SF 1686

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to retirement; providing for uniformity in 
  1.3             various administrative provisions of laws governing 
  1.4             the Minnesota state retirement system, public 
  1.5             employees retirement association, teachers retirement 
  1.6             association, first class city teacher retirement 
  1.7             funds, and Minneapolis employees retirement fund; 
  1.8             amending Minnesota Statutes 1994, sections 3A.02, 
  1.9             subdivision 1; 176.021, subdivision 7; 352.113, 
  1.10            subdivisions 2, 4, and 7; 352.115, subdivisions 8 and 
  1.11            10; 352.95, subdivisions 3 and 7; 352B.08, subdivision 
  1.12            1; 352B.10, subdivision 3; 352B.101; 352B.11, by 
  1.13            adding a subdivision; 353.29, subdivision 7; 353.31, 
  1.14            subdivision 8; 353.33, subdivisions 2, 5, and 7; 
  1.15            353.37, subdivisions 1 and 3; 353.656, subdivisions 2 
  1.16            and 4; 353C.08, subdivisions 4 and 6; 354.44, 
  1.17            subdivision 5; 354.48, subdivision 7; 354A.31, 
  1.18            subdivisions 2a and 3; 354A.36, subdivisions 2, 7, and 
  1.19            by adding a subdivision; 356.611; 422A.14, subdivision 
  1.20            1; and 422A.18, subdivision 3; repealing Minnesota 
  1.21            Statutes 1994, section 354A.36, subdivision 5. 
  1.22  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.23                             ARTICLE 1 
  1.24                 MINNESOTA STATE RETIREMENT SYSTEM 
  1.25     Section 1.  Minnesota Statutes 1994, section 3A.02, 
  1.26  subdivision 1, is amended to read: 
  1.27     Subdivision 1.  [QUALIFICATIONS.] (a) A former legislator 
  1.28  is entitled, upon written application to the director, to 
  1.29  receive a retirement allowance monthly, if the person: 
  1.30     (1) has served at least six full years, without regard to 
  1.31  the application of section 3A.10, subdivision 2, or has served 
  1.32  during all or part of four regular sessions as a member of the 
  1.33  legislature, which service need not be continuous; 
  2.1      (2) has attained the normal retirement age; 
  2.2      (3) has retired as a member of the legislature; and 
  2.3      (4) has made all contributions provided for in section 
  2.4   3A.03, has made payments for past service under subdivision 2, 
  2.5   or has made payments in lieu of contributions under section 
  2.6   3A.031. 
  2.7      (b) For service rendered before the beginning of the 1979 
  2.8   legislative session, but not to exceed eight years of service, 
  2.9   the retirement allowance is an amount equal to five percent per 
  2.10  year of service of that member's average monthly salary.  For 
  2.11  service in excess of eight years rendered before the beginning 
  2.12  of the 1979 legislative session, and for service rendered after 
  2.13  the beginning of the 1979 legislative session, the retirement 
  2.14  allowance is an amount equal to 2-1/2 percent per year of 
  2.15  service of that member's average monthly salary. 
  2.16     (c) The retirement allowance accrues beginning with the 
  2.17  first day of the month of receipt of the application, but not 
  2.18  before age 60, and for the remainder of the former legislator's 
  2.19  life, if the former legislator is not serving as a member of the 
  2.20  legislature or as a constitutional officer or commissioner as 
  2.21  defined in section 352C.021, subdivisions 2 and 3.  The annuity 
  2.22  shall not begin to accrue prior to retirement as a legislator.  
  2.23  No annuity payment shall be made retroactive for more than 180 
  2.24  days six months before the date the annuity application is filed 
  2.25  with the director. 
  2.26     (d) Any member who has served during all or part of four 
  2.27  regular sessions is considered to have served eight years as a 
  2.28  member of the legislature. 
  2.29     (e) The retirement allowance ceases with the last payment 
  2.30  that accrued to the retired legislator during the retired 
  2.31  legislator's lifetime, except that the surviving spouse, if any, 
  2.32  is entitled to the retirement allowance for the calendar month 
  2.33  in which the retired legislator died. 
  2.34     Sec. 2.  Minnesota Statutes 1994, section 352.113, 
  2.35  subdivision 2, is amended to read: 
  2.36     Subd. 2.  [APPLICATION; ACCRUAL OF BENEFITS.] An employee 
  3.1   making claim for a total and permanent disability benefit, or 
  3.2   someone acting on behalf of the employee upon proof of authority 
  3.3   satisfactory to the director, shall file a written application 
  3.4   for benefits in the office of the system.  The application must 
  3.5   be in a form and manner prescribed by the executive director.  
  3.6   The benefit shall begin to accrue the day following the start of 
  3.7   disability or the day following the last day paid, whichever is 
  3.8   later, but not earlier than 180 days six months before the date 
  3.9   the application is filed with the director. 
  3.10     Sec. 3.  Minnesota Statutes 1994, section 352.113, 
  3.11  subdivision 4, is amended to read: 
  3.12     Subd. 4.  [MEDICAL EXAMINATIONS; AUTHORIZATION FOR PAYMENT 
  3.13  OF BENEFIT.] An applicant shall provide medical evidence to 
  3.14  support an application for total and permanent disability.  The 
  3.15  director shall have the employee examined by at least one 
  3.16  additional licensed physician designated by the medical 
  3.17  adviser.  The physicians shall make written reports to the 
  3.18  director concerning the employee's disability including medical 
  3.19  opinions as to whether the employee is permanently and totally 
  3.20  disabled within the meaning of section 352.01, subdivision 17.  
  3.21  The director shall also obtain written certification from the 
  3.22  employer stating whether the employment has ceased or whether 
  3.23  the employee is on sick leave of absence because of a disability 
  3.24  that will prevent further service to the employer and as a 
  3.25  consequence the employee is not entitled to compensation from 
  3.26  the employer.  The medical adviser shall consider the reports of 
  3.27  the physicians and any other evidence supplied by the employee 
  3.28  or other interested parties.  If the medical adviser finds the 
  3.29  employee totally and permanently disabled, the adviser shall 
  3.30  make appropriate recommendation to the director in writing 
  3.31  together with the date from which the employee has been totally 
  3.32  disabled.  The director shall then determine if the disability 
  3.33  occurred within 180 days of filing the application, while still 
  3.34  in the employment of the state, and the propriety of authorizing 
  3.35  payment of a disability benefit as provided in this section.  A 
  3.36  terminated employee may apply for a disability benefit 
  4.1   within 180 days six months of termination as long as the 
  4.2   disability occurred while in the prior to termination of 
  4.3   employment of with the state.  The fact that an employee is 
  4.4   placed on leave of absence without compensation because of 
  4.5   disability does not bar that employee from receiving a 
  4.6   disability benefit.  Unless payment of a disability benefit has 
  4.7   terminated because the employee is no longer totally disabled, 
  4.8   or because the employee has reached normal retirement age as 
  4.9   provided in this section, the disability benefit shall cease 
  4.10  with the last payment received by the disabled employee or which 
  4.11  had accrued during the lifetime of the employee unless there is 
  4.12  a spouse surviving; in that event the surviving spouse is 
  4.13  entitled to the disability benefit for the calendar month in 
  4.14  which the disabled employee died.  
  4.15     Sec. 4.  Minnesota Statutes 1994, section 352.113, 
  4.16  subdivision 7, is amended to read: 
  4.17     Subd. 7.  [PARTIAL REEMPLOYMENT.] If the disabled employee 
  4.18  resumes a gainful occupation from which earnings are less than 
  4.19  the employee's salary at the date of disability or the salary 
  4.20  currently paid for similar positions, the director shall 
  4.21  continue the disability benefit in an amount which when added to 
  4.22  earnings does not exceed the salary rate at the date of 
  4.23  disability as adjusted by the same percentage increase in United 
  4.24  States average wages used by social security in calculating 
  4.25  average indexed monthly earnings, provided the disability 
  4.26  benefit in this case does not exceed the disability benefit 
  4.27  originally allowed as adjusted by postretirement fund 
  4.28  increases.  Deductions for the retirement fund must not be taken 
  4.29  from the salary of a disabled employee who is receiving a 
  4.30  disability benefit as provided in this subdivision. 
  4.31     Sec. 5.  Minnesota Statutes 1994, section 352.115, 
  4.32  subdivision 8, is amended to read: 
  4.33     Subd. 8.  [ACCRUAL OF ANNUITY.] State employees shall apply 
  4.34  for an annuity.  The application must not be made more than 90 
  4.35  days before the time the employee is eligible to retire by 
  4.36  reason of both age and service requirements.  If the director 
  5.1   determines an applicant for annuity has fulfilled the legal 
  5.2   requirements for an annuity, the director shall authorize the 
  5.3   annuity payment in accordance with this chapter and payment must 
  5.4   be made as authorized.  An annuity shall begin to accrue no 
  5.5   earlier than 180 days six months before the date the application 
  5.6   is filed with the director, but not before the day following the 
  5.7   termination of state service or before the day the employee is 
  5.8   eligible to retire by reason of both age and service 
  5.9   requirements.  The retirement annuity shall cease with the last 
  5.10  payment which had accrued during the lifetime of the retired 
  5.11  employee unless an optional annuity provided in section 352.116, 
  5.12  subdivision 3, had been selected and had become payable.  The 
  5.13  joint and last survivor annuity shall cease with the last 
  5.14  payment received by the survivor during the lifetime of the 
  5.15  survivor.  If a retired employee had not selected an optional 
  5.16  annuity, or a survivor annuity is not payable under the option, 
  5.17  and a spouse survives, the spouse is entitled only to the 
  5.18  annuity for the calendar month in which the retired employee 
  5.19  died.  If an optional annuity is payable after the death of the 
  5.20  retired employee, the survivor is entitled to the annuity for 
  5.21  the calendar month in which the retired employee died.  
  5.22     Sec. 6.  Minnesota Statutes 1994, section 352.115, 
  5.23  subdivision 10, is amended to read: 
  5.24     Subd. 10.  [REEMPLOYMENT OF ANNUITANT.] If any retired 
  5.25  employee again becomes entitled to receive salary or wages from 
  5.26  the state, or any employer who employs state employees as that 
  5.27  term is defined in section 352.01, subdivision 2, other than 
  5.28  salary or wages received as a temporary employee of the 
  5.29  legislature during a legislative session, the annuity or 
  5.30  retirement allowance shall cease when the retired employee has 
  5.31  earned an amount equal to be reduced by one-third of the amount 
  5.32  in excess of the annual maximum earnings allowable for that age 
  5.33  a person between ages 65 and 70 for the continued receipt of 
  5.34  full benefit amounts monthly under the federal Old Age, 
  5.35  Survivors, and Disability Insurance program as set by the 
  5.36  secretary of health and human services under United States Code, 
  6.1   title 42, section 403, in any calendar year.  If the retired 
  6.2   employee has not yet reached the minimum age for the receipt of 
  6.3   social security benefits, the maximum earnings for the retired 
  6.4   employee shall be equal to the annual maximum earnings allowable 
  6.5   for the minimum age for the receipt of social security 
  6.6   benefits.  After a person has reached the age of 70, no 
  6.7   reduction is applied.  The annuity must be resumed when state 
  6.8   service ends, or, if the retired employee is still employed 
  6.9   adjusted at the beginning of the next calendar year, at the 
  6.10  beginning of that calendar year, and payment must again end when 
  6.11  the retired employee has earned the applicable reemployment 
  6.12  earnings maximum specified in this subdivision.  No payroll 
  6.13  deductions for the retirement fund shall be made from the 
  6.14  earnings of a reemployed retired employee.  If the retired 
  6.15  employee is granted a sick leave without pay, but not otherwise, 
  6.16  the annuity or retirement allowance must be resumed during the 
  6.17  period of sick leave.  No change shall be made in the monthly 
  6.18  amount of an annuity or retirement allowance because of the 
  6.19  reemployment of an annuitant. 
  6.20     Sec. 7.  Minnesota Statutes 1994, section 352.95, 
  6.21  subdivision 3, is amended to read: 
  6.22     Subd. 3.  [APPLYING FOR BENEFITS; ACCRUAL.] No application 
  6.23  for disability benefits shall be made until after the last day 
  6.24  physically on the job.  The disability benefit shall begin to 
  6.25  accrue the day following the last day for which the employee is 
  6.26  paid sick leave or annual leave but not earlier than 180 days 
  6.27  six months before the date the application is filed.  
  6.28     Sec. 8.  Minnesota Statutes 1994, section 352.95, 
  6.29  subdivision 7, is amended to read: 
  6.30     Subd. 7.  [RESUMPTION OF EMPLOYMENT.] If the disabled 
  6.31  employee resumes a gainful occupation from which earnings are 
  6.32  less than the salary received at the date of disability or the 
  6.33  salary currently paid for similar positions, or if the employee 
  6.34  is entitled to receive workers' compensation benefits work, the 
  6.35  disability benefit must be continued in an amount which when 
  6.36  added to current earnings and workers' compensation benefits 
  7.1   does not exceed the salary received at the date of disability or 
  7.2   the salary currently paid for similar positions, whichever is 
  7.3   higher, if the disability benefit in that case does not exceed 
  7.4   the disability benefit originally authorized and in effect 
  7.5   salary rate at the date of disability as adjusted by the same 
  7.6   percentage increase in United States average wages used by 
  7.7   social security in calculating average indexed monthly earnings. 
  7.8      Sec. 9.  Minnesota Statutes 1994, section 352B.08, 
  7.9   subdivision 1, is amended to read: 
  7.10     Subdivision 1.  [WHO IS ELIGIBLE; WHEN TO APPLY; ACCRUAL.] 
  7.11  Every member who is credited with three or more years of 
  7.12  allowable service is entitled to separate from state service and 
  7.13  upon becoming 50 years old, is entitled to receive a life 
  7.14  annuity, upon separation from state service.  Members shall 
  7.15  apply for an annuity in a form and manner prescribed by the 
  7.16  executive director.  No application may be made more than 90 
  7.17  days before the date the member is eligible to retire by reason 
  7.18  of both age and service requirements.  An annuity begins to 
  7.19  accrue no earlier than 180 days six months before the date the 
  7.20  application is filed with the executive director.  
  7.21     Sec. 10.  Minnesota Statutes 1994, section 352B.10, 
  7.22  subdivision 3, is amended to read: 
  7.23     Subd. 3.  [ANNUAL AND SICK LEAVE; WORK AT LOWER PAY.] No 
  7.24  member shall receive any disability benefit payment when the 
  7.25  member has unused annual leave or sick leave or under any other 
  7.26  circumstances, when during the period of disability there has 
  7.27  been no impairment of salary.  Should the member or former 
  7.28  member resume gainful work and earn less than the salary 
  7.29  received at the date of disability or the salary currently paid 
  7.30  for similar positions, the disability benefit must be continued 
  7.31  in an amount which when added to current earnings does not 
  7.32  exceed the salary rate received at the date of disability or the 
  7.33  salary currently paid for similar positions, whichever is 
  7.34  higher.  The disability benefit must not exceed the disability 
  7.35  benefit originally allowed as adjusted by the same percentage 
  7.36  increase in United States average wages used by social security 
  8.1   in calculating average indexed monthly earnings. 
  8.2      Sec. 11.  Minnesota Statutes 1994, section 352B.101, is 
  8.3   amended to read: 
  8.4      352B.101 [APPLICATION FOR DISABILITY BENEFIT.] 
  8.5      A member claiming a disability benefit must file a written 
  8.6   application for benefits in the office of the system in a form 
  8.7   and manner prescribed by the executive director.  The member 
  8.8   shall provide medical evidence to support the application.  The 
  8.9   benefit begins to accrue the day following the start of 
  8.10  disability or the day following the last day for which the 
  8.11  member was paid, whichever is later, but not earlier than 180 
  8.12  days six months before the date the application is filed with 
  8.13  the executive director.  
  8.14     Sec. 12.  Minnesota Statutes 1994, section 352B.11, is 
  8.15  amended by adding a subdivision to read: 
  8.16     Subd. 6.  [REEMPLOYMENT OF ANNUITANT.] If a retired member 
  8.17  again becomes entitled to receive salary or wages from the 
  8.18  state, and is employed in a position normally eligible for 
  8.19  coverage under this chapter, the person shall not again be 
  8.20  covered by this chapter.  The annuity shall be reduced by 
  8.21  one-third of the amount in excess of the annual maximum earnings 
  8.22  allowable for an employee between ages 65 and 70 for the 
  8.23  continued receipt of full benefit amounts monthly under the 
  8.24  federal Old Age, Survivors, and Disability Insurance program as 
  8.25  set by the secretary of health and human services under United 
  8.26  States Code, title 42, section 403, in any calendar year.  After 
  8.27  a person has reached the age of 70, no reduction is applied.  No 
  8.28  payroll deductions for the retirement fund shall be made from 
  8.29  the earnings of a reemployed retired member.  No change shall be 
  8.30  made in the monthly amount of an annuity or retirement allowance 
  8.31  because of the reemployment of an annuitant. 
  8.32     Sec. 13.  [EFFECTIVE DATES.] 
  8.33     Sections 1 to 5 and 7 to 11 are effective July 1, 1995.  
  8.34  Sections 6 and 12 are effective January 1, 1996. 
  8.35                             ARTICLE 2 
  8.36              PUBLIC EMPLOYEES RETIREMENT ASSOCIATION 
  9.1      Section 1.  Minnesota Statutes 1994, section 176.021, 
  9.2   subdivision 7, is amended to read: 
  9.3      Subd. 7.  [PUBLIC OFFICER.] If an employee who is a public 
  9.4   officer of the state or governmental subdivision continues to 
  9.5   receive the compensation of office during a period when 
  9.6   receiving benefits under the workers' compensation law for 
  9.7   temporary total or temporary partial disability or permanent 
  9.8   total disability and the compensation of office exceeds $100 a 
  9.9   year, the amount of that compensation attributable to the period 
  9.10  for which benefits under the workers' compensation law are paid 
  9.11  shall must be deducted from such benefits.  If an employee 
  9.12  covered by the Minnesota state retirement system, public 
  9.13  employees retirement system, or Minneapolis employees retirement 
  9.14  fund receives total and permanent disability benefits pursuant 
  9.15  to under section 352.113 or disability benefits pursuant to 
  9.16  sections 352.95 and, 352B.10, 353.33, 353.656, 353C.08, or 
  9.17  422A.18, the amount of disability benefits shall must be 
  9.18  deducted from workers' compensation benefits otherwise payable.  
  9.19  If an employee covered by the teachers retirement fund or a 
  9.20  teachers retirement fund in a city of the first class receives 
  9.21  total and permanent disability benefits pursuant to under 
  9.22  section 354.48, or 354A.36, or under the respective association 
  9.23  articles and bylaws, the amount of disability benefits must be 
  9.24  deducted from workers' compensation benefits otherwise payable.  
  9.25  Notwithstanding the provisions of section 176.132, a deduction 
  9.26  under this subdivision does not entitle an employee to 
  9.27  supplemental benefits under section 176.132.  
  9.28     Sec. 2.  Minnesota Statutes 1994, section 353.29, 
  9.29  subdivision 7, is amended to read: 
  9.30     Subd. 7.  [ANNUITIES; ACCRUAL.] Except as to elected public 
  9.31  officials, a retirement annuity granted under this chapter 
  9.32  begins with the first day of the first calendar month after the 
  9.33  date of termination of public service under subdivision 11a or 
  9.34  termination of membership under subdivision 11b, whichever is 
  9.35  earlier.  The annuity must be paid in equal monthly installments 
  9.36  and does not accrue beyond the end of the month in which 
 10.1   entitlement to the annuity has terminated.  If the annuitant 
 10.2   dies prior to negotiating the check for the month in which death 
 10.3   occurs, payment must be made to the surviving spouse, or if 
 10.4   none, to the designated beneficiary, or if none, to the estate.  
 10.5      An annuity granted to an elective public official accrues 
 10.6   on the day following expiration of public office or expiration 
 10.7   of the right to hold that office.  The annuity for the month 
 10.8   during which the expiration occurred is prorated accordingly.  
 10.9   An annuity, once granted, must not be increased, decreased, or 
 10.10  revoked except under this chapter.  An annuity payment may be 
 10.11  made retroactive for up to one year prior to six months before 
 10.12  that month in which a complete application is received by the 
 10.13  executive director under subdivision 4. 
 10.14     Sec. 3.  Minnesota Statutes 1994, section 353.31, 
 10.15  subdivision 8, is amended to read: 
 10.16     Subd. 8.  [ACCRUAL OF BENEFITS.] All benefits under this 
 10.17  section and survivor benefits otherwise provided in this chapter 
 10.18  when payable to persons qualifying therefor shall accrue on the 
 10.19  first day following the death of a "basic member" or the first 
 10.20  day of the month following the death of an annuitant or 
 10.21  disabilitant.  No payment may be made retroactively for more 
 10.22  than 12 six months prior to before that month in which the 
 10.23  application is filed, and no benefit shall accrue beyond the end 
 10.24  of the month in which entitlement to such benefits has 
 10.25  terminated. 
 10.26     Sec. 4.  Minnesota Statutes 1994, section 353.33, 
 10.27  subdivision 2, is amended to read: 
 10.28     Subd. 2.  [APPLICATIONS; ACCRUAL OF BENEFITS.] Every claim 
 10.29  or demand for a total and permanent disability benefit must be 
 10.30  initiated by written application in the manner and form 
 10.31  prescribed by the executive director showing compliance with the 
 10.32  statutory conditions qualifying the applicant for a total and 
 10.33  permanent disability benefit and filed with the executive 
 10.34  director.  A member or former member who became totally and 
 10.35  permanently disabled during a period of membership shall file 
 10.36  application for total and permanent disability benefits within 
 11.1   three years next following termination of public service.  This 
 11.2   benefit begins to accrue the day following the commencement of 
 11.3   disability, 90 days preceding the filing of the six months 
 11.4   before that month in which a complete application is received, 
 11.5   or, if annual or sick leave is paid for more than the 90-day 
 11.6   six-month period, from the date salary ceased, whichever is 
 11.7   later.  Payment must not accrue beyond the end of the month in 
 11.8   which entitlement has terminated.  If the disabilitant dies 
 11.9   prior to negotiating the check for the month in which death 
 11.10  occurs, payment is made to the surviving spouse, or if none, to 
 11.11  the designated beneficiary, or if none, to the estate.  An 
 11.12  applicant for total and permanent disability benefits may file a 
 11.13  retirement annuity application under section 353.29, subdivision 
 11.14  4, simultaneously with an application for total and permanent 
 11.15  disability benefits.  The retirement annuity application is void 
 11.16  upon the determination of the entitlement for disability 
 11.17  benefits by the executive director.  If disability benefits are 
 11.18  denied, the retirement annuity application must be initiated and 
 11.19  processed. 
 11.20     Sec. 5.  Minnesota Statutes 1994, section 353.33, 
 11.21  subdivision 5, is amended to read: 
 11.22     Subd. 5.  [BENEFITS PAID UNDER WORKERS' COMPENSATION LAW.] 
 11.23  Disability benefits paid shall be coordinated with any amounts 
 11.24  received or receivable under workers' compensation law, such as 
 11.25  temporary total, permanent total, temporary partial, permanent 
 11.26  partial, or economic recovery compensation benefits, in either 
 11.27  periodic or lump sum payments from the employer under applicable 
 11.28  workers' compensation laws, after deduction of amount of 
 11.29  attorney fees, authorized under applicable workers' compensation 
 11.30  laws, paid by a disabilitant.  If the total of the single life 
 11.31  annuity actuarial equivalent disability benefit and the workers' 
 11.32  compensation benefit exceeds:  (1) the salary the disabled 
 11.33  member received as of the date of the disability or (2) the 
 11.34  salary currently payable for the same employment position or an 
 11.35  employment position substantially similar to the one the person 
 11.36  held as of the date of the disability, whichever is greater, the 
 12.1   disability benefit must be reduced to that amount which, when 
 12.2   added to the workers' compensation benefits, does not exceed the 
 12.3   greater of the salaries described in clauses (1) and (2). 
 12.4      Disability benefits must not be reduced by any periodic or 
 12.5   lump sum amounts received or receivable under workers' 
 12.6   compensation laws.  A disabilitant who is eligible to receive a 
 12.7   disability benefit after June 30, 1995, whose disability benefit 
 12.8   amount was reduced prior to July 1, 1995, as a result of the 
 12.9   receipt of workers' compensation benefits, must have the 
 12.10  disability benefit payment amount restored, as of July 1, 1995, 
 12.11  and calculated under subdivision 3.  A disabilitant is not 
 12.12  entitled to retroactive payment of the reduction amounts applied 
 12.13  to disability benefits before July 1, 1995, because of receipt 
 12.14  of workers' compensation benefits. 
 12.15     A disability benefit overpayment made before July 1, 1995, 
 12.16  because a reduction had not been made for receipt of workers' 
 12.17  compensation benefits, must be collected by the association.  
 12.18  The overpaid amounts may be obtained through the reduction by 
 12.19  the association of disability benefits or annuity payments made 
 12.20  after June 30, 1995, until the overpayment is fully recovered. 
 12.21     Sec. 6.  Minnesota Statutes 1994, section 353.33, 
 12.22  subdivision 7, is amended to read: 
 12.23     Subd. 7.  [PARTIAL REEMPLOYMENT.] If, following a work or 
 12.24  non-work-related injury or illness, a disabled person resumes a 
 12.25  gainful occupation from which earnings are less than the salary 
 12.26  at the date of disability or the salary currently paid for 
 12.27  similar positions rate at the date of disability increased by 
 12.28  the same percentage increase in the United States average wages 
 12.29  used by social security in calculating average indexed monthly 
 12.30  earnings, the board shall continue the disability benefit in an 
 12.31  amount that, when the normal disability benefit is added to the 
 12.32  earnings and workers' compensation benefit, does not exceed the 
 12.33  salary at the date of disability or the salary currently paid 
 12.34  for similar positions rate at the date of disability increased 
 12.35  by the same percentage increase in the United States average 
 12.36  wages used by social security in calculating average indexed 
 13.1   monthly earnings, whichever is higher, provided the disability 
 13.2   benefit does not exceed the disability benefit originally 
 13.3   allowed, plus any postretirement adjustments payable after 
 13.4   December 31, 1988, in accordance with section 11A.18, 
 13.5   subdivision 10.  No deductions for the retirement fund may be 
 13.6   taken from the salary of a disabled person who is receiving a 
 13.7   disability benefit as provided in this subdivision. 
 13.8      Sec. 7.  Minnesota Statutes 1994, section 353.37, 
 13.9   subdivision 1, is amended to read: 
 13.10     Subdivision 1.  [SALARY MAXIMUMS.] The annuity of a person 
 13.11  otherwise eligible for an annuity under this chapter must be 
 13.12  suspended under subdivision 2 or reduced under subdivision 3, 
 13.13  whichever results in the higher annual annuity amount, if the 
 13.14  person reenters public service as a nonelective employee of with 
 13.15  a governmental subdivision as defined under section 353.01, 
 13.16  subdivision 6, in a position covered by this chapter or returns 
 13.17  to work as an employee of a labor organization that represents 
 13.18  public employees who are association members under this chapter 
 13.19  and salary for the reemployment service exceeds the annual 
 13.20  maximum earnings allowable for that age a person between the 
 13.21  ages of 65 and 70 for the continued receipt of full benefit 
 13.22  amounts monthly under the federal Old Age, Survivors and 
 13.23  Disability Insurance Program as set by the secretary of health 
 13.24  and human services under United States Code, title 42, section 
 13.25  403, in any calendar year.  If the person has not yet reached 
 13.26  the minimum age for the receipt of social security benefits, the 
 13.27  maximum salary for the person is equal to the annual maximum 
 13.28  earnings allowable for the minimum age for the receipt of social 
 13.29  security benefits.  
 13.30     Sec. 8.  Minnesota Statutes 1994, section 353.37, 
 13.31  subdivision 3, is amended to read: 
 13.32     Subd. 3.  [REDUCTION OF ANNUITY.] The association shall 
 13.33  reduce the amount of the annuity as follows: 
 13.34     (a) for a person who has not reached normal retirement age, 
 13.35  one-half of the amount in excess of the applicable reemployment 
 13.36  income maximum under subdivision 1; exceeded the reemployment 
 14.1   earnings limitation defined in subdivision 1, by one-third of 
 14.2   the amount in excess of the allowable limitation; or 
 14.3      (b) for a person who has reached normal retirement age, but 
 14.4   has not reached age 70, one-third of the amount in excess of the 
 14.5   applicable reemployment income maximum under subdivision 1; 
 14.6      (c) for a person who has reached age 70, or for salary 
 14.7   earned through service in an elected office, there is no 
 14.8   reduction upon reemployment, regardless of income. 
 14.9      For purposes of this subdivision, salary paid for return to 
 14.10  service with a governmental subdivision covered by this chapter 
 14.11  or for a labor organization that represents public employees who 
 14.12  are association members includes, but is not limited to, salary 
 14.13  defined under section 353.01, subdivision 10. 
 14.14     Sec. 9.  Minnesota Statutes 1994, section 353.656, 
 14.15  subdivision 2, is amended to read: 
 14.16     Subd. 2.  [BENEFITS PAID UNDER WORKERS' COMPENSATION LAW.] 
 14.17  If a member, as described in subdivision 1, is injured under 
 14.18  circumstances which entitle the member to receive benefits under 
 14.19  the workers' compensation law, the member shall receive the same 
 14.20  benefits as provided in subdivision 1, with disability benefits 
 14.21  paid reimbursed and future benefits reduced by all periodic or 
 14.22  lump sum amounts paid to the member under the workers' 
 14.23  compensation law, after deduction of amount of attorney fees, 
 14.24  authorized under applicable workers' compensation laws, paid by 
 14.25  a disabilitant if the total of the single life annuity actuarial 
 14.26  equivalent disability benefit and the workers' compensation 
 14.27  benefit exceeds:  (1) the salary the disabled member received as 
 14.28  of the date of the disability or (2) the salary currently 
 14.29  payable for the same employment position or an employment 
 14.30  position substantially similar to the one the person held as of 
 14.31  the date of the disability, whichever is greater.  The 
 14.32  disability benefit must be reduced to that amount which, when 
 14.33  added to the workers' compensation benefits, does not exceed the 
 14.34  greater of the salaries described in clauses (1) and (2). 
 14.35  Disability benefits must not be reduced by any periodic or lump 
 14.36  sum amounts received or receivable under workers' compensation 
 15.1   laws.  A disabilitant who is eligible to receive a disability 
 15.2   benefit after June 30, 1995, whose disability benefit amount was 
 15.3   reduced before July 1, 1995, as a result of the receipt of 
 15.4   workers' compensation benefits, must have the disability benefit 
 15.5   payment amount restored, as of July 1, 1995, and calculated 
 15.6   under subdivision 1 or 3.  A disabilitant is not entitled to 
 15.7   retroactive payment of the reduction amounts applied to 
 15.8   disability benefits before July 1, 1995, because of receipt of 
 15.9   workers' compensation benefits. 
 15.10     A disability benefit overpayment made before July 1, 1995, 
 15.11  because a reduction had not been made for receipt of workers' 
 15.12  compensation benefits must be collected by the association.  The 
 15.13  overpaid amounts may be obtained through the reduction by the 
 15.14  association of disability benefits or annuity payments made 
 15.15  after June 30, 1995, until the overpayment is fully recovered. 
 15.16     Sec. 10.  Minnesota Statutes 1994, section 353.656, 
 15.17  subdivision 4, is amended to read: 
 15.18     Subd. 4.  [LIMITATION ON DISABILITY BENEFIT PAYMENTS.] (a) 
 15.19  No member is entitled to receive a disability benefit payment 
 15.20  when there remains to the member's credit unused annual leave or 
 15.21  sick leave or under any other circumstances when, during the 
 15.22  period of disability, there has been no impairment of the 
 15.23  person's salary as a police officer or a firefighter, whichever 
 15.24  applies.  
 15.25     (b) If a disabled member resumes a gainful occupation with 
 15.26  earnings less than, which when added to the normal disability 
 15.27  benefit exceed the disabilitant reemployment earnings limit, the 
 15.28  amount of the disability benefit must be reduced as provided in 
 15.29  this paragraph.  The disabilitant reemployment earnings limit is 
 15.30  the greater of: 
 15.31     (1) the salary earned at the date of disability; or 
 15.32     (2) 125 percent of the salary currently paid by the 
 15.33  employing governmental subdivision for similar positions rate 
 15.34  earned at the date of disability increased by the same 
 15.35  percentage increase in the United States average wages used by 
 15.36  social security in calculating average indexed monthly earnings. 
 16.1      The disability benefit must be reduced by one dollar for 
 16.2   each three dollars by which the total amount of the current 
 16.3   disability benefit, any workers' compensation benefits, and 
 16.4   actual earnings exceed the greater disabilitant reemployment 
 16.5   earnings limit.  In no event may the disability benefit as 
 16.6   adjusted under this subdivision exceed the disability benefit 
 16.7   originally allowed.  
 16.8      Sec. 11.  Minnesota Statutes 1994, section 353C.08, 
 16.9   subdivision 4, is amended to read: 
 16.10     Subd. 4.  [DISABILITY BENEFIT APPLICATION.] A claim or 
 16.11  demand for a disability benefit must be initiated by written 
 16.12  application in the manner and form prescribed by the executive 
 16.13  director, filed in the office of the association, showing 
 16.14  compliance with the statutory conditions qualifying the 
 16.15  applicant for a disability benefit.  A member or former member 
 16.16  who became disabled during a period of membership may file an 
 16.17  application for disability benefits within three years following 
 16.18  termination of local government correctional service, but not 
 16.19  after that time has elapsed.  This benefit begins to accrue the 
 16.20  day following the commencement of disability, 90 days preceding 
 16.21  six months before the filing of the application, or, if annual 
 16.22  or sick leave is paid for more than the 90-day six-month period, 
 16.23  from the date salary ceased, whichever is latest.  No payment 
 16.24  may accrue beyond the end of the month in which entitlement has 
 16.25  terminated.  If the disabilitant dies before negotiating the 
 16.26  check for the month in which death occurs, payment must be made 
 16.27  to the optional annuitant or beneficiary. 
 16.28     Sec. 12.  Minnesota Statutes 1994, section 353C.08, 
 16.29  subdivision 6, is amended to read: 
 16.30     Subd. 6.  [RESUMPTION OF EMPLOYMENT.] Should a disabled 
 16.31  employee resume a gainful occupation from which earnings are 
 16.32  less than salary received at the date of disability or the 
 16.33  salary currently paid for similar positions, or should the 
 16.34  employee be entitled to receive workers' compensation 
 16.35  benefits rate received at the date of disability increased by 
 16.36  the same percentage increase in the United States average wages 
 17.1   used by social security in calculating average indexed monthly 
 17.2   earnings, the disability benefit must be continued in an amount 
 17.3   that, when added to such earnings and workers' compensation 
 17.4   benefits, does not exceed the salary received at the date of 
 17.5   disability or the salary currently payable for the same 
 17.6   employment position or an employment position substantially 
 17.7   similar to the one the person held rate as of the date of the 
 17.8   disability increased by the same percentage increase in the 
 17.9   United States average wages used by social security in 
 17.10  calculating average indexed monthly earnings, whichever is 
 17.11  greater. 
 17.12     Sec. 13.  [EFFECTIVE DATES.] 
 17.13     Sections 1 to 6 and 9 to 12 are effective July 1, 1995.  
 17.14  Sections 7 and 8 are effective January 1, 1996. 
 17.15                             ARTICLE 3 
 17.16                  TEACHERS RETIREMENT ASSOCIATION 
 17.17     Section 1.  Minnesota Statutes 1994, section 354.44, 
 17.18  subdivision 5, is amended to read: 
 17.19     Subd. 5.  [RESUMPTION OF TEACHING SERVICE AFTER 
 17.20  RETIREMENT.] Any A person who retired retires under the 
 17.21  provisions of this chapter and has thereafter resumed resumes 
 17.22  teaching in any employer unit to which this chapter applies is 
 17.23  eligible to may continue to receive annuity payments in 
 17.24  accordance with the annuity except that those annuity payments 
 17.25  must be reduced during the calendar year immediately 
 17.26  following any the calendar year in which the person's income 
 17.27  from the teaching service is in an amount greater than the 
 17.28  annual maximum earnings allowable for that age persons between 
 17.29  ages 65 and 70 for the continued receipt of full benefit amounts 
 17.30  monthly under the federal Old Age, Survivors and Disability 
 17.31  Insurance program as set by the secretary of health and human 
 17.32  services under United States Code, title 42, section 403. 
 17.33     The amount of the reduction must be one-half one-third of 
 17.34  the amount in excess of the applicable reemployment income 
 17.35  maximum specified in this subdivision and must be deducted from 
 17.36  the annuity payable for the calendar year immediately following 
 18.1   the calendar year in which the excess amount was earned.  If the 
 18.2   person has not yet reached the minimum age for the receipt of 
 18.3   social security benefits, the maximum earnings for the person 
 18.4   must be equal to the annual maximum earnings allowable for the 
 18.5   minimum age for the receipt of social security benefits.  
 18.6      If the person is retired for only a fractional part of the 
 18.7   calendar year during the initial year of retirement, the maximum 
 18.8   reemployment income specified in this subdivision must be 
 18.9   prorated for that calendar year.  
 18.10     After a person has reached the age of 70, no reemployment 
 18.11  income maximum is applicable regardless of the amount of income. 
 18.12  For the purpose of this subdivision, income from teaching 
 18.13  service includes, but is not limited to:  
 18.14     (a) all income for services performed as a consultant or an 
 18.15  independent contractor for an employer unit covered by the 
 18.16  provisions of this chapter; and 
 18.17     (b) the greater of either the income received or an amount 
 18.18  based on the rate paid with respect to an administrative 
 18.19  position, consultant, or independent contractor in an employer 
 18.20  unit with approximately the same number of pupils and at the 
 18.21  same level as the position occupied by the person who resumes 
 18.22  teaching service.  
 18.23     Sec. 2.  Minnesota Statutes 1994, section 354.48, 
 18.24  subdivision 7, is amended to read: 
 18.25     Subd. 7.  [PARTIAL REEMPLOYMENT.] If the disabled person 
 18.26  resumes a gainful occupation in which earnings are less than the 
 18.27  person's salary at the date of disability as adjusted by the 
 18.28  same percentage increase in United States average wages used by 
 18.29  social security in calculating average indexed monthly earnings, 
 18.30  the amount of earnings plus the disability benefit originally 
 18.31  granted may not exceed the this adjusted salary at the date of 
 18.32  disability.  If the sum of earnings plus the disability 
 18.33  benefit originally granted exceeds the this adjusted salary at 
 18.34  the date of disability, the amount of excess earnings must be 
 18.35  deducted from the disability benefit payable during the 
 18.36  following calendar year.  The provisions of this subdivision 
 19.1   shall not prohibit the executive director from making a 
 19.2   determination that a member is no longer totally and permanently 
 19.3   disabled or that the member is engaged or is able to engage in a 
 19.4   substantial gainful occupation based on the results of the 
 19.5   regular physical examinations required by subdivision 6 or any 
 19.6   other physical examinations required by the board.  Payment of 
 19.7   the disability benefit provided in this subdivision during a 
 19.8   period of partial reemployment shall be discontinued if the 
 19.9   executive director finds that the member is no longer totally 
 19.10  and permanently disabled.  
 19.11     Sec. 3.  [EFFECTIVE DATE.] 
 19.12     Sections 1 and 2 are effective January 1, 1996. 
 19.13                             ARTICLE 4
 19.14             FIRST CLASS CITY TEACHER RETIREMENT FUNDS 
 19.15     Section 1.  Minnesota Statutes 1994, section 354A.31, 
 19.16  subdivision 2a, is amended to read: 
 19.17     Subd. 2a.  [APPLICATIONS AFTER RETIREMENT.] If an 
 19.18  application for retirement is filed with the board during the 
 19.19  90-day six-month period immediately following the termination of 
 19.20  teaching service, the annuity may begin to accrue as if the 
 19.21  application for retirement had been filed with the board on the 
 19.22  date teaching service terminated.  In no event may an annuity 
 19.23  begin to accrue more than one month before the date of final 
 19.24  salary receipt. 
 19.25     Sec. 2.  Minnesota Statutes 1994, section 354A.31, 
 19.26  subdivision 3, is amended to read: 
 19.27     Subd. 3.  [RESUMPTION OF TEACHING AFTER COMMENCEMENT OF A 
 19.28  RETIREMENT ANNUITY.] Any person who retired and is receiving a 
 19.29  coordinated program retirement annuity under the provisions of 
 19.30  sections 354A.31 to 354A.41 or any person receiving a basic 
 19.31  program retirement annuity under the governing sections in the 
 19.32  articles of incorporation or bylaws and who has resumed teaching 
 19.33  service for the school district in which the teachers retirement 
 19.34  fund association exists is entitled to continue to receive 
 19.35  retirement annuity payments, except that annuity payments must 
 19.36  be reduced during the calendar year immediately following the 
 20.1   calendar year in which the person's income from the teaching 
 20.2   service is in an amount greater than the annual maximum earnings 
 20.3   allowable for that age for a person between ages 65 and 70 for 
 20.4   the continued receipt of full benefit amounts monthly under the 
 20.5   federal Old Age, Survivors, and Disability Insurance program as 
 20.6   set by the secretary of health and human services under United 
 20.7   States Code, title 42, section 403.  The amount of the reduction 
 20.8   must be one-third the amount in excess of the applicable 
 20.9   reemployment income maximum specified in this subdivision and 
 20.10  must be deducted from the annuity payable for the calendar year 
 20.11  immediately following the calendar year in which the excess 
 20.12  amount was earned.  If the person has not yet reached the 
 20.13  minimum age for the receipt of social security benefits, the 
 20.14  maximum earnings for the person must be equal to the annual 
 20.15  maximum earnings allowable for the minimum age for the receipt 
 20.16  of social security benefits. 
 20.17     If the person is retired for only a fractional part of the 
 20.18  calendar year during the initial year of retirement, the maximum 
 20.19  reemployment income specified in this subdivision must be 
 20.20  prorated for that calendar year. 
 20.21     After a person has reached the age of 70, no reemployment 
 20.22  income maximum is applicable regardless of the amount of any 
 20.23  compensation received for teaching service for the school 
 20.24  district in which the teachers retirement fund association 
 20.25  exists.  For the purpose of this subdivision, income from 
 20.26  teaching service includes:  (i) all income for services 
 20.27  performed as a consultant or independent contractor; or income 
 20.28  resulting from working with the school district in any capacity; 
 20.29  and (ii) the greater of either the income received or an amount 
 20.30  based on the rate paid with respect to an administrative 
 20.31  position, consultant, or independent contractor in the school 
 20.32  district in which the teachers retirement fund association 
 20.33  exists and at the same level as the position occupied by the 
 20.34  person who resumes teaching service. 
 20.35     Sec. 3.  Minnesota Statutes 1994, section 354A.36, 
 20.36  subdivision 2, is amended to read: 
 21.1      Subd. 2.  [TIME AND MANNER OF PAYMENTS.] The disability 
 21.2   benefit shall begin to accrue from the later of either 90 days 
 21.3   following the commencement of the permanent disability or the 
 21.4   first day of the month following the date on which the written 
 21.5   application for the disability benefit has been filed with the 
 21.6   board, but payment shall not begin to accrue until any salary 
 21.7   which is received by the disabled coordinated member for either 
 21.8   annual or sick leave during the period of disability ceases the 
 21.9   date at which sick leave expires or the date at which the 
 21.10  employer provided long-term disability insurance ceases, 
 21.11  whichever is later.  The accrual shall not be for a period 
 21.12  longer than six months.  
 21.13     Sec. 4.  Minnesota Statutes 1994, section 354A.36, 
 21.14  subdivision 7, is amended to read: 
 21.15     Subd. 7.  [PARTIAL REEMPLOYMENT OF DISABILITY BENEFIT 
 21.16  RECIPIENT.] If a disability benefit recipient resumes gainful 
 21.17  employment but the compensation from the employment is less than 
 21.18  the recipient's salary at the date of disability or the salary 
 21.19  paid currently to positions similar to the position which the 
 21.20  recipient held at the date of disability, the recipient shall be 
 21.21  entitled to a disability benefit from the board in an amount 
 21.22  which when added to the compensation for the partial 
 21.23  reemployment does not exceed the lower of the recipient's salary 
 21.24  at the date of disability or the salary paid currently to 
 21.25  positions similar to the position which the recipient held at 
 21.26  the date of disability as adjusted by the same percentage 
 21.27  increase in the United States average wages used by social 
 21.28  security, for calculating average indexed monthly earnings, and 
 21.29  does not in any event exceed the disability benefit originally 
 21.30  computed pursuant to subdivision 3 as adjusted by postretirement 
 21.31  increases. 
 21.32     Sec. 5.  Minnesota Statutes 1994, section 354A.36, is 
 21.33  amended by adding a subdivision to read: 
 21.34     Subd. 11.  [APPLICATIONS.] Any person described in 
 21.35  subdivision 1, or another person authorized to act on behalf of 
 21.36  the person, may make application for a total and permanent 
 22.1   disability benefit within six months following the termination 
 22.2   of service or the start of the disability or the termination of 
 22.3   any employer provided long-term disability insurance, whichever 
 22.4   is later, provided that the disability occurred while in the 
 22.5   employment of the respective school district in a city of the 
 22.6   first class. 
 22.7      Sec. 6.  [BYLAW AMENDMENT.] 
 22.8      Consistent with Minnesota Statutes, section 354A.12, 
 22.9   subdivision 4, the boards of the Duluth teachers retirement fund 
 22.10  association, the Minneapolis teachers retirement fund 
 22.11  association, and the St. Paul teachers retirement fund 
 22.12  association may amend their bylaws or articles of incorporation 
 22.13  to provide that: 
 22.14     (1) If an application for retirement is filed with the 
 22.15  board during the six-month period immediately following the 
 22.16  termination of teaching service, the annuity may begin to accrue 
 22.17  as if the application for retirement had been filed with the 
 22.18  board on the date teaching service terminated.  An annuity may 
 22.19  not begin to accrue more than one month before the date of final 
 22.20  salary receipt. 
 22.21     (2) If an application for disability benefit is filed 
 22.22  within six months following the beginning of the disability or 
 22.23  the termination of employment of the exhaustion of available 
 22.24  sick leave or the expiration of employer provided long-term 
 22.25  disability insurance, whichever is later, the benefit will begin 
 22.26  to accrue as if the application had been filed with the board on 
 22.27  the date of termination of employment or the exhaustion of sick 
 22.28  leave or the expiration of employer provided long-term 
 22.29  disability insurance, whichever is applicable, provided that the 
 22.30  disability occurred while in the employment in the respective 
 22.31  school district in a city of the first class. 
 22.32     (3) Any person who is a retired basic plan member of 
 22.33  Minneapolis teachers retirement fund association, St. Paul 
 22.34  teachers retirement fund association, or a retired old 
 22.35  coordinated plan member of Duluth teachers retirement fund 
 22.36  association, and receiving a benefit under the respective 
 23.1   association articles and bylaws and who has resumed teaching 
 23.2   service for an employer covered by the respective first class 
 23.3   city teachers retirement fund association, and who earns from 
 23.4   reemployment more than the annual maximum earnings allowable for 
 23.5   a person between ages 65 and 70 for the continued receipt of 
 23.6   full benefit amounts monthly under the federal Old Age Survivors 
 23.7   and Disability Insurance program as set by the secretary of 
 23.8   health and human services under United States Code, title 42, 
 23.9   section 403, must have their benefit reduced.  After a person 
 23.10  reaches age 70, no reemployment income maximum applies. 
 23.11     Sec. 7.  [REPEALER.] 
 23.12     Minnesota Statutes 1994, section 354A.36, subdivision 5, is 
 23.13  repealed. 
 23.14     Sec. 8.  [EFFECTIVE DATE.] 
 23.15     Sections 1 and 3 to 7 are effective July 1, 1995.  Section 
 23.16  2 is effective January 1, 1996. 
 23.17                             ARTICLE 5 
 23.18               MINNEAPOLIS EMPLOYEES RETIREMENT FUND 
 23.19     Section 1.  Minnesota Statutes 1994, section 422A.14, 
 23.20  subdivision 1, is amended to read: 
 23.21     Subdivision 1.  [APPLICATION APPROVAL.] No disability 
 23.22  benefit or retirement allowance shall be granted to any employee 
 23.23  who may become eligible for retirement as provided in sections 
 23.24  422A.01 to 422A.25 until the employee, or one authorized to act 
 23.25  in the employee's behalf, shall have filed with the retirement 
 23.26  board, in such form as may be prescribed by the board, an 
 23.27  application for such allowance.  No installment of any such 
 23.28  allowance shall be paid for any period prior to the effective 
 23.29  date of retirement or the date of application, whichever occurs 
 23.30  later No annuity payment shall be made retroactive for more than 
 23.31  six months prior to that month on which a complete application 
 23.32  has been received by the retirement board. 
 23.33     Sec. 2.  Minnesota Statutes 1994, section 422A.18, 
 23.34  subdivision 3, is amended to read: 
 23.35     Subd. 3.  Payment of any disability allowance authorized by 
 23.36  sections 422A.01 to 422A.25, shall commence three months after 
 24.1   date of application provided that the applicant has not been 
 24.2   restored to duty.  Such payment shall be retroactive to date of 
 24.3   application and shall continue throughout the full period of the 
 24.4   disability subject to the same optional selections as are 
 24.5   provided for service allowances; provided that when a disability 
 24.6   beneficiary shall have attained the minimum age for retirement 
 24.7   on a service allowance the disability allowance shall be 
 24.8   discontinued only as provided by the terms of the option 
 24.9   selected.  Any employee eligible for a disability allowance who 
 24.10  is also entitled to an allowance under a workers' compensation 
 24.11  act and/or and resumes a gainful occupation shall be entitled to 
 24.12  receive during the period of such compensation only that portion 
 24.13  of the retirement allowance provided by this act which when 
 24.14  added to such additional compensation does not exceed the salary 
 24.15  of the employee at the time of disability as adjusted by the 
 24.16  same percentage increase in the United States average wages used 
 24.17  by social security for calculating average indexed monthly 
 24.18  earnings. 
 24.19     Sec. 3.  [EFFECTIVE DATE.] 
 24.20     Sections 1 and 2 are effective July 1, 1995. 
 24.21                             ARTICLE 6 
 24.22                         IRS MAXIMUM SALARY 
 24.23     Section 1.  Minnesota Statutes 1994, section 356.611, is 
 24.24  amended to read: 
 24.25     356.611 [LIMITATION ON PUBLIC EMPLOYEE SALARIES FOR PENSION 
 24.26  PURPOSES.] 
 24.27     Subdivision 1.  (a) Notwithstanding any provision of law, 
 24.28  bylaws, articles or of incorporation, retirement and disability 
 24.29  allowance plan agreements, or retirement plan contracts to the 
 24.30  contrary, the covered salary for pension purposes for a plan 
 24.31  participant of a covered retirement fund under section 356.30, 
 24.32  subdivision 3, may not exceed 95 percent of the salary 
 24.33  established for the governor under section 15A.082 at the time 
 24.34  the person received the salary. 
 24.35     (b) This section does not apply to a salary paid: 
 24.36     (1) to the governor; 
 25.1      (2) to an employee of a political subdivision in a position 
 25.2   that is excluded from the limit as specified under section 
 25.3   43A.17, subdivision 9; or 
 25.4      (3) to a state employee in a position for which the 
 25.5   commissioner of employee relations has approved a salary rate 
 25.6   that exceeds 95 percent of the governor's salary. 
 25.7      (c) The limited covered salary determined under this 
 25.8   section must be used in determining employee and employer 
 25.9   contributions and in determining retirement annuities and other 
 25.10  benefits under the respective covered retirement fund and under 
 25.11  this chapter. 
 25.12     Subd. 2.  Compensation in excess of the limitation in 
 25.13  Internal Revenue Code, section 401(a)(17), shall be disregarded 
 25.14  for contribution and benefit computation purposes.  For this 
 25.15  purpose, an "eligible plan participant" is an individual who was 
 25.16  a member of a covered retirement fund under section 356.30, 
 25.17  subdivision 3, before July 1, 1996.  The limitation on 
 25.18  compensation for an eligible plan participant shall not be less 
 25.19  than the amount which was allowed to be taken into account for a 
 25.20  plan participant of a covered retirement fund under section 
 25.21  356.30, subdivision 3, as in effect on July 1, 1994. 
 25.22     Sec. 2.  [EFFECTIVE DATE.] 
 25.23     Section 1 is effective the day following final enactment.