 3, a person who 33.25 has met the qualifications of clause (2) may elect to receive a 33.26 retirement annuity from each fund in which the person has at 33.27 least six months allowable service, based on the allowable 33.28 service in each fund, subject to the provisions of clause (3). 33.29 (2) A person may receive upon retirement a retirement 33.30 annuity from each fund in which the person has at least six 33.31 months allowable service, and augmentation of a deferred annuity 33.32 calculated under the laws governing each public pension plan or 33.33 fund named in subdivision 3, from the date the person terminated 33.34 all public service if: 33.35 (a) the person has allowable service totaling an amount 33.36 that allows the person to receive an annuity in any two or more 34.1 of the enumerated funds; and 34.2 (b) the person has not begun to receive an annuity from any 34.3 enumerated fund or the person has made application for benefits 34.4 from all funds and the effective dates of the retirement annuity 34.5 with each fund under which the person chooses to receive an 34.6 annuity are within a one-year period. 34.7 (3) The retirement annuity from each fund must be based 34.8 upon the allowable service in each fund, except that: 34.9 (a) The laws governing annuities must be the law in effect 34.10 on the date of termination from the last period of public 34.11 service under a covered fund with which the person earned a 34.12 minimum of one-half year of allowable service credit during that 34.13 employment. 34.14 (b) The "average salary" on which the annuity from each 34.15 covered fund in which the employee has credit in a formula plan 34.16 shall be based on the employee's highest five successive years 34.17 of covered salary during the entire service in covered funds. 34.18 (c) The formula percentages to be used by each fund must be 34.19 those percentages prescribed by each fund's formula as continued 34.20 for the respective years of allowable service from one fund to 34.21 the next, recognizing all previous allowable service with the 34.22 other covered funds. 34.23 (d) Allowable service in all the funds must be combined in 34.24 determining eligibility for and the application of each fund's 34.25 provisions in respect to actuarial reduction in the annuity 34.26 amount for retirement prior to normal retirement. 34.27 (e) The annuity amount payable for any allowable service 34.28 under a nonformula plan of a covered fund must not be affected 34.29 but such service and covered salary must be used in the above 34.30 calculation. 34.31 (f) This section shall not apply to any person whose final 34.32 termination from the last public service under a covered fund is 34.33 prior to May 1, 1975. 34.34 (g) For the purpose of computing annuities under this 34.35 section the formula percentages used by any covered fund, except 34.36 the public employees police and fire fund and the state patrol 35.1 retirement fund, must not exceed 2-1/2 percent per year of 35.2 service for any year of service or fraction thereof. The 35.3 formula percentage used by the public employees police and fire 35.4 fund and the state patrol retirement fund must not exceed 2.65 35.5 percent per year of service for any year of service or fraction 35.6 thereof. 35.7 (h) Any period of time for which a person has credit in 35.8 more than one of the covered funds must be used only once for 35.9 the purpose of determining total allowable service. 35.10 (i) If the period of duplicated service credit is more than 35.11 six months, or the person has credit for more than six months 35.12 with each of the funds, each fund shall apply its formula to a 35.13 prorated service credit for the period of duplicated service 35.14 based on a fraction of the salary on which deductions were paid 35.15 to that fund for the period divided by the total salary on which 35.16 deductions were paid to all funds for the period. 35.17 (j) If the period of duplicated service credit is less than 35.18 six months, or when added to other service credit with that fund 35.19 is less than six months, the service credit must be ignored and 35.20 a refund of contributions made to the person in accord with that 35.21 fund's refund provisions. 35.22 Sec. 7. Laws 1994, chapter 499, section 2, is amended to 35.23 read: 35.24 Sec. 2. [EFFECTIVE DATE.] 35.25 Section 1 is effective on the first of the month next 35.26 following: 35.27 (1) receipt of an affirmative written determination from 35.28 theSecretary of the federal Department of Health and Human35.29ServicesSocial Security Administration of ineligibility for 35.30 coverage under the federal old age, survivors, and disability 35.31 insurance; and 35.32 (2) approval by the Hennepin county board and compliance 35.33 with Minnesota Statutes, section 645.021, subdivisions 2 and 3, 35.34 except that, for section 1 to be deemed approved, a certificate 35.35 of approval must be filed within the year following receipt of 35.36 the written affirmative determination from the Social Security 36.1 Administration, or before January 1, 1998, whichever is earlier. 36.2 Sec. 8. [EFFECTIVE DATE.] 36.3 (a) Section 1 is effective on the first day of the first 36.4 full pay period occurring after July 1, 1995. 36.5 (b) Sections 2, 3, 4, 5, and 6 are effective on July 1, 36.6 1995. 36.7 (c) Section 7 is effective on the day following final 36.8 enactment. 36.9 ARTICLE 4 36.10 HIGHER EDUCATION SYSTEM EARLY RETIREMENT 36.11 EMPLOYER-PAID HEALTH INSURANCE PREMIUM INCENTIVE 36.12 Section 1. [STATE COLLEGE AND UNIVERSITY EARLY RETIREMENT 36.13 INCENTIVES.] 36.14 Subdivision 1. [INTENT.] To avoid the disruptive effects 36.15 of employee layoffs due to campus consolidations, mergers, and 36.16 budget reductions resulting in downsizing within the Minnesota 36.17 state colleges and universities and the higher education 36.18 coordinating board, an employer-funded early retirement 36.19 incentive is made available in this section to employees of the 36.20 state universities, community colleges, technical colleges, the 36.21 existing system central offices, and the higher education 36.22 coordinating board. 36.23 Subd. 2. [EMPLOYER PARTICIPATION.] The early retirement 36.24 incentives provided in this section may be offered to eligible 36.25 employees in the state university, community college, technical 36.26 college systems, the higher education board, and the higher 36.27 education coordinating board. The incentives apply to personnel 36.28 in any state university, community college, or technical college 36.29 department being downsized or where a reduction in force has 36.30 been declared by the president of the institution. In the case 36.31 of personnel in the chancellor's office, a reduction in force 36.32 must be declared by the chancellor or the chancellor's designee 36.33 or the executive director of the higher education coordinating 36.34 board. Positions that are not assigned to a specific department 36.35 or support positions that are assigned campus-wide or to a 36.36 specific department are considered to be campus-wide in 37.1 jurisdiction and eligible for this incentive as part of the 37.2 reduction-in-force declaration. 37.3 Subd. 3. [ELIGIBILITY.] A person identified in subdivision 37.4 2 is eligible to receive the incentives if the person: 37.5 (1) has at least 15 years of combined service credit in any 37.6 Minnesota public pension plans governed by Minnesota Statutes, 37.7 section 356.30, subdivision 3, and the plan governed by 37.8 Minnesota Statutes, chapter 354B; 37.9 (2) upon retirement is immediately eligible for a 37.10 retirement annuity from a defined benefit plan if the person is 37.11 a member of a defined benefit plan; 37.12 (3) is at least 55 years of age; and 37.13 (4) either retires before January 31, 1996, or, for a 37.14 person who first becomes eligible for this incentive between 37.15 January 31, 1996, and December 31, 1996, retires before January 37.16 31, 1997. 37.17 Subd. 4. [INCENTIVE.] Persons who retire under this 37.18 section are eligible to receive employer-paid hospital, medical, 37.19 and dental insurance, subject to the conditions in subdivision 5 37.20 and at the level and under conditions existing at the time of 37.21 retirement. 37.22 Subd. 5. [LIMITS ON REHIRING.] Persons retiring under the 37.23 provisions of this section may not be reemployed by the state or 37.24 hired under a professional technical contract in any capacity 37.25 except: 37.26 (1) under conditions of a stated emergency, and then only 37.27 if the rehire or contract is approved by the higher education 37.28 board or the higher education coordinating board under 37.29 procedures adopted by the boards; and 37.30 (2) if rehired as adjunct faculty as defined in the 37.31 appropriate bargaining agreement, or, if rehired by another 37.32 executive branch agency of state government, if the retired 37.33 employee works only on a seasonal, temporary, or intermittent 37.34 basis as defined in Minnesota Statutes, section 43A.02, 37.35 subdivision 23, or 179A.03, subdivision 14, clause (f), for no 37.36 more than 1,044 hours in any consecutive 12-month period. 38.1 Subd. 6. [CONDITIONS; INSURANCE COVERAGE.] A retired 38.2 employee is eligible for single and dependent insurance 38.3 coverages and employer payments to which the person was entitled 38.4 immediately before retirement, subject to any changes in 38.5 coverage and employer and employee payments through collective 38.6 bargaining or personnel plans for employees in positions 38.7 equivalent to the position from which the employee retired. The 38.8 retired employee is not eligible for employer-paid life 38.9 insurance. Eligibility ceases when the retired employee reaches 38.10 age 65, when the person chooses not to receive the retirement 38.11 benefits for which the person has applied, or when the person is 38.12 eligible for employer-paid health insurance from a new 38.13 employer. Coverages must be coordinated with relevant health 38.14 insurance benefits provided through the federally sponsored 38.15 Medicare program. 38.16 Subd. 7. [APPLICATION OF OTHER LAWS.] Unilateral 38.17 implementation of this section by a public employer is not an 38.18 unfair labor practice for the purposes of Minnesota Statutes, 38.19 chapter 179A. The requirement in this section for an employer 38.20 to pay health insurance costs for certain retired employees is 38.21 not subject to the limits in Minnesota Statutes, section 38.22 179A.20, subdivision 2a. 38.23 Sec. 2. [NOTIFICATION OF SUBSEQUENT HEALTH COVERAGE: 38.24 PENALTY FOR NOTIFICATION FAILURE.] 38.25 (a) An employee who accepts the early retirement incentive 38.26 benefit under section 1 agrees as a condition of receipt of the 38.27 incentive to notify the higher education board or the higher 38.28 education coordinating board within 30 days of the event that 38.29 the person is eligible for employer-paid health insurance from 38.30 subsequent employment. 38.31 (b) Failure to make the notification required in paragraph 38.32 (a) obligates the person to reimburse the higher education board 38.33 or the higher education coordinating board for any insurance 38.34 premiums that it paid since the person became eligible for the 38.35 subsequent employment health insurance coverage. 38.36 Sec. 3. [EFFECTIVE DATE.] 39.1 Sections 1 and 2 are effective on the day following final 39.2 enactment. 39.3 ARTICLE 5 39.4 PUBLIC PENSION PLAN COLLATERALIZATION REQUIREMENT 39.5 AND INVESTMENT AUTHORITY STATEMENT 39.6 Section 1. Minnesota Statutes 1994, section 356A.06, is 39.7 amended by adding a subdivision to read: 39.8 Subd. 8a. [COLLATERALIZATION REQUIREMENT.] (a) The 39.9 governing board of a covered pension plan shall designate a 39.10 national bank, an insured state bank, an insured credit union, 39.11 or an insured thrift institution as the depository for the 39.12 pension plan for assets not held by the pension plan's custodian 39.13 bank. 39.14 (b) Unless collateralized as provided under paragraph (c), 39.15 a covered pension plan may not deposit in a designated 39.16 depository an amount in excess of the insurance held by the 39.17 depository in the federal deposit insurance corporation, the 39.18 federal savings and loan insurance corporation, or the national 39.19 credit union administration, whichever applies. 39.20 (c) For an amount greater than the insurance under 39.21 paragraph (b), the depository must provide collateral in 39.22 compliance with section 118.01 or with any comparable successor 39.23 enactment relating to the collateralization of municipal 39.24 deposits. 39.25 Sec. 2. Minnesota Statutes 1994, section 356A.06, is 39.26 amended by adding a subdivision to read: 39.27 Subd. 8b. [DISCLOSURE OF INVESTMENT AUTHORITY; RECEIPT OF 39.28 STATEMENT.] (a) For this subdivision, the term "broker" means a 39.29 broker, broker-dealer, investment advisor, investment manager, 39.30 or third party agent who transfers, purchases, sells, or obtains 39.31 investment securities for, or on behalf of, a covered pension 39.32 plan. 39.33 (b) Before a covered pension plan may complete an 39.34 investment transaction with or in accord with the advice of a 39.35 broker, the covered pension plan shall provide annually to the 39.36 broker a written statement of investment restrictions applicable 40.1 under state law to the covered pension plan or applicable under 40.2 the pension plan governing board investment policy. 40.3 (c) A broker must acknowledge in writing annually the 40.4 receipt of the statement of investment restrictions and must 40.5 agree to handle the covered pension plan's investments and 40.6 assets in accord with the provided investment restrictions. A 40.7 covered pension plan may not enter into or continue a business 40.8 arrangement with a broker until the broker has provided this 40.9 written acknowledgment to the chief administrative officer of 40.10 the covered pension plan. 40.11 Sec. 3. [EFFECTIVE DATE.] 40.12 Sections 1 and 2 are effective January 1, 1996.