SF 1419

as introduced - 87th Legislature (2011 - 2012) Posted on 06/13/2012 02:44pm

A bill for an act
relating to retirement; public employees police and fire retirement plan; providing
for a voluntary consolidation of the Minneapolis Firefighters Relief Association
and a voluntary consolidation of the Minneapolis Police Relief Association with
PERA-P&F; amending Minnesota Statutes 2010, sections 353.01, subdivision
16, by adding subdivisions; 353.65, subdivisions 1, 2, 3; 353.651, subdivision 1;
353.656, subdivisions 1, 1a, 3, 3a; 353.657, subdivision 1; 423A.02, subdivision
1b; proposing coding for new law in Minnesota Statutes, chapter 353.

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

ARTICLE 1

VOLUNTARY CONSOLIDATION OF THE MINNEAPOLIS
FIREFIGHTERS RELIEF ASSOCIATION

Section 1.

Minnesota Statutes 2010, section 353.01, is amended by adding a
subdivision to read:

new text begin Subd. 10a. new text end

new text begin Base salary; Minneapolis fire. new text end

new text begin "Base salary," for a member of the
public employees police and fire retirement plan who was an active member of the former
Minneapolis Firefighters Relief Association on the day prior to the effective date of
consolidation under section 16, is $.......
new text end

Sec. 2.

Minnesota Statutes 2010, section 353.01, subdivision 16, is amended to read:

Subd. 16.

Allowable service; limits and computation.

(a) "Allowable service"
means:

(1) service during years of actual membership in the course of which employee
deductions were withheld from salary and contributions were made at the applicable rates
under section 353.27, 353.65, or 353E.03;

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

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

(4) a period of authorized leave of absence with pay from which deductions for
employee contributions are made, deposited, and credited to the fund;

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

(6) a periodic, repetitive leave that is offered to all employees of a governmental
subdivision. The leave program may not exceed 208 hours per annual normal work cycle
as certified to the association by the employer. A participating member obtains service
credit by making employee contributions in an amount or amounts based on the member's
average salary, excluding overtime pay, that would have been paid if the leave had not been
taken. The employer shall pay the employer and additional employer contributions on
behalf of the participating member. The employee and the employer are responsible to pay
interest on their respective shares at the rate of 8.5 percent a year, compounded annually,
from the end of the normal cycle until full payment is made. An employer shall also make
the employer and additional employer contributions, plus 8.5 percent interest, compounded
annually, on behalf of an employee who makes employee contributions but terminates
public service. The employee contributions must be made within one year after the end of
the annual normal working cycle or within 30 days after termination of public service,
whichever is sooner. The executive director shall prescribe the manner and forms to be
used by a governmental subdivision in administering a periodic, repetitive leave. Upon
payment, the member must be granted allowable service credit for the purchased period;

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

(8) a period during which a member is absent from employment by a governmental
subdivision by reason of service in the uniformed services, as defined in United States
Code, title 38, section 4303(13), if the member returns to public service with the same
governmental subdivision upon discharge from service in the uniformed service within the
time frames required under United States Code, title 38, section 4312(e), provided that
the member did not separate from uniformed service with a dishonorable or bad conduct
discharge or under other than honorable conditions. The service must be credited if the
member pays into the fund equivalent employee contributions based upon the contribution
rate or rates in effect at the time that the uniformed service was performed multiplied by
the full and fractional years being purchased and applied to the annual salary rate. The
annual salary rate is the average annual salary, excluding overtime pay, during the purchase
period that the member would have received if the member had continued to be employed
in covered employment rather than to provide uniformed service, or, if the determination
of that rate is not reasonably certain, the annual salary rate is the member's average salary
rate, excluding overtime pay, during the 12-month period of covered employment rendered
immediately preceding the period of the uniformed service. Payment of the member
equivalent contributions must be made during a period that begins with the date on which
the individual returns to public employment and that is three times the length of the
military leave period, or within five years of the date of discharge from the military service,
whichever is less. If the determined payment period is less than one year, the contributions
required under this clause to receive service credit may be made within one year of the
discharge date. Payment may not be accepted following 30 days after termination of
public service under subdivision 11a. If the member equivalent contributions provided for
in this clause are not paid in full, the member's allowable service credit must be prorated
by multiplying the full and fractional number of years of uniformed service eligible for
purchase by the ratio obtained by dividing the total member contributions received by the
total member contributions otherwise required under this clause. The equivalent employer
contribution, and, if applicable, the equivalent additional employer contribution must be
paid by the governmental subdivision employing the member if the member makes the
equivalent employee contributions. The employer payments must be made from funds
available to the employing unit, using the employer and additional employer contribution
rate or rates in effect at the time that the uniformed service was performed, applied to the
same annual salary rate or rates used to compute the equivalent member contribution. The
governmental subdivision involved may appropriate money for those payments. The
amount of service credit obtainable under this section may not exceed five years unless a
longer purchase period is required under United States Code, title 38, section 4312. The
employing unit shall pay interest on all equivalent member and employer contribution
amounts payable under this clause. Interest must be computed at a rate of 8.5 percent
compounded annually from the end of each fiscal year of the leave or the break in service
to the end of the month in which the payment is received. Upon payment, the employee
must be granted allowable service credit for the purchased period; or

(9) a period specified under subdivision 40.

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

(c) For a public employee who has prior service covered by a local police or
firefighters relief association that has consolidated with the Public Employees Retirement
Association new text begin under chapter 353A new text end or to which section 353.665 applies, and who has elected
the type of benefit coverage provided by the public employees police and fire fund either
under section 353A.08 following the consolidation or under section 353.665, subdivision
4, " deleted text begin applicable deleted text end new text begin allowable new text end service" is a period of service credited by the local police or
firefighters relief association as of the effective date of the consolidation based on law
and on bylaw provisions governing the relief association on the date of the initiation of
the consolidation procedure. new text begin For an active member who was an active member of the
former Minneapolis Firefighters Relief Association on the day prior to the effective date
of consolidation under section 16, "allowable service" is the period of service credited by
the Minneapolis Firefighters Relief Association as reflected in the transferred records of
the association up to the effective date of consolidation under section 16 and the period of
service credited under paragraph (a), clause (1), after the effective date of consolidation
under section 16.
new text end

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

(e) MS 2002 [Expired]

Sec. 3.

Minnesota Statutes 2010, section 353.65, subdivision 1, is amended to read:

Subdivision 1.

Fund established.

new text begin (a) new text end The public employees police and fire fund
is established for police officers and firefighters who meet the eligibility criteria under
section 353.64.

new text begin (b) new text end Employee contributions new text begin other than those made under subdivision 2, paragraph
(b) new text end , employer contributions new text begin under subdivision 3 and under section 353.667, subdivision 6 new text end ,
other than the excess contribution established by section 69.031, subdivision 5, paragraphs
(2), clauses (b) and (c), and (3), and other amounts authorized by law, including all
employee and employer contributions of members transferred new text begin , new text end must be deposited in the
public employees police and fire fund.

new text begin (c) Within the public employees police and fire fund is established a special health
benefit contribution account. The member contributions in excess of 25 years of service
under subdivision 2, paragraph (b), must be deposited in the special account.
new text end

Sec. 4.

Minnesota Statutes 2010, section 353.65, subdivision 2, is amended to read:

Subd. 2.

Employee contribution.

new text begin (a) For members other than members who were
active members of the former Minneapolis Firefighters Relief Association on the day prior
to the effective date of consolidation under section 16, new text end the employee contribution is 9.4
percent of the salary of the member in calendar year 2010 and is 9.6 percent of the salary
of the member in each calendar year after 2010. deleted text begin This contribution
deleted text end

new text begin (b) For members other than members who were active members of the former
Minneapolis Firefighters Relief Association on the day prior to the effective date of
consolidation under section 16, the employee contribution is an amount equal to eight
percent of the base salary of the member. The employee contribution made by a member
with at least 25 years of service credit as an active member of the former Minneapolis
Firefighters Relief Association must be deposited in the special health benefit contribution
account established under subdivision 1, paragraph (c).
new text end

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

Sec. 5.

Minnesota Statutes 2010, section 353.65, subdivision 3, is amended to read:

Subd. 3.

Employer contribution.

new text begin (a) With respect to members other than members
who were active members of the former Minneapolis Firefighters Relief Association
on the day prior to the effective date of consolidation under section 16, new text end the employer
contribution is 14.1 percent of the salary of the member in calendar year 2010 and is 14.4
percent of the salary of the member in each calendar year after 2010. deleted text begin This contribution
deleted text end

new text begin (b) With respect to members who were active members of the former Minneapolis
Firefighters Relief Association on the day prior to the effective date of consolidation under
section 16, the employer contribution is $....... per month.
new text end

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

Sec. 6.

Minnesota Statutes 2010, section 353.651, subdivision 1, is amended to read:

Subdivision 1.

Age and allowable service requirements.

Upon separation from
public service, any police officer or firefighter member new text begin , other than a firefighter covered
by section 353.6511, new text end who has attained the age of at least 55 years and who is vested
under section 353.01, subdivision 47, is entitled upon application to a retirement annuity,
known as the "normal" retirement annuity.

Sec. 7.

new text begin [353.6511] ALTERNATIVE RETIREMENT BENEFIT COVERAGE IN
CERTAIN INSTANCES.
new text end

new text begin Subdivision 1. new text end

new text begin Applicability. new text end

new text begin The alternative benefit coverage under this section
applies only to an active member of the public employees police and fire retirement plan
who was an active member of the former Minneapolis Firefighters Relief Association on
the day prior to the consolidation effective date under section 16 and who retires after the
consolidation effective date under section 16.
new text end

new text begin Subd. 2. new text end

new text begin Retirement annuity. new text end

new text begin (a) A member described in subdivision 1, if the
member meets the eligibility requirements of paragraph (b), is only entitled to a retirement
annuity under this subdivision.
new text end

new text begin (b) The member, upon application, if the person is at least age 50 and has credit for
at least 20 years of allowable service, is entitled to a normal retirement annuity. The
normal retirement annuity is the following amount based on the service credit of the
retiring member as a Minneapolis police officer:
new text end

	new text begin years of service new text end			new text begin retirement annuity amount new text end
		new text begin 20 new text end		new text begin 42.5 percent of base salary new text end
		new text begin 21 new text end		new text begin 44.5 percent of base salary new text end
		new text begin 22 new text end		new text begin 46.5 percent of base salary new text end
		new text begin 23 new text end		new text begin 48.5 percent of base salary new text end
		new text begin 24 new text end		new text begin 50.5 percent of base salary new text end
		new text begin 25 or more new text end		new text begin 52.5 percent of base salary new text end

new text begin Subd. 3. new text end

new text begin Disability benefit. new text end

new text begin A member described in subdivision 1, if the member is
disabled under section 353.01, subdivision 41 or 46, and has not yet attained the age of 50
years, is entitled to a disability benefit equal to 51.25 percent of base salary.
new text end

new text begin Subd. 4. new text end

new text begin Surviving spouse benefit. new text end

new text begin A surviving spouse under section 353.01,
subdivision 20, of a deceased member described in subdivision 1 is entitled to a surviving
spouse benefit equal to 27.5 percent of base salary.
new text end

new text begin Subd. 5. new text end

new text begin Surviving dependent child benefit. new text end

new text begin A surviving dependent child under
section 353.01, subdivision 15a, of a deceased member described in subdivision 1 is
entitled to a surviving child benefit equal to ten percent of base salary.
new text end

new text begin Subd. 6. new text end

new text begin Surviving family benefit maximum. new text end

new text begin The surviving spouse and surviving
dependent child under subdivisions 4 and 5 are entitled to a combined family benefit under
subdivisions 4 and 5 of 52.5 percent of base salary.
new text end

new text begin Subd. 7. new text end

new text begin Health insurance account. new text end

new text begin Member contributions made in excess of 25
years of service credit that are deposited in the separate account under section 353.65,
subdivision 1, paragraph (c), upon the retirement, disablement, or death of a member
described in subdivision 1, must be deposited into the postretirement health care savings
plan under section 352.98, for the reimbursement of health or medical expenses of the
member or the deceased member's heirs.
new text end

new text begin Subd. 8. new text end

new text begin Postretirement adjustments. new text end

new text begin Retirement annuities, service pensions,
disability benefits, and survivor benefits are eligible for postretirement adjustments under
section 356.415.
new text end

Sec. 8.

Minnesota Statutes 2010, section 353.656, subdivision 1, is amended to read:

Subdivision 1.

Duty disability; computation of benefits.

(a) A member of
the police and fire plan new text begin , other than a firefighter covered by section 353.6511, new text end who is
determined to qualify for duty disability as defined in section 353.01, subdivision 41,
shall receive disability benefits during the period of such disability in an amount equal to
60 percent of the average salary as defined in section 353.01, subdivision 17a, plus an
additional percentage specified under section 356.315, subdivision 6, of that average
salary for each year of service in excess of 20 years.

(b) To be eligible for a benefit under paragraph (a), the member must have:

(1) not met the requirements for a retirement annuity under section 353.651,
subdivision 1; or

(2) met the requirements under that subdivision, but does not have at least 20 years
of allowable service credit.

(c) If paragraph (b), clause (2), applies, the disability benefit must be paid for a
period of 60 months from the disability benefit accrual date and at the end of that period
is subject to provisions of subdivision 5a.

(d) If the disability under this subdivision occurs before the member has at least five
years of allowable service credit in the police and fire plan, the disability benefit must be
computed on the average salary from which deductions were made for contribution to
the police and fire fund.

Sec. 9.

Minnesota Statutes 2010, section 353.656, subdivision 1a, is amended to read:

Subd. 1a.

Total and permanent duty disability; computation of benefits.

(a) A
member of the police and fire plan new text begin , other than a firefighter covered by section 353.6511, new text end
whose disabling condition is determined to be a duty disability that is also a permanent
and total disability as defined in section 353.01, subdivision 19, is entitled to receive, for
life, disability benefits in an amount equal to 60 percent of the average salary as defined in
section 353.01, subdivision 17a, plus an additional percent specified in section 356.315,
subdivision 6, of that average salary for each year of service in excess of 20 years.

(b) A disability benefit payable under paragraph (a) is subject to eligibility review
under section 353.33, subdivision 6, but the review may be waived if the executive
director receives a written statement from the association's medical advisor that no
improvement can be expected in the member's disabling condition that was the basis for
payment of the benefit under paragraph (a). A member receiving a disability benefit
under this subdivision who is found to no longer be permanently and totally disabled as
defined under section 353.01, subdivision 19, but continues to meet the definition for
receipt of a duty disability under section 353.01, subdivision 41, is subject to subdivision
1 upon written notice from the association's medical advisor that the person is no longer
considered permanently and totally disabled.

(c) If a member approved for disability benefits under this subdivision dies before
attaining normal retirement age as defined in section 353.01, subdivision 37, paragraph
(b), or within 60 months of the effective date of the disability, whichever is later,
the surviving spouse is entitled to receive a survivor benefit under section 353.657,
subdivision 2, paragraph (a), clause (1), if the death is the direct result of the disabling
condition for which disability benefits were approved, or section 353.657, subdivision
2, paragraph (a), clause (2), if the death is not directly related to the disabling condition
for which benefits were approved under this subdivision.

(d) If the election of an actuarial equivalent optional annuity is not made at the time
the permanent and total disability benefit accrues, an election must be made within 90
days before the member attains normal retirement age as defined under section 353.01,
subdivision 37, paragraph (b), or having collected total and permanent disability benefits
for 60 months, whichever is later. If a member receiving disability benefits who has
dependent children dies, subdivision 6a, paragraph (c), applies.

Sec. 10.

Minnesota Statutes 2010, section 353.656, subdivision 3, is amended to read:

Subd. 3.

Regular disability benefit.

(a) A member of the police and fire plan new text begin , other
than a firefighter covered by section 353.6511, new text end who qualifies for a regular disability benefit
as defined in section 353.01, subdivision 46, is entitled to receive a disability benefit,
after filing a valid application, in an amount equal to 45 percent of the average salary as
defined in section 353.01, subdivision 17a.

(b) To be eligible for a benefit under paragraph (a), the member must have at least
one year of allowable service credit and have:

(1) not met the requirements for a retirement annuity under section 353.651,
subdivision 1, or

(2) met the requirements under that subdivision, but does not have at least 15 years
of allowable service credit.

(c) If paragraph (b), clause (2), applies, the disability benefit must be paid for a
period of 60 months from the disability benefit accrual date and, at the end of that period,
is subject to provisions of subdivision 5a.

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

Sec. 11.

Minnesota Statutes 2010, section 353.656, subdivision 3a, is amended to read:

Subd. 3a.

Total and permanent regular disability; computation of benefits.

(a)
A member of the police and fire plan new text begin , other than a firefighter covered by section 353.6511, new text end
whose disabling condition is determined to be a regular disability under section 353.01,
subdivision 46, that is also a permanent and total disability as defined in section 353.01,
subdivision 19, is entitled to receive, for life, a disability benefit in an amount equal to
45 percent of the average salary as defined in section 353.01, subdivision 17a, plus an
additional percent specified in section 356.315, subdivision 6, of that average salary for
each year of service in excess of 15 years.

(b) A disability benefit payable under paragraph (a) is subject to eligibility review
under section 353.33, subdivision 6, but the review may be waived if the executive
director receives a written statement from the association's medical advisor that no
improvement can be expected in the member's disabling condition that was the basis for
payment of the benefit under paragraph (a). A member receiving a disability benefit under
this subdivision who is found to no longer be permanently and totally disabled as defined
under section 353.01, subdivision 19, but continues to meet the definition for receipt
of a regular disability under section 353.01, subdivision 46, is subject to subdivision 3
upon written notice from the association's medical advisor that the person is no longer
considered permanently and totally disabled.

(c) A member approved for disability benefits under this subdivision may elect
to receive a normal disability benefit or an actuarial equivalent optional annuity. If the
election of an actuarial equivalent optional annuity is not made at the time the total and
permanent disability benefit accrues, an election must be made within 90 days before
the member attains normal retirement age as defined in section 353.01, subdivision 37,
paragraph (b), or having collected disability benefits for 60 months, whichever is later.
No surviving spouse benefits are payable if the member dies during the period in which
a normal total and permanent disability benefit is being paid. If a member receiving
disability benefits who has dependent children dies, subdivision 6a, paragraph (c), applies.

Sec. 12.

Minnesota Statutes 2010, section 353.657, subdivision 1, is amended to read:

Subdivision 1.

Generally.

(a) In the event that a member of the police and fire fund new text begin ,
other than a firefighter covered by section 353.6511, new text end dies from any cause before retirement
or before becoming disabled and receiving disability benefits, the association shall grant
survivor benefits to a surviving spouse, as defined in section 353.01, subdivision 20, and
to a dependent child or children, as defined in section 353.01, subdivision 15, except
that if the death is not a line of duty death, the member must be vested under section
353.01, subdivision 47.

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

(c) The spouse and child or children are entitled to monthly benefits as provided in
subdivisions 2 to 4.

Sec. 13.

new text begin [353.667] CONSOLIDATION OF THE MINNEAPOLIS
FIREFIGHTERS RELIEF ASSOCIATION.
new text end

new text begin Subdivision 1. new text end

new text begin Membership transfer. new text end

new text begin On the effective date of consolidation under
section 16, the active, inactive, and retired members of the Minneapolis Firefighters Relief
Association are transferred to the public employees police and fire retirement plan, are
no longer members of the Minneapolis Firefighters Relief Association, and are members
of the public employees police and fire retirement plan.
new text end

new text begin Subd. 2. new text end

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

new text begin (a) Allowable service
credit and base salary credit of the active members of the Minneapolis Firefighters
Relief Association, as contained in the records of the Minneapolis Firefighters Relief
Association through the day before the effective date of consolidation under section 16,
are transferred to the public employees police and fire retirement plan and is credited as
provided in section 353.01, subdivisions 10a and 16, paragraph (c), on the effective date
of consolidation under section 16.
new text end

new text begin (b) The liability for the payment of retirement annuities, service pensions, and
retirement benefits of the Minneapolis Firefighters Relief Association retired members,
service pensioners, disabilitants, and other retirement benefit recipients as specified
in the records of the Minneapolis Firefighters Relief Association is transferred to the
public employees police and fire retirement plan on the effective date of consolidation
under section 16.
new text end

new text begin Subd. 3. new text end

new text begin Transfer of records. new text end

new text begin On the effective date of consolidation under section
16, the chief administrative officer of the Minneapolis Firefighters Relief Association
shall transfer all records and documents relating to the Minneapolis Firefighters Relief
Association to the executive director of the Public Employees Retirement Association. To
the extent possible, original copies of all records and documents must be transferred.
new text end

new text begin Subd. 4. new text end

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

new text begin (a) On the effective date
of consolidation under section 16, the chief administrative officer of the Minneapolis
Firefighters Relief Association shall transfer the entire assets of the special fund of the
Minneapolis Firefighters Relief Association to the public employees police and fire
retirement fund. The transfer must include any accounts receivable that are determined by
the State Board of Investment as being capable of being collected. An amount, in cash,
must be transferred by the city of Minneapolis equal to the carrying value recognized
by the relief association of investment securities that are determined to be ineligible or
inappropriate by the executive director of the State Board of Investment or of accounts
receivable determined as being incapable of being collected by the executive director of
the State Board of Investment. Legal and beneficial title to assets that are ineligible or
inappropriate securities or that are uncollectible accounts receivable are transferred to the
city of Minneapolis on the effective date of consolidation under section 16. Any accounts
payable on the effective date of consolidation under section 16 are an obligation of the
city of Minneapolis.
new text end

new text begin (b) Upon the transfer of assets to the State Board of Investment under paragraph
(a), legal title to those transferred assets vests with the State Board of Investment on
behalf of the public employees police and fire retirement plan, and beneficial title to the
transferred assets remains with the membership of the former Minneapolis Firefighters
Relief Association.
new text end

new text begin (c) The public employees police and fire retirement plan and fund is the successor
in interest to all claims for or against the Minneapolis Firefighters Relief Association,
but the public employees police and fire retirement plan and fund is not liable for any
claim against the Minneapolis Firefighters Relief Association, its governing board, or its
administrative staff acting in a fiduciary capacity, under chapter 356A or common law,
which is founded upon a claim of a breach of fiduciary duty, but where the act or acts
constituting the claimed breach were not undertaken in good faith. The public employees
police and fire retirement plan may assert any applicable defense to any claim in any
judicial or administrative proceeding that the Minneapolis Firefighters Relief Association,
its board, or its administrative staff would otherwise have been entitled to assert, and the
public employees police and fire retirement plan may assert any applicable defense that it
has in its capacity as a statewide agency.
new text end

new text begin Subd. 5. new text end

new text begin Benefits. new text end

new text begin The annuities, service pensions, and other retirement benefits
of or attributable to retired, disabled, deferred, or inactive Minneapolis Firefighters
Relief Association members who had that status as of the day before the effective date of
consolidation under section 16 continue after consolidation in the same amount and under
the same terms as provided in Minnesota Statutes 2010, chapter 423B, except that the base
monthly salary is governed by section 353.01, subdivision 10a, and the postretirement
adjustments must be calculated solely under section 353.6511, subdivision 8.
new text end

new text begin Subd. 6. new text end

new text begin Additional asset transfers. new text end

new text begin As of the effective date of consolidation
under section 16, the approved actuary retained by the Public Employees Retirement
Association shall calculate the present value of future benefits of the former Minneapolis
Firefighters Relief Association, and, after subtracting the market value of the transferred
assets of the former Minneapolis Firefighters Relief Association and the present value
of the employer contribution under section 353.64, subdivision 3, paragraph (c), shall
calculate the remainder present value of future benefits amount. Annually, following the
effective date of consolidation under section 16, the city of Minneapolis shall amortize
on a level annual dollar basis the remainder present value of future benefits amount by
December 31, 2025. The amortization payment is payable annually on December 1.
new text end

Sec. 14.

Minnesota Statutes 2010, section 423A.02, subdivision 1b, is amended to read:

Subd. 1b.

Additional amortization state aid.

(a) Annually, on October 1, the
commissioner of revenue shall allocate the additional amortization state aid transferred
under section 69.021, subdivision 11, to:

(1) all police or salaried firefighters relief associations governed by and in full
compliance with the requirements of section 69.77, that had an unfunded actuarial accrued
liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the
preceding December 31;

(2) all local police or salaried firefighter consolidation accounts governed by chapter
353A that are certified by the executive director of the public employees retirement
association as having for the current fiscal year an additional municipal contribution
amount under section 353A.09, subdivision 5, paragraph (b), and that have implemented
section 353A.083, subdivision 1, if the effective date of the consolidation preceded May
24, 1993, and that have implemented section 353A.083, subdivision 2, if the effective date
of the consolidation preceded June 1, 1995; and

(3) the municipalities that are required to make an additional municipal contribution
under section 353.665, subdivision 8, new text begin or 353.667, subdivision 6, new text end for the duration of the
required additional contribution.

(b) The commissioner shall allocate the state aid on the basis of the proportional share
of the relief association or consolidation account of the total unfunded actuarial accrued
liability of all recipient relief associations and consolidation accounts as of December 31,
1993, for relief associations, and as of June 30, 1994, for consolidation accounts.

(c) Beginning October 1, 2000, and annually thereafter, the commissioner shall
allocate the state aid, including any state aid in excess of the limitation in subdivision
4, on the following basis:

(1) 64.5 percent to the municipalities to which section 353.665, subdivision
8, paragraph (b), or 353A.09, subdivision 5, paragraph (b), apply for distribution in
accordance with paragraph (b) and subject to the limitation in subdivision 4;

(2) 34.2 percent to the city of Minneapolis to fund any unfunded actuarial accrued
liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the
preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis
Fire Department Relief Association; and

(3) 1.3 percent to the city of Virginia to fund any unfunded actuarial accrued liability
in the actuarial valuation prepared under sections 356.215 and 356.216 as of the preceding
December 31 for the Virginia Fire Department Relief Association.

If there is no unfunded actuarial accrued liability in both the Minneapolis Police
Relief Association and the Minneapolis Fire Department Relief Association as disclosed
in the most recent actuarial valuations for the relief associations prepared under sections
356.215 and 356.216, the commissioner shall allocate that 34.2 percent of the aid as
follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul
Teachers Retirement Fund Association, and 30 percent as additional funding to support
minimum fire state aid for volunteer firefighters relief associations. If there is no unfunded
actuarial accrued liability in the Virginia Fire Department Relief Association as disclosed
in the most recent actuarial valuation for the relief association prepared under sections
356.215 and 356.216, the commissioner shall allocate that 1.3 percent of the aid as
follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul
Teachers Retirement Fund Association, and 30 percent as additional funding to support
minimum fire state aid for volunteer firefighters relief associations. Upon the final
payment to municipalities required by section 353.665, subdivision 8, paragraph (b),
or 353A.09, subdivision 5, paragraph (b), the commissioner shall allocate that 64.5
percent of the aid as follows: 20 percent to the St. Paul Teachers Retirement Fund
Association, 20 percent to the city of Minneapolis to fund any unfunded actuarial accrued
liability in the actuarial valuation proposed under sections 356.215 and 356.216 as of the
preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis
Firefighters Relief Association, 20 percent for the city of Duluth to pay for any costs
associated with the police and firefighters pensions, and 40 percent as additional funding to
support minimum fire state aid for volunteer firefighters relief associations. The allocation
must be made by the commissioner at the same time and under the same procedures
as specified in subdivision 3. With respect to the St. Paul Teachers Retirement Fund
Association, annually, beginning on July 1, 2005, if the applicable teacher's association
five-year average time-weighted rate of investment return does not equal or exceed the
performance of a composite portfolio assumed passively managed (indexed) invested ten
percent in cash equivalents, 60 percent in bonds and similar debt securities, and 30 percent
in domestic stock calculated using the formula under section 11A.04, clause (11), the aid
allocation to that retirement fund under this section ceases until the five-year annual rate
of investment return equals or exceeds the performance of that composite portfolio.

(d) The amounts required under this subdivision are the amounts annually
appropriated to the commissioner of revenue under section 69.021, subdivision 11,
paragraph (e).

Sec. 15. new text begin MINNEAPOLIS FIREFIGHTERS RELIEF ASSOCIATION; SPECIAL
ACTUARIAL VALUATION PENDING CONSOLIDATION.
new text end

new text begin (a) On or before August 1, 2011, the approved actuarial consulting firm retained by
the Public Employees Retirement Association under Minnesota Statutes, section 356.214,
shall prepare an alternative actuarial valuation of the Minneapolis Firefighters Relief
Association under Minnesota Statutes, section 356.215, and the most recent standards for
actuarial work adopted by the Legislative Commission on Pensions and Retirement as
of December 31, 2009, using the applicable actuarial assumptions and the applicable
amortization target date of the public employee police and fire retirement plan.
new text end

new text begin (b) The board of trustees of the Minneapolis Firefighters Relief Association shall
supply the approved actuary retained by the Public Employees Retirement Association
with the financial and demographic data necessary to perform the alternative actuarial
valuation.
new text end

new text begin (c) The alternative actuarial valuation of the Minneapolis Firefighters Relief
Association shall be filed with the mayor of the city of Minneapolis, with the Minneapolis
city coordinator, with the executive director of the Minneapolis Firefighters Relief
Association, with the executive director of the Public Employees Retirement Association,
with the executive director of the Legislative Commission on Pensions and Retirement,
and with the Legislative Reference Library.
new text end

new text begin (d) The expense of preparing the alternative actuarial valuation must be paid by the
city of Minneapolis within 30 days of its certification to the finance director of the city of
Minneapolis by the executive director of the Public Employees Retirement Association.
new text end

Sec. 16. new text begin EFFECTIVE DATE; LOCAL APPROVAL.
new text end

new text begin Sections 1 to 15 are effective December 31, 2011, if the board of trustees of the
Minneapolis Firefighters Relief Association approves the article, if the chief administrative
officer of the Minneapolis Firefighters Relief Association certifies that approval to the
mayor of the city of Minneapolis and the president of the Minneapolis city council, and if
the governing body of the city of Minneapolis and the chief clerical officer of Minneapolis
timely complete their compliance with Minnesota Statutes, section 645.021, subdivisions
2 and 3, on or before September 30, 2011, or on the first day of the month occurring two
months after the governing body of the city of Minneapolis and the chief clerical officer of
Minneapolis timely complete their compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3, if that completion occurs on or after October 1, 2011.
new text end

ARTICLE 2

VOLUNTARY CONSOLIDATION OF THE MINNEAPOLIS POLICE
RELIEF ASSOCIATION

Section 1.

Minnesota Statutes 2010, section 353.01, is amended by adding a
subdivision to read:

new text begin Subd. 10b. new text end

new text begin Base salary; Minneapolis police. new text end

new text begin "Base salary," for a member of
the public employees police and fire retirement plan who was an active member of the
former Minneapolis Police Relief Association on the day prior to the effective date of
consolidation under section 16, is $.......
new text end

Sec. 2.

Minnesota Statutes 2010, section 353.01, subdivision 16, is amended to read:

Subd. 16.

Allowable service; limits and computation.

(a) "Allowable service"
means:

(1) service during years of actual membership in the course of which employee
deductions were withheld from salary and contributions were made at the applicable rates
under section 353.27, 353.65, or 353E.03;

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

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

(4) a period of authorized leave of absence with pay from which deductions for
employee contributions are made, deposited, and credited to the fund;

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

(6) a periodic, repetitive leave that is offered to all employees of a governmental
subdivision. The leave program may not exceed 208 hours per annual normal work cycle
as certified to the association by the employer. A participating member obtains service
credit by making employee contributions in an amount or amounts based on the member's
average salary, excluding overtime pay, that would have been paid if the leave had not been
taken. The employer shall pay the employer and additional employer contributions on
behalf of the participating member. The employee and the employer are responsible to pay
interest on their respective shares at the rate of 8.5 percent a year, compounded annually,
from the end of the normal cycle until full payment is made. An employer shall also make
the employer and additional employer contributions, plus 8.5 percent interest, compounded
annually, on behalf of an employee who makes employee contributions but terminates
public service. The employee contributions must be made within one year after the end of
the annual normal working cycle or within 30 days after termination of public service,
whichever is sooner. The executive director shall prescribe the manner and forms to be
used by a governmental subdivision in administering a periodic, repetitive leave. Upon
payment, the member must be granted allowable service credit for the purchased period;

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

(8) a period during which a member is absent from employment by a governmental
subdivision by reason of service in the uniformed services, as defined in United States
Code, title 38, section 4303(13), if the member returns to public service with the same
governmental subdivision upon discharge from service in the uniformed service within the
time frames required under United States Code, title 38, section 4312(e), provided that
the member did not separate from uniformed service with a dishonorable or bad conduct
discharge or under other than honorable conditions. The service must be credited if the
member pays into the fund equivalent employee contributions based upon the contribution
rate or rates in effect at the time that the uniformed service was performed multiplied by
the full and fractional years being purchased and applied to the annual salary rate. The
annual salary rate is the average annual salary, excluding overtime pay, during the purchase
period that the member would have received if the member had continued to be employed
in covered employment rather than to provide uniformed service, or, if the determination
of that rate is not reasonably certain, the annual salary rate is the member's average salary
rate, excluding overtime pay, during the 12-month period of covered employment rendered
immediately preceding the period of the uniformed service. Payment of the member
equivalent contributions must be made during a period that begins with the date on which
the individual returns to public employment and that is three times the length of the
military leave period, or within five years of the date of discharge from the military service,
whichever is less. If the determined payment period is less than one year, the contributions
required under this clause to receive service credit may be made within one year of the
discharge date. Payment may not be accepted following 30 days after termination of
public service under subdivision 11a. If the member equivalent contributions provided for
in this clause are not paid in full, the member's allowable service credit must be prorated
by multiplying the full and fractional number of years of uniformed service eligible for
purchase by the ratio obtained by dividing the total member contributions received by the
total member contributions otherwise required under this clause. The equivalent employer
contribution, and, if applicable, the equivalent additional employer contribution must be
paid by the governmental subdivision employing the member if the member makes the
equivalent employee contributions. The employer payments must be made from funds
available to the employing unit, using the employer and additional employer contribution
rate or rates in effect at the time that the uniformed service was performed, applied to the
same annual salary rate or rates used to compute the equivalent member contribution. The
governmental subdivision involved may appropriate money for those payments. The
amount of service credit obtainable under this section may not exceed five years unless a
longer purchase period is required under United States Code, title 38, section 4312. The
employing unit shall pay interest on all equivalent member and employer contribution
amounts payable under this clause. Interest must be computed at a rate of 8.5 percent
compounded annually from the end of each fiscal year of the leave or the break in service
to the end of the month in which the payment is received. Upon payment, the employee
must be granted allowable service credit for the purchased period; or

(9) a period specified under subdivision 40.

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

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

(d) No member may receive more than 12 months of allowable service credit in a
year either for vesting purposes or for benefit calculation purposes. new text begin For an active member
who was an active member of the former Minneapolis Police Relief Association on the
day prior to the effective date of consolidation under section 16, "allowable service" is the
period of service credited by the Minneapolis Police Relief Association as reflected in
the transferred records of the association up to the effective date of consolidation under
section 16 and the period of service credited under paragraph (a), clause (1), after the
effective date of consolidation under section 16.
new text end

(e) MS 2002 [Expired]

Sec. 3.

Minnesota Statutes 2010, section 353.65, subdivision 1, is amended to read:

Subdivision 1.

Fund established.

new text begin (a) new text end The public employees police and fire fund
is established for police officers and firefighters who meet the eligibility criteria under
section 353.64.

new text begin (b) new text end Employee contributions new text begin other than those made under subdivision 2, paragraph
(b) new text end , employer contributions new text begin under subdivision 3 and under section 353.668, subdivision 6 new text end ,
other than the excess contribution established by section 69.031, subdivision 5, paragraphs
(2), clauses (b) and (c), and (3), and other amounts authorized by law, including all
employee and employer contributions of members transferred new text begin , new text end must be deposited in the
public employees police and fire fund.

new text begin (c) Within the public employees police and fire fund is established a special health
benefit contribution account. The member contributions in excess of 25 years of service
under subdivision 2, paragraph (b), must be deposited in the special account.
new text end

Sec. 4.

Minnesota Statutes 2010, section 353.65, subdivision 2, is amended to read:

Subd. 2.

Employee contribution.

new text begin (a) For members other than members who were
active members of the former Minneapolis Police Relief Association on the day prior to
the effective date of consolidation under section 16, new text end the employee contribution is 9.4
percent of the salary of the member in calendar year 2010 and is 9.6 percent of the salary
of the member in each calendar year after 2010. deleted text begin This contribution
deleted text end

new text begin (b) For members other than members who were active members of the former
Minneapolis Police Relief Association on the day prior to the effective date of
consolidation under section 16, the employee contribution is an amount equal to eight
percent of the base salary of the member. The employee contribution made by a member
with at least 25 years of service credit as an active member of the former Minneapolis
Police Relief Association must be deposited in the special health benefit contribution
account established under subdivision 1, paragraph (c).
new text end

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

Sec. 5.

Minnesota Statutes 2010, section 353.65, subdivision 3, is amended to read:

Subd. 3.

Employer contribution.

new text begin (a) With respect to members other than members
who were active members of the former Minneapolis Police Relief Association on the day
prior to the effective date of consolidation under section 16, new text end the employer contribution is
14.1 percent of the salary of the member in calendar year 2010 and is 14.4 percent of the
salary of the member in each calendar year after 2010. deleted text begin This contribution
deleted text end

new text begin (b) With respect to members who were active members of the former Minneapolis
Police Relief Association on the day prior to the effective date of consolidation under
section 16, the employer contribution is $....... per month.
new text end

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

Sec. 6.

Minnesota Statutes 2010, section 353.651, subdivision 1, is amended to read:

Subdivision 1.

Age and allowable service requirements.

Upon separation from
public service, any police officer or firefighter member new text begin , other than a police officer covered
by section 353.6512, new text end who has attained the age of at least 55 years and who is vested
under section 353.01, subdivision 47, is entitled upon application to a retirement annuity,
known as the "normal" retirement annuity.

Sec. 7.

new text begin [353.6512] ALTERNATIVE RETIREMENT BENEFIT COVERAGE IN
CERTAIN INSTANCES.
new text end

new text begin Subdivision 1. new text end

new text begin Applicability. new text end

new text begin The alternative benefit coverage under this section
applies only to an active member of the public employees police and fire retirement plan
who was an active member of the former Minneapolis Police Relief Association on the
day prior to the consolidation effective date under section 16 and who retires after the
consolidation effective date under section 16.
new text end

new text begin Subd. 2. new text end

new text begin Retirement annuity. new text end

new text begin (a) A member described in subdivision 1, if the
member meets the eligibility requirements of paragraph (b), is only entitled to a retirement
annuity under this subdivision.
new text end

new text begin (b) The member, upon application, if the person is at least age 50 and has credit for
at least 20 years of allowable service, is entitled to a normal retirement annuity. The
normal retirement annuity is the following amount based on the service credit of the
retiring member as a Minneapolis police officer:
new text end

	new text begin years of service new text end			new text begin retirement annuity amount new text end
		new text begin 20 new text end		new text begin 45.00 percent of base salary new text end
		new text begin 21 new text end		new text begin 47.00 percent of base salary new text end
		new text begin 22 new text end		new text begin 49.00 percent of base salary new text end
		new text begin 23 new text end		new text begin 51.00 percent of base salary new text end
		new text begin 24 new text end		new text begin 53.00 percent of base salary new text end
		new text begin 25 or more new text end		new text begin 55.00 percent of base salary new text end

new text begin Subd. 3. new text end

new text begin Disability benefit. new text end

new text begin A member described in subdivision 1, if the member is
disabled under section 353.01, subdivision 41 or 46, and has not yet attained the age of 50
years, is entitled to a disability benefit equal to 43.25 percent of base salary.
new text end

new text begin Subd. 4. new text end

new text begin Surviving spouse benefit. new text end

new text begin A surviving spouse under section 353.01,
subdivision 20, of a deceased member described in subdivision 1 is entitled to a surviving
spouse benefit equal to 30 percent of base salary.
new text end

new text begin Subd. 5. new text end

new text begin Surviving dependent child benefit. new text end

new text begin A surviving dependent child under
section 353.01, subdivision 15a, of a deceased member described in subdivision 1 is
entitled to a surviving child benefit equal to 11.25 percent of base salary.
new text end

new text begin Subd. 6. new text end

new text begin Surviving family benefit maximum. new text end

new text begin The surviving spouse and surviving
dependent child under subdivisions 4 and 5 are entitled to a combined family benefit under
subdivisions 4 and 5 of 53 percent of base salary.
new text end

new text begin Subd. 7. new text end

new text begin Health insurance account. new text end

new text begin Member contributions made in excess of 25
years of service credit that are deposited in the separate account under section 353.65,
subdivision 1, paragraph (c), upon the retirement, disablement, or death of a member
described in subdivision 1, must be deposited into the postretirement health care savings
plan under section 352.98, for the reimbursement of health or medical expenses of the
member or the deceased member's heirs.
new text end

new text begin Subd. 8. new text end

new text begin Postretirement adjustments. new text end

new text begin Retirement annuities, service pensions,
disability benefits, and survivor benefits are eligible for postretirement adjustments under
section 356.415.
new text end

Sec. 8.

Minnesota Statutes 2010, section 353.656, subdivision 1, is amended to read:

Subdivision 1.

Duty disability; computation of benefits.

(a) A member of the
police and fire plan new text begin , other than a police officer covered by section 353.6512, new text end who is
determined to qualify for duty disability as defined in section 353.01, subdivision 41,
shall receive disability benefits during the period of such disability in an amount equal to
60 percent of the average salary as defined in section 353.01, subdivision 17a, plus an
additional percentage specified under section 356.315, subdivision 6, of that average
salary for each year of service in excess of 20 years.

(b) To be eligible for a benefit under paragraph (a), the member must have:

(1) not met the requirements for a retirement annuity under section 353.651,
subdivision 1; or

(2) met the requirements under that subdivision, but does not have at least 20 years
of allowable service credit.

(c) If paragraph (b), clause (2), applies, the disability benefit must be paid for a
period of 60 months from the disability benefit accrual date and at the end of that period
is subject to provisions of subdivision 5a.

(d) If the disability under this subdivision occurs before the member has at least five
years of allowable service credit in the police and fire plan, the disability benefit must be
computed on the average salary from which deductions were made for contribution to
the police and fire fund.

Sec. 9.

Minnesota Statutes 2010, section 353.656, subdivision 1a, is amended to read:

Subd. 1a.

Total and permanent duty disability; computation of benefits.

(a) A
member of the police and fire plan new text begin , other than a police officer covered by section 353.6512, new text end
whose disabling condition is determined to be a duty disability that is also a permanent
and total disability as defined in section 353.01, subdivision 19, is entitled to receive, for
life, disability benefits in an amount equal to 60 percent of the average salary as defined in
section 353.01, subdivision 17a, plus an additional percent specified in section 356.315,
subdivision 6, of that average salary for each year of service in excess of 20 years.

(b) A disability benefit payable under paragraph (a) is subject to eligibility review
under section 353.33, subdivision 6, but the review may be waived if the executive
director receives a written statement from the association's medical advisor that no
improvement can be expected in the member's disabling condition that was the basis for
payment of the benefit under paragraph (a). A member receiving a disability benefit
under this subdivision who is found to no longer be permanently and totally disabled as
defined under section 353.01, subdivision 19, but continues to meet the definition for
receipt of a duty disability under section 353.01, subdivision 41, is subject to subdivision
1 upon written notice from the association's medical advisor that the person is no longer
considered permanently and totally disabled.

(c) If a member approved for disability benefits under this subdivision dies before
attaining normal retirement age as defined in section 353.01, subdivision 37, paragraph
(b), or within 60 months of the effective date of the disability, whichever is later,
the surviving spouse is entitled to receive a survivor benefit under section 353.657,
subdivision 2, paragraph (a), clause (1), if the death is the direct result of the disabling
condition for which disability benefits were approved, or section 353.657, subdivision
2, paragraph (a), clause (2), if the death is not directly related to the disabling condition
for which benefits were approved under this subdivision.

(d) If the election of an actuarial equivalent optional annuity is not made at the time
the permanent and total disability benefit accrues, an election must be made within 90
days before the member attains normal retirement age as defined under section 353.01,
subdivision 37, paragraph (b), or having collected total and permanent disability benefits
for 60 months, whichever is later. If a member receiving disability benefits who has
dependent children dies, subdivision 6a, paragraph (c), applies.

Sec. 10.

Minnesota Statutes 2010, section 353.656, subdivision 3, is amended to read:

Subd. 3.

Regular disability benefit.

(a) A member of the police and fire plan new text begin , other
than a police officer covered by section 353.6512, new text end who qualifies for a regular disability
benefit as defined in section 353.01, subdivision 46, is entitled to receive a disability
benefit, after filing a valid application, in an amount equal to 45 percent of the average
salary as defined in section 353.01, subdivision 17a.

(b) To be eligible for a benefit under paragraph (a), the member must have at least
one year of allowable service credit and have:

(1) not met the requirements for a retirement annuity under section 353.651,
subdivision 1, or

(2) met the requirements under that subdivision, but does not have at least 15 years
of allowable service credit.

(c) If paragraph (b), clause (2), applies, the disability benefit must be paid for a
period of 60 months from the disability benefit accrual date and, at the end of that period,
is subject to provisions of subdivision 5a.

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

Sec. 11.

Minnesota Statutes 2010, section 353.656, subdivision 3a, is amended to read:

Subd. 3a.

Total and permanent regular disability; computation of benefits.

(a) A member of the police and fire plan new text begin , other than a police officer covered by section
353.6512, new text end whose disabling condition is determined to be a regular disability under section
353.01, subdivision 46, that is also a permanent and total disability as defined in section
353.01, subdivision 19, is entitled to receive, for life, a disability benefit in an amount
equal to 45 percent of the average salary as defined in section 353.01, subdivision 17a,
plus an additional percent specified in section 356.315, subdivision 6, of that average
salary for each year of service in excess of 15 years.

(b) A disability benefit payable under paragraph (a) is subject to eligibility review
under section 353.33, subdivision 6, but the review may be waived if the executive
director receives a written statement from the association's medical advisor that no
improvement can be expected in the member's disabling condition that was the basis for
payment of the benefit under paragraph (a). A member receiving a disability benefit under
this subdivision who is found to no longer be permanently and totally disabled as defined
under section 353.01, subdivision 19, but continues to meet the definition for receipt
of a regular disability under section 353.01, subdivision 46, is subject to subdivision 3
upon written notice from the association's medical advisor that the person is no longer
considered permanently and totally disabled.

(c) A member approved for disability benefits under this subdivision may elect
to receive a normal disability benefit or an actuarial equivalent optional annuity. If the
election of an actuarial equivalent optional annuity is not made at the time the total and
permanent disability benefit accrues, an election must be made within 90 days before
the member attains normal retirement age as defined in section 353.01, subdivision 37,
paragraph (b), or having collected disability benefits for 60 months, whichever is later.
No surviving spouse benefits are payable if the member dies during the period in which
a normal total and permanent disability benefit is being paid. If a member receiving
disability benefits who has dependent children dies, subdivision 6a, paragraph (c), applies.

Sec. 12.

Minnesota Statutes 2010, section 353.657, subdivision 1, is amended to read:

Subdivision 1.

Generally.

(a) In the event that a member of the police and fire
fund new text begin , other than a police officer covered by section 353.6512, new text end dies from any cause
before retirement or before becoming disabled and receiving disability benefits, the
association shall grant survivor benefits to a surviving spouse, as defined in section
353.01, subdivision 20, and to a dependent child or children, as defined in section 353.01,
subdivision 15, except that if the death is not a line of duty death, the member must be
vested under section 353.01, subdivision 47.

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

(c) The spouse and child or children are entitled to monthly benefits as provided in
subdivisions 2 to 4.

Sec. 13.

new text begin [353.668] CONSOLIDATION OF THE MINNEAPOLIS POLICE
RELIEF ASSOCIATION.
new text end

new text begin Subdivision 1. new text end

new text begin Membership transfer. new text end

new text begin On the effective date of consolidation under
section 16, the active, inactive, and retired members of the Minneapolis Police Relief
Association are transferred to the public employees police and fire retirement plan, are no
longer members of the Minneapolis Police Relief Association, and are members of the
public employees police and fire retirement plan.
new text end

new text begin Subd. 2. new text end

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

new text begin (a) Allowable service credit
and base salary credit of the active members of the Minneapolis Police Relief Association,
as contained in the records of the Minneapolis Police Relief Association through the
day before the effective date of consolidation under section 16, are transferred to the
public employees police and fire retirement plan and is credited as provided in section
353.01, subdivisions 10a and 16, paragraph (c), on the effective date of consolidation
under section 16.
new text end

new text begin (b) The liability for the payment of retirement annuities, service pensions, and
retirement benefits of the Minneapolis Police Relief Association retired members, service
pensioners, disabilitants, and other retirement benefit recipients as specified in the records
of the Minneapolis Police Relief Association is transferred to the public employees police
and fire retirement plan on the effective date of consolidation under section 16.
new text end

new text begin Subd. 3. new text end

new text begin Transfer of records. new text end

new text begin On the effective date of the consolidation under
section 16, the chief administrative officer of the Minneapolis Police Relief Association
shall transfer all records and documents relating to the Minneapolis Police Relief
Association to the executive director of the Public Employees Retirement Association. To
the extent possible, original copies of all records and documents must be transferred.
new text end

new text begin Subd. 4. new text end

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

new text begin (a) On the effective date
of the consolidation under section 16, the chief administrative officer of the Minneapolis
Police Relief Association shall transfer the entire assets of the special fund of the
Minneapolis Police Relief Association to the public employees police and fire retirement
fund. The transfer must include any accounts receivable that are determined by the
State Board of Investment as being capable of being collected. An amount, in cash,
must be transferred by the city of Minneapolis equal to the carrying value recognized
by the relief association of investment securities that are determined to be ineligible or
inappropriate by the executive director of the State Board of Investment or of accounts
receivable determined as being incapable of being collected by the executive director of
the State Board of Investment. Legal and beneficial title to assets that are ineligible or
inappropriate securities or that are uncollectible accounts receivable are transferred to the
city of Minneapolis on the effective date of consolidation under section 16. Any accounts
payable on the effective date of consolidation under section 16 are an obligation of the
city of Minneapolis.
new text end

new text begin (b) Upon the transfer of assets to the State Board of Investment under paragraph (a),
legal title to those transferred assets vests with the State Board of Investment on behalf of
the public employees police and fire retirement plan, and beneficial title to the transferred
assets remains with the membership of the former Minneapolis Police Relief Association.
new text end

new text begin (c) The public employees police and fire retirement plan and fund is the successor
in interest to all claims for or against the Minneapolis Police Relief Association, but
the public employees police and fire retirement plan and fund is not liable for any
claim against the Minneapolis Police Relief Association, its governing board, or its
administrative staff acting in a fiduciary capacity, under chapter 356A or common law,
which is founded upon a claim of a breach of fiduciary duty, but where the act or acts
constituting the claimed breach were not undertaken in good faith. The public employees
police and fire retirement plan may assert any applicable defense to any claim in any
judicial or administrative proceeding that the Minneapolis Police Relief Association, its
board, or its administrative staff would otherwise have been entitled to assert, and the
public employees police and fire retirement plan may assert any applicable defense that it
has in its capacity as a statewide agency.
new text end

new text begin Subd. 5. new text end

new text begin Benefits. new text end

new text begin The annuities, service pensions, and other retirement benefits
of or attributable to retired, disabled, deferred, or inactive Minneapolis Police Relief
Association members who had that status as of the day before the effective date of
consolidation under section 16 continue after consolidation in the same amount and under
the same terms as provided in Minnesota Statutes 2010, chapter 423B, except that the base
monthly salary is governed by section 353.01, subdivision 10b, and the postretirement
adjustments must be calculated solely under section 353.6512, subdivision 8.
new text end

new text begin Subd. 6. new text end

new text begin Additional asset transfers. new text end

new text begin As of the effective date of the consolidation
under section 16, the approved actuary retained by the Public Employees Retirement
Association shall calculate the present value of future benefits of the former Minneapolis
Police Relief Association, and, after subtracting the market value of the transferred
assets of the former Minneapolis Police Relief Association and the present value of the
employer contribution under section 353.64, subdivision 3, paragraph (c), shall calculate
the remainder present value of future benefits amount. Annually, following the effective
date of consolidation under section 16, the city of Minneapolis shall amortize on a level
annual dollar basis the remainder present value of future benefits amount by December 31,
2020. The amortization payment is payable annually on December 1.
new text end

Sec. 14.

Minnesota Statutes 2010, section 423A.02, subdivision 1b, is amended to read:

Subd. 1b.

Additional amortization state aid.

(a) Annually, on October 1, the
commissioner of revenue shall allocate the additional amortization state aid transferred
under section 69.021, subdivision 11, to:

(1) all police or salaried firefighters relief associations governed by and in full
compliance with the requirements of section 69.77, that had an unfunded actuarial accrued
liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the
preceding December 31;

(2) all local police or salaried firefighter consolidation accounts governed by chapter
353A that are certified by the executive director of the public employees retirement
association as having for the current fiscal year an additional municipal contribution
amount under section 353A.09, subdivision 5, paragraph (b), and that have implemented
section 353A.083, subdivision 1, if the effective date of the consolidation preceded May
24, 1993, and that have implemented section 353A.083, subdivision 2, if the effective date
of the consolidation preceded June 1, 1995; and

(3) the municipalities that are required to make an additional municipal contribution
under section 353.665, subdivision 8, new text begin or 353.668, subdivision 6, new text end for the duration of the
required additional contribution.

(b) The commissioner shall allocate the state aid on the basis of the proportional share
of the relief association or consolidation account of the total unfunded actuarial accrued
liability of all recipient relief associations and consolidation accounts as of December 31,
1993, for relief associations, and as of June 30, 1994, for consolidation accounts.

(c) Beginning October 1, 2000, and annually thereafter, the commissioner shall
allocate the state aid, including any state aid in excess of the limitation in subdivision
4, on the following basis:

(1) 64.5 percent to the municipalities to which section 353.665, subdivision
8, paragraph (b), or 353A.09, subdivision 5, paragraph (b), apply for distribution in
accordance with paragraph (b) and subject to the limitation in subdivision 4;

(2) 34.2 percent to the city of Minneapolis to fund any unfunded actuarial accrued
liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the
preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis
Fire Department Relief Association; and

(3) 1.3 percent to the city of Virginia to fund any unfunded actuarial accrued liability
in the actuarial valuation prepared under sections 356.215 and 356.216 as of the preceding
December 31 for the Virginia Fire Department Relief Association.

If there is no unfunded actuarial accrued liability in both the Minneapolis Police
Relief Association and the Minneapolis Fire Department Relief Association as disclosed
in the most recent actuarial valuations for the relief associations prepared under sections
356.215 and 356.216, the commissioner shall allocate that 34.2 percent of the aid as
follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul
Teachers Retirement Fund Association, and 30 percent as additional funding to support
minimum fire state aid for volunteer firefighters relief associations. If there is no unfunded
actuarial accrued liability in the Virginia Fire Department Relief Association as disclosed
in the most recent actuarial valuation for the relief association prepared under sections
356.215 and 356.216, the commissioner shall allocate that 1.3 percent of the aid as
follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul
Teachers Retirement Fund Association, and 30 percent as additional funding to support
minimum fire state aid for volunteer firefighters relief associations. Upon the final
payment to municipalities required by section 353.665, subdivision 8, paragraph (b),
or 353A.09, subdivision 5, paragraph (b), the commissioner shall allocate that 64.5
percent of the aid as follows: 20 percent to the St. Paul Teachers Retirement Fund
Association, 20 percent to the city of Minneapolis to fund any unfunded actuarial accrued
liability in the actuarial valuation proposed under sections 356.215 and 356.216 as of the
preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis
Firefighters Relief Association, 20 percent for the city of Duluth to pay for any costs
associated with the police and firefighters pensions, and 40 percent as additional funding to
support minimum fire state aid for volunteer firefighters relief associations. The allocation
must be made by the commissioner at the same time and under the same procedures
as specified in subdivision 3. With respect to the St. Paul Teachers Retirement Fund
Association, annually, beginning on July 1, 2005, if the applicable teacher's association
five-year average time-weighted rate of investment return does not equal or exceed the
performance of a composite portfolio assumed passively managed (indexed) invested ten
percent in cash equivalents, 60 percent in bonds and similar debt securities, and 30 percent
in domestic stock calculated using the formula under section 11A.04, clause (11), the aid
allocation to that retirement fund under this section ceases until the five-year annual rate
of investment return equals or exceeds the performance of that composite portfolio.

(d) The amounts required under this subdivision are the amounts annually
appropriated to the commissioner of revenue under section 69.021, subdivision 11,
paragraph (e).

Sec. 15. new text begin MINNEAPOLIS POLICE RELIEF ASSOCIATION; SPECIAL
ACTUARIAL VALUATION PENDING CONSOLIDATION.
new text end

new text begin (a) On or before August 1, 2011, the approved actuarial consulting firm retained
by the Public Employees Retirement Association under Minnesota Statutes, section
356.214, shall prepare an alternative actuarial valuation of the Minneapolis Police Relief
Association under Minnesota Statutes, section 356.215, and the most recent standards for
actuarial work adopted by the Legislative Commission on Pensions and Retirement as
of December 31, 2009, using the applicable actuarial assumptions and the applicable
amortization target date of the public employee police and fire retirement plan.
new text end

new text begin (b) The board of trustees of the Minneapolis Police Relief Association shall supply
the approved actuary retained by the Public Employees Retirement Association with the
financial and demographic data necessary to perform the alternative actuarial valuation.
new text end

new text begin (c) The alternative actuarial valuation of the Minneapolis Police Relief Association
shall be filed with the mayor of the city of Minneapolis, with the Minneapolis city
coordinator, with the executive director of the Minneapolis Police Relief Association,
with the executive director of the Public Employees Retirement Association, with the
executive director of the Legislative Commission on Pensions and Retirement, and with
the Legislative Reference Library.
new text end

new text begin (d) The expense of preparing the alternative actuarial valuation must be paid by the
city of Minneapolis within 30 days of its certification to the finance director of the city of
Minneapolis by the executive director of the Public Employees Retirement Association.
new text end

Sec. 16. new text begin EFFECTIVE DATE; LOCAL APPROVAL.
new text end

new text begin Sections 1 to 15 are effective December 31, 2011, if the board of trustees of the
Minneapolis Police Relief Association approves the article, if the chief administrative
officer of the Minneapolis Police Relief Association certifies that approval to the mayor
of the city of Minneapolis and the president of the Minneapolis city council, and if the
governing body of the city of Minneapolis and the chief clerical officer of Minneapolis
timely complete their compliance with Minnesota Statutes, section 645.021, subdivisions
2 and 3, on or before September 30, 2011, or on the first day of the month occurring two
months after the governing body of the city of Minneapolis and the chief clerical officer of
Minneapolis timely complete their compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3, if that completion occurs on or after October 1, 2011.
new text end