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Capital IconMinnesota Legislature

SF 2233

as introduced - 90th Legislature (2017 - 2018) Posted on 03/24/2017 09:12am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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29.8
29.9 29.10 29.11 29.12 29.13 29.14 29.15 29.16 29.17 29.18 29.19 29.20 29.21 29.22 29.23 29.24 29.25 29.26 29.27 29.28 29.29 29.30 29.31 29.32 29.33 30.1 30.2 30.3 30.4 30.5 30.6 30.7 30.8 30.9 30.10 30.11 30.12 30.13 30.14 30.15 30.16 30.17 30.18 30.19 30.20 30.21 30.22 30.23 30.24 30.25 30.26 30.27 30.28 30.29 30.30 30.31 30.32 30.33 31.1 31.2
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32.1 32.2 32.3 32.4 32.5 32.6
32.7 32.8 32.9 32.10 32.11 32.12 32.13 32.14 32.15 32.16 32.17 32.18 32.19 32.20 32.21 32.22 32.23 32.24 32.25 32.26 32.27 32.28 32.29 32.30 32.31 32.32 33.1 33.2 33.3 33.4 33.5 33.6 33.7 33.8 33.9 33.10 33.11 33.12 33.13 33.14 33.15 33.16 33.17 33.18
33.19
33.20 33.21 33.22 33.23 33.24 33.25 33.26 33.27 33.28 33.29 33.30 33.31 33.32
33.33
34.1 34.2
34.3 34.4 34.5 34.6 34.7 34.8 34.9 34.10 34.11 34.12 34.13 34.14 34.15 34.16 34.17 34.18 34.19 34.20 34.21 34.22 34.23 34.24 34.25 34.26 34.27 34.28 34.29 34.30
34.31
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35.7 35.8 35.9 35.10 35.11 35.12 35.13 35.14 35.15 35.16 35.17 35.18 35.19 35.20 35.21 35.22 35.23 35.24 35.25 35.26 35.27 35.28 35.29 35.30 35.31 35.32 35.33 35.34 36.1 36.2 36.3 36.4 36.5 36.6 36.7 36.8 36.9 36.10 36.11 36.12 36.13
36.14
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38.23
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41.26 41.27 41.28 41.29 41.30 41.31 41.32 41.33 42.1 42.2 42.3 42.4 42.5 42.6 42.7 42.8 42.9 42.10 42.11 42.12 42.13 42.14 42.15 42.16 42.17 42.18 42.19 42.20 42.21 42.22 42.23 42.24 42.25 42.26 42.27 42.28 42.29
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44.5
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44.8

A bill for an act
relating to retirement; providing financial solvency measures for Minnesota State
Retirement System, Teachers Retirement Association, St. Paul Teachers Retirement
Fund Association; increasing contribution rates; reducing certain postretirement
adjustment increase rates; modifying investment return assumptions; extending
amortization target dates; amending Minnesota Statutes 2016, sections 3A.03,
subdivision 2; 352.01, subdivision 13a; 352.017, subdivision 2; 352.04, subdivisions
2, 3, 8, 9; 352.23; 352.27; 352.92, subdivisions 1, 2, by adding a subdivision;
352.955, subdivision 3; 352B.013, subdivision 2; 352B.02, subdivisions 1a, 1c;
352B.085; 352B.086; 352B.11, subdivision 4; 352D.05, subdivision 4; 352D.11,
subdivision 2; 352D.12; 354.42, subdivision 3; 354.50, subdivision 2; 354.51,
subdivision 5; 354.52, subdivision 4; 354.53, subdivision 5; 354A.011, subdivision
3a; 354A.093, subdivision 6; 354A.096; 354A.12, subdivisions 1a, 2a, 7; 354A.29,
subdivision 7; 354A.34; 354A.38, subdivision 3; 356.215, subdivisions 8, 11;
356.415, subdivisions 1a, 1d, 1e, 1f; 490.121, subdivisions 4, 25, 26; 490.1211;
490.124, subdivision 12; proposing coding for new law in Minnesota Statutes,
chapter 356; repealing Minnesota Statutes 2016, sections 354A.29, subdivisions
8, 9; 356.415, subdivision 1.

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

ARTICLE 1

GENERAL PROVISIONS

Section 1.

Minnesota Statutes 2016, section 356.215, subdivision 8, is amended to read:


Subd. 8.

deleted text begin Interest and salarydeleted text end new text begin Actuarial new text end assumptions.

(a) The actuarial valuation must
use the applicable following deleted text begin interestdeleted text end new text begin investment return new text end assumption:

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

deleted text begin plan
deleted text end
deleted text begin ultimate interest rate
assumption
deleted text end
deleted text begin teachers retirement plan
deleted text end
deleted text begin 8.5%
deleted text end

deleted text begin The select preretirement interest rate assumption for the period through June 30, 2017,
is eight percent.
deleted text end

deleted text begin (2) single rate interest rate assumption
deleted text end

plan
deleted text begin interest ratedeleted text end new text begin
investment return
new text end
assumption
new text begin teachers retirement plan
new text end
new text begin 7.5%
new text end
general state employees retirement plan
deleted text begin 8% deleted text end new text begin 7.5
new text end
correctional state employees retirement plan
deleted text begin 8 deleted text end new text begin 7.5
new text end
State Patrol retirement plan
deleted text begin 8 deleted text end new text begin 7.5
new text end
legislators retirement plan, and for the
constitutional officers calculation of total plan
liabilities
0
judges retirement plan
deleted text begin 8 deleted text end new text begin 7.5
new text end
general public employees retirement plan
8
public employees police and fire retirement plan
8
local government correctional service retirement
plan
8
St. Paul teachers retirement plan
deleted text begin 8 deleted text end new text begin 7.5
new text end
Bloomington Fire Department Relief Association
6
local monthly benefit volunteer firefighter relief
associations
5
monthly benefit retirement plans in the statewide
volunteer firefighter retirement plan
6

(b)deleted text begin (1) If funding stability has been attained,deleted text end The new text begin actuarial new text end valuation new text begin for each of the
covered retirement plans listed in section 356.415, subdivision 2,
new text end must deleted text begin use adeleted text end new text begin take into account
the
new text end postretirement adjustment rate deleted text begin actuarial assumption equal to the postretirement adjustment
rate
deleted text end new text begin or rates applicable to the plan as new text end specified in section deleted text begin 354A.27, subdivision 7;deleted text end 354A.29,
subdivision deleted text begin 9;deleted text end new text begin 7, new text end or 356.415deleted text begin , subdivision 1deleted text end , whichever applies.

deleted text begin (2) If funding stability has not been attained, the valuation must use a select postretirement
adjustment rate actuarial assumption equal to the postretirement adjustment rate specified
in section 354A.27, subdivision 6a; 354A.29, subdivision 8; or 356.415, subdivision 1a,
1b, 1c, 1d, 1e, or 1f, whichever applies, for a period ending when the approved actuary
estimates that the plan will attain the defined funding stability measure, and thereafter an
ultimate postretirement adjustment rate actuarial assumption equal to the postretirement
adjustment rate under section 354A.27, subdivision 7; 354A.29, subdivision 9; or 356.415,
subdivision 1
, for the applicable period or periods beginning when funding stability is
projected to be attained.
deleted text end

(c) 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%
judges retirement plan
2.75
Bloomington Fire Department Relief Association
4

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

plan
future salary increase assumption
local government correctional service retirement plan
assumption B
St. Paul teachers retirement plan
assumption A

For plans other than the St. Paul teachers
retirement plan and the local government
correctional service retirement plan, 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
ten years and the designated integer is ten for
the local government correctional service
retirement plan and 15 for the St. Paul
Teachers Retirement Fund Association. The
designated percentage rate is 0.2 percent for
the St. Paul Teachers Retirement Fund
Association.

The ultimate future salary increase assumption is:

age
A
B
16
5.9%
8.75%
17
5.9
8.75
18
5.9
8.75
19
5.9
8.75
20
5.9
8.75
21
5.9
8.5
22
5.9
8.25
23
5.85
8
24
5.8
7.75
25
5.75
7.5
26
5.7
7.25
27
5.65
7
28
5.6
6.75
29
5.55
6.5
30
5.5
6.5
31
5.45
6.25
32
5.4
6.25
33
5.35
6.25
34
5.3
6
35
5.25
6
36
5.2
5.75
37
5.15
5.75
38
5.1
5.75
39
5.05
5.5
40
5
5.5
41
4.95
5.5
42
4.9
5.25
43
4.85
5
44
4.8
5
45
4.75
4.75
46
4.7
4.75
47
4.65
4.75
48
4.6
4.75
49
4.55
4.75
50
4.5
4.75
51
4.45
4.75
52
4.4
4.75
53
4.35
4.75
54
4.3
4.75
55
4.25
4.5
56
4.2
4.5
57
4.15
4.25
58
4.1
4
59
4.05
4
60
4
4
61
4
4
62
4
4
63
4
4
64
4
4
65
4
3.75
66
4
3.75
67
4
3.75
68
4
3.75
69
4
3.75
70
4
3.75

(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
State Patrol retirement plan
assumption E
correctional state employees retirement plan of the
Minnesota State Retirement System
assumption F
service
length
A
B
C
D
E
F
1
10.25%
11.78%
12%
12.75%
7.75%
5.75%
2
7.85
8.65
9
10.75
7.25
5.6
3
6.65
7.21
8
8.75
6.75
5.45
4
5.95
6.33
7.5
7.75
6.5
5.3
5
5.45
5.72
7.25
6.25
6.25
5.15
6
5.05
5.27
7
5.85
6
5
7
4.75
4.91
6.85
5.55
5.75
4.85
8
4.45
4.62
6.7
5.35
5.6
4.7
9
4.25
4.38
6.55
5.15
5.45
4.55
10
4.15
4.17
6.4
5.05
5.3
4.4
11
3.95
3.99
6.25
4.95
5.15
4.3
12
3.85
3.83
6
4.85
5
4.2
13
3.75
3.69
5.75
4.75
4.85
4.1
14
3.55
3.57
5.5
4.65
4.7
4
15
3.45
3.45
5.25
4.55
4.55
3.9
16
3.35
3.35
5
4.55
4.4
3.8
17
3.25
3.26
4.75
4.55
4.25
3.7
18
3.25
3.25
4.5
4.55
4.1
3.6
19
3.25
3.25
4.25
4.55
3.95
3.5
20
3.25
3.25
4
4.55
3.8
3.5
21
3.25
3.25
3.9
4.45
3.75
3.5
22
3.25
3.25
3.8
4.35
3.75
3.5
23
3.25
3.25
3.7
4.25
3.75
3.5
24
3.25
3.25
3.6
4.25
3.75
3.5
25
3.25
3.25
3.5
4.25
3.75
3.5
26
3.25
3.25
3.5
4.25
3.75
3.5
27
3.25
3.25
3.5
4.25
3.75
3.5
28
3.25
3.25
3.5
4.25
3.75
3.5
29
3.25
3.25
3.5
4.25
3.75
3.5
30 or more
3.25
3.25
3.5
4.25
3.75
3.5

(d) 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
3.5%
correctional state employees retirement plan
3.5
State Patrol retirement plan
3.5
judges retirement plan
2.75
general employees retirement plan of the Public
Employees Retirement Association
3.5
public employees police and fire retirement plan
3.5
local government correctional service retirement plan
3.5
teachers retirement plan
3.75
St. Paul teachers retirement plan
4

(e) The assumptions set forth in paragraphs (c) and (d) 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 July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, 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 legislators retirement plan, 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 (d). For all other retirement
plans and for the legislators retirement plan, the additional annual contribution must be
calculated on a level annual dollar amount basis.

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

(e) For the Teachers Retirement Association, the established date for full funding is June
30, deleted text begin 2037deleted text end new text begin 2047new text end .

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

(g) For the judges retirement plan, the established date for full funding is June 30, deleted text begin 2038deleted text end new text begin
2047
new text end .

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

(i) For the St. Paul Teachers Retirement Fund Association, the established date for full
funding is June 30, deleted text begin 2042. 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
deleted text end new text begin 2047new text end .

(j) For the general state employees retirement plan of the Minnesota State Retirement
System, the established date for full funding is June 30, deleted text begin 2040deleted text end new text begin 2047new text end .

(k) 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 July 1, 2017.
new text end

Sec. 3.

new text begin [356.59] INTEREST RATES.
new text end

new text begin Subdivision 1. new text end

new text begin Applicable interest rates. new text end

new text begin Whenever the payment of interest is required
with respect to any payment, including refunds, remittances, shortages, contributions, or
repayments, the rate of interest is the rate or rates specified in subdivisions 2 to 5 for each
public retirement plan.
new text end

new text begin Subd. 2. new text end

new text begin Minnesota State Retirement System. new text end

new text begin The interest rates for all retirement plans
administered by the Minnesota State Retirement System are as follows:
new text end

new text begin Annual
new text end
new text begin Monthly
new text end
new text begin before July 1, 2015
new text end
new text begin 8.5 percent
new text end
new text begin 0.71 percent
new text end
new text begin from July 1, 2015, to June 30, 2017
new text end
new text begin 8.0 percent
new text end
new text begin 0.667 percent
new text end
new text begin after June 30, 2017
new text end
new text begin 7.5 percent
new text end
new text begin 0.625 percent
new text end

new text begin Subd. 3. new text end

new text begin Teachers Retirement Association. new text end

new text begin The interest rates for the retirement plan
administered by the Teachers Retirement Association are as follows:
new text end

new text begin Annual
new text end
new text begin Monthly
new text end
new text begin before July 1, 2017
new text end
new text begin 8.5 percent
new text end
new text begin 0.71 percent
new text end
new text begin after June 30, 2017
new text end
new text begin 7.5 percent
new text end
new text begin 0.625 percent
new text end

new text begin Subd. 4. new text end

new text begin St. Paul Teachers Retirement Fund Association. new text end

new text begin The interest rates for the
retirement plan administered by the St. Paul Teachers Retirement Fund Association are as
follows:
new text end

new text begin Annual
new text end
new text begin Monthly
new text end
new text begin before July 1, 2015
new text end
new text begin 8.5 percent
new text end
new text begin 0.71 percent
new text end
new text begin from July 1, 2015, to June 30, 2017
new text end
new text begin 8.0 percent
new text end
new text begin 0.667 percent
new text end
new text begin after June 30, 2017
new text end
new text begin 7.5 percent
new text end
new text begin 0.625 percent
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, section 356.415, subdivision 1, 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 2

MINNESOTA STATE RETIREMENT SYSTEM

Section 1.

Minnesota Statutes 2016, section 3A.03, subdivision 2, is amended to read:


Subd. 2.

Refund.

(a) A former member who has made contributions under subdivision
1 and who is no longer a member of the legislature is entitled to receive, upon written
application to the executive director on a form prescribed by the executive director, a refund
from the general fund of all contributions credited to the member's account with interest
computed as provided in section 352.22, subdivision 2.

(b) The refund of contributions as provided in paragraph (a) terminates all rights of a
former member of the legislature and the survivors of the former member under this chapter.

(c) If the former member of the legislature again becomes a member of the legislature
after having taken a refund as provided in paragraph (a), the member is a member of the
unclassified employees retirement program of the Minnesota State Retirement System.

(d) However, the member may reinstate the rights and credit for service previously
forfeited under this chapter if the member repays all refunds taken, plus interest at the deleted text begin rate
of 8.5 percent until June 30, 2015, and eight percent thereafter
deleted text end new text begin applicable annual rate or
rates specified in section 356.59, subdivision 2,
new text end compounded annuallynew text begin ,new text end from the date on
which the refund was taken to the date on which the refund is repaid.

(e) No person may be required to apply for or to accept a refund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 352.01, subdivision 13a, is amended to read:


Subd. 13a.

Reduced salary during period of workers' compensation.

An employee
on leave of absence receiving temporary workers' compensation payments and a reduced
salary or no salary from the employer who is entitled to allowable service credit for the
period of absence, may make payment to the fund for the difference between salary received,
if any, and the salary the employee would normally receive if not on leave of absence during
the period. The employee shall pay an amount equal to the employee and employer
contribution rate under section 352.04, subdivisions 2 and 3, on the differential salary amount
for the period of the leave of absence.

The employing department, at its option, may pay the employer amount on behalf of its
employees. Payment made under this subdivision must include interest at the deleted text begin rate of 8.5
percent until June 30, 2015, and eight percent thereafter per year
deleted text end new text begin applicable annual rate or
rates specified in section 356.59, subdivision 2
new text end , and must be completed within one year of
the return from leave of absence.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 352.017, subdivision 2, is amended to read:


Subd. 2.

Purchase procedure.

(a) An employee covered by a plan specified in this
chapter may purchase credit for allowable service in that plan for a period specified in
subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c), whichever
applies. The employing unit, at its option, may pay the employer portion of the amount
specified in paragraph (b) on behalf of its employees.

(b) If payment is received by the executive director within one year from the date the
employee returned to work following the authorized leave, the payment amount is equal to
the employee and employer contribution rates specified in law for the applicable plan at the
end of the leave period multiplied by the employee's hourly rate of salary on the date of
return from the leave of absence and by the days and months of the leave of absence for
which the employee is eligible for allowable service credit. The payment must include
compound interest at the deleted text begin monthly rate of 0.71 percent until June 30, 2015, and 0.667 percent
per month thereafter
deleted text end new text begin applicable monthly rate or rates specified in section 356.59, subdivision
2,
new text end from the last day of the leave period until the last day of the month in which payment is
received. If payment is received by the executive director after one year, the payment amount
is the amount determined under section 356.551. Payment under this paragraph must be
made before the date of termination from public employment covered under this chapter.

(c) If the employee terminates employment covered by this chapter during the leave or
following the leave rather than returning to covered employment, payment must be received
by the executive director within 30 days after the termination date. The payment amount is
equal to the employee and employer contribution rates specified in law for the applicable
plan on the day prior to the termination date, multiplied by the employee's hourly rate of
salary on that date and by the days and months of the leave of absence prior to termination.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 352.04, subdivision 2, is amended to read:


Subd. 2.

Employee contributions.

(a) The employee contribution to the fund must be
equal to the following percent of salary:

deleted text begin from July 1, 2010, to June 30, 2014
deleted text end
deleted text begin 5
deleted text end
from July 1, 2014, deleted text begin and thereafterdeleted text end new text begin to June 30, 2017
new text end
5.5
new text begin after June 30, 2017
new text end
new text begin 6
new text end

(b) These contributions must be made by deduction from salary as provided in subdivision
4.

new text begin (c) Contribution increases under paragraph (a) must be paid starting the first day of the
first full pay period after the effective date of the increase.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 352.04, subdivision 3, is amended to read:


Subd. 3.

Employer contributions.

new text begin (a) new text end The employer contribution to the fund must be
equal to the following percent of salary:

deleted text begin from July 1, 2010, to June 30, 2014
deleted text end
deleted text begin 5
deleted text end
from July 1, 2014, deleted text begin and thereafterdeleted text end new text begin to June 30, 2017
new text end
5.5
new text begin from July 1, 2017, to June 30, 2018
new text end
new text begin 6.5
new text end
new text begin from July 1, 2018, to June 30, 2019
new text end
new text begin 7
new text end
new text begin From July 1, 2019, to June 30, 2020
new text end
new text begin 7.5
new text end
new text begin after June 30, 2020
new text end
new text begin 8
new text end

new text begin (b) Contribution increases under paragraph (a) must be paid starting the first day of the
first full pay period after the effective date of the increase.
new text end

new text begin (c) The employer contribution rate must decrease to seven percent once the market value
of the assets of the general state employees retirement plan of the Minnesota State Retirement
System equals or exceeds the actuarial accrued liability of the plan as determined by the
actuary retained under section 356.214. The reduction is effective on the first day of the
first full pay period of the fiscal year immediately following the issuance of the actuarial
valuation upon which the reduction is based.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 352.04, subdivision 8, is amended to read:


Subd. 8.

Department required to pay omitted salary deductions.

(a) If a department
fails to take deductions past due for a period of 60 days or less from an employee's salary
as provided in this section, those deductions must be taken on later payroll abstracts.

(b) If a department fails to take deductions past due for a period in excess of 60 days
from an employee's salary as provided in this section, the department, and not the employee,
must pay on later payroll abstracts the employee and employer contributions and an amount
deleted text begin equivalent to 8.5 percent until June 30, 2015, and eight percent thereafter of the total amount
due in lieu of interest, or if the delay in payment exceeds one year, 8.5 percent until June
30, 2015, and eight percent thereafter compound annual
deleted text end interestnew text begin at the applicable annual
rate or rates specified in section 356.59, subdivision 2, compounded annually, from the date
the employee and employer contributions should have been deducted to the date payment
of the total amount due is paid by the department
new text end .

(c) If a department fails to take deductions past due for a period of 60 days or less and
the employee is no longer in state service so that the required deductions cannot be taken
from the salary of the employee, the department must nevertheless pay the required employer
contributions. If any department fails to take deductions past due for a period in excess of
60 days and the employee is no longer in state service, the omitted contributions must be
recovered under paragraph (b).

(d) If an employee from whose salary required deductions were past due for a period of
60 days or less leaves state service before the payment of the omitted deductions and
subsequently returns to state service, the unpaid amount is considered the equivalent of a
refund. The employee accrues no right by reason of the unpaid amount, except that the
employee may pay the amount of omitted deductions as provided in section 352.23.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 7.

Minnesota Statutes 2016, section 352.04, subdivision 9, is amended to read:


Subd. 9.

Erroneous deductions, canceled warrants.

(a) Deductions taken from the
salary of an employee for the retirement fund in excess of required amounts must, upon
discovery and verification by the department making the deduction, be refunded to the
employee.

(b) If a deduction for the retirement fund is taken from a salary warrant or check, and
the check is canceled or the amount of the warrant or check returned to the funds of the
department making the payment, the sum deducted, or the part of it required to adjust the
deductions, must be refunded to the department or institution if the department applies for
the refund on a form furnished by the director. The department's payments must likewise
be refunded to the department.

(c) If erroneous employee deductions and employer contributions are caused by an error
in plan coverage involving the plan and any other plans specified in section 356.99, that
section applies. If the employee should have been covered by the plan governed by chapter
352D, 353D, 354B, or 354D, the employee deductions and employer contributions taken
in error must be directly transferred to the applicable employee's account in the correct
retirement plan, with interest at the deleted text begin rate of 0.71 percent per month until June 30, 2015, and
0.667 percent per month thereafter
deleted text end new text begin applicable monthly rate or rates specified in section
356.59, subdivision 2, per month
new text end , compounded annually, from the first day of the month
following the month in which coverage should have commenced in the correct defined
contribution plan until the end of the month in which the transfer occurs.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 8.

Minnesota Statutes 2016, section 352.23, is amended to read:


352.23 TERMINATION OF RIGHTS; REPAYMENT OF REFUND.

(a) When any employee accepts a refund as provided in section 352.22, all existing
allowable service credits and all rights and benefits to which the employee was entitled
before accepting the refund terminate.

(b) Terminated service credits and rights must not again be restored until the former
employee acquires at least six months of allowable service credit after taking the last refund.
In that event, the employee may repay all refunds previously taken from the retirement fund.

(c) Repayment of refunds entitles the employee only to credit for service covered by (1)
salary deductions; (2) payments previously made in lieu of salary deductions as permitted
under law in effect when the payment in lieu of deductions was made; (3) payments made
to obtain credit for service as permitted by laws in effect when payment was made; and (4)
allowable service previously credited while receiving temporary workers' compensation as
provided in section 352.01, subdivision 11, paragraph (a), clause (3).

(d) Payments under this section for repayment of refunds are to be paid with interest at
the deleted text begin rate of 8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin applicable annual
rate or rates specified in section 356.59, subdivision 2,
new text end compounded annuallynew text begin ,new text end from the date
the refund was taken until the date the refund is repaid. They may be paid in a lump sum
or by payroll deduction in the manner provided in section 352.04. Payment may be made
in a lump sum up to six months after termination from service.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 352.27, is amended to read:


352.27 CREDIT FOR BREAK IN SERVICE TO PROVIDE UNIFORMED
SERVICE.

(a) An employee who is absent from employment by reason of service in the uniformed
services, as defined in United States Code, title 38, section 4303(13), and who returns to
state service upon discharge from service in the uniformed service within the time frames
required in United States Code, title 38, section 4312(e), may obtain service credit for the
period of the uniformed service as further specified in this section, provided that the employee
did not separate from uniformed service with a dishonorable or bad conduct discharge or
under other than honorable conditions.

(b) The employee may obtain credit by paying into the fund an equivalent employee
contribution 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 during
the purchase period that the employee would have received if the employee 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 employee's
average salary rate during the 12-month period of covered employment rendered immediately
preceding the period of the uniformed service.

(c) The equivalent employer contribution and, if applicable, the equivalent additional
employer contribution provided in this chapter must be paid by the department employing
the employee from funds available to the department at the time and in the manner provided
in this chapter, 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 employee contribution.

(d) If the employee equivalent contributions provided in this section are not paid in full,
the employee'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 employee contribution received by the total employee contribution otherwise
required under this section.

(e) To receive service credit under this section, the contributions specified in this section
must be transmitted to the Minnesota State Retirement System during the period which
begins with the date on which the individual returns to state service and which has a duration
of three times the length of the uniformed service period, but not to exceed five years. If
the determined payment period is less than one year, the contributions required under this
section to receive service credit may be made within one year of the discharge date.

(f) 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.

(g) The employing unit shall pay interest on all equivalent employee and employer
contribution amounts payable under this section. Interest must be deleted text begin computed at the rate of
8.5 percent until June 30, 2015, and eight percent thereafter
deleted text end new text begin at the applicable annual rate or
rates specified in section 356.59, subdivision 2,
new text end compounded annuallynew text begin ,new text end 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 10.

Minnesota Statutes 2016, section 352.92, subdivision 1, is amended to read:


Subdivision 1.

Employee contributions.

(a) Employee contributions of covered
correctional employees must be in an amount equal to the following percent of salary:

deleted text begin from July 1, 2010, to June 30, 2014
deleted text end
deleted text begin 8.6
deleted text end
from July 1, 2014, deleted text begin and thereafterdeleted text end new text begin to June 30, 2017
new text end
9.1
new text begin after June 30, 2017
new text end
new text begin 9.6
new text end

(b) These contributions must be made by deduction from salary as provided in section
352.04, subdivision 4.

new text begin (c) Contribution increases under paragraph (a) must be paid starting the first day of the
first full pay period after the effective date of the increase.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 11.

Minnesota Statutes 2016, section 352.92, subdivision 2, is amended to read:


Subd. 2.

Employer contributions.

new text begin (a) new text end The employer shall contribute for covered
correctional employees an amount equal to the following percent of salary:

deleted text begin from July 1, 2010, to June 30, 2014
deleted text end
deleted text begin 12.1
deleted text end
from July 1, 2014, deleted text begin and thereafterdeleted text end new text begin to June 30, 2017
new text end
12.85
new text begin after June 30, 2017
new text end
new text begin 14.4
new text end

new text begin (b) Contribution increases under paragraph (a) must be paid starting the first day of the
first full pay period after the effective date of the increase.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 12.

Minnesota Statutes 2016, section 352.92, is amended by adding a subdivision to
read:


new text begin Subd. 2a. new text end

new text begin Supplemental employer contribution. new text end

new text begin Effective July 1, 2018, the employer
shall pay a supplemental contribution. The supplemental contribution shall be 1.45 percent
of salary for covered correctional employees from July 1, 2018, through June 30, 2019;
2.95 percent of salary for covered correctional employees from July 1, 2019, through June
30, 2020; and 4.45 percent of salary for covered correctional employees thereafter. The
supplemental contribution rate of 4.45 percent shall remain in effect until the market value
of the assets of the correctional state employees retirement plan of the Minnesota State
Retirement System equals or exceeds the actuarial accrued liability of the plan as determined
by the actuary retained under section 356.214. The expiration of the supplemental employer
contribution is effective the first day of the first full pay period of the fiscal year immediately
following the issuance of the actuarial valuation upon which the expiration is based.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the first day of the first full pay period
after July 1, 2018.
new text end

Sec. 13.

Minnesota Statutes 2016, section 352.955, subdivision 3, is amended to read:


Subd. 3.

Payment of additional equivalent contributions.

(a) An eligible employee
who is transferred to plan coverage and who elects to transfer past service credit under this
section must pay an additional member contribution for that prior service period. The
additional member contribution is the amount computed under paragraph (b), plus the greater
of the amount computed under paragraph (c), or 40 percent of the unfunded actuarial accrued
liability attributable to the past service credit transfer.

(b) The executive director shall compute, for the most recent 12 months of service credit
eligible for transfer, or for the entire period eligible for transfer if less than 12 months, the
difference between the employee contribution rate or rates for the general state employees
retirement plan and the employee contribution rate or rates for the correctional state
employees retirement plan applied to the eligible employee's salary during that transfer
period, plus compound interest at the deleted text begin monthly rate of 0.71 percent until June 30, 2015, and
0.667 percent per month thereafter
deleted text end new text begin applicable monthly rate or rates specified in section
356.59, subdivision 2
new text end .

(c) The executive director shall compute, for any service credit being transferred on
behalf of the eligible employee and not included under paragraph (b), the difference between
the employee contribution rate or rates for the general state employees retirement plan and
the employee contribution rate or rates for the correctional state employees retirement plan
applied to the eligible employee's salary during that transfer period, plus compound interest
at the deleted text begin monthly rate of 0.71 percent until June 30, 2015, and 0.667 percent per month thereafterdeleted text end new text begin
applicable monthly rate or rates specified in section 356.59, subdivision 2
new text end .

(d) The executive director shall compute an amount using the process specified in
paragraph (b), but based on differences in employer contribution rates between the general
state employees retirement plan and the correctional state employees retirement plan rather
than employee contribution rates.

(e) The executive director shall compute an amount using the process specified in
paragraph (c), but based on differences in employer contribution rates between the general
state employees retirement plan and the correctional state employees retirement plan rather
than employee contribution rates.

(f) The additional equivalent member contribution under this subdivision must be paid
in a lump sum. Payment must accompany the election to transfer the prior service credit.
No transfer election or additional equivalent member contribution payment may be made
by a person or accepted by the executive director after the one year anniversary date of the
effective date of the retirement coverage transfer, or the date on which the eligible employee
terminates state employment, whichever is earlier.

(g) If an eligible employee elects to transfer past service credit under this section and
pays the additional equivalent member contribution amount under paragraph (a), the
applicable department shall pay an additional equivalent employer contribution amount.
The additional employer contribution is the amount computed under paragraph (d), plus the
greater of the amount computed under paragraph (e), or 60 percent of the unfunded actuarial
accrued liability attributable to the past service credit transfer.

(h) The unfunded actuarial accrued liability attributable to the past service credit transfer
is the present value of the benefit obtained by the transfer of the service credit to the
correctional state employees retirement plan reduced by the amount of the asset transfer
under subdivision 4, by the amount of the member contribution equivalent payment computed
under paragraph (b), and by the amount of the employer contribution equivalent payment
computed under paragraph (d).

(i) The additional equivalent employer contribution under this subdivision must be paid
in a lump sum and must be paid within 30 days of the date on which the executive director
of the Minnesota State Retirement System certifies to the applicable department that the
employee paid the additional equivalent member contribution.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 14.

Minnesota Statutes 2016, section 352B.013, subdivision 2, is amended to read:


Subd. 2.

Purchase procedure.

(a) An employee covered by the plan specified in this
chapter may purchase credit for allowable service in the plan for a period specified in
subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c), whichever
applies. The employing unit, at its option, may pay the employer portion of the amount
specified in paragraph (b) on behalf of its employees.

(b) If payment is received by the executive director within one year from the date the
employee returned to work following the authorized leave, the payment amount is equal to
the employee and employer contribution rates specified in section 352B.02 at the end of
the leave period multiplied by the employee's hourly rate of salary on the date of return
from the leave of absence and by the days and months of the leave of absence for which
the employee is eligible for allowable service credit. The payment must include compound
interest at the deleted text begin monthly rate of 0.71 percent until June 30, 2015, and 0.667 percent per month
thereafter
deleted text end new text begin applicable monthly rate or rates specified in section 356.59, subdivision 2,new text end from
the last day of the leave period until the last day of the month in which payment is received.
If payment is received by the executive director after one year from the date the employee
returned to work following the authorized leave, the payment amount is the amount
determined under section 356.551. Payment under this paragraph must be made before the
date of termination from public employment covered under this chapter.

(c) If the employee terminates employment covered by this chapter during the leave or
following the leave rather than returning to covered employment, payment must be received
by the executive director within 30 days after the termination date. The payment amount is
equal to the employee and employer contribution rates specified in section 352B.02 on the
day prior to the termination date, multiplied by the employee's hourly rate of salary on that
date and by the days and months of the leave of absence prior to termination.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 15.

Minnesota Statutes 2016, section 352B.02, subdivision 1a, is amended to read:


Subd. 1a.

Member contributions.

(a) The member contribution is the following
percentage of the member's salary:

deleted text begin (1) before the first day of the first pay period beginning
after July 1, 2014
deleted text end
deleted text begin 12.4 percent
deleted text end
deleted text begin (2) on or after the first day of the first pay period
beginning after
deleted text end new text begin from new text end July 1, 2014, to June 30, 2016
13.4 deleted text begin percent
deleted text end
deleted text begin (3) after June 30, 2016 deleted text end new text begin from July 1, 2016, to June 30,
2017
new text end
14.4 deleted text begin percent
deleted text end
new text begin from July 1, 2017, to June 30, 2019
new text end
new text begin 14.9
new text end
new text begin after June 30, 2019
new text end
new text begin 15.4
new text end

(b) These contributions must be made by deduction from salary as provided in section
352.04, subdivision 4.

new text begin (c) Contribution increases under paragraph (a) must be paid starting the first day of the
first full pay period after the effective date of the increase.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 16.

Minnesota Statutes 2016, section 352B.02, subdivision 1c, is amended to read:


Subd. 1c.

Employer contributionsnew text begin and supplemental employer contributionnew text end .

(a) In
addition to member contributions, department heads shall pay a sum equal to the specified
percentage of the salary upon which deductions were made, which constitutes the employer
contribution to the fund as follows:

deleted text begin (1) before the first day of the first pay period beginning
after July 1, 2014
deleted text end
deleted text begin 18.6 percent
deleted text end
deleted text begin (2) on or after the first day of the first pay period
beginning after
deleted text end new text begin from new text end July 1, 2014, to June 30, 2016
20.1 deleted text begin percent
deleted text end
deleted text begin (3) after June 30, 2016 deleted text end new text begin from July 1, 2016, to June 30,
2017
new text end
21.6 deleted text begin percent
deleted text end
new text begin from July 1, 2017, to June 30, 2018
new text end
new text begin 22.35
new text end
new text begin after June 30, 2018
new text end
new text begin 23.1
new text end

(b) Department contributions must be paid out of money appropriated to departments
for this purpose.

new text begin (c) Contribution increases under paragraph (a) must be paid starting the first day of the
first full pay period after the effective date of the increase.
new text end

new text begin (d) Effective July 1, 2017, department heads shall pay a supplemental employer
contribution. The supplemental contribution shall be 1.75 percent of the salary upon which
deductions are made from July 1, 2017, through June 30, 2018; three percent of the salary
upon which deductions are made from July 1, 2018, through June 30, 2019; five percent of
the salary which deductions are made from July 1, 2019, through June 30, 2020; and seven
percent of the salary upon which deductions are made thereafter. The supplemental
contribution rate of seven percent shall remain in effect until the market value of the assets
of the State Patrol retirement plan of the Minnesota State Retirement System equals or
exceeds the actuarial accrued liability of the plan as determined by the actuary retained
under section 356.214. The expiration of the supplemental employer contribution is effective
the first day of the first full pay period of the fiscal year immediately following the issuance
of the actuarial valuation upon which the expiration is based.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin The amendments to paragraphs (a) and (c) are effective July 1,
2017. The amendments to paragraph (d) are effective the first day of the first full pay period
after July 1, 2017.
new text end

Sec. 17.

Minnesota Statutes 2016, section 352B.085, is amended to read:


352B.085 SERVICE CREDIT FOR CERTAIN DISABILITY LEAVES OF
ABSENCE.

A member on leave of absence receiving temporary workers' compensation payments
and a reduced salary or no salary from the employer who is entitled to allowable service
credit for the period of absence under section 352B.011, subdivision 3, paragraph (b), may
make payment to the fund for the difference between salary received, if any, and the salary
that the member would normally receive if the member was not on leave of absence during
the period. The member shall pay an amount equal to the member and employer contribution
rate under section 352B.02, subdivisions 1b and 1c, on the differential salary amount for
the period of the leave of absence. The employing department, at its option, may pay the
employer amount on behalf of the member. Payment made under this subdivision must
include interest at the deleted text begin rate of 8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin
applicable annual rate or rates specified in section 356.59, subdivision 2,
new text end per year, and must
be completed within one year of the member's return from the leave of absence.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 18.

Minnesota Statutes 2016, section 352B.086, is amended to read:


352B.086 SERVICE CREDIT FOR UNIFORMED SERVICE.

(a) A member who is absent from employment by reason of service in the uniformed
services, as defined in United States Code, title 38, section 4303(13), and who returns to
state employment in a position covered by the plan upon discharge from service in the
uniformed services within the time frame required in United States Code, title 38, section
4312(e), may obtain service credit for the period of the uniformed service, provided that
the member did not separate from uniformed service with a dishonorable or bad conduct
discharge or under other than honorable conditions.

(b) The member may obtain credit by paying into the fund an equivalent member
contribution based on the member 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
during the purchase period that the member would have received if the member had continued
to provide employment services to the state 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 during the 12-month period of covered employment rendered immediately
preceding the purchase period.

(c) The equivalent employer contribution and, if applicable, the equivalent employer
additional contribution, must be paid by the employing unit, using the employer and employer
additional 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.

(d) If the member equivalent contributions provided for in this section 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 section.

(e) To receive allowable service credit under this section, the contributions specified in
this section must be transmitted to the fund during the period which begins with the date
on which the individual returns to state employment covered by the plan and which has a
duration of three times the length of the uniformed service period, but not to exceed five
years. If the determined payment period is calculated to be less than one year, the
contributions required under this section to receive service credit must be transmitted to the
fund within one year from the discharge date.

(f) The amount of allowable 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.

(g) The employing unit shall pay interest on all equivalent member and employer
contribution amounts payable under this section. Interest must be computed at the deleted text begin rate of
8.5 percent until June 30, 2015, and eight percent thereafter
deleted text end new text begin applicable annual rate or rates
specified in section 356.59, subdivision 2,
new text end compounded annuallynew text begin ,new text end from the end of each
fiscal year of the leave or break in service to the end of the month in which payment is
received.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 19.

Minnesota Statutes 2016, section 352B.11, subdivision 4, is amended to read:


Subd. 4.

Reentry into state service.

When a former member, who has become separated
from state service that entitled the member to membership and has received a refund of
retirement payments, reenters the state service in a position that entitles the member to
membership, that member shall receive credit for the period of prior allowable state service
if the member repays into the fund the amount of the refund, plus interest deleted text begin on it at the rate
of 8.5 percent until June 30, 2015, and eight percent thereafter
deleted text end new text begin at the applicable annual rate
or rates specified in section 356.59, subdivision 2,
new text end compounded annually, at any time before
subsequent retirement. Repayment may be made in installments or in a lump sum.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 20.

Minnesota Statutes 2016, section 352D.05, subdivision 4, is amended to read:


Subd. 4.

Repayment of refund.

(a) A participant in the unclassified program may repay
regular refunds taken under section 352.22, as provided in section 352.23.

(b) A participant in the unclassified program or an employee covered by the general
employees retirement plan who has withdrawn the value of the total shares may repay the
refund taken and thereupon restore the service credit, rights and benefits forfeited by paying
into the fund the amount refunded plus interest at the deleted text begin rate of 8.5 percent until June 30, 2015,
and eight percent thereafter
deleted text end new text begin applicable annual rate or rates specified in section 356.59,
subdivision 2,
new text end compounded annuallynew text begin ,new text end from the date that the refund was taken until the date
that the refund is repaid. If the participant had withdrawn only the employee shares as
permitted under prior laws, repayment must be pro rata.

(c) Except as provided in section 356.441, the repayment of a refund under this section
must be made in a lump sum.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 21.

Minnesota Statutes 2016, section 352D.11, subdivision 2, is amended to read:


Subd. 2.

Payments by employee.

An employee entitled to purchase service credit may
make the purchase by paying to the state retirement system an amount equal to the current
employee contribution rate in effect for the state retirement system applied to the current
or final salary rate multiplied by the months and days of prior temporary, intermittent, or
contract legislative service. Payment shall be made in one lump sum unless the executive
director of the state retirement system agrees to accept payment in installments over a period
of not more than three years from the date of the agreement. Installment payments shall be
charged interest at the deleted text begin rate of 8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin
applicable annual rate or rates specified in section 356.59, subdivision 2,
new text end compounded
annually.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 22.

Minnesota Statutes 2016, section 352D.12, is amended to read:


352D.12 TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.

(a) An employee who is a participant in the unclassified program and who has prior
service credit in a covered plan under chapter 352, 353, 354, 354A, or 422A may, within
the time limits specified in this section, elect to transfer to the unclassified program prior
service contributions to one or more of those plans.

(b) For participants with prior service credit in a plan governed by chapter 352, 353,
354, 354A, or 422A, "prior service contributions" means the accumulated employee and
equal employer contributions with interest at the deleted text begin rate of 8.5 percent until June 30, 2015,
and eight percent thereafter
deleted text end new text begin applicable annual rate or rates specified in section 356.59,
subdivision 2,
new text end compounded annually, based on fiscal year balances.

(c) If a participant has taken a refund from a retirement plan listed in this section, the
participant may repay the refund to that plan, notwithstanding any restrictions on repayment
to that plan, deleted text begin plus 8.5 percent interest until June 30, 2015, and eight percent interest thereafterdeleted text end new text begin
with interest at the applicable annual rate or rates specified in section 356.59, subdivision
2,
new text end compounded annuallynew text begin ,new text end and have the accumulated employee and equal employer
contributions transferred to the unclassified program with interest at the rate of 8.5 percent
until June 30, 2015, and eight percent thereafter compounded annually based on fiscal year
balances. If a person repays a refund and subsequently elects to have the money transferred
to the unclassified program, the repayment amount, including interest, is added to the fiscal
year balance in the year which the repayment was made.

(d) A participant electing to transfer prior service contributions credited to a retirement
plan governed by chapter 352, 353, 354, 354A, or 422A as provided under this section must
complete a written application for the transfer and repay any refund within one year of the
commencement of the employee's participation in the unclassified program.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 23.

Minnesota Statutes 2016, section 356.415, subdivision 1a, is amended to read:


Subd. 1a.

Annual postretirement adjustments; Minnesota State Retirement System
plans other than new text begin the new text end State Patrol new text begin and judges new text end retirement deleted text begin plandeleted text end new text begin plansnew text end .

(a) Retirement
annuity, disability benefit, or survivor benefit recipients of the legislators retirement plan,
including constitutional officers as specified in chapter 3A, the general state employees
retirement plan, the correctional state employees retirement plan, and the unclassified state
employees retirement program are entitled to a postretirement adjustment annually deleted text begin ondeleted text end new text begin ,
effective as of each
new text end January 1, as follows:

(1) deleted text begin for each successive January 1, if the definition of funding stability under paragraph
(b) has not been met as of the prior July 1 for or with respect to the applicable retirement
plan,
deleted text end a postretirement increase of deleted text begin twodeleted text end new text begin 1.5 new text end percent must be applied each yeardeleted text begin , effective on
January 1,
deleted text end to the monthly annuity or benefit of each annuitant or benefit recipient who has
been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the
calendar year immediately before the adjustment; and

(2) deleted text begin for each successive January 1, if the definition of funding stability under paragraph
(b) has not been met as of the prior July 1 for or with respect to the applicable retirement
plan,
deleted text end for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, an annual postretirement increase of 1/12 of deleted text begin twodeleted text end
new text begin 1.5 new text end percent for each month that the person has been receiving an annuity or benefit must
be appliednew text begin to the monthly annuity or benefit amount of the annuitant or benefit recipientnew text end .

deleted text begin (b) Increases under this subdivision for the general state employees retirement plan or
the correctional state employees retirement plan terminate on December 31 of the calendar
year in which two prior consecutive actuarial valuations prepared by the approved actuary
under sections 356.214 and 356.215 and the standards for actuarial work promulgated by
the Legislative Commission on Pensions and Retirement indicate that the market value of
assets of the retirement plan equals or exceeds 90 percent of the actuarial accrued liability
of the retirement plan and increases under subdivision 1 recommence after that date. Increases
under this subdivision for the legislators retirement plan established under chapter 3A,
including the constitutional officers specified in that chapter, and for the unclassified state
employees retirement program, terminate on December 31 of the calendar year in which
two prior consecutive actuarial valuations prepared by the approved actuary under sections
356.214 and 356.215 and the standards for actuarial work promulgated by the Legislative
Commission on Pensions and Retirement indicate that the market value of assets of the
general state employees retirement plan equals or exceeds 90 percent of the actuarial accrued
liability of the retirement plan and increases under subdivision 1 recommence after that
date.
deleted text end

deleted text begin (c) After having met the definition of funding stability under paragraph (b), the increase
provided in paragraph (a), clauses (1) and (2), rather than an increase under subdivision 1,
for the general state employees retirement plan or the correctional state employees retirement
plan, is again to be applied in a subsequent year or years if the market value of assets of the
applicable plan equals or is less than:
deleted text end

deleted text begin (1) 85 percent of the actuarial accrued liabilities of the applicable plan for two consecutive
actuarial valuations; or
deleted text end

deleted text begin (2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most recent
actuarial valuation.
deleted text end

deleted text begin (d) After having met the definition of funding stability under paragraph (b), the increase
provided in paragraph (a), clauses (1) and (2), rather than an increase under subdivision 1,
for the legislators retirement plan, including the constitutional officers, and for the
unclassified state employees retirement program, is again to be applied in a subsequent year
or years if the market value of assets of the general state employees retirement plan equals
or is less than:
deleted text end

deleted text begin (1) 85 percent of the actuarial accrued liabilities of the applicable plan for two consecutive
actuarial valuations; or
deleted text end

deleted text begin (2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most recent
actuarial valuation.
deleted text end

deleted text begin (e)deleted text end new text begin (b) new text end An increase in annuity or benefit payments under this subdivision must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the applicable covered retirement plan requesting that the increase not
be made.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 24.

Minnesota Statutes 2016, section 356.415, subdivision 1e, is amended to read:


Subd. 1e.

Annual postretirement adjustments; State Patrol retirement plan.

(a)
Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol
retirement plan are entitled to a postretirement adjustment annually deleted text begin ondeleted text end new text begin , effective as of eachnew text end
January 1 deleted text begin if the definition of funding stability under paragraph (b) has not been metdeleted text end , as
follows:

(1) a postretirement increase of one percent must be applied each yeardeleted text begin , effective on
January 1,
deleted text end to the monthly annuity or benefit of each annuitant or benefit recipient who has
been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the
calendar year immediately before the adjustment; and

(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, an annual postretirement increase of 1/12 of one
percent for each month that the person has been receiving an annuity or benefit must be
appliednew text begin to the monthly annuity or benefit amount of the annuitant or benefit recipientnew text end .

deleted text begin (b) Increases under paragraph (a) for the State Patrol retirement plan terminate on
December 31 of the calendar year in which two prior consecutive actuarial valuations for
the plan prepared by the approved actuary under sections 356.214 and 356.215 and the
standards for actuarial work promulgated by the Legislative Commission on Pensions and
Retirement indicates that the market value of assets of the retirement plan equals or exceeds
85 percent of the actuarial accrued liability of the retirement plan. Thereafter, increases
under paragraph (a) become effective again on the December 31 of the calendar year in
which the actuarial valuation, or prior consecutive actuarial valuations for the plan prepared
by the approved actuary under sections 356.214 and 356.215 and the standards for actuarial
work promulgated by the Legislative Commission on Pensions and Retirement indicates
that the market value of the assets of the retirement plan equals or is less than 80 percent
of the actuarial accrued liability of the retirement plan for two years, or equals or is less
than 75 percent of the actuarial accrued liability of the retirement plan for one year and
increases under paragraph (c) commence after that date.
deleted text end

deleted text begin (c) Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol
retirement plan are entitled to a postretirement adjustment annually on January 1, as follows:
deleted text end

deleted text begin (1) a postretirement increase of 1.5 percent must be applied each year, effective on
January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has
been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the
calendar year immediately before the adjustment; and
deleted text end

deleted text begin (2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, an annual postretirement increase of 1/12 of 1.5
percent for each month that the person has been receiving an annuity or benefit must be
applied.
deleted text end

deleted text begin (d) Increases under paragraph (c) for the State Patrol retirement plan terminate on
December 31 of the calendar year in which two prior consecutive actuarial valuations
prepared by the approved actuary under sections 356.214 and 356.215 and the standards
for actuarial work adopted by the Legislative Commission on Pensions and Retirement
indicates that the market value of assets of the retirement plan equals or exceeds 90 percent
of the actuarial accrued liability of the retirement plan and increases under subdivision 1
recommence after that date.
deleted text end

deleted text begin (e)deleted text end new text begin (b) new text end An increase in annuity or benefit payments under this subdivision must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the applicable covered retirement plan requesting that the increase not
be made.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 25.

Minnesota Statutes 2016, section 356.415, subdivision 1f, is amended to read:


Subd. 1f.

Annual postretirement adjustments; Minnesota State Retirement System
judges retirement plan.

deleted text begin (a) The increases provided under this subdivision are in lieu of
increases under subdivision 1 or 1a for retirement annuity, disability benefit, or survivor
benefit recipients of the judges retirement plan.
deleted text end

deleted text begin (b)deleted text end new text begin (a) new text end Retirement annuity, disability benefit, or survivor benefit recipients of the judges
retirement plan are entitled to a postretirement adjustment annually deleted text begin ondeleted text end new text begin , effective as of each new text end
January 1new text begin if the definition of funding stability under paragraph (b) has not been metnew text end , as
follows:

(1) a postretirement increase of 1.75 percent must be applied each yeardeleted text begin , effective on
January 1,
deleted text end to the monthly annuity or benefit of each annuitant or benefit recipient who has
been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the
calendar year immediately before the adjustment; and

(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, an annual postretirement increase of 1/12 of 1.75
percent for each month that the person has been receiving an annuity or benefit must be
appliednew text begin to the monthly annuity or benefit amount of the annuitant or benefit recipientnew text end .

deleted text begin (c)deleted text end new text begin (b) new text end Increases under deleted text begin this subdivisiondeleted text end new text begin paragraph (a) new text end terminate on December 31 of the
calendar year in which two prior consecutive actuarial valuations prepared by the approved
actuary under sections 356.214 and 356.215 and the standards for actuarial work promulgated
by the Legislative Commission on Pensions and Retirement indicates that the market value
of assets of the judges retirement plan equals or exceeds 70 percent of the actuarial accrued
liability of the retirement plandeleted text begin .deleted text end new text begin andnew text end increases under deleted text begin subdivision 1 or 1a, whichever is
applicable,
deleted text end new text begin paragraph (c) new text end begin deleted text begin on the January 1 next followingdeleted text end new text begin after new text end that date.

new text begin (c) Retirement annuity, disability benefit, or survivor benefit recipients of the judges
retirement plan are entitled to a postretirement adjustment annually, effective as of each
January 1 if the definition of funding stability under paragraph (d) has not been met, as
follows:
new text end

new text begin (1) a postretirement increase of two percent must be applied each year to the monthly
annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity
or a benefit for at least 12 full months as of the June 30 of the calendar year immediately
before the adjustment; and
new text end

new text begin (2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, an annual postretirement increase of 1/12 of two
percent for each month that the person has been receiving an annuity or benefit must be
applied to the monthly annuity or benefit amount of the annuitant or benefit recipient.
new text end

new text begin (d) Increases under paragraph (c) terminate on December 31 of the calendar year in
which two prior consecutive actuarial valuations prepared by the approved actuary under
section 356.214 and the standards for actuarial work promulgated by the Legislative
Commission on Pensions and Retirement indicate that the market value of assets of the
judges retirement plan equals or exceeds 90 percent of the actuarial accrued liability of the
retirement plan and increases under paragraph (e) begin after that date.
new text end

new text begin (e) Retirement annuity, disability benefit, or survivor benefit recipients of the judges
retirement plan are entitled to a postretirement adjustment annually, effective as of each
January 1, as follows:
new text end

new text begin (1) a postretirement increase of 2.5 percent must be applied each year to the monthly
annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity
or a benefit for at least 12 full months as of the June 30 of the calendar year immediately
before the adjustment; and
new text end

new text begin (2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, an annual postretirement increase of 1/12 of 2.5
percent for each month that the person has been receiving an annuity or benefit must be
applied to the monthly annuity or benefit amount of the annuitant or benefit recipient.
new text end

deleted text begin (d)deleted text end new text begin (f) new text end An increase in annuity or benefit payments under this subdivision must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the applicable covered retirement plan requesting that the increase not
be made.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 26.

Minnesota Statutes 2016, section 490.121, subdivision 4, is amended to read:


Subd. 4.

Allowable service.

(a) "Allowable service" means any calendar month, subject
to the service credit limit in subdivision 22, served as a judge at any time, during which the
judge received compensation for that service from the state, municipality, or county,
whichever applies, and for which the judge made any required member contribution. It also
includes any month served as a referee in probate for all referees in probate who were in
office before January 1, 1974.

(b) "Allowable service" also means a period of authorized leave of absence for which
the judge has made a payment in lieu of contributions, not in an amount in excess of the
service credit limit under subdivision 22. To obtain the service credit, the judge shall pay
an amount equal to the normal cost of the judges retirement plan on the date of return from
the leave of absence, as determined in the most recent actuarial report for the plan filed with
the Legislative Commission on Pensions and Retirement, multiplied by the judge's average
monthly salary rate during the authorized leave of absence and multiplied by the number
of months of the authorized leave of absence, plus deleted text begin annual compound interest at the rate of
8.5 percent until June 30, 2015, and eight percent thereafter
deleted text end new text begin interest at the applicable annual
rate or rates specified in section 356.59, subdivision 2, compounded annually,
new text end from the date
of the termination of the leave to the date on which payment is made. The payment must
be made within one year of the date on which the authorized leave of absence terminated.
Service credit for an authorized leave of absence is in addition to a uniformed service leave
under section 490.1211.

(c) "Allowable service" does not mean service as a retired judge.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 27.

Minnesota Statutes 2016, section 490.121, subdivision 25, is amended to read:


Subd. 25.

Tier I.

"Tier I" is the benefit program of the retirement plan with a membership
specified by section 490.1221, paragraph (b), and governed by sections 356.415, deleted text begin subdivisions
1
deleted text end
deleted text begin anddeleted text end new text begin subdivisionnew text end 1f; and 490.121 to 490.133, except as modified in sections 490.121,
subdivision 21f
, paragraph (b); 490.1222; 490.123, subdivision 1a, paragraph (b); and
490.124, subdivision 1, paragraphs (c) and (d).

Sec. 28.

Minnesota Statutes 2016, section 490.121, subdivision 26, is amended to read:


Subd. 26.

Tier II.

"Tier II" is the benefit program of the retirement plan with a
membership specified by section 490.1221, paragraph (c), and governed by sections 356.415,
deleted text begin subdivisions 1deleted text end
deleted text begin anddeleted text end new text begin subdivisionnew text end 1f; 490.121 to 490.133, as modified in section 490.121,
subdivision 21f
, paragraph (b); 490.1222; 490.123, subdivision 1a, paragraph (b); and
490.124, subdivision 1, paragraphs (c) and (d).

Sec. 29.

Minnesota Statutes 2016, section 490.1211, is amended to read:


490.1211 UNIFORMED SERVICE.

(a) A judge who is absent from employment by reason of service in the uniformed
services, as defined in United States Code, title 38, section 4303(13), and who returns to
state employment as a judge upon discharge from service in the uniformed service within
the time frame required in United States Code, title 38, section 4312(e), may obtain service
credit for the period of the uniformed service, provided that the judge did not separate from
uniformed service with a dishonorable or bad conduct discharge or under other than honorable
conditions.

(b) The judge may obtain credit by paying into the fund equivalent member contribution
based on 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 during the purchase
period that the judge would have received if the judge had continued to provide employment
services to the state rather than to provide uniformed service, or if the determination of that
rate is not reasonably certain, the annual salary rate is the judge's average salary rate during
the 12-month period of judicial employment rendered immediately preceding the purchase
period.

(c) The equivalent employer contribution and, if applicable, the equivalent employer
additional contribution, must be paid by the employing unit, using the employer and employer
additional 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.

(d) If the member equivalent contributions provided for in this section are not paid in
full, the judge'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 section.

(e) To receive allowable service credit under this section, the contributions specified in
this section and section 490.121 must be transmitted to the fund during the period which
begins with the date on which the individual returns to judicial employment and which has
a duration of three times the length of the uniformed service period, but not to exceed five
years. If the determined payment period is calculated to be less than one year, the
contributions required under this section to receive service credit may be within one year
from the discharge date.

(f) The amount of allowable service credit obtainable under this section and section
490.121 may not exceed five years, unless a longer purchase period is required under United
States Code, title 38, section 4312.

(g) The state court administrator shall pay interest on all equivalent member and employer
contribution amounts payable under this section. Interest must be deleted text begin computed at the rate of
8.5 percent until June 30, 2015, and eight percent thereafter
deleted text end new text begin at the applicable annual rate or
rates specified in section 356.59, subdivision 2,
new text end compounded annuallynew text begin ,new text end from the end of each
fiscal year of the leave or break in service to the end of the month in which payment is
received.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 30.

Minnesota Statutes 2016, section 490.124, subdivision 12, is amended to read:


Subd. 12.

Refund.

(a) A person who ceases to be a judge is entitled to a refund in an
amount that is equal to all of the member's employee contributions to the judges' retirement
fund plus interest computed under section 352.22, subdivision 2.

(b) A refund of contributions under paragraph (a) terminates all service credits and all
rights and benefits of the judge and the judge's survivors under this chapter.

(c) A person who becomes a judge again after taking a refund under paragraph (a) may
reinstate the previously terminated allowable service credit, rights, and benefits by repaying
the total amount of the previously received refund. The refund repayment must include
interest deleted text begin on the total amount previously received at the annual rate of 8.5 percent until June
30, 2015, and eight percent thereafter
deleted text end new text begin at the applicable annual rate or rates specified in
section 356.59, subdivision 2
new text end , compounded annually, from the date on which the refund
was received until the date on which the refund is repaid.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

ARTICLE 3

TEACHER RETIREMENT ASSOCIATION

Section 1.

Minnesota Statutes 2016, section 354.42, subdivision 3, is amended to read:


Subd. 3.

Employer.

(a) The regular employer contribution to the fund by Special School
District No. 1, Minneapolis, is an amount equal to the applicable following percentage of
salary of each coordinated member and the applicable percentage of salary of each basic
member specified in paragraph (c).

The additional employer contribution to the fund by Special School District No. 1,
Minneapolis, is an amount equal to 3.64 percent of the salary of each teacher who is a
coordinated member or who is a basic member.

(b) The regular employer contribution to the fund by Independent School District No.
709, Duluth, is an amount equal to the applicable percentage of salary of each old law or
new law coordinated member specified for the coordinated program in paragraph (c).

(c) The employer contribution to the fund for every other employer is an amount equal
to the applicable following percentage of the salary of each coordinated member and the
applicable following percentage of the salary of each basic member:

Period
Coordinated Member
Basic Member
deleted text begin from July 1, 2013, until June 30, 2014
deleted text end
deleted text begin 7 percent
deleted text end
deleted text begin 11 percent
deleted text end
deleted text begin after June 30, 2014 deleted text end new text begin from July 1, 2014,
through June 30, 2017
new text end
7.5 percent
11.5 percent
new text begin from July 1, 2017, through June 30, 2018
new text end
new text begin 8.0 percent
new text end
new text begin 12 percent
new text end
new text begin from July 1, 2018, through June 30, 2019
new text end
new text begin 8.5 percent
new text end
new text begin 12.5 percent
new text end
new text begin from July 1, 2019, through June 30, 2020
new text end
new text begin 9.0 percent
new text end
new text begin 13 percent
new text end
new text begin after June 30, 2020
new text end
new text begin 9.5 percent
new text end
new text begin 13.5 percent
new text end

(d) When an employer contribution rate changes for a fiscal year, the new contribution
rate is effective for the entire salary paid for each employer unit with the first payroll cycle
reported.

(e) After June 30, 2015, if a contribution rate revision is made under subdivisions 4a,
4b, and 4c, the employer contributions under paragraphs (a), (b), and (c) must be adjusted
accordingly.

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 2016, section 354.50, subdivision 2, is amended to read:


Subd. 2.

Interest charge.

If a member desires to repay the refunds, payment shall include
interest at deleted text begin an annual rate of 8.5 percentdeleted text end new text begin the applicable annual rate or rates specified in section
356.59, subdivision 3,
new text end compounded annuallynew text begin ,new text end from date of withdrawal to the date payment
is made and shall be credited to the fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, 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 of shortages in member deductions on salary earned are the sole obligation of the
employing unit and are payable by the employing unit upon notification by the executive
director of the shortagenew text begin . The amount of the shortage shall be paid new text end with interest at deleted text begin an annual
rate of 8.5 percent
deleted text end new text begin the applicable annual rate or rates specified in section 356.59, subdivision
3,
new text end compounded annuallynew text begin ,new text end 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. 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, and if the executive director does not use the
recovery procedure in section 354.512, the executive director shall certify the amount of
the shortage 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. Payment may not be made 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 deleted text begin annual
compound
deleted text end interest at the deleted text begin rate of 8.5 percentdeleted text end new text begin applicable annual rate or rates specified in
section 356.59, subdivision 3, compounded annually,
new text end 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. 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 July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 354.52, subdivision 4, is amended to read:


Subd. 4.

Reporting and remittance requirements.

An employer shall remit all amounts
due to the association and furnish a statement indicating the amount due and transmitted
with any other information required by the executive director. If an amount due is not
received by the association within 14 calendar days of the payroll warrant, the deleted text begin amount
accrues interest at an annual rate of 8.5 percent
deleted text end new text begin employer shall pay interest on the amount
due at the applicable annual rate or rates specified in section 356.59, subdivision 3,
new text end compounded annuallynew text begin ,new text end from the due date until the amount is received by the association.
All amounts due and other employer obligations not remitted within 60 days of notification
by the association must be certified to the commissioner of management and budget who
shall deduct the amount from any state aid or appropriation amount applicable to the
employing unit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 354.53, subdivision 5, is amended to read:


Subd. 5.

Interest requirements.

The employer shall pay interest on all equivalent
employee and employer contribution amounts payable under this sectiondeleted text begin . Interest must be
computed at a rate of 8.5 percent
deleted text end new text begin at the applicable annual rate or rates specified in section
356.59, subdivision 3,
new text end compounded annuallynew text begin ,new text end 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, 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 deleted text begin ondeleted text end new text begin , effective
as of each
new text end January 1, as follows:

(1) deleted text begin for each January 1 until funding stability is restored,deleted text end new text begin effective January 1, 2018,
through December 31, 2022,
new text end a postretirement increase of deleted text begin twodeleted text end new text begin one new text end percent must be applied
each yeardeleted text begin , effective on January 1,deleted text end 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 12 full months
as of the June 30 of the calendar year immediately before the adjustment;

(2) deleted text begin for each January 1 until funding stability is restored,deleted text end new text begin effective January 1, 2018,
through December 31, 2022,
new text end for each annuitant or benefit recipient who has been receiving
an annuity or a benefit for at least one full month, but less than 12 full months as of the June
30 of the calendar year immediately before the adjustment, an annual postretirement increase
of 1/12 of deleted text begin twodeleted text end new text begin one new text end percent for each month the person has been receiving an annuity or
benefit must be appliednew text begin to the monthly annuity or benefit amount of the annuitant or benefit
recipient
new text end ;

(3) deleted text begin for each January 1 following the restoration of funding stability,deleted text end new text begin effective January
1, 2023, and thereafter,
new text end a postretirement increase of deleted text begin 2.5deleted text end new text begin 1.5new text end percent must be applied each
yeardeleted text begin , effective January 1,deleted text end 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 12 full months
as of the June 30 of the calendar year immediately before the adjustment; and

(4) deleted text begin for each January 1 following the restoration of funding stability,deleted text end new text begin effective January
1, 2023, and thereafter,
new text end for each annuitant or benefit recipient who has been receiving an
annuity or a benefit for at least one new text begin full new text end month, but less than 12 full months as of the June
30 of the calendar year immediately before the adjustment, an annual postretirement increase
of 1/12 of deleted text begin 2.5deleted text end new text begin 1.5 new text end percent for each month the person has been receiving an annuity or benefit
must be appliednew text begin to the monthly annuity or benefit amount of the annuitant or benefit recipientnew text end .

deleted text begin (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 two most recent prior actuarial valuations
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.
deleted text end

deleted text begin (c) After having met the definition of funding stability under paragraph (b), the increase
provided in paragraph (a), clauses (1) and (2), rather than an increase under subdivision 1,
or the increase under paragraph (a), clauses (3) and (4), is again to be applied in a subsequent
year or years if the market value of assets of the plan equals or is less than:
deleted text end

deleted text begin (1) 85 percent of the actuarial accrued liabilities of the plan for two consecutive actuarial
valuations; or
deleted text end

deleted text begin (2) 80 percent of the actuarial accrued liabilities of the plan for the most recent actuarial
valuation.
deleted text end

deleted text begin (d)deleted text end new text begin (b) new text end 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.

deleted text begin (e)deleted text end new text begin (c) new text end 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

ARTICLE 4

ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION

Section 1.

Minnesota Statutes 2016, section 354A.011, subdivision 3a, is amended to read:


Subd. 3a.

Actuarial equivalent.

"Actuarial equivalent" means the condition of one
annuity or benefit having an equal actuarial present value as another annuity or benefit,
determined as of a given date with each actuarial present value based on the appropriate
mortality table adopted by the appropriate board of trustees based on the experience of that
retirement fund association as recommended by the actuary retained under section 356.214,
and approved under section 356.215, subdivision 18, and using the applicable deleted text begin preretirement
or postretirement interest rate
deleted text end new text begin investment return new text end assumption specified in section 356.215,
subdivision 8
.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 354A.093, subdivision 6, is amended to read:


Subd. 6.

Interest requirements.

The employer shall pay interest on all equivalent
employee and employer contribution amounts payable under this section. Interest must be
computed at the deleted text begin rate of 8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin applicable
rate or rates specified in section 356.59, subdivision 4,
new text end compounded annuallynew text begin ,new text end from the end
of each fiscal year of the leave or break in service to the end of the month in which payment
is received.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 354A.096, is amended to read:


354A.096 MEDICAL LEAVE.

Any teacher in the coordinated program of the St. Paul Teachers Retirement Fund
Association who is on an authorized medical leave of absence and subsequently returns to
teaching service is entitled to receive allowable service credit, not to exceed one year, for
the period of leave, upon making the prescribed payment to the fund. This payment must
include the required employee and employer contributions at the rates specified in section
354A.12, subdivisions 1 and 2a, as applied to the member's average full-time monthly salary
rate on the date the leave of absence commenced plus deleted text begin annualdeleted text end interest at the deleted text begin rate of 8.5
percent until June 30, 2015, and eight percent thereafter per year
deleted text end new text begin applicable rate or rates
specified in section 356.59, subdivision 4, compounded annually,
new text end from the end of the fiscal
year during which the leave terminates to the end of the month during which payment is
made. The member must pay the total amount required unless the employing unit, at its
option, pays the employer contributions. The total amount required must be paid by the end
of the fiscal year following the fiscal year in which the leave of absence terminated or before
the member retires, whichever is earlier. Payment must be accompanied by a copy of the
resolution or action of the employing authority granting the leave and the employing
authority, upon granting the leave, must certify the leave to the association in a manner
specified by the executive director. A member may not receive more than one year of
allowable service credit during any fiscal year by making payment under this section. A
member may not receive disability benefits under section 354A.36 and receive allowable
service credit under this section for the same period of time.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 354A.12, subdivision 1a, is amended to read:


Subd. 1a.

Obligation for omitted salary deductions.

If the full required contributions
are not deducted from the salary of a teacher, payment of the shortage in such deductions
is the sole obligation of the employing unit during the three-year period following the end
of the fiscal year in which the shortage occurred. The shortage is payable by the employing
unit upon notification of the shortage by the executive director of the applicable retirement
fund association. The employing unit shall also pay any employer contributions related to
the shortage. The amount of the shortage in employee contributions and associated employer
contributions is payable with interest at the deleted text begin preretirement interest assumption for the
retirement fund as specified in section 356.215, subdivision 8, stated as a monthly rate
deleted text end
new text begin applicable rate or rates specified in section 356.59, subdivision 4, new text end from the date due until
the date payment is received in the office of the association, new text begin compounded annually, new text end with a
minimum interest charge of $10. If the shortage payment and interest is not paid by the
employing unit within 60 days of notification, the executive director shall certify the amount
of the shortage payment and interest to the commissioner of management and budget, who
shall deduct the amount from any state aid or appropriation amount applicable to the
employing unit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 354A.12, subdivision 2a, is amended to read:


Subd. 2a.

Employer regular and additional contributions.

(a) The employing units
shall make the following employer contributions to the teachers retirement fund association:

(1) for deleted text begin anydeleted text end new text begin each new text end coordinated member of the St. Paul Teachers Retirement Fund
Association, the employing unit shall make a regular employer contribution to the retirement
fund association in an amount equal to the designated percentage of the salary of the
coordinated member as provided below:

deleted text begin after June 30, 2014
deleted text end
deleted text begin 5.5 percent
deleted text end
deleted text begin after June 30, 2015
deleted text end
deleted text begin 6 percent
deleted text end
after June 30, 2016
6.25 percent
after June 30, 2017
deleted text begin 6.5deleted text end new text begin 7 new text end percent
new text begin after June 30, 2018
new text end
new text begin 7.5 percent
new text end
new text begin after June 30, 2019
new text end
new text begin 8 percent
new text end
new text begin after June 30, 2020
new text end
new text begin 8.5 percent
new text end

(2) for deleted text begin anydeleted text end new text begin each new text end basic member of the St. Paul Teachers Retirement Fund Association,
the employing unit shall make a regular employer contribution to the respective retirement
fund in an amount according to the schedule below:

deleted text begin after June 30, 2014
deleted text end
deleted text begin 9 percent of salary
deleted text end
deleted text begin after June 30, 2015
deleted text end
deleted text begin 9.5 percent of salary
deleted text end
after June 30, 2016
9.75 percent of salary
after June 30, 2017
deleted text begin 10deleted text end new text begin 10.5 new text end percent of salary
new text begin after June 30, 2018
new text end
new text begin 11 percent of salary
new text end
new text begin after June 30, 2019
new text end
new text begin 11.5 percent of salary
new text end
new text begin after June 30, 2020
new text end
new text begin 12 percent of salary
new text end

(3) for deleted text begin adeleted text end new text begin each new text end basic member of the St. Paul Teachers Retirement Fund Association, the
employing unit shall make an additional employer contribution to the respective fund in an
amount equal to 3.64 percent of the salary of the basic member;

(4) for deleted text begin adeleted text end new text begin each new text end coordinated member of the St. Paul Teachers Retirement Fund Association,
the employing unit shall make an additional employer contribution to the respective fund
in an amount equal to 3.84 percent of the coordinated member's salary.

(b) The regular and additional employer contributions must be remitted directly to the
St. Paul Teachers Retirement Fund Association at least once each month. Delinquent amounts
are payable with interest under the procedure in subdivision 1a.

(c) Payments of regular and additional employer contributions for school district or
technical college employees who are paid from normal operating funds must be made from
the appropriate fund of the district or technical college.

(d) When an employer contribution rate changes for a fiscal year, the new contribution
rate is effective for the entire salary paid by the employer with the first payroll cycle reported.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 354A.12, subdivision 7, is amended to read:


Subd. 7.

Recovery of benefit overpayments.

(a) If the executive director discovers,
within the time period specified in subdivision 8 following the payment of a refund or the
accrual date of any retirement annuity, survivor benefit, or disability benefit, that benefit
overpayment has occurred due to using invalid service or salary, or due to any erroneous
calculation procedure, the executive director must recalculate the annuity or benefit payable
and recover any overpayment. The executive director shall recover the overpayment by
requiring direct repayment or by suspending or reducing the payment of a retirement annuity
or other benefit payable under this chapter to the applicable person or the person's estate,
whichever applies, until all outstanding amounts have been recovered. If a benefit
overpayment or improper payment of benefits occurred caused by a failure of the person
to satisfy length of separation requirements for retirement under section 354A.011,
subdivision 21
, the executive director shall recover the improper payments by requiring
direct repayment. The repayment must include interest at the deleted text begin rate of 0.71 percent per monthdeleted text end
new text begin applicable rate or rates specified in section 356.59, subdivision 4, new text end from the first of the month
in which a monthly benefit amount was paid to the first of the month in which the amount
is repaid, with annual compounding.

(b) In the event the executive director determines that an overpaid annuity or benefit
that is the result of invalid salary included in the average salary used to calculate the payment
amount must be recovered, the executive director must determine the amount of the employee
deductions taken in error on the invalid salary, with interest as determined under 354A.37,
subdivision 3
, and must subtract that amount from the total annuity or benefit overpayment,
and the remaining balance of the overpaid annuity or benefit, if any, must be recovered.

(c) If the invalid employee deductions plus interest exceed the amount of the overpaid
benefits, the balance must be refunded to the person to whom the benefit or annuity is being
paid.

(d) Any invalid employer contributions reported on the invalid salary must be credited
against future contributions payable by the employer.

(e) If a member or former member, who is receiving a retirement annuity or disability
benefit for which an overpayment is being recovered, dies before recovery of the overpayment
is completed and an optional annuity or refund is payable, the remaining balance of the
overpaid annuity or benefit must continue to be recovered from the payment to the optional
annuity beneficiary or refund recipient.

(f) The board of trustees shall adopt policies directing the period of time and manner
for the collection of any overpaid retirement or optional annuity, and survivor or disability
benefit, or a refund that the executive director determines must be recovered as provided
under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 7.

Minnesota Statutes 2016, section 354A.29, subdivision 7, is amended to read:


Subd. 7.

deleted text begin Eligibility for payment ofdeleted text end Postretirement adjustments.

deleted text begin (a) Annually, after
June 30, the board of trustees of the St. Paul Teachers Retirement Fund Association must
determine the amount of any postretirement adjustment using the procedures in this
subdivision and subdivision 8 or 9, whichever is applicable.(b) On
deleted text end new text begin Each new text end January 1, each
person who has been receiving an annuity or benefit under the articles of incorporation, the
bylaws, or this chapterdeleted text begin , whose effective date of benefit commencement occurreddeleted text end new text begin that
commenced
new text end on or before July 1 of the new text begin immediately preceding new text end calendar year deleted text begin immediately
before the adjustment, is eligible to
deleted text end new text begin will new text end receive deleted text begin adeleted text end new text begin an annual new text end postretirement deleted text begin increase as
specified in subdivision 8 or 9.
deleted text end new text begin adjustment as follows:
new text end

new text begin (1) the monthly annuity or benefit amount of each person whose annuity or benefit
commenced on or before January 1 of the immediately preceding calendar year shall be
increased by one percent of the monthly amount; and
new text end

new text begin (2) the monthly annuity or benefit amount of each person whose annuity or benefit
commenced after January 1 of the immediately preceding calendar year shall be increased
by one-half of one percent of the monthly amount.
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 2016, section 354A.34, is amended to read:


354A.34 DISPOSITION OF UNPAID PERIOD CERTAIN FOR LIFE OR
GUARANTEED REFUND OPTIONAL ANNUITIES.

If a retiree from a coordinated program who has elected a period certain and for life
thereafter or a guaranteed refund optional annuity form dies without having a designated
beneficiary who has survived the retiree, any remaining unpaid guaranteed annuity payments
shall be computed at the rate of interest specified in section 356.215, subdivision 8, and
paid in one lump sum to the estate of the retiree. If a retiree from a coordinated program
who has elected a period certain and for life or a guaranteed refund optional annuity form
dies with a designated beneficiary who has survived the retiree but the designated beneficiary
dies without there existing another designated beneficiary, any remaining unpaid guaranteed
annuity payments shall be computed new text begin with interest new text end at the new text begin applicable new text end rate deleted text begin of interestdeleted text end new text begin or rates
new text end specified in section deleted text begin 356.215deleted text end new text begin 356.59new text end , subdivision deleted text begin 8deleted text end new text begin 4new text end , and paid in one lump sum to the estate
of the designated beneficiary.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 354A.38, subdivision 3, is amended to read:


Subd. 3.

Computation of refund repayment amount.

If the coordinated member elects
to repay a refund under subdivision 2, the repayment to the fund must be in an amount equal
to refunds the member has accepted plus interest at the deleted text begin rate of 8.5 percent until June 30,
2015, and eight percent thereafter
deleted text end new text begin applicable rate or rates specified in section 356.59,
subdivision 4,
new text end compounded annuallynew text begin ,new text end from the date that the refund was accepted to the date
that the refund is repaid.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

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

new text begin Minnesota Statutes 2016, section 354A.29, subdivisions 8 and 9, 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 July 1, 2017.
new text end

APPENDIX

Repealed Minnesota Statutes: 17-2368

354A.29 ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION POSTRETIREMENT ADJUSTMENT.

Subd. 8.

Calculation of postretirement adjustments; percentage based.

(a) For purposes of computing postretirement adjustments for eligible benefit recipients of the St. Paul Teachers Retirement Fund Association, the accrued liability funding ratio based on the actuarial value of assets of the plan as determined by the two most recent actuarial valuations prepared under sections 356.214 and 356.215 determines the postretirement increase, as follows:

Funding ratio Postretirement increase
Less than 80 percent 1 percent
At least 80 percent but less than 90 percent 2 percent

(b) The amount determined under paragraph (a) is the full postretirement increase to be applied as a permanent increase to the regular payment of each eligible member on January 1 of the next calendar year. For any eligible member whose effective date of benefit commencement occurred after January 1 of the calendar year immediately before the postretirement increase is applied, the amount determined under paragraph (a) must be reduced by 50 percent.

(c) If the accrued liability funding ratio based on the actuarial value of assets is at least 90 percent in two consecutive actuarial valuations, subsequent postretirement increases must be paid as specified in subdivision 9.

(d) If, following a postretirement increase under paragraph (a), the accrued liability funding ratio, based on the actuarial value of assets, falls below 80 percent for two consecutive actuarial valuations, the applicable postretirement increase must be reduced to one percent until January 1 of the calendar year next following the date on which the requirements for an increase under paragraph (a) are again satisfied.

Subd. 9.

Calculation of postretirement adjustments.

(a) This subdivision applies if the requirements of subdivision 8, paragraph (c), have been satisfied.

(b) A percentage adjustment must be paid under this subdivision to eligible persons under subdivision 7.

(c) The amount of 2.5 percent is the full postretirement adjustment to be applied as a permanent increase to the regular payment of each eligible member on January 1 of the next calendar year. For any eligible member whose effective date of benefit commencement occurred after January 1 of the calendar year immediately before the postretirement adjustment is applied, the postretirement adjustment amount must be reduced by 50 percent.

(d) In the event the accrued liability funding ratio based on the actuarial value of assets falls below 90 percent for two consecutive actuarial valuations, the applicable postretirement increase must be determined under subdivision 8 until January 1 of the calendar year next following the date on which the requirements of subdivision 8, paragraph (c), are again satisfied.

356.415 POSTRETIREMENT ADJUSTMENTS; STATEWIDE RETIREMENT PLANS.

Subdivision 1.

Annual postretirement adjustments; generally.

(a) Except as otherwise provided in subdivision 1a, 1b, 1c, 1d, 1e, or 1f, retirement annuity, disability benefit, or survivor benefit recipients of a covered retirement plan are entitled to a postretirement adjustment annually on January 1, as follows:

(1) a postretirement increase of 2.5 percent must be applied each year, effective January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the calendar year immediately before the adjustment; and

(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit amount for at least one full month, but less than 12 full months as of the June 30 of the calendar year immediately before the adjustment, an annual postretirement increase of 1/12 of 2.5 percent for each month that the person has been receiving an annuity or benefit must be applied.

(b) 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 covered retirement plan requesting that the increase not be made.