1st Engrossment - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to retirement; various public pension plans 1.3 and retirement programs; including seasonal revenue 1.4 department employees in general state employee 1.5 retirement plan coverage; modifying various pension 1.6 provisions relating to the Minnesota state colleges 1.7 and universities, the higher education individual 1.8 retirement account plan, and the higher education 1.9 supplemental retirement plan; requiring a study by the 1.10 state board of investment on tax-sheltered annuities 1.11 and the evaluation of insurance companies providing 1.12 tax-sheltered annuities; providing for the 1.13 requalification for police and paid firefighter relief 1.14 association amortization state aid in certain 1.15 instances; clarifying the handling of unclaimed money 1.16 and property obtained by the Minneapolis police 1.17 department; modifying the retirement date for certain 1.18 Hibbing high school teachers; revising and 1.19 streamlining the investment performance reporting 1.20 requirements of various public pension plans; 1.21 modifying penalty provisions for noncompliance with 1.22 investment performance reporting requirements; 1.23 authorizing certain Minnesota correctional 1.24 facility-Red Wing employees to elect correctional 1.25 state employee retirement plan coverage; authorizing 1.26 various correctional employees to transfer prior 1.27 eligible service credit to the correctional state 1.28 employee retirement plan; authorizing certain 1.29 Minnesota state colleges and universities faculty a 1.30 limited exemption from the general state employees 1.31 retirement plan reemployed annuitant earnings 1.32 limitation; authorizing the teachers retirement 1.33 association to accept a beneficiary designation change 1.34 form filed late; authorizing certain public employees 1.35 retirement association disabilitants to purchase 1.36 service credit for a period of uncredited St. Paul 1.37 parks and recreation division employment; amending 1.38 Minnesota Statutes 1996, sections 69.051, subdivisions 1.39 1, 1a, and 1b; 136F.45, by adding subdivisions; 1.40 352.01, subdivisions 2a and 2b; 354B.21, subdivision 1.41 3; 354C.11; 356.20, by adding a subdivision; 356.219; 1.42 423A.02, subdivision 2; 423B.06, subdivisions 1 and 1.43 1a; 424A.02, subdivision 10; and Laws 1996, chapter 1.44 408, article 8, sections 21, 22, subdivision 1, and 1.45 24; repealing Minnesota Statutes 1996, section 1.46 356.218; and Laws 1995, chapter 262, article 1, 2.1 sections 8, 9, 10, 11, and 12. 2.2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.3 ARTICLE 1 2.4 GENERAL STATEWIDE EMPLOYEE PENSION 2.5 PLAN MODIFICATIONS 2.6 Section 1. Minnesota Statutes 1996, section 136F.45, is 2.7 amended by adding a subdivision to read: 2.8 Subd. 3. [TAX-SHELTERED ANNUITY ADMINISTRATIVE 2.9 EXPENSES.] (a) The reasonable and necessary administrative 2.10 expenses of the tax-sheltered annuity program, to a maximum of 2.11 $5 for each participant, must be paid by the financial 2.12 institutions authorized by the board of trustees of the 2.13 Minnesota state colleges and universities system to provide 2.14 tax-sheltered annuity investment options. 2.15 (b) Annually, the board of trustees shall establish a 2.16 budget for the tax-sheltered annuity program administrative 2.17 expenses. The total budgeted administrative expense must be 2.18 allocated among the applicable financial institutions by the 2.19 board of trustees. 2.20 Sec. 2. Minnesota Statutes 1996, section 136F.45, is 2.21 amended by adding a subdivision to read: 2.22 Subd. 4. [PERIODIC REVIEW.] If the board so chooses, it 2.23 may solicit bids or proposals for options under subdivision 1. 2.24 The board may retain consulting services to assist it in 2.25 soliciting and evaluating bids or proposals and in the periodic 2.26 review of companies offering options under subdivision 1. The 2.27 board may annually establish a budget for its costs in the 2.28 soliciting, evaluating, and periodic review processes. The 2.29 board may charge a proportional share of all costs related to 2.30 the periodic review to each company currently under contract and 2.31 may charge a proportional share of all costs related to 2.32 soliciting and evaluating bids or proposals to each company 2.33 selected by the board. Contracts must provide that all options 2.34 in subdivision 1 must: (1) be presented in an unbiased manner, 2.35 (2) be reported on a periodic basis to all employees 2.36 participating in the tax-sheltered annuity program, and (3) not 3.1 be the subject of unreasonable solicitation of state employees 3.2 to participate in the program. The contract may not permit any 3.3 person to jeopardize the tax-deferred status of money invested 3.4 by state employees under this section. All costs or fees in 3.5 relation to the bid solicitation and evaluation process for the 3.6 options provided under subdivision 1 must be paid by the 3.7 underwriting companies ultimately selected by the board. 3.8 Sec. 3. Minnesota Statutes 1996, section 352.01, 3.9 subdivision 2a, is amended to read: 3.10 Subd. 2a. [INCLUDED EMPLOYEES.] (a) "State employee" 3.11 includes: 3.12 (1) employees of the Minnesota historical society; 3.13 (2) employees of the state horticultural society; 3.14 (3) employees of the Disabled American Veterans, Department 3.15 of Minnesota, Veterans of Foreign Wars, Department of Minnesota, 3.16 if employed before July 1, 1963; 3.17 (4) employees of the Minnesota crop improvement 3.18 association; 3.19 (5) employees of the adjutant general who are paid from 3.20 federal funds and who are not covered by any federal civilian 3.21 employees retirement system; 3.22 (6) employees of the state universities employed under the 3.23 university activities program; 3.24 (7) currently contributing employees covered by the system 3.25 who are temporarily employed by the legislature during a 3.26 legislative session or any currently contributing employee 3.27 employed for any special service as defined in clause (8) of 3.28 subdivision 2b; 3.29 (8) employees of the armory building commission; 3.30 (9) permanent employees of the legislature and persons 3.31 employed or designated by the legislature or by a legislative 3.32 committee or commission or other competent authority to conduct 3.33 a special inquiry, investigation, examination, or installation; 3.34 (10) trainees who are employed on a full-time established 3.35 training program performing the duties of the classified 3.36 position for which they will be eligible to receive immediate 4.1 appointment at the completion of the training period; 4.2 (11) employees of the Minnesota safety council; 4.3 (12) any employees on authorized leave of absence from the 4.4 transit operating division of the former metropolitan transit 4.5 commission who are employed by the labor organization which is 4.6 the exclusive bargaining agent representing employees of the 4.7 transit operating division; 4.8 (13) employees of the metropolitan council, metropolitan 4.9 parks and open space commission, metropolitan sports facilities 4.10 commission, metropolitan mosquito control commission, or 4.11 metropolitan radio board unless excluded or covered by another 4.12 public pension fund or plan under section 473.415, subdivision 4.13 3; 4.14 (14) judges of the tax court;
and4.15 (15) personnel employed on June 30, 1992, by the University 4.16 of Minnesota in the management, operation, or maintenance of its 4.17 heating plant facilities, whose employment transfers to an 4.18 employer assuming operation of the heating plant facilities, so 4.19 long as the person is employed at the University of Minnesota 4.20 heating plant by that employer or by its successor organization; 4.21 (16) seasonal help in the classified service employed by 4.22 the department of revenue; and 4.23 (17) a person who renders teaching or other service for the 4.24 Minnesota state colleges and universities system and who also 4.25 renders service on a part-time basis for an employer with 4.26 employees covered by the general state employees retirement plan 4.27 of the Minnesota state retirement system, for all service with 4.28 the Minnesota state colleges and universities system, if the 4.29 person's nonteaching service comprises at least 50 percent of 4.30 the combined total salary received by the person as determined 4.31 by the chancellor of the Minnesota state colleges and 4.32 universities system or if the person is certified for general 4.33 state employees retirement plan coverage by the chancellor of 4.34 the Minnesota state colleges and universities system. 4.35 (b) Employees specified in paragraph (a), clause (15), are 4.36 included employees under paragraph (a) providing thatif 5.1 employer and employee contributions are made in a timely manner 5.2 in the amounts required by section 352.04. Employee 5.3 contributions must be deducted from salary. Employer 5.4 contributions are the sole obligation of the employer assuming 5.5 operation of the University of Minnesota heating plant 5.6 facilities or any successor organizations to that employer. 5.7 Sec. 4. Minnesota Statutes 1996, section 352.01, 5.8 subdivision 2b, is amended to read: 5.9 Subd. 2b. [EXCLUDED EMPLOYEES.] "State employee" does not 5.10 include: 5.11 (1) elective state officers; 5.12 (2) students employed by the University of Minnesota, the 5.13 state universities, and community colleges unless approved for 5.14 coverage by the board of regents, the state university board, or 5.15 the state board for community colleges, as the case may be; 5.16 (3) employees who are eligible for membership in the state 5.17 teachers retirement association except employees of the 5.18 department of children, families, and learning who have chosen 5.19 or may choose to be covered by the Minnesota state retirement 5.20 system instead of the teachers retirement association; 5.21 (4) employees of the University of Minnesota who are 5.22 excluded from coverage by action of the board of regents; 5.23 (5) officers and enlisted personnel in the national guard 5.24 and the naval militia who are assigned to permanent peacetime 5.25 duty and who under federal law are or are required to be members 5.26 of a federal retirement system; 5.27 (6) election officers; 5.28 (7) persons engaged in public work for the state but 5.29 employed by contractors when the performance of the contract is 5.30 authorized by the legislature or other competent authority; 5.31 (8) officers and employees of the senate and house of 5.32 representatives or a legislative committee or commission who are 5.33 temporarily employed; 5.34 (9) receivers, jurors, notaries public, and court employees 5.35 who are not in the judicial branch as defined in section 43A.02, 5.36 subdivision 25, except referees and adjusters employed by the 6.1 department of labor and industry; 6.2 (10) patient and inmate help in state charitable, penal, 6.3 and correctional institutions including the Minnesota veterans 6.4 home; 6.5 (11) persons employed for professional services where the 6.6 service is incidental to regular professional duties and whose 6.7 compensation is paid on a per diem basis; 6.8 (12) employees of the Sibley House Association; 6.9 (13) the members of any state board or commission who serve 6.10 the state intermittently and are paid on a per diem basis; the 6.11 secretary, secretary-treasurer, and treasurer of those boards if 6.12 their compensation is $5,000 or less per year, or, if they are 6.13 legally prohibited from serving more than three years; and the 6.14 board of managers of the state agricultural society and its 6.15 treasurer unless the treasurer is also its full-time secretary; 6.16 (14) state troopers; 6.17 (15) temporary employees of the Minnesota state fair 6.18 employed on or after July 1 for a period not to extend beyond 6.19 October 15 of that year; and persons employed at any time by the 6.20 state fair administration for special events held on the 6.21 fairgrounds; 6.22 (16) emergency employees in the classified service; except 6.23 that if an emergency employee, within the same pay period, 6.24 becomes a provisional or probationary employee on other than a 6.25 temporary basis, the employee shall be considered a "state 6.26 employee" retroactively to the beginning of the pay period; 6.27 (17) persons described in section 352B.01, subdivision 2, 6.28 clauses (2) to (5); 6.29 (18) temporary employees in the classified service, and 6.30 temporary employees in the unclassified service appointed for a 6.31 definite period of not more than six months and employed less 6.32 than six months in any one-year period and seasonal help in the6.33 classified service employed by the department of revenue; 6.34 (19) trainee employees, except those listed in subdivision 6.35 2a, clause (10); 6.36 (20) persons whose compensation is paid on a fee basis; 7.1 (21) state employees who in any year have credit for 12 7.2 months service as teachers in the public schools of the state 7.3 and as teachers are members of the teachers retirement 7.4 association or a retirement system in St. Paul, Minneapolis, or 7.5 Duluth; 7.6 (22) employees of the adjutant general employed on an 7.7 unlimited intermittent or temporary basis in the classified and 7.8 unclassified service for the support of army and air national 7.9 guard training facilities; 7.10 (23) chaplains and nuns who are excluded from coverage 7.11 under the federal Old Age, Survivors, Disability, and Health 7.12 Insurance Program for the performance of service as specified in 7.13 United States Code, title 42, section 410(a)(8)(A), as amended, 7.14 if no irrevocable election of coverage has been made under 7.15 section 3121(r) of the Internal Revenue Code of 1986, as amended 7.16 through December 31, 1992; 7.17 (24) examination monitors employed by departments, 7.18 agencies, commissions, and boards to conduct examinations 7.19 required by law; 7.20 (25) persons appointed to serve as members of fact-finding 7.21 commissions or adjustment panels, arbitrators, or labor referees 7.22 under chapter 179; 7.23 (26) temporary employees employed for limited periods under 7.24 any state or federal program for training or rehabilitation 7.25 including persons employed for limited periods from areas of 7.26 economic distress except skilled and supervisory personnel and 7.27 persons having civil service status covered by the system; 7.28 (27) full-time students employed by the Minnesota 7.29 historical society intermittently during part of the year and 7.30 full-time during the summer months; 7.31 (28) temporary employees, appointed for not more than six 7.32 months, of the metropolitan council and of any of its statutory 7.33 boards, if the board members are appointed by the metropolitan 7.34 council; 7.35 (29) persons employed in positions designated by the 7.36 department of employee relations as student workers; 8.1 (30) members of trades employed by the successor to the 8.2 metropolitan waste control commission with trade union pension 8.3 plan coverage under a collective bargaining agreement first 8.4 employed after June 1, 1977; 8.5 (31) persons employed in subsidized on-the-job training, 8.6 work experience, or public service employment as enrollees under 8.7 the federal Comprehensive Employment and Training Act after 8.8 March 30, 1978, unless the person has as of the later of March 8.9 30, 1978, or the date of employment sufficient service credit in 8.10 the retirement system to meet the minimum vesting requirements 8.11 for a deferred annuity, or the employer agrees in writing on 8.12 forms prescribed by the director to make the required employer 8.13 contributions, including any employer additional contributions, 8.14 on account of that person from revenue sources other than funds 8.15 provided under the federal Comprehensive Employment and Training 8.16 Act, or the person agrees in writing on forms prescribed by the 8.17 director to make the required employer contribution in addition 8.18 to the required employee contribution; 8.19 (32) off-duty peace officers while employed by the 8.20 metropolitan council; 8.21 (33) persons who are employed as full-time police officers 8.22 by the metropolitan council and as police officers are members 8.23 of the public employees police and fire fund; 8.24 (34) persons who are employed as full-time firefighters by 8.25 the department of military affairs and as firefighters are 8.26 members of the public employees police and fire fund; 8.27 (35) foreign citizens with a work permit of less than three 8.28 years, or an H-1b/JV visa valid for less than three years of 8.29 employment, unless notice of extension is supplied which allows 8.30 them to work for three or more years as of the date the 8.31 extension is granted, in which case they are eligible for 8.32 coverage from the date extended; and 8.33 (36) persons who are employed by the board of trustees of 8.34 the Minnesota state colleges and universities and who elect to 8.35 remain members of the public employees retirement association or 8.36 the Minneapolis employees retirement fund, whichever applies, 9.1 under section 136C.75. 9.2 Sec. 5. Minnesota Statutes 1996, section 354B.21, 9.3 subdivision 3, is amended to read: 9.4 Subd 3. [DEFAULT COVERAGE.] (a) If an eligible person 9.5 fails to elect coverage by the plan under subdivision 2 or if 9.6 the person fails to make a timely election, the following 9.7 retirement coverage applies: 9.8 (1) for employees of the board who are employed in faculty 9.9 positions in the technical colleges, in the state universities 9.10 or in the community colleges, the retirement coverage is by the 9.11 plan established by this chapter; 9.12 (2) for employees of the board who are employed in faculty 9.13 positions in the technical colleges, the retirement coverage is 9.14 by the plan established by this chapter unless on June 30, 1997, 9.15 the employee was a member of the teachers retirement association 9.16 established under chapter 354 and then the retirement coverage 9.17 is by the teachers retirement association, or, unless the 9.18 employee was a member of a first class city teacher retirement 9.19 fund established under chapter 354A on June 30, 1995, and then 9.20 the retirement coverage is by the Duluth teachers retirement 9.21 fund association if the person was a member of that plan on June 9.22 30, 1995, or the Minneapolis teachers retirement fund 9.23 association if the person was a member of that plan on June 30, 9.24 1995, or the St. Paul teachers retirement fund association if 9.25 the person was a member of that plan on June 30, 1995; and 9.26 (3) for employees of the board who are employed in eligible 9.27 unclassified administrative positions, the retirement coverage 9.28 is by the plan established by this chapter. 9.29 (b) If an employee fails to correctly certify prior 9.30 membership in the teachers retirement association to the 9.31 Minnesota state colleges and universities system, the system 9.32 shall not pay interest on employee contributions, employer 9.33 contributions, and additional employer contributions to the 9.34 teachers retirement association under section 354.52, 9.35 subdivision 4. 9.36 Sec. 6. Minnesota Statutes 1996, section 354C.11, is 10.1 amended to read: 10.2 354C.11 [COVERAGE.] 10.3 Personnel employed by the board of trustees of the 10.4 Minnesota state colleges and universities who are in the 10.5 unclassified service of the state, and who have completed at 10.6 least two years of employment by the board or a predecessor 10.7 board with a full-time contract are participants in the 10.8 supplemental retirement plan, effective on the next following 10.9 July 1, if the person is employed in an eligible unclassified 10.10 administrative position as defined in section 354B.20, 10.11 subdivision 6, or is employed in an employment classification 10.12 included in one of the following collective bargaining units 10.13 under section 179A.10, subdivision 2: 10.14 (1) the state university instructional unit; 10.15 (2) the community college instructional unit; 10.16 (3) the technical college instructional unit; and 10.17 (4) the state university administrative unit. 10.18 Once a person qualifies for participation in the 10.19 supplemental plan, all subsequent service by the person as an 10.20 unclassified employee of the state university board, the state 10.21 board for community colleges, the higher education board, or the 10.22 technical colleges is covered by the supplemental plan. 10.23 Sec. 7. [PURCHASE OF SERVICE CREDIT AUTHORIZATION.] 10.24 Subdivision 1. [ELIGIBLE EMPLOYEE.] (a) An eligible 10.25 employee described in paragraph (b) is eligible to purchase 10.26 service credit in the Minnesota state retirement system general 10.27 plan as specified in subdivision 2. 10.28 (b) An eligible employee is a person who: 10.29 (1) is employed in the classified service by the department 10.30 of revenue as seasonal help, newly authorized to receive 10.31 prospective service credit under section 3; and 10.32 (2) was employed in the classified service by the 10.33 department of revenue as seasonal help in each of the last three 10.34 fiscal years. 10.35 Subd. 2. [RETIREMENT COVERAGE.] An eligible employee under 10.36 subdivision 1, paragraph (b), is entitled to purchase service 11.1 credit in the Minnesota state retirement system general plan for 11.2 the period of service prior to the effective date of section 3 11.3 as seasonal help in the classified service by the department of 11.4 revenue. Any period for which the individual has received 11.5 service credit or is eligible to receive service credit in any 11.6 other Minnesota public pension plan, other than a volunteer fire 11.7 plan, is not eligible for purchase. 11.8 Subd. 3. [AMOUNT.] (a) To receive service credit under 11.9 subdivision 2, the Minnesota state retirement system must 11.10 receive an amount equal to the actuarial present value, on the 11.11 date of payment, as calculated by the actuary retained by the 11.12 legislative commission on pensions and retirement, of the amount 11.13 of the additional retirement annuity obtained by the acquisition 11.14 of the additional service credit in this section. Calculation 11.15 of this amount must be made using the preretirement interest 11.16 rate applicable to the Minnesota state retirement system general 11.17 plan specified in Minnesota Statutes, section 356.215, 11.18 subdivision 4d, and the mortality table adopted for the pension 11.19 plan. The calculation must assume continuous future service in 11.20 the association until, and retirement at, the age at which the 11.21 minimum requirements of the fund for normal retirement or 11.22 retirement with an annuity unreduced for retirement at an early 11.23 age, including Minnesota Statutes, section 356.30, are met with 11.24 the additional service credit purchased. The calculation must 11.25 assume that the individual accrues future service credit each 11.26 year based on a three year average using the most recent three 11.27 year period prior to the effective date of section 3 for service 11.28 provided compared to full-time service. The salary used in the 11.29 calculation must be the eligible person's actual current hourly 11.30 salary. The calculation must assume a future salary history 11.31 that includes annual salary increases at the applicable salary 11.32 increase rate for the plan specified in Minnesota Statutes, 11.33 section 356.215, subdivision 4d. 11.34 (b) Payment must be made in one lump sum before July 1, 11.35 1998, or before retirement, whichever is earlier. 11.36 (c) Payment of the amount calculated under this subdivision 12.1 must be made by the eligible employee. However, the Minnesota 12.2 department of revenue may, at its discretion, pay all or any 12.3 portion of the payment amount that exceeds an amount equal to 12.4 the employee contribution rates in effect during the periods of 12.5 prior service applied to the actual salary rates in effect 12.6 during the periods of prior service, plus interest at the rate 12.7 of 8-1/2 percent a year compounded annually from the date on 12.8 which the contributions would have been made if retirement 12.9 coverage were authorized at the time, to the date on which the 12.10 payment is made. If the department agrees to payments under 12.11 this paragraph, the eligible employee must make the employee 12.12 payments required under this paragraph before July 1, 1998. If 12.13 that employee payment is made, the department payment under this 12.14 paragraph must be remitted to the executive director of the 12.15 Minnesota state retirement system within 60 days of receipt by 12.16 the executive director of the employee payments specified under 12.17 this paragraph. 12.18 Subd. 4. [SERVICE CREDIT GRANT.] Service credit for the 12.19 purchase period must be granted by the Minnesota state 12.20 retirement system to the account of the eligible employee upon 12.21 receipt of the purchase payment amount specified in subdivision 12.22 3. 12.23 Sec. 8. [STUDY.] 12.24 The state board of investment, in consultation with the 12.25 commissioner of commerce, shall study and make recommendations 12.26 to the legislature on the most desirable method for evaluating 12.27 insurance companies for purposes of Minnesota Statutes, section 12.28 356.24, subdivision 1, and on the most desirable method for the 12.29 use of Internal Revenue Code, section 403(b), annuities and the 12.30 most effective delivery mechanism to employees. The board shall 12.31 report to the legislative commission on pensions and retirement 12.32 by February 1, 1998. 12.33 Sec. 9. [REPEALER.] 12.34 Laws 1995, chapter 262, article 1, sections 8, 9, 10, 11, 12.35 and 12, are repealed. 12.36 Sec. 10. [EFFECTIVE DATE.] 13.1 Sections 1 to 9 are effective on July 1, 1997. 13.2 ARTICLE 2 13.3 PENSION MODIFICATIONS WITH 13.4 A LOCAL APPLICATION 13.5 Section 1. Minnesota Statutes 1996, section 423A.02, 13.6 subdivision 2, is amended to read: 13.7 Subd. 2. [CONTINUED ELIGIBILITY.] A municipality that has 13.8 qualified for amortization state aid under subdivision 1 on 13.9 December 31, 1984, and has an additional municipal contribution 13.10 payable under section 353A.09, subdivision 5, paragraph (b), as 13.11 of the most recent December 31, continues upon application to be 13.12 entitled to receive amortization state aid under subdivision 1 13.13 and supplementary amortization state aid under subdivision 1a, 13.14 after the local police or salaried firefighters' relief 13.15 association has been consolidated into the public employees 13.16 police and fire fund. If a municipality loses entitlement for 13.17 amortization state aid and supplementary amortization state aid 13.18 in any year because of not having an additional municipal 13.19 contribution, the municipality is not entitled to the aid 13.20 amounts in any subsequent year. If the actuarial assumptions 13.21 specified in section 356.215 are changed in 1997, and the change 13.22 results in a municipality having an additional municipal 13.23 contribution, and the municipality had previously lost 13.24 entitlement for amortization aid and supplementary amortization 13.25 due to not having an additional municipal contribution, then the 13.26 municipality is again entitled to receive amortization aid and 13.27 supplementary amortization aid in the same amount as it 13.28 previously received. 13.29 Sec. 2. Minnesota Statutes 1996, section 423B.06, 13.30 subdivision 1, is amended to read: 13.31 Subdivision 1. [SOURCES.] The fund is derived from the 13.32 following sources: 13.33 (1) gifts provided to the fund; 13.34 (2) rewards received by activemembers of the Minneapolis 13.35 police department; 13.36 (3) money coming into the hands of activemembers of the 14.1 Minneapolis police department in their official capacity and 14.2 remaining unclaimed for six months; 14.3 (4) proceeds from sales of property coming into the hands 14.4 of activemembers of the Minneapolis police department in their 14.5 official capacity and remaining unclaimed for six months, upon 14.6 sale by the chief of police of the city; 14.7 (5) an amount equal to the minimum percentage specified in 14.8 section 69.77, subdivision 2a, of the salary of a first grade 14.9 patrol officer deducted from the monthly salary of each active 14.10 member; 14.11 (6) all money derived from taxation as provided by sections 14.12 69.77, subdivisions 2b, 2c, 2d, 2e, and 2f; and 423A.01, 14.13 subdivision 2; 14.14 (7) all money received from the state amortization aid 14.15 programs under section 423A.02, to fund the unfunded actuarial 14.16 accrued liability of the association; 14.17 (8) all money received from the state under chapter 69, as 14.18 state police aid; 14.19 (9) all money provided by the state for the association in 14.20 addition to clauses (7) and (8); 14.21 (10) all money derived from taxation by the municipality 14.22 for the support of the association and the payment of pensions; 14.23 and 14.24 (11) money from the investment of, earnings on, and 14.25 interest on the assets of the fund. 14.26 Sec. 3. Minnesota Statutes 1996, section 423B.06, 14.27 subdivision 1a, is amended to read: 14.28 Subd. 1a. [SALES OF UNCLAIMED PROPERTY.] The chief of 14.29 police of the city shall sell property coming into the hands of 14.30 activemembers of the Minneapolis police department in their 14.31 official capacity and remaining unclaimed for six months. 14.32 Sec. 4. [TEACHER RETIREMENT DATE.] 14.33 Notwithstanding Minnesota Statutes, section 354.44, 14.34 subdivision 4, teachers terminating active teaching service at 14.35 the high school in independent school district No. 701, Hibbing, 14.36 during June, 1997, shall have May 30, 1997, as their date of 15.1 retirement for the purpose of receiving retirement benefits from 15.2 the teachers retirement association. 15.3 Sec. 5. [EFFECTIVE DATE.] 15.4 Sections 1 to 4 are effective on the day following final 15.5 enactment. 15.6 ARTICLE 3 15.7 INVESTMENT REPORTING MODIFICATIONS 15.8 Section 1. Minnesota Statutes 1996, section 69.051, 15.9 subdivision 1, is amended to read: 15.10 Subdivision 1. [FINANCIAL REPORT AND AUDIT.] The board of 15.11 each salaried firefighters' andrelief association, police 15.12 relief association, and of eachvolunteer firefighters' relief 15.13 association as defined in section 424A.001, subdivision 4, with 15.14 assets of at least $200,000 or liabilities of at least $200,000, 15.15 according to the most recent actuarial valuation or financial 15.16 report if no valuation is required, shall: 15.17 (a)(1) prepare a financial report covering the special and 15.18 general funds of the relief association for the preceding fiscal 15.19 year on a form prescribed by the state auditor. The financial 15.20 report shall contain financial statements and disclosures which 15.21 present the true financial condition of the relief association 15.22 and the results of relief association operations in conformity 15.23 with generally accepted accounting principles and in compliance 15.24 with the regulatory, financing and funding provisions of this 15.25 chapter and any other applicable laws. The financial report 15.26 shall be countersigned by the municipal clerk or clerk-treasurer 15.27 of the municipality in which the relief association is located 15.28 if the relief association is a firefighters' relief association 15.29 which is directly associated with a municipal fire department or 15.30 is a police relief association, or countersigned by the 15.31 secretary of the independent nonprofit firefighting corporation 15.32 and by the municipal clerk or clerk-treasurer of the largest 15.33 municipality in population which contracts with the independent 15.34 nonprofit firefighting corporation if the relief association is 15.35 a subsidiary of an independent nonprofit firefighting 15.36 corporation; 16.1 (b)(2) file the financial report in its office for public 16.2 inspection and present it to the city council after the close of 16.3 the fiscal year. One copy of the financial report shall be 16.4 furnished to the state auditor after the close of the fiscal 16.5 year; and 16.6 (c)(3) submit to the state auditor audited financial 16.7 statements which have been attested to by a certified public 16.8 accountant, public accountant, or the state auditor within 180 16.9 days after the close of the fiscal year , except that the state16.10 auditor may upon request of a city and a showing of inability to16.11 conform, extend the deadline. The state auditor may accept this 16.12 report in lieu of the report required in clause (b)(2). 16.13 Sec. 2. Minnesota Statutes 1996, section 69.051, 16.14 subdivision 1a, is amended to read: 16.15 Subd. 1a. [FINANCIAL STATEMENT.] (a) The board of each 16.16 volunteer firefighters' relief association and each independent16.17 nonprofit firefighting corporation, as defined in section 16.18 424A.001, subdivision 4, with assets of less than $200,000 and 16.19 liabilities less than $200,000, according to the most recent 16.20 financial report, shall :16.21 (a)prepare a detailed statement of the financial affairs 16.22 for the preceding fiscal year of the relief association's 16.23 special and general funds in the style and form prescribed by 16.24 the state auditor , for the preceding fiscal year showing all16.25 money received, with the sources, and respective amounts16.26 thereof. The detailed statement must show the sources and 16.27 amounts of all money received; all disbursements for which16.28 orders have been drawn upon the treasurer; all; accounts 16.29 payable ; alland accounts receivable; the amount of money 16.30 remaining in the treasury; total assets including a listing of 16.31 all investments; the accrued liabilities; and all items 16.32 necessary to show accurately the revenues and expenditures and 16.33 financial position of the relief association ;. 16.34 (b) The detailed financial statement shallrequired under 16.35 paragraph (a) must be certified by an independent public 16.36 accountant or auditor or by the auditor or accountant who 17.1 regularly examines or audits the financial transactions of the 17.2 municipality. In addition to certifying the financial condition 17.3 of the special and general funds of the relief association, the 17.4 accountant or auditor conducting the examination shall give an 17.5 opinion as to the condition of the special and general funds of 17.6 the relief association, and shall comment upon any exceptions to 17.7 the report. The independent accountant or auditor shall have at 17.8 least five years of public accounting, auditing, or similar 17.9 experience, and shall not be an active, inactive, or retired 17.10 member of the relief association or the fire or police 17.11 department ;. 17.12 (c) The detailed statement shallrequired under paragraph 17.13 (a) must be countersigned by the municipal clerk or 17.14 clerk-treasurer of the municipality, or, where applicable, by 17.15 the secretary of the independent nonprofit firefighting 17.16 corporation and by the municipal clerk or clerk-treasurer of the 17.17 largest municipality in population which contracts with the 17.18 independent nonprofit firefighting corporation if the relief 17.19 association is a subsidiary of an independent nonprofit 17.20 firefighting corporation ;. 17.21 (d) The volunteer firefighters' relief association board 17.22 must file the detailed statement required under paragraph (a) in 17.23 the relief association office for public inspection and present 17.24 it to the city council within 45 days after the close of the 17.25 fiscal year ;, and must 17.26 (e)submit within 90 days after the close of the fiscal17.27 yeara copy of the detailed statement to the state auditor 17.28 within 90 days of the close of the fiscal year. 17.29 Sec. 3. Minnesota Statutes 1996, section 69.051, 17.30 subdivision 1b, is amended to read: 17.31 Subd. 1b. [QUALIFICATION.] The state auditor may, upon a 17.32 demonstration by a relief association of hardship or inability 17.33 to conform, extend the deadline for reports under subdivision 1 17.34 or 1a, but not beyond November 30 following the due date. If 17.35 the reports are not received by November 30, the municipality or 17.36 relief association will forfeit its current year state aid, and 18.1 until the state auditor receives the required information, the 18.2 relief or municipality will be ineligible to receive any future 18.3 state aid. A municipality or police or firefighters' relief 18.4 association shall not qualify initially to receive, or be 18.5 entitled subsequently to retain, state aid pursuant to this 18.6 chapter if the financial reporting requirement or the applicable 18.7 requirements of this chapter or any other statute or special law 18.8 have not been complied with or are not fulfilled. 18.9 Sec. 4. Minnesota Statutes 1996, section 356.20, is 18.10 amended by adding a subdivision to read: 18.11 Subd. 4b. [ADDITIONAL REPORTING REQUIREMENTS.] Pension 18.12 funds referred to in subdivision 2, clauses (5) to (10), must 18.13 include, as part of the report required by this section, the 18.14 information required under section 356.219. A pension fund 18.15 which fails to include that information is subject to penalties 18.16 specified in section 356.219, subdivision 5. The office of the 18.17 state auditor is authorized to develop forms to facilitate the 18.18 reporting required under this subdivision. For pension funds 18.19 subject to this subdivision, at the time when reports are filed 18.20 under subdivision 3, a copy of the reports must also be 18.21 delivered to the office of the state auditor. 18.22 Sec. 5. Minnesota Statutes 1996, section 356.219, is 18.23 amended to read: 18.24 356.219 [DISCLOSURE OF ADDITIONALPUBLIC PENSION PLAN 18.25 INVESTMENT INFORMATION.] 18.26 Subdivision 1. [REPORT REQUIRED.] (a) Except as indicated 18.27 in subdivision 4, the state board of investment on behalf of the 18.28 public pension funds and programs for which it is the investment 18.29 authority and any Minnesota public pension plan not whollyfully 18.30 invested through the state board of investment, including a 18.31 local police or firefighters' relief association governed by 18.32 sectionssection 69.77 or sections 69.771 to 69.775, shall 18.33 report the information specified in subdivision 2 to the state 18.34 auditor, and collect and retain the information required by 18.35 subdivision 3. The state auditor may prescribe a form or forms 18.36 for the purposes of the reporting requirements contained in this 19.1 section. 19.2 (b) A local police or firefighters' relief association 19.3 governed by section 69.77 or sections 69.771 to 69.775 is fully 19.4 invested during a given calendar year for purposes of this 19.5 section if all assets of the applicable pension plan beyond 19.6 sufficient cash equivalent investments to cover six months 19.7 expected expenses are invested under section 11A.17. 19.8 (c) For purposes of this section, the state board of 19.9 investment is considered to be the investment authority for any 19.10 Minnesota public pension fund required to be invested by the 19.11 state board of investment under section 11A.23, or for any 19.12 Minnesota public pension fund that is fully invested and is 19.13 authorized to invest in the supplemental investment fund under 19.14 section 11A.17. 19.15 Subd. 2. [CONTENT AND TIMINGOF REPORTS.] (a) The 19.16 following information, as further specified in paragraphs (b) to 19.17 (f), shall be included in the report required by subdivision 1: 19.18 (1) the total portfolio market value of all investments at19.19 the close of the reporting periodas of the beginning and end of 19.20 the calendar year; 19.21 (2) regular payroll-based contributions to the fundthe 19.22 total portfolio market value for each month or quarter, as 19.23 specified in paragraph (c), (d), (e), or (f), as applicable; 19.24 (3) other contributions and revenue paid into the fund,19.25 including, but not limited to, state or local non-payroll-based19.26 contributions, repaid refunds, and buybacksfor the calendar 19.27 year end, the market value of each asset class as a percentage 19.28 of total portfolio market value; and 19.29 (4) total benefits paid to members;the amount and date of 19.30 each total portfolio injection and withdrawal. 19.31 (5) fees paid for investment management services;19.32 (6) salaries and other administrative expenses paid; and19.33 (7) total return on investment.19.34 (b) The report must also include a written statement of the 19.35 investment policy in effect on June 30, 1988, and any1997, if 19.36 that statement has not been previously submitted. Following 20.1 that date, subsequent reports shall include investment policy 20.2 changes made subsequentlyand shall includethe effective date 20.3 of each policy change rather than a complete statement of 20.4 investment policy, unless the state auditor requests submission 20.5 of a complete current statement. The information required under20.6 this subdivision must be reported separately for each investment20.7 account or investment portfolio included in the pension fund.20.8 (b) For public pension plans other than volunteer20.9 firefighters' relief associations governed by sections 69.77 or20.10 69.771 to 69.775, the information specified in paragraph (a)20.11 must be provided separately for each quarter for the fiscal20.12 years of the pension fund ending during calendar years 198920.13 through 1991 and on a monthly basis thereafter. For volunteer20.14 firefighters' relief associations governed by sections 69.77 or20.15 69.771 to 69.775, the information specified in paragraph (a)20.16 must be provided separately each quarter.20.17 (c) Firefighters' relief associations that have assets with20.18 a market value of less than $300,000 must submit a written20.19 statement of their current investment policy on or before20.20 October 1, 1996, must report any subsequent investment policy20.21 changes, including the effective date of the change, within 9020.22 days of the change, must begin collecting the required20.23 information under paragraph (a), clauses (1) to (7), on January20.24 1, 1997, and must submit the required information to the state20.25 auditor on or before October 1, 1998, and subsequently within20.26 six months of the end of each fiscal year. Other associations20.27 must submit the required information through fiscal year 1993 to20.28 the state auditor on or before October 1, 1994, and subsequently20.29 within six months of the end of each fiscal year.20.30 (c) For public pension plans not fully invested through the 20.31 state board of investment with assets less than $1,000,000 in 20.32 market value at the beginning of the calendar year, the 20.33 information required in paragraph (a), clauses (2) and (4), must 20.34 be provided separately for each quarter. 20.35 (d) For public pension plans not fully invested through the 20.36 state board of investment with assets of $1,000,000 in market 21.1 value or more at the beginning of the calendar year, the 21.2 information required in paragraph (a), clauses (2) and (4), must 21.3 be provided separately for each month. If a public pension plan 21.4 files a report under this paragraph, it must continue reporting 21.5 under this paragraph even if asset values drop below $1,000,000 21.6 in market value in a subsequent year, unless paragraph (e) or 21.7 (f) applies. 21.8 (e) For public pension plans required to invest assets 21.9 under section 11A.23, the state board of investment must include 21.10 monthly information under paragraph (a), clauses (2) and (4), as 21.11 it applies to retirement assets for active employees, and as it 21.12 applies to the Minnesota postretirement investment fund under 21.13 section 11A.18, and for both funds combined. 21.14 (f) For public pension plans investing under section 11A.17 21.15 and fully invested through the state board of investment, the 21.16 state board of investment must report the monthly information 21.17 required in paragraph (a), clauses (2) and (4), for each public 21.18 retirement plan. The board of any fully invested public pension 21.19 plan retains responsibility for submitting investment policy 21.20 statements and subsequent revisions as required under paragraph 21.21 (b). 21.22 (g) Any public pension fund may include computed 21.23 time-weighted rates of return with the report, in addition to 21.24 information required under paragraphs (a) to (f), as 21.25 applicable. If returns are supplied, the individual who 21.26 computed the returns must certify that the returns are net of 21.27 all costs and fees, including investment management fees, and 21.28 that the procedures used to compute the returns are consistent 21.29 with bank administration institute studies of investment 21.30 performance measurement and association of investment management 21.31 and research presentation standards. 21.32 Subd. 3. [ADDITIONAL ASSET CLASS DATA RETENTION 21.33 REQUIREMENTS.] (a) For purposes of this subdivision, "asset 21.34 class" means any of the following asset groupings as authorized 21.35 in applicable law, by-laws, or articles of incorporation: 21.36 (1) cash and any cash equivalent investments with 22.1 maturities of one year or less when issued; 22.2 (2) debt securities with maturities greater than one year 22.3 when issued, including, but not limited to, mortgage 22.4 participation certificates and pools, asset-backed securities, 22.5 guaranteed investment contracts, and authorized government and 22.6 corporate obligations of corporations organized under laws of 22.7 the United States or any state, or the Dominion of Canada or its 22.8 provinces; 22.9 (3) stocks or convertible issues of any corporation 22.10 organized under laws of the United States or any state, the 22.11 Dominion of Canada or its provinces, or any corporation listed 22.12 on the New York Stock Exchange or the American Stock Exchange; 22.13 (4) international stocks or convertible issues; 22.14 (5) international debt securities; and 22.15 (6) real estate and venture capital. 22.16 If the pension plan is investing under section 69.77, 22.17 subdivision 2g, 69.775, or other applicable law, in open-end 22.18 investment companies registered under the federal Investment 22.19 Company Act of 1940, or in the Minnesota supplemental investment 22.20 fund under section 11A.17, this investment shall be included 22.21 under clauses (1) to (6), as appropriate. If the investment 22.22 vehicle includes underlying securities from more than one asset 22.23 class as indicated by clauses (1) to (6), the investment may be 22.24 treated as a separate asset class. 22.25 (b) The state board of investment on behalf of plans for 22.26 which it is the investment authority and each public pension 22.27 plan subject to subdivision 2 must collect and retain as part of 22.28 its permanent records the following information: 22.29 (1) the total market value of each asset class; and 22.30 (2) the amount and date of each asset class injection and 22.31 withdrawal. 22.32 If the public pension plan is required to report for a 22.33 given year under subdivision 2, paragraph (c), the information 22.34 for that year under this subdivision must be retained separately 22.35 for each quarter. If the public pension plan is required to 22.36 report under subdivision 2, paragraph (d), the information under 23.1 this subdivision must be retained separately for each month. 23.2 For each public pension plan for which the state board of 23.3 investment is the investment authority under this section, the 23.4 state board of investment must retain the information required 23.5 by this subdivision separately for each month. Information that 23.6 is required to be collected and retained for any given year or 23.7 years under this subdivision must be submitted to the office of 23.8 the state auditor if the office of the state auditor requests in 23.9 writing that the information be submitted by a public pension 23.10 plan or plans, or be submitted by the state board of investment 23.11 for any plan or plans for which the state board of investment is 23.12 the investment authority under this section. If the state 23.13 auditor requests information under this subdivision, the 23.14 information is considered to be part of the report required 23.15 under this section. Information required to be collected and 23.16 retained under this subdivision must also be transmitted to the 23.17 legislative commission on pensions and retirement upon official 23.18 action of that commission if that commission submits a written 23.19 request for the information. All data submitted or retained 23.20 under this section are public data under chapter 13. 23.21 Subd. 4. [ALTERNATIVE REPORTING; CERTAIN PLANS.] In lieu 23.22 of requirements in subdivisions 2 and 3, the applicable 23.23 administration for the individual retirement account plans under 23.24 chapters 354B and 354D and for the University of Minnesota 23.25 faculty retirement plan shall submit computed time-weighted 23.26 rates of return to the office of the state auditor. These 23.27 time-weighted rates of return are to cover the most recent 23.28 complete calendar year and are to be computed for each 23.29 investment option available to plan members. To the extent 23.30 feasible, the returns are to be computed net of all costs, fees, 23.31 and charges, so that the computed return reflects the net 23.32 time-weighted return available to the investor. If this is not 23.33 practical, the existence of any remaining cost, fee, or charge 23.34 which could further lower the net return must be disclosed. The 23.35 procedures used to compute the returns must be consistent with 23.36 bank administration institute studies of investment performance 24.1 measurement and association of investment management and 24.2 research presentation standards, or, if applicable, securities 24.3 exchange commission requirements. The individual who computes 24.4 the returns must certify that the supplied returns comply with 24.5 this subdivision. The applicable plan administrator must also 24.6 submit, with the return information, the total amounts invested 24.7 by the plan members, in aggregate, in each investment option as 24.8 of the last day of the calendar year. 24.9 Subd. 35. [PENALTY FOR NONCOMPLIANCE.] Failure to comply 24.10 with the reporting requirements of this section shall result in 24.11 a withholding of all state aid or state appropriation to which 24.12 the pension plan may otherwise be directly or indirectly 24.13 entitled until the pension plan has complied with the reporting 24.14 requirements. The state auditor shall instruct the 24.15 commissioners of revenue and finance to withhold state aid or 24.16 state appropriation from any pension plan that fails to comply 24.17 with the reporting requirements contained in this section, until 24.18 the pension plan has complied with the reporting 24.19 requirements. The state auditor may waive the withholding of 24.20 state aid or state appropriations if the state auditor 24.21 determines in writing that compliance would create an excessive 24.22 hardship. 24.23 The state auditor shall agree to waive the withholding of24.24 all state aid required by this subdivision for a volunteer24.25 firefighters' relief association governed by sections 69.77 or24.26 69.771 to 69.775 if:24.27 (1) the relief association certifies to the state auditor24.28 that the financial records necessary to comply with this24.29 reporting requirement for the fiscal years of the pension fund24.30 ending during calendar years 1991 to 1993 no longer exist; or24.31 (2) the state auditor determines that reconstructing24.32 historical financial data for the fiscal years of the pension24.33 fund ending during calendar years 1991 to 1993 would create an24.34 excessive hardship for the relief association.24.35 Subd. 46. [INVESTMENT DISCLOSUREREPORT.] Using the 24.36 information provided under subdivision 2, the state auditor 25.1 shall compute time-weighted rates of return for each pension 25.2 fund, net of all costs and fees, and prepare an annual report to 25.3 the legislature on the components ofinvestment performance 25.4 resulting from stages in the investment decision making process25.5 of variousthe public pension plans subject to this section25.6 subdivision 2. The report may also include information 25.7 collected under subdivision 4 and, if applicable, subdivision 25.8 3. The state auditor may contract with a qualified consultant25.9 or consulting firm to perform the analysis and prepare the25.10 report required under this subdivision.25.11 Subd. 57. [EXPENSE OF REPORT.] All expenses incurred 25.12 relating to the investment disclosurereport described in 25.13 subdivision 46 must be borne by the office of the state auditor 25.14 and may not be charged back to the entities described in 25.15 subdivision 1. 25.16 Subd. 8. [TIMING OF REPORTS.] (a) For salaried firefighter 25.17 relief associations, police relief associations, and volunteer 25.18 firefighter relief associations, the information required under 25.19 this section must be submitted by the due date for reports 25.20 required under section 69.051, subdivision 1 or 1a, as 25.21 applicable. If a relief association satisfies the definition of 25.22 a fully invested plan under subdivision 1, paragraph (b), for 25.23 the calendar year covered by the report required under section 25.24 69.051, subdivision 1 or 1a, as applicable, the chief 25.25 administrative officer of the covered pension plan shall certify 25.26 compliance on a form prescribed by the state auditor. The state 25.27 auditor shall transmit annually to the state board of investment 25.28 a list or lists of covered pension plans which submitted 25.29 certifications, in order to facilitate reporting by the state 25.30 board of investment under paragraph (c) of this subdivision and 25.31 record retention under subdivision 3. 25.32 (b) For the Minneapolis teachers retirement fund 25.33 association, the St. Paul teachers retirement fund association, 25.34 the Duluth teachers retirement fund association, the Minneapolis 25.35 employees retirement fund, and the University of Minnesota 25.36 faculty supplemental retirement plan, the information required 26.1 under this section must be submitted as part of the report 26.2 required under section 356.20. 26.3 (c) The state board of investment, on behalf of pension 26.4 funds specified in subdivision 2, paragraphs (e) and (f), must 26.5 report information required under this section by September 1 of 26.6 each year. 26.7 (d) The applicable administrators for the University of 26.8 Minnesota faculty retirement plan and the individual retirement 26.9 account plans under chapters 354B and 354D must report 26.10 information required under this section by June 1 of each year. 26.11 Sec. 6. Minnesota Statutes 1996, section 424A.02, 26.12 subdivision 10, is amended to read: 26.13 Subd. 10. [LOCAL APPROVAL OF BYLAW AMENDMENTS; FILING 26.14 REQUIREMENTS.] (a) Each relief association to which this section 26.15 applies shall file a revised copy of its governing bylaws with 26.16 the commissioner of commercestate auditor upon the adoption of 26.17 any amendment to its governing bylaws by the relief association 26.18 or upon the approval of any amendment to its governing bylaws 26.19 granted by the governing body of each municipality served by the 26.20 fire department to which the relief association is directly 26.21 associated. Failure of the relief association to file a copy of 26.22 the bylaws or any bylaw amendments with the commissioner of26.23 commercestate auditor shall disqualify the municipality from 26.24 the distribution of any future fire state aid until this filing 26.25 requirement has been completed. 26.26 (b) If the special fund of the relief association does not 26.27 have a surplus over full funding pursuant to section 69.772, 26.28 subdivision 3, clause (2), subclause (e), or 69.773, subdivision 26.29 4, and if the municipality is required to provide financial 26.30 support to the special fund of the relief association pursuant 26.31 to section 69.772 or 69.773, no bylaw amendment which would 26.32 affect the amount of, the manner of payment of, or the 26.33 conditions for qualification for service pensions or ancillary 26.34 benefits or disbursements other than administrative expenses 26.35 authorized pursuant to section 69.80 payable from the special 26.36 fund of the relief association shall be effective until it has 27.1 been ratified by the governing body or bodies of the appropriate 27.2 municipalities. If the municipality is not required to provide 27.3 financial support to the special fund pursuant to this section, 27.4 the relief association may adopt or amend without municipal 27.5 ratification its articles of incorporation or bylaws which 27.6 increase or otherwise affect the service pensions or ancillary 27.7 benefits payable from the special fund so long as the changes do 27.8 not cause the amount of the resulting increase in the accrued 27.9 liability of the special fund to exceed 90 percent of the amount 27.10 of the prior surplus over full funding and the changes do not 27.11 result in the financial requirements of the special fund 27.12 exceeding the expected amount of the future fire state aid to be 27.13 received by the relief association. 27.14 (c) If the relief association pays only a lump sum pension, 27.15 the financial requirements are to be determined by the board of 27.16 trustees following the preparation of an estimate of the 27.17 expected increase in the accrued liability and annual accruing 27.18 liability of the relief association attributable to the change. 27.19 If the relief association pays a monthly benefit service 27.20 pension, the financial requirements are to be determined by the 27.21 board of trustees following either an updated actuarial 27.22 valuation including the proposed change or an estimate of the 27.23 expected actuarial impact of the proposed change prepared by the 27.24 actuary of the relief association. If a relief association 27.25 adopts or amends its articles of incorporation or bylaws without 27.26 municipal ratification pursuant to this subdivision, and, 27.27 subsequent to the amendment or adoption, the financial 27.28 requirements of the special fund pursuant to this section are 27.29 such so as to require financial support from the municipality, 27.30 the provision which was implemented without municipal 27.31 ratification shall no longer be effective without municipal 27.32 ratification, and any service pensions or ancillary benefits 27.33 payable after that date shall be paid only in accordance with 27.34 the articles of incorporation or bylaws as amended or adopted 27.35 with municipal ratification. 27.36 Sec. 7. [REPEALER.] 28.1 Minnesota Statutes 1996, section 356.218, is repealed. 28.2 Sec. 8. [EFFECTIVE DATE.] 28.3 Sections 1 to 7 are effective January 1, 1998, except that 28.4 no penalty for noncompliance with section 5 may be assessed on 28.5 account of any failure to comply with reporting requirements of 28.6 that section prior to January 1, 1999. 28.7 ARTICLE 4 28.8 CORRECTIONAL RETIREMENT PLAN 28.9 MODIFICATIONS 28.10 Section 1. Laws 1996, chapter 408, article 8, section 21, 28.11 is amended to read: 28.12 Sec. 21. [TEMPORARY PROVISION; ELECTION TO RETAIN 28.13 RETIREMENT COVERAGE.] 28.14 (a) An employee in a position specified as qualifying under 28.15 sections 12, 14, and 15, or an auto mechanic lead, an 28.16 electrician, an electrician master of record, a groundskeeper 28.17 intermediate, or a plumber master in charge at the Minnesota 28.18 correctional facility-Red Wing, may elect to retain coverage 28.19 under the general employees retirement plan of the Minnesota 28.20 state retirement system or the teachers retirement association, 28.21 or may elect to have coverage transferred to and to contribute 28.22 to the correctional employees retirement plan. An employee 28.23 electing to participate in the correctional employees retirement 28.24 plan shall begin making contributions to the correctional plan 28.25 beginning the first full pay period after January 1, 1997, or 28.26 the first full pay period following filing of their election to 28.27 transfer coverage to the correctional employees retirement plan, 28.28 whichever is later. The election to retain coverage or to 28.29 transfer coverage must be made in writing by the person on a 28.30 form prescribed by the executive director of the Minnesota state 28.31 retirement system and must be filed with the executive director 28.32 no later than June 30December 31, 1997. 28.33 (b) An employee failing to make an election by June 15, 28.34 1997, must be notified by certified mail by the executive 28.35 director of the Minnesota state retirement system or of the 28.36 teachers retirement association, whichever applies, of the 29.1 deadline to make a choice. A person who does not submit an 29.2 election form must continue coverage in the general employees 29.3 retirement plan or the teachers retirement association, 29.4 whichever applies, and forfeits all rights to transfer 29.5 retirement coverage to the correctional employees retirement 29.6 plan. 29.7 (c) The election to retain coverage in the general employee 29.8 retirement plan or the teachers retirement association or the 29.9 election to transfer retirement coverage to the correctional 29.10 employees retirement plan is irrevocable once it is filed with 29.11 the executive director. 29.12 Sec. 2. Laws 1996, chapter 408, article 8, section 22, 29.13 subdivision 1, is amended to read: 29.14 Subdivision 1. [ELECTION OF PRIOR STATE SERVICE COVERAGE.] 29.15 (a) An employee who has future retirement coverage transferred 29.16 to the correctional employees retirement plan under sections 11, 29.17 12, 14, and15, and 16, or an auto mechanic lead, an 29.18 electrician, an electrician master of record, a groundskeeper 29.19 intermediate, or a plumber master in charge at the Minnesota 29.20 correctional facility-Red Wing, and who does not elect to retain 29.21 general state employee retirement plan or teachers retirement 29.22 association coverage is entitled to elect to obtain prior 29.23 service credit for eligible state service performed on or after 29.24 July 1, 1975, and before the first day of the first full pay 29.25 period beginning after June 30December 31, 1997, with the 29.26 department of corrections or with the department of human 29.27 services at the Minnesota security hospital or the Minnesota 29.28 sexual psychopathic personality treatment center. All prior 29.29 service credit must be purchased. 29.30 (b) Eligible state service with the department of 29.31 corrections or with the department of human services is any 29.32 prior period of continuous service on or after July 1, 1975, 29.33 performed as an employee of the department of corrections or of 29.34 the department of human services that would have been eligible 29.35 for the correctional employees retirement plan coverage under 29.36 sections 11, 12, 14, and15, and 16, or an auto mechanic lead, 30.1 an electrician, an electrician master of record, a groundskeeper 30.2 intermediate, or a plumber master in charge at the Minnesota 30.3 correctional facility-Red Wing, if that prior service had been 30.4 performed after the first day of the first full pay period 30.5 beginning after December 31, 1996, rather than before that 30.6 date. Service is continuous if there has been no period of 30.7 discontinuation of eligible state service for a period greater 30.8 than 180 calendar days. 30.9 (c) The department of corrections or the department of 30.10 human services, whichever applies, shall certify eligible state 30.11 service to the executive director of the Minnesota state 30.12 retirement system. 30.13 (d) A covered correctional plan employee employed on 30.14 January 1, 1997, who has past service in a job classification 30.15 covered under section 11, 12, 14, or15, or 16, or an auto 30.16 mechanic lead, an electrician, an electrician master of record, 30.17 a groundskeeper intermediate, or a plumber master in charge at 30.18 the Minnesota correctional facility-Red Wing, on January 1, 30.19 1997, is entitled to purchase the past service if the applicable 30.20 department certifies that the employee met the eligibility 30.21 requirements for coverage. The employee must make the 30.22 additional employee contributions under section 17. Payments 30.23 for past service must be completed by June 30, 1999. 30.24 Sec. 3. Laws 1996, chapter 408, article 8, section 24, is 30.25 amended to read: 30.26 Sec. 24. [EARLY RETIREMENT INCENTIVE.] 30.27 This section applies to an employee who has future 30.28 retirement coverage transferred to the correctional employee 30.29 retirement plan under sections 11, 12, 14, and15, and 16, and 30.30 who is at least 55 years old on the effective date of sections 30.31 11, 12, 14, and15, and 16. This section also applies to an 30.32 auto mechanic lead, an electrician, an electrician master of 30.33 record, a groundskeeper intermediate, or a plumber master in 30.34 charge at the Minnesota correctional facility-Red Wing who has 30.35 transferred to the correctional employee retirement plan under 30.36 this act. That employee may participate in a health insurance 31.1 early retirement incentive available under the terms of a 31.2 collective bargaining agreement in effect on the day before the 31.3 effective date of sections 11, 12, 14, and15, and 16, 31.4 notwithstanding any provision of the collective bargaining 31.5 agreement that limits participation to persons who select the 31.6 option during the payroll period in which their 55th birthday 31.7 occurs. A person selecting the health insurance early 31.8 retirement incentive under this section must retire by the later 31.9 of December 31, 1997June 30, 1998, or within the pay period 31.10 following the time at which the person has at least three years 31.11 of covered correctional service, including any purchased service 31.12 credit. An employee meeting this criteria who wishes to extend 31.13 the person's employment must do so under Minnesota Statutes, 31.14 section 43A.34, subdivision 3. 31.15 Sec. 4. [EFFECTIVE DATE.] 31.16 Sections 1 to 3 are effective on the day following final 31.17 enactment. 31.18 ARTICLE 5 31.19 MISCELLANEOUS PROVISIONS 31.20 Section 1. [EXEMPTION; METROPOLITAN STATE UNIVERSITY.] 31.21 (a) Minnesota Statutes, section 352.115, subdivision 10, 31.22 does not apply to a person who: 31.23 (1) was born June 22, 1939; 31.24 (2) retires from the faculty of Metropolitan State 31.25 University with at least ten years of combined service credit in 31.26 a system under the jurisdiction of the board of trustees of the 31.27 Minnesota state colleges and universities; 31.28 (3) was employed on a full-time basis immediately preceding 31.29 retirement; 31.30 (4) begins drawing an annuity from the Minnesota state 31.31 retirement system; and 31.32 (5) returns to work on not less than a one-third time basis 31.33 and not more than a two-thirds time basis at Metropolitan State 31.34 University under an agreement in which the person may not earn a 31.35 salary of more than $35,000 in a calendar year from employment 31.36 after retirement at Metropolitan State University. 32.1 (b) Initial participation, the amount of time worked, and 32.2 the duration of participation under this section must be 32.3 mutually agreed upon by the employer and the employee. The 32.4 employer may require up to a one-year notice of intent to 32.5 participate in the program as a condition of participation under 32.6 this section. The employer shall determine the time of year the 32.7 employee shall work. 32.8 (c) Minnesota Statutes, section 136F.48, applies to a 32.9 person described in paragraph (a), even though the person draws 32.10 an annuity from the Minnesota state retirement system instead of 32.11 a teachers retirement association. 32.12 (d) Notwithstanding any law to the contrary, a person 32.13 eligible under paragraphs (a) and (b) may not earn further 32.14 service credit in the Minnesota state retirement system or the 32.15 teachers retirement association and is not eligible to 32.16 participate in the individual retirement account plan or the 32.17 supplemental retirement plan established in chapter 354B as a 32.18 result of service under this section. No employer or employee 32.19 contribution to any of these plans may be made on behalf of such 32.20 a person. 32.21 Sec. 2. [ACCEPTANCE OF BENEFICIARY DESIGNATION CHANGE IN 32.22 CERTAIN INSTANCES.] 32.23 (a) Notwithstanding any provision of Minnesota Statutes 32.24 1996, chapter 354, to the contrary, the teachers retirement 32.25 association may consider as validly filed a beneficiary 32.26 designation change form under Minnesota Statutes 1996, section 32.27 354.10, subdivision 4, and a joint specification form under 32.28 Minnesota Statutes 1996, section 354.46, subdivision 5, which 32.29 was postmarked on January 8, 1997, and received by the teachers 32.30 retirement association on January 10, 1997, on behalf of a 32.31 teacher who was born on February 28, 1947, and who died on 32.32 December 22, 1996. 32.33 (b) The designated beneficiary of the teacher specified in 32.34 paragraph (a) is entitled to receive the applicable monthly 32.35 survivor benefit retroactive to January 1, 1997. 32.36 Sec. 3. [PRIOR SERVICE CREDIT PURCHASE FOR CERTAIN PUBLIC 33.1 EMPLOYEES.] 33.2 (a) A person described in paragraph (b) is entitled to 33.3 purchase the period of allowable service credit from the public 33.4 employees retirement association described in paragraph (c) if 33.5 the purchase payment specified in paragraph (d) is made to the 33.6 public employees retirement association. 33.7 (b) An eligible person is a person who: 33.8 (1) was born on August 10, 1939; 33.9 (2) was initially employed on a full-time basis by the 33.10 parks and recreation division of the city of St. Paul on 33.11 February 12, 1964; 33.12 (3) was initially covered by the public employees 33.13 retirement association on November 1, 1964; and 33.14 (4) left public service on September 16, 1996. 33.15 (c) The period of purchasable allowable service credit is 33.16 the period beginning on February 12, 1964, and ending on October 33.17 31, 1964. 33.18 (d) To purchase credit for prior eligible service under 33.19 paragraph (c), there must be paid to the public employees 33.20 retirement association an amount equal to the present value of 33.21 the amount of the additional disability benefit obtained by 33.22 purchase of the additional service credit. The calculation of 33.23 this amount must be made by the executive director of the public 33.24 employees retirement association using the applicable 33.25 preretirement interest rate specified in Minnesota Statutes, 33.26 section 356.215, subdivision 4d, and the mortality table adopted 33.27 for the retirement association. The person making the purchase 33.28 must establish in the records of the association proof of the 33.29 service for which the purchase of prior service is requested. 33.30 The manner of the proof of service must be in accordance with 33.31 procedures prescribed by the executive director of the 33.32 retirement association. Payment of the amount calculated under 33.33 this subdivision is the obligation of the eligible person and 33.34 must be made prior to July 1, 1998, in a lump sum. However, the 33.35 former employer of the eligible individual may, at its 33.36 discretion, pay all or any portion of the payment amount that 34.1 exceeds an amount equal to the employee contribution rate or 34.2 rates in effect during the period or periods of prior service, 34.3 plus interest at the rate of 8.5 percent per year compounded 34.4 annually from the date on which the contributions would 34.5 otherwise have been made to the date on which the payment is 34.6 made. If the employer agrees to payments under this paragraph, 34.7 the person must make the employee payments required under this 34.8 paragraph prior to July 1, 1998. If that employee payment is 34.9 made, the employing unit payment under this paragraph must be 34.10 remitted to the executive director of the retirement association 34.11 within 60 days of receipt by the executive director of the 34.12 employee payments specified under this paragraph. 34.13 (e) Service credit for the purchase period or periods must 34.14 be granted to the account of the eligible person upon receipt of 34.15 the purchase payment amount specified in paragraph (d) and the 34.16 disability benefit of the person must be recalculated in light 34.17 of the additional service credit. 34.18 Sec. 4. [EFFECTIVE DATE.] 34.19 Sections 1, 2, and 3 are effective on the day following 34.20 final enactment.