Engrossments
Introduction		Posted on 04/18/2005
1st Engrossment		Posted on 03/15/2006
2nd Engrossment		Posted on 03/20/2006
3rd Engrossment		Posted on 04/07/2006
4th Engrossment		Posted on 05/21/2006

Unofficial Engrossments
1st Unofficial Engrossment		Posted on 04/21/2006
2nd Unofficial Engrossment		Posted on 05/19/2006

A bill for an act
relating to retirement; Minneapolis Teachers Retirement Fund Association and
expanded list plans; clarifying mutual fund authority; revising investment
authority to exclude below-investment grade bonds; amending Minnesota
Statutes 2004, sections 3A.01, subdivisions 1, 2, 6, 8, by adding subdivisions;
3A.011; 3A.02, subdivisions 1, 1b, 3, 4, 5; 3A.03, subdivisions 1, 2; 3A.04,
subdivisions 1, 2, 3, 4, by adding a subdivision; 3A.05; 3A.07; 3A.10,
subdivision 1; 3A.12; 3A.13; 6.72; 136F.45, subdivision 1a; 352.04, subdivisions
2, 3; 352.113, subdivision 7a; 352.116, subdivisions 3a, 3b; 352.90; 352.91,
subdivisions 1, 2, 3c, 3d, 3e, 3f, 3g, by adding subdivisions; 352.92, subdivisions
1, 2; 352B.02, subdivisions 1a, 1c; 352C.091, subdivision 1; 352C.10; 352D.02,
subdivision 1; 352D.04, subdivision 2; 352F.04; 353.01, subdivisions 2a, 11a,
11b, 12, 16, by adding a subdivision; 353.03, subdivisions 1, 1a, by adding a
subdivision; 353.27, subdivisions 7, 7a, 7b; 353.29, subdivision 8; 353.30,
subdivisions 3a, 3b; 353.32, subdivisions 1a, 1b; 353.33, subdivisions 1, 9;
353.34, subdivision 1; 353.656, subdivisions 3, 4, 6a; 353D.01, subdivision 2;
353D.02, subdivision 3; 353E.02, subdivision 3; 353F.04; 354.45, subdivision
1a; 354A.08; 354A.28, subdivision 5; 354A.32, subdivision 1a; 354D.05;
355.01, subdivision 3g; 355.02, subdivisions 1, 3, by adding subdivisions;
356.219, subdivisions 3, 6; 356.24, subdivision 1; 422A.05, subdivision 2c;
422A.06, subdivisions 3, 5, 8; 422A.101, subdivision 3; 423B.07; 424A.001,
by adding a subdivision; 424A.02, subdivision 8b; 424A.05, subdivision 3;
490.121, subdivisions 1, 6, 7, 13, 14, 15, 22, by adding subdivisions; 490.122;
490.123, subdivisions 1, 1a, 1b, 1c, 2, 3; 490.124, subdivisions 1, 2, 3, 4, 5, 8,
9, 10, 11, 12, 13; 490.125, subdivisions 1, 2; 490.126, as amended; 490.133;
525.05; Minnesota Statutes 2005 Supplement, sections 353.01, subdivision 2d;
353.28, subdivision 6; 353.656, subdivision 1; 353F.02, subdivision 4; 356A.06,
subdivision 7; 422A.06, subdivision 7; 423B.09, subdivision 1; 490.121,
subdivision 4; Laws 2004, chapter 267, article 8, section 41; proposing coding for
new law in Minnesota Statutes, chapters 352; 352C; 353; 355; proposing coding
for new law as Minnesota Statutes, chapter 490A; repealing Minnesota Statutes
2004, sections 3A.01, subdivisions 3, 4, 6a, 7; 3A.02, subdivision 2; 3A.04,
subdivision 1a; 3A.09; 43A.34, subdivision 1; 352C.01; 352C.011; 352C.021,
subdivisions 1, 2, 3, 4, 5, 6, 7; 352C.031, subdivisions 1, 2, 4, 5, 6; 352C.033;
352C.04; 352C.051; 352C.09; 352C.091, subdivisions 2, 3; 490.021; 490.025;
490.101; 490.102; 490.103; 490.105; 490.106; 490.107; 490.108; 490.109;
490.1091; 490.12; 490.121, subdivisions 2, 3, 5, 8, 9, 10, 11, 12, 16, 17, 18, 19;
490.124, subdivision 6; 490.132; 490.15; 490.16; 490.18; Minnesota Statutes
2005 Supplement, sections 352C.021, subdivision 1a; 490.121, subdivision 20.

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

ARTICLE 1

MINNESOTA STATE RETIREMENT SYSTEM

CONTRIBUTION INCREASES

Section 1.

Minnesota Statutes 2004, section 352.04, subdivision 2, is amended to read:

Subd. 2.

Employee contributions.

The employee contribution to the fund must be
equal to deleted text begin 4.0deleted text end new text begin the following new text end percent of salarydeleted text begin .deleted text end new text begin :new text end

	new text begin before July 1, 2007 new text end	new text begin 4.00 new text end
	new text begin from July 1, 2007, to June 30, 2008 new text end	new text begin 4.25 new text end
	new text begin from July 1, 2008, to June 30, 2009 new text end	new text begin 4.50 new text end
	new text begin from July 1, 2009, to June 30, 2010 new text end	new text begin 4.75 new text end
	new text begin from July 1, 2010, and thereafter new text end	new text begin 5.00. new text end

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

Sec. 2.

Minnesota Statutes 2004, section 352.04, subdivision 3, is amended to read:

Subd. 3.

Employer contributions.

The employer contribution to the fund must be
equal to deleted text begin 4.0deleted text end new text begin the following new text end percent of salarydeleted text begin .deleted text end new text begin :new text end

	new text begin before July 1, 2007 new text end	new text begin 4.00 new text end
	new text begin from July 1, 2007, to June 30, 2008 new text end	new text begin 4.25 new text end
	new text begin from July 1, 2008, to June 30, 2009 new text end	new text begin 4.50 new text end
	new text begin from July 1, 2009, to June 30, 2010 new text end	new text begin 4.75 new text end
	new text begin from July 1, 2010, and thereafter new text end	new text begin 5.00. new text end

Sec. 3.

new text begin [352.045] PROCEDURE FOR REVISING EMPLOYEE AND
EMPLOYER CONTRIBUTIONS IN CERTAIN INSTANCES.
new text end

new text begin new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin This section applies to the general state employees
retirement plan and the correctional state employees retirement plan under this chapter,
and to the state patrol retirement plan under chapter 352B.
new text end

new text begin Subd. 2. new text end

new text begin Determination. new text end

new text begin For purposes of this section, a contribution sufficiency
exists if, for purposes of the applicable plan, the total of the employee contributions,
the employer contributions, and any additional employer contributions, if applicable,
exceeds the total of the normal cost, the administrative expenses, and the amortization
contribution of the retirement plan as reported in the most recent actuarial valuation of the
retirement plan prepared by the actuary retained under section 356.214 and prepared under
section 356.215 and the standards for actuarial work of the Legislative Commission on
Pensions and Retirement. For purposes of this section, a contribution deficiency exists
if, for the applicable plan, the total employee contributions, employer contributions, and
any additional employer contributions are less than the total of the normal cost, the
administrative expenses, and the amortization contribution of the retirement plan as
reported in the most recent actuarial valuation of the retirement plan prepared by the
actuary retained under section 356.214 and prepared under section 356.215 and the
standards for actuarial work of the Legislative Commission on Pensions and Retirement.
new text end

new text begin Subd. 3. new text end

new text begin Contribution rate revision. new text end

new text begin Notwithstanding the contribution rate
provisions stated in plan law, the employee and employer contribution rates must be
adjusted:
new text end

new text begin (1) if, after July 1, 2011, the regular actuarial valuations of the applicable plan under
section 356.215 indicate that there is a contribution sufficiency under subdivision 2 equal
to or greater than 0.5 percent of covered payroll for two consecutive years, the employee
and employer contribution rates for the applicable plan must be decreased as determined
under subdivision 4 to a level such that the sufficiency equals no more than 0.25 percent of
covered payroll based on the most recent actuarial valuation; or
new text end

new text begin (2) if, after July 1, 2011, the regular actuarial valuations of the applicable plan under
section 356.215 indicate that there is a deficiency equal to or greater than 0.5 percent of
covered payroll for two consecutive years, the employee and employer contribution rates
for the applicable plan must be increased as determined under subdivision 4 to a level such
that no deficiency exists based on the most recent actuarial valuation.
new text end

new text begin Subd. 4. new text end

new text begin Reporting, commission review. new text end

new text begin (a) The contribution rate increase or
decrease must be determined by the executive director of the Minnesota State Retirement
System, must be reported to the chair and the executive director of the Legislative
Commission on Pensions and Retirement on or before the next February 1, and, if the
Legislative Commission on Pensions and Retirement does not recommend against the
rate change or does not recommend a modification in the rate change, is effective on the
next July 1 following the determination by the executive director that a contribution
deficiency or sufficiency has existed for two consecutive fiscal years based on the most
recent actuarial valuations under section 356.215. If the actuarially required contribution
exceeds or is less than the total support provided by the combined employee and employer
contribution rates for the applicable plan by more than 0.5 percent of covered payroll, the
applicable plan employee and employer contribution rates must be adjusted incrementally
over one or more years to a level such that there remains a contribution sufficiency of no
more than 0.25 percent of covered payroll.
new text end

new text begin (b) No incremental adjustment may exceed 0.25 percent of payroll for either the
employee or employer contribution rates per year in which any adjustment is implemented.
For an applicable plan, a contribution rate adjustment under this section must not be
made until at least two years have passed since fully implementing a previous adjustment
under this section.
new text end

Sec. 4.

Minnesota Statutes 2004, section 352.92, subdivision 1, is amended to read:

Subdivision 1.

Employee contributions.

Employee contributions of covered
correctional employees must be in an amount equal to deleted text begin 5.69deleted text end new text begin the following new text end percent of salarydeleted text begin .deleted text end new text begin :new text end

	new text begin before July 1, 2007 new text end	new text begin 5.69 new text end
	new text begin from July 1, 2007, to June 30, 2008 new text end	new text begin 6.40 new text end
	new text begin from July 1, 2008, to June 30, 2009 new text end	new text begin 7.00 new text end
	new text begin from July 1, 2009, to June 30, 2010 new text end	new text begin 7.70 new text end
	new text begin from July 1, 2010, and thereafter new text end	new text begin 8.60. new text end

new text begin These contributions must be made by deduction from salary as provided in section
352.04, subdivision 4.
new text end

Sec. 5.

Minnesota Statutes 2004, section 352.92, subdivision 2, is amended to read:

Subd. 2.

Employer contributions.

The employer shall contribute for covered
correctional employees an amount equal to deleted text begin 7.98deleted text end new text begin the following new text end percent of salarydeleted text begin .deleted text end new text begin :new text end

	new text begin before July 1, 2007 new text end	new text begin 7.98 new text end
	new text begin from July 1, 2007, to June 30, 2008 new text end	new text begin 9.10 new text end
	new text begin from July 1, 2008, to June 30, 2009 new text end	new text begin 10.10 new text end
	new text begin from July 1, 2009, to June 30, 2010 new text end	new text begin 11.10 new text end
	new text begin from July 1, 2010, and thereafter new text end	new text begin 12.10. new text end

Sec. 6.

Minnesota Statutes 2004, section 352B.02, subdivision 1a, is amended to read:

Subd. 1a.

Member contributions.

Each member shall pay a sum equal to deleted text begin 8.40deleted text end new text begin the
following new text end percent of the member's salary, which shall constitute the member contribution
to the funddeleted text begin .deleted text end new text begin :new text end

	new text begin before July 1, 2007 new text end	new text begin 8.40 new text end
	new text begin from July 1, 2007, to June 30, 2008 new text end	new text begin 9.10 new text end
	new text begin from July 1, 2008, to June 30, 2009 new text end	new text begin 9.80 new text end
	new text begin from July 1, 2009, and thereafter new text end	new text begin 10.40. new text end

new text begin These contributions must be made by deduction from salary as provided in section
352.04, subdivision 4.
new text end

Sec. 7.

Minnesota Statutes 2004, section 352B.02, subdivision 1c, is amended to read:

Subd. 1c.

Employer contributions.

In addition to member contributions,
department heads shall pay a sum equal to deleted text begin 12.60deleted text end new text begin the following new text end percent of the salary upon
which deductions were made, which shall constitute the employer contribution to the funddeleted text begin .deleted text end new text begin :new text end

	new text begin before July 1, 2007 new text end	new text begin 12.60 new text end
	new text begin from July 1, 2007, to June 30, 2008 new text end	new text begin 13.60 new text end
	new text begin from July 1, 2008, to June 30, 2009 new text end	new text begin 14.60 new text end
	new text begin from July 1, 2009, and thereafter new text end	new text begin 15.60. new text end

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

Sec. 8.

Minnesota Statutes 2004, section 352D.04, subdivision 2, is amended to read:

Subd. 2.

Contribution rates.

(a) The money used to purchase shares under this
section is the employee and employer contributions provided in this subdivision.

(b) The employee contribution is an amount equal to deleted text begin the employee contribution
specified in section 352.04, subdivision 2 deleted text end new text begin four percent of salarynew text end .

(d) These contributions must be made in the manner provided in section 352.04,
subdivisions 4, 5, and 6.

(e) For members of the legislature, the contributions under this subdivision also must
be made on per diem payments received during a regular or special legislative session, but
may not be made on per diem payments received outside of a regular or special legislative
session, on the additional compensation attributable to a leadership position under section
3.099, subdivision 3, living expense payments under section 3.101, or special session
living expense payments under section 3.103.

(f) For a judge who is a member of the unclassified plan under section 352D.02,
subdivision 1, paragraph (c), clause (16), the employee contribution rate is eight percent
of salary, and there is no employer contribution.

Sec. 9. new text begin EFFECTIVE DATE.
new text end

new text begin (a) Sections 1, 2, 3, and 8 are effective July 1, 2007.
new text end

new text begin (b) Sections 4, 5, 6, and 7 are effective July 1, 2006.
new text end

ARTICLE 2

MSRS-CORRECTIONAL RETIREMENT PLAN INCLUSIONS

Section 1.

Minnesota Statutes 2004, section 352.90, is amended to read:

352.90 POLICY.

It is the policy of the legislature to provide special retirement benefits new text begin for new text end and new text begin special
new text end contributions deleted text begin fordeleted text end new text begin by new text end certain correctional employees who may be required to retire at
an early age because they lose the mental or physical capacity required to maintain the
safety, security, discipline, and custody of inmates at state correctional facilities or of
patients at the Minnesota Security Hospital deleted text begin or atdeleted text end new text begin , of patients innew text end the Minnesota deleted text begin Sexual
Psychopathic Personality Treatment Centerdeleted text end new text begin Sex Offender Program, new text end or of patients in the
Minnesota extended treatment options deleted text begin on-campusdeleted text end program deleted text begin at the Cambridge Regional
Human Services Centerdeleted text end .

Sec. 2.

Minnesota Statutes 2004, section 352.91, subdivision 1, is amended to read:

Subdivision 1.

Qualifying jobs.

"Covered correctional service" means service
performed by a state employee, as defined in section 352.01, employed at a state
correctional facility, the Minnesota Security Hospital, or the Minnesota deleted text begin Sexual
Psychopathic Personality Treatment Centerdeleted text end new text begin Sex Offender Program new text end as:

(1) a corrections officer 1;

(2) a corrections officer 2;

(3) a corrections officer 3;

(4) a corrections officer supervisor;

(5) a corrections deleted text begin officer 4deleted text end new text begin lieutenantnew text end ;

(6) a corrections captain;

(7) a security counselor; deleted text begin or
deleted text end

(8) a security counselor leadnew text begin ; or
new text end

new text begin (9) a corrections canine officernew text end .

Sec. 3.

Minnesota Statutes 2004, section 352.91, subdivision 2, is amended to read:

Subd. 2.

Maintenancenew text begin , correctional industry, new text end and trades.

"Covered correctional
service" also means service rendered at any time by state employees as maintenance
personnel deleted text begin anddeleted text end new text begin , correctional industry personnel, or new text end members of trades certified by the
commissioner of employee relations new text begin to the executive director new text end as being deleted text begin regularlydeleted text end engaged
new text begin for at least 75 percent of the employee's working time new text end in new text begin the new text end rehabilitation, treatment,
custody, or supervision of inmates at a Minnesota correctional facility, or of patients at
the Minnesota Security Hospital or deleted text begin atdeleted text end the Minnesota deleted text begin Sexual Psychopathic Personality
Treatment Centerdeleted text end new text begin Sex Offender Programnew text end .

Sec. 4.

Minnesota Statutes 2004, section 352.91, subdivision 3c, is amended to read:

Subd. 3c.

Nursing personnel.

(a) "Covered correctional service" means service by
a state employee in one of the employment positions at a correctional facility or at the
Minnesota Security Hospitalnew text begin , or in the Minnesota Sex Offender Program that are new text end specified
in paragraph (b)deleted text begin , provided thatdeleted text end new text begin if new text end at least 75 percent of the employee's working time is
spent in direct contact with inmates or patients and the fact of this direct contact is certified
to the executive director by the appropriate commissionerdeleted text begin , unless the person elects to
retain the current retirement deleted text end deleted text begin coverage under Laws 1996, chapter 408, article 8, section 21deleted text end .

(b) The employment positions are as follows:

(1) registered nurse - senior;

(2) registered nurse;

(3) registered nurse - principal;

(4) licensed practical nurse 2; and

(5) registered nurse deleted text begin practitionerdeleted text end new text begin advance practicenew text end .

Sec. 5.

Minnesota Statutes 2004, section 352.91, subdivision 3d, is amended to read:

Subd. 3d.

Other correctional personnel.

(a) "Covered correctional service" means
service by a state employee in one of the employment positions at a correctional facility or
at the Minnesota Security Hospital specified in paragraph (b)deleted text begin , provided thatdeleted text end new text begin if new text end at least 75
percent of the employee's working time is spent in direct contact with inmates or patients
and the fact of this direct contact is certified to the executive director by the appropriate
commissionerdeleted text begin , unless the person elects to retain the current retirement coverage under
deleted text end deleted text begin Laws 1996, chapter 408, article 8, section 21deleted text end .

(b) The employment positions are as follows: bakerdeleted text begin ,deleted text end new text begin ; central services administrative
specialist, intermediate; central services administrative specialist, principal; chaplain;new text end
chemical dependency counselor supervisordeleted text begin ,deleted text end new text begin ;new text end chief cookdeleted text begin ,deleted text end new text begin ;new text end cookdeleted text begin ,deleted text end new text begin ;new text end cook coordinatordeleted text begin ,
corrections behavior therapist, corrections behavior therapist specialist, corrections parent
education coordinator,deleted text end new text begin ; corrections program therapist 1; corrections program therapist 2;
corrections program therapist 3; corrections inmate program coordinator; corrections
transitions program coordinator;new text end corrections security caseworkerdeleted text begin ,deleted text end new text begin ;new text end corrections security
caseworker careerdeleted text begin ,deleted text end new text begin ;new text end corrections teaching assistantdeleted text begin ,deleted text end new text begin ; delivery van driver;new text end dentistdeleted text begin ,deleted text end new text begin ;new text end electrician
supervisordeleted text begin ,deleted text end new text begin ; general maintenance worker;new text end general repair workerdeleted text begin ,deleted text end new text begin ; laundry coordinator;new text end
library/information research services specialistdeleted text begin ,deleted text end new text begin ;new text end library/information research services
specialist seniordeleted text begin ,deleted text end new text begin ; library technician;new text end plumber supervisordeleted text begin ,deleted text end new text begin ; psychologist 1;new text end psychologist
3deleted text begin ,deleted text end new text begin ;new text end recreation therapistdeleted text begin ,deleted text end new text begin ;new text end recreation therapist coordinatordeleted text begin ,deleted text end new text begin ;new text end recreation program assistantdeleted text begin ,deleted text end new text begin ;new text end
recreation therapist seniordeleted text begin , stores clerk senior,deleted text end new text begin ; sports medicine specialist;new text end water treatment
plant operatordeleted text begin , work therapy technician,deleted text end new text begin ;new text end work therapy assistantdeleted text begin ,deleted text end new text begin ;new text end work therapy program
coordinatornew text begin ; and work therapy techniciannew text end .

deleted text begin (c) "Covered correctional service" also means service as the director or as an
deleted text end deleted text begin assistant group supervisor of the Phoenix/Pomiga treatment/behavior change program of
deleted text end deleted text begin the Department of Corrections.
deleted text end

Sec. 6.

Minnesota Statutes 2004, section 352.91, subdivision 3e, is amended to read:

Subd. 3e.

Minnesota extended treatment options programdeleted text begin ; Cambridgedeleted text end .

new text begin (a)
new text end "Covered correctional service" means service by a state employee in one of the deleted text begin followingdeleted text end
employment positions with the Minnesota extended treatment options deleted text begin on-campusdeleted text end program
deleted text begin at the Cambridge Regional Human Services Centerdeleted text end new text begin specified in paragraph (b)new text end if at least 75
percent of the employee's working time is spent in direct contact with patients who are
in the Minnesota extended treatment options program and if service in such a position
is certified to the executive director by the commissioner of human servicesdeleted text begin , unless thedeleted text end
deleted text begin person elects to retain current retirement coverage under deleted text end deleted text begin section 6deleted text end new text begin .
new text end

new text begin (b) The employment positions arenew text end :

(1) behavior analyst deleted text begin Ideleted text end new text begin 1new text end ;

(2) new text begin behavior analyst 2;
new text end

new text begin (3) behavior analyst 3;
new text end

new text begin (4) group supervisor;
new text end

new text begin (5) group supervisor assistant;
new text end

new text begin (6) new text end human services support specialist;

deleted text begin (3)deleted text end new text begin (7) new text end mental retardation residential program lead;

deleted text begin (4)deleted text end new text begin (8) new text end psychologist 2;

deleted text begin (5)deleted text end new text begin (9) new text end recreation program assistant;

deleted text begin (6)deleted text end new text begin (10) new text end recreation therapist senior;

deleted text begin (7) deleted text end new text begin (11) new text end registered nurse senior;

deleted text begin (8)deleted text end new text begin (12) new text end skills development specialist; deleted text begin and
deleted text end

deleted text begin (9)deleted text end new text begin (13) new text end social worker seniornew text begin ;
new text end

new text begin (14) social worker specialist; and
new text end

new text begin (15) speech pathology specialistnew text end .

Sec. 7.

Minnesota Statutes 2004, section 352.91, subdivision 3f, is amended to read:

Subd. 3f.

Additional Department of Human Services personnel.

(a) "Covered
correctional service" means service by a state employee in one of the employment
positions specified in paragraph (b) at the Minnesota Security Hospital or new text begin in new text end the Minnesota
deleted text begin Sexual Psychopathic Personality Treatment Centerdeleted text end deleted text begin , provided thatdeleted text end new text begin Sex Offender Program if
new text end at least 75 percent of the employee's working time is spent in direct contact with patients
and the deleted text begin factdeleted text end new text begin determination new text end of this direct contact is certified to the executive director by the
commissioner of human services.

(b) The employment positions are:

(1) behavior analyst 2;

(2) deleted text begin licensed practical nurse 1deleted text end new text begin behavior analyst 3new text end ;

(3) new text begin chemical dependency counselor senior;
new text end

new text begin (4) client advocate;
new text end

new text begin (5) dental assistant registered;
new text end

new text begin (6) group supervisor;
new text end

new text begin (7) group supervisor assistant;
new text end

new text begin (8) licensed practical nurse 1;
new text end

new text begin (9) occupational therapist;
new text end

new text begin (10) occupational therapist, senior;
new text end

new text begin (11) new text end office and administrative specialist senior;

deleted text begin (4) deleted text end new text begin (12) psychologist 1;
new text end

new text begin (13)new text end psychologist 2;

deleted text begin (5) deleted text end new text begin (14) psychologist 3;
new text end

new text begin (15) recreation program assistant;
new text end

new text begin (16) recreation therapist senior;
new text end

new text begin (17) rehabilitation counselor senior;
new text end

new text begin (18) skills development specialist;
new text end

new text begin (19) new text end social worker new text begin senior;
new text end

new text begin (20) social worker new text end specialist;

deleted text begin (6) behavior analyst 3 deleted text end new text begin (21) social worker specialist, senior;
new text end

new text begin (22) speech pathology clinician;
new text end

new text begin (23) work therapy assistantnew text end ; and

deleted text begin (7) social worker seniordeleted text end new text begin (24) work therapy program coordinatornew text end .

Sec. 8.

Minnesota Statutes 2004, section 352.91, subdivision 3g, is amended to read:

Subd. 3g.

Additional Corrections Department personnel.

(a) "Covered
correctional service" means service by a state employee in one of the employment
positions deleted text begin at the designated Minnesota correctional facilitydeleted text end specified in paragraph (b) if at
least 75 percent of the employee's working time is spent in direct contact with inmates
and the deleted text begin factdeleted text end new text begin determination new text end of this direct contact is certified to the executive director by
the commissioner of corrections.

(b) The qualifying employment positions deleted text begin and the designated correctional facilitiesdeleted text end
are:

(1) corrections discipline unit supervisordeleted text begin , at the Minnesota Correctional
Facility-Faribault, the Minnesota Correctional Facility-Lino Lakes, the Minnesota
Correctional Facility-Oak Park Heights, the Minnesota Correctional Facility-Rush City,
and the Minnesota Correctional Facility-St. Clouddeleted text end ;

(2) dental assistant registereddeleted text begin , at the Minnesota Correctional Facility-Faribault, the
Minnesota Correctional Facility-Lino Lakes, the Minnesota Correctional Facility-Moose
Lake, the Minnesota Correctional Facility-Oak Park Heights, and the Minnesota
Correctional Facility-Red Wingdeleted text end ;

(3) dental hygienistdeleted text begin , at the Minnesota Correctional Facility-Shakopee and the
Minnesota Correctional Facility-Rush Citydeleted text end ;

(4) psychologist 2deleted text begin , at the Minnesota Correctional Facility-Faribault, the Minnesota
Correctional Facility-Lino Lakes, the Minnesota Correctional Facility-Moose Lake,
the Minnesota Correctional Facility-Oak Park Heights, the Minnesota Correctional
Facility-Red Wing, the Minnesota Correctional Facility-Rush City, the Minnesota
Correctional Facility-St. Cloud, the Minnesota Correctional Facility-Shakopee, and the
Minnesota Correctional Facility-Stillwaterdeleted text end ; deleted text begin ordeleted text end new text begin and
new text end

(5) sentencing to service crew leader involved with the inmate community work
crew programdeleted text begin , at the Minnesota Correctional Facility-Faribault and the Minnesota
Correctional Facility-Lino Lakesdeleted text end .

Sec. 9.

Minnesota Statutes 2004, section 352.91, is amended by adding a subdivision
to read:

new text begin Subd. 3h. new text end

new text begin Employment occupation name changes. new text end

new text begin (a) If the occupational title of a
state employee covered by the Minnesota correctional employees retirement plan changes
from the applicable title listed in subdivision 1, 2, 2a, 3c, 3d, 3e, 3f, or 3g, qualification for
coverage by the correctional state employees retirement plan continues until the July 1
next following the title change if the commissioner of employee relations certifies to the
executive director of the Minnesota State Retirement System and to the executive director
of the Legislative Commission on Pensions and Retirement that the duties, requirements,
and responsibilities of the new occupational title are substantially identical to the duties,
requirements, and responsibilities of the prior occupational title.
new text end

new text begin (b) If the commissioner of employee relations does not certify a new occupational
title under paragraph (a), eligibility for future correctional state employees retirement
coverage terminates as of the start of the first payroll period next following the effective
date of the occupational title change.
new text end

new text begin (c) For consideration by the Legislative Commission on Pensions and Retirement
during the legislative session next following an occupational title change involving a
state employee in covered correctional service, the commissioner of employee relations
shall submit the applicable draft proposed legislation accommodating the occupational
title change in this section.
new text end

Sec. 10.

Minnesota Statutes 2004, section 352.91, is amended by adding a subdivision
to read:

new text begin Subd. 3i. new text end

new text begin Lateral transfers to new correctional facilities. new text end

new text begin If a new correctional
facility is established, a state employee rendering covered correctional service immediately
before the transfer remains eligible for coverage by the correctional state employees
retirement plan for future state employment at the new facility if the person is employed in
the same occupational title at the new facility. The eligibility for future coverage continues
until the July 1 next following the effective date of the establishment of the new facility.
new text end

Sec. 11.

Minnesota Statutes 2004, section 352.91, is amended by adding a subdivision
to read:

new text begin Subd. 4b. new text end

new text begin Department of Corrections; procedure for coverage change
considerations. new text end

new text begin (a) The commissioner of corrections shall appoint a standing review
committee to review and determine positions that should be included in legislative
requests for correctional employees retirement plan coverage under subdivision 4a.
new text end

new text begin (b) The review committee must include relevant department employees and
employee representatives. Periodically, the Department of Corrections will convene
meetings of the review committee. The review committee must review all requests and
the supporting documentation for coverage by the correctional employees retirement
plan and must determine which classes or positions meet the statutory requirements for
coverage. The review committee also must determine if incumbents of and recent retirees
from classes or positions determined for inclusion in correctional employees retirement
plan coverage have prior Department of Corrections employment which also qualified as
correctional service and which should be transferred from the general state employees
retirement plan to the plan and the initial date for each potential service credit transfer.
new text end

new text begin (c) The department must provide a notice of each determination and of the
employee's right to appeal from the review committee to each employee who requested
inclusion. Appeals must be filed with the agency human resource manager within 30 days
of the date of the notice of determination.
new text end

new text begin (d) The commissioner of corrections shall appoint a standing appeals committee to
hear appeals of determinations for coverage. Appeal committee determinations are final.
new text end

new text begin (e) All positions approved for inclusion must be forwarded to the commissioner
of corrections for the preparation of legislation to implement the coverage change and
submission. The commissioner will submit a written recommendation documenting
classes or positions that should or should not be covered by the correctional employees
retirement plan. Documentation of each request and the final determination must be
retained in the Department of Corrections' office of human resource management.
new text end

Sec. 12. new text begin COVERAGE FOR PRIOR STATE SERVICE FOR CERTAIN
PERSONS.
new text end

new text begin Subdivision 1. new text end

new text begin Election of prior state coverage. new text end

new text begin (a) An employee in the
occupational position of laundry coordinator or delivery van driver at the Minnesota
Correctional Facility-Faribault who has future retirement coverage transferred to the
correctional state employees retirement plan under section 5 is entitled to elect to obtain
prior service credit for eligible correctional state service performed after June 30, 1997,
and before July 1, 2006, with the Department of Corrections and an employee who had
future retirement coverage transferred to the correctional state employees retirement
plan under Laws 2004, chapter 267, article 1, section 1, is entitled to elect to obtain
prior service credit for eligible correctional state service performed at the Minnesota
Correctional Facility-Rush City before August 1, 2004. All prior service credit in either
instance must be purchased.
new text end

new text begin (b) Eligible correctional state service is either a prior period of continuous service
after June 30, 1997, at the Minnesota Correctional Facility-Faribault, or a prior period
of continuous service at the Minnesota Correctional Facility-Rush City before August 1,
2004, whichever applies, performed as an employee of the Department of Corrections that
would have been eligible for the correctional state employees retirement plan coverage
under section 1, if that prior service had been performed after August 1, 2004, or June 30,
2006, rather than before August 1, 2004, or July 1, 2006, whichever applies. Service is
continuous if there has been no period of discontinuation of eligible state service for a
period greater than 30 calendar days.
new text end

new text begin (c) The commissioner of corrections shall certify eligible correctional state service
to the commissioner of employee relations and to the executive director of the Minnesota
State Retirement System.
new text end

new text begin (d) A correctional employee covered under section 1 is entitled to purchase the past
service if the department certifies that the employee met the eligibility requirements for
coverage. The employee must make additional employee contributions. Payment for past
service must be completed by June 30, 2007.
new text end

new text begin Subd. 2. new text end

new text begin Payment for prior service. new text end

new text begin (a) An employee electing to obtain prior
service credit under subdivision 1 must pay an additional employee contribution for
that prior service. The additional member contribution is the contribution differential
percentage applied to the actual salary paid to the employee during the period of the
prior eligible correctional state service, plus interest at the rate of 8.5 percent per annum,
compounded annually. The contribution differential percentage is the difference between
5.69 percent of salary and the applicable employee contribution rate of the general state
employees retirement plan during the period of the prior eligible correctional state service.
new text end

new text begin (b) The additional member contribution may be paid only in a lump sum. Payment
must accompany the election to obtain prior service credit. No election or payment may
be made by the person or accepted by the executive director of the Minnesota State
Retirement System after June 30, 2007.
new text end

new text begin Subd. 3. new text end

new text begin Transfer of assets. new text end

new text begin (a) Assets must be transferred from the general state
employees retirement plan to the correctional state employees retirement plan in an
amount equal to the present value of benefits earned under the general state employees
retirement plan for each employee transferring to the correctional state employees
retirement plan under this section, as determined by the actuary retained under Minnesota
Statutes, section 356.214, in accordance with Minnesota Statutes, section 356.215,
multiplied by the accrued liability funding ratio of active members as derived from the
most recent actuarial valuation prepared by the actuary retained under Minnesota Statutes,
section 356.214. The transfer of assets must be made within 30 days after the employee
elects to transfer the coverage to the correctional state employees retirement plan.
new text end

new text begin (b) The Department of Corrections shall pay the cost of the actuarial work performed
by the actuary retained under Minnesota Statutes, section 356.214, under paragraph (a)
upon receipt of a billing from the executive director of the Public Employees Retirement
Association.
new text end

new text begin Subd. 4. new text end

new text begin Effect of the asset transfer. new text end

new text begin Upon the transfer of assets in subdivision
3, service credit in the general state employees retirement plan of the Minnesota State
Retirement System is forfeited and may not be reinstated. The service credit and
transferred assets must be credited to the correctional state employees retirement plan.
new text end

Sec. 13. new text begin SERVICE CREDIT TRANSFER TO CORRECTIONAL PLAN.
new text end

new text begin Subdivision 1. new text end

new text begin Authorization. new text end

new text begin If the review of the corrections program director
position of the eligible individual under Minnesota Statutes 2005 Supplement, section
352.91, subdivision 4a, results in the inclusion of the corrections program director position
in the correctional state employees retirement plan of the Minnesota State Retirement
System by legislative enactment during the 2006 or 2007 legislative sessions, an eligible
individual specified in subdivision 2 is authorized to have service credit in the Minnesota
State Retirement System general state employees retirement plan for employment as
a corrections program director from June 17, 1995, to June 5, 2001, transferred from
the Minnesota State Retirement System general state employees retirement plan to the
Minnesota State Retirement System correctional state employees retirement plan, if all
conditions required by this section are met.
new text end

new text begin Subd. 2. new text end

new text begin Eligibility. new text end

new text begin An eligible individual is an individual who:
new text end

new text begin (1) was born on November 14, 1956;
new text end

new text begin (2) is currently employed as a corrections lieutenant;
new text end

new text begin (3) was covered by the Minnesota State Retirement System correctional state
employees retirement plan for service provided from November 1, 1980, to June 16, 1995;
new text end

new text begin (4) was covered by the Minnesota State Retirement System general state employees
retirement plan for employment as a corrections program director from June 17, 1995, to
June 5, 2001; and
new text end

new text begin (5) is covered by the Minnesota State Retirement System correctional state
employees retirement plan for employment as a corrections lieutenant beginning June
6, 2001.
new text end

new text begin Subd. 3. new text end

new text begin Employee equivalent contribution. new text end

new text begin To receive the transfer of service
credit specified in subdivision 1, the individual must pay to the executive director of the
Minnesota State Retirement System the difference between the employee contribution rate
for the general state employees retirement plan and the employee contribution rate for
the correctional state employees retirement plan in effect during the period eligible for
transfer applied to the eligible individual's salary at the time each additional contribution
would have been deducted from pay if coverage had been provided by the correctional
state employees retirement plan. These amounts shall be paid in a lump sum by September
1, 2005, or prior to termination of service, whichever is earlier, plus 8.5 percent annual
compound interest from the applicable payroll deduction date until paid.
new text end

new text begin Subd. 4. new text end

new text begin Employer equivalent. new text end

new text begin The eligible individual shall also pay to the
executive director of the Minnesota State Retirement System the difference between
the employer contribution rate for the general state employees retirement plan and the
employer contribution rate for the correctional state employees retirement plan in effect
during the period eligible for transfer applied to the eligible individual's salary at the
time each additional contribution would have been deducted from pay if coverage had
been provided by the correctional state employees retirement plan. These amounts shall
be paid in a lump sum at the same time as the amount under subdivision 3, with interest
as specified in that subdivision.
new text end

new text begin Subd. 5. new text end

new text begin Transfer of assets. new text end

new text begin If payments under subdivisions 3 and 4 are made,
assets must be transferred from the general state employees retirement plan fund to the
correctional state employees retirement plan fund in an amount equal to the present value
of benefits earned by the eligible individual under the general state employees retirement
plan, as determined by the actuary retained under section 356.214 in accordance with
Minnesota Statutes, section 356.215. The transfer of assets must be made within 45 days
after the receipt of payments under subdivisions 3 and 4.
new text end

new text begin Subd. 6. new text end

new text begin Effect of the asset transfer. new text end

new text begin Upon transfer of assets in subdivision 5,
service credit in the general state employees retirement plan of the Minnesota State
Retirement System is forfeited and may not be reinstated. The service credit and
transferred assets must be credited to the correctional state employees retirement plan.
new text end

new text begin Subd. 7. new text end

new text begin Payment of actuarial calculation costs. new text end

new text begin The expense for the calculations
by the actuary under subdivision 5 must be paid by the Department of Corrections.
new text end

Sec. 14. new text begin EFFECTIVE DATE.
new text end

new text begin (a) Sections 1 to 8 and 12 are effective the first day of the first payroll period next
following the date of enactment.
new text end

new text begin (b) Sections 9, 10, and 11 are effective the day following final enactment.
new text end

new text begin (c) Section 13 is effective July 1, 2006, applies retroactively to permit a transfer
by an eligible individual of service credit before January 1, 2008, even if the eligible
individual has terminated active state employment before July 1, 2007, and, if the eligible
individual is in receipt of a retirement annuity from the correctional state employees
retirement plan of the Minnesota State Retirement System on or before July 1, 2007,
allows the eligible individual to have the retirement annuity recalculated on the basis
of any transferred service credit.
new text end

new text begin (d) The addition of the reference to "correctional industry" in section 3 is a
clarification of the existing provision and is not intended to be the basis for the addition of
any employment position to plan coverage beyond the employment positions included
on January 15, 2006, unless there is a change in the duties of an employment position
connected with correctional industries that increases the regularly occurring direct inmate
contact of the position to in excess of 75 percent and the inclusion of the position as
"correctional industry personnel" is approved by the commissioner of employee relations.
new text end

ARTICLE 3

RETIREMENT PLAN ADMINISTRATIVE PROVISIONS

Section 1.

Minnesota Statutes 2004, section 136F.45, subdivision 1a, is amended to
read:

Subd. 1a.

Subsequent vendor contracts.

(a) The board may limit the number
of vendors under subdivision 1.

(b) In addition to any other tax-sheltered annuity program investment options, the
board may offer as an investment option the Minnesota supplemental investment fund
administered by the State Board of Investment under section 11A.17.

(c) deleted text begin For the tax-sheltered annuity program vendor contracts executed after July 1,
2000,deleted text end The board shall actively solicit participation of and shall include as vendors lower
expense and "no-load" mutual funds or equivalent investment products as those terms are
defined by the federal Securities and Exchange Commission. deleted text begin To the extent possible, in
addition to a range of insurance annuity contract providers and other mutual fund provider
arrangements, the board must assure that no less than five insurance annuity providers
and no less than one nor more than three lower expense and "no-load" mutual funds or
equivalent investment products will be made available for direct-access by employee
participants.deleted text end To the extent that offering a lower expense "no-load" product increases the
total necessary and reasonable expenses of the program and if the board is unable to
negotiate a rebate of fees from the mutual fund or equivalent investment product providers,
the board may charge the participants utilizing the lower expense "no-load" mutual fund
products a fee to cover those expenses. The participant fee may not exceed one percent
of the participant's annual contributions or $20 per participant per year, whichever is
greater. Any excess fee revenue generated under this subdivision must be reimbursed to
participant accounts in the manner provided in subdivision 3a.

Sec. 2.

Minnesota Statutes 2004, section 352.113, subdivision 7a, is amended to read:

Subd. 7a.

Temporary reemployment benefit reduction waiver.

new text begin (a) new text end A reduction in
benefits under subdivision 7, or a termination of benefits due to the disabled employee
resuming a gainful occupation from which earnings are equal to or more than the
employee's salary at the date of disability or the salary currently paid for similar positions
does not apply until six months after the individual returns to a gainful occupation.

new text begin (b) No deductions for the retirement fund may be taken from the salary of a disabled
person who is attempting to return to work under this provision unless the member waives
further disability benefits.
new text end

new text begin (c) A member may return to employment and continue disability benefit payments
under this subdivision only once while receiving disability benefits from a plan
administered by the Minnesota State Retirement System.
new text end

Sec. 3.

Minnesota Statutes 2004, section 352.116, subdivision 3a, is amended to read:

Subd. 3a.

Bounce-back annuity.

(a) If a retired employee or disabilitant selects
a joint and survivor annuity option under subdivision 3new text begin after June 30, 1989new text end , the retired
employee or disabilitant must receive a normal single-life annuity if the designated
optional annuity beneficiary dies before the retired employee or disabilitant. Under this
option, no reduction may be made in the annuity to provide for restoration of the normal
single-life annuity in the event of the death of the designated optional annuity beneficiary.

(b) deleted text begin A retired employee or disabilitant who selected an optional joint and survivor
annuity before July 1, 1989, but did not choose an option that provides that the normal
single-life annuity is payable to the retired employee or the disabilitant if the designated
optional annuity beneficiary dies first, is eligible for restoration of the normal single-life
annuity if the designated optional annuity beneficiary dies first, without further actuarial
reduction of the person's annuity. A retired employee or disabilitant who selected an
optional joint and survivor annuity, but whose designated optional annuity beneficiary died
before July 1, 1989, shall receive a normal single-life annuity after that date, but shall not
receive retroactive payments for periods before that datedeleted text end new text begin The annuity adjustment specified
in paragraph (a) also applies to joint and survivor annuity options under subdivision
3 elected prior to July 1, 1989. The annuity adjustment under this paragraph occurs on
July 1, 1989, or on the first day of the first month following the death of the designated
optional annuity beneficiary, whichever is later. This paragraph should not be interpreted
as authorizing retroactive paymentsnew text end .

deleted text begin (c) A retired employee or disabilitant who took a further actuarial reduction to elect
an optional joint and survivor annuity that provides that the normal annuity is payable
to the retired employee or disabilitant if the designated optional beneficiary died before
July 1, 1989, shall have the annuity increased as of July 1, 1989, to the amount the person
would have received if, at the time of retirement or disability, the person had selected only
optional survivor coverage that would not have provided for restoration of the normal
annuity upon the death of the designated optional annuity beneficiary. Any annuity or
benefit increase under this paragraph is effective only for payments made after June 30,
1989, and is not retroactive for payments made before July 1, 1989.
deleted text end

Sec. 4.

Minnesota Statutes 2004, section 352.116, subdivision 3b, is amended to read:

Subd. 3b.

Bounce-back annuity.

(a) The board of directors must provide a joint
and survivor annuity option to members of the correctional employees and State Patrol
retirement funds. Under this option, new text begin if new text end a former member or disabilitant new text begin selects a joint
and survivor annuity option after June 30, 1989, the former member or disabilitant new text end must
receive a normal single life annuity if the designated optional annuity beneficiary dies
before the former member or disabilitant. Under this option, no reduction may be made
in the person's annuity to provide for restoration of the normal single life annuity in the
event of the death of the designated optional annuity beneficiary.

(b) deleted text begin A former member or disabilitant of the correctional or State Patrol fund who
selected an optional joint and survivor annuity before July 1, 1989, but did not choose an
option that provides that the normal single life annuity is payable to the former member
or the disabilitant if the designated optional annuity beneficiary dies first, is eligible for
restoration of the normal single life annuity if the designated optional annuity beneficiary
dies first, without further actuarial reduction of the person's annuity. A former member
or disabilitant who selected an optional joint and survivor annuity, but whose designated
optional annuity beneficiary died before July 1, 1989, shall receive a normal single life
annuity after that date, but shall not receive retroactive payments for periods before that
datedeleted text end new text begin The annuity adjustment specified in paragraph (a) also applies to joint and survivor
annuity options elected prior to July 1, 1989. The annuity adjustment under this paragraph
occurs on July 1, 1989, or on the first day of the first month following the death of the
designated optional annuity beneficiary, whichever is later. This paragraph should not be
interpreted as authorizing retroactive paymentsnew text end .

deleted text begin (c) A former member or disabilitant who took a further actuarial reduction to elect
an optional joint and survivor annuity that provides that the normal annuity is payable to
the former member or disabilitant if the designated optional beneficiary died before July
1, 1989, shall have their annuity increased as of July 1, 1989, to the amount the person
would have received if, at the time of retirement or disability, the person had selected only
optional survivor coverage that would not have provided for restoration of the normal
annuity upon the death of the designated optional annuity beneficiary. Any annuity or
benefit increase under this paragraph is effective only for payments made after June 30,
1989, and is not retroactive for payments made before July 1, 1989.
deleted text end

Sec. 5.

Minnesota Statutes 2004, section 353.01, subdivision 2a, is amended to read:

Subd. 2a.

Included employees.

(a) Public employees whose salary from one
governmental subdivision exceeds $425 in any month shall participate as members of the
association. If the salary is less than $425 in a subsequent month, the employee retains
membership eligibility. Eligible public employees shall participate as members of the
association with retirement coverage by the public employees retirement plan or the public
employees police and fire retirement plan under this chapter, or the local government
correctional employees retirement plan under chapter 353E, whichever applies, as a
condition of their employment on the first day of employment unless they:

(1) are specifically excluded under subdivision 2b;

(2) do not exercise their option to elect retirement coverage in the association as
provided in subdivision 2d, paragraph (a); or

(3) are employees of the governmental subdivisions listed in subdivision 2d,
paragraph (b), where the governmental subdivision has not elected to participate as a
governmental subdivision covered by the association.

(b) A public employee who was a member of the association on June 30, 2002,
based on employment that qualified for membership coverage by the public employees
retirement plan or the public employees police and fire plan under this chapter, or the local
government correctional employees retirement plan under chapter 353E as of June 30,
2002, retains that membership until the employee terminates public employment under
subdivision 11a or terminates membership under subdivision 11b.

new text begin (c) Public employees under paragraph (a) includes physicians under section
353D.01, subdivision 2, who do not elect public employees defined contribution plan
coverage under section 353D.02, subdivision 2.
new text end

Sec. 6.

Minnesota Statutes 2005 Supplement, section 353.01, subdivision 2d, is
amended to read:

Subd. 2d.

Optional membership.

(a) Membership in the association is optional
by action of the individual employee for the following public employees who meet the
conditions set forth in subdivision 2a:

(1) members of the coordinated plan who are also employees of labor organizations
as defined in section 353.017, subdivision 1, for their employment by the labor
organization only if they elect to have membership under section 353.017, subdivision 2;

(2) persons who are elected or persons who are appointed to elected positions other
than local governing body elected positions who elect to participate by filing a written
election for membership;

(3) members of the association who are appointed by the governor to be a state
department head and who elect not to be covered by the general state employees retirement
plan of the Minnesota State Retirement System under section 352.021;

(4) city managers as defined in section 353.028, subdivision 1, who do not elect to be
excluded from membership in the association under section 353.028, subdivision 2; and

(5) employees of the Port Authority of the city of St. Paul deleted text begin who were at least age 45deleted text end
on January 1, 2003, new text begin who were at least age 45 on that date, new text end and who elect to participate by
filing a written election for membership.

(b) Membership in the association is optional by action of the governmental
subdivision for the employees of the following governmental subdivisions under the
conditions specified:

(1) the Minnesota Association of Townships if the board of the association, at its
option, certifies to the executive director that its employees are to be included for purposes
of retirement coverage, in which case the status of the association as a participating
employer is permanent;

(2) a county historical society if the county in which the historical society is located,
at its option, certifies to the executive director that the employees of the historical society
are to be county employees for purposes of retirement coverage under this chapter. The
status as a county employee must be accorded to all similarly situated county historical
society employees and, once established, must continue as long as a person is an employee
of the county historical society; and

(3) Hennepin Healthcare System, Inc., a public corporation, with respect to
employees other than paramedics, emergency medical technicians, and protection officers,
if the corporate board establishes alternative retirement plans for certain classes of
employees of the corporation and certifies the employees to be excluded from future
retirement coverage.

(c) For employees who are covered by paragraph (a), clause (1), (2), or (3), or
covered by paragraph (b), clause (1) or (2), if the necessary membership election is
not made, the employee is excluded from retirement coverage under this chapter. For
employees who are covered by paragraph (a), clause (4), if the necessary election is not
made, the employee must become a member and have retirement coverage under this
chapter. For employees specified in paragraph (b), clause (3), membership continues until
the exclusion option is exercised for the designated class of employee. The option to
become a member, once exercised under this subdivision, may not be withdrawn until
termination of public service as defined under subdivision 11a.

Sec. 7.

Minnesota Statutes 2004, section 353.01, subdivision 11a, is amended to read:

Subd. 11a.

Termination of public service.

(a) "Termination of public service"
occurs when a member resigns or is dismissed from public service by the employing
governmental subdivision deleted text begin or when a position ends and the member who held the position
is not considered by the governmental subdivision to be on a temporary layoff,deleted text end and
the employee does not, within 30 days of the date the employment relationship ended,
return to an employment position in the same governmental subdivisionnew text begin or when the
employer-employee relationship is severed due to the expiration of a layoff under
subdivision 12 or 12cnew text end .

(b) The termination of public service must be recorded in the association records
upon receipt of an appropriate notice from the governmental subdivision.

Sec. 8.

Minnesota Statutes 2004, section 353.01, subdivision 11b, is amended to read:

Subd. 11b.

Termination of membership.

(a) "Termination of membership" means
the conclusion of membership in the association new text begin for a person who has not terminated
public service under subdivision 11a new text end and occurs:

(1) deleted text begin upon termination of public service under subdivision 11a;
deleted text end

deleted text begin (2) when a member does not return to work within 30 days of the expiration of
an authorized temporary layoff under subdivision 12 or an authorized leave of absence
under subdivision 31 as evidenced by the appropriate record filed by the governmental
subdivision; or
deleted text end

deleted text begin (3)deleted text end when a person files a written election new text begin with the association new text end to discontinue
employee deductions under section 353.27, subdivision 7, paragraph (a), clause (1)new text begin ;
new text end

new text begin (2) when a city manager files a written election with the association to discontinue
employee deductions under section 353.028, subdivision 2; or
new text end

new text begin (3) when a member transfers to a temporary position and becomes excluded from
membership under subdivision 2b, clause (4)new text end .

(b) The termination of membership new text begin under clause (3) new text end must be reported to the
association by the governmental subdivision.

deleted text begin (c) If the employee subsequently returns to a position in the same governmental
subdivision, the employee shall not again be required to earn a salary in excess of $425 per
month to qualify for membership, unless the employee has taken a refund of accumulated
employee deduction plus interest under section deleted text begin 353.34, subdivision 1deleted text end .
deleted text end

Sec. 9.

Minnesota Statutes 2004, section 353.01, subdivision 12, is amended to read:

Subd. 12.

Authorized temporary new text begin or seasonal new text end layoff.

"Authorized temporary
new text begin or seasonal new text end layoff," including seasonal leave of absence, means a suspension of public
service new text begin for a limited period during a year new text end authorized by the employing governmental
subdivision for a deleted text begin period not exceeding three months in any calendar year, as evidenced by
appropriate record of the employer and promptly transmitted to the associationdeleted text end new text begin member
who is expected to return to the same position at the end of the layoff period and for which
there has been no termination of public service under subdivision 11anew text end .

Sec. 10.

Minnesota Statutes 2004, section 353.01, is amended by adding a subdivision
to read:

new text begin Subd. 12c. new text end

new text begin Indefinite layoff. new text end

new text begin "Indefinite layoff" occurs when a member is placed on
a layoff that is not a temporary or seasonal layoff under subdivision 12, for which no date
has been specified by the employing governmental subdivision for the employee's return
to work, and there has been no termination of public service under subdivision 11a.
new text end

Sec. 11.

Minnesota Statutes 2004, section 353.01, subdivision 16, is amended to read:

Subd. 16.

Allowable service; limits and computation.

(a) "Allowable service"
means:

(1) service during years of actual membership in the course of which employee
contributions were made, periods covered by payments in lieu of salary deductions under
section 353.35;

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

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

(4) a period of authorized personal, parental, or medical leave of absence without
pay, including a leave of absence covered under the federal Family Medical Leave Act,
that does not exceed one year, and during or for which a member obtained service credit
for each month in the leave period by payments to the fund made in place of salary
deductions. The payments must be made in an amount or amounts based on the member's
average salary on which deductions were paid for the last six months of public service, or
for that portion of the last six months while the member was in public service, to apply to
the period in either case that immediately precedes the commencement of the leave of
absence. If the employee elects to pay the employee contributions for the period of any
authorized personal, parental, or medical leave of absence without pay, or for any portion
of the leave, the employee shall also, as a condition to the exercise of the election, pay
to the fund an amount equivalent to the required employer and the additional employer
contributions, if any, for the employee. The payment must be made within one year from
the expiration of the leave of absence or within 20 days after termination of public service
under subdivision 11a, whichever is earlier. The employer, by appropriate action of its
governing body which is made a part of its official records and which is adopted before the
date of the first payment of the employee contribution, may certify to the association in
writing its commitment to pay the employer and additional employer contributions from
the proceeds of a tax levy made under section 353.28. Payments under this paragraph must
include interest at an annual rate of 8.5 percent compounded annually from the date of the
termination of the leave of absence to the date payment is made. An employee shall return
to public service and render a minimum of three months of allowable service in order to
be eligible to pay employee and employer contributions for a subsequent authorized leave
of absence without pay. Upon payment, the employee must be granted allowable service
credit for the purchased period;

(5) a periodic, repetitive leave that is offered to all employees of a governmental
subdivision. The leave program may not exceed 208 hours per annual normal work
cycle as certified to the association by the employer. A participating member obtains
service credit by making employee contributions in an amount or amounts based on the
member's average salary that would have been paid if the leave had not been taken. The
employer shall pay the employer and additional employer contributions on behalf of the
participating member. The employee and the employer are responsible to pay interest on
their respective shares at the rate of 8.5 percent a year, compounded annually, from the
end of the normal cycle until full payment is made. An employer shall also make the
employer and additional employer contributions, plus 8.5 percent interest, compounded
annually, on behalf of an employee who makes employee contributions but terminates
public service. The employee contributions must be made within one year after the end of
the annual normal working cycle or within 20 days after termination of public service,
whichever is sooner. The association shall prescribe the manner and forms to be used by a
governmental subdivision in administering a periodic, repetitive leave. Upon payment, the
member must be granted allowable service credit for the purchased period;

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

(7) a period during which a member is absent from employment by a governmental
subdivision by reason of service in the uniformed services, as defined in United States
Code, title 38, section 4303(13), if the member returns to public service upon discharge
from service in the uniformed service within the time frames required under United
States Code, title 38, section 4312(e), provided that the member did not separate from
uniformed service with a dishonorable or bad conduct discharge or under other than
honorable conditions. The service is credited if the member pays into the fund equivalent
employee contributions based upon the contribution rate or rates in effect at the time
that the uniformed service was performed multiplied by the full and fractional years
being purchased and applied to the annual salary rate. The annual salary rate is the
average annual salary during the purchase period that the member would have received
if the member had continued to be employed in covered employment rather than to
provide uniformed service, or, if the determination of that rate is not reasonably certain,
the annual salary rate is the member's average salary rate during the 12-month period of
covered employment rendered immediately preceding the period of the uniformed service.
Payment of the member equivalent contributions must be made during a period which
begins with the date on which the individual returns to public employment and that is three
times the length of the military leave period, or within five years of the date of discharge
from the military service, whichever is less. If the determined payment period is less than
one year, the contributions required under this clause to receive service credit may be
made within one year of the discharge date. Payment may not be accepted following 20
days after termination of public service under subdivision 11a. If the member equivalent
contributions provided for in this clause are not paid in full, the member's allowable
service credit must be prorated by multiplying the full and fractional number of years of
uniformed service eligible for purchase by the ratio obtained by dividing the total member
contributions received by the total member contributions otherwise required under this
clause. The equivalent employer contribution, and, if applicable, the equivalent additional
employer contribution must be paid by the governmental subdivision employing the
member if the member makes the equivalent employee contributions. The employer
payments must be made from funds available to the employing unit, using the employer
and additional employer contribution rate or rates in effect at the time that the uniformed
service was performed, applied to the same annual salary rate or rates used to compute the
equivalent member contribution. The governmental subdivision involved may appropriate
money for those payments. The amount of service credit obtainable under this section may
not exceed five years unless a longer purchase period is required under United States Code,
title 38, section 4312. The employing unit shall pay interest on all equivalent member and
employer contribution amounts payable under this clause. Interest must be computed at
a rate of 8.5 percent compounded annually from the end of each fiscal year of the leave
or the break in service to the end of the month in which the payment is received. Upon
payment, the employee must be granted allowable service credit for the purchased period.

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

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

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

(e) MS 2002 (Expired)

Sec. 12.

Minnesota Statutes 2004, section 353.03, subdivision 1, is amended to read:

Subdivision 1.

Management; composition; election.

new text begin (a) new text end The management of the
public employees retirement fund is vested in an 11-member board of trustees consisting
of ten members and the state auditordeleted text begin whodeleted text end new text begin . The state auditornew text end may designate a deputy
auditor with expertise in pension matters as the auditor's representative on the board. The
governor shall appoint five trustees to four-year terms, one of whom shall be designated to
represent school boards, one to represent cities, one to represent counties, one who is a
retired annuitant, and one who is a public member knowledgeable in pension matters. The
membership of the association, including recipients of retirement annuities and disability
and survivor benefits, shall elect five trusteesnew text begin for terms of four yearsnew text end , one of whom must
be a member of the police and fire fund and one of whom must be a former member
who met the definition of public employee under section 353.01, subdivisions 2 and
2a, for at least five years prior to terminating membership or a member who receives a
disability benefitdeleted text begin , for terms of four yearsdeleted text end . new text begin Terms expire on January 31 of the fourth year,
and positions are vacant until newly elected members are seated. new text end Except as provided in
this subdivision, trustees elected by the membership of the association must be public
employees and members of the association.

new text begin (b) new text end For seven days beginning October 1 of each year preceding a year in which
an election is held, the association shall accept at its office filings in person or by mail
of candidates for the board of trustees. A candidate shall submit at the time of filing a
nominating petition signed by 25 or more members of the deleted text begin funddeleted text end new text begin associationnew text end . No name may
be withdrawn from nomination by the nominee after October 15. At the request of a
candidate for an elected position on the board of trustees, the board shall mail a statement
of up to 300 words prepared by the candidate to all persons eligible to vote in the election
of the candidate. The board may adopt policiesnew text begin , subject to review and approval by the
secretary of state under paragraph (e),new text end to govern new text begin the new text end form and length of these statements,
timing of mailings, and deadlines for submitting materials to be mailed. deleted text begin These policies
must be approved by the secretary of state.deleted text end The secretary of state shall resolve disputes
between the board and a candidate concerning application of these policies to a particular
statement.

new text begin (c) By January 10 of each year in which elections are to be held, the board shall
distribute by mail to the members ballots listing the candidates. No member may vote for
more than one candidate for each board position to be filled. A ballot indicating a vote for
more than one person for any position is void. No special marking may be used on the
ballot to indicate incumbents. Ballots mailed to the association must be postmarked no
later than January 31. The ballot envelopes must be so designated and the ballots counted
in a manner that ensures that each vote is secret.
new text end

new text begin (d) new text end A candidate whodeleted text begin :deleted text end

deleted text begin (1)deleted text end receives contributions or makes expenditures in excess of $100deleted text begin ;deleted text end new text begin ,new text end or

deleted text begin (2)deleted text end has given implicit or explicit consent for any other person to receive contributions
or make expenditures in excess of $100 for the purpose of bringing about the candidate's
election, shall file a report with the campaign finance and public disclosure board
disclosing the source and amount of all contributions to the candidate's campaign. The
campaign finance and public disclosure board shall prescribe forms governing these
disclosures. Expenditures and contributions have the meaning defined in section 10A.01.
These terms do not include the mailing made by the association board on behalf of the
candidate. A candidate shall file a report within 30 days from the day that the results of
the election are announced. The Campaign Finance and Public Disclosure Board shall
maintain these reports and make them available for public inspection in the same manner
as the board maintains and makes available other reports filed with it. deleted text begin By January 10
of each year in which elections are to be held the board shall distribute by mail to the
members ballots listing the candidates. No member may vote for more than one candidate
for each board position to be filled. A ballot indicating a vote for more than one person for
any position is void. No special marking may be used on the ballot to indicate incumbents.
The last day for mailing ballots to the fund is January 31. Terms expire on January 31 of
the fourth year, and positions are vacant until newly elected members are qualified. The
ballot envelopes must be so designed and the ballots counted in a manner that ensures
that each vote is secret.deleted text end

new text begin (e) new text end The secretary of state shall deleted text begin supervisedeleted text end new text begin review and approve the procedures defined
by the board of trustees for conductingnew text end the electionsnew text begin specified in this subdivision, including
board policies adopted under paragraph (b)new text end .

new text begin (f) new text end The board of trustees and the executive director shall undertake their activities
consistent with chapter 356A.

Sec. 13.

Minnesota Statutes 2004, section 353.03, subdivision 1a, is amended to read:

Subd. 1a.

Vacancy, how filled.

Any vacancy on the board caused by death,
resignation, or removal of any trustee, or occurring because an elected trustee ceases to be
a public employee and an active member of the association, must be filled by the board
for trustees elected by members, and by the governor for other trustees, for the unexpired
portion of the term in which the vacancy occurs.new text begin The board shall adopt policies and
procedures governing how the vacancy of an elected trustee is to be filled.
new text end

Sec. 14.

Minnesota Statutes 2004, section 353.03, is amended by adding a subdivision
to read:

new text begin Subd. 2b. new text end

new text begin Board legal authority. new text end

new text begin The board is authorized to take legal action when
necessary to effectively administer the various plans administered by the association,
consistent with applicable articles of incorporation, bylaws, law, and rules, as applicable,
and including but not limited to the recapture of overpaid annuities, benefits, or refunds,
and the correction of omitted or deficient deductions.
new text end

Sec. 15.

Minnesota Statutes 2004, section 353.27, subdivision 7, is amended to read:

Subd. 7.

Adjustment for erroneous receipts or disbursements.

(a) Except
as provided in paragraph (b), erroneous employee deductions and erroneous employer
contributions and additional employer contributions for a person, who otherwise does not
qualify for membership under this chapter, are considered:

(1) valid if the initial erroneous deduction began before January 1, 1990. Upon
determination of the error by the association, the person may continue membership in the
association while employed in the same position for which erroneous deductions were
taken, or file a written election to terminate membership and apply for a refund new text begin upon
termination of public service new text end or defer an annuity under section 353.34; or

(2) invalid, if the initial erroneous employee deduction began on or after January
1, 1990. Upon determination of the error, the association shall deleted text begin require the employer
to discontinue erroneous employee deductions and erroneous employer contributions
and additional employer contributions. Upon discontinuance, the association shall
deleted text end refund all erroneous employee deductions deleted text begin to the person, with interest, under section
353.34, subdivision 2,deleted text end and all erroneous employer contributions deleted text begin and additional employer
contributions to the employerdeleted text end new text begin as specified in paragraph (d)new text end . No person may claim a right
to continued or past membership in the association based on erroneous deductions which
began on or after January 1, 1990.

(b) Erroneous deductions taken from the salary of a person who did not qualify
for membership in the association by virtue of concurrent employment before July 1,
1978, which required contributions to another retirement fund or relief association
established for the benefit of officers and employees of a governmental subdivision, are
invalid. Upon discovery of the error, the association shall remove all new text begin invalid new text end service and
new text begin upon termination of public service, the association shall new text end refund all erroneous employee
deductions to the person, with interest under section 353.34, subdivision 2, and all
erroneous employer contributions to the employer. This paragraph has both retroactive
and prospective application.

(c) Employer contributions and employee deductions taken in error from amounts
which are not salary under section 353.01, subdivision 10, are invalid upon discovery by
the association and deleted text begin maydeleted text end new text begin mustnew text end be refunded deleted text begin at any timedeleted text end new text begin as specified in paragraph (d)new text end .

(d) new text begin Upon discovery of the receipt of erroneous deductions and contributions under
paragraph (a), clause (2), or paragraph (c), the association must require the employer to
discontinue the erroneous employee deductions and erroneous employer contributions.
Upon discontinuation, the association must refund the invalid employee deductions to the
person without interest and invalid employer contributions to the employer or provide a
credit against future contributions payable by the employer for the amount of all erroneous
deductions and contributions. In the event a retirement annuity or disability benefit had
been computed using invalid service or salary, the association must adjust the annuity or
benefit and recover the overpayment under subdivision 7b.
new text end

new text begin (e) new text end In the event a salary warrant or check from which a deduction for the retirement
fund was taken has been canceled or the amount of the warrant or check returned to the
funds of the department making the payment, a refund of the sum deducted, or a portion of
it that is required to adjust the deductions, must be made to the department or institution.

new text begin (f) Any refund to a member under this subdivision that would cause the plan to fail
to be a qualified plan under section 401(a) of the Internal Revenue Code, as amended, may
not be refunded and instead must be credited against future contributions payable by the
employer. The employer receiving the credit is responsible for refunding to the applicable
employee any amount that had been erroneously deducted from the person's salary.
new text end

Sec. 16.

Minnesota Statutes 2004, section 353.27, subdivision 7a, is amended to read:

Subd. 7a.

Deductions or contributions transmitted by error.

(a) If employee
deductions and employer contributions were erroneously transmitted to the association,
but should have been transmitted to another Minnesota public pension plan, the
association shall transfer the erroneous employee deductions and employer contributions
to the appropriate retirement fund new text begin or individual account, as applicable, new text end without interest.
The time limitations in subdivisions 7 and 12 do not apply.

(b) For purposes of this subdivision, a Minnesota public pension plan means a
plan specified in section 356.30, subdivision 3, or the deleted text begin plandeleted text end new text begin plansnew text end governed by deleted text begin chapterdeleted text end new text begin
chapters 353D andnew text end 354B.

new text begin (c) A potential transfer under paragraph (a) that would cause the plan to fail to be a
qualified plan under section 401(a) of the Internal Revenue Code, as amended, must not be
made by the executive director of the association. Within 30 days after being notified by
the Public Employees Retirement Association of an unmade potential transfer under this
paragraph, the employer of the affected person must transmit an amount representing the
applicable salary deductions and employer contributions, without interest, to the retirement
fund of the appropriate Minnesota public pension plan, or to the individual account if the
proper coverage is by a defined contribution plan. The association must provide a credit
for the amount of the erroneous salary deductions and employer contributions against
future contributions from the employer.
new text end

Sec. 17.

Minnesota Statutes 2004, section 353.27, subdivision 7b, is amended to read:

Subd. 7b.

Overpayments to members.

In the event of an overpayment to a
member, new text begin retiree, beneficiary, or other person, new text end the executive director shall recover the
overpayment by suspending or reducing the payment of a retirement annuity, refund,
disability benefit, survivor benefit, or optional annuity under this chapter until all
outstanding money has been recovered.

Sec. 18.

Minnesota Statutes 2005 Supplement, section 353.28, subdivision 6, is
amended to read:

Subd. 6.

Collection of unpaid amounts.

(a) If a governmental subdivision which
receives the direct proceeds of property taxation fails to pay an amount due under chapter
353, 353A, 353B, 353C, or 353D, the executive director shall certify the amount to the
governmental subdivision for payment. If the governmental subdivision fails to remit the
sum so due in a timely fashion, the executive director shall certify the amount to the
applicable county auditor for collection. The county auditor shall collect the amount
out of the revenue of the governmental subdivision, or shall add the amount to the levy
of the governmental subdivision and make payment directly to the association. This
tax must be levied, collected, and apportioned in the manner that other taxes are levied,
collected, and apportioned.

(b) If a governmental subdivision which is not funded directly from the proceeds
of property taxation fails to pay an amount due under this chapter, the executive director
shall certify the amount to the governmental subdivision for payment. If the governmental
subdivision fails to pay the amount for a period of 60 days after certification, the executive
director shall certify the amount to the commissioner of finance, who shall deduct the
amount from any subsequent state-aid payment or state appropriation amount applicable
to the governmental subdivisionnew text begin and make payment directly to the associationnew text end .

Sec. 19.

Minnesota Statutes 2004, section 353.29, subdivision 8, is amended to read:

Subd. 8.

Annuities; payment; evidence of receipt.

Payment of any annuity or
benefit for a given month shall be mailed by the association to the annuitant, recipient
of a disability benefit, or survivor, new text begin or automatically deposited under section 356.401,
subdivision 2, new text end during the first week of that month. deleted text begin Evidence of receipt of warrants issued
by the association in payment of an annuity or benefit shall be submitted by the payee
thereof to the association periodically at times specified by the board of trustees, together
with a written declaration that the annuitant or recipient of a disability benefit has or
has not returned to public service; that the surviving dependent spouse has or has not
remarried; and shall be furnished on forms provided by the executive director thereof,
before the association shall pay to the disability recipient or survivor for the next ensuing
month, the benefit to which the person otherwise may be entitled. In lieu of the evidence
of receipt of warrants for recipients of an annuity or a benefit,deleted text end The board may contract
for professional services to identify deceased annuitants and benefit recipients through a
review of nationally maintained death records.

Sec. 20.

Minnesota Statutes 2004, section 353.30, subdivision 3a, is amended to read:

Subd. 3a.

Bounce-back annuity.

(a) If a former member or disabilitant selects a
joint and survivor annuity option under subdivision 3new text begin after June 30, 1989new text end , the former
member or disabilitant must receive a normal single life annuity if the designated optional
annuity beneficiary dies before the former member or disabilitant. Under this option, no
reduction may be made in the person's annuity to provide for restoration of the normal
single life annuity in the event of the death of the designated optional annuity beneficiary.

(b) deleted text begin A former member or disabilitant who selected an optional joint and survivor
annuity before July 1, 1989, but did not choose an option that provides that the normal
single life annuity is payable to the former member or the disabilitant if the designated
optional annuity beneficiary dies first, is eligible for restoration of the normal single life
annuity if the designated optional annuity beneficiary dies first, without further actuarial
reduction of the person's annuity. A former member or disabilitant who selected an
optional joint and survivor annuity, but whose designated optional annuity beneficiary died
before July 1, 1989, shall receive a normal single life annuity after that date, but shall not
receive retroactive payments for periods before that datedeleted text end new text begin The annuity adjustment specified
in paragraph (a) also applies to joint and survivor annuity options under subdivision
3 elected prior to July 1, 1989. The annuity adjustment under this paragraph occurs on
July 1, 1989, or on the first day of the first month following the death of the designated
optional annuity beneficiary, whichever is later. This paragraph should not be interpreted
as authorizing retroactive paymentsnew text end .

deleted text begin (c) A former member or disabilitant who took a further actuarial reduction to elect
an optional joint and survivor annuity that provides that the normal annuity is payable to
the former member or disabilitant if the designated optional beneficiary dies first but has
not died before July 1, 1989, shall have their annuity increased as of July 1, 1989, to the
amount the person would have received if, at the time of retirement or disability, the person
had selected only optional survivor coverage that would not have provided for restoration
of the normal annuity upon the death of the designated optional annuity beneficiary. Any
annuity or benefit increase under this paragraph is effective only for payments made after
June 30, 1989, and is not retroactive for payments made before July 1, 1989.
deleted text end

Sec. 21.

Minnesota Statutes 2004, section 353.30, subdivision 3b, is amended to read:

Subd. 3b.

Bounce-back annuity.

(a) The board of trustees must provide a joint
and survivor annuity option to members of the police and fire fund. deleted text begin Under this option, adeleted text end
new text begin If a joint and survivor annuity is elected on or after July 1, 1989, thenew text end former member or
disabilitant must receive a normal single life annuity if the designated optional annuity
beneficiary dies before the former member or disabilitant. Under this option, no reduction
may be made in the person's annuity to provide for restoration of the normal single life
annuity in the event of the death of the designated optional annuity beneficiary.

(b) deleted text begin A former member or disabilitant of the police and fire fund who selected an
optional joint and survivor annuity before July 1, 1989, but did not choose an option
that provides that the normal single life annuity is payable to the former member or
the disabilitant if the designated optional annuity beneficiary dies first, is eligible for
restoration of the normal single life annuity if the designated optional annuity beneficiary
dies first, without further actuarial reduction of the person's annuity. A former member
or disabilitant who selected an optional joint and survivor annuity, but whose designated
optional annuity beneficiary died before July 1, 1989, shall receive a normal single life
annuity after that date, but shall not receive retroactive payments for periods before that
datedeleted text end new text begin The annuity adjustment specified in paragraph (a) also applies to joint and survivor
annuity options under subdivision 3 elected prior to July 1, 1989. The annuity adjustment
under this paragraph occurs on July 1, 1989, or on the first day of the first month following
the death of the designated optional annuity beneficiary, whichever is later. This paragraph
should not be interpreted as authorizing retroactive paymentsnew text end .

deleted text begin (c) A former member or disabilitant who took a further actuarial reduction to elect
an optional joint and survivor annuity that provides that the normal annuity is payable to
the former member or disabilitant if the designated optional beneficiary dies first but has
not died before July 1, 1989, shall have their annuity increased as of July 1, 1989, to the
amount the person would have received if, at the time of retirement or disability, the person
had selected only optional survivor coverage that would not have provided for restoration
of the normal annuity upon the death of the designated optional annuity beneficiary. Any
annuity or benefit increase under this paragraph is effective only for payments made after
June 30, 1989, and is not retroactive for payments made before July 1, 1989.
deleted text end

Sec. 22.

Minnesota Statutes 2004, section 353.32, subdivision 1a, is amended to read:

Subd. 1a.

Surviving spouse optional annuity.

(a) If a member or former member
who has credit for not less than three years of allowable service and dies before the
annuity or disability benefit begins to accrue under section 353.29, subdivision 7, or
353.33, subdivision 2, notwithstanding any designation of beneficiary to the contrary, the
surviving spouse may elect to receive, instead of a refund with interest under subdivision
1, or surviving spouse benefits otherwise payable under section 353.31, an annuity equal
to the 100 percent joint and survivor annuity that the member could have qualified for
had the member terminated service on the date of death.

(b) If the member was under age 55 and has credit for at least 30 years of allowable
service on the date of death, the surviving spouse may elect to receive a 100 percent joint
and survivor annuity based on the age of the member and surviving spouse on the date
of death. The annuity is payable using the full early retirement reduction under section
353.30, subdivisions 1b and 1c, to age 55 and one-half of the early retirement reduction
from age 55 to the age payment begins.

(c) If the member was under age 55 and has credit for at least three years of
allowable service on the date of death but did not qualify for retirement, the surviving
spouse may elect to receive the 100 percent joint and survivor annuity based on the age of
the member and surviving spouse at the time of death. The annuity is payable using the
full early retirement reduction under section 353.30, subdivision 1, 1b, 1c, or 5, to age 55
and one-half of the early retirement reduction from age 55 to the age payment begins.

new text begin (d) new text end Notwithstanding the definition of surviving spouse in section 353.01, subdivision
20, a former spouse of the member, if any, is entitled to a portion of the monthly surviving
spouse optional annuity if stipulated under the terms of a marriage dissolution decree filed
with the association. If there is no surviving spouse or child or children, a former spouse
may be entitled to a lump-sum refund payment under subdivision 1, if provided for in a
marriage dissolution decree but not a monthly surviving spouse optional annuity despite
the terms of a marriage dissolution decree filed with the association.

new text begin (e) new text end The surviving spouse eligible for surviving spouse benefits under paragraph (a)
may apply for the annuity at any time after the date on which the deceased employee
would have attained the required age for retirement based on the employee's allowable
service. The surviving spouse eligible for surviving spouse benefits under paragraph (b)
or (c) may apply for an annuity any time after the member's death. The annuity must be
computed under sections 353.29, subdivisions 2 and 3; new text begin and new text end 353.30, subdivisions 1, 1a,
1b, 1c, and 5deleted text begin ; and 353.31, subdivision 3deleted text end .

new text begin (f) new text end Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred
annuity or surviving spouse benefit payable under this subdivision. No payment may
accrue beyond the end of the month in which entitlement to the annuity has terminated
or upon expiration of the term certain benefit payment under subdivision 1b. An amount
equal to any excess of the accumulated contributions that were credited to the account of
the deceased employee over and above the total of the annuities paid and payable to the
surviving spouse must be paid to the deleted text begin deceased member's last designated beneficiary or, if
none, as specified under subdivision 1deleted text end new text begin surviving spouse's estatenew text end .

new text begin (g) new text end A member may specify in writing that this subdivision does not apply and that
payment may be made only to the designated beneficiary as otherwise provided by this
chapter.new text begin The waiver of a surviving spouse annuity under this section does not make a
dependent child eligible for benefits under subdivision 1c.
new text end

Sec. 23.

Minnesota Statutes 2004, section 353.32, subdivision 1b, is amended to read:

Subd. 1b.

Survivor coverage term certain.

new text begin (a) new text end In lieu of the 100 percent optional
annuity under subdivision 1a, or a refund under subdivision 1, the surviving spouse of
a deceased member may elect to receive survivor coverage for a term certain of deleted text begin five,
deleted text end ten, 15, or 20 years, but monthly payments must not exceed 75 percent of the average
high-five monthly salary of the deceased member. The monthly term certain annuity must
be actuarially equivalent to the 100 percent optional annuity under subdivision 1a.

new text begin (b) new text end If a surviving spouse elects a term certain annuity and dies before the expiration
of the specified term certain period, the commuted value of the remaining annuity
payments must be paid in a lump sum to the survivor's estate.

Sec. 24.

Minnesota Statutes 2004, section 353.33, subdivision 1, is amended to read:

Subdivision 1.

Age, service, and salary requirements.

A coordinated member
who has at least three years of allowable service and becomes totally and permanently
disabled before normal retirement age, and a basic member who has at least three years
of allowable service and who becomes totally and permanently disabled is entitled to a
disability benefit in an amount new text begin determined new text end under subdivision 3. If the disabled person's
public service has terminated at any time, at least two of the required three years of
allowable service must have been rendered after last becoming deleted text begin adeleted text end new text begin an active new text end member. A
repayment of a refund must be made within six months after the effective date of disability
benefits under subdivision 2 or within six months after the date of the filing of the
disability application, whichever is later. No purchase of prior service or payment made
in lieu of salary deductions otherwise authorized under section 353.01, subdivision 16,
deleted text begin 353.017, subdivision 4, or 353.36, subdivision 2,deleted text end may be made after the occurrence of the
disability for which an application under this section is filed.

Sec. 25.

Minnesota Statutes 2004, section 353.33, subdivision 9, is amended to read:

Subd. 9.

Return to deleted text begin public servicedeleted text end new text begin employmentnew text end .

new text begin (a) new text end Any person receiving a
disability benefit new text begin under this section new text end who is restored to deleted text begin active public service except persons
receiving benefits as provided indeleted text end new text begin employment not covered bynew text end subdivision 7deleted text begin ,deleted text end new text begin or 7anew text end shall
have new text begin the disability benefit discontinued on the first day of the month following the return
to employment.
new text end

new text begin (b) If the person is employed by a governmental subdivision as defined under
section 353.01, subdivision 6, new text end deductions new text begin must be new text end taken for the retirement fund and upon
subsequent retirement have the retirement annuity payable based upon all allowable
service including that upon which the disability benefits were based.

new text begin (c) If the employment is not through public service covered under this chapter, the
account may be placed on a deferred status and the subsequent retirement annuity must
be calculated as provided in section 353.34, subdivision 3, if the person meets the length
of allowable service requirement stated in that subdivision; or the person may request a
refund of any remaining employee deductions. The refund shall be in an amount equal
to the accumulated employee deductions plus six percent interest compounded annually
less the sum of the disability benefits paid to the member.
new text end

Sec. 26.

new text begin [353.335] DISABILITANT EARNINGS REPORTS.
new text end

new text begin Disability benefit recipients must report all earnings from reemployment and from
income from workers' compensation to the association annually by May 15 in a format
prescribed by the executive director. If the form is not submitted by May 15, benefits will
be suspended effective June 1. Upon receipt of the form, if the disability benefit recipient
is deemed to be eligible for continued payment, benefits will be reinstated retroactive
to June 1.
new text end

Sec. 27.

Minnesota Statutes 2004, section 353.34, subdivision 1, is amended to read:

Subdivision 1.

Refund or deferred annuity.

(a) A former member is entitled
to a refund of accumulated employee deductions under subdivision 2, or to a deferred
annuity under subdivision 3. Application for a refund may not be made prior to the date
of termination of public servicedeleted text begin or the termination of membership, whichever is soonerdeleted text end .
Except as specified in paragraph (b), a refund must be paid within 120 days following
receipt of the application unless the applicant has again become a public employee
required to be covered by the association.

(b) If an individual was deleted text begin granted an authorized temporarydeleted text end new text begin placed onnew text end layoffnew text begin under
section 353.01, subdivision 12 or 12cnew text end , a refund is not payable before termination of
deleted text begin membershipdeleted text end new text begin service new text end under section 353.01, subdivision deleted text begin 11b, clause (3)deleted text end new text begin 11anew text end .

(c) An individual who terminates public service covered by the Public Employees
Retirement Association general plan, the Public Employees Retirement Association police
and fire plan, or the public employees local government corrections service retirement
plan, and who new text begin is employed by a different employer and new text end becomes an active member
covered by one of the other two plans, may receive a refund of employee contributions
plus six percent interest compounded annually from the plan in which the member
terminated service.

Sec. 28.

Minnesota Statutes 2004, section 353.656, subdivision 4, is amended to read:

Subd. 4.

Limitation on disability benefit payments.

(a) No member is entitled to
receive a disability benefit payment when there remains to the member's credit unused
annual leave or sick leave or under any other circumstances when, during the period of
disability, there has been no impairment of the person's salary as a police officerdeleted text begin ordeleted text end new text begin ,new text end a
firefighter, new text begin or a paramedic as defined in section 353.64, subdivision 10, new text end whichever applies.

(b) If a disabled member resumes a gainful occupation with earningsdeleted text begin less thandeleted text end new text begin ,
that when added to the normal disability benefit, and workers' compensation benefit
if applicable, exceednew text end the disabilitant reemployment earnings limit, the amount of the
disability benefit must be reduced as provided in this paragraph. The disabilitant
reemployment earnings limit is the greater of:

(1) the salary earned at the date of disability; or

(2) 125 percent of the new text begin base new text end salary currently paid by the employing governmental
subdivision for similar positions.

The disability benefit must be reduced by one dollar for each three dollars by which
the total amount of the current disability benefit, any workers' compensation benefitsnew text begin if
applicablenew text end , and actual earnings exceed the greater disabilitant reemployment earnings
limit. In no event may the disability benefit as adjusted under this subdivision exceed
the disability benefit originally allowed.

Sec. 29.

Minnesota Statutes 2004, section 353D.01, subdivision 2, is amended to read:

Subd. 2.

Eligibility.

(a) Eligibility to participate in the defined contribution plan
is available to:

(1) elected local government officials of a governmental subdivision who elect to
participate in the plan under section 353D.02, subdivision 1, and who, for the elected
service rendered to a governmental subdivision, are not members of the Public Employees
Retirement Association within the meaning of section 353.01, subdivision 7;

(2) physicians who, if they did not elect to participate in the plan under section
353D.02, subdivision 2, would meet the definition of member under section 353.01,
subdivision 7;

(3) basic and advanced life support emergency medical service personnel employed
by deleted text begin or providing services fordeleted text end any public ambulance service deleted text begin or privately operated ambulance
service that receives an operating subsidy from a governmental entitydeleted text end that elects to
participate under section 353D.02, subdivision 3;

(4) members of a municipal rescue squad associated with Litchfield in Meeker
County, or of a county rescue squad associated with Kandiyohi County, if an independent
nonprofit rescue squad corporation, incorporated under chapter 317A, performing
emergency management services, and if not affiliated with a fire department or ambulance
service and if its members are not eligible for membership in that fire department's or
ambulance service's relief association or comparable pension plan; and

(5) employees of the Port Authority of the city of St. Paul who elect to participate in
the plan under section 353D.02, subdivision 5, and who are not members of the Public
Employees Retirement Association under section 353.01, subdivision 7.

(b) For purposes of this chapter, an elected local government official includes
a person appointed to fill a vacancy in an elective office. Service as an elected local
government official only includes service for the governmental subdivision for which the
official was elected by the public-at-large. Service as an elected local government official
ceases and eligibility to participate terminates when the person ceases to be an elected
official. An elected local government official does not include an elected county sheriff.

(c) Individuals otherwise eligible to participate in the plan under this subdivision
who are currently covered by a public or private pension plan because of their employment
or provision of services are not eligible to participate in the public employees defined
contribution plan.

(d) A former participant is a person who has terminated eligible employment or
service and has not withdrawn the value of the person's individual account.

Sec. 30.

Minnesota Statutes 2004, section 353D.02, subdivision 3, is amended to read:

Subd. 3.

Eligible ambulance service personnel.

Each public ambulance service
deleted text begin or privately operated ambulance servicedeleted text end with eligible personnel deleted text begin that receives an operating
subsidy from a governmental entitydeleted text end may elect to participate in the plan. If a service elects
to participate, its eligible personnel may elect to participate or to decline to participate. An
individual's election must be made within 30 days of the service's election to participate
or 30 days of the date on which the individual was employed by the service or began to
provide service for it, whichever date is later. An election by a service or an individual is
revocable.

Sec. 31.

Minnesota Statutes 2004, section 353E.02, subdivision 3, is amended to read:

Subd. 3.

County correctional institution.

A county correctional institution is:

(1) a jail administered by a county;

(2) a correctional facility administered by a county; deleted text begin or
deleted text end

(3) a regional correctional facility administered by or on behalf of multiple countiesnew text begin ;
or
new text end

new text begin (4) a juvenile correctional facility administered by a county or on behalf of multiple
countiesnew text end .

Sec. 32.

Minnesota Statutes 2004, section 354.45, subdivision 1a, is amended to read:

Subd. 1a.

Bounce-back annuity.

(a) If a former member or disabilitant selects a
joint and survivor annuity option under subdivision 1new text begin after June 30, 1989new text end , the former
member or disabilitant must receive a normal single life annuity if the designated optional
annuity beneficiary dies before the former member or disabilitant. Under this option, no
reduction may be made in the person's annuity to provide for restoration of the normal
single life annuity in the event of the death of the designated optional annuity beneficiary.

(b) deleted text begin A former member or disabilitant who selected an optional joint and survivor
annuity before July 1, 1989, but did not choose an option that provides that the normal
single life annuity is payable to the former member or the disabilitant if the designated
optional annuity beneficiary dies first, is eligible for restoration of the normal single life
annuity if the designated optional annuity beneficiary dies first, without further actuarial
reduction of the person's annuity. A former member or disabilitant who selected an
optional joint and survivor annuity, but whose designated optional annuity beneficiary died
before July 1, 1989, shall receive a normal single life annuity after that date, but shall not
receive retroactive payments for periods before that datedeleted text end new text begin The annuity adjustment specified
in paragraph (a) also applies to joint and survivor annuity options under subdivision
1 elected prior to July 1, 1989. The annuity adjustment under this paragraph occurs on
July 1, 1989, or on the first day of the first month following the death of the designated
optional annuity beneficiary, whichever is later. This paragraph should not be interpreted
as authorizing retroactive paymentsnew text end .

deleted text begin (c) The restoration of the normal single life annuity under this subdivision will take
effect on the first of the month following the date of death of the designated optional
annuity beneficiary or on the first of the month following one year before the date on
which a certified copy of the death record of the designated optional annuity beneficiary is
received in the office of the Teachers Retirement Association, whichever date is later.
deleted text end

Sec. 33.

Minnesota Statutes 2004, section 354A.32, subdivision 1a, is amended to read:

Subd. 1a.

Bounce-back annuity.

(a) If a former coordinated member or disabilitant
has selected a joint and survivor annuity option under subdivision 1new text begin after June 30,
1989new text end , the former member or disabilitant must receive a normal single life annuity if the
designated optional annuity beneficiary dies before the former member or disabilitant.
Under this option, no reduction may be made in the person's annuity to provide for
restoration of the normal single life annuity in the event of the death of the designated
optional annuity beneficiary.

(b) deleted text begin A former coordinated member or disabilitant who selected an optional joint
and survivor annuity before July 1, 1989, but did not choose an option that provides
that the normal single life annuity is payable to the former member or the disabilitant if
the designated optional annuity beneficiary dies first, is eligible for restoration of the
normal single life annuity if the designated optional annuity beneficiary dies first, without
further actuarial reduction of the person's annuity. A former member or disabilitant who
selected an optional joint and survivor annuity, but whose designated optional annuity
beneficiary died before July 1, 1989, shall receive a normal single life annuity after that
date, but shall not receive retroactive payments for periods before that datedeleted text end new text begin The annuity
adjustment specified in paragraph (a) also applies to joint and survivor annuity options
elected prior to July 1, 1989. The annuity adjustment under this paragraph occurs on
July 1, 1989, or on the first day of the first month following the death of the designated
optional annuity beneficiary, whichever is later. This paragraph should not be interpreted
as authorizing retroactive paymentsnew text end .

(c) deleted text begin A former coordinated member or disabilitant who took a further actuarial
reduction to elect an optional joint and survivor annuity that provides that the normal
annuity is payable to the former member or disabilitant if the designated optional
beneficiary dies first but has not died before July 1, 1989, shall have the annuity increased
as of July 1, 1989, to the amount the person would have received if, at the time of
retirement or disability, the person had selected only optional survivor coverage that
would not have provided for restoration of the normal annuity upon the death of the
designated optional annuity beneficiary. Any annuity or benefit increase under this
paragraph is effective only for payments made after June 30, 1989, and is not retroactive
for payments made before July 1, 1989.
deleted text end

deleted text begin (d)deleted text end new text begin Unless otherwise specified in this subdivision,new text end the restoration of the normal
single life annuity under this subdivision will take effect on the first of the month
following the date of death of the designated optional annuity beneficiary or on the first of
the month following one year before the date on which a certified copy of the death record
of the designated optional annuity beneficiary is received in the office of the appropriate
teachers retirement fund association, whichever date is later.

Sec. 34.

Minnesota Statutes 2004, section 354D.05, is amended to read:

354D.05 CONTRIBUTIONS.

Subdivision 1.

Member contributions.

deleted text begin Eligible employeesdeleted text end new text begin (a) Participants in the
individual retirement account plan who are specified in section 354D.02, subdivision 2,
clause (1) or (2), and new text end who would otherwise be deleted text begin eligible to participate in thedeleted text end new text begin members of a
new text end Minnesota State Retirement System, deleted text begin thedeleted text end Public Employees Retirement Association, or deleted text begin thedeleted text end
Teachers Retirement Associationnew text begin plannew text end , deleted text begin but who participate in the individual retirement
account plan,deleted text end shall make a member contribution deleted text begin in an amount equal to the member
contribution amount required by the plan for which the individual was originally eligible
for membership. The contributiondeleted text end new text begin as specified in section 354B.23, subdivision 1.
new text end

new text begin (b) For individual retirement account plan members specified in section 354D.02,
subdivision 2, clause (3), the member contribution is the employee contribution specified
in applicable law for the Minnesota State Retirement System, Public Employees
Retirement Association, or Teachers Retirement Association plan in which the individual
would otherwise be a member.
new text end

new text begin (c) Contributions under this subdivision new text end must be made by payroll deduction each
pay period and must be in accordance with either section 403(b) or 414(h) of the Internal
Revenue Code.

Subd. 2.

Employer contributions.

new text begin (a) new text end The employer of deleted text begin eligible employeesdeleted text end new text begin an
employeenew text end described in subdivision 1 deleted text begin who are eligible to participate in either the Minnesota
State Retirement System or the Public Employees Retirement Association shalldeleted text end new text begin , paragraph
(a), must new text end make an employer contribution to the new text begin employee's individual retirement account
new text end plan deleted text begin in an amount equal to the employer contribution amount required by the plan for
which the individual was originally eligible for membershipdeleted text end new text begin account as specified in section
354B.23, subdivisions 3 and 4new text end .

new text begin (b) new text end The employer of deleted text begin eligible employeesdeleted text end new text begin an employeenew text end described in subdivision 1
deleted text begin who are eligible to participate in the Teachers Retirement Association shalldeleted text end new text begin , paragraph
(b), must new text end make an employer contribution to the new text begin employee's individual retirement account
new text end plan deleted text begin in an amountdeleted text end new text begin account new text end equal to the employer contribution new text begin including, if applicable,
any employer additional contribution new text end required by deleted text begin section 354.42, subdivision 3, and
shall make an employer contribution to thedeleted text end new text begin applicable plan law for the Minnesota State
Retirement System, Public Employees Retirement Association, ornew text end Teachers Retirement
Association in deleted text begin an amount equal todeleted text end new text begin which new text end the deleted text begin employer contribution required by section
354.42, subdivision 5deleted text end new text begin individual would otherwise be a membernew text end .

Sec. 35.

Laws 2004, chapter 267, article 8, section 41, is amended to read:

Sec. 41. REPEALER.

deleted text begin (a)deleted text end Minnesota Statutes 2002, sections 353.33, subdivision 5b; and 490.11, are
repealed on July 1, 2004.

deleted text begin (b) Sections 3 and 19 are repealed on July 1, 2006.deleted text end

Sec. 36. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2004, section 43A.34, subdivision 1, new text end new text begin is repealed.
new text end

Sec. 37. new text begin EFFECTIVE DATE.
new text end

new text begin (a) Sections 1 and 36 are effective the day following final enactment.
new text end

new text begin (b) Sections 2 to 33 and 35 are effective July 1, 2006.
new text end

new text begin (c) Section 34 is effective the first day of the first payroll period next following
final enactment.
new text end

new text begin (d) Sections 3, 4, 20, 21, 32, and 33 are not intended to increase, modify, impair,
or diminish the benefit entitlements specified in the sections of Minnesota Statutes being
amended. If the executive director of the Minnesota State Retirement System, the Public
Employees Retirement Association, the Teachers Retirement Association, or a first
class city teacher retirement fund association, whichever is applicable, determines that
any provision of those sections does increase, modify, impair, or diminish the benefit
entitlements as reflected in applicable law just prior to the effective date of this section,
the applicable executive director shall certify that determination and a recommendation
as to the required legislative correction to the chairs of the Legislative Commission on
Pensions and Retirement, the house Governmental Operations and Veterans Affairs Policy
Committee, the senate State and Local Governmental Operations Committee, and the
executive director of the Legislative Commission on Pensions and Retirement.
new text end

ARTICLE 4

PERA-P&F RETIREMENT PLAN CHANGES

Section 1.

Minnesota Statutes 2005 Supplement, section 353.656, subdivision 1,
is amended to read:

Subdivision 1.

In line of duty; computation of benefits.

new text begin (a) new text end A member of the
police and fire plan whonew text begin :
new text end

new text begin (1) has not met the requirements for a retirement annuity under section 353.651,
subdivision 1, or
new text end

new text begin (2) has met the requirements for a retirement annuity under section 353.651,
subdivision 1, but who does not have 20 years of credited service; and who new text end becomes
disabled and physically unfit to perform duties as a police officer, firefighter, or paramedic
as defined under section 353.64, subdivision 10, as a direct result of an injury, sickness, or
other disability incurred in or arising out of any act of duty, which has or is expected to
render the member physically or mentally unable to perform the duties as a police officer,
firefighter, or paramedic as defined under section 353.64, subdivision 10, for a period of at
least one year, shall receive disability benefits during the period of such disability.

new text begin (b) new text end The benefits must be in an amount equal to 60 percent of the "average salary" as
defined in section 353.01, subdivision 17a, plus an additional percent specified in section
356.315, subdivision 6, of that average salary for each year of service in excess of 20
years. If the disability under this subdivision occurs before the member has at least five
years of allowable service credit in the police and fire plan, the disability benefit must be
computed on the "average salary" from which deductions were made for contribution to
the police and fire fund.

Sec. 2.

Minnesota Statutes 2004, section 353.656, subdivision 3, is amended to read:

Subd. 3.

Nonduty disability benefit.

new text begin (a) new text end Any member of the police and fire plan
whonew text begin :
new text end

new text begin (1) has not met the requirements for a retirement annuity under section 353.651,
subdivision 1, or
new text end

new text begin (2) has met the requirements for a retirement annuity under section 353.651,
subdivision 1, but who does not have 15 years of credited service; and who new text end becomes
disabled after not less than one year of allowable service because of sickness or injury
occurring while not on duty as a police officer, firefighter, or paramedic as defined under
section 353.64, subdivision 10, and by reason of that sickness or injury the member has
been or is expected to be unable to perform the duties as a police officer, firefighter, or
paramedic as defined under section 353.64, subdivision 10, for a period of at least one
year, is entitled to receive a disability benefit.

new text begin (b) new text end The benefit must be paid in the same manner as if the benefit were paid under
section 353.651. If a disability under this subdivision occurs after one but in less than 15
years of allowable service, the disability benefit must be the same as though the member
had at least 15 years service. For a member who is employed as a full-time firefighter
by the Department of Military Affairs of the state of Minnesota, allowable service as a
full-time state Military Affairs Department firefighter credited by the Minnesota State
Retirement System may be used in meeting the minimum allowable service requirement
of this subdivision.

Sec. 3.

Minnesota Statutes 2004, section 353.656, subdivision 6a, is amended to read:

Subd. 6a.

Disability survivor benefits.

If a member who is receiving a disability
benefit under subdivision 1 or 3:

deleted text begin (a)deleted text end new text begin (1) new text end dies before attaining new text begin the new text end agedeleted text begin 65deleted text end new text begin required for receipt of a retirement annuity
under section 353.651, subdivision 1,new text end or within five years of the effective date of the
disability, whichever is later, the surviving spouse shall receive a survivor benefit under
section 353.657, subdivision 2 or 2a, unless the surviving spouse elected to receive a
refund under section 353.32, subdivision 1. The joint and survivor optional annuity under
subdivision 2a is based on the minimum disability benefit under subdivision 1 or 3, or the
deceased member's allowable service, whichever is greaterdeleted text begin .deleted text end new text begin ;new text end

deleted text begin (b)deleted text end new text begin (2) new text end is living at new text begin the new text end agedeleted text begin 65deleted text end new text begin required for receipt of a retirement annuity under
section 353.651, subdivision 1,new text end or five years after the effective date of the disability,
whichever is later, the member may continue to receive a normal disability benefit,
or the member may elect a joint and survivor optional annuity under section 353.30.
The optional annuity is based on the minimum disability benefit under subdivision 1 or
3, or the member's allowable service, whichever is greater. The election of this joint
and survivor annuity must occur within 90 days of new text begin the new text end agedeleted text begin 65deleted text end new text begin required for receipt of a
retirement annuity under section 353.651, subdivision 1,new text end or the five-year anniversary of the
effective date of the disability benefit, whichever is later. The optional annuity takes effect
the first of the month following the month in which the person attains new text begin the new text end agedeleted text begin 65deleted text end new text begin required
for receipt of a retirement annuity under section 353.651, subdivision 1,new text end or reaches the
five-year anniversary of the effective date of the disability benefit, whichever is laterdeleted text begin .deleted text end new text begin ; ornew text end

deleted text begin (c) if there isdeleted text end new text begin (3) hasnew text end a dependent child or children under deleted text begin paragraph (a) or (b)deleted text end new text begin clause
(1) or (2)new text end , the association shall grant a dependent child benefit under section 353.657,
subdivision 3.

Sec. 4. new text begin REIMBURSEMENT OF CERTAIN PERA-P&F PENSION COSTS;
APPROPRIATION.
new text end

new text begin An amount equal to the applicable actuarial present value of the survivor benefits
attributable to a member of the city of St. Louis Park police department who died on
February 21, 2005, plus interest at the rate of 0.71 percent per month since July 1, 2005, is
appropriated from the general fund in fiscal year 2006 to the commissioner of finance for
payment to the public employees police and fire retirement fund. The actuarial present
value of this survivor benefit must be calculated by the consulting actuary retained under
Minnesota Statutes, section 356.214, based on the applicable mortality assumption and
postretirement interest rate used for the June 30, 2005, actuarial valuation and must be
certified by the executive director of the Public Employees Retirement Association.
new text end

Sec. 5. new text begin EFFECTIVE DATE.
new text end

new text begin (a) Sections 1 to 3 are effective July 1, 2006.
new text end

new text begin (b) Section 4 is effective the day following final enactment.
new text end

ARTICLE 5

PRIVATIZATION RETIREMENT COVERAGE CHANGE

Section 1.

Minnesota Statutes 2004, section 352F.04, is amended to read:

352F.04 AUGMENTATION INTEREST deleted text begin RATEdeleted text end new text begin RATESnew text end FOR TERMINATED
deleted text begin UNIVERSITY HOSPITALdeleted text end new text begin PRIVATIZEDnew text end EMPLOYEES.

new text begin Subdivision 1. new text end

new text begin Enhanced augmentation rates. new text end

new text begin (a) new text end The deferred annuity of a
terminated hospital employee new text begin who attained that status prior to the effective date of this
section new text end is subject to augmentation deleted text begin in accordance withdeleted text end new text begin under new text end Minnesota Statutes 1994,
section 352.72, subdivision 2, except that the rate of deleted text begin interest for this purposedeleted text end new text begin augmentation
new text end is 5.5 percent compounded annually until January 1 following the year in which deleted text begin suchdeleted text end new text begin the
new text end person attains age 55. From that date to the effective date of retirement, the new text begin augmentation
new text end rate is 7.5 percentnew text begin compounded annuallynew text end . deleted text begin These
deleted text end

new text begin (b) If a terminated hospital employee attained that status on or after the effective date
of this section, the augmentation rate is four percent compounded annually until January
1, following the year in which the person attains age 55. From that date to the effective
date of retirement, the augmentation rate is six percent compounded annually.new text end

new text begin Subd. 2. new text end

new text begin Exceptions. new text end

new text begin Thenew text end increased augmentation rates deleted text begin are no longer applicable for
any time afterdeleted text end new text begin specified in subdivision 1 do not apply if new text end the terminated deleted text begin hospital employee
or Academic Health Centerdeleted text end employeenew text begin :
new text end

new text begin (1)new text end becomes covered again by a retirement deleted text begin funddeleted text end new text begin plan new text end enumerated in section 356.30,
subdivision 3deleted text begin . These increased deferred annuity augmentation rates do not apply to a
terminated transferred hospital employee or Academic Health Center employee whodeleted text end new text begin ; or
new text end

new text begin (2)new text end begins receipt of a retirement annuity while employed by deleted text begin Fairviewdeleted text end new text begin the employer
which assumed operations of the medical facility or other public employing unit or
purchased the medical facility or other public employing unitnew text end .

Sec. 2.

Minnesota Statutes 2005 Supplement, section 353F.02, subdivision 4, is
amended to read:

Subd. 4.

Medical facility.

"Medical facility" means:

(1) Bridges Medical Services;

(2) new text begin the City of Cannon Falls Hospital;
new text end

new text begin (3) the Dassel Lakeside Community Home;
new text end

new text begin (4) new text end the Fair Oaks Lodge, Wadena;

deleted text begin (3)deleted text end new text begin (5)new text end the Glencoe Area Health Center;

deleted text begin (4)deleted text end new text begin (6)new text end the Hutchinson Area Health Care;

deleted text begin (5)deleted text end new text begin (7)new text end the Kanabec Hospital;

deleted text begin (6)deleted text end new text begin (8)new text end the Luverne Public Hospital;

deleted text begin (7)deleted text end new text begin (9)new text end the Northfield Hospital;

deleted text begin (8)deleted text end new text begin (10)new text end the RenVilla Nursing Home;

deleted text begin (9)deleted text end new text begin (11)new text end the Renville County Hospital in Olivia;

deleted text begin (10)deleted text end new text begin (12)new text end the St. Peter Community Healthcare Center; and

deleted text begin (11)deleted text end new text begin (13)new text end the Waconia-Ridgeview Medical Center.

Sec. 3.

Minnesota Statutes 2004, section 353F.04, is amended to read:

353F.04 AUGMENTATION INTEREST deleted text begin RATEdeleted text end new text begin RATESnew text end FOR TERMINATED
MEDICAL new text begin OR OTHER PUBLIC EMPLOYING UNITnew text end FACILITY EMPLOYEES.

new text begin Subdivision 1. new text end

new text begin Enhanced augmentation rates. new text end

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

new text begin (b) This paragraph applies if the legislation adding the medical facility or other
employing unit to section 353F.02, subdivision 4 or 5, as applicable, was enacted before
July 26, 2005, and became effective before January 1, 2007. For a terminated medical
facility or other public employing unit employee, the augmentation rate is new text end 5.5 percent
compounded annually until January 1 following the year in which deleted text begin suchdeleted text end new text begin the new text end person attains
age 55. From that date to the effective date of retirement, the new text begin augmentation new text end rate is 7.5
percentnew text begin compounded annuallynew text end . deleted text begin These
deleted text end

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

new text begin Subd. 2. new text end

new text begin Exceptions. new text end

new text begin Thenew text end increased augmentation rates deleted text begin are no longer applicable for
any time afterdeleted text end new text begin specified in subdivision 1 do not apply if new text end the terminated medical facility
or other public employing unit employeenew text begin :
new text end

new text begin (1)new text end becomes covered again by a retirement deleted text begin funddeleted text end new text begin plan new text end enumerated in section 356.30,
subdivision 3deleted text begin . These increased deferred annuity augmentation rates do not apply to a
terminated transferred medical facility or other public employing unit employee whodeleted text end new text begin ; or
new text end

new text begin (2)new text end begins receipt of a retirement annuity while employed by the employer which
assumed operations of the medical facility or other public employing unit or purchased the
medical facility or other public employing unit.

Sec. 4. new text begin EFFECTIVE DATE.
new text end

new text begin (a) Sections 1 and 3 are effective the day following final enactment and section 3
has effect retroactively from July 25, 2005.
new text end

new text begin (b) Section 2 with respect to the Cannon Falls Hospital District is effective upon the
latter of:
new text end

new text begin (1) the day after the governing body of the Cannon Falls Hospital District and its
chief clerical officer meet the requirements under Minnesota Statutes, section 645.021,
subdivisions 2 and 3; and
new text end

new text begin (2) the first day of the month following certification to the Cannon Falls Hospital
District by the executive director of the Public Employees Retirement Association that the
actuarial accrued liability of the special benefit coverage proposed for extension to the
privatized City of Cannon Falls Hospital employees under section 1 does not exceed the
actuarial gain otherwise to be accrued by the Public Employees Retirement Association, as
calculated by the consulting actuary retained under Minnesota Statutes, section 356.214.
The cost of the actuarial calculations must be borne by the current employer or by the
entity which is the employer following the privatization.
new text end

new text begin (c) Section 2 with respect to the Dassel Lakeside Community Home is effective
upon the latter of:
new text end

new text begin (1) the day after the governing body of the city of Dassel and its chief clerical officer
timely complete compliance with Minnesota Statutes, section 645.021, subdivisions 2
and 3; and
new text end

new text begin (2) the first day of the month next following certification to the Dassel City
Council by the executive director of the Public Employees Retirement Association that
the actuarial accrued liability of the special benefit coverage proposed for extension to
the privatized Dassel Lakeside Community Home employees under section 2 does not
exceed the actuarial gain otherwise to be accrued by the Public Employees Retirement
Association, as calculated by the consulting actuary retained under Minnesota Statutes,
section 356.214. The cost of the actuarial calculations must be borne by the city of Dassel
or by the entity which is the employer following the privatization.
new text end

ARTICLE 6

SOCIAL SECURITY COVERAGE CHANGES

Section 1.

Minnesota Statutes 2004, section 355.01, subdivision 3g, is amended to read:

Subd. 3g.

Local governmental subdivision.

"Local governmental subdivision"
means:

(1) a political subdivision as defined in section 218(b) of the Social Security Act;

(2) an instrumentality of the state;

(3) an instrumentality of one or more of the political subdivisions of the statedeleted text begin ,
including the League of Minnesota Citiesdeleted text end ;

(4) an instrumentality of the state and one or more of its political subdivisions;

(5) a governmental subdivision as defined in section 353.01, subdivision 6; and

(6) any instrumentality established under a joint powers agreement under section
471.59 wherein the instrumentality is responsible for the employment and the payment of
the salaries of the employees of the instrumentality.

Sec. 2.

Minnesota Statutes 2004, section 355.02, subdivision 1, is amended to read:

Subdivision 1.

General authority.

(a) The director, with the approval of the
governor, is hereby authorized to enter into an agreement on behalf of the statenew text begin , its political
subdivisions, and its other governmental employers, new text end with the federal Secretary of Health
and Human Services, consistent with the terms and provisions of this chapter, for the
purpose of extending the benefits of the federal old age, survivors, and disability insurance
system to employees of the state or any political subdivision thereof new text begin who hold positions
covered by a retirement system new text end with respect to services specified in the agreement which
constitute "employmentdeleted text begin ,deleted text end new text begin .new text end " deleted text begin whenever so specifically authorized by the statutory provisions
of this state pertaining to any coverage group of such employees to which the agreement
may become applicable under the Social Security Act.
deleted text end

(b) deleted text begin Under this specific authorizationdeleted text end The agreement may contain those provisions
relating to coverage, benefits, contributions, effective date, modification and termination
of the agreement, administration, and other appropriate provisions as the director and the
federal Secretary of Health and Human Services shall agree upon, but, except as may be
otherwise required by or under the Social Security Act as to the services to be covered,
such agreement must provide in effect that:

(1) benefits will be provided for employees whose services are covered by the
agreement (and their dependents and survivors) on the same basis as though those services
constituted employment within the meaning of title II of the Social Security Act;

(2) the state or other employer will pay to the federal Secretary of the Treasury, at
such time or times as may be prescribed under the Social Security Act, contributions
with respect to wages, equal to the sum of the taxes which would be imposed by the
Federal Insurance Contributions Act if the services covered by the agreement constituted
employment within the meaning of that act;

(3) the agreement is effective with respect to services in employment covered by the
agreement performed after a date specified therein; and

(4) all services which constitute employment and are performed in the employ of
the state or any of its political subdivisions by employees thereof, may be covered by the
agreement deleted text begin whenever so specifically authorized by the statutory provisions of this state
pertaining to any coverage group of such employees to which the agreement may become
applicable under the Social Security Actdeleted text end .

Sec. 3.

Minnesota Statutes 2004, section 355.02, subdivision 3, is amended to read:

Subd. 3.

Groups covered by Social Security.

new text begin (a) new text end The following groups new text begin having
coverage under a retirement plan in section 356.30, subdivision 3, except clauses (4) and
(8) new text end must be covered by an agreement or a modification to an agreement between the
director and the federal Secretary of Health and Human Services:

(1) constitutional officers;

(2) Duluth teachers;

(3) educational employees;

(4) higher education employees;

(5) hospital employees;

(6) judges;

(7) legislators;

(8) Minneapolis teachers;

(9) public employees;

(10) St. Paul teachers;new text begin and
new text end

(11) deleted text begin special authority or district employees; and
deleted text end

deleted text begin (12)deleted text end state employees.

new text begin (b) The following groups must be covered prospectively following the referendum
in subdivision 4 and the modification to the state Social Security agreement under
subdivision 1:
new text end

new text begin (1) special authority or district employees in positions covered by a retirement plan
provided by the employer; and
new text end

new text begin (2) local elected officials of a local governmental subdivision or of a special authority
or district holding positions covered by the defined contribution plan under chapter 353D.
new text end

new text begin (c) Each local governmental subdivision or special authority or district desiring
inclusion in the state Social Security agreement for groups covered by paragraph (b) must
request such coverage by submitting a formal resolution to the director, including therein
the desired starting date for Social Security coverage.
new text end

new text begin (d) For purposes of paragraph (b), clause (2), the defined contribution plan of the
Public Employees Retirement Association is considered a separate retirement system with
respect to each local governmental subdivision or special authority or district, and the
elected officials in a local governmental subdivision or in a special authority or district
must be treated separately and independently from the other governmental subdivisions.
new text end

Sec. 4.

Minnesota Statutes 2004, section 355.02, is amended by adding a subdivision
to read:

new text begin Subd. 4. new text end

new text begin Referendum. new text end

new text begin The director shall authorize and supervise a referendum
under section 218(d)(6)(C) of the Social Security Act to be held on the date or dates set by
the local governmental subdivision or by the special authority or district desiring inclusion
under subdivision 3, paragraph (b). The referendum must permit each eligible employee
the opportunity to elect Social Security coverage. The notice of referendum required by
section 218(d) of the Social Security Act must contain a statement sufficient to inform
the person of the rights which accrue under the Social Security Act and the employee
contribution rates applicable to the program. The cost of the referendum must be borne
by the governmental subdivision. The director, on receiving satisfactory evidence that
the conditions required by section 218 of the Social Security Act have been met, must
so certify to the Secretary of Health and Human Services.
new text end

Sec. 5.

Minnesota Statutes 2004, section 355.02, is amended by adding a subdivision
to read:

new text begin Subd. 5. new text end

new text begin Retroactive Social Security coverage. new text end

new text begin An employee or elected official
who elects Social Security coverage under subdivision 4 may obtain retroactive coverage
for the period specified in the modification of the agreement if the individual is employed
by the local governmental subdivision or by the special authority or district on the date of
the modification of the agreement. The employee or elected official must pay an amount
equal to the taxes which would have been imposed on the person by the Federal Insurance
Contributions Act had the service been covered at the time performed. The employing
local governmental subdivision or special authority or district must pay the necessary
employer contributions for the retroactive period. Nothing in this section shall require an
employee or elected official to elect retroactive Social Security coverage.
new text end

Sec. 6.

new text begin [355.095] OPTIONAL MEDICARE COVERAGE FOR CERTAIN
PUBLIC EMPLOYEES.
new text end

new text begin new text end

new text begin Subdivision 1. new text end

new text begin Agreement. new text end

new text begin (a) The director, on behalf of the state, its political
subdivisions, and its other governmental employers, is authorized to enter into an
agreement with the Secretary of Health and Human Services to extend the provisions of
United States Code, title 42, section 426, 426-1, and 1395c, to the employees in paragraph
(b) who meet the requirements of United States Code, title 42, section 418(v)(2) and who
do not have coverage by the federal old age, survivors, and disability insurance program
for that employment under any previous modification of the agreement or previous
Medicare referendum.
new text end

new text begin (b) The applicable employees are:
new text end

new text begin (1) employees who are members of one of the retirement plans in section 356.30,
subdivision 3, except clauses (4) and (8), based on continuous employment since March
31, 1986; and
new text end

new text begin (2) employees of a special authority or district who have been continuously
employed by the special authority or district since March 31, 1986.
new text end

new text begin Subd. 2. new text end

new text begin Referendum. new text end

new text begin (a) Each local governmental subdivision or special authority
or district desiring inclusion in the state Social Security agreement under subdivision 1
must request such coverage by submitting a formal resolution to the director, including
therein the desired starting date for Social Security coverage.
new text end

new text begin (b) The director shall authorize a referendum on the question of extending the
provisions of United States Code, title 42, sections 426, 426-1, and 1395c. The director
shall supervise the referendum in accordance with the requirements of United States Code,
title 42, section 418, on the date or dates set. The cost of such referendum must be borne by
the requesting retirement plan, or the requesting special authority or district. The notice of
the referendum provided to each eligible employee must contain a statement sufficient to
inform the person of the rights available as an employee in Medicare qualified government
employment and the employee contribution rates applicable to the program. The
referendum must permit each eligible employee the opportunity to vote in such referendum
in accordance with the requirements in the Social Security Act. The director, on receiving
satisfactory evidence that the conditions specified in United States Code, title 42, section
418(d)(7) have been met, must so certify to the Secretary of Health and Human Services.
new text end

new text begin Subd. 3. new text end

new text begin Contributions. new text end

new text begin Employers must pay the necessary employer contributions
and make the necessary deductions from salary for employees who elect to participate in
the federal Medicare program under this section and as required by federal law.
new text end

new text begin Subd. 4. new text end

new text begin Retroactive Medicare coverage. new text end

new text begin An individual who obtains Medicare
coverage through the referendum under subdivision 2 may obtain retroactive coverage for
the period specified in the modification of the agreement if employed by the governmental
subdivision or by the special authority or district on the date of the modification of the
agreement. The individual must pay an amount equal to the Medicare taxes which would
have been imposed on the employee had the service been covered at the time performed.
The employing local governmental subdivision or special authority or district must pay
the necessary employer contributions for the retroactive Medicare coverage period.
Nothing in this section shall require an employee or elected official to elect retroactive
Medicare coverage.
new text end

Sec. 7. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 6 are effective the day following final enactment.
new text end

ARTICLE 7

SUPPLEMENTAL RETIREMENT PLAN COVERAGE CHANGES

Section 1.

Minnesota Statutes 2004, section 356.24, subdivision 1, is amended to read:

Subdivision 1.

Restriction; exceptions.

It is unlawful for a school district or other
governmental subdivision or state agency to levy taxes for, or to contribute public funds to
a supplemental pension or deferred compensation plan that is established, maintained,
and operated in addition to a primary pension program for the benefit of the governmental
subdivision employees other than:

(1) to a supplemental pension plan that was established, maintained, and operated
before May 6, 1971;

(2) to a plan that provides solely for group health, hospital, disability, or death
benefits;

(3) to the individual retirement account plan established by chapter 354B;

(4) to a plan that provides solely for severance pay under section 465.72 to a retiring
or terminating employee;

(5) for employees other than personnel employed by the Board of Trustees of the
Minnesota State Colleges and Universities and covered under the Higher Education
Supplemental Retirement Plan under chapter 354C, if the supplemental plan coverage is
provided for in a personnel policy of the public employer or in the collective bargaining
agreement between the public employer and the exclusive representative of public
employees in an appropriate unit, in an amount matching employee contributions on a
dollar for dollar basis, but not to exceed an employer contribution of $2,000 a year per
employee;

(i) to the state of Minnesota deferred compensation plan under section 352.96; or

(ii) in payment of the applicable portion of the contribution made to any investment
eligible under section 403(b) of the Internal Revenue Code, if the employing unit has
complied with any applicable pension plan provisions of the Internal Revenue Code with
respect to the tax-sheltered annuity program during the preceding calendar year;

(6) for personnel employed by the Board of Trustees of the Minnesota State Colleges
and Universities and not covered by clause (5), to the supplemental retirement plan under
chapter 354C, if the supplemental plan coverage is provided for in a personnel policy
or in the collective bargaining agreement of the public employer with the exclusive
representative of the covered employees in an appropriate unit, in an amount matching
employee contributions on a dollar for dollar basis, but not to exceed an employer
contribution of $2,700 a year for each employee;

(7) to a supplemental plan or to a governmental trust to save for postretirement
health care expenses qualified for tax-preferred treatment under the Internal Revenue
Code, if the supplemental plan coverage is provided for in a personnel policy or in the
collective bargaining agreement of a public employer with the exclusive representative of
the covered employees in an appropriate unit;

(8) to the laborer's national industrial pension fund new text begin or to a laborer's local pension
fund new text end for the employees of a governmental subdivision who are covered by a collective
bargaining agreement that provides for coverage by that fund and that sets forth a fund
contribution rate, but not to exceed an employer contribution of deleted text begin $2,000deleted text end new text begin $5,000 new text end per year
per employee;

(9) to the plumbers' and pipefitters' national pension fund or to a plumbers' and
pipefitters' local pension fund for the employees of a governmental subdivision who are
covered by a collective bargaining agreement that provides for coverage by that fund
and that sets forth a fund contribution rate, but not to exceed an employer contribution
of deleted text begin $2,000deleted text end new text begin $5,000 new text end per year per employee;

(10) to the International Union of Operating Engineers pension fund for the
employees of a governmental subdivision who are covered by a collective bargaining
agreement that provides for coverage by that fund and that sets forth a fund contribution
rate, but not to exceed an employer contribution of deleted text begin $2,000deleted text end new text begin $5,000 new text end per year per employee;
deleted text begin or
deleted text end

(11) to a supplemental plan organized and operated under the federal Internal
Revenue Code, as amended, that is wholly and solely funded by the employee's
accumulated sick leave, accumulated vacation leave, and accumulated severance paynew text begin ; or
new text end

new text begin (12) to the International Association of Machinists national pension fund for the
employees of a governmental subdivision who are covered by a collective bargaining
agreement that provides for coverage by that fund and that sets forth a fund contribution
rate, but not to exceed an employer contribution of $5,000 per year per employeenew text end .

Sec. 2. new text begin EFFECTIVE DATE.
new text end

new text begin Section 1 is effective the day following final enactment.
new text end

ARTICLE 8

RETIREMENT FUND INVESTMENT AUTHORITY CHANGES

Section 1.

Minnesota Statutes 2004, section 354A.08, is amended to read:

354A.08 AUTHORIZED INVESTMENTS.

new text begin In addition to investments authorized under section 356A.06, subdivision 7, new text end a
teachers retirement fund association may receive, hold, and dispose of real estate or
personal property acquired by it, whether the acquisition was by purchase, or any other
lawful means, as provided in this chapter or in the association's articles of incorporation.
In addition to other authorized real estate investments, an association may also invest
funds in Minnesota situs nonfarm real estate ownership interests or loans secured by
mortgages or deeds of trust.new text begin The board may also certify assets for investment by the State
Board of Investment as provided under section 11A.17.
new text end

Sec. 2.

Minnesota Statutes 2004, section 354A.28, subdivision 5, is amended to read:

Subd. 5.

Investment.

The assets of the annuity reserve fund must be invested,
reinvested, and retained deleted text begin in the discretion ofdeleted text end new text begin by new text end the board of trustees of the Minneapolis
Teachers Retirement Fund Association in authorized investments under section deleted text begin 11A.24deleted text end new text begin
356A.06, subdivision 7new text end .

Sec. 3.

Minnesota Statutes 2004, section 356.219, subdivision 3, is amended to read:

Subd. 3.

Content of reports.

(a) The report required by subdivision 1 must include
a written statement of the investment policy deleted text begin in effect on June 30, 1997, if that statement
has not been previously submitteddeleted text end . Following that deleted text begin datedeleted text end new text begin initial reportnew text end , subsequent reports
must include investment policy changes and the effective date of each policy change
rather than a complete statement of investment policy, unless the state auditor requests
submission of a complete current statement. The report must also include the information
required by the following paragraphs, as applicable.

(b) If new text begin after four years of reporting under this paragraph, the total portfolio time
weighted rate of return, net of all investment related costs and fees, provided by the public
pension plan differs by no more than 0.1 percent from the comparable return for the plan
calculated by the office of the state auditor, and if new text end a public pension plan has a total market
value of deleted text begin $10,000,000deleted text end new text begin $25,000,000 new text end or more as of the beginning of the calendar year, new text begin and if
the public pension plan's annual audit is performed by the state auditor or by the legislative
auditor, new text end the report required by subdivision 1 must include the market value of the total
portfolio and the market value of each deleted text begin investment account, investment portfolio, ordeleted text end asset
class included in the pension fund as of the beginning of the calendar year and new text begin as of the
end of the calendar year. At the discretion of the state auditor, the public pension plan may
be required to submit the market value of the total portfolio and the market value of each
investment account, investment portfolio, or asset class included in the pension fund new text end for
each month, and the amount and date of each injection and withdrawal to the total portfolio
and to each investment account, investment portfolio, or asset class. If deleted text begin a public pension
plan once files a report under this paragraphdeleted text end new text begin the market value of a public pension plan's
fund drops below $25,000,000 in a subsequent yearnew text end , it must continue reporting under this
paragraph for any subsequent year in which the public pension plan is not fully invested as
specified in subdivision 1, paragraph (b), deleted text begin even if asset values drop below $10,000,000 in
market value in that subsequent yeardeleted text end new text begin except that if the public pension plan's annual audit
is not performed by the state auditor or legislative auditor, paragraph (c) appliesnew text end .

(c) new text begin If paragraph (b) would apply if the annual audit were provided by the state
auditor or legislative auditor, the report required by subdivision 1 must include the market
value of the total portfolio and the market value of each asset class included in the pension
fund as of the beginning of the calendar year and for each month, and the amount and date
of each injection and withdrawal to the total portfolio and to each investment account,
investment portfolio, or asset class.
new text end

new text begin (d) new text end For public pension plans to which paragraph (b) new text begin or (c) new text end applies, the report required
by subdivision 1 must also include a calculation of the total time-weighted rate of return
available from index-matching investments assuming the asset class performance targets
and target asset mix indicated in the written statement of investment policy. The provided
information must include a description of indices used in the analyses and an explanation
of why those indices are appropriate. This paragraph does not apply to any fully invested
plan, as defined by subdivision 1, paragraph (b). Reporting by the State Board of
Investment under this paragraph is limited to information on the Minnesota public pension
plans required to be invested by the State Board of Investment under section 11A.23.

deleted text begin (d)deleted text end new text begin (e) new text end If a public pension plan has a total market value of less than deleted text begin $10,000,000deleted text end
new text begin $25,000,000 new text end as of the beginning of the calendar year and was never required to file under
paragraph (b)new text begin or (c)new text end , the report required by subdivision 1 must include the amount and
date of each total portfolio injection and withdrawal. In addition, the report must include
the market value of the total portfolio as of the beginning of the calendar year and for
each quarter.

deleted text begin (e)deleted text end new text begin (f) new text end Any public pension plan reporting under paragraph (b) or deleted text begin (d) maydeleted text end new text begin (c) must
new text end include computed time-weighted rates of return with the report, in addition to all other
required information, as applicable. deleted text begin If these returns are supplied, the individual who
computeddeleted text end new text begin The chief administrative officer of the public pension plan submitting new text end the returns
must certify new text begin on a form prescribed by the state auditor new text end that the returns new text begin have been computed
by the pension plan's investment performance consultant or custodial bank. The chief
administrative officer of the public pension plan submitting the returns also must certify
that the returns new text end are net of all costs and fees, including investment management fees, and
that the procedures used to compute the returns are consistent with Bank Administration
Institute studies of investment performance measurement and deleted text begin Association for Investment
Management and Researchdeleted text end presentation standardsnew text begin set by the Certified Financial Analyst
Institute. If the certifications required under this paragraph are not provided, the reporting
requirements of paragraph (c) applynew text end .

deleted text begin (f)deleted text end new text begin (g) new text end For public pension plans reporting under paragraph deleted text begin (d)deleted text end new text begin (e)new text end , the public pension
plan must retain supporting information specifying the date and amount of each injection
and withdrawal to each investment account and investment portfolio. The public pension
plan must also retain the market value of each investment account and investment
portfolio at the beginning of the calendar year and for each quarter. Information that is
required to be collected and retained for any given year or years under this paragraph
must be submitted to the Office of the State Auditor if the Office of the State Auditor
requests in writing that the information be submitted by a public pension plan or plans,
or be submitted by the State Board of Investment for any plan or plans for which the
State Board of Investment is the investment authority under this section. If the state
auditor requests information under this subdivision, and the public plan fails to comply,
the pension plan is subject to penalties under subdivision 5, unless penalties are waived by
the state auditor under that subdivision.

Sec. 4.

Minnesota Statutes 2004, section 356.219, subdivision 6, is amended to read:

Subd. 6.

Investment disclosure report.

(a) The state auditor shall prepare an annual
report to the legislature on the investment performance of the various public pension plans
subject to this section. The content of the report is specified in paragraphs (b) to deleted text begin (e)deleted text end new text begin (f)new text end .

(b) For each public pension plan reporting under subdivision 3, paragraph (b), the
state auditor shall deleted text begin compute anddeleted text end report total portfolio and asset class time-weighted rates of
return, net of all investment-related costs and fees.new text begin If the state auditor has required a plan
to submit the market value of the total portfolio and the market value of each investment
account, investment portfolio, or asset class included in the pension fund for each month,
and the amount and date of each injection and withdrawal to the total portfolio and to each
investment account, investment portfolio, or asset class as prescribed under subdivision
3, paragraph (b), the state auditor shall also compute and report total portfolio and asset
class time-weighted rates of return, net of all costs and fees.
new text end

(c) new text begin For each public pension plan reporting under subdivision 3, paragraph (c), the
state auditor shall compute and report total portfolio and asset class time-weighted rates of
return, net of all costs and fees.
new text end

new text begin (d) new text end For each public pension plan reporting under subdivision 3, paragraph deleted text begin (d)deleted text end new text begin (e)new text end ,
the state auditor shall compute and report total portfolio time-weighted rates of return, net
of all costs and fees. If the state auditor has requested data for a plan under subdivision 3,
paragraph deleted text begin (f)deleted text end new text begin (g)new text end , the state auditor may also compute and report asset class time-weighted
rates of return, net of all costs and fees.

deleted text begin (d)deleted text end new text begin (e) new text end The report by the state auditor must include the information submitted by the
pension plans under subdivision 3, paragraph deleted text begin (c)deleted text end new text begin (d)new text end , or a synopsis of that information.

deleted text begin (e)deleted text end new text begin (f) new text end The report by the state auditor may also include a presentation of multiyear
performance, information collected under subdivision 4, and any other information or
analysis deemed appropriate by the state auditor.

Sec. 5.

Minnesota Statutes 2005 Supplement, section 356A.06, subdivision 7, is
amended to read:

Subd. 7.

Expanded list of authorized investment securities.

(a) Authority.
Except to the extent otherwise authorized by law deleted text begin or bylawsdeleted text end , a covered pension plan not
described by subdivision 6, paragraph (a), deleted text begin maydeleted text end new text begin shall new text end invest its assets only in accordance
with this subdivision.

(b) Securities generally. The covered pension plan has the authority to purchase,
sell, lend, or exchange the securities specified in paragraphs (c) to deleted text begin (h)deleted text end new text begin (i)new text end , including
puts and call options and future contracts traded on a contract market regulated by a
governmental agency or by a financial institution regulated by a governmental agency.
These securities may be owned as units in commingled trusts that own the securities
described in paragraphs (c) to deleted text begin (h)deleted text end new text begin (i), including real estate investment trusts and insurance
company commingled accounts, including separate accountsnew text end .

(c) Government obligations. The covered pension plan may invest funds in
governmental bonds, notes, bills, mortgages, and other evidences of indebtedness
provided the issue is backed by the full faith and credit of the issuer or the issue is rated
among the top four quality rating categories by a nationally recognized rating agency. The
obligations in which funds may be invested under this paragraph include guaranteed or
insured issues of (1) the United States, its agencies, its instrumentalities, or organizations
created and regulated by an act of Congress; (2) Canada and its provinces, provided
the principal and interest is payable in United States dollars; (3) the states and their
municipalities, political subdivisions, agencies, or instrumentalities; (4) the International
Bank for Reconstruction and Development, the Inter-American Development Bank, the
Asian Development Bank, the African Development Bank, or any other United States
government sponsored organization of which the United States is a member, provided the
principal and interest is payable in United States dollars.

(d) Corporate obligations. The covered pension plan may invest funds in bonds,
notes, debentures, transportation equipment obligations, or any other longer term
evidences of indebtedness issued or guaranteed by a corporation organized under the laws
of the United States or any state thereof, or the Dominion of Canada or any province
thereof if they conform to the following provisions:

(1) the principal and interest of obligations of corporations incorporated or organized
under the laws of the Dominion of Canada or any province thereof must be payable in
United States dollars; and

(2) obligations must be rated among the top four quality categories by a nationally
recognized rating agency.

(e) Other obligations. (1) The covered pension plan may invest funds in
bankers acceptances, certificates of deposit, deposit notes, commercial paper, mortgage
participation certificates and pools, asset backed securities, repurchase agreements and
reverse repurchase agreements, guaranteed investment contracts, savings accounts, and
guaranty fund certificates, surplus notes, or debentures of domestic mutual insurance
companies if they conform to the following provisions:

(i) bankers acceptances and deposit notes of United States banks are limited to those
issued by banks rated in the highest four quality categories by a nationally recognized
rating agency;

(ii) certificates of deposit are limited to those issued by (A) United States banks and
savings institutions that are rated in the highest four quality categories by a nationally
recognized rating agency or whose certificates of deposit are fully insured by federal
agencies; or (B) credit unions in amounts up to the limit of insurance coverage provided
by the National Credit Union Administration;

(iii) commercial paper is limited to those issued by United States corporations or
their Canadian subsidiaries and rated in the highest two quality categories by a nationally
recognized rating agency;

(iv) mortgage participation or pass through certificates evidencing interests in pools
of first mortgages or trust deeds on improved real estate located in the United States where
the loan to value ratio for each loan as calculated in accordance with section 61A.28,
subdivision 3, does not exceed 80 percent for fully amortizable residential properties and
in all other respects meets the requirements of section 61A.28, subdivision 3;

(v) collateral for repurchase agreements and reverse repurchase agreements is
limited to letters of credit and securities authorized in this section;

(vi) guaranteed investment contracts are limited to those issued by insurance
companies or banks rated in the top four quality categories by a nationally recognized
rating agency or to alternative guaranteed investment contracts where the underlying
assets comply with the requirements of this subdivision;

(vii) savings accounts are limited to those fully insured by federal agencies; and

(viii) asset backed securities must be rated in the top four quality categories by a
nationally recognized rating agency.

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

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

(f) Corporate stocks. The covered pension plan may invest funds in stocks or
convertible issues of any corporation organized under the laws of the United States or the
states thereof, any corporation organized under the laws of the Dominion of Canada or its
provinces, or any corporation listed on an exchange regulated by an agency of the United
States or of the Canadian national government, if they conform to the following provisions:

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

(2) investments must not exceed five percent of the total outstanding shares of
any one corporation.

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

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

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

new text begin (j) new text end Exchange traded funds.The covered pension plan may invest funds in exchange
traded funds, subject to the maximums, the requirements, and the limitations set forth in
deleted text begin paragraph (d), (e), (f), or (h), whichever appliesdeleted text end new text begin paragraphs (c) to (i), as applicablenew text end .

deleted text begin (h)deleted text end new text begin (k) new text end Other investments.(1) In addition to the investments authorized in
paragraphs (b) to deleted text begin (g)deleted text end new text begin (j)new text end , and subject to the provisions in clause (2), the covered pension
plan may invest funds in:

(i) venture capital investment businesses through participation in limited partnerships
and corporations;

(ii) real estate ownership interests or loans secured by mortgages or deeds of trust
through investment in limited partnershipsdeleted text begin ,deleted text end new text begin or new text end bank sponsored collective fundsdeleted text begin , trusts, and
insurance company commingled accounts, including separate accountsdeleted text end ;

(iii) regional and mutual funds through bank sponsored collective funds and
open-end investment companies registered under the Federal Investment Company Act of
1940new text begin which do not qualify under paragraph (h)new text end ;

(iv) resource investments through limited partnerships, private placements, and
corporations; and

(v) international new text begin debt new text end securitiesnew text begin and emerging market equity securitiesnew text end .

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

(i) the aggregate value of all investments made according to clause (1) may not
exceed deleted text begin 35deleted text end new text begin 20 new text end percent of the market value of the fund for which the covered pension
plan is investing;

(ii) there must be at least four unrelated owners of the investment other than the
covered pension plan for investments made under clause (1), item (i), (ii), (iii), or (iv);

(iii) covered pension plan participation in an investment vehicle is limited to 20
percent thereof for investments made under clause (1), item (i), (ii), (iii), or (iv); and

(iv) covered pension plan participation in a limited partnership does not include a
general partnership interest or other interest involving general liability. The covered
pension plan may not engage in any activity as a limited partner which creates general
liability.

Sec. 6. new text begin TRANSITION PROVISION.
new text end

new text begin A covered pension plan with investments that on the day prior to the effective date
of this section do not comply with section 3 shall divest of any assets not in compliance
before January 1, 2008.
new text end

Sec. 7. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 5 are effective the day following final enactment.
new text end

ARTICLE 9

MINNEAPOLIS EMPLOYEES RETIREMENT FUND CHANGES

Section 1.

Minnesota Statutes 2004, section 422A.05, subdivision 2c, is amended to
read:

Subd. 2c.

Minneapolis employees retirement fund investment authority.

(a) For
investments made on or after July 1, 1991, the board shall invest funds only in investments
authorized by section 356A.06, subdivision 7.

(b) However, in addition to real estate investments authorized under paragraph (a),
the board may also make loans to purchasers of Minnesota situs nonfarm residential real
estate that is owned by the Minneapolis Employees Retirement Fund. The loans must
be secured by mortgages or deeds of trust.

(c) For investments made before July 1, 1991, the board may, but is not required to,
comply with paragraph (a). However, with respect to these investments, the board shall
act in accordance with subdivision 2a and chapter 356A.

new text begin (d) The board may certify assets for investment by the State Board of Investment
under section 11A.14, subject to any restrictions established by the State Board of
Investment, and section 11A.17.
new text end

Sec. 2.

Minnesota Statutes 2004, section 422A.06, subdivision 3, is amended to read:

Subd. 3.

Deposit accumulation fund.

new text begin (a) new text end The deposit accumulation fund consists
of the assets held in the fund, including amounts contributed by or for employees, amounts
contributed by the city, amounts contributed by municipal activities supported in whole or
in part by revenues other than taxes and amounts contributed by any public corporation,
amounts paid by the state, and by income from investments.

new text begin (b) new text end There must be paid from the fund the amounts required to be transferred to the
retirement benefit fund, or the disability benefit fund, refunds of contributions, including
the death-while-active refund specified in section 422A.22, subdivision 4, postretirement
increases in retirement allowances granted under Laws 1965, chapter 688, or Laws 1969,
chapter 859, and expenses of the administration of the retirement fund which were not
charged by the retirement board against the income of the retirement benefit fund from
investments as the cost of handling the investments of the retirement benefit fund.

new text begin (c) To the extent that the deposit accumulation fund has insufficient assets to transfer
the total value of the required reserves for retirement annuities to either the fund under
subdivisions 5 and 7 or the retirement benefit fund under subdivisions 5 and 8 as required,
the deposit accumulation fund has a transfer amount payable on which an interest charge
accrues. The executive director must determine the interest charge for the period that
transfer amount payable remains unpaid at an annual rate equal to five percent plus
the percentage increase in the amount of the annual Consumer Price Index for urban
wage earners and clerical workers as calculated by the Bureau of Labor Statistics of the
United States Department of Labor from the previous June 30. The interest charge must
be reflected in the books of the Minneapolis Employees Retirement Fund and assessed
against the deposit accumulation fund based on the average quarterly transfer amount
payable balance outstanding. Any revenue received by the deposit accumulation fund
subsequent to unpaid transfers must be transferred from the deposit accumulation fund
to the disability benefit fund or to the retirement fund, whichever applies, must first be
applied to any remaining interest charge and then must be applied to the principal amount
of transfer amount payable outstanding.
new text end

Sec. 3.

Minnesota Statutes 2004, section 422A.06, subdivision 5, is amended to read:

Subd. 5.

Transfer of reserves to retirement benefit fund; adjustments of
annuities and benefits.

(a) Assets equal to the required reserves for retirement annuities
as determined in accordance with the appropriate mortality table adopted by the board of
trustees based on the experience of the fund as recommended by the deleted text begin commission-retained
deleted text end actuary new text begin retained under section 356.214 new text end and using the postretirement interest assumption
specified in section 356.215, subdivision 8, deleted text begin shall deleted text end new text begin must new text end be transferred to the disability
benefit fund as provided in subdivision 7, or the retirement benefit fund, except for any
amounts payable from the survivor benefit fund, as of date of retirement.

new text begin (b) If a full transfer amount is not payable from the deposit accumulation fund, the
applicable fund must be credited with an interest-bearing transfer amount receivable.
new text end

deleted text begin (b) deleted text end new text begin (c) new text end Annuity payments deleted text begin shall deleted text end new text begin must new text end be adjusted in accordance with this chapter,
except that no minimum retirement payments described in this chapter deleted text begin shall deleted text end new text begin must new text end include
any amounts payable from the survivors' benefit fund or disability benefit fund and
supplemented benefits specifically financed by statute.

deleted text begin (c) deleted text end new text begin (d) new text end Increases in annuity payments deleted text begin pursuant to deleted text end new text begin under new text end this section deleted text begin shalldeleted text end new text begin must new text end be
made automatically unless written notice on a form prescribed by the board is filed with
the retirement board requesting that the increase not be made.

deleted text begin (d) deleted text end new text begin (e) new text end Any additional annuity which began to accrue on July 1, 1973, or which
began to accrue on January 1, 1974, pursuant to Laws 1973, chapter 770, section 1, deleted text begin shall
deleted text end new text begin must new text end be considered as part of the base amount to be used in determining any postretirement
adjustments payable deleted text begin pursuant to deleted text end new text begin under new text end the provisions of subdivision 8.

Sec. 4.

Minnesota Statutes 2005 Supplement, section 422A.06, subdivision 7, is
amended to read:

Subd. 7.

Disability benefit fund.

(a) A disability benefit fund is established,
containing the required reserves for disability allowances under this chapternew text begin unless
subdivision 3, paragraph (c), appliesnew text end . A proportionate share of income from investments
must be allocated to this fundnew text begin and any interest charge under subdivision 3, paragraph (c),
must be credited to the fundnew text end . There must be paid from this fund the disability allowances
payable under this chapter.

(b) In the event of the termination of any disability allowance for any reason other
than the death of the recipient, the balance of the required reserves for the disability
allowance as of the date of the termination must be transferred from the disability benefit
fund to the deposit accumulation fund.

(c) At the end of each fiscal year, as part of the annual actuarial valuation, a
determination must be made of the required reserves for all disability allowances being
paid from the disability benefit fund. Any excess of assets over actuarial required reserves
in the disability benefit fund must be transferred to the deposit accumulation fund. new text begin Unless
subdivision 3, paragraph (c), applies, new text end any excess of actuarial reserves over assets in the
disability benefit fund must be funded by a transfer of the appropriate amount of assets
from the deposit accumulation fund.

Sec. 5.

Minnesota Statutes 2004, section 422A.06, subdivision 8, is amended to read:

Subd. 8.

Retirement benefit fund.

(a) The retirement benefit fund deleted text begin shall consist
deleted text end new text begin consists new text end of amounts held for payment of retirement allowances for members retired
deleted text begin pursuant to deleted text end new text begin under new text end this chapternew text begin , including any transfer amount payable under subdivision 3,
paragraph (c)new text end .

(b) new text begin Unless subdivision 3, paragraph (c), applies,new text end assets equal to the required reserves
for retirement allowances deleted text begin pursuant to deleted text end new text begin under new text end this chapter determined in accordance with
the appropriate mortality table adopted by the board of trustees based on the experience of
the fund as recommended by the deleted text begin commission-retained deleted text end actuary deleted text begin shall deleted text end new text begin retained under section
356.214, must new text end be transferred from the deposit accumulation fund to the retirement benefit
fund as of the last business day of the month in which the retirement allowance begins.
The income from investments of these assets deleted text begin shall deleted text end new text begin must new text end be allocated to this fund new text begin and any
interest charge under subdivision 3, paragraph (c), must be credited to the fundnew text end . There
deleted text begin shall deleted text end new text begin must new text end be paid from this fund the retirement annuities authorized by law. A required
reserve calculation for the retirement benefit fund must be made by the actuary retained
deleted text begin by the Legislative Commission on Pensions and Retirement deleted text end new text begin under section 356.214 new text end and
must be certified to the retirement board by the deleted text begin commission-retained deleted text end actuary.

(c) The retirement benefit fund deleted text begin shall deleted text end new text begin must new text end be governed by the applicable laws
governing the accounting and audit procedures, investment, actuarial requirements,
calculation and payment of postretirement benefit adjustments, discharge of any deficiency
in the assets of the fund when compared to the actuarially determined required reserves,
and other applicable operations and procedures regarding the Minnesota postretirement
investment fund in effect on June 30, 1997, established under Minnesota Statutes 1996,
section 11A.18, and any legal or administrative interpretations of those laws of the State
Board of Investment, the legal advisor to the Board of Investment and the executive
director of the State Board of Investment in effect on June 30, 1997. If a deferred yield
adjustment account is established for the Minnesota postretirement investment fund
before June 30, 1997, under Minnesota Statutes 1996, section 11A.18, subdivision 5, the
retirement board shall also establish and maintain a deferred yield adjustment account
within this fund.

(d) Annually, following the calculation of any postretirement adjustment payable
from the retirement benefit fund, the board of trustees shall submit a report to the
executive director of the Legislative Commission on Pensions and Retirement and to the
commissioner of finance indicating the amount of any postretirement adjustment and
the underlying calculations on which that postretirement adjustment amount is based,
including the amount of dividends, the amount of interest, and the amount of net realized
capital gains or losses utilized in the calculations.

(e) With respect to a former contributing member who began receiving a retirement
annuity or disability benefit under section 422A.151, paragraph (a), clause (2), after June
30,1997, or with respect to a survivor of a former contributing member who began
receiving a survivor benefit under section 422A.151, paragraph (a), clause (2), after June
30, 1997, the reserves attributable to the one percent lower amount of the cost-of-living
adjustment payable to those annuity or benefit recipients annually must be transferred back
to the deposit accumulation fund to the credit of the Metropolitan Airports Commission.
The calculation of this annual reduced cost-of-living adjustment reserve transfer must
be reviewed by the actuary retained deleted text begin by the Legislative Commission on Pensions and
Retirement deleted text end new text begin under section 356.214new text end .

Sec. 6.

Minnesota Statutes 2004, section 422A.101, subdivision 3, is amended to read:

Subd. 3.

State contributions.

(a) Subject to the limitation set forth in paragraph (c),
the state shall pay to the Minneapolis Employees Retirement Fund annually an amount
equal to the amount calculated under paragraph (b).

(b) The payment amount is an amount equal to the financial requirements of the
Minneapolis Employees Retirement Fund reported in the actuarial valuation of the fund
prepared by the commission-retained actuary pursuant to section 356.215 for the most
recent year but based on a target date for full amortization of the unfunded actuarial
accrued liabilities by June 30, 2020, less the amount of employee contributions required
pursuant to section 422A.10, and the amount of employer contributions required pursuant
to subdivisions 1a, 2, and 2a. Payments shall be made September 15 annually.

(c) The annual state contribution under this subdivision may not exceed $9,000,000,
plus the cost of the annual supplemental benefit determined under section 356.43.

(d) If the amount determined under paragraph (b) exceedsdeleted text begin $11,910,000deleted text end new text begin $9,000,000new text end ,
the excess must be allocated to and paid to the fund by the employers identified in
subdivisions 1a and 2, other than units of metropolitan government. Each employer's
share of the excess is proportionate to the employer's share of the fund's unfunded
actuarial accrued liability as disclosed in the annual actuarial valuation prepared by
the actuary retained deleted text begin by the Legislative Commission on Pensions and Retirement deleted text end new text begin under
section 356.214 new text end compared to the total unfunded actuarial accrued liability attributed
to all employers identified in subdivisions 1a and 2, other than units of metropolitan
government. Payments must be made in equal installments as set forth in paragraph (b).

Sec. 7. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2004, section 422A.101, subdivision 4, new text end new text begin are repealed.
new text end

Sec. 8. new text begin EFFECTIVE DATE; LOCAL APPROVAL.
new text end

new text begin Sections 1 to 7 are effective retroactively on June 30, 2005, once the city council of
the city of Minneapolis and its chief clerical officer timely complete their compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3.
new text end

ARTICLE 10

MINNEAPOLIS POLICE RELIEF ASSOCIATION CHANGES

Section 1.

Minnesota Statutes 2004, section 423B.07, is amended to read:

423B.07 AUTHORIZED FUND DISBURSEMENTS.

The police pension fund may be used only for the payment of:

(1) service, disability, or dependency pensions;

(2) notwithstanding a contrary provision of section 69.80, the salaries of the elected
members of the board of trustees in an amount not to exceed deleted text begin threedeleted text end new text begin seven new text end unitsnew text begin for the
president and five units for other elected board membersnew text end ;

(3) expenses of officers and employees of the association in connection with the
protection of the fund;

(4) expenses of operating and maintaining the association, including the
administrative expenses related to the administration of the insurance plan authorized
in section 423B.08; and

(5) other expenses authorized by section 69.80, or other applicable law.

Sec. 2.

Minnesota Statutes 2005 Supplement, section 423B.09, subdivision 1, is
amended to read:

Subdivision 1.

Minneapolis police; persons entitled to receive pensions.

The
association shall grant pensions payable from the police pension fund in monthly
installments to persons entitled to pensions in the manner and for the following purposes.

(a) An active member or a deferred pensioner who has performed duty as a member
of the police department of the city for five years or more, upon written application after
retiring from duty and reaching at least age 50, is entitled to be paid monthly for life a
service pension. Active members, deferred members, and service pensioners are entitled
to a service pension according to the following schedule:

	new text begin A new text end	new text begin B new text end
5 years	deleted text begin 8.0deleted text end new text begin 8.5 new text end units	new text begin 9.0 units new text end
6 years	deleted text begin 9.6deleted text end new text begin 10.1 new text end units	new text begin 10.6 units new text end
7 years	deleted text begin 11.2deleted text end new text begin 11.7 new text end units	new text begin 12.2 units new text end
8 years	deleted text begin 12.8deleted text end new text begin 13.3 new text end units	new text begin 13.8 units new text end
9 years	deleted text begin 14.4deleted text end new text begin 14.9 new text end units	new text begin 15.4 units new text end
10 years	deleted text begin 16.0deleted text end new text begin 16.5 new text end units	new text begin 17.0 units new text end
11 years	deleted text begin 17.6deleted text end new text begin 18.1 new text end units	new text begin 18.6 units new text end
12 years	deleted text begin 19.2deleted text end new text begin 19.7 new text end units	new text begin 20.2 units new text end
13 years	deleted text begin 20.8deleted text end new text begin 21.3 new text end units	new text begin 21.8 units new text end
14 years	deleted text begin 22.4deleted text end new text begin 22.9 new text end units	new text begin 23.4 units new text end
15 years	deleted text begin 24.0deleted text end new text begin 24.5 new text end units	new text begin 25.0 units new text end
16 years	deleted text begin 25.6deleted text end new text begin 26.1 new text end units	new text begin 26.6 units new text end
17 years	deleted text begin 27.2deleted text end new text begin 27.7 new text end units	new text begin 28.2 units new text end
18 years	deleted text begin 28.8deleted text end new text begin 29.3 new text end units	new text begin 29.8 units new text end
19 years	deleted text begin 30.4deleted text end new text begin 30.9 new text end units	new text begin 31.4 units new text end
	deleted text begin A deleted text end	deleted text begin B deleted text end
20 years	34.5 units	35.0 units
21 years	36.1 units	36.6 units
22 years	37.7 units	38.2 units
23 years	39.3 units	39.8 units
24 years	40.9 units	41.4 units
25 years	42.5 units	43.0 units

Column A is applicable until December 31, 2005, and applies retroactively to
January 1, 2005, for a service pensioner who retired before January 1, 2005. Column B
applies on and after January 1, 2006.

Fractional years of service may not be used in computing pensions.

(b) An active member who after five years' service but less than 20 years' service
with the police department of the city, becomes superannuated so as to be permanently
unable to perform the person's assigned duties, is entitled to be paid monthly for life a
superannuation pension equal to four units for five years of service and an additional two
units for each full year of service over five years and less than 20 years.

(c) An active member who is not eligible for a service pension and who, while a
member of the police department of the city, becomes diseased or sustains an injury while
in the service that permanently unfits the member for the performance of police duties is
entitled to be paid monthly for life a pension equal to 34 units while so disabled.

Sec. 3. new text begin EFFECTIVE DATE; LOCAL APPROVAL.
new text end

new text begin (a) Section 1 is effective the day after the date of approval by the city council of
the city of Minneapolis and the timely completion by the chief clerical officer of the city
of Minneapolis of compliance with Minnesota Statutes, section 645.021, subdivisions
2 and 3.
new text end

new text begin (b) Section 2 is effective the day after the governing body of the city of Minneapolis
and its chief clerical officer timely complete their compliance with Minnesota Statutes,
section 645.021, subdivisions 2 and 3.
new text end

ARTICLE 11

RECODIFICATION OF VARIOUS

STATEWIDE SPECIALTY RETIREMENT PLANS

Section 1.

Minnesota Statutes 2004, section 3A.01, subdivision 1, is amended to read:

Subdivision 1.

Purposes.

new text begin Each of new text end the terms defined in this sectionnew text begin ,new text end for the purposes
of this chapter deleted text begin shall be given deleted text end new text begin has new text end the deleted text begin meanings deleted text end new text begin meaning new text end ascribed deleted text begin to themdeleted text end .

Sec. 2.

Minnesota Statutes 2004, section 3A.01, is amended by adding a subdivision to
read:

new text begin Subd. 1a. new text end

new text begin Actuarial equivalent. new text end

new text begin "Actuarial equivalent" means the condition of one
allowance or benefit having an equal actuarial present value to another allowance or
benefit, determined by the actuary retained under section 356.214 as of a given date at a
specified age with each actuarial present value based on the mortality table applicable for
the plan and approved under section 356.215, subdivision 18, and using the applicable
preretirement or postretirement interest rate assumption specified in section 356.215,
subdivision 8.
new text end

Sec. 3.

Minnesota Statutes 2004, section 3A.01, is amended by adding a subdivision to
read:

new text begin Subd. 1b. new text end

new text begin Average monthly salary. new text end

new text begin "Average monthly salary" means the average
of the member's highest five successive years of salary that was received as a member
of the legislature and upon which the member has made contributions under section
3A.03, subdivision 1, or for which the member of the legislature has made payments for
past service under Minnesota Statutes 2004, section 3A.02, subdivision 2, or has made,
before July 1, 1994, payments in lieu of contributions under Minnesota Statutes 1992,
section 3A.031.
new text end

Sec. 4.

Minnesota Statutes 2004, section 3A.01, is amended by adding a subdivision to
read:

new text begin Subd. 1c. new text end

new text begin Constitutional officer. new text end

new text begin "Constitutional officer" means a person who was
duly elected, qualifies for, and serves as the governor, the lieutenant governor, the attorney
general, the secretary of state, or the state auditor of the state of Minnesota.
new text end

Sec. 5.

Minnesota Statutes 2004, section 3A.01, subdivision 2, is amended to read:

Subd. 2.

Dependent child.

new text begin (a) new text end "Dependent child" means any natural or adopted
child of a deceased member of the legislature or new text begin a new text end former legislator who is under the age
of 18, or who is under the age of 22 and is a full-time student, and whonew text begin ,new text end in either casenew text begin ,new text end is
unmarried and was actually dependent for more than one-half of support upon deleted text begin such deleted text end new text begin the
new text end legislator for a period new text begin of new text end at least 90 days immediately deleted text begin prior to deleted text end new text begin before new text end the legislator's
death. deleted text begin It
deleted text end

new text begin (b) The term new text end also includes any child of the member of the legislature or former
legislator new text begin who was new text end conceived during the lifetime of, and new text begin who was new text end born after the death of,
the member or former legislator. deleted text begin This subdivision shall be retroactive as to any dependent
child under the age of 22 years as of April 1,1975.
deleted text end

Sec. 6.

Minnesota Statutes 2004, section 3A.01, subdivision 6, is amended to read:

Subd. 6.

Director.

"Director" means the executive director of the Minnesota State
Retirement System new text begin who was appointed under section 352.03, subdivision 5new text end .

Sec. 7.

Minnesota Statutes 2004, section 3A.01, is amended by adding a subdivision to
read:

new text begin Subd. 6b. new text end

new text begin Former legislator. new text end

new text begin "Former legislator" means a legislator who has
ceased to be a member of the legislature for any reason, including, but not limited to, the
expiration of the term for which a member of the legislature was elected or the death
of the member.
new text end

Sec. 8.

Minnesota Statutes 2004, section 3A.01, is amended by adding a subdivision to
read:

new text begin Subd. 6c. new text end

new text begin Member of the legislature. new text end

new text begin "Member of the legislature" means a
person who was a member of the house of representatives or of the senate of the state of
Minnesota who has subscribed to the oath of office after July 1, 1965, and who was first
elected to a legislative office before July 1, 1997, and retained coverage by the plan under
Laws 1997, chapter 233, article 2, section 15.
new text end

Sec. 9.

Minnesota Statutes 2004, section 3A.01, subdivision 8, is amended to read:

Subd. 8.

Normal retirement age.

"Normal retirement age" means the age of deleted text begin 60
years with regard to any member of the legislature whose service terminates prior to the
beginning of the 1981 legislative session, and the age ofdeleted text end 62 years deleted text begin with regard to any
member of the legislature whose service terminates after the beginning of the 1981 sessiondeleted text end .

Sec. 10.

Minnesota Statutes 2004, section 3A.01, is amended by adding a subdivision
to read:

new text begin Subd. 9. new text end

new text begin Retirement. new text end

new text begin "Retirement" means the period of time after which a former
legislator is entitled to a retirement allowance.
new text end

Sec. 11.

Minnesota Statutes 2004, section 3A.01, is amended by adding a subdivision
to read:

new text begin Subd. 10. new text end

new text begin Salary. new text end

new text begin (a) "Salary" means the regular compensation payable under law
to a member of the legislature and paid to the person for service as a legislator.
new text end

new text begin (b) The term includes the monthly compensation paid to the member of the
legislature and the per diem payments paid during a regular or special session to the
member of the legislature.
new text end

new text begin (c) The term does not include per diem payments paid to a member of the legislature
other than during the regular or special session; additional compensation attributable to a
leadership position under section 3.099, subdivision 3; living expense payments under
section 3.101; and special session living expense payments under section 3.103.
new text end

Sec. 12.

Minnesota Statutes 2004, section 3A.011, is amended to read:

3A.011 ADMINISTRATION OF PLAN.

The new text begin executive director and the board of directors of the new text end Minnesota State Retirement
System shall administer the legislators retirement plan in accordance with new text begin this chapter
and new text end chapter 356A.

Sec. 13.

Minnesota Statutes 2004, section 3A.02, subdivision 1, is amended to read:

Subdivision 1.

Qualifications.

(a) A former legislator is entitled, upon written
application to the director, to receive a retirement allowance monthly, if the person:

(1) has new text begin either new text end served at least six full years, without regard to the application of
section 3A.10, subdivision 2, or has served during all or part of four regular sessions as a
member of the legislature, which service need not be continuous;

(2) has attained the normal retirement age;

(3) has retired as a member of the legislature; and

(4) has made all contributions provided for in section 3A.03, has made payments
for past service under subdivision 2, or has made payments in lieu of contributions under
Minnesota Statutes 1992, section 3A.031, deleted text begin prior to deleted text end new text begin before new text end July 1, 1994.

(b) deleted text begin This paragraph applies to members of the legislature who terminate service as
a legislator before July 1, 1997. For service rendered before the beginning of the 1979
legislative session, but not to exceed eight years of service, the retirement allowance is
an amount equal to five percent per year of service of that member's average monthly
salary. For service in excess of eight years rendered before the beginning of the 1979
legislative session, and for service rendered after the beginning of the 1979 legislative
session,deleted text end new text begin Unless the former legislator has legislative service before January 1, 1979,new text end the
retirement allowance is an amount equal to 2-1/2 percent per year of service of that
member's average monthly salarydeleted text begin .
deleted text end

deleted text begin (c) This paragraph applies to members of the legislature who terminate service as
a legislator after June 30, 1997. The retirement allowance is an amount equal to the
applicable rate or rates under paragraph (b) per year of service of the member's average
monthly salarydeleted text end new text begin and new text end adjusted for that person on an actuarial equivalent basis to reflect the
change in the postretirement interest rate actuarial assumption under section 356.215,
subdivision 8, from five percent to six percent. The adjustment must be calculated by or,
alternatively, the adjustment procedure must be specified by, the actuary retained deleted text begin by the
Legislative Commission on Pensions and Retirement deleted text end new text begin under section 356.214new text end . The purpose
of this adjustment is to ensure that the total amount of benefits that the actuary predicts
an individual member will receive over the member's lifetime under this paragraph will
be the same as the total amount of benefits the actuary predicts the individual member
would receive over the member's lifetime under the law in effect before enactment of this
paragraph. new text begin If the former legislator has legislative service before January 1, 1979, the
person's benefit must include the additional benefit amount in effect on January 1,1979,
and adjusted as otherwise provided in this paragraph.
new text end

deleted text begin (d) deleted text end new text begin (c) new text end The retirement allowance accrues beginning with the first day of the month
of receipt of the application, but not before age 60, and for the remainder of the former
legislator's life, if the former legislator is not serving as a member of the legislature or as a
constitutional officer deleted text begin or commissioner deleted text end as defined in section deleted text begin 352C.021, subdivisions 2 and
3 deleted text end new text begin 3A.01, subdivision 1cnew text end . The annuity does not begin to accrue deleted text begin prior to deleted text end new text begin before the person's
new text end retirement as a legislator. No annuity payment may be made retroactive for more than 180
days before the date new text begin that new text end the annuity application is filed with the director.

deleted text begin (e) deleted text end new text begin (d) new text end Any member who has served during all or part of four regular sessions is
considered to have served eight years as a member of the legislature.

deleted text begin (f) deleted text end new text begin (e) new text end The retirement allowance ceases with the last payment that accrued to the
retired legislator during the retired legislator's lifetime, except that the surviving spouse, if
any, is entitled to new text begin receive new text end the retirement allowance new text begin of the retired legislator new text end for the calendar
month in which the retired legislator died.

Sec. 14.

Minnesota Statutes 2004, section 3A.02, subdivision 1b, is amended to read:

Subd. 1b.

Reduced retirement allowance.

(a) Upon separation from service after
the beginning of the 1981 legislative session, a former member of the legislature who has
attained the age set by the board of directors of the Minnesota State Retirement System
and who is otherwise qualified deleted text begin in accordance with deleted text end new text begin under new text end subdivision 1 is entitlednew text begin ,new text end upon
making written application on deleted text begin forms supplied deleted text end new text begin a form prescribed new text end by the directornew text begin ,new text end to a
new text begin reduced new text end retirement allowance deleted text begin indeleted text end new text begin . The reduced retirement allowance isnew text end an amount equal
to the retirement allowance specified in subdivision 1new text begin , paragraph (b), that isnew text end reduced so
that the reduced deleted text begin annuity deleted text end new text begin allowance new text end is the actuarial equivalent of the deleted text begin annuity deleted text end new text begin allowance
new text end that would be payable if the former member of the legislature deferred receipt of the
deleted text begin annuity deleted text end new text begin allowance new text end and the deleted text begin annuity deleted text end new text begin allowance new text end amount deleted text begin were deleted text end new text begin was new text end augmented at an annual
rate of three percent compounded annually from the date the deleted text begin annuity deleted text end new text begin allowance new text end begins to
accrue until age 62.

(b) The age set by the board of directors under paragraph (a) cannot be deleted text begin less deleted text end new text begin an earlier
age new text end than the early retirement age under section 352.116, subdivision 1a.

(c) If there is an actuarial cost to the plan of resetting the early retirement age under
paragraph (a), the retired legislator is required to pay an additional amount to cover the
full actuarial value. The additional amount must be paid in a lump sum within 30 days of
the certification of the amount by the executive director.

(d) The executive director of the Minnesota State Retirement System shall report
to the Legislative Commission on Pensions and Retirement on the utilization of this
provision new text begin annually new text end on or before September 1deleted text begin , 2000deleted text end .

Sec. 15.

Minnesota Statutes 2004, section 3A.02, subdivision 3, is amended to read:

Subd. 3.

Appropriation.

The amounts required for payment of retirement
allowances provided by this section are appropriated annually to the director from the
participation new text begin of the legislators retirement plan new text end in the Minnesota postretirement investment
fund deleted text begin and shalldeleted text end new text begin . The retirement allowance mustnew text end be paid monthly to the recipients entitled
deleted text begin thereto deleted text end new text begin to those retirement allowancesnew text end .

Sec. 16.

Minnesota Statutes 2004, section 3A.02, subdivision 4, is amended to read:

Subd. 4.

Deferred annuities augmentation.

(a) The deferred deleted text begin annuity deleted text end new text begin retirement
allowance new text end of any former legislator must be augmented as provided herein.

new text begin (b) new text end The required reserves applicable to the deferred deleted text begin annuity deleted text end new text begin retirement allowancenew text end ,
determined as of the date the benefit begins to accrue using an appropriate mortality table
and an interest assumption of six percent, must be augmented from the first of the month
following new text begin the new text end termination of new text begin active new text end service, or July 1, 1973, whichever is later, to the
first day of the month in which the deleted text begin annuity deleted text end new text begin allowance new text end begins to accrue, at the new text begin following
annually compounded new text end rate deleted text begin of five percent per annum compounded annually until January
1, 1981, and thereafter at the rate of three percent per annum compounded annually until
January 1 of the year in which the former legislator attains age 55. From that date to the
effective date of retirement, the rate is five percent compounded annually.deleted text end new text begin or rates:
new text end

new text begin (1) five percent until January 1, 1981;
new text end

new text begin (2) three percent from January 1, 1981, or from the first day of the month following
the termination of active service, whichever is later, until January 1 of the year in which
the former legislator attains age 55; and
new text end

new text begin (3) five percent from the period end date under clause (2) to the effective date of
retirement.
new text end

deleted text begin (b) The retirement allowance of, or the survivor benefit payable on behalf of, a
former member of the legislature who terminated service before July 1, 1997, which is
not first payable until after June 30, 1997, must be increased on an actuarial equivalent
basis to reflect the change in the postretirement interest rate actuarial assumption under
section 356.215, subdivision 8, from five percent to six percent under a calculation
procedure and tables adopted by the board of directors of the Minnesota State Retirement
System and approved by the actuary retained by the Legislative Commission on Pensions
and Retirement.
deleted text end

Sec. 17.

Minnesota Statutes 2004, section 3A.02, subdivision 5, is amended to read:

Subd. 5.

Optional annuities.

(a) The board of directors shall establish an optional
retirement annuity in the form of a joint and survivor annuity and an optional retirement
annuity in the form of a period certain and life thereafter. Except as provided in paragraph
(b), these optional annuity forms must be actuarially equivalent to the normal deleted text begin annuity
deleted text end new text begin allowance new text end computed under this section, plus the actuarial value of any surviving spouse
benefit otherwise potentially payable at the time of retirement under section 3A.04,
subdivision 1. An individual selecting an optional annuity under this subdivision deleted text begin waives
deleted text end new text begin and the person's spouse waive new text end any rights to surviving spouse benefits under section 3A.04,
subdivision 1.

(b) If a retired legislator selects the joint and survivor annuity option, the retired
legislator must receive a normal single-life deleted text begin annuity deleted text end new text begin allowance new text end if the designated optional
annuity beneficiary dies before the retired legislator and no reduction may be made in the
annuity to provide for restoration of the normal single-life deleted text begin annuity deleted text end new text begin allowance new text end in the event
of the death of the designated optional annuity beneficiary.

(c) The surviving spouse of a legislator who has attained at least age 60 and who dies
while a member of the legislature may elect an optional joint and survivor annuity under
paragraph (a), in lieu of surviving spouse benefits under section 3A.04, subdivision 1.

Sec. 18.

Minnesota Statutes 2004, section 3A.03, subdivision 1, is amended to read:

Subdivision 1.

Percentage.

new text begin (a) new text end Every member of the legislature shall contribute
nine percent of total salarydeleted text begin ,deleted text end new text begin .
new text end

new text begin (b) The contribution must be made new text end by payroll deductiondeleted text begin , to deleted text end new text begin and must new text end be paid into
the state treasury and deposited in the general fund. deleted text begin It shall be the duty of
deleted text end

new text begin (c) new text end The director deleted text begin to deleted text end new text begin must new text end record the periodic contributions of each member of the
legislature and new text begin must new text end credit deleted text begin such deleted text end new text begin each new text end contribution to the member's account.

Sec. 19.

Minnesota Statutes 2004, 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 new text begin from the general fund new text end 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 deleted text begin must be
considered deleted text end new text begin is new text end a deleted text begin new deleted text end member of deleted text begin this plan deleted text end new text begin the unclassified employees retirement program of
the Minnesota State Retirement Systemnew text end .

new text begin (d) new text end However, the member may reinstate the rights and credit for service previously
forfeited new text begin under this chapter new text end if the member repays all refunds takennew text begin ,new text end plus interest at an
annual rate of 8.5 percent compounded annually from the date on which the refund was
taken to the date on which the refund is repaid.

deleted text begin (d) deleted text end new text begin (e) new text end No person may be required to apply for or to accept a refund.

Sec. 20.

Minnesota Statutes 2004, section 3A.04, subdivision 1, is amended to read:

Subdivision 1.

Surviving spouse.

new text begin (a) new text end Upon the death of a member of the legislature
while serving as deleted text begin such deleted text end new text begin a new text end member deleted text begin after June 30, 1973deleted text end , or upon the death of a former member
of the legislature with at least deleted text begin the number of deleted text end new text begin six full new text end years of service deleted text begin as required by section
3A.02, subdivision 1, clause (1) deleted text end new text begin or service in all or part of four regular legislative sessionsnew text end ,
the surviving spouse deleted text begin shall be paid deleted text end new text begin is entitled to new text end a survivor benefitdeleted text begin in the amount of deleted text end new text begin .
new text end

new text begin (b) The surviving spouse benefit is new text end one-half of the retirement allowance of the
member of the legislature computed as though the member were at least normal retirement
age on the date of death and based upon new text begin the member's new text end allowable service or new text begin upon new text end eight
yearsnew text begin ,new text end whichever is greater. The augmentation provided in section 3A.02, subdivision 4, if
applicable, deleted text begin shall deleted text end new text begin must new text end be applied new text begin for the period up new text end tonew text begin , and including,new text end the month of death.

new text begin (c) new text end Upon the death of a former legislator receiving a retirement allowance, the
surviving spouse deleted text begin shall be deleted text end new text begin is new text end entitled to one-half of the amount of the new text begin retirement new text end allowance
being paid to the legislator. deleted text begin Such
deleted text end

new text begin (d) The surviving spouse new text end benefit deleted text begin shall be paid during deleted text end new text begin is payable for new text end the lifetime
of the surviving spouse.

Sec. 21.

Minnesota Statutes 2004, section 3A.04, subdivision 2, is amended to read:

Subd. 2.

Dependent children.

new text begin (a) new text end Upon the death of a member of the legislature
while serving as a member, or upon the death of a former member of the legislature who
has rendered at least deleted text begin the number of deleted text end new text begin six full new text end years of service deleted text begin as required by section 3A.02,
subdivision 1, clause (1) deleted text end new text begin or service in all or part of four regular legislative sessions new text end and
who was not receiving a retirement allowance, each dependent child of the member or
former legislator deleted text begin shall be deleted text end new text begin is new text end entitled to receive a survivor benefit in the following amount:

new text begin (1) for the new text end first dependent child, a monthly deleted text begin allowance which equals deleted text end new text begin benefit equal to
new text end 25 percent of the monthly retirement allowance of the member of the legislature or new text begin the
new text end former legislator computed as though the member or new text begin the new text end former legislator had attained at
least the normal retirement age on the date of death and based upon the average monthly
salary as of the date of death or as of the date of termination, whichever deleted text begin is applicable
deleted text end new text begin appliesnew text end , and the new text begin member's new text end allowable service or eight yearsnew text begin ,new text end whichever is greater;

new text begin (2) new text end for each additional dependent child, a monthly deleted text begin allowance which equals deleted text end new text begin benefit
equal to new text end 12-1/2 percent of the monthly retirement allowance of the member or new text begin the new text end former
legislator computed as new text begin provided new text end in deleted text begin the case of the first child deleted text end new text begin clause (1)new text end ; deleted text begin but deleted text end new text begin and
new text end

new text begin (3) new text end the total amount paid to the surviving spouse and new text begin to the new text end dependent new text begin child or
new text end children deleted text begin shalldeleted text end new text begin may new text end not exceednew text begin ,new text end in any one monthnew text begin ,new text end 100 percent of the monthly retirement
allowance of the member or new text begin of the new text end former legislator computed as new text begin provided new text end in deleted text begin the case of
the first child deleted text end new text begin clause (1)new text end .

new text begin (b) new text end The augmentation provided in section 3A.02, subdivision 4, if applicable,
deleted text begin shall be applied deleted text end new text begin applies new text end from the first day of the month next following the date of new text begin the
new text end termination of new text begin the person from new text end service as a member of the legislature to the month of
new text begin the new text end death new text begin of the personnew text end .

new text begin (c) new text end Upon the death of a former legislator who was receiving a retirement allowance,
deleted text begin the deleted text end new text begin a new text end surviving dependent child deleted text begin shall be deleted text end new text begin is new text end entitled to the applicable percentage specified
deleted text begin above deleted text end new text begin in paragraph (a), clause (1) or (2), whichever applies,new text end of the amount of the
allowance which was paid to the former legislator for the month immediately deleted text begin prior to
deleted text end new text begin before new text end the date of death new text begin of the former legislatornew text end .

new text begin (d) new text end The payments for dependent children deleted text begin shall deleted text end new text begin must new text end be made to the surviving spouse
or new text begin to new text end the guardian of the estate of the dependent children, if there is one.

Sec. 22.

Minnesota Statutes 2004, section 3A.04, subdivision 3, is amended to read:

Subd. 3.

Payment.

The surviving deleted text begin spouse's deleted text end new text begin spouse new text end and dependent deleted text begin children's deleted text end new text begin child
or children new text end survivor benefits payable under this section deleted text begin shall be paid deleted text end new text begin are payable new text end by the
director monthly in the same manner as retirement allowances are authorized to be paid
by this chapter.

Sec. 23.

Minnesota Statutes 2004, section 3A.04, subdivision 4, is amended to read:

Subd. 4.

Death refunds.

new text begin (a) new text end Upon the death of a member of the legislature or
new text begin of a new text end former legislator who was not receiving a retirement allowancedeleted text begin ,deleted text end without new text begin leaving
new text end either a surviving spouse or new text begin a new text end dependent new text begin child or dependent new text end children, the last designated
beneficiary named on a form new text begin that was new text end filed with the director before the death of the
legislator, or if no designation is filed, the estate of the member or new text begin the new text end former legislator,
upon application, deleted text begin shall be deleted text end new text begin is new text end entitled to a refundnew text begin .
new text end

new text begin (b) The refund is the amount of contributions credited to the person's account new text end plus
interest as provided in section 3A.03, subdivision 2, deleted text begin clause (2) deleted text end new text begin paragraph (a)new text end .

Sec. 24.

Minnesota Statutes 2004, section 3A.04, is amended by adding a subdivision
to read:

new text begin Subd. 5. new text end

new text begin Appropriation. new text end

new text begin The survivor benefits and the death refunds authorized by
this section are appropriated to the director from the general fund when they are due and
payable.
new text end

Sec. 25.

Minnesota Statutes 2004, section 3A.05, is amended to read:

3A.05 APPLICATION FOR SURVIVOR BENEFIT.

new text begin (a) new text end Applications for survivor benefits deleted text begin pursuant to deleted text end new text begin under new text end section 3A.04 deleted text begin shall deleted text end new text begin must new text end be
filed with the director by the surviving spouse and dependent new text begin child or new text end children entitled
to benefits deleted text begin pursuant to deleted text end new text begin under new text end section 3A.04, or by the guardian of the estate, if there is
one, of the dependent new text begin child or new text end children.

new text begin (b) new text end Survivor benefits deleted text begin shall deleted text end accrue as of the first day of the month following the death
of the member of the legislature or former legislator and payments deleted text begin shall deleted text end commence as
of the first of the month next following the filing of the application, and deleted text begin shall be deleted text end new text begin are
new text end retroactive to the date the benefit accruesdeleted text begin ; provided, however, that no payment shall be
retroactive for more than deleted text end new text begin or the first of the month occurring new text end 12 months deleted text begin prior to deleted text end new text begin before new text end the
month new text begin in which new text end the application is filed with the directornew text begin , whichever is earliernew text end .

Sec. 26.

Minnesota Statutes 2004, section 3A.07, is amended to read:

3A.07 APPLICATION.

(a) Except as provided in paragraph (b), this chapter applies to members of the
legislature in service after July 1, 1965, who otherwise meet the requirements of this
chapter.

(b) Members of the legislature who were elected for the first time after June 30,
1997, or members of the legislature who were elected before July 1, 1997, and who, after
July 1, 1998, elect not to be members of the plan established by this chapter are covered
by the unclassified employees retirement program governed by chapter 352D.

(c) The post-July 1, 1998, coverage election under paragraph (b) is irrevocable
and must be made on a form prescribed by the director. new text begin The second chance referendum
election under Laws 2002, chapter 392, article 15, also is irrevocable.
new text end

Sec. 27.

Minnesota Statutes 2004, section 3A.10, subdivision 1, is amended to read:

Subdivision 1.

Service credit for legislative term.

new text begin (a) new text end In the case of a member of
the house of representativesnew text begin ,new text end one full term of office deleted text begin shall deleted text end new text begin must new text end be considered two full years
new text begin of new text end servicenew text begin ,new text end notwithstanding the fact that the oath of office deleted text begin may be deleted text end new text begin was new text end taken on different
days each biennium.

new text begin (b) new text end In the case of a member of the senate, one full term of office deleted text begin shall deleted text end new text begin must new text end be
considered four full years new text begin of new text end servicenew text begin ,new text end notwithstanding the fact that the oath of office deleted text begin may
be deleted text end new text begin was new text end taken on different days at the start of each term.

new text begin (c) new text end For purposes of this chapter, a legislative term deleted text begin shall deleted text end new text begin must new text end be deemed to
commence on January deleted text begin 1st deleted text end new text begin 1 new text end and to end on December deleted text begin 31st deleted text end new text begin 31new text end .

Sec. 28.

Minnesota Statutes 2004, section 3A.12, is amended to read:

3A.12 COVERAGE BY MORE THAN ONE RETIREMENT SYSTEM OR
ASSOCIATION.

Subdivision 1.

Entitlement to annuity.

new text begin (a) new text end Any legislator who has been deleted text begin an
employee covered by deleted text end new text begin a member of a retirement plan listed in paragraph (b) is entitled,
when otherwise qualified, to a retirement allowance or annuity from each plan if the total
allowable service in all plans or in any two of these plans totals ten or more years.
new text end

new text begin (b) This section applies to any retirement plan or program administered by new text end the
Minnesota State Retirement System, or deleted text begin a member of deleted text end new text begin any retirement plan administered
by new text end the Public Employees Retirement Associationnew text begin ,new text end including the Public Employees
Retirement Association police and fire fund, or the Teachers Retirement Association, or
the Minneapolis employees retirement deleted text begin fund deleted text end new text begin plannew text end , or the State Patrol retirement deleted text begin fund
deleted text end new text begin plannew text end , or any other public employee retirement system in the state of Minnesota having a
like provision deleted text begin but excluding alldeleted text end new text begin .
new text end

new text begin (c) This section does not apply to new text end other deleted text begin funds deleted text end new text begin retirement plans new text end providing benefits for
police or firefightersdeleted text begin , shall be entitled when qualified to an annuity from each fund if the
total allowable service for which the legislator has credit in all funds or in any two of these
funds totals ten or more years, provideddeleted text end new text begin .
new text end

new text begin (d) new text end No portion of the allowable service upon which the retirement annuity from one
deleted text begin fund deleted text end new text begin plan new text end is based is again used in the computation for benefits from another deleted text begin fund deleted text end new text begin plannew text end .
The annuity from each deleted text begin fund shall deleted text end new text begin plan must new text end be determined by the appropriate provisions
of the lawnew text begin ,new text end except that the requirement that a person must have deleted text begin at least ten deleted text end new text begin a minimum
number of new text end yearsnew text begin of new text end allowable service in the respective system or association deleted text begin shall deleted text end new text begin does new text end not
apply for the purposes of this section deleted text begin provided deleted text end new text begin if new text end the combined service in two or more
of these deleted text begin fundsdeleted text end new text begin plans new text end equals ten or more years. The augmentation of deferred annuities
provided in section 3A.02, subdivision 4, deleted text begin shall apply deleted text end new text begin applies new text end to the annuities accruing
deleted text begin hereunder deleted text end new text begin under this sectionnew text end .

Subd. 2.

Refund repayment.

deleted text begin Any deleted text end new text begin A new text end former legislator who has received a refund as
provided in section 3A.03, subdivision 2, who is a currently contributing member of a
retirement deleted text begin fund deleted text end new text begin plan new text end specified in subdivision 1new text begin , paragraph (b)new text end , may repay the refund as
provided in section 3A.03, subdivision 2. deleted text begin Any deleted text end new text begin A new text end member of the legislature who has
received a refund from any of the deleted text begin funds deleted text end new text begin retirement plans new text end specified in subdivision 1deleted text begin ,deleted text end may
repay the refund to the respective deleted text begin fund deleted text end new text begin plan new text end under such terms and conditions consistent
with the law governing deleted text begin such fund deleted text end new text begin the retirement plan new text end if the law governing deleted text begin such fund deleted text end new text begin the
plan new text end permits the repayment of refunds. If the total amount to be repaid, including principal
and interest exceeds $2,000, repayment maybe made in three equal installments over a
period of 18 months, with new text begin the new text end interest accrued during the period of new text begin the new text end repayment added
to the final installment.

Sec. 29.

Minnesota Statutes 2004, section 3A.13, is amended to read:

3A.13 EXEMPTION FROM PROCESS AND TAXATION; HEALTH
PREMIUM DEDUCTION.

new text begin (a) new text end The provisions of section 352.15 deleted text begin shall deleted text end apply to the legislators retirement plan,
chapter 3A.

new text begin (b) new text end The executive director of the Minnesota State Retirement System must, at the
request of a retired legislator who is enrolled in a health insurance plan covering state
employees, deduct the person's health insurance premiums from the person's annuity and
transfer the amount of the premium to a health insurance carrier covering state employees.

Sec. 30.

new text begin [352C.001] RETIREMENT PLAN; APPLICATION.
new text end

new text begin (a) The retirement plan applicable to a former constitutional officer who was first
elected to a constitutional office after July 1, 1967, and before July 1, 1997, is the
applicable portions of this chapter and chapter 356 in effect on the date on which the
person terminated active service as a constitutional officer.
new text end

new text begin (b) Nothing in this section or section 31 or 34, subdivision 2, is intended to reduce
the benefits of former constitutional officers or to adversely modify their eligibility for
benefits in effect as of the day before the effective date of this section.
new text end

Sec. 31.

Minnesota Statutes 2004, section 352C.091, subdivision 1, is amended to read:

Subdivision 1.

Administrative agency and standards.

deleted text begin This chapter deleted text end new text begin (a) The elected
officers retirement plan new text end must be administered by the new text begin board of directors and the executive
director of the new text end Minnesota State Retirement System.

new text begin (b) new text end The elected state officers retirement plan must be administered consistent with
deleted text begin this chapter deleted text end new text begin the applicable statutory provisions governing the plan new text end and chapters 356 and
356A.

Sec. 32.

Minnesota Statutes 2004, section 352C.10, is amended to read:

352C.10 BENEFIT ADJUSTMENTS.

Retirement allowances payable to retired constitutional officers deleted text begin pursuant to section
352C.031 deleted text end and surviving spouse benefits payable deleted text begin pursuant to section 352C.04, shall deleted text end new text begin must
new text end be adjusted in the same manner, at the same times and in the same amounts as are benefits
payable from the Minnesota postretirement investment fund to retirees of a participating
public pension fund.

Sec. 33.

Minnesota Statutes 2004, section 352D.02, subdivision 1, is amended to read:

Subdivision 1.

Coverage.

(a) Employees enumerated in paragraph (c), clauses (2),
(3), (4), and (6) to (14), if they are in the unclassified service of the state or Metropolitan
Council and are eligible for coverage under the general state employees retirement plan
under chapter 352, are participants in the unclassified plan under this chapter unless the
employee gives notice to the executive director of the Minnesota State Retirement System
within one year following the commencement of employment in the unclassified service
that the employee desires coverage under the general state employees retirement plan.
For the purposes of this chapter, an employee who does not file notice with the executive
director is deemed to have exercised the option to participate in the unclassified plan.

(b) Persons referenced in paragraph (c), deleted text begin clauses (1) and deleted text end new text begin clause new text end (5), are participants
in the unclassified program under this chapter unless the person deleted text begin isdeleted text end new text begin was new text end eligible to elect
different coverage under section 3A.07 deleted text begin or 352C.011 deleted text end anddeleted text begin , after July 1,1998, elects deleted text end new text begin elected
new text end retirement coverage by the applicable alternative retirement plan. Persons referenced
in paragraph (c), clause (15), are participants in the unclassified program under this
chapter for judicial employment in excess of the service credit limit in section 490.121,
subdivision 22.

(1) the governor, the lieutenant governor, the secretary of state, the state auditor,
and the attorney general;

(2) an employee in the Office of the Governor, Lieutenant Governor, Secretary
of State, State Auditor, Attorney General;

(3) an employee of the State Board of Investment;

(4) the head of a department, division, or agency created by statute in the unclassified
service, an acting department head subsequently appointed to the position, or an employee
enumerated in section 15A.0815 or 15A.083, subdivision 4;

(5) a member of the legislature;

(6) a full-time unclassified employee of the legislature ora commission or agency of
the legislature who is appointed without a limit on the duration of the employment or a
temporary legislative employee having shares in the supplemental retirement fund as a
result of former employment covered by this chapter, whether or not eligible for coverage
under the Minnesota State Retirement System;

(7) a person who is employed in a position established under section 43A.08,
subdivision 1, clause (3), or in a position authorized under a statute creating or establishing
a department or agency of the state, which is at the deputy or assistant head of department
or agency or director level;

(8) the regional administrator, or executive director of the Metropolitan Council,
general counsel, division directors, operations managers, and other positions as designated
by the council, all of which may not exceed 27 positions at the council and the chair;

(9) the executive director, associate executive director, and not to exceed nine
positions of the Higher Education Services Office in the unclassified service, as designated
by the Higher Education Services Office before January 1, 1992, or subsequently
redesignated with the approval of the board of directors of the Minnesota State Retirement
System, unless the person has elected coverage by the individual retirement account
plan under chapter 354B;

(10) the clerk of the appellate courts appointed under article VI, section 2, of the
Constitution of the state of Minnesota;

(11) the chief executive officers of correctional facilities operated by the Department
of Corrections and of hospitals and nursing homes operated by the Department of Human
Services;

(12) an employee whose principal employment is at the state ceremonial house;

(13) an employee of the Minnesota Educational Computing Corporation;

(14) an employee of the State Lottery who is covered by the managerial plan
established under section 43A.18, subdivision 3; and

(15) a judge who has exceeded the service credit limit in section 490.121,
subdivision 22.

Sec. 34. new text begin REPEALER; EFFECT ON BENEFIT COVERAGE.
new text end

new text begin Subdivision 1. new text end

new text begin Legislators retirement plan; repealed as obsolete. new text end

new text begin Minnesota
Statutes 2004, sections 3A.01, subdivisions 3, 4, 6a, and 7; 3A.02, subdivision 2; 3A.04,
subdivision 1a; and 3A.09, new text end new text begin are repealed.
new text end

new text begin Subd. 2. new text end

new text begin Elective state officers retirement plan; repealed as obsolete. new text end

new text begin Minnesota
Statutes 2004, sections 352C.01; 352C.011; 352C.021, subdivisions 1, 2, 3, 4, 5, 6, and
7; 352C.031, subdivisions 1, 2, 4, 5, and 6; 352C.033; 352C.04; 352C.051; 352C.09;
and 352C.091, subdivisions 2 and 3, new text end new text begin and new text end new text begin Minnesota Statutes 2005 Supplement, section
352C.021, subdivision 1a, new text end new text begin are repealed.
new text end

Sec. 35. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 34 are effective July 1, 2006.
new text end

ARTICLE 12

JUDGES RETIREMENT PLAN AND

BOARD ON JUDICIAL STANDARDS RECODIFICATION

Section 1.

Minnesota Statutes 2004, section 490.121, subdivision 1, is amended to read:

Subdivision 1.

Scope.

For purposes of sections 490.121to 490.132, new text begin unless the
context clearly indicates otherwise, each of the new text end terms defined in this section deleted text begin have deleted text end new text begin has new text end the
deleted text begin meanings deleted text end new text begin meaning new text end given deleted text begin them unless the context clearly indicates otherwise deleted text end new text begin itnew text end .

Sec. 2.

Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision
to read:

new text begin Subd. 2a. new text end

new text begin Actuarial equivalent. new text end

new text begin "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 board of directors of the Minnesota State Retirement
System based on the experience of the fund as recommended by the actuary retained
under section 356.214 and approved under section 356.215, subdivision 18, and using the
applicable preretirement or postretirement interest rate assumption specified in section
356.215, subdivision 8.
new text end

Sec. 3.

Minnesota Statutes 2005 Supplement, 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, deleted text begin ordeleted text end new text begin 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 monthnew text end served as a referee in probate for all referees in
probate who were in office deleted text begin prior todeleted text end new text begin beforenew text end 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 annual compound
interest at the rate of 8.5 percent 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.

new text begin (c) "Allowable service" does not mean service as a retired judge.
new text end

Sec. 4.

Minnesota Statutes 2004, section 490.121, subdivision 6, is amended to read:

Subd. 6.

Annuity.

"Annuity" means the payments new text begin that are new text end made each year to an
annuitant from the judges' retirement funddeleted text begin , pursuant to the provisions of deleted text end new text begin under new text end sections
490.121 to 490.132.

Sec. 5.

Minnesota Statutes 2004, section 490.121, subdivision 7, is amended to read:

Subd. 7.

Annuitant.

"Annuitant" means a new text begin former new text end judge, new text begin a new text end surviving spousenew text begin ,new text end or new text begin a
new text end dependent child new text begin who is new text end entitled to new text begin and is receiving new text end an annuity under deleted text begin the provisions of
deleted text end sections 490.121 to 490.132.

Sec. 6.

Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision
to read:

new text begin Subd. 7a. new text end

new text begin Approved actuary. new text end

new text begin "Approved actuary" means an actuary as defined in
section 356.215, subdivision 1, paragraph (c).
new text end

Sec. 7.

Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision
to read:

new text begin Subd. 7b. new text end

new text begin Court. new text end

new text begin "Court" means any court of this state that is established by the
Minnesota Constitution.
new text end

Sec. 8.

Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision
to read:

new text begin Subd. 7c. new text end

new text begin Dependent surviving child. new text end

new text begin "Dependent surviving child" means any
natural or adopted child of a deceased judge who has not reached the age of 18 years, or
having reached the age of 18, is under age 22 and who is a full-time student throughout
the normal school year, is unmarried, and is actually dependent for more than one-half of
the child's support upon the judge for a period of at least 90 days before the judge's death.
It also includes any natural child of the judge who was born after the death of the judge.
new text end

Sec. 9.

Minnesota Statutes 2004, section 490.121, subdivision 13, is amended to read:

Subd. 13.

Disability.

"Disability" means new text begin the new text end permanent inability new text begin of a judge to
continue new text end to perform the functions of judge by reason of new text begin a new text end physical or mental impairment
resulting from new text begin a new text end sickness or new text begin an new text end injury.

Sec. 10.

Minnesota Statutes 2004, section 490.121, subdivision 14, is amended to read:

Subd. 14.

Disability retirement date.

"Disability retirement date" means the last
day of the first month after new text begin the date on new text end which the governor determines, upon new text begin receipt of the
new text end voluntary application by the judge or otherwise, that a judge suffers from a disability.

Sec. 11.

Minnesota Statutes 2004, section 490.121, subdivision 15, is amended to read:

Subd. 15.

Disability retirement annuity.

"Disability retirement annuity" means an
annuity to which a judge is entitled under section 490.124, subdivisions 1 and 4new text begin ,new text end after new text begin the
new text end retirement deleted text begin for reason deleted text end of new text begin the judge because of a new text end disability.

Sec. 12.

Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision
to read:

new text begin Subd. 15a. new text end

new text begin Early retirement date. new text end

new text begin "Early retirement date" means the last day of
the month after a judge attains the age of 60 but before the judge reaches the normal
retirement date.
new text end

Sec. 13.

Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision
to read:

new text begin Subd. 15b. new text end

new text begin Early retirement annuity. new text end

new text begin "Early retirement annuity" means an annuity
to which a judge is entitled under section 490.124, subdivisions 1 and 3, upon retirement
by the judge at an early retirement date.
new text end

Sec. 14.

Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision
to read:

new text begin Subd. 21a. new text end

new text begin Judge. new text end

new text begin "Judge" means a judge or a justice of any court as defined under
subdivision 7b.
new text end

Sec. 15.

Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision
to read:

new text begin Subd. 21b. new text end

new text begin Judges' retirement fund; retirement fund; fund. new text end

new text begin "Judges' retirement
fund," "retirement fund," or "fund" means the fund created by section 490.123.
new text end

Sec. 16.

Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision
to read:

new text begin Subd. 21c. new text end

new text begin Mandatory retirement date. new text end

new text begin "Mandatory retirement date" means the
last day of the month in which a judge has attained 70 years of age.
new text end

Sec. 17.

Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision
to read:

new text begin Subd. 21d. new text end

new text begin Normal retirement annuity. new text end

new text begin Except as otherwise provided in sections
490.121 to 490.132, "normal retirement annuity" means an annuity to which a judge is
entitled under section 490.124, subdivision 1, upon retirement on or after the normal
retirement date of the judge.
new text end

Sec. 18.

Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision
to read:

new text begin Subd. 21e. new text end

new text begin Normal retirement date. new text end

new text begin "Normal retirement date" means the last day
of the month in which a judge attains the age of 65.
new text end

Sec. 19.

Minnesota Statutes 2004, section 490.121, subdivision 22, is amended to read:

Subd. 22.

Service credit limit.

"Service credit limit" means the greater of: (1)
24 years of allowable service under new text begin this new text end chapter deleted text begin 490deleted text end ; or (2) for judges with allowable
service rendered deleted text begin prior to deleted text end new text begin before new text end July 1, 1980, the number of years of allowable service
under chapter 490, which, when multiplied by the percentage listed in section 356.315,
subdivision 7 or 8, whichever is applicable to each year of service, equals 76.8.

Sec. 20.

Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision
to read:

new text begin Subd. 23. new text end

new text begin Surviving spouse. new text end

new text begin "Surviving spouse" means the surviving legally
married spouse of a deceased judge.
new text end

Sec. 21.

Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision
to read:

new text begin Subd. 24. new text end

new text begin Survivor's annuity. new text end

new text begin "Survivor's annuity" means an annuity to which a
surviving spouse or dependent child is entitled under section 490.124, subdivision 9.
new text end

Sec. 22.

Minnesota Statutes 2004, section 490.122, is amended to read:

490.122 ADMINISTRATION OF JUDGES' RETIREMENT.

new text begin Subdivision 1. new text end

new text begin Administration. new text end

The policy-making, management, and
administrative functions governing the operation of the judges' retirement fund and the
administration of deleted text begin sections 490.121 to 490.132 deleted text end new text begin this chapter new text end are vested in the board of
directors and executive director of the Minnesota State Retirement System deleted text begin with suchdeleted text end new text begin . In
administering the plan and fund, the board and the director have the samenew text end duties, authority,
and responsibility as are provided in chapter 352.

new text begin Subd. 2. new text end

new text begin Inapplicability of certain laws. new text end

Except as otherwise specified, no
provision of chapter 352 applies to the judges' retirement fund or any judge.

new text begin Subd. 3. new text end

new text begin Fiduciary responsibility. new text end

Fiduciary activities deleted text begin of deleted text end new text begin relating to new text end the uniform
new text begin judges' new text end retirement deleted text begin and Survivors' Annuities for Judges deleted text end new text begin plan new text end must be undertaken in a
manner consistent with chapter 356A.

Sec. 23.

Minnesota Statutes 2004, section 490.123, subdivision 1, is amended to read:

Subdivision 1.

Fund creation; revenue and authorized disbursements.

new text begin (a) There
is created a special fund to be known as new text end the "judges' retirement fundnew text begin .new text end "

new text begin (b) The judges' retirement fund new text end must be credited with all contributionsdeleted text begin ,deleted text end new text begin ; new text end all interest,
new text begin dividends, and other investment proceeds;new text end and all other income authorized by new text begin this chapter
or other applicable new text end law.

new text begin (c) new text end From this fund there are appropriated the payments authorized by sections
490.121 to 490.132, in the amounts and at the times provided, including the necessary and
reasonable expenses of the Minnesota State Retirement System in administering the fund
and the transfers to the Minnesota postretirement investment fund.

Sec. 24.

Minnesota Statutes 2004, section 490.123, subdivision 1a, is amended to read:

Subd. 1a.

Member contribution rates.

(a) A judge who is covered by the federal
Old Age, Survivors, Disability, and Health Insurance Program new text begin and new text end whose service does not
exceed the service credit limit in section 490.121, subdivision 22, shall contribute to the
fund from each salary payment a sum equal to 8.00 percent of salary.

(b) deleted text begin A judge not so covered whose service does not exceed the service credit limit in
section 490.121, subdivision 22, shall contribute to the fund from each salary payment a
sum equal to 8.15 percent of salary.
deleted text end

deleted text begin (c) deleted text end The contribution under this subdivision is payable by salary deduction.
new text begin The deduction must be made by the state court administrator under section 352.04,
subdivisions 4, 5, and 8.
new text end

Sec. 25.

Minnesota Statutes 2004, section 490.123, subdivision 1b, is amended to read:

Subd. 1b.

Employer contribution rate.

new text begin (a) new text end The employer contribution rate to the
fund on behalf of a judge is 20.5 percent of salary deleted text begin anddeleted text end new text begin . The employer obligationnew text end continues
after a judge exceeds the service credit limit in section 490.121, subdivision 22.

new text begin (b) new text end The employer contribution must be paid by the state court administrator deleted text begin anddeleted text end new text begin .
The employer contributionnew text end is payable at the same time as member contributions new text begin are made
new text end under subdivision 1a or new text begin as new text end employee contributions new text begin are made new text end to the unclassified deleted text begin plan in
deleted text end new text begin program governed by new text end chapter 352D for judges whose service exceeds the limit in section
490.121, subdivision 22, are remitted.

Sec. 26.

Minnesota Statutes 2004, section 490.123, subdivision 1c, is amended to read:

Subd. 1c.

Additional employer contribution.

deleted text begin In the event that deleted text end new text begin If new text end the employer
contribution under subdivision 1b and the assets of the judges retirement fund are
insufficient to meet reserve transfers to the Minnesota postretirement investment fund
or payments of survivor benefits deleted text begin before July 1, 1993 deleted text end new text begin in a monthnew text end , the necessary amount
is appropriated from the general fund to the executive director of the Minnesota State
Retirement System, upon new text begin the new text end certification new text begin of the required amount new text end by the executive director
to the commissioner of finance.

Sec. 27.

Minnesota Statutes 2004, section 490.123, subdivision 2, is amended to read:

Subd. 2.

Commissioner of finance.

The commissioner of finance deleted text begin shall be deleted text end new text begin is the new text end ex
officio treasurer of the judges' retirement fund deleted text begin and thedeleted text end new text begin . Thenew text end commissioner's general bond
to the state deleted text begin shall deleted text end new text begin must new text end be deleted text begin so deleted text end conditioned deleted text begin as deleted text end to cover all liability for acting as new text begin the new text end treasurer
of deleted text begin this deleted text end new text begin the new text end fund. All deleted text begin moneys deleted text end new text begin money new text end received by the commissioner deleted text begin pursuant to deleted text end new text begin under new text end this
section deleted text begin shall deleted text end new text begin must new text end be set aside in the state treasury to the credit of the judges' retirement
fund. deleted text begin The commissioner shall transmit monthly to the executive director described in
section 352.03, subdivision 5, a detailed statement of all amounts so received and credited
to the fund. The commissioner shall pay out the fund only upon vouchers signed by said
executive director; provided that vouchers for investment may be signed by the secretary
of the State Board of Investment.
deleted text end

Sec. 28.

Minnesota Statutes 2004, section 490.123, subdivision 3, is amended to read:

Subd. 3.

Investment.

new text begin (a) new text end The new text begin executive new text end director deleted text begin referred to in subdivision 2 deleted text end new text begin of the
Minnesota State Retirement System new text end shall, from time to time, certify to the State Board
of Investment such portions of the judges' retirement fund as in the director's judgment
may not be required for immediate use.

new text begin (b) new text end Assets from the judges' retirement fund deleted text begin shall deleted text end new text begin must new text end be transferred to the
Minnesota postretirement investment fund for retirement and disability benefits as
provided in sections11A.18 and 352.119.

new text begin (c) new text end The State Board of Investment shall thereupon invest and reinvest sums so
transferred, or certified, in such securities as are duly authorized legal investments for such
purposes under section 11A.24new text begin in compliance with sections 356A.04 and 356A.06new text end .

Sec. 29.

Minnesota Statutes 2004, section 490.124, subdivision 1, is amended to read:

Subdivision 1.

Basic retirement annuity.

new text begin (a) new text end Except as qualified hereinafter from
and after new text begin the new text end mandatory retirement date, new text begin the new text end normal retirement date, new text begin the new text end early retirement
date, or one year from the disability retirement date, as the case may be, new text begin a retiring judge
is eligible to receive new text end a retirement annuity deleted text begin shall be payable to a retiring judgedeleted text end from the
judges' retirement fund deleted text begin indeleted text end new text begin .
new text end

new text begin (b) The retirement annuity isnew text end an amount equal to: (1) the percent specified in section
356.315, subdivision 7, multiplied by the judge's final average compensation new text begin with that
result then new text end multiplied by the number of years and fractions of years of allowable service
rendered deleted text begin prior to deleted text end new text begin before new text end July 1, 1980; plus (2) the percent specified in section 356.315,
subdivision 8, multiplied by the judge's final average compensation new text begin with that result then
new text end multiplied by the number of years and fractions of years of allowable service rendered
after June 30, 1980.

new text begin (c) new text end Service that exceeds the service credit limit in section 490.121, subdivision 22,
must be excluded in calculating the retirement annuity, but new text begin the new text end compensation earned new text begin by
the judge new text end during this new text begin period of judicial new text end service must be used in determining a judge's final
average compensation and calculating the retirement annuity.

Sec. 30.

Minnesota Statutes 2004, section 490.124, subdivision 2, is amended to read:

Subd. 2.

Minimum service requirementdeleted text begin ; extension of termdeleted text end .

deleted text begin No deleted text end new text begin (a) Unless section
356.30 applies, a new text end judge deleted text begin shall be deleted text end new text begin is not new text end eligible for an annuity at new text begin the new text end normal new text begin retirement date
new text end or new text begin the new text end early retirement date if the judge has less than five years of allowable service.

new text begin (b) new text end A judge who deleted text begin shall retire deleted text end new text begin retires new text end on or, as permitted under sections 490.121 to
490.132, after new text begin the judge's new text end mandatory retirement date, deleted text begin shall be deleted text end new text begin is new text end entitled to a proportionate
annuity based upon the allowable service of the judge at new text begin the new text end date of retirement.

deleted text begin A judge who was in office on December 31, 1973, and thereafter and who, by the
date on which the current term expires, would not be eligible to retire with full benefits
under statutes in effect on December 31, 1973, may apply to the governor for an extension
to serve up to three additional years, stating the intention of the judge to retire upon
attaining eligibility to receive a retirement allowance. Notwithstanding section 490.125,
the governor shall forthwith make a written order accepting the retirement application,
and extending the term of office of the judge for the period of time, not to exceed three
years, as may be necessary to make the judge eligible for retirement, solely for purposes
of computing benefits hereunder.
deleted text end

Sec. 31.

Minnesota Statutes 2004, section 490.124, subdivision 3, is amended to read:

Subd. 3.

Early new text begin reduced new text end retirement.

The retirement annuity deleted text begin provided by deleted text end new text begin under
new text end subdivision 1 of any judge deleted text begin electing deleted text end new text begin who elects new text end to retire at an early retirement date deleted text begin shall
deleted text end new text begin must new text end be reduced by one-half of one percent per month from the retirement date to new text begin the
new text end normal retirement date.

Sec. 32.

Minnesota Statutes 2004, section 490.124, subdivision 4, is amended to read:

Subd. 4.

Disability retirement.

new text begin (a) When the governor determines that a judge is
disabled under section 490.121, subdivision 13, notice of the governor's determination
must be sent to the judge, to the chief justice of the Supreme Court, to the state court
administrator, and to the executive director of the Minnesota State Retirement System.
new text end

new text begin (b) new text end From and after disability retirement date, a disabled judge deleted text begin shall be deleted text end new text begin is new text end entitled to
continuation of the judge's full salary payable by the judge's employer, as if the judge's
office were not vacated by retirement, for a period of up to one full year, but in no event
beyond the judge's mandatory retirement date. During this year the judge deleted text begin will deleted text end new text begin is entitled
to new text end earn additional service credit new text begin in the judges' retirement plannew text end . The salary deleted text begin earned will be
deleted text end new text begin payable to a disabled judge is new text end subject to retirement deductions and deleted text begin will deleted text end new text begin must new text end be included
in computing final average compensation new text begin of the judgenew text end . deleted text begin Thereafter
deleted text end

new text begin (c) At the conclusion of the year of continued salary following a disability or
upon the judge's mandatory retirement date, whichever is earlier, the disabled judge is
entitled to new text end a disability retirement annuity computed as provided in subdivision 1 deleted text begin shall be
paid, provided thatdeleted text end new text begin . If the computed retirement annuity is a smaller amount,new text end the judge
deleted text begin shall deleted text end new text begin is entitled to new text end receive a minimum annuity of 25 percent of the judge's final average
compensation.

Sec. 33.

Minnesota Statutes 2004, section 490.124, subdivision 5, is amended to read:

Subd. 5.

Deferred benefits.

(a) deleted text begin Any deleted text end new text begin A new text end benefit to which a judge is entitled under this
section may be deferred until new text begin the new text end early or normal retirement date new text begin or laternew text end , notwithstanding
new text begin the new text end termination of deleted text begin such deleted text end new text begin the new text end judge's service prior thereto.

(b) The retirement annuity of, or the survivor benefit payable on behalf of, a former
judge, who terminated service before July 1, 1997, which is not first payable until after
June 30, 1997, must be increased on an actuarial equivalent basis to reflect the change in
the postretirement interest rate actuarial assumption under section 356.215, subdivision
8, from five percent to six percent under a calculation procedure and tables adopted by
the board of directors of the Minnesota State Retirement System and approved by the
actuary retained deleted text begin by the Legislative Commission on Pensions and Retirement deleted text end new text begin under section
356.214new text end .

Sec. 34.

Minnesota Statutes 2004, section 490.124, subdivision 8, is amended to read:

Subd. 8.

Exclusive normal retirement benefits.

deleted text begin Any deleted text end new text begin (a) Except as provided in
paragraph (b), a new text end judge who retires after December 31, 1973, deleted text begin shall be deleted text end new text begin is new text end entitled to a
retirement pension, retirement compensation or other retirement payment under statutes
applicable solely to judges deleted text begin pursuant to deleted text end new text begin under new text end this section onlydeleted text begin , except that any such deleted text end new text begin .
new text end

new text begin (b) A new text end judge new text begin who was new text end in office deleted text begin prior to deleted text end new text begin before new text end January 1, 1974, who retires at or after
normal retirement age may then elect to receive during the judge's lifetime a normal
retirement annuity computed on the basis of retirement compensation provided for such
judge under statutes in effect on December 31, 1973, in lieu of the amount of normal
retirement annuity otherwise computed under sections 490.121 to 490.132.

deleted text begin For purposes of this subdivision, the Conciliation Court of the city of Duluth shall be
deemed to have been a court of record by the statutes in effect on December 31, 1973.
deleted text end

Sec. 35.

Minnesota Statutes 2004, section 490.124, subdivision 9, is amended to read:

Subd. 9.

Survivors' annuity.

new text begin (a) new text end Upon the death of a judge deleted text begin prior to deleted text end new text begin before
new text end retirement, or upon the death of a person who has qualified for an annuity new text begin under this
section new text end but who ceases to be a judge deleted text begin prior to deleted text end new text begin before new text end retirement and new text begin who new text end has not received a
refund of contributions deleted text begin pursuant to deleted text end new text begin under new text end subdivision 12, a surviving spouse new text begin is entitled
to,new text end or, if there be no surviving spouse, dependent children, deleted text begin shall deleted text end new text begin are entitled to new text end receive an
annuity, payable monthly, equal new text begin in total new text end to 60 percent of the normal retirement annuity
which would have been payable to the judge or former judge had the date of death been
the normal retirement datedeleted text begin , provided that thedeleted text end new text begin .
new text end

new text begin (b) The annuity payable to anew text end surviving spouse or new text begin to new text end dependent children deleted text begin shall receive
an annuity deleted text end new text begin is an amount new text end of not less than 25 percent of the judge's or new text begin the new text end former judge's
final average compensation.

deleted text begin If a judge, whose surviving spouse was not entitled to survivors benefits provided
solely for judges under statutes in effect prior to January 1, 1974, shall have died prior to
retirement on or after May 23, 1973 and before January 1, 1974, a surviving spouse and
dependent children, if any, shall be entitled to survivors benefits as provided hereunder as
if such judge had died on January 1, 1974.
deleted text end

Sec. 36.

Minnesota Statutes 2004, section 490.124, subdivision 10, is amended to read:

Subd. 10.

Prior survivors' benefits; limitation.

new text begin (a) new text end Benefits provided deleted text begin pursuant
todeleted text end new text begin under Minnesota Statutes 2004,new text end section 490.102, subdivision 6, or 490.1091, for a
surviving spouse of a retired judge, payable after the death of the judge, deleted text begin shall be deleted text end new text begin are
new text end limited todeleted text begin :
deleted text end

deleted text begin (a) deleted text end spouses of judges who have retired deleted text begin prior to deleted text end new text begin before new text end January 1, 1974deleted text begin ; and deleted text end new text begin .
new text end

(b) deleted text begin spouses of judges in office on December 31, 1973 and thereafter who elect
to continue contributions pursuant to section 490.102, subdivision 6 or 490.109. The
contributions shall be in addition to contributions pursuant to section 490.123, and upon
retirement the judge may not elect to receive any optional annuity pursuant to subdivision
11 unless the judge and the spouse shall waive any benefits pursuant to section 490.102,
subdivision 6 or 490.1091.
deleted text end

No other judge in office on or after January 1, 1974, deleted text begin shall be deleted text end new text begin is new text end required to contribute
deleted text begin pursuant to deleted text end new text begin under Minnesota Statutes 2004,new text end section 490.102, subdivision 6new text begin ,new text end or 490.109.

Sec. 37.

Minnesota Statutes 2004, section 490.124, subdivision 11, is amended to read:

Subd. 11.

new text begin Limitation on survivor benefits; new text end optional annuities.

new text begin (a) new text end No survivor
or death benefits may be paid in connection with the death of a judge who retires after
December 31, 1973, except as otherwise provided in sections 490.121 to 490.132.

new text begin (b) new text end Except as provided in subdivision 10, a judge may elect to receive, instead of
the normal retirement annuity, an optional retirement annuity in the form of new text begin either (1) new text end an
annuity payable for a period certain and for life after that period, new text begin (2) new text end a joint and survivor
annuity without reinstatement deleted text begin in the event of deleted text end new text begin if new text end the designated beneficiary deleted text begin predeceasing
deleted text end new text begin predeceases new text end the retired judge, or new text begin (3) new text end a joint and survivor annuity with reinstatement deleted text begin in the
event of deleted text end new text begin if new text end the designated beneficiary deleted text begin predeceasing deleted text end new text begin predeceases new text end the retired judge.

new text begin (c) new text end An optional retirement annuity must be actuarially equivalent to a single-life
annuity with no term certain and must be established by the board of directors of the
Minnesota State Retirement System. In establishing these optional retirement annuity
forms, the board shall obtain the written recommendation of the actuary retained deleted text begin by
the Legislative Commission on Pensions and Retirement deleted text end new text begin under section 356.214new text end . The
recommendations must be new text begin retained as new text end a part of the permanent records of the board.

Sec. 38.

Minnesota Statutes 2004, section 490.124, subdivision 12, is amended to read:

Subd. 12.

Refund.

(a) A person who ceases to be a judge deleted text begin but who does not qualify
for a retirement annuity or other benefit under section 490.121 deleted text end is entitled to a refund in
an amount new text begin that is new text end equal to all new text begin of new text end 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 new text begin under this chapternew text end .

new text begin (c) new text end A person who becomes a judge again after taking a refund under paragraph
(a) may reinstate the previously terminated new text begin allowable new text end service deleted text begin credits deleted text end new text begin creditnew text end , rights, and
benefits by repaying the total amount of the previously received refund. The refund
repayment must include interest on the total amount previously received at an annual rate
of 8.5 percentnew text begin , new text end compounded annuallynew text begin , new text end from the date on which the refund was received
until the date on which the refund is repaid.

Sec. 39.

Minnesota Statutes 2004, section 490.124, subdivision 13, is amended to read:

Subd. 13.

Death refund.

If a judge who has not received other benefits under this
chapter dies and there are no survivor benefits payable under this chapter, a refund plus
interest as provided in subdivision 12 is payable to the last designated beneficiary named
on a form filed with the director before the death of the judge, ornew text begin , new text end if no designation is on
file, deleted text begin the refund is payable deleted text end to the estate of the deceased judge.

Sec. 40.

Minnesota Statutes 2004, section 490.125, subdivision 1, is amended to read:

Subdivision 1.

Mandatory retirement new text begin agenew text end .

Except as otherwise provided in
sections 490.121 to 490.132, deleted text begin each deleted text end new text begin a new text end judge shall deleted text begin retire deleted text end new text begin terminate active service as a judge
new text end on the judge's mandatory retirement date.

Sec. 41.

Minnesota Statutes 2004, section 490.125, subdivision 2, is amended to read:

Subd. 2.

Exception.

deleted text begin Except as provided by sections 490.025, subdivision 3,
490.102, subdivisions 3 and 3a and 490.12, subdivision 2,deleted text end Any judge in office on
December 31, 1973 who shall have attained 70 years of age on or prior to such date shall
retire upon the expiration of the term of office of such judge.

Sec. 42.

Minnesota Statutes 2004, section 490.126, as amended by Laws 2005, First
Special Session chapter 8, article 10, section 79, is amended to read:

490.126 PROCEDURES.

Subdivision 1.

Compulsory retirement.

Proceedings for compulsory retirement
of a judge, if necessary, deleted text begin shalldeleted text end new text begin mustnew text end be conducted in accordance with rules issued by the
Supreme Court deleted text begin pursuant todeleted text end new text begin undernew text end section .

Subd. 2.

Vacancies.

Any judge may make written application to the governor for
retirement. The governor thereupon shall direct the judge's retirement by written order
which, when filed in the Office of the Secretary of State, deleted text begin shall effectdeleted text end new text begin effectsnew text end a vacancy in
the office to be filled as provided by law.

Subd. 3.

Application for annuity or refund.

new text begin An new text end application for an annuity or new text begin a
new text end refund under sections 490.121 to 490.132 may be made by the new text begin potential new text end annuitant or by
someone authorized to act for the new text begin potential new text end annuitant. Every application for an annuity
or refund, deleted text begin withdeleted text end new text begin accompanied by anew text end proof of age and new text begin by a record of new text end years of service
when required, deleted text begin shalldeleted text end new text begin mustnew text end be submitted to the deleted text begin governing bodydeleted text end new text begin executive directornew text end of the
Minnesota State Retirement System in a form prescribed by deleted text begin itdeleted text end new text begin the directornew text end .

Subd. 4.

Manner of payment.

Unless otherwise specifically provided by statute or
agreed upon by the annuitant and the deleted text begin governing bodydeleted text end new text begin board of directorsnew text end of the new text begin Minnesota
new text end State Retirement System, annuities payable under sections 490.121 to 490.132 deleted text begin shalldeleted text end new text begin mustnew text end
be paid in the manner and at the intervals as prescribed by the executive director of the
new text begin Minnesota new text end State Retirement System. The annuity deleted text begin shall ceasedeleted text end new text begin ceasesnew text end with the last payment
received by the annuitant while living.

Subd. 5.

Exemption from process; no assignment.

The provisions of section
356.401 apply to the judges retirement plan.

Sec. 43.

Minnesota Statutes 2004, section 490.133, is amended to read:

490.133 RETIREMENT; TRANSITION PROVISIONS; TRANSFER TO
COURT OF APPEALS.

new text begin (a) new text end If a judge to whom or to whose survivors benefits would be payable under
new text begin Minnesota Statutes 2004,new text end sections 490.101 to 490.12, is elected or appointed to the Court
of Appeals, that judge and the judge's survivorsdeleted text begin , shall deleted text end continue to be eligible for benefits
under those sections and not under sections 490.121to 490.132.

new text begin (b) new text end In deleted text begin that deleted text end new text begin the new text end case new text begin of a judge to whom paragraph (a) appliesnew text end , the service of the
judge in the Court of Appeals deleted text begin shall deleted text end new text begin must new text end be added to the new text begin prior new text end service as district judge,
probate judge, or judge of any other court of record in determining eligibility and the
compensation of a judge of the Court of Appeals at the time of the judge's death, disability,
or retirement deleted text begin shall be deleted text end new text begin is new text end the "compensation allotted to the office" for the purposes of
calculating benefit amounts.

new text begin (c) new text end All other judges of the Court of Appeals and their survivors deleted text begin shall be deleted text end new text begin are new text end subject
to the retirement and survivor's annuity provisions of sections 490.121 to 490.132.

Sec. 44.

new text begin [490A.01] BOARD OF JUDICIAL STANDARDS; ESTABLISHMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment; composition. new text end

new text begin The Board on Judicial Standards is
established. The board is a continuation of the board established by Laws 1971, chapter
909, sections 1and 2, as amended.
new text end

new text begin Subd. 2. new text end

new text begin Composition; appointment. new text end

new text begin (a) The board consists of one judge of the
Court of Appeals, three trial court judges, two lawyers who have practiced law in the state
for at least ten years, and four citizens who are not judges, retired judges, or lawyers.
new text end

new text begin (b) All members must be appointed by the governor with the advice and consent of
the senate. Senate confirmation is not required for judicial members.
new text end

new text begin Subd. 3. new text end

new text begin Term maximum; membership termination. new text end

new text begin No member may serve more
than two full four-year terms or their equivalent. Membership terminates if a member
ceases to hold the position that qualified the member for appointment.
new text end

new text begin Subd. 4. new text end

new text begin Member terms; compensation; removal. new text end

new text begin The membership terms,
compensation, removal of members, and filling of vacancies on the board are as provided
in section 15.0575.
new text end

new text begin Subd. 5. new text end

new text begin Executive secretary appointment; salary. new text end

new text begin (a) The board shall appoint
the executive secretary.
new text end

new text begin (b) The salary of the executive secretary of the board is 85 percent of the maximum
salary provided for an administrative law judge under section 15A.083, subdivision 6a.
new text end

Sec. 45.

new text begin [490A.02] JUDICIAL STANDARDS BOARD; POWERS.
new text end

new text begin Subdivision 1. new text end

new text begin Judicial disqualification. new text end

new text begin A judge is disqualified from acting as a
judge, without a loss of salary, while there is pending an indictment or any information
charging the judge with a crime that is punishable as a felony under either Minnesota law
or federal law, or while there is pending a recommendation to the Supreme Court by the
Board on Judicial Standards for the judge's removal or retirement.
new text end

new text begin Subd. 2. new text end

new text begin Judicial suspension. new text end

new text begin On receipt of a recommendation of the Board on
Judicial Standards or on its own motion, the Supreme Court may suspend a judge from
office without salary when the judge pleads guilty to or no contest to or is found guilty of
a crime that is punishable as a felony under either Minnesota law or federal law or any
other crime that involves moral turpitude. If the conviction is reversed, the suspension
terminates and the judge must be paid a salary for the period of suspension. If the judge
is suspended and the conviction becomes final, the Supreme Court shall remove the
judge from office.
new text end

new text begin Subd. 3. new text end

new text begin Judicial disability. new text end

new text begin On receipt of a recommendation of the Board on
Judicial Standards, the Supreme Court may retire a judge for a disability that the court
determines seriously interferes with the performance of the judge's duties and is or is
likely to become permanent, and censure or remove a judge for an action or inaction that
may constitute persistent failure to perform the judge's duties, incompetence in performing
the judge's duties, habitual intemperance, or conduct prejudicial to the administration of
justice that brings the judicial office into disrepute.
new text end

new text begin Subd. 4. new text end

new text begin Authority to reopen matters. new text end

new text begin The board is specifically empowered to
reopen any matter wherein any information or evidence was previously precluded by a
statute of limitations or by a previously existing provision of time limitation.
new text end

new text begin Subd. 5. new text end

new text begin Retirement status. new text end

new text begin (a) A judge who is retired by the Supreme Court must
be considered to have retired voluntarily.
new text end

new text begin (b) This section and section 490A.01 must not affect the right of a judge who
is suspended, retired, or removed hereunder from qualifying for any pension or other
retirement benefits to which the judge would otherwise be entitled by law to receive.
new text end

new text begin Subd. 6. new text end

new text begin Eligibility for judicial office; practice law. new text end

new text begin A judge removed by the
Supreme Court is ineligible for any future service in a judicial office. The question of
the right of a removed judge to practice law in this state must be referred to the proper
authority for review.
new text end

new text begin Subd. 7. new text end

new text begin Supreme court rules. new text end

new text begin The Supreme Court shall make rules to implement
this section.
new text end

Sec. 46.

new text begin [490A.03] PERSONS AFFECTED.
new text end

new text begin The provisions of sections 490A.01 and 490A.02 apply to all judges, judicial
officers, and referees.
new text end

Sec. 47.

Minnesota Statutes 2004, section 525.05, is amended to read:

525.05 JUDGE OR REFEREE; GROUNDS FOR DISQUALIFICATION.

The following shall be grounds for disqualification of any judge or referee from
acting in any matter: (1) That the judge or the judge's spouse or any of either of their kin
nearer than first cousin is interested as representative, heir, devisee, legatee, ward, or
creditor in the estate involved therein; (2) that it involves the validity or interpretation of a
will drawn or witnessed by the judge; (3) that the judge may be a necessary witness in the
matter; (4) that it involves a property right in respect to which the judge has been engaged
or is engaged as an attorney; or (5) that the judge was engaged in a joint enterprise for
profit with the decedent at the time of death or that the judge is then engaged in a joint
enterprise for profit with any person interested in the matter as representative, heir,
devisee, legatee, ward, or creditor. When grounds for disqualification exist, the judge may,
and upon proper petition of any person interested in the estate must, request another
judge or a judge who has retired deleted text begin as provided in section 490.12, subdivision 2,deleted text end to act in
the judge's stead in the matter.

Sec. 48. new text begin REVISOR'S INSTRUCTION.
new text end

new text begin (a) In Minnesota Statutes, chapters 352, 352D, 355, 356,and 487, the revisor of
statutes shall change references to "sections 490.121 to 490.132" to "chapter 490."
new text end

new text begin (b) In Minnesota Statutes, chapter 490, the revisor of statutes shall change references
to "sections 490.121 to 490.132" to "this chapter."
new text end

new text begin (c) In Minnesota Statutes, sections 175A.01, subdivision 4, and 271.01, subdivision
1, the revisor of statutes shall change references to "sections 490.15 and 490.16" to
"sections 490A.01 and 490A.02."
new text end

Sec. 49. new text begin REPEALER.
new text end

new text begin Subdivision 1. new text end

new text begin Judicial retirement plans; repealed as obsolete. new text end

new text begin Minnesota
Statutes 2004, sections 490.021; 490.025; 490.101; 490.102; 490.103; 490.105; 490.106;
490.107; 490.108; 490.109; 490.1091; 490.12; 490.121, subdivisions 2, 3, 5, 8, 9, 10, 11,
12, 16, 17, 18, and 19; 490.124, subdivision 6; and 490.132, new text end new text begin and new text end new text begin Minnesota Statutes 2005
Supplement, section 490.121, subdivision 20, new text end new text begin are repealed.
new text end

new text begin Subd. 2. new text end

new text begin Judicial standards board; repealed for relocation as Minnesota
Statutes, chapter 490A. new text end

new text begin Minnesota Statutes 2004, sections 490.15; 490.16; and 490.18, new text end new text begin
are repealed.
new text end

new text begin Subd. 3. new text end

new text begin Uniform judicial retirement plan; no benefit diminishment intended;
procedure. new text end

new text begin Sections 1 to 50 are not intended to reduce or increase the entitlement of
active, deferred, or retired judges to retirement annuities or benefits as of July 1, 2006, as
reflected in the records of the Minnesota State Retirement System. If the executive director
of the Minnesota State Retirement System determines that any provision of sections 1 to
48 functions to modify, impair, or diminish the retirement annuity or benefit entitlement
of any judge that had accrued or earned before July 1, 2006, the executive director shall
certify that determination and a recommendation as to the required legislative correction
to the chair of the Legislative Commission on Pensions and Retirement, the chair of
the senate State and Local Government Operations Committee, the chair of the house
Governmental Operations and Veterans Affairs Policy Committee, and the executive
director of the Legislative Commission on Pensions and Retirement on or before the
October 1 next following that determination.
new text end

Sec. 50. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 50 are effective July 1, 2006.
new text end

ARTICLE 13

JUDGES RETIREMENT PLAN AND RELATED CHANGES

Section 1.

Minnesota Statutes 2004, section 3A.02, subdivision 5, is amended to read:

Subd. 5.

Optional annuities.

(a) The board of directors shall establish an optional
retirement annuity in the form of a joint and survivor annuity and an optional retirement
annuity in the form of a period certain and life thereafter. Except as provided in paragraph
(b), these optional annuity forms must be actuarially equivalent to the normal annuity
computed under this section, plus the actuarial value of any surviving spouse benefit
otherwise potentially payable at the time of retirement under section 3A.04, subdivision 1.
An individual selecting an optional annuity under this subdivision waives any rights to
surviving spouse benefits under section 3A.04, subdivision 1.

(b) If a retired legislator selects the joint and survivor annuity option, the retired
legislator must receive a normal single-life annuity if the designated optional annuity
beneficiary dies before the retired legislator and no reduction may be made in the annuity
to provide for restoration of the normal single-life annuity in the event of the death of the
designated optional annuity beneficiary.

(c) The surviving spouse of a legislator who has attained at least age deleted text begin 60deleted text end new text begin 55new text end and who
dies while a member of the legislature may elect an optional joint and survivor annuity
under paragraph (a), in lieu of surviving spouse benefits under section 3A.04, subdivision
1.

Sec. 2.

Minnesota Statutes 2004, section 3A.04, subdivision 1, is amended to read:

Subdivision 1.

Surviving spouse.

Upon the death of a member of the legislature
while serving as such member after June 30, 1973, or upon the death of a former member
of the legislature with at least the number of years of service as required by section 3A.02,
subdivision 1, clause (1), new text begin if section 3A.02, subdivision 5, paragraph (c), does not apply,
new text end the surviving spouse shall be paid a survivor benefit in the amount of one-half of the
retirement allowance of the member of the legislature computed as though the member
were at least normal retirement age on the date of death and based upon allowable
service or eight years whichever is greater. The augmentation provided in section 3A.02,
subdivision 4, if applicable, shall be applied to the month of death. Upon the death of a
former legislator receiving a retirement allowance, the surviving spouse shall be entitled
to one-half of the amount of the allowance being paid to the legislator. Such benefit shall
be paid during the lifetime of the surviving spouse.

Sec. 3.

Minnesota Statutes 2004, section 490.124, subdivision 9, is amended to read:

Subd. 9.

Survivors' annuity.

new text begin (a) new text end Upon the death of a judge prior to retirement, or
upon the death of a person who has qualified for an annuity but who ceases to be a judge
prior to retirement and has not received a refund of contributions pursuant to subdivision
12, a surviving spouse or, if there be no surviving spouse, dependent children, shall
receive an annuity, payable monthly, equal to 60 percent of the normal retirement annuity
which would have been payable to the judge or former judge had the date of death been
the normal retirement date, provided that the surviving spouse or dependent children
shall receive an annuity of not less than 25 percent of the judge's or former judge's final
average compensation.

new text begin (b) The surviving spouse of a deceased judge may elect to receive, in lieu of the
annuity under paragraph (a), an annuity equal to the 100 percent joint and survivor annuity
which the judge or former judge could have qualified for on the date of death.
new text end

new text begin (c) new text end If a judge, whose surviving spouse was not entitled to survivors benefits provided
solely for judges under statutes in effect prior to January 1, 1974, shall have died prior to
retirement on or after May 23, 1973new text begin , new text end and before January 1, 1974, a surviving spouse and
dependent children, if any, shall be entitled to survivors benefits as provided hereunder as
if such judge had died on January 1, 1974.

Sec. 4. new text begin EFFECTIVE DATE.
new text end

new text begin (a) Sections 1 and 2 are effective the day following final enactment.
new text end

new text begin (b) Section 3 is effective January 1, 2006, and applies to the surviving spouse of
any judge who died on or after that date.
new text end

ARTICLE 14

VOLUNTEER FIRE RELIEF ASSOCIATION CHANGES

Section 1.

Minnesota Statutes 2004, section 6.72, is amended to read:

6.72 STATE AUDITOR; REPORT TO LEGISLATURE ON VOLUNTEER
FIREFIGHTERS' RELIEF ASSOCIATIONS.

Subdivision 1.

Reporting requirements.

deleted text begin Commencing November 15, 1981, and
every two years thereafterdeleted text end new text begin (a) Annuallynew text end , the state auditor shall report to the legislature on
the general financial condition of the various volunteer firefighters' relief associations in
the state as of December 31 of the year preceding the filing of the report.

new text begin (b) new text end Two copies of the report shall be filed with the executive director of the
Legislative Commission on Pensions and Retirement and ten copies of the report shall be
filed with the director of the Legislative Reference Library.

Subd. 2.

Contents of report.

The report deleted text begin shalldeleted text end new text begin mustnew text end include deleted text begin the aggregate totalsdeleted text end for
all volunteer firefighters' relief associations directly associated with the municipal fire
departments and all volunteer firefighters' relief associations subsidiary to independent
nonprofit firefighting corporations, the deleted text begin aggregate totals by the various benefit types and the
individual results for each volunteer firefighters' relief association listed by various benefit
types specified in subdivision 3. Thedeleted text end following deleted text begin items shall be reported in each instancedeleted text end :

(1) amount of accrued liability,

(2) amount of new text begin the new text end assetsnew text begin of the special fundnew text end ,

(3) amount of surplus or unfunded accrued liability,

(4) funding ratio,

(5) amount of annual accruing liability or normal cost,

(6) amount of annual required contribution to amortize the unfunded accrued
liability,

(7) amount of total required contribution,

(8) amount of fire state aidnew text begin and supplemental fire state aidnew text end ,

(9) amount of any municipal contributions,

(10) amount of administrative expenses,

(11) amount of service pension disbursements,

(12) amount of other retirement benefit disbursements,

(13) number of active members,

(14) number of retired members,

(15) number of deferred members,

(16) amount of fidelity bond of secretary and treasurer,

(17) amount of lump sum or monthly service pension accrued per year of service
credit,

(18) minimum retirement age required for commencement of a service pension,

(19) minimum years of active service credit required for commencement of service
pension,

(20) minimum years of active membership credit required for commencement of
service pension,new text begin and
new text end

(21) type and amount of other retirement benefits.

Subd. 3.

deleted text begin Benefit categoriesdeleted text end new text begin Report formatnew text end .

deleted text begin For purposes of compilingdeleted text end The report
required by this sectiondeleted text begin , the various benefit types shall be as follows:
deleted text end

deleted text begin (1) volunteer firefighters' relief associations paying a lump sum service pension of:
deleted text end

deleted text begin (i) less than $50 per year of service,
deleted text end

deleted text begin (ii) $50 or more, but less than $100 per year of service,
deleted text end

deleted text begin (iii) $100 or more, but less than $200 per year of service,
deleted text end

deleted text begin (iv) $200 or more, but less than $300 per year of service,
deleted text end

deleted text begin (v) $300 or more per year of service;
deleted text end

deleted text begin (2) volunteer firefighters' relief associations paying a monthly benefit service
pension of:
deleted text end

deleted text begin (i) less than $2 per month per year of service,
deleted text end

deleted text begin (ii) $2 or more per month per year of service;
deleted text end

deleted text begin (3) volunteer firefighters' relief associations paying a defined contribution service
pension;
deleted text end

deleted text begin (4) volunteer firefighters' relief associations paying no service pensiondeleted text end new text begin must be
organized in a manner that the state auditor determines to provide fair representation of
the condition of the various volunteer firefighters' relief associationsnew text end .

Sec. 2.

Minnesota Statutes 2004, section 424A.001, is amended by adding a
subdivision to read:

new text begin Subd. 10. new text end

new text begin Volunteer firefighter. new text end

new text begin "Volunteer firefighter" means a person who:
new text end

new text begin (1) was a member of the applicable fire department or the firefighting corporation
and a member of the relief association on July 1, 2006; or
new text end

new text begin (2) became a member of the applicable fire department or the firefighting corporation
and is eligible for membership in the applicable relief association after June 30, 2006, and
new text end

new text begin (i) is engaged in providing emergency response services or delivering fire education
or prevention services as a member of a municipal fire department, a joint powers entity
fire department, or an independent nonprofit firefighting corporation;
new text end

new text begin (ii) is trained in or is qualified to provide fire suppression duties or to provide fire
prevention duties under subdivision 8; and
new text end

new text begin (iii) meets any other minimum firefighter and service standards established by the
fire department or firefighting corporation or specified in the articles of incorporation or
bylaws of the relief association.
new text end

Sec. 3.

Minnesota Statutes 2004, section 424A.02, subdivision 8b, is amended to read:

Subd. 8b.

Transfer to individual retirement account.

A relief association that is
a qualified pension plan under section 401(a) of the federal Internal Revenue Code, as
amended, and that provides a lump sum service pension, at the written request of deleted text begin adeleted text end new text begin the
applicable new text end retiring membernew text begin or, following the death of the active member, at the written
request of the deceased member's surviving spousenew text end , may directly transfer the eligible
member's lump sum pension new text begin or the death, funeral, or survivor benefit attributable to the
member, whichever applies, new text end to the deleted text begin member'sdeleted text end new text begin requesting person's new text end individual retirement
account under section 408(a) of the federal Internal Revenue Code, as amended.

Sec. 4.

Minnesota Statutes 2004, section 424A.05, subdivision 3, is amended to read:

Subd. 3.

Authorized disbursements from the special fund.

(a) Disbursements
from the special fund are not permitted to be made for any purpose other than one of
the following:

(1) for the payment of service pensions to retired members of the relief association if
authorized and paid pursuant to law and the bylaws governing the relief association;

(2) for the payment of temporary or permanent disability benefits to disabled
members of the relief association if authorized and paid pursuant to law and specified in
amount in the bylaws governing the relief association;

(3) for the payment of survivor benefits to surviving spouses and surviving children,
or if none, to designated beneficiaries, of deceased members of the relief associationnew text begin ,
and if survivors and if no designated beneficiary, for the payment of a death benefit to
the estate of the deceased active firefighter, new text end if authorized by and paid pursuant to law and
specified in amount in the bylaws governing the relief association;

(4) for the payment of any funeral benefits to the surviving spouse, or if no surviving
spouse, the estate, of the deceased member of the relief association if authorized by law
and specified in amount in the bylaws governing the relief association;

(5) for the payment of the fees, dues and assessments to the Minnesota State Fire
Department Association, to the Minnesota Area Relief Association Coalition, and to
the state Volunteer Firefighters Benefit Association in order to entitle relief association
members to membership in and the benefits of these associations or organizations; and

(6) for the payment of administrative expenses of the relief association as authorized
pursuant to section 69.80.

(b) For purposes of this chapter, a designated beneficiary must be a natural person.

Sec. 5. new text begin RANDALL FIREMEN'S RELIEF ASSOCIATION; REVISED BENEFIT
FOR SPOUSE OF DECEASED FIREFIGHTER.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin This section applies to a surviving spouse of a person
who:
new text end

new text begin (1) was born on June 21, 1973;
new text end

new text begin (2) as a member of the Randall Firemen's Relief Association provided one year and
ten months of service to the associated fire department and had one year of service credit
in the association on the date of death; and
new text end

new text begin (3) was killed in a construction accident on October 28, 2005.
new text end

new text begin Subd. 2. new text end

new text begin Eligibility for benefit. new text end

new text begin Notwithstanding any law to the contrary, the
eligible person described in subdivision 1 is entitled to receive a survivor benefit from the
Randall Firemen's Relief Association benefit plan as revised in November 2005, not to
exceed the survivor benefit amount that would be applicable if the firefighter had lived
until a day after the effective date of the increased minimum surviving spouse benefit
approved by the Randall City Council in November 2005, consistent with Minnesota
Statutes, section 424A.02, subdivision 9.
new text end

new text begin Subd. 3. new text end

new text begin Restrictions. new text end

new text begin This section does not authorize payment of more than
a single survivor benefit to the eligible individual specified in subdivision 1. If a
survivor benefit has been paid to the eligible individual by the Randall Firemen's Relief
Association, this section authorizes payment to the eligible individual of the difference
between the amount previously paid and the amount payable under the Randall Firemen's
Relief Association benefit plan as revised in November 2005.
new text end

Sec. 6. new text begin EFFECTIVE DATE.
new text end

new text begin (a) Sections 1 and 4 are effective July 1, 2006.
new text end

new text begin (b) Section 2 is effective January 1, 2008.
new text end

new text begin (c) Section 3 is effective the day following final enactment and applies retroactively
to January 1, 2006.
new text end

new text begin (d) Section 5 is effective the day after the date on which the Randall City Council and
the chief clerical office of the city of Randall complete, in a timely manner, compliance
with Minnesota Statutes, section 645.021, subdivisions 2 and 3.
new text end

ARTICLE 15

ONE PERSON AND SMALL GROUP RETIREMENT PROVISIONS

Section 1. new text begin CORRECTING PLAN COVERAGE ERROR BY PROVIDING A
PUBLIC EMPLOYEES POLICE AND FIRE RETIREMENT PLAN ANNUITY.
new text end

new text begin Subdivision 1. new text end

new text begin Purpose. new text end

new text begin The annuity provided under this section is intended
to compensate for an error in pension coverage. Due to the employment specified in
subdivision 2, an eligible individual specified in subdivision 2 should have become a
member of the public employees police and fire retirement plan but was incorrectly placed
in the St. Paul Fire Department Relief Association retirement plan.
new text end

new text begin Subd. 2. new text end

new text begin Eligibility. new text end

new text begin (a) An eligible individual under paragraph (b) is authorized to
receive the benefit specified in subdivision 4, upon satisfying all requirements specified
in this section.
new text end

new text begin (b) An eligible individual is an individual who:
new text end

new text begin (1) was born on April 24, 1951;
new text end

new text begin (2) was hired as a St. Paul firefighter with a certified appointment date of June 13,
1980, but first earned salary as a St. Paul firefighter on June 30, 1980;
new text end

new text begin (3) was erroneously placed in the St. Paul Fire Department Relief Association
retirement plan due to that employment; and
new text end

new text begin (4) terminated from the St. Paul Fire Department employment on January 3, 1990.
new text end

new text begin Subd. 3. new text end

new text begin Additional employee contribution or refund amount. new text end

new text begin (a) If a valid
annuity application is made under subdivision 7, the executive director of the Public
Employees Retirement Association shall determine the employee contributions that
an eligible individual under subdivision 2 would have made to the public employees
police and fire retirement plan fund, if coverage had been provided by that plan for
the employment period specified in subdivision 2, and from each of these contribution
amounts the employee contribution actually made by the eligible individual to the St. Paul
Fire Department Relief Association for the same payroll period shall be subtracted. These
differences, plus 8.5 percent annual compound interest from the date the public employees
police and fire retirement plan contribution would have been made until the first of the
month after a valid annuity application has been received, shall be aggregated.
new text end

new text begin (b) If the aggregate amount under paragraph (a) is a positive number, the total
amount shall be paid in a lump sum to the executive director of the Public Employees
Retirement Association. The executive director shall notify the eligible individual
in writing of the required amount. To be eligible for the current or deferred annuity
specified in subdivision 4, the eligible individual must pay the amount required under this
paragraph, if applicable, within three months of the executive director's notification.
new text end

new text begin (c) If the aggregate amount computed under paragraph (a) is a negative amount, the
value of the contributions that the eligible employee made to the local relief association
exceeded the value of employee contributions that would have been made to the public
employees police and fire fund. This aggregate negative amount shall be multiplied by
minus one and the resulting amount shall be refunded to the eligible individual by the city
of St. Paul. The executive director shall inform the eligible individual of the refund
amount in writing, and shall notify the city of St. Paul. The city of St. Paul shall pay this
amount to the eligible individual within 30 days of notification.
new text end

new text begin Subd. 4. new text end

new text begin Benefit amount. new text end

new text begin The eligible individual is entitled to apply for an annuity,
as further specified in subdivision 7, and to receive a public employees police and fire
retirement plan retirement annuity computed based on the version of Minnesota Statutes,
chapter 353, in effect on the date that the eligible individual terminated from St. Paul Fire
Department Relief Association employment.
new text end

new text begin Subd. 5. new text end

new text begin Calculation of reserves; payment by city of St. Paul. new text end

new text begin The executive
director of the Public Employees Retirement Association shall compute the full required
reserves for the annuity determined under subdivision 4 using all applicable actuarial
assumptions for the public employees police and fire retirement plan. This amount, after
deducting the amount received by the Public Employees Retirement Association under
subdivision 3, paragraph (b), if applicable, is to be paid to the executive director of the
Public Employees Retirement Association in a lump sum by the city of St. Paul. The
executive director shall notify the chief administrative officer of the city of St. Paul in
writing of the payment amount required under this subdivision. This notification shall be
made by the executive director within one month following the receipt by the executive
director of any amount required under subdivision 3, paragraph (b), if applicable. The
city of St. Paul must pay the amount required under this subdivision within 30 days after
receipt of the executive director's notification.
new text end

new text begin Subd. 6. new text end

new text begin Actions upon failure to pay. new text end

new text begin If the city of St. Paul fails to transmit the
amount required under subdivision 5 in a timely manner, or fails to make a timely refund
under subdivision 3, paragraph (c), if applicable, the executive director of the Public
Employees Retirement Association shall notify the commissioner of finance of this
nonpayment or nonpayments, and the commissioner of finance shall deduct the applicable
amount or amounts from any state aid otherwise payable to the city and transmit the
amount required under subdivision 5 to the executive director for deposit in the public
employees police and fire fund. If the city of St. Paul fails to make a payment required
under subdivision 3, paragraph (c), if applicable, the commissioner of finance will make
any necessary refund, with reimbursement through the withholding of aid, as stated in
this subdivision.
new text end

new text begin Subd. 7. new text end

new text begin Annuity application. new text end

new text begin An eligible individual described in subdivision 2
shall apply in writing on forms provided by the Public Employees Retirement Association
for the annuity provided by this section. The application must be made before January 1,
2007, and must include all necessary documentation of the applicability of this section and
any other relevant information which the executive director may require.
new text end

new text begin Subd. 8. new text end

new text begin Service credit grant. new text end

new text begin Service credit in the public employees police and
fire retirement plan for the eligible individual's employment period as a St. Paul firefighter
shall be granted following the filing of a valid application for an annuity under subdivision
7 and receipt by the executive director of any amount applicable under subdivision 3,
paragraph (b).
new text end

Sec. 2. new text begin PERA-P&F; PURCHASE OF SERVICE CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility. new text end

new text begin An eligible person may purchase allowable service credit
from the public employees police and fire plan for the period from November 23, 1984,
to March 16, 1985. An eligible person is a person who:
new text end

new text begin (1) is currently a member of the public employees police and fire plan; and
new text end

new text begin (2) was employed by the city of Faribault as a firefighter since November 23, 1984,
but was not covered by the public employees police and fire plan from November 23,
1984, until March 16, 1985, despite the provided firefighting service.
new text end

new text begin Subd. 2. new text end

new text begin Purchase requirements. new text end

new text begin An eligible person must apply to the executive
director of the Public Employees Retirement Association to make the service credit
purchase authorized in this section. The application must be in writing and must contain
documentation required by the executive director.
new text end

new text begin Subd. 3. new text end

new text begin Payment. new text end

new text begin If an eligible person meets the requirements to purchase service
credit under this section, the public employees police and fire fund must be paid the
amount determined under Minnesota Statutes, section 356.551.
new text end

new text begin Subd. 4. new text end

new text begin Additional requirements. new text end

new text begin (a) In addition to the one-year payment
limitation in Minnesota Statutes, section 356.551, the authority provided by this section is
voided if the amount required under subdivision 3 from an eligible person is not paid to the
executive director of the Public Employees Retirement Association prior to termination
of service by the eligible person.
new text end

new text begin (b) Notwithstanding Minnesota Statutes, section 356.551, allowable service credit in
the public employees police and fire plan for the eligible person must be granted upon
receipt by the executive director of payment from the eligible person of the amount
required under subdivision 3.
new text end

new text begin (c) If the city of Faribault fails to pay the amount required under subdivision 3 within
30 days of notification from the executive director of the amount required, the executive
director shall inform the commissioner of the Department of Finance of the amount of the
deficiency, and the amount must be deducted from any subsequent state aid to the city.
new text end

Sec. 3. new text begin TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF PRIOR
SERVICE CREDIT FOR MONTANA TEACHING SERVICE.
new text end

new text begin (a) An eligible person described in paragraph (b) is authorized to purchase service
credit, in accordance with Minnesota Statutes, section 356.551, from the Teachers
Retirement Association coordinated program for a period of teaching service in Montana
public schools, not to exceed ten years.
new text end

new text begin (b) An eligible person is a person who:
new text end

new text begin (1) is currently an active member of the Teachers Retirement Association for
teaching service at the Northfield Middle School in Independent School District No. 659;
new text end

new text begin (2) was born on January 1, 1959; and
new text end

new text begin (3) was a teacher at the Pine Hills School in Miles City, Montana, for 11.2 years with
coverage for that service by the Montana Teachers Retirement System.
new text end

new text begin (c) An eligible person described in paragraph (b) is authorized to apply with the
executive director of the Teachers Retirement Association to make the service credit
purchase under this section. The application must be in writing and must include all
necessary documentation of the applicability of this section, and any other relevant
information which the executive director may require. The payment required under this
section to receive the service credit must be received by the executive director of the
Teachers Retirement Association before December 31, 2006, and before the eligible
person's retirement or termination from service. The service credit authorized by this
section shall be granted upon receipt of the service credit purchase payment by the
executive director.
new text end

new text begin (d) The authority under this section is voided if an eligible person under paragraph
(b) retains a right to an annuity from the Montana Teachers Retirement System.
new text end

Sec. 4. new text begin PERA-GENERAL; PUBLIC DEFENDER SERVICE CREDIT
PURCHASE.
new text end

new text begin (a) An eligible person described in paragraph (b) may purchase allowable service
credit in the general employees retirement plan of the Public Employees Retirement
Association for the period described in paragraph (c) by making the payment required
under paragraph (d).
new text end

new text begin (b) An eligible person is a person who:
new text end

new text begin (1) was born on October 7, 1949;
new text end

new text begin (2) was employed as a public defender by the Tenth Judicial District on July 1, 1987;
new text end

new text begin (3) was also retained as an independent contractor by Washington County as a
public defender as of June 12, 1989;
new text end

new text begin (4) was determined to have had deductions related to the Tenth Judicial District
employment for the general employees retirement plan of the Public Employees
Retirement Association taken in error and had those deductions returned on January 7,
1991; and
new text end

new text begin (5) is currently a member of the general state employees retirement plan of the
Minnesota State Retirement System.
new text end

new text begin (c) The period of allowable service credit available for purchase under this section
is 21 months.
new text end

new text begin (d) The prior service credit purchase payment must be calculated under Minnesota
Statutes, section 356.551.
new text end

Sec. 5. new text begin PUBLIC EMPLOYEES POLICE AND FIRE PLAN; EMPLOYEE
ORGANIZATION BUSINESS AGENT LEAVE OF ABSENCE SERVICE CREDIT
PURCHASE.
new text end

new text begin (a) An eligible person described in paragraph (b) is entitled to purchase allowable
service credit in the public employees police and fire retirement plan for the period
described in paragraph (c) by making the payment required under paragraph (d).
new text end

new text begin (b) An eligible person is a person who:
new text end

new text begin (1) was born on January 3, 1959;
new text end

new text begin (2) was employed by the Minnetonka Police Department before 1995;
new text end

new text begin (3) was granted a leave of absence from employment by the Minnetonka Police
Department in 1995 to serve as the business agent for an employee labor organization; and
new text end

new text begin (4) returned to employment with the Minnetonka Police Department from the leave
of absence in 1997.
new text end

new text begin (c) The period of service credit available for purchase under this section is one year.
new text end

new text begin (d) The prior service credit purchase payment must be calculated under Minnesota
Statutes, section 356.551.
new text end

Sec. 6. new text begin PERA-GENERAL; PUBLIC GOLF COURSE EMPLOYEE SERVICE
CREDIT PURCHASE .
new text end

new text begin (a) An eligible person described in paragraph (b) is entitled to purchase allowable
service credit from the general employees retirement plan of the Public Employees
Retirement Association for the period of employment by the city of Anoka at the
Greenhaven Golf Course between March 1, 1984, and December 28, 1997, that qualified as
employment by a public employee under Minnesota Statutes, section 353.01, subdivisions
2, 2a, and 2b, that was not previously credited by the retirement plan.
new text end

new text begin (b) An eligible person is a person who:
new text end

new text begin (1) was born on July 18, 1954;
new text end

new text begin (2) was first employed by the city of Anoka at the Greenhaven Golf Course as a
part-time employee in 1978;
new text end

new text begin (3) was incorrectly characterized as an independent contractor by the city of Anoka
during the period 1982-1998, although the person was provided health insurance and other
employment recognition during portions of that period; and
new text end

new text begin (4) became a member of the general employees retirement plan of the Public
Employees Retirement Association in 1998.
new text end

new text begin (c) The eligible person described in paragraph (b) must apply with the executive
director of the Public Employees Retirement Association to make the service credit
purchase under this section. The application must be in writing and must include all
necessary documentation of the applicability of this section and any other relevant
information that the executive director may require.
new text end

new text begin (d) Allowable service credit under Minnesota Statutes, section 353.01, subdivision
16, must be granted by the general employees retirement plan of the Public Employees
Retirement Association to the account of the eligible person upon the receipt of the prior
service credit purchase payment amount required under Minnesota Statutes, section
356.551.
new text end

new text begin (e) Of the prior service credit purchase payment amount under Minnesota Statutes,
section 356.551, the eligible person must pay an amount equal to the employee
contribution rate or rates in effect during the uncredited employment period applied to the
actual salary rates in effect during the period, plus annual compound interest at the rate of
8.5 percent from the date the member contribution payment should have been made if
made in a timely fashion until the date on which the contribution is actually made. If the
equivalent member contribution payment, plus interest, is made, the city of Anoka shall
pay the balance of the total prior service credit purchase payment amount under Minnesota
Statutes, section 356.551, within 60 days of notification by the executive director of the
Public Employees Retirement Association of the member contribution equivalent payment.
new text end

new text begin (f) Authority for an eligible person to make a prior service credit purchase under this
section expires on June 30, 2007.
new text end

new text begin (g) If the city of Anoka fails to pay its portion of the prior service credit purchase
payment amount under paragraph (e), the executive director of the Public Employees
Retirement Association must notify the commissioners of finance and revenue of that fact
and the commissioners shall order the deduction of the required payment amount from
the next subsequent payment of any state aid to the city of Anoka and be transmitted
to the general employees retirement fund.
new text end

Sec. 7. new text begin TEACHERS RETIREMENT ASSOCIATION; REFUND REPAYMENT
OF CERTAIN TRANSFERRED AMOUNTS.
new text end

new text begin (a) Notwithstanding Minnesota Statutes, section 352D.12 or 354.50, or any other
provision to the contrary, an eligible person described in paragraph (b) may repay to
the Teachers Retirement Association the amount specified in paragraph (c) and thereby
restore the person's prior allowable and formula service credit under Minnesota Statutes,
chapter 354.
new text end

new text begin (b) An eligible person is a person who:
new text end

new text begin (1) was born on July 17, 1947;
new text end

new text begin (2) taught for ten years with Independent School District No. 191, Burnsville;
new text end

new text begin (3) was employed by the Minnesota Educational Computing Corporation in 1984
and 1985;
new text end

new text begin (4) transferred accumulated employee contributions and an equal employer
contribution amount from the Teachers Retirement Association to the unclassified state
employees retirement program of the Minnesota State Retirement System in 1985; and
new text end

new text begin (5) after employment in the private sector in educational computing, returned to
teaching employed by Independent School District No. 196, Rosemount-Apple Valley-
Eagan.
new text end

new text begin (c) The amount of the refund to be repaid to the Teachers Retirement Association is
an amount equal to the amount transferred from the Teachers Retirement Association to
the unclassified state employees retirement program of the Minnesota State Retirement
System under Laws 1984, chapter 619, section 6, subdivision 3, plus compound annual
interest at the rate of 8.5 percent from the date on which the amount was transferred from
the Teachers Retirement Association to the date on which the transfer amount is repaid.
new text end

new text begin (d) Upon the repayment of the transfer amount, plus interest, the allowable and
formula service credit in the Teachers Retirement Association under Minnesota Statutes,
section 354.05, subdivisions 13 and 25, related to the transferred amount in 1985, must
be restored to the eligible person.
new text end

new text begin (e) The transfer amount repayment, plus interest, may be made through an institution
to institution transfer.
new text end

new text begin (f) This provision expires on July 1, 2007.
new text end

Sec. 8. new text begin TEACHERS RETIREMENT ASSOCIATION; PROSPECTIVE
TEACHERS RETIREMENT ASSOCIATION COVERAGE; PURCHASE OF
PAST SERVICE CREDIT.
new text end

new text begin (a) An eligible person described in paragraph (b) is authorized to become a
coordinated member of the Teachers Retirement Association, and to purchase service and
salary credit in the Teachers Retirement Association coordinated plan retroactive from
January 1, 1995, upon making an election under paragraph (c) and upon making the
required payment under paragraph (d).
new text end

new text begin (b) An eligible person is a person who:
new text end

new text begin (1) was born on September 10, 1958;
new text end

new text begin (2) has prior employment covered by the Public Employees Retirement Association
general plan;
new text end

new text begin (3) is the director of student support services at North Hennepin Community College;
new text end

new text begin (4) began working at North Hennepin Community College on February 3, 1992, with
coverage for that service by the higher education individual retirement account plan; and
new text end

new text begin (5) was not offered an election of Teachers Retirement Association coverage, as
required under Laws 1994, chapter 508, article 1, section 10.
new text end

new text begin (c)(1) To be eligible for coverage by the Teachers Retirement Association, an
eligible person must submit a written application to the executive director of the Teachers
Retirement Association on a form provided by the Teachers Retirement Association. The
application must include all documentation of the applicability of this section and any
other relevant information that the executive director may require. Following receipt by
the executive director of the written application specified in this paragraph and receipt
of the payment specified in paragraph (d):
new text end

new text begin (i) Teachers Retirement Association plan membership commences as of July 1, 2006;
new text end

new text begin (ii) individual retirement account plan coverage terminates for the applicable
eligible person; and
new text end

new text begin (iii) past salary and service credit is granted from January 1, 1995, as specified
in this section.
new text end

new text begin (2) The authority granted by this section is voided if the applicable eligible
individual terminates from Minnesota State Colleges and Universities system employment
prior to receipt by the executive director of the Teachers Retirement Association of the
application specified in this paragraph and the amount specified in paragraph (d).
new text end

new text begin (d) To receive the treatment specified in this section, an eligible person shall make
payment of the amount determined under Minnesota Statutes, section 356.551, to the
executive director of the Teachers Retirement Association for the period from January 1,
1995. The individual is authorized to cover the payment using assets transferred from the
eligible individual's individual retirement account plan account, or from any other sources
permitted by law. The total amount to be paid under this paragraph shall be determined
by the executive director of the Teachers Retirement Association. Written notification of
the amount required under this paragraph should be transmitted to the eligible individual.
The Teachers Retirement Association is authorized to utilize the actuary jointly retained
under Minnesota Statutes, section 356.214, to make the computations required under this
paragraph. The Teachers Retirement Association shall allocate the amount received under
this paragraph between the Teachers Retirement Association and the Public Employees
Retirement Association, or other applicable pension fund, as indicated by the full actuarial
cost determination required under this paragraph.
new text end

Sec. 9. new text begin TRA; PURCHASE OF UNCREDITED MEDICAL LEAVE.
new text end

new text begin (a) An eligible person described in paragraph (b) is entitled to purchase allowable
and formula service credit in the Teachers Retirement Association for any period of
medical leave that was not properly reported to the Teachers Retirement Association by
Independent School District No. 197, West St. Paul, and consequently not previously
audited under Minnesota Statutes, section 354.05, subdivision 13, upon the making of the
payments required under paragraphs (c) and (d).
new text end

new text begin (b) An eligible person is a person who:
new text end

new text begin (1) was born on August 24, 1948;
new text end

new text begin (2) was initially employed as a teacher in September 1970;
new text end

new text begin (3) is employed by Independent School District No. 197, West St. Paul; and
new text end

new text begin (4) took a medical leave during the 2003-2004 school year that was not reported to
the Teachers Retirement Association in a timely fashion.
new text end

new text begin (c) The eligible person shall make a payment equal to five percent of the person's
2004-2005 school year salary, plus compound interest at the rate of 8.5 percent per annum
from July 1, 2004, to the date on which the payment is made.
new text end

new text begin (d) Upon the payment under paragraph (c), the executive director of the Teachers
Retirement Association shall, within 30 days, notify Independent School District No. 197,
West St. Paul, of its obligation under this section. The school district's obligation is the
balance of the prior service credit purchase payment amount determined under Minnesota
Statutes, section 356.551, that exceeds the payment under paragraph (c). If the school
district fails to pay its obligation within 60 days following notification, the executive
director shall certify that failure and the amount due to the commissioner of finance, who
shall deduct the amount due from any subsequent state aid payable to Independent School
District No. 197, West St. Paul, plus interest at the rate of 0.71 percent per month from the
date of the payment under paragraph (c) to the date of the actual payment.
new text end

new text begin (e) This provision expires on July 1, 2008.
new text end

Sec. 10. new text begin INTERNATIONAL FALLS AND RED WING SCHOOL STRIKE
SERVICE CREDIT PROVISION.
new text end

new text begin Notwithstanding any provision of Minnesota Statutes, section 356.195, a teacher
who was covered by the Teachers Retirement Association and who was on strike
between September 20, 2002, and October 14, 2002, if the teacher was employed by
the International Falls public schools or was on strike between October 22, 2002, and
November 14, 2002, if the teacher was employed by the Red Wing public schools, is
authorized to make a payment to the Teachers Retirement Association and receive
allowable and formula service credit under Minnesota Statutes, section 354.05,
subdivisions 13 and 25, for the applicable strike period under Minnesota Statutes, section
356.195, subdivision 2, paragraph (c).
new text end

Sec. 11. new text begin PUBLIC EMPLOYEES RETIREMENT ASSOCIATION-GENERAL;
BLOOMINGTON PUBLIC SCHOOLS CUSTODIAN SERVICE CREDIT
PURCHASE AUTHORIZATION.
new text end

new text begin (a) Notwithstanding any provision of law to the contrary, an eligible person
specified in paragraph (b) may purchase allowable service credit in the general employees
retirement plan of the Public Employees Retirement Association for the years and
months that elapsed between the date of hire by Independent School District No. 271,
Bloomington, and the date on which the person was recorded as a member of the general
employees retirement plan of the Public Employees Retirement Association upon the
payment of the amount set forth in paragraph (c).
new text end

new text begin (b) An eligible person is a person who was employed by Independent School District
No. 271, Bloomington, on the applicable indicated employment date, but who was not
reported to the Public Employees Retirement Association as a member of the general
employees retirement plan until the applicable indicated membership record date, and who
consequently has an uncredited period of school district employment, as follows:
new text end

new text begin employee new text end	new text begin employment date new text end	new text begin membership record date new text end
new text begin A new text end	new text begin August 29, 1985 new text end	new text begin January 1, 1989 new text end
new text begin B new text end	new text begin April 29, 1986 new text end	new text begin November 16, 1988 new text end
new text begin C new text end	new text begin January 7, 1987 new text end	new text begin June 12, 1989 new text end
new text begin D new text end	new text begin July 21, 1986 new text end	new text begin July 1, 1989 new text end
new text begin E new text end	new text begin May 22, 1988 new text end	new text begin June 12, 1989 new text end
new text begin F new text end	new text begin September 11, 1988 new text end	new text begin June 12, 1989 new text end
new text begin G new text end	new text begin February 9, 1989 new text end	new text begin June 16, 1989 new text end
new text begin H new text end	new text begin February 15, 1989 new text end	new text begin June 16, 1989 new text end
new text begin I new text end	new text begin March 25, 1989 new text end	new text begin June 12, 1989 new text end

new text begin (c) The prior service credit purchase payment amount is the amount determined
for each eligible person by the executive director of the Public Employees Retirement
Association under Minnesota Statutes, section 356.551.
new text end

new text begin (d) The eligible person shall pay an amount equal to the member contribution that
the person would have paid if the person had been a member of the general employees
retirement plan of the Public Employees Retirement Association during the period
between the applicable employment date and the applicable membership record date,
plus annual compound interest on the total amount at the rate of 8.5 percent from the
midpoint date of the uncredited employment period until the date on which the equivalent
member contribution is paid. Payment must be made by July 1, 2006, or by the date of the
termination of employment, whichever is earlier.
new text end

new text begin (e) If the eligible person makes the required payment under paragraph (d) in a timely
fashion, Independent School District No. 271, Bloomington, may pay the difference
between the amount determined under paragraph (c) and the amount paid under paragraph
(d). If Independent School District No. 271, Bloomington, does not pay that balance
within 30 days of notification by the executive director of the Public Employees Retirement
Association of the payment by an eligible person under paragraph (d), the executive
director shall notify the commissioner of finance of that fact and the commissioner of
finance shall deduct the balance, plus compound interest on that amount at the rate of 1.5
percent per month or portion of a month that has elapsed from the effective date of this
section, from any state aid payable to the school district and shall transmit that amount to
the executive director of the Public Employees Retirement Association.
new text end

new text begin (f) The eligible person shall provide any relevant documentation related to the
eligibility to make this service credit purchase that is required by the executive director of
the Public Employees Retirement Association.
new text end

new text begin (g) Only periods of employment when the eligible person would have been
eligible for coverage by the general employees retirement plan of the Public Employees
Retirement Association is purchasable under this section.
new text end

Sec. 12. new text begin PERA-GENERAL; AUTHORIZING TRANSFER OF COVERAGE
FROM DEFINED CONTRIBUTION PLAN IN CERTAIN INSTANCES.
new text end

new text begin (a) An eligible person described in paragraph (b) may elect under paragraph (c) to
transfer past retirement coverage from the defined contribution retirement plan of the
public employees retirement association to the general employees retirement plan of the
Public Employees Retirement Association by authorizing the transfer of assets specified in
paragraph (d) and making the additional payment, if any, specified in paragraph (e).
new text end

new text begin (b) An eligible person is a former public employee or official who:
new text end

new text begin (1) was born on August 2, 1950;
new text end

new text begin (2) served in the Minnesota house of representatives from 1975 to 1991;
new text end

new text begin (3) served in the Minnesota senate from 1991 to 2002;
new text end

new text begin (4) became the mayor of a Minnesota home rule city in January 2002; and
new text end

new text begin (5) elected retirement coverage by the defined contribution retirement plan of the
Public Employees Retirement Association on January 15, 2002.
new text end

new text begin (c) The election of the retirement coverage transfer must be made in writing within
180 days of the date of enactment of this act. The election must authorize the asset
transfer specified in paragraph (d) and must be accompanied with any payment amount
required under paragraph (e). Upon the transfer and payment, the electing eligible person
is entitled to allowable service and salary credit under Minnesota Statutes, section 353.01,
subdivisions 10 and 16, for the service and salary related to the defined contribution
retirement plan coverage period.
new text end

new text begin (d) The transfer amount is the total member and employer contributions and any
investment performance to the credit of the eligible person in the defined contribution
retirement plan of the Public Employees Retirement Association.
new text end

new text begin (e) The additional payment amount is the amount by which the transfer amount
under paragraph (d) is less than the amount that would be required to be transferred to
the Minnesota postretirement investment fund for the coordinated program of the general
employees retirement plan of the Public Employees Retirement Association retirement
annuity payable to the eligible person on the first day of the month next following the
date of enactment or on the first day of the month next following the day on which the
eligible person is first eligible to receive a retirement annuity from the general employees
retirement plan of the Public Employees Retirement Association if that date is later than
the date of enactment plus the amount representing the present value of the amount by
which the retirement annuity from the legislators retirement plan was increased or the
retirement age eligibility was modified under Minnesota Statutes, section 356.30, from the
additional service and salary credit under Minnesota Statutes, chapter 353. The former
employer of the eligible employee may pay a portion of the additional payment amount,
but not to exceed 52 percent of the total amount, at the discretion of the former employer.
new text end

new text begin (f) The executive director of the Public Employees Retirement Association may
request any relevant documentation to verify a person's status as an eligible person under
this section and may audit city records to verify conformity with Minnesota Statutes,
section 353.01, subdivisions 10 and 16.
new text end

Sec. 13. new text begin MSRS-GENERAL; PAYMENT OF PORTION OF ANNUITY IN
CERTAIN MARRIAGE DISSOLUTIONS.
new text end

new text begin (a) Notwithstanding the provisions of Minnesota Statutes, section 518.58,
subdivision 4, or any other law to the contrary, if a court of competent jurisdiction
makes a finding meeting the requirements of paragraph (b), and that finding is filed with
the executive director of the Minnesota State Retirement System, an eligible person
described in paragraph (c) is entitled to immediately receive the person's designated
portion of the ex-spouse's public retirement plan annuity awarded as part of the applicable
marriage dissolution judgement that conformed with Minnesota Statutes, section 518.58,
subdivision 4, when issued.
new text end

new text begin (b) The finding necessary to implement this section would be:
new text end

new text begin (1) that the court in its marriage dissolution judgment intended that the eligible
person described in paragraph (c) receive a portion of the person's ex-spouse's public
retirement plan annuity in a timely fashion;
new text end

new text begin (2) that the ex-spouse has declined to commence receipt of that public retirement
plan annuity; and
new text end

new text begin (3) that the decision of the ex-spouse not to draw the public retirement plan annuity
was not reasonably done in pursuit of an end other than to frustrate the payment of a
portion of the retirement annuity to the eligible person.
new text end

new text begin (c) An eligible person is a person:
new text end

new text begin (1) who was born on August 12, 1944;
new text end

new text begin (2) who resides in Edina, Minnesota;
new text end

new text begin (3) who was married to a member of the general state employees retirement plan of
the Minnesota State Retirement System; and
new text end

new text begin (4) whose marriage was dissolved on December 15, 1999.
new text end

new text begin (d) If the immediate payment of the eligible person's designated portion of the
ex-spouse's public retirement plan annuity occurs under this section, the executive director
of the Minnesota State Retirement System shall establish a separate account for the
eligible person within the state employees retirement fund, shall credit that account with
the applicable percentage of the actuarial present value of the retirement annuity of the
ex-spouse under the marriage dissolution judgment, and shall reduce the account of the
ex-spouse by that amount. The present value of the subsequent retirement annuity of the
ex-spouse, when initiated, may not exceed the person's account value upon the division,
plus the value of any deferred annuity augmentation.
new text end

Sec. 14. new text begin MINNEAPOLIS EMPLOYEES RETIREMENT FUND; SERVICE
CREDIT PURCHASE FOR CERTAIN WORKERS' COMPENSATION INJURY
PERIODS.
new text end

new text begin (a) An eligible person described in paragraph (b) is entitled to purchase allowable
service credit from the Minneapolis Employees Retirement Fund for up to two years for
the period of the injury that qualified for a workers' compensation benefit but that was not
previously credited by the Minneapolis Employees Retirement Fund.
new text end

new text begin (b) An eligible person is a person who:
new text end

new text begin (1) was born on January 4, 1951;
new text end

new text begin (2) was first employed in the engineering department of the city of Minneapolis
in 1974;
new text end

new text begin (3) suffered an injury that, in 1978, qualified the person for workers' compensation
benefits;
new text end

new text begin (4) applied for disabled status in the Minneapolis Employees Retirement Fund in
1986 and accrued allowable service credit for the period from 1986 to 1991; and
new text end

new text begin (5) was advised by the Minneapolis Employees Retirement Fund to wait until
retirement age to pursue a claim for allowable service credit for the period from 1978
to 1985.
new text end

new text begin (c) The eligible person described in paragraph (b) must apply with the executive
director of the Minneapolis Employees Retirement Fund to make a service credit purchase
under this section. The application must be in writing and must include all necessary
documentation of the applicability of this section and any other relevant information that
the executive director may require.
new text end

new text begin (d) Allowable service credit under Minnesota Statutes, sections 422A.15,
subdivisions 1 and 4, and 422A.19, must be granted by the Minneapolis Employees
Retirement Fund to the eligible person upon receipt from the applicable eligible person of
the portion of the prior service credit purchase payment amount payable under paragraph
(e) in a lump sum.
new text end

new text begin (e) Notwithstanding any provision of Minnesota Statutes, section 356.551, to the
contrary, to obtain the service credit an eligible person must pay an amount equal to
one-half of the prior service credit purchase payment amount determined under Minnesota
Statutes, section 356.551. Payment must be made before July 1, 2007, or prior to
termination of Minneapolis Employees Retirement Fund covered employment, whichever
is earlier.
new text end

new text begin (f) If the eligible person makes the payment under paragraph (e), the city of
Minneapolis must pay the remaining balance of the prior service credit purchase payment
amount determined under Minnesota Statutes, section 356.551, within 30 days of the
payment by the eligible person. The executive director of the Minneapolis Employees
Retirement Fund must notify the chief financial officer of the city of Minneapolis of
its payment amount and its payment due date if the eligible person makes the required
payment. If the city of Minneapolis fails to pay its portion of the required prior service
credit purchase payment amount, the executive director of the Minneapolis Employees
Retirement Fund must notify the commissioner of finance of that fact within 30 days of the
city payment due date and the commissioner of finance must order that the required city
payment be deducted from any state aid otherwise payable to the city and be transmitted
to the Minneapolis Employees Retirement Fund.
new text end

Sec. 15. new text begin EFFECTIVE DATE.
new text end

new text begin (a) Sections 1 to 11 and 13 are effective the day following final enactment.
new text end

new text begin (b) Section 12 is effective the day following the date on which the city council of
the city of St. Paul and its chief clerical officer timely complete their compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3.
new text end

new text begin (c) Section 14 is effective the day following the date on which the city council of the
city of Minneapolis and its chief clerical officer timely complete their compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3.
new text end

new text begin (d) Section 12 expires July 1, 2007.
new text end

SF 2239

Bill Text Versions

ARTICLE 1

MINNESOTA STATE RETIREMENT SYSTEM

CONTRIBUTION INCREASES

Section 1.

Subd. 2.

Employee contributions.

Sec. 2.

Subd. 3.

Employer contributions.

Sec. 3.

new text begin [352.045] PROCEDURE FOR REVISING EMPLOYEE AND EMPLOYER CONTRIBUTIONS IN CERTAIN INSTANCES. new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin Subd. 2. new text end

new text begin Determination. new text end

new text begin Subd. 3. new text end

new text begin Contribution rate revision. new text end

new text begin Subd. 4. new text end

new text begin Reporting, commission review. new text end

Sec. 4.

Subdivision 1.

Employee contributions.

Sec. 5.

Subd. 2.

Employer contributions.

Sec. 6.

Subd. 1a.

Member contributions.

Sec. 7.

Subd. 1c.

Employer contributions.

Sec. 8.

Subd. 2.

Contribution rates.

Sec. 9. new text begin EFFECTIVE DATE.new text end

ARTICLE 2

MSRS-CORRECTIONAL RETIREMENT PLAN INCLUSIONS

Section 1.

352.90 POLICY.

Sec. 2.

Subdivision 1.

Qualifying jobs.

Sec. 3.

Subd. 2.

Maintenancenew text begin , correctional industry, new text end and trades.

Sec. 4.

Subd. 3c.

Nursing personnel.

Sec. 5.

Subd. 3d.

Other correctional personnel.

Sec. 6.

Subd. 3e.

Minnesota extended treatment options programdeleted text begin ; Cambridgedeleted text end .

Sec. 7.

Subd. 3f.

Additional Department of Human Services personnel.

Sec. 8.

Subd. 3g.

Additional Corrections Department personnel.

Sec. 9.

new text begin Subd. 3h. new text end

new text begin Employment occupation name changes. new text end

Sec. 10.

new text begin Subd. 3i. new text end

new text begin Lateral transfers to new correctional facilities. new text end

Sec. 11.

new text begin Subd. 4b. new text end

new text begin Department of Corrections; procedure for coverage change considerations. new text end

Sec. 12. new text begin COVERAGE FOR PRIOR STATE SERVICE FOR CERTAIN PERSONS.new text end

new text begin Subdivision 1. new text end

new text begin Election of prior state coverage. new text end

new text begin Subd. 2. new text end

new text begin Payment for prior service. new text end

new text begin Subd. 3. new text end

new text begin Transfer of assets. new text end

new text begin Subd. 4. new text end

new text begin Effect of the asset transfer. new text end

new text begin [352.045] PROCEDURE FOR REVISING EMPLOYEE AND
EMPLOYER CONTRIBUTIONS IN CERTAIN INSTANCES.
new text end

Sec. 9. new text begin EFFECTIVE DATE.
new text end

new text begin Department of Corrections; procedure for coverage change
considerations. new text end

Sec. 12. new text begin COVERAGE FOR PRIOR STATE SERVICE FOR CERTAIN
PERSONS.
new text end

Sec. 13. new text begin SERVICE CREDIT TRANSFER TO CORRECTIONAL PLAN.
new text end

Sec. 14. new text begin EFFECTIVE DATE.
new text end