SF 1808

2nd Engrossment - 87th Legislature (2011 - 2012) Posted on 10/11/2012 01:42pm

A bill for an act
relating to retirement; statewide and local retirement plans; revising certain
statutory actuarial assumptions; requiring comprehensive annual retirement
plan fund reporting by Minnesota Management and Budget, modifying
various Department of Human Services employment classifications eligible
for correctional retirement coverage; modifying certain health care savings
plan provisions; clarifying transfer eligibility for the unclassified state
employees retirement program; making various modifications in retirement
plans administered by the Public Employees Retirement Association, making
various revisions in the public employees privatization law; making various
administrative changes in the Teachers Retirement Association law, including
revising state and local aid programs inherited from the former Minneapolis
Teachers Retirement Fund Association; making various modifications to conform
with the federal Internal Revenue Code retirement plan requirements; updating
the public pension fund investment laws, merging the Fairmont Police Relief
Association and the Virginia fire consolidation account with the public employees
police and fire retirement plan; making various volunteer fire retirement
law changes; and making various small group or single person retirement
authorizations; amending Minnesota Statutes 2010, sections 11A.07, subdivision
4; 11A.14, subdivision 14; 11A.24; 16A.06, subdivision 9; 69.011, subdivision
1; 69.051, subdivisions 1, 1a, 3; 69.77, subdivision 9; 69.772, subdivision 4;
69.773, subdivision 5; 69.775; 69.80; 126C.41, subdivision 3; 352.90; 352.91,
subdivisions 3c, 3d, 3e, 3f; 352.98, subdivisions 3, 4, 5, 8; 352D.02, subdivision
3; 353.01, subdivision 47; 353.50, subdivision 7; 353.656, subdivision 2;
353F.02, subdivision 4; 353F.04, subdivision 1; 353F.07; 353G.08, by adding a
subdivision; 354.51, subdivision 5; 354A.08; 354A.12, subdivision 3c; 356.215,
subdivisions 1, 11; 356.219, subdivisions 1, 8; 356.415, subdivision 1d; 356.611,
subdivisions 2, 3, 3a, 4, by adding a subdivision; 356.635, subdivisions 6, 9;
356A.01, subdivision 19; 356A.06, subdivisions 6, 7; 423A.02, subdivision 3;
424A.001, subdivision 4; 424A.01, subdivision 6; 424A.016, subdivisions 5, 6;
424A.02, subdivisions 1, 7, 9; 424A.04, subdivision 3; 424A.06, subdivision
2; Minnesota Statutes 2011 Supplement, sections 69.77, subdivisions 1a, 4;
353.01, subdivisions 2a, 6, 16; 353.668, subdivision 4; 356.215, subdivision 8;
Laws 2002, chapter 392, article 1, section 8; proposing coding for new law in
Minnesota Statutes, chapters 16A; 353; 354; repealing Minnesota Statutes 2010,
sections 128D.18; 354A.12, subdivision 3b; 356.219, subdivision 4; 423A.06;
Laws 1947, chapter 624, sections 1; 2; 3; 4; 5; 6; 8; 9; 10; 11; 12; 13; 14; 15; 16;
17; 18; 19; 21; 22; Laws 1953, chapter 399, as amended; Laws 1961, chapter 420,
sections 2, as amended; 3; 4; 5, as amended; 6; Laws 1963, chapter 407, section
1, as amended; Laws 1963, chapter 423; Laws 1965, chapter 546, sections 1; 2,
as amended; 3; Laws 1969, chapter 578, sections 1; 2; 3; Laws 1974, chapter
183, as amended; Laws 1982, chapter 574, section 1; Laws 1982, chapter 578,
article 1, section 14; Laws 1983, chapter 69, section 1; Laws 1984, chapter 547,
section 27; Laws 1987, chapter 372, article 2, section 14; Laws 1988, chapter
709, sections 1, as amended; 2; Laws 1991, chapter 62, sections 1; 2; Laws 1992,
chapter 465, section 1; Laws 1999, chapter 222, article 3, sections 3; 4; 5.

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

ARTICLE 1

STATUTORY ACTUARIAL ASSUMPTION AND CONFORMING CHANGES

Section 1.

Minnesota Statutes 2010, section 356.215, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For the purposes of sections 3.85 and 356.20 to
356.23, each of the terms in the following paragraphs has the meaning given.

(b) "Actuarial valuation" means a set of calculations prepared by an actuary retained
under section 356.214 if so required under section 3.85, or otherwise, by an approved
actuary, to determine the normal cost and the accrued actuarial liabilities of a benefit
plan, according to the entry age actuarial cost method and based upon stated assumptions
including, but not limited to rates of interest, mortality, salary increase, disability,
withdrawal, and retirement and to determine the payment necessary to amortize over a
stated period any unfunded accrued actuarial liability disclosed as a result of the actuarial
valuation of the benefit plan.

(c) "Approved actuary" means a person who is regularly engaged in the business of
providing actuarial services and who is a fellow in the Society of Actuaries.

(d) "Entry age actuarial cost method" means an actuarial cost method under which
the actuarial present value of the projected benefits of each individual currently covered
by the benefit plan and included in the actuarial valuation is allocated on a level basis over
the service of the individual, if the benefit plan is governed by section 69.773, or over the
earnings of the individual, if the benefit plan is governed by any other law, between the
entry age and the assumed exit age, with the portion of the actuarial present value which is
allocated to the valuation year to be the normal cost and the portion of the actuarial present
value not provided for at the valuation date by the actuarial present value of future normal
costs to be the actuarial accrued liability, with aggregation in the calculation process to be
the sum of the calculated result for each covered individual and with recognition given to
any different benefit formulas which may apply to various periods of service.

(e) "Experience study" means a report providing experience data and an actuarial
analysis of the adequacy of the actuarial assumptions on which actuarial valuations are
based.

(f) "Actuarial value of assets" means:

deleted text begin (1) For the July 1, 2009, actuarial valuation, the market value of all assets as of
June 30, 2009, reduced by:
deleted text end

deleted text begin (i) 20 percent of the difference between the actual net change in the market value of
assets other than the Minnesota postretirement investment fund between June 30, 2006,
and June 30, 2005, and the computed increase in the market value of assets other than the
Minnesota postretirement investment fund over that fiscal year period if the assets had
earned a rate of return on assets equal to the annual percentage preretirement interest rate
assumption used in the actuarial valuation for July 1, 2005;
deleted text end

deleted text begin (ii) 40 percent of the difference between the actual net change in the market value of
assets other than the Minnesota postretirement investment fund between June 30, 2007,
and June 30, 2006, and the computed increase in the market value of assets other than the
Minnesota postretirement investment fund over that fiscal year period if the assets had
earned a rate of return on assets equal to the annual percentage preretirement interest rate
assumption used in the actuarial valuation for July 1, 2006;
deleted text end

deleted text begin (iii) 60 percent of the difference between the actual net change in the market value
of assets other than the Minnesota postretirement investment fund between June 30, 2008,
and June 30, 2007, and the computed increase in the market value of assets other than the
Minnesota postretirement investment fund over that fiscal year period if the assets had
earned a rate of return on assets equal to the annual percentage preretirement interest rate
assumption used in the actuarial valuation for July 1, 2007;
deleted text end

deleted text begin (iv) 80 percent of the difference between the actual net change in the market value of
assets other than the Minnesota postretirement investment fund between June 30, 2009,
and June 30, 2008, and the computed increase in the market value of assets other than the
Minnesota postretirement investment fund over that fiscal year period if the assets had
earned a rate of return on assets equal to the annual percentage preretirement interest rate
assumption used in the actuarial valuation for July 1, 2008; and
deleted text end

deleted text begin (v) if applicable, 80 percent of the difference between the actual net change in the
market value of the Minnesota postretirement investment fund between June 30, 2009,
and June 30, 2008, and the computed increase in the market value of assets over that fiscal
year period if the assets had increased at 8.5 percent annually.
deleted text end

deleted text begin (2) For the July 1, 2010, actuarial valuation, the market value of all assets as of
June 30, 2010, reduced by:
deleted text end

deleted text begin (i) 20 percent of the difference between the actual net change in the market value of
assets other than the Minnesota postretirement investment fund between June 30, 2007,
and June 30, 2006, and the computed increase in the market value of assets other than the
Minnesota postretirement investment fund over that fiscal year period if the assets had
earned a rate of return on assets equal to the annual percentage preretirement interest rate
assumption used in the actuarial valuation for July 1, 2006;
deleted text end

deleted text begin (ii) 40 percent of the difference between the actual net change in the market value of
assets other than the Minnesota postretirement investment fund between June 30, 2008,
and June 30, 2007, and the computed increase in the market value of assets other than the
Minnesota postretirement investment fund over that fiscal year period if the assets had
earned a rate of return on assets equal to the annual percentage preretirement interest rate
assumption used in the actuarial valuation for July 1, 2007;
deleted text end

deleted text begin (iii) 60 percent of the difference between the actual net change in the market value
of assets other than the Minnesota postretirement investment fund between June 30, 2009,
and June 30, 2008, and the computed increase in the market value of assets other than the
Minnesota postretirement investment fund over that fiscal year period if the assets had
earned a rate of return on assets equal to the annual percentage preretirement interest rate
assumption used in the actuarial valuation for July 1, 2008;
deleted text end

deleted text begin (iv) 80 percent of the difference between the actual net change in the market value of
total assets between June 30, 2010, and June 30, 2009, and the computed increase in the
market value of total assets over that fiscal year period if the assets had earned a rate of
return on assets equal to the annual percentage preretirement interest rate assumption used
in the actuarial valuation for July 1, 2009; and
deleted text end

deleted text begin (v) if applicable, 60 percent of the difference between the actual net change in the
market value of the Minnesota postretirement investment fund between June 30, 2009,
and June 30, 2008, and the computed increase in the market value of assets over that fiscal
year period if the assets had increased at 8.5 percent annually.
deleted text end

deleted text begin (3) For the July 1, 2011, actuarial valuation, the market value of all assets as of
June 30, 2011, reduced by:
deleted text end

deleted text begin (i) 20 percent of the difference between the actual net change in the market value of
assets other than the Minnesota postretirement investment fund between June 30, 2008,
and June 30, 2007, and the computed increase in the market value of assets other than the
Minnesota postretirement investment fund over that fiscal year period if the assets had
earned a rate of return on assets equal to the annual percentage preretirement interest rate
assumption used in the actuarial valuation for July 1, 2007;
deleted text end

deleted text begin (ii) 40 percent of the difference between the actual net change in the market value of
assets other than the Minnesota postretirement investment fund between June 30, 2009,
and June 30, 2008, and the computed increase in the market value of assets other than the
Minnesota postretirement investment fund over that fiscal year period if the assets had
earned a rate of return on assets equal to the annual percentage preretirement interest rate
assumption used in the actuarial valuation for July 1, 2008;
deleted text end

deleted text begin (iii) 60 percent of the difference between the actual net change in the market value
of the total assets between June 30, 2010, and June 30, 2009, and the computed increase in
the market value of the total assets over that fiscal year period if the assets had earned
a rate of return on assets equal to the annual percentage preretirement interest rate
assumption used in the actuarial valuation for July 1, 2009;
deleted text end

deleted text begin (iv) 80 percent of the difference between the actual net change in the market value of
total assets between June 30, 2011, and June 30, 2010, and the computed increase in the
market value of total assets over that fiscal year period if the assets had earned a rate of
return on assets equal to the annual percentage preretirement interest rate assumption used
in the actuarial valuation for July 1, 2010; and
deleted text end

deleted text begin (v) if applicable, 40 percent of the difference between the actual net change in the
market value of the Minnesota postretirement investment fund between June 30, 2009,
and June 30, 2008, and the computed increase in the market value of assets over that fiscal
year period if the assets had increased at 8.5 percent annually.
deleted text end

deleted text begin (4) deleted text end new text begin(1) new text endFor the July 1, 2012, actuarial valuation, the market value of all assets as of
June 30, 2012, reduced by:

(i) 20 percent of the difference between the actual net change in the market value of
assets other than the Minnesota postretirement investment fund between June 30, 2009,
and June 30, 2008, and the computed increase in the market value of assets other than the
Minnesota postretirement investment fund over that fiscal year period if the assets had
earned a rate of return on assets equal to the annual percentage preretirement interest rate
assumption used in the actuarial valuation for July 1, 2008;

(ii) 40 percent of the difference between the actual net change in the market value of
total assets between June 30, 2010, and June 30, 2009, and the computed increase in the
market value of total assets over that fiscal year period if the assets had earned a rate of
return on assets equal to the annual percentage preretirement interest rate assumption used
in the actuarial valuation for July 1, 2009;

(iii) 60 percent of the difference between the actual net change in the market value
of total assets between June 30, 2011, and June 30, 2010, and the computed increase in the
market value of total assets over that fiscal year period if the assets had earned a rate of
return on assets equal to the annual percentage preretirement interest rate assumption used
in the actuarial valuation for July 1, 2010;

(iv) 80 percent of the difference between the actual net change in the market value of
total assets between June 30, 2012, and June 30, 2011, and the computed increase in the
market value of total assets over that fiscal year period if the assets had earned a rate of
return on assets equal to the annual percentage preretirement interest rate assumption used
in the actuarial valuation for July 1, 2011; and

(v) if applicable, 20 percent of the difference between the actual net change in the
market value of the Minnesota postretirement investment fund between June 30, 2009,
and June 30, 2008, and the computed increase in the market value of assets over that fiscal
year period if the assets had increased at 8.5 percent annually.

deleted text begin (5) deleted text end new text begin(2) new text endFor the July 1, 2013, and following actuarial valuations, the market value of
all assets as of the preceding June 30, reduced by:

(i) 20 percent of the difference between the actual net change in the market value
of total assets between the June 30 that occurred three years earlier and the June 30 that
occurred four years earlier and the computed increase in the market value of total assets
over that fiscal year period if the assets had earned a rate of return on assets equal to the
annual percentage preretirement interest rate assumption used in the actuarial valuation
for the July 1 that occurred four years earlier;

(ii) 40 percent of the difference between the actual net change in the market value
of total assets between the June 30 that occurred two years earlier and the June 30 that
occurred three years earlier and the computed increase in the market value of total assets
over that fiscal year period if the assets had earned a rate of return on assets equal to the
annual percentage preretirement interest rate assumption used in the actuarial valuation
for the July 1 that occurred three years earlier;

(iii) 60 percent of the difference between the actual net change in the market value
of total assets between the June 30 that occurred one year earlier and the June 30 that
occurred two years earlier and the computed increase in the market value of total assets
over that fiscal year period if the assets had earned a rate of return on assets equal to the
annual percentage preretirement interest rate assumption used in the actuarial valuation
for the July 1 that occurred two years earlier; and

(iv) 80 percent of the difference between the actual net change in the market value
of total assets between the most recent June 30 and the June 30 that occurred one year
earlier and the computed increase in the market value of total assets over that fiscal year
period if the assets had earned a rate of return on assets equal to the annual percentage
preretirement interest rate assumption used in the actuarial valuation for the July 1 that
occurred one year earlier.

(g) "Unfunded actuarial accrued liability" means the total current and expected
future benefit obligations, reduced by the sum of the actuarial value of assets and the
present value of future normal costs.

(h) "Pension benefit obligation" means the actuarial present value of credited
projected benefits, determined as the actuarial present value of benefits estimated to be
payable in the future as a result of employee service attributing an equal benefit amount,
including the effect of projected salary increases and any step rate benefit accrual rate
differences, to each year of credited and expected future employee service.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012.
new text end

Sec. 2.

Minnesota Statutes 2011 Supplement, section 356.215, subdivision 8, is
amended to read:

Subd. 8.

Interest and salary assumptions.

(a) The actuarial valuation must use
the applicable following preretirement interest assumption and the applicable following
postretirement interest assumption:

new text begin (1) select and ultimate interest rate assumption
new text end

plan	new text beginultimate new text endpreretirement interest rate assumption	new text begin ultimate new text endpostretirement interest rate assumption
general state employees retirement plan	8.5%	6.0%
correctional state employees retirement plan	8.5	6.0
State Patrol retirement plan	8.5	6.0
legislators retirement plan	deleted text begin8.5 deleted text end new text begin0.0 new text end	deleted text begin 6.0 deleted text end new text begin-2.0 until June 30, 2040, and -2.5 after June 30, 2040 new text end
elective state officers retirement plan	deleted text begin8.5 deleted text end new text begin0.0 new text end	deleted text begin 6.0 deleted text end new text begin-2.0 until June 30, 2040, and -2.5 after June 30, 2040 new text end
judges retirement plan	8.5	6.0
general public employees retirement plan	8.5	6.0
public employees police and fire retirement plan	8.5	6.0
local government correctional service retirement plan	8.5	6.0
teachers retirement plan	8.5	6.0
Duluth teachers retirement plan	8.5	8.5
St. Paul teachers retirement plan	8.5	8.5

new text begin Except for the legislators retirement plan and the elective state officers retirement
plan, the select preretirement interest rate assumption for the period after June 30, 2012,
through June 30, 2017, is 8.0 percent. Except for the legislators retirement plan and the
elective state officers retirement plan, the select postretirement interest rate assumption for
the period after June 30, 2012, through June 30, 2017, is 5.5 percent, except for the Duluth
teachers retirement plan and the St. Paul teachers retirement plan, each with a select
postretirement interest rate assumption for the period after June 30, 2012, through June
30, 2017, of 8.0 percent.
new text end

new text begin (2) single rate preretirement and postretirement interest rate assumption
new text end

new text begin plan new text end	new text begin interest rate assumption new text end
Fairmont Police Relief Association	5.0	deleted text begin 5.0 deleted text end
Virginia Fire Department Relief Association	5.0	deleted text begin 5.0 deleted text end
Bloomington Fire Department Relief Association	6.0	deleted text begin 6.0 deleted text end
local monthly benefit volunteer firefighters relief associations	5.0	deleted text begin 5.0 deleted text end

(b) deleted text beginBefore July 1, 2010, deleted text end The actuarial valuation must use the applicable following
single rate future salary increase assumption, the applicable following modified single
rate future salary increase assumption, or the applicable following graded rate future
salary increase assumption:

(1) single rate future salary increase assumption

plan	future salary increase assumption
legislators retirement plan		5.0%
judges retirement plan		deleted text begin 4.0 deleted text end new text begin3.0 new text end
Fairmont Police Relief Association		3.5
Virginia Fire Department Relief Association		3.5
Bloomington Fire Department Relief Association		4.0

(2) new text begin age-related future salary increase new text end age-related select and ultimate future salary
increase assumption or graded rate future salary increase assumption

plan	future salary increase assumption
deleted text begin correctional state employees retirement plan deleted text end	deleted text begin assumption D deleted text end
deleted text begin State Patrol retirement plan deleted text end	deleted text begin assumption C deleted text end
local government correctional service retirement plan	assumption C
Duluth teachers retirement plan	assumption A
St. Paul teachers retirement plan	assumption B

The select calculation is: during the
designated select period, a designated
percentage rate is multiplied by the result of
the designated integer minus T, where T is
the number of completed years of service,
and is added to the applicable future salary
increase assumption. deleted text beginThe designated select deleted text end
deleted text begin period is five years and the designated
deleted text end deleted text begininteger is five for the general state employees
deleted text end deleted text beginretirement plan. deleted text end The designated select period
is ten years and the designated integer is ten
for all other retirement plans covered by
this clause. The designated percentage rate
is: (1) deleted text begin0.2 percent for the deleted text end deleted text begincorrectional state deleted text end
deleted text begin employees retirement plan, the State Patrol
deleted text end deleted text beginretirement plan, and the deleted text end deleted text begin local government
deleted text end deleted text begincorrectional service retirement plan; (2)
deleted text end0.6 percent for the general state employees
retirement plan; and deleted text begin(3) deleted text end new text begin (2) new text end 0.3 percent for
the teachers retirement plan, the Duluth
Teachers Retirement Fund Association,
and the St. Paul Teachers Retirement
Fund Association. The select calculation
for the Duluth Teachers Retirement Fund
Association is 8.00 percent per year for
service years one through seven, 7.25 percent
per year for service years seven and eight,
and 6.50 percent per year for service years
eight and nine.

The ultimate future salary increase assumption is:

age	A	B	C	deleted text begin D deleted text end
16	8.00%	6.90%	deleted text begin 7.7500% deleted text end new text begin 9.00% new text end	deleted text begin 7.2500% deleted text end
17	8.00	6.90	deleted text begin 7.7500 deleted text end new text begin 9.00 new text end	deleted text begin 7.2500 deleted text end
18	8.00	6.90	deleted text begin 7.7500 deleted text end new text begin 9.00 new text end	deleted text begin 7.2500 deleted text end
19	8.00	6.90	deleted text begin 7.7500 deleted text end new text begin 9.00 new text end	deleted text begin 7.2500 deleted text end
20	6.90	6.90	deleted text begin 7.7500 deleted text end new text begin 9.00 new text end	deleted text begin 7.2500 deleted text end
21	6.90	6.90	deleted text begin 7.1454 deleted text end new text begin 8.75 new text end	deleted text begin 6.6454 deleted text end
22	6.90	6.90	deleted text begin 7.0725 deleted text end new text begin 8.50 new text end	deleted text begin 6.5725 deleted text end
23	6.85	6.85	deleted text begin 7.0544 deleted text end new text begin 8.25 new text end	deleted text begin 6.5544 deleted text end
24	6.80	6.80	deleted text begin 7.0363 deleted text end new text begin 8.00 new text end	deleted text begin 6.5363 deleted text end
25	6.75	6.75	deleted text begin 7.0000 deleted text end new text begin 7.75 new text end	deleted text begin 6.5000 deleted text end
26	6.70	6.70	deleted text begin 7.0000 deleted text end new text begin 7.50 new text end	deleted text begin 6.5000 deleted text end
27	6.65	6.65	deleted text begin 7.0000 deleted text end new text begin 7.25 new text end	deleted text begin 6.5000 deleted text end
28	6.60	6.60	deleted text begin 7.0000 deleted text end new text begin 7.00 new text end	deleted text begin 6.5000 deleted text end
29	6.55	6.55	deleted text begin 7.0000 deleted text end new text begin 6.75 new text end	deleted text begin 6.5000 deleted text end
30	6.50	6.50	deleted text begin 7.0000 deleted text end new text begin 6.75 new text end	deleted text begin 6.5000 deleted text end
31	6.45	6.45	deleted text begin 7.0000 deleted text end new text begin 6.50 new text end	deleted text begin 6.5000 deleted text end
32	6.40	6.40	deleted text begin 7.0000 deleted text end new text begin 6.50 new text end	deleted text begin 6.5000 deleted text end
33	6.35	6.35	deleted text begin 7.0000 deleted text end new text begin 6.50 new text end	deleted text begin 6.5000 deleted text end
34	6.30	6.30	deleted text begin 7.0000 deleted text end new text begin 6.25 new text end	deleted text begin 6.5000 deleted text end
35	6.25	6.25	deleted text begin 7.0000 deleted text end new text begin 6.25 new text end	deleted text begin 6.5000 deleted text end
36	6.20	6.20	deleted text begin 6.9019 deleted text end new text begin 6.00 new text end	deleted text begin 6.4019 deleted text end
37	6.15	6.15	deleted text begin 6.8074 deleted text end new text begin 6.00 new text end	deleted text begin 6.3074 deleted text end
38	6.10	6.10	deleted text begin 6.7125 deleted text end new text begin 6.00 new text end	deleted text begin 6.2125 deleted text end
39	6.05	6.05	deleted text begin 6.6054 deleted text end new text begin 5.75 new text end	deleted text begin 6.1054 deleted text end
40	6.00	6.00	deleted text begin 6.5000 deleted text end new text begin 5.75 new text end	deleted text begin 6.0000 deleted text end
41	5.90	5.95	deleted text begin 6.3540 deleted text end new text begin 5.75 new text end	deleted text begin 5.8540 deleted text end
42	5.80	5.90	deleted text begin 6.2087 deleted text end new text begin 5.50 new text end	deleted text begin 5.7087 deleted text end
43	5.70	5.85	deleted text begin 6.0622 deleted text end new text begin 5.25 new text end	deleted text begin 5.5622 deleted text end
44	5.60	5.80	deleted text begin 5.9048 deleted text end new text begin 5.25 new text end	deleted text begin 5.4078 deleted text end
45	5.50	5.75	deleted text begin 5.7500 deleted text end new text begin 5.00 new text end	deleted text begin 5.2500 deleted text end
46	5.40	5.70	deleted text begin 5.6940 deleted text end new text begin 5.00 new text end	deleted text begin 5.1940 deleted text end
47	5.30	5.65	deleted text begin 5.6375 deleted text end new text begin 5.00 new text end	deleted text begin 5.1375 deleted text end
48	5.20	5.60	deleted text begin 5.5822 deleted text end new text begin 5.00 new text end	deleted text begin 5.0822 deleted text end
49	5.10	5.55	deleted text begin 5.5404 deleted text end new text begin 5.00 new text end	deleted text begin 5.0404 deleted text end
50	5.00	5.50	deleted text begin 5.5000 deleted text end new text begin 5.00 new text end	deleted text begin 5.0000 deleted text end
51	4.90	5.45	deleted text begin 5.4384 deleted text end new text begin 5.00 new text end	deleted text begin 4.9384 deleted text end
52	4.80	5.40	deleted text begin 5.3776 deleted text end new text begin 5.00 new text end	deleted text begin 4.8776 deleted text end
53	4.70	5.35	deleted text begin 5.3167 deleted text end new text begin 5.00 new text end	deleted text begin 4.8167 deleted text end
54	4.60	5.30	deleted text begin 5.2826 deleted text end new text begin 5.00 new text end	deleted text begin 4.7826 deleted text end
55	4.50	5.25	deleted text begin 5.2500 deleted text end new text begin 4.75 new text end	deleted text begin 4.7500 deleted text end
56	4.40	5.20	deleted text begin 5.2500 deleted text end new text begin 4.75 new text end	deleted text begin 4.7500 deleted text end
57	4.30	5.15	deleted text begin 5.2500 deleted text end new text begin 4.50 new text end	deleted text begin 4.7500 deleted text end
58	4.20	5.10	deleted text begin 5.2500 deleted text end new text begin 4.25 new text end	deleted text begin 4.7500 deleted text end
59	4.10	5.05	deleted text begin 5.2500 deleted text end new text begin 4.25 new text end	deleted text begin 4.7500 deleted text end
60	4.00	5.00	deleted text begin 5.2500 deleted text end new text begin 4.25 new text end	deleted text begin 4.7500 deleted text end
61	3.90	5.00	deleted text begin 5.2500 deleted text end new text begin 4.25 new text end	deleted text begin 4.7500 deleted text end
62	3.80	5.00	deleted text begin 5.2500 deleted text end new text begin 4.25 new text end	deleted text begin 4.7500 deleted text end
63	3.70	5.00	deleted text begin 5.2500 deleted text end new text begin 4.25 new text end	deleted text begin 4.7500 deleted text end
64	3.60	5.00	deleted text begin 5.2500 deleted text end new text begin 4.25 new text end	deleted text begin 4.7500 deleted text end
65	3.50	5.00	deleted text begin 5.2500 deleted text end new text begin 4.00 new text end	deleted text begin 4.7500 deleted text end
66	3.50	5.00	deleted text begin 5.2500 deleted text end new text begin 4.00 new text end	deleted text begin 4.7500 deleted text end
67	3.50	5.00	deleted text begin 5.2500 deleted text end new text begin 4.00 new text end	deleted text begin 4.7500 deleted text end
68	3.50	5.00	deleted text begin 5.2500 deleted text end new text begin 4.00 new text end	deleted text begin 4.7500 deleted text end
69	3.50	5.00	deleted text begin 5.2500 deleted text end new text begin 4.00 new text end	deleted text begin 4.7500 deleted text end
70	3.50	5.00	deleted text begin 5.2500 deleted text end new text begin 4.00 new text end	deleted text begin 4.7500 deleted text end

(3) service-related ultimate future salary increase assumption

general state employees retirement plan of the Minnesota State Retirement System	assumption A
general employees retirement plan of the Public Employees Retirement Association	assumption B
Teachers Retirement Association	assumption C
public employees police and fire retirement plan	assumption D
new text begin State Patrol retirement plan new text end	new text begin assumption E new text end
new text begin correctional state employees retirement plan of the Minnesota State Retirement System new text end	new text begin assumption F new text end

service length	A	B	C	D	new text begin E new text end	new text begin F new text end
1	deleted text begin10.75 deleted text end new text begin10.50 new text end%	deleted text begin12.25 deleted text end new text begin12.03 new text end%	12.00%	13.00%	new text begin 8.00% new text end	new text begin 6.00% new text end
2	deleted text begin 8.35 deleted text end new text begin 8.10 new text end	deleted text begin 9.15 deleted text end new text begin 8.90 new text end	9.00	11.00	new text begin 7.50 new text end	new text begin 5.85 new text end
3	deleted text begin 7.15 deleted text end new text begin 6.90 new text end	deleted text begin 7.75 deleted text end new text begin 7.46 new text end	8.00	9.00	new text begin 7.00 new text end	new text begin 5.70 new text end
4	deleted text begin 6.45 deleted text end new text begin 6.20 new text end	deleted text begin 6.85 deleted text end new text begin 6.58 new text end	7.50	8.00	new text begin 6.75 new text end	new text begin 5.55 new text end
5	deleted text begin 5.95 deleted text end new text begin 5.70 new text end	deleted text begin 6.25 deleted text end new text begin 5.97 new text end	7.25	6.50	new text begin 6.50 new text end	new text begin 5.40 new text end
6	deleted text begin 5.55 deleted text end new text begin 5.30 new text end	deleted text begin 5.75 deleted text end new text begin 5.52 new text end	7.00	6.10	new text begin 6.25 new text end	new text begin 5.25 new text end
7	deleted text begin 5.25 deleted text end new text begin 5.00 new text end	deleted text begin 5.45 deleted text end new text begin 5.16 new text end	6.85	5.80	new text begin 6.00 new text end	new text begin 5.10 new text end
8	deleted text begin 4.95 deleted text end new text begin 4.70 new text end	deleted text begin 5.15 deleted text end new text begin 4.87 new text end	6.70	5.60	new text begin 5.85 new text end	new text begin 4.95 new text end
9	deleted text begin 4.75 deleted text end new text begin 4.50 new text end	deleted text begin 4.85 deleted text end new text begin 4.63 new text end	6.55	5.40	new text begin 5.70 new text end	new text begin 4.80 new text end
10	deleted text begin 4.65 deleted text end new text begin 4.40 new text end	deleted text begin 4.65 deleted text end new text begin 4.42 new text end	6.40	5.30	new text begin 5.55 new text end	new text begin 4.65 new text end
11	deleted text begin 4.45 deleted text end new text begin 4.20 new text end	deleted text begin 4.45 deleted text end new text begin 4.24 new text end	6.25	5.20	new text begin 5.40 new text end	new text begin 4.55 new text end
12	deleted text begin 4.35 deleted text end new text begin 4.10 new text end	deleted text begin 4.35 deleted text end new text begin 4.08 new text end	6.00	5.10	new text begin 5.25 new text end	new text begin 4.45 new text end
13	deleted text begin 4.25 deleted text end new text begin 4.00 new text end	deleted text begin 4.15 deleted text end new text begin 3.94 new text end	5.75	5.00	new text begin 5.10 new text end	new text begin 4.35 new text end
14	deleted text begin 4.05 deleted text end new text begin 3.80 new text end	deleted text begin 4.05 deleted text end new text begin 3.82 new text end	5.50	4.90	new text begin 4.95 new text end	new text begin 4.25 new text end
15	deleted text begin 3.95 deleted text end new text begin 3.70 new text end	deleted text begin 3.95 deleted text end new text begin 3.70 new text end	5.25	4.80	new text begin 4.80 new text end	new text begin 4.15 new text end
16	deleted text begin 3.85 deleted text end new text begin 3.60 new text end	deleted text begin 3.85 deleted text end new text begin 3.60 new text end	5.00	4.80	new text begin 4.65 new text end	new text begin 4.05 new text end
17	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	deleted text begin 3.75 deleted text end new text begin 3.51 new text end	4.75	4.80	new text begin 4.50 new text end	new text begin 3.95 new text end
18	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	4.50	4.80	new text begin 4.35 new text end	new text begin 3.85 new text end
19	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	4.25	4.80	new text begin 4.20 new text end	new text begin 3.75 new text end
20	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	4.00	4.80	new text begin 4.05 new text end	new text begin 3.75 new text end
21	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	3.90	4.70	new text begin 4.00 new text end	new text begin 3.75 new text end
22	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	3.80	4.60	new text begin 4.00 new text end	new text begin 3.75 new text end
23	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	3.70	4.50	new text begin 4.00 new text end	new text begin 3.75 new text end
24	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	3.60	4.50	new text begin 4.00 new text end	new text begin 3.75 new text end
25	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	3.50	4.50	new text begin 4.00 new text end	new text begin 3.75 new text end
26	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	3.50	4.50	new text begin 4.00 new text end	new text begin 3.75 new text end
27	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	3.50	4.50	new text begin 4.00 new text end	new text begin 3.75 new text end
28	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	3.50	4.50	new text begin 4.00 new text end	new text begin 3.75 new text end
29	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	3.50	4.50	new text begin 4.00 new text end	new text begin 3.75 new text end
30 or more	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	deleted text begin 3.75 deleted text end new text begin 3.50 new text end	3.50	4.50	new text begin 4.00 new text end	new text begin 3.75 new text end

(c) deleted text beginBefore July 2, 2010, deleted text end The actuarial valuation must use the applicable following
payroll growth assumption for calculating the amortization requirement for the unfunded
actuarial accrued liability where the amortization retirement is calculated as a level
percentage of an increasing payroll:

plan	payroll growth assumption
general state employees retirement plan of the Minnesota State Retirement System	3.75%
correctional state employees retirement plan	deleted text begin 4.50 deleted text end new text begin 3.75 new text end
State Patrol retirement plan	deleted text begin 4.50 deleted text end new text begin 3.75 new text end
deleted text begin legislators retirement plan deleted text end	deleted text begin 4.50 deleted text end
judges retirement plan	deleted text begin 4.00 deleted text end new text begin 3.00 new text end
general employees retirement plan of the Public Employees Retirement Association	deleted text begin 3.75 deleted text end new text begin 3.75 new text end
public employees police and fire retirement plan	deleted text begin 3.75 deleted text end new text begin 3.75 new text end
local government correctional service retirement plan	deleted text begin 4.50 deleted text end new text begin 3.75 new text end
teachers retirement plan	deleted text begin 3.75 deleted text end new text begin 3.75 new text end
Duluth teachers retirement plan	deleted text begin 4.50 deleted text end new text begin 4.50 new text end
St. Paul teachers retirement plan	deleted text begin 5.00 deleted text end new text begin 5.00 new text end

(d) deleted text beginAfter July 1, 2010, deleted text end The assumptions set forth in paragraphs (b) and (c) continue
to apply, unless a different salary assumption or a different payroll increase assumption:

(1) has been proposed by the governing board of the applicable retirement plan;

(2) is accompanied by the concurring recommendation of the actuary retained under
section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the
most recent actuarial valuation report if section 356.214 does not apply; and

(3) has been approved or deemed approved under subdivision 18.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2012.
new text end

Sec. 3.

Minnesota Statutes 2010, section 356.215, subdivision 11, is amended to read:

Subd. 11.

Amortization contributions.

(a) In addition to the exhibit indicating
the level normal cost, the actuarial valuation of the retirement plan must contain an
exhibit for financial reporting purposes indicating the additional annual contribution
sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit
for contribution determination purposes indicating the additional contribution sufficient
to amortize the unfunded actuarial accrued liability. For the retirement plans listed in
subdivision 8, paragraph (c), but excluding the MERF division of the Public Employees
Retirement Association new text begin and the legislators retirement plan new text end, the additional contribution
must be calculated on a level percentage of covered payroll basis by the established
date for full funding in effect when the valuation is prepared, assuming annual payroll
growth at the applicable percentage rate set forth in subdivision 8, paragraph (c). For all
other retirement plans and for the MERF division of the Public Employees Retirement
Association new text begin and the legislators retirement plan new text end, the additional annual contribution must be
calculated on a level annual dollar amount basis.

(b) For any retirement plan other than the general state employees retirement plan
of the Minnesota State Retirement System or a retirement plan governed by paragraph
(d), (e), (f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions
used for calculating the actuarial accrued liability of the fund, a change in the benefit
plan governing annuities and benefits payable from the fund, a change in the actuarial
cost method used in calculating the actuarial accrued liability of all or a portion of the
fund, or a combination of the three, which change or changes by itself or by themselves
without inclusion of any other items of increase or decrease produce a net increase in the
unfunded actuarial accrued liability of the fund, the established date for full funding is the
first actuarial valuation date occurring after June 1, 2020.

(c) For any retirement plan other than the general employees retirement plan of the
Public Employees Retirement Association, if there has been a change in any or all of the
actuarial assumptions used for calculating the actuarial accrued liability of the fund, a
change in the benefit plan governing annuities and benefits payable from the fund, a
change in the actuarial cost method used in calculating the actuarial accrued liability of all
or a portion of the fund, or a combination of the three, and the change or changes, by itself
or by themselves and without inclusion of any other items of increase or decrease, produce
a net increase in the unfunded actuarial accrued liability in the fund, the established date
for full funding must be determined using the following procedure:

(i) the unfunded actuarial accrued liability of the fund must be determined in
accordance with the plan provisions governing annuities and retirement benefits and the
actuarial assumptions in effect before an applicable change;

(ii) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the unfunded actuarial accrued liability amount determined under item
(i) by the established date for full funding in effect before the change must be calculated
using the interest assumption specified in subdivision 8 in effect before the change;

(iii) the unfunded actuarial accrued liability of the fund must be determined in
accordance with any new plan provisions governing annuities and benefits payable from
the fund and any new actuarial assumptions and the remaining plan provisions governing
annuities and benefits payable from the fund and actuarial assumptions in effect before
the change;

(iv) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the difference between the unfunded actuarial accrued liability amount
calculated under item (i) and the unfunded actuarial accrued liability amount calculated
under item (iii) over a period of 30 years from the end of the plan year in which the
applicable change is effective must be calculated using the applicable interest assumption
specified in subdivision 8 in effect after any applicable change;

(v) the level annual dollar or level percentage amortization contribution under item
(iv) must be added to the level annual dollar amortization contribution or level percentage
calculated under item (ii);

(vi) the period in which the unfunded actuarial accrued liability amount determined
in item (iii) is amortized by the total level annual dollar or level percentage amortization
contribution computed under item (v) must be calculated using the interest assumption
specified in subdivision 8 in effect after any applicable change, rounded to the nearest
integral number of years, but not to exceed 30 years from the end of the plan year in
which the determination of the established date for full funding using the procedure set
forth in this clause is made and not to be less than the period of years beginning in the
plan year in which the determination of the established date for full funding using the
procedure set forth in this clause is made and ending by the date for full funding in effect
before the change; and

(vii) the period determined under item (vi) must be added to the date as of which
the actuarial valuation was prepared and the date obtained is the new established date
for full funding.

(d) For the MERF division of the Public Employees Retirement Association, the
established date for full funding is June 30, 2031.

(e) For the general employees retirement plan of the Public Employees Retirement
Association, the established date for full funding is June 30, 2031.

(f) For the Teachers Retirement Association, the established date for full funding is
June 30, 2037.

(g) For the correctional state employees retirement plan of the Minnesota State
Retirement System, the established date for full funding is June 30, 2038.

(h) For the judges retirement plan, the established date for full funding is June
30, 2038.

(i) For the public employees police and fire retirement plan, the established date
for full funding is June 30, 2038.

(j) For the St. Paul Teachers Retirement Fund Association, the established date for
full funding is June 30 of the 25th year from the valuation date. In addition to other
requirements of this chapter, the annual actuarial valuation must contain an exhibit
indicating the funded ratio and the deficiency or sufficiency in annual contributions when
comparing liabilities to the market value of the assets of the fund as of the close of the
most recent fiscal year.

(k) For the general state employees retirement plan of the Minnesota State
Retirement System, the established date for full funding is June 30, 2040.

(l) For the retirement plans for which the annual actuarial valuation indicates an
excess of valuation assets over the actuarial accrued liability, the valuation assets in
excess of the actuarial accrued liability must be recognized as a reduction in the current
contribution requirements by an amount equal to the amortization of the excess expressed
as a level percentage of pay over a 30-year period beginning anew with each annual
actuarial valuation of the plan.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4. new text beginDELAYED REPORTING DATE FOR CERTAIN QUADRENNIAL
EXPERIENCE STUDIES.
new text end

new text begin Notwithstanding any provision of Minnesota Statutes, section 356.215, subdivisions
2 and 3, paragraph (c), to the contrary, the next experience studies of the general state
employees retirement plan of the Minnesota State Retirement System, the general
employees retirement plan of the Public Employees Retirement Association, and the
Teachers Retirement Association must cover the period of July 1, 2008, through June 30,
2014, and must be filed with the applicable entities on June 30, 2015.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 2

CONTRIBUTION ADEQUACY REPORTING

Section 1.

new text begin [16A.106] ADEQUACY OF BUDGETED AND FORECASTED
DEFINED BENEFIT PLAN RETIREMENT CONTRIBUTIONS.
new text end

new text begin (a) On or before May 30 or the date occurring 30 days after the conclusion of
the regular legislative session, whichever is later, in each odd-numbered year, the
commissioner shall prepare a report to the legislature on the adequacy of the budgeted
appropriations, including retirement-related state aids, and forecasted member and
employer retirement contributions to meet the total calculated actuarial funding
requirements of the statewide and major local defined benefit retirement plans.
new text end

new text begin (b) The total calculated actuarial funding requirements are the sum of:
new text end

new text begin (1) the normal cost;
new text end

new text begin (2) the administrative expenses as defined in section 356.20, subdivision 4,
paragraph (c); and
new text end

new text begin (3) the supplemental amortization contribution requirement using the amortization
target date specified in section 356.215, subdivision 11.
new text end

new text begin The total calculated actuarial funding requirements must be as determined in the
most recent actuarial valuation of the retirement plan prepared by an approved actuary
under section 356.215 and the most recent standards for actuarial work adopted by the
Legislative Commission on Pensions and Retirement.
new text end

new text begin (c) The statewide and major local retirement plans are the defined benefit retirement
plans listed in section 356.20, subdivision 2, clauses (1) to (6), (9), (12), (13), and (14).
new text end

new text begin (d) The report must also include as an exhibit as of the start of the most recent fiscal
year, the following information for each statewide and major local retirement plan in a
single comparative table:
new text end

new text begin (1) the year the retirement plan was enacted or established;
new text end

new text begin (2) the number of active members of the retirement plan;
new text end

new text begin (3) the number of retirement annuitants and retirement benefit recipients;
new text end

new text begin (4) whether or not the retirement plan supplements the federal Old Age, Survivors
and Disability Insurance program;
new text end

new text begin (5) the complete schedule of accrued benefit obligations and projected benefit
obligations from the latest actuarial valuation reports;
new text end

new text begin (6) whether or not the retirement plan permits the purchase of service credit for
out-of-state service or time;
new text end

new text begin (7) the percentage of covered salary employer contributions;
new text end

new text begin (8) the percentage of covered salary member contributions;
new text end

new text begin (9) the amount of unfunded actuarial accrued liability calculated using the actuarial
value of assets and the market value of assets;
new text end

new text begin (10) the percentage that assets, at actuarial value and at market value, represent
of the actuarial accrued liability;
new text end

new text begin (11) the normal retirement age or ages;
new text end

new text begin (12) the salary base definition and the percentage of salary base benefit accrual rate
per year of service credit formula for a normal retirement annuity;
new text end

new text begin (13) the amount of automatic postretirement adjustment;
new text end

new text begin (14) whether or not service credit is available for military service and any limitation
on its acquisition;
new text end

new text begin (15) the vesting period for a disability benefit and the definition of a disability
qualifying for a disability benefit;
new text end

new text begin (16) investment performance and interest rate actuarial assumptions;
new text end

new text begin (17) the amortization target date;
new text end

new text begin (18) four fiscal years running statistics of active retirement plan members;
new text end

new text begin (19) four fiscal years running statistics of retirement annuitants and retirement
benefit recipients;
new text end

new text begin (20) four fiscal years running statistics of deferred annuitants;
new text end

new text begin (21) four fiscal years running statistics of unfunded actuarial accrued liability
determined on an actuarial value of assets basis and on a market value of assets basis;
new text end

new text begin (22) four fiscal years running statistics of the percentage that assets, at actuarial
value and at market value, represent of the actuarial accrued liability;
new text end

new text begin (23) four fiscal years running statistics of actuarial value of assets; and
new text end

new text begin (24) four fiscal years running statistics of market value of assets.
new text end

new text begin (e) The report under this section also must be included on the Web site of the
department.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 3

MSRS-CORRECTIONAL PLAN MEMBERSHIP CHANGES

Section 1.

Minnesota Statutes 2010, section 352.90, is amended to read:

352.90 POLICY.

It is the policy of the legislature to provide special retirement benefits for and
special contributions by certain correctional employees who may be required to retire at
an early age because they lose the mental or physical capacity required to maintain the
safety, security, discipline, and custody of inmates at state correctional facilities or of
patients at the Minnesota Security Hospital, of patients in the Minnesota sex offender
program, or of patients in the Minnesota deleted text beginextended treatment options program deleted text end new text begin specialty
health system-Cambridge new text end.

Sec. 2.

Minnesota Statutes 2010, section 352.91, subdivision 3c, is amended to read:

Subd. 3c.

Nursing personnel.

(a) "Covered correctional service" means service by
a state employee in one of the employment positions at a correctional facility or at the
Minnesota Security Hospital, or in the Minnesota sex offender program that are specified
in paragraph (b) if at least 75 percent of the employee's working time is spent in direct
contact with inmates or patients and the fact of this direct contact is certified to the
executive director by the appropriate commissioner.

(b) The employment positions are as follows:

(1) registered nurse - senior;

(2) registered nurse;

(3) registered nurse - principal;

(4) licensed practical nurse 2; deleted text beginand
deleted text end

(5) registered nurse advance practice new text begin; and
new text end

new text begin (6) psychiatric advance practice registered nurse new text end.

new text begin EFFECTIVE DATE. new text end

new text begin (a) This section is effective retroactively from August 22,
2011.
new text end

new text begin (b) Service credit under the correctional state employees retirement plan rather
than under the general state employees retirement plan for the period between August
22, 2011, and the day following enactment is contingent on the state employee and the
Department of Human Services paying the difference between the applicable employee
and employer contributions in the two retirement plans under Minnesota Statutes, section
352.017, subdivision 2.
new text end

Sec. 3.

Minnesota Statutes 2010, section 352.91, subdivision 3d, is amended to read:

Subd. 3d.

Other correctional personnel.

(a) "Covered correctional service" means
service by a state employee in one of the employment positions at a correctional facility or
at the Minnesota Security Hospital specified in paragraph (b) if at least 75 percent of the
employee's working time is spent in direct contact with inmates or patients and the fact of
this direct contact is certified to the executive director by the appropriate commissioner.

(b) The employment positions are:

(1) automotive mechanic;

(2) baker;

(3) central services administrative specialist, intermediate;

(4) central services administrative specialist, principal;

(5) chaplain;

(6) chief cook;

(7) new text beginclinical program therapist 1;
new text end

new text begin (8) clinical program therapist 2;
new text end

new text begin (9) clinical program therapist 3;
new text end

new text begin (10) clinical program therapist 4;
new text end

new text begin (11) new text endcook;

deleted text begin (8) deleted text end new text begin(12) new text endcook coordinator;

deleted text begin (9) corrections program therapist 1;
deleted text end

deleted text begin (10) corrections program therapist 2;
deleted text end

deleted text begin (11) corrections program therapist 3;
deleted text end

deleted text begin (12) corrections program therapist 4;
deleted text end

(13) corrections inmate program coordinator;

(14) corrections transitions program coordinator;

(15) corrections security caseworker;

(16) corrections security caseworker career;

(17) corrections teaching assistant;

(18) delivery van driver;

(19) dentist;

(20) electrician supervisor;

(21) general maintenance worker lead;

(22) general repair worker;

(23) library/information research services specialist;

(24) library/information research services specialist senior;

(25) library technician;

(26) painter lead;

(27) plant maintenance engineer lead;

(28) plumber supervisor;

(29) psychologist 1;

(30) psychologist 3;

(31) recreation therapist;

(32) recreation therapist coordinator;

(33) recreation program assistant;

(34) recreation therapist senior;

(35) sports medicine specialist;

(36) work therapy assistant;

(37) work therapy program coordinator; and

(38) work therapy technician.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2010, section 352.91, subdivision 3e, is amended to read:

Subd. 3e.

Minnesota deleted text beginextended treatment options program deleted text end new text begin specialty health
system-Cambridge new text end.

(a) "Covered correctional service" means service by a state employee
in one of the employment positions with the Minnesota deleted text beginextended treatment options
program deleted text end new text begin specialty health system-Cambridge new text end specified in paragraph (b) if at least 75
percent of the employee's working time is spent in direct contact with patients who are in
the Minnesota deleted text beginextended treatment options program deleted text end new text begin specialty health system-Cambridge
new text end and if service in such a position is certified to the executive director by the commissioner
of human services.

(b) The employment positions are:

(1) behavior analyst 1;

(2) behavior analyst 2;

(3) behavior analyst 3;

(4) group supervisor;

(5) group supervisor assistant;

(6) human services support specialist;

(7) residential program lead;

(8) psychologist 2;

(9) recreation program assistant;

(10) recreation therapist senior;

(11) registered nurse senior;

(12) skills development specialist;

(13) social worker senior;

(14) social worker specialist; and

(15) speech pathology specialist.

Sec. 5.

Minnesota Statutes 2010, section 352.91, subdivision 3f, is amended to read:

Subd. 3f.

Additional Department of Human Services personnel.

(a) "Covered
correctional service" means service by a state employee in one of the employment
positions specified in paragraph (b) at the Minnesota Security Hospital or in the Minnesota
sex offender program if at least 75 percent of the employee's working time is spent in
direct contact with patients and the determination of this direct contact is certified to the
executive director by the commissioner of human services.

(b) The employment positions are:

(1) behavior analyst 2;

(2) behavior analyst 3;

(3) certified occupational therapy assistant 1;

(4) certified occupational therapy assistant 2;

(5) chemical dependency counselor senior;

(6) client advocate;

(7) new text beginclinical program therapist 3;
new text end

new text begin (8) clinical program therapist 4;
new text end

new text begin (9) new text endcustomer services specialist principal;

deleted text begin (8) deleted text end new text begin(10) new text enddental assistant registered;

deleted text begin (9) deleted text end new text begin(11) new text endgroup supervisor;

deleted text begin (10) deleted text end new text begin(12) new text endgroup supervisor assistant;

deleted text begin (11) deleted text end new text begin(13) new text endhuman services support specialist;

deleted text begin (12) deleted text end new text begin(14) new text endlicensed alcohol and drug counselor;

deleted text begin (13) deleted text end new text begin(15) new text endlicensed practical nurse 1;

deleted text begin (14) deleted text end new text begin(16) new text endmanagement analyst 3;

deleted text begin (15) deleted text end new text begin(17) new text endoccupational therapist;

deleted text begin (16) deleted text end new text begin(18) new text endoccupational therapist, senior;

deleted text begin (17) deleted text end new text begin(19) new text endpsychologist 1;

deleted text begin (18) deleted text end new text begin(20) new text endpsychologist 2;

deleted text begin (19) deleted text end new text begin(21) new text endpsychologist 3;

deleted text begin (20) deleted text end new text begin(22) new text endrecreation program assistant;

deleted text begin (21) deleted text end new text begin(23) new text endrecreation therapist lead;

deleted text begin (22) deleted text end new text begin(24) new text endrecreation therapist senior;

deleted text begin (23) deleted text end new text begin(25) new text endrehabilitation counselor senior;

deleted text begin (24) deleted text end new text begin(26) new text endsecurity supervisor;

deleted text begin (25) deleted text end new text begin(27) new text endskills development specialist;

deleted text begin (26) deleted text end new text begin(28) new text endsocial worker senior;

deleted text begin (27) deleted text end new text begin(29) new text endsocial worker specialist;

deleted text begin (28) deleted text end new text begin(30) new text endsocial worker specialist, senior;

deleted text begin (29) deleted text end new text begin(31) new text endspecial education program assistant;

deleted text begin (30) deleted text end new text begin(32) new text endspeech pathology clinician;

deleted text begin (31) deleted text end new text begin(33) new text endwork therapy assistant; and

deleted text begin (32) deleted text end new text begin(34) new text endwork therapy program coordinator.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 4

HEALTH CARE SAVINGS PLAN MODIFICATIONS

Section 1.

Minnesota Statutes 2010, section 352.98, subdivision 3, is amended to read:

Subd. 3.

Contributions.

(a) Contributions to the plan must be defined in a
personnel policy or in a collective bargaining agreement of a public employer or political
subdivision. The executive director may offer different types of trusts permitted under the
Internal Revenue Code to best meet the needs of different employer units.

(b) Contributions to the plan by or on behalf of the participant must be held in trust
for reimbursement of eligible health-related expenses for participants and their dependents
following termination from public employment or deleted text beginduring active employment deleted text end new text begin in other
circumstances set forth in the plan document new text end. The executive director shall maintain
a separate account of the contributions made by or on behalf of each participant and
the earnings thereon. The executive director shall make available a limited range of
investment options, and each participant may direct the investment of the accumulations
in the participant's account among the investment options made available by the executive
director.

(c) This section does not obligate a public employer to meet and negotiate in good
faith with the exclusive bargaining representative of any public employee group regarding
an employer contribution to a postretirement or active employee health care savings plan
authorized by this section and section 356.24, subdivision 1, clause (7). It is not the intent
of the legislature to authorize the state to incur new funding obligations for the costs of
retiree health care or the costs of administering retiree health care plans or accounts.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2010, section 352.98, subdivision 4, is amended to read:

Subd. 4.

Reimbursement for health-related expenses.

The executive director
shall reimburse participants at least quarterly for eligible health-related expenses, as
allowable by federal and state law, until the participant exhausts the accumulation in the
participant's account. If a participant dies prior to exhausting the participant's account
balance, the participant's spouse or dependents are eligible to be reimbursed for health care
expenses from the account until the account balance is exhausted. If an account balance
remains after the death of a participant and all of the participant's legal dependents, the
remainder of the account must be paid to the participant's beneficiaries or, if none, to
deleted text begin the participant's estate deleted text end new text begin a living person or persons named by the personal representative
of the estate. The person or persons named must use the account for reimbursement of
allowable health care expenses new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2010, section 352.98, subdivision 5, is amended to read:

Subd. 5.

Fees.

The executive director is authorized to charge deleted text beginuniform deleted text end fees to
participants to cover the ongoing cost of operating the plan. deleted text begin Any fees not needed must
deleted text end deleted text beginrevert to participant accounts or be used to reduce plan fees deleted text end deleted text beginthe deleted text end deleted text beginfollowing year deleted text end deleted text begin. deleted text end new text beginThe fees
must be deposited in an administrative fee account. On January 1, following the end of the
prior fiscal year, the executive director shall estimate the amount needed to cover plan
expenses, record keeping costs, and custodial fees for the new fiscal year. If the balance
of the administrative fee account is in excess of this amount, the excess must revert to
participant accounts, or plan fees must be reduced to eliminate the excess, or the executive
director may use a combination of both approaches to eliminate the excess.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2010, section 352.98, subdivision 8, is amended to read:

Subd. 8.

Exemption from process.

Assets in a deleted text beginhealth-care deleted text end new text beginhealth care new text endsavings
plan account described in this section must be used for the reimbursement of deleted text beginhealthcare deleted text end
new text begin health care new text endexpenses and are not assignable or subject to execution, levy, attachment,
garnishment, or other legal process, except as provided in section 518.58, 518.581, or
518A.53.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 5

MSRS-UNCLASSIFIED RETIREMENT PROGRAM MODIFICATIONS

Section 1.

Minnesota Statutes 2010, section 352D.02, subdivision 3, is amended to
read:

Subd. 3.

Transfer to general employees retirement plan.

(a) new text beginIf permitted under
paragraph (b), new text endan employee referred to in subdivision 1, paragraph (c), clauses (2) to (4),
(6) to (14), and (16) to (18), who is credited with shares in the unclassified program deleted text begin, deleted text end and
deleted text begin who deleted text endhas credit for allowable service deleted text begin, not later than one month following the termination
of covered employment, deleted text end may elect to terminate participation in the unclassified program
and be covered by the general employees retirement plan deleted text begin by filing a written election
with the executive director deleted text end new text begin.
new text end

new text begin (b) An employee specified in paragraph (a) is permitted to terminate participation
in the unclassified program and be covered by the general employees retirement plan new text end if
the employee new text begin:
new text end

new text begin (1) new text end was employed before July 1, 2010, and has at least ten years of allowable service deleted text begin
as of the date of the election deleted text end new text begin; new text end or deleted text beginif the employee
deleted text end

new text begin (2) new text end was new text beginfirst new text endemployed after June 30, 2010, and has no more than seven years of
allowable service deleted text begin as of the date of the election deleted text end.

new text begin The election must be in writing on a form provided by the executive director, and
can be made no later than one month following the termination of covered employment.
new text end

deleted text begin (b) deleted text end new text begin(c) new text endIf the transfer election is made, the executive director shall deleted text beginthen deleted text end redeem the
employee's total shares and deleted text beginshall deleted text end credit to the employee's account in the general employees
retirement plan the amount of contributions that would have been deleted text beginso deleted text end credited had the
employee been covered by the general employees retirement plan during the employee's
entire covered employment deleted text begin or elective state service deleted text end. The balance of money deleted text beginso deleted text end redeemed
and not credited to the employee's account must be transferred to the general employees
retirement plan, except that new text beginthe executive director must determine:
new text end

(1) the employee deleted text begincontribution deleted text end new text begincontributions new text endpaid to the unclassified program deleted text begin must
be compared to deleted text end new text begin; and
new text end

(2) the employee contributions that would have been paid to the general employees
retirement plan for the comparable period, if the individual had been covered by that plan.

If clause (1) is greater than clause (2), the difference must be refunded to the
employee as provided in section 352.22. If clause (2) is greater than clause (1), the
difference must be paid by the employee within six months of electing general employees
retirement plan coverage or before the effective date of the annuity, whichever is sooner.

deleted text begin (c) deleted text end new text begin(d) new text endAn election under paragraph deleted text begin(a) deleted text end new text begin(b) new text endto transfer coverage to the general
employees retirement plan is irrevocable during any period of covered employment.

deleted text begin (d) deleted text end new text begin(e) new text endA person referenced in subdivision 1, paragraph (c), clause (1), (5), or
(15), who is credited with employee shares in the unclassified program is not permitted
to terminate participation in the unclassified program and be covered by the general
employees retirement plan.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 6

PERA-ADMINISTERED RETIREMENT PLAN MODIFICATIONS

Section 1.

Minnesota Statutes 2011 Supplement, section 353.01, subdivision 16,
is amended to read:

Subd. 16.

Allowable service; limits and computation.

(a) "Allowable service"
means:

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

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

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

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

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

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

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

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

(9) a period specified under deleted text beginsubdivision 40 deleted text end new text begin section 353.0162 new text end.

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

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

(d) No member may receive more than 12 months of allowable service credit in a
year either for vesting purposes or for benefit calculation purposes. For an active member
who was an active member of the former Minneapolis Firefighters Relief Association on
the day prior to the effective date of consolidation under Laws 2011, First Special Session
chapter 8, article 6, section 19, "allowable service" is the period of service credited by
the Minneapolis Firefighters Relief Association as reflected in the transferred records of
the association up to the effective date of consolidation under Laws 2011, First Special
Session chapter 8, article 6, section 19, and the period of service credited under paragraph
(a), clause (1), after the effective date of consolidation under Laws 2011, First Special
Session chapter 8, article 6, section 19. For an active member who was an active member
of the former Minneapolis Police Relief Association on the day prior to the effective date
of consolidation under Laws 2011, First Special Session chapter 8, article 7, section 19,
"allowable service" is the period of service credited by the Minneapolis Police Relief
Association as reflected in the transferred records of the association up to the effective date
of consolidation under Laws 2011, First Special Session chapter 8, article 7, section 19,
and the period of service credited under paragraph (a), clause (1), after the effective date
of consolidation under Laws 2011, First Special Session chapter 8, article 7, section 19.

(e) MS 2002 [Expired]

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2010, section 353.01, subdivision 47, is amended to read:

Subd. 47.

Vesting.

(a) "Vesting" means obtaining a nonforfeitable entitlement
to an annuity or benefit from a retirement plan administered by the Public Employees
Retirement Association by having credit for sufficient allowable service under paragraph
(b) or (c), whichever applies.

(b) For purposes of qualifying for an annuity or benefit as a basic or coordinated plan
member of the general employees retirement plan of the Public Employees Retirement
Association:

(1) a deleted text beginmember deleted text end new text beginpublic employee new text endwho first became a deleted text beginpublic employee deleted text end new text beginmember new text endbefore
July 1, 2010, is vested when the person has accrued credit for not less than three years
of allowable service as defined under subdivision 16; and

(2) a deleted text beginmember deleted text end new text beginpublic employee new text endwho first becomes a deleted text beginpublic employee deleted text end new text beginmember new text endafter
June 30, 2010, is vested when the person has accrued credit for not less than five years of
allowable service as defined under subdivision 16.

(c) For purposes of qualifying for an annuity or benefit as a member of the police
and fire plan or a member of the local government correctional employees retirement plan:

(1) a deleted text beginmember deleted text end new text beginpublic employee new text endwho first became a deleted text beginpublic employee deleted text end new text beginmember new text endbefore
July 1, 2010, is vested when the person has accrued credit for not less than three years
of allowable service as defined under subdivision 16; and

(2) a deleted text beginmember deleted text end new text beginpublic employee new text endwho first becomes a deleted text beginpublic employee deleted text end new text beginmember new text endafter
June 30, 2010, is vested at the following percentages when the person has accrued credited
allowable service as defined under subdivision 16, as follows:

(i) 50 percent after five years;

(ii) 60 percent after six years;

(iii) 70 percent after seven years;

(iv) 80 percent after eight years;

(v) 90 percent after nine years; and

(vi) 100 percent after ten years.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2010, section 353.50, subdivision 7, is amended to read:

Subd. 7.

MERF division account contributions.

(a) After June 30, 2010, the
member and employer contributions to the MERF division account are governed by this
subdivision.

(b) An active member covered by the MERF division must make an employee
contribution of 9.75 percent of the total salary of the member as defined in section 353.01,
subdivision 10. The employee contribution must be made by payroll deduction by the
member's employing unit under section 353.27, subdivision 4, and is subject to the
provisions of section 353.27, subdivisions 7, 7a, 7b, 12, 12a, and 12b.

(c) The employer regular contribution to the MERF division account with respect
to an active MERF division member is 9.75 percent of the total salary of the member as
defined in section 353.01, subdivision 10.

(d) The employer additional contribution to the MERF division account with respect
to an active member of the MERF division is 2.68 percent of the total salary of the member
as defined in section 353.01, subdivision 10, plus the employing unit's share of $3,900,000
that the employing unit paid or is payable to the former Minneapolis Employees
Retirement Fund under Minnesota Statutes 2008, section 422A.101, subdivision 1a, 2,
or 2a, during calendar year 2009, as was certified by the former executive director of the
former Minneapolis Employees Retirement Fund.

(e) Annually after June 30, 2012, the employer supplemental contribution to
the MERF division account by the city of Minneapolis, Special School District No. 1,
Minneapolis, a Minneapolis-owned public utility, improvement, or municipal activity,
Hennepin county, the Metropolitan Council, the Metropolitan Airports Commission, and
the Minnesota State Colleges and Universities system is the larger of the following:

(1) the amount by which the total actuarial required contribution determined under
section 356.215 by the approved actuary retained by the Public Employees Retirement
Association in the most recent actuarial valuation of the MERF division and based on a
June 30, 2031, amortization date, after subtracting the contributions under paragraphs (b),
(c), and (d), exceeds $22,750,000 or $24,000,000, whichever applies; or

(2) the amount of $27,000,000, but the total supplemental contribution amount
plus the contributions under paragraphs (c) and (d) may not exceed $34,000,000. Each
employing unit's share of the total employer supplemental contribution amount is equal to
the applicable portion specified in paragraph deleted text begin(g) deleted text end new text begin (h) new text end. The initial total actuarial required
contribution after June 30, 2012, must be calculated using the mortality assumption
change recommended on September 30, 2009, for the Minneapolis Employees Retirement
Fund by the approved consulting actuary retained by the Minneapolis Employees
Retirement Fund board.

new text begin (f) Before January 31, each employing unit must be invoiced for its share of the
total employer supplemental contribution amount under paragraph (e). The amount is
payable by the employing unit in two parts. The first half of the amount due is payable
on or before the July 31 following the date of the invoice, and the second half of the
amount due is payable on or before December 15. Each invoice must be based on the
actuarial valuation report prepared under section 356.215 and the standards for actuarial
work promulgated by the Legislative Commission on Pensions and Retirement as of the
valuation date occurring 18 months earlier.
new text end

deleted text begin (f) deleted text end new text begin (g) new text end Notwithstanding any provision of paragraph (c), (d), or (e) to the contrary, as
of August 1 annually, if the amount of the retirement annuities and benefits paid from the
MERF division account during the preceding fiscal year, multiplied by the factor of 1.035,
exceeds the market value of the assets of the MERF division account on the preceding
June 30, plus state aid of $9,000,000, $22,750,000, or $24,000,000, whichever applies,
plus the amounts payable under paragraphs (b), (c), (d), and (e) during the preceding
fiscal year, multiplied by the factor of 1.035, the balance calculated is a special additional
employer contribution. The special additional employer contribution under this paragraph
is payable in addition to any employer contribution required under paragraphs (c), (d), and
(e), and is payable on or before the following June 30. The special additional employer
contribution under this paragraph must be allocated as specified in paragraph deleted text begin(g) deleted text end new text begin (h) new text end.

deleted text begin (g) deleted text end new text begin (h) new text end The employer supplemental contribution under paragraph (e) or the special
additional employer contribution under paragraph deleted text begin(f) deleted text end new text begin(g) new text endmust be allocated between the
city of Minneapolis, Special School District No. 1, Minneapolis, any Minneapolis-owned
public utility, improvement, or municipal activity, the Minnesota State Colleges and
Universities system, Hennepin County, the Metropolitan Council, and the Metropolitan
Airports Commission in proportion to their share of the actuarial accrued liability of the
former Minneapolis Employees Retirement Fund as of July 1, 2009, as calculated by the
approved actuary retained under section 356.214 as part of the actuarial valuation prepared
as of July 1, 2009, under section 356.215 and the Standards for Actuarial Work adopted by
the Legislative Commission on Pensions and Retirement.

deleted text begin (h) deleted text end new text begin (i) new text end The employer contributions under paragraphs (c), (d), deleted text beginand deleted text end (e) new text begin, and (g) new text end must be
paid as provided in section 353.28.

deleted text begin (i) deleted text end new text begin(j) new text endContributions under this subdivision are subject to the provisions of section
353.27, subdivisions 4, 7, 7a, 7b, 11, 12, 12a, 12b, 13, and 14.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2010, section 353.656, subdivision 2, is amended to read:

Subd. 2.

Benefits paid under workers' compensation law.

(a) If a member deleted text begin, as
described in subdivision 1, is injured under circumstances which entitle the member to
receive benefits under the deleted text end new text beginbecomes disabled and receives a disability benefit as specified
in this section and is also entitled to receive lump sum or periodic benefits under new text endworkers'
compensation deleted text beginlaw, the member shall receive the same benefits as provided in subdivision
1, with disability benefits paid reimbursed and future benefits reduced by all periodic or
lump-sum amounts, other than those amounts excluded under paragraph (b), paid to the
member under the workers' compensation law, after deduction of amount of attorney fees,
authorized under applicable workers' compensation laws, paid by a disabilitant if the total
of deleted text end new text beginlaws, new text endthe single life annuity actuarial equivalent disability benefit new text beginamount new text endand the
workers' compensation deleted text beginbenefit exceeds: deleted text end new text beginamount must be added. The computation must
exclude any attorney fees paid by the disabilitant as authorized under applicable workers'
compensation laws. The computation must also exclude permanent partial disability
payments provided under section 176.101, subdivision 2a, and retraining payments under
section 176.102, subdivision 11, if the permanent partial disability or retraining payments
are reported to the executive director in a manner specified by the executive director.
new text end

new text begin (b) The equivalent salary is the amount determined under clause (1) or (2),
whichever is greater:
new text end

(1) the salary the disabled member received as of the date of the disability new text begin; new text end or

(2) the salary currently payable for the same employment position or deleted text beginan employment
position deleted text end substantially similar deleted text beginto the one the person held as of the date of the disability,
whichever is greater. The disability benefit must be reduced to that amount which, when
added to the workers' compensation benefits, does not exceed the greater of the salaries
described in clauses (1) and (2) deleted text end new text begin positions in the applicable government subdivision new text end.

deleted text begin (b) Permanent partial disability payments provided for in section 176.101,
subdivision 2a, and retraining payments provided for in section 176.102, subdivision 11,
must not be offset from disability payments due under paragraph (a) if the amounts of
the permanent partial or retraining payments are reported to the executive director in a
manner specified by the executive director.
deleted text end

new text begin (c) If the amount determined under paragraph (a) exceeds the equivalent salary
determined under paragraph (b), the disability benefit amount must be reduced to that
amount which, when added to the workers' compensation benefits, equals the equivalent
salary.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5. new text beginPERA-ADMINISTERED RETIREMENT PLANS; STUDY OF
UPDATED MEMBERSHIP WAGE THRESHOLD FIGURE.
new text end

new text begin (a) The Public Employees Retirement Association shall: (1) identify the options
for revising the membership threshold salary under Minnesota Statutes, section 353.01,
subdivisions 2a and 2b, for membership in a retirement plan administered by the
association; (2) determine the actuarial impact on the retirement plans administered by the
association, the financial impact on participating employers, and the financial impact on
prospective public employees of each option; and (3) formulate the recommendations for
structuring each identified option.
new text end

new text begin (b) The Public Employees Retirement Association shall report its findings and
recommendations of its study to the chair, the vice chair, and the executive director of the
Legislative Commission on Pensions and Retirement. The report must be filed with the
commission on or before February 15, 2013.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 7

REVISIONS IN THE PERA PRIVATIZATION LAW

Section 1.

Minnesota Statutes 2010, section 353F.02, subdivision 4, is amended to read:

Subd. 4.

Medical facility.

"Medical facility" means:

(1) Bridges Medical Services;

new text begin (2) Cedarview Care Center in Steele County;
new text end

deleted text begin (2) deleted text end new text begin(3) new text endthe City of Cannon Falls Hospital;

deleted text begin (3) deleted text end new text begin(4) new text endthe Chris Jenson Health and Rehabilitation Center in St. Louis County;

deleted text begin (4) deleted text end new text begin(5) new text endClearwater County Memorial Hospital doing business as Clearwater Health
Services in Bagley;

deleted text begin (5) deleted text end new text begin(6) new text endthe Dassel Lakeside Community Home;

deleted text begin (6) deleted text end new text begin(7) new text endthe Douglas County Hospital, with respect to the Mental Health Unit;

deleted text begin (7) deleted text end new text begin(8) new text endthe Fair Oaks Lodge, Wadena;

deleted text begin (8) deleted text end new text begin(9) new text endthe Glencoe Area Health Center;

deleted text begin (9) deleted text end new text begin(10) new text endHutchinson Area Health Care;

deleted text begin (10) deleted text end new text begin(11) new text endthe Lakefield Nursing Home;

deleted text begin (11) deleted text end new text begin(12) new text endthe Lakeview Nursing Home in Gaylord;

deleted text begin (12) deleted text end new text begin(13) new text endthe Luverne Public Hospital;

deleted text begin (13) deleted text end new text begin(14) new text endthe Oakland Park Nursing Home;

deleted text begin (14) deleted text end new text begin(15) new text endthe RenVilla Nursing Home;

deleted text begin (15) deleted text end new text begin(16) new text endthe Rice Memorial Hospital in Willmar, with respect to the Department
of Radiology and the Department of Radiation/Oncology;

deleted text begin (16) deleted text end new text begin(17) new text endthe St. Peter Community Health Care Center;

new text begin (18) the Traverse Care Center in Traverse County;
new text end

deleted text begin (17) deleted text end new text begin(19) new text endthe Waconia-Ridgeview Medical Center;

deleted text begin (18) deleted text end new text begin(20) new text endthe Weiner Memorial Medical Center, Inc.;

deleted text begin (19) deleted text end new text begin(21) new text endthe Wheaton Community Hospital; and

deleted text begin (20) deleted text end new text begin(22) new text endthe Worthington Regional Hospital.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2010, section 353F.04, subdivision 1, is amended to read:

Subdivision 1.

Enhanced augmentation rates.

(a) The deferred annuity of
a terminated medical facility or other public employing unit employee is subject
to augmentation under section 353.71, subdivision 2, of the edition of Minnesota
Statutes published in the year in which the privatization occurred, except that the rate
of augmentation is as specified in deleted text beginparagraph (b) or (c), whichever is applicable deleted text end new text begin this
subdivision new text end.

(b) This paragraph applies if the legislation adding the medical facility or other
employing unit to section 353F.02, subdivision 4 or 5, as applicable, was enacted before
July 26, 2005, and became effective before January 1, 2008, for the Hutchinson Area
Health Care or before January 1, 2007, for all other medical facilities and all other
employing units. For a terminated medical facility or other public employing unit
employee, the augmentation rate is 5.5 percent compounded annually until January 1
following the year in which the person attains age 55. From that date to the effective date
of retirement, the augmentation rate is 7.5 percent compounded annually.

(c) If paragraph (b) is not applicable, new text beginand if the effective date of the privatization is
before January 1, 2011, new text endthe augmentation rate is four percent compounded annually until
January 1, following the year in which the person attains age 55. From that date to the
effective date of retirement, the augmentation rate is six percent compounded annually.

new text begin (d) If the effective date of the privatization is after December 31, 2010, the
applicable augmentation rate depends on the result of computations specified in section
353F.025, subdivision 1. If those computations indicate no loss or a net gain to the fund of
the general employees retirement plan of the Public Employees Retirement Association,
the augmentation rate is 2.0 percent compounded annually until the effective date of
retirement. If the computations under that subdivision indicate a net loss to the fund if
a 2.0 percent augmentation rate is used, but a net gain or no loss if a 1.0 percent rate is
used, then the augmentation rate is 1.0 percent compounded annually until the effective
date of retirement.
new text end

new text begin (e) The term "effective date of the privatization" as used in this subdivision means
the "effective date" as defined in section 353F.02, subdivision 3.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2010, section 353F.07, is amended to read:

353F.07 EFFECT ON REFUND.

Notwithstanding any provision of chapter 353 to the contrary, terminated medical
facility or other public employing unit employees may receive a refund of employee
accumulated contributions plus interest deleted text beginat the rate of six percent per year compounded
annually deleted text end new text beginas provided new text endin deleted text beginaccordance with deleted text end section 353.34, subdivision 2, deleted text beginof the edition
of Minnesota Statutes published in the year in which the privatization occurred, deleted text end at any
time after the transfer of employment to the successor employer deleted text beginto deleted text end new text beginof new text endthe new text beginterminated
new text endmedical facility or other public employing unit. If a terminated medical facility new text beginor other
public employing unit new text endemployee has received a refund from a pension plan deleted text beginenumerated deleted text end
new text begin listed new text endin section 356.30, subdivision 3, the person may not repay that refund unless the
person again becomes a member of one of those deleted text beginenumerated deleted text end new text beginlisted new text endplans and complies
with section 356.30, subdivision 2.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 8

TRA ADMINISTRATIVE CHANGES AND RELATED MODIFICATIONS

Section 1.

Minnesota Statutes 2010, section 16A.06, subdivision 9, is amended to read:

Subd. 9.

First class city teacher retirement funds aids reporting.

Each year,
on or before April 15, the commissioner of management and budget shall report to the
chairs of the senate Finance Committee and the house of representatives Ways and Means
Committee on expenditures for state aids to the deleted text beginMinneapolis and Saint deleted text end new text beginSt. new text endPaul Teacher
Retirement Fund deleted text beginassociations deleted text end new text beginAssociation, and to the Teachers Retirement Association on
behalf of the merged Minneapolis Teachers Retirement Fund Association, new text endunder sections
new text begin 354.435, new text end354A.12 new text begin, new text end and 423A.02, subdivision 3. This report shall include the amounts
expended in the most recent fiscal year and estimates of expected expenditures for the
current and next fiscal year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2010, section 126C.41, subdivision 3, is amended to read:

Subd. 3.

Retirement levies.

(a) In 1991 and each year thereafter, a district to which
this subdivision applies may levy an additional amount required for contributions to
the general employees retirement plan of the Public Employees Retirement Association
as the successor of the Minneapolis Employees Retirement Fund as a result of the
maximum dollar amount limitation on state contributions to that plan imposed under
section 353.505. The additional levy must not exceed the most recent amount certified by
the executive director of the Public Employees Retirement Association as the district's
share of the contribution requirement in excess of the maximum state contribution under
section 353.505.

(b) For taxes payable in 1994 and thereafter, Special School District No. 1,
Minneapolis, and Independent School District No. 625, St. Paul, may levy for the increase
in the employer retirement fund contributions, under Laws 1992, chapter 598, article 5,
section 1.

(c) If the employer retirement fund contributions under section 354A.12, subdivision
2a, are increased for fiscal year 1994 or later fiscal years, Special School District No. 1,
Minneapolis, and Independent School District No. 625, St. Paul, may levy in payable
1994 or later an amount equal to the amount derived by applying the net increase in
the employer retirement fund contribution rate of the respective teacher retirement fund
association between fiscal year 1993 and the fiscal year beginning in the year after the
levy is certified to the total covered payroll of the applicable teacher retirement fund
association. If an applicable school district levies under this paragraph, they may not
levy under paragraph (b).

(d) In addition to the levy authorized under paragraph (c), Special School District
No. 1, Minneapolis, may also levy payable in 1997 or later an amount equal to the
contributions under section deleted text begin423A.02 deleted text end new text begin 354.435 new text end, subdivision deleted text begin3 deleted text end new text begin 2 new text end, and may also levy in
payable 1994 or later an amount equal to the state aid contribution under section deleted text begin354A.12 deleted text end new text begin
354.435 new text end, subdivision deleted text begin3b deleted text end new text begin 1 new text end. Independent School District No. 625, St. Paul, may levy
payable in 1997 or later an amount equal to the supplemental contributions under section
423A.02, subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

new text begin [354.435] ADDITIONAL CONTRIBUTIONS BY SPECIAL SCHOOL
DISTRICT NO. 1 AND CITY OF MINNEAPOLIS.
new text end

new text begin Subdivision 1. new text end

new text begin Special direct state matching aid. new text end

new text begin (a) Special School District No. 1,
Minneapolis, and the city of Minneapolis must make additional employer contributions
to the Teachers Retirement Association in the amounts specified in paragraph (b). These
contributions can be made from any available source. If made in whole or in part by a
levy, the levy may be classified as that of a special taxing district for purposes of sections
275.065 and 276.04, and for all other property tax purposes.
new text end

new text begin (b) Each fiscal year $1,250,000 must be contributed by Special School District
No. 1, Minneapolis, and $1,250,000 must be contributed by the city of Minneapolis to
the Teachers Retirement Association and the state shall match this total by paying to
the Teachers Retirement Association $2,500,000. The superintendent of Special School
District No. 1, Minneapolis, the mayor of the city of Minneapolis, and the executive
director of the Teachers Retirement Association shall jointly certify to the commissioner
of management and budget the total amount that has been contributed by Special School
District No. 1, Minneapolis, and by the city of Minneapolis to the Teachers Retirement
Association. Any certification to the commissioner of management and budget must
be made quarterly. If the certifications for a fiscal year exceed the maximum annual
direct state matching aid amount in any quarter, the amount of direct state matching aid
payable to the Teachers Retirement Association must be limited to the balance of the
maximum annual direct state matching aid amount available. The amount required under
this paragraph, subject to the maximum direct state matching aid amount, is appropriated
annually to the commissioner of management and budget.
new text end

new text begin (c) The commissioner of management and budget may prescribe the form of the
certifications required under paragraph (b).
new text end

new text begin Subd. 2. new text end

new text begin Additional contributions. new text end

new text begin In addition to any other required contributions,
on or before June 30 each fiscal year, Special School District No. 1, Minneapolis, and the
city of Minneapolis must each make an additional contribution to the Teachers Retirement
Association of $1,000,000.
new text end

new text begin Subd. 3. new text end

new text begin Procedure for recovery of deficient or delinquent amounts. new text end

new text begin If Special
School District No. 1, Minneapolis, or the city of Minneapolis fails to pay the full amount
required under subdivision 1, paragraph (b), or 2, in a timely manner, the executive
director is authorized to use section 354.512, or any other process in law to ensure full
payment is obtained.
new text end

new text begin Subd. 4. new text end

new text begin Expiration. new text end

new text begin This section expires effective the first day of the fiscal year
next following the fiscal year in which the Teachers Retirement Association has no
unfunded actuarial accrued liability as determined by the actuarial valuation prepared
under section 356.215 by the approved actuary retained under section 356.214.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2010, section 354.51, subdivision 5, is amended to read:

Subd. 5.

Payment of shortages.

(a) Except as provided in paragraph (b), in the
event that full required member contributions are not deducted from the salary of a
teacher, payment must be made as follows:

(1) Payment of shortages in member deductions on salary earned after June 30,
1957, and before July 1, 1981, may be made any time before retirement. Payment must
include interest at an annual rate of 8.5 percent compounded annually from the end of the
fiscal year in which the shortage occurred to the end of the month in which payment is
made and the interest must be credited to the fund. If payment of a shortage in deductions
is not made, the formula service credit of the member must be prorated under section
354.05, subdivision 25, clause (3).

(2) Payment of shortages in member deductions on salary earned after June 30,
1981, are the sole obligation of the employing unit and are payable by the employing
unit upon notification by the executive director of the shortage with interest at an annual
rate of 8.5 percent compounded annually from the end of the fiscal year in which the
shortage occurred to the end of the month in which payment is made and the interest
must be credited to the fund. Effective July 1, 1986, the employing unit shall also pay
the employer contributions as specified in section 354.42, subdivisions 3 and 5 for the
shortages. If the shortage payment is not paid by the employing unit within 60 days of
notification, new text beginand if the executive director does not use the recovery procedure in section
354.512, new text end the executive director shall certify the amount of the shortage deleted text beginpayment deleted text end to the
applicable county auditor, who shall spread a levy in the amount of the shortage payment
over the taxable property of the taxing district of the employing unit if the employing unit
is supported by property taxes deleted text begin, or to the commissioner of management and budget, who
shall deduct the amount from any state aid or appropriation amount applicable to the
employing unit if the employing unit is not supported by property taxes deleted text end.

(3) Payment may not be made for shortages in member deductions on salary earned
before July 1, 1957, for shortages in member deductions on salary paid or payable under
paragraph (b), or for shortages in member deductions for persons employed by the
Minnesota State Colleges and Universities system in a faculty position or in an eligible
unclassified administrative position and whose employment was less than 25 percent
of a full academic year, exclusive of the summer session, for the applicable institution
that exceeds the most recent 36 months.

(b) For a person who is employed by the Minnesota State Colleges and Universities
system in a faculty position or in an eligible unclassified administrative position and
whose employment was less than 25 percent of a full academic year, exclusive of the
summer session, for the applicable institution, upon the person's election under section
354B.21 of retirement coverage under this chapter, the shortage in member deductions
on the salary for employment by the Minnesota State Colleges and Universities system
institution of less than 25 percent of a full academic year, exclusive of the summer session,
for the applicable institution for the most recent 36 months and the associated employer
contributions must be paid by the Minnesota State Colleges and Universities system
institution, plus annual compound interest at the rate of 8.5 percent from the end of the
fiscal year in which the shortage occurred to the end of the month in which the Teachers
Retirement Association coverage election is made. deleted text beginIf the shortage payment is not made by
the institution within 60 days of notification, the executive director shall certify the amount
of the shortage payment to the commissioner of management and budget, who shall deduct
the amount from any state appropriation to the system. deleted text end An individual electing coverage
under this paragraph shall repay the amount of the shortage in member deductions, plus
interest, through deduction from salary or compensation payments within the first year of
employment after the election under section 354B.21, subject to the limitations in section
16D.16. The Minnesota State Colleges and Universities system may use any means
available to recover amounts which were not recovered through deductions from salary or
compensation payments. No payment of the shortage in member deductions under this
paragraph may be made for a period longer than the most recent 36 months.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

new text begin [354.512] RECOVERY OF DEFICIENCIES.
new text end

new text begin In addition to any other remedies permitted under law, if an employing unit or
other entity required by law to make any form of payment to the Teachers Retirement
Association fails to make full payment within 60 days of notification, the executive
director is authorized to certify the amount of deficiency to the commissioner of
management and budget, who shall deduct the amount from any state aid or appropriation
applicable to the employing unit or entity, and transmit the withheld aid or appropriation
to the executive director for deposit in the fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

Minnesota Statutes 2010, section 354A.12, subdivision 3c, is amended to read:

Subd. 3c.

Termination of supplemental contributions and direct matching and
state aid.

deleted text beginThe supplemental contributions payable to the Minneapolis Teachers Retirement
Fund Association by Special School District No. 1 and the city of Minneapolis under
section 423A.02, subdivision 3, must be paid to the Teachers Retirement Association and
must continue until the current assets of the fund equal or exceed the actuarial accrued
liability of the fund as determined in the most recent actuarial report for the fund by
the actuary retained under section 356.214, or 2037, whichever occurs earlier. deleted text end The
supplemental contributions payable to the St. Paul Teachers Retirement Fund Association
by Independent School District No. 625 under section 423A.02, subdivision 3, or the
direct state aid under subdivision 3a to the St. Paul Teachers Retirement Fund Association
must continue until the current assets of the fund equal or exceed the actuarial accrued
liability of the fund as determined in the most recent actuarial report for the fund by the
actuary retained under section 356.214 or until 2037, whichever occurs earlier.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7.

Minnesota Statutes 2011 Supplement, section 356.215, subdivision 8, is
amended to read:

Subd. 8.

Interest and salary assumptions.

(a) The actuarial valuation must use
the applicable following preretirement interest assumption and the applicable following
postretirement interest assumption:

plan	preretirement interest rate assumption	postretirement interest rate assumption
general state employees retirement plan	8.5%	6.0%
correctional state employees retirement plan	8.5	6.0
State Patrol retirement plan	8.5	6.0
legislators retirement plan	8.5	6.0
elective state officers retirement plan	8.5	6.0
judges retirement plan	8.5	6.0
general public employees retirement plan	8.5	6.0
public employees police and fire retirement plan	8.5	6.0
local government correctional service retirement plan	8.5	6.0
teachers retirement plan	8.5	6.0
Duluth teachers retirement plan	8.5	8.5
St. Paul teachers retirement plan	8.5	8.5
Fairmont Police Relief Association	5.0	5.0
Virginia Fire Department Relief Association	5.0	5.0
Bloomington Fire Department Relief Association	6.0	6.0
local monthly benefit volunteer firefighters relief associations	5.0	5.0

(b) Before July 1, 2010, the actuarial valuation must use the applicable following
single rate future salary increase assumption, the applicable following modified single
rate future salary increase assumption, or the applicable following graded rate future
salary increase assumption:

(1) single rate future salary increase assumption

plan	future salary increase assumption
legislators retirement plan		5.0%
judges retirement plan		4.0
Fairmont Police Relief Association		3.5
Virginia Fire Department Relief Association		3.5
Bloomington Fire Department Relief Association		4.0

(2) age-related select and ultimate future salary increase assumption or graded rate
future salary increase assumption

plan	future salary increase assumption
correctional state employees retirement plan	assumption D
State Patrol retirement plan	assumption C
local government correctional service retirement plan	assumption C
Duluth teachers retirement plan	assumption A
St. Paul teachers retirement plan	assumption B

new text begin For plans other than the Duluth teachers
retirement plan, new text endthe select calculation
is: during the designated select period, a
designated percentage rate is multiplied by
the result of the designated integer minus T,
where T is the number of completed years of
service, and is added to the applicable future
salary increase assumption. deleted text beginThe designated
select period is five years and the designated
integer is five for the general state employees
retirement plan. deleted text end The designated select period
is ten years and the designated integer is ten
for all deleted text beginother deleted text end retirement plans covered by
this clause. The designated percentage rate
is: (1) 0.2 percent for the correctional state
employees retirement plan, the State Patrol
retirement plan, and the local government
correctional service retirement plan; new text beginand new text end(2)
deleted text begin 0.6 percent for the general state employees
retirement plan; and (3) deleted text end 0.3 percent for the
deleted text begin teachers retirement plan, the Duluth Teachers
Retirement Fund Association, and the deleted text end St.
Paul Teachers Retirement Fund Association.
The select calculation for the Duluth Teachers
Retirement Fund Association is 8.00 percent
per year for service years one through seven,
7.25 percent per year for service years seven
and eight, and 6.50 percent per year for
service years eight and nine.

The ultimate future salary increase assumption is:

age	A	B	C	D
16	8.00%	6.90%	7.7500%	7.2500%
17	8.00	6.90	7.7500	7.2500
18	8.00	6.90	7.7500	7.2500
19	8.00	6.90	7.7500	7.2500
20	6.90	6.90	7.7500	7.2500
21	6.90	6.90	7.1454	6.6454
22	6.90	6.90	7.0725	6.5725
23	6.85	6.85	7.0544	6.5544
24	6.80	6.80	7.0363	6.5363
25	6.75	6.75	7.0000	6.5000
26	6.70	6.70	7.0000	6.5000
27	6.65	6.65	7.0000	6.5000
28	6.60	6.60	7.0000	6.5000
29	6.55	6.55	7.0000	6.5000
30	6.50	6.50	7.0000	6.5000
31	6.45	6.45	7.0000	6.5000
32	6.40	6.40	7.0000	6.5000
33	6.35	6.35	7.0000	6.5000
34	6.30	6.30	7.0000	6.5000
35	6.25	6.25	7.0000	6.5000
36	6.20	6.20	6.9019	6.4019
37	6.15	6.15	6.8074	6.3074
38	6.10	6.10	6.7125	6.2125
39	6.05	6.05	6.6054	6.1054
40	6.00	6.00	6.5000	6.0000
41	5.90	5.95	6.3540	5.8540
42	5.80	5.90	6.2087	5.7087
43	5.70	5.85	6.0622	5.5622
44	5.60	5.80	5.9048	5.4078
45	5.50	5.75	5.7500	5.2500
46	5.40	5.70	5.6940	5.1940
47	5.30	5.65	5.6375	5.1375
48	5.20	5.60	5.5822	5.0822
49	5.10	5.55	5.5404	5.0404
50	5.00	5.50	5.5000	5.0000
51	4.90	5.45	5.4384	4.9384
52	4.80	5.40	5.3776	4.8776
53	4.70	5.35	5.3167	4.8167
54	4.60	5.30	5.2826	4.7826
55	4.50	5.25	5.2500	4.7500
56	4.40	5.20	5.2500	4.7500
57	4.30	5.15	5.2500	4.7500
58	4.20	5.10	5.2500	4.7500
59	4.10	5.05	5.2500	4.7500
60	4.00	5.00	5.2500	4.7500
61	3.90	5.00	5.2500	4.7500
62	3.80	5.00	5.2500	4.7500
63	3.70	5.00	5.2500	4.7500
64	3.60	5.00	5.2500	4.7500
65	3.50	5.00	5.2500	4.7500
66	3.50	5.00	5.2500	4.7500
67	3.50	5.00	5.2500	4.7500
68	3.50	5.00	5.2500	4.7500
69	3.50	5.00	5.2500	4.7500
70	3.50	5.00	5.2500	4.7500

(3) service-related ultimate future salary increase assumption

general state employees retirement plan of the Minnesota State Retirement System	assumption A
general employees retirement plan of the Public Employees Retirement Association	assumption B
Teachers Retirement Association	assumption C
public employees police and fire retirement plan	assumption D

service length	A	B	C	D
1	10.75%	12.25%	12.00%	13.00%
2	8.35	9.15	9.00	11.00
3	7.15	7.75	8.00	9.00
4	6.45	6.85	7.50	8.00
5	5.95	6.25	7.25	6.50
6	5.55	5.75	7.00	6.10
7	5.25	5.45	6.85	5.80
8	4.95	5.15	6.70	5.60
9	4.75	4.85	6.55	5.40
10	4.65	4.65	6.40	5.30
11	4.45	4.45	6.25	5.20
12	4.35	4.35	6.00	5.10
13	4.25	4.15	5.75	5.00
14	4.05	4.05	5.50	4.90
15	3.95	3.95	5.25	4.80
16	3.85	3.85	5.00	4.80
17	3.75	3.75	4.75	4.80
18	3.75	3.75	4.50	4.80
19	3.75	3.75	4.25	4.80
20	3.75	3.75	4.00	4.80
21	3.75	3.75	3.90	4.70
22	3.75	3.75	3.80	4.60
23	3.75	3.75	3.70	4.50
24	3.75	3.75	3.60	4.50
25	3.75	3.75	3.50	4.50
26	3.75	3.75	3.50	4.50
27	3.75	3.75	3.50	4.50
28	3.75	3.75	3.50	4.50
29	3.75	3.75	3.50	4.50
30 or more	3.75	3.75	3.50	4.50

(c) Before July 2, 2010, the actuarial valuation must use the applicable following
payroll growth assumption for calculating the amortization requirement for the unfunded
actuarial accrued liability where the amortization retirement is calculated as a level
percentage of an increasing payroll:

plan	payroll growth assumption
general state employees retirement plan of the Minnesota State Retirement System	3.75%
correctional state employees retirement plan	4.50
State Patrol retirement plan	4.50
legislators retirement plan	4.50
judges retirement plan	4.00
general employees retirement plan of the Public Employees Retirement Association	3.75
public employees police and fire retirement plan	3.75
local government correctional service retirement plan	4.50
teachers retirement plan	3.75
Duluth teachers retirement plan	4.50
St. Paul teachers retirement plan	5.00

(d) After July 1, 2010, the assumptions set forth in paragraphs (b) and (c) continue to
apply, unless a different salary assumption or a different payroll increase assumption:

(1) has been proposed by the governing board of the applicable retirement plan;

(2) is accompanied by the concurring recommendation of the actuary retained under
section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the
most recent actuarial valuation report if section 356.214 does not apply; and

(3) has been approved or deemed approved under subdivision 18.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8.

Minnesota Statutes 2010, section 356.415, subdivision 1d, is amended to read:

Subd. 1d.

Teachers Retirement Association annual postretirement adjustments.

(a) Retirement annuity, disability benefit, or survivor benefit recipients of the Teachers
Retirement Association are entitled to a postretirement adjustment annually on January
1, as follows:

(1) for January 1, 2011, and January 1, 2012, no postretirement increase is payable;

(2) for January 1, 2013, and each successive January 1 until funding stability is
restored, a postretirement increase of two percent must be applied each year, effective
on January 1, to the monthly annuity or benefit amount of each annuitant or benefit
recipient who has been receiving an annuity or a benefit for at least 18 full months prior
to the January 1 increase;

(3) for January 1, 2013, and each successive January 1 until funding stability is
restored, for each annuitant or benefit recipient who has been receiving an annuity or a
benefit for at least six full months new text begin before the January 1 increase new text end, an annual postretirement
increase of 1/12 of two percent for each month the person has been receiving an annuity or
benefit must be applied, effective January 1, deleted text beginfollowing the year in deleted text end new text beginfor new text endwhich the person has
been retired for new text beginat least six months but new text endless than deleted text begin12 deleted text end new text begin18 new text endmonths;

(4) for each January 1 following the restoration of funding stability, a postretirement
increase of 2.5 percent must be applied each year, effective January 1, to the monthly
annuity or benefit amount of each annuitant or benefit recipient who has been receiving an
annuity or a benefit for at least 18 full months prior to the January 1 increase; and

(5) for each January 1 following the restoration of funding stability, for each
annuitant or benefit recipient who has been receiving an annuity or a benefit for at least six
full months new text begin before the January 1 increase new text end, an annual postretirement increase of 1/12 of
2.5 percent for each month the person has been receiving an annuity or benefit must be
applied, effective January 1, deleted text beginfollowing the year in deleted text end new text beginfor new text endwhich the person has been retired
for new text beginat least six months but new text endless than deleted text begin12 deleted text end new text begin18 new text endmonths.

(b) Funding stability is restored when the market value of assets of the Teachers
Retirement Association equals or exceeds 90 percent of the actuarial accrued liabilities of
the Teachers Retirement Association in the most recent prior actuarial valuation prepared
under section 356.215 and the standards for actuarial work by the approved actuary
retained by the Teachers Retirement Association under section 356.214.

(c) An increase in annuity or benefit payments under this section must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the Teachers Retirement Association requesting that the increase
not be made.

(d) The retirement annuity payable to a person who retires before becoming eligible
for Social Security benefits and who has elected the optional payment as provided in
section 354.35 must be treated as the sum of a period-certain retirement annuity and a life
retirement annuity for the purposes of any postretirement adjustment. The period-certain
retirement annuity plus the life retirement annuity must be the annuity amount payable
until age 62, 65, or normal retirement age, as selected by the member at retirement, for an
annuity amount payable under section 354.35. A postretirement adjustment granted on
the period-certain retirement annuity must terminate when the period-certain retirement
annuity terminates.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 9.

Minnesota Statutes 2010, section 423A.02, subdivision 3, is amended to read:

Subd. 3.

Reallocation of amortization or supplementary amortization state
aid.

(a) Seventy percent of the difference between $5,720,000 and the current year
amortization aid and supplemental amortization aid distributed under subdivisions 1
and 1a that is not distributed for any reason to a municipality for use by a local police
or salaried fire relief association must be distributed by the commissioner of revenue
according to this paragraph. The commissioner shall distribute 50 percent of the amounts
derived under this paragraph to the Teachers Retirement Association, ten percent to the
Duluth Teachers Retirement Fund Association, and 40 percent to the St. Paul Teachers
Retirement Fund Association to fund the unfunded actuarial accrued liabilities of the
respective funds. These payments shall be made on or before June 30 each fiscal year. If
the St. Paul Teachers Retirement Fund Association becomes fully funded, its eligibility
for this aid ceases. Amounts remaining in the undistributed balance account at the end of
the biennium if aid eligibility ceases cancel to the general fund.

(b) In order to receive amortization and supplementary amortization aid under
paragraph (a), new text beginprior to June 30 new text endIndependent School District No. 625, St. Paul, must make
deleted text begin contributions deleted text end new text beginan additional contribution of $800,000 each year new text endto the St. Paul Teachers
Retirement Fund Association deleted text begin in accordance with the following schedule: deleted text end new text begin.
new text end

	deleted text begin Fiscal Year deleted text end		deleted text begin Amount deleted text end
	deleted text begin 1996 deleted text end	deleted text begin $ deleted text end	deleted text begin 0 deleted text end
	deleted text begin 1997 deleted text end	deleted text begin $ deleted text end	deleted text begin 0 deleted text end
	deleted text begin 1998 deleted text end	deleted text begin $ deleted text end	deleted text begin 200,000 deleted text end
	deleted text begin 1999 deleted text end	deleted text begin $ deleted text end	deleted text begin 400,000 deleted text end
	deleted text begin 2000 deleted text end	deleted text begin $ deleted text end	deleted text begin 600,000 deleted text end
	deleted text begin 2001 and thereafter deleted text end	deleted text begin $ deleted text end	deleted text begin 800,000 deleted text end

deleted text begin (c) Special School District No. 1, Minneapolis, and the city of Minneapolis must
each make contributions to the Teachers Retirement Association in accordance with the
following schedule:
deleted text end

	deleted text begin Fiscal Year deleted text end	deleted text begin City amount deleted text end			deleted text begin School district amount deleted text end
	deleted text begin 1996 deleted text end	deleted text begin $ deleted text end	deleted text begin 0 deleted text end		deleted text begin $ deleted text end	deleted text begin 0 deleted text end
	deleted text begin 1997 deleted text end	deleted text begin $ deleted text end	deleted text begin 0 deleted text end		deleted text begin $ deleted text end	deleted text begin 0 deleted text end
	deleted text begin 1998 deleted text end	deleted text begin $ deleted text end	deleted text begin 250,000 deleted text end		deleted text begin $ deleted text end	deleted text begin 250,000 deleted text end
	deleted text begin 1999 deleted text end	deleted text begin $ deleted text end	deleted text begin 400,000 deleted text end		deleted text begin $ deleted text end	deleted text begin 400,000 deleted text end
	deleted text begin 2000 deleted text end	deleted text begin $ deleted text end	deleted text begin 550,000 deleted text end		deleted text begin $ deleted text end	deleted text begin 550,000 deleted text end
	deleted text begin 2001 deleted text end	deleted text begin $ deleted text end	deleted text begin 700,000 deleted text end		deleted text begin $ deleted text end	deleted text begin 700,000 deleted text end
	deleted text begin 2002 deleted text end	deleted text begin $ deleted text end	deleted text begin 850,000 deleted text end		deleted text begin $ deleted text end	deleted text begin 850,000 deleted text end
	deleted text begin 2003 and thereafter deleted text end	deleted text begin $ deleted text end	deleted text begin 1,000,000 deleted text end		deleted text begin $ deleted text end	deleted text begin 1,000,000 deleted text end

deleted text begin (d) deleted text end new text begin(c) new text endThirty percent of the difference between $5,720,000 and the current year
amortization aid and supplemental amortization aid under subdivisions 1 and 1a that is not
distributed for any reason to a municipality for use by a local police or salaried firefighter
relief association must be distributed under section 69.021, subdivision 7, paragraph (d),
as additional funding to support a minimum fire state aid amount for volunteer firefighter
relief associations.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 10. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2010, sections 128D.18; and 354A.12, subdivision 3b, new text end new text begin are
repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 9

FEDERAL INTERNAL REVENUE CODE CONFORMITY PROVISIONS

Section 1.

Minnesota Statutes 2010, section 356.611, subdivision 2, is amended to read:

Subd. 2.

Federal compensation limits.

(a) For members of a covered pension plan
enumerated in section 356.30, subdivision 3, and of the plan established under chapter
353D, compensation in excess of the limitation specified in section 401(a)(17) of the
Internal Revenue Code, as amended, for changes in the cost of living under section
401(a)(17)(B) of the Internal Revenue Code, may not be included for contribution and
benefit computation purposes.

(b) Notwithstanding paragraph (a), for members specified in paragraph (a) who
first contributed to a plan specified in that paragraph before July 1, 1995, the annual
compensation limit specified in deleted text beginInternal Revenue Code deleted text end new text begin section new text end 401(a)(17) new text beginof the Internal
Revenue Code new text end on June 30, 1993, applies if that provides a greater allowable annual
compensation.

new text begin (c) To the extent required by sections 3401(h) and 414(u)(12) of the federal Internal
Revenue Code, an individual receiving a differential wage payment as defined in section
3401(h)(2) of the federal Internal Revenue Code from an employer shall be treated
as employed by that employer, and the differential wage payment will be treated as
compensation for purposes of applying the limits on annual additions under section 415(c)
of the federal Internal Revenue Code.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from January 1, 2009.
new text end

Sec. 2.

Minnesota Statutes 2010, section 356.611, subdivision 3, is amended to read:

Subd. 3.

Maximum benefit limitations.

deleted text beginA member's deleted text end new text beginAn annuitant's new text endannual benefit,
if necessary, must be reduced to the extent required by section 415(b) of the federal
Internal Revenue Code, as adjusted by the United States secretary of the treasury under
section 415(d) of the new text beginfederal new text endInternal Revenue Code for any applicable increases in the
cost of living new text begin, including applicable increases in the cost of living new text end after the member's
termination of employment. deleted text beginFor purposes of section 415 of the federal Internal Revenue
Code, the limitation year of a pension plan covered by this section must be the fiscal year
or calendar year of that plan, whichever is applicable. deleted text end new text begin If an annuitant participated in more
than one pension plan in which the employer participates, the benefits under each plan
must be reduced proportionately, if necessary, to satisfy the applicable limitation.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2010, section 356.611, subdivision 3a, is amended to read:

Subd. 3a.

Maximum annual addition limitation new text begin, defined contribution plans new text end.

The
annual additions on behalf of a member to deleted text beginthe deleted text end new text begina defined contribution new text endplan deleted text beginestablished
under chapter 352D or 353D deleted text end for any limitation year deleted text beginbeginning after December 31, 2001, deleted text end
shall not exceed the deleted text beginlesser of 100 percent of the member's compensation, as defined for
purposes of deleted text end new text beginapplicable limitation on annual additions under new text endsection 415(c) of the new text beginfederal
new text endInternal Revenue Code deleted text begin; or $40,000 deleted text end, as adjusted by the United States secretary of the
treasury under section 415(d) of the new text beginfederal new text endInternal Revenue Code.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2010, section 356.611, subdivision 4, is amended to read:

Subd. 4.

Compensation.

deleted text begin(a) deleted text end For purposes of this section, compensation means a
member's compensation actually paid or made available for any limitation year including
new text begin all new text enditems new text beginof remuneration new text enddescribed in federal treasury regulation section 1.415 (c)-2(b)
and excluding new text beginall new text enditems new text beginof remuneration new text enddescribed in federal treasury regulation section
1.415 (c)-2(c). new text begin Compensation for pension plan purposes for any limitation year shall not
exceed the applicable federal compensation limit described in subdivision 2.
new text end

deleted text begin (b) Compensation for any period includes:
deleted text end

deleted text begin (1) any elective deferral as defined in section 402(g)(3) of the federal Internal
Revenue Code;
deleted text end

deleted text begin (2) any elective amounts that are not includable in a member's gross income by
reason of sections 125 or 457 of the federal Internal Revenue Code; and
deleted text end

deleted text begin (3) any elective amounts that are not includable in a member's gross income by
reason of section 132(f)(4) of the federal Internal Revenue Code.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2010, section 356.611, is amended by adding a subdivision
to read:

new text begin Subd. 5. new text end

new text begin Limitation year. new text end

new text begin Unless otherwise specifically provided, for purposes of
section 415 of the federal Internal Revenue Code, the limitation year of a pension plan
covered by this section is the calendar year or fiscal year, whichever is applicable.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

Minnesota Statutes 2010, section 356.635, subdivision 6, is amended to read:

Subd. 6.

Eligible retirement plan.

(a) An "eligible retirement plan" is:

(1) an individual retirement account under section 408(a) new text beginor 408A new text endof the federal
Internal Revenue Code;

(2) an individual retirement annuity plan under section 408(b) of the federal Internal
Revenue Code;

(3) an annuity plan under section 403(a) of the federal Internal Revenue Code;

(4) a qualified trust plan under section 401(a) of the federal Internal Revenue Code
that accepts the distributee's eligible rollover distribution;

(5) an annuity contract under section 403(b) of the federal Internal Revenue Code;

(6) an eligible deferred compensation plan under section 457(b) of the federal
Internal Revenue Code, which is maintained by a state or local government and which
agrees to separately account for the amounts transferred into the plan; or

(7) in the case of an eligible rollover distribution to a nonspousal beneficiary, an
individual account or annuity treated as an inherited individual retirement account under
section 402(c)(11) of the federal Internal Revenue Code.

(b) For distributions of after-tax contributions which are not includable in gross
income, the after-tax portion may be transferred only to an individual retirement
account or annuity described in section 408(a) or (b) of the federal Internal Revenue
Code, new text beginto a Roth individual retirement account described in section 408A of the federal
Internal Revenue Code, new text endor to a qualified deleted text begindefined contribution deleted text end plan described in either
section 401(a) or 403(a) of the federal Internal Revenue Code, that agrees to separately
account for the amounts transferred, including separately accounting for the portion of
the distribution which is includable in gross income and the portion of the distribution
which is not includable.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from January 1, 2008.
new text end

Sec. 7.

Minnesota Statutes 2010, section 356.635, subdivision 9, is amended to read:

Subd. 9.

Military service.

Contributions, benefits, new text beginincluding death and disability
benefits under section 401(a)(37) of the federal Internal Revenue Code, new text endand service credit
with respect to qualified military service must be provided according to section 414(u) of
the new text beginfederal new text endInternal Revenue Code.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from January 1, 2007.
new text end

ARTICLE 10

AUTHORIZED PUBLIC PENSION FUND INVESTMENT REVISIONS

Section 1.

Minnesota Statutes 2010, section 11A.07, subdivision 4, is amended to read:

Subd. 4.

Duties and powers.

The director, at the direction of the state board, shall:

(1) plan, direct, coordinate, and execute administrative and investment functions
in conformity with the policies and directives of the state board and the requirements of
this chapter and of chapter 356A;

(2) prepare and submit biennial and annual budgets to the board and with the
approval of the board submit the budgets to the Department of Management and Budget;

(3) employ professional and clerical staff as necessary. Employees whose primary
responsibility is to invest or manage money or employees who hold positions designated
as unclassified under section 43A.08, subdivision 1a, are in the unclassified service of the
state. Other employees are in the classified service. Unclassified employees who are
not covered by a collective bargaining agreement are employed under the terms and
conditions of the compensation plan approved under section 43A.18, subdivision 3b;

(4) report to the state board on all operations under the director's control and
supervision;

(5) maintain accurate and complete records of securities transactions and official
activities;

(6) establish a policy relating to the purchase and sale of securities on the basis of
competitive offerings or bids. The policy is subject to board approval;

(7) cause securities acquired to be kept in the custody of the commissioner of
management and budget or other depositories consistent with chapter 356A, as the state
board deems appropriate;

(8) prepare and file with the director of the Legislative Reference Library, by
December 31 of each year, a report summarizing the activities of the state board, the
council, and the director during the preceding fiscal year. The report must be prepared
so as to provide the legislature and the people of the state with a clear, comprehensive
summary of the portfolio composition, the transactions, the total annual rate of return,
and the yield to the state treasury and to each of the funds whose assets are invested by
the state board, and the recipients of business placed or commissions allocated among
the various commercial banks, investment bankers, money managers, and brokerage
organizations and the amount of these commissions or other fees. deleted text beginThe report must contain
financial statements for funds managed by the board prepared in accordance with generally
accepted accounting principles. deleted text end The report must include an executive summary;

(9) include on the state board's Web site its annual report and an executive summary
of its quarterly reports;

(10) require state officials from any department or agency to produce and provide
access to any financial documents the state board deems necessary in the conduct of
its investment activities;

(11) receive and expend legislative appropriations; and

(12) undertake any other activities necessary to implement the duties and powers
set forth in this subdivision consistent with chapter 356A.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2010, section 11A.14, subdivision 14, is amended to read:

Subd. 14.

Reports required.

As of each valuation date, or as often as the state
board determines, each participant shall be informed of the number of units owned and the
current value of the units. deleted text beginAnnually, the state board shall provide each participant financial
statements prepared in accordance with generally accepted accounting principles.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2010, section 11A.24, is amended to read:

11A.24 AUTHORIZED INVESTMENTS.

Subdivision 1.

Securities generally.

new text begin(a) new text endThe state board deleted text beginshall have the authority deleted text end
new text begin is authorized new text endto purchase, sell, lend deleted text beginor deleted text end new text begin, and new text endexchange the deleted text beginfollowing deleted text end securities new text beginspecified
in this section, new text endfor funds or accounts specifically made subject to this section new text begin, new text end including
puts and call options and future contracts traded on a contract market regulated by a
governmental agency or by a financial institution regulated by a governmental agency.
These securities may be owned new text begindirectly or through shares in exchange-traded or mutual
funds, or new text endas units in commingled trusts deleted text begin that own the securities described in subdivisions 2
to 6 deleted text end new text begin, subject to any limitations as specified in this section new text end.

new text begin (b) new text end Any agreement to lend securities must be concurrently collateralized with cash
or securities with a market value of not less than 100 percent of the market value of the
loaned securities at the time of the agreement. Any agreement for put and call options
and futures contracts may only be entered into with a fully offsetting amount of cash or
securities. Only securities authorized by this section, excluding those under subdivision 6,
paragraph (a), clauses (1) to deleted text begin(4) deleted text end new text begin (3) new text end, may be accepted as collateral or offsetting securities.

Subd. 2.

Government obligations.

The state board deleted text beginmay deleted text end new text beginis authorized to new text endinvest
funds in governmental bonds, notes, bills, mortgages, and other evidences of indebtedness
deleted text begin provided deleted text end new text beginif new text endthe issue is backed by the full faith and credit of the issuer or new text beginif new text endthe issue
is rated among the top four quality rating categories by a nationally recognized rating
agency. The obligations in which the board may invest under this subdivision deleted text begininclude deleted text end new text beginare
new text endguaranteed or insured issues of deleted text begin (a) deleted text end new text begin:
new text end

new text begin (1) new text end the United States, its agencies, its instrumentalities, or organizations created
and regulated by an act of Congress; deleted text begin(b)
deleted text end

new text begin (2) the Dominion of new text end Canada deleted text beginand deleted text end new text beginor any of new text endits provinces, provided the principal and
interest deleted text beginis deleted text end new text beginare new text endpayable in United States dollars; deleted text begin(c)
deleted text end

new text begin (3) any of new text end the states deleted text beginand deleted text end new text beginor any of new text endtheir municipalities, political subdivisions,
agencies or instrumentalities; deleted text begin(d) the International Bank for Reconstruction and
Development, the Inter-American Development Bank, the Asian Development Bank, the
African Development Bank, or deleted text end new text begin and
new text end

new text begin (4) new text end any deleted text beginother deleted text end United States government sponsored organization of which the United
States is a member, deleted text beginprovided deleted text end new text beginif new text endthe principal and interest deleted text beginis deleted text end new text beginare new text endpayable in United States
dollars.

Subd. 3.

Corporate obligations.

(a) The state board deleted text beginmay deleted text end new text beginis authorized to new text endinvest
funds in bonds, notes, debentures, transportation equipment obligations, deleted text beginor deleted text end new text beginand new text endany other
longer term evidences of indebtedness issued or guaranteed by a corporation organized
under the laws of the United States or any state deleted text beginthereof deleted text end new text begin of the United States new text end, or the
Dominion of Canada or any new text beginCanadian new text endprovince deleted text beginthereof provided that deleted text end new text begin if new text end:

(1) the principal and interest of obligations of corporations incorporated or organized
under the laws of the Dominion of Canada or any new text beginCanadian new text endprovince deleted text beginthereof shall be deleted text end
new text begin are new text endpayable in United States dollars; and

(2) new text beginthe new text endobligations deleted text beginshall be deleted text end new text beginare new text endrated among the top four quality categories by a
nationally recognized rating agency.

(b) The state board may invest in unrated corporate obligations or in corporate
obligations that are not rated among the top four quality categories as provided in
paragraph (a), clause (2), deleted text beginprovided that deleted text end new text begin if new text end:

(1) the aggregate value of these obligations deleted text beginmay deleted text end new text begindoes new text endnot exceed five percent of the
market deleted text beginor book deleted text end value deleted text begin, whichever is less, deleted text end of the fund for which the state board is investing;

(2) the state board's participation is limited to 50 percent of a single offering subject
to this paragraph; and

(3) the state board's participation is limited to 25 percent of an issuer's obligations
subject to this paragraph.

Subd. 4.

Other obligations.

(a) The state board deleted text beginmay deleted text end new text beginis authorized to new text endinvest funds
in deleted text begin bankers acceptances, certificates of deposit, deposit notes, commercial paper, mortgage
securities and asset backed securities, repurchase agreements and reverse repurchase
agreements, guaranteed investment contracts, savings accounts, and guaranty fund
certificates, surplus notes, or debentures of domestic mutual insurance companies if they
conform to the following provisions deleted text end:

(1) bankers acceptances and deposit notes deleted text beginof United States banks are limited to those deleted text end
new text begin if new text endissued by deleted text beginbanks deleted text end new text begina United States bank that is new text endrated in the highest four quality categories
by a nationally recognized rating agency;

(2) certificates of deposit deleted text beginare limited to those deleted text end new text beginif new text endissued by deleted text begin(i) deleted text end new text begina new text endUnited States deleted text beginbanks
and savings institutions that are deleted text end new text beginbank or savings institution that is new text endrated in the top four
quality categories by a nationally recognized rating agency or whose certificates of deposit
are fully insured by federal agencies deleted text begin; deleted text end new text begin, new text end or deleted text begin(ii) deleted text end new text begincertificates of deposits issued by a new text endcredit
deleted text begin unions deleted text end new text beginunion new text endin deleted text beginamounts up to deleted text end new text beginan amount within new text endthe limit of new text beginthe new text endinsurance coverage
provided by the National Credit Union Administration;

(3) commercial paper deleted text beginis limited to those deleted text end new text beginif new text endissued by new text begina new text endUnited States deleted text begincorporations deleted text end
new text begin corporation new text endor deleted text begintheir deleted text end new text beginits new text endCanadian deleted text beginsubsidiaries deleted text end new text beginsubsidiary new text endand new text beginif new text endrated in the highest two
quality categories by a nationally recognized rating agency;

(4) mortgage securities deleted text beginshall be deleted text end new text beginand asset-backed securities if new text endrated in the top four
quality categories by a nationally recognized rating agency;

(5) deleted text begincollateral for deleted text end repurchase agreements and reverse repurchase agreements deleted text beginis
limited to deleted text end new text beginif collateralized with new text endletters of credit deleted text beginand deleted text end new text beginor new text endsecurities authorized in this section;

(6) guaranteed investment contracts deleted text beginare limited to those deleted text end new text beginif new text endissued by new text beginan new text endinsurance
deleted text begin companies deleted text end new text begincompany new text endor deleted text beginbanks deleted text end new text begina bank that is new text endrated in the top four quality categories by a
nationally recognized rating agency or deleted text beginto deleted text end alternative guaranteed investment contracts
deleted text begin where deleted text end new text beginif new text endthe underlying assets comply with the requirements of this section;

(7) savings accounts deleted text beginare limited to those deleted text end new text beginif new text endfully insured by new text begina new text endfederal deleted text beginagencies deleted text end new text begin
agency new text end; and

(8) deleted text beginasset backed securities shall be rated in the top four quality categories by a
nationally recognized rating agency deleted text end new text begin guaranty fund certificates, surplus notes, or debentures
if issued by a domestic mutual insurance company new text end.

(b) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do not apply to certificates
of deposit and collateralization agreements executed by the state board under paragraph
(a), clause (2).

(c) In addition to investments authorized by paragraph (a), clause (4), the state board
deleted text begin may deleted text end new text beginis authorized to new text endpurchase from the Minnesota Housing Finance Agency all or any
part of a pool of residential mortgages, not in default, that has previously been financed
by the issuance of bonds or notes of the agency. The state board may also enter into a
commitment with the agency, at the time of any issue of bonds or notes, to purchase at
a specified future date, not exceeding 12 years from the date of the issue, the amount of
mortgage loans then outstanding and not in default that have been made or purchased from
the proceeds of the bonds or notes. The state board may charge reasonable fees for any
such commitment and may agree to purchase the mortgage loans at a price sufficient to
produce a yield to the state board comparable, in its judgment, to the yield available on
similar mortgage loans at the date of the bonds or notes. The state board may also enter
into agreements with the agency for the investment of any portion of the funds of the
agency. The agreement must cover the period of the investment, withdrawal privileges,
and any guaranteed rate of return.

Subd. 5.

Corporate stocks.

The state board deleted text beginmay deleted text end new text beginis authorized to new text endinvest funds in
stocks or convertible issues of any corporation organized under the laws of the United
States or deleted text beginthe deleted text end new text beginany of its new text endstates deleted text begin thereof deleted text end, the Dominion of Canada or new text beginany of new text endits provinces, or
any corporation listed on an exchange new text beginthat is new text endregulated by an agency of the United States
or new text beginof the new text endCanadian national government deleted text begin, if they conform to the following provisions: deleted text end new text begin.
new text end

deleted text begin (a) The aggregate value of corporate stock investments, as adjusted for realized
profits and losses, shall not exceed 85 percent of the market or book value, whichever is
less, of a fund, less the aggregate value of investments according to subdivision 6;
deleted text end

deleted text begin (b) Investments shall deleted text end new text beginAn investment in any corporation must new text endnot exceed five percent
of the total outstanding shares of deleted text beginany one deleted text end new text beginthat new text endcorporation, except that the state board may
hold up to 20 percent of the shares of a real estate investment trust and up to 20 percent
of the shares of a closed-end mutual fund.

new text begin Subd. 5a. new text end

new text begin Asset mix limitations. new text end

new text begin The aggregate value of investments under
subdivision 5, plus the aggregate value of all investments under subdivision 6, must not
exceed 85 percent of the market value of a fund.
new text end

Subd. 6.

Other investments.

(a) In addition to the investments authorized in
subdivisions 1 to 5, and subject to the provisions in paragraph (b), the state board deleted text beginmay deleted text end
new text begin is authorized to new text endinvest funds in:

(1) deleted text beginventure capital deleted text end new text beginequity and debt new text endinvestment businesses through participation in
limited partnerships, trusts, private placements, limited liability corporations, limited
liability companies, limited liability partnerships, and corporations;

(2) real estate ownership interests or loans secured by mortgages or deeds of trust or
shares of real estate investment trusts through investment in limited partnerships, deleted text beginbank
sponsored deleted text end new text begin bank-sponsored new text end collective funds, trusts, mortgage participation agreements,
and insurance company commingled accounts, including separate accounts;

deleted text begin (3) regional and mutual funds through bank sponsored collective funds and open-end
investment companies registered under the Federal Investment Company Act of 1940, and
closed-end mutual funds listed on an exchange regulated by a governmental agency;
deleted text end

deleted text begin (4) deleted text end new text begin(3) new text endresource investments through limited partnerships, trusts, private placements,
limited liability corporations, limited liability companies, limited liability partnerships,
and corporations; and

deleted text begin (5) deleted text end new text begin(4) new text endinternational securities.

(b) The investments authorized in paragraph (a) must conform to the following
provisions:

(1) the aggregate value of all investments made deleted text beginaccording to deleted text end new text beginunder new text endparagraph (a),
clauses (1) to deleted text begin(4) deleted text end new text begin (3) new text end, may not exceed 35 percent of the market value of the fund for
which the state board is investing;

(2) there must be at least four unrelated owners of the investment other than the state
board for investments made under paragraph (a), clause (1), (2), new text beginor new text end(3) deleted text begin, or (4) deleted text end;

(3) state board participation in an investment vehicle is limited to 20 percent thereof
for investments made under paragraph (a), clause (1), (2), new text beginor new text end(3) deleted text begin, or (4) deleted text end; and

(4) state board participation in a limited partnership does not include a general
partnership interest or other interest involving general liability. The state board may not
engage in any activity as a limited partner which creates general liability.

(c) All financial, business, or proprietary data collected, created, received, or
maintained by the state board in connection with investments authorized by paragraph (a),
clause (1), (2), or deleted text begin(4) deleted text end new text begin (3) new text end, are nonpublic data under section 13.02, subdivision 9. As used
in this paragraph, "financial, business, or proprietary data" means data, as determined by
the responsible authority for the state board, that is of a financial, business, or proprietary
nature, the release of which could cause competitive harm to the state board, the legal
entity in which the state board has invested or has considered an investment, the managing
entity of an investment, or a portfolio company in which the legal entity holds an interest.
As used in this section, "business data" is data described in section 13.591, subdivision 1.
Regardless of whether they could be considered financial, business, or proprietary data, the
following data received, prepared, used, or retained by the state board in connection with
investments authorized by paragraph (a), clause (1), (2), or deleted text begin(4) deleted text end new text begin (3) new text end, are public at all times:

(1) the name and industry group classification of the legal entity in which the state
board has invested or in which the state board has considered an investment;

(2) the state board commitment amount, if any;

(3) the funded amount of the state board's commitment to date, if any;

(4) the market value of the investment by the state board;

(5) the state board's internal rate of return for the investment, including expenditures
and receipts used in the calculation of the investment's internal rate of return; and

(6) the age of the investment in years.

Subd. 7.

Appropriation.

There is annually appropriated to the state board, from
the assets of the funds for which the state board invests deleted text beginpursuant deleted text end new text beginrelating new text endto new text beginauthorized
investments under new text endsubdivision 6, deleted text beginclause deleted text end new text beginparagraph new text end(a), sums sufficient to pay the costs for
the management of these deleted text beginfunds deleted text end new text beginassets new text endby private management firms.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2010, section 69.77, subdivision 9, is amended to read:

Subd. 9.

Local police and paid fire relief association investment authority.

(a) The deleted text beginfunds deleted text end new text beginspecial fund new text endof the association must be invested in securities that are
authorized investments under section 356A.06, subdivision 6 or 7, whichever applies. deleted text begin
Notwithstanding any provision of section 356A.06, subdivision 6 or 7 to the contrary, the
special fund of the relief association may be additionally invested in:
deleted text end

deleted text begin (1) open-end investment companies registered under the federal Investment
Company Act of 1940, if the portfolio investments of the investment companies comply
with the type of securities authorized for investment under section 356A.06, subdivision 7,
up to 75 percent of the market value of the assets of the fund; and
deleted text end

deleted text begin (2) domestic government and corporate debt obligations that are not rated in the top
four quality categories by a nationally recognized rating agency, and comparable unrated
securities if the percentage of these assets does not exceed five percent of the total assets
of the special fund or 15 percent of the special fund's nonequity assets, whichever is less,
the special fund's participation is limited to 50 percent of a single offering of the debt
obligations, and the special fund's participation is limited to 25 percent of an issuer's debt
obligations that are not rated in the top four quality categories. Securities held by the
association before June 2, 1989, that do not meet the requirements of this subdivision may
be retained after that date if they were proper investments for the association on that date.
deleted text end

(b) deleted text begin The governing board of the association may select and appoint investment
agencies to act for and in its behalf or may certify special fund assets for investment by the
State Board of Investment under section 11A.17. The governing board of the association
may certify general fund assets of the relief association for investment by the State Board
of Investment in fixed income pools or in a separately managed account at the discretion
of the State Board of Investment as provided in section 11A.14. deleted text end The governing board of
the association may select and appoint a qualified private firm to measure management
performance and return on investment, and the firm deleted text beginshall deleted text end new text beginmust new text enduse the formula or formulas
developed by the state board under section 11A.04, clause (11).

new text begin (c) The governing board of the association may certify general fund assets of the
relief association for investment by the State Board of Investment in fixed income pools
or in a separately managed account at the discretion of the State Board of Investment
as provided in section 11A.14.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2010, section 69.775, is amended to read:

69.775 INVESTMENTS.

(a) The special fund assets of a relief association governed by sections 69.771 to
69.776 must be invested in securities that are authorized investments under section
356A.06, subdivision 6 or 7 new text begin, whichever applies new text end.

deleted text begin (b) Notwithstanding the foregoing, up to 75 percent of the market value of the assets
of the special fund, not including any money market mutual funds, may be invested in
open-end investment companies registered under the federal Investment Company Act of
1940, if the portfolio investments of the investment companies comply with the type of
securities authorized for investment under section 356A.06, subdivision 7.
deleted text end

deleted text begin (c) Securities held by the associations before June 2, 1989, that do not meet the
requirements of this section may be retained after that date if they were proper investments
for the association on that date.
deleted text end

deleted text begin (d) The governing board of the association may select and appoint investment
agencies to act for and in its behalf or may certify special fund assets for investment by the
State Board of Investment under section 11A.17.
deleted text end

deleted text begin (e) The governing board of the association may certify general fund assets of the
relief association for investment by the State Board of Investment in fixed income pools
or in a separately managed account at the discretion of the State Board of Investment
as provided in section 11A.14.
deleted text end

deleted text begin (f) deleted text end new text begin(b) new text endThe governing board of the association may select and appoint a qualified
private firm to measure management performance and return on investment, and the
firm deleted text beginshall deleted text end new text beginmust new text enduse the formula or formulas developed by the state board under section
11A.04, clause (11).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

Minnesota Statutes 2010, section 354A.08, is amended to read:

354A.08 AUTHORIZED INVESTMENTS.

deleted text begin (a) deleted text end In addition to investments authorized under section 356A.06, subdivision 7, a
teachers retirement fund association may receive, hold, and dispose of deleted text begin:
deleted text end

deleted text begin (1) deleted text end real estate or personal property acquired by it, whether the acquisition was by
purchase deleted text begin, deleted text end or any other lawful means, as provided in this chapter or in the association's
articles of incorporation deleted text begin; and deleted text end new text begin.
new text end

deleted text begin (2) domestic government and corporate debt obligations that are not rated in the top
four quality categories by a nationally recognized rating agency, and comparable unrated
securities if the percentage of these assets does not exceed five percent of the total assets
of the pension plan or 15 percent of the pension plan's nonequity assets, whichever is less,
if the pension plan's participation is limited to 50 percent of a single offering of the debt
obligations, and if the pension plan's participation is limited to 25 percent of an issuer's
debt obligations that are not rated in the top four quality categories.
deleted text end

deleted text begin (b) In addition to other authorized real estate investments, an association may also
invest funds in Minnesota situs nonfarm real estate ownership interests or loans secured
by mortgages or deeds of trust. The board may also certify assets for investment by the
State Board of Investment as provided under section 11A.17.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7.

Minnesota Statutes 2010, section 356.219, subdivision 1, is amended to read:

Subdivision 1.

Report required.

(a) deleted text beginExcept as indicated in subdivision 4, deleted text end The State
Board of Investment, on behalf of the public pension funds and programs for which it is
the investment authority, and any Minnesota public pension plan that is not fully invested
through the State Board of Investment, including a local police or firefighters relief
association governed by sections 69.77 or 69.771 to 69.775, shall report the information
specified in subdivision 3 to the state auditor. The state auditor may prescribe a form or
forms for the purposes of the reporting requirements contained in this section.

(b) A local police or firefighters relief association governed by section 69.77 or
sections 69.771 to 69.775 is fully invested during a given calendar year for purposes of
this section if all assets of the applicable pension plan beyond sufficient cash equivalent
investments to cover six months expected expenses are invested under section 11A.17.
The board of any fully invested public pension plan remains responsible for submitting
investment policy statements and subsequent revisions as required by subdivision 3,
paragraph (a).

(c) For purposes of this section, the State Board of Investment is considered to be
the investment authority for any Minnesota public pension fund required to be invested by
the State Board of Investment under section 11A.23, or for any Minnesota public pension
fund authorized to invest in the supplemental investment fund under section 11A.17 and
which is fully invested by the State Board of Investment.

new text begin (d) This section does not apply to the following plans:
new text end

new text begin (1) the Minnesota unclassified employees retirement program under chapter 352D;
new text end

new text begin (2) the public employees defined contribution plan under chapter 353D;
new text end

new text begin (3) the individual retirement account plans under chapters 354B and 354D;
new text end

new text begin (4) the higher education supplemental retirement plan under chapter 354C;
new text end

new text begin (5) any alternative retirement benefit plan established under section 383B.914; and
new text end

new text begin (6) the University of Minnesota faculty retirement plan.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8.

Minnesota Statutes 2010, section 356.219, subdivision 8, is amended to read:

Subd. 8.

Timing of reports.

(a) For salaried firefighter relief associations, police
relief associations, and volunteer firefighter relief associations, the information required
under this section must be submitted by the due date for reports required under section
69.051, subdivision 1 or 1a, as applicable. If a relief association satisfies the definition of
a fully invested plan under subdivision 1, paragraph (b), for the calendar year covered
by the report required under section 69.051, subdivision 1 or 1a, as applicable, the chief
administrative officer of the covered pension plan shall certify that compliance on a form
prescribed by the state auditor. The state auditor shall transmit annually to the State Board
of Investment a list or lists of covered pension plans which submitted certifications in
order to facilitate reporting by the State Board of Investment under paragraph (c).

(b) For deleted text beginthe Minneapolis Teachers Retirement Fund Association, deleted text end the St. Paul
Teachers Retirement Fund Association, the Duluth Teachers Retirement Fund Association,
deleted text begin the Minneapolis Employees Retirement Fund, deleted text end new text beginand new text endthe University of Minnesota faculty
supplemental retirement plan, deleted text beginand the applicable administrators for the University of
Minnesota faculty retirement plan and the individual retirement account plans under
chapters 354B and 354D, deleted text end the information required under this section must be submitted to
the state auditor by June 1 of each year.

(c) The State Board of Investment, on behalf of pension funds specified in
subdivision 1, paragraph (c), must report information required under this section by
September 1 of each year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 9.

Minnesota Statutes 2010, section 356A.01, subdivision 19, is amended to read:

Subd. 19.

Pension fund.

"Pension fund" means the assets amassed and held in a
pension plan, other than the general fund, as reserves for present and future payment of
benefits and administrative expenses. new text begin For a retirement plan governed by section 69.77 or
by chapter 424A, the term means the relief association special fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 10.

Minnesota Statutes 2010, section 356A.06, subdivision 6, is amended to read:

Subd. 6.

Limited list of authorized investment securities.

(a) deleted text beginExcept to the
extent otherwise authorized by law, deleted text end new text begin Authority. new text end new text beginThis subdivision specifies the investment
authority for a limited list plan. A limited list plan is new text end a covered pension plan deleted text beginmay invest its
assets only in investment securities authorized by this subdivision if the plan deleted text end new text beginthat new text enddoes not:

(1) have new text beginpension fund new text endassets with a deleted text beginbook deleted text end new text beginmarket new text endvalue in excess of $1,000,000;

(2) use the services of an investment advisor registered with the Securities and
Exchange Commission in accordance with the Investment Advisers Act of 1940, or
registered as an investment advisor in accordance with sections 80A.58, and 80A.60,
for the investment of at least 60 percent of its new text beginpension fund new text endassets, calculated on deleted text beginbook deleted text end
new text begin market new text endvalue;

(3) use the services of the State Board of Investment for the investment of at least 60
percent of its new text beginpension fund new text endassets, calculated on deleted text beginbook deleted text end new text beginmarket new text endvalue; or

(4) use a combination of the services of an investment advisor meeting the
requirements of clause (2) and the services of the State Board of Investment for the
investment of at least 75 percent of its new text beginpension fund new text endassets, calculated on deleted text beginbook deleted text end new text beginmarket
new text endvalue.

(b) Investment new text beginagency appointment authority. new text end deleted text beginsecurities authorized for deleted text end new text beginThe
governing board of new text enda new text begincovered new text endpension plan deleted text begincovered by this subdivision are: deleted text end new text begin may select
and appoint investment agencies to act for or on its behalf.
new text end

new text begin (c) Savings accounts; similar vehicles. A limited list plan is authorized to invest in:
new text end

(1) certificates of deposit issued, to the extent of available insurance or
collateralization, by a financial institution that is a member of the Federal Deposit
Insurance Corporation or the Federal Savings and Loan Insurance Corporation, new text beginthat new text endis
insured by the National Credit Union Administration, or new text beginthat new text endis authorized to do business
in this state and has deposited with the chief administrative officer of the plan a sufficient
amount of marketable securities as collateral in accordance with section 118A.03;

(2) new text beginguaranteed investment contracts, limited to those issued by insurance companies
or banks rated in the top four quality categories by a nationally recognized rating agency
or to alternative guaranteed investment contracts where the underlying assets comply
with the requirements of this paragraph; and
new text end

new text begin (3) new text endsavings accounts, deleted text beginto the extent of available insurance, with a financial institution
that is a member of the Federal Deposit Insurance Corporation or the Federal Savings and
Loan Insurance Corporation; deleted text end new text begin limited to those fully insured by federal agencies.
new text end

deleted text begin (3) deleted text end new text begin(d) new text beginGovernment-backed obligations. new text endA limited list plan is authorized to invest
in new text endgovernmental obligations new text begin as further specified in this paragraph new text end, including bonds, notes,
bills, deleted text beginor other fixed obligations, issued by the United States, an agency or instrumentality
of the United States, an organization established and regulated by an act of Congress or by
a state, state agency or instrumentality, municipality, or other governmental or political
subdivision that deleted text end new text begin mortgages, and other evidences of indebtedness, if the issue is backed
by the full faith and credit of the issuer or if the issue is rated among the top four quality
rating categories by a nationally recognized rating agency. The obligations in which plans
are authorized to invest under this paragraph are guaranteed or insured issues of new text end:

deleted text begin (i) for the obligation in question, issues an obligation that equals or exceeds the
stated investment yield of debt securities not exempt from federal income taxation and of
comparable quality;
deleted text end

deleted text begin (ii) for an obligation that is a revenue bond, has been completely self-supporting
for the last five years; and
deleted text end

deleted text begin (iii) for an obligation other than a revenue bond, has issued an obligation backed by
the full faith and credit of the applicable taxing jurisdiction and has not been in default on
the payment of principal or interest on the obligation in question or any other nonrevenue
bond obligation during the preceding ten years;
deleted text end

new text begin (1) the United States, one of its agencies, one of its instrumentalities, or an
organization created and regulated by an act of Congress;
new text end

new text begin (2) the Dominion of Canada or one of its provinces if the principal and interest are
payable in United States dollars;
new text end

new text begin (3) a state or one of its municipalities, political subdivisions, agencies, or
instrumentalities; or
new text end

new text begin (4) any United States government-sponsored organization of which the United States
is a member if the principal and interest are payable in United States dollars.
new text end

deleted text begin (4) deleted text end new text begin(e) new text beginCorporate obligations. new text endA limited list plan is authorized to invest in new text endcorporate
obligations, including bonds, notes, debentures, deleted text beginor other regularly issued and readily
marketable evidences of indebtedness issued by a corporation organized under the laws
of any state that during the preceding five years has had on average annual net pretax
earnings at least 50 percent greater than the annual interest charges and principal payments
on the total issued debt of the corporation during that period and that, for the obligation
in question, has issued an obligation rated in one of the top three quality categories by
Moody's Investors Service, Incorporated, or Standard and Poor's Corporation; and
deleted text end

deleted text begin (5) shares in an open-end investment company registered under the federal
Investment Company Act of 1940, if the portfolio investments of the company are limited
to investments that meet the requirements of clauses (1) to (4). deleted text end new text begin transportation equipment
obligations, or any other longer-term evidences of indebtedness issued or guaranteed by
a corporation organized under the laws of the United States or any of its states, or the
Dominion of Canada or any of its provinces if:
new text end

new text begin (1) the principal and interest are payable in United States dollars; and
new text end

new text begin (2) the obligations are rated among the top four quality categories by a nationally
recognized rating agency.
new text end

new text begin (f) Mutual fund authority, limited list authorized assets. Securities authorized
under paragraphs (c) to (e) may be owned directly or through shares in exchange-traded
funds, or through open-end mutual funds, or as units of commingled trusts.
new text end

new text begin (g) Extended mutual fund authority. Notwithstanding restrictions in other
paragraphs of this subdivision, a limited list plan is authorized to invest the assets of
the special fund in exchange-traded funds and open-end mutual funds, if their portfolio
investments comply with the type of securities authorized for investment under section
356A.06, subdivision 7, paragraphs (c) to (g). Investments under this paragraph must not
exceed 75 percent of the assets of the special fund, not including any money market
investments through mutual or exchange-traded funds.
new text end

new text begin (h) Supplemental fund authority. The governing body of a limited list plan may
certify special fund assets to the State Board of Investment for investment under section
11A.17.
new text end

new text begin (i) Assets mix restrictions. A limited list plan must conform to the asset mix
limitations specified in section 356A.06, subdivision 7.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 11.

Minnesota Statutes 2010, section 356A.06, subdivision 7, is amended to read:

Subd. 7.

Expanded list of authorized investment securities.

(a) Authority.
deleted text begin Except to the extent otherwise authorized by law, deleted text end A covered pension plan not described by
subdivision 6, paragraph (a), new text beginis an expanded list plan and new text endshall invest its assets deleted text beginonly in
accordance with deleted text end new text beginas specified in new text endthis subdivision. new text begin The governing board of an expanded list
plan may select and appoint investment agencies to act for or on its behalf.
new text end

(b) Securities generally new text begin; investment forms new text end. deleted text beginThe covered pension deleted text end new text beginAn expanded list
new text endplan deleted text beginhas the authority deleted text end new text beginis authorized new text endto purchase, sell, lend, deleted text beginor deleted text end new text beginand new text endexchange the new text begininvestment
new text endsecurities deleted text beginspecified in paragraphs (c) to (i) deleted text end new text begin authorized under this subdivision new text end, including
puts and call options and future contracts traded on a contract market regulated by a
governmental agency or by a financial institution regulated by a governmental agency.
These securities may be owned new text begindirectly or through shares in exchange-traded or mutual
funds, or new text endas units in commingled trusts deleted text begin that own the securities described in paragraphs (c)
to (i), including real estate investment trusts and insurance company commingled accounts,
including separate accounts deleted text end new text begin, subject to any limitations specified in this subdivision new text end.

(c) Government obligations. deleted text beginThe covered pension deleted text end new text beginAn expanded list new text endplan deleted text beginmay deleted text end
new text begin is authorized to new text endinvest funds in governmental bonds, notes, bills, mortgages, and other
evidences of indebtedness if the issue is backed by the full faith and credit of the issuer or
the issue is rated among the top four quality rating categories by a nationally recognized
rating agency. The obligations in which funds may be invested under this paragraph
deleted text begin include deleted text end new text beginare new text endguaranteed or insured issues of new text begin: new text end

(1) the United States, new text beginone of new text endits agencies, new text beginone of new text endits instrumentalities, or deleted text beginorganizations deleted text end
new text begin an organization new text endcreated and regulated by an act of Congress;

(2) new text beginthe Dominion of new text endCanada deleted text beginand deleted text end new text beginor one of new text endits provinces deleted text begin, provided deleted text end new text beginif new text endthe principal
and interest deleted text beginis deleted text end new text beginare new text endpayable in United States dollars;

(3) deleted text beginthe states and their deleted text end new text begina state or one of its new text endmunicipalities, political subdivisions,
agencies, or instrumentalities; new text beginand
new text end

(4) deleted text beginthe International Bank for Reconstruction and Development, the Inter-American
Development Bank, the Asian Development Bank, the African Development Bank, or
any other deleted text end new text begina new text endUnited States deleted text begingovernment sponsored deleted text end new text begin government-sponsored new text end organization of
which the United States is a member deleted text begin, provided deleted text end new text beginif new text endthe principal and interest deleted text beginis deleted text end new text beginare new text endpayable
in United States dollars.

(d) new text beginInvestment-grade new text endcorporate obligations. deleted text beginThe covered pension deleted text end new text beginAn expanded
list new text endplan deleted text beginmay deleted text end new text beginis authorized to new text endinvest funds in bonds, notes, debentures, transportation
equipment obligations, or any other longer term evidences of indebtedness issued or
guaranteed by a corporation organized under the laws of the United States or any deleted text beginstate
thereof deleted text end new text begin of its states new text end, or the Dominion of Canada or any deleted text beginprovince thereof deleted text end new text beginof its provinces new text endif deleted text begin
they conform to the following provisions deleted text end:

(1) the principal and interest deleted text beginof obligations of corporations incorporated or organized
under the laws of the Dominion of Canada or any province thereof must be deleted text end new text beginare new text endpayable in
United States dollars; and

(2) new text beginthe new text endobligations deleted text beginmust be deleted text end new text beginare new text endrated among the top four quality categories by a
nationally recognized rating agency.

new text begin (e) Below-investment-grade corporate obligations. An expanded list plan is
authorized to invest in unrated corporate obligations or in corporate obligations that are
not rated among the top four quality categories by a nationally recognized rating agency if:
new text end

new text begin (1) the aggregate value of these obligations does not exceed five percent of the
covered pension plan's market value;
new text end

new text begin (2) the covered pension plan's participation is limited to 50 percent of a single
offering subject to this paragraph; and
new text end

new text begin (3) the covered pension plan's participation is limited to 25 percent of an issuer's
obligations subject to this paragraph.
new text end

deleted text begin (e) deleted text end new text begin(f) new text endOther obligations. (1) deleted text beginThe covered pension deleted text end new text beginAn expanded list new text endplan deleted text beginmay deleted text end new text beginis
authorized to new text endinvest funds in deleted text begin bankers acceptances, certificates of deposit, deposit notes,
commercial paper, mortgage participation certificates and pools, asset backed securities,
repurchase agreements and reverse repurchase agreements, guaranteed investment
contracts, savings accounts, and guaranty fund certificates, surplus notes, or debentures of
domestic mutual insurance companies if they conform to the following provisions deleted text end:

(i) bankers acceptances and deposit notes deleted text beginof United States banks are limited to those deleted text end
new text begin if new text endissued by deleted text beginbanks deleted text end new text begina United States bank that is new text endrated in the highest four quality categories
by a nationally recognized rating agency;

(ii) certificates of deposit deleted text beginare limited to those deleted text end new text beginif new text endissued by deleted text begin(A) deleted text end new text begina new text endUnited States
deleted text begin banks and deleted text end new text beginbank or new text endsavings deleted text begininstitutions that are deleted text end new text begininstitution new text endrated in the highest four quality
categories by a nationally recognized rating agency or whose certificates of deposit are
fully insured by federal agencies deleted text begin; deleted text end new text begin, new text end or deleted text begin(B) deleted text end new text beginif issued by a new text endcredit deleted text beginunions deleted text end new text beginunion new text endin deleted text beginamounts
up to deleted text end new text beginan amount within new text endthe limit of new text beginthe new text endinsurance coverage provided by the National
Credit Union Administration;

(iii) commercial paper deleted text beginis limited to those deleted text end new text beginif new text endissued by new text begina new text endUnited States deleted text begincorporations deleted text end
new text begin corporation new text endor deleted text begintheir deleted text end new text beginits new text endCanadian deleted text beginsubsidiaries deleted text end new text beginsubsidiary new text endand new text beginif new text endrated in the highest two
quality categories by a nationally recognized rating agency;

(iv) mortgage deleted text beginparticipation or pass through certificates evidencing interests in pools
of first mortgages or trust deeds on improved real estate located in the United States where
the loan to value ratio for each loan as calculated in accordance with section 61A.28,
subdivision 3, does not exceed 80 percent for fully amortizable residential properties and
in all other respects meets the requirements of section 61A.28, subdivision 3 deleted text end new text begin securities
and asset-backed securities if rated in the top four quality categories by a nationally
recognized rating agency new text end;

(v) deleted text begincollateral for deleted text end repurchase agreements and reverse repurchase agreements deleted text beginis
limited to deleted text end new text beginif collateralized with new text endletters of credit deleted text beginand deleted text end new text beginor new text endsecurities authorized in this section;

(vi) guaranteed investment contracts deleted text beginare limited to those deleted text end new text beginif new text endissued by new text beginan new text endinsurance
deleted text begin companies deleted text end new text begincompany new text endor deleted text beginbanks deleted text end new text begina bank that is new text endrated in the top four quality categories by a
nationally recognized rating agency or deleted text beginto deleted text end alternative guaranteed investment contracts
deleted text begin where deleted text end new text beginif new text endthe underlying assets comply with the requirements of this subdivision;

(vii) savings accounts deleted text beginare limited to those deleted text end new text beginif new text endfully insured by new text begina new text endfederal deleted text beginagencies deleted text end new text begin
agency new text end; and

(viii) deleted text beginasset backed securities must be rated in the top four quality categories by a
nationally recognized rating agency deleted text end new text begin guaranty fund certificates, surplus notes, or debentures
if issued by a domestic mutual insurance company new text end.

(2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do not apply to certificates
of deposit and collateralization agreements executed by the covered pension plan under
clause (1), item (ii).

(3) In addition to investments authorized by clause (1), item (iv), deleted text beginthe covered pension deleted text end
new text begin an expanded list new text endplan deleted text beginmay deleted text end new text beginis authorized to new text endpurchase from the Minnesota Housing Finance
Agency all or any part of a pool of residential mortgages, not in default, that has previously
been financed by the issuance of bonds or notes of the agency. The covered pension plan
may also enter into a commitment with the agency, at the time of any issue of bonds or
notes, to purchase at a specified future date, not exceeding 12 years from the date of the
issue, the amount of mortgage loans then outstanding and not in default that have been
made or purchased from the proceeds of the bonds or notes. The covered pension plan may
charge reasonable fees for any such commitment and may agree to purchase the mortgage
loans at a price sufficient to produce a yield to the covered pension plan comparable, in
its judgment, to the yield available on similar mortgage loans at the date of the bonds or
notes. The covered pension plan may also enter into agreements with the agency for the
investment of any portion of the funds of the agency. The agreement must cover the period
of the investment, withdrawal privileges, and any guaranteed rate of return.

deleted text begin (f) deleted text end new text begin(g) new text endCorporate stocks. deleted text beginThe covered pension deleted text end new text beginAn expanded list new text endplan deleted text beginmay deleted text end new text beginis
authorized to new text endinvest deleted text beginfunds deleted text end in stocks or convertible issues of any corporation organized
under the laws of the United States or deleted text beginthe deleted text end new text beginany of its new text endstates deleted text begin thereof deleted text end, any corporation
organized under the laws of the Dominion of Canada or new text beginany of new text endits provinces, or any
corporation listed on an exchange new text beginthat is new text endregulated by an agency of the United States or of
the Canadian national government deleted text begin, if they conform to the following provisions: deleted text end new text begin.
new text end

deleted text begin (1) the aggregate value of investments under this paragraph, plus paragraphs (g) and
(k), plus equity investments under paragraphs (h), (i), and (j), as adjusted for realized
gains and losses, must not exceed 85 percent of the market or book value, whichever is
less, of a fund; and
deleted text end

deleted text begin (2) investments deleted text end new text beginAn investment in any corporation new text endmust not exceed five percent of
the total outstanding shares of deleted text beginany one deleted text end new text beginthat new text endcorporation new text begin, except that an expanded list plan
may hold up to 20 percent of the shares of a real estate investment trust and up to 20
percent of the shares of a closed mutual fund new text end.

deleted text begin (g) Developed market foreign stocks investments. In addition to investments
authorized under paragraph (f), the covered pension fund may invest in foreign stock sold
on an exchange in any developed market country that is included in the Europe, Australia,
and Far East Index.
deleted text end

deleted text begin (h) Commingled or mutual investments. The covered pension plan may invest
in index funds or mutual funds, including index mutual funds, through bank-sponsored
collective funds and shares of open-end investment companies registered under the
Federal Investment Company Act of 1940, to the extent that these funds comply with
paragraphs (c) to (j).
deleted text end

deleted text begin (i) Real estate investment trust; related investments. The covered pension plan
may invest in real estate investment trusts secured by mortgages or deeds of trust and
sold on an exchange, and insurance company commingled accounts, including separate
accounts, of a debt or equity nature.
deleted text end

deleted text begin (j) Exchange traded funds. The covered pension plan may invest funds in exchange
traded funds, subject to the maximums, the requirements, and the limitations set forth in
paragraphs (c) to (i), as applicable.
deleted text end

deleted text begin (k) deleted text end new text begin(h) new text endOther investments. (1) In addition to the investments authorized in
paragraphs (b) to deleted text begin(j) deleted text end new text begin (g) new text end, and subject to the provisions in clause (2), deleted text beginthe covered pension deleted text end
new text begin an expanded list new text endplan deleted text beginmay deleted text end new text beginis authorized to new text endinvest funds in:

(i) deleted text beginventure capital deleted text end new text beginequity and debt new text endinvestment businesses through participation in
limited partnerships new text begin, trusts, private placements, limited liability corporations, limited
liability companies, limited liability partnerships, new text end and corporations;

(ii) real estate ownership interests or loans secured by mortgages or deeds of trust new text beginor
shares of real estate investment trusts, new text endthrough investment in limited partnerships deleted text begin or bank
sponsored deleted text end new text begin, bank-sponsored new text end collective funds new text begin, trusts, mortgage participation agreements,
and insurance company commingled accounts, including separate accounts new text end;

deleted text begin (iii) regional and mutual funds through bank sponsored collective funds and
open-end investment companies registered under the Federal Investment Company Act of
1940 to the extent that a fund or a portion of a fund does not qualify under paragraph (h);
deleted text end

deleted text begin (iv) deleted text end new text begin(iii) new text endresource investments through limited partnerships, new text begintrusts, new text endprivate
placements, new text beginlimited liability corporations, limited liability companies, limited liability
partnerships, new text endand corporations; and

deleted text begin (v) deleted text end new text begin(iv) new text endinternational deleted text begindebt securities and emerging market equity deleted text end securities.

(2) The investments authorized in clause (1) must conform to the following
provisions:

(i) the aggregate value of all investments made deleted text beginaccording to deleted text end new text beginunder new text endclause (1),
deleted text begin including allocated amounts of index and mutual funds deleted text end new text begin items (i), (ii), and (iii) new text end, may not
exceed deleted text begin20 deleted text end new text begin35 new text endpercent of the market value of the fund for which the deleted text begincovered pension deleted text end
new text begin expanded list new text endplan is investing;

(ii) there must be at least four unrelated owners of the investment other than the
deleted text begin covered pension deleted text end new text beginexpanded list new text endplan for investments made under clause (1), item (i), (ii),
new text begin or new text end(iii) deleted text begin, or (iv) deleted text end;

(iii) deleted text begincovered pension plan deleted text end new text beginthe expanded list plan's new text endparticipation in an investment
vehicle is limited to 20 percent thereof for investments made under clause (1), item (i),
(ii), new text beginor new text end(iii) deleted text begin, or (iv) deleted text end; deleted text begin and
deleted text end

(iv) deleted text begincovered pension plan deleted text end new text beginthe expanded list plan's new text endparticipation in a limited
partnership does not include a general partnership interest or other interest involving
general liability. The deleted text begincovered pension deleted text end new text beginexpanded list new text endplan may not engage in any activity
as a limited partner which creates general liability deleted text begin. deleted text end new text begin; and
new text end

new text begin (v) for volunteer firefighter relief associations, emerging market equity and
international debt investments authorized under clause (1), item (iv), must not exceed 15
percent of the association's special fund market value.
new text end

new text begin (i) new text end new text begin Supplemental plan investments. new text end new text begin The governing body of an expanded list plan
may certify assets to the State Board of Investment for investment under section 11A.17.
new text end

new text begin (j) new text end new text begin Asset mix limitations. new text end new text begin The aggregate value of an expanded list plan's
investments under paragraphs (g) and (h) and equity investments under paragraph (i),
regardless of the form in which these investments are held, must not exceed 85 percent of
the covered plan's market value.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 12. new text beginINVESTMENT AUTHORITY TRANSITION PROVISION.
new text end

new text begin If any investment by the State Board of Investment or any covered pension plan fund
was an authorized investment under law in effect immediately before the effective date
of applicable sections of this act, but is not authorized by this act, the applicable assets
must be liquidated before June 30, 2013.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 13. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2010, section 356.219, subdivision 4, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 11

LOCAL RELIEF ASSOCIATION OR CONSOLIDATION ACCOUNT
MERGERS WITH PERA-P&F

Section 1.

Minnesota Statutes 2011 Supplement, section 69.77, subdivision 1a, is
amended to read:

Subd. 1a.

Covered retirement plans.

The provisions of this section apply to deleted text beginthe
following local retirement plans:
deleted text end

deleted text begin (1) deleted text end the Bloomington Firefighters Relief Association deleted text begin; deleted text end new text begin.
new text end

deleted text begin (2) the Fairmont Police Relief Association; and
deleted text end

deleted text begin (3) the Virginia Fire Department Relief Association.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin (a) For the Fairmont Police Relief Association, this section
is effective as of the date for consolidation set by the board of the Public Employees
Retirement Association in consultation with the State Board of Investment, but not later
than June 29, 2012.
new text end

new text begin (b) For the Virginia fire consolidation account, this section is effective on June 29,
2012, which is the effective date of merger.
new text end

Sec. 2.

Minnesota Statutes 2011 Supplement, section 69.77, subdivision 4, is amended
to read:

Subd. 4.

Relief association financial requirements; minimum municipal
obligation.

(a) The officers of the relief association shall determine the financial
requirements of the relief association and minimum obligation of the municipality for
the following calendar year in accordance with the requirements of this subdivision.
The financial requirements of the relief association and the minimum obligation of the
municipality must be determined on or before the submission date established by the
municipality under subdivision 5.

(b) The financial requirements of the relief association for the following calendar
year must be based on the most recent actuarial valuation or survey of the special fund of
the association if more than one fund is maintained by the association, or of the association,
if only one fund is maintained, prepared in accordance with sections 356.215, subdivisions
4 to 15, and 356.216, as required under subdivision 10. If an actuarial estimate is prepared
by the actuary of the relief association as part of obtaining a modification of the benefit
plan of the relief association and the modification is implemented, the actuarial estimate
must be used in calculating the subsequent financial requirements of the relief association.

(c) If the relief association has an unfunded actuarial accrued liability as reported in
the most recent actuarial valuation or survey, the total of the amounts calculated under
clauses (1), (2), and (3), constitute the financial requirements of the relief association for
the following year. If the relief association does not have an unfunded actuarial accrued
liability as reported in the most recent actuarial valuation or survey, the amount calculated
under clauses (1) and (2) constitute the financial requirements of the relief association for
the following year. The financial requirement elements are:

(1) the normal level cost requirement for the following year, expressed as a dollar
amount, which must be determined by applying the normal level cost of the relief
association as reported in the actuarial valuation or survey and expressed as a percentage
of covered payroll to the estimated covered payroll of the active membership of the relief
association, including any projected change in the active membership, for the following
year;

(2) for the Bloomington Fire Department Relief Association deleted text begin, the Fairmont Police
Relief Association, and the Virginia Fire Department Relief Association deleted text end, to the dollar
amount of normal cost determined under clause (1) must be added an amount equal to the
dollar amount of the administrative expenses of the special fund of the association if more
than one fund is maintained by the association, or of the association if only one fund is
maintained, for the most recent year, multiplied by the factor of 1.035. The administrative
expenses are those authorized under section 69.80; and

(3) to the dollar amount of normal cost and expenses determined under clauses
(1) and (2) must be added an amount equal to the level annual dollar amount which
is sufficient to amortize the unfunded actuarial accrued liability as determined from
the actuarial valuation or survey of the fund, using an interest assumption set at the
applicable rate specified in section 356.215, subdivision 8, by that fund's amortization
date as specified in paragraph (d).

(d) deleted text beginThe Virginia Fire Department Relief Association special fund amortization date
is December 31, 2010. The Fairmont Police Relief Association special fund amortization
date is December 31, 2020. deleted text end The Bloomington Fire Department Relief Association
special fund amortization date is determined under section 356.216, clause (2). The
amortization date specified in this paragraph supersedes any amortization date specified in
any applicable special law.

(e) The minimum obligation of the municipality is an amount equal to the financial
requirements of the relief association reduced by the estimated amount of member
contributions from covered salary anticipated for the following calendar year and the
estimated amounts anticipated for the following calendar year from the applicable state aid
program established under sections 69.011 to 69.051 receivable by the relief association
after any allocation made under section 69.031, subdivision 5, paragraph (b), clause (2),
or 423A.01, subdivision 2, paragraph (a), clause (6), from the local police and salaried
firefighters' relief association amortization aid program established under section 423A.02,
subdivision 1, from the supplementary amortization state-aid program established under
section 423A.02, subdivision 1a, and from the additional amortization state aid under
section 423A.02, subdivision 1b.

new text begin EFFECTIVE DATE. new text end

new text begin (a) For the Fairmont Police Relief Association, this section
is effective as of the date for consolidation set by the board of the Public Employees
Retirement Association in consultation with the State Board of Investment, but not later
than June 29, 2012.
new text end

new text begin (b) For the Virginia fire consolidation account, this section is effective on June 29,
2012, which is the effective date of merger.
new text end

Sec. 3.

Minnesota Statutes 2011 Supplement, section 353.668, subdivision 4, is
amended to read:

Subd. 4.

Transfer of assets; transfer of title to assets.

(a) On the effective date of
the consolidation under Laws 2011, First Special Session chapter 8, article 7, section 19,
the chief administrative officer of the Minneapolis Police Relief Association shall transfer
the entire assets of the special fund of the Minneapolis Police Relief Association other
than the health insurance account to the public employees police and fire retirement fund
at market value. Unless ineligible or inappropriate, the transfer must be in the form of
investment securities and must include any accounts receivable that are determined by the
State Board of Investment as being capable of being collected. An amount, in cash, must
be transferred by the city of Minneapolis equal to the market value recognized by the relief
association of investment securities that are determined by the executive director of the
State Board of Investment not to be in compliance with the requirements and limitations
set forth in sections 11A.09, 11A.14, 11A.23, and 11A.24 or not to be appropriate for
retention in light of the established investment objectives of the State Board of Investment
or of accounts receivable determined by the executive director of the State Board of
Investment as being incapable of being collected. Legal and beneficial title to assets that
are determined noncompliant or inappropriate securities or that are uncollectible accounts
receivable are transferred to the city of Minneapolis on the effective date of consolidation
under Laws 2011, First Special Session chapter 8, article 7, section 19. Any accounts
payable on the effective date of consolidation under Laws 2011, First Special Session
chapter 8, article 7, section 19, are an obligation of the public employees police and fire
retirement fund and reduce the asset value for purposes of subdivision 6. The transferred
assets must be deposited in the public employees police and fire retirement fund. The
amount of the health insurance account as of the date of the consolidation must remain
deposited in the financial institution retained by the former Minneapolis Police Relief
Association on May 1, 2011, and that financial institution must act as the custodian of the
account. new text beginThe health insurance account may be transferred from the financial institution
that holds the account to a successor financial institution on June 30, 2012, under the
requirements of this subdivision and the terms of an agreement between the Minneapolis
Police Relief Association and the successor financial institution dated December 30,
2011, that provides for the transfer. new text endThe financial institution shall perform all trustee and
fiduciary duties with respect to the account as a condition to the retention of the account.
The executive director of the Minneapolis Police Relief Association, prior to the effective
date of consolidation, shall estimate three calendar years of the administrative expenses
related to the operation of the account and shall prepay those expenses from the account to
the financial institution prior to the effective date of consolidation. After the three-year
prepayment period, the beneficiaries of the account are responsible for the payment of the
administrative expenses related to the operation of the account.

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

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

(d) The Public Employees Retirement Association shall indemnify any former
fiduciary of the Minneapolis Police Relief Association consistent with the provisions of
section 356A.11. The indemnification may be effected by the purchase by the Public
Employees Retirement Association of reasonable fiduciary liability tail insurance for the
officers and directors of the former Minneapolis Police Relief Association. Consistent
with section 69.80, the relief association may purchase reasonable fiduciary liability tail
insurance for its officers and directors prior to the effective date of consolidation under
Laws 2011, First Special Session chapter 8, article 7, section 19.

(e) Office equipment and other physical assets of the special fund of the Minneapolis
Police Relief Association that are not needed by the Public Employees Retirement
Association may be sold by the special fund of the Minneapolis Police Relief Association
to the general fund of the Minneapolis Police Relief Association or to any successor
fraternal organization of the Minneapolis Police Relief Association at fair market value,
with the proceeds of that sale deposited in the public employees police and fire retirement
fund and included in the transferred asset value under subdivision 6.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

new text begin [353.669] CONSOLIDATION OF THE FAIRMONT POLICE RELIEF
ASSOCIATION.
new text end

new text begin Subdivision 1. new text end

new text begin Membership transfer. new text end

new text begin On the effective date of consolidation, the
retired members, including surviving spouses, of the Fairmont Police Relief Association
are transferred to the public employees police and fire retirement plan, are no longer
members of the former Fairmont Police Relief Association, and are members of the public
employees police and fire retirement plan.
new text end

new text begin Subd. 2. new text end

new text begin Benefit liability transfer. new text end

new text begin The liability for the payment of retirement
annuities, service pensions, and survivor benefits of the retired members, service
pensioners, surviving spouses, and any other retirement benefit recipients of the former
Fairmont Police Relief Association, as contained in the transferred records of the former
relief association, is transferred to the public employees police and fire retirement plan on
the effective date of consolidation.
new text end

new text begin Subd. 3. new text end

new text begin Transfer of records. new text end

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

new text begin Subd. 4. new text end

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

new text begin (a) On the effective date of
consolidation, the chief administrative officer of the Fairmont Police Relief Association
shall transfer the entire assets of the special fund of the Fairmont Police Relief Association
to the public employees police and fire retirement fund at market value. Unless ineligible
or inappropriate as determined by the State Board of Investment, the transfer must be
in the form of investment securities and must include any accounts receivable that are
determined by the State Board of Investment as being capable of being collected. The city
of Fairmont must transfer, in cash, an amount equal to the market value, as recognized by
the relief association of any investment securities that are determined by the executive
director of the State Board of Investment to be not in compliance with the requirements
and limitations set forth in sections 11A.09, 11A.14, 11A.23, and 11A.24, or to be
inappropriate for retention in light of the established investment objectives of the State
Board of Investment, or of any accounts receivable that are determined by the executive
director as being incapable of being collected. The legal and beneficial title to assets that
are determined to be noncompliant or inappropriate securities or that are determined to be
uncollectable accounts receivable are transferred from the relief association special fund
to the city of Fairmont as of the effective date of consolidation. Any accounts payable
of the special fund of the Fairmont Police Relief Association on the effective date of
consolidation, are an obligation of the public employees police and fire retirement fund
and reduce the value of the transferred relief association special fund assets for purposes
of subdivision 6. Assets transferred from the special fund of the Fairmont Police Relief
Association must be deposited in the public employees police and fire retirement fund
and must be managed by the State Board of Investment through the Minnesota combined
investment funds under section 11A.14.
new text end

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

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

new text begin (d) The Public Employees Retirement Association shall indemnify any former
fiduciary of the Fairmont Police Relief Association consistent with the provisions of
section 356A.11. The indemnification may be effected by the purchase by the Public
Employees Retirement Association of reasonable fiduciary liability tail insurance for the
officers and directors of the former Fairmont Police Relief Association.
new text end

new text begin Subd. 5. new text end

new text begin Benefits. new text end

new text begin (a) The annuities, service pensions, and other retirement benefits
of or attributable to retired members and surviving spouses of the Fairmont Police Relief
Association who had that status as of the effective date of consolidation, continue after
consolidation in the same amount and under the same terms as provided under Minnesota
Statutes 2000, sections 423.41 to 423.46, 423.48 to 423.59, 423.61, and 423.62; Laws
1963, chapter 423; Laws 1977, chapter 100; and Laws 1999, chapter 222, article 3, section
4, except as provided in paragraph (b).
new text end

new text begin (b) The annual base salary figure for pension and benefit determinations upon
consolidation and for the balance of calendar year 2012 is $106,666.67. After December
31, 2012, annual postretirement adjustments of pensions and benefits in force must be
calculated solely under section 356.415, subdivision 1c.
new text end

new text begin Subd. 6. new text end

new text begin Calculation of final funded status; employer contributions. new text end

new text begin (a) As of
the effective date of consolidation, the approved actuary retained by the Public Employees
Retirement Association under section 356.214 shall determine the final funded status of
the Fairmont Police Relief Association special fund. The final funded status is the present
value of future benefits payable from the Fairmont Police Relief Association as of the
effective date of consolidation after subtracting the market value of the transferred assets
of the Fairmont Police Relief Association as of the effective date of consolidation. The
present value of future benefits figure must be calculated using the applicable actuarial
assumptions for the public employees police and fire retirement plan specified in or
established under section 356.215. If there is a remainder present value of future benefits
amount, the city of Fairmont shall pay to the public employees police and fire retirement
fund an amount sufficient, on a level annual dollar basis, to amortize the calculated
remainder present value of future benefits amount by December 31, 2020. Payments shall
be made annually on or before December 31, beginning in 2012.
new text end

new text begin (b) If there are assets of the former Fairmont Police Relief Association in excess of
the present value of future benefits as of the effective date of consolidation, these assets
must be credited to an interest bearing suspense account within the public employees
police and fire retirement fund, must be used to offset any amount payable under paragraph
(c) until June 30, 2015, and, after June 30, 2015, must be paid to the city of Fairmont. The
suspense account must be credited with the same rate of investment return as the public
employees police and fire retirement fund.
new text end

new text begin (c) If, after the effective date of consolidation, the postretirement or preretirement
interest rate actuarial assumption applicable to the public employees police and fire
retirement plan under section 356.215, subdivision 8, is modified from the rates specified
in Minnesota Statutes 2010, section 356.215, subdivision 8, the remainder present value of
future benefits amount calculation under paragraph (a), updated for the passage of time,
must be revised and the amortization contribution by the city of Fairmont for the balance
of the amortization period must be redetermined and certified to the city of Fairmont.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective as of the date for consolidation set
by the board of the Public Employees Retirement Association in consultation with the
State Board of Investment, but not later than June 29, 2012.
new text end

Sec. 5.

new text begin [353.6691] MERGER OF THE VIRGINIA FIRE DEPARTMENT
RELIEF ASSOCIATION.
new text end

new text begin Subdivision 1. new text end

new text begin Merger authorized. new text end

new text begin On the effective date of merger, the Virginia
fire department consolidation account of the Public Employees Retirement Association
under chapter 353A becomes a part of the public employees police and fire retirement plan
and fund governed by sections 353.63 to 353.659.
new text end

new text begin Subd. 2. new text end

new text begin Benefit liability transfer. new text end

new text begin All current and future liabilities of the Virginia
fire department consolidation account under chapter 353A are liabilities of the public
employees police and fire retirement plan and fund as of the effective date of merger and
the accrued benefits of the members of the consolidation account are the obligation of the
public employees police and fire retirement plan and fund.
new text end

new text begin Subd. 3. new text end

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

new text begin On the effective date of merger,
the assets of the Virginia fire department consolidation account must be transferred to the
public employees police and fire retirement fund. Upon transfer, the market value of the
assets of the consolidation account, less any amount of residual assets under subdivision 5,
are assets of the public employees police and fire fund as of the effective date of merger,
and the assets, excluding the distribution amount under subdivision 5, become an asset of
the public employees police and fire retirement fund. The public employees police and
fire retirement fund also must be credited as an asset with the amount of any receivable
assets from employer contributions under subdivision 5.
new text end

new text begin Subd. 4. new text end

new text begin Benefits. new text end

new text begin A person who received a service pension, a disability benefit, or a
survivor benefit from the Virginia fire department consolidation account for the month
prior to the effective date of merger and who has not previously elected postretirement
adjustments under section 356.415, subdivision 1c, rather than the postretirement
adjustment mechanism of the Virginia Fire Department Relief Association under section
353A.08, subdivision 1, may elect future postretirement adjustments under section
356.415, subdivision 1c, or the retention of the former Virginia Fire Department Relief
Association postretirement adjustment mechanism. The election must be made in writing
on a form prescribed by the executive director on or before September 1, 2012. Unless
modified by an election under this subdivision, the benefit plan election by any person or
on behalf of any person under section 353A.08 remains binding.
new text end

new text begin Subd. 5. new text end

new text begin Calculation of final funded status; employer contributions. new text end

new text begin (a) As of
the effective date of merger, the approved actuary retained by the Public Employees
Retirement Association under section 356.214 shall determine the final funded status of the
former Virginia Fire Department Relief Association special fund. The final funded status is
the present value of future benefits payable from the Virginia fire department consolidation
account as of the effective date of merger after subtracting the market value of the
transferred assets of the Virginia fire department consolidation account as of the effective
date of merger. The present value of future benefits figure must be calculated using the
applicable actuarial assumptions for the public employees police and fire retirement plan
specified in or established under section 356.215. If there is a remainder present value
of future benefits amount, the city of Virginia shall pay to the public employees police
and fire retirement fund an amount sufficient, on a level annual dollar basis, to amortize
the calculated remainder present value of future benefits amount by December 31, 2020.
Payments shall be made annually on or before December 31, beginning in 2012.
new text end

new text begin (b) If there are assets of the former Virginia fire department consolidation account in
excess of the present value of future benefits as of the effective date of merger, these assets
shall be credited to an interest bearing suspense account within the public employees police
and fire retirement fund until January 1, 2013. The suspense account must be credited with
the same rate of investment return as the public employees police and fire retirement fund.
new text end

new text begin (c) If, after the effective date of merger, the postretirement or preretirement interest
rate actuarial assumption applicable to the public employees police and fire retirement plan
under section 356.215, subdivision 8, is modified from the rates specified in Minnesota
Statutes 2010, section 356.215, subdivision 8, the remainder present value of future
benefits amount calculation under paragraph (a), updated for the passage of time, must be
revised and any amortization contribution by the city of Virginia for the balance of the
amortization period must be redetermined and certified to the city of Virginia.
new text end

new text begin (d) On January 1, 2013, one-half of any suspense account under paragraph (b)
must be paid as an additional ad hoc postretirement adjustment to the service pensioners,
disabilitants, and surviving spouses of the former Virginia fire consolidation account. The
additional ad hoc postretirement adjustment for each recipient is the total amount available
for the adjustment divided by the total number of recipients as of January 1, 2013, of the
former Virginia fire consolidation account. On January 1, 2014, if the suspense account
has earned investment income equal to or greater than the preretirement interest rate
assumption applicable to the public employees police and fire retirement plan under section
356.215, subdivision 8, the balance remaining of the suspense account under paragraph (b)
must be paid as an additional ad hoc postretirement adjustment to the service pensioners,
disabilitants, and surviving spouses of the former Virginia fire consolidation account,
divided by the total number of recipients as of January 1, 2014. Nothing in this paragraph
may be deemed to authorize the payment of a postretirement adjustment to an estate.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective on June 29, 2012, which is the
effective date of merger.
new text end

Sec. 6.

Minnesota Statutes 2011 Supplement, section 356.215, subdivision 8, is
amended to read:

Subd. 8.

Interest and salary assumptions.

(a) The actuarial valuation must use
the applicable following preretirement interest assumption and the applicable following
postretirement interest assumption:

plan	preretirement interest rate assumption	postretirement interest rate assumption
general state employees retirement plan	8.5%	6.0%
correctional state employees retirement plan	8.5	6.0
State Patrol retirement plan	8.5	6.0
legislators retirement plan	8.5	6.0
elective state officers retirement plan	8.5	6.0
judges retirement plan	8.5	6.0
general public employees retirement plan	8.5	6.0
public employees police and fire retirement plan	8.5	6.0
local government correctional service retirement plan	8.5	6.0
teachers retirement plan	8.5	6.0
Duluth teachers retirement plan	8.5	8.5
St. Paul teachers retirement plan	8.5	8.5
deleted text begin Fairmont Police Relief Association deleted text end	deleted text begin 5.0 deleted text end	deleted text begin 5.0 deleted text end
deleted text begin Virginia Fire Department Relief Association deleted text end	deleted text begin 5.0 deleted text end	deleted text begin 5.0 deleted text end
Bloomington Fire Department Relief Association	6.0	6.0
local monthly benefit volunteer firefighters relief associations	5.0	5.0

(b) Before July 1, 2010, the actuarial valuation must use the applicable following
single rate future salary increase assumption, the applicable following modified single
rate future salary increase assumption, or the applicable following graded rate future
salary increase assumption:

(1) single rate future salary increase assumption

plan	future salary increase assumption
legislators retirement plan		5.0%
judges retirement plan		4.0
deleted text begin Fairmont Police Relief Association deleted text end		deleted text begin 3.5 deleted text end
deleted text begin Virginia Fire Department Relief Association deleted text end		deleted text begin 3.5 deleted text end
Bloomington Fire Department Relief Association		4.0

(2) age-related select and ultimate future salary increase assumption or graded rate
future salary increase assumption

plan	future salary increase assumption
correctional state employees retirement plan	assumption D
State Patrol retirement plan	assumption C
local government correctional service retirement plan	assumption C
Duluth teachers retirement plan	assumption A
St. Paul teachers retirement plan	assumption B

The select calculation is: during the
designated select period, a designated
percentage rate is multiplied by the result of
the designated integer minus T, where T is
the number of completed years of service,
and is added to the applicable future salary
increase assumption. The designated select
period is five years and the designated
integer is five for the general state employees
retirement plan. The designated select period
is ten years and the designated integer is ten
for all other retirement plans covered by
this clause. The designated percentage rate
is: (1) 0.2 percent for the correctional state
employees retirement plan, the State Patrol
retirement plan, and the local government
correctional service retirement plan; (2)
0.6 percent for the general state employees
retirement plan; and (3) 0.3 percent for the
teachers retirement plan, the Duluth Teachers
Retirement Fund Association, and the St.
Paul Teachers Retirement Fund Association.
The select calculation for the Duluth Teachers
Retirement Fund Association is 8.00 percent
per year for service years one through seven,
7.25 percent per year for service years seven
and eight, and 6.50 percent per year for
service years eight and nine.

The ultimate future salary increase assumption is:

age	A	B	C	D
16	8.00%	6.90%	7.7500%	7.2500%
17	8.00	6.90	7.7500	7.2500
18	8.00	6.90	7.7500	7.2500
19	8.00	6.90	7.7500	7.2500
20	6.90	6.90	7.7500	7.2500
21	6.90	6.90	7.1454	6.6454
22	6.90	6.90	7.0725	6.5725
23	6.85	6.85	7.0544	6.5544
24	6.80	6.80	7.0363	6.5363
25	6.75	6.75	7.0000	6.5000
26	6.70	6.70	7.0000	6.5000
27	6.65	6.65	7.0000	6.5000
28	6.60	6.60	7.0000	6.5000
29	6.55	6.55	7.0000	6.5000
30	6.50	6.50	7.0000	6.5000
31	6.45	6.45	7.0000	6.5000
32	6.40	6.40	7.0000	6.5000
33	6.35	6.35	7.0000	6.5000
34	6.30	6.30	7.0000	6.5000
35	6.25	6.25	7.0000	6.5000
36	6.20	6.20	6.9019	6.4019
37	6.15	6.15	6.8074	6.3074
38	6.10	6.10	6.7125	6.2125
39	6.05	6.05	6.6054	6.1054
40	6.00	6.00	6.5000	6.0000
41	5.90	5.95	6.3540	5.8540
42	5.80	5.90	6.2087	5.7087
43	5.70	5.85	6.0622	5.5622
44	5.60	5.80	5.9048	5.4078
45	5.50	5.75	5.7500	5.2500
46	5.40	5.70	5.6940	5.1940
47	5.30	5.65	5.6375	5.1375
48	5.20	5.60	5.5822	5.0822
49	5.10	5.55	5.5404	5.0404
50	5.00	5.50	5.5000	5.0000
51	4.90	5.45	5.4384	4.9384
52	4.80	5.40	5.3776	4.8776
53	4.70	5.35	5.3167	4.8167
54	4.60	5.30	5.2826	4.7826
55	4.50	5.25	5.2500	4.7500
56	4.40	5.20	5.2500	4.7500
57	4.30	5.15	5.2500	4.7500
58	4.20	5.10	5.2500	4.7500
59	4.10	5.05	5.2500	4.7500
60	4.00	5.00	5.2500	4.7500
61	3.90	5.00	5.2500	4.7500
62	3.80	5.00	5.2500	4.7500
63	3.70	5.00	5.2500	4.7500
64	3.60	5.00	5.2500	4.7500
65	3.50	5.00	5.2500	4.7500
66	3.50	5.00	5.2500	4.7500
67	3.50	5.00	5.2500	4.7500
68	3.50	5.00	5.2500	4.7500
69	3.50	5.00	5.2500	4.7500
70	3.50	5.00	5.2500	4.7500

(3) service-related ultimate future salary increase assumption

general state employees retirement plan of the Minnesota State Retirement System	assumption A
general employees retirement plan of the Public Employees Retirement Association	assumption B
Teachers Retirement Association	assumption C
public employees police and fire retirement plan	assumption D

service length	A	B	C	D
1	10.75%	12.25%	12.00%	13.00%
2	8.35	9.15	9.00	11.00
3	7.15	7.75	8.00	9.00
4	6.45	6.85	7.50	8.00
5	5.95	6.25	7.25	6.50
6	5.55	5.75	7.00	6.10
7	5.25	5.45	6.85	5.80
8	4.95	5.15	6.70	5.60
9	4.75	4.85	6.55	5.40
10	4.65	4.65	6.40	5.30
11	4.45	4.45	6.25	5.20
12	4.35	4.35	6.00	5.10
13	4.25	4.15	5.75	5.00
14	4.05	4.05	5.50	4.90
15	3.95	3.95	5.25	4.80
16	3.85	3.85	5.00	4.80
17	3.75	3.75	4.75	4.80
18	3.75	3.75	4.50	4.80
19	3.75	3.75	4.25	4.80
20	3.75	3.75	4.00	4.80
21	3.75	3.75	3.90	4.70
22	3.75	3.75	3.80	4.60
23	3.75	3.75	3.70	4.50
24	3.75	3.75	3.60	4.50
25	3.75	3.75	3.50	4.50
26	3.75	3.75	3.50	4.50
27	3.75	3.75	3.50	4.50
28	3.75	3.75	3.50	4.50
29	3.75	3.75	3.50	4.50
30 or more	3.75	3.75	3.50	4.50

(c) Before July 2, 2010, the actuarial valuation must use the applicable following
payroll growth assumption for calculating the amortization requirement for the unfunded
actuarial accrued liability where the amortization retirement is calculated as a level
percentage of an increasing payroll:

plan	payroll growth assumption
general state employees retirement plan of the Minnesota State Retirement System	3.75%
correctional state employees retirement plan	4.50
State Patrol retirement plan	4.50
legislators retirement plan	4.50
judges retirement plan	4.00
general employees retirement plan of the Public Employees Retirement Association	3.75
public employees police and fire retirement plan	3.75
local government correctional service retirement plan	4.50
teachers retirement plan	3.75
Duluth teachers retirement plan	4.50
St. Paul teachers retirement plan	5.00

(d) After July 1, 2010, the assumptions set forth in paragraphs (b) and (c) continue to
apply, unless a different salary assumption or a different payroll increase assumption:

(1) has been proposed by the governing board of the applicable retirement plan;

(2) is accompanied by the concurring recommendation of the actuary retained under
section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the
most recent actuarial valuation report if section 356.214 does not apply; and

(3) has been approved or deemed approved under subdivision 18.

new text begin EFFECTIVE DATE. new text end

new text begin (a) For the Fairmont Police Relief Association, this section
is effective as of the date for consolidation set by the board of the Public Employees
Retirement Association in consultation with the State Board of Investment, but not later
than June 29, 2012.
new text end

new text begin (b) For the Virginia fire consolidation account, this section is effective on June 29,
2012, which is the effective date of merger.
new text end

Sec. 7.

Laws 2002, chapter 392, article 1, section 8, is amended to read:

Sec. 8. REVISOR INSTRUCTIONS.

deleted text begin (a) In the next and subsequent editions of Minnesota Statutes, the revisor of statutes
shall not print Minnesota Statutes, sections 423.41 to 423.62, but shall denote those
sections as "[LOCAL, CITY OF FAIRMONT, POLICE PENSIONS.]."
deleted text end

deleted text begin (b) deleted text end In the next and subsequent editions of Minnesota Statutes, the revisor of statutes
shall, in each section indicated in column A, replace the cross-reference specified in
column B with the cross-reference set forth in column C:

Column A	Column B	Column C
69.021, subd. 10	69.77, subd. 2a	69.77, subd. 3
69.021, subd. 10	69.77, subd. 2b	69.77, subd. 4
69.021, subd. 10	69.77, subd. 2c	69.77, subd. 5
299A.465, subd. 5	424.03	Minnesota Statutes, 2000, 424.03
353A.07, subd. 6	69.77, subd. 2a	69.77, subd. 3
353A.09, subd. 4	69.77, subd. 2a	69.77, subd. 3
356.216	69.77, subd. 2b	69.77, subd. 4
356.219, subd. 2	69.77, subd. 2g	69.77, subd. 9
423.01, subd. 2	69.77, subd. 2b	69.77, subd. 4
423A.18	69.77, subd. 2i	69.77, subd. 11
423A.19, subd. 4	69.77, subd. 2i	69.77, subd. 11
423B.06, subd. 1	69.77, subd. 2a	69.77, subd. 3
423B.06, subd. 1	69.77, subd. 2b	69.77, subd. 4
423B.06, subd. 1	69.77, subd. 2c	69.77, subd. 5
423B.06, subd. 1	69.77, subd. 2d	69.77, subd. 6
423B.06, subd. 1	69.77, subd. 2e	69.77, subd. 7
423B.06, subd. 1	69.77, subd. 2f	69.77, subd. 8
423B.21, subd. 1	69.77, subd. 2b	69.77, subd. 4

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective as of the date for consolidation set
by the board of the Public Employees Retirement Association in consultation with the
State Board of Investment, but not later than June 29, 2012.
new text end

Sec. 8. new text beginTERMINATION OF THE FAIRMONT POLICE RELIEF
ASSOCIATION.
new text end

new text begin On the effective date of consolidation, the Fairmont Police Relief Association
ceases to exist.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective as of the date for consolidation set
by the board of the Public Employees Retirement Association in consultation with the
State Board of Investment, but not later than June 29, 2012.
new text end

Sec. 9. new text beginTERMINATION OF THE VIRGINIA FIRE DEPARTMENT RELIEF
ASSOCIATION.
new text end

new text begin On the effective date of merger, the Virginia fire department consolidation account
ceases to exist.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective on June 29, 2012, which is the
effective date of merger.
new text end

Sec. 10. new text begin REPEALER.
new text end

new text begin Subdivision 1. new text end

new text begin Fairmont Police Relief Association. new text end

new text begin (a) new text end new text begin Laws 1963, chapter 423;
and Laws 1999, chapter 222, article 3, sections 3; 4; and 5, new text end new text begin are repealed.
new text end

new text begin (b) new text end new text begin Minnesota Statutes 2010, section 423A.06, new text end new text begin is repealed.
new text end

new text begin (c) The revisor shall show Minnesota Statutes, sections 423.41, 423.42, 423.43,
423.44, 423.45, 423.46, 423.48, 423.49, 423,50, 423.51, 423.52, 423.53, 423.54, 423.55,
423.56, 423.57, 423.58, 423.59, 423.61, and 423.62, as repealed.
new text end

new text begin (d) new text end new text begin Laws 1947, chapter 624, sections 1; 2; 3; 4; 5; 6; 8; 9; 10; 11; 12; 13; 14; 15;
16; 17; 18; 19; 21; and 22, new text end new text begin are repealed.
new text end

new text begin Subd. 2. new text end

new text begin Virginia fire department consolidation account. new text end

new text begin Laws 1953, chapter
399, as amended by Laws 1961, chapter 420, section 1, Laws 1961, chapter 420, section 2,
Laws 1961, chapter 420, section 3, Laws 1961, chapter 420, section 4, Laws 1961, chapter
420, section 5, Laws 1961, chapter 420, section 6, Laws 1963, chapter 407, section 1,
Laws 1965, chapter 546, section 1, Laws 1965, chapter 546, section 2, Laws 1965, chapter
546, section 3, Laws 1969, chapter 578, section 1, Laws 1969, chapter 578, section 2,
Laws 1969, chapter 578, section 3; Laws 1961, chapter 420, sections 2, as amended by
Laws 1965, chapter 546, section 2, Laws 1965, chapter 546, section 3, Laws 1969, chapter
578, section 1; 3; 4; 5, as amended by Laws 1963, chapter 407, section 1, Laws 1969,
chapter 578, section 2; and 6; Laws 1963, chapter 407, section 1, as amended by Laws
1969, chapter 578, section 2; Laws 1965, chapter 546, sections 1; 2, as amended by Laws
1969, chapter 578, section 1; and 3; Laws 1969, chapter 578, sections 1; 2; and 3; Laws
1974, chapter 183, as amended by Laws 1991, chapter 62, section 1; Laws 1982, chapter
574, section 1; Laws 1982, chapter 578, article 1, section 14; Laws 1983, chapter 69,
section 1; Laws 1984, chapter 547, section 27; Laws 1987, chapter 372, article 2, section
14; Laws 1988, chapter 709, sections 1, as amended by Laws 1989, chapter 319, article 4,
section 2, Laws 1989, chapter 319, article 18, section 11; and 2; Laws 1991, chapter 62,
sections 1; and 2; and Laws 1992, chapter 465, section 1, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Subdivision 1 is effective as of the date for consolidation
of the Fairmont Police Relief Association set by the board of the Public Employees
Retirement Association in consultation with the State Board of Investment, but not later
than June 29, 2012.
new text end

new text begin Subdivision 2 is effective for the Virginia fire consolidation account on June 29,
2012, which is the effective date of merger.
new text end

ARTICLE 12

VOLUNTEER FIRE RETIREMENT CHANGES

Section 1.

Minnesota Statutes 2010, section 69.011, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

Unless the language or context clearly indicates that
a different meaning is intended, the following words and terms, for the purposes of this
chapter and chapters 423, 423A, 424 and 424A, have the meanings ascribed to them:

(a) "Commissioner" means the commissioner of revenue.

(b) "Municipality" means:

(1) a home rule charter or statutory city;

(2) an organized town;

(3) a park district subject to chapter 398;

(4) the University of Minnesota;

(5) for purposes of the fire state aid program only, an American Indian tribal
government entity located within a federally recognized American Indian reservation;

(6) for purposes of the police state aid program only, an American Indian tribal
government with a tribal police department which exercises state arrest powers under
section 626.90, 626.91, 626.92, or 626.93;

(7) for purposes of the police state aid program only, the Metropolitan Airports
Commission; and

(8) for purposes of the police state aid program only, the Department of Natural
Resources and the Department of Public Safety with respect to peace officers covered
under chapter 352B.

(c) "Minnesota Firetown Premium Report" means a form prescribed by the
commissioner containing space for reporting by insurers of fire, lightning, sprinkler
leakage and extended coverage premiums received upon risks located or to be performed
in this state less return premiums and dividends.

(d) "Firetown" means the area serviced by any municipality having a qualified fire
department or a qualified incorporated fire department having a subsidiary volunteer
firefighters' relief association.

(e) "Market value" means latest available market value of all property in a taxing
jurisdiction, whether the property is subject to taxation, or exempt from ad valorem
taxation obtained from information which appears on abstracts filed with the commissioner
of revenue or equalized by the State Board of Equalization.

(f) "Minnesota Aid to Police Premium Report" means a form prescribed by the
commissioner for reporting by each fire and casualty insurer of all premiums received
upon direct business received by it in this state, or by its agents for it, in cash or otherwise,
during the preceding calendar year, with reference to insurance written for insuring against
the perils contained in auto insurance coverages as reported in the Minnesota business
schedule of the annual financial statement which each insurer is required to file with
the commissioner in accordance with the governing laws or rules less return premiums
and dividends.

(g) "Peace officer" means any person:

(1) whose primary source of income derived from wages is from direct employment
by a municipality or county as a law enforcement officer on a full-time basis of not less
than 30 hours per week;

(2) who has been employed for a minimum of six months prior to December 31
preceding the date of the current year's certification under subdivision 2, clause (b);

(3) who is sworn to enforce the general criminal laws of the state and local
ordinances;

(4) who is licensed by the Peace Officers Standards and Training Board and is
authorized to arrest with a warrant; and

(5) who is a member of the deleted text beginMinneapolis Police Relief Association, the deleted text end State Patrol
retirement plan deleted text begin, deleted text end or the public employees police and fire fund.

(h) "Full-time equivalent number of peace officers providing contract service" means
the integral or fractional number of peace officers which would be necessary to provide
the contract service if all peace officers providing service were employed on a full-time
basis as defined by the employing unit and the municipality receiving the contract service.

(i) "Retirement benefits other than a service pension" means any disbursement
authorized under section 424A.05, subdivision 3, clauses (3) and (4).

(j) "Municipal clerk, municipal clerk-treasurer, or county auditor" means new text begin:
new text end

new text begin (1) for the police state aid program and police relief association financial reports:
new text end

new text begin (i) new text end the person who was elected or appointed to the specified position or, in the
absence of the person, another person who is designated by the applicable governing body deleted text begin. deleted text end new text begin;
new text end

new text begin (ii) new text end in a park district, the deleted text beginclerk is the deleted text end secretary of the board of park district
commissioners deleted text begin. deleted text end new text begin;
new text end

new text begin (iii) new text end in the case of the University of Minnesota, the deleted text beginclerk is that deleted text end official designated
by the Board of Regents deleted text begin. deleted text end new text begin;
new text end

new text begin (iv) new text end for the Metropolitan Airports Commission, the deleted text beginclerk is the deleted text end person designated
by the commission deleted text begin. deleted text end new text begin;
new text end

new text begin (v) new text end for the Department of Natural Resources or the Department of Public Safety,
the deleted text beginclerk is the deleted text end respective commissioner deleted text begin. deleted text end new text begin;
new text end

new text begin (vi) new text end for a tribal police department which exercises state arrest powers under section
626.90, 626.91, 626.92, or 626.93, the deleted text beginclerk is the deleted text end person designated by the applicable
American Indian tribal government deleted text begin. deleted text end new text begin; and
new text end

new text begin (2) for the fire state aid program and fire relief association financial reports, the
person who was elected or appointed to the specified position, or, for governmental
entities other than counties, if the governing body of the governmental entity designates
the position to perform the function, the chief financial official of the governmental entity
or the chief administrative official of the governmental entity.
new text end

(k) "Voluntary statewide lump-sum volunteer firefighter retirement plan" means the
retirement plan established by chapter 353G.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012.
new text end

Sec. 2.

Minnesota Statutes 2010, section 69.051, subdivision 1, is amended to read:

Subdivision 1.

Financial report and audit.

new text begin(a) new text endThe board of each salaried
firefighters relief association, police relief association, and volunteer firefighters relief
association as defined in section 424A.001, subdivision 4, with assets of at least $200,000
or liabilities of at least $200,000 in the prior year or in any previous year, according to
the applicable actuarial valuation or financial report if no valuation is required, shall deleted text begin: (1) deleted text end
prepare a financial report covering the special and general funds of the relief association
for the preceding fiscal year deleted text begin on a form prescribed by the state auditor deleted text end new text begin, file the financial
report, and submit financial statements new text end.

new text begin (b) new text end The financial report must contain financial statements and disclosures which
present the true financial condition of the relief association and the results of relief
association operations in conformity with generally accepted accounting principles and in
compliance with the regulatory, financing and funding provisions of this chapter and any
other applicable laws. The financial report must be countersigned by new text begin:
new text end

new text begin (1) new text end the municipal clerk or clerk-treasurer of the municipality in which the relief
association is located if the relief association is a firefighters relief association which is
directly associated with a municipal fire department or is a police relief association deleted text begin, deleted text end new text begin; new text end or
deleted text begin countersigned by the secretary of the independent nonprofit firefighting corporation and
deleted text end

new text begin (2) new text end by the municipal clerk or clerk-treasurer of the largest municipality in population
which contracts with the independent nonprofit firefighting corporation if the volunteer
firefighter relief association is a subsidiary of an independent nonprofit firefighting
corporation new text begin and by the secretary of the independent nonprofit firefighting corporation new text end; new text begin or
new text end

new text begin (3) by the chief financial official of the county in which the volunteer firefighter
relief association is located or primarily located if the relief association is associated with
a fire department that is not located in or associated with an organized municipality.
new text end

deleted text begin (2) file deleted text end new text begin(c) new text endThe financial report new text beginmust be retained new text endin its office for public inspection
and deleted text beginpresent it to deleted text end new text beginmust be filed with new text endthe deleted text begincity council deleted text end new text begingoverning body of the government
subdivision in which the associated fire department is located new text endafter the close of the fiscal
year. One copy of the financial report must be furnished to the state auditor after the
close of the fiscal year deleted text begin; and deleted text end new text begin.
new text end

deleted text begin (3) submit to the state auditor deleted text end new text begin(d) new text endAudited financial statements deleted text beginwhich have been deleted text end new text beginmust
be new text endattested to by a certified public accountant, deleted text beginpublic accountant, deleted text end or the state auditor new text beginand
must be filed with the state auditor new text endwithin 180 days after the close of the fiscal year. The
state auditor may accept this report in lieu of the report required in deleted text beginclause (2) deleted text end new text begin paragraph (c) new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012.
new text end

Sec. 3.

Minnesota Statutes 2010, section 69.051, subdivision 1a, is amended to read:

Subd. 1a.

Financial statement.

(a) The board of each volunteer firefighters relief
association, as defined in section 424A.001, subdivision 4, that is not required to file
a financial report and audit under subdivision 1 must prepare a detailed statement of
the financial affairs for the preceding fiscal year of the relief association's special and
general funds in the style and form prescribed by the state auditor. The detailed statement
must show the sources and amounts of all money received; all disbursements, accounts
payable and accounts receivable; the amount of money remaining in the treasury; total
assets including a listing of all investments; the accrued liabilities; and all items necessary
to show accurately the revenues and expenditures and financial position of the relief
association.

(b) The detailed financial statement required under paragraph (a) must be certified
by an independent public accountant or auditor or by the auditor or accountant who
regularly examines or audits the financial transactions of the municipality. In addition to
certifying the financial condition of the special and general funds of the relief association,
the accountant or auditor conducting the examination shall give an opinion as to the
condition of the special and general funds of the relief association, and shall comment
upon any exceptions to the report. The independent accountant or auditor must have at
least five years of public accounting, auditing, or similar experience, and must not be an
active, inactive, or retired member of the relief association or the fire or police department.

(c) The detailed statement required under paragraph (a) must be countersigned by new text begin:
new text end

new text begin (1) new text end the municipal clerk or clerk-treasurer of the municipality deleted text begin, deleted text end new text begin; new text end or deleted text begin,
deleted text end

new text begin (2) new text end where applicable, by the deleted text beginsecretary of the independent nonprofit firefighting
corporation and by the deleted text end municipal clerk or clerk-treasurer of the largest municipality in
population which contracts with the independent nonprofit firefighting corporation if the
relief association is a subsidiary of an independent nonprofit firefighting corporation deleted text begin. deleted text end new text begin and
by the secretary of the independent nonprofit firefighting corporation; or
new text end

new text begin (3) by the chief financial official of the county in which the volunteer firefighter
relief association is located or primarily located if the relief association is associated with
a fire department that is not located in or associated with an organized municipality.
new text end

(d) The volunteer firefighters' relief association board must file the detailed statement
required under paragraph (a) in the relief association office for public inspection and
present it to the city council within 45 days after the close of the fiscal year, and must
submit a copy of the detailed statement to the state auditor within 90 days of the close of
the fiscal year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012.
new text end

Sec. 4.

Minnesota Statutes 2010, section 69.051, subdivision 3, is amended to read:

Subd. 3.

Report by certain municipalities.

(a) Each municipality which has
an organized fire department but which does not have a firefighters' relief association
governed by section 69.77 or sections 69.771 to 69.775 and which is not exempted
under paragraph (b) shall annually prepare a detailed financial report of the receipts and
disbursements by the municipality for fire protection service during the preceding calendar
year, on a form prescribed by the state auditor. The financial report must contain any
information which the state auditor deems necessary to disclose the sources of receipts
and the purpose of disbursements for fire protection service. The financial report must be
signed by the municipal clerk or clerk-treasurer of the municipality. The financial report
must be filed by the municipal clerk or clerk-treasurer with the state auditor on or before
July 1 annually. deleted text beginThe state auditor shall forward one copy to the county auditor of the
county wherein the municipality is located. deleted text end The municipality shall not qualify initially to
receive, or be entitled subsequently to retain, state aid under this chapter if the financial
reporting requirement or the applicable requirements of this chapter or any other statute or
special law have not been complied with or are not fulfilled.

(b) Each municipality that has an organized fire department and provides retirement
coverage to its firefighters through the voluntary statewide lump-sum volunteer firefighter
retirement plan under chapter 353G qualifies to have fire state aid transmitted to and
retained in the statewide lump-sum volunteer firefighter retirement fund without filing
a detailed financial report if the executive director of the Public Employees Retirement
Association certifies compliance by the municipality with the requirements of sections
353G.04 and 353G.08, paragraph (e), and by the applicable fire chief with the requirements
of section 353G.07.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2010, section 69.772, subdivision 4, is amended to read:

Subd. 4.

Certification of financial requirements and minimum municipal
obligation; levy.

(a) The officers of the relief association shall certify the financial
requirements of the special fund of the relief association and the minimum obligation of
the municipality with respect to the special fund of the relief association as determined
under subdivision 3 deleted text beginto the governing body of the municipality deleted text end on or before August 1 of
each year. new text begin The certification must be made to the entity that is responsible for satisfying
the minimum obligation with respect to the special fund of the relief association. If the
responsible entity is a joint powers entity, the certification must be made in the manner
specified in the joint powers agreement, or if the joint powers agreement is silent on this
point, the certification must be made to the chair of the joint powers board.
new text end

new text begin (b) new text end The financial requirements of the relief association and the minimum municipal
obligation must be included in the financial report or financial statement under section
69.051. The schedule forms related to the determination of the financial requirements
must be filed with the state auditor by March 31, annually, if the relief association is
required to file a financial statement under section 69.051, subdivision 1a, or by June 30,
annually, if the relief association is required to file a financial report and audit under
section 69.051, subdivision 1.

deleted text begin (b) deleted text end new text begin(c) new text endThe municipality shall provide for at least the minimum obligation of the
municipality with respect to the special fund of the relief association by tax levy or from
any other source of public revenue.

deleted text begin (c) deleted text end new text begin(d) new text endThe municipality may levy taxes for the payment of the minimum municipal
obligation without any limitation as to rate or amount and irrespective of any limitations
imposed by other provisions of law upon the rate or amount of taxation until the balance
of the special fund or any fund of the relief association has attained a specified level. In
addition, any taxes levied under this section must not cause the amount or rate of any other
taxes levied in that year or to be levied in a subsequent year by the municipality which are
subject to a limitation as to rate or amount to be reduced.

deleted text begin (d) deleted text end new text begin(e) new text endIf the municipality does not include the full amount of the minimum
municipal obligations in its levy for any year, the officers of the relief association shall
certify that amount to the county auditor, who shall spread a levy in the amount of the
certified minimum municipal obligation on the taxable property of the municipality.

deleted text begin (e) deleted text end new text begin(f) new text endIf the state auditor determines that a municipal contribution actually made
in a plan year was insufficient under section 69.771, subdivision 3, paragraph (c), clause
(5), the state auditor may request a copy of the certifications under this subdivision
from the relief association or from the city. The relief association or the city, whichever
applies, must provide the certifications within 14 days of the date of the request from
the state auditor.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012.
new text end

Sec. 6.

Minnesota Statutes 2010, section 69.773, subdivision 5, is amended to read:

Subd. 5.

Minimum municipal obligation.

(a) The officers of the relief association
shall determine the minimum obligation of the municipality with respect to the special
fund of the relief association for the following calendar year on or before August 1 of each
year in accordance with the requirements of this subdivision.

(b) The minimum obligation of the municipality with respect to the special fund is
an amount equal to the financial requirements of the special fund of the relief association
determined under subdivision 4, reduced by the estimated amount of any fire state
aid payable under sections 69.011 to 69.051 reasonably anticipated to be received by
the municipality for transmittal to the special fund of the relief association during the
following year and the amount of any anticipated contributions to the special fund
required by the relief association bylaws from the active members of the relief association
reasonably anticipated to be received during the following calendar year. A reasonable
amount of anticipated fire state aid is an amount that does not exceed the fire state aid
actually received in the prior year multiplied by the factor 1.035.

(c) The officers of the relief association shall certify the financial requirements of
the special fund of the relief association and the minimum obligation of the municipality
with respect to the special fund of the relief association as determined under subdivision 4
and this subdivision deleted text beginto the governing body of the municipality deleted text end by August 1 of each year. new text begin
The certification must be made to the entity that is responsible for satisfying the minimum
obligation with respect to the special fund of the relief association. If the responsible
entity is a joint powers entity, the certification must be made in the manner specified in
the joint powers agreement, or if the joint powers agreement is silent on this point, the
certification must be made to the chair of the joint powers board.
new text end

new text begin (d) new text end The financial requirements of the relief association and the minimum municipal
obligation must be included in the financial report or financial statement under section
69.051.

deleted text begin (d) deleted text end new text begin(e) new text endThe municipality shall provide for at least the minimum obligation of the
municipality with respect to the special fund of the relief association by tax levy or from
any other source of public revenue. The municipality may levy taxes for the payment of the
minimum municipal obligation without any limitation as to rate or amount and irrespective
of any limitations imposed by other provisions of law or charter upon the rate or amount
of taxation until the balance of the special fund or any fund of the relief association has
attained a specified level. In addition, any taxes levied under this section must not cause
the amount or rate of any other taxes levied in that year or to be levied in a subsequent year
by the municipality which are subject to a limitation as to rate or amount to be reduced.

deleted text begin (e) deleted text end new text begin(f) new text endIf the municipality does not include the full amount of the minimum municipal
obligation in its levy for any year, the officers of the relief association shall certify that
amount to the county auditor, who shall spread a levy in the amount of the minimum
municipal obligation on the taxable property of the municipality.

deleted text begin (f) deleted text end new text begin(g) new text endIf the state auditor determines that a municipal contribution actually made
in a plan year was insufficient under section 69.771, subdivision 3, paragraph (c), clause
(5), the state auditor may request from the relief association or from the city a copy of
the certifications under this subdivision. The relief association or the city, whichever
applies, must provide the certifications within 14 days of the date of the request from
the state auditor.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012.
new text end

Sec. 7.

Minnesota Statutes 2010, section 69.80, is amended to read:

69.80 AUTHORIZED ADMINISTRATIVE EXPENSES.

(a) Notwithstanding any provision of law to the contrary, the payment of the
following necessary, reasonable and direct expenses of maintaining, protecting and
administering the special fund, when provided for in the bylaws of the association and
approved by the board of trustees, constitutes authorized administrative expenses of a
police, salaried firefighters', or volunteer firefighters' relief association organized under
any law of this state:

(1) office expense, including, but not limited to, rent, utilities, equipment, supplies,
postage, periodical subscriptions, furniture, fixtures, and salaries of administrative
personnel;

(2) salaries of the deleted text beginpresident, secretary, and treasurer deleted text end new text beginofficers new text endof the association, or
their designees, and deleted text beginany other official deleted text end new text beginsalaries of the members of the board of trustees new text endof
the deleted text beginrelief deleted text end association deleted text beginto whom a salary is payable under bylaws or articles of incorporation
in effect on January 1, 1986 deleted text end new text begin if the salary amounts are approved by the governing body of
the entity that is responsible for meeting any minimum obligation under section 69.77,
69.772, or 69.773 new text end, and deleted text begintheir deleted text end new text beginthe new text enditemized expenses new text beginof relief association officers and board
members that are new text endincurred as a result of fulfilling their responsibilities as administrators
of the special fund;

(3) tuition, registration fees, organizational dues, and other authorized expenses
of the officers or members of the board of trustees incurred in attending educational
conferences, seminars, or classes relating to the administration of the relief association;

(4) audit, actuarial, medical, legal, and investment and performance evaluation
expenses;

(5) new text beginfiling and application fees payable by the relief association to federal or other
governmental entities;
new text end

new text begin (6) new text endreimbursement to the officers and members of the board of trustees, or their
designees, for reasonable and necessary expenses actually paid and incurred in the
performance of their duties as officers or members of the board; and

deleted text begin (6) deleted text end new text begin(7) new text endpremiums on fiduciary liability insurance and official bonds for the officers,
members of the board of trustees, and employees of the relief association.

(b) Any other expenses of the relief association must be paid from the general fund
of the association, if one exists. If a relief association has only one fund, that fund is the
special fund for purposes of this section. If a relief association has a special fund and
a general fund, and any expense of the relief association that is directly related to the
purposes for which both funds were established, the payment of that expense must be
apportioned between the two funds on the basis of the benefits derived by each fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012, with respect to the
amendment to paragraph (a), clause (2), and is effective retroactively from January 1,
2010, with respect to the amendment to paragraph (a), clauses (5), (6), and (7).
new text end

Sec. 8.

Minnesota Statutes 2010, section 353G.08, is amended by adding a subdivision
to read:

new text begin Subd. 2a. new text end

new text begin Additional municipal contributions authorized. new text end

new text begin (a) At the discretion of
the municipality or the independent nonprofit firefighting corporation associated with a fire
department covered by a voluntary statewide lump-sum volunteer firefighter retirement
plan account, the municipality or the corporation may make additional contributions
to the applicable account.
new text end

new text begin (b) The executive director of the Public Employees Retirement Association
may specify requirements as to the form, timing, and accompanying information for
contributions made under this subdivision.
new text end

new text begin (c) Any contributions made under this subdivision must be included as total present
assets of the account for the calculation of any subsequent annual funding requirements
for the account under subdivision 1 or for the calculation of any cash flow funding
requirement under subdivision 2.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 9.

Minnesota Statutes 2010, section 424A.001, subdivision 4, is amended to read:

Subd. 4.

Relief association.

new text begin(a) new text end"Relief association" new text beginor "volunteer firefighters'
relief association" new text endmeans deleted text begin(1) deleted text end a volunteer firefighters' relief association or a volunteer
firefighters' division or account of a partially salaried and partially volunteer firefighters'
relief association that is new text begin:
new text end

new text begin (1) new text end organized and incorporated new text beginas a nonprofit corporation to provide retirement
benefits to volunteer firefighters new text endunder chapter 317A and any laws of the state deleted text begin, deleted text end new text begin;
new text end

new text begin (2) new text end is governed by this chapter and deleted text beginchapter 69, deleted text end new text beginsections 69.771 to 69.775; new text endand

new text begin (3) new text end is directly associated with new text begin:
new text end

new text begin (i) new text end a fire department established by municipal ordinance; deleted text beginor
deleted text end

deleted text begin (2) any separately incorporated volunteer firefighters' relief association that is
subsidiary to and that provides service pension and retirement benefit coverage for
members of deleted text end new text begin(ii) new text endan independent nonprofit firefighting corporation that is organized under
the provisions of chapter 317A deleted text begin, is governed by this chapter, deleted text end and new text beginthat new text endoperates deleted text beginexclusively deleted text end
new text begin primarily new text endfor firefighting purposes new text begin; or
new text end

new text begin (iii) a fire department operated as or by a joint powers entity that operates primarily
for firefighting purposes new text end.

new text begin (b) "Relief association" or "volunteer firefighters' relief association" does not mean:
new text end

new text begin (1) the Bloomington Fire Department Relief Association governed by section 69.77;
Minnesota Statutes 2000, chapter 424; and Laws 1965, chapter 446, as amended; or
new text end

new text begin (2) the voluntary statewide lump-sum volunteer firefighter retirement plan governed
by Minnesota Statutes, chapter 353G.
new text end

new text begin (c) new text end A relief association new text beginor volunteer firefighters' relief association new text endis a governmental
entity that receives and manages public money to provide retirement benefits for
individuals providing the governmental services of firefighting and emergency first
response.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 10.

Minnesota Statutes 2010, section 424A.01, subdivision 6, is amended to read:

Subd. 6.

Return to active firefighting after break in service.

(a) The requirements
of this section apply to all breaks in service, except breaks in service mandated by federal
or state law.

(b)(1) If a firefighter who has ceased to perform or supervise fire suppression and
fire prevention duties for at least 60 days resumes performing active firefighting with the
fire department associated with the relief association, if the bylaws of the relief association
so permit, the firefighter may again become an active member of the relief association. A
firefighter who returns to active service and membership is subject to the service pension
calculation requirements under this section.

(2) A firefighter who has been granted an approved leave of absence not exceeding
one year by the fire department or by the relief association is exempt from the minimum
period of resumption service requirement of this section.

(3) A person who has a break in service not exceeding one year but has not been
granted an approved leave of absence and who has not received a service pension or
disability benefit may be made exempt from the minimum period of resumption service
requirement of this section by the relief association bylaws.

(4) If the bylaws so provide, a firefighter who returns to active relief association
membership under this paragraph may continue to collect a monthly service pension,
notwithstanding the service pension eligibility requirements under chapter 424A.

(c) If a former firefighter who has received a service pension or disability benefit
returns to active relief association membership under paragraph (b), the firefighter may
qualify for the receipt of a service pension from the relief association for the resumption
service period if the firefighter meets the service requirements of section 424A.016,
subdivision 3, or 424A.02, subdivision 2. new text begin No firefighter may be paid a service pension
more than once for the same period of service.
new text end

(d) If a former firefighter who has not received a service pension or disability benefit
returns to active relief association membership under paragraph (b), the firefighter may
qualify for the receipt of a service pension from the relief association for the new text beginoriginal
and new text endresumption service deleted text beginperiod deleted text end new text beginperiods new text endif the firefighter meets the deleted text beginminimum period of
resumption service specified in the relief association bylaws and the deleted text end service requirements
of section 424A.016, subdivision 3, or 424A.02, subdivision 2 new text begin, based on the original and
resumption years of service credit new text end.

(e) A firefighter who returns to active lump-sum relief association membership
new text begin under paragraph (b) new text endand who qualifies for a service pension under paragraph (c) deleted text begin or (d) deleted text end
must have, upon a subsequent cessation of duties, any service pension for the resumption
service period calculated as a separate benefit. If a lump-sum service pension had
been paid to the firefighter upon the firefighter's previous cessation of duties, a second
lump-sum service pension for the resumption service period must be calculated deleted text beginto apply deleted text end
new text begin by applying new text endthe service pension amount in effect on the date of the firefighter's termination
of the resumption service for all years of the resumption service. deleted text beginNo firefighter may be
paid a service pension twice for the same period of service. If a lump-sum service pension
had not been paid to the firefighter upon the firefighter's previous cessation of duties and
the firefighter meets the minimum service requirement of section 424A.016, subdivision
3, or 424A.02, subdivision 2, a service pension must be calculated to apply the service
pension amount in effect on the date of the firefighter's termination of the resumption
service for all years of service credit.
deleted text end

(f) A firefighter who had not been paid a lump-sum service pension returns to
active relief association membership under paragraph (b), who deleted text begindoes deleted text end new text begindid new text endnot deleted text beginqualify for
a service pension under paragraph (d) deleted text end new text begin meet the minimum period of resumption service
requirement specified in the relief association's bylaws new text end, but who does meet the minimum
service requirement of section deleted text begin424A.016, subdivision 3, or deleted text end 424A.02, subdivision 2, based
on the firefighter's deleted text beginprevious deleted text end new text beginoriginal and resumption new text endyears of active service, must have,
upon a subsequent cessation of duties, a service pension deleted text begincalculated deleted text end for the deleted text beginprevious years
of deleted text end new text beginoriginal and resumption new text endservice deleted text beginbased on deleted text end new text beginperiods calculated by applying new text endthe service
pension amount in effect on the date of the firefighter's termination of the resumption
service, or, if the bylaws so provide, based on the service pension amount in effect on the
date of the firefighter's previous cessation of duties. new text begin The service pension for a firefighter
who returns to active lump-sum relief association membership under this paragraph, but
who had met the minimum period of resumption service requirement specified in the relief
association's bylaws, must be calculated by applying the service pension amount in effect
on the date of the firefighter's termination of the resumption service.
new text end

(g) If a firefighter receiving a monthly benefit service pension returns to active
monthly benefit relief association membership under paragraph (b), and if the relief
association bylaws do not allow for the firefighter to continue collecting a monthly service
pension, any monthly benefit service pension payable to the firefighter is suspended as
of the first day of the month next following the date on which the firefighter returns to
active membership. If the firefighter was receiving a monthly benefit service pension, and
qualifies for a service pension under paragraph (c), the firefighter is entitled to an additional
monthly benefit service pension upon a subsequent cessation of duties calculated based
on the resumption service credit and the service pension accrual amount in effect on the
date of the termination of the resumption service. A suspended initial service pension
resumes as of the first of the month next following the termination of the resumption
service. If the firefighter was not receiving a monthly benefit service pension and meets
the minimum service requirement of section 424A.02, subdivision 2, a service pension
must be calculated deleted text beginto apply deleted text end new text beginby applying new text endthe service pension amount in effect on the date
of the firefighter's termination of the resumption service for all years of service credit.

(h) A firefighter who was not receiving a monthly benefit service pension returns to
active relief association membership under paragraph (b), who deleted text begindoes deleted text end new text begindid new text endnot deleted text beginqualify for
a service pension under paragraph (d) deleted text end new text begin meet the minimum period of resumption service
requirement specified in the relief association's bylaws new text end, but who does meet the minimum
service requirement of section 424A.02, subdivision 2, based on the firefighter's deleted text beginprevious deleted text end
new text begin original and resumption new text endyears of active service, must have, upon a subsequent cessation
of duties, a service pension deleted text begincalculated deleted text end for the deleted text beginprevious years of deleted text end new text beginoriginal and resumption
new text endservice deleted text beginbased on deleted text end new text beginperiods calculated by applying new text endthe service pension amount in effect on
the date of the firefighter's termination of the resumption service, or, if the bylaws so
provide, based on the service pension amount in effect on the date of the firefighter's
previous cessation of duties. new text begin The service pension for a firefighter who returns to active
relief association membership under this paragraph, but who had met the minimum period
of resumption service requirement specified in the relief association's bylaws, must be
calculated by applying the service pension amount in effect on the date of the firefighter's
termination of the resumption service.
new text end

new text begin (i) For defined contribution plans, a firefighter who returns to active relief
association membership under paragraph (b) and who qualifies for a service pension
under paragraph (c) or (d) must have, upon a subsequent cessation of duties, any service
pension for the resumption service period calculated as a separate benefit. If a service
pension had been paid to the firefighter upon the firefighter's previous cessation of duties,
and if the firefighter meets the minimum service requirement of section 424A.016,
subdivision 3, based on the resumption years of service, a second service pension for
the resumption service period must be calculated to include allocations credited to the
firefighter's individual account during the resumption period of service and deductions
for administrative expenses, if applicable.
new text end

new text begin (j) For defined contribution plans, if a firefighter who had not been paid a service
pension returns to active relief association membership under paragraph (b), and who
meets the minimum service requirement of section 424A.016, subdivision 3, based on
the firefighter's original and resumption years of service, must have, upon a subsequent
cessation of duties, a service pension for the original and resumption service periods
calculated to include allocations credited to the firefighter's individual account during the
resumption period of service and deductions for administrative expenses, if applicable,
less any amounts previously forfeited under section 424A.016, subdivision 4.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012.
new text end

Sec. 11.

Minnesota Statutes 2010, section 424A.016, subdivision 5, is amended to read:

Subd. 5.

Service pension installment payments.

new text begin(a) new text endA defined contribution relief
association, if the governing bylaws so provide, may pay, at the option of the deleted text beginretiring
member deleted text end new text beginintended recipient new text endand in lieu of a single payment of a service pension new text begin or a
survivor benefit new text end, the service pension new text beginor survivor benefit new text endin installments.

new text begin (b) new text end The election of installment payments is irrevocable and must be made by the
deleted text begin retiring member deleted text end new text beginintended recipient new text endin writing and filed with the secretary of the relief
association no later than 30 days before the commencement of payment of the service
pension new text begin or survivor benefit new text end.

new text begin (c) new text end The amount of the installment payments must be the fractional portion of the
remaining account balance equal to one divided by the number of remaining annual
installment payments.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012.
new text end

Sec. 12.

Minnesota Statutes 2010, section 424A.016, subdivision 6, is amended to read:

Subd. 6.

Deferred service pensions.

(a) A member of a relief association is entitled
to a deferred service pension if the member:

(1) has completed the lesser of the minimum period of active service with the fire
department specified in the bylaws or 20 years of active service with the fire department;

(2) has completed at least five years of active membership in the relief association;
and

(3) separates from active service and membership deleted text begin before reaching age 50 or the
minimum age for retirement and commencement of a service pension specified in the
bylaws governing the relief association if that age is greater than age 50 deleted text end. new text begin The requirement
that a member separate from active service and membership is waived for persons who
have discontinued their volunteer firefighter duties and who are employed on a full-time
basis under section 424A.015, subdivision 1.
new text end

(b) The deferred service pension is payable when the former member reaches
new text begin at least new text endage 50, or new text beginat least new text endthe minimum age specified in the bylaws governing the relief
association if that age is greater than age 50, and when the former member makes a valid
written application.

(c) A defined contribution relief association may, if its governing bylaws so provide,
credit interest or additional investment performance on the deferred lump-sum service
pension during the period of deferral. If provided for in the bylaws, the interest must be
paid:

(1) at the investment performance rate actually earned on that portion of the assets
if the deferred benefit amount is invested by the relief association in a separate account
established and maintained by the relief association deleted text begin or deleted text end new text begin;
new text end

new text begin (2) at the investment performance rate actually earned on that portion of the assets new text end
if the deferred benefit amount is invested in a separate investment vehicle held by the
relief association; or

deleted text begin (2) deleted text end new text begin(3) at new text endthe investment return on the assets of the special fund of the defined
contribution volunteer firefighter relief association in proportion to the share of the assets
of the special fund to the credit of each individual deferred member account through
the new text beginaccounting new text enddate on which the investment return is recognized by and credited to the
special fund.

(d) new text beginUnless the bylaws of a relief association that has elected to pay interest or
additional investment performance on deferred lump-sum service pensions under
paragraph (c) specifies a different interest or additional investment performance method,
including the interest or additional investment performance period starting date and ending
date, the interest or additional investment performance on a deferred service pension
is creditable as follows:
new text end

new text begin (1) for a relief association that has elected to pay interest or additional investment
performance under paragraph (c), clause (1) or (3), beginning on the date that the
member separates from active service and membership and ending on the accounting
date immediately before the deferred member commences receipt of the deferred service
pension; or
new text end

new text begin (2) for a relief association that has elected to pay interest or additional investment
performance under paragraph (c), clause (2), beginning on the date that the member
separates from active service and membership and ending on the date that the separate
investment vehicle is valued immediately before the date on which the deferred member
commences receipt of the deferred service pension.
new text end

new text begin (e) new text endThe deferred service pension is governed by and must be calculated under
the general statute, special law, relief association articles of incorporation, and relief
association bylaw provisions applicable on the date on which the member separated from
active service with the fire department and active membership in the relief association.

new text begin EFFECTIVE DATE. new text end

new text begin (a) This section is effective January 1, 2013.
new text end

new text begin (b) This section applies only to persons becoming deferred service pensioners after
January 1, 2013.
new text end

Sec. 13.

Minnesota Statutes 2010, section 424A.02, subdivision 1, is amended to read:

Subdivision 1.

Authorization.

(a) A defined benefit relief association, when its
articles of incorporation or bylaws so provide, may pay out of the assets of its special
fund a defined benefit service pension to each of its members who: (1) separates from
active service with the fire department; (2) reaches age 50; (3) completes at least five
years of active service as an active member of the municipal fire department to which the
relief association is associated; (4) completes at least five years of active membership
with the relief association before separation from active service; and (5) complies with
any additional conditions as to age, service, and membership that are prescribed by the
bylaws of the relief association. A service pension computed under this section may be
prorated monthly for fractional years of service as the bylaws or articles of incorporation
of the relief association so provide. The bylaws or articles of incorporation may define
a "month," but the definition must require a calendar month to have at least 16 days of
active service. If the bylaws or articles of incorporation do not define a "month," a
"month" is a completed calendar month of active service measured from the member's
date of entry to the same date in the subsequent month. The service pension earned by a
volunteer firefighter under this chapter and the articles of incorporation and bylaws of the
volunteer firefighters' relief association may be paid whether or not the municipality or
nonprofit firefighting corporation to which the relief association is associated qualifies for
the receipt of fire state aid under chapter 69.

(b) In the case of a member who has completed at least five years of active service as
an active member of the fire department to which the relief association is associated on
the date that the relief association is established and incorporated, the requirement that
the member complete at least five years of active membership with the relief association
before separation from active service may be waived by the board of trustees of the relief
association if the member completes at least five years of inactive membership with the
relief association before the date of the payment of the service pension. During the
period of inactive membership, the member is not entitled to receive disability benefit
coverage, is not entitled to receive additional service credit towards computation of a
service pension, and is considered to have the status of a person entitled to a deferred
service pension under subdivision 7.

(c) No municipality or nonprofit firefighting corporation may delegate the power to
take final action in setting a service pension or ancillary benefit amount or level to the
board of trustees of the relief association or to approve in advance a service pension or
ancillary benefit amount or level equal to the maximum amount or level that this chapter
would allow rather than a specific dollar amount or level.

deleted text begin (d) No relief association as defined in section 424A.001, subdivision 4, may pay a
defined benefit service pension or disability benefit to a former member of the relief
association if that person has not separated from active service with the fire department to
which the relief association is directly associated, unless:
deleted text end

deleted text begin (1) the person is employed subsequent to retirement by the municipality or the
independent nonprofit firefighting corporation, whichever applies, to perform duties within
the municipal fire department or corporation on a full-time basis;
deleted text end

deleted text begin (2) the governing body of the municipality or of the corporation has filed its
determination with the board of trustees of the relief association that the person's
experience with and service to the fire department in that person's full-time capacity
would be difficult to replace; and
deleted text end

deleted text begin (3) the bylaws of the relief association were amended to provide for the payment of
a service pension or disability benefit for such full-time employees.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 14.

Minnesota Statutes 2010, section 424A.02, subdivision 7, is amended to read:

Subd. 7.

Deferred service pensions.

(a) A member of a defined benefit relief
association is entitled to a deferred service pension if the member:

(1) has completed the lesser of either the minimum period of active service with
the fire department specified in the bylaws or 20 years of active service with the fire
department;

(2) has completed at least five years of active membership in the relief association;
and

(3) separates from active service and membership deleted text begin before reaching age 50 or the
minimum age for retirement and commencement of a service pension specified in the
bylaws governing the relief association if that age is greater than age 50 deleted text end. new text begin The requirement
that a member separate from active service and membership is waived for persons who
have discontinued their volunteer firefighter duties and who are employed on a full-time
basis under section 424A.015, subdivision 1.
new text end

(b) The deferred service pension is payable when the former member reaches
new text begin at least new text endage 50, or new text beginat least new text endthe minimum age specified in the bylaws governing the relief
association if that age is greater than age 50, and when the former member makes a valid
written application.

(c) A defined benefit relief association that provides a lump-sum service pension
governed by subdivision 3 may, when its governing bylaws so provide, pay interest on the
deferred lump-sum service pension during the period of deferral. If provided for in the
bylaws, interest must be paid in one of the following manners:

(1) at the investment performance rate actually earned on that portion of the assets
if the deferred benefit amount is invested by the relief association in a separate account
established and maintained by the relief association deleted text beginor deleted text end new text begin;
new text end

new text begin (2) at the investment performance rate actually earned on that portion of the assets new text end
if the deferred benefit amount is invested in a separate investment vehicle held by the
relief association; or

deleted text begin (2) deleted text end new text begin(3) new text endat an interest rate of up to five percent, compounded annually, as set by the
board of directors and approved as provided in subdivision 10.

(d) Interest under paragraph (c), clause deleted text begin(2) deleted text end new text begin (3) new text end, is payable following the date on
which the municipality has approved the deferred service pension interest rate established
by the board of trustees.

(e) new text beginUnless the bylaws of a relief association that has elected to pay interest or
additional investment performance on deferred lump-sum service pensions under
paragraph (c) specifies a different interest or additional investment performance method,
including the interest or additional investment performance period starting date and ending
date, the interest or additional investment performance on a deferred service pension
is creditable as follows:
new text end

new text begin (1) for a relief association that has elected to pay interest or additional investment
performance under paragraph (c), clause (1) or (3), beginning on the date that the
member separates from active service and membership and ending on the accounting
date immediately before the deferred member commences receipt of the deferred service
pension; or
new text end

new text begin (2) for a relief association that has elected to pay interest or additional investment
performance under paragraph (c), clause (2), beginning on the date that the member
separates from active service and membership and ending on the date that the separate
investment vehicle is valued immediately before the date on which the deferred member
commences receipt of the deferred service pension.
new text end

new text begin (f) new text endFor a deferred service pension that is transferred to a separate account established
and maintained by the relief association or separate investment vehicle held by the relief
association, the deferred member bears the full investment risk subsequent to transfer and
in calculating the accrued liability of the volunteer firefighters relief association that pays
a lump-sum service pension, the accrued liability for deferred service pensions is equal
to the separate relief association account balance or the fair market value of the separate
investment vehicle held by the relief association.

deleted text begin (f) deleted text end new text begin(g) new text endThe deferred service pension is governed by and must be calculated under
the general statute, special law, relief association articles of incorporation, and relief
association bylaw provisions applicable on the date on which the member separated from
active service with the fire department and active membership in the relief association.

new text begin EFFECTIVE DATE. new text end

new text begin (a) This section is effective January 1, 2013.
new text end

new text begin (b) This section applies only to persons becoming deferred service pensioners after
January 1, 2013.
new text end

Sec. 15.

Minnesota Statutes 2010, section 424A.02, subdivision 9, is amended to read:

Subd. 9.

Limitation on ancillary benefits.

A defined benefit relief association,
including any volunteer firefighters relief association governed by section 69.77 or any
volunteer firefighters division of a relief association governed by chapter 424, may only
pay ancillary benefits which would constitute an authorized disbursement as specified in
section 424A.05 subject to the following requirements or limitations:

(1) with respect to a defined benefit relief association in which governing bylaws
provide new text beginsolely new text endfor a lump-sum service pension to a retiring member, new text beginor provide a retiring
member the choice of either a lump-sum service pension or a monthly service pension
and the lump-sum service pension was chosen, new text endno ancillary benefit may be paid to any
former member or paid to any person on behalf of any former member after the former
member (i) terminates active service with the fire department and active membership
in the relief association; and (ii) commences receipt of a service pension as authorized
under this section; and

(2) with respect to any defined benefit relief association, no ancillary benefit paid or
payable to any member, to any former member, or to any person on behalf of any member
or former member, may exceed in amount the total earned service pension of the member
or former member. The total earned service pension must be calculated by multiplying
the service pension amount specified in the bylaws of the relief association at the time of
death or disability, whichever applies, by the years of service credited to the member or
former member. The years of service must be determined as of (i) the date the member or
former member became entitled to the ancillary benefit; or (ii) the date the member or
former member died entitling a survivor or the estate of the member or former member to
an ancillary benefit. The ancillary benefit must be calculated without regard to whether the
member had attained the minimum amount of service and membership credit specified in
the governing bylaws. For active members, the amount of a permanent disability benefit
or a survivor benefit must be equal to the member's total earned service pension except
that the bylaws of a defined benefit relief association may provide for the payment of a
survivor benefit in an amount not to exceed five times the yearly service pension amount
specified in the bylaws on behalf of any member who dies before having performed five
years of active service in the fire department with which the relief association is affiliated.

(3)(i) If a lump sum survivor or death benefit is payable under the articles of
incorporation or bylaws, the benefit must be paid:

(A) as a survivor benefit to the surviving spouse of the deceased firefighter;

(B) as a survivor benefit to the surviving children of the deceased firefighter if
no surviving spouse;

(C) as a survivor benefit to a designated beneficiary of the deceased firefighter if no
surviving spouse or surviving children; or

(D) as a death benefit to the estate of the deceased active or deferred firefighter if no
surviving children and no beneficiary designated.

(ii) If there are no surviving children, the surviving spouse may waive, in writing,
wholly or partially, the spouse's entitlement to a survivor benefit.

(4)(i) If a monthly benefit survivor or death benefit is payable under the articles of
incorporation or bylaws, the benefit must be paid:

(A) as a survivor benefit to the surviving spouse of the deceased firefighter;

(B) as a survivor benefit to the surviving children of the deceased firefighter if
no surviving spouse;

(C) as a survivor benefit to a designated beneficiary of the deceased firefighter if no
surviving spouse or surviving children; or

(D) as a death benefit to the estate of the deceased active or deferred firefighter if no
surviving spouse, no surviving children, and no beneficiary designated.

(ii) If there are no surviving children, the surviving spouse may waive, in writing,
wholly or partially, the spouse's entitlement to a survivor benefit.

(iii) For purposes of this clause, if the relief association bylaws authorize a monthly
survivor benefit payable to a designated beneficiary, the relief association bylaws may
limit the total survivor benefit amount payable.

(5) For purposes of this section, for a monthly benefit volunteer fire relief association
or for a combination lump-sum and monthly benefit volunteer fire relief association where
a monthly benefit service pension has been elected by or a monthly benefit is payable with
respect to a firefighter, a designated beneficiary must be a natural person. For purposes
of this section, for a lump-sum volunteer fire relief association or for a combination
lump-sum and monthly benefit volunteer fire relief association where a lump-sum service
pension has been elected by or a lump-sum benefit is payable with respect to a firefighter,
a trust created under chapter 501B may be a designated beneficiary. If a trust is payable to
the surviving children organized under chapter 501B as authorized by this section and
there is no surviving spouse, the survivor benefit may be paid to the trust, notwithstanding
a requirement of this section to the contrary.