1st Unofficial Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to retirement; various public pension plans; 1.3 clarifying and revising various plan provisions; 1.4 eliminating obsolete provisions; defining final 1.5 average salary; modifying the definition of allowable 1.6 service to include time on strike; permitting judges 1.7 to purchase service credit for an authorized leave; 1.8 requiring specified payments; clarifying references to 1.9 actuarial services in determining actuarial 1.10 equivalence; defining covered salary to include 1.11 certain employer contributions to supplemental 1.12 retirement plans; specifying itemized detail of plan 1.13 administrative expenses in annual financial reporting; 1.14 excluding police officers of the University of 1.15 Minnesota from the public employees police and fire 1.16 fund; clarifying collection procedures relating to 1.17 charter schools; adding a uniform nonassignment and 1.18 legal process exemption provision; adding employees of 1.19 Bridges Medical Services, Hutchinson Area Health Care, 1.20 and Northfield Hospital to privatization coverage; 1.21 extending date for filing special law approval with 1.22 the secretary of state for the RenVilla Nursing Home; 1.23 requiring the privatization periodic filing of updated 1.24 copies of articles of incorporation and bylaws; 1.25 modifying a higher education individual retirement 1.26 account plan investment option provision; implementing 1.27 the recommendations of the Volunteer Firefighter 1.28 Relief Association working group of the state auditor; 1.29 modifying the trigger date for filing financial 1.30 reports; revising the per firefighter financing 1.31 requirements for monthly benefit service pensions; 1.32 modifying the options for crediting interest on 1.33 deferred service pensions; clarifying the deferred 1.34 service pension options available to defined 1.35 contribution plans; providing for the crediting of 1.36 service during military service leaves; requiring the 1.37 amortization of experience losses; clarifying the 1.38 compliance requirements for the qualification for fire 1.39 state aid; modifying a limit on mutual fund 1.40 investments; clarifying corporate stock and exchange 1.41 traded funds investment authority; modifying the 1.42 municipal representation requirements on relief 1.43 association governing boards; clarifying exemptions 1.44 from process and taxation; providing that certain laws 1.45 do not apply to the consolidation of specified 1.46 volunteer firefighter relief associations; providing 2.1 an ad hoc postretirement adjustment to Eveleth police 2.2 and fire trust fund benefit recipients; authorizing 2.3 the Maplewood Firefighters Relief Association to 2.4 transfer assets to the Oakdale Firefighters Relief 2.5 Association to cover service credits earned by certain 2.6 individuals; appropriating money; amending Minnesota 2.7 Statutes 2004, sections 3A.01, subdivisions 1, 2, 6, 2.8 8, by adding subdivisions; 3A.011; 3A.02, subdivisions 2.9 1, 1b, 3, 4, 5; 3A.03, subdivisions 1, 2; 3A.04, 2.10 subdivisions 1, 2, 3, 4, by adding a subdivision; 2.11 3A.05; 3A.07; 3A.10, subdivision 1; 3A.12; 3A.13; 2.12 43A.17, subdivision 9; 69.011, subdivision 2b, by 2.13 adding a subdivision; 69.021, subdivisions 5, 11; 2.14 69.051, subdivisions 1, 1a; 69.33; 69.77, subdivision 2.15 4; 69.771; 69.772, subdivisions 3, 4; 69.773, 2.16 subdivisions 4, 5; 69.775; 352.01, subdivisions 2a, 4, 2.17 5, 12, 21, 23, by adding a subdivision; 352.021, 2.18 subdivisions 1, 2, 3, 4; 352.04, subdivisions 1, 12; 2.19 352.041, subdivisions 1, 2, 3, 5; 352.115, 2.20 subdivisions 2, 3; 352.15, subdivisions 1, 3, 4; 2.21 352.22, subdivision 10; 352.87, subdivision 3; 352.91, 2.22 by adding a subdivision; 352.93, subdivision 1; 2.23 352B.01, subdivisions 1, 2, 3; 352B.02, subdivision 2.24 1e; 352B.071; 352C.021, by adding a subdivision; 2.25 352C.091, subdivision 1; 352C.10; 352D.01; 352D.015, 2.26 subdivisions 3, 4; 352D.02, subdivision 1; 352D.03; 2.27 352D.05, subdivision 4; 352D.085, subdivision 1; 2.28 352D.09, subdivision 5; 352D.12; 353.01, subdivisions 2.29 6, 10, 14, 32, 33, by adding a subdivision; 353.025; 2.30 353.026; 353.027; 353.028; 353.14; 353.15, 2.31 subdivisions 1, 3; 353.27, subdivision 11; 353.271; 2.32 353.28, subdivisions 5, 6; 353.29, subdivision 3; 2.33 353.31, subdivision 1c; 353.32, subdivision 9; 353.33, 2.34 subdivisions 3, 12; 353.64, by adding a subdivision; 2.35 353.651, subdivision 3; 353.656, subdivision 1; 2.36 353F.02, subdivision 4; 354.05, subdivision 7, by 2.37 adding a subdivision; 354.091; 354.094, subdivision 1; 2.38 354.10, subdivisions 1, 3, 4; 354.33, subdivision 5; 2.39 354.39; 354.41, subdivision 2; 354.42, by adding a 2.40 subdivision; 354.44, subdivisions 2, 6; 354A.011, 2.41 subdivision 3a, by adding a subdivision; 354A.021, 2.42 subdivision 5, by adding a subdivision; 354A.097, 2.43 subdivision 1; 354A.31, subdivisions 4, 4a, 5; 2.44 354B.21, subdivisions 2, 3; 354B.25, subdivision 2; 2.45 355.01, subdivision 3e; 356.20, subdivision 4; 2.46 356.215, subdivision 8; 356.216; 356.24, subdivision 2.47 1; 356.47, subdivision 3; 356.551; 356.65, subdivision 2.48 2; 356A.06, subdivision 7; 383B.46, subdivision 2; 2.49 383B.47; 383B.48; 383B.49; 422A.01, subdivisions 6, 2.50 11, by adding a subdivision; 422A.05, subdivision 2c; 2.51 422A.06, subdivisions 3, 5, 7, 8; 422A.10, 2.52 subdivisions 1, 2; 422A.101, subdivision 3; 422A.15, 2.53 subdivision 1; 422A.16, subdivision 9; 422A.22, 2.54 subdivisions 1, 3, 4, 6; 422A.231; 422A.24; 423B.01, 2.55 subdivision 12; 423B.09, subdivision 1, by adding a 2.56 subdivision; 423B.10, subdivision 1; 423B.15, 2.57 subdivision 3; 423B.17; 423C.05, subdivision 2; 2.58 423C.09; 424A.02, subdivisions 3, 4, 7; 424A.04, 2.59 subdivision 1; 424B.10, subdivision 1; 471A.10; 2.60 490.121, subdivisions 1, 4, 6, 7, 13, 14, 15, 20, 21, 2.61 22, by adding subdivisions; 490.122; 490.123, 2.62 subdivisions 1, 1a, 1b, 1c, 2, 3; 490.124, 2.63 subdivisions 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 13; 2.64 490.125, subdivisions 1, 2; 490.126; 490.133; 525.05; 2.65 Laws 1999, chapter 222, article 16, section 16, as 2.66 amended; Laws 2000, chapter 461, article 4, section 4, 2.67 as amended; Laws 2004, chapter 267, article 12, 2.68 section 4; proposing coding for new law in Minnesota 2.69 Statutes, chapters 352C; 356; 383B; 423C; 424A; 2.70 proposing coding for new law as Minnesota Statutes, 2.71 chapter 490A; repealing Minnesota Statutes 2004, 3.1 sections 3A.01, subdivisions 3, 4, 6a, 7; 3A.02, 3.2 subdivision 2; 3A.04, subdivision 1a; 3A.09; 352.119, 3.3 subdivision 1; 352.15, subdivision 1a; 352C.01; 3.4 352C.011; 352C.021; 352C.031; 352C.033; 352C.04; 3.5 352C.051; 352C.09; 352C.091, subdivisions 2, 3; 3.6 353.15, subdivision 2; 353.29, subdivision 2; 353.34, 3.7 subdivision 3b; 353.36, subdivisions 2, 2a, 2b, 2c; 3.8 353.46, subdivision 4; 353.651, subdivision 2; 3.9 353.663; 353.74; 353.75; 354.10, subdivision 2; 3.10 354.59; 422A.101, subdivision 4; 422A.22, subdivisions 3.11 2, 5; 422A.221; 490.021; 490.025; 490.101; 490.102; 3.12 490.103; 490.105; 490.106; 490.107; 490.108; 490.109; 3.13 490.1091; 490.12; 490.121, subdivisions 2, 3, 5, 8, 9, 3.14 10, 11, 12, 16, 17, 18, 19, 20; 490.124, subdivision 3.15 6; 490.132; 490.15; 490.16; 490.18. 3.16 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 3.17 2005 OMNIBUS RETIREMENT BILL 3.18 ARTICLE 1 3.19 CLARIFICATION/RECODIFICATION OF 3.20 STATEWIDE SPECIALTY RETIREMENT PLANS 3.21 Section 1. Minnesota Statutes 2004, section 3A.01, 3.22 subdivision 1, is amended to read: 3.23 Subdivision 1. [PURPOSES.] Each of the terms defined in 3.24 this section, for the purposes of this chaptershall be3.25givenhas themeaningsmeaning ascribedto them. 3.26 Sec. 2. Minnesota Statutes 2004, section 3A.01, is amended 3.27 by adding a subdivision to read: 3.28 Subd. 1a. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 3.29 means the condition of one allowance or benefit having an equal 3.30 actuarial present value to another allowance or benefit, 3.31 determined by the actuary retained under section 356.214 as of a 3.32 given date at a specified age with each actuarial present value 3.33 based on the mortality table applicable for the plan and 3.34 approved under section 356.215, subdivision 18, and using the 3.35 applicable preretirement or postretirement interest rate 3.36 assumption specified in section 356.215, subdivision 8. 3.37 Sec. 3. Minnesota Statutes 2004, section 3A.01, is amended 3.38 by adding a subdivision to read: 3.39 Subd. 1b. [AVERAGE MONTHLY SALARY.] "Average monthly 3.40 salary" means the average of the member's highest five 3.41 successive years of salary that was received as a member of the 3.42 legislature and upon which the member has made contributions 3.43 under section 3A.03, subdivision 1, or for which the member of 4.1 the legislature has made payments for past service under 4.2 Minnesota Statutes 2004, section 3A.02, subdivision 2, or has 4.3 made, before July 1, 1994, payments in lieu of contributions 4.4 under Minnesota Statutes 1992, section 3A.031. 4.5 Sec. 4. Minnesota Statutes 2004, section 3A.01, is amended 4.6 by adding a subdivision to read: 4.7 Subd. 1c. [CONSTITUTIONAL OFFICER.] "Constitutional 4.8 officer" means a person who was duly elected, qualifies for, and 4.9 serves as the governor, the lieutenant governor, the attorney 4.10 general, the secretary of state, or the state auditor of the 4.11 state of Minnesota. 4.12 Sec. 5. Minnesota Statutes 2004, section 3A.01, 4.13 subdivision 2, is amended to read: 4.14 Subd. 2. [DEPENDENT CHILD.] (a) "Dependent child" means 4.15 any natural or adopted child of a deceased member of the 4.16 legislature or a former legislator who is under the age of 18, 4.17 or who is under the age of 22 and is a full-time student, and 4.18 who, in either case, is unmarried and was actually dependent for 4.19 more than one-half of support uponsuchthe legislator for a 4.20 period of at least 90 days immediatelyprior tobefore the 4.21 legislator's death.It4.22 (b) The term also includes any child of the member of the 4.23 legislature or former legislator who was conceived during the 4.24 lifetime of, and who was born after the death of, the member or 4.25 former legislator.This subdivision shall be retroactive as to4.26any dependent child under the age of 22 years as of April 1,4.271975.4.28 Sec. 6. Minnesota Statutes 2004, section 3A.01, 4.29 subdivision 6, is amended to read: 4.30 Subd. 6. [DIRECTOR.] "Director" means the executive 4.31 director of the Minnesota State Retirement System who was 4.32 appointed under section 352.03, subdivision 5. 4.33 Sec. 7. Minnesota Statutes 2004, section 3A.01, is amended 4.34 by adding a subdivision to read: 4.35 Subd. 6b. [FORMER LEGISLATOR.] "Former legislator" means a 4.36 legislator who has ceased to be a member of the legislature for 5.1 any reason, including, but not limited to, the expiration of the 5.2 term for which a member of the legislature was elected or the 5.3 death of the member. 5.4 Sec. 8. Minnesota Statutes 2004, section 3A.01, is amended 5.5 by adding a subdivision to read: 5.6 Subd. 6c. [MEMBER OF THE LEGISLATURE.] "Member of the 5.7 legislature" means a person who was a member of the House of 5.8 Representatives or of the Senate of the state of Minnesota who 5.9 has subscribed to the oath of office after July 1, 1965, and who 5.10 was first elected to a legislative office before July 1, 1997, 5.11 and retained coverage by the plan under Laws 1997, chapter 233, 5.12 article 2, section 15. 5.13 Sec. 9. Minnesota Statutes 2004, section 3A.01, 5.14 subdivision 8, is amended to read: 5.15 Subd. 8. [NORMAL RETIREMENT AGE.] "Normal retirement age" 5.16 means the age of60 years with regard to any member of the5.17legislature whose service terminates prior to the beginning of5.18the 1981 legislative session, and the age of62 yearswith5.19regard to any member of the legislature whose service terminates5.20after the beginning of the 1981 session. 5.21 Sec. 10. Minnesota Statutes 2004, section 3A.01, is 5.22 amended by adding a subdivision to read: 5.23 Subd. 9. [RETIREMENT.] "Retirement" means the period of 5.24 time after which a former legislator is entitled to a retirement 5.25 allowance. 5.26 Sec. 11. Minnesota Statutes 2004, section 3A.01, is 5.27 amended by adding a subdivision to read: 5.28 Subd. 10. [SALARY.] (a) "Salary" means the regular 5.29 compensation payable under law to a member of the legislature 5.30 and paid to the person for service as a legislator. 5.31 (b) The term includes the monthly compensation paid to the 5.32 member of the legislature and the per diem payments paid during 5.33 a regular or special session to the member of the legislature. 5.34 (c) The term does not include per diem payments paid to a 5.35 member of the legislature other than during the regular or 5.36 special session; additional compensation attributable to a 6.1 leadership position under section 3.099, subdivision 3; living 6.2 expense payments under section 3.101; and special session living 6.3 expense payments under section 3.103. 6.4 Sec. 12. Minnesota Statutes 2004, section 3A.011, is 6.5 amended to read: 6.6 3A.011 [ADMINISTRATION OF PLAN.] 6.7 The executive director and the board of directors of the 6.8 Minnesota State Retirement System shall administer the 6.9 legislators retirement plan in accordance with this chapter and 6.10 chapter 356A. 6.11 Sec. 13. Minnesota Statutes 2004, section 3A.02, 6.12 subdivision 1, is amended to read: 6.13 Subdivision 1. [QUALIFICATIONS.] (a) A former legislator 6.14 is entitled, upon written application to the director, to 6.15 receive a retirement allowance monthly, if the person: 6.16 (1) has either served at least six full years, without 6.17 regard to the application of section 3A.10, subdivision 2, or 6.18 has served during all or part of four regular sessions as a 6.19 member of the legislature, which service need not be continuous; 6.20 (2) has attained the normal retirement age; 6.21 (3) has retired as a member of the legislature; and 6.22 (4) has made all contributions provided for in section 6.23 3A.03, has made payments for past service under subdivision 2, 6.24 or has made payments in lieu of contributions under Minnesota 6.25 Statutes 1992, section 3A.031,prior tobefore July 1, 1994. 6.26 (b)This paragraph applies to members of the legislature6.27who terminate service as a legislator before July 1, 1997. For6.28service rendered before the beginning of the 1979 legislative6.29session, but not to exceed eight years of service, the6.30retirement allowance is an amount equal to five percent per year6.31of service of that member's average monthly salary. For service6.32in excess of eight years rendered before the beginning of the6.331979 legislative session, and for service rendered after the6.34beginning of the 1979 legislative session,Unless the former 6.35 legislator has legislative service before January 1, 1979, the 6.36 retirement allowance is an amount equal to 2-1/2 percent per 7.1 year of service of that member's average monthly salary.7.2(c) This paragraph applies to members of the legislature7.3who terminate service as a legislator after June 30, 1997. The7.4retirement allowance is an amount equal to the applicable rate7.5or rates under paragraph (b) per year of service of the member's7.6average monthly salaryand adjusted for that person on an 7.7 actuarial equivalent basis to reflect the change in the 7.8 postretirement interest rate actuarial assumption under section 7.9 356.215, subdivision 8, from five percent to six percent. The 7.10 adjustment must be calculated by or, alternatively, the 7.11 adjustment procedure must be specified by, the actuary retained 7.12by the Legislative Commission on Pensions and Retirementunder 7.13 section 356.214. The purpose of this adjustment is to ensure 7.14 that the total amount of benefits that the actuary predicts an 7.15 individual member will receive over the member's lifetime under 7.16 this paragraph will be the same as the total amount of benefits 7.17 the actuary predicts the individual member would receive over 7.18 the member's lifetime under the law in effect before enactment 7.19 of this paragraph. If the former legislator has legislative 7.20 service before January 1, 1979, the person's benefit must 7.21 include the additional benefit amount in effect on January 1, 7.22 1979, and adjusted as otherwise provided in this paragraph. 7.23(d)(c) The retirement allowance accrues beginning with the 7.24 first day of the month of receipt of the application, but not 7.25 before age 60, and for the remainder of the former legislator's 7.26 life, if the former legislator is not serving as a member of the 7.27 legislature or as a constitutional officeror commissioneras 7.28 defined insection 352C.021, subdivisions 2 and 3section 3A.01, 7.29 subdivision 1c. The annuity does not begin to accrueprior to7.30 before the person's retirement as a legislator. No annuity 7.31 payment may be made retroactive for more than 180 days before 7.32 the date that the annuity application is filed with the director. 7.33(e)(d) Any member who has served during all or part of 7.34 four regular sessions is considered to have served eight years 7.35 as a member of the legislature. 7.36(f)(e) The retirement allowance ceases with the last 8.1 payment that accrued to the retired legislator during the 8.2 retired legislator's lifetime, except that the surviving spouse, 8.3 if any, is entitled to receive the retirement allowance of the 8.4 retired legislator for the calendar month in which the retired 8.5 legislator died. 8.6 Sec. 14. Minnesota Statutes 2004, section 3A.02, 8.7 subdivision 1b, is amended to read: 8.8 Subd. 1b. [REDUCED RETIREMENT ALLOWANCE.] (a) Upon 8.9 separation from service after the beginning of the 1981 8.10 legislative session, a former member of the legislature who has 8.11 attained the age set by the board of directors of the Minnesota 8.12 State Retirement System and who is otherwise qualifiedin8.13accordance withunder subdivision 1 is entitled, upon making 8.14 written application onforms supplieda form prescribed by the 8.15 director, to a reduced retirement allowancein. The reduced 8.16 retirement allowance is an amount equal to the retirement 8.17 allowance specified in subdivision 1, paragraph (b), that is 8.18 reduced so that the reducedannuityallowance is the actuarial 8.19 equivalent of theannuityallowance that would be payable if the 8.20 former member of the legislature deferred receipt of theannuity8.21 allowance and theannuityallowance amountwerewas augmented 8.22 at an annual rate of three percent compounded annually from the 8.23 date theannuityallowance begins to accrue until age 62. 8.24 (b) The age set by the board of directors under paragraph 8.25 (a) cannot belessan earlier age than the early retirement age 8.26 under section 352.116, subdivision 1a. 8.27 (c) If there is an actuarial cost to the plan of resetting 8.28 the early retirement age under paragraph (a), the retired 8.29 legislator is required to pay an additional amount to cover the 8.30 full actuarial value. The additional amount must be paid in a 8.31 lump sum within 30 days of the certification of the amount by 8.32 the executive director. 8.33 (d) The executive director of the Minnesota State 8.34 Retirement System shall report to the Legislative Commission on 8.35 Pensions and Retirement on the utilization of this 8.36 provision annually on or before September 1, 2000. 9.1 Sec. 15. Minnesota Statutes 2004, section 3A.02, 9.2 subdivision 3, is amended to read: 9.3 Subd. 3. [APPROPRIATION.] The amounts required for payment 9.4 of retirement allowances provided by this section are 9.5 appropriated annually to the director from the participation of 9.6 the legislators retirement plan in the Minnesota postretirement 9.7 investment fundand shall. The retirement allowance must be 9.8 paid monthly to the recipients entitledtheretoto those 9.9 retirement allowances. 9.10 Sec. 16. Minnesota Statutes 2004, section 3A.02, 9.11 subdivision 4, is amended to read: 9.12 Subd. 4. [DEFERRED ANNUITIES AUGMENTATION.] (a) The 9.13 deferredannuityretirement allowance of any former legislator 9.14 must be augmented as provided herein. 9.15 (b) The required reserves applicable to the 9.16 deferredannuityretirement allowance, determined as of the date 9.17 the benefit begins to accrue using an appropriate mortality 9.18 table and an interest assumption of six percent, must be 9.19 augmented from the first of the month following the termination 9.20 of active service, or July 1, 1973, whichever is later, to the 9.21 first day of the month in which theannuityallowance begins to 9.22 accrue, at the following annually compounded rateof five9.23percent per annum compounded annually until January 1, 1981, and9.24thereafter at the rate of three percent per annum compounded9.25annually until January 1 of the year in which the former9.26legislator attains age 55. From that date to the effective date9.27of retirement, the rate is five percent compounded annually.or 9.28 rates: 9.29 rate period 9.30 (1) five percent until January 1, 1981 9.31 (2) three percent from January 1, 1981, or from the 9.32 first day of the month following 9.33 the termination of active service, 9.34 whichever is later, until January 1 9.35 of the year in which the former 9.36 legislator attains age 55 10.2 (3) five percent from the period end date under 10.3 clause (2) to the effective date 10.4 of retirement. 10.5(b) The retirement allowance of, or the survivor benefit10.6payable on behalf of, a former member of the legislature who10.7terminated service before July 1, 1997, which is not first10.8payable until after June 30, 1997, must be increased on an10.9actuarial equivalent basis to reflect the change in the10.10postretirement interest rate actuarial assumption under section10.11356.215, subdivision 8, from five percent to six percent under a10.12calculation procedure and tables adopted by the board of10.13directors of the Minnesota State Retirement System and approved10.14by the actuary retained by the Legislative Commission on10.15Pensions and Retirement.10.16 Sec. 17. Minnesota Statutes 2004, section 3A.02, 10.17 subdivision 5, is amended to read: 10.18 Subd. 5. [OPTIONAL ANNUITIES.] (a) The board of directors 10.19 shall establish an optional retirement annuity in the form of a 10.20 joint and survivor annuity and an optional retirement annuity in 10.21 the form of a period certain and life thereafter. Except as 10.22 provided in paragraph (b), these optional annuity forms must be 10.23 actuarially equivalent to the normalannuityallowance computed 10.24 under this section, plus the actuarial value of any surviving 10.25 spouse benefit otherwise potentially payable at the time of 10.26 retirement under section 3A.04, subdivision 1. An individual 10.27 selecting an optional annuity under this subdivisionwaivesand 10.28 the person's spouse waive any rights to surviving spouse 10.29 benefits under section 3A.04, subdivision 1. 10.30 (b) If a retired legislator selects the joint and survivor 10.31 annuity option, the retired legislator must receive a normal 10.32 single-lifeannuityallowance if the designated optional annuity 10.33 beneficiary dies before the retired legislator and no reduction 10.34 may be made in the annuity to provide for restoration of the 10.35 normal single-lifeannuityallowance in the event of the death 10.36 of the designated optional annuity beneficiary. 11.1 (c) The surviving spouse of a legislator who has attained 11.2 at least age 60 and who dies while a member of the legislature 11.3 may elect an optional joint and survivor annuity under paragraph 11.4 (a), in lieu of surviving spouse benefits under section 3A.04, 11.5 subdivision 1. 11.6 Sec. 18. Minnesota Statutes 2004, section 3A.03, 11.7 subdivision 1, is amended to read: 11.8 Subdivision 1. [PERCENTAGE.] (a) Every member of the 11.9 legislature shall contribute nine percent of total salary,. 11.10 (b) The contribution must be made by payroll deduction,11.11toand must be paid into the state treasury and deposited in the 11.12 general fund.It shall be the duty of11.13 (c) The directortomust record the periodic contributions 11.14 of each member of the legislature and must creditsucheach 11.15 contribution to the member's account. 11.16 Sec. 19. Minnesota Statutes 2004, section 3A.03, 11.17 subdivision 2, is amended to read: 11.18 Subd. 2. [REFUND.] (a) A former member who has made 11.19 contributions under subdivision 1 and who is no longer a member 11.20 of the legislature is entitled to receive, upon written 11.21 application to the executive director on a form prescribed by 11.22 the executive director, a refund from the general fund of all 11.23 contributions credited to the member's account with interest 11.24 computed as provided in section 352.22, subdivision 2. 11.25 (b) The refund of contributions as provided in paragraph (a) 11.26 terminates all rights of a former member of the legislature and 11.27 the survivors of the former member under this chapter. 11.28 (c) If the former member of the legislature again becomes a 11.29 member of the legislature after having taken a refund as 11.30 provided in paragraph (a), the membermust be consideredis a 11.31newmember ofthis planthe unclassified employees retirement 11.32 program of the Minnesota State Retirement System. 11.33 (d) However, the member may reinstate the rights and credit 11.34 for service previously forfeited under this chapter if the 11.35 member repays all refunds taken, plus interest at an annual rate 11.36 of 8.5 percent compounded annually from the date on which the 12.1 refund was taken to the date on which the refund is repaid. 12.2(d)(e) No person may be required to apply for or to accept 12.3 a refund. 12.4 Sec. 20. Minnesota Statutes 2004, section 3A.04, 12.5 subdivision 1, is amended to read: 12.6 Subdivision 1. [SURVIVING SPOUSE.] (a) Upon the death of a 12.7 member of the legislature while serving assucha memberafter12.8June 30, 1973, or upon the death of a former member of the 12.9 legislature with at leastthe number ofsix full years of 12.10 serviceas required by section 3A.02, subdivision 1, clause12.11(1)or service in all or part of four regular legislative 12.12 sessions, the surviving spouseshall be paidis entitled to a 12.13 survivor benefitin the amount of. 12.14 (b) The surviving spouse benefit is one-half of the 12.15 retirement allowance of the member of the legislature computed 12.16 as though the member were at least normal retirement age on the 12.17 date of death and based upon the member's allowable service 12.18 or upon eight years, whichever is greater. The augmentation 12.19 provided in section 3A.02, subdivision 4, if applicable,shall12.20 must be applied for the period up to, and including, the month 12.21 of death. 12.22 (c) Upon the death of a former legislator receiving a 12.23 retirement allowance, the surviving spouseshall beis entitled 12.24 to one-half of the amount of the retirement allowance being paid 12.25 to the legislator.Such12.26 (d) The surviving spouse benefitshall be paid duringis 12.27 payable for the lifetime of the surviving spouse. 12.28 Sec. 21. Minnesota Statutes 2004, section 3A.04, 12.29 subdivision 2, is amended to read: 12.30 Subd. 2. [DEPENDENT CHILDREN.] (a) Upon the death of a 12.31 member of the legislature while serving as a member, or upon the 12.32 death of a former member of the legislature who has rendered at 12.33 leastthe number ofsix full years of serviceas required by12.34section 3A.02, subdivision 1, clause (1)or service in all or 12.35 part of four regular legislative sessions and who was not 12.36 receiving a retirement allowance, each dependent child of the 13.1 member or former legislatorshall beis entitled to receive a 13.2 survivor benefit in the following amount: 13.3 (1) for the first dependent child, a monthlyallowance13.4which equalsbenefit equal to 25 percent of the monthly 13.5 retirement allowance of the member of the legislature or the 13.6 former legislator computed as though the member or the former 13.7 legislator had attained at least the normal retirement age on 13.8 the date of death and based upon the average monthly salary as 13.9 of the date of death or as of the date of termination, whichever 13.10is applicableapplies, and the member's allowable service or 13.11 eight years, whichever is greater; 13.12 (2) for each additional dependent child, a monthly 13.13allowance which equalsbenefit equal to 12-1/2 percent of the 13.14 monthly retirement allowance of the member or the former 13.15 legislator computed as provided inthe case of the first child13.16 clause (1);butand 13.17 (3) the total amount paid to the surviving spouse and to 13.18 the dependent child or childrenshallmay not exceed, in any 13.19 one month, 100 percent of the monthly retirement allowance of 13.20 the member or of the former legislator computed as provided in 13.21the case of the first childclause (1). 13.22 (b) The augmentation provided in section 3A.02, subdivision 13.23 4, if applicable,shall be appliedapplies from the first day of 13.24 the month next following the date of the termination of the 13.25 person from service as a member of the legislature to the month 13.26 of the death of the person. 13.27 (c) Upon the death of a former legislator who was receiving 13.28 a retirement allowance,thea surviving dependent childshall be13.29 is entitled to the applicable percentage specifiedabovein 13.30 paragraph (a), clause (1) or (2), whichever applies, of the 13.31 amount of the allowance which was paid to the former legislator 13.32 for the month immediatelyprior tobefore the date of death of 13.33 the former legislator. 13.34 (d) The payments for dependent childrenshallmust be made 13.35 to the surviving spouse or to the guardian of the estate of the 13.36 dependent children, if there is one. 14.1 Sec. 22. Minnesota Statutes 2004, section 3A.04, 14.2 subdivision 3, is amended to read: 14.3 Subd. 3. [PAYMENT.] The survivingspouse'sspouse and 14.4 dependentchildren'schild or children survivor benefits payable 14.5 under this sectionshall be paidare payable by the director 14.6 monthly in the same manner as retirement allowances are 14.7 authorized to be paid by this chapter. 14.8 Sec. 23. Minnesota Statutes 2004, section 3A.04, 14.9 subdivision 4, is amended to read: 14.10 Subd. 4. [DEATH REFUNDS.] (a) Upon the death of a member 14.11 of the legislature or of a former legislator who was not 14.12 receiving a retirement allowance,without leaving either a 14.13 surviving spouse or a dependent child or dependent children, the 14.14 last designated beneficiary named on a form that was filed with 14.15 the director before the death of the legislator, or if no 14.16 designation is filed, the estate of the member or the former 14.17 legislator, upon application,shall beis entitled to a refund. 14.18 (b) The refund is the amount of contributions credited to 14.19 the person's account plus interest as provided in section 3A.03, 14.20 subdivision 2,clause (2)paragraph (a). 14.21 Sec. 24. Minnesota Statutes 2004, section 3A.04, is 14.22 amended by adding a subdivision to read: 14.23 Subd. 5. [APPROPRIATION.] The survivor benefits and the 14.24 death refunds authorized by this section are appropriated to the 14.25 director from the general fund when they are due and payable. 14.26 Sec. 25. Minnesota Statutes 2004, section 3A.05, is 14.27 amended to read: 14.28 3A.05 [APPLICATION FOR SURVIVOR BENEFIT.] 14.29 (a) Applications for survivor benefitspursuant tounder 14.30 section 3A.04shallmust be filed with the director by the 14.31 surviving spouse and dependent child or children entitled to 14.32 benefitspursuant tounder section 3A.04, or by the guardian of 14.33 the estate, if there is one, of the dependent child or children. 14.34 (b) Survivor benefitsshallaccrue as of the first day of 14.35 the month following the death of the member of the legislature 14.36 or former legislator and paymentsshallcommence as of the first 15.1 of the month next following the filing of the application, 15.2 andshall beare retroactive to the date the benefit accrues;15.3provided, however, that no payment shall be retroactive for more15.4thanor the first of the month occurring 12 monthsprior15.5tobefore the month in which the application is filed with the 15.6 director, whichever is earlier. 15.7 Sec. 26. Minnesota Statutes 2004, section 3A.07, is 15.8 amended to read: 15.9 3A.07 [APPLICATION.] 15.10 (a) Except as provided in paragraph (b), this chapter 15.11 applies to members of the legislature in service after July 1, 15.12 1965, who otherwise meet the requirements of this chapter. 15.13 (b) Members of the legislature who were elected for the 15.14 first time after June 30, 1997, or members of the legislature 15.15 who were elected before July 1, 1997, and who, after July 1, 15.16 1998, elect not to be members of the plan established by this 15.17 chapter are covered by the unclassified employees retirement 15.18 program governed by chapter 352D. 15.19 (c) The post-July 1, 1998, coverage election under 15.20 paragraph (b) is irrevocable and must be made on a form 15.21 prescribed by the director. The second chance referendum 15.22 election under Laws 2002, chapter 392, article 15, also is 15.23 irrevocable. 15.24 Sec. 27. Minnesota Statutes 2004, section 3A.10, 15.25 subdivision 1, is amended to read: 15.26 Subdivision 1. [SERVICE CREDIT FOR LEGISLATIVE TERM.] (a) 15.27 In the case of a member of the house of representatives, one 15.28 full term of officeshallmust be considered two full years of 15.29 service, notwithstanding the fact that the oath of officemay be15.30 was taken on different days each biennium. 15.31 (b) In the case of a member of the senate, one full term of 15.32 officeshallmust be considered four full years of service, 15.33 notwithstanding the fact that the oath of officemay bewas 15.34 taken on different days at the start of each term. 15.35 (c) For purposes of this chapter, a legislative termshall15.36 must be deemed to commence on January1st1 and to end on 16.1 December31st31. 16.2 Sec. 28. Minnesota Statutes 2004, section 3A.12, is 16.3 amended to read: 16.4 3A.12 [COVERAGE BY MORE THAN ONE RETIREMENT SYSTEM OR 16.5 ASSOCIATION.] 16.6 Subdivision 1. [ENTITLEMENT TO ANNUITY.] (a) Any 16.7 legislator who has beenan employee covered bya member of a 16.8 retirement plan listed in paragraph (b) is entitled, when 16.9 otherwise qualified, to a retirement allowance or annuity from 16.10 each plan if the total allowable service in all plans or in any 16.11 two of these plans totals ten or more years. 16.12 (b) This section applies to any retirement plan or program 16.13 administered by the Minnesota State Retirement System, ora16.14member ofany retirement plan administered by the Public 16.15 Employees Retirement Association, including the Public Employees 16.16 Retirement Association police and fire fund, or the Teachers 16.17 Retirement Association, or the Minneapolis employees 16.18 retirementFundplan, or the State Patrol retirementfundplan, 16.19 or any other public employee retirement system in the state of 16.20 Minnesota having a like provisionbut excluding all. 16.21 (c) This section does not apply to otherfundsretirement 16.22 plans providing benefits for police or firefighters, shall be16.23entitled when qualified to an annuity from each fund if the16.24total allowable service for which the legislator has credit in16.25all funds or in any two of these funds totals ten or more years,16.26provided. 16.27 (d) No portion of the allowable service upon which the 16.28 retirement annuity from onefundplan is based is again used in 16.29 the computation for benefits from anotherfundplan. The 16.30 annuity from eachfund shallplan must be determined by the 16.31 appropriate provisions of the law, except that the requirement 16.32 that a person must haveat least tena minimum number of years 16.33 of allowable service in the respective system or 16.34 associationshalldoes not apply for the purposes of this 16.35 sectionprovidedif the combined service in two or more of these 16.36fundsplans equals ten or more years. The augmentation of 17.1 deferred annuities provided in section 3A.02, subdivision 17.2 4,shall applyapplies to the annuities accruinghereunderunder 17.3 this section. 17.4 Subd. 2. [REFUND REPAYMENT.]AnyA former legislator who 17.5 has received a refund as provided in section 3A.03, subdivision 17.6 2, who is a currently contributing member of a retirementfund17.7 plan specified in subdivision 1, paragraph (b), may repay the 17.8 refund as provided in section 3A.03, subdivision 2.AnyA 17.9 member of the legislature who has received a refund from any of 17.10 thefundsretirement plans specified in subdivision 1,may repay 17.11 the refund to the respectivefundplan under such terms and 17.12 conditions consistent with the law governingsuch fundthe 17.13 retirement plan if the law governingsuch fundthe plan permits 17.14 the repayment of refunds. If the total amount to be repaid, 17.15 including principal and interest exceeds $2,000, repayment may 17.16 be made in three equal installments over a period of 18 months, 17.17 with the interest accrued during the period of the repayment 17.18 added to the final installment. 17.19 Sec. 29. Minnesota Statutes 2004, section 3A.13, is 17.20 amended to read: 17.21 3A.13 [EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM 17.22 DEDUCTION.] 17.23 (a) The provisions of section 352.15shallapply to the 17.24 legislators retirement plan, chapter 3A. 17.25 (b) The executive director of the Minnesota State 17.26 Retirement System must, at the request of a retired legislator 17.27 who is enrolled in a health insurance plan covering state 17.28 employees, deduct the person's health insurance premiums from 17.29 the person's annuity and transfer the amount of the premium to a 17.30 health insurance carrier covering state employees. 17.31 Sec. 30. [352C.001] [RETIREMENT PLAN; APPLICATION.] 17.32 (a) The retirement plan applicable to a former 17.33 constitutional officer who was first elected to a constitutional 17.34 office after July 1, 1967, and before July 1, 1997, is the 17.35 applicable portions of this chapter and chapter 356 in effect on 17.36 the date on which the person terminated active service as a 18.1 constitutional officer. 18.2 (b) Nothing in this section or section 31 or 77, 18.3 subdivision 2, is intended to reduce the benefits of former 18.4 constitutional officers or to adversely modify their eligibility 18.5 for benefits in effect as of the day before the effective date 18.6 of this section. 18.7 Sec. 31. Minnesota Statutes 2004, section 352C.091, 18.8 subdivision 1, is amended to read: 18.9 Subdivision 1. [ADMINISTRATIVE AGENCY AND STANDARDS.]This18.10chapter(a) The elected officers retirement plan must be 18.11 administered by the board of directors and the executive 18.12 director of the Minnesota State Retirement System. 18.13 (b) The elected state officers retirement plan must be 18.14 administered consistent withthis chapterthe applicable 18.15 statutory provisions governing the plan and chapters 356 and 18.16 356A. 18.17 Sec. 32. Minnesota Statutes 2004, section 352C.10, is 18.18 amended to read: 18.19 352C.10 [BENEFIT ADJUSTMENTS.] 18.20 Retirement allowances payable to retired constitutional 18.21 officerspursuant to section 352C.031and surviving spouse 18.22 benefits payablepursuant to section 352C.04, shallmust be 18.23 adjusted in the same manner, at the same times and in the same 18.24 amounts as are benefits payable from the Minnesota 18.25 postretirement investment fund to retirees of a participating 18.26 public pension fund. 18.27 Sec. 33. Minnesota Statutes 2004, section 352D.02, 18.28 subdivision 1, is amended to read: 18.29 Subdivision 1. [COVERAGE.] (a) Employees enumerated in 18.30 paragraph (c), clauses (2), (3), (4), and (6) to (14), if they 18.31 are in the unclassified service of the state or Metropolitan 18.32 Council and are eligible for coverage under the general state 18.33 employees retirement plan under chapter 352, are participants in 18.34 the unclassified plan under this chapter unless the employee 18.35 gives notice to the executive director of the Minnesota State 18.36 Retirement System within one year following the commencement of 19.1 employment in the unclassified service that the employee desires 19.2 coverage under the general state employees retirement plan. For 19.3 the purposes of this chapter, an employee who does not file 19.4 notice with the executive director is deemed to have exercised 19.5 the option to participate in the unclassified plan. 19.6 (b) Persons referenced in paragraph (c),clauses (1) and19.7 clause (5), are participants in the unclassified program under 19.8 this chapter unless the person is eligible to elect different 19.9 coverage under section 3A.07or 352C.011and, after July 1,19.101998, electselected retirement coverage by the applicable 19.11 alternative retirement plan. Persons referenced in paragraph 19.12 (c), clause (15), are participants in the unclassified program 19.13 under this chapter for judicial employment in excess of the 19.14 service credit limit in section 490.121, subdivision 22. 19.15 (c) Enumerated employees and referenced persons are: 19.16 (1) the governor, the lieutenant governor, the secretary of 19.17 state, the state auditor, and the attorney general; 19.18 (2) an employee in the Office of the Governor, Lieutenant 19.19 Governor, Secretary of State, State Auditor, Attorney General; 19.20 (3) an employee of the State Board of Investment; 19.21 (4) the head of a department, division, or agency created 19.22 by statute in the unclassified service, an acting department 19.23 head subsequently appointed to the position, or an employee 19.24 enumerated in section 15A.0815 or 15A.083, subdivision 4; 19.25 (5) a member of the legislature; 19.26 (6) a full-time unclassified employee of the legislature or 19.27 a commission or agency of the legislature who is appointed 19.28 without a limit on the duration of the employment or a temporary 19.29 legislative employee having shares in the supplemental 19.30 retirement fund as a result of former employment covered by this 19.31 chapter, whether or not eligible for coverage under the 19.32 Minnesota State Retirement System; 19.33 (7) a person who is employed in a position established 19.34 under section 43A.08, subdivision 1, clause (3), or in a 19.35 position authorized under a statute creating or establishing a 19.36 department or agency of the state, which is at the deputy or 20.1 assistant head of department or agency or director level; 20.2 (8) the regional administrator, or executive director of 20.3 the Metropolitan Council, general counsel, division directors, 20.4 operations managers, and other positions as designated by the 20.5 council, all of which may not exceed 27 positions at the council 20.6 and the chair; 20.7 (9) the executive director, associate executive director, 20.8 and not to exceed nine positions of the Higher Education 20.9 Services Office in the unclassified service, as designated by 20.10 the Higher Education Services Office before January 1, 1992, or 20.11 subsequently redesignated with the approval of the board of 20.12 directors of the Minnesota State Retirement System, unless the 20.13 person has elected coverage by the individual retirement account 20.14 plan under chapter 354B; 20.15 (10) the clerk of the appellate courts appointed under 20.16 article VI, section 2, of the Constitution of the state of 20.17 Minnesota; 20.18 (11) the chief executive officers of correctional 20.19 facilities operated by the Department of Corrections and of 20.20 hospitals and nursing homes operated by the Department of Human 20.21 Services; 20.22 (12) an employee whose principal employment is at the state 20.23 ceremonial house; 20.24 (13) an employee of the Minnesota Educational Computing 20.25 Corporation; 20.26 (14) an employee of the State Lottery who is covered by the 20.27 managerial plan established under section 43A.18, subdivision 3; 20.28 and 20.29 (15) a judge who has exceeded the service credit limit in 20.30 section 490.121, subdivision 22. 20.31 Sec. 34. Minnesota Statutes 2004, section 355.01, 20.32 subdivision 3e, is amended to read: 20.33 Subd. 3e. [JUDGE.] "Judge" means a judge as defined in 20.34 section 490.121, subdivision321a. 20.35 Sec. 35. Minnesota Statutes 2004, section 356.65, 20.36 subdivision 2, is amended to read: 21.1 Subd. 2. [DISPOSITION OF ABANDONED AMOUNTS.] Any unclaimed 21.2 public pension fund amounts existing in any public pension fund 21.3 are presumed to be abandoned, but are not subject to the 21.4 provisions of sections 345.31 to 345.60. Unless the benefit 21.5 plan of the public pension fund specifically provides for a 21.6 different disposition of unclaimed or abandoned funds or 21.7 amounts, any unclaimed public pension fund amounts cancel and 21.8 must be credited to the public pension fund. If the unclaimed 21.9 public pension fund amount exceeds $25 and the inactive or 21.10 former member again becomes a member of the applicable public 21.11 pension plan or applies for a retirement annuity under section 21.12 3A.12, 352.72, 352B.30,352C.051,353.71, 354.60, 356.30, or 21.13 422A.16, subdivision 8, whichever applies, the canceled amount 21.14 must be restored to the credit of the person. 21.15 Sec. 36. Minnesota Statutes 2004, section 490.121, 21.16 subdivision 1, is amended to read: 21.17 Subdivision 1. [SCOPE.] For purposes of sections 490.121 21.18 to 490.132, unless the context clearly indicates otherwise, each 21.19 of the terms defined in this sectionhavehas themeanings21.20 meaning giventhem unless the context clearly indicates21.21otherwiseit. 21.22 Sec. 37. Minnesota Statutes 2004, section 490.121, is 21.23 amended by adding a subdivision to read: 21.24 Subd. 2a. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 21.25 means the condition of one annuity or benefit having an equal 21.26 actuarial present value as another annuity or benefit, 21.27 determined as of a given date with each actuarial present value 21.28 based on the appropriate mortality table adopted by the board of 21.29 directors of the Minnesota State Retirement System based on the 21.30 experience of the fund as recommended by the actuary retained 21.31 under section 356.214 and approved under section 356.215, 21.32 subdivision 18, and using the applicable preretirement or 21.33 postretirement interest rate assumption specified in section 21.34 356.215, subdivision 8. 21.35 Sec. 38. Minnesota Statutes 2004, section 490.121, 21.36 subdivision 4, is amended to read: 22.1 Subd. 4. [ALLOWABLE SERVICE.] (a) "Allowable service" 22.2 means any calendar month, subject to the service credit limit in 22.3 subdivision 22, served as a judge at any time,orduring which 22.4 the judge received compensation for that service from the state, 22.5 municipality, or county, whichever applies, and for which the 22.6 judge made any required member contribution. It also includes 22.7 any month served as a referee in probate for all referees in 22.8 probate who were in officeprior tobefore January 1, 1974. 22.9 (b) "Allowable service" does not mean service as a retired 22.10 judge. 22.11 Sec. 39. Minnesota Statutes 2004, section 490.121, 22.12 subdivision 6, is amended to read: 22.13 Subd. 6. [ANNUITY.] "Annuity" means the payments that are 22.14 made each year to an annuitant from the judges' retirement fund,22.15pursuant to the provisions ofunder sections 490.121 to 490.132. 22.16 Sec. 40. Minnesota Statutes 2004, section 490.121, 22.17 subdivision 7, is amended to read: 22.18 Subd. 7. [ANNUITANT.] "Annuitant" means a former judge, a 22.19 surviving spouse, or a dependent child who is entitled to and is 22.20 receiving an annuity underthe provisions ofsections 490.121 to 22.21 490.132. 22.22 Sec. 41. Minnesota Statutes 2004, section 490.121, is 22.23 amended by adding a subdivision to read: 22.24 Subd. 7a. [APPROVED ACTUARY.] "Approved actuary" means an 22.25 actuary as defined in section 356.215, subdivision 1, paragraph 22.26 (c). 22.27 Sec. 42. Minnesota Statutes 2004, section 490.121, is 22.28 amended by adding a subdivision to read: 22.29 Subd. 7b. [COURT.] "Court" means any court of this state 22.30 that is established by the Minnesota Constitution. 22.31 Sec. 43. Minnesota Statutes 2004, section 490.121, is 22.32 amended by adding a subdivision to read: 22.33 Subd. 7c. [DEPENDENT SURVIVING CHILD.] "Dependent 22.34 surviving child" means any natural or adopted child of a 22.35 deceased judge who has not reached the age of 18 years, or 22.36 having reached the age of 18, is under age 22 and who is a 23.1 full-time student throughout the normal school year, is 23.2 unmarried, and is actually dependent for more than one-half of 23.3 the child's support upon the judge for a period of at least 90 23.4 days before the judge's death. It also includes any natural 23.5 child of the judge who was born after the death of the judge. 23.6 Sec. 44. Minnesota Statutes 2004, section 490.121, 23.7 subdivision 13, is amended to read: 23.8 Subd. 13. [DISABILITY.] "Disability" means the permanent 23.9 inability of a judge to continue to perform the functions of 23.10 judge by reason of a physical or mental impairment resulting 23.11 from a sickness or an injury. 23.12 Sec. 45. Minnesota Statutes 2004, section 490.121, 23.13 subdivision 14, is amended to read: 23.14 Subd. 14. [DISABILITY RETIREMENT DATE.] "Disability 23.15 retirement date" means the last day of the first month after the 23.16 date on which the governor determines, upon receipt of the 23.17 voluntary application by the judge or otherwise, that a judge 23.18 suffers from a disability. 23.19 Sec. 46. Minnesota Statutes 2004, section 490.121, 23.20 subdivision 15, is amended to read: 23.21 Subd. 15. [DISABILITY RETIREMENT ANNUITY.] "Disability 23.22 retirement annuity" means an annuity to which a judge is 23.23 entitled under section 490.124, subdivisions 1 and 4, after the 23.24 retirementfor reasonof the judge because of a disability. 23.25 Sec. 47. Minnesota Statutes 2004, section 490.121, is 23.26 amended by adding a subdivision to read: 23.27 Subd. 15a. [EARLY RETIREMENT DATE.] "Early retirement date" 23.28 means the last day of the month after a judge attains the age of 23.29 60 but before the judge reaches the normal retirement date. 23.30 Sec. 48. Minnesota Statutes 2004, section 490.121, is 23.31 amended by adding a subdivision to read: 23.32 Subd. 15b. [EARLY RETIREMENT ANNUITY.] "Early retirement 23.33 annuity" means an annuity to which a judge is entitled under 23.34 section 490.124, subdivisions 1 and 3, upon retirement by the 23.35 judge at an early retirement date. 23.36 Sec. 49. Minnesota Statutes 2004, section 490.121, 24.1 subdivision 21, is amended to read: 24.2 Subd. 21. [FINAL AVERAGE COMPENSATION.] "Final average 24.3 compensation" means the total amount of the salary payable to a 24.4 judge in the highest five years out of the last ten yearsprior24.5tobefore theevent of maturity of benefitstermination of 24.6 judicial service, divided by five; provided, however, thatif 24.7 the number of years of service by the judge equals or exceeds 24.8 ten. If the number of years of service by the judge is less 24.9 than ten, but more than five, the highest fiveshallyears of 24.10 salary must be counted, and. If the number of years of service 24.11 by the judge is less than five, the aggregate salaryin suchfor 24.12 the periodshallof service must be divided by the number of 24.13 months insuchthe period and multiplied by 12. 24.14 Sec. 50. Minnesota Statutes 2004, section 490.121, is 24.15 amended by adding a subdivision to read: 24.16 Subd. 21a. [JUDGE.] "Judge" means a judge or a justice of 24.17 any court as defined under subdivision 7b. 24.18 Sec. 51. Minnesota Statutes 2004, section 490.121, is 24.19 amended by adding a subdivision to read: 24.20 Subd. 21b. [JUDGES' RETIREMENT FUND; RETIREMENT FUND; 24.21 FUND.] "Judges' retirement fund," "retirement fund," or "fund" 24.22 means the fund created by section 490.123. 24.23 Sec. 52. Minnesota Statutes 2004, section 490.121, is 24.24 amended by adding a subdivision to read: 24.25 Subd. 21c. [MANDATORY RETIREMENT DATE.] "Mandatory 24.26 retirement date" means the last day of the month in which a 24.27 judge has attained 70 years of age. 24.28 Sec. 53. Minnesota Statutes 2004, section 490.121, is 24.29 amended by adding a subdivision to read: 24.30 Subd. 21d. [NORMAL RETIREMENT ANNUITY.] Except as 24.31 otherwise provided in sections 490.121 to 490.132, "normal 24.32 retirement annuity" means an annuity to which a judge is 24.33 entitled under section 490.124, subdivision 1, upon retirement 24.34 on or after the normal retirement date of the judge. 24.35 Sec. 54. Minnesota Statutes 2004, section 490.121, is 24.36 amended by adding a subdivision to read: 25.1 Subd. 21e. [NORMAL RETIREMENT DATE.] "Normal retirement 25.2 date" means the last day of the month in which a judge attains 25.3 the age of 65. 25.4 Sec. 55. Minnesota Statutes 2004, section 490.121, 25.5 subdivision 22, is amended to read: 25.6 Subd. 22. [SERVICE CREDIT LIMIT.] "Service credit limit" 25.7 means the greater of: (1) 24 years of allowable service 25.8 under this chapter490; or (2) for judges with allowable service 25.9 renderedprior tobefore July 1, 1980, the number of years of 25.10 allowable service under chapter 490, which, when multiplied by 25.11 the percentage listed in section 356.315, subdivision 7 or 8, 25.12 whichever is applicable to each year of service, equals 76.8. 25.13 Sec. 56. Minnesota Statutes 2004, section 490.121, is 25.14 amended by adding a subdivision to read: 25.15 Subd. 23. [SURVIVING SPOUSE.] "Surviving spouse" means the 25.16 surviving legally married spouse of a deceased judge. 25.17 Sec. 57. Minnesota Statutes 2004, section 490.121, is 25.18 amended by adding a subdivision to read: 25.19 Subd. 24. [SURVIVOR'S ANNUITY.] "Survivor's annuity" means 25.20 an annuity to which a surviving spouse or dependent child is 25.21 entitled under section 490.124, subdivision 9. 25.22 Sec. 58. Minnesota Statutes 2004, section 490.122, is 25.23 amended to read: 25.24 490.122 [ADMINISTRATION OF JUDGES' RETIREMENT.] 25.25 Subdivision 1. [ADMINISTRATION.] The policy-making, 25.26 management, and administrative functions governing the operation 25.27 of the judges' retirement fund and the administration 25.28 ofsections 490.121 to 490.132this chapter are vested in the 25.29 board of directors and executive director of the Minnesota State 25.30 Retirement Systemwith such. In administering the plan and 25.31 fund, the board and the director have the same duties, 25.32 authority, and responsibility as are provided in chapter 352. 25.33 Subd. 2. [INAPPLICABILITY OF CERTAIN LAWS.] Except as 25.34 otherwise specified, no provision of chapter 352 applies to the 25.35 judges' retirement fund or any judge. 25.36 Subd. 3. [FIDUCIARY RESPONSIBILITY.] Fiduciary 26.1 activitiesofrelating to the uniform judges' retirementand26.2Survivors' Annuities for Judgesplan must be undertaken in a 26.3 manner consistent with chapter 356A. 26.4 Sec. 59. Minnesota Statutes 2004, section 490.123, 26.5 subdivision 1, is amended to read: 26.6 Subdivision 1. [FUND CREATION; REVENUE AND AUTHORIZED 26.7 DISBURSEMENTS.] (a) There is created a special fund to be known 26.8 as the "judges' retirement fund." 26.9 (b) The judges' retirement fund must be credited with all 26.10 contributions,; all interest, dividends, and other investment 26.11 proceeds; and all other income authorized by this chapter or 26.12 other applicable law. 26.13 (c) From this fund there are appropriated the payments 26.14 authorized by sections 490.121 to 490.132, in the amounts and at 26.15 the times provided, including the necessary and reasonable 26.16 expenses of the Minnesota State Retirement System in 26.17 administering the fund and the transfers to the Minnesota 26.18 postretirement investment fund. 26.19 Sec. 60. Minnesota Statutes 2004, section 490.123, 26.20 subdivision 1a, is amended to read: 26.21 Subd. 1a. [MEMBER CONTRIBUTION RATES.] (a) A judge who is 26.22 covered by the federal Old Age, Survivors, Disability, and 26.23 Health Insurance Program and whose service does not exceed the 26.24 service credit limit in section 490.121, subdivision 22, shall 26.25 contribute to the fund from each salary payment a sum equal to 26.26 8.00 percent of salary. 26.27 (b)A judge not so covered whose service does not exceed26.28the service credit limit in section 490.121, subdivision 22,26.29shall contribute to the fund from each salary payment a sum26.30equal to 8.15 percent of salary.26.31(c)The contribution under this subdivision is payable by 26.32 salary deduction. The deduction must be made by the state court 26.33 administrator under section 352.04, subdivisions 4, 5, and 8. 26.34 Sec. 61. Minnesota Statutes 2004, section 490.123, 26.35 subdivision 1b, is amended to read: 26.36 Subd. 1b. [EMPLOYER CONTRIBUTION RATE.] (a) The employer 27.1 contribution rate to the fund on behalf of a judge is 20.5 27.2 percent of salaryand. The employer obligation continues after 27.3 a judge exceeds the service credit limit in section 490.121, 27.4 subdivision 22. 27.5 (b) The employer contribution must be paid by the state 27.6 court administratorand. The employer contribution is payable 27.7 at the same time as member contributions are made under 27.8 subdivision 1a or as employee contributions are made to the 27.9 unclassifiedplan inprogram governed by chapter 352D for judges 27.10 whose service exceeds the limit in section 490.121, subdivision 27.11 22, are remitted. 27.12 Sec. 62. Minnesota Statutes 2004, section 490.123, 27.13 subdivision 1c, is amended to read: 27.14 Subd. 1c. [ADDITIONAL EMPLOYER CONTRIBUTION.]In the event27.15thatIf the employer contribution under subdivision 1b and the 27.16 assets of the judges retirement fund are insufficient to meet 27.17 reserve transfers to the Minnesota postretirement investment 27.18 fund or payments of survivor benefitsbefore July 1, 1993in a 27.19 month, the necessary amount is appropriated from the general 27.20 fund to the executive director of the Minnesota State Retirement 27.21 System, upon the certification of the required amount by the 27.22 executive director to the commissioner of finance. 27.23 Sec. 63. Minnesota Statutes 2004, section 490.123, 27.24 subdivision 2, is amended to read: 27.25 Subd. 2. [COMMISSIONER OF FINANCE.] The commissioner of 27.26 financeshall beis the ex officio treasurer of the judges' 27.27 retirement fundand the. The commissioner's general bond to the 27.28 stateshallmust besoconditionedasto cover all liability for 27.29 acting as the treasurer ofthisthe fund. Allmoneysmoney 27.30 received by the commissionerpursuant tounder this section 27.31shallmust be set aside in the state treasury to the credit of 27.32 the judges' retirement fund.The commissioner shall transmit27.33monthly to the executive director described in section 352.03,27.34subdivision 5, a detailed statement of all amounts so received27.35and credited to the fund. The commissioner shall pay out the27.36fund only upon vouchers signed by said executive director;28.1provided that vouchers for investment may be signed by the28.2secretary of the State Board of Investment.28.3 Sec. 64. Minnesota Statutes 2004, section 490.123, 28.4 subdivision 3, is amended to read: 28.5 Subd. 3. [INVESTMENT.] (a) The executive directorreferred28.6to in subdivision 2of the Minnesota State Retirement System 28.7 shall, from time to time, certify to the State Board of 28.8 Investment such portions of the judges' retirement fund as in 28.9 the director's judgment may not be required for immediate use. 28.10 (b) Assets from the judges' retirement fundshallmust be 28.11 transferred to the Minnesota postretirement investment fund for 28.12 retirement and disability benefits as provided in sections 28.13 11A.18 and 352.119. 28.14 (c) The State Board of Investment shall thereupon invest 28.15 and reinvest sums so transferred, or certified, in such 28.16 securities as are duly authorized legal investments for such 28.17 purposes under section 11A.24 in compliance with sections 28.18 356A.04 and 356A.06. 28.19 Sec. 65. Minnesota Statutes 2004, section 490.124, 28.20 subdivision 1, is amended to read: 28.21 Subdivision 1. [BASIC RETIREMENT ANNUITY.] (a) Except as 28.22 qualified hereinafter from and after the mandatory retirement 28.23 date, the normal retirement date, the early retirement date, or 28.24 one year from the disability retirement date, as the case may 28.25 be, a retiring judge is eligible to receive a retirement annuity 28.26shall be payable to a retiring judgefrom the judges' retirement 28.27 fundin. 28.28 (b) The retirement annuity is an amount equal to: (1) the 28.29 percent specified in section 356.315, subdivision 7, multiplied 28.30 by the judge's final average compensation with that result then 28.31 multiplied by the number of years and fractions of years of 28.32 allowable service renderedprior tobefore July 1, 1980; plus 28.33 (2) the percent specified in section 356.315, subdivision 8, 28.34 multiplied by the judge's final average compensation with that 28.35 result then multiplied by the number of years and fractions of 28.36 years of allowable service rendered after June 30, 1980. 29.1 (c) Service that exceeds the service credit limit in 29.2 section 490.121, subdivision 22, must be excluded in calculating 29.3 the retirement annuity, but the compensation earned by the judge 29.4 during this period of judicial service must be used in 29.5 determining a judge's final average compensation and calculating 29.6 the retirement annuity. 29.7 Sec. 66. Minnesota Statutes 2004, section 490.124, 29.8 subdivision 2, is amended to read: 29.9 Subd. 2. [MINIMUM SERVICE REQUIREMENT; EXTENSION OF TERM.] 29.10No(a) Unless section 356.30 applies, a judgeshall beis not 29.11 eligible for an annuity at the normal retirement date or the 29.12 early retirement date if the judge has less than five years of 29.13 allowable service. 29.14 (b) A judge whoshall retireretires on or, as permitted 29.15 under sections 490.121 to 490.132, after the judge's mandatory 29.16 retirement date,shall beis entitled to a proportionate annuity 29.17 based upon the allowable service of the judge at the date of 29.18 retirement. 29.19A judge who was in office on December 31, 1973, and29.20thereafter and who, by the date on which the current term29.21expires, would not be eligible to retire with full benefits29.22under statutes in effect on December 31, 1973, may apply to the29.23governor for an extension to serve up to three additional years,29.24stating the intention of the judge to retire upon attaining29.25eligibility to receive a retirement allowance. Notwithstanding29.26section 490.125, the governor shall forthwith make a written29.27order accepting the retirement application, and extending the29.28term of office of the judge for the period of time, not to29.29exceed three years, as may be necessary to make the judge29.30eligible for retirement, solely for purposes of computing29.31benefits hereunder.29.32 Sec. 67. Minnesota Statutes 2004, section 490.124, 29.33 subdivision 3, is amended to read: 29.34 Subd. 3. [EARLY REDUCED RETIREMENT.] The retirement 29.35 annuityprovided byunder subdivision 1 of any judgeelecting29.36 who elects to retire at an early retirement dateshallmust be 30.1 reduced by one-half of one percent per month from the retirement 30.2 date to the normal retirement date. 30.3 Sec. 68. Minnesota Statutes 2004, section 490.124, 30.4 subdivision 4, is amended to read: 30.5 Subd. 4. [DISABILITY RETIREMENT.] (a) When the governor 30.6 determines that a judge is disabled under section 490.121, 30.7 subdivision 13, notice of the governor's determination must be 30.8 sent to the judge, the chief justice of the Supreme Court, the 30.9 state court administrator, and the executive director of the 30.10 Minnesota State Retirement System. 30.11 (b) From and after disability retirement date, a disabled 30.12 judgeshall beis entitled to continuation of the judge's full 30.13 salary payable by the judge's employer, as if the judge's office 30.14 were not vacated by retirement, for a period of up to one full 30.15 year, but in no event beyond the judge's mandatory retirement 30.16 date. During this year the judgewillis entitled to earn 30.17 additional service credit in the judges' retirement plan. The 30.18 salaryearned will bepayable to a disabled judge is subject to 30.19 retirement deductions andwillmust be included in computing 30.20 final average compensation of the judge.Thereafter30.21 (c) At the conclusion of the year of continued salary 30.22 following a disability or upon the judge's mandatory retirement 30.23 date, whichever is earlier, the disabled judge is entitled to a 30.24 disability retirement annuity computed as provided in 30.25 subdivision 1shall be paid, provided that. If the computed 30.26 retirement annuity is a smaller amount, the judgeshallis 30.27 entitled to receive a minimum annuity of 25 percent of the 30.28 judge's final average compensation. 30.29 Sec. 69. Minnesota Statutes 2004, section 490.124, 30.30 subdivision 5, is amended to read: 30.31 Subd. 5. [DEFERRED BENEFITS.] (a)AnyA benefit to which a 30.32 judge is entitled under this section may be deferred until the 30.33 early or normal retirement date or later, notwithstanding the 30.34 termination ofsuchthe judge's service prior thereto. 30.35 (b) The retirement annuity of, or the survivor benefit 30.36 payable on behalf of, a former judge, who terminated service 31.1 before July 1, 1997, which is not first payable until after June 31.2 30, 1997, must be increased on an actuarial equivalent basis to 31.3 reflect the change in the postretirement interest rate actuarial 31.4 assumption under section 356.215, subdivision 8, from five 31.5 percent to six percent under a calculation procedure and tables 31.6 adopted by the board of directors of the Minnesota State 31.7 Retirement System and approved by the actuary retainedby the31.8Legislative Commission on Pensions and Retirementunder section 31.9 356.214. 31.10 Sec. 70. Minnesota Statutes 2004, section 490.124, 31.11 subdivision 8, is amended to read: 31.12 Subd. 8. [EXCLUSIVE NORMAL RETIREMENT BENEFITS.]Any(a) 31.13 Except as provided in paragraph (b), a judge who retires after 31.14 December 31, 1973,shall beis entitled to a retirement pension, 31.15 retirement compensation or other retirement payment under 31.16 statutes applicable solely to judgespursuant tounder this 31.17 section only, except that any such. 31.18 (b) A judge who was in officeprior tobefore January 1, 31.19 1974, who retires at or after normal retirement age may then 31.20 elect to receive during the judge's lifetime a normal retirement 31.21 annuity computed on the basis of retirement compensation 31.22 provided for such judge under statutes in effect on December 31, 31.23 1973, in lieu of the amount of normal retirement annuity 31.24 otherwise computed under sections 490.121 to 490.132. 31.25For purposes of this subdivision, the Conciliation Court of31.26the city of Duluth shall be deemed to have been a court of31.27record by the statutes in effect on December 31, 1973.31.28 Sec. 71. Minnesota Statutes 2004, section 490.124, 31.29 subdivision 9, is amended to read: 31.30 Subd. 9. [SURVIVORS' ANNUITY.] (a) Upon the death of a 31.31 judgeprior tobefore retirement, or upon the death of a person 31.32 who has qualified for an annuity under this section but who 31.33 ceases to be a judgeprior tobefore retirement and has who not 31.34 received a refund of contributionspursuant tounder subdivision 31.35 12, a surviving spouse is entitled to, or, if there be no 31.36 surviving spouse, dependent children,shallare entitled to 32.1 receive an annuity, payable monthly, equal in total to 60 32.2 percent of the normal retirement annuity which would have been 32.3 payable to the judge or former judge had the date of death been 32.4 the normal retirement date, provided that the. 32.5 (b) The annuity payable to a surviving spouse or to 32.6 dependent childrenshall receive an annuityis an amount of not 32.7 less than 25 percent of the judge's or the former judge's final 32.8 average compensation. 32.9If a judge, whose surviving spouse was not entitled to32.10survivors benefits provided solely for judges under statutes in32.11effect prior to January 1, 1974, shall have died prior to32.12retirement on or after May 23, 1973 and before January 1, 1974,32.13a surviving spouse and dependent children, if any, shall be32.14entitled to survivors benefits as provided hereunder as if such32.15judge had died on January 1, 1974.32.16 Sec. 72. Minnesota Statutes 2004, section 490.124, 32.17 subdivision 10, is amended to read: 32.18 Subd. 10. [PRIOR SURVIVORS' BENEFITS; LIMITATION.] (a) 32.19 Benefits providedpursuant tounder Minnesota Statutes 2004, 32.20 section 490.102, subdivision 6, or 490.1091, for a surviving 32.21 spouse of a retired judge, payable after the death of the judge, 32.22shall beare limited to:32.23(a)spouses of judges who have retiredprior tobefore 32.24 January 1, 1974; and. 32.25 (b)spouses of judges in office on December 31, 1973 and32.26thereafter who elect to continue contributions pursuant to32.27section 490.102, subdivision 6 or 490.109. The contributions32.28shall be in addition to contributions pursuant to section32.29490.123, and upon retirement the judge may not elect to receive32.30any optional annuity pursuant to subdivision 11 unless the judge32.31and the spouse shall waive any benefits pursuant to section32.32490.102, subdivision 6 or 490.1091.32.33 No other judge in office on or after January 1, 1974,shall32.34beis required to contributepursuant tounder Minnesota 32.35 Statutes 2004, section 490.102, subdivision 6, or 490.109. 32.36 Sec. 73. Minnesota Statutes 2004, section 490.124, 33.1 subdivision 11, is amended to read: 33.2 Subd. 11. [LIMITATION ON SURVIVOR BENEFITS; OPTIONAL 33.3 ANNUITIES.] (a) No survivor or death benefits may be paid in 33.4 connection with the death of a judge who retires after December 33.5 31, 1973, except as otherwise provided in sections 490.121 to 33.6 490.132. 33.7 (b) Except as provided in subdivision 10, a judge may elect 33.8 to receive, instead of the normal retirement annuity, an 33.9 optional retirement annuity in the form of either (1) an annuity 33.10 payable for a period certain and for life after that period, (2) 33.11 a joint and survivor annuity without reinstatementin the event33.12ofif the designated beneficiarypredeceasingpredeceases the 33.13 retired judge, or (3) a joint and survivor annuity with 33.14 reinstatementin the event ofif the designated beneficiary 33.15predeceasingpredeceases the retired judge. 33.16 (c) An optional retirement annuity must be actuarially 33.17 equivalent to a single-life annuity with no term certain and 33.18 must be established by the board of directors of the Minnesota 33.19 State Retirement System. In establishing these optional 33.20 retirement annuity forms, the board shall obtain the written 33.21 recommendation of the actuary retainedby the Legislative33.22Commission on Pensions and Retirementunder section 356.214. 33.23 The recommendations must be retained as a part of the permanent 33.24 records of the board. 33.25 Sec. 74. Minnesota Statutes 2004, section 490.124, 33.26 subdivision 12, is amended to read: 33.27 Subd. 12. [REFUND.] (a) A person who ceases to be a 33.28 judgebut who does not qualify for a retirement annuity or other33.29benefit under section 490.121is entitled to a refund in an 33.30 amount that is equal to all of the member's employee 33.31 contributions to the judges' retirement fund plus interest 33.32 computed under section 352.22, subdivision 2. 33.33 (b) A refund of contributions under paragraph (a) 33.34 terminates all service credits and all rights and benefits of 33.35 the judge and the judge's survivors under this chapter. 33.36 (c) A person who becomes a judge again after taking a 34.1 refund under paragraph (a) may reinstate the previously 34.2 terminated allowable servicecreditscredit, rights, and 34.3 benefits by repaying the total amount of the previously received 34.4 refund. The refund repayment must include interest on the total 34.5 amount previously received at an annual rate of 8.5 percent, 34.6 compounded annually, from the date on which the refund was 34.7 received until the date on which the refund is repaid. 34.8 Sec. 75. Minnesota Statutes 2004, section 490.124, 34.9 subdivision 13, is amended to read: 34.10 Subd. 13. [DEATH REFUND.] If a judge who has not received 34.11 other benefits under this chapter dies and there are no survivor 34.12 benefits payable under this chapter, a refund plus interest as 34.13 provided in subdivision 12 is payable to the last designated 34.14 beneficiary named on a form filed with the director before the 34.15 death of the judge, or, if no designation is on file,the refund34.16is payableto the estate of the deceased judge. 34.17 Sec. 76. Minnesota Statutes 2004, section 490.125, 34.18 subdivision 1, is amended to read: 34.19 Subdivision 1. [MANDATORY RETIREMENT AGE.] Except as 34.20 otherwise provided in sections 490.121 to 490.132,eacha judge 34.21 shallretireterminate active service as a judge on the judge's 34.22 mandatory retirement date. 34.23 Sec. 77. Minnesota Statutes 2004, section 490.125, 34.24 subdivision 2, is amended to read: 34.25 Subd. 2. [EXCEPTION.]Except as provided by sections34.26490.025, subdivision 3, 490.102, subdivisions 3 and 3a and34.27490.12, subdivision 2,Any judge in office on December 31, 1973 34.28 who shall have attained 70 years of age on or prior to such date 34.29 shall retire upon the expiration of the term of office of such 34.30 judge. 34.31 Sec. 78. Minnesota Statutes 2004, section 490.126, is 34.32 amended to read: 34.33 490.126 [PROCEDURES.] 34.34 Subdivision 1. [COMPULSORY RETIREMENT.] Proceedings for 34.35 compulsory retirement of a judge, if necessary,shallmust be 34.36 conducted in accordance with rules issued by the Supreme Court 35.1pursuant tounder section490.16490A.02. 35.2 Subd. 2. [VACANCIES.] Any judge may make written 35.3 application to the governor for retirement. The governor 35.4 thereupon shall direct the judge's retirement by written order 35.5 which, when filed in the Office of the Secretary of State,shall35.6effecteffects a vacancy in the office to be filled as provided 35.7 by law. 35.8 Subd. 3. [APPLICATION FOR ANNUITY OR REFUND.] An 35.9 application for an annuity or a refund under sections 490.121 to 35.10 490.132 may be made by the potential annuitant or by someone 35.11 authorized to act for the potential annuitant. Every 35.12 application for an annuity or refund,withaccompanied by a 35.13 proof of age and by a record of years of service when 35.14 required,shallmust be submitted to thegoverning35.15bodyexecutive director of the Minnesota State Retirement System 35.16 in a form prescribed byitthe director. 35.17 Subd. 4. [MANNER OF PAYMENT.] Unless otherwise 35.18 specifically provided by statute or agreed upon by the annuitant 35.19 and thegoverning bodyboard of directors of the Minnesota State 35.20 Retirement System, annuities payable under sections 490.121 to 35.21 490.132shallmust be paid in the manner and at the intervals as 35.22 prescribed by the executive director of the Minnesota State 35.23 Retirement System. The annuityshall ceaseceases with the last 35.24 payment received by the annuitant while living. 35.25 Subd. 5. [EXEMPTION FROM PROCESS; NO ASSIGNMENT.] None of 35.26 the money, annuities, or other benefits provided in this chapter 35.27 is assignable either in law or equity or is subject to state 35.28 estate tax, or to execution, levy, attachment, garnishment, or 35.29 other legal process, except as provided in section 518.58, 35.30 518.581, or 518.6111. 35.31 Sec. 79. Minnesota Statutes 2004, section 490.133, is 35.32 amended to read: 35.33 490.133 [RETIREMENT; TRANSITION PROVISIONS; TRANSFER TO 35.34 COURT OF APPEALS.] 35.35 (a) If a judge to whom or to whose survivors benefits would 35.36 be payable under Minnesota Statutes 2004, sections 490.101 to 36.1 490.12,is elected or appointed to the Court of Appeals, that 36.2 judge and the judge's survivors, shallcontinue to be eligible 36.3 for benefits under those sections and not under sections 490.121 36.4 to 490.132. 36.5 (b) Inthatthe case of a judge to whom paragraph (a) 36.6 applies, the service of the judge in the Court of Appealsshall36.7 must be added to the prior service as district judge, probate 36.8 judge, or judge of any other court of record in determining 36.9 eligibility and the compensation of a judge of the Court of 36.10 Appeals at the time of the judge's death, disability, or 36.11 retirementshall beis the "compensation allotted to the office" 36.12 for the purposes of calculating benefit amounts. 36.13 (c) All other judges of the Court of Appeals and their 36.14 survivorsshall beare subject to the retirement and survivor's 36.15 annuity provisions of sections 490.121 to 490.132. 36.16 Sec. 80. [490A.01] [BOARD OF JUDICIAL STANDARDS; 36.17 ESTABLISHMENT.] 36.18 Subdivision 1. [ESTABLISHMENT; COMPOSITION.] The Board on 36.19 Judicial Standards is established. The Board on Judicial 36.20 Standards is a continuation of the board established by Laws 36.21 1971, chapter 909, sections 1 and 2, as amended. For the 36.22 purposes of this chapter, "board" means the Board on Judicial 36.23 Standards. 36.24 Subd. 2. [COMPOSITION; APPOINTMENT.] (a) The board 36.25 consists of one judge of the Court of Appeals, three trial court 36.26 judges, two lawyers who have practiced law in the state for at 36.27 least ten years, and four citizens who are not judges, retired 36.28 judges, or lawyers. 36.29 (b) All members must be appointed by the governor with the 36.30 advice and consent of the senate. Senate confirmation is not 36.31 required for judicial members. 36.32 Subd. 3. [TERM MAXIMUM; MEMBERSHIP TERMINATION.] No member 36.33 may serve more than two full four-year terms or their equivalent. 36.34 Membership terminates if a member ceases to hold the position 36.35 that qualified the member for appointment. 36.36 Subd. 4. [MEMBER TERMS; COMPENSATION; REMOVAL.] The 37.1 membership terms, compensation, removal of members, and filling 37.2 of vacancies on the board are as provided in section 15.0575. 37.3 Subd. 5. [EXECUTIVE SECRETARY APPOINTMENT; SALARY.] (a) 37.4 The board shall appoint the executive secretary. 37.5 (b) The salary of the executive secretary of the board is 37.6 85 percent of the maximum salary provided for an administrative 37.7 law judge under section 15A.083, subdivision 6a. 37.8 Sec. 81. [490A.02] [JUDICIAL STANDARDS BOARD; POWERS.] 37.9 Subdivision 1. [JUDICIAL DISQUALIFICATION.] A judge is 37.10 disqualified from acting as a judge, without a loss of salary, 37.11 while there is pending an indictment or any information charging 37.12 the judge with a crime that is punishable as a felony under 37.13 either Minnesota law or federal law, or while there is pending a 37.14 recommendation to the Supreme Court by the Board on Judicial 37.15 Standards for the judge's removal or retirement. 37.16 Subd. 2. [JUDICIAL SUSPENSION.] On receipt of a 37.17 recommendation of the Board on Judicial Standards or on its own 37.18 motion, the Supreme Court may suspend a judge from office 37.19 without salary when the judge pleads guilty to or no contest to 37.20 or is found guilty of a crime that is punishable as a felony 37.21 under either Minnesota law or federal law or any other crime 37.22 that involves moral turpitude. If the conviction is reversed, 37.23 the suspension terminates and the judge must be paid a salary 37.24 for the period of suspension. If the judge is suspended and the 37.25 conviction becomes final, the Supreme Court shall remove the 37.26 judge from office. 37.27 Subd. 3. [JUDICIAL DISABILITY.] On receipt of a 37.28 recommendation of the Board on Judicial Standards, the Supreme 37.29 Court may retire a judge for a disability that the court 37.30 determines seriously interferes with the performance of the 37.31 judge's duties and is or is likely to become permanent, and 37.32 censure or remove a judge for an action or inaction that may 37.33 constitute persistent failure to perform the judge's duties, 37.34 incompetence in performing the judge's duties, habitual 37.35 intemperance, or conduct prejudicial to the administration of 37.36 justice that brings the judicial office into disrepute. 38.1 Subd. 4. [AUTHORITY TO REOPEN MATTERS.] The board is 38.2 specifically empowered to reopen any matter wherein any 38.3 information or evidence was previously precluded by a statute of 38.4 limitations or by a previously existing provision of time 38.5 limitation. 38.6 Subd. 5. [RETIREMENT STATUS.] (a) A judge who is retired 38.7 by the Supreme Court must be considered to have retired 38.8 voluntarily. 38.9 (b) This section and section 490A.01 must not affect the 38.10 right of a judge who is suspended, retired, or removed under 38.11 this section from qualifying for any pension or other retirement 38.12 benefits to which the judge would otherwise be entitled by law 38.13 to receive. 38.14 Subd. 6. [ELIGIBILITY FOR JUDICIAL OFFICE; PRACTICE 38.15 LAW.] A judge removed by the Supreme Court is ineligible for any 38.16 future service in a judicial office. The question of the right 38.17 of a removed judge to practice law in this state must be 38.18 referred to the proper authority for review. 38.19 Subd. 7. [SUPREME COURT RULES.] The Supreme Court shall 38.20 make rules to implement this section. 38.21 Sec. 82. [490A.03] [PERSONS AFFECTED.] 38.22 The provisions of sections 490A.01 and 490A.02 apply to all 38.23 judges, judicial officers, and referees. 38.24 Sec. 83. Minnesota Statutes 2004, section 525.05, is 38.25 amended to read: 38.26 525.05 [JUDGE OR REFEREE; GROUNDS FOR DISQUALIFICATION.] 38.27 The following shall be grounds for disqualification of any 38.28 judge or referee from acting in any matter: (1) That the judge 38.29 or the judge's spouse or any of either of their kin nearer than 38.30 first cousin is interested as representative, heir, devisee, 38.31 legatee, ward, or creditor in the estate involved therein; (2) 38.32 that it involves the validity or interpretation of a will drawn 38.33 or witnessed by the judge; (3) that the judge may be a necessary 38.34 witness in the matter; (4) that it involves a property right in 38.35 respect to which the judge has been engaged or is engaged as an 38.36 attorney; or (5) that the judge was engaged in a joint 39.1 enterprise for profit with the decedent at the time of death or 39.2 that the judge is then engaged in a joint enterprise for profit 39.3 with any person interested in the matter as representative, 39.4 heir, devisee, legatee, ward, or creditor. When grounds for 39.5 disqualification exist, the judge may, and upon proper petition 39.6 of any person interested in the estate must, request another 39.7 judge or a judge who has retiredas provided in section 490.12,39.8subdivision 2,to act in the judge's stead in the matter. 39.9 Sec. 84. [REPEALER; EFFECT ON BENEFIT COVERAGE.] 39.10 Subdivision 1. [LEGISLATORS RETIREMENT PLAN; REPEALED AS 39.11 OBSOLETE.] Minnesota Statutes 2004, sections 3A.01, subdivisions 39.12 3, 4, 6a, and 7; 3A.02, subdivision 2; 3A.04, subdivision 1a; 39.13 and 3A.09, are repealed. 39.14 Subd. 2. [ELECTIVE STATE OFFICERS RETIREMENT PLAN; 39.15 REPEALED AS OBSOLETE.] Minnesota Statutes 2004, sections 39.16 352C.01; 352C.011; 352C.021; 352C.031; 352C.033; 352C.04; 39.17 352C.051; 352C.09; and 352C.091, subdivisions 2 and 3, are 39.18 repealed. 39.19 Subd. 3. [JUDICIAL RETIREMENT PLANS; REPEALED AS 39.20 OBSOLETE.] Minnesota Statutes 2004, sections 490.021; 490.025; 39.21 490.101; 490.102; 490.103; 490.105; 490.106; 490.107; 490.108; 39.22 490.109; 490.1091; 490.12; 490.121, subdivisions 2, 3, 5, 8, 9, 39.23 10, 11, 12, 16, 17, 18, 19, and 20; 490.124, subdivision 6; and 39.24 490.132, are repealed. 39.25 Subd. 4. [JUDICIAL STANDARDS BOARD; REPEALED FOR 39.26 RELOCATION AS MINNESOTA STATUTES, CHAPTER 490A.] Minnesota 39.27 Statutes 2004, sections 490.15, 490.16, and 490.18, are repealed. 39.28 Subd. 5. [UNIFORM JUDICIAL RETIREMENT PLAN; NO BENEFIT 39.29 DIMINISHMENT INTENDED; PROCEDURE.] Sections 32 to 76 are not 39.30 intended to reduce or increase the entitlement of active, 39.31 deferred, or retired judges to retirement annuities or benefits 39.32 as of July 1, 2005, as reflected in the records of the Minnesota 39.33 State Retirement System. If the executive director of the 39.34 Minnesota State Retirement System determines that any provisions 39.35 of sections 32 to 76 functions to modify, impair, or diminish 39.36 the retirement annuity or benefit entitlement of any judge that 40.1 had accrued or earned before July 1, 2005, the executive 40.2 director shall certify that determination and a recommendation 40.3 as to the required legislative correction to the chair of the 40.4 Legislative Commission on Pensions and Retirement, the chair of 40.5 the senate State and Local Governmental Operations Committee, 40.6 the chair of the house Governmental Operations and Veterans 40.7 Affairs Policy Committee, and the executive director of the 40.8 Legislative Commission on Pensions and Retirement on or before 40.9 the October 1 next following that determination. 40.10 Sec. 85. [REVISOR INSTRUCTIONS.] 40.11 (a) In Minnesota Statutes, chapters 352, 352D, 355, 356, 40.12 and 487, the revisor of statutes shall change references to 40.13 "sections 490.121 to 490.132" to "chapter 490". 40.14 (b) In Minnesota Statutes, chapter 490, the revisor of 40.15 statutes shall change references to "sections 490.121 to 40.16 490.132" to "this chapter". 40.17 (c) In Minnesota Statutes, sections 175A.01, subdivision 4, 40.18 and 271.01, subdivision 1, the revisor of statutes shall change 40.19 references to "sections 490.15 and 490.16" to "sections 490A.01 40.20 and 490A.02". 40.21 Sec. 86. [EFFECTIVE DATE.] 40.22 This article is effective on July 1, 2005. 40.23 ARTICLE 2 40.24 COVERED SALARY; AVERAGE SALARY 40.25 Section 1. Minnesota Statutes 2004, section 352.01, is 40.26 amended by adding a subdivision to read: 40.27 Subd. 14a. [AVERAGE SALARY.] (a) "Average salary" means 40.28 the average of the highest five successive years of salary upon 40.29 which the employee has made contributions to the retirement fund 40.30 by payroll deductions. Average salary must be based upon all 40.31 allowable service if this service is less than five years. 40.32 (b) "Average salary" does not include the payment of 40.33 accrued unused annual leave or overtime paid at time of final 40.34 separation from state service if paid in a lump sum nor does it 40.35 include the reduced salary, if any, paid during the period the 40.36 employee is entitled to workers' compensation benefit payments 41.1 for temporary disability. 41.2 (c) For an employee covered by the correctional state 41.3 employees retirement plan, "average salary" means the average of 41.4 the monthly salary during the employee's highest five successive 41.5 years of salary as an employee covered by the general state 41.6 employees retirement plan, or the correctional state employees 41.7 retirement plan, or by a combination of the two. If the total 41.8 of the covered service is less than five years, the 41.9 determination of average salary must be based on all allowable 41.10 service. 41.11 Sec. 2. Minnesota Statutes 2004, section 352.115, 41.12 subdivision 2, is amended to read: 41.13 Subd. 2. [AVERAGE SALARYNORMAL RETIREMENT ANNUITY.] The 41.14 retirement annuity hereunder payable at normal retirement age or 41.15 thereafter must be computed in accordance with the applicable 41.16 provisions of the formula stated in subdivision 3, on the basis 41.17 of the employee's average salary for the period of allowable 41.18 service. This retirement annuity is known as the "normal" 41.19 retirement annuity. 41.20For each year of allowable service, "average salary" of an41.21employee in determining a retirement annuity means the average41.22of the highest five successive years of salary upon which the41.23employee has made contributions to the retirement fund by41.24payroll deductions. Average salary must be based upon all41.25allowable service if this service is less than five years.41.26"Average salary" does not include the payment of accrued41.27unused annual leave or overtime paid at time of final separation41.28from state service if paid in a lump sum nor does it include the41.29reduced salary, if any, paid during the period the employee is41.30entitled to workers' compensation benefit payments for temporary41.31disability.41.32 Sec. 3. Minnesota Statutes 2004, section 352.115, 41.33 subdivision 3, is amended to read: 41.34 Subd. 3. [RETIREMENT ANNUITY FORMULA.] (a) This paragraph, 41.35 in conjunction with section 352.116, subdivision 1, applies to a 41.36 person who became a covered employee or a member of a pension 42.1 fund listed in section 356.30, subdivision 3, before July 1, 42.2 1989, unless paragraph (b), in conjunction with section 352.116, 42.3 subdivision 1a, produces a higher annuity amount, in which case 42.4 paragraph (b) will apply. The employee's average salary, as 42.5 defined in section 352.01, subdivision214a, multiplied by the 42.6 percent specified in section 356.315, subdivision 1, per year of 42.7 allowable service for the first ten years and the percent 42.8 specified in section 356.315, subdivision 2, for each later year 42.9 of allowable service and pro rata for completed months less than 42.10 a full year shall determine the amount of the retirement annuity 42.11 to which the employee is entitled. 42.12 (b) This paragraph applies to a person who has become at 42.13 least 55 years old and first became a covered employee after 42.14 June 30, 1989, and to any other covered employee who has become 42.15 at least 55 years old and whose annuity amount, when calculated 42.16 under this paragraph and in conjunction with section 352.116, 42.17 subdivision 1a, is higher than it is when calculated under 42.18 paragraph (a), in conjunction with section 352.116, subdivision 42.19 1. The employee's average salary, as defined in section 352.01, 42.20 subdivision214a, multiplied by the percent specified in 42.21 section 356.315, subdivision 2, for each year of allowable 42.22 service and pro rata for months less than a full year shall 42.23 determine the amount of the retirement annuity to which the 42.24 employee is entitled. 42.25 Sec. 4. Minnesota Statutes 2004, section 352.87, 42.26 subdivision 3, is amended to read: 42.27 Subd. 3. [RETIREMENT ANNUITY FORMULA.] A person specified 42.28 in subdivision 1will haveis entitled to receive a retirement 42.29 annuity applicable for allowable service credit under this 42.30 section calculated by multiplying the employee's average salary, 42.31 as defined in section352.115352.01, subdivision214a, by the 42.32 percent specified in section 356.315, subdivision 2a, for each 42.33 year or portions of a year of allowable service credit. No 42.34 reduction for retirementprior tobefore the normal retirement 42.35 age, as specified in section 352.01, subdivision 25, applies to 42.36 service to which this section applies. 43.1 Sec. 5. Minnesota Statutes 2004, section 352.93, 43.2 subdivision 1, is amended to read: 43.3 Subdivision 1. [BASIS OF ANNUITY; WHEN TO APPLY.] After 43.4 separation from state service, an employee covered under section 43.5 352.91 who has reached age 55 years and has credit for at least 43.6 three years of covered correctional service or a combination of 43.7 covered correctional service andregular Minnesotageneral 43.8 employees state retirementSystemplan service is entitled upon 43.9 application to a retirement annuity under this section, based 43.10 only on covered correctional employees' service. Application 43.11 may be made no earlier than 60 days before the date the employee 43.12 is eligible to retire by reason of both age and service 43.13 requirements. 43.14In this section, "average salary" means the average of the43.15monthly salary during the employee's highest five successive43.16years of salary as an employee covered by the Minnesota State43.17Retirement System. Average salary must be based upon all43.18allowable service if this service is less than five years.43.19 Sec. 6. Minnesota Statutes 2004, section 352C.021, is 43.20 amended by adding a subdivision to read: 43.21 Subd. 1a. [AVERAGE SALARY.] "Average salary," for purposes 43.22 of calculating the normal retirement annuity under section 43.23 352C.031, subdivision 4, means the average of the highest five 43.24 successive years of salary upon which contributions have been 43.25 made under section 352C.09. 43.26 Sec. 7. Minnesota Statutes 2004, section 353.01, 43.27 subdivision 10, is amended to read: 43.28 Subd. 10. [SALARY.] (a) "Salary" means: 43.29 (1) the periodic compensation of a public employee, before 43.30 deductions for deferred compensation, supplemental retirement 43.31 plans, or other voluntary salary reduction programs, and also 43.32 means "wages" and includes net income from fees; 43.33 (2) for a public employee who is covered by a supplemental 43.34 retirement plan under section 356.24, subdivision 1, clause (8), 43.35 (9), or (10), which require all plan contributions be made by 43.36 the employer, the contribution to the applicable supplemental 44.1 retirement plan when the contribution is from mandatory 44.2 withholdings from employees' wages; and 44.3(2)(3) for a public employee who has prior service covered 44.4 by a local police or firefighters relief association that has 44.5 consolidated with the Public Employees Retirement Association or 44.6 to which section 353.665 applies and who has elected coverage 44.7 either under the public employees police and fire fund benefit 44.8 plan under section 353A.08 following the consolidation or under 44.9 section 353.665, subdivision 4, the rate of salary upon which 44.10 member contributions to the special fund of the relief 44.11 association were made prior to the effective date of the 44.12 consolidation as specified by law and by bylaw provisions 44.13 governing the relief association on the date of the initiation 44.14 of the consolidation procedure and the actual periodic 44.15 compensation of the public employee after the effective date of 44.16 consolidation. 44.17 (b) Salary does not mean: 44.18 (1) the fees paid to district court reporters, unused 44.19 annual vacation or sick leave payments, in lump-sum or periodic 44.20 payments, severance payments, reimbursement of expenses, 44.21 lump-sum settlements not attached to a specific earnings period, 44.22 or workers' compensation payments; 44.23 (2) employer-paid amounts used by an employee toward the 44.24 cost of insurance coverage, employer-paid fringe benefits, 44.25 flexible spending accounts, cafeteria plans, health care expense 44.26 accounts, day care expenses, or any payments in lieu of any 44.27 employer-paid group insurance coverage, including the difference 44.28 between single and family rates that may be paid to a member 44.29 with single coverage and certain amounts determined by the 44.30 executive director to be ineligible; 44.31 (3) the amount equal to that which the employing 44.32 governmental subdivision would otherwise pay toward single or 44.33 family insurance coverage for a covered employee when, through a 44.34 contract or agreement with some but not all employees, the 44.35 employer: 44.36 (i) discontinues, or for new hires does not provide, 45.1 payment toward the cost of the employee's selected insurance 45.2 coverages under a group plan offered by the employer; 45.3 (ii) makes the employee solely responsible for all 45.4 contributions toward the cost of the employee's selected 45.5 insurance coverages under a group plan offered by the employer, 45.6 including any amount the employer makes toward other employees' 45.7 selected insurance coverages under a group plan offered by the 45.8 employer; and 45.9 (iii) provides increased salary rates for employees who do 45.10 not have any employer-paid group insurance coverages; 45.11 (4) except as provided in section 353.86 or 353.87, 45.12 compensation of any kind paid to volunteer ambulance service 45.13 personnel or volunteer firefighters, as defined in subdivision 45.14 35 or 36; and 45.15 (5) the amount of compensation that exceeds the limitation 45.16 provided in section 356.611. 45.17 (c) Amounts provided to an employee by the employer through 45.18 a grievance proceeding or a legal settlement are salary only if 45.19 the settlement is reviewed by the executive director and the 45.20 amounts are determined by the executive director to be 45.21 consistent with paragraph (a) and prior determinations. 45.22 Sec. 8. Minnesota Statutes 2004, section 353.01, is 45.23 amended by adding a subdivision to read: 45.24 Subd. 17a. [AVERAGE SALARY.] (a) "Average salary," for 45.25 purposes of calculating a retirement annuity under section 45.26 353.29, subdivision 3, means an amount equivalent to the average 45.27 of the highest salary of the member, police officer, or 45.28 firefighter, whichever applies, upon which employee 45.29 contributions were paid for any five successive years of 45.30 allowable service, based on dates of salary periods as listed on 45.31 salary deduction reports. Average salary must be based upon all 45.32 allowable service if this service is less than five years. 45.33 (b) "Average salary" may not include any reduced salary 45.34 paid during a period in which the employee is entitled to 45.35 benefit payments from workers' compensation for temporary 45.36 disability, unless the average salary is higher, including this 46.1 period. 46.2 Sec. 9. Minnesota Statutes 2004, section 353.29, 46.3 subdivision 3, is amended to read: 46.4 Subd. 3. [RETIREMENT ANNUITY FORMULA.] (a) This paragraph, 46.5 in conjunction with section 353.30, subdivisions 1, 1a, 1b, and 46.6 1c, applies to any member who first became a public employee or 46.7 a member of a pension fund listed in section 356.30, subdivision 46.8 3, before July 1, 1989, unless paragraph (b), in conjunction 46.9 with section 353.30, subdivision 5, produces a higher annuity 46.10 amount, in which case paragraph (b) will apply. The average 46.11 salary as defined in section 353.01, subdivision217a, 46.12 multiplied by the percent specified in section 356.315, 46.13 subdivision 3, for each year of allowable service for the first 46.14 ten years and thereafter by the percent specified in section 46.15 356.315, subdivision 4, per year of allowable service and 46.16 completed months less than a full year for the "basic member," 46.17 and the percent specified in section 356.315, subdivision 1, for 46.18 each year of allowable service for the first ten years and 46.19 thereafter by the percent specified in section 356.315, 46.20 subdivision 2, per year of allowable service and completed 46.21 months less than a full year for the "coordinated member," shall 46.22 determine the amount of the "normal" retirement annuity. 46.23 (b) This paragraph applies to a member who has become at 46.24 least 55 years old and first became a public employee after June 46.25 30, 1989, and to any other member whose annuity amount, when 46.26 calculated under this paragraph and in conjunction with section 46.27 353.30, subdivision 5, is higher than it is when calculated 46.28 under paragraph (a), in conjunction with section 353.30, 46.29 subdivisions 1, 1a, 1b, and 1c. The average salary, as defined 46.30 in section 353.01, subdivision217a, multiplied by the percent 46.31 specified in section 356.315, subdivision 4, for each year of 46.32 allowable service and completed months less than a full year for 46.33 a basic member and the percent specified in section 356.315, 46.34 subdivision 2, per year of allowable service and completed 46.35 months less than a full year for a coordinated member, shall 46.36 determine the amount of the normal retirement annuity. 47.1 Sec. 10. Minnesota Statutes 2004, section 353.33, 47.2 subdivision 3, is amended to read: 47.3 Subd. 3. [COMPUTATION OF BENEFITS.] This disability 47.4 benefit is an amount equal to the normal annuity payable to a 47.5 member who has reached normal retirement age with the same 47.6 number of years of allowable service and the same average 47.7 salary, as provided in section 353.01, subdivision 17a, and 47.8 section 353.29,subdivisions 2 andsubdivision 3. 47.9 A basic member shall receive a supplementary monthly 47.10 benefit of $25 to age 65 or the five-year anniversary of the 47.11 effective date of the disability benefit, whichever is later. 47.12 If the disability benefits under this subdivision exceed 47.13 the average salary as defined in section353.29353.01, 47.14 subdivision217a, the disability benefits must be reduced to an 47.15 amount equal tosaidthe average salary. 47.16 Sec. 11. Minnesota Statutes 2004, section 353.651, 47.17 subdivision 3, is amended to read: 47.18 Subd. 3. [RETIREMENT ANNUITY FORMULA.] The average salary 47.19 as defined in section 353.01, subdivision217a, multiplied by 47.20 the percent specified in section 356.315, subdivision 6, per 47.21 year of allowable service determines the amount of the normal 47.22 retirement annuity. If the member has earned allowable service 47.23 for performing services other than those of a police officer or 47.24 firefighter, the annuity representingsuchthat serviceismust 47.25 be computed under sections 353.29 and 353.30. 47.26 Sec. 12. Minnesota Statutes 2004, section 353.656, 47.27 subdivision 1, is amended to read: 47.28 Subdivision 1. [IN LINE OF DUTY; COMPUTATION OF BENEFITS.] 47.29 A member of the police and fire plan who becomes disabled and 47.30 physically unfit to perform duties as a police officer, 47.31 firefighter, or paramedic as defined under section 353.64, 47.32 subdivision 10, as a direct result of an injury, sickness, or 47.33 other disability incurred in or arising out of any act of duty, 47.34 which has or is expected to render the member physically or 47.35 mentally unable to perform the duties as a police officer, 47.36 firefighter, or paramedic as defined under section 353.64, 48.1 subdivision 10, for a period of at least one year, shall receive 48.2 disability benefits during the period of such disability. The 48.3 benefits must be in an amount equal to 60 percent of the 48.4 "average salary" as defined in section353.651353.01, 48.5 subdivision217a, plus an additional percent specified in 48.6 section 356.315, subdivision 6, of that average salary for each 48.7 year of service in excess of 20 years. If the disability under 48.8 this subdivision occurs before the member has at least five 48.9 years of allowable service credit in the police and fire plan, 48.10 the disability benefit must be computed on the "average salary" 48.11 from which deductions were made for contribution to the police 48.12 and fire fund. 48.13 Sec. 13. Minnesota Statutes 2004, section 354.05, is 48.14 amended by adding a subdivision to read: 48.15 Subd. 13a. [AVERAGE SALARY.] (a) "Average salary," for the 48.16 purpose of determining the member's retirement annuity, means 48.17 the average salary upon which contributions were made for the 48.18 highest five successive years of formula service credit. 48.19 (b) "Average salary" may not include any more than the 48.20 equivalent of 60 monthly salary payments. 48.21 (c) "Average salary" must be based upon all years of 48.22 formula service credit if this service credit is less than five 48.23 years. 48.24 Sec. 14. Minnesota Statutes 2004, section 354.44, 48.25 subdivision 6, is amended to read: 48.26 Subd. 6. [COMPUTATION OF FORMULA PROGRAM RETIREMENT 48.27 ANNUITY.] (a) The formula retirement annuity must be computed in 48.28 accordance with the applicable provisions of the formulas stated 48.29 in paragraph (b) or (d) on the basis of each member's average 48.30 salary under section 354.05, subdivision 13a, for the period of 48.31 the member's formula service credit. 48.32For all years of formula service credit, "average salary,"48.33for the purpose of determining the member's retirement annuity,48.34means the average salary upon which contributions were made and48.35upon which payments were made to increase the salary limitation48.36provided in Minnesota Statutes 1971, section 354.511, for the49.1highest five successive years of formula service credit49.2provided, however, that such "average salary" shall not include49.3any more than the equivalent of 60 monthly salary payments.49.4Average salary must be based upon all years of formula service49.5credit if this service credit is less than five years.49.6 (b) This paragraph, in conjunction with paragraph (c), 49.7 applies to a person who first became a member of the association 49.8 or a member of a pension fund listed in section 356.30, 49.9 subdivision 3, before July 1, 1989, unless paragraph (d), in 49.10 conjunction with paragraph (e), produces a higher annuity 49.11 amount, in which case paragraph (d) applies. The average salary 49.12 as defined inparagraph (a)section 354.05, subdivision 13a, 49.13 multiplied by the following percentages per year of formula 49.14 service credit shall determine the amount of the annuity to 49.15 which the member qualifying therefor is entitled: 49.16 Coordinated Member Basic Member 49.17 Each year of service the percent the percent 49.18 during first ten specified in specified in 49.19 section 356.315, section 356.315, 49.20 subdivision 1, subdivision 3, 49.21 per year per year 49.22 Each year of service the percent the percent 49.23 thereafter specified in specified in 49.24 section 356.315, section 356.315, 49.25 subdivision 2, subdivision 4, 49.26 per year per year 49.27 (c)(i) This paragraph applies only to a person who first 49.28 became a member of the association or a member of a pension fund 49.29 listed in section 356.30, subdivision 3, before July 1, 1989, 49.30 and whose annuity is higher when calculated under paragraph (b), 49.31 in conjunction with this paragraph than when calculated under 49.32 paragraph (d), in conjunction with paragraph (e). 49.33 (ii) Where any member retires prior to normal retirement 49.34 age under a formula annuity, the member shall be paid a 49.35 retirement annuity in an amount equal to the normal annuity 49.36 provided in paragraph (b) reduced by one-quarter of one percent 50.1 for each month that the member is under normal retirement age at 50.2 the time of retirement except that for any member who has 30 or 50.3 more years of allowable service credit, the reduction shall be 50.4 applied only for each month that the member is under age 62. 50.5 (iii) Any member whose attained age plus credited allowable 50.6 service totals 90 years is entitled, upon application, to a 50.7 retirement annuity in an amount equal to the normal annuity 50.8 provided in paragraph (b), without any reduction by reason of 50.9 early retirement. 50.10 (d) This paragraph applies to a member who has become at 50.11 least 55 years old and first became a member of the association 50.12 after June 30, 1989, and to any other member who has become at 50.13 least 55 years old and whose annuity amount when calculated 50.14 under this paragraph and in conjunction with paragraph (e), is 50.15 higher than it is when calculated under paragraph (b), in 50.16 conjunction with paragraph (c). The average salary, as defined 50.17 inparagraph (a)section 354.05, subdivision 13a, multiplied by 50.18 the percent specified by section 356.315, subdivision 4, for 50.19 each year of service for a basic member and by the percent 50.20 specified in section 356.315, subdivision 2, for each year of 50.21 service for a coordinated member shall determine the amount of 50.22 the retirement annuity to which the member is entitled. 50.23 (e) This paragraph applies to a person who has become at 50.24 least 55 years old and first becomes a member of the association 50.25 after June 30, 1989, and to any other member who has become at 50.26 least 55 years old and whose annuity is higher when calculated 50.27 under paragraph (d) in conjunction with this paragraph than when 50.28 calculated under paragraph (b), in conjunction with paragraph 50.29 (c). An employee who retires under the formula annuity before 50.30 the normal retirement age shall be paid the normal annuity 50.31 provided in paragraph (d) reduced so that the reduced annuity is 50.32 the actuarial equivalent of the annuity that would be payable to 50.33 the employee if the employee deferred receipt of the annuity and 50.34 the annuity amount were augmented at an annual rate of three 50.35 percent compounded annually from the day the annuity begins to 50.36 accrue until the normal retirement age. 51.1 (f) No retirement annuity is payable to a former employee 51.2 with a salary that exceeds 95 percent of the governor's salary 51.3 unless and until the salary figures used in computing the 51.4 highest five successive years average salary under paragraph (a) 51.5 have been audited by the Teachers Retirement Association and 51.6 determined by the executive director to comply with the 51.7 requirements and limitations of section 354.05, subdivisions 35 51.8 and 35a. 51.9 Sec. 15. Minnesota Statutes 2004, section 354A.011, is 51.10 amended by adding a subdivision to read: 51.11 Subd. 7a. [AVERAGE SALARY.] "Average salary," for purposes 51.12 of computing a normal coordinated program retirement annuity 51.13 under section 354A.31, subdivision 4 or 4a, means an amount 51.14 equal to the average salary upon which contributions were made 51.15 for the highest five successive years of service credit but may 51.16 not, in any event, include any more than the equivalent of 60 51.17 monthly salary payments. Average salary must be based upon all 51.18 years of service credit if this service credit is less than five 51.19 years. 51.20 Sec. 16. Minnesota Statutes 2004, section 354A.31, 51.21 subdivision 4, is amended to read: 51.22 Subd. 4. [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT 51.23 ANNUITY; MINNEAPOLIS AND ST. PAUL FUNDS.] (a) This subdivision 51.24 applies to the coordinated programs of the Minneapolis Teachers 51.25 Retirement Fund Association and the St. Paul Teachers Retirement 51.26 Fund Association. 51.27 (b) The normal coordinated retirement annuityshall beis 51.28 an amount equal to a retiring coordinated member's average 51.29 salary under section 354A.011, subdivision 7a, multiplied by the 51.30 retirement annuity formula percentage.Average salary for51.31purposes of this section shall mean an amount equal to the51.32average salary upon which contributions were made for the51.33highest five successive years of service credit, but which shall51.34not in any event include any more than the equivalent of 6051.35monthly salary payments. Average salary must be based upon all51.36years of service credit if this service credit is less than five52.1years.52.2 (c) This paragraph, in conjunction with subdivision 6, 52.3 applies to a person who first became a member or a member in a 52.4 pension fund listed in section 356.30, subdivision 3, before 52.5 July 1, 1989, unless paragraph (d), in conjunction with 52.6 subdivision 7, produces a higher annuity amount, in which case 52.7 paragraph (d) will apply. The retirement annuity formula 52.8 percentage for purposes of this paragraph is the percent 52.9 specified in section 356.315, subdivision 1, per year for each 52.10 year of coordinated service for the first ten years and the 52.11 percent specified in section 356.315, subdivision 2, for each 52.12 year of coordinated service thereafter. 52.13 (d) This paragraph applies to a person who has become at 52.14 least 55 years old and who first becomes a member after June 30, 52.15 1989, and to any other member who has become at least 55 years 52.16 old and whose annuity amount, when calculated under this 52.17 paragraph and in conjunction with subdivision 7 is higher than 52.18 it is when calculated under paragraph (c), in conjunction with 52.19 the provisions of subdivision 6. The retirement annuity formula 52.20 percentage for purposes of this paragraph is the percent 52.21 specified in section 356.315, subdivision 2, for each year of 52.22 coordinated service. 52.23 Sec. 17. Minnesota Statutes 2004, section 354A.31, 52.24 subdivision 4a, is amended to read: 52.25 Subd. 4a. [COMPUTATION OF THE NORMAL COORDINATED 52.26 RETIREMENT ANNUITY; DULUTH FUND.] (a) This subdivision applies 52.27 to the new law coordinated program of the Duluth Teachers 52.28 Retirement Fund Association. 52.29 (b) The normal coordinated retirement annuity is an amount 52.30 equal to a retiring coordinated member's average salary under 52.31 section 354A.011, subdivision 7a, multiplied by the retirement 52.32 annuity formula percentage.Average salary for purposes of this52.33section means an amount equal to the average salary upon which52.34contributions were made for the highest five successive years of52.35service credit, but may not in any event include any more than52.36the equivalent of 60 monthly salary payments. Average salary53.1must be based upon all years of service credit if this service53.2credit is less than five years.53.3 (c) This paragraph, in conjunction with subdivision 6, 53.4 applies to a person who first became a member or a member in a 53.5 pension fund listed in section 356.30, subdivision 3, before 53.6 July 1, 1989, unless paragraph (d), in conjunction with 53.7 subdivision 7, produces a higher annuity amount, in which case 53.8 paragraph (d) applies. The retirement annuity formula 53.9 percentage for purposes of this paragraph is the percent 53.10 specified in section 356.315, subdivision 1, per year for each 53.11 year of coordinated service for the first ten years and the 53.12 percent specified in section 356.315, subdivision 2, for each 53.13 subsequent year of coordinated service. 53.14 (d) This paragraph applies to a person who is at least 55 53.15 years old and who first becomes a member after June 30, 1989, 53.16 and to any other member who is at least 55 years old and whose 53.17 annuity amount, when calculated under this paragraph and in 53.18 conjunction with subdivision 7, is higher than it is when 53.19 calculated under paragraph (c) in conjunction with subdivision 53.20 6. The retirement annuity formula percentage for purposes of 53.21 this paragraph is the percent specified in section 356.315, 53.22 subdivision 2, for each year of coordinated service. 53.23 Sec. 18. Minnesota Statutes 2004, section 422A.01, is 53.24 amended by adding a subdivision to read: 53.25 Subd. 4a. [AVERAGE SALARY.] (a) "Average salary" means the 53.26 arithmetic average annual salary, wages, or compensation of the 53.27 member from the city for any five calendar years out of the last 53.28 ten calendar years of service, except as provided for in section 53.29 422A.16, which may include the year in which the employee 53.30 retires, as selected by the employee. 53.31 (b) A member with more than five calendar years of service, 53.32 but less than ten calendar years, may select any five calendar 53.33 years of service to determine the average salary. A member with 53.34 less than five years of service with the city shall use all 53.35 earnings to determine the average salary. 53.36 Sec. 19. Minnesota Statutes 2004, section 422A.15, 54.1 subdivision 1, is amended to read: 54.2 Subdivision 1. [FORMULA PENSION AND ANNUITY.] Except as 54.3 otherwise provided in subdivision 3, each contributing member 54.4 who, at the time of retirement, fulfills the conditions 54.5 necessary to enable the member to retire, shallis entitled to 54.6 receivewhat shall be known asa "formula pension and annuity" 54.7 equal to two percent for each year of allowable service for the 54.8 first ten years and thereafter 2.5 percent per year of allowable 54.9 service of thearithmeticaverageannualsalary, wages or54.10compensation of the member from the city for any five calendar54.11years out of the last ten calendar years of service except as54.12provided for in section 422A.16, which may include the year in54.13which the employee retires, as selected by the employee, 54.14 multiplied by the years of service credited by the retirement 54.15 fund. The formula pension and annuityshallmust be computed on 54.16 the single life plan but subject to the option selections 54.17 provided for in section 422A.17. 54.18 In order to be entitled to the formula pension and annuity 54.19 herein provided for, the retiring employee at the time of 54.20 cessation of employment and of actual retirementshallmust have 54.21 attained the age of 60 years or have been employed by the city 54.22 not less than 30 years, or meet the qualifications provided for 54.23 in section 422A.16, and in addition thereto have contributed to 54.24 the retirement fund at the percentage rate prescribed by the 54.25 retirement law applicable when the salary, wages or compensation 54.26 was paid on all salaries, wages, or compensation received from 54.27 the city or from an applicable employing unit. The years of 54.28 service to be applied in the formula pension and annuityshall54.29 must be found and determined by the retirement board, except 54.30 that no creditshallmay be allowed for any year in which a back 54.31 charge is owing at time of retirement and the earnings from any 54.32 year in which a back charge is owingshallmay not be used in 54.33 determining the averageannualsalary. 54.34 Sec. 20. Minnesota Statutes 2004, section 422A.16, 54.35 subdivision 9, is amended to read: 54.36 Subd. 9. [INCOMPETENCY OR DEATH OF MEMBER.] Any member of 55.1 the contributing class who becomes permanently separated from 55.2 the service of the city under subdivision 8, may, by an 55.3 instrument in writing, filed with the municipal employees 55.4 retirement board within 30 days aftersuchthe separation 55.5 becomes permanent, elect to allow the member contributions 55.6 tosuchthe fund to the date of separation to remain on deposit 55.7 insuchthe fund, and insuchthe event the membershall be55.8 is entitled to receive a retirement allowance at age 65, 55.9 provided the member, or someone acting in the member's behalf if 55.10 the member be incompetent,shallmust make a written application 55.11 forsuchthe retirement allowance in the same manner provided 55.12 for in section 422A.17 and in accordance with the provisions of 55.13 section 422A.15, subdivision 1, except for determining 55.14 averageannualsalary.A member with more than five calendar55.15years of service but less than ten calendar years may select any55.16five calendar years of service to determine the average annual55.17salary. A member with less than five years of service with the55.18city shall use all earnings to determine the average annual55.19salary.55.20 If the contributing member dies before reaching the age of 55.21 65 years, or having attained the age of 65 years without having 55.22 made the election provided for herein, the net accumulated 55.23 amount of deductions from the member's salary, pay or 55.24 compensation, plus interest, to the member's credit on date of 55.25 deathshall be paidis payable tosuchthe person or persons as 55.26 have been nominated by written designation filed with the 55.27 retirement board, insuchthe formasthat the retirement board 55.28shall requirerequires. 55.29 If the employee fails to make a designation, or if the 55.30 person or persons designated bysuchthe employee predeceases 55.31suchthe employee, the net accumulated credit tosuchthe 55.32 employee's account on date of deathshall be paidis payable to 55.33suchthe employee's estate. 55.34 The provisions of subdivisions 4, 5, and 6shallalso apply 55.35 to any member qualifying for benefits under this subdivision, 55.36 except for purposes of this subdivision the age referred to in 56.1 subdivision 4shall beis 65 years. 56.2 Sec. 21. Minnesota Statutes 2004, section 490.121, 56.3 subdivision 21, is amended to read: 56.4 Subd. 21. [FINAL AVERAGE COMPENSATION.] "Final average 56.5 compensation" means the total amount of salary payable to a 56.6 judge in the highest five years out of the last ten yearsprior56.7tobefore theevent of maturity of benefitstermination of 56.8 judicial service, divided by five; provided, however, thatif 56.9 the number of years of service by the judge equals or exceeds 56.10 ten. If the number of years of service by the judge is less 56.11 than ten, but more than five, the highest fiveshallyears of 56.12 salary must be counted, and. If the number of years of service 56.13 by the judge is less than five, the aggregate salaryin suchfor 56.14 the periodshallof service must be divided by the number of 56.15 months insuchthe period and multiplied by 12. 56.16 Sec. 22. [REPEALER.] 56.17 Minnesota Statutes 2004, sections 352C.031, subdivision 3; 56.18 353.29, subdivision 2; and 353.651, subdivision 2, are repealed. 56.19 Sec. 23. [EFFECTIVE DATE.] 56.20 This article is effective July 1, 2005. 56.21 ARTICLE 3 56.22 ALLOWABLE SERVICE CREDIT 56.23 Section 1. [356.195] [SERVICE CREDIT PURCHASE PROCEDURES 56.24 FOR STRIKE PERIODS.] 56.25 Subdivision 1. [COVERED PLANS.] This section applies to 56.26 all defined benefit plans specified in section 356.30, 56.27 subdivision 3. 56.28 Subd. 2. [PURCHASE PROCEDURE FOR STRIKE PERIODS.] (a) An 56.29 employee covered by a plan specified in subdivision 1 may 56.30 purchase allowable service credit in the applicable plan for any 56.31 period of time during which the employee was on a public 56.32 employee strike without pay, not to exceed a period of one year, 56.33 if the employee makes a payment in lieu of salary deductions as 56.34 specified in paragraph (b) or (c), whichever applies. The 56.35 employing unit, at its option, may pay the employer portion of 56.36 the amount specified in paragraph (b) on behalf of its employees. 57.1 (b) If payment is received by the applicable pension plan 57.2 executive director within one year from the end of the strike, 57.3 the payment amount is equal to the applicable employee and 57.4 employer contribution rates specified in law for the applicable 57.5 plan during the strike period, applied to the employee's rate of 57.6 salary in effect at the conclusion of the strike for the period 57.7 of the strike without pay, plus compound interest at a monthly 57.8 rate of 0.71 percent from the last day of the strike period 57.9 until the date payment is received. 57.10 (c) If payment is received by the applicable pension fund 57.11 director after one year and before five years from the end of 57.12 the strike, the payment amount is the amount determined under 57.13 section 356.551. 57.14 (d) Payments may not be made more than five years after the 57.15 end of the strike. 57.16 Sec. 2. Minnesota Statutes 2004, section 490.121, 57.17 subdivision 4, is amended to read: 57.18 Subd. 4. [ALLOWABLE SERVICE.] (a) "Allowable service" 57.19 means any calendar month, subject to the service credit limit in 57.20 subdivision 22, served as a judge at any time, or served as a 57.21 referee in probate for all referees in probate who were in 57.22 office prior to January 1, 1974. 57.23 (b) "Allowable service" also means a period of authorized 57.24 leave of absence for which the judge has made a payment in lieu 57.25 of contributions, not in an amount in excess of the service 57.26 credit limit under subdivision 22. To obtain the service 57.27 credit, the judge shall pay an amount equal to the member and 57.28 employer contribution rates under section 490.123, subdivisions 57.29 1a and 1b, applied to the judge's average monthly salary rate 57.30 during the authorized leave of absence and multiplied by the 57.31 number of months of the authorized leave of absence, plus annual 57.32 compound interest at the rate of 8.5 percent from the date of 57.33 the termination of the leave to the date on which payment is 57.34 made. The payment must be made within one year of the date on 57.35 which the authorized leave of absence terminated. Service 57.36 credit for an authorized leave of absence is in addition to a 58.1 uniformed service leave under section 490.1211. 58.2 Sec. 3. Laws 1999, chapter 222, article 16, section 16, as 58.3 amended by Laws 2002, chapter 392, article 7, section 1, and 58.4 Laws 2003, First Special Session chapter 12, article 6, section 58.5 2, and Laws 2004, chapter 267, article 17, section 6, is amended 58.6 to read: 58.7 Sec. 16. [REPEALER.] 58.8 (a) Sections 2 to 6 and 8 to 13 are repealed on May 16, 58.9 2004. 58.10 (b) Sections 1 and 7 are repealed on May 16,20062007. 58.11 Sec. 4. Laws 2000, chapter 461, article 4, section 4, as 58.12 amended by Laws 2003, First Special Session chapter 12, article 58.13 6, section 3, and Laws 2004, chapter 267, article 17, section 7, 58.14 is amended to read: 58.15 Sec. 4. [EFFECTIVE DATE; SUNSET REPEALER.] 58.16 (a) Sections 1, 2, and 3 are effectiveonthe day following 58.17 final enactment. 58.18 (b) Sections 1, 2, and 3, are repealed on May 16,20062007. 58.19 Sec. 5. [METRO TRANSIT STRIKE PROVISION.] 58.20 Notwithstanding the payment deadline specified in Minnesota 58.21 Statutes, section 356.195, subdivision 2, paragraph (b), a Metro 58.22 Transit employee covered by the general state employees 58.23 retirement plan of the Minnesota State Retirement System who was 58.24 on strike on or after January 1, 2004, and before the effective 58.25 date of this section, is authorized to make a payment under that 58.26 paragraph on or before one year after the effective date of this 58.27 section. 58.28 Sec. 6. [CROSBY-IRONTON PUBLIC SCHOOL STRIKE PROVISION.] 58.29 Notwithstanding the payment deadline specified in Minnesota 58.30 Statutes, section 356.195, subdivision 2, paragraph (b), a 58.31 Crosby-Ironton public school teacher covered by the Teachers 58.32 Retirement Association who was on strike during a period that 58.33 included April 1, 2005, and before the effective date of this 58.34 section, is authorized to make a payment under that paragraph on 58.35 or before one year after the effective date of this section. 58.36 Sec. 7. [EFFECTIVE DATE.] 59.1 (a) Sections 1 and 3 to 6 are effective the day following 59.2 final enactment. 59.3 (b) Section 2 is effective retroactively from January 1, 59.4 2005, and applies to any person who was in active service as a 59.5 judge on or after that date and applies to an authorized leave 59.6 of absence that occurred before or after that date. For a 59.7 person for whom section 2 is retroactive, the equivalent 59.8 contribution payment must be made on or before July 1, 2006. 59.9 ARTICLE 4 59.10 ACTUARIAL FINANCIAL REPORTING AND OTHER 59.11 GENERALLY APPLICABLE ADMINISTRATIVE CHANGES 59.12 Section 1. Minnesota Statutes 2004, section 352.01, 59.13 subdivision 12, is amended to read: 59.14 Subd. 12. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 59.15 means the condition of one annuity or benefit having an equal 59.16 actuarial present value as another annuity or benefit, 59.17 determined as of a given date at a specified age with each 59.18 actuarial present value based on the appropriate mortality table 59.19 adopted by the board of directors based on the experience of the 59.20 fund as recommended by the actuary retainedby the Legislative59.21Commission on Pensions and Retirementunder section 356.214, and 59.22 approved under section 356.215, subdivision 18, and using the 59.23 applicable preretirement or postretirement interest rate 59.24 assumption specified in section 356.215, subdivision 8. 59.25 Sec. 2. Minnesota Statutes 2004, section 353.01, 59.26 subdivision 14, is amended to read: 59.27 Subd. 14. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 59.28 means the condition of one annuity or benefit having an equal 59.29 actuarial present value as another annuity or benefit, 59.30 determined as of a given date with each actuarial present value 59.31 based on the appropriate mortality table adopted by the board of 59.32 trustees based on the experience of the fund as recommended by 59.33 the actuary retainedby the Legislative Commission on Pensions59.34and Retirementunder section 356.214, and approved under section 59.35 356.215, subdivision 18, and using the applicable preretirement 59.36 or postretirement interest rate assumption specified in section 60.1 356.215, subdivision 8. 60.2 Sec. 3. Minnesota Statutes 2004, section 354.05, 60.3 subdivision 7, is amended to read: 60.4 Subd. 7. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 60.5 means the condition of one annuity or benefit having an equal 60.6 actuarial present value as another annuity or benefit, 60.7 determined as of a given date with each actuarial present value 60.8 based on the appropriate mortality table adopted by the board of 60.9 trustees based on the experience of the association as 60.10 recommended by the actuary retainedby the Legislative60.11Commission on Pensions and Retirementunder section 356.214, and 60.12 approved under section 356.215, subdivision 18, and using the 60.13 applicable preretirement or postretirement interest rate 60.14 assumption specified in section 356.215, subdivision 8. 60.15 Sec. 4. Minnesota Statutes 2004, section 354.094, 60.16 subdivision 1, is amended to read: 60.17 Subdivision 1. [SERVICE CREDIT CONTRIBUTIONS.] (a) Upon 60.18 granting any extended leave of absence under section 122A.46 or 60.19 136F.43, the employing unit granting the leave must certify the 60.20 leave to the association on a form specified by the executive 60.21 director. A member granted an extended leave of absence under 60.22 section 122A.46 or 136F.43 may pay employee contributions and 60.23 receive allowable service credit toward annuities and other 60.24 benefits under this chapter, for each year of the leave, 60.25 provided that the member and the employing board make the 60.26 required employer contribution in any proportion they may agree 60.27 upon, during the period of the leave. The employer may enter 60.28 into an agreement with the exclusive bargaining representative 60.29 of the teachers in the district under which, for an individual 60.30 teacher, all or a portion of the employee's contribution is paid 60.31 by the employer. Any such agreement must include a sunset of 60.32 eligibility to qualify for the payment and must not be a part of 60.33 the collective bargaining agreement. The leave period must not 60.34 exceed five years. A member may not receive more than five 60.35 years of allowable service credit under this section. The 60.36 employee and employer contributions must be based upon the rates 61.1 of contribution prescribed by section 354.42 for the salary 61.2 received during the year immediately preceding the extended 61.3 leave. 61.4 (b) Employee contribution payments for the years for which 61.5 a member is receiving service credit while on extended leave 61.6 must be made on or beforethe later ofJune 30 of each fiscal 61.7 year for which service credit is to be receivedor within 3061.8days after first notification of the amount due, if requested by61.9the member, is given by the association. If payment is to be 61.10 made by a transfer of pretax assets authorized under section 61.11 356.441, payment is authorized after June 30 of the fiscal year 61.12 providing that authorization for the asset transfer has been 61.13 received by the applicable third party administrator by June 30, 61.14 and the payment must include interest at a rate of .708 percent 61.15 per month from June 30 through the end of the month in which 61.16 payment is received. No payment is permitted after the 61.17 following September 30.Payments received after June 30 must61.18include interest at an annual rate of 8.5 percent from June 3061.19through the end of the month in which payment is received.61.20 (c) Notwithstanding the provisions of any agreements to the 61.21 contrary, employee and employer contributions may not be made to 61.22 receive allowable service credit if the member does not have 61.23 full reinstatement rights as provided in section 122A.46 or 61.24 136F.43, both during and at the end of the extended leave. 61.25 (d) Any school district paying the employee's retirement 61.26 contributions under this section shall forward to the applicable 61.27 retirement association or retirement fund a copy of the 61.28 agreement executed by the school district and the employee. 61.29 Sec. 5. Minnesota Statutes 2004, section 354A.011, 61.30 subdivision 3a, is amended to read: 61.31 Subd. 3a. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 61.32 means the condition of one annuity or benefit having an equal 61.33 actuarial present value as another annuity or benefit, 61.34 determined as of a given date with each actuarial present value 61.35 based on the appropriate mortality table adopted by the 61.36 appropriate board of trustees based on the experience of that 62.1 retirement fund association as recommended by the actuary 62.2 retainedby the Legislative Commission on Pensions and62.3Retirementunder section 356.214, and approved under section 62.4 356.215, subdivision 18, and using the applicable preretirement 62.5 or postretirement interest rate assumption specified in section 62.6 356.215, subdivision 8. 62.7 Sec. 6. Minnesota Statutes 2004, section 356.20, 62.8 subdivision 4, is amended to read: 62.9 Subd. 4. [CONTENTS OF FINANCIAL REPORT.] (a) The financial 62.10 report required by this section must contain financial 62.11 statements and disclosures that indicate the financial 62.12 operations and position of the retirement plan and fund. The 62.13 report must conform with generally accepted governmental 62.14 accounting principles, applied on a consistent basis. The 62.15 report must be audited. The report must include, as part of its 62.16 exhibits or its footnotes, an actuarial disclosure item based on 62.17 the actuarial valuation calculations prepared by the 62.18commission-retainedactuary retained under section 356.214 or by 62.19 the actuary retained by the retirement fund or plan,if62.20applicablewhichever applies, according to applicable actuarial 62.21 requirements enumerated in section 356.215, and specified in the 62.22 most recent standards for actuarial work adopted by the 62.23 Legislative Commission on Pensions and Retirement. The accrued 62.24 assets, the accrued liabilities, including accrued reserves, and 62.25 the unfunded actuarial accrued liability of the fund or plan 62.26 must be disclosed. The disclosure item must contain a 62.27 declaration by the actuary retainedby the Legislative62.28Commission on Pensions and Retirementunder section 356.214 or 62.29 the actuary retained by the fund or plan, whichever applies, 62.30 specifying that the required reserves for any retirement, 62.31 disability, or survivor benefits provided under a benefit 62.32 formula are computed in accordance with the entry age actuarial 62.33 cost method and in accordance with the most recent applicable 62.34 standards for actuarial work adopted by the Legislative 62.35 Commission on Pensions and Retirement. 62.36 (b) Assets of the fund or plan contained in the disclosure 63.1 item must include the following statement of the actuarial value 63.2 of current assets as defined in section 356.215, subdivision 1: 63.3 Value Value 63.4 at cost at market 63.5 Cash, cash equivalents, and 63.6 short-term securities ......... ......... 63.7 Accounts receivable ......... ......... 63.8 Accrued investment income ......... ......... 63.9 Fixed income investments ......... ......... 63.10 Equity investments other 63.11 than real estate ......... ......... 63.12 Real estate investments ......... ......... 63.13 Equipment ......... ......... 63.14EquityParticipation in the Minnesota 63.15 postretirement investment 63.16 fund or the retirement 63.17 benefit fund ......... ......... 63.18 Other ......... ......... 63.19 63.20 Total assets 63.21 Value at cost ......... 63.22 Value at market ......... 63.23 Actuarial value of current assets ......... 63.24 (c) The unfunded actuarial accrued liability of the fund or 63.25 plan contained in the disclosure item must include the following 63.26 measures of unfunded actuarial accrued liability, using 63.27 the actuarial value of current assets: 63.28 (1) the unfunded actuarial accrued liability, determined by 63.29 subtracting the current assets and the present value of future 63.30 normal costs from the total current and expected future benefit 63.31 obligations; and 63.32 (2) the unfunded pension benefit obligation, determined by 63.33 subtracting the current assets from the actuarial present value 63.34 of credited projected benefits. 63.35 If the current assets of the fund or plan exceed the 63.36 actuarial accrued liabilities, the excess must be disclosed and 64.1 indicated as a surplus. 64.2 (d) The pension benefit obligations schedule included in 64.3 the disclosure must contain the following information on the 64.4 benefit obligations: 64.5 (1) the pension benefit obligation, determined as the 64.6 actuarial present value of credited projected benefits on 64.7 account of service rendered to date, separately identified as 64.8 follows: 64.9 (i) for annuitants; 64.10 retirement annuities; 64.11 disability benefits; 64.12 surviving spouse and child benefits; 64.13 (ii) for former members without vested rights; 64.14 (iii) for deferred annuitants' benefits, including 64.15 any augmentation; 64.16 (iv) for active employees; 64.17 accumulated employee contributions, 64.18 including allocated investment income; 64.19 employer-financed benefits vested; 64.20 employer-financed benefits nonvested; 64.21 total pension benefit obligation; and 64.22 (2) if there are additional benefits not appropriately 64.23 covered by the foregoing items of benefit obligations, a 64.24 separate identification of the obligation. 64.25 (e) The report must contain an itemized exhibit describing 64.26 the administrative expenses of the plan, including, but not 64.27 limited to, the following items, classified on a consistent 64.28 basis from year to year, and with any further meaningful detail: 64.29 (1) personnel expenses; 64.30 (2) communication-related expenses; 64.31 (3) office building and maintenance expenses; 64.32 (4) professional services fees; and 64.33 (5) other expenses. 64.34 (f) The report must contain an itemized exhibit describing 64.35 the investment expenses of the plan, including, but not limited 64.36 to, the following items, classified on a consistent basis from 65.1 year to year, and with any further meaningful detail: 65.2 (1) internal investment-related expenses; and 65.3 (2) external investment-related expenses. 65.4 (g) Any additional statements or exhibits or more detailed 65.5 or subdivided itemization of a disclosure item that will enable 65.6 the management of the fund to portray a true interpretation of 65.7 the fund's financial condition must be included in the 65.8 additional statements or exhibits. 65.9 Sec. 7. Minnesota Statutes 2004, section 356.47, 65.10 subdivision 3, is amended to read: 65.11 Subd. 3. [PAYMENT.] (a) Upon the retired member attaining 65.12 the age of 65 years or upon the first day of the month next 65.13 following the month occurring one year after the termination of 65.14 the reemployment that gave rise to the limitation, whichever is 65.15 later, and the filing of a written application, the retired 65.16 member is entitled to the payment, in a lump sum, of the value 65.17 of the person's amount under subdivision 2, plus interest at the 65.18 compound annual rate of six percent from the date that the 65.19 amount was deducted from the retirement annuity to the date of 65.20 payment. 65.21 (b) The written application must be on a form prescribed by 65.22 the chief administrative officer of the applicable retirement 65.23 plan. 65.24 (c) If the retired member dies before the payment provided 65.25 for in paragraph (a) is made, the amount is payable, upon 65.26 written application, to the deceased person's surviving spouse, 65.27 or if none, to the deceased person's designated beneficiary, or 65.28 if none, to the deceased person's estate. 65.29 (d) In lieu of the direct payment of the person's amount 65.30 under subdivision 2, on or after the payment date under 65.31 paragraph (a), if the federal Internal Revenue Code so permits, 65.32 the retired member may elect to have all or any portion of the 65.33 payment amount under this section paid in the form of a direct 65.34 rollover to an eligible retirement plan as defined in section 65.35 402(c) of the federal Internal Revenue Code that is specified by 65.36 the retired member. If the retired member dies with a balance 66.1 remaining payable under this section, the surviving spouse of 66.2 the retired member, or if none, the deceased person's designated 66.3 beneficiary, or if none, the administrator of the deceased 66.4 person's estate may elect a direct rollover under this paragraph. 66.5 Sec. 8. Minnesota Statutes 2004, section 422A.01, 66.6 subdivision 6, is amended to read: 66.7 Subd. 6. [PRESENT WORTH OR PRESENT VALUE.] "Present worth" 66.8 or "present value" means that the present amount of money if 66.9 increased at the applicable postretirement or preretirement 66.10 interest rate assumption specified in section 356.215, 66.11 subdivision 8, and based on the mortality table adopted by the 66.12 board of trustees based on the experience of the fund as 66.13 recommended by the actuary retainedby the Legislative66.14Commission on Pensions and Retirementunder section 356.214, and 66.15 approved under section 356.215, subdivision 18, will at 66.16 retirement equal the actuarial accrued liability of the annuity 66.17 already earned. 66.18 Sec. 9. Minnesota Statutes 2004, section 490.121, 66.19 subdivision 20, is amended to read: 66.20 Subd. 20. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 66.21 means the condition of one annuity or benefit having an equal 66.22 actuarial present value as another annuity or benefit, 66.23 determined as of a given date with each actuarial present value 66.24 based on the appropriate mortality table adopted by the board of 66.25trusteesdirectors of the Minnesota State Retirement System 66.26 based on the experience of the fund as recommended by 66.27 thecommission-retainedactuary retained under section 356.214, 66.28 and approved under section 356.215, subdivision 18, and using 66.29 the applicable preretirement or postretirement interest rate 66.30 assumption specified in section 356.215, subdivision 8. 66.31 Sec. 10. [EFFECTIVE DATE.] 66.32 (a) Sections 1 to 5, 8, and 9 are effective on July 1, 2005. 66.33 (b) Section 6 is effective the day following final 66.34 enactment and applies to annual financial reporting occurring on 66.35 or after June 30, 2005. 66.36 (c) Section 4 is effective on the day following final 67.1 enactment. 67.2 (d) Section 7 is effective on July 1, 2005, and applies to 67.3 retired members with an amount in a reemployed annuitant's 67.4 account on or after that date. 67.5 ARTICLE 5 67.6 MEMBERSHIP INCLUSIONS 67.7 AND EXCLUSIONS 67.8 Section 1. Minnesota Statutes 2004, section 69.011, is 67.9 amended by adding a subdivision to read: 67.10 Subd. 2c. [INELIGIBILITY OF CERTAIN POLICE OFFICERS.] A 67.11 police officer employed by the University of Minnesota who is 67.12 required by the Board of Regents to be a member of the 67.13 University of Minnesota faculty retirement plan is not eligible 67.14 to be included in any police state-aid certification under this 67.15 section. 67.16 Sec. 2. Minnesota Statutes 2004, section 352.01, 67.17 subdivision 2a, is amended to read: 67.18 Subd. 2a. [INCLUDED EMPLOYEES.] (a) "State employee" 67.19 includes: 67.20 (1) employees of the Minnesota Historical Society; 67.21 (2) employees of the State Horticultural Society; 67.22 (3) employees of the Disabled American Veterans, Department 67.23 of Minnesota, Veterans of Foreign Wars, Department of Minnesota, 67.24 if employed before July 1, 1963; 67.25 (4) employees of the Minnesota Crop Improvement 67.26 Association; 67.27 (5) employees of the adjutant general who are paid from 67.28 federal funds and who are not covered by any federal civilian 67.29 employees retirement system; 67.30 (6) employees of the Minnesota State Colleges and 67.31 Universities employed under the university or college activities 67.32 program; 67.33 (7) currently contributing employees covered by the system 67.34 who are temporarily employed by the legislature during a 67.35 legislative session or any currently contributing employee 67.36 employed for any special service as defined in subdivision 2b, 68.1 clause (8); 68.2 (8) employees of the Armory Building Commission; 68.3 (9) employees of the legislature appointed without a limit 68.4 on the duration of their employment and persons employed or 68.5 designated by the legislature or by a legislative committee or 68.6 commission or other competent authority to conduct a special 68.7 inquiry, investigation, examination, or installation; 68.8 (10) trainees who are employed on a full-time established 68.9 training program performing the duties of the classified 68.10 position for which they will be eligible to receive immediate 68.11 appointment at the completion of the training period; 68.12 (11) employees of the Minnesota Safety Council; 68.13 (12) any employees on authorized leave of absence from the 68.14 Transit Operating Division of the former Metropolitan Transit 68.15 Commission who are employed by the labor organization which is 68.16 the exclusive bargaining agent representing employees of the 68.17 Transit Operating Division; 68.18 (13) employees of the Metropolitan Council, Metropolitan 68.19 Parks and Open Space Commission, Metropolitan Sports Facilities 68.20 Commission, Metropolitan Mosquito Control Commission, or 68.21 Metropolitan Radio Board unless excluded or covered by another 68.22 public pension fund or plan under section 473.415, subdivision 68.23 3; 68.24 (14) judges of the Tax Court; 68.25 (15) personnel employed on June 30, 1992, by the University 68.26 of Minnesota in the management, operation, or maintenance of its 68.27 heating plant facilities, whose employment transfers to an 68.28 employer assuming operation of the heating plant facilities, so 68.29 long as the person is employed at the University of Minnesota 68.30 heating plant by that employer or by its successor organization; 68.31and68.32 (16) seasonal help in the classified service employed by 68.33 the Department of Revenue; and 68.34 (17) persons employed by the Department of Commerce as a 68.35 peace officer in the Insurance Fraud Prevention Division under 68.36 section 45.0135 who have attained the mandatory retirement age 69.1 specified in section 43A.34, subdivision 4. 69.2 (b) Employees specified in paragraph (a), clause (15), are 69.3 included employees under paragraph (a) if employer and employee 69.4 contributions are made in a timely manner in the amounts 69.5 required by section 352.04. Employee contributions must be 69.6 deducted from salary. Employer contributions are the sole 69.7 obligation of the employer assuming operation of the University 69.8 of Minnesota heating plant facilities or any successor 69.9 organizations to that employer. 69.10 Sec. 3. Minnesota Statutes 2004, section 352.91, is 69.11 amended by adding a subdivision to read: 69.12 Subd. 4a. [PROCESS FOR EVALUATING AND RECOMMENDING 69.13 POTENTIAL EMPLOYMENT POSITIONS FOR MEMBERSHIP INCLUSION.] (a) 69.14 The Department of Corrections and the Department of Human 69.15 Services must establish a procedure for evaluating periodic 69.16 requests by department employees for qualification for 69.17 recommendation by the commissioner for inclusion of the 69.18 employment position in the correctional facility or human 69.19 services facility in the correctional retirement plan and for 69.20 periodically determining employment positions that no longer 69.21 qualify for continued correctional retirement plan coverage. 69.22 (b) The procedure must provide for an evaluation of the 69.23 extent of the employee's working time spent in direct contact 69.24 with patients or inmates, the extent of the physical hazard that 69.25 the employee is routinely subjected to in the course of 69.26 employment, and the extent of intervention routinely expected of 69.27 the employee in the event of a facility incident. The 69.28 percentage of routine direct contact with inmates or patients 69.29 may not be less than 75 percent. 69.30 (c) The applicable commissioner shall notify the employee 69.31 of the determination of the appropriateness of recommending the 69.32 employment position for inclusion in the correctional retirement 69.33 plan, if the evaluation procedure results in a finding that the 69.34 employee: 69.35 (1) routinely spends 75 percent of the employee's time in 69.36 direct contact with inmates or patients; and 70.1 (2) is regularly engaged in the rehabilitation, treatment, 70.2 custody, or supervision of inmates or patients. 70.3 (d) After providing the affected employee an opportunity to 70.4 dispute or clarify any evaluation determinations, if the 70.5 commissioner determines that the employment position is 70.6 appropriate for inclusion in the correctional retirement plan, 70.7 the commissioner shall forward that recommendation and 70.8 supporting documentation to the chair of the Legislative 70.9 Commission on Pensions and Retirement, the chair of the State 70.10 and Local Governmental Operations Committee of the senate, the 70.11 chair of the Governmental Operations and Veterans Affairs Policy 70.12 Committee of the house of representatives, and the executive 70.13 director of the Legislative Commission on Pensions and 70.14 Retirement in the form of the appropriate proposed legislation. 70.15 The recommendation must be forwarded to the legislature before 70.16 January 15 for the recommendation to be considered in that 70.17 year's legislative session. 70.18 Sec. 4. Minnesota Statutes 2004, section 352B.01, 70.19 subdivision 2, is amended to read: 70.20 Subd. 2. [MEMBER.] "Member" means: 70.21 (1) a State Patrol member currently employed after June 30, 70.22 1943, under section 299D.03 by the state, who is a peace officer 70.23 under section 626.84, and whose salary or compensation is paid 70.24 out of state funds; 70.25 (2) a conservation officer employed under section 97A.201, 70.26 currently employed by the state, whose salary or compensation is 70.27 paid out of state funds; 70.28 (3) a crime bureau officer who was employed by the crime 70.29 bureau and was a member of the Highway Patrolmen's retirement 70.30 fund on July 1, 1978, whether or not that person has the power 70.31 of arrest by warrant after that date, or who is employed as 70.32 police personnel, with powers of arrest by warrant under section 70.33 299C.04, and who is currently employed by the state, and whose 70.34 salary or compensation is paid out of state funds; 70.35 (4) a person who is employed by the state in the Department 70.36 of Public Safety in a data processing management position with 71.1 salary or compensation paid from state funds, who was a crime 71.2 bureau officer covered by the State Patrol retirement plan on 71.3 August 15, 1987, and who was initially hired in the data 71.4 processing management position within the department during 71.5 September 1987, or January 1988, with membership continuing for 71.6 the duration of the person's employment in that position, 71.7 whether or not the person has the power of arrest by warrant 71.8 after August 15, 1987; 71.9 (5) a public safety employee defined as a peace officer in 71.10 section 626.84, subdivision 1, paragraph (c), and employed with 71.11 the Division of Alcohol and Gambling Enforcement under section 71.12 299L.01;and71.13 (6) a Fugitive Apprehension Unit officer after October 31, 71.14 2000, employed by the Office of Special Investigations of the 71.15 Department of Corrections who is a peace officer under section 71.16 626.84; and 71.17 (7) an employee of the Department of Commerce defined as a 71.18 peace officer in section 626.84, subdivision 1, paragraph (c), 71.19 who is employed by the Division of Insurance Fraud Prevention 71.20 under section 45.0135 after January 1, 2005, and who has not 71.21 attained the mandatory retirement age specified in section 71.22 43A.34, subdivision 4. 71.23 Sec. 5. Minnesota Statutes 2004, section 353.01, 71.24 subdivision 6, is amended to read: 71.25 Subd. 6. [GOVERNMENTAL SUBDIVISION.] (a) "Governmental 71.26 subdivision" means a county, city, town, school district within 71.27 this state, or a department or unit of state government, or any 71.28 public body whose revenues are derived from taxation, fees, 71.29 assessments or from other sources. 71.30 (b) Governmental subdivision also means the Public 71.31 Employees Retirement Association, the League of Minnesota 71.32 Cities, the Association of Metropolitan Municipalities, public 71.33 hospitals owned or operated by, or an integral part of, a 71.34 governmental subdivision or governmental subdivisions, the 71.35 Association of Minnesota Counties, the Metropolitan Intercounty 71.36 Association, the Minnesota Municipal Utilities Association, the 72.1 Metropolitan Airports Commission, the University of Minnesota 72.2 with respect to police officers covered by the public employees 72.3 police and fire retirement plan, the Minneapolis Employees 72.4 Retirement Fund for employment initially commenced after June 72.5 30, 1979, the Range Association of Municipalities and Schools, 72.6 soil and water conservation districts, economic development 72.7 authorities created or operating under sections 469.090 to 72.8 469.108, the Port Authority of the city of St. Paul, the Spring 72.9 Lake Park Fire Department, incorporated, the Lake Johanna 72.10 Volunteer Fire Department, incorporated, the Red Wing 72.11 Environmental Learning Center, and the Dakota County 72.12 Agricultural Society. 72.13 (c) Governmental subdivision does not mean any municipal 72.14 housing and redevelopment authority organized under the 72.15 provisions of sections 469.001 to 469.047; or any port authority 72.16 organized under sections 469.048 to 469.089 other than the Port 72.17 Authority of the city of St. Paul; or any hospital district 72.18 organized or reorganized prior to July 1, 1975, under sections 72.19 447.31 to 447.37 or the successor of the district, nor the 72.20 Minneapolis Community Development Agency. 72.21 Sec. 6. Minnesota Statutes 2004, section 353.64, is 72.22 amended by adding a subdivision to read: 72.23 Subd. 6a. [UNIVERSITY OF MINNESOTA POLICE OFFICERS; 72.24 INCLUSIONS AND EXCLUSIONS.] (a) Unless paragraph (b) applies, a 72.25 person who is employed as a peace officer by the University of 72.26 Minnesota at any campus or facility of the university, who is 72.27 required by the university to be and is licensed as a peace 72.28 officer by the Minnesota Peace Officer Standards and Training 72.29 Board under sections 626.84 to 626.863, and who has the full 72.30 power of arrest is a member of the public employees police and 72.31 fire retirement plan. 72.32 (b) A police officer employed by the University of 72.33 Minnesota who is required by the Board of Regents to contribute 72.34 to the University of Minnesota faculty retirement plan is not 72.35 eligible to be a member of the public employees police and fire 72.36 retirement plan. 73.1 Sec. 7. Minnesota Statutes 2004, section 354B.21, 73.2 subdivision 2, is amended to read: 73.3 Subd. 2. [COVERAGE; ELECTION.] (a)An eligible person is73.4entitled to elect coverage by the plan. If the eligible person73.5does not make a timely election of coverage by the plan, the73.6person has the coverage specified in subdivision 3.73.7(b)For eligible persons who were employed by the former 73.8 state university system or the former community college system 73.9 before May 1, 1995, the person has the retirement coverage that 73.10 the person had for employment immediately before May 1, 1995. 73.11(c)(b) For all other eligible persons,the election of73.12coverage must be made within 90 days of May 10, 1995, or 90 days73.13of receiving notice from the employer of the options available73.14under this section, whichever occurs laterunless otherwise 73.15 specified in this section, the eligible person is authorized to 73.16 elect prospective Teachers Retirement Association plan coverage 73.17 rather than coverage by the plan established by this chapter. 73.18 The election of prospective Teachers Retirement Association plan 73.19 coverage shall be made within one year of commencing eligible 73.20 Minnesota State Colleges and Universities system employment. If 73.21 an election is not made within the specified election period due 73.22 to a termination of Minnesota State Colleges and Universities 73.23 system employment, an election may be made within 90 days of 73.24 returning to eligible Minnesota State Colleges and Universities 73.25 system employment. All elections are irrevocable. Prior to 73.26 making an election the eligible person shall be covered by the 73.27 plan indicated as default coverage under subdivision 3. 73.28 (c) A purchase of service credit in the Teachers Retirement 73.29 Association plan for any period or periods of Minnesota State 73.30 Colleges and Universities system employment occurring prior to 73.31 the election under paragraph (b) is prohibited. 73.32 Sec. 8. Minnesota Statutes 2004, section 354B.21, 73.33 subdivision 3, is amended to read: 73.34 Subd. 3. [DEFAULT COVERAGE.] (a) Prior to making an 73.35 election under subdivision 2, or if an eligible person fails to 73.36 elect coverage by the plan under subdivision 2 or if the person 74.1 fails to make a timely election, the following retirement 74.2 coverage applies: 74.3 (1) for employees of the board who are employed in faculty 74.4 positions in the technical colleges, in the state universities 74.5 or in the community colleges, the retirement coverage is by the 74.6 plan established by this chapter; 74.7 (2) for employees of the board who are employed in faculty 74.8 positions in the technical colleges, the retirement coverage is 74.9 by the plan established by this chapter unless on June 30, 1997, 74.10 the employee was a member of the Teachers Retirement Association 74.11 established under chapter 354 and then the retirement coverage 74.12 is by the Teachers Retirement Association, or, unless the 74.13 employee was a member of a first class city teacher retirement 74.14 fund established under chapter 354A on June 30, 1995, and then 74.15 the retirement coverage is by the Duluth Teachers Retirement 74.16 Fund Association if the person was a member of that plan on June 74.17 30, 1995, or the Minneapolis Teachers Retirement Fund 74.18 Association if the person was a member of that plan on June 30, 74.19 1995, or the St. Paul Teachers Retirement Fund Association if 74.20 the person was a member of that plan on June 30, 1995; and 74.21 (3) for employees of the board who are employed in eligible 74.22 unclassified administrative positions, the retirement coverage 74.23 is by the plan established by this chapter. 74.24 (b) If an employee fails to correctly certify prior 74.25 membership in the Teachers Retirement Association to the 74.26 Minnesota State colleges and Universities system, the system 74.27 shall not pay interest on employee contributions, employer 74.28 contributions, and additional employer contributions to the 74.29 Teachers Retirement Association under section 354.52, 74.30 subdivision 4. 74.31 Sec. 9. [EFFECTIVE DATE.] 74.32 (a) Sections 1, 3, 5, and 6 are effective July 1, 2005. 74.33 (b) Sections 2 and 4 are effective retroactively from 74.34 January 1, 2005. 74.35 (c) Sections 7 and 8 are effective on the day following 74.36 final enactment. 75.1 ARTICLE 6 75.2 RETIREMENT CONTRIBUTIONS 75.3 Section 1. Minnesota Statutes 2004, section 353.28, 75.4 subdivision 5, is amended to read: 75.5 Subd. 5. [INTERESTCHARGESCHARGEABLE ON AMOUNTS DUE.] Any 75.6 amount due under this section or section 353.27, subdivision 4, 75.7 is payable with interest at an annual compound rate of 8.5 75.8 percentcompounded annuallyfrom the date due until the date 75.9 payment is received by the association, with a minimum interest 75.10 charge of $10.Interest for past due payments of excess police75.11state aid under section 69.031, subdivision 5, must be charged75.12at an annual rate of 8.5 percent compounded annually.75.13 Sec. 2. Minnesota Statutes 2004, section 353.28, 75.14 subdivision 6, is amended to read: 75.15 Subd. 6. [FAILURE TO PAYCOLLECTION OF UNPAID AMOUNTS.] (a) 75.16 Ifthea governmental subdivision which receives the direct 75.17 proceeds of property taxation fails to payamountsan amount due 75.18 underchapterschapter 353, 353A, 353B, 353C,andor 353Dor75.19fails to make payments of excess police state aid to the public75.20employees police and fire fund under section 69.031, subdivision75.215, the executive director shall certifythose amountsthe amount 75.22 to the governmental subdivision for payment. If the 75.23 governmental subdivision fails to remit the sum so due in a 75.24 timely fashion, the executive director shall certifyamountsthe 75.25 amount to the applicable county auditor for collection. The 75.26 county auditor shall collectsuch amountsthe amount out of the 75.27 revenue of the governmental subdivision, or shall addthemthe 75.28 amount to the levy of the governmental subdivision and make 75.29 payment directly to the association. This taxshallmust be 75.30 levied, collected, and apportioned in the manner that other 75.31 taxes are levied, collected, and apportioned. 75.32 (b) If a governmental subdivision which is not funded 75.33 directly from the proceeds of property taxation fails to pay an 75.34 amount due under this chapter, the executive director shall 75.35 certify the amount to the governmental subdivision for payment. 75.36 If the governmental subdivision fails to pay the amount for a 76.1 period of 60 days after certification, the executive director 76.2 shall certify the amount to the commissioner of finance, who 76.3 shall deduct the amount from any subsequent state-aid payment or 76.4 state appropriation amount applicable to the governmental 76.5 subdivision. 76.6 Sec. 3. [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; INTEREST 76.7 ON SERVICE CREDIT PURCHASE PAYMENT RETURN.] 76.8 If a former employee of the Minneapolis Community 76.9 Development Agency made a prior service credit purchase payment 76.10 under Minnesota Statutes 2002, section 356.55, in an amount that 76.11 is greater than the actually required payment amount because of 76.12 the use of an inaccurate salary figure or other similar 76.13 reporting or clerical error, the general employees retirement 76.14 plan of the Public Employees Retirement Association may pay 76.15 interest on the overage amount at an annual compound rate of six 76.16 percent per year. 76.17 Sec. 4. [RETURN OF PRIOR SERVICE CREDIT PURCHASE PAYMENT 76.18 FOR CERTAIN MINNEAPOLIS CITY EMPLOYEES.] 76.19 (a) An eligible person, upon written application, may 76.20 receive a return of a prior service credit purchase payment 76.21 under Minnesota Statutes 2002, section 356.55, plus interest on 76.22 the amount at an annual compound rate of six percent per year. 76.23 The return amount and interest must be made in an 76.24 institution-to-institution transfer to a federal tax qualified 76.25 retirement plan or account and may not be paid directly to an 76.26 individual. 76.27 (b) An eligible person is a person who was an employee of 76.28 the Minneapolis Community Development Agency and made a payment 76.29 for the purchase of prior service credit under Laws 2003, 76.30 chapter 127, article 12, section 31, subdivision 4, and 76.31 Minnesota Statutes 2002, section 356.55, in an erroneous amount 76.32 because of an inaccurate salary figure supplied by the employing 76.33 agency. 76.34 Sec. 5. [EFFECTIVE DATE.] 76.35 (a) Sections 1 and 2 are effective July 1, 2005. 76.36 (b) Sections 3 and 4 are effective on the day following 77.1 final enactment. 77.2 (c) Section 4 expires on June 30, 2005. 77.3 ARTICLE 7 77.4 PENSION BENEFITS UPON PRIVATIZATION 77.5 Section 1. Minnesota Statutes 2004, section 353F.02, 77.6 subdivision 4, is amended to read: 77.7 Subd. 4. [MEDICAL FACILITY.] "Medical facility" means: 77.8 (1) Bridges Medical Services; 77.9 (2) the Fair Oaks Lodge, Wadena; 77.10(2)(3) the Glencoe Area Health Center; 77.11(3)(4) the Hutchinson Area Health Care; 77.12 (5) the Kanabec Hospital; 77.13(4)(6) the Luverne Public Hospital; 77.14 (7) the Northfield Hospital; 77.15(5)(8) the RenVilla Nursing Home; 77.16(6)(9) the Renville County Hospital in Olivia; 77.17(7)(10) the St. Peter Community Healthcare Center; and 77.18(8)(11) the Waconia-Ridgeview Medical Center. 77.19 Sec. 2. Minnesota Statutes 2004, section 471A.10, is 77.20 amended to read: 77.21 471A.10 [PUBLIC EMPLOYEE LAWS; SALE OR LEASE OF EXISTING 77.22 FACILITY.] 77.23 (a) Unless expressly provided therein, and except as 77.24 provided in this section, no state law, charter provision, or 77.25 ordinance of a municipality relating to public employees shall 77.26 apply to a person solely by reason of that person's employment 77.27 by a private vendor in connection with services rendered under a 77.28 service contract. 77.29 (b) A private vendor purchasing or leasing existing related 77.30 facilities from a municipality or operating or maintaining the 77.31 facility shall recognize all exclusive bargaining 77.32 representatives and existing labor agreements and those 77.33 agreements shall remain in force until they expire by their 77.34 terms. Personswho are notwho were employed by a municipality 77.35 in a related facilityat the time ofand who were members of the 77.36 Public Employees Retirement Association general plan due to that 78.1 employment are not permitted to remain as active members of the 78.2 plan following a lease or purchase of the facility bythea 78.3 private vendorare not "public employees" within the meaning of78.4the Public Employees Retirement Act, chapter 353. Persons78.5employed by a municipality in a related facility at the time of78.6a lease or purchase of the facility by a private vendor shall78.7continue to be considered to be "public employees" within the78.8meaning of the Public Employees Retirement Act, chapter 353, but78.9may elect to terminate their participation in the Public78.10Employees Retirement Association as provided in this section.78.11Each such employee may exercise the election annually on the78.12anniversary of the person's initial employment by the78.13municipality. An employee electing to terminate participation78.14in the association is entitled to benefits that the employee78.15would be entitled to if terminating public employment and may78.16participate in a retirement program established by the private78.17vendor. 78.18 Sec. 3. Laws 2004, chapter 267, article 12, section 4, is 78.19 amended to read: 78.20 Sec. 4. [EFFECTIVE DATE.] 78.21 (a) Section 1, relating to the Fair Oaks Lodge, Wadena, is 78.22 effective upon the latter of: 78.23 (1) the day after the governing body of Todd County and its 78.24 chief clerical officer timely complete their compliance with 78.25 Minnesota Statutes, section 645.021, subdivisions 2 and 3; and 78.26 (2) the day after the governing body of Wadena County and 78.27 its chief clerical officer timely complete their compliance with 78.28 Minnesota Statutes, section 645.021, subdivisions 2 and 3. 78.29 (b) Section 1, relating to the RenVilla Nursing Home, is 78.30 effective upon the latter of: 78.31 (1) the day after the governing body of the city of 78.32 Renville and its chief clerical officer timely complete their 78.33 compliance with Minnesota Statutes, section 645.021, 78.34 subdivisions 2 and 3, except that the certificate of approval 78.35 must be filed before January 1, 2006; and 78.36 (2) the first day of the month next following certification 79.1 to the governing body of the city of Renville by the executive 79.2 director of the Public Employees Retirement Association that the 79.3 actuarial accrued liability of the special benefit coverage 79.4 proposed for extension to the privatized RenVilla Nursing Home 79.5 employees under section 1 does not exceed the actuarial gain 79.6 otherwise to be accrued by the Public Employees Retirement 79.7 Association, as calculated by the consulting actuary retained by 79.8 the Legislative Commission on Pensions and Retirement, or the 79.9 actuary retained under Minnesota Statutes, section 356.214, 79.10 whichever is applicable. 79.11 (c) The cost of the actuarial calculations must be borne by 79.12 the city of Renville or the purchaser of the RenVilla Nursing 79.13 Home. 79.14 (d) Section 1, relating to the St. Peter Community 79.15 Healthcare Center, is effective upon the latter of: 79.16 (1) the day after the governing body of the city of St. 79.17 Peter and its chief clerical officer timely complete their 79.18 compliance with Minnesota Statutes, section 645.021, 79.19 subdivisions 2 and 3; and 79.20 (2) the first day of the month next following certification 79.21 to the governing body of the city of St. Peter by the executive 79.22 director of the Public Employees Retirement Association that the 79.23 actuarial accrued liability of the special benefit coverage 79.24 proposed for extension to the privatized St. Peter Community 79.25 Healthcare Center employees under section 1 does not exceed the 79.26 actuarial gain otherwise to be accrued by the Public Employees 79.27 Retirement Association, as calculated by the consulting actuary 79.28 retained by the Legislative Commission on Pensions and 79.29 Retirement, or the actuary retained under Minnesota Statutes, 79.30 section 356.214, whichever is applicable. 79.31 (e) The cost of the actuarial calculations must be borne by 79.32 the city of St. Peter or the purchaser of the St. Peter 79.33 Community Healthcare Center. 79.34 (f) If the required actions under paragraphs (b) and (c) 79.35 occur, section 1 applies retroactively to the RenVilla Nursing 79.36 Home as of the date of privatization. 80.1 (g) If the required actions under paragraph (a) occur, 80.2 section 1 applies retroactively to Fair Oaks Lodge, Wadena, as 80.3 of January 1, 2004. 80.4 (h) Sections 2 and 3 are effective on the day following 80.5 final enactment. 80.6 Sec. 4. [EFFECTIVE DATE.] 80.7 (a) Section 1, relating to Bridges Medical Services, is 80.8 effective upon the later of: 80.9 (1) the day after the governing body of the city of Ada and 80.10 its chief clerical officer timely complete their compliance with 80.11 Minnesota Statutes, section 645.021, subdivisions 2 and 3; and 80.12 (2) the first day of the month next following certification 80.13 to the governing body of the city of Ada by the executive 80.14 director of the Public Employees Retirement Association that the 80.15 actuarial accrued liability of the special benefit coverage 80.16 proposed for extension to the privatized Bridges Medical 80.17 Services employees under section 1 does not exceed the actuarial 80.18 gain otherwise to be accrued by the Public Employees Retirement 80.19 Association, as calculated by the consulting actuary retained 80.20 under Minnesota Statutes, section 356.214. 80.21 (b) Section 1, relating to the Hutchinson Area Health Care, 80.22 is effective upon the later of: 80.23 (1) the day after the governing body of the city of 80.24 Hutchinson and its chief clerical officer timely complete their 80.25 compliance with Minnesota Statutes, section 645.021, 80.26 subdivisions 2 and 3; and 80.27 (2) the first day of the month next following certification 80.28 to the governing body of the city of Hutchinson by the executive 80.29 director of the Public Employees Retirement Association that the 80.30 actuarial accrued liability of the special benefit coverage 80.31 proposed for extension to the privatized Hutchinson Area Health 80.32 Care employees under section 1 does not exceed the actuarial 80.33 gain otherwise to be accrued by the Public Employees Retirement 80.34 Association, as calculated by the consulting actuary retained by 80.35 the Legislative Commission on Pensions and Retirement. 80.36 (c) Section 1, relating to the Northfield Hospital, is 81.1 effective upon the later of: 81.2 (1) the day after the governing body of the city of 81.3 Northfield and its chief clerical officer timely complete their 81.4 compliance with Minnesota Statutes, section 645.021, 81.5 subdivisions 2 and 3; and 81.6 (2) the first day of the month next following certification 81.7 to the governing body of the city of Northfield by the executive 81.8 director of the Public Employees Retirement Association that the 81.9 actuarial accrued liability of the special benefit coverage 81.10 proposed for extension to the privatized Northfield Hospital 81.11 employees under section 1 does not exceed the actuarial gain 81.12 otherwise to be accrued by the Public Employees Retirement 81.13 Association, as calculated by the consulting actuary retained by 81.14 the Legislative Commission on Pensions and Retirement. 81.15 (d) The cost of the actuarial calculations must be borne by 81.16 the facility, the city in which the facility is located, or the 81.17 purchaser of the facility. 81.18 (e) If the required actions in paragraphs (a), (b), or (c) 81.19 and (d) occur, section 1 applies retroactively to the date of 81.20 privatization. 81.21 (f) Section 3 is effective the day following final 81.22 enactment. 81.23 (g) Section 2 is effective on the day following final 81.24 enactment and applies to privatizations occurring on or after 81.25 the effective date. 81.26 ARTICLE 8 81.27 FIRST CLASS CITY TEACHER 81.28 RETIREMENT FUND ASSOCIATIONS 81.29 Section 1. Minnesota Statutes 2004, section 354A.021, is 81.30 amended by adding a subdivision to read: 81.31 Subd. 9. [UPDATED ARTICLES OF INCORPORATION AND BYLAWS; 81.32 FILING.] (a) On or before July 1, 2006, and within six months of 81.33 the date of the approval of any amendment to the articles of 81.34 incorporation or bylaws, the chief administrative officer of 81.35 each first class city teacher retirement fund association shall 81.36 prepare and publish an updated compilation of the articles of 82.1 incorporation and the bylaws of the association. 82.2 (b) The chief administrative officer of the first class 82.3 city teacher retirement fund association must certify the 82.4 accuracy and the completeness of the compilation. 82.5 (c) The compilation of the articles of incorporation and 82.6 bylaws of a first class city teacher retirement fund association 82.7 must contain an index. 82.8 (d) The compilation must be made available to association 82.9 members and other interested parties. The association may 82.10 charge a fee for a copy that reflects the price of printing or 82.11 otherwise producing the copy. Two copies of the compilation 82.12 must be filed, without charge, by each retirement fund 82.13 association with the Legislation Commission on Pensions and 82.14 Retirement, the Legislative Reference Library, the state 82.15 auditor, the commissioner of education, the chancellor of the 82.16 Minnesota State Colleges and Universities system, and the 82.17 superintendent of the applicable school district. 82.18 (e) A first class city teacher retirement fund association 82.19 may contract with the revisor of statutes for the preparation of 82.20 the compilation. 82.21 (f) If a first class city teacher retirement fund 82.22 association makes an updated copy of its articles of 82.23 incorporation and bylaws available on its Web site, the 82.24 retirement fund association is not obligated to file a hard copy 82.25 of the documents under paragraph (d) for the applicable filing 82.26 period. 82.27 Sec. 2. [EFFECTIVE DATE.] 82.28 Section 1 is effective July 1, 2005. 82.29 ARTICLE 9 82.30 MINNESOTA STATE COLLEGES AND UNIVERSITIES 82.31 INDIVIDUAL RETIREMENT ACCOUNT PLAN CHANGES 82.32 Section 1. Minnesota Statutes 2004, section 354B.25, 82.33 subdivision 2, is amended to read: 82.34 Subd. 2. [INVESTMENT OPTIONS.] (a) The plan administrator 82.35 shall arrange for the purchase of investment products. 82.36 (b) The investment products must be purchased with 83.1 contributions under section 354B.23 or with money or assets 83.2 otherwise provided by law by authority of the board. 83.3 (c) Various investment accounts offered through the 83.4 Minnesota supplemental investment fund established under section 83.5 11A.17 and administered by the State Board of Investmentis one83.6of themay be included as investment products for the individual 83.7 retirement account plan. Direct access must also be provided to 83.8 lower expense and no-load mutual funds, as those terms are 83.9 defined by the federal Securities and Exchange Commission, 83.10 including stock funds, bond funds, and balanced funds. Other 83.11 investment products or combination of investment products which 83.12 may be included are: 83.13 (1) savings accounts at federally insured financial 83.14 institutions; 83.15 (2) life insurance contracts, fixed and variable annuity 83.16 contracts from companies that are subject to regulation by the 83.17 commerce commissioner; 83.18 (3) investment options from open-ended investment companies 83.19 registered under the federal Investment Company Act of 1940, 83.20 United States Code, title 15, sections 80a-1 to 80a-64; 83.21 (4) investment options from a firm that is a registered 83.22 investment advisor under the federal Investment Advisers Act of 83.23 1940, United States Code, title 15, sections 80b-1 to 80b-21; 83.24 and 83.25 (5) investment options of a bank as defined in United 83.26 States Code, title 15, section 80b-2, subsection (a), paragraph 83.27 2, or a bank holding company as defined in the Bank Holding 83.28 Company Act of 1956, United States Code, title 12, section 1841, 83.29 subsection (a), paragraph (1). 83.30 Sec. 2. [EFFECTIVE DATE.] 83.31 Section 1 is effective the day following final enactment. 83.32 ARTICLE 10 83.33 SUPPLEMENTAL RETIREMENT PLANS 83.34 Section 1. Minnesota Statutes 2004, section 356.24, 83.35 subdivision 1, is amended to read: 83.36 Subdivision 1. [RESTRICTION; EXCEPTIONS.] It is unlawful 84.1 for a school district or other governmental subdivision or state 84.2 agency to levy taxes for, or to contribute public funds to a 84.3 supplemental pension or deferred compensation plan that is 84.4 established, maintained, and operated in addition to a primary 84.5 pension program for the benefit of the governmental subdivision 84.6 employees other than: 84.7 (1) to a supplemental pension plan that was established, 84.8 maintained, and operated before May 6, 1971; 84.9 (2) to a plan that provides solely for group health, 84.10 hospital, disability, or death benefits; 84.11 (3) to the individual retirement account plan established 84.12 by chapter 354B; 84.13 (4) to a plan that provides solely for severance pay under 84.14 section 465.72 to a retiring or terminating employee; 84.15 (5) for employees other than personnel employed by the 84.16 Board of Trustees of the Minnesota State Colleges and 84.17 Universities and covered under the Higher Education Supplemental 84.18 Retirement Plan under chapter 354C, if the supplemental plan 84.19 coverage is provided for in a personnel policy of the public 84.20 employer or in the collective bargaining agreement between the 84.21 public employer and the exclusive representative of public 84.22 employees in an appropriate unit, in an amount matching employee 84.23 contributions on a dollar for dollar basis, but not to exceed an 84.24 employer contribution of $2,000 a year per employee; 84.25 (i) to the state of Minnesota deferred compensation plan 84.26 under section 352.96; or 84.27 (ii) in payment of the applicable portion of the 84.28 contribution made to any investment eligible under section 84.29 403(b) of the Internal Revenue Code, if the employing unit has 84.30 complied with any applicable pension plan provisions of the 84.31 Internal Revenue Code with respect to the tax-sheltered annuity 84.32 program during the preceding calendar year; 84.33 (6) for personnel employed by the Board of Trustees of the 84.34 Minnesota State Colleges and Universities and not covered by 84.35 clause (5), to the supplemental retirement plan under chapter 84.36 354C, if the supplemental plan coverage is provided for in a 85.1 personnel policy or in the collective bargaining agreement of 85.2 the public employer with the exclusive representative of the 85.3 covered employees in an appropriate unit, in an amount matching 85.4 employee contributions on a dollar for dollar basis, but not to 85.5 exceed an employer contribution of $2,700 a year for each 85.6 employee; 85.7 (7) to a supplemental plan or to a governmental trust to 85.8 save for postretirement health care expenses qualified for 85.9 tax-preferred treatment under the Internal Revenue Code, if the 85.10 supplemental plan coverage is provided for in a personnel policy 85.11 or in the collective bargaining agreement of a public employer 85.12 with the exclusive representative of the covered employees in an 85.13 appropriate unit; 85.14 (8) to the laborer's national industrial pension fund or to 85.15 a laborer's local pension fund for the employees of a 85.16 governmental subdivision who are covered by a collective 85.17 bargaining agreement that provides for coverage by that fund and 85.18 that sets forth a fund contribution rate, but not to exceed an 85.19 employer contribution of$2,000$5,000 per year per employee; 85.20 (9) to the plumbers' and pipefitters' national pension fund 85.21 or to a plumbers' and pipefitters' local pension fund for the 85.22 employees of a governmental subdivision who are covered by a 85.23 collective bargaining agreement that provides for coverage by 85.24 that fund and that sets forth a fund contribution rate, but not 85.25 to exceed an employer contribution of$2,000$5,000 per year per 85.26 employee; 85.27 (10) to the international union of operating engineers 85.28 pension fund for the employees of a governmental subdivision who 85.29 are covered by a collective bargaining agreement that provides 85.30 for coverage by that fund and that sets forth a fund 85.31 contribution rate, but not to exceed an employer contribution of 85.32$2,000$5,000 per year per employee; or 85.33 (11) to a supplemental plan organized and operated under 85.34 the federal Internal Revenue Code, as amended, that is wholly 85.35 and solely funded by the employee's accumulated sick leave, 85.36 accumulated vacation leave, and accumulated severance pay at the 86.1 date of retirement or the termination of active employment. 86.2 Sec. 2. [EFFECTIVE DATE.] 86.3 Section 1 is effective the day following final enactment. 86.4 ARTICLE 11 86.5 VOLUNTEER FIREFIGHTER RELIEF 86.6 ASSOCIATION CHANGES 86.7 Section 1. Minnesota Statutes 2004, section 69.051, 86.8 subdivision 1, is amended to read: 86.9 Subdivision 1. [FINANCIAL REPORT AND AUDIT.] The board of 86.10 each salaried firefighters relief association, police relief 86.11 association, and volunteer firefighters relief association as 86.12 defined in section 424A.001, subdivision 4, with assets of at 86.13 least $200,000 or liabilities of at least $200,000 in the prior 86.14 year or in any previous year, according to themost recent86.15 applicable actuarial valuation or financial report if no 86.16 valuation is required, shall: 86.17 (1) prepare a financial report covering the special and 86.18 general funds of the relief association for the preceding fiscal 86.19 year on a form prescribed by the state auditor. The financial 86.20 reportshallmust contain financial statements and disclosures 86.21 which present the true financial condition of the relief 86.22 association and the results of relief association operations in 86.23 conformity with generally accepted accounting principles and in 86.24 compliance with the regulatory, financing and funding provisions 86.25 of this chapter and any other applicable laws. The financial 86.26 reportshallmust be countersigned by the municipal clerk or 86.27 clerk-treasurer of the municipality in which the relief 86.28 association is located if the relief association is a 86.29 firefighters relief association which is directly associated 86.30 with a municipal fire department or is a police relief 86.31 association, or countersigned by the secretary of the 86.32 independent nonprofit firefighting corporation and by the 86.33 municipal clerk or clerk-treasurer of the largest municipality 86.34 in population which contracts with the independent nonprofit 86.35 firefighting corporation if the volunteer firefighter relief 86.36 association is a subsidiary of an independent nonprofit 87.1 firefighting corporation; 87.2 (2) file the financial report in its office for public 87.3 inspection and present it to the city council after the close of 87.4 the fiscal year. One copy of the financial reportshallmust be 87.5 furnished to the state auditor after the close of the fiscal 87.6 year; and 87.7 (3) submit to the state auditor audited financial 87.8 statements which have been attested to by a certified public 87.9 accountant, public accountant, or the state auditor within 180 87.10 days after the close of the fiscal year. The state auditor may 87.11 accept this report in lieu of the report required in clause (2). 87.12 Sec. 2. Minnesota Statutes 2004, section 69.051, 87.13 subdivision 1a, is amended to read: 87.14 Subd. 1a. [FINANCIAL STATEMENT.] (a) The board of each 87.15 volunteer firefighters relief association, as defined in section 87.16 424A.001, subdivision 4,with assets of less than $200,000 and87.17liabilities less than $200,000, according to the most recent87.18financial report, shallthat is not required to file a financial 87.19 report and audit under subdivision 1 must prepare a detailed 87.20 statement of the financial affairs for the preceding fiscal year 87.21 of the relief association's special and general funds in the 87.22 style and form prescribed by the state auditor. The detailed 87.23 statement must show the sources and amounts of all money 87.24 received; all disbursements, accounts payable and accounts 87.25 receivable; the amount of money remaining in the treasury; total 87.26 assets including a listing of all investments; the accrued 87.27 liabilities; and all items necessary to show accurately the 87.28 revenues and expenditures and financial position of the relief 87.29 association. 87.30 (b) The detailed financial statement required under 87.31 paragraph (a) must be certified by an independent public 87.32 accountant or auditor or by the auditor or accountant who 87.33 regularly examines or audits the financial transactions of the 87.34 municipality. In addition to certifying the financial condition 87.35 of the special and general funds of the relief association, the 87.36 accountant or auditor conducting the examination shall give an 88.1 opinion as to the condition of the special and general funds of 88.2 the relief association, and shall comment upon any exceptions to 88.3 the report. The independent accountant or auditorshallmust 88.4 have at least five years of public accounting, auditing, or 88.5 similar experience, andshallmust not be an active, inactive, 88.6 or retired member of the relief association or the fire or 88.7 police department. 88.8 (c) The detailed statement required under paragraph (a) 88.9 must be countersigned by the municipal clerk or clerk-treasurer 88.10 of the municipality, or, where applicable, by the secretary of 88.11 the independent nonprofit firefighting corporation and by the 88.12 municipal clerk or clerk-treasurer of the largest municipality 88.13 in population which contracts with the independent nonprofit 88.14 firefighting corporation if the relief association is a 88.15 subsidiary of an independent nonprofit firefighting corporation. 88.16 (d) The volunteer firefighters' relief association board 88.17 must file the detailed statement required under paragraph (a) in 88.18 the relief association office for public inspection and present 88.19 it to the city council within 45 days after the close of the 88.20 fiscal year, and must submit a copy of the detailed statement to 88.21 the state auditor within 90 days of the close of the fiscal year. 88.22 Sec. 3. Minnesota Statutes 2004, section 69.771, is 88.23 amended to read: 88.24 69.771 [VOLUNTEER FIREFIGHTERS' RELIEF ASSOCIATION 88.25 FINANCING GUIDELINES ACT; APPLICATION.] 88.26 Subdivision 1. [COVERED RELIEF ASSOCIATIONS.] The 88.27 applicable provisions of sections 69.771 to 69.776shallapply 88.28 to any firefighters' relief association other than a relief 88.29 association enumerated in section 69.77, subdivision 1a, which 88.30 is organized under any laws of this state, which is composed of 88.31 volunteer firefighters or is composed partially of volunteer 88.32 firefighters and partially of salaried firefighters with 88.33 retirement coverage provided by the public employees police and 88.34 fire fund and which, in either case, operates subject to the 88.35 service pension minimum requirements for entitlement and 88.36 maximums contained in section 424A.02, or subject to a special 89.1 law modifying those requirements or maximums. 89.2 Subd. 2. [AUTHORIZED EMPLOYER SUPPORT FOR A RELIEF 89.3 ASSOCIATION.] Notwithstanding any law to the contrary, a 89.4 municipality may lawfully contribute public funds, including the 89.5 transfer of any applicable fire state aid, or may levy property 89.6 taxes for the support of a firefighters' relief association 89.7 specified in subdivision 1, however organized, which provides 89.8 retirement coverage or pays a service pension to retired 89.9 firefighter or a retirement benefit to a disabled firefighter or 89.10 a surviving dependent of either an active or retired firefighter 89.11 for the operation and maintenance of the relief association only 89.12 if the municipality and the relief association both comply with 89.13 the applicable provisions of sections 69.771 to 69.776. 89.14 Subd. 3. [REMEDY FOR NONCOMPLIANCE; DETERMINATION.] 89.15Any(a) A municipality in which there exists a firefighters' 89.16 relief association as specified in subdivision 1 which does not 89.17 comply with the applicable provisions of sections 69.771 to 89.18 69.776 or the provisions of any applicable special law relating 89.19 to the funding or financing of the associationshalldoes not 89.20 qualify initially to receive,or beand is not entitled 89.21 subsequently to retain, fire state aidpursuant tounder 89.22 sections 69.011 to 69.051 until the reason for the 89.23 disqualification specified by the state auditor is remedied, 89.24 whereupon the municipality or relief association, if otherwise 89.25 qualified,shall beis entitled to again receive fire state aid 89.26 for the year occurring immediately subsequent to the year in 89.27 which the disqualification is remedied. 89.28 (b) The state auditor shall determine if a municipality to 89.29 which a firefighters' relief association is directly associated 89.30 or a firefighters' relief association fails to comply with the 89.31 provisions of sections 69.771 to 69.776 or the funding or 89.32 financing provisions of any applicable special law based upon 89.33 the information contained in the annual financial report of the 89.34 firefighters' relief association requiredpursuant tounder 89.35 section 69.051., the actuarial valuation of the relief 89.36 association, if applicable, the relief association officers' 90.1 financial requirements of the relief association and minimum 90.2 municipal obligation determination documentation under section 90.3 69.772, subdivisions 3 and 4; 69.773, subdivisions 4 and 5; or 90.4 69.774, subdivision 2, if requested to be filed by the state 90.5 auditor, the applicable municipal or nonprofit firefighting 90.6 corporation budget, if requested to be filed by the state 90.7 auditor, and any other relevant documents or reports obtained by 90.8 the state auditor. 90.9 (c) The municipality or nonprofit firefighting corporation 90.10 and the associated relief association are not eligible to 90.11 receive or to retain fire state aid if: 90.12 (1) the relief association fails to prepare or to file the 90.13 financial report or financial statement under section 69.051; 90.14 (2) the relief association treasurer is not bonded in the 90.15 manner and in the amount required by section 69.051, subdivision 90.16 2; 90.17 (3) the relief association officers fail to determine or 90.18 improperly determine the accrued liability and the annual 90.19 accruing liability of the relief association under section 90.20 69.772, subdivisions 2, 2a, and 3, paragraph (c), clause (2), if 90.21 applicable; 90.22 (4) if applicable, the relief association officers fail to 90.23 obtain and file a required actuarial valuation or the officers 90.24 file an actuarial valuation that does not contain the special 90.25 fund actuarial liability calculated under the entry age normal 90.26 actuarial cost method, the special fund current assets, the 90.27 special fund unfunded actuarial accrued liability, the special 90.28 fund normal cost under the entry age normal actuarial cost 90.29 method, the amortization requirement for the special fund 90.30 unfunded actuarial accrued liability by the applicable target 90.31 date, a summary of the applicable benefit plan, a summary of the 90.32 membership of the relief association, a summary of the actuarial 90.33 assumptions used in preparing the valuation, and a signed 90.34 statement by the actuary attesting to its results and certifying 90.35 to the qualifications of the actuary as an approved actuary 90.36 under section 356.215, subdivision 1, paragraph (c); 91.1 (5) the municipality failed to provide a municipal 91.2 contribution, or the nonprofit firefighting corporation failed 91.3 to provide a corporate contribution, in the amount equal to the 91.4 minimum municipal obligation if the relief association is 91.5 governed under section 69.772, or the amount necessary, when 91.6 added to the fire state aid actually received in the plan year 91.7 in question, to at least equal in total the calculated annual 91.8 financial requirements of the special fund of the relief 91.9 association if the relief association is governed under section 91.10 69.773, and, if the municipal or corporate contribution is 91.11 deficient, the municipality failed to include the minimum 91.12 municipal obligation certified under section 69.772, subdivision 91.13 3, or 69.773, subdivision 5, in its budget and tax levy or the 91.14 nonprofit firefighting corporation failed to include the minimum 91.15 corporate obligation certified under section 69.774, subdivision 91.16 2, in the corporate budget; 91.17 (6) the relief association did not receive municipal 91.18 ratification for the most recent plan amendment when municipal 91.19 ratification was required under section 69.772, subdivision 6; 91.20 69.773, subdivision 6; or 424A.02, subdivision 10; 91.21 (7) the relief association invested special fund assets in 91.22 an investment security that is not authorized under section 91.23 69.775; 91.24 (8) the relief association had an administrative expense 91.25 that is not authorized under section 69.80 or 424A.05, 91.26 subdivision 3, or the municipality had an expenditure that is 91.27 not authorized under section 424A.08; 91.28 (9) the relief association officers fail to provide a 91.29 complete and accurate public pension plan investment portfolio 91.30 and performance disclosure under section 356.219; 91.31 (10) the relief association fails to obtain the 91.32 acknowledgment from a broker of the statement of investment 91.33 restrictions under section 356A.06, subdivision 8b; 91.34 (11) the relief association officers permitted to occur a 91.35 prohibited transaction under section 356A.06, subdivision 9, or 91.36 424A.001, subdivision 7, or failed to undertake correction of a 92.1 prohibited transaction that did occur; or 92.2 (12) the relief association pays a defined benefit service 92.3 pension in an amount that is in excess of the applicable service 92.4 pension maximum under section 424A.02, subdivision 3. 92.5 Sec. 4. Minnesota Statutes 2004, section 69.772, 92.6 subdivision 3, is amended to read: 92.7 Subd. 3. [FINANCIAL REQUIREMENTS OF RELIEF ASSOCIATION; 92.8 MINIMUM OBLIGATION OF MUNICIPALITY.] (a) During the month of 92.9 July, the officers of the relief association shall determine the 92.10 overall funding balance of the special fund for the current 92.11 calendar year, the financial requirements of the special fund 92.12 for the following calendar year and the minimum obligation of 92.13 the municipality with respect to the special fund for the 92.14 following calendar year in accordance with the requirements of 92.15 this subdivision. 92.16(1)(b) The overall funding balance of the special fund for 92.17 the current calendar yearshallmust be determined in the 92.18 following manner: 92.19(a)(1) The total accrued liability of the special fund for 92.20 all active and deferred members of the relief association as of 92.21 December 31 of the current yearshallmust be calculated 92.22pursuant tounder subdivisions 2 and 2a, if applicable. 92.23(b)(2) The total present assets of the special fund 92.24 projected to December 31 of the current year, including receipts 92.25 by and disbursements from the special fund anticipated to occur 92.26 on or before December 31shall, must be calculated. To the 92.27 extent possible, for those assets for which a market value is 92.28 readily ascertainable, the current market value as of the date 92.29 of the calculation for those assetsshallmust be utilized in 92.30 making this calculation. For any asset for which no market 92.31 value is readily ascertainable, the cost value or the book 92.32 value, whichever is applicable,shallmust be utilized in making 92.33 this calculation. 92.34(c)(3) The amount of the total present assets of the 92.35 special fund calculatedpursuant tounder clause(b) shall(2) 92.36 must be subtracted from the amount of the total accrued 93.1 liability of the special fund calculatedpursuant tounder 93.2 clause(a)(1). If the amount of total present assets exceeds 93.3 the amount of the total accrued liability, then the special fund 93.4shall beis considered to have a surplus over full funding. If 93.5 the amount of the total present assets is less than the amount 93.6 of the total accrued liability, then the special fundshall be93.7 is considered to have a deficit from full funding. If the 93.8 amount of total present assets is equal to the amount of the 93.9 total accrued liability, then the special fundshall beis 93.10 considered to be fully funded. 93.11(2)(c) The financial requirements of the special fund for 93.12 the following calendar yearshallmust be determined in the 93.13 following manner: 93.14(a)(1) The total accrued liability of the special fund for 93.15 all active and deferred members of the relief association as of 93.16 December 31 of the calendar year next following the current 93.17 calendar yearshallmust be calculatedpursuant tounder 93.18 subdivisions 2 and 2a, if applicable. 93.19(b)(2) The increase in the total accrued liability of the 93.20 special fund for the following calendar year over the total 93.21 accrued liability of the special fund for the current yearshall93.22 must be calculated. 93.23(c)(3) The amount of anticipated future administrative 93.24 expenses of the special fundshallmust be calculated by 93.25 multiplying the dollar amount of the administrative expenses of 93.26 the special fund for the most recent prior calendar year by the 93.27 factor of 1.035. 93.28(d)(4) If the special fund is fully funded, the financial 93.29requirementrequirements of the special fund for the following 93.30 calendar yearshall beare thefigure which represents the93.31increase in thetotalaccrued liabilityof thespecial fund as93.32 amounts calculatedpursuant to subclause (b)under clauses (2) 93.33 and (3). 93.34(e)(5) If the special fund has a deficit from full 93.35 funding, the financial requirements of the special fund for the 93.36 following calendar yearshall beare the financial requirements 94.1 of the special fund calculated as though the special fund were 94.2 fully fundedpursuant to subclause (d)under clause (4) plus an 94.3 amount equal to one-tenth of the original amount of the deficit 94.4 from full funding of the special fund as determinedpursuant to94.5this section for the calendar year 1971 until that deficit from94.6full funding is fully retired, and plus an amount equal to94.7one-tenth of the increase in the deficit from full funding of94.8the special fundunder clause (2) resulting either from an 94.9 increase in the amount of the service pensionaccruing after94.10December 31, 1971occurring in the last ten years or from a net 94.11 annual investment loss occurring during the last ten years until 94.12 each increase in the deficit from full funding is fully 94.13 retired. The annual amortization contribution under this clause 94.14 may not exceed the amount of the deficit from full funding. 94.15(f)(6) If the special fund has a surplus over full 94.16 funding, the financial requirements of the special fund for the 94.17 following calendar yearshall beare the financial requirements 94.18 of the special fund calculated as though the special fund were 94.19 fully fundedpursuant to subclause (d)under clause (4) reduced 94.20 by an amount equal to one-tenth of the amount of the surplus 94.21 over full funding of the special fund. 94.22(3)(d) The minimum obligation of the municipality with 94.23 respect to the special fundshall beis the financial 94.24 requirements of the special fund reduced by the amount of any 94.25 fire state aid payablepursuant tounder sections 69.011 to 94.26 69.051 reasonably anticipated to be received by the municipality 94.27 for transmittal to the special fund during the following 94.28 calendar year, an amount of interest on the assets of the 94.29 special fund projected to the beginning of the following 94.30 calendar year calculated at the rate of five percent per annum, 94.31 and the amount of anyanticipatedcontributions to the special 94.32 fund required by the relief association bylaws from the active 94.33 members of the relief association reasonably anticipated to be 94.34 received during the following calendar year. A reasonable 94.35 amount of anticipated fire state aid is an amount that does not 94.36 exceed the fire state aid actually received in the prior year 95.1 multiplied by the factor 1.035. 95.2 Sec. 5. Minnesota Statutes 2004, section 69.772, 95.3 subdivision 4, is amended to read: 95.4 Subd. 4. [CERTIFICATION OF FINANCIAL REQUIREMENTS AND 95.5 MINIMUM MUNICIPAL OBLIGATION; LEVY.] (a) The officers of the 95.6 relief association shall certify the financial requirements of 95.7 the special fund of the relief association and the minimum 95.8 obligation of the municipality with respect to the special fund 95.9 of the relief association as determinedpursuant tounder 95.10 subdivision 3 to the governing body of the municipality on or 95.11 before August 1 of each year. The financial requirements of the 95.12 relief association and the minimum municipal obligation must be 95.13 included in the financial report or financial statement under 95.14 section 69.051. 95.15 (b) The municipality shall provide for at least the minimum 95.16 obligation of the municipality with respect to the special fund 95.17 of the relief association by tax levy or from any other source 95.18 of public revenue. 95.19 (c) The municipality may levy taxes for the payment of the 95.20 minimum municipal obligation without any limitation as to rate 95.21 or amount and irrespective of any limitations imposed by other 95.22 provisions of law upon the rate or amount of taxation until the 95.23 balance of the special fund or any fund of the relief 95.24 association has attained a specified level. In addition, any 95.25 taxes leviedpursuant tounder this sectionshallmust not cause 95.26 the amount or rate of any other taxes levied in that year or to 95.27 be levied in a subsequent year by the municipality which are 95.28 subject to a limitation as to rate or amount to be reduced. 95.29 (d) If the municipality does not include the full amount of 95.30 the minimum municipal obligations in its levy for any year, the 95.31 officers of the relief association shall certify that amount to 95.32 the county auditor, who shall spread a levy in the amount of the 95.33 certified minimum municipal obligation on the taxable property 95.34 of the municipality. 95.35 (e) If the state auditor determines that a municipal 95.36 contribution actually made in a plan year was insufficient under 96.1 section 69.771, subdivision 3, paragraph (c), clause (5), the 96.2 state auditor may request a copy of the certifications under 96.3 this subdivision from the relief association or from the city. 96.4 The relief association or the city, whichever applies, must 96.5 provide the certifications within 14 days of the date of the 96.6 request from the state auditor. 96.7 Sec. 6. Minnesota Statutes 2004, section 69.773, 96.8 subdivision 4, is amended to read: 96.9 Subd. 4. [FINANCIAL REQUIREMENTS OF SPECIAL FUND.]Prior96.10to(a) On or before August 1 of each year, the officers of the 96.11 relief association shall determine the financial requirements of 96.12 the special fund of the relief association in accordance with 96.13 the requirements of this subdivision. 96.14 (b) The financial requirements of the relief 96.15 associationshallmust be based on the most recent actuarial 96.16 valuation of the special fund prepared in accordance with 96.17 subdivision 2. If the relief association has an unfunded 96.18 actuarial accrued liability as reported in the most recent 96.19 actuarial valuation, the financial requirementsshallmust be 96.20 determined by adding the figures calculatedpursuant tounder 96.21 paragraph (d), clauses(a)(1),(b)(2), and(c)(3). If 96.22 the relief association does not have an unfunded actuarial 96.23 accrued liability as reported in the most recent actuarial 96.24 valuation, the financial requirementsshallmust be an amount 96.25 equal to the figure calculatedpursuant tounder paragraph (d), 96.26 clauses(a)(1) and(b)(2), reduced by an amount equal to 96.27 one-tenth of the amount of any assets in excess of the actuarial 96.28 accrued liability of the relief association. 96.29 (c) The determination of whether or not the relief 96.30 association has an unfunded actuarial accrued liability 96.31shallmust be based on the current market value of assets for 96.32 which a market value is readily ascertainable and the cost or 96.33 book value, whichever is applicable, for assets for which no 96.34 market value is readily ascertainable. 96.35(a)(d) The components of the financial requirements of the 96.36 relief association are the following: 97.1 (1) The normal level cost requirement for the following 97.2 year, expressed as a dollar amount,shall beis the figure for 97.3 the normal level cost of the relief association as reported in 97.4 the actuarial valuation. 97.5(b)(2) The amount of anticipated future administrative 97.6 expenses of the special fundshallmust be calculated by 97.7 multiplying the dollar amount of the administrative expenses of 97.8 the special fund for the most recent prior calendar year by the 97.9 factor of 1.035. 97.10(c)(3) The amortization contribution requirement to retire 97.11 the current unfunded actuarial accrued liability by the 97.12 established date for full fundingshall beis the figure for the 97.13 amortization contribution as reported in the actuarial 97.14 valuation. If there has not been a change in the actuarial 97.15 assumptions used for calculating the actuarial accrued liability 97.16 of the special fund, a change in the bylaws of the relief 97.17 association governing the service pensions, retirement benefits, 97.18 or both, payable from the special fund, or a change in the 97.19 actuarial cost method used to value all or a portion of the 97.20 special fund which change or changes, which by themselves, 97.21 without inclusion of any other items of increase or decrease, 97.22 produce a net increase in the unfunded actuarial accrued 97.23 liability of the special fundsince December 31, 1970, the 97.24 established date for full fundingshall beis the December 31,97.251990occurring ten years later. If there has been a change in 97.26 the actuarial assumptions used for calculating the actuarial 97.27 accrued liability of the special fund, a change in the bylaws of 97.28 the relief association governing the service pensions, 97.29 retirement benefits, or both payable from the special fund or a 97.30 change in the actuarial cost method used to value all or a 97.31 portion of the special fund and the change or changes, by 97.32 themselves and without inclusion of any other items of increase 97.33 or decrease, produce a net increase in the unfunded actuarial 97.34 accrued liability of the special fundsince December 31, 1970,97.35but prior to January 1, 1979within the past 20 years, the 97.36 established date for full fundingshall be December 31, 1998,98.1and if there has been a change since December 31, 1978, the98.2established date for full funding shallmust be determined using 98.3 the following procedure: 98.4 (i) the unfunded actuarial accrued liability of the special 98.5 fund attributable to experience losses that have occurred since 98.6 the most recent prior actuarial valuation must be determined and 98.7 the level annual dollar contribution needed to amortize the 98.8 experience loss over a period of ten years ending on the 98.9 December 31 occurring ten years later must be calculated; 98.10 (ii) the unfunded actuarial accrued liability of the 98.11 special fundshallmust be determined in accordance with the 98.12 provisions governing service pensions, retirement benefits, and 98.13 actuarial assumptions in effect before an applicable change; 98.14(ii)(iii) the level annual dollar contribution needed to 98.15 amortize this unfunded actuarial accrued liability amount by the 98.16 date for full funding in effectprior tobefore the changeshall98.17 must be calculated using the interest assumption specified in 98.18 section 356.215, subdivision 8, in effect before any applicable 98.19 change; 98.20(iii)(iv) the unfunded actuarial accrued liability of the 98.21 special fundshallmust be determined in accordance with any new 98.22 provisions governing service pensions, retirement benefits, and 98.23 actuarial assumptions and the remaining provisions governing 98.24 service pensions, retirement benefits, and actuarial assumptions 98.25 in effect before an applicable change; 98.26(iv)(v) the level annual dollar contribution needed to 98.27 amortize the difference between the unfunded actuarial accrued 98.28 liability amount calculatedpursuant to subclause (i)under item 98.29 (ii) and the unfunded actuarial accrued liability amount 98.30 calculatedpursuant to subclause (iii)under item (iv) over a 98.31 period of 20 years starting December 31 of the year in which the 98.32 change is effectiveshallmust be calculated using the interest 98.33 assumption specified in section 356.215, subdivision 8, in 98.34 effect after any applicable change; 98.35(v)(vi) the annual amortization contribution calculated 98.36pursuant to subclause (iv) shallunder item (v) must be added to 99.1 the annual amortization contribution calculatedpursuant to99.2subclause (ii)under items (i) and (iii); 99.3(vi)(vii) the period in which the unfunded actuarial 99.4 accrued liability amount determined insubclause (iii)item (iv) 99.5 will be amortized by the total annual amortization contribution 99.6 computedpursuant to subclause (v) shallunder item (vi) must be 99.7 calculated using the interest assumption specified in section 99.8 356.215, subdivision 8, in effect after any applicable change, 99.9 rounded to the nearest integral number of years, but whichshall99.10 must not exceed a period of 20 years from the end of the year in 99.11 which the determination of the date for full funding using this 99.12 procedure is made and whichshallmust not be less than the 99.13 period of years beginning in the year in which the determination 99.14 of the date for full funding using this procedure is made and 99.15 ending by the date for full funding in effect before the change; 99.16(vii)(viii) the period determinedpursuant to subclause99.17(vi) shallunder item (vii) must be added to the date as of 99.18 which the actuarial valuation was prepared and the resulting 99.19 dateshall beis the new date for full funding. 99.20 Sec. 7. Minnesota Statutes 2004, section 69.773, 99.21 subdivision 5, is amended to read: 99.22 Subd. 5. [MINIMUM MUNICIPAL OBLIGATION.] (a) The officers 99.23 of the relief association shall determine the minimum obligation 99.24 of the municipality with respect to the special fund of the 99.25 relief association for the following calendar yearprior toon 99.26 or before August 1 of each year in accordance with the 99.27 requirements of this subdivision. 99.28 (b) The minimum obligation of the municipality with respect 99.29 to the special fundshall beis an amount equal to the financial 99.30 requirements of the special fund of the relief association 99.31 determinedpursuant tounder subdivision 4, reduced by the 99.32 estimated amount of any fire state aid payablepursuant tounder 99.33 sections 69.011 to 69.051 reasonably anticipated to be received 99.34 by the municipality for transmittal to the special fund of the 99.35 relief association during the following year and the amount of 99.36 any anticipated contributions to the special fund required by 100.1 the relief association bylaws from the active members of the 100.2 relief association reasonably anticipated to be received during 100.3 the following calendar year. A reasonable amount of anticipated 100.4 fire state aid is an amount that does not exceed the fire state 100.5 aid actually received in the prior year multiplied by the factor 100.6 1.035. 100.7 (c) The officers of the relief association shall certify 100.8 the financial requirements of the special fund of the relief 100.9 association and the minimum obligation of the municipality with 100.10 respect to the special fund of the relief association as 100.11 determinedpursuant tounder subdivision 4 and this subdivision 100.12 to the governing body of the municipality by August 1 of each 100.13 year. The financial requirements of the relief association and 100.14 the minimum municipal obligation must be included in the 100.15 financial report or financial statement under section 69.051. 100.16 (d) The municipality shall provide for at least the minimum 100.17 obligation of the municipality with respect to the special fund 100.18 of the relief association by tax levy or from any other source 100.19 of public revenue. The municipality may levy taxes for the 100.20 payment of the minimum municipal obligation without any 100.21 limitation as to rate or amount and irrespective of any 100.22 limitations imposed by other provisions of law or charter upon 100.23 the rate or amount of taxation until the balance of the special 100.24 fund or any fund of the relief association has attained a 100.25 specified level. In addition, any taxes leviedpursuant to100.26 under this sectionshallmust not cause the amount or rate of 100.27 any other taxes levied in that year or to be levied in a 100.28 subsequent year by the municipality which are subject to a 100.29 limitation as to rate or amount to be reduced. 100.30 (e) If the municipality does not include the full amount of 100.31 the minimum municipal obligation in its levy for any year, the 100.32 officers of the relief association shall certify that amount to 100.33 the county auditor, who shall spread a levy in the amount of the 100.34 minimum municipal obligation on the taxable property of the 100.35 municipality. 100.36 (f) If the state auditor determines that a municipal 101.1 contribution actually made in a plan year was insufficient under 101.2 section 69.771, subdivision 3, paragraph (c), clause (5), the 101.3 state auditor may request from the relief association or from 101.4 the city a copy of the certifications under this subdivision. 101.5 The relief association or the city, whichever applies, must 101.6 provide the certifications within 14 days of the date of the 101.7 request from the state auditor. 101.8 Sec. 8. Minnesota Statutes 2004, section 69.775, is 101.9 amended to read: 101.10 69.775 [INVESTMENTS.] 101.11 (a) The special fund assets ofthea reliefassociations101.12 association governed by sections 69.771 to 69.776 must be 101.13 invested in securities that are authorized investments under 101.14 section 356A.06, subdivision 6 or 7. 101.15 (b) Notwithstanding the foregoing, up to 75 percent of the 101.16 market value of the assets of the special fund, not including 101.17 any money market mutual funds, may be invested in open-end 101.18 investment companies registered under the federal Investment 101.19 Company Act of 1940, if the portfolio investments of the 101.20 investment companies comply with the type of securities 101.21 authorized for investment under section 356A.06, subdivision 7. 101.22 (c) Securities held by the associations before June 2, 101.23 1989, that do not meet the requirements of this section may be 101.24 retained after that date if they were proper investments for the 101.25 association on that date. 101.26 (d) The governing board of the association may select and 101.27 appoint investment agencies to act for and in its behalf or may 101.28 certify special fund assets for investment by the State Board of 101.29 Investment under section 11A.17. 101.30 (e) The governing board of the association may certify 101.31 general fund assets of the relief association for investment by 101.32 the State Board of Investment in fixed income pools or in a 101.33 separately managed account at the discretion of the State Board 101.34 of Investment as provided in section 11A.14. 101.35 (f) The governing board of the association may select and 101.36 appoint a qualified private firm to measure management 102.1 performance and return on investment, and the firm shall use the 102.2 formula or formulas developed by the state board under section 102.3 11A.04, clause (11). 102.4 Sec. 9. Minnesota Statutes 2004, section 356A.06, 102.5 subdivision 7, is amended to read: 102.6 Subd. 7. [EXPANDED LIST OF AUTHORIZED INVESTMENT 102.7 SECURITIES.] (a) [AUTHORITY.] Except to the extent otherwise 102.8 authorized by law or bylaws, a covered pension plan not 102.9 described by subdivision 6, paragraph (a), may invest its assets 102.10 only in accordance with this subdivision. 102.11 (b) [SECURITIES GENERALLY.] The covered pension plan has 102.12 the authority to purchase, sell, lend, or exchange the 102.13 securities specified in paragraphs (c) to(g)(h), including 102.14 puts and call options and future contracts traded on a contract 102.15 market regulated by a governmental agency or by a financial 102.16 institution regulated by a governmental agency. These 102.17 securities may be owned as units in commingled trusts that own 102.18 the securities described in paragraphs (c) to(g)(h). 102.19 (c) [GOVERNMENT OBLIGATIONS.] The covered pension plan may 102.20 invest funds in governmental bonds, notes, bills, mortgages, and 102.21 other evidences of indebtedness provided the issue is backed by 102.22 the full faith and credit of the issuer or the issue is rated 102.23 among the top four quality rating categories by a nationally 102.24 recognized rating agency. The obligations in which funds may be 102.25 invested under this paragraph include guaranteed or insured 102.26 issues of (1) the United States, its agencies, its 102.27 instrumentalities, or organizations created and regulated by an 102.28 act of Congress; (2) Canada and its provinces, provided the 102.29 principal and interest is payable in United States dollars; (3) 102.30 the states and their municipalities, political subdivisions, 102.31 agencies, or instrumentalities; (4) the International Bank for 102.32 Reconstruction and Development, the Inter-American Development 102.33 Bank, the Asian Development Bank, the African Development Bank, 102.34 or any other United States government sponsored organization of 102.35 which the United States is a member, provided the principal and 102.36 interest is payable in United States dollars. 103.1 (d) [CORPORATE OBLIGATIONS.] The covered pension plan may 103.2 invest funds in bonds, notes, debentures, transportation 103.3 equipment obligations, or any other longer term evidences of 103.4 indebtedness issued or guaranteed by a corporation organized 103.5 under the laws of the United States or any state thereof, or the 103.6 Dominion of Canada or any province thereof if they conform to 103.7 the following provisions: 103.8 (1) the principal and interest of obligations of 103.9 corporations incorporated or organized under the laws of the 103.10 Dominion of Canada or any province thereof must be payable in 103.11 United States dollars; and 103.12 (2) obligations must be rated among the top four quality 103.13 categories by a nationally recognized rating agency. 103.14 (e) [OTHER OBLIGATIONS.] (1) The covered pension plan may 103.15 invest funds in bankers acceptances, certificates of deposit, 103.16 deposit notes, commercial paper, mortgage participation 103.17 certificates and pools, asset backed securities, repurchase 103.18 agreements and reverse repurchase agreements, guaranteed 103.19 investment contracts, savings accounts, and guaranty fund 103.20 certificates, surplus notes, or debentures of domestic mutual 103.21 insurance companies if they conform to the following provisions: 103.22 (i) bankers acceptances and deposit notes of United States 103.23 banks are limited to those issued by banks rated in the highest 103.24 four quality categories by a nationally recognized rating 103.25 agency; 103.26 (ii) certificates of deposit are limited to those issued by 103.27 (A) United States banks and savings institutions that are rated 103.28 in the highest four quality categories by a nationally 103.29 recognized rating agency or whose certificates of deposit are 103.30 fully insured by federal agencies; or (B) credit unions in 103.31 amounts up to the limit of insurance coverage provided by the 103.32 National Credit Union Administration; 103.33 (iii) commercial paper is limited to those issued by United 103.34 States corporations or their Canadian subsidiaries and rated in 103.35 the highest two quality categories by a nationally recognized 103.36 rating agency; 104.1 (iv) mortgage participation or pass through certificates 104.2 evidencing interests in pools of first mortgages or trust deeds 104.3 on improved real estate located in the United States where the 104.4 loan to value ratio for each loan as calculated in accordance 104.5 with section 61A.28, subdivision 3, does not exceed 80 percent 104.6 for fully amortizable residential properties and in all other 104.7 respects meets the requirements of section 61A.28, subdivision 104.8 3; 104.9 (v) collateral for repurchase agreements and reverse 104.10 repurchase agreements is limited to letters of credit and 104.11 securities authorized in this section; 104.12 (vi) guaranteed investment contracts are limited to those 104.13 issued by insurance companies or banks rated in the top four 104.14 quality categories by a nationally recognized rating agency or 104.15 to alternative guaranteed investment contracts where the 104.16 underlying assets comply with the requirements of this 104.17 subdivision; 104.18 (vii) savings accounts are limited to those fully insured 104.19 by federal agencies; and 104.20 (viii) asset backed securities must be rated in the top 104.21 four quality categories by a nationally recognized rating agency. 104.22 (2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do 104.23 not apply to certificates of deposit and collateralization 104.24 agreements executed by the covered pension plan under clause 104.25 (1), item (ii). 104.26 (3) In addition to investments authorized by clause (1), 104.27 item (iv), the covered pension plan may purchase from the 104.28 Minnesota Housing Finance Agency all or any part of a pool of 104.29 residential mortgages, not in default, that has previously been 104.30 financed by the issuance of bonds or notes of the agency. The 104.31 covered pension plan may also enter into a commitment with the 104.32 agency, at the time of any issue of bonds or notes, to purchase 104.33 at a specified future date, not exceeding 12 years from the date 104.34 of the issue, the amount of mortgage loans then outstanding and 104.35 not in default that have been made or purchased from the 104.36 proceeds of the bonds or notes. The covered pension plan may 105.1 charge reasonable fees for any such commitment and may agree to 105.2 purchase the mortgage loans at a price sufficient to produce a 105.3 yield to the covered pension plan comparable, in its judgment, 105.4 to the yield available on similar mortgage loans at the date of 105.5 the bonds or notes. The covered pension plan may also enter 105.6 into agreements with the agency for the investment of any 105.7 portion of the funds of the agency. The agreement must cover 105.8 the period of the investment, withdrawal privileges, and any 105.9 guaranteed rate of return. 105.10 (f) [CORPORATE STOCKS.] The covered pension plan may 105.11 invest funds in stocks or convertible issues of any corporation 105.12 organized under the laws of the United States or the states 105.13 thereof, any corporation organized under the laws of the 105.14 Dominion of Canada or its provinces, or any corporation listed 105.15 onthe New York Stock Exchange or the American Stock Exchangean 105.16 exchange regulated by an agency of the United States or of the 105.17 Canadian national government, if they conform to the following 105.18 provisions: 105.19 (1) the aggregate value of corporate stock investments, as 105.20 adjusted for realized profits and losses, must not exceed 85 105.21 percent of the market or book value, whichever is less, of a 105.22 fund, less the aggregate value of investments according to 105.23subdivision 6paragraph (h); 105.24 (2) investments must not exceed five percent of the total 105.25 outstanding shares of any one corporation. 105.26 (g) [EXCHANGE TRADED FUNDS.] The covered pension plan may 105.27 invest funds in exchange traded funds, subject to the maximums, 105.28 the requirements, and the limitations set forth in paragraph 105.29 (d), (e), (f), or (h), whichever applies. 105.30 (h) [OTHER INVESTMENTS.] (1) In addition to the 105.31 investments authorized in paragraphs (b) to(f)(g), and subject 105.32 to the provisions in clause (2), the covered pension plan may 105.33 invest funds in: 105.34 (i) venture capital investment businesses through 105.35 participation in limited partnerships and corporations; 105.36 (ii) real estate ownership interests or loans secured by 106.1 mortgages or deeds of trust through investment in limited 106.2 partnerships, bank sponsored collective funds, trusts, and 106.3 insurance company commingled accounts, including separate 106.4 accounts; 106.5 (iii) regional and mutual funds through bank sponsored 106.6 collective funds and open-end investment companies registered 106.7 under the Federal Investment Company Act of 1940; 106.8 (iv) resource investments through limited partnerships, 106.9 private placements, and corporations; and 106.10 (v) international securities. 106.11 (2) The investments authorized in clause (1) must conform 106.12 to the following provisions: 106.13 (i) the aggregate value of all investments made according 106.14 to clause (1) may not exceed 35 percent of the market value of 106.15 the fund for which the covered pension plan is investing; 106.16 (ii) there must be at least four unrelated owners of the 106.17 investment other than thestate boardcovered pension plan for 106.18 investments made under clause (1), item (i), (ii), (iii), or 106.19 (iv); 106.20 (iii) covered pension plan participation in an investment 106.21 vehicle is limited to 20 percent thereof for investments made 106.22 under clause (1), item (i), (ii), (iii), or (iv); and 106.23 (iv) covered pension plan participation in a limited 106.24 partnership does not include a general partnership interest or 106.25 other interest involving general liability. The covered pension 106.26 plan may not engage in any activity as a limited partner which 106.27 creates general liability. 106.28 Sec. 10. Minnesota Statutes 2004, section 424A.02, 106.29 subdivision 3, is amended to read: 106.30 Subd. 3. [FLEXIBLE SERVICE PENSION MAXIMUMS.] (a) Annually 106.31 on or before August 1 as part of the certification of the 106.32 financial requirements and minimum municipal obligation 106.33 determined under section 69.772, subdivision 4, or 69.773, 106.34 subdivision 5, as applicable, the secretary or some other 106.35 official of the relief association designated in the bylaws of 106.36 each relief association shall calculate and certify to the 107.1 governing body of the applicable qualified municipality the 107.2 average amount of available financing per active covered 107.3 firefighter for the most recent three-year period. The amount 107.4 of available financing shall include any amounts of fire state 107.5 aid received or receivable by the relief association, any 107.6 amounts of municipal contributions to the relief association 107.7 raised from levies on real estate or from other available 107.8 revenue sources exclusive of fire state aid, and one-tenth of 107.9 the amount of assets in excess of the accrued liabilities of the 107.10 relief association calculated under section 69.772, subdivision 107.11 2; 69.773, subdivisions 2 and 4; or 69.774, subdivision 2, if 107.12 any. 107.13 (b) The maximum service pension which the relief 107.14 association has authority to provide for in its bylaws for 107.15 payment to a member retiring after the calculation date when the 107.16 minimum age and service requirements specified in subdivision 1 107.17 are met must be determined using the table in paragraph (c) or 107.18 (d), whichever applies. 107.19 (c) For a relief association where the governing bylaws 107.20 provide for a monthly service pension to a retiring member, the 107.21 maximum monthly service pension amount per month for each year 107.22 of service credited that may be provided for in the bylaws is 107.23 the greater of the service pension amount provided for in the 107.24 bylaws on the date of the calculation of the average amount of 107.25 the available financing per active covered firefighter or the 107.26 maximum service pension figure corresponding to the average 107.27 amount of available financing per active covered firefighter: 107.28 Minimum Average Amount of Maximum Service Pension 107.29 Available Financing per Amount Payable per Month 107.30 Firefighter for Each Year of Service 107.31 $... $ .25 107.324241 .50 107.338481 1.00 107.34126122 1.50 107.35168162 2.00 107.36209203 2.50 108.1252243 3.00 108.2294284 3.50 108.3335324 4.00 108.4378365 4.50 108.5420405 5.00 108.6503486 6.00 108.7587567 7.00 108.8672648 8.00 108.9755729 9.00 108.10839810 10.00 108.11923891 11.00 108.121007972 12.00 108.1310901053 13.00 108.1411751134 14.00 108.1512591215 15.00 108.1613421296 16.00 108.1714271377 17.00 108.1815101458 18.00 108.1915941539 19.00 108.2016771620 20.00 108.2117621701 21.00 108.2218451782 22.00 108.2318881823 22.50 108.2419291863 23.00 108.2520141944 24.00 108.2620982025 25.00 108.2721832106 26.00 108.2822672187 27.00 108.2923512268 28.00 108.3024362349 29.00 108.3125202430 30.00 108.3226042511 31.00 108.3326892592 32.00 108.3427732673 33.00 108.3528572754 34.00 108.3629422834 35.00 109.130262916 36.00 109.231102997 37.00 109.331943078 38.00 109.432783159 39.00 109.533623240 40.00 109.634463321 41.00 109.735303402 42.00 109.836143483 43.00 109.936983564 44.00 109.1037823645 45.00 109.1138663726 46.00 109.1239503807 47.00 109.1340343888 48.00 109.1441183969 49.00 109.1542024050 50.00 109.1642864131 51.00 109.1743704212 52.00 109.18Effective beginning December 31, 2003:109.1944544293 53.00 109.2045384374 54.00 109.2146224455 55.00 109.2247064536 56.00 109.23 (d) For a relief association in which the governing bylaws 109.24 provide for a lump sum service pension to a retiring member, the 109.25 maximum lump sum service pension amount for each year of service 109.26 credited that may be provided for in the bylaws is the greater 109.27 of the service pension amount provided for in the bylaws on the 109.28 date of the calculation of the average amount of the available 109.29 financing per active covered firefighter or the maximum service 109.30 pension figure corresponding to the average amount of available 109.31 financing per active covered firefighter for the applicable 109.32 specified period: 109.33 Minimum Average Amount Maximum Lump Sum Service 109.34 of Available Financing Pension Amount Payable 109.35 per Firefighter for Each Year of Service 109.36 $.. $10 110.1 11 20 110.2 16 30 110.3 23 40 110.4 27 50 110.5 32 60 110.6 43 80 110.7 54 100 110.8 65 120 110.9 77 140 110.10 86 160 110.11 97 180 110.12 108 200 110.13 131 240 110.14 151 280 110.15 173 320 110.16 194 360 110.17 216 400 110.18 239 440 110.19 259 480 110.20 281 520 110.21 302 560 110.22 324 600 110.23 347 640 110.24 367 680 110.25 389 720 110.26 410 760 110.27 432 800 110.28 486 900 110.29 540 1000 110.30 594 1100 110.31 648 1200 110.32 702 1300 110.33 756 1400 110.34 810 1500 110.35 864 1600 110.36 918 1700 111.1 972 1800 111.2 1026 1900 111.3 1080 2000 111.4 1134 2100 111.5 1188 2200 111.6 1242 2300 111.7 1296 2400 111.8 1350 2500 111.9 1404 2600 111.10 1458 2700 111.11 1512 2800 111.12 1566 2900 111.13 1620 3000 111.14 1672 3100 111.15 1726 3200 111.16 1753 3250 111.17 1780 3300 111.18 1820 3375 111.19 1834 3400 111.20 1888 3500 111.21 1942 3600 111.22 1996 3700 111.23 2023 3750 111.24 2050 3800 111.25 2104 3900 111.26 2158 4000 111.27 2212 4100 111.28 2265 4200 111.29 2319 4300 111.30 2373 4400 111.31 2427 4500 111.32 2481 4600 111.33 2535 4700 111.34 2589 4800 111.35 2643 4900 111.36 2697 5000 112.1 2751 5100 112.2 2805 5200 112.3 2859 5300 112.4 2913 5400 112.5 2967 5500 112.6 3021 5600 112.7 3075 5700 112.8 3129 5800 112.9 3183 5900 112.10 3237 6000 112.11 3291 6100 112.12 3345 6200 112.13 3399 6300 112.14 3453 6400 112.15 3507 6500 112.16 3561 6600 112.17 3615 6700 112.18 3669 6800 112.19 3723 6900 112.20 3777 7000 112.21Effective beginning December 31, 2003:112.22 3831 7100 112.23 3885 7200 112.24 3939 7300 112.25 3993 7400 112.26 4047 7500 112.27 (e) For a relief association in which the governing bylaws 112.28 provide for a monthly benefit service pension as an alternative 112.29 form of service pension payment to a lump sum service pension, 112.30 the maximum service pension amount for each pension payment type 112.31 must be determined using the applicable table contained in this 112.32 subdivision. 112.33 (f) If a relief association establishes a service pension 112.34 in compliance with the applicable maximum contained in paragraph 112.35 (c) or (d) and the minimum average amount of available financing 112.36 per active covered firefighter is subsequently reduced because 113.1 of a reduction in fire state aid or because of an increase in 113.2 the number of active firefighters, the relief association may 113.3 continue to provide the prior service pension amount specified 113.4 in its bylaws, but may not increase the service pension amount 113.5 until the minimum average amount of available financing per 113.6 firefighter under the table in paragraph (c) or (d), whichever 113.7 applies, permits. 113.8 (g) No relief association is authorized to provide a 113.9 service pension in an amount greater than the largest applicable 113.10 flexible service pension maximum amount even if the amount of 113.11 available financing per firefighter is greater than the 113.12 financing amount associated with the largest applicable flexible 113.13 service pension maximum. 113.14 Sec. 11. Minnesota Statutes 2004, section 424A.02, 113.15 subdivision 4, is amended to read: 113.16 Subd. 4. [DEFINED CONTRIBUTION LUMP SUM SERVICE 113.17 PENSIONS.] (a) If the bylaws governing the relief association so 113.18 provide exclusively, the relief association may pay a defined 113.19 contribution lump sum service pension in lieu of any defined 113.20 benefit service pension governed by subdivision 2. 113.21 (b) An individual account for each firefighter who is a 113.22 member of the relief associationshallmust be established. To 113.23 each individual active member accountshallmust be crediteda113.24right toan equal share of:(a)(1) any amounts of fire state 113.25 aid received by the relief association;(b)(2) any amounts of 113.26 municipal contributions to the relief association raised from 113.27 levies on real estate or from other available revenue sources 113.28 exclusive of fire state aid; and(c)(3) any amounts equal to 113.29 the share of the assets of the special fund to the credit 113.30 of:(1)(i) any former member who terminated active service 113.31 with the fire department to which the relief association is 113.32 associatedprior tobefore meeting the minimum service 113.33 requirement provided for in subdivision 1 and has not returned 113.34 to active service with the fire department for a period no 113.35 shorter than five years; or(2)(ii) any retired member who 113.36 retiredprior tobefore obtaining a full nonforfeitable interest 114.1 in the amounts credited to the individual member 114.2 accountpursuant tounder subdivision 2 and any applicable 114.3 provision of the bylaws of the relief association. In addition, 114.4 anyinterest orinvestmentincome earnedreturn on the assets of 114.5 the special fundshallmust be credited in proportion to the 114.6 share of the assets of the special fund to the credit of each 114.7 individual active member account through the date on which the 114.8 investment return is recognized by and credited to the special 114.9 fund. 114.10 (c) At the time of retirementpursuant tounder subdivision 114.11 1 and any applicable provision of the bylaws of the relief 114.12 association, a retiring membershall beis entitled to that 114.13 portion of the assets of the special fund to the credit of the 114.14 member in the individual member account which is 114.15 nonforfeitablepursuant tounder subdivision 2 and any 114.16 applicable provision of the bylaws of the relief association 114.17 based on the number of years of service to the credit of the 114.18 retiring member. 114.19 Sec. 12. Minnesota Statutes 2004, section 424A.02, 114.20 subdivision 7, is amended to read: 114.21 Subd. 7. [DEFERRED SERVICE PENSIONS.] (a) A member of a 114.22 relief associationto which this section appliesis entitled to 114.23 a deferred service pension if the member: 114.24 (1) has completed the lesser of the minimum period of 114.25 active service with the fire department specified in the bylaws 114.26 or 20 years of active service with the fire department; 114.27 (2) has completed at least five years of active membership 114.28 in the relief association; and 114.29 (3) separates from active service and membership before 114.30 reaching age 50 or the minimum age for retirement and 114.31 commencement of a service pension specified in the bylaws 114.32 governing the relief association if that age is greater than age 114.33 50. 114.34 (b) The deferred service pensionstartsis payable when the 114.35 former member reaches age 50, or the minimum age specified in 114.36 the bylaws governing the relief association if that age is 115.1 greater than age 50, and when the former member makes a valid 115.2 written application. 115.3 (c) A relief association that provides a lump sum service 115.4 pension governed by subdivision 3 may, when its governing bylaws 115.5 so provide, pay interest on the deferred lump sum service 115.6 pension during the period of deferral. If provided for in the 115.7 bylaws, interest must be paid in one of the following manners: 115.8 (1) at the investment performance rate actually earned on 115.9 that portion of the assets if the deferred benefit amount is 115.10 invested by the relief association in a separate account 115.11 established and maintained by the relief association or if the 115.12 deferred benefit amount is invested in a separate investment 115.13 vehicle held by the relief association; 115.14 (2) atthean interest rate of up to five percent, 115.15 compounded annually, as set by the board of directors and 115.16 approved as provided in subdivision 10; or 115.17 (3) at a rate equal to the actual time weighted total rate 115.18 of return investment performance of the special fund as reported 115.19 by the Office of the State Auditor under section 356.219, up to 115.20 five percent, compounded annually, and applied consistently for 115.21 all deferred service pensioners. 115.22(d)A relief association may not use the method provided 115.23 for inparagraph (c),clause (3), until it has modified its 115.24 bylaws to be consistent with that clause. 115.25 (d) Interest under paragraph (c), clause (2) or (3), is 115.26 payable from the first day of the month next following the date 115.27 on which the municipality has approved the deferred service 115.28 pension interest rate established by the board of trustees or 115.29 from the first day of the month next following the date on which 115.30 the member separated from active fire department service and 115.31 relief association membership, whichever is later, to the last 115.32 day of the month immediately before the month in which the 115.33 deferred member becomes eligible to begin receipt of the service 115.34 pension and applies for the deferred service pension. 115.35 (e) A relief association that provides a defined 115.36 contribution service pension may, if its governing bylaws so 116.1 provide, credit interest or additional investment performance on 116.2 the deferred lump sum service pension during the period of 116.3 deferral. If provided for in the bylaws, the interest must be 116.4 paid in one of the manners specified in paragraph (c) or 116.5 alternatively the relief association may credit any investment 116.6 return on the assets of the special fund of the defined 116.7 contribution volunteer firefighter relief association in 116.8 proportion to the share of the assets of the special fund to the 116.9 credit of each individual deferred member account through the 116.10 date on which the investment return is recognized by and 116.11 credited to the special fund. 116.12 (f) For a deferred service pension that is transferred to a 116.13 separate account established and maintained by the relief 116.14 association or separate investment vehicle held by the relief 116.15 association, the deferred member bears the full investment risk 116.16 subsequent to transfer and in calculating the accrued liability 116.17 of the volunteer firefighters relief association that pays a 116.18 lump sum service pension, the accrued liability for deferred 116.19 service pensions is equal to the separate relief association 116.20 account balance or the fair market value of the separate 116.21 investment vehicle held by the relief association. 116.22(f)(g) The deferred service pension is governed by and 116.23 must be calculated under the general statute, special law, 116.24 relief association articles of incorporation, and relief 116.25 association bylaw provisions applicable on the date on which the 116.26 member separated from active service with the fire department 116.27 and active membership in the relief association. 116.28 Sec. 13. [424A.021] [CREDIT FOR BREAK IN SERVICE TO 116.29 PROVIDE UNIFORMED SERVICE.] 116.30 Subdivision 1. [AUTHORIZATION.] Subject to restrictions 116.31 stated in this section, a volunteer firefighter who is absent 116.32 from firefighting service due to service in the uniformed 116.33 services, as defined in United States Code, title 38, section 116.34 4303(13), may obtain service credit if the relief association is 116.35 a defined benefit plan or an allocation of any fire state aid, 116.36 any municipal contributions, and any investment return received 117.1 by the relief association if the relief association is a defined 117.2 contribution plan for the period of the uniformed service, not 117.3 to exceed five years, unless a longer period is required under 117.4 United States Code, title 38, section 4312. 117.5 Subd. 2. [LIMITATIONS.] (a) To be eligible for service 117.6 credit or an investment return allocation under this section, 117.7 the volunteer firefighter must return to firefighting service 117.8 with coverage by the same relief association or by the successor 117.9 to that relief association upon discharge from service in the 117.10 uniformed service within the time frame required in United 117.11 States Code, title 38, section 4312(e). 117.12 (b) Service credit or an investment return allocation is 117.13 not authorized if the firefighter separates from uniformed 117.14 service with a dishonorable or bad conduct discharge or under 117.15 other than honorable conditions. 117.16 (c) Service credit or an investment return allocation is 117.17 not authorized if the firefighter fails to provide notice to the 117.18 fire department that the individual is leaving to provide 117.19 service in the uniformed service, unless it is not feasible to 117.20 provide that notice due to the emergency nature of the situation. 117.21 Sec. 14. Minnesota Statutes 2004, section 424A.04, 117.22 subdivision 1, is amended to read: 117.23 Subdivision 1. [MEMBERSHIP.] (a)EveryA relief 117.24 association that is directly associated with a municipal fire 117.25 departmentshallmust be managed by a board of trustees 117.26 consisting of nine members. Six trusteesshallmust be elected 117.27 from the membership of the relief association and three trustees 117.28shallmust be drawn from the officials of the municipalities 117.29 served by the fire department to which the relief association is 117.30 directly associated. The bylaws of a relief association which 117.31 provides a monthly benefit service pension may provide that one 117.32 of the six trustees elected from the relief 117.33 association membership may be a retired member receiving a 117.34 monthly pension who is elected by the membership of the relief 117.35 association. The threeex officiomunicipal trusteesshall be117.36the mayor, the clerk, clerk-treasurer or finance director,must 118.1 be one elected municipal official and one elected or appointed 118.2 municipal official who are designated as municipal 118.3 representatives by the municipal governing board annually and 118.4 the chief of the municipal fire department. 118.5 (b)EveryA relief association that is a subsidiary of an 118.6 independent nonprofit firefighting corporationshallmust be 118.7 managed by a board of trustees consisting oftennine members. 118.8 Six trusteesshallmust be elected from the membership of the 118.9 relief association,threetwo trusteesshallmust be drawn from 118.10 the officials of the municipalities served by the fire 118.11 department to which the relief association is directly 118.12 associated, and one trustee shall be the fire chief serving with 118.13 the independent nonprofit firefighting corporation. The bylaws 118.14 of a relief association may provide that one of the six trustees 118.15 elected from the relief association membership may be a retired 118.16 member receiving a monthly pension who is elected by the 118.17 membership of the relief association. Thethree ex officiotwo 118.18 municipal trusteeswho are the elected officials shallmust 118.19 be elected or appointed municipal officials, selected as follows: 118.20 (1) if only one municipality contracts with the independent 118.21 nonprofit firefighting corporation, theex officiomunicipal 118.22 trusteesshallmust bethree electedtwo officials of the 118.23 contracting municipality who are designated annually by the 118.24 governing body of the municipality; 118.25(2) if two municipalities contract with the independent118.26nonprofit firefighting corporation, the ex officio trustees118.27shall be two elected officials of the largest municipality in118.28population and one elected official of the next largest118.29municipality in population who are designated by the governing118.30bodies of the applicable municipalities;or 118.31(3)(2) ifthreetwo or more municipalities contract with 118.32 the independent nonprofit corporation, theex officiomunicipal 118.33 trusteesshallmust be oneelectedofficialoffrom each of 118.34 thethreetwo largest municipalities in population who are 118.35 designated annually by the governing bodies of the applicable 118.36 municipalities. 119.1 (c) The municipal trustees for a relief association that is 119.2 directly associated with a fire department operated as or by a 119.3 joint powers entity must be designated annually by the joint 119.4 powers board. The municipal trustees for a relief association 119.5 that is directly associated with a fire department service area 119.6 township must be designated by the township board. 119.7 (d) If a relief association lacks theex officiomunicipal 119.8 board members provided for in paragraph (a), (b), or(b)(c) 119.9 because the fire department is not located in or associated with 119.10 an organized municipality, joint powers entity, or township, the 119.11ex officiomunicipal board members must be appointed from the 119.12 fire department service area by the board of commissioners of 119.13 the applicable county. 119.14 (e) The term of these appointedex officiomunicipal board 119.15 members isthree yearsone year or until the person's successor 119.16 is qualified, whichever is later. 119.17(d) An ex officio(f) A municipal trustee under paragraph 119.18 (a), (b),or(c)shall have, or (d) has all the rights and 119.19 duties accorded to any other trustee, except the right to be an 119.20 officer of the relief association board of trustees. 119.21(e)(g) A boardshallmust have at least three officers, 119.22which shall bewho are a president, a secretary and a treasurer. 119.23 These officersshallmust be elected from among the elected 119.24 trustees by either the full board of trustees or by the 119.25 membership, as specified in the bylaws, and. In no eventshall119.26 may any trustee hold more than one officer position at any one 119.27 time. The terms of the elected trustees and of the officers of 119.28 the boardshallmust be specified in the bylaws of the relief 119.29 association, butshallmay not exceed three years. If the term 119.30 of the elected trustees exceeds one year, the election of the 119.31 various trustees elected from the membershipshall initially and119.32shall thereafter continue tomust be staggered on as equal a 119.33 basis as is practicable. 119.34 Sec. 15. Minnesota Statutes 2004, section 424B.10, 119.35 subdivision 1, is amended to read: 119.36 Subdivision 1. [BENEFITS.] (a) Notwithstanding any 120.1 provision of section 424A.02, subdivision 3, to the contrary, 120.2 the service pension of the subsequent relief association as of 120.3 the effective date of consolidation is either the service 120.4 pension amount specified in clause (1) or the service pension 120.5 amounts specified in clause (2), as provided for in the 120.6 consolidated relief association's articles of incorporation or 120.7 bylaws: 120.8 (1) the highest dollar amount service pension amount of any 120.9 prior volunteer firefighters relief association in effect 120.10 immediately before the consolidation initiation if the pension 120.11 amount was implemented consistent with section 424A.02; or 120.12 (2) for service rendered by each individual volunteer 120.13 firefighter before consolidation, the service pension amount 120.14 under the consolidating volunteer firefighters relief 120.15 association that the firefighter belonged to immediately before 120.16 the consolidation if the pension amount was implemented 120.17 consistent with section 424A.02 and for service rendered after 120.18 the effective date of the consolidation, the highest dollar 120.19 amount service pension of any of the consolidating volunteer 120.20 firefighters relief associations in effect immediately before 120.21 the consolidation if the pension amount was implemented 120.22 consistent with section 424A.02. 120.23 (b) Any increase in the service pension amount beyond the 120.24 amount implemented under paragraph (a) must conform with the 120.25 requirements and limitations of sections 69.771 to 69.775 and 120.26 424A.02. 120.27 Sec. 16. [STUDY OF STATEWIDE LUMP-SUM VOLUNTEER 120.28 FIREFIGHTER RETIREMENT PLAN; CREATION OF TASK FORCE.] 120.29 Subdivision 1. [TASK FORCE MEMBERSHIP.] (a) A statewide 120.30 Volunteer Firefighter Retirement Plan Study Task Force is 120.31 created. 120.32 (b) The task force members are: 120.33 (1) four members who are appointed by the president of the 120.34 Minnesota Area Relief Association coalition; 120.35 (2) four members who are appointed by the president of the 120.36 Minnesota State Fire Department Association; 121.1 (3) four members who are appointed by the president of the 121.2 Minnesota State Fire Chiefs Association; 121.3 (4) four members who are appointed by the board of 121.4 directors of the League of Minnesota Cities; 121.5 (5) two members who are appointed by the board of directors 121.6 of the Insurance Federation of Minnesota; 121.7 (6) two members who are appointed by the board of directors 121.8 of the Minnesota Association of Farm Mutual Insurance Companies; 121.9 and 121.10 (7) the Minnesota state auditor or the auditor's designee. 121.11 (c) Appointments must be made on or before July 1, 2005. 121.12 If the appointment is not made in a timely manner, or if there 121.13 is a vacancy, the state auditor shall appoint the task force 121.14 member or the replacement member. 121.15 (d) The chair of the task force shall be selected by the 121.16 task force. 121.17 (e) Administrative services for the task force must be 121.18 provided by the Department of Public Safety. 121.19 Subd. 2. [TASK FORCE DUTIES.] (a) The task force shall 121.20 conduct fact finding regarding the creation of a statewide 121.21 volunteer firefighter retirement plan. 121.22 (b) The task force shall recommend whether or not a 121.23 statewide volunteer firefighter retirement plan should be 121.24 created. If the task force concludes a statewide volunteer 121.25 firefighter retirement plan has merit, the task force shall 121.26 recommend the investment vehicle or vehicles to be utilized by 121.27 the plan, the administration and corporate governance structure 121.28 of the plan, the incentives needed to formulate the plan, the 121.29 limitations applicable to the plan, and the state resources 121.30 needed to be dedicated to the plan. The task force may also 121.31 consider creation of regional volunteer firefighter retirement 121.32 plans. 121.33 Subd. 3. [REPORT.] The task force shall prepare a report 121.34 detailing its findings about a potential statewide or regional 121.35 volunteer firefighter retirement plan or plans. The report is 121.36 due January 15, 2006, and must be filed with the Legislative 122.1 Reference Library; the chair of the Legislative Commission on 122.2 Pensions and Retirement; the chair of the State and Local 122.3 Governmental Operations Committee of the senate; the chair of 122.4 the State Government Budget Division of the senate Finance 122.5 Committee; the chair of the Governmental Operations and Veterans 122.6 Affairs Committee of the house of representatives; and the chair 122.7 of the State Government Finance Committee of the house of 122.8 representatives. 122.9 Sec. 17. [EFFECTIVE DATE.] 122.10 (a) Sections 1 to 12, 14, and 15 are effective July 1, 2005. 122.11 (b) Section 13 is effective July 1, 2005, and applies to 122.12 breaks in service that end on or after that date. 122.13 (c) Section 16 is effective the day following final 122.14 enactment. 122.15 ARTICLE 12 122.16 VARIOUS CORRECTIONS 122.17 AND CLARIFICATIONS 122.18 Section 1. Minnesota Statutes 2004, section 3A.13, is 122.19 amended to read: 122.20 3A.13 [EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM 122.21 DEDUCTION.] 122.22 (a) The provisions of section352.15 shall356.401 apply to 122.23 the legislators retirement plan, chapter 3A. 122.24 (b) The executive director of the Minnesota State 122.25 Retirement System must, at the request of a retired legislator 122.26 who is enrolled in a health insurance plan covering state 122.27 employees, deduct the person's health insurance premiums from 122.28 the person's annuity and transfer the amount of the premium to a 122.29 health insurance carrier covering state employees. 122.30 Sec. 2. Minnesota Statutes 2004, section 69.011, 122.31 subdivision 2b, is amended to read: 122.32 Subd. 2b. [DEPARTMENTS OF NATURAL RESOURCES AND PUBLIC 122.33 SAFETY.] (a)On or before July 1, 1997, the commissioner of122.34natural resources shall certify one-half of the number of peace122.35officers as defined in subdivision 1, clause (g), employed by122.36the Enforcement Division during calendar year 1996 and the123.1commissioner of public safety shall certify one-half of the123.2number of peace officers as defined in subdivision 1, clause123.3(g), employed by the Bureau of Criminal Apprehension, the123.4Gambling Enforcement Division, and the State Patrol Division123.5during calendar year 1996.123.6(b) On or before March 15, 1998, the commissioner of123.7natural resources shall certify seven-tenths of the number of123.8peace officers as defined in subdivision 1, clause (g), employed123.9by the Enforcement Division and the commissioner of public123.10safety shall certify seven-tenths of the number of peace123.11officers as defined in subdivision 1, clause (g), employed by123.12the Bureau of Criminal Apprehension, the Gambling Enforcement123.13Division, and the State Patrol Division.123.14(c)On or beforeMarch 15, 1999, and annually on or before123.15 each March 15thereafter, the commissioner of natural resources 123.16 shall certify the number of peace officers as defined in 123.17 subdivision 1, clause (g), employed by the Enforcement Division 123.18 and the commissioner of public safety shall certify the number 123.19 of peace officers as defined in subdivision 1, clause (g), 123.20 employed by the Bureau of Criminal Apprehension, the Gambling 123.21 Enforcement Division, and the State Patrol Division. 123.22(d)(b) The certification must be on a form prescribed by 123.23 the commissioner. Peace officers certified under this paragraph 123.24 must be included in the total certifications under subdivision 2. 123.25 Sec. 3. Minnesota Statutes 2004, section 69.021, 123.26 subdivision 5, is amended to read: 123.27 Subd. 5. [CALCULATION OF STATE AID.] (a) The amount of 123.28 fire state aid available for apportionment, before the addition 123.29 of the minimum fire state aid allocation amount under 123.30 subdivision 7, is equal to 107 percent of the amount of premium 123.31 taxes paid to the state upon the fire, lightning, sprinkler 123.32 leakage, and extended coverage premiums reported to the 123.33 commissioner by insurers on the Minnesota Firetown Premium 123.34 Report. This amountshallmust be reduced by the amount 123.35 required to pay the state auditor's costs and expenses of the 123.36 audits or exams of the firefighters relief associations. 124.1 The total amount for apportionment in respect to fire state 124.2 aid must not be less than two percent of the premiums reported 124.3 to the commissioner by insurers on the Minnesota Firetown 124.4 Premium Report after subtracting the following amounts: 124.5 (1) the amount required to pay the state auditor's costs 124.6 and expenses of the audits or exams of the firefighters relief 124.7 associations; and 124.8 (2) one percent of the premiums reported by town and 124.9 farmers' mutual insurance companies and mutual property and 124.10 casualty companies with total assets of $5,000,000 or less. 124.11 (b) The total amount for apportionment as police state aid 124.12 is equal to 104 percent of the amount of premium taxes paid to 124.13 the state on the premiums reported to the commissioner by 124.14 insurers on the Minnesota Aid to Police Premium Report, reduced 124.15 by the amount required to pay the costs and expenses of the 124.16 state auditor for audits or exams of police relief 124.17 associations. The total amount for apportionment in respect to 124.18 the police state aid program must not be less than two percent 124.19 of the amount of premiums reported to the commissioner by 124.20 insurers on the Minnesota Aid to Police Premium Report after 124.21 subtracting the amount required to pay the state auditor's cost 124.22 and expenses of the audits or exams of the police relief 124.23 associations. 124.24 (c) The commissioner shall calculate the percentage of 124.25 increase or decrease reflected in the apportionment over or 124.26 under the previous year's available state aid using the same 124.27 premiums as a basis for comparison. 124.28 (d)The amount for apportionment in respect to peace124.29officer state aid under paragraph (b) must be further reduced by124.30$1,779,000 in fiscal year 1999, $2,077,000 in fiscal year 2000,124.31and $2,404,000 in fiscal year 2001. These reductions in this124.32paragraph cancel to the general fund.124.33(e)In addition to the amount for apportionment of police 124.34 state aid under paragraph (b), each year $100,000shallmust be 124.35 apportioned for police state aid. An amount sufficient to pay 124.36 this increase is annually appropriated from the general fund. 125.1 Sec. 4. Minnesota Statutes 2004, section 69.021, 125.2 subdivision 11, is amended to read: 125.3 Subd. 11. [EXCESS POLICE STATE-AID HOLDING ACCOUNT.] (a) 125.4 The excess police state-aid holding account is established in 125.5 the general fund. The excess police state-aid holding account 125.6 must be administered by the commissioner. 125.7 (b) Excess police state aid determined according to 125.8 subdivision 10, must be deposited in the excess police state-aid 125.9 holding account. 125.10 (c) From the balance in the excess police state-aid holding 125.11 account, $900,000 is appropriated to and must be transferred 125.12 annually to the ambulance service personnel longevity award and 125.13 incentive suspense account established by section 144E.42, 125.14 subdivision 2. 125.15 (d) If a police officer stress reduction program is created 125.16 by law and money is appropriated for that program, an amount 125.17 equal to that appropriation must be transferred to the 125.18 administrator of that program from the balance in the excess 125.19 police state-aid holding account. 125.20 (e) On October 1, 1997, and annually on each subsequent125.21October 1of each year, one-half of the balance of the excess 125.22 police state-aid holding account remaining after the deductions 125.23 under paragraphs (c) and (d) is appropriated for additional 125.24 amortization aid under section 423A.02, subdivision 1b. 125.25 (f) Annually, the remaining balance in the excess police 125.26 state-aid holding account, after the deductions under paragraphs 125.27 (c), (d), and (e), cancels to the general fund. 125.28 Sec. 5. Minnesota Statutes 2004, section 69.33, is amended 125.29 to read: 125.30 69.33 [NAMES OF ASSOCIATIONS REPORTED TO INSURANCE 125.31 COMPANIES.] 125.32 The commissioner shall enclose in the annual statement 125.33 blank that is sent to all fire insurance companies doing 125.34 business in this state a blank form containing the names ofall125.35firefighters' relief associations inall cities of the first 125.36 classand the names of the citiesand require these companies, 126.1 at the time of making their annual statements to the 126.2 commissioner, to state on these blanks the amount of premiums 126.3 received by them upon properties insured within the corporate 126.4 limits of the cities named thereon during the year ending 126.5 December 31st last past. Thereafter, before July first each 126.6 year, the commissioner shall certify to the commissioner of 126.7 finance the information thus obtained, together with the amount 126.8 of the tax for the benefit of therelief associationpension 126.9 plans covering firefighters in cities of the first class paid in 126.10 such year by these companies upon these insurance premiums. 126.11 Sec. 6. Minnesota Statutes 2004, section 69.773, 126.12 subdivision 4, is amended to read: 126.13 Subd. 4. [FINANCIAL REQUIREMENTS OF SPECIAL FUND.]Prior126.14toBefore August 1 of each year, the officers of the relief 126.15 association shall determine the financial requirements of the 126.16 special fund of the relief association in accordance with the 126.17 requirements of this subdivision. The financial requirements of 126.18 the relief associationshallmust be based on the most recent 126.19 actuarial valuation of the special fund prepared in accordance 126.20 with subdivision 2. If the relief association has an unfunded 126.21 actuarial accrued liability as reported in the most recent 126.22 actuarial valuation, the financial requirementsshallmust be 126.23 determined by adding the figures calculatedpursuant tounder 126.24 clauses (a), (b), and (c). If the relief association does not 126.25 have an unfunded actuarial accrued liability as reported in the 126.26 most recent actuarial valuation, the financial requirements 126.27shallmust be an amount equal to the figure calculatedpursuant126.28tounder clauses (a) and (b), reduced by an amount equal to 126.29 one-tenth of the amount of any assets in excess of the actuarial 126.30 accrued liability of the relief association. The determination 126.31 of whether or not the relief association has an unfunded 126.32 actuarial accrued liabilityshallmust be based on the current 126.33 market value of assets for which a market value is readily 126.34 ascertainable and the cost or book value, whichever is 126.35 applicable, for assets for which no market value is readily 126.36 ascertainable. 127.1 (a) The normal level cost requirement for the following 127.2 year, expressed as a dollar amount,shall beis the figure for 127.3 the normal level cost of the relief association as reported in 127.4 the actuarial valuation. 127.5 (b) The amount of anticipated future administrative 127.6 expenses of the special fundshallmust be calculated by 127.7 multiplying the dollar amount of the administrative expenses of 127.8 the special fund for the most recent year by the factor of 1.035. 127.9 (c) The amortization contribution requirement to retire the 127.10 current unfunded actuarial accrued liability by the established 127.11 date for full fundingshall beis the figure for the 127.12 amortization contribution as reported in the actuarial 127.13 valuation.If there has not been a change in the actuarial127.14assumptions used for calculating the actuarial accrued liability127.15of the special fund, a change in the bylaws of the relief127.16association governing the service pensions, retirement benefits,127.17or both payable from the special fund or a change in the127.18actuarial cost method used to value all or a portion of the127.19special fund which change or changes, which by themselves127.20without inclusion of any other items of increase or decrease,127.21produce a net increase in the unfunded actuarial accrued127.22liability of the special fund since December 31, 1970, the127.23established date for full funding shall be December 31, 1990.127.24 If there has been a change in the actuarial assumptions used for 127.25 calculating the actuarial accrued liability of the special fund, 127.26 a change in the bylaws of the relief association governing the 127.27 service pensions, retirement benefits, or both payable from the 127.28 special fund or a change in the actuarial cost method used to 127.29 value all or a portion of the special fund and the change or 127.30 changes, by themselves and without inclusion of any other items 127.31 of increase or decrease, produce a net increase in the unfunded 127.32 actuarial accrued liability of the special fundsince December127.3331, 1970, but prior to January 1, 1979, the established date for127.34full funding shall be December 31, 1998, and if there has been a127.35change since December 31, 1978, the established date for full 127.36 fundingshallmust be determined using the following procedure: 128.1 (i) the unfunded actuarial accrued liability of the special 128.2 fundshallmust be determined in accordance with the provisions 128.3 governing service pensions, retirement benefits, and actuarial 128.4 assumptions in effect before an applicable change; 128.5 (ii) the level annual dollar contribution needed to 128.6 amortize this unfunded actuarial accrued liability amount by the 128.7 date for full funding in effectprior tobefore the changeshall128.8 must be calculated using the interest assumption specified in 128.9 section 356.215, subdivision 8, in effect before any applicable 128.10 change; 128.11 (iii) the unfunded actuarial accrued liability of the 128.12 special fundshallmust be determined in accordance with any new 128.13 provisions governing service pensions, retirement benefits, and 128.14 actuarial assumptions and the remaining provisions governing 128.15 service pensions, retirement benefits, and actuarial assumptions 128.16 in effect before an applicable change; 128.17 (iv) the level annual dollar contribution needed to 128.18 amortize the difference between the unfunded actuarial accrued 128.19 liability amount calculatedpursuant tounder subclause (i) and 128.20 the unfunded actuarial accrued liability amount 128.21 calculatedpursuant tounder subclause (iii) over a period of 20 128.22 years starting December 31 of the year in which the change is 128.23 effectiveshallmust be calculated using the interest assumption 128.24 specified in section 356.215, subdivision 8, in effect after any 128.25 applicable change; 128.26 (v) the annual amortization contribution calculated 128.27pursuant tounder subclause (iv)shallmust be added to the 128.28 annual amortization contribution calculatedpursuant tounder 128.29 subclause (ii); 128.30 (vi) the period in which the unfunded actuarial accrued 128.31 liability amount determined in subclause (iii) will be amortized 128.32 by the total annual amortization contribution computedpursuant128.33tounder subclause (v)shallmust be calculated using the 128.34 interest assumption specified in section 356.215, subdivision 8, 128.35 in effect after any applicable change, rounded to the nearest 128.36 integral number of years, but whichshalldoes not exceed a 129.1 period of 20 years from the end of the year in which the 129.2 determination of the date for full funding using this procedure 129.3 is made and whichshallis notbeless than the period of years 129.4 beginning in the year in which the determination of the date for 129.5 full funding using this procedure is made and ending by the date 129.6 for full funding in effect before the change; 129.7 (vii) the period determinedpursuant tounder subclause (vi) 129.8shallmust be added to the date as of which the actuarial 129.9 valuation was prepared and the resulting dateshall beis the 129.10 new date for full funding. 129.11 Sec. 7. Minnesota Statutes 2004, section 352.01, 129.12 subdivision 4, is amended to read: 129.13 Subd. 4. [ACCUMULATED CONTRIBUTIONS.] "Accumulated 129.14 contributions" means the total, exclusive of interest, of (1) 129.15 the sums deducted from the salary of an employee, (2) the amount 129.16 of payments, including assessments, paid by the employee in lieu 129.17 of salary deductions and all other payments made underLaws129.181929, chapter 191, as amended,this chapter and credited to the 129.19 employee's individual account in the retirement fund. 129.20 Sec. 8. Minnesota Statutes 2004, section 352.01, 129.21 subdivision 5, is amended to read: 129.22 Subd. 5. [RETIREMENT FUND.] (a) "Retirement fund" means 129.23 the general state employees retirement fund created by section 129.24 352.04, subdivision 1, with respect to the general state 129.25 employees retirement plan or the correctional state employees 129.26 retirement fund created by section 352.911, subdivision 1, with 129.27 respect to the correctional state employees retirement plan. 129.28 (b)"The retirement fund"includes the aggregate of 129.29 accumulated contributions of employees covered by the applicable 129.30 plan, and all other funds paid into the state treasury or 129.31 received by the director underLaws 1929, chapter 191, as129.32amendedthis chapter, together with all income and profits from 129.33 the money and interest on it, including contributions on the 129.34 part of the federal government, the state, and state departments. 129.35 Sec. 9. Minnesota Statutes 2004, section 352.01, 129.36 subdivision 21, is amended to read: 130.1 Subd. 21. [ACCRUED ANNUITIES.] (a) In this chapter and 130.2 chapters 3A, 352B, 352C, and 490, "accrued annuity" means an 130.3 annuity that had become payable to a retired employee in the 130.4 lifetime of the employee. 130.5 (b) An annuity or benefit authorized as provided in this 130.6 chapter and chapters 3A, 352B, 352C, and 490 becomes payable on 130.7 the first day of each calendar month for that calendar month and 130.8is tomust be paid on the first day of each calendar month 130.9beginning with benefits payable on and after December 1, 1977. 130.10 (c) Notwithstanding any provision to the contrary in this 130.11 chapter and chapters 3A, 352B, 352C, and 490, benefit payment 130.12 authorized as "payable for life" is payable for the entire month 130.13 in which death occurs, and the benefit payment for the month of 130.14 death is payable to the surviving spouse or other beneficiary 130.15 only if the annuitant dies before negotiating the benefit check. 130.16 Sec. 10. Minnesota Statutes 2004, section 352.01, 130.17 subdivision 23, is amended to read: 130.18 Subd. 23. [COVERAGE OR COVERED BY THE SYSTEM.] "Coverage" 130.19 or "covered by the system" means that a stateemployeesemployee 130.20 whoserveserves the state of Minnesota andmakemakes the 130.21 required employee contributions to the retirement fundwillis, 130.22 by reason of these contributionsbecome, entitled to either (1) 130.23 a retirement annuity, or (2) a disability benefit, or (3) a 130.24 refund of accumulated contributions, as provided in this chapter. 130.25 Sec. 11. Minnesota Statutes 2004, section 352.021, 130.26 subdivision 1, is amended to read: 130.27 Subdivision 1. [ESTABLISHMENT.] (a) There is established 130.28 the general state employees retirement plan of the Minnesota 130.29 State Retirement System for state employees. 130.30 (b) Thesystemgeneral state employees retirement plan is a 130.31 continuation of the State Employees Retirement Association. 130.32 (c) Any person who was a member of the State Employees 130.33 Retirement Association on June 30, 1967, is covered by 130.34 thesystemgeneral state employees retirement plan and is 130.35 entitled to all benefits provided by thesystemplan upon 130.36 fulfilling the age, service, contribution, and other 131.1 requirements of this chapter. 131.2 Sec. 12. Minnesota Statutes 2004, section 352.021, 131.3 subdivision 2, is amended to read: 131.4 Subd. 2. [STATE EMPLOYEES COVERED.] Every person whois a131.5state employee, as defined in section 352.01, on July 1, 1967,131.6orbecomes a state employeeafter that dateas defined in 131.7 section 352.01 is covered by thesystemgeneral state employees 131.8 retirement plan. Acceptance of state employment or continuance 131.9 in state service is deemed to be consent to have deductions made 131.10 from salary for deposit to the credit of the account of the 131.11 state employee in the retirement fund. 131.12 Sec. 13. Minnesota Statutes 2004, section 352.021, 131.13 subdivision 3, is amended to read: 131.14 Subd. 3. [OPTIONAL EXEMPTIONS.] Any person who is 131.15 appointed by the governor or lieutenant governor may request 131.16 exemption from coverage by the general state employees 131.17 retirement plan under this chapter if the appointee is notso131.18 coveredatby the plan on the date of appointment. To qualify 131.19 for this exemption, a written request must be made within 90 131.20 days from the date of entering upon the duties of the position 131.21 to which the person is appointed. After making the request, a 131.22 person requesting the exemption is not entitled to coverage by 131.23 the general state employees retirement plan while employed in 131.24 the position that entitled that person to an exemption from 131.25 coverage. 131.26 Sec. 14. Minnesota Statutes 2004, section 352.021, 131.27 subdivision 4, is amended to read: 131.28 Subd. 4. [REENTERING SERVICE AFTER REFUND.] When a former 131.29 employee who has withdrawn accumulated contributions reenters 131.30 employment in a position entitled to coverage under the 131.31systemgeneral state employees retirement plan, the employee 131.32shallmust be covered by thesystemplan on the same basis as a 131.33 new employee and is not entitled to credit for any former 131.34 service. The annuity rights forfeited when taking a refund can 131.35 only be restored as provided in this chapter. 131.36 Sec. 15. Minnesota Statutes 2004, section 352.04, 132.1 subdivision 1, is amended to read: 132.2 Subdivision 1. [FUND CREATED.] (a) There is created a 132.3 special fund to be known as the general state employees 132.4 retirement fund. In that fundthere shall be deposited132.5employees, employee contributions,employersemployer 132.6 contributions, and other amounts authorized by law must be 132.7 deposited. 132.8 (b)Effective July 1, 1969,The general state employees 132.9 retirement plan of the Minnesota State Retirement Systemshall132.10 must participate in the Minnesota postretirement investment fund. 132.11In that fund there shall be depositedThe amounts provided in 132.12 section 352.119 must be deposited in the Minnesota 132.13 postretirement investment fund. 132.14 Sec. 16. Minnesota Statutes 2004, section 352.04, 132.15 subdivision 12, is amended to read: 132.16 Subd. 12. [FUND DISBURSEMENT RESTRICTED.] The general 132.17 state employees retirement fund and the participation in the 132.18 Minnesota postretirement investment fund must be disbursed only 132.19 for the purposes provided by law. The expenses of the system 132.20 and any benefits provided by law, other than benefits payable 132.21 from the Minnesota postretirement investment fund, must be paid 132.22 from the general state employees retirement fund. The 132.23 retirement allowances, retirement annuities, and disability 132.24 benefits, as well as refunds of any sum remaining to the credit 132.25 of a deceased retired employee or a disabled employee must be 132.26 paid only from the general state employees retirement fund after 132.27 the needs have been certified and the amounts withdrawn from the 132.28 participation in the Minnesota postretirement investment fund 132.29 under section 11A.18. The amounts necessary to make the 132.30 payments from the general state employees retirement fund and 132.31 the participation in the Minnesota postretirement investment 132.32 fund are annually appropriated from these funds for those 132.33 purposes. 132.34 Sec. 17. Minnesota Statutes 2004, section 352.041, 132.35 subdivision 1, is amended to read: 132.36 Subdivision 1. [ALLOWABLE SERVICE CREDIT.]Any(a) An 133.1 employee covered by thesystemgeneral state employees 133.2 retirement plan who is given a leave of absence for employment 133.3 by a political subdivision of the stateshallremains a member 133.4 of the plan and must continue to pay member contributions into 133.5 the general state employees retirement fund for the period of 133.6 leave. 133.7 (b) Upon payment of member contributions, the employee must 133.8 be given allowable service credit as a state employee on the 133.9 records of thesystemretirement plan as though the employee had 133.10 received salary from the state during the leave. Payments into 133.11 the retirement fundshallmust be at the rate required in 133.12 section 352.04, subdivision 2, and must be based upon the salary 133.13 received from the political subdivisionsubject to the maximum133.14amount, if any. 133.15 Sec. 18. Minnesota Statutes 2004, section 352.041, 133.16 subdivision 2, is amended to read: 133.17 Subd. 2. [EMPLOYEE CONTRIBUTIONS, PROCEDURE.] The officer 133.18 or employee who is authorized by law to pay salaries to 133.19 employees of the political subdivision which is employing a 133.20 state employeeshall havemust deduct employee contributions 133.21deductedfor the general state employees retirement plan under 133.22 section 352.04, subdivision 2, from the salary of each employee 133.23 who is on leave of absence from state service on each payroll 133.24 abstract andshallmust pay the sum to the director following 133.25 the conclusion of each pay period. 133.26 Sec. 19. Minnesota Statutes 2004, section 352.041, 133.27 subdivision 3, is amended to read: 133.28 Subd. 3. [EMPLOYER CONTRIBUTIONS, PROCEDURE.] The officer 133.29 or employee who is authorized by law to pay salaries to 133.30 employees of the political subdivision which is employing a 133.31 state employee covered by thesystem shallgeneral state 133.32 employees retirement plan also must have employer contributions 133.33 made to the general state employees retirement fundonfollowing 133.34 the conclusion of each payroll abstract in the amount required 133.35 by section 352.04, subdivision 3. These contributionsare to133.36 must be charged to the political subdivision as an 134.1 administrative cost. 134.2 Sec. 20. Minnesota Statutes 2004, section 352.041, 134.3 subdivision 5, is amended to read: 134.4 Subd. 5. [EMPLOYER CONTRIBUTIONS, LEAVES OF ABSENCE; TAX 134.5 LEVIES.] (a) Every political subdivision which is employing a 134.6 state employee covered by the system on leave of absence from 134.7 state service for employment by a political subdivision of the 134.8 stateshallmust pay into the general state employees retirement 134.9 fund the amount of the employer contribution required by law for 134.10 state employees covered by the system under section 352.04, 134.11 subdivision 3. 134.12 (b) Employing political subdivisions, exceptother than 134.13 school districts,may levy taxes necessary for the payment of 134.14 employer contributions without limitation as to rate or amount. 134.15 The levy of the taxes does not reduce the amount of other 134.16 taxestothat may be levied by political subdivisions,134.17exceptother than school districts,which are subject to any 134.18 limitation. 134.19 Sec. 21. Minnesota Statutes 2004, section 352.15, 134.20 subdivision 1, is amended to read: 134.21 Subdivision 1. [EXEMPTION; EXCEPTIONS.]None of the money,134.22annuities, or other benefits mentioned in this chapter is134.23assignable either in law or in equity or subject to execution,134.24levy, attachment, garnishment, or other legal process, except as134.25provided in subdivision 1a or section 518.58, 518.581, or134.26518.6111.The provisions of section 356.401 apply to the general 134.27 state employees retirement plan and to the correctional state 134.28 employees retirement plan. 134.29 Sec. 22. Minnesota Statutes 2004, section 352.15, 134.30 subdivision 3, is amended to read: 134.31 Subd. 3. [DEDUCTING HEALTH OR DENTAL INSURANCE PREMIUMS.] 134.32 The board maydirectauthorize, at its discretion, the deduction 134.33 of a retiree's health or dental insurance premiums and transfer 134.34 of the amounts to a health or dental insurance carrier covering 134.35 state employees. The insurance carrier must certify that the 134.36 retired employee has signed an authorization for the deduction 135.1 and provide a computer readable roster of covered retirees and 135.2 amounts. The health or dental insurance carrier must refund 135.3 deductions withheld from a retiree's check in error directly to 135.4 the retiree. The board shall require that the insurance carrier 135.5toreimburse the fund for the administrative expense of 135.6 withholding the premium amounts. The insurance carrier shall 135.7 assume liability for any failure of the system to properly 135.8 withhold the premium amounts. 135.9 Sec. 23. Minnesota Statutes 2004, section 352.15, 135.10 subdivision 4, is amended to read: 135.11 Subd. 4. [DIRECT TRANSFER OF REFUNDS.] A direct transfer 135.12 ofaccountrefunds under this chapter may be made to an 135.13 individual retirement savingsaccountsaccount or a qualified 135.14 retirementplansplan of the person upon the receipt of an 135.15 application for transfer by a former employee, on forms 135.16 acceptable to the executive director. 135.17 Sec. 24. Minnesota Statutes 2004, section 352.22, 135.18 subdivision 10, is amended to read: 135.19 Subd. 10. [OTHER REFUNDS.] Former employees covered by the 135.20 system are entitled to apply for refunds if they are or become 135.21 members of the State Patrol retirement fund, the state Teachers 135.22 Retirement Association, or employees of the University of 135.23 Minnesota excluded from coverage under the system by action of 135.24 the Board of Regents;or labor service employees, excluded from135.25coverage under section 352.01, subdivision 2b, clause (25);or 135.26 employees of the adjutant general who under federal law 135.27 effectually elect membership in a federal retirement system; or 135.28 officers or employees of the senate or house of representatives, 135.29 excluded from coverage under section 352.01, subdivision 2b, 135.30 clause(8)(7). The refunds must include accumulated 135.31 contributions plus interest as provided in subdivision 2. These 135.32 employees may apply for a refund once 30 days or more have 135.33 elapsed after their coverage ceases, even if they continue in 135.34 state service but in positions not covered by this chapter. 135.35 Sec. 25. Minnesota Statutes 2004, section 352B.01, 135.36 subdivision 1, is amended to read: 136.1 Subdivision 1. [SCOPE.] In this chapter, each of the terms 136.2 defined in this sectionhavehas themeaningsmeaning given 136.3themto it. 136.4 Sec. 26. Minnesota Statutes 2004, section 352B.01, 136.5 subdivision 2, is amended to read: 136.6 Subd. 2. [MEMBER.] "Member" means: 136.7 (1) a State Patrol member currently employedafter June 30,136.81943,under section 299D.03 by the state, who is a peace officer 136.9 under section 626.84, and whose salary or compensation is paid 136.10 out of state funds; 136.11 (2) a conservation officer employed under section 97A.201, 136.12 currently employed by the state, whose salary or compensation is 136.13 paid out of state funds; 136.14 (3) a crime bureau officer who was employed by the crime 136.15 bureau and was a member of the Highway Patrolmen's retirement 136.16 fund on July 1, 1978, whether or not that person has the power 136.17 of arrest by warrant after that date, or who is employed as 136.18 police personnel, with powers of arrest by warrant under section 136.19 299C.04, and who is currently employed by the state, and whose 136.20 salary or compensation is paid out of state funds; 136.21 (4) a person who is employed by the state in the Department 136.22 of Public Safety in a data processing management position with 136.23 salary or compensation paid from state funds, who was a crime 136.24 bureau officer covered by the State Patrol retirement plan on 136.25 August 15, 1987, and who was initially hired in the data 136.26 processing management position within the department during 136.27 September 1987, or January 1988, with membership continuing for 136.28 the duration of the person's employment in that position, 136.29 whether or not the person has the power of arrest by warrant 136.30 after August 15, 1987; 136.31 (5) a public safety employeedefined aswho is a peace 136.32 officerinunder section 626.84, subdivision 1, paragraph (c), 136.33 and who is employedwithby the Division of Alcohol and Gambling 136.34 Enforcement under section 299L.01; and 136.35 (6) a Fugitive Apprehension Unit officer after October 31, 136.36 2000, who is employed by the Office of Special Investigations of 137.1 the Department of Corrections and who is a peace officer under 137.2 section 626.84. 137.3 Sec. 27. Minnesota Statutes 2004, section 352B.01, 137.4 subdivision 3, is amended to read: 137.5 Subd. 3. [ALLOWABLE SERVICE.] (a) "Allowable service" 137.6 means: 137.7 (1) for members defined in subdivision 2, clause(a)(1), 137.8monthlyserviceis granted forin any month for which payments 137.9 have been made to the State Patrol retirement fund, and 137.10 (2) for members defined in subdivision 2, clauses(b)(2) 137.11 and(c)(3), service for which payments have been made to the 137.12 State Patrol retirement fund, service for which payments were 137.13 made to the State Police officers retirement fund after June 30, 137.14 1961, and all prior service which was credited to a member for 137.15 service on or before June 30, 1961. 137.16 (b) Allowable service also includes any period of absence 137.17 from duty by a member who, by reason of injury incurred in the 137.18 performance of duty, is temporarily disabled and for which 137.19 disability the state is liable under the workers' compensation 137.20 law, until the date authorized by the executive director for 137.21 commencement of payment of a disability benefit or return to 137.22 employment. 137.23 (c) MS 2002 (Expired) 137.24 (d) Allowable service means service in a month during which 137.25 a member is paid a salary from which a member contribution is 137.26 deducted, deposited, and credited in the State Patrol retirement 137.27 plan. 137.28 Sec. 28. Minnesota Statutes 2004, section 352B.02, 137.29 subdivision 1e, is amended to read: 137.30 Subd. 1e. [AUDIT; ACTUARIAL VALUATION.] The legislative 137.31 auditor shall audit the fund. Any actuarial valuation of the 137.32 fund required under section 356.215 must be prepared by the 137.33 actuary retained under section 356.214. Any approved actuary 137.34 retained by the executive director under section 352.03, 137.35 subdivision 6, may perform actuarial valuations and experience 137.36 studies to supplement those performed by thecommission-retained138.1 actuary retained under section 356.214. Any supplemental 138.2 actuarial valuation or experience studiesshallmust be filed 138.3 with the executive director of the Legislative Commission on 138.4 Pensions and Retirement. 138.5 Sec. 29. Minnesota Statutes 2004, section 352B.071, is 138.6 amended to read: 138.7 352B.071 [EXEMPTION FROM PROCESS.] 138.8None of the money, annuities, or other benefits provided138.9for in this chapter is assignable either in law or in equity or138.10be subject to execution, levy, attachment, garnishment, or other138.11legal process, except as provided in section 518.58, 518.581, or138.12518.6111.The provisions of section 356.401 apply to the State 138.13 Patrol retirement plan. 138.14 Sec. 30. Minnesota Statutes 2004, section 352D.01, is 138.15 amended to read: 138.16 352D.01 [ESTABLISHMENT.] 138.17 There is hereby established within the Minnesota State 138.18 Retirement System a retirement program for certain public 138.19 employees to be known as the Minnesota unclassified employees 138.20 retirement program, which shall be. The program must be 138.21 administered by the Minnesota State Retirement System. 138.22 Sec. 31. Minnesota Statutes 2004, section 352D.015, 138.23 subdivision 3, is amended to read: 138.24 Subd. 3. [SUPPLEMENTAL INVESTMENT FUND.] "Supplemental 138.25 investment fund" means the fund established and governed by 138.26 section 11A.17. 138.27 Sec. 32. Minnesota Statutes 2004, section 352D.015, 138.28 subdivision 4, is amended to read: 138.29 Subd. 4. [GENERAL FUND.] "General fund" means the general 138.30 state employees retirement fund except the moneys for the 138.31 unclassified program. 138.32 Sec. 33. Minnesota Statutes 2004, section 352D.03, is 138.33 amended to read: 138.34 352D.03 [TRANSFER OF ASSETS.] 138.35 Unless an eligible employee enumerated in section 352D.02, 138.36 subdivision 1or 1a, has elected coverage under the individual 139.1 retirement account plan under chapter 354B, a sum of money 139.2 representing the assets credited to each employee exercising the 139.3 option contained in section 352D.02, plus an equal employer 139.4 contribution together with interest for the employment period at 139.5 theactuarially assumed ratesapplicable preretirement interest 139.6 actuarial assumption rate during this period, compounded 139.7 annually,shallmust be used for the purchase of shares on 139.8 behalf of each employee in the accounts of the supplemental 139.9 retirement fund established by section 11A.17.Any employer's139.10contribution to amortize the deficit in the state employee's139.11retirement fund shall not, however, be used for the purchase of139.12shares.139.13 Sec. 34. Minnesota Statutes 2004, section 352D.05, 139.14 subdivision 4, is amended to read: 139.15 Subd. 4. [REPAYMENT OF REFUND.] (a) A participant in the 139.16 unclassified program may repay regular refunds takenpursuant to139.17 under section 352.22, as provided in section 352.23. 139.18 (b) A participant in the unclassified program or an 139.19 employee covered by the general plan who has withdrawn the value 139.20 of the total shares may repay the refund taken and thereupon 139.21 restore the service credit, rights and benefits forfeited by 139.22 paying into the fund the amount refunded plus interest at an 139.23 annual rate of 8.5 percent compounded annually from the date 139.24 that the refund was taken until the date that the refund is 139.25 repaid. If the participant had withdrawn only the employee 139.26 shares as permitted under prior laws, repaymentshallmust be 139.27 pro rata.Payment shall139.28 (c) Except as provided in section 356.441, the repayment of 139.29 a refund under this section must be made in a lump sum. 139.30 Sec. 35. Minnesota Statutes 2004, section 352D.085, 139.31 subdivision 1, is amended to read: 139.32 Subdivision 1. [COMBINED SERVICE.] Except as provided in 139.33 section 356.30, 356.302, or 356.303, service under the 139.34 unclassified program for which the employee has been credited 139.35 with employee shares may be used for the limited purpose of 139.36 qualifying for benefits under sections 352.115, 352.72, 140.1 subdivision 1, 352.113, 354.44, 354.45, 354.48, and 354.60;140.2provided such. The service also may not be used to qualify for 140.3 a disability benefit under section 352.113 or 354.48 if a 140.4 participant was under the unclassified program at the time of 140.5 the disability, and provided further that. Also, the years of 140.6 service and salary paid while the participant was in the 140.7 unclassified programshallmay not be used in determining the 140.8 amount of benefits. 140.9 Sec. 36. Minnesota Statutes 2004, section 352D.09, 140.10 subdivision 5, is amended to read: 140.11 Subd. 5. [UNCLAIMED BENEFITS.] If the beneficiary, 140.12 surviving spouse or estate has not made application for benefits 140.13 within ten years after the date of the death of a participant, 140.14 the value of the sharesshall beis appropriated to theregular140.15 general state employees retirement fund and the provisions of 140.16 section 352.12, subdivision 12shall, govern. If a former 140.17 participant fails to make a claim for benefits within five years 140.18 after the termination of covered service or by age 70, whichever 140.19 is later, the value of the sharesshall beis appropriated to 140.20 the general state employees retirement fund and the provisions 140.21 of section 352.22, subdivision 8,shallapply. 140.22 Sec. 37. Minnesota Statutes 2004, section 352D.12, is 140.23 amended to read: 140.24 352D.12 [TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.] 140.25 (a) An employee who is a participant in the unclassified 140.26 program and who has prior service credit in a covered plan under 140.27chapters 3A,chapter 352,352C,353, 354, 354A,andor 422A 140.28 may, within the time limits specified in this section, elect to 140.29 transfer to the unclassified program prior service contributions 140.30 to one or more of those plans.Participants with six or more140.31years of prior service credit in a plan governed by chapter 3A140.32or 352C on July 1, 1998, may not transfer prior service140.33contributions. Participants with less than six years of prior140.34service credit in a plan governed by chapter 3A or 352C on July140.351, 1998, must be contributing to the unclassified plan on or140.36after January 5, 1999, in order to transfer prior contributions.141.1 (b) For participants with prior service credit in a plan 141.2 governed by chapter 352, 353, 354, 354A, or 422A, "prior service 141.3 contributions" means the accumulated employee and equal employer 141.4 contributions with interest at an annual rate of 8.5 percent 141.5 compounded annually, based on fiscal year balances.For141.6participants with less than six years of service credit as of141.7July 1, 1998, and with prior service credit in a plan governed141.8by chapter 3A or 352C, "prior service contributions" means an141.9amount equal to twice the amount of the accumulated member141.10contributions plus annual compound interest at the rate of 8.5141.11percent, computed on fiscal year balances.141.12 (c) If a participant has taken a refund from a retirement 141.13 plan listed in this section, the participant may repay the 141.14 refund to that plan, notwithstanding any restrictions on 141.15 repayment to that plan, plus 8.5 percent interest compounded 141.16 annually and have the accumulated employee and equal employer 141.17 contributions transferred to the unclassified program with 141.18 interest at an annual rate of 8.5 percent compounded annually 141.19 based on fiscal year balances. If a person repays a refund and 141.20 subsequently elects to have the money transferred to the 141.21 unclassified program, the repayment amount, including interest, 141.22 is added to the fiscal year balance in the year which the 141.23 repayment was made. 141.24 (d) A participant electing to transfer prior service 141.25 contributions credited to a retirement plan governed by chapter 141.26 352, 353, 354, 354A, or 422A as provided under this section must 141.27 completethea written application for the transfer and repay 141.28 any refund within one year of the commencement of the employee's 141.29 participation in the unclassified program.A participant141.30electing to transfer prior service contributions credited to a141.31retirement plan governed by chapter 3A or 352C as provided under141.32this section must complete the application for the transfer and141.33repay any refund between January 5, 1999, and June 1, 1999, if141.34the employee commenced participation in the unclassified program141.35before January 5, 1999, or within one year of the commencement141.36of the employee's participation in the unclassified program if142.1the employee commenced participation in the unclassified program142.2after January 4, 1999.142.3 Sec. 38. Minnesota Statutes 2004, section 353.01, 142.4 subdivision 32, is amended to read: 142.5 Subd. 32. [COORDINATED MEMBER.] "Coordinated member" means 142.6anya public employee, includinganya public hospital employee, 142.7 who is covered byanyan agreement or modification made between 142.8 the state and the Secretary of Health, EducationandWelfare142.9 Human Services, making the provisions of the federal Old Age, 142.10 Survivors and Disability Insurance Act applicable to the member 142.11 if the membership eligibility criteria are met under this 142.12 chapter. A coordinated member also is a former basic member who 142.13 has a complete and continuous separation for at least 30 days 142.14 from employment as a public employee meeting the requirements 142.15 specified in subdivision 28, paragraphs (a) and (b), and who 142.16 reenters public service as a public employee and meets the 142.17 membership eligibility criteria under this chapter. 142.18 Sec. 39. Minnesota Statutes 2004, section 353.01, 142.19 subdivision 33, is amended to read: 142.20 Subd. 33. [BASIC MEMBER.] "Basic member" meansanya 142.21 public employee, includinganya public hospital employee, who 142.22 is not covered by any agreement or modification made between the 142.23 state and the Secretary of Health, EducationandWelfareHuman 142.24 Services. 142.25 Sec. 40. Minnesota Statutes 2004, section 353.025, is 142.26 amended to read: 142.27 353.025 [RANGE ASSOCIATION OF MUNICIPALITIES AND SCHOOLS.] 142.28From and after January 1, 1982,Employees of the Range 142.29 Association of Municipalities and Schoolshereinafter referred142.30to as the association, shall becomeare coordinated members of 142.31 the general employees retirement plan of the Public Employees 142.32 Retirement Association unless specifically exempt under section 142.33 353.01, subdivision 2b, and. The Range Associationshall be142.34deemed to beof Municipalities and Schools is a governmental 142.35 subdivision for the purposes of this chapter. 142.36 Sec. 41. Minnesota Statutes 2004, section 353.026, is 143.1 amended to read: 143.2 353.026 [COVERAGE FOR CERTAIN MUNICIPAL AND SCHOOL DISTRICT 143.3 EMPLOYEES.] 143.4 Any person who was employed by the city of Minneapolis, 143.5 Special School District No. 1, or public corporation as defined 143.6 in section 422A.01, subdivision 9, on or after July 1, 1978, and 143.7prior tobefore July 1, 1979, and who was excluded from 143.8 retirement coverage by the coordinated program of the 143.9 Minneapolis municipal employees retirement fundpursuant to143.10 under section 422A.09, subdivision 3,shall beis entitled to 143.11 retirement coverage by the general employees retirement plan of 143.12 the Public Employees Retirement Association unless specifically 143.13 excludedpursuant tounder section 353.01, subdivision 2b, from 143.14 and after May 19, 1981. 143.15 Sec. 42. Minnesota Statutes 2004, section 353.027, is 143.16 amended to read: 143.17 353.027 [RETENTION OF COVERAGE FOR CERTAIN MUNICIPAL COURT 143.18 EMPLOYEES.] 143.19 Any person employed on January 1, 1975, by a municipal 143.20 court establishedpursuant tounder Minnesota Statutes 1957, 143.21 section 488.03, and located in the cities of New Brighton, 143.22 Roseville, Maplewood, North Saint Paul, White Bear Lake, or St. 143.23 Paulshall beis eligible for membership in the general 143.24 employees retirement plan of the Public Employees Retirement 143.25 Association andshall retainretains any rights or benefits the 143.26 person had attained as a member of the general employees 143.27 retirement plan of the association on January 1, 1975, so long 143.28 as the person remains an employee of the municipal court of 143.29 Ramsey County. 143.30 Sec. 43. Minnesota Statutes 2004, section 353.028, is 143.31 amended to read: 143.32 353.028 [CITY MANAGERS; ELECTION; DEFERRED COMPENSATION.] 143.33 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 143.34 section, each of the terms in this subdivision has the meaning 143.35 indicated. 143.36 (b) "City manager" means (1) a person who is duly appointed 144.1 to and is holding the position of city manager in a Plan B 144.2 statutory city or in a home rule city operating under the 144.3 "council-manager" form of government, or (2) a person who is 144.4 appointed to and is holding the position of chief administrative 144.5 officer of a home rule charter city or a statutory citypursuant144.6tounder a charter provision, ordinance, or resolution 144.7 establishing such a position and prescribing its duties and 144.8 responsibilities. 144.9 (c) "Governing body" means the city council of the city 144.10 employing the city manager. 144.11 (d) "Election" means the election described in subdivision 144.12 2. 144.13 Subd. 2. [ELECTION.] (a) A city manager may elect to be 144.14 excluded from membership in the general employees retirement 144.15 plan of the Public Employees Retirement Association. The 144.16 election of exclusion must be made within six months following 144.17 the commencement of employment, must be made in writing on a 144.18 form prescribed by the executive director, and must be approved 144.19 by a resolutionofadopted by the governing body of the city. 144.20 The election of exclusion is not effective until it is filed 144.21 with the executive director. Membership of a city manager in 144.22 theassociationgeneral employees retirement plan ceases on the 144.23 date the written election is received by the executive director 144.24 or upon a later date specified. Employee and employer 144.25 contributions made on behalf of a person exercising the option 144.26 to be excluded from membership under this section must be 144.27 refunded in accordance with section 353.27, subdivision 7. 144.28 (b) A city manager who has elected exclusion under this 144.29 subdivision may elect to revoke that action by filing a written 144.30 notice with the executive director. The notice must be on a 144.31 form prescribed by the executive director and must be approved 144.32 by a resolution of the governing body of the city. Membership 144.33 of the city manager in the association resumes prospectively 144.34 from the date of the first day of the pay period for which 144.35 contributions were deducted or, if pay period coverage dates are 144.36 not provided, the date on which the notice of revocation or 145.1 contributions are received in the office of the association, 145.2 provided that the notice of revocation is received by the 145.3 association within 60 days of the receipt of contributions. 145.4 (c) An election under paragraph (b) is irrevocable. Any 145.5 election under paragraph (a) or (b) must include a statement 145.6 that the individual will not seek authorization to purchase 145.7 service credit for any period of excluded service. 145.8 Subd. 3. [DEFERRED COMPENSATION; CITY CONTRIBUTION.] If an 145.9 election of exclusion is made, and if the city manager and the 145.10 governing body of the city additionally agree in writing that 145.11 the additional compensation is to be deferred andshallis to be 145.12 contributed on behalf of the city manager to a deferred 145.13 compensation program which meets the requirements of section 457 145.14 of the Internal Revenue Code of19541986, as amendedthrough145.15December 31, 1980, the governing body may compensate the city 145.16 manager, in addition to the salary allowed under any limitation 145.17 imposed on salaries by law or charter, in an amount equal to the 145.18 employer contribution which would be required by section 353.27, 145.19 subdivision 3, if the city manager were a member of the 145.20associationgeneral employees retirement plan. 145.21 Subd. 4. [REFUNDS; DEFERRED ANNUITY.] A city manager who 145.22 makes an election to be excluded from membership is entitled to 145.23 a refund of accumulated deductions or, if otherwise qualified, a 145.24 deferred annuityin the manner provided byunder section 353.34, 145.25 at the option of the manager. 145.26 Subd. 5. [ELECTION; OTHER EMPLOYMENT.] If a city manager 145.27 who has made an election to be excluded subsequently accepts 145.28 employment in another governmental subdivision or subsequently 145.29 accepts employment other than as a city manager in the same 145.30 city, the electionshall be deemed to have beenis rescinded on 145.31 the effective date of employment. 145.32 Sec. 44. Minnesota Statutes 2004, section 353.14, is 145.33 amended to read: 145.34 353.14 [BENEFITS FROM OTHER FUNDS.] 145.35 No annuity or benefit provided by this chaptershallmay be 145.36 affected, diminished, or impaired by any pension, benefit, or 146.1 annuity which any member or survivor is entitled to receive from 146.2 a tax supported public retirement plan or system authorized by 146.3 any other law, forbased on service that is different service 146.4 than the service for which the member or survivor is entitled to 146.5 receive benefit or annuity from a retirement plan administered 146.6 by the Public Employees Retirement Association. 146.7 Sec. 45. Minnesota Statutes 2004, section 353.15, 146.8 subdivision 1, is amended to read: 146.9 Subdivision 1. [EXEMPTION; EXCEPTIONS.]No money, annuity,146.10or benefit provided for in this chapter is assignable or subject146.11to execution, levy, attachment, garnishment, or legal process,146.12except as provided in subdivision 2 or section 518.58, 518.581,146.13or 518.6111.The provisions of section 356.401 apply to the 146.14 general employees retirement plan, to the public employees 146.15 police and fire retirement plan, and to the local government 146.16 correctional service retirement plan. 146.17 Sec. 46. Minnesota Statutes 2004, section 353.15, 146.18 subdivision 3, is amended to read: 146.19 Subd. 3. [PAYMENT TO PUBLIC BODIES.] If, in the judgment 146.20 of the executive director, conditions so warrant, payment of an 146.21 annuity, a retirement benefit, or a refund may be made to a 146.22 public body in behalf of an annuitant, disabilitant, or survivor 146.23 upon such terms as the executive director may prescribe. 146.24 Sec. 47. Minnesota Statutes 2004, section 353.27, 146.25 subdivision 11, is amended to read: 146.26 Subd. 11. [EMPLOYERS; REQUIRED TO FURNISH REQUESTED 146.27 INFORMATION.] (a) All governmental subdivisions shall furnish 146.28 promptly such other information relative to the employment 146.29 status of all employees or former employees, including, but not 146.30 limited to, payroll abstracts pertaining to all past and present 146.31 employees, as may be requested by theassociation or its146.32 executive director, including schedules of salaries applicable 146.33 to various categories of employment. 146.34 (b) In the event payroll abstract records have been lost or 146.35 destroyed, for whatever reason or in whatever manner, so that 146.36 such schedules of salaries cannot be furnished therefrom, the 147.1 employing governmental subdivision, in lieu thereof, shall 147.2 furnish to the association an estimate of the earnings of any 147.3 employee or former employee for any period as may be requested 147.4 by theassociation or itsexecutive director.ShouldIf the 147.5 associationreceive such schedulesis provided a schedule of 147.6 estimated earnings, the executive director isherebyauthorized 147.7 to use the same as a basis for making whatever computations 147.8 might be necessary for determining obligations of the employee 147.9 and employer to the retirement fund. If estimates are not 147.10 furnished by the employerpursuant toat the request of the 147.11association or itsexecutive director, theassociationexecutive 147.12 director may estimate the obligations of the employee and 147.13 employer to the retirement fund based uponsuchthose recordsas147.14 that are in its possession.Where payroll abstracts have been147.15lost or destroyed, the governmental agency need not furnish any147.16information pertaining to employment prior to July 1, 1963. The147.17association shall make no estimate of any obligation of any147.18employee, former employee, or employer covering employment prior147.19to July 1, 1963.147.20 Sec. 48. Minnesota Statutes 2004, section 353.271, is 147.21 amended to read: 147.22 353.271 [PARTICIPATION IN MINNESOTA POSTRETIREMENT 147.23 INVESTMENT FUND.] 147.24 Subdivision 1. [AUTHORIZATION.] The general employees 147.25 retirement plan of the Public Employees Retirement Association, 147.26includingthe public employees police and firefund but147.27excluding the various local relief association consolidation147.28accounts, isretirement plan, and the local government 147.29 correctional service retirement plan are authorized to 147.30 participate in the Minnesota postretirement investment fund. 147.31 Thereshall beis one general participation in the Minnesota 147.32 postretirement investment fund forall purposes byeach plan of 147.33 the Public Employees Retirementfund and one general147.34participation in the Minnesota postretirement investment fund147.35for all purposes by the public employees police and fire147.36fundAssociation. 148.1 Subd. 2. [VALUATION OF ASSETS; ADJUSTMENT OF BENEFITS.] 148.2(1)(a) The required reserves for retirement annuities payable 148.3 as provided in this chapter other than those payable from the 148.4 various local relief association consolidation accounts, as 148.5 determined in accordance with the appropriate mortality table 148.6 adopted by the board of trustees based on the experience of the 148.7 fund as recommended by the actuary retainedby the Legislative148.8Commission on Pensions and Retirementunder section 356.214, and 148.9 approved under section 356.215, subdivision 18, and using the 148.10 postretirement interest assumption specified in section 356.215, 148.11 subdivision 8,shallmust be transferred to the Minnesota 148.12 postretirement investment fund as of the last business day of 148.13 the month in which the retirement annuity begins. 148.14(2)(b) Annuity paymentsother than those payable from the148.15various local relief association consolidation accounts148.16shallmust be adjusted in accordance with the provisions of 148.17 section 11A.18. 148.18(3)(c) Increases in paymentspursuant tounder this 148.19 sectionor from the various local relief association148.20consolidation accounts, if applicable, willmust be made 148.21 automatically unless the intended recipient files written notice 148.22 with the executive director of the Public Employees Retirement 148.23 Association requesting that the increaseshallnot be made. 148.24 Sec. 49. Minnesota Statutes 2004, section 353.31, 148.25 subdivision 1c, is amended to read: 148.26 Subd. 1c. [COORDINATED MEMBERS.] Except for benefits 148.27 provided under section 353.32,subdivisions 1 and 1a,no 148.28 survivor benefits are payable to the surviving spouse or 148.29 dependent children of a deceased coordinated member. 148.30 Sec. 50. Minnesota Statutes 2004, section 353.32, 148.31 subdivision 9, is amended to read: 148.32 Subd. 9. [PAYMENT TO A MINOR.] If a member or former 148.33 member dies having named as beneficiary a person who is a minor 148.34 at the time of the application for refund, the board may make 148.35 the payment(a)(1) directly to the minor,(b)(2) toany148.36 a person who has legally qualified and is acting as guardian of 149.1 the minor's person or property in any jurisdiction, or(c)(3) 149.2 to either parent of the minor or toanyan adult person with 149.3 whom the minor may at the time be living, provided only that. 149.4 The parent or other person to whom any amount is to be 149.5 paidshall have advisedmust advise the board in writing that 149.6 the amount will be held or used in trust for the benefit of such 149.7 minor. Any annuity or disability benefit payable at the time of 149.8 death of an annuitant or recipient of a disability benefit, 149.9 which is payable to a beneficiary who is a minor, may be paid in 149.10 the same manner.SuchThe paymentshall beis a bar to recovery 149.11 by any other person or persons. 149.12 Sec. 51. Minnesota Statutes 2004, section 353.33, 149.13 subdivision 12, is amended to read: 149.14 Subd. 12. [BASIC DISABILITY SURVIVOR BENEFITS.] If a basic 149.15 member who is receiving a disability benefit under subdivision 3: 149.16(a)(1) dies before attaining age 65 or within five years 149.17 of the effective date of the disability, whichever is later, the 149.18 surviving spouseshallis entitled to receive a survivor benefit 149.19 under section 353.31, unless the surviving spouse elected to 149.20 receive a refund under section 353.32, subdivision 1.; 149.21(b)(2) is living at age 65 or five years after the 149.22 effective date of the disability, whichever is later, the basic 149.23 member may continue to receive a normal disability benefit, or 149.24 elect a joint and survivor optional annuity under section 149.25 353.31, subdivision 1b. The election of the joint and survivor 149.26 optional annuity must occur within 90 days of attaining age 65 149.27 or of reaching the five-year anniversary of the effective date 149.28 of the disability benefit, whichever is later. The optional 149.29 annuity takes effect on the first day of the month following the 149.30 month in which the person attains age 65 or reaches the 149.31 five-year anniversary of the effective date of the disability 149.32 benefit, whichever is later.; or 149.33(c)(3) if there is a dependent child or children under 149.34paragraph (a) or (b)clause (1) or (2), theassociation shall149.35grantdependent child is entitled to a dependent child benefit 149.36 under section 353.31, subdivision 1b, paragraph (b). 150.1 Sec. 52. Minnesota Statutes 2004, section 354.091, is 150.2 amended to read: 150.3 354.091 [SERVICE CREDIT.] 150.4 (a) In computing service credit, no teachershallmay 150.5 receive credit for more than one year of teaching service for 150.6 any fiscal year.Commencing July 1, 1961Additionally, in 150.7 crediting allowable service: 150.8 (1) if a teacher teaches less than five hours in a day, 150.9 service credit must be given for the fractional part of the day 150.10 as the term of service performed bears to five hours; 150.11 (2) if a teacher teaches five or more hours in a day, 150.12 service credit must be given for only one day; 150.13 (3) if a teacher teaches at least 170 full days in any 150.14 fiscal year, service credit must be given for a full year of 150.15 teaching service; and 150.16 (4) if a teacher teaches for only a fractional part of the 150.17 year, service credit must be given for such fractional part of 150.18 the year in the same relationship as the period of service 150.19 performed bears to 170 days. 150.20 (b) A teachershallmust receive a full year of service 150.21 credit based on the number of days in the employer's full school 150.22 year ifitthat school year is less than 170 days. Teaching 150.23 service performed before July 1, 1961, must be computed under 150.24 the law in effect at the time it was performed. 150.25 (c) A teacher must not lose or gain retirement service 150.26 credit as a result of the employer converting to a flexible or 150.27 alternate work schedule. If the employer converts to a flexible 150.28 or alternate work schedule, the forms for reporting teaching 150.29 service and the procedures for determining service credit must 150.30 be determined by the executive director with the approval of the 150.31 board of trustees. 150.32 (d) For all services rendered on or after July 1, 2003, 150.33 service credit for all members employed by the Minnesota State 150.34 Colleges and Universities system must be determined: 150.35 (1) for full-time employees, by the definition of full-time 150.36 employment contained in the collective bargaining agreement for 151.1 those units listed in section 179A.10, subdivision 2, or 151.2 contained in the applicable personnel or salary plan for those 151.3 positions designated in section 179A.10, subdivision 1; 151.4 (2) for part-time employees, by the appropriate proration 151.5 of full-time equivalency based on the provisions contained in 151.6 the collective bargaining agreement for those units listed in 151.7 section 179A.10, subdivision 2, or contained in the applicable 151.8 personnel or salary plan for those positions designated in 151.9 section 179A.10, subdivision 1, and the applicable procedures of 151.10 the Minnesota State Colleges and Universities system; and 151.11 (3) in no case may a member receive more than one year of 151.12 service credit for any fiscal year. 151.13 Sec. 53. Minnesota Statutes 2004, section 354.10, 151.14 subdivision 1, is amended to read: 151.15 Subdivision 1. [EXEMPTION; EXCEPTIONS.] (a) The provisions 151.16 of section 356.401 apply to the teachers retirement plan. 151.17 (b) The right of a teacher to take advantage of the 151.18 benefits provided by this chapter, is a personal right only and 151.19 is not assignable. All money to the credit of a teacher's 151.20 account in the fund or any money payable to the teacher from the 151.21 fund belongs to the state of Minnesota until actually paid to 151.22 the teacher or a beneficiary under this chapter. 151.23 (c) The association may acknowledge a properly completed 151.24 power of attorney form.An assignment or attempted assignment151.25of a teacher's interest in the fund, or of the beneficiary's151.26interest in the fund, by a teacher or a beneficiary is void and151.27exempt from garnishment or levy under attachment or execution,151.28except as provided in subdivision 2 or 3, or section 518.58,151.29518.581, or 518.6111.151.30 Sec. 54. Minnesota Statutes 2004, section 354.10, 151.31 subdivision 3, is amended to read: 151.32 Subd. 3. [PAYMENT TO PUBLIC BODIES.] If, in the judgment 151.33 of the executive director, conditions so warrant, payment of an 151.34 annuity, a retirement benefit, or a refund may be made to a 151.35 public body in behalf of an annuitant, disabilitant, or survivor 151.36 upon such terms as the executive director may prescribe. 152.1 Sec. 55. Minnesota Statutes 2004, section 354.10, 152.2 subdivision 4, is amended to read: 152.3 Subd. 4. [CHANGES IN DESIGNATED BENEFICIARIES.]Any(a) A 152.4 beneficiary designated by a retiree or member under section 152.5 354.05, subdivision 22, may be changed or revoked by the retiree 152.6 or member on a form provided by the executive director. 152.7 (b) A change or revocation made under this subdivision is 152.8 valid only if the properly completed form is received by the 152.9 association on or before the date of death of the retiree or the 152.10 member. 152.11 (c) If a designated beneficiary dies before the retiree or 152.12 member designating the beneficiary,and a new beneficiary is not 152.13 designated, the retiree's or member's estate is the beneficiary. 152.14 Sec. 56. Minnesota Statutes 2004, section 354.33, 152.15 subdivision 5, is amended to read: 152.16 Subd. 5. [RETIREES NOT ELIGIBLE FOR FEDERAL BENEFITS.] 152.17 Notwithstanding the provisions of section 354.55, subdivision 3, 152.18 when any person retires after July 1, 1973, who(a)(1) has ten 152.19 or more years of allowable service, and(b)(2) does not have 152.20 any retroactive Social Security coverage by reason of the 152.21 person's position in the retirement system, and(c)(3) does not 152.22 qualify for federal old age and survivor primary benefits at the 152.23 time of retirement, the annuityshallmust be computed under 152.24 section 354.44, subdivision 2, of the law in effect on June 30, 152.25 1969, except that accumulations after June 30, 1957,shallmust 152.26 be calculated using the same mortality table and interest 152.27 assumption as are used to transfer the required reserves to the 152.28 Minnesota postretirement investment fund. 152.29 Sec. 57. Minnesota Statutes 2004, section 354.39, is 152.30 amended to read: 152.31 354.39 [EFFECTIVE DATE; APPLICATION.] 152.32After July 1, 1971, anyA member of the Teachers Retirement 152.33 Association who is employed in a new state universityandor any 152.34 other newinstitutionsinstitution of higher learning not 152.35 included in any agreement or modification made between the state 152.36 and the federal Secretary of Health, EducationandWelfareHuman 153.1 Services, making the provisions of the federal Old Ageand, 153.2 Survivors and Disability Insurance Act applicable to such 153.3 members,shallmust be covered under the provisions of this 153.4 chapter applicable to coordinated members. 153.5 Sec. 58. Minnesota Statutes 2004, section 354.41, 153.6 subdivision 2, is amended to read: 153.7 Subd. 2. [TEACHERS.] Every teacherafter June 30, 1957,in 153.8the service or enteringthe service of the state or one of its 153.9 governmentalsubdivisionsubdivisions as a teacher, except 153.10 personsspeciallyspecifically excluded,shallmust become a 153.11 member of the association by the acceptance of such employment. 153.12 Sec. 59. Minnesota Statutes 2004, section 354.42, is 153.13 amended by adding a subdivision to read: 153.14 Subd. 1a. [TEACHERS RETIREMENT FUND.] (a) Within the 153.15 Teachers Retirement Association and the state treasury is 153.16 created a special retirement fund, which must include all the 153.17 assets of the Teachers Retirement Association and all revenue of 153.18 the association. The fund is the continuation of the fund 153.19 established under Laws 1931, chapter 406, section 2, 153.20 notwithstanding the repeal of Minnesota Statutes 1973, section 153.21 354.42, subdivision 1, by Laws 1974, chapter 289, section 59. 153.22 (b) The teachers retirement fund must be credited with all 153.23 employee and employer contributions, all investment revenue and 153.24 gains, and all other income authorized by law. 153.25 (c) From the teachers retirement fund is appropriated the 153.26 payments of annuities and benefits authorized by this chapter, 153.27 the transfers to the Minnesota postretirement investment fund, 153.28 and the reasonable and necessary expenses of administering the 153.29 fund and the association. 153.30 Sec. 60. Minnesota Statutes 2004, section 354.44, 153.31 subdivision 2, is amended to read: 153.32 Subd. 2. [COMPUTATION OF MONEY PURCHASE ANNUITY.] (a) The 153.33 amount of retirement annuity is an amount equal to double the 153.34 annuity which could be purchased by the member's accumulated 153.35 deductions plus interest thereon. The annuityshallmust be 153.36 determined by the member's age, sex, double the amount of 154.1 accumulated deductions, double the amount of interest earned on 154.2 the accumulated deductions, and the appropriate mortality tables 154.3 and interest rates. To determine the amount of the annuity for 154.4 a basic member, the accumulated deductionsprior tobefore July 154.5 1, 1957, and the accumulated deductionssubsequent toafter July 154.6 1, 1957,shallmust be considered separately. 154.7(1)(b) For service renderedprior tobefore July 1, 1957, 154.8 the accumulated deductions foranya membershallmust be 154.9 carried forward at a fixed amount which is shown credited to the 154.10 member's account as of that date. That fixed amountshallmust 154.11 also include any payments in lieu of salary deductions whichare154.12to be made in the future and arewere actually so madepursuant154.13tounder an agreement executed between the member and the board 154.14 as authorized by section 354.50 or any other authorized payments 154.15 made by the member to the fund. The annuity granted with 154.16 respect to the periodshallmust be determined as follows: 154.17(a)(1) the fixed amount of the accumulated deductions for 154.18 the period including the interest credited on the amount as 154.19 earned up to July 1, 1957.; and 154.20(b)(2) annuity purchase rates based on the applicable 154.21 mortality table established by the board and the interest rate 154.22 assumption in effectprior tobefore July 1, 1957, in the case 154.23 of basic members and an annuity purchase rate based on an 154.24 appropriate annuity table of mortality established by the board 154.25 as provided in section 354.07, subdivision 1, and using the 154.26 applicable postretirement interest rate assumption specified in 154.27 section 356.215, subdivision 8, in the case of coordinated 154.28 members. 154.29(2)(c) For service renderedsubsequent toafter July 1, 154.30 1957, the accumulated deductions foranya membershallmust 154.31 consist of the amounts actually credited to the member's account 154.32 by reason of salary deductions. The annuity granted with 154.33 respect to the periodshallmust be determined by the following: 154.34(a)(1) accumulated deductions for the period; 154.35(b)(2) interest credited on these accumulated deductions 154.36 from July 1, 1957, to the date of retirement; 155.1(c)(3) interest credited on accumulated deductions 155.2 including prior credited interest provided in paragraph(1)(b) 155.3 from July 1, 1957, to the date of retirement; 155.4(d)(4) after the amount available for an annuity granted 155.5 with respect to the person is determined in accordance with the 155.6 provisions of this subdivision, an additional amount equal to 20 155.7 percent of the sum of clause(2)(a)(1) plus interest credited 155.8 tomembersa member's account from July 1, 1957, to date of 155.9 retirement is to be added. This added amount is not to be 155.10 doubled as provided for other amounts determined in this 155.11 subdivision; and 155.12(e)(5) the annuity purchase rate based on an appropriate 155.13 annuity table of mortality established by the board as provided 155.14 in section 354.07, subdivision 1, and using the applicable 155.15 postretirement interest rate assumption specified in section 155.16 356.215, subdivision 8. 155.17 Sec. 61. Minnesota Statutes 2004, section 354A.021, 155.18 subdivision 5, is amended to read: 155.19 Subd. 5. [TAX SHELTERED ANNUITY PROGRAM AND FUND.]AnyA 155.20 teachers retirement fund association may establish a tax 155.21 sheltered annuity program and fund meeting the requirements of 155.22 section 403(b) of the Internal Revenue Code of 1986, as amended 155.23through December 31, 1992, whichshallmust include all assets 155.24 which were acquired for the specific purpose of being credited 155.25 to the program and fund and to whichshallmust be credited all 155.26 employee contributions,and employer contributions, if 155.27 negotiated under a collective bargaining agreement, designated 155.28 for this purpose and all interest income attributable to the 155.29 assets of the program and fund. 155.30 Sec. 62. Minnesota Statutes 2004, section 354A.097, 155.31 subdivision 1, is amended to read: 155.32 Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A 155.33 teacher who has at least three years of allowable service credit 155.34 with the teachers retirement fund association and who performed 155.35 service in the United States armed forces before becoming a 155.36 teacher as defined in section 354A.011, subdivision 27, or who 156.1 failed to obtain service credit for a military leave of absence 156.2 period under section 354A.093, is entitled to purchase allowable 156.3 service credit for the initial period of enlistment, induction, 156.4 or call to active duty without any voluntary extension by making 156.5 payment under section356.55 provided356.551 if the teacher has 156.6 not purchased service credit from another Minnesota defined 156.7 benefit public employee pension plan for the same period of 156.8 service. 156.9 Sec. 63. Minnesota Statutes 2004, section 354A.31, 156.10 subdivision 5, is amended to read: 156.11 Subd. 5. [UNREDUCED NORMAL RETIREMENT ANNUITY.] Upon 156.12 retirement at normal retirement age with at least three years of 156.13 service credit, a coordinated membershall beis entitled to a 156.14 normal retirement annuity calculatedpursuant tounder 156.15 subdivision 4 or 4a, whichever applies. 156.16 Sec. 64. [356.401] [EXEMPTION FROM PROCESS.] 156.17 Subdivision 1. [EXEMPTION; EXCEPTIONS.] None of the money, 156.18 annuities, or other benefits provided for in the governing law 156.19 of a covered retirement plan is assignable either in law or in 156.20 equity or subject to state estate tax, or to execution, levy, 156.21 attachment, garnishment, or other legal process, except as 156.22 provided in subdivision 2 or section 518.58, 518.581, or 156.23 518.6111. 156.24 Subd. 2. [AUTOMATIC DEPOSITS.] (a) The chief 156.25 administrative officer of a covered retirement plan may remit, 156.26 through an automatic deposit system, annuity, benefit, or refund 156.27 payments only to a financial institution associated with the 156.28 National Automated Clearinghouse Association or a comparable 156.29 successor organization that is trustee for a person who is 156.30 eligible to receive the annuity, benefit, or refund. 156.31 (b) Upon the request of a retiree, disabilitant, survivor, 156.32 or former member, the chief administrative officer of a covered 156.33 retirement plan may remit the annuity, benefit, or refund check 156.34 to the applicable financial institution for deposit in the 156.35 person's individual account or the person's joint account. An 156.36 overpayment to a joint account after the death of the annuitant 157.1 or benefit recipient must be repaid to the fund of the 157.2 applicable covered retirement plan by the joint tenant if the 157.3 overpayment is not repaid to that fund by the financial 157.4 institution associated with the National Automated Clearinghouse 157.5 Association or its successor. The governing board of the 157.6 covered retirement plan may prescribe the conditions under which 157.7 these payments may be made. 157.8 Subd. 3. [COVERED RETIREMENT PLANS.] The provisions of 157.9 this section apply to the following retirement plans: 157.10 (1) the legislators retirement plan, established by chapter 157.11 3A; 157.12 (2) the general state employees retirement plan of the 157.13 Minnesota State Retirement System, established by chapter 352; 157.14 (3) the correctional state employees retirement plan of the 157.15 Minnesota State Retirement System, established by chapter 352; 157.16 (4) the State Patrol retirement plan, established by 157.17 chapter 352B; 157.18 (5) the elective state officers retirement plan, 157.19 established by chapter 352C; 157.20 (6) the unclassified state employees retirement program, 157.21 established by chapter 352D; 157.22 (7) the general employees retirement plan of the Public 157.23 Employees Retirement Association, established by chapter 353; 157.24 (8) the public employees police and fire plan of the Public 157.25 Employees Retirement Association, established by chapter 353; 157.26 (9) the public employees defined contribution plan, 157.27 established by chapter 353D; 157.28 (10) the local government correctional service retirement 157.29 plan of the Public Employees Retirement Association, established 157.30 by chapter 353E; 157.31 (11) the Teachers Retirement Association, established by 157.32 chapter 354; 157.33 (12) the Duluth Teachers Retirement Fund Association, 157.34 established by chapter 354A; 157.35 (13) the Minneapolis Teachers Retirement Fund Association, 157.36 established by chapter 354A; 158.1 (14) the St. Paul Teachers Retirement Fund Association, 158.2 established by chapter 354A; 158.3 (15) the individual retirement account plan, established by 158.4 chapter 354B; 158.5 (16) the higher education supplemental retirement plan, 158.6 established by chapter 354C; 158.7 (17) the Minneapolis employees retirement fund, established 158.8 by chapter 422A; 158.9 (18) the Minneapolis Police Relief Association, established 158.10 by chapter 423B; 158.11 (19) the Minneapolis Firefighters Relief Association, 158.12 established by chapter 423C; and 158.13 (20) the judges retirement fund, established by sections 158.14 490.121 to 490.132. 158.15 Sec. 65. Minnesota Statutes 2004, section 356.551, is 158.16 amended to read: 158.17 356.551 [POST JULY 1,20032004, PRIOR SERVICE CREDIT 158.18 PURCHASE PAYMENT AMOUNT DETERMINATION PROCEDURE.] 158.19 Subdivision 1. [APPLICATION.] (a) Unless the prior service 158.20 credit purchase authorization special law or general statute 158.21 provision explicitly specifies a different purchase payment 158.22 amount determination procedure,and if section 356.55 has158.23expired,this section governs the determination of the prior 158.24 service credit purchase payment amount of any prior service 158.25 credit purchase. 158.26 (b) The purchase payment amount determination procedure 158.27 must recognize any service credit accrued to the purchaser in a 158.28 pension plan enumerated in section 356.30, subdivision 3. 158.29 (c) Any service credit in a Minnesota defined benefit 158.30 public employee pension plan available to be reinstated by the 158.31 purchaser through the repayment of a refund of member or 158.32 employee contributions previously received must be repaid in 158.33 full before any purchase of prior service credit payment is made 158.34 under this section. 158.35 Subd. 2. [DETERMINATION.] (a) Unless the minimum purchase 158.36 amount set forth in paragraph (c) applies, the prior service 159.1 credit purchase amount is an amount equal to the actuarial 159.2 present value, on the date of payment, as calculated by the 159.3 chief administrative officer of the pension plan and reviewed by 159.4 the actuary retainedby the Legislative Commission on Pensions159.5and Retirementunder section 356.214, of the amount of the 159.6 additional retirement annuity obtained by the acquisition of the 159.7 additional service credit in this section. 159.8 (b) Calculation of this amount must be made using the 159.9 preretirement interest rate applicable to the public pension 159.10 plan specified in section 356.215, subdivision4d8, and the 159.11 mortality table adopted for the public pension plan. The 159.12 calculation must assume continuous future service in the public 159.13 pension plan until, and retirement at, the age at which the 159.14 minimum requirements of the fund for normal retirement or 159.15 retirement with an annuity unreduced for retirement at an early 159.16 age, including section 356.30, are met with the additional 159.17 service credit purchased. The calculation must also assume a 159.18 full-time equivalent salary, or actual salary, whichever is 159.19 greater, and a future salary history that includes annual salary 159.20 increases at the applicable salary increase rate for the plan 159.21 specified in section 356.215, subdivision 4d. 159.22 (c) The prior service credit purchase amount may not be 159.23 less than the amount determined by applying the current employee 159.24 or member contribution rate, the employer contribution rate, and 159.25 the additional employer contribution rate, if any, to the 159.26 person's current annual salary and multiplying that result by 159.27 the number of whole and fraction years of service to be 159.28 purchased. 159.29 (d) Payment must be made in one lump sum within one year of 159.30 the prior service credit authorization. Payment of the amount 159.31 calculated under this section must be made by the applicable 159.32 eligible person. 159.33 (e) However, the current employer or the prior employer 159.34 may, at its discretion, pay all or any portion of the payment 159.35 amount that exceeds an amount equal to the employee contribution 159.36 rates in effect during the period or periods of prior service 160.1 applied to the actual salary rates in effect during the period 160.2 or periods of prior service, plus interest at the rate of 8.5 160.3 percent a year compounded annually from the date on which the 160.4 contributions would otherwise have been made to the date on 160.5 which the payment is made. If the employer agrees to payments 160.6 under this subdivision, the purchaser must make the employee 160.7 payments required under this subdivision within29090 days of 160.8 the prior service credit authorization. If that employee 160.9 payment is made, the employer payment under this subdivision 160.10 must be remitted to the chief administrative officer of the 160.11 public pension plan within 60 days of receipt by the chief 160.12 administrative officer of the employee payments specified under 160.13 this subdivision. 160.14 Subd. 3. [DOCUMENTATION.] The prospective prior service 160.15 credit purchaser must provide any relevant documentation 160.16 required by the chief administrative officer of the applicable 160.17 public pension plan to determine eligibility for the prior 160.18 service credit under this section. 160.19 Subd. 4. [PAYMENT PRECONDITION FOR CREDIT GRANT.] Service 160.20 credit for the purchase period must be granted by the public 160.21 pension plan to the purchaser upon receipt of the full purchase 160.22 payment amount specified in subdivision 2. 160.23 Sec. 66. Minnesota Statutes 2004, section 356A.06, 160.24 subdivision 7, is amended to read: 160.25 Subd. 7. [EXPANDED LIST OF AUTHORIZED INVESTMENT 160.26 SECURITIES.] (a) [AUTHORITY.] Except to the extent otherwise 160.27 authorized by law or bylaws, a covered pension plan not 160.28 described by subdivision 6, paragraph (a), may invest its assets 160.29 only in accordance with this subdivision. 160.30 (b) [SECURITIES GENERALLY.] The covered pension plan has 160.31 the authority to purchase, sell, lend, or exchange the 160.32 securities specified in paragraphs (c) to (g), including puts 160.33 and call options and future contracts traded on a contract 160.34 market regulated by a governmental agency or by a financial 160.35 institution regulated by a governmental agency. These 160.36 securities may be owned as units in commingled trusts that own 161.1 the securities described in paragraphs (c) to (g). 161.2 (c) [GOVERNMENT OBLIGATIONS.] The covered pension plan may 161.3 invest funds in governmental bonds, notes, bills, mortgages, and 161.4 other evidences of indebtedness provided the issue is backed by 161.5 the full faith and credit of the issuer or the issue is rated 161.6 among the top four quality rating categories by a nationally 161.7 recognized rating agency. The obligations in which funds may be 161.8 invested under this paragraph include guaranteed or insured 161.9 issues of (1) the United States, its agencies, its 161.10 instrumentalities, or organizations created and regulated by an 161.11 act of Congress; (2) Canada and its provinces, provided the 161.12 principal and interest is payable in United States dollars; (3) 161.13 the states and their municipalities, political subdivisions, 161.14 agencies, or instrumentalities; (4) the International Bank for 161.15 Reconstruction and Development, the Inter-American Development 161.16 Bank, the Asian Development Bank, the African Development Bank, 161.17 or any other United States government sponsored organization of 161.18 which the United States is a member, provided the principal and 161.19 interest is payable in United States dollars. 161.20 (d) [CORPORATE OBLIGATIONS.] The covered pension plan may 161.21 invest funds in bonds, notes, debentures, transportation 161.22 equipment obligations, or any other longer term evidences of 161.23 indebtedness issued or guaranteed by a corporation organized 161.24 under the laws of the United States or any state thereof, or the 161.25 Dominion of Canada or any province thereof if they conform to 161.26 the following provisions: 161.27 (1) the principal and interest of obligations of 161.28 corporations incorporated or organized under the laws of the 161.29 Dominion of Canada or any province thereof must be payable in 161.30 United States dollars; and 161.31 (2) obligations must be rated among the top four quality 161.32 categories by a nationally recognized rating agency. 161.33 (e) [OTHER OBLIGATIONS.] (1) The covered pension plan may 161.34 invest funds in bankers acceptances, certificates of deposit, 161.35 deposit notes, commercial paper, mortgage participation 161.36 certificates and pools, asset backed securities, repurchase 162.1 agreements and reverse repurchase agreements, guaranteed 162.2 investment contracts, savings accounts, and guaranty fund 162.3 certificates, surplus notes, or debentures of domestic mutual 162.4 insurance companies if they conform to the following provisions: 162.5 (i) bankers acceptances and deposit notes of United States 162.6 banks are limited to those issued by banks rated in the highest 162.7 four quality categories by a nationally recognized rating 162.8 agency; 162.9 (ii) certificates of deposit are limited to those issued by 162.10 (A) United States banks and savings institutions that are rated 162.11 in the highest four quality categories by a nationally 162.12 recognized rating agency or whose certificates of deposit are 162.13 fully insured by federal agencies; or (B) credit unions in 162.14 amounts up to the limit of insurance coverage provided by the 162.15 National Credit Union Administration; 162.16 (iii) commercial paper is limited to those issued by United 162.17 States corporations or their Canadian subsidiaries and rated in 162.18 the highest two quality categories by a nationally recognized 162.19 rating agency; 162.20 (iv) mortgage participation or pass through certificates 162.21 evidencing interests in pools of first mortgages or trust deeds 162.22 on improved real estate located in the United States where the 162.23 loan to value ratio for each loan as calculated in accordance 162.24 with section 61A.28, subdivision 3, does not exceed 80 percent 162.25 for fully amortizable residential properties and in all other 162.26 respects meets the requirements of section 61A.28, subdivision 162.27 3; 162.28 (v) collateral for repurchase agreements and reverse 162.29 repurchase agreements is limited to letters of credit and 162.30 securities authorized in this section; 162.31 (vi) guaranteed investment contracts are limited to those 162.32 issued by insurance companies or banks rated in the top four 162.33 quality categories by a nationally recognized rating agency or 162.34 to alternative guaranteed investment contracts where the 162.35 underlying assets comply with the requirements of this 162.36 subdivision; 163.1 (vii) savings accounts are limited to those fully insured 163.2 by federal agencies; and 163.3 (viii) asset backed securities must be rated in the top 163.4 four quality categories by a nationally recognized rating agency. 163.5 (2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do 163.6 not apply to certificates of deposit and collateralization 163.7 agreements executed by the covered pension plan under clause 163.8 (1), item (ii). 163.9 (3) In addition to investments authorized by clause (1), 163.10 item (iv), the covered pension plan may purchase from the 163.11 Minnesota Housing Finance Agency all or any part of a pool of 163.12 residential mortgages, not in default, that has previously been 163.13 financed by the issuance of bonds or notes of the agency. The 163.14 covered pension plan may also enter into a commitment with the 163.15 agency, at the time of any issue of bonds or notes, to purchase 163.16 at a specified future date, not exceeding 12 years from the date 163.17 of the issue, the amount of mortgage loans then outstanding and 163.18 not in default that have been made or purchased from the 163.19 proceeds of the bonds or notes. The covered pension plan may 163.20 charge reasonable fees for any such commitment and may agree to 163.21 purchase the mortgage loans at a price sufficient to produce a 163.22 yield to the covered pension plan comparable, in its judgment, 163.23 to the yield available on similar mortgage loans at the date of 163.24 the bonds or notes. The covered pension plan may also enter 163.25 into agreements with the agency for the investment of any 163.26 portion of the funds of the agency. The agreement must cover 163.27 the period of the investment, withdrawal privileges, and any 163.28 guaranteed rate of return. 163.29 (f) [CORPORATE STOCKS.] The covered pension plan may 163.30 invest funds in stocks or convertible issues of any corporation 163.31 organized under the laws of the United States or the states 163.32 thereof, the Dominion of Canada or its provinces, or any 163.33 corporation listed on the New York Stock Exchange or the 163.34 American Stock Exchange, if they conform to the following 163.35 provisions: 163.36 (1) the aggregate value of corporate stock investments, as 164.1 adjusted for realized profits and losses, must not exceed 85 164.2 percent of the market or book value, whichever is less, of a 164.3 fund, less the aggregate value of investments according to 164.4subdivision 6paragraph (g); 164.5 (2) investments must not exceed five percent of the total 164.6 outstanding shares of any one corporation. 164.7 (g) [OTHER INVESTMENTS.] (1) In addition to the 164.8 investments authorized in paragraphs (b) to (f), and subject to 164.9 the provisions in clause (2), the covered pension plan may 164.10 invest funds in: 164.11 (i) venture capital investment businesses through 164.12 participation in limited partnerships and corporations; 164.13 (ii) real estate ownership interests or loans secured by 164.14 mortgages or deeds of trust through investment in limited 164.15 partnerships, bank sponsored collective funds, trusts, and 164.16 insurance company commingled accounts, including separate 164.17 accounts; 164.18 (iii) regional and mutual funds through bank sponsored 164.19 collective funds and open-end investment companies registered 164.20 under the Federal Investment Company Act of 1940; 164.21 (iv) resource investments through limited partnerships, 164.22 private placements, and corporations; and 164.23 (v) international securities. 164.24 (2) The investments authorized in clause (1) must conform 164.25 to the following provisions: 164.26 (i) the aggregate value of all investments made according 164.27 to clause (1) may not exceed 35 percent of the market value of 164.28 the fund for which the covered pension plan is investing; 164.29 (ii) there must be at least four unrelated owners of the 164.30 investment other than thestate boardcovered pension plan for 164.31 investments made under clause (1), item (i), (ii), (iii), or 164.32 (iv); 164.33 (iii) covered pension plan participation in an investment 164.34 vehicle is limited to 20 percent thereof for investments made 164.35 under clause (1), item (i), (ii), (iii), or (iv); and 164.36 (iv) covered pension plan participation in a limited 165.1 partnership does not include a general partnership interest or 165.2 other interest involving general liability. The covered pension 165.3 plan may not engage in any activity as a limited partner which 165.4 creates general liability. 165.5 Sec. 67. Minnesota Statutes 2004, section 422A.01, 165.6 subdivision 11, is amended to read: 165.7 Subd. 11. [EMPLOYEE.] "Employee" meansanya person who is 165.8 not exempted from the contributing classpursuant tounder 165.9 section 422A.09, subdivision 3, whoiswas employed before July 165.10 1, 1979, by and paid, in whole or in part, by the city or any of 165.11 its boards, departments, or commissions, operated as a 165.12 department of city government or independently if financed in 165.13 whole or in part by city funds, includinganya person who was 165.14 employed by a public corporation as herein defined,and165.15including anya person who was employed before July 1, 1979, by 165.16 Special School District No. 1, and who is not a member of any 165.17 other retirement system, andalso including anya person whois165.18 was employed before July 1, 1973, by the county of Hennepin, who 165.19 was entitled by law to elect and has elected to retain 165.20 membership in themunicipalMinneapolis Employees Retirement 165.21 Fund and who makes any required member contributions to the fund 165.22 and who remains so employed. 165.23 Sec. 68. Minnesota Statutes 2004, section 422A.06, 165.24 subdivision 7, is amended to read: 165.25 Subd. 7. [DISABILITY BENEFIT FUND.] (a)The required165.26reserves for disability allowances which become effective after165.27December 31, 1973, shall be transferred from the deposit165.28accumulation fund to theA disability benefit fund is 165.29 established, containing the required reserves for disability 165.30 allowances under this chapter. A proportionate share of income 165.31 from investmentsshallmust be allocated to this fund. 165.32 Thereshallmust be paid from this fund the disability 165.33 allowanceswhich become effective after December 31, 1973165.34 payable under this chapter. 165.35 (b) In the event of the termination of any disability 165.36 allowance for any reason other than the death of the recipient, 166.1 the balance of the required reserves for the disability 166.2 allowance as of the date of the terminationshallmust be 166.3 transferred from the disability benefit fund to the deposit 166.4 accumulation fund. 166.5 (c) At the end of each fiscal year, as part of the annual 166.6 actuarial valuation, a determinationshallmust be made of the 166.7 required reserves for all disability allowances being paid from 166.8 the disability benefit fund. Any excess of assets over 166.9 actuarial required reserves in the disability benefit fundshall166.10 must be transferred to the deposit accumulation fund. Any 166.11 excess of actuarial reserves over assets in the disability 166.12 benefit fundshallmust be funded by a transfer of the 166.13 appropriate amount of assets from the deposit accumulation fund. 166.14 Sec. 69. Minnesota Statutes 2004, section 422A.10, 166.15 subdivision 1, is amended to read: 166.16 Subdivision 1. [MEMBER CONTRIBUTIONRATE; DEDUCTIONS.] (a) 166.17 Thereshallmust be deducted and withheld from the basic salary, 166.18 pay or compensation of each employee in the contributing class,166.19prior to January 1, 1980 an amount equal to 7-1/4 percent, after166.20December 31, 1979 but prior to January 1, 1981 an amount equal166.21to 8-1/4 percent and after December 31, 1980an amount equal to 166.22 9-1/4 percent of such salary, pay or compensation, except as 166.23 hereinafter provided. 166.24 (b) The retirement board may increase the percentage rate 166.25 of contribution to the retirement fund of any employee or 166.26 employees for the purpose of establishing and maintaining on an 166.27 actuarial basis a plan of insurance, survivors' benefits, or 166.28 other type of benefit or benefits, the cost of whichshallmust 166.29 be paid out of such extra percentage so authorized and deducted 166.30 from the employee's compensation, except as hereinafter 166.31 provided. Any plan or plans so established and placed in 166.32 operation may be amended from time to time, or may be abandoned, 166.33 but if abandoned, any surplus remaining from the operation of a 166.34 planshallmust be the property of the fund, andshallmust be 166.35 credited to the reserve for loss in investment account. 166.36 Sec. 70. Minnesota Statutes 2004, section 422A.10, 167.1 subdivision 2, is amended to read: 167.2 Subd. 2. [CONSENT TO DEDUCTIONSMANDATORY MEMBER 167.3 CONTRIBUTIONS.] Every employee to whomsections 422A.01 to167.4422A.25this chapter applieswho shall continue in the service167.5after the passage of Laws 1919, chapter 522, as well as every167.6person to whom sections 422A.01 to 422A.25 applies who may167.7hereafter be appointed to a position or place, shall beis 167.8 deemed to consent and agree to the deductions made and provided 167.9 for herein, and payment with such reductions, for service,shall167.10beare a full and complete discharge and acquittance of all 167.11 claims and demands for all services rendered by such person 167.12 during the period covered by such payment; except the person's 167.13 claim to the benefits to which the person may be entitled under 167.14 the provisions ofsections 422A.01 to 422A.25this chapter. 167.15 Sec. 71. Minnesota Statutes 2004, section 422A.22, 167.16 subdivision 1, is amended to read: 167.17 Subdivision 1. [RETENTION; TRANSFER.] (a) If an employee 167.18 to whomsections 422A.01 to 422A.25this chapter applies becomes 167.19 absolutely separated fromtheactive serviceprior tobefore 167.20 attaining the minimum retirement age established in section 167.21 422A.13, the employee is entitled to a refund of the net 167.22 accumulated amount of deduction from salary, pay, or 167.23 compensation, made for the purpose of accumulating a fund from 167.24 which to pay retirement allowances,shall be returned to such167.25employee,with interest at the annual compound rate of six 167.26 percent. 167.27 (b) Any contributing employee who separates from a 167.28 department, board or commission of the city whose employees are 167.29 covered by a fund organized undersections 422A.01 to 422A.25167.30 this chapter, and becomes an employee of a department or board 167.31 of the same city, whose employees are covered by a retirement 167.32 fund or relief association by whatever name known, organized 167.33 under any other law and supported in whole or in part by taxes 167.34 on the same city,shall havehas the option of: 167.35 (1) retaining their membership in the fund organized under 167.36sections 422A.01 to 422A.25this chapter, regardless of the 168.1 provisions of any law, rule, bylaw or other action requiring 168.2 membership in any other retirement fund or relief association 168.3 however organized.; or 168.4 (2) transferring to the fund or association covering the 168.5 employees of the department or board to which they are 168.6 transferring, providing they are eligible for membership therein. 168.7 (c) Any contributing employee who elects to transfer to 168.8 another fund or association ashereinprovided in paragraph (b), 168.9 clause (2),shallmust make such election within one year from 168.10 the date of separation from the city service covered by this 168.11 fund. If the contributing employee elects to transfer to 168.12 another fundas herein provided, the employee is entitled to a 168.13 refund of the net accumulated contributions made by such 168.14 employee to the fund organized undersections 422A.01 to168.15422A.25, shall be returned to the employeethis chapter with 168.16 interest at the annual compound rate of six percent. 168.17 Sec. 72. Minnesota Statutes 2004, section 422A.22, 168.18 subdivision 3, is amended to read: 168.19 Subd. 3. [LIMITATION ON ELIGIBILITY.] No employee of the 168.20 cityshall beis eligible to be a member of, or receive benefits 168.21 from, more than one retirement plan or fund of the city for the 168.22 same period of service. 168.23 Sec. 73. Minnesota Statutes 2004, section 422A.22, 168.24 subdivision 4, is amended to read: 168.25 Subd. 4. [DEATH-WHILE-ACTIVE REFUND.] (a) Upon the death 168.26 of an active memberprior tobefore the employee's termination 168.27 of active service,there shall be paid tothe beneficiary or 168.28 beneficiaries designated by the member on a form specified by 168.29 the executive director and filed with the retirement board,are 168.30 entitled to receive the net accumulated employee deductions from 168.31 salary, pay, or compensation, including interest under 168.32 subdivision 1, paragraph (a), compounded annually to the date of 168.33 the member's death. The amount must not include any 168.34 contributions made by the employee or on the employee's behalf, 168.35 or any interest or investment earnings on those contributions, 168.36 which were allocated to the survivor benefit fund under section 169.1 422A.06, subdivision 6. 169.2 (b) If the employee fails to make a designation, or if the 169.3 beneficiary or beneficiaries designated by the employee 169.4 predeceases the employee,the benefit specified in paragraph (a)169.5must be paid tothe deceased employee's estate is entitled to 169.6 the benefit specified in paragraph (a). 169.7 (c) A benefit payable under this subdivision is in addition 169.8 to any applicable survivor benefit under section 422A.23. 169.9 Sec. 74. Minnesota Statutes 2004, section 422A.22, 169.10 subdivision 6, is amended to read: 169.11 Subd. 6. [REFUND; MUNICIPAL EMPLOYEES RETIREMENT FUND.] 169.12AnyA person who has received a refund from themunicipal169.13 Minneapolis Employees Retirement Fund, and who is a member of a 169.14 public retirement system included in section 422A.16, 169.15 subdivision 8, may repay such refund with interest at a compound 169.16 annual rate of 8.5 percent to themunicipalMinneapolis 169.17 Employees Retirement Fund. If a refund is repaid to the fund 169.18 and if more than one refund has been received from the fund, all 169.19 refunds must be repaid. Repaymentshallmust be made as 169.20 provided insections 422A.01 to 422A.25this chapter. 169.21 Sec. 75. Minnesota Statutes 2004, section 422A.231, is 169.22 amended to read: 169.23 422A.231 [COST ALLOCATION.] 169.24 (a) Notwithstanding any law to the contrary, all current 169.25 and future contribution requirements due to this article are 169.26 payable by the participating contributing employing units other 169.27 than the state of Minnesota. 169.28 (b) In each actuarial valuation of the retirement fund, the 169.29 actuary retainedby the Legislative Commission on Pensions and169.30Retirementunder section 356.214 shall include an exhibit on the 169.31 impact of the benefit increases contained in this article on the 169.32 survivor benefit fund. The actuary shall calculate the expected 169.33 change in the present value of the future benefits payable from 169.34 the survivor benefit fund attributable to this article, using 169.35 the actuarial method and assumptions applicable to the 169.36 Minneapolis Employees Retirement Fund, from the prior actuarial 170.1 valuation and shall compare that result with the actual change 170.2 in the present value of future benefits payable from the 170.3 survivor benefit fund attributable to this article from the 170.4 prior actuarial valuation. 170.5 (c) The executive director shall assess each participating 170.6 employer, other than the state of Minnesota, its proportional 170.7 share of the net increase amount calculated under paragraph 170.8 (b). The assessment must be made on the first business day of 170.9 the following February, plus compound interest at an annual rate 170.10 of six percent on the amount from the actuarial valuation date 170.11 to the date of payment. 170.12 Sec. 76. Minnesota Statutes 2004, section 422A.24, is 170.13 amended to read: 170.14 422A.24 [ALLOWANCES NOT ASSIGNABLE OR SUBJECT TO PROCESS.] 170.15No money payable pursuant to this chapter shall be170.16assignable either in law or equity or be subject to execution,170.17levy, attachment, garnishment, or other legal process, except as170.18provided in section 518.58, 518.581, or 518.6111, nor shall any170.19of the proceeds of payments due pursuant to this chapter be170.20subject to the inheritance tax provisions of this state upon170.21transfer to a surviving spouse or minor or dependent child of170.22the decedent or a trust for their benefit.The provisions of 170.23 section 356.401 apply to the Minneapolis employees retirement 170.24 plan. 170.25 Sec. 77. Minnesota Statutes 2004, section 423B.17, is 170.26 amended to read: 170.27 423B.17 [PAYMENTS EXEMPT FROM PROCESS.] 170.28A payment made by the association under a provision of170.29sections 423B.01 to 423B.18, as amended, is exempt from legal170.30process except as provided in section 518.58, 518.581, or170.31518.6111. No person entitled to a payment may assign the same.170.32The association may not recognize an assignment or pay a sum on170.33account of an assignment.The provisions of section 356.401 170.34 apply to the Minneapolis Police Relief Association. 170.35 Sec. 78. Minnesota Statutes 2004, section 423C.09, is 170.36 amended to read: 171.1 423C.09 [PAYMENTS EXEMPT FROM PROCESS.] 171.2All payments made, or to be made, by the association under171.3this chapter shall be totally exempt from garnishment,171.4execution, or other legal process, except as provided in section171.5518.58, 518.581, or 518.6111. No person entitled to a payment171.6shall have the right to assign the name, nor shall the171.7association have authority to recognize any assignment or to pay171.8any sum on account thereof. Any attempt to transfer any right171.9or claim, or any part thereof, shall be void.The provisions of 171.10 section 356.401 apply to the Minneapolis Firefighters Relief 171.11 Association. 171.12 Sec. 79. Minnesota Statutes 2004, section 490.126, 171.13 subdivision 5, is amended to read: 171.14 Subd. 5. [EXEMPTION FROM PROCESS; NO ASSIGNMENT.]None of171.15the money, annuities, or other benefits provided in this chapter171.16is assignable either in law or equity or is subject to171.17execution, levy, attachment, garnishment, or other legal171.18process, except as provided in section 518.58, 518.581, or171.19518.6111.The provisions of section 356.401 apply to the judges 171.20 retirement plan. 171.21 Sec. 80. [REVISOR'S INSTRUCTION.] 171.22 In the next edition and subsequent editions of Minnesota 171.23 Statutes, the revisor of statutes shall replace the reference to 171.24 "sections 422A.01 to 422A.25" with the reference to "this 171.25 chapter" wherever the reference appears in Minnesota Statutes, 171.26 chapter 422A. 171.27 Sec. 81. [REPEALER.] 171.28 (a) Minnesota Statutes 2004, section 352.119, subdivision 171.29 1, is repealed. 171.30 (b) Minnesota Statutes 2004, sections 353.34, subdivision 171.31 3b; 353.36, subdivisions 2, 2a, 2b, and 2c; 353.46, subdivision 171.32 4; 353.663; 353.74; and 353.75, are repealed. 171.33 (c) Minnesota Statutes 2004, section 354.59, is repealed. 171.34 (d) Minnesota Statutes 2004, sections 422A.22, subdivisions 171.35 2 and 5; and 422A.221, are repealed. 171.36 (e) Minnesota Statutes 2004, sections 352.15, subdivision 172.1 1a; 353.15, subdivision 2; and 354.10, subdivision 2, are 172.2 repealed. 172.3 Sec. 82. [EFFECTIVE DATE.] 172.4 (a) Sections 1 to 73 and 75 to 81 are effective July 1, 172.5 2005. 172.6 (b) Section 74 is effective January 1, 2006. 172.7 (c) Sections 1, 21, 22, 23, 29, 45, 46, 53, 64, 76, 77, 78, 172.8 79, and 81, paragraph (e), do not apply to any cause of action 172.9 that is proceeding on the date of enactment or to any cause of 172.10 action for which the applicable statute of limitations has not 172.11 expired as of the date of enactment. 172.12 ARTICLE 13 172.13 LOCAL RETIREMENT PLANS 172.14 Section 1. Minnesota Statutes 2004, section 69.77, 172.15 subdivision 4, is amended to read: 172.16 Subd. 4. [RELIEF ASSOCIATION FINANCIAL REQUIREMENTS; 172.17 MINIMUM MUNICIPAL OBLIGATION.] (a) The officers of the relief 172.18 association shall determine the financial requirements of the 172.19 relief association and minimum obligation of the municipality 172.20 for the following calendar year in accordance with the 172.21 requirements of this subdivision. The financial requirements of 172.22 the relief association and the minimum obligation of the 172.23 municipality must be determined on or before the submission date 172.24 established by the municipality under subdivision 5. 172.25 (b) The financial requirements of the relief association 172.26 for the following calendar year must be based on the most recent 172.27 actuarial valuation or survey of the special fund of the 172.28 association if more than one fund is maintained by the 172.29 association, or of the association, if only one fund is 172.30 maintained, prepared in accordance with sections 356.215, 172.31 subdivisions 4 to 15, and 356.216, as required under subdivision 172.32 10. If an actuarial estimate is prepared by the actuary of the 172.33 relief association as part of obtaining a modification of the 172.34 benefit plan of the relief association and the modification is 172.35 implemented, the actuarial estimate must be used in calculating 172.36 the subsequent financial requirements of the relief association. 173.1 (c) If the relief association has an unfunded actuarial 173.2 accrued liability as reported in the most recent actuarial 173.3 valuation or survey, the total of the amounts calculated under 173.4 clauses (1), (2), and (3), constitute the financial requirements 173.5 of the relief association for the following year. If the relief 173.6 association does not have an unfunded actuarial accrued 173.7 liability as reported in the most recent actuarial valuation or 173.8 survey, the amount calculated under clauses (1) and (2) 173.9 constitute the financial requirements of the relief association 173.10 for the following year. The financial requirement elements are: 173.11 (1) the normal level cost requirement for the following 173.12 year, expressed as a dollar amount, which must be determined by 173.13 applying the normal level cost of the relief association as 173.14 reported in the actuarial valuation or survey and expressed as a 173.15 percentage of covered payroll to the estimated covered payroll 173.16 of the active membership of the relief association, including 173.17 any projected change in the active membership, for the following 173.18 year; 173.19 (2) for the Bloomington Fire Department Relief Association, 173.20 the Fairmont Police Relief Association, and the Virginia Fire 173.21 Department Relief Association, to the dollar amount of normal 173.22 cost determined under clause (1) must be added an amount equal 173.23 to the dollar amount of the administrative expenses of the 173.24 special fund of the association if more than one fund is 173.25 maintained by the association, or of the association if only one 173.26 fund is maintained, for the most recent year, multiplied by the 173.27 factor of 1.035. The administrative expenses are those 173.28 authorized under section 69.80. No amount of administrative 173.29 expenses under this clause are to be included in the financial 173.30 requirements of the Minneapolis Firefighters Relief Association 173.31 or the Minneapolis Police Relief Association; and 173.32 (3) to the dollar amount of normal cost and expenses 173.33 determined under clauses (1) and (2) must be added an amount 173.34 equal to the level annual dollar amount which is sufficient to 173.35 amortize the unfunded actuarial accrued liability by December 173.36 31, 2010, for the Bloomington Fire Department Relief 174.1 Association, the Fairmont Police Relief Association, the 174.2 Minneapolis Firefighters Relief Association, and the Virginia 174.3 Fire Department Relief Association, and by December 31, 2020, 174.4 for the Minneapolis Police Relief Association, as determined 174.5 from the actuarial valuation or survey of the fund, using an 174.6 interest assumption set at the applicable rate specified in 174.7 section 356.215, subdivision 8. The amortization date specified 174.8 in this clause applies to all local police or salaried 174.9 firefighters' relief associations and that date supersedes any 174.10 amortization date specified in any applicable special law. 174.11 (d) The minimum obligation of the municipality is an amount 174.12 equal to the financial requirements of the relief association 174.13 reduced by the estimated amount of member contributions from 174.14 covered salary anticipated for the following calendar year and 174.15 the estimated amounts anticipated for the following calendar 174.16 year from the applicable state aid program established under 174.17 sections 69.011 to 69.051 receivable by the relief association 174.18 after any allocation made under section 69.031, subdivision 5, 174.19 paragraph (b), clause (2), or 423A.01, subdivision 2, clause 174.20 (6), from the local police and salaried firefighters' relief 174.21 association amortization aid program established under section 174.22 423A.02, subdivision 1, from the supplementary amortization 174.23 state-aid program established under section 423A.02, subdivision 174.24 1a, and from the additional amortization state aid under section 174.25 423A.02, subdivision 1b. 174.26 Sec. 2. Minnesota Statutes 2004, section 356.215, 174.27 subdivision 8, is amended to read: 174.28 Subd. 8. [INTEREST AND SALARY ASSUMPTIONS.] (a) The 174.29 actuarial valuation must use the applicable following 174.30 preretirement interest assumption and the applicable following 174.31 postretirement interest assumption: 174.32 preretirement postretirement 174.33 interest rate interest rate 174.34 plan assumption assumption 174.35 general state employees 174.36 retirement plan 8.5% 6.0% 174.37 correctional state employees 174.38 retirement plan 8.5 6.0 174.39 State Patrol retirement plan 8.5 6.0 174.40 legislators retirement plan 8.5 6.0 175.1 elective state officers 175.2 retirement plan 8.5 6.0 175.3 judges retirement plan 8.5 6.0 175.4 general public employees 175.5 retirement plan 8.5 6.0 175.6 public employees police and fire 175.7 retirement plan 8.5 6.0 175.8 local government correctional 175.9 service retirement plan 8.5 6.0 175.10 teachers retirement plan 8.5 6.0 175.11 Minneapolis employees 175.12 retirement plan 6.0 5.0 175.13 Duluth teachers retirement plan 8.5 8.5 175.14 Minneapolis teachers retirement 175.15 plan 8.5 8.5 175.16 St. Paul teachers retirement 175.17 plan 8.5 8.5 175.18 Minneapolis Police Relief 175.19 Association 6.0 6.0 175.20 Fairmont Police Relief 175.21 Association 5.0 5.0 175.22 Minneapolis Fire Department 175.23 Relief Association 6.0 6.0 175.24 Virginia Fire Department 175.25 Relief Association 5.0 5.0 175.26 Bloomington Fire Department 175.27 Relief Association 6.0 6.0 175.28 local monthly benefit volunteer 175.29 firefighters relief associations 5.0 5.0 175.30 (b) The actuarial valuation must use the applicable 175.31 following single rate future salary increase assumption, the 175.32 applicable following modified single rate future salary increase 175.33 assumption, or the applicable following graded rate future 175.34 salary increase assumption: 175.35 (1) single rate future salary increase assumption 175.36 future salary 175.37 plan increase assumption 175.38 legislators retirement plan 5.0% 175.39 elective state officers retirement 175.40 plan 5.0 175.41 judges retirement plan 5.0 175.42 Minneapolis Police Relief Association 4.0 175.43 Fairmont Police Relief 175.44 Association 3.5 175.45 Minneapolis Fire Department Relief 175.46 Association 4.0 175.47 Virginia Fire Department 175.48 Relief Association 3.5 175.49 Bloomington Fire Department Relief 175.50 Association 4.0 175.51 (2) modified single rate future salary increase assumption 175.52 future salary 175.53 plan increase assumption 175.54 Minneapolis employees the prior calendar year 175.55 retirement plan amount increased first by 175.56 1.0198 percent to prior 175.57 fiscal year date and 175.58 then increased by 4.0 175.59 percent annually for 175.60 each future year 176.1 (3) select and ultimate future salary increase assumption 176.2 or graded rate future salary increase assumption 176.3 future salary 176.4 plan increase assumption 176.5 general state employees select calculation and 176.6 retirement plan assumption A 176.7 correctional state employees 176.8 retirement plan assumption H 176.9 State Patrol retirement plan assumption H 176.10 general public employees select calculation and 176.11 retirement plan assumption B 176.12 public employees police and fire 176.13 fund retirement plan assumption C 176.14 local government correctional service 176.15 retirement plan assumption H 176.16 teachers retirement plan assumption D 176.17 Duluth teachers retirement plan assumption E 176.18 Minneapolis teachers retirement plan assumption F 176.19 St. Paul teachers retirement plan assumption G 176.20 176.21 The select calculation is: 176.22 during the ten-year select period, a designated percent 176.23 is multiplied by the result of ten minus T, where T is 176.24 the number of completed years of service, and is added 176.25 to the applicable future salary increase assumption. The 176.26 designated percent is 0.2 percent for the correctional state 176.27 employees retirement plan, the State Patrol retirement 176.28 plan, the public employees police and fire plan, and the 176.29 local government correctional service plan; 0.3 percent 176.30 for the general state employees retirement plan, the 176.31 general public employees retirement plan, the teachers 176.32 retirement plan, the Duluth Teachers Retirement Fund 176.33 Association, and the St. Paul Teachers Retirement Fund 176.34 Association; and 0.4 percent for the Minneapolis Teachers 176.35 Retirement Fund Association. 176.36 176.37 The ultimate future salary increase assumption is: 176.38 176.39 age A B C D E F G H 176.40 16 6.95% 6.95% 11.50% 8.20% 8.00% 6.50% 6.90% 7.7500 176.41 17 6.90 6.90 11.50 8.15 8.00 6.50 6.90 7.7500 176.42 18 6.85 6.85 11.50 8.10 8.00 6.50 6.90 7.7500 176.43 19 6.80 6.80 11.50 8.05 8.00 6.50 6.90 7.7500 176.44 20 6.75 6.40 11.50 6.00 6.90 6.50 6.90 7.7500 176.45 21 6.75 6.40 11.50 6.00 6.90 6.50 6.90 7.1454 176.46 22 6.75 6.40 11.00 6.00 6.90 6.50 6.90 7.0725 176.47 23 6.75 6.40 10.50 6.00 6.85 6.50 6.85 7.0544 176.48 24 6.75 6.40 10.00 6.00 6.80 6.50 6.80 7.0363 176.49 25 6.75 6.40 9.50 6.00 6.75 6.50 6.75 7.0000 176.50 26 6.75 6.36 9.20 6.00 6.70 6.50 6.70 7.0000 176.51 27 6.75 6.32 8.90 6.00 6.65 6.50 6.65 7.0000 176.52 28 6.75 6.28 8.60 6.00 6.60 6.50 6.60 7.0000 176.53 29 6.75 6.24 8.30 6.00 6.55 6.50 6.55 7.0000 176.54 30 6.75 6.20 8.00 6.00 6.50 6.50 6.50 7.0000 176.55 31 6.75 6.16 7.80 6.00 6.45 6.50 6.45 7.0000 176.56 32 6.75 6.12 7.60 6.00 6.40 6.50 6.40 7.0000 176.57 33 6.75 6.08 7.40 6.00 6.35 6.50 6.35 7.0000 176.58 34 6.75 6.04 7.20 6.00 6.30 6.50 6.30 7.0000 176.59 35 6.75 6.00 7.00 6.00 6.25 6.50 6.25 7.0000 176.60 36 6.75 5.96 6.80 6.00 6.20 6.50 6.20 6.9019 176.61 37 6.75 5.92 6.60 6.00 6.15 6.50 6.15 6.8074 176.62 38 6.75 5.88 6.40 5.90 6.10 6.50 6.10 6.7125 176.63 39 6.75 5.84 6.20 5.80 6.05 6.50 6.05 6.6054 176.64 40 6.75 5.80 6.00 5.70 6.00 6.50 6.00 6.5000 176.65 41 6.75 5.76 5.90 5.60 5.90 6.50 5.95 6.3540 176.66 42 6.75 5.72 5.80 5.50 5.80 6.50 5.90 6.2087 176.67 43 6.65 5.68 5.70 5.40 5.70 6.50 5.85 6.0622 176.68 44 6.55 5.64 5.60 5.30 5.60 6.50 5.80 5.9048 177.1 45 6.45 5.60 5.50 5.20 5.50 6.50 5.75 5.7500 177.2 46 6.35 5.56 5.45 5.10 5.40 6.40 5.70 5.6940 177.3 47 6.25 5.52 5.40 5.00 5.30 6.30 5.65 5.6375 177.4 48 6.15 5.48 5.35 5.00 5.20 6.20 5.60 5.5822 177.5 49 6.05 5.44 5.30 5.00 5.10 6.10 5.55 5.5404 177.6 50 5.95 5.40 5.25 5.00 5.00 6.00 5.50 5.5000 177.7 51 5.85 5.36 5.25 5.00 5.00 5.90 5.45 5.4384 177.8 52 5.75 5.32 5.25 5.00 5.00 5.80 5.40 5.3776 177.9 53 5.65 5.28 5.25 5.00 5.00 5.70 5.35 5.3167 177.10 54 5.55 5.24 5.25 5.00 5.00 5.60 5.30 5.2826 177.11 55 5.45 5.20 5.25 5.00 5.00 5.50 5.25 5.2500 177.12 56 5.35 5.16 5.25 5.00 5.00 5.40 5.20 5.2500 177.13 57 5.25 5.12 5.25 5.00 5.00 5.30 5.15 5.2500 177.14 58 5.25 5.08 5.25 5.10 5.00 5.20 5.10 5.2500 177.15 59 5.25 5.04 5.25 5.20 5.00 5.10 5.05 5.2500 177.16 60 5.25 5.00 5.25 5.30 5.00 5.00 5.00 5.2500 177.17 61 5.25 5.00 5.25 5.40 5.00 5.00 5.00 5.2500 177.18 62 5.25 5.00 5.25 5.50 5.00 5.00 5.00 5.2500 177.19 63 5.25 5.00 5.25 5.60 5.00 5.00 5.00 5.2500 177.20 64 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 177.21 65 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 177.22 66 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 177.23 67 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 177.24 68 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 177.25 69 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 177.26 70 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 177.27 71 5.25 5.00 5.70 177.28 (c) The actuarial valuation must use the applicable 177.29 following payroll growth assumption for calculating the 177.30 amortization requirement for the unfunded actuarial accrued 177.31 liability where the amortization retirement is calculated as a 177.32 level percentage of an increasing payroll: 177.33 payroll growth 177.34 plan assumption 177.35 general state employees retirement plan 5.00% 177.36 correctional state employees retirement plan 5.00 177.37 State Patrol retirement plan 5.00 177.38 legislators retirement plan 5.00 177.39 elective state officers retirement plan 5.00 177.40 judges retirement plan 5.00 177.41 general public employees retirement plan 6.00 177.42 public employees police and fire 177.43 retirement plan 6.00 177.44 local government correctional service 177.45 retirement plan 6.00 177.46 teachers retirement plan 5.00 177.47 Duluth teachers retirement plan 5.00 177.48 Minneapolis teachers retirement plan 5.00 177.49 St. Paul teachers retirement plan 5.00 177.50 Sec. 3. Minnesota Statutes 2004, section 356.216, is 177.51 amended to read: 177.52 356.216 [CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL POLICE 177.53 AND FIRE FUNDS.] 177.54 (a) The provisions of section 356.215 that govern the 177.55 contents of actuarial valuations must apply to any local police 177.56 or fire pension fund or relief association required to make an 177.57 actuarial report under this section, except as follows: 178.1 (1) in calculating normal cost and other requirements, if 178.2 required to be expressed as a level percentage of covered 178.3 payroll, the salaries used in computing covered payroll must be 178.4 the maximum rate of salary on which retirement and survivorship 178.5 credits and amounts of benefits are determined and from which 178.6 any member contributions are calculated and deducted; 178.7 (2) in lieu of the amortization date specified in section 178.8 356.215, subdivision 11, the appropriate amortization target 178.9 date specified in section 69.77, subdivision 4, or 69.773, 178.10 subdivision 4, clause (c), must be used in calculating any 178.11 required amortization contribution, except that if the actuarial 178.12 report for the Bloomington Fire Department Relief Association 178.13 indicates an unfunded actuarial accrued liability, the unfunded 178.14 obligation is to be amortized on a level dollar basis by 178.15 December 31 of the year occurring 20 years later, and if 178.16 subsequent actuarial valuations for the Bloomington Fire 178.17 Department Relief Association determine a net actuarial 178.18 experience loss incurred during the year which ended as of the 178.19 day before the most recent actuarial valuation date, any 178.20 unfunded liability due to that loss is to be amortized on a 178.21 level dollar basis by December 31 of the year occurring 20 years 178.22 later; 178.23 (3) in addition to the tabulation of active members and 178.24 annuitants provided for in section 356.215, subdivision 13, the 178.25 member contributions for active members for the calendar year 178.26 and the prospective annual retirement annuities under the 178.27 benefit plan for active members must be reported; 178.28 (4) actuarial valuations required under section 69.773, 178.29 subdivision 2, must be made at least every four years and 178.30 actuarial valuations required under section 69.77 shall be made 178.31 annually; 178.32 (5) the actuarial balance sheet showing accrued assets 178.33 valued at market value if the actuarial valuation is required to 178.34 be prepared at least every four years or valued as current 178.35 assets under section 356.215, subdivision 1, clause (6), or 178.36 paragraph (b), whichever applies, if the actuarial valuation is 179.1 required to be prepared annually, actuarial accrued liabilities, 179.2 and the unfunded actuarial accrued liability must include the 179.3 following required reserves: 179.4 (i) For active members 179.5 1. Retirement benefits 179.6 2. Disability benefits 179.7 3. Refund liability due to death or withdrawal 179.8 4. Survivors' benefits 179.9 (ii) For deferred annuitants' benefits 179.10 (iii) For former members without vested rights 179.11 (iv) For annuitants 179.12 1. Retirement annuities 179.13 2. Disability annuities 179.14 3. Surviving spouses' annuities 179.15 4. Surviving children's annuities 179.16 In addition to those required reserves, separate items must 179.17 be shown for additional benefits, if any, which may not be 179.18 appropriately included in the reserves listed above; and 179.19 (6) actuarial valuations are due by the first day of the 179.20 seventh month after the end of the fiscal year which the 179.21 actuarial valuation covers. 179.22 (b) For the Minneapolis Firefighters Relief Association or 179.23 the Minneapolis Police Relief Association, the following 179.24 provisions additionally apply: 179.25 (1) in calculating the actuarial balance sheet, unfunded 179.26 actuarial accrued liability, and amortization contribution of 179.27 the relief association, "current assets" means the value of all 179.28 assets at cost, including realized capital gains and losses, 179.29 plus or minus, whichever applies, the average value of total 179.30 unrealized capital gains or losses for the most recent 179.31 three-year period ending with the end of the plan year 179.32 immediately preceding the actuarial valuation report 179.33 transmission date; and 179.34 (2) in calculating the applicable portions of the actuarial 179.35 valuation, an annual preretirement interest assumption of six 179.36 percent, an annual postretirement interest assumption of six 180.1 percent, and an annual salary increase assumption of four 180.2 percent must be used. 180.3 Sec. 4. Minnesota Statutes 2004, section 356.216, is 180.4 amended to read: 180.5 356.216 [CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL POLICE 180.6 AND FIRE FUNDS.] 180.7 (a) The provisions of section 356.215 that govern the 180.8 contents of actuarial valuations must apply to any local police 180.9 or fire pension fund or relief association required to make an 180.10 actuarial report under this section, except as follows: 180.11 (1) in calculating normal cost and other requirements, if 180.12 required to be expressed as a level percentage of covered 180.13 payroll, the salaries used in computing covered payroll must be 180.14 the maximum rate of salary on which retirement and survivorship 180.15 credits and amounts of benefits are determined and from which 180.16 any member contributions are calculated and deducted; 180.17 (2) in lieu of the amortization date specified in section 180.18 356.215, subdivision 11, the appropriate amortization target 180.19 date specified in section 69.77, subdivision 4, or 69.773, 180.20 subdivision 4, clause (c), must be used in calculating any 180.21 required amortization contribution except that the amortization 180.22 date for the Minneapolis Police Relief Association is December 180.23 31, 2020; 180.24 (3) in addition to the tabulation of active members and 180.25 annuitants provided for in section 356.215, subdivision 13, the 180.26 member contributions for active members for the calendar year 180.27 and the prospective annual retirement annuities under the 180.28 benefit plan for active members must be reported; 180.29 (4) actuarial valuations required under section 69.773, 180.30 subdivision 2, must be made at least every four years and 180.31 actuarial valuations required under section 69.77 shall be made 180.32 annually; 180.33 (5) the actuarial balance sheet showing accrued assets 180.34 valued at market value if the actuarial valuation is required to 180.35 be prepared at least every four years or valued as current 180.36 assets under section 356.215, subdivision 1, clause (6), or 181.1 paragraph (b), whichever applies, if the actuarial valuation is 181.2 required to be prepared annually, actuarial accrued liabilities, 181.3 and the unfunded actuarial accrued liability must include the 181.4 following required reserves: 181.5 (i) For active members 181.6 1. Retirement benefits 181.7 2. Disability benefits 181.8 3. Refund liability due to death or withdrawal 181.9 4. Survivors' benefits 181.10 (ii) For deferred annuitants' benefits 181.11 (iii) For former members without vested rights 181.12 (iv) For annuitants 181.13 1. Retirement annuities 181.14 2. Disability annuities 181.15 3. Surviving spouses' annuities 181.16 4. Surviving children's annuities 181.17 In addition to those required reserves, separate items must 181.18 be shown for additional benefits, if any, which may not be 181.19 appropriately included in the reserves listed above; and 181.20 (6) actuarial valuations are due by the first day of the 181.21 seventh month after the end of the fiscal year which the 181.22 actuarial valuation covers. 181.23 (b) For the Minneapolis Firefighters Relief Association or 181.24 the Minneapolis Police Relief Association, the following 181.25 provisions additionally apply: 181.26 (1) in calculating the actuarial balance sheet, unfunded 181.27 actuarial accrued liability, and amortization contribution of 181.28 the relief association, "current assets" means the value of all 181.29 assets at cost, including realized capital gains and losses, 181.30 plus or minus, whichever applies, the average value of total 181.31 unrealized capital gains or losses for the most recent 181.32 three-year period ending with the end of the plan year 181.33 immediately preceding the actuarial valuation report 181.34 transmission date; and 181.35 (2) in calculating the applicable portions of the actuarial 181.36 valuation, an annual preretirement interest assumption of six 182.1 percent, an annual postretirement interest assumption of six 182.2 percent, and an annual salary increase assumption of four 182.3 percent must be used. 182.4 Sec. 5. Minnesota Statutes 2004, section 383B.46, 182.5 subdivision 2, is amended to read: 182.6 Subd. 2. [ESTABLISHMENT OF ACCOUNT; CONTRIBUTIONS.] The 182.7 county of Hennepin shall deduct from the salary of every person 182.8 who is eligible for coverage and who elected to retain or obtain 182.9 coverage by the Hennepin County supplemental retirement program 182.10 a sum equal to one percent of the total salary of the person. 182.11 Any classified or unclassified employee who is employed in 182.12 subsidized on-the-job training, work experience or public 182.13 service employment as an enrollee under the federal 182.14 Comprehensive Employment and Training Act shall not be included 182.15 in the supplemental retirement account from and after March 30, 182.16 1978 unless the employee has as of the later of March 30, 1978 182.17 or the date of employment sufficient service credit in the 182.18 public employees retirement fund or the Minneapolis municipal 182.19 employees retirement fund, whichever is applicable, to meet the 182.20 minimum vesting requirements for a deferred retirement annuity, 182.21 or the county agrees in writing to make the required employer 182.22 contributions on account of the individual from revenue sources 182.23 other than funds provided under the federal Comprehensive 182.24 Employment and Training Act, or the employee agrees in writing 182.25 to make the required employer contribution in addition to the 182.26 employee contribution. The deduction shall be made in the same 182.27 manner as other retirement deductions are made from the salary 182.28 of the person. An amount equal to the amounts deducted during 182.29 each payroll period shall be contributed by the county of 182.30 Hennepin. The total amount deducted and contributed shall be 182.31 deposited to the credit of the supplemental retirement account 182.32 inthe treasury of the county of Hennepina separate account 182.33 administered by the Minnesota State Retirement System on behalf 182.34 of Hennepin County. The Hennepin County supplemental retirement 182.35 account is hereby established as an account separate and 182.36 distinct from other funds, accounts, or assets of the county of 183.1 Hennepin. 183.2 Sec. 6. Minnesota Statutes 2004, section 383B.47, is 183.3 amended to read: 183.4 383B.47 [PARTICIPATION IN MINNESOTA SUPPLEMENTAL INVESTMENT 183.5 FUND.] 183.6 With the moneys deposited to the credit of the supplemental 183.7 retirement accountin the treasury of the county of Hennepin,183.8the county of Hennepin, the Minnesota State Retirement System 183.9 shall purchase shares on behalf of Hennepin County in the 183.10 accounts of the Minnesota supplemental investment fund as 183.11 provided in section 383B.48. 183.12 Sec. 7. Minnesota Statutes 2004, section 383B.48, is 183.13 amended to read: 183.14 383B.48 [BUYING STATE SUPPLEMENTAL INVESTMENT FUND SHARES.] 183.15At the time a person becomes eligible for coverage and183.16elects to obtain coverage by the Hennepin County supplemental183.17retirement program and before November 1 of each subsequent183.18year,A participant in the Hennepin County supplemental 183.19 retirement program shall indicatein writing on a form provided183.20by the county of Hennepinthe account of the Minnesota 183.21 supplemental investment fund in which the participant wishes 183.22 salary deductions and county matching contributions attributable 183.23 to salary deductions to be invested forthe subsequent 12-month183.24periodsuch time as allowed by the Minnesota State Retirement 183.25 System.For that 12-month period,Thecounty of Hennepin183.26 Minnesota State Retirement System shall purchase with the salary 183.27 deductions and county matching funds attributable to the salary 183.28 deductions shares in the appropriate account of the Minnesota 183.29 supplemental investment fund in accordance with the indicated 183.30 preferences of the participant. However, the county of Hennepin 183.31 has the authority to determine which accounts of the Minnesota 183.32 supplemental investment fund will be available for participant 183.33 investment. The shares purchased must stand in the name of the 183.34 county of Hennepin. A record must be kept by thecounty of183.35HennepinMinnesota State Retirement System indicating the number 183.36 of shares in each account of the Minnesota supplemental 184.1 investment fund purchased with the salary deductions and county 184.2 matching funds attributable to the salary deductions of each 184.3 participant. The record must be known as the "participant's 184.4 share account record." The participant's share account record 184.5 must show, in addition to the number of shares in the account, 184.6 any cash balance of salary deductions or county matching funds 184.7 attributable to those deductions which stand uninvested in 184.8 shares. At the option of the county of Hennepin, and subject to 184.9 any terms and conditions established and communicated in writing 184.10 by the county to a participant, the participant may designate no 184.11 more often than once eachcalendar quartermonth that prior 184.12 salary deductions and county matching contributions attributable 184.13 to the salary deductions, together with any interest earned, be 184.14 reinvested in another account of the Minnesota supplemental 184.15 investment fund made available by the county of Hennepin. 184.16 Sec. 8. Minnesota Statutes 2004, section 383B.49, is 184.17 amended to read: 184.18 383B.49 [SUPPLEMENTAL RETIREMENT BENEFITS; REDEMPTION OF 184.19 SHARES.] 184.20 When requested to do so, in writing, on forms provided by 184.21 thecountyMinnesota State Retirement System, by a participant, 184.22 surviving spouse, a guardian of a surviving child or a personal 184.23 representative, whichever is applicable, thecounty of Hennepin184.24 Minnesota State Retirement System shall on behalf of Hennepin 184.25 County redeem shares in the accounts of the Minnesota 184.26 supplemental investment fund standing in a participant's share 184.27 account record under the following circumstances and in 184.28 accordance with the laws and regulations governing the Minnesota 184.29 supplemental investment fund: 184.30 (1) A participant who is no longer employed by the county 184.31 of Hennepin is entitled to receive the cash realized on the 184.32 redemption of the shares to the credit of the participant's 184.33 share account record of the person. The participant may request 184.34 the redemption of all or a portion of the shares in the 184.35 participant's share account record of the person, but may not 184.36 request more than one redemption in any one calendar year. If 185.1 only a portion of the shares in the participant's share account 185.2 record is requested to be redeemed the person may request to 185.3 redeem not less than 20 percent of the shares in any one 185.4 calendar year and the redemption must be completed in no more 185.5 than five years. The person may select annual redemption in a 185.6 single lump sum or in monthly payments. An election is 185.7 irrevocable except that a participant may request an amendment 185.8 of the election to redeem all of the person's remaining shares. 185.9 All requests under this paragraph are subject to application to 185.10 and approval of theHennepin County administrator, in the sole185.11discretion of the administratorMinnesota State Retirement 185.12 System upon verification by Hennepin County through the county 185.13 administrator of the recipient's eligibility to redeem funds. 185.14 (2) In the event of the death of a participant leaving a 185.15 surviving spouse, the surviving spouse is entitled to receive 185.16 the cash realized on the redemption of all or a portion of the 185.17 shares in the participant's share account record of the deceased 185.18 spouse, but in no event may the spouse request more than one 185.19 redemption in each calendar year. If only a portion of the 185.20 shares in the participant's share account record is requested to 185.21 be redeemed, the surviving spouse may request the redemption of 185.22 not less than 20 percent of the shares in any one calendar year. 185.23 The surviving spouse may elect annual redemption in a single 185.24 lump sum payment or in monthly payments. Redemption must be 185.25 completed in no more than five years. An election is 185.26 irrevocable except that the surviving spouse may request an 185.27 amendment of the election to redeem all of the participant's 185.28 remaining shares. All requests under this paragraph are subject 185.29 to application to and approval of theHennepin County185.30administrator, in the sole discretion of the185.31administratorMinnesota State Retirement System upon 185.32 verification by Hennepin County through the county administrator 185.33 of the recipient's eligibility to redeem funds. Upon the death 185.34 of the surviving spouse, any shares remaining in the 185.35 participant's share account record must be redeemed on behalf of 185.36 Hennepin County by thecounty of HennepinMinnesota State 186.1 Retirement System and the cash realized from the redemption 186.2 distributed to the estate of the surviving spouse. 186.3 (3) In the event of the death of a participant leaving no 186.4 surviving spouse, but leaving a minor surviving child or minor 186.5 surviving children, the guardianship estate of the minor child 186.6 is, or the guardianship estates of the minor children are, 186.7 entitled to receive the cash realized on the redemption of all 186.8 shares to the credit of the participant's share account record 186.9 of the deceased participant. In the event of minor surviving 186.10 children, the cash realized must be paid in equal shares to the 186.11 guardianship estates of the minor surviving children. 186.12 (4) In the event of the death of a participant leaving no 186.13 surviving spouse and no minor surviving children, the estate of 186.14 the deceased participant is entitled to receive the cash 186.15 realized on the redemption of all shares to the credit of the 186.16 participant's share account record of the deceased participant. 186.17 Sec. 9. [383B.491] [MINNESOTA STATE RETIREMENT SYSTEM 186.18 BILLING AUTHORITY.] 186.19 The Minnesota State Retirement System executive director is 186.20 authorized to enter into an interagency agreement with Hennepin 186.21 County under which the Minnesota State Retirement System would 186.22 directly bill the county for the cost of the Minnesota State 186.23 Retirement System's administration of the Hennepin County 186.24 Supplemental Retirement Plan. 186.25 Sec. 10. Minnesota Statutes 2004, section 423B.01, 186.26 subdivision 12, is amended to read: 186.27 Subd. 12. [EXCESS INVESTMENT INCOME.] "Excess investment 186.28 income" means the amount, if any, by which the average time 186.29 weighted total rate of return earned by the fund in the most 186.30 recent priorfivetwo fiscal years has exceeded the actual 186.31 average percentage increase in the current monthly salary of a 186.32 first grade patrol officer in the most recent priorfivetwo 186.33 fiscal years plus two percent, and must be expressed as a dollar 186.34 amount. The amount may not exceed one percent of the total 186.35 assets of the fund, except when the actuarial value of assets of 186.36 the fund according to the most recent annual actuarial valuation 187.1 prepared in accordance with sections 356.215 and 356.216 is 187.2 greater than 102 percent of its actuarial accrued liabilities, 187.3 in which case the amount must not exceed 1-1/2 percent of the 187.4 total assets of the fund, and does not exist unless the yearly 187.5 average percentage increase of the time weighted total rate of 187.6 return of the fund for the previousfivetwo years exceeds by 187.7 two percent the yearly average percentage increase in monthly 187.8 salary of a first grade patrol officer during the previousfive187.9 two calendar years. 187.10 Sec. 11. Minnesota Statutes 2004, section 423B.09, 187.11 subdivision 1, is amended to read: 187.12 Subdivision 1. [MINNEAPOLIS POLICE; PERSONS ENTITLED TO 187.13 RECEIVE PENSIONS.] The association shall grant pensions payable 187.14 from the police pension fund in monthly installments to persons 187.15 entitled to pensions in the manner and for the following 187.16 purposes. 187.17 (a)When the actuarial value of assets of the fund187.18according to the most recent annual actuarial valuation187.19performed in accordance with sections 356.215 and 356.216 is187.20less than 90 percent of the actuarial accrued liabilities, an187.21active member or a deferred pensioner who has performed duty as187.22a member of the police department of the city for five years or187.23more, upon written application after retiring from duty and187.24reaching at least age 50, is entitled to be paid monthly for187.25life a service pension equal to eight units. For full years of187.26service beyond five years, the service pension increases by 1.6187.27units for each full year, to a maximum of 40 units. When the187.28actuarial value of assets of the fund according to the most187.29recent annual actuarial valuation prepared in accordance with187.30sections 356.215 and 356.216 is greater than 90 percent of187.31actuarial accrued liabilities,Active members, deferred members, 187.32 and service pensioners are entitled to a service pension 187.33 according to the following schedule: 187.34 5 years 8.0 units 187.35 6 years 9.6 units 187.36 7 years 11.2 units 188.1 8 years 12.8 units 188.2 9 years 14.4 units 188.3 10 years 16.0 units 188.4 11 years 17.6 units 188.5 12 years 19.2 units 188.6 13 years 20.8 units 188.7 14 years 22.4 units 188.8 15 years 24.0 units 188.9 16 years 25.6 units 188.10 17 years 27.2 units 188.11 18 years 28.8 units 188.12 19 years 30.4 units 188.13 20 years34.035.0 units 188.14 21 years35.636.6 units 188.15 22 years37.238.2 units 188.16 23 years38.839.8 units 188.17 24 years40.441.4 units 188.18 25 years42.043.0 units 188.19 Fractional years of service may not be used in computing 188.20 pensions. 188.21 (b) An active member who after five years' service but less 188.22 than 20 years' service with the police department of the city, 188.23 becomes superannuated so as to be permanently unable to perform 188.24 the person's assigned duties, is entitled to be paid monthly for 188.25 life a superannuation pension equal to four units for five years 188.26 of service and an additional two units for each full year of 188.27 service over five years and less than 20 years. 188.28 (c) An active member who is not eligible for a service 188.29 pension and who, while a member of the police department of the 188.30 city, becomes diseased or sustains an injury while in the 188.31 service that permanently unfits the member for the performance 188.32 of police duties is entitled to be paid monthly for life a 188.33 pension equal to 34 units while so disabled. 188.34 Sec. 12. Minnesota Statutes 2004, section 423B.09, 188.35 subdivision 1, is amended to read: 188.36 Subdivision 1. [MINNEAPOLIS POLICE; PERSONS ENTITLED TO 189.1 RECEIVE PENSIONS.] The association shall grant pensions payable 189.2 from the police pension fund in monthly installments to persons 189.3 entitled to pensions in the manner and for the following 189.4 purposes. 189.5 (a)When the actuarial value of assets of the fund189.6according to the most recent annual actuarial valuation189.7performed in accordance with sections 356.215 and 356.216 is189.8less than 90 percent of the actuarial accrued liabilities,An 189.9 active member or a deferred pensioner who has performed duty as 189.10 a member of the police department of the city for five years or 189.11 more, upon written application after retiring from duty and 189.12 reaching at least age 50, is entitled to be paid monthly for 189.13 life a service pensionequal to eight units. For full years of189.14service beyond five years, the service pension increases by 1.6189.15units for each full year, to a maximum of 40 units. When the189.16actuarial value of assets of the fund according to the most189.17recent annual actuarial valuation prepared in accordance with189.18sections 356.215 and 356.216 is greater than 90 percent of189.19actuarial accrued liabilities,. Active members, deferred 189.20 members, and service pensioners are entitled to a service 189.21 pension according to the following schedule: 189.22 5 years 8.0 units 189.23 6 years 9.6 units 189.24 7 years 11.2 units 189.25 8 years 12.8 units 189.26 9 years 14.4 units 189.27 10 years 16.0 units 189.28 11 years 17.6 units 189.29 12 years 19.2 units 189.30 13 years 20.8 units 189.31 14 years 22.4 units 189.32 15 years 24.0 units 189.33 16 years 25.6 units 189.34 17 years 27.2 units 189.35 18 years 28.8 units 189.36 19 years 30.4 units 190.1 20 years 34.0 units 190.2 21 years 35.6 units 190.3 22 years 37.2 units 190.4 23 years 38.8 units 190.5 24 years 40.4 units 190.6 25 years 42.0 units 190.7 Fractional years of service may not be used in computing 190.8 pensions. 190.9 (b) An active member who after five years' service but less 190.10 than 20 years' service with the police department of the city, 190.11 becomes superannuated so as to be permanently unable to perform 190.12 the person's assigned duties, is entitled to be paid monthly for 190.13 life a superannuation pension equal to four units for five years 190.14 of service and an additional two units for each full year of 190.15 service over five years and less than 20 years. 190.16 (c) An active member who is not eligible for a service 190.17 pension and who, while a member of the police department of the 190.18 city, becomes diseased or sustains an injury while in the 190.19 service that permanently unfits the member for the performance 190.20 of police duties is entitled to be paid monthly for life a 190.21 pension equal to 34 units while so disabled. 190.22 Sec. 13. Minnesota Statutes 2004, section 423B.09, is 190.23 amended by adding a subdivision to read: 190.24 Subd. 7. [ADDITIONAL UNIT.] The additional unit provided 190.25 to members by subdivision 1 must also be provided to members who 190.26 selected a joint annuity option under subdivision 6 and must be 190.27 in an amount that is actuarially equivalent to the service 190.28 pension and the automatic survivor coverage for that additional 190.29 unit. 190.30 Sec. 14. Minnesota Statutes 2004, section 423B.10, 190.31 subdivision 1, is amended to read: 190.32 Subdivision 1. [ENTITLEMENT; BENEFIT AMOUNT.] (a) The 190.33 surviving spouse of a deceased service pensioner, disability 190.34 pensioner, deferred pensioner, superannuation pensioner, or 190.35 active member, who was the legally married spouse of the 190.36 decedent, residing with the decedent, and who was married while 191.1 or before the time the decedent was on the payroll of the police 191.2 department, and who, if the deceased member was a service or 191.3 deferred pensioner, was legally married to the member for a 191.4 period of at least one year before retirement from the police 191.5 department, is entitled to a surviving spouse benefit. The 191.6 surviving spouse benefit is equal to2223 units per month if 191.7 the person is the surviving spouse of a deceased active member 191.8 or disabilitant. The surviving spouse benefit is equal to six 191.9 units per month, plus an additional one unit for each year of 191.10 service to the credit of the decedent in excess of five years, 191.11 to a maximum of2223 units per month, if the person is the 191.12 surviving spouse of a deceased service pensioner, deferred 191.13 pensioner, or superannuation pensioner. The surviving spouse 191.14 benefit is payable for the life of the surviving spouse. 191.15 (b) A surviving child of a deceased service pensioner, 191.16 disability pensioner, deferred pensioner, superannuation 191.17 pensioner, or active member, who was living while the decedent 191.18 was an active member of the police department or was born within 191.19 nine months after the decedent terminated active service in the 191.20 police department, is entitled to a surviving child benefit. 191.21 The surviving child benefit is equal to eight units per month if 191.22 the person is the surviving child of a deceased active member or 191.23 disabilitant. The surviving child benefit is equal to two units 191.24 per month, plus an additional four-tenths of one unit per month 191.25 for each year of service to the credit of the decedent in excess 191.26 of five years, to a maximum of eight units, if the person is the 191.27 surviving child of a deceased service pensioner, deferred 191.28 pensioner, or superannuation pensioner. The surviving child 191.29 benefit is payable until the person attains age 18, or, if in 191.30 full-time attendance during the normal school year, in a school 191.31 approved by the board of directors, until the person receives a 191.32 bachelor's degree or attains the age of 22 years, whichever 191.33 occurs first. In the event of the death of both parents leaving 191.34 a surviving child or children entitled to a surviving child 191.35 benefit as determined in this paragraph, the surviving child is, 191.36 or the surviving children are, entitled to a surviving child 192.1 benefit in such sums as determined by the board of directors to 192.2 be necessary for the care and education of such surviving child 192.3 or children, but not to exceed the family maximum benefit per 192.4 month, to the children of any one family. 192.5 (c) The surviving spouse and surviving child benefits are 192.6 subject to a family maximum benefit. The family maximum benefit 192.7 is 41 units per month. 192.8 (d) A surviving spouse who is otherwise not qualified may 192.9 receive a benefit if the surviving spouse was married to the 192.10 decedent for a period of five years and was residing with the 192.11 decedent at the time of death. The surviving spouse benefit is 192.12 the same as that provided in paragraph (a), except that if the 192.13 surviving spouse is younger than the decedent, the surviving 192.14 spouse benefit must be actuarially equivalent to a surviving 192.15 spouse benefit that would have been paid to the member's spouse 192.16 had the member been married to a person of the same age or a 192.17 greater age than the member's age before retirement. 192.18 Sec. 15. Minnesota Statutes 2004, section 423B.15, 192.19 subdivision 3, is amended to read: 192.20 Subd. 3. [AMOUNT OF ANNUAL POSTRETIREMENT PAYMENT.] The 192.21 amount determined under subdivision 2 must be applied in 192.22 accordance with this subdivision. When the actuarial value of 192.23 assets of the fund according to the most recent annual actuarial 192.24 valuation prepared in accordance with sections 356.215 and 192.25 356.216 is less than 102 percent of its total actuarial 192.26 liabilities, the relief association shall apply the first 192.27 one-half of excess investment income to the payment of an annual 192.28 postretirement payment as specified in this subdivision and the 192.29 second one-half of excess investment income up to one-half of 192.30 one percent of the assets of the fund must be applied to reduce 192.31 the state amortization state aid or supplementary amortization 192.32 state aid payments otherwise due to the relief association under 192.33 section 423A.02 for the current calendar year. When the 192.34 actuarial value of assets of the fund according to the most 192.35 recent annual actuarial valuation prepared in accordance with 192.36 sections 356.215 and 356.216 is less than 102 percent funded and 193.1 other conditions are met, the relief association shall pay an 193.2 annual postretirement payment to all eligible members in an 193.3 amount not to exceed one-half of one percent of the assets of 193.4 the fund. When the actuarial value of assets of the fund 193.5 according to the most recent annual actuarial valuation prepared 193.6 in accordance with sections 356.215 and 356.216 is greater than 193.7 102 percent of its actuarial accrued liabilities, the relief 193.8 association shall pay an annual postretirement payment to all 193.9 eligible members in an amount not to exceed 1-1/2 percent of the 193.10 assets of the fund. Payment of the annual postretirement 193.11 payment must be in a lump sum amount on June 1 following the 193.12 determination date in any year. Payment of the annual 193.13 postretirement payment may be made only if the average time 193.14 weighted total rate of return for the most recent priorfivetwo 193.15 years exceeds by two percent the actual average percentage 193.16 increase in the current monthly salary of a top grade patrol 193.17 officer in the most recent priorfivetwo fiscal years. The 193.18 total amount of all payments to members may not exceed the 193.19 amount determined under this subdivision. Payment to each 193.20 eligible member must be calculated by dividing the total number 193.21 of pension units to which eligible members are entitled into the 193.22 excess investment income available for distribution to members, 193.23 and then multiplying that result by the number of units to which 193.24 each eligible member is entitled to determine each eligible 193.25 member's annual postretirement payment. When the actuarial 193.26 value of assets of the fund according to the most recent annual 193.27 actuarial valuation prepared in accordance with sections 356.215 193.28 and 356.216 is less than 102 percent of its actuarial accrued 193.29 liabilities, payment to each eligible member may not exceed an 193.30 amount equal to the total monthly benefit that the eligible 193.31 member was entitled to in the prior year under the terms of the 193.32 benefit plan of the relief association or each eligible member's 193.33 proportionate share of the excess investment income, whichever 193.34 is less. When the actuarial value of assets of the fund 193.35 according to the most recent annual actuarial valuation prepared 193.36 in accordance with sections 356.215 and 356.216 is greater than 194.1 102 percent of its actuarial accrued liabilities, payment to 194.2 each eligible member must not exceed the member's proportionate 194.3 share of 1-1/2 percent of the assets of the fund. 194.4 A person who received a pension or benefit for the entire 194.5 12 months before the determination date is eligible for a full 194.6 annual postretirement payment. A person who received a pension 194.7 or benefit for less than 12 months before the determination date 194.8 is eligible for a prorated annual postretirement payment. 194.9 Sec. 16. Minnesota Statutes 2004, section 423C.05, 194.10 subdivision 2, is amended to read: 194.11 Subd. 2. [SERVICE PENSION.] (a)An activeA member who has 194.12 performed duty for the fire department for five years or more, 194.13 upon written application after retiring from duty and reaching 194.14 at least age 50, is entitled to be paid monthly for life a 194.15 service pension under paragraph (b). 194.16 (b)Based on the percentage that the actuarial value of194.17assets of the special fund equal to the actuarial accrued194.18liabilities of the special fund according to the most recent194.19annual actuarial valuation of the relief association prepared in194.20accordance with sections 356.215 and 356.216,The amount of the 194.21 service pension is as follows: 194.22 Length ofServiceServiceService194.23 allowablepensionpensionpension194.24 servicepayable ifpayablepayable if194.25 creditunder 90if greatergreater194.26percentthan 89.99than 92.49194.27percent andpercent194.28less thanNumber of 194.2992.5 percentunits 194.30 5 years-8.0 units8.0 units 194.31 6 years-9.6 units9.6 units 194.32 7 years-11.2 units11.2 units 194.33 8 years-12.8 units12.8 units 194.34 9 years-14.4 units14.4 units 194.35 10 years16.0 units16.0 units16.0 units 194.36 11 years17.6 units17.6 units17.6 units 195.1 12 years19.2 units19.2 units19.2 units 195.2 13 years20.8 units20.8 units20.8 units 195.3 14 years22.4 units22.4 units22.4 units 195.4 15 years24.0 units24.0 units24.0 units 195.5 16 years25.6 units25.6 units25.6 units 195.6 17 years27.2 units27.2 units27.2 units 195.7 18 years28.8 units28.8 units28.8 units 195.8 19 years30.4 units30.4 units30.4 units 195.9 20 years33.0 units33.5 units34.0 units 195.10 21 years34.6 units35.1 units35.6 units 195.11 22 years36.2 units37.7 units37.2 units 195.12 23 years37.8 units38.3 units38.8 units 195.13 24 years39.4 units39.9 units40.4 units 195.14 25 years 195.15 or more41.0 units41.5 units42.0 units 195.16 (c) A member entitled to a benefit under this subdivision 195.17 may elect to have it paid as an optional retirement annuity 195.18 pursuant to the conditions set forth in subdivision 8. A member 195.19 receiving a benefit pursuant to subdivision 5 or 6 shall not 195.20 simultaneously be entitled to a benefit under this subdivision. 195.21 Sec. 17. [423C.16] [RECOMPUTATION OF DISABLED BENEFIT 195.22 PROHIBITED.] 195.23 Notwithstanding section 423A.11, the Board of Trustees of 195.24 the Minneapolis Firefighters Relief Association shall not 195.25 recompute the disability benefit of a member who became 195.26 permanently disabled as the result of a service-related disease 195.27 or injury. Any prior recomputation of a disabled member's 195.28 service-related disability pension shall be revoked upon the 195.29 member's request and upon the member's signed and sworn 195.30 agreement to waive any right to a recomputation of the benefit 195.31 in the future. Non-service-related disability pension benefits 195.32 that were recomputed at full 25-year service pensions shall 195.33 remain in effect. 195.34 Sec. 18. [NO REDUCTION OF BENEFITS.] 195.35 Once a pension benefit is properly paid in accordance with 195.36 the laws governing the Minneapolis Police Relief Association to 196.1 any member, the dollar amount of the pension a member received 196.2 shall not be reduced if the city of Minneapolis and the 196.3 collective bargaining agent representing active police officers 196.4 enter into or are required to abide by an agreement that would 196.5 otherwise require the association to reduce the dollar amount of 196.6 a pension that had properly been paid to any member. 196.7 Sec. 19. [AURORA, BIWABIK CITY, HOYT LAKES, AND PALO 196.8 VOLUNTEER FIREFIGHTER RELIEF ASSOCIATIONS; CONSOLIDATION.] 196.9 (a) This section applies to consolidation of any 196.10 combination of two or more of the following volunteer 196.11 firefighter relief associations: Aurora, Biwabik City, Hoyt 196.12 Lakes, and Palo. 196.13 (b) Notwithstanding Minnesota Statutes, section 424B.10, 196.14 subdivision 1, paragraph (a), the service pension to be paid by 196.15 the relief association existing after the consolidation is as 196.16 follows: 196.17 (1) for the service rendered by each individual volunteer 196.18 firefighter before the effective date of the consolidation, the 196.19 service pension amount is the amount payable to that volunteer 196.20 firefighter under the articles of incorporation or bylaws of the 196.21 consolidating volunteer firefighters relief association that the 196.22 firefighter was a member of immediately before the 196.23 consolidation; 196.24 (2) for the service rendered after the effective date of 196.25 the consolidation, the service pension amount is the highest 196.26 dollar amount service pension of any of the consolidating 196.27 volunteer firefighters relief associations under the articles of 196.28 incorporation or bylaws in effect immediately before the 196.29 consolidation; and 196.30 (3) after consolidation, increases in the amounts 196.31 established in clauses (1) and (2) may be implemented if 196.32 consistent with applicable requirements of Minnesota Statutes, 196.33 chapters 69 and 424A. 196.34 Sec. 20. [EVELETH RETIRED POLICE AND FIRE TRUST FUND; AD 196.35 HOC POSTRETIREMENT ADJUSTMENT.] 196.36 (a) In addition to the current pensions and other 197.1 retirement benefits payable, the pensions and retirement 197.2 benefits payable to retired police officers and firefighters and 197.3 their surviving spouses by the Eveleth police and fire trust 197.4 fund are increased by $100 per month. Increases are retroactive 197.5 from January 1, 2005. 197.6 (b) Following the January 1, 2005, effective date of the 197.7 benefit increase provided under paragraph (a), every two years 197.8 thereafter, to be effective no earlier than the applicable 197.9 January 1, the city council of the city of Eveleth is authorized 197.10 to provide permanent, uniform benefit increases, not less than 197.11 $10 per month nor to exceed $100 per month, to any remaining 197.12 retirees and survivors receiving benefits from the Eveleth 197.13 police and fire trust fund. Any given benefit improvement under 197.14 this paragraph is not effective unless the city council passes a 197.15 resolution approving the increase. 197.16 (c) Within 30 days following the approval of a resolution 197.17 under paragraph (b), the chief administrative officer of the 197.18 city of Eveleth shall file a copy of the resolution with the 197.19 executive director of the Legislative Commission on Pensions and 197.20 Retirement, with the chair of the house Governmental Operations 197.21 and Veterans Affairs Committee, and with the chair of the senate 197.22 State and Local Government Operations Committee. Along with a 197.23 copy of the resolution, the city's chief administrative officer 197.24 must send a statement indicating the age of each benefit 197.25 recipient and the retirement benefit or survivor benefit being 197.26 received before and after the benefit increase. 197.27 Sec. 21. [MAPLEWOOD AND OAKDALE VOLUNTEER FIREFIGHTER 197.28 RELIEF ASSOCIATIONS; TRANSFER OF ASSETS.] 197.29 Notwithstanding any limitations in Minnesota Statutes, 197.30 section 424A.02, subdivision 13, or any other provision of law 197.31 to the contrary, if an agreement between the affected relief 197.32 associations and cities is reached as provided in this section, 197.33 the Maplewood Firefighters Relief Association may transfer 197.34 assets from its special fund to the Oakdale Fire Department 197.35 Relief Association representing the value of the accumulated 197.36 service credit for the current members of the Oakdale Fire 198.1 Department Relief Association who are currently eligible to 198.2 receive a combined service pension for firefighter service in 198.3 both associations. The transfer of the assets from the 198.4 Maplewood Firefighters Relief Association to the Oakdale Fire 198.5 Department Relief Association must be in an amount representing 198.6 the cumulative value of the service credit earned by the members 198.7 of the Oakdale Fire Department Relief Association who are 198.8 currently eligible to receive a combined service pension for 198.9 firefighting service in both associations for the service credit 198.10 that they accrued while working for the Maplewood Fire 198.11 Department. The amount of the assets, liabilities, and service 198.12 credit to be transferred must be specified in a joint agreement 198.13 negotiated by the secretaries of the two relief associations and 198.14 ratified by the boards of trustees of both relief associations 198.15 and of the cities of Maplewood and Oakdale. The agreement must 198.16 specify by name or other appropriate means the firefighters 198.17 affected by the liability, asset, and service credit transfer. 198.18 The ratification must be expressed in the form of resolutions 198.19 adopted by each entity. The agreements must specify the amount 198.20 of assets to be transferred, the amount of liabilities to be 198.21 transferred, and the amount of service credit each of the 198.22 applicable individuals will receive in the Oakdale Fire 198.23 Department Relief Association. Upon the ratification of the 198.24 agreement by both relief associations and both cities, the 198.25 assets, liabilities, and service credit of the applicable 198.26 individuals must be transferred to the Oakdale Fire Department 198.27 Relief Association, and the Maplewood Firefighters Relief 198.28 Association is relieved of any obligation to the individuals. A 198.29 certified copy of the ratified agreement must be filed with the 198.30 state auditor and with the secretary of state. 198.31 Sec. 22. [EFFECTIVE DATE; LOCAL APPROVAL.] 198.32 (a) Sections 1 and 2 are effective the day after the date 198.33 on which the city council of the city of Bloomington and its 198.34 chief clerical officer timely complete their compliance with 198.35 Minnesota Statutes, section 645.021, subdivisions 2 and 4. 198.36 (b) Sections 3 to 10 are not severable and are effective on 199.1 the day after the date of the approval by the city council of 199.2 the city of Minneapolis and the timely completion by the chief 199.3 clerical officer of the city of Minneapolis of compliance with 199.4 Minnesota Statutes, section 645.021, subdivisions 2 and 3. 199.5 (c) Sections 3, 4, 5, 6, and 7 are effective on the day 199.6 after the board of Hennepin County and its chief clerical 199.7 officer complete in a timely manner their compliance with 199.8 Minnesota Statutes, section 645.021, subdivisions 2 and 3. 199.9 (d) Section 8 is effective on the day after the Minneapolis 199.10 city council and the chief clerical officer of the city of 199.11 Minneapolis complete in a timely manner their compliance with 199.12 Minnesota Statutes, section 645.021, subdivisions 2 and 3. 199.13 (e) Sections 9 and 10 are effective on the day after the 199.14 governing body of the city of Minneapolis and its chief clerical 199.15 officer timely complete their compliance with Minnesota 199.16 Statutes, section 645.021, subdivisions 2 and 3. 199.17 (f) Section 4 is effective the day after the date on which 199.18 the city council of the city of Eveleth and its chief clerical 199.19 officer timely complete their compliance with Minnesota 199.20 Statutes, section 645.021, subdivisions 2 and 3. 199.21 (g) Section 3 is effective with respect to a volunteer 199.22 firefighters relief association listed in column A the day after 199.23 the governing body of the municipality listed in column B and 199.24 its chief clerical officer timely complete compliance with 199.25 Minnesota Statutes, section 645.021, subdivisions 2 and 3. 199.26 A B 199.27 Aurora city of Aurora 199.28 Biwabik city of Biwabik 199.29 Hoyt Lakes city of Hoyt Lakes 199.30 Palo town of White 199.31 (h) Section 5 is effective the day after the governing body 199.32 of the city of Maplewood, the governing body of the city of 199.33 Oakdale, the Maplewood chief clerical officer, and the Oakdale 199.34 chief clerical officer complete their compliance with Minnesota 199.35 Statutes, section 645.021, subdivisions 2 and 3. 199.36 ARTICLE 14 200.1 MINNEAPOLIS EMPLOYEES RETIREMENT 200.2 FUND CHANGES 200.3 Section 1. Minnesota Statutes 2004, section 43A.17, 200.4 subdivision 9, is amended to read: 200.5 Subd. 9. [POLITICAL SUBDIVISION COMPENSATION LIMIT.] (a) 200.6 The salary and the value of all other forms of compensation of a 200.7 person employed by a political subdivision of this state, 200.8 excluding a school district,or employed under section 422A.03200.9 may not exceed 95 percent of the salary of the governor as set 200.10 under section 15A.082, except as provided in this subdivision. 200.11 For purposes of this subdivision, "political subdivision of this 200.12 state" includes a statutory or home rule charter city, county, 200.13 town, metropolitan or regional agency, or other political 200.14 subdivision, but does not include a hospital, clinic, or health 200.15 maintenance organization owned by such a governmental unit or a 200.16 retirement plan governed by chapter 422A. 200.17 (b) Deferred compensation and payroll allocations to 200.18 purchase an individual annuity contract for an employee are 200.19 included in determining the employee's salary. Other forms of 200.20 compensation which shall be included to determine an employee's 200.21 total compensation are all other direct and indirect items of 200.22 compensation which are not specifically excluded by this 200.23 subdivision. Other forms of compensation which shall not be 200.24 included in a determination of an employee's total compensation 200.25 for the purposes of this subdivision are: 200.26 (1) employee benefits that are also provided for the 200.27 majority of all other full-time employees of the political 200.28 subdivision, vacation and sick leave allowances, health and 200.29 dental insurance, disability insurance, term life insurance, and 200.30 pension benefits or like benefits the cost of which is borne by 200.31 the employee or which is not subject to tax as income under the 200.32 Internal Revenue Code of 1986; 200.33 (2) dues paid to organizations that are of a civic, 200.34 professional, educational, or governmental nature; and 200.35 (3) reimbursement for actual expenses incurred by the 200.36 employee which the governing body determines to be directly 201.1 related to the performance of job responsibilities, including 201.2 any relocation expenses paid during the initial year of 201.3 employment. 201.4 The value of other forms of compensation shall be the 201.5 annual cost to the political subdivision for the provision of 201.6 the compensation. 201.7 (c) The salary of a medical doctor or doctor of osteopathy 201.8 occupying a position that the governing body of the political 201.9 subdivision has determined requires an M.D. or D.O. degree is 201.10 excluded from the limitation in this subdivision. 201.11 (d) The commissioner may increase the limitation in this 201.12 subdivision for a position that the commissioner has determined 201.13 requires special expertise necessitating a higher salary to 201.14 attract or retain a qualified person. The commissioner shall 201.15 review each proposed increase giving due consideration to salary 201.16 rates paid to other persons with similar responsibilities in the 201.17 state and nation. The commissioner may not increase the 201.18 limitation until the commissioner has presented the proposed 201.19 increase to the Legislative Coordinating Commission and received 201.20 the commission's recommendation on it. The recommendation is 201.21 advisory only. If the commission does not give its 201.22 recommendation on a proposed increase within 30 days from its 201.23 receipt of the proposal, the commission is deemed to have made 201.24 no recommendation. 201.25 Sec. 2. Minnesota Statutes 2004, section 422A.05, 201.26 subdivision 2c, is amended to read: 201.27 Subd. 2c. [MINNEAPOLIS EMPLOYEES RETIREMENT FUND 201.28 INVESTMENT AUTHORITY.] (a) For investments made on or after July 201.29 1, 1991, the board shall invest funds only in investments 201.30 authorized by section 356A.06, subdivision 7. 201.31 (b) However, in addition to real estate investments 201.32 authorized under paragraph (a), the board may also make loans to 201.33 purchasers of Minnesota situs nonfarm residential real estate 201.34 that is owned by the Minneapolis Employees Retirement Fund. The 201.35 loans must be secured by mortgages or deeds of trust. 201.36 (c) For investments made before July 1, 1991, the board 202.1 may, but is not required to, comply with paragraph (a). 202.2 However, with respect to these investments, the board shall act 202.3 in accordance with subdivision 2a and chapter 356A. 202.4 (d) The board may certify assets for investment by the 202.5 State Board of Investment under sections 11A.14 and 11A.17. 202.6 Sec. 3. Minnesota Statutes 2004, section 422A.06, 202.7 subdivision 3, is amended to read: 202.8 Subd. 3. [DEPOSIT ACCUMULATION FUND.] (a) The deposit 202.9 accumulation fund consists of the assets held in the fund, 202.10 including amounts contributed by or for employees, amounts 202.11 contributed by the city, amounts contributed by municipal 202.12 activities supported in whole or in part by revenues other than 202.13 taxes and amounts contributed by any public corporation, amounts 202.14 paid by the state, and by income from investments. 202.15 (b) There must be paid from the fund the amounts required 202.16 to be transferred to the retirement benefit fund, or the 202.17 disability benefit fund, refunds of contributions, including the 202.18 death-while-active refund specified in section 422A.22, 202.19 subdivision 4, postretirement increases in retirement allowances 202.20 granted under Laws 1965, chapter 688, or Laws 1969, chapter 859, 202.21 and expenses of the administration of the retirement fund which 202.22 were not charged by the retirement board against the income of 202.23 the retirement benefit fund from investments as the cost of 202.24 handling the investments of the retirement benefit fund. 202.25 (c) To the extent that the deposit accumulation fund has 202.26 insufficient assets to transfer the total value of the required 202.27 reserves for retirement annuities to either the disability 202.28 benefit fund under subdivisions 5 and 7 or the retirement 202.29 benefit fund under subdivisions 5 and 8 as required, the deposit 202.30 accumulation fund has a transfer amount payable on which an 202.31 interest charge accrues. The executive director must determine 202.32 the interest charge for the period that transfer amount payable 202.33 remains unpaid at an annual rate equal to five percent plus the 202.34 percentage increase in the amount of the annual Consumer Price 202.35 Index for urban wage earners and clerical workers as calculated 202.36 by the Bureau of Labor Statistics of the United States 203.1 Department of Labor from the previous June 30. The interest 203.2 charge must be reflected in the books of the Minneapolis 203.3 Employees Retirement Fund and assessed against the deposit 203.4 accumulation fund based on the average quarterly transfer amount 203.5 payable balance outstanding. Any revenue received by the 203.6 deposit accumulation fund subsequent to unpaid transfers must be 203.7 transferred from the deposit accumulation fund to the disability 203.8 benefit fund or to the retirement fund, whichever applies, must 203.9 first be applied to any remaining interest charge and then must 203.10 be applied to the principal amount of transfer amount payable 203.11 outstanding. 203.12 Sec. 4. Minnesota Statutes 2004, section 422A.06, 203.13 subdivision 5, is amended to read: 203.14 Subd. 5. [TRANSFER OF RESERVES TO RETIREMENT BENEFIT FUND; 203.15 ADJUSTMENTS OF ANNUITIES AND BENEFITS.] (a) Assets equal to the 203.16 required reserves for retirement annuities as determined in 203.17 accordance with the appropriate mortality table adopted by the 203.18 board of trustees based on the experience of the fund as 203.19 recommended by thecommission-retainedactuary retained under 203.20 section 356.214 and using the postretirement interest assumption 203.21 specified in section 356.215, subdivision 8,shallmust be 203.22 transferred to the disability benefit fund as provided in 203.23 subdivision 7, or the retirement benefit fund, except for any 203.24 amounts payable from the survivor benefit fund, as of date of 203.25 retirement. 203.26 (b) If a full transfer amount is not payable from the 203.27 deposit accumulation fund, the applicable fund must be credited 203.28 with an interest-bearing transfer amount receivable. 203.29(b)(c) Annuity paymentsshallmust be adjusted in 203.30 accordance with this chapter, except that no minimum retirement 203.31 payments described in this chaptershallmust include any 203.32 amounts payable from the survivors' benefit fund or disability 203.33 benefit fund and supplemented benefits specifically financed by 203.34 statute. 203.35(c)(d) Increases in annuity paymentspursuant tounder 203.36 this section shall be made automatically unless written notice 204.1 on a form prescribed by the board is filed with the retirement 204.2 board requesting that the increase not be made. 204.3(d)(e) Any additional annuity which began to accrue on 204.4 July 1, 1973, or which began to accrue on January 1, 1974, 204.5 pursuant to Laws 1973, chapter 770, section 1,shallmust be 204.6 considered as part of the base amount to be used in determining 204.7 any postretirement adjustments payablepursuant tounder the 204.8 provisions of subdivision 8. 204.9 Sec. 5. Minnesota Statutes 2004, section 422A.06, 204.10 subdivision 7, is amended to read: 204.11 Subd. 7. [DISABILITY BENEFIT FUND.] (a) Unless subdivision 204.12 3, paragraph (c), applies, the required reserves for disability 204.13 allowances which become effective after December 31, 1973,shall204.14 must be transferred from the deposit accumulation fund to the 204.15 disability benefit fund. A proportionate share of income from 204.16 investmentsshallmust be allocated to this fund and any 204.17 interest charge under subdivision 3, paragraph (c), must be 204.18 credited to the fund.There shall be paidFrom this fund, the 204.19 disability allowances which become effective after December 31, 204.20 1973, must be paid. 204.21 (b) In the event of termination of any disability allowance 204.22 for any reason other than the death of the recipient, the 204.23 balance of the required reserves for the disability allowance as 204.24 of the date of terminationshallmust be transferred from the 204.25 disability benefit fund to the deposit accumulation fund. 204.26 (c) At the end of each fiscal year, as part of the annual 204.27 actuarial valuation, a determinationshallmust be made of the 204.28 required reserves for all disability allowances being paid from 204.29 the disability benefit fund. Any excess of assets over 204.30 actuarial required reserves in the disability benefit fundshall204.31 must be transferred to the deposit accumulation fund. Unless 204.32 subdivision 3, paragraph (c), applies, any excess of actuarial 204.33 reserves over assets in the disability benefit fundshallmust 204.34 be funded by a transfer of the appropriate amount of assets from 204.35 the deposit accumulation fund. 204.36 Sec. 6. Minnesota Statutes 2004, section 422A.06, 205.1 subdivision 8, is amended to read: 205.2 Subd. 8. [RETIREMENT BENEFIT FUND.] (a) The retirement 205.3 benefit fundshall consistconsists of amounts held for payment 205.4 of retirement allowances for members retiredpursuant tounder 205.5 this chapter, including any transfer amount payable under 205.6 subdivision 3, paragraph (c). 205.7 (b) Unless subdivision 3, paragraph (c), applies, assets 205.8 equal to the required reserves for retirement 205.9 allowancespursuant tounder this chapter determined in 205.10 accordance with the appropriate mortality table adopted by the 205.11 board of trustees based on the experience of the fund as 205.12 recommended by thecommission-retainedactuaryshallretained 205.13 under section 356.214, must be transferred from the deposit 205.14 accumulation fund to the retirement benefit fund as of the last 205.15 business day of the month in which the retirement allowance 205.16 begins. The income from investments of these assetsshallmust 205.17 be allocated to this fund and any interest charge under 205.18 subdivision 3, paragraph (c), must be credited to the fund. 205.19 Thereshallmust be paid from this fund the retirement annuities 205.20 authorized by law. A required reserve calculation for the 205.21 retirement benefit fund must be made by the actuary retainedby205.22the Legislative Commission on Pensions and Retirementunder 205.23 section 356.214 and must be certified to the retirement board by 205.24 thecommission-retainedactuary. 205.25 (c) The retirement benefit fundshallmust be governed by 205.26 the applicable laws governing the accounting and audit 205.27 procedures, investment, actuarial requirements, calculation and 205.28 payment of postretirement benefit adjustments, discharge of any 205.29 deficiency in the assets of the fund when compared to the 205.30 actuarially determined required reserves, and other applicable 205.31 operations and procedures regarding the Minnesota postretirement 205.32 investment fund in effect on June 30, 1997, established under 205.33 Minnesota Statutes 1996, section 11A.18, and any legal or 205.34 administrative interpretations of those laws of the State Board 205.35 of Investment, the legal advisor to the Board of Investment and 205.36 the executive director of the State Board of Investment in 206.1 effect on June 30, 1997. If a deferred yield adjustment account 206.2 is established for the Minnesota postretirement investment fund 206.3 before June 30, 1997, under Minnesota Statutes 1996, section 206.4 11A.18, subdivision 5, the retirement board shall also establish 206.5 and maintain a deferred yield adjustment account within this 206.6 fund. 206.7 (d) Annually, following the calculation of any 206.8 postretirement adjustment payable from the retirement benefit 206.9 fund, the board of trustees shall submit a report to the 206.10 executive director of the Legislative Commission on Pensions and 206.11 Retirement and to the commissioner of finance indicating the 206.12 amount of any postretirement adjustment and the underlying 206.13 calculations on which that postretirement adjustment amount is 206.14 based, including the amount of dividends, the amount of 206.15 interest, and the amount of net realized capital gains or losses 206.16 utilized in the calculations. 206.17 (e) With respect to a former contributing member who began 206.18 receiving a retirement annuity or disability benefit under 206.19 section 422A.151, paragraph (a), clause (2), after June 30, 206.20 1997, or with respect to a survivor of a former contributing 206.21 member who began receiving a survivor benefit under section 206.22 422A.151, paragraph (a), clause (2), after June 30, 1997, the 206.23 reserves attributable to the one percent lower amount of the 206.24 cost-of-living adjustment payable to those annuity or benefit 206.25 recipients annually must be transferred back to the deposit 206.26 accumulation fund to the credit of the Metropolitan Airports 206.27 Commission. The calculation of this annual reduced 206.28 cost-of-living adjustment reserve transfer must be reviewed by 206.29 the actuary retainedby the Legislative Commission on Pensions206.30and Retirementunder section 356.214. 206.31 Sec. 7. Minnesota Statutes 2004, section 422A.101, 206.32 subdivision 3, is amended to read: 206.33 Subd. 3. [STATE CONTRIBUTIONS.] (a) Subject to the 206.34 limitation set forth in paragraph (c), the state shall pay to 206.35 the Minneapolis Employees Retirement Fund annually an amount 206.36 equal to the amount calculated under paragraph (b). 207.1 (b) The payment amount is an amount equal to the financial 207.2 requirements of the Minneapolis Employees Retirement Fund 207.3 reported in the actuarial valuation of the fund prepared by the 207.4 commission-retained actuary pursuant to section 356.215 for the 207.5 most recent year but based on a target date for full 207.6 amortization of the unfunded actuarial accrued liabilities by 207.7 June 30, 2020, less the amount of employee contributions 207.8 required pursuant to section 422A.10, and the amount of employer 207.9 contributions required pursuant to subdivisions 1a, 2, and 2a. 207.10 Payments shall be made September 15 annually. 207.11 (c) The annual state contribution under this subdivision 207.12 may not exceed $9,000,000, plus the cost of the annual 207.13 supplemental benefit determined under section 356.43. 207.14 (d) If the amount determined under paragraph (b) exceeds 207.15$11,910,000$9,000,000, the excess must be allocated to and paid 207.16 to the fund by the employers identified in subdivisions 1a and 207.17 2, other than units of metropolitan government. Each employer's 207.18 share of the excess is proportionate to the employer's share of 207.19 the fund's unfunded actuarial accrued liability as disclosed in 207.20 the annual actuarial valuation prepared by the actuary 207.21 retainedby the Legislative Commission on Pensions and207.22Retirementunder section 356.214 compared to the total unfunded 207.23 actuarial accrued liability attributed to all employers 207.24 identified in subdivisions 1a and 2, other than units of 207.25 metropolitan government. Payments must be made in equal 207.26 installments as set forth in paragraph (b). 207.27 Sec. 8. [REPEALER.] 207.28 Minnesota Statutes 2004, section 422A.101, subdivision 4, 207.29 is repealed. 207.30 Sec. 9. [EFFECTIVE DATE; LOCAL APPROVAL.] 207.31 Sections 1 to 8 are effective on the day after the city 207.32 council of the city of Minneapolis and its chief clerical 207.33 officer timely complete their compliance with Minnesota 207.34 Statutes, section 645.021, subdivisions 2 and 3. 207.35 ARTICLE 15 207.36 ONE PERSON AND SMALL GROUP 208.1 RETIREMENT CHANGES 208.2 Section 1. [SURVIVOR BENEFIT FOR ST. LOUIS PARK POLICE 208.3 OFFICER KILLED IN IRAQ CONFLICT.] 208.4 Subdivision 1. [ELIGIBILITY.] (a) Notwithstanding any 208.5 provision of Minnesota Statutes, section 353.657, subdivision 1, 208.6 regarding required length of marriage, an eligible person 208.7 described in paragraph (b) is authorized to apply for a 208.8 surviving spouse annuity from the public employees police and 208.9 fire retirement plan to be computed under Minnesota Statutes, 208.10 section 353.657, subdivision 2. 208.11 (b) An eligible person for purposes of paragraph (a) is the 208.12 surviving spouse of a deceased public employees police and fire 208.13 retirement plan member who: 208.14 (1) was born on October 29, 1979; 208.15 (2) was a member of the public employees police and fire 208.16 retirement plan commencing on January 24, 2004, due to 208.17 employment as a police officer by the city of St. Louis Park; 208.18 and 208.19 (3) died on February 21, 2005, while providing military 208.20 service in Iraq. 208.21 Subd. 2. [APPLICATION PROCESS.] An eligible person 208.22 described in subdivision 1 is authorized to apply for the 208.23 applicable surviving spouse annuity on a form or forms provided 208.24 by the executive director of the Public Employees Retirement 208.25 Association. The person must provide sufficient documentation 208.26 of eligibility to the executive director, as the executive 208.27 director may prescribe. 208.28 Subd. 3. [REFUND REPAYMENT AUTHORIZATION.] An annuity 208.29 under this section is in lieu of any death refund to which an 208.30 eligible person would otherwise be entitled. If an eligible 208.31 person has received a death refund, that person is authorized to 208.32 repay that refund, under the terms specified in Minnesota 208.33 Statutes, section 353.35, notwithstanding any law to the 208.34 contrary. 208.35 Subd. 4. [RETROACTIVE APPLICATION.] If a valid benefit 208.36 application is made by an eligible person under this section, 209.1 the monthly annuity payments commence retroactive to February 209.2 21, 2005. 209.3 Sec. 2. [PURCHASE OF PRIOR SERVICE CREDIT.] 209.4 (a) An eligible person described in paragraph (b) is 209.5 entitled to purchase up to one year of allowable service credit 209.6 from the Teachers Retirement Association for the 2003-2004 209.7 school year. The service credit purchase under this section 209.8 must be made in accordance with Minnesota Statutes, section 209.9 356.551, except as otherwise stated in this section. 209.10 (b) An eligible person is a person who: 209.11 (1) is currently a member of the Teachers Retirement 209.12 Association; 209.13 (2) was born on April 2, 1949; 209.14 (3) has been employed by Independent School District No. 209.15 11, Anoka-Hennepin, since the 1971-1972 school year; 209.16 (4) applied for and was granted an extended leave of 209.17 absence from Independent School District No. 11, Anoka-Hennepin, 209.18 for the 2002-2003, 2003-2004, and 2004-2005 school years under 209.19 Minnesota Statutes, section 122A.46; 209.20 (5) was unable to make timely payment for the 2003-2004 209.21 school year under Minnesota Statutes, section 354.094, because 209.22 of a problem in transferring funds from the individual's 209.23 tax-sheltered annuity account; and 209.24 (6) was not permitted by the Teachers Retirement 209.25 Association to make payment after June 30, 2004, with interest. 209.26 (c) Notwithstanding Minnesota Statutes, section 356.551, 209.27 payment must be made by September 1, 2005, or prior to 209.28 termination of service, whichever is earlier, and the employee 209.29 payment amount is an amount equal to the employee contribution 209.30 rate in effect during the 2003-2004 school year applied to the 209.31 eligible individual's salary in the year prior to the leave, 209.32 plus .708 percent monthly interest from June 30, 2004, until the 209.33 end of the month in which payment is made. If the full payment 209.34 required under this paragraph is made, then notwithstanding 209.35 Minnesota Statutes, section 354.094, the individual is 209.36 authorized under Minnesota Statutes, section 354.094, to make 210.1 the required contribution for the 2004-2005 school year, and any 210.2 subsequent years of the leave. Notwithstanding payment 210.3 deadlines in Minnesota Statutes, section 354.094, the employee 210.4 contribution for the 2004-2005 school year must be made on or 210.5 before September 30, 2005, with .708 percent monthly interest 210.6 from June 30, 2005, until paid. 210.7 (d) If payment is received under paragraph (c), the 210.8 executive director of the Teachers Retirement Association shall 210.9 bill Independent School District No. 11, Anoka-Hennepin, for the 210.10 employer contribution that would have been made on behalf of the 210.11 eligible person for the 2003-2004 fiscal year under Minnesota 210.12 Statutes, section 354.094. The remainder of the full actuarial 210.13 value payment under Minnesota Statutes, section 356.551, is 210.14 waived. If the school district fails to make payment under this 210.15 paragraph within 30 days of notification of the amount due, the 210.16 executive director shall notify the commissioner of the 210.17 Department of Finance of that fact and the employer payment 210.18 amount shall be deducted from any subsequent state aid to the 210.19 school district. 210.20 Sec. 3. [EFFECTIVE DATE.] 210.21 (a) For purposes of determining whether section 1 becomes 210.22 effective, the board of trustees of the Public Employees 210.23 Retirement Association shall be considered to be comparable to 210.24 the city council of a local government unit. 210.25 (b) Section 1 is effective on the day after the board of 210.26 trustees of the Public Employees Retirement Association and its 210.27 executive director complete in a timely manner their compliance 210.28 with Minnesota Statutes, section 645.021, subdivisions 2 and 3. 210.29 (c) Section 2 is effective on the day following final 210.30 enactment.