1st 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 1.41 exchange-traded funds investment authority; modifying 1.42 the 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 69.011, subdivision 2b, by adding a subdivision; 2.13 69.021, subdivisions 5, 11; 69.051, subdivisions 1, 2.14 1a; 69.33; 69.771; 69.772, subdivisions 3, 4; 69.773, 2.15 subdivisions 4, 5; 69.775; 352.01, subdivisions 2a, 4, 2.16 5, 12, 21, 23, by adding a subdivision; 352.021, 2.17 subdivisions 1, 2, 3, 4; 352.04, subdivisions 1, 12; 2.18 352.041, subdivisions 1, 2, 3, 5; 352.115, 2.19 subdivisions 2, 3; 352.15, subdivisions 1, 3, 4; 2.20 352.22, subdivision 10; 352.87, subdivision 3; 352.91, 2.21 by adding a subdivision; 352.93, subdivision 1; 2.22 352B.01, subdivisions 1, 2, 3; 352B.02, subdivision 2.23 1e; 352B.071; 352C.021, by adding a subdivision; 2.24 352C.091, subdivision 1; 352D.01; 352D.015, 2.25 subdivisions 3, 4; 352D.03; 352D.05, subdivision 4; 2.26 352D.085, subdivision 1; 352D.09, subdivision 5; 2.27 352D.12; 353.01, subdivisions 6, 10, 14, 32, 33, by 2.28 adding a subdivision; 353.025; 353.026; 353.027; 2.29 353.028; 353.14; 353.15, subdivisions 1, 3; 353.27, 2.30 subdivision 11; 353.271; 353.28, subdivisions 5, 6; 2.31 353.29, subdivision 3; 353.31, subdivision 1c; 353.32, 2.32 subdivision 9; 353.33, subdivisions 3, 12; 353.64, by 2.33 adding a subdivision; 353.651, subdivision 3; 353.656, 2.34 subdivision 1; 353F.02, subdivision 4; 354.05, 2.35 subdivision 7, by adding a subdivision; 354.091; 2.36 354.10, subdivisions 1, 3, 4; 354.33, subdivision 5; 2.37 354.39; 354.41, subdivision 2; 354.42, by adding a 2.38 subdivision; 354.44, subdivisions 2, 6; 354A.011, 2.39 subdivision 3a, by adding a subdivision; 354A.021, 2.40 subdivision 5, by adding a subdivision; 354A.097, 2.41 subdivision 1; 354A.31, subdivisions 4, 4a, 5; 2.42 354B.25, subdivision 2; 356.20, subdivision 4; 2.43 356.215, subdivision 8; 356.216; 356.24, subdivision 2.44 1; 356.551; 356A.06, subdivision 7; 422A.01, 2.45 subdivisions 6, 11, by adding a subdivision; 422A.06, 2.46 subdivision 7; 422A.10, subdivisions 1, 2; 422A.15, 2.47 subdivision 1; 422A.16, subdivision 9; 422A.22, 2.48 subdivisions 1, 3, 4, 6; 422A.231; 422A.24; 423B.17; 2.49 423C.09; 424A.02, subdivisions 3, 4, 7; 424A.04, 2.50 subdivision 1; 424B.10, subdivision 1; 490.121, 2.51 subdivisions 1, 4, 6, 7, 13, 14, 15, 20, 21, 22, by 2.52 adding subdivisions; 490.122; 490.123, subdivisions 1, 2.53 1a, 1b, 1c, 2, 3; 490.124, subdivisions 1, 2, 3, 4, 5, 2.54 8, 9, 10, 11, 12, 13; 490.125, subdivision 1; 490.126; 2.55 490.133; Laws 1999, chapter 222, article 16, section 2.56 16, as amended; Laws 2000, chapter 461, article 4, 2.57 section 4, as amended; Laws 2004, chapter 267, article 2.58 12, section 4; proposing coding for new law in 2.59 Minnesota Statutes, chapters 352C; 356; 424A; 2.60 proposing coding for new law as Minnesota Statutes, 2.61 chapter 490A; repealing Minnesota Statutes 2004, 2.62 sections 3A.01, subdivisions 3, 4, 6a, 7; 3A.02, 2.63 subdivision 2; 3A.04, subdivision 1; 3A.09; 352.119, 2.64 subdivision 1; 352.15, subdivision 1a; 352C.01; 2.65 352C.011; 352C.021; 352C.031, subdivision 3; 352C.033; 2.66 352C.04; 352C.051; 352C.09; 352C.091, subdivisions 2, 2.67 3; 353.15, subdivision 2; 353.29, subdivision 2; 2.68 353.34, subdivision 3b; 353.36, subdivisions 2, 2a, 2.69 2b, 2c; 353.46, subdivision 4; 353.651, subdivision 2; 2.70 353.663; 353.74; 353.75; 354.10, subdivision 2; 2.71 354.59; 422A.22, subdivisions 2, 5; 422A.221; 490.021; 3.1 490.025, subdivisions 1, 2, 3, 4, 6; 490.101; 490.102; 3.2 490.103; 490.105; 490.106; 490.107; 490.108; 490.109; 3.3 490.1091; 490.12; 490.121, subdivisions 2, 3, 5, 8, 9, 3.4 10, 11, 12, 16, 17, 18, 19, 20. 3.5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 3.6 2005 OMNIBUS RETIREMENT BILL 3.7 ARTICLE 1 3.8 CLARIFICATION/RECODIFICATION OF 3.9 STATEWIDE SPECIALTY RETIREMENT PLANS 3.10 Section 1. Minnesota Statutes 2004, section 3A.01, 3.11 subdivision 1, is amended to read: 3.12 Subdivision 1. [PURPOSES.] Each of the terms defined in 3.13 this section, for the purposes of this chaptershall be3.14givenhas themeaningsmeaning ascribedto them. 3.15 Sec. 2. Minnesota Statutes 2004, section 3A.01, is amended 3.16 by adding a subdivision to read: 3.17 Subd. 1a. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 3.18 means the condition of one allowance or benefit having an equal 3.19 actuarial present value to another allowance or benefit, 3.20 determined by the actuary retained under section 356.214 as of a 3.21 given date at a specified age with each actuarial present value 3.22 based on the mortality table applicable for the plan and 3.23 approved under section 356.215, subdivision 18, and using the 3.24 applicable preretirement or postretirement interest rate 3.25 assumption specified in section 356.215, subdivision 8. 3.26 Sec. 3. Minnesota Statutes 2004, section 3A.01, is amended 3.27 by adding a subdivision to read: 3.28 Subd. 1b. [AVERAGE MONTHLY SALARY.] "Average monthly 3.29 salary" means the average of the member's highest five 3.30 successive years of salary that was received as a member of the 3.31 legislature and upon which the member has made contributions 3.32 under section 3A.03, subdivision 1, or for which the member of 3.33 the legislature has made payments for past service under section 3.34 3A.02, subdivision 2, or has made, before July 1, 1994, payments 3.35 in lieu of contributions under Minnesota Statutes 1992, section 3.36 3A.031. 3.37 Sec. 4. Minnesota Statutes 2004, section 3A.01, is amended 4.1 by adding a subdivision to read: 4.2 Subd. 1c. [CONSTITUTIONAL OFFICER.] "Constitutional 4.3 officer" means a person who was duly elected, qualifies for, and 4.4 serves as the governor, the lieutenant governor, the attorney 4.5 general, the secretary of state, or the state auditor of the 4.6 state of Minnesota. 4.7 Sec. 5. Minnesota Statutes 2004, section 3A.01, 4.8 subdivision 2, is amended to read: 4.9 Subd. 2. [DEPENDENT CHILD.] (a) "Dependent child" means 4.10 any natural or adopted child of a deceased member of the 4.11 legislature or a former legislator who is under the age of 18, 4.12 or who is under the age of 22 and is a full-time student, and 4.13 who, in either case, is unmarried and was actually dependent for 4.14 more than one-half of support uponsuchthe legislator for a 4.15 period of at least 90 days immediatelyprior tobefore the 4.16 legislator's death.It4.17 (b) The term also includes any child of the member of the 4.18 legislature or former legislator who was conceived during the 4.19 lifetime of, and who was born after the death of, the member or 4.20 former legislator.This subdivision shall be retroactive as to4.21any dependent child under the age of 22 years as of April 1,4.221975.4.23 Sec. 6. Minnesota Statutes 2004, section 3A.01, 4.24 subdivision 6, is amended to read: 4.25 Subd. 6. [DIRECTOR.] "Director" means the executive 4.26 director of the Minnesota State Retirement System who was 4.27 appointed under section 352.03, subdivision 5. 4.28 Sec. 7. Minnesota Statutes 2004, section 3A.01, is amended 4.29 by adding a subdivision to read: 4.30 Subd. 6b. [FORMER LEGISLATOR.] "Former legislator" means a 4.31 legislator who has ceased to be a member of the legislature for 4.32 any reason, including, but not limited to, the expiration of the 4.33 term for which a member of the legislature was elected or the 4.34 death of the member. 4.35 Sec. 8. Minnesota Statutes 2004, section 3A.01, is amended 4.36 by adding a subdivision to read: 5.1 Subd. 6c. [MEMBER OF THE LEGISLATURE.] "Member of the 5.2 legislature" means a person who was a member of the house of 5.3 representatives or of the senate of the state of Minnesota who 5.4 has subscribed to the oath of office after July 1, 1965, and who 5.5 was first elected to a legislative office before July 1, 1997, 5.6 and retained coverage by the plan under Laws 1997, chapter 233, 5.7 article 2, section 15. 5.8 Sec. 9. Minnesota Statutes 2004, section 3A.01, 5.9 subdivision 8, is amended to read: 5.10 Subd. 8. [NORMAL RETIREMENT AGE.] "Normal retirement age" 5.11 means the age of60 years with regard to any member of the5.12legislature whose service terminates prior to the beginning of5.13the 1981 legislative session, and the age of62 yearswith5.14regard to any member of the legislature whose service terminates5.15after the beginning of the 1981 session. 5.16 Sec. 10. Minnesota Statutes 2004, section 3A.01, is 5.17 amended by adding a subdivision to read: 5.18 Subd. 9. [RETIREMENT.] "Retirement" means the period of 5.19 time after which a former legislator is entitled to a retirement 5.20 allowance. 5.21 Sec. 11. Minnesota Statutes 2004, section 3A.01, is 5.22 amended by adding a subdivision to read: 5.23 Subd. 10. [SALARY.] (a) "Salary" means the regular 5.24 compensation payable under law to a member of the legislature 5.25 and paid to the person for service as a legislator. 5.26 (b) The term includes the monthly compensation paid to the 5.27 member of the legislature and the per diem payments paid during 5.28 a regular or special session to the member of the legislature. 5.29 (c) The term does not include per diem payments paid to a 5.30 member of the legislature other than during the regular or 5.31 special session; additional compensation attributable to a 5.32 leadership position under section 3.099, subdivision 3; living 5.33 expense payments under section 3.101; and special session living 5.34 expense payments under section 3.103. 5.35 Sec. 12. Minnesota Statutes 2004, section 3A.011, is 5.36 amended to read: 6.1 3A.011 [ADMINISTRATION OF PLAN.] 6.2 The executive director and the board of directors of the 6.3 Minnesota State Retirement System shall administer the 6.4 legislators retirement plan in accordance with this chapter and 6.5 chapter 356A. 6.6 Sec. 13. Minnesota Statutes 2004, section 3A.02, 6.7 subdivision 1, is amended to read: 6.8 Subdivision 1. [QUALIFICATIONS.] (a) A former legislator 6.9 is entitled, upon written application to the director, to 6.10 receive a retirement allowance monthly, if the person: 6.11 (1) has either served at least six full years, without 6.12 regard to the application of section 3A.10, subdivision 2, or 6.13 has served during all or part of four regular sessions as a 6.14 member of the legislature, which service need not be continuous; 6.15 (2) has attained the normal retirement age; 6.16 (3) has retired as a member of the legislature; and 6.17 (4) has made all contributions provided for in section 6.18 3A.03, has made payments for past service under subdivision 2, 6.19 or has made payments in lieu of contributions under Minnesota 6.20 Statutes 1992, section 3A.031,prior tobefore July 1, 1994. 6.21 (b)This paragraph applies to members of the legislature6.22who terminate service as a legislator before July 1, 1997. For6.23service rendered before the beginning of the 1979 legislative6.24session, but not to exceed eight years of service, the6.25retirement allowance is an amount equal to five percent per year6.26of service of that member's average monthly salary. For service6.27in excess of eight years rendered before the beginning of the6.281979 legislative session, and for service rendered after the6.29beginning of the 1979 legislative session,Unless the former 6.30 legislator has legislative service before January 1, 1979, the 6.31 retirement allowance is an amount equal to 2-1/2 percent per 6.32 year of service of that member's average monthly salary.6.33(c) This paragraph applies to members of the legislature6.34who terminate service as a legislator after June 30, 1997. The6.35retirement allowance is an amount equal to the applicable rate6.36or rates under paragraph (b) per year of service of the member's7.1average monthly salaryand adjusted for that person on an 7.2 actuarial equivalent basis to reflect the change in the 7.3 postretirement interest rate actuarial assumption under section 7.4 356.215, subdivision 8, from five percent to six percent. The 7.5 adjustment must be calculated by or, alternatively, the 7.6 adjustment procedure must be specified by, the actuary retained 7.7by the Legislative Commission on Pensions and Retirementunder 7.8 section 356.214. The purpose of this adjustment is to ensure 7.9 that the total amount of benefits that the actuary predicts an 7.10 individual member will receive over the member's lifetime under 7.11 this paragraph will be the same as the total amount of benefits 7.12 the actuary predicts the individual member would receive over 7.13 the member's lifetime under the law in effect before enactment 7.14 of this paragraph. If the former legislator has legislative 7.15 service before January 1, 1979, the person's benefit must 7.16 include the additional benefit amount in effect on January 1, 7.17 1979, and adjusted as otherwise provided in this paragraph. 7.18(d)(c) The retirement allowance accrues beginning with the 7.19 first day of the month of receipt of the application, but not 7.20 before age 60, and for the remainder of the former legislator's 7.21 life, if the former legislator is not serving as a member of the 7.22 legislature or as a constitutional officeror commissioneras 7.23 defined in section352C.021, subdivisions 2 and 33A.01, 7.24 subdivision 1c. The annuity does not begin to accrueprior to7.25 before the person's retirement as a legislator. No annuity 7.26 payment may be made retroactive for more than 180 days before 7.27 the date that the annuity application is filed with the director. 7.28(e)(d) Any member who has served during all or part of 7.29 four regular sessions is considered to have served eight years 7.30 as a member of the legislature. 7.31(f)(e) The retirement allowance ceases with the last 7.32 payment that accrued to the retired legislator during the 7.33 retired legislator's lifetime, except that the surviving spouse, 7.34 if any, is entitled to receive the retirement allowance of the 7.35 retired legislator for the calendar month in which the retired 7.36 legislator died. 8.1 Sec. 14. Minnesota Statutes 2004, section 3A.02, 8.2 subdivision 1b, is amended to read: 8.3 Subd. 1b. [REDUCED RETIREMENT ALLOWANCE.] (a) Upon 8.4 separation from service after the beginning of the 1981 8.5 legislative session, a former member of the legislature who has 8.6 attained the age set by the board of directors of the Minnesota 8.7 State Retirement System and who is otherwise qualifiedin8.8accordance withunder subdivision 1 is entitled, upon making 8.9 written application onforms supplieda form prescribed by the 8.10 director, to a reduced retirement allowancein. The reduced 8.11 retirement allowance is an amount equal to the retirement 8.12 allowance specified in subdivision 1, paragraph (b), that is 8.13 reduced so that the reducedannuityallowance is the actuarial 8.14 equivalent of theannuityallowance that would be payable if the 8.15 former member of the legislature deferred receipt of theannuity8.16 allowance and theannuityallowance amountwerewas augmented 8.17 at an annual rate of three percent compounded annually from the 8.18 date theannuityallowance begins to accrue until age 62. 8.19 (b) The age set by the board of directors under paragraph 8.20 (a) cannot belessan earlier age than the early retirement age 8.21 under section 352.116, subdivision 1a. 8.22 (c) If there is an actuarial cost to the plan of resetting 8.23 the early retirement age under paragraph (a), the retired 8.24 legislator is required to pay an additional amount to cover the 8.25 full actuarial value. The additional amount must be paid in a 8.26 lump sum within 30 days of the certification of the amount by 8.27 the executive director. 8.28 (d) The executive director of the Minnesota State 8.29 Retirement System shall report to the Legislative Commission on 8.30 Pensions and Retirement on the utilization of this 8.31 provision annually on or before September 1, 2000. 8.32 Sec. 15. Minnesota Statutes 2004, section 3A.02, 8.33 subdivision 3, is amended to read: 8.34 Subd. 3. [APPROPRIATION.] The amounts required for payment 8.35 of retirement allowances provided by this section are 8.36 appropriated annually to the director from the participation of 9.1 the legislators retirement plan in the Minnesota postretirement 9.2 investment fundand shall. The retirement allowance must be 9.3 paid monthly to the recipients entitledtheretoto those 9.4 retirement allowances. 9.5 Sec. 16. Minnesota Statutes 2004, section 3A.02, 9.6 subdivision 4, is amended to read: 9.7 Subd. 4. [DEFERRED ANNUITIES AUGMENTATION.] (a) The 9.8 deferredannuityretirement allowance of any former legislator 9.9 must be augmented as provided herein. 9.10 (b) The required reserves applicable to the 9.11 deferredannuityretirement allowance, determined as of the date 9.12 the benefit begins to accrue using an appropriate mortality 9.13 table and an interest assumption of six percent, must be 9.14 augmented from the first of the month following the termination 9.15 of active service, or July 1, 1973, whichever is later, to the 9.16 first day of the month in which theannuityallowance begins to 9.17 accrue, at the following annually compounded rateof five9.18percent per annum compounded annually until January 1, 1981, and9.19thereafter at the rate of three percent per annum compounded9.20annually until January 1 of the year in which the former9.21legislator attains age 55. From that date to the effective date9.22of retirement, the rate is five percent compounded annually.or 9.23 rates: 9.24 rate period 9.25 (1) five percent until January 1, 1981 9.26 (2) three percent from January 1, 1981, or from the 9.27 first day of the month following 9.28 the termination of active service, 9.29 whichever is later, until January 1 9.30 of the year in which the former 9.31 legislator attains age 55 9.33 (3) five percent from the period end date under 9.34 clause (2) to the effective date 9.35 of retirement. 9.36(b) The retirement allowance of, or the survivor benefit10.1payable on behalf of, a former member of the legislature who10.2terminated service before July 1, 1997, which is not first10.3payable until after June 30, 1997, must be increased on an10.4actuarial equivalent basis to reflect the change in the10.5postretirement interest rate actuarial assumption under section10.6356.215, subdivision 8, from five percent to six percent under a10.7calculation procedure and tables adopted by the board of10.8directors of the Minnesota State Retirement System and approved10.9by the actuary retained by the Legislative Commission on10.10Pensions and Retirement.10.11 Sec. 17. Minnesota Statutes 2004, section 3A.02, 10.12 subdivision 5, is amended to read: 10.13 Subd. 5. [OPTIONAL ANNUITIES.] (a) The board of directors 10.14 shall establish an optional retirement annuity in the form of a 10.15 joint and survivor annuity and an optional retirement annuity in 10.16 the form of a period certain and life thereafter. Except as 10.17 provided in paragraph (b), these optional annuity forms must be 10.18 actuarially equivalent to the normalannuityallowance computed 10.19 under this section, plus the actuarial value of any surviving 10.20 spouse benefit otherwise potentially payable at the time of 10.21 retirement under section 3A.04, subdivision 1. An individual 10.22 selecting an optional annuity under this subdivisionwaivesand 10.23 the person's spouse waive any rights to surviving spouse 10.24 benefits under section 3A.04, subdivision 1. 10.25 (b) If a retired legislator selects the joint and survivor 10.26 annuity option, the retired legislator must receive a normal 10.27 single-lifeannuityallowance if the designated optional annuity 10.28 beneficiary dies before the retired legislator and no reduction 10.29 may be made in the annuity to provide for restoration of the 10.30 normal single-lifeannuityallowance in the event of the death 10.31 of the designated optional annuity beneficiary. 10.32 (c) The surviving spouse of a legislator who has attained 10.33 at least age 60 and who dies while a member of the legislature 10.34 may elect an optional joint and survivor annuity under paragraph 10.35 (a), in lieu of surviving spouse benefits under section 3A.04, 10.36 subdivision 1. 11.1 Sec. 18. Minnesota Statutes 2004, section 3A.03, 11.2 subdivision 1, is amended to read: 11.3 Subdivision 1. [PERCENTAGE.] (a) Every member of the 11.4 legislature shall contribute nine percent of total salary,. 11.5 (b) The contribution must be made by payroll deduction,11.6toand must be paid into the state treasury and deposited in the 11.7 general fund.It shall be the duty of11.8 (c) The directortomust record the periodic contributions 11.9 of each member of the legislature and must creditsucheach 11.10 contribution to the member's account. 11.11 Sec. 19. Minnesota Statutes 2004, section 3A.03, 11.12 subdivision 2, is amended to read: 11.13 Subd. 2. [REFUND.] (a) A former member who has made 11.14 contributions under subdivision 1 and who is no longer a member 11.15 of the legislature is entitled to receive, upon written 11.16 application to the executive director on a form prescribed by 11.17 the executive director, a refund from the general fund of all 11.18 contributions credited to the member's account with interest 11.19 computed as provided in section 352.22, subdivision 2. 11.20 (b) The refund of contributions as provided in paragraph (a) 11.21 terminates all rights of a former member of the legislature and 11.22 the survivors of the former member under this chapter. 11.23 (c) If the former member of the legislature again becomes a 11.24 member of the legislature after having taken a refund as 11.25 provided in paragraph (a), the membermust be consideredis a 11.26newmember ofthis planthe unclassified employees retirement 11.27 program of the Minnesota State Retirement System. 11.28 (d) However, the member may reinstate the rights and credit 11.29 for service previously forfeited under this chapter if the 11.30 member repays all refunds taken, plus interest at an annual rate 11.31 of 8.5 percent compounded annually from the date on which the 11.32 refund was taken to the date on which the refund is repaid. 11.33(d)(e) No person may be required to apply for or to accept 11.34 a refund. 11.35 Sec. 20. Minnesota Statutes 2004, section 3A.04, 11.36 subdivision 1, is amended to read: 12.1 Subdivision 1. [SURVIVING SPOUSE.] (a) Upon the death of a 12.2 member of the legislature while serving assucha memberafter12.3June 30, 1973, or upon the death of a former member of the 12.4 legislature with at leastthe number ofsix full years of 12.5 serviceas required by section 3A.02, subdivision 1, clause12.6(1)or service in all or part of four regular legislative 12.7 sessions, the surviving spouseshall be paidis entitled to a 12.8 survivor benefitin the amount of. 12.9 (b) The surviving spouse benefit is one-half of the 12.10 retirement allowance of the member of the legislature computed 12.11 as though the member were at least normal retirement age on the 12.12 date of death and based upon the member's allowable service 12.13 or upon eight years, whichever is greater. The augmentation 12.14 provided in section 3A.02, subdivision 4, if applicable,shall12.15 must be applied for the period up to, and including, the month 12.16 of death. 12.17 (c) Upon the death of a former legislator receiving a 12.18 retirement allowance, the surviving spouseshall beis entitled 12.19 to one-half of the amount of the retirement allowance being paid 12.20 to the legislator.Such12.21 (d) The surviving spouse benefitshall be paid duringis 12.22 payable for the lifetime of the surviving spouse. 12.23 Sec. 21. Minnesota Statutes 2004, section 3A.04, 12.24 subdivision 2, is amended to read: 12.25 Subd. 2. [DEPENDENT CHILDREN.] (a) Upon the death of a 12.26 member of the legislature while serving as a member, or upon the 12.27 death of a former member of the legislature who has rendered at 12.28 leastthe number ofsix full years of serviceas required by12.29section 3A.02, subdivision 1, clause (1)or service in all or 12.30 part of four regular legislative sessions and who was not 12.31 receiving a retirement allowance, each dependent child of the 12.32 member or former legislatorshall beis entitled to receive a 12.33 survivor benefit in the following amount: 12.34 (1) for the first dependent child, a monthlyallowance12.35which equalsbenefit equal to 25 percent of the monthly 12.36 retirement allowance of the member of the legislature or the 13.1 former legislator computed as though the member or the former 13.2 legislator had attained at least the normal retirement age on 13.3 the date of death and based upon the average monthly salary as 13.4 of the date of death or as of the date of termination, whichever 13.5is applicableapplies, and the member's allowable service or 13.6 eight years, whichever is greater; 13.7 (2) for each additional dependent child, a monthly 13.8allowance which equalsbenefit equal to 12-1/2 percent of the 13.9 monthly retirement allowance of the member or the former 13.10 legislator computed as provided inthe case of the first child13.11 clause (1);butand 13.12 (3) the total amount paid to the surviving spouse and to 13.13 the dependent child or childrenshallmay not exceed, in any 13.14 one month, 100 percent of the monthly retirement allowance of 13.15 the member or of the former legislator computed as provided in 13.16the case of the first childclause (1). 13.17 (b) The augmentation provided in section 3A.02, subdivision 13.18 4, if applicable,shall be appliedapplies from the first day of 13.19 the month next following the date of the termination of the 13.20 person from service as a member of the legislature to the month 13.21 of the death of the person. 13.22 (c) Upon the death of a former legislator who was receiving 13.23 a retirement allowance,thea surviving dependent childshall be13.24 is entitled to the applicable percentage specifiedabovein 13.25 paragraph (a), clause (1) or (2), whichever applies, of the 13.26 amount of the allowance which was paid to the former legislator 13.27 for the month immediatelyprior tobefore the date of death of 13.28 the former legislator. 13.29 (d) The payments for dependent childrenshallmust be made 13.30 to the surviving spouse or to the guardian of the estate of the 13.31 dependent children, if there is one. 13.32 Sec. 22. Minnesota Statutes 2004, section 3A.04, 13.33 subdivision 3, is amended to read: 13.34 Subd. 3. [PAYMENT.] The survivingspouse'sspouse and 13.35 dependentchildren'schild or children survivor benefits payable 13.36 under this sectionshall be paidare payable by the director 14.1 monthly in the same manner as retirement allowances are 14.2 authorized to be paid by this chapter. 14.3 Sec. 23. Minnesota Statutes 2004, section 3A.04, 14.4 subdivision 4, is amended to read: 14.5 Subd. 4. [DEATH REFUNDS.] (a) Upon the death of a member 14.6 of the legislature or of a former legislator who was not 14.7 receiving a retirement allowance,without leaving either a 14.8 surviving spouse or a dependent child or dependent children, the 14.9 last designated beneficiary named on a form that was filed with 14.10 the director before the death of the legislator, or if no 14.11 designation is filed, the estate of the member or the former 14.12 legislator, upon application,shall beis entitled to a refund. 14.13 (b) The refund is the amount of contributions credited to 14.14 the person's account plus interest as provided in section 3A.03, 14.15 subdivision 2,clause (2)paragraph (a). 14.16 Sec. 24. Minnesota Statutes 2004, section 3A.04, is 14.17 amended by adding a subdivision to read: 14.18 Subd. 5. [APPROPRIATION.] The survivor benefits and the 14.19 death refunds authorized by this section are appropriated to the 14.20 director from the general fund when they are due and payable. 14.21 Sec. 25. Minnesota Statutes 2004, section 3A.05, is 14.22 amended to read: 14.23 3A.05 [APPLICATION FOR SURVIVOR BENEFIT.] 14.24 (a) Applications for survivor benefitspursuant tounder 14.25 section 3A.04shallmust be filed with the director by the 14.26 surviving spouse and dependent child or children entitled to 14.27 benefitspursuant tounder section 3A.04, or by the guardian of 14.28 the estate, if there is one, of the dependent child or children. 14.29 (b) Survivor benefitsshallaccrue as of the first day of 14.30 the month following the death of the member of the legislature 14.31 or former legislator and paymentsshallcommence as of the first 14.32 of the month next following the filing of the application, 14.33 andshall beare retroactive to the date the benefit accrues;14.34provided, however, that no payment shall be retroactive for more14.35thanor the first of the month occurring 12 monthsprior14.36tobefore the month in which the application is filed with the 15.1 director, whichever is earlier. 15.2 Sec. 26. Minnesota Statutes 2004, section 3A.07, is 15.3 amended to read: 15.4 3A.07 [APPLICATION.] 15.5 (a) Except as provided in paragraph (b), this chapter 15.6 applies to members of the legislature in service after July 1, 15.7 1965, who otherwise meet the requirements of this chapter. 15.8 (b) Members of the legislature who were elected for the 15.9 first time after June 30, 1997, or members of the legislature 15.10 who were elected before July 1, 1997, and who, after July 1, 15.11 1998, elect not to be members of the plan established by this 15.12 chapter are covered by the unclassified employees retirement 15.13 program governed by chapter 352D. 15.14 (c) The post-July 1, 1998, coverage election under 15.15 paragraph (b) is irrevocable and must be made on a form 15.16 prescribed by the director. The second chance referendum 15.17 election under Laws 2002, chapter 392, article 15, also is 15.18 irrevocable. 15.19 Sec. 27. Minnesota Statutes 2004, section 3A.10, 15.20 subdivision 1, is amended to read: 15.21 Subdivision 1. [SERVICE CREDIT FOR LEGISLATIVE TERM.] (a) 15.22 In the case of a member of the house of representatives, one 15.23 full term of officeshallmust be considered two full years of 15.24 service, notwithstanding the fact that the oath of officemay be15.25 was taken on different days each biennium. 15.26 (b) In the case of a member of the senate, one full term of 15.27 officeshallmust be considered four full years of service, 15.28 notwithstanding the fact that the oath of officemay bewas 15.29 taken on different days at the start of each term. 15.30 (c) For purposes of this chapter, a legislative termshall15.31 must be deemed to commence on January1st1 and to end on 15.32 December31st31. 15.33 Sec. 28. Minnesota Statutes 2004, section 3A.12, is 15.34 amended to read: 15.35 3A.12 [COVERAGE BY MORE THAN ONE RETIREMENT SYSTEM OR 15.36 ASSOCIATION.] 16.1 Subdivision 1. [ENTITLEMENT TO ANNUITY.] (a) Any 16.2 legislator who has beenan employee covered bya member of a 16.3 retirement plan listed in paragraph (b) is entitled, when 16.4 otherwise qualified, to a retirement allowance or annuity from 16.5 each plan if the total allowable service in all plans or in any 16.6 two of these plans totals ten or more years. 16.7 (b) This section applies to any retirement plan or program 16.8 administered by the Minnesota State Retirement System, ora16.9member ofany retirement plan administered by the Public 16.10 Employees Retirement Association, including the Public Employees 16.11 Retirement Association police and fire fund, or the Teachers 16.12 Retirement Association, or the Minneapolis employees 16.13 retirementFundplan, or the State Patrol retirementfundplan, 16.14 or any other public employee retirement system in the state of 16.15 Minnesota having a like provisionbut excluding all. 16.16 (c) This section does not apply to otherfundsretirement 16.17 plans providing benefits for police or firefighters, shall be16.18entitled when qualified to an annuity from each fund if the16.19total allowable service for which the legislator has credit in16.20all funds or in any two of these funds totals ten or more years,16.21provided. 16.22 (d) No portion of the allowable service upon which the 16.23 retirement annuity from onefundplan is based is again used in 16.24 the computation for benefits from anotherfundplan. The 16.25 annuity from eachfund shallplan must be determined by the 16.26 appropriate provisions of the law, except that the requirement 16.27 that a person must haveat least tena minimum number of years 16.28 of allowable service in the respective system or 16.29 associationshalldoes not apply for the purposes of this 16.30 sectionprovidedif the combined service in two or more of these 16.31fundsplans equals ten or more years. The augmentation of 16.32 deferred annuities provided in section 3A.02, subdivision 16.33 4,shall applyapplies to the annuities accruinghereunderunder 16.34 this section. 16.35 Subd. 2. [REFUND REPAYMENT.]AnyA former legislator who 16.36 has received a refund as provided in section 3A.03, subdivision 17.1 2, who is a currently contributing member of a retirementfund17.2 plan specified in subdivision 1, paragraph (b), may repay the 17.3 refund as provided in section 3A.03, subdivision 2.AnyA 17.4 member of the legislature who has received a refund from any of 17.5 thefundsretirement plans specified in subdivision 1,may repay 17.6 the refund to the respectivefundplan under such terms and 17.7 conditions consistent with the law governingsuch fundthe 17.8 retirement plan if the law governingsuch fundthe plan permits 17.9 the repayment of refunds. If the total amount to be repaid, 17.10 including principal and interest exceeds $2,000, repayment may 17.11 be made in three equal installments over a period of 18 months, 17.12 with the interest accrued during the period of the repayment 17.13 added to the final installment. 17.14 Sec. 29. Minnesota Statutes 2004, section 3A.13, is 17.15 amended to read: 17.16 3A.13 [EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM 17.17 DEDUCTION.] 17.18 (a) The provisions of section 352.15shallapply to the 17.19 legislators retirement plan, chapter 3A. 17.20 (b) The executive director of the Minnesota State 17.21 Retirement System must, at the request of a retired legislator 17.22 who is enrolled in a health insurance plan covering state 17.23 employees, deduct the person's health insurance premiums from 17.24 the person's annuity and transfer the amount of the premium to a 17.25 health insurance carrier covering state employees. 17.26 Sec. 30. [352C.001] [RETIREMENT PLAN; APPLICATION.] 17.27 (a) The retirement plan applicable to a former 17.28 constitutional officer who was first elected to a constitutional 17.29 office after July 1, 1967, and before July 1, 1997, is the 17.30 applicable portions of this chapter and chapter 356 in effect on 17.31 the date on which the person terminated active service as a 17.32 constitutional officer. 17.33 (b) Nothing in this section or section 31 or 77, 17.34 subdivision 2, is intended to reduce the benefits of former 17.35 constitutional officers or to adversely modify their eligibility 17.36 for benefits in effect as of the day before the effective date 18.1 of this section. 18.2 Sec. 31. Minnesota Statutes 2004, section 352C.091, 18.3 subdivision 1, is amended to read: 18.4 Subdivision 1. [ADMINISTRATIVE AGENCY AND STANDARDS.]This18.5chapter(a) The elected officers retirement plan must be 18.6 administered by the board of directors and the executive 18.7 director of the Minnesota State Retirement System. 18.8 (b) The elected state officers retirement plan must be 18.9 administered consistent withthis chapterthe applicable 18.10 statutory provisions governing the plan and chapters 356 and 18.11 356A. 18.12 Sec. 32. Minnesota Statutes 2004, section 490.121, 18.13 subdivision 1, is amended to read: 18.14 Subdivision 1. [SCOPE.] For purposes of sections 490.121 18.15 to 490.132, unless the context clearly indicates otherwise, each 18.16 of the terms defined in this sectionhavehas themeanings18.17 meaning giventhem unless the context clearly indicates18.18otherwiseit. 18.19 Sec. 33. Minnesota Statutes 2004, section 490.121, is 18.20 amended by adding a subdivision to read: 18.21 Subd. 2a. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 18.22 means the condition of one annuity or benefit having an equal 18.23 actuarial present value as another annuity or benefit, 18.24 determined as of a given date with each actuarial present value 18.25 based on the appropriate mortality table adopted by the board of 18.26 directors of the Minnesota State Retirement System based on the 18.27 experience of the fund as recommended by the actuary retained 18.28 under section 356.214 and approved under section 356.215, 18.29 subdivision 18, and using the applicable preretirement or 18.30 postretirement interest rate assumption specified in section 18.31 356.215, subdivision 8. 18.32 Sec. 34. Minnesota Statutes 2004, section 490.121, 18.33 subdivision 4, is amended to read: 18.34 Subd. 4. [ALLOWABLE SERVICE.] (a) "Allowable service" 18.35 means any calendar month, subject to the service credit limit in 18.36 subdivision 22, served as a judge at any time,orduring which 19.1 the judge received compensation for that service from the state, 19.2 municipality, or county, whichever applies, and for which the 19.3 judge made any required member contribution. It also includes 19.4 any month served as a referee in probate for all referees in 19.5 probate who were in officeprior tobefore January 1, 1974. 19.6 (b) "Allowable service" does not mean service as a retired 19.7 judge. 19.8 Sec. 35. Minnesota Statutes 2004, section 490.121, 19.9 subdivision 6, is amended to read: 19.10 Subd. 6. [ANNUITY.] "Annuity" means the payments that are 19.11 made each year to an annuitant from the judges' retirement fund,19.12pursuant to the provisions ofunder sections 490.121 to 490.132. 19.13 Sec. 36. Minnesota Statutes 2004, section 490.121, 19.14 subdivision 7, is amended to read: 19.15 Subd. 7. [ANNUITANT.] "Annuitant" means a former judge, a 19.16 surviving spouse, or a dependent child who is entitled to and is 19.17 receiving an annuity underthe provisions ofsections 490.121 to 19.18 490.132. 19.19 Sec. 37. Minnesota Statutes 2004, section 490.121, is 19.20 amended by adding a subdivision to read: 19.21 Subd. 7a. [APPROVED ACTUARY.] "Approved actuary" means an 19.22 actuary as defined in section 356.215, subdivision 1, paragraph 19.23 (c). 19.24 Sec. 38. Minnesota Statutes 2004, section 490.121, is 19.25 amended by adding a subdivision to read: 19.26 Subd. 7b. [COURT.] "Court" means any court of this state 19.27 that is established by the Minnesota Constitution. 19.28 Sec. 39. Minnesota Statutes 2004, section 490.121, is 19.29 amended by adding a subdivision to read: 19.30 Subd. 7c. [DEPENDENT SURVIVING CHILD.] "Dependent 19.31 surviving child" means any natural or adopted child of a 19.32 deceased judge who has not reached the age of 18 years, or 19.33 having reached the age of 18, is under age 22 and who is a 19.34 full-time student throughout the normal school year, is 19.35 unmarried, and is actually dependent for more than one-half of 19.36 the child's support upon the judge for a period of at least 90 20.1 days before the judge's death. It also includes any natural 20.2 child of the judge who was born after the death of the judge. 20.3 Sec. 40. Minnesota Statutes 2004, section 490.121, 20.4 subdivision 13, is amended to read: 20.5 Subd. 13. [DISABILITY.] "Disability" means the permanent 20.6 inability of a judge to continue to perform the functions of 20.7 judge by reason of a physical or mental impairment resulting 20.8 from a sickness or an injury. 20.9 Sec. 41. Minnesota Statutes 2004, section 490.121, 20.10 subdivision 14, is amended to read: 20.11 Subd. 14. [DISABILITY RETIREMENT DATE.] "Disability 20.12 retirement date" means the last day of the first month after the 20.13 date on which the governor determines, upon receipt of the 20.14 voluntary application by the judge or otherwise, that a judge 20.15 suffers from a disability. 20.16 Sec. 42. Minnesota Statutes 2004, section 490.121, 20.17 subdivision 15, is amended to read: 20.18 Subd. 15. [DISABILITY RETIREMENT ANNUITY.] "Disability 20.19 retirement annuity" means an annuity to which a judge is 20.20 entitled under section 490.124, subdivisions 1 and 4, after the 20.21 retirementfor reasonof the judge because of a disability. 20.22 Sec. 43. Minnesota Statutes 2004, section 490.121, is 20.23 amended by adding a subdivision to read: 20.24 Subd. 15a. [EARLY RETIREMENT DATE.] "Early retirement date" 20.25 means the last day of the month after a judge attains the age of 20.26 60 but before the judge reaches the normal retirement date. 20.27 Sec. 44. Minnesota Statutes 2004, section 490.121, is 20.28 amended by adding a subdivision to read: 20.29 Subd. 15b. [EARLY RETIREMENT ANNUITY.] "Early retirement 20.30 annuity" means an annuity to which a judge is entitled under 20.31 section 490.124, subdivisions 1 and 3, upon retirement by the 20.32 judge at an early retirement date. 20.33 Sec. 45. Minnesota Statutes 2004, section 490.121, 20.34 subdivision 21, is amended to read: 20.35 Subd. 21. [FINAL AVERAGE COMPENSATION.] "Final average 20.36 compensation" means the total amount of the salarypayablepaid 21.1 to a judge in the highest five years out of the last ten years 21.2prior tobefore theevent of maturity of benefitstermination of 21.3 judicial service, divided by five; provided, however, thatif 21.4 the number of years of service by the judge equals or exceeds 21.5 ten. If the number of years of service by the judge is less 21.6 than ten, but more than five, the highest fiveshallyears of 21.7 salary must be counted, and. If the number of years of service 21.8 by the judge is less than five, the aggregate salaryin suchfor 21.9 the periodshallof service must be divided by the number of 21.10 months insuchthe period and multiplied by 12. 21.11 Sec. 46. Minnesota Statutes 2004, section 490.121, is 21.12 amended by adding a subdivision to read: 21.13 Subd. 21a. [JUDGE.] "Judge" means a judge or a justice of 21.14 any court as defined under subdivision 7b. 21.15 Sec. 47. Minnesota Statutes 2004, section 490.121, is 21.16 amended by adding a subdivision to read: 21.17 Subd. 21b. [JUDGES' RETIREMENT FUND; RETIREMENT FUND; 21.18 FUND.] "Judges' retirement fund," "retirement fund," or "fund" 21.19 means the fund created by section 490.123. 21.20 Sec. 48. Minnesota Statutes 2004, section 490.121, is 21.21 amended by adding a subdivision to read: 21.22 Subd. 21c. [MANDATORY RETIREMENT DATE.] "Mandatory 21.23 retirement date" means the last day of the month in which a 21.24 judge has attained 70 years of age. 21.25 Sec. 49. Minnesota Statutes 2004, section 490.121, is 21.26 amended by adding a subdivision to read: 21.27 Subd. 21d. [NORMAL RETIREMENT ANNUITY.] Except as 21.28 otherwise provided in sections 490.121 to 490.132, "normal 21.29 retirement annuity" means an annuity to which a judge is 21.30 entitled under section 490.124, subdivision 1, upon retirement 21.31 on or after the normal retirement date of the judge. 21.32 Sec. 50. Minnesota Statutes 2004, section 490.121, is 21.33 amended by adding a subdivision to read: 21.34 Subd. 21e. [NORMAL RETIREMENT DATE.] "Normal retirement 21.35 date" means the last day of the month in which a judge attains 21.36 the age of 65. 22.1 Sec. 51. Minnesota Statutes 2004, section 490.121, 22.2 subdivision 22, is amended to read: 22.3 Subd. 22. [SERVICE CREDIT LIMIT.] "Service credit limit" 22.4 means the greater of: (1) 24 years of allowable service 22.5 under this chapter490; or (2) for judges with allowable service 22.6 renderedprior tobefore July 1, 1980, the number of years of 22.7 allowable service under chapter 490, which, when multiplied by 22.8 the percentage listed in section 356.315, subdivision 7 or 8, 22.9 whichever is applicable to each year of service, equals 76.8. 22.10 Sec. 52. Minnesota Statutes 2004, section 490.121, is 22.11 amended by adding a subdivision to read: 22.12 Subd. 23. [SURVIVING SPOUSE.] "Surviving spouse" means the 22.13 surviving legally married spouse of a deceased judge. 22.14 Sec. 53. Minnesota Statutes 2004, section 490.121, is 22.15 amended by adding a subdivision to read: 22.16 Subd. 24. [SURVIVOR'S ANNUITY.] "Survivor's annuity" means 22.17 an annuity to which a surviving spouse or dependent child is 22.18 entitled under section 490.124, subdivision 9. 22.19 Sec. 54. Minnesota Statutes 2004, section 490.122, is 22.20 amended to read: 22.21 490.122 [ADMINISTRATION OF JUDGES' RETIREMENT.] 22.22 Subdivision 1. [ADMINISTRATION.] The policy-making, 22.23 management, and administrative functions governing the operation 22.24 of the judges' retirement fund and the administration 22.25 ofsections 490.121 to 490.132this chapter are vested in the 22.26 board of directors and executive director of the Minnesota State 22.27 Retirement Systemwith such. In administering the plan and 22.28 fund, the board and the director have the same duties, 22.29 authority, and responsibility as are provided in chapter 352. 22.30 Subd. 2. [INAPPLICABILITY OF CERTAIN LAWS.] Except as 22.31 otherwise specified, no provision of chapter 352 applies to the 22.32 judges' retirement fund or any judge. 22.33 Subd. 3. [FIDUCIARY RESPONSIBILITY.] Fiduciary 22.34 activitiesofrelating to the uniform judges' retirementand22.35Survivors' Annuities for Judgesplan must be undertaken in a 22.36 manner consistent with chapter 356A. 23.1 Sec. 55. Minnesota Statutes 2004, section 490.123, 23.2 subdivision 1, is amended to read: 23.3 Subdivision 1. [FUND CREATION; REVENUE AND AUTHORIZED 23.4 DISBURSEMENTS.] (a) There is created a special fund to be known 23.5 as the "judges' retirement fund." 23.6 (b) The judges' retirement fund must be credited with all 23.7 contributions,; all interest, dividends, and other investment 23.8 proceeds; and all other income authorized by this chapter or 23.9 other applicable law. 23.10 (c) From this fund there are appropriated the payments 23.11 authorized by sections 490.121 to 490.132, in the amounts and at 23.12 the times provided, including the necessary and reasonable 23.13 expenses of the Minnesota State Retirement System in 23.14 administering the fund and the transfers to the Minnesota 23.15 postretirement investment fund. 23.16 Sec. 56. Minnesota Statutes 2004, section 490.123, 23.17 subdivision 1a, is amended to read: 23.18 Subd. 1a. [MEMBER CONTRIBUTION RATES.] (a) A judge who is 23.19 covered by the federal Old Age, Survivors, Disability, and 23.20 Health Insurance Program and whose service does not exceed the 23.21 service credit limit in section 490.121, subdivision 22, shall 23.22 contribute to the fund from each salary payment a sum equal to 23.23 8.00 percent of salary. 23.24 (b)A judge not so covered whose service does not exceed23.25the service credit limit in section 490.121, subdivision 22,23.26shall contribute to the fund from each salary payment a sum23.27equal to 8.15 percent of salary.23.28(c)The contribution under this subdivision is payable by 23.29 salary deduction. The deduction must be made by the state court 23.30 administrator under section 352.04, subdivisions 4, 5, and 8. 23.31 Sec. 57. Minnesota Statutes 2004, section 490.123, 23.32 subdivision 1b, is amended to read: 23.33 Subd. 1b. [EMPLOYER CONTRIBUTION RATE.] (a) The employer 23.34 contribution rate to the fund on behalf of a judge is 20.5 23.35 percent of salaryand. The employer obligation continues after 23.36 a judge exceeds the service credit limit in section 490.121, 24.1 subdivision 22. 24.2 (b) The employer contribution must be paid by the state 24.3 court administratorand. The employer contribution is payable 24.4 at the same time as member contributions are made under 24.5 subdivision 1a or as employee contributions are made to the 24.6 unclassifiedplan inprogram governed by chapter 352D for judges 24.7 whose service exceeds the limit in section 490.121, subdivision 24.8 22, are remitted. 24.9 Sec. 58. Minnesota Statutes 2004, section 490.123, 24.10 subdivision 1c, is amended to read: 24.11 Subd. 1c. [ADDITIONAL EMPLOYER CONTRIBUTION.]In the event24.12thatIf the employer contribution under subdivision 1b and the 24.13 assets of the judges retirement fund are insufficient to meet 24.14 reserve transfers to the Minnesota postretirement investment 24.15 fund or payments of survivor benefitsbefore July 1, 1993in a 24.16 month, the necessary amount is appropriated from the general 24.17 fund to the executive director of the Minnesota State Retirement 24.18 System, upon the certification of the required amount by the 24.19 executive director to the commissioner of finance. 24.20 Sec. 59. Minnesota Statutes 2004, section 490.123, 24.21 subdivision 2, is amended to read: 24.22 Subd. 2. [COMMISSIONER OF FINANCE.] The commissioner of 24.23 financeshall beis the ex officio treasurer of the judges' 24.24 retirement fundand the. The commissioner's general bond to the 24.25 stateshallmust besoconditionedasto cover all liability for 24.26 acting as the treasurer ofthisthe fund. Allmoneysmoney 24.27 received by the commissionerpursuant tounder this section 24.28shallmust be set aside in the state treasury to the credit of 24.29 the judges' retirement fund.The commissioner shall transmit24.30monthly to the executive director described in section 352.03,24.31subdivision 5, a detailed statement of all amounts so received24.32and credited to the fund. The commissioner shall pay out the24.33fund only upon vouchers signed by said executive director;24.34provided that vouchers for investment may be signed by the24.35secretary of the State Board of Investment.24.36 Sec. 60. Minnesota Statutes 2004, section 490.123, 25.1 subdivision 3, is amended to read: 25.2 Subd. 3. [INVESTMENT.] (a) The executive directorreferred25.3to in subdivision 2of the Minnesota State Retirement System 25.4 shall, from time to time, certify to the State Board of 25.5 Investment such portions of the judges' retirement fund as in 25.6 the director's judgment may not be required for immediate use. 25.7 (b) Assets from the judges' retirement fundshallmust be 25.8 transferred to the Minnesota postretirement investment fund for 25.9 retirement and disability benefits as provided in sections 25.10 11A.18 and 352.119. 25.11 (c) The State Board of Investment shall thereupon invest 25.12 and reinvest sums so transferred, or certified, in such 25.13 securities as are duly authorized legal investments for such 25.14 purposes under section 11A.24 in compliance with sections 25.15 356A.04 and 356A.06. 25.16 Sec. 61. Minnesota Statutes 2004, section 490.124, 25.17 subdivision 1, is amended to read: 25.18 Subdivision 1. [BASIC RETIREMENT ANNUITY.] (a) Except as 25.19 qualified hereinafter from and after the mandatory retirement 25.20 date, the normal retirement date, the early retirement date, or 25.21 one year from the disability retirement date, as the case may 25.22 be, a retiring judge is eligible to receive a retirement annuity 25.23shall be payable to a retiring judgefrom the judges' retirement 25.24 fundin. 25.25 (b) The retirement annuity is an amount equal to: (1) the 25.26 percent specified in section 356.315, subdivision 7, multiplied 25.27 by the judge's final average compensation with that result then 25.28 multiplied by the number of years and fractions of years of 25.29 allowable service renderedprior tobefore July 1, 1980; plus 25.30 (2) the percent specified in section 356.315, subdivision 8, 25.31 multiplied by the judge's final average compensation with that 25.32 result then multiplied by the number of years and fractions of 25.33 years of allowable service rendered after June 30, 1980. 25.34 (c) Service that exceeds the service credit limit in 25.35 section 490.121, subdivision 22, must be excluded in calculating 25.36 the retirement annuity, but the compensation earned by the judge 26.1 during this period of judicial service must be used in 26.2 determining a judge's final average compensation and calculating 26.3 the retirement annuity. 26.4 Sec. 62. Minnesota Statutes 2004, section 490.124, 26.5 subdivision 2, is amended to read: 26.6 Subd. 2. [MINIMUM SERVICE REQUIREMENT; EXTENSION OF TERM.] 26.7No(a) Unless section 356.30 applies, a judgeshall beis not 26.8 eligible for an annuity at the normal retirement date or the 26.9 early retirement date if the judge has less than five years of 26.10 allowable service. 26.11 (b) A judge whoshall retireretires on or, as permitted 26.12 under sections 490.121 to 490.132, after the judge's mandatory 26.13 retirement date,shall beis entitled to a proportionate annuity 26.14 based upon the allowable service of the judge at the date of 26.15 retirement. 26.16A judge who was in office on December 31, 1973, and26.17thereafter and who, by the date on which the current term26.18expires, would not be eligible to retire with full benefits26.19under statutes in effect on December 31, 1973, may apply to the26.20governor for an extension to serve up to three additional years,26.21stating the intention of the judge to retire upon attaining26.22eligibility to receive a retirement allowance. Notwithstanding26.23section 490.125, the governor shall forthwith make a written26.24order accepting the retirement application, and extending the26.25term of office of the judge for the period of time, not to26.26exceed three years, as may be necessary to make the judge26.27eligible for retirement, solely for purposes of computing26.28benefits hereunder.26.29 Sec. 63. Minnesota Statutes 2004, section 490.124, 26.30 subdivision 3, is amended to read: 26.31 Subd. 3. [EARLY REDUCED RETIREMENT.] The retirement 26.32 annuityprovided byunder subdivision 1 of any judgeelecting26.33 who elects to retire at an early retirement dateshallmust be 26.34 reduced by one-half of one percent per month from the retirement 26.35 date to the normal retirement date. 26.36 Sec. 64. Minnesota Statutes 2004, section 490.124, 27.1 subdivision 4, is amended to read: 27.2 Subd. 4. [DISABILITY RETIREMENT.] (a) When the governor 27.3 determines that a judge is disabled under section 490.121, 27.4 subdivision 13, notice of the governor's determination must be 27.5 sent to the judge, to the chief justice of the Supreme Court, to 27.6 the state court administrator, and to the executive director of 27.7 the Minnesota State Retirement System. 27.8 (b) From and after disability retirement date, a disabled 27.9 judgeshall beis entitled to continuation of the judge's full 27.10 salary payable by the judge's employer, as if the judge's office 27.11 were not vacated by retirement, for a period of up to one full 27.12 year, but in no event beyond the judge's mandatory retirement 27.13 date. During this year the judgewillis entitled to earn 27.14 additional service credit in the judges' retirement plan. The 27.15 salaryearned will bepayable to a disabled judge is subject to 27.16 retirement deductions andwillmust be included in computing 27.17 final average compensation of the judge.Thereafter27.18 (c) At the conclusion of the year of continued salary 27.19 following a disability or upon the judge's mandatory retirement 27.20 date, whichever is earlier, the disabled judge is entitled to a 27.21 disability retirement annuity computed as provided in 27.22 subdivision 1shall be paid, provided that. If the computed 27.23 retirement annuity is a smaller amount, the judgeshallis 27.24 entitled to receive a minimum annuity of 25 percent of the 27.25 judge's final average compensation. 27.26 Sec. 65. Minnesota Statutes 2004, section 490.124, 27.27 subdivision 5, is amended to read: 27.28 Subd. 5. [DEFERRED BENEFITS.] (a)AnyA benefit to which a 27.29 judge is entitled under this section may be deferred until the 27.30 early or normal retirement date or later, notwithstanding the 27.31 termination ofsuchthe judge's service prior thereto. 27.32 (b) The retirement annuity of, or the survivor benefit 27.33 payable on behalf of, a former judge, who terminated service 27.34 before July 1, 1997, which is not first payable until after June 27.35 30, 1997, must be increased on an actuarial equivalent basis to 27.36 reflect the change in the postretirement interest rate actuarial 28.1 assumption under section 356.215, subdivision 8, from five 28.2 percent to six percent under a calculation procedure and tables 28.3 adopted by the board of directors of the Minnesota State 28.4 Retirement System and approved by the actuary retainedby the28.5Legislative Commission on Pensions and Retirementunder section 28.6 356.214. 28.7 Sec. 66. Minnesota Statutes 2004, section 490.124, 28.8 subdivision 8, is amended to read: 28.9 Subd. 8. [EXCLUSIVE NORMAL RETIREMENT BENEFITS.]Any(a) 28.10 Except as provided in paragraph (b), a judge who retires after 28.11 December 31, 1973,shall beis entitled to a retirement pension, 28.12 retirement compensation or other retirement payment under 28.13 statutes applicable solely to judgespursuant tounder this 28.14 section only, except that any such. 28.15 (b) A judge who was in officeprior tobefore January 1, 28.16 1974, who retires at or after normal retirement age may then 28.17 elect to receive during the judge's lifetime a normal retirement 28.18 annuity computed on the basis of retirement compensation 28.19 provided for such judge under statutes in effect on December 31, 28.20 1973, in lieu of the amount of normal retirement annuity 28.21 otherwise computed under sections 490.121 to 490.132. 28.22For purposes of this subdivision, the Conciliation Court of28.23the city of Duluth shall be deemed to have been a court of28.24record by the statutes in effect on December 31, 1973.28.25 Sec. 67. Minnesota Statutes 2004, section 490.124, 28.26 subdivision 9, is amended to read: 28.27 Subd. 9. [SURVIVORS' ANNUITY.] (a) Upon the death of a 28.28 judgeprior tobefore retirement, or upon the death of a person 28.29 who has qualified for an annuity under this section but who 28.30 ceases to be a judgeprior tobefore retirement and has who not 28.31 received a refund of contributionspursuant tounder subdivision 28.32 12, a surviving spouse is entitled to, or, if there be no 28.33 surviving spouse, dependent children,shallare entitled to 28.34 receive an annuity, payable monthly, equal in total to 60 28.35 percent of the normal retirement annuity which would have been 28.36 payable to the judge or former judge had the date of death been 29.1 the normal retirement date, provided that the. 29.2 (b) The annuity payable to a surviving spouse or to 29.3 dependent childrenshall receive an annuityis an amount of not 29.4 less than 25 percent of the judge's or the former judge's final 29.5 average compensation. 29.6If a judge, whose surviving spouse was not entitled to29.7survivors benefits provided solely for judges under statutes in29.8effect prior to January 1, 1974, shall have died prior to29.9retirement on or after May 23, 1973 and before January 1, 1974,29.10a surviving spouse and dependent children, if any, shall be29.11entitled to survivors benefits as provided hereunder as if such29.12judge had died on January 1, 1974.29.13 Sec. 68. Minnesota Statutes 2004, section 490.124, 29.14 subdivision 10, is amended to read: 29.15 Subd. 10. [PRIOR SURVIVORS' BENEFITS; LIMITATION.] (a) 29.16 Benefits providedpursuant tounder Minnesota Statutes 2004, 29.17 section 490.102, subdivision 6, or 490.1091, for a surviving 29.18 spouse of a retired judge, payable after the death of the judge, 29.19shall beare limited to:29.20(a)spouses of judges who have retiredprior tobefore 29.21 January 1, 1974; and. 29.22 (b)spouses of judges in office on December 31, 1973 and29.23thereafter who elect to continue contributions pursuant to29.24section 490.102, subdivision 6 or 490.109. The contributions29.25shall be in addition to contributions pursuant to section29.26490.123, and upon retirement the judge may not elect to receive29.27any optional annuity pursuant to subdivision 11 unless the judge29.28and the spouse shall waive any benefits pursuant to section29.29490.102, subdivision 6 or 490.1091.29.30 No other judge in office on or after January 1, 1974,shall29.31beis required to contributepursuant tounder Minnesota 29.32 Statutes 2004, section 490.102, subdivision 6, or 490.109. 29.33 Sec. 69. Minnesota Statutes 2004, section 490.124, 29.34 subdivision 11, is amended to read: 29.35 Subd. 11. [LIMITATION ON SURVIVOR BENEFITS; OPTIONAL 29.36 ANNUITIES.] (a) No survivor or death benefits may be paid in 30.1 connection with the death of a judge who retires after December 30.2 31, 1973, except as otherwise provided in sections 490.121 to 30.3 490.132. 30.4 (b) Except as provided in subdivision 10, a judge may elect 30.5 to receive, instead of the normal retirement annuity, an 30.6 optional retirement annuity in the form of either (1) an annuity 30.7 payable for a period certain and for life after that period, (2) 30.8 a joint and survivor annuity without reinstatementin the event30.9ofif the designated beneficiarypredeceasingpredeceases the 30.10 retired judge, or (3) a joint and survivor annuity with 30.11 reinstatementin the event ofif the designated beneficiary 30.12predeceasingpredeceases the retired judge. 30.13 (c) An optional retirement annuity must be actuarially 30.14 equivalent to a single-life annuity with no term certain and 30.15 must be established by the board of directors of the Minnesota 30.16 State Retirement System. In establishing these optional 30.17 retirement annuity forms, the board shall obtain the written 30.18 recommendation of the actuary retainedby the Legislative30.19Commission on Pensions and Retirementunder section 356.214. 30.20 The recommendations must be retained as a part of the permanent 30.21 records of the board. 30.22 Sec. 70. Minnesota Statutes 2004, section 490.124, 30.23 subdivision 12, is amended to read: 30.24 Subd. 12. [REFUND.] (a) A person who ceases to be a 30.25 judgebut who does not qualify for a retirement annuity or other30.26benefit under section 490.121is entitled to a refund in an 30.27 amount that is equal to all of the member's employee 30.28 contributions to the judges' retirement fund plus interest 30.29 computed under section 352.22, subdivision 2. 30.30 (b) A refund of contributions under paragraph (a) 30.31 terminates all service credits and all rights and benefits of 30.32 the judge and the judge's survivors under this chapter. 30.33 (c) A person who becomes a judge again after taking a 30.34 refund under paragraph (a) may reinstate the previously 30.35 terminated allowable servicecreditscredit, rights, and 30.36 benefits by repaying the total amount of the previously received 31.1 refund. The refund repayment must include interest on the total 31.2 amount previously received at an annual rate of 8.5 percent, 31.3 compounded annually, from the date on which the refund was 31.4 received until the date on which the refund is repaid. 31.5 Sec. 71. Minnesota Statutes 2004, section 490.124, 31.6 subdivision 13, is amended to read: 31.7 Subd. 13. [DEATH REFUND.] If a judge who has not received 31.8 other benefits under this chapter dies and there are no survivor 31.9 benefits payable under this chapter, a refund plus interest as 31.10 provided in subdivision 12 is payable to the last designated 31.11 beneficiary named on a form filed with the director before the 31.12 death of the judge, or, if no designation is on file,the refund31.13is payableto the estate of the deceased judge. 31.14 Sec. 72. Minnesota Statutes 2004, section 490.125, 31.15 subdivision 1, is amended to read: 31.16 Subdivision 1. [MANDATORY RETIREMENT AGE.] Except as 31.17 otherwise provided in sections 490.121 to 490.132,eacha judge 31.18 shallretireterminate active service as a judge on the judge's 31.19 mandatory retirement date. 31.20 Sec. 73. Minnesota Statutes 2004, section 490.126, is 31.21 amended to read: 31.22 490.126 [PROCEDURES.] 31.23 Subdivision 1. [COMPULSORY RETIREMENT.] Proceedings for 31.24 compulsory retirement of a judge, if necessary,shallmust be 31.25 conducted in accordance with rules issued by the Supreme Court 31.26pursuant tounder section 490.16. 31.27 Subd. 2. [VACANCIES.] Any judge may make written 31.28 application to the governor for retirement. The governor 31.29 thereupon shall direct the judge's retirement by written order 31.30 which, when filed in the Office of the Secretary of State,shall31.31effecteffects a vacancy in the office to be filled as provided 31.32 by law. 31.33 Subd. 3. [APPLICATION FOR ANNUITY OR REFUND.] An 31.34 application for an annuity or a refund under sections 490.121 to 31.35 490.132 may be made by the potential annuitant or by someone 31.36 authorized to act for the potential annuitant. Every 32.1 application for an annuity or refund,withaccompanied by a 32.2 proof of age and by a record of years of service when 32.3 required,shallmust be submitted to thegoverning32.4bodyexecutive director of the Minnesota State Retirement System 32.5 in a form prescribed byitthe director. 32.6 Subd. 4. [MANNER OF PAYMENT.] Unless otherwise 32.7 specifically provided by statute or agreed upon by the annuitant 32.8 and thegoverning bodyboard of directors of the Minnesota State 32.9 Retirement System, annuities payable under sections 490.121 to 32.10 490.132shallmust be paid in the manner and at the intervals as 32.11 prescribed by the executive director of the Minnesota State 32.12 Retirement System. The annuityshall ceaseceases with the last 32.13 payment received by the annuitant while living. 32.14 Subd. 5. [EXEMPTION FROM PROCESS; NO ASSIGNMENT.] None of 32.15 the money, annuities, or other benefits provided in this chapter 32.16 is assignable either in law or equity or is subject to state 32.17 estate tax, or to execution, levy, attachment, garnishment, or 32.18 other legal process, except as provided in section 518.58, 32.19 518.581, or 518.6111. 32.20 Sec. 74. Minnesota Statutes 2004, section 490.133, is 32.21 amended to read: 32.22 490.133 [RETIREMENT; TRANSITION PROVISIONS; TRANSFER TO 32.23 COURT OF APPEALS.] 32.24 (a) If a judge to whom or to whose survivors benefits would 32.25 be payable under Minnesota Statutes 2004, sections 490.101 to 32.26 490.12, is elected or appointed to the Court of Appeals, that 32.27 judge and the judge's survivors, shallcontinue to be eligible 32.28 for benefits under those sections and not under sections 490.121 32.29 to 490.132. 32.30 (b) Inthatthe case of a judge to whom paragraph (a) 32.31 applies, the service of the judge in the Court of Appealsshall32.32 must be added to the prior service as district judge, probate 32.33 judge, or judge of any other court of record in determining 32.34 eligibility and the compensation of a judge of the Court of 32.35 Appeals at the time of the judge's death, disability, or 32.36 retirementshall beis the "compensation allotted to the office" 33.1 for the purposes of calculating benefit amounts. 33.2 (c) All other judges of the Court of Appeals and their 33.3 survivorsshall beare subject to the retirement and survivor's 33.4 annuity provisions of sections 490.121 to 490.132. 33.5 Sec. 75. [490A.01] [BOARD OF JUDICIAL STANDARDS; 33.6 ESTABLISHMENT.] 33.7 Subdivision 1. [ESTABLISHMENT; COMPOSITION.] The Board on 33.8 Judicial Standards is established. The board is a continuation 33.9 of the board established by Laws 1971, chapter 909, sections 1 33.10 and 2, as amended. 33.11 Subd. 2. [COMPOSITION; APPOINTMENT.] (a) The board 33.12 consists of one judge of the Court of Appeals, three trial court 33.13 judges, two lawyers who have practiced law in the state for at 33.14 least ten years, and four citizens who are not judges, retired 33.15 judges, or lawyers. 33.16 (b) All members must be appointed by the governor with the 33.17 advice and consent of the senate. Senate confirmation is not 33.18 required for judicial members. 33.19 Subd. 3. [TERM MAXIMUM; MEMBERSHIP TERMINATION.] No member 33.20 may serve more than two full four-year terms or their equivalent. 33.21 Membership terminates if a member ceases to hold the position 33.22 that qualified the member for appointment. 33.23 Subd. 4. [MEMBER TERMS; COMPENSATION; REMOVAL.] The 33.24 membership terms, compensation, removal of members, and filling 33.25 of vacancies on the board are as provided in section 15.0575. 33.26 Subd. 5. [EXECUTIVE SECRETARY APPOINTMENT; SALARY.] (a) 33.27 The board shall appoint the executive secretary. 33.28 (b) The salary of the executive secretary of the board is 33.29 85 percent of the maximum salary provided for an administrative 33.30 law judge under section 15A.083, subdivision 6a. 33.31 Sec. 76. [490A.02] [JUDICIAL STANDARDS BOARD; POWERS.] 33.32 Subdivision 1. [JUDICIAL DISQUALIFICATION.] A judge is 33.33 disqualified from acting as a judge, without a loss of salary, 33.34 while there is pending an indictment or any information charging 33.35 the judge with a crime that is punishable as a felony under 33.36 either Minnesota law or federal law, or while there is pending a 34.1 recommendation to the Supreme Court by the Board on Judicial 34.2 Standards for the judge's removal or retirement. 34.3 Subd. 2. [JUDICIAL SUSPENSION.] On receipt of a 34.4 recommendation of the Board on Judicial Standards or on its own 34.5 motion, the Supreme Court may suspend a judge from office 34.6 without salary when the judge pleads guilty to or no contest to 34.7 or is found guilty of a crime that is punishable as a felony 34.8 under either Minnesota law or federal law or any other crime 34.9 that involves moral turpitude. If the conviction is reversed, 34.10 the suspension terminates and the judge must be paid a salary 34.11 for the period of suspension. If the judge is suspended and the 34.12 conviction becomes final, the Supreme Court shall remove the 34.13 judge from office. 34.14 Subd. 3. [JUDICIAL DISABILITY.] On receipt of a 34.15 recommendation of the Board on Judicial Standards, the Supreme 34.16 Court may retire a judge for a disability that the court 34.17 determines seriously interferes with the performance of the 34.18 judge's duties and is or is likely to become permanent, and 34.19 censure or remove a judge for an action or inaction that may 34.20 constitute persistent failure to perform the judge's duties, 34.21 incompetence in performing the judge's duties, habitual 34.22 intemperance, or conduct prejudicial to the administration of 34.23 justice that brings the judicial office into disrepute. 34.24 Subd. 4. [AUTHORITY TO REOPEN MATTERS.] The board is 34.25 specifically empowered to reopen any matter wherein any 34.26 information or evidence was previously precluded by a statute of 34.27 limitations or by a previously existing provision of time 34.28 limitation. 34.29 Subd. 5. [RETIREMENT STATUS.] (a) A judge who is retired 34.30 by the Supreme Court must be considered to have retired 34.31 voluntarily. 34.32 (b) This section and section 490A.01 must not affect the 34.33 right of a judge who is suspended, retired, or removed hereunder 34.34 from qualifying for any pension or other retirement benefits to 34.35 which the judge would otherwise be entitled by law to receive. 34.36 Subd. 6. [ELIGIBILITY FOR JUDICIAL OFFICE; PRACTICE 35.1 LAW.] A judge removed by the Supreme Court is ineligible for any 35.2 future service in a judicial office. The question of the right 35.3 of a removed judge to practice law in this state must be 35.4 referred to the proper authority for review. 35.5 Subd. 7. [SUPREME COURT RULES.] The Supreme Court shall 35.6 make rules to implement this section. 35.7 Sec. 77. [REPEALER; EFFECT ON BENEFIT COVERAGE.] 35.8 Subdivision 1. [LEGISLATORS RETIREMENT PLAN; REPEALED AS 35.9 OBSOLETE.] Minnesota Statutes 2004, sections 3A.01, subdivisions 35.10 3, 4, 6a, and 7; 3A.02, subdivision 2; 3A.04, subdivision 1; and 35.11 3A.09, are repealed. 35.12 Subd. 2. [ELECTIVE STATE OFFICERS RETIREMENT PLAN; 35.13 REPEALED AS OBSOLETE.] Minnesota Statutes 2004, sections 35.14 352C.01; 352C.011; 352C.021; 352C.031; 352C.033; 352C.04; 35.15 352C.051; 352C.09; and 352C.091, subdivisions 2 and 3, are 35.16 repealed. 35.17 Subd. 3. [JUDICIAL RETIREMENT PLANS; REPEALED AS 35.18 OBSOLETE.] Minnesota Statutes 2004, sections 490.021; 490.025, 35.19 subdivisions 1, 2, 3, 4, and 6; 490.101; 490.102; 490.103; 35.20 490.105; 490.106; 490.107; 490.108; 490.109; 490.1091; 490.12; 35.21 and 490.121, subdivisions 2, 3, 5, 8, 9, 10, 11, 12, 16, 17, 18, 35.22 19, and 20, are repealed. 35.23 Subd. 4. [JUDICIAL STANDARDS BOARD; REPEALED FOR 35.24 RELOCATION AS MINNESOTA STATUTES, CHAPTER 490A.] Minnesota 35.25 Statutes 2004, sections 490.021; 490.025, subdivisions 1, 2, 3, 35.26 4, and 6; 490.101; 490.102; 490.103; 490.105; 490.106; 490.107; 35.27 490.108; 490.109; 490.1091; 490.12; and 490.121, subdivisions 2, 35.28 3, 5, 8, 9, 10, 11, 12, 16, 17, 18, 19, and 20, are repealed. 35.29 Subd. 5. [UNIFORM JUDICIAL RETIREMENT PLAN; NO BENEFIT 35.30 DIMINISHMENT INTENDED; PROCEDURE.] Sections 32 to 76 are not 35.31 intended to reduce or increase the entitlement of active, 35.32 deferred, or retired judges to retirement annuities or benefits 35.33 as of July 1, 2005, as reflected in the records of the Minnesota 35.34 State Retirement System. If the executive director of the 35.35 Minnesota State Retirement System determines that any provisions 35.36 of sections 32 to 76 functions to modify, impair, or diminish 36.1 the retirement annuity or benefit entitlement of any judge that 36.2 had accrued or earned before July 1, 2005, the executive 36.3 director shall certify that determination and a recommendation 36.4 as to the required legislative correction to the chair of the 36.5 Legislative Commission on Pensions and Retirement, the chair of 36.6 the senate State and Local Government Operations Committee, the 36.7 chair of the house Governmental Operations and Veterans Affairs 36.8 Policy Committee, and the executive director of the Legislative 36.9 Commission on Pensions and Retirement on or before the October 1 36.10 next following that determination. 36.11 Sec. 78. [EFFECTIVE DATE.] 36.12 Sections 1 to 77 are effective on July 1, 2005. 36.13 ARTICLE 2 36.14 COVERED SALARY; AVERAGE SALARY 36.15 Section 1. Minnesota Statutes 2004, section 352.01, is 36.16 amended by adding a subdivision to read: 36.17 Subd. 14a. [AVERAGE SALARY.] (a) "Average salary" means 36.18 the average of the highest five successive years of salary upon 36.19 which the employee has made contributions to the retirement fund 36.20 by payroll deductions. Average salary must be based upon all 36.21 allowable service if this service is less than five years. 36.22 (b) "Average salary" does not include the payment of 36.23 accrued unused annual leave or overtime paid at time of final 36.24 separation from state service if paid in a lump sum nor does it 36.25 include the reduced salary, if any, paid during the period the 36.26 employee is entitled to workers' compensation benefit payments 36.27 for temporary disability. 36.28 (c) For an employee covered by the correctional state 36.29 employees retirement plan, "average salary" means the average of 36.30 the monthly salary during the employee's highest five successive 36.31 years of salary as an employee covered by the general state 36.32 employees retirement plan, or the correctional state employees 36.33 retirement plan, or by a combination of the two. If the total 36.34 of the covered service is less than five years, the 36.35 determination of average salary must be based on all allowable 36.36 service. 37.1 Sec. 2. Minnesota Statutes 2004, section 352.115, 37.2 subdivision 2, is amended to read: 37.3 Subd. 2. [AVERAGE SALARYNORMAL RETIREMENT ANNUITY.] The 37.4 retirement annuity hereunder payable at normal retirement age or 37.5 thereafter must be computed in accordance with the applicable 37.6 provisions of the formula stated in subdivision 3, on the basis 37.7 of the employee's average salary for the period of allowable 37.8 service. This retirement annuity is known as the "normal" 37.9 retirement annuity. 37.10For each year of allowable service, "average salary" of an37.11employee in determining a retirement annuity means the average37.12of the highest five successive years of salary upon which the37.13employee has made contributions to the retirement fund by37.14payroll deductions. Average salary must be based upon all37.15allowable service if this service is less than five years.37.16"Average salary" does not include the payment of accrued37.17unused annual leave or overtime paid at time of final separation37.18from state service if paid in a lump sum nor does it include the37.19reduced salary, if any, paid during the period the employee is37.20entitled to workers' compensation benefit payments for temporary37.21disability.37.22 Sec. 3. Minnesota Statutes 2004, section 352.115, 37.23 subdivision 3, is amended to read: 37.24 Subd. 3. [RETIREMENT ANNUITY FORMULA.] (a) This paragraph, 37.25 in conjunction with section 352.116, subdivision 1, applies to a 37.26 person who became a covered employee or a member of a pension 37.27 fund listed in section 356.30, subdivision 3, before July 1, 37.28 1989, unless paragraph (b), in conjunction with section 352.116, 37.29 subdivision 1a, produces a higher annuity amount, in which case 37.30 paragraph (b) will apply. The employee's average salary, as 37.31 defined in section 352.01, subdivision214a, multiplied by the 37.32 percent specified in section 356.315, subdivision 1, per year of 37.33 allowable service for the first ten years and the percent 37.34 specified in section 356.315, subdivision 2, for each later year 37.35 of allowable service and pro rata for completed months less than 37.36 a full year shall determine the amount of the retirement annuity 38.1 to which the employee is entitled. 38.2 (b) This paragraph applies to a person who has become at 38.3 least 55 years old and first became a covered employee after 38.4 June 30, 1989, and to any other covered employee who has become 38.5 at least 55 years old and whose annuity amount, when calculated 38.6 under this paragraph and in conjunction with section 352.116, 38.7 subdivision 1a, is higher than it is when calculated under 38.8 paragraph (a), in conjunction with section 352.116, subdivision 38.9 1. The employee's average salary, as defined in section 352.01, 38.10 subdivision214a, multiplied by the percent specified in 38.11 section 356.315, subdivision 2, for each year of allowable 38.12 service and pro rata for months less than a full year shall 38.13 determine the amount of the retirement annuity to which the 38.14 employee is entitled. 38.15 Sec. 4. Minnesota Statutes 2004, section 352.87, 38.16 subdivision 3, is amended to read: 38.17 Subd. 3. [RETIREMENT ANNUITY FORMULA.] A person specified 38.18 in subdivision 1will haveis entitled to receive a retirement 38.19 annuity applicable for allowable service credit under this 38.20 section calculated by multiplying the employee's average salary, 38.21 as defined in section352.115352.01, subdivision214a, by the 38.22 percent specified in section 356.315, subdivision 2a, for each 38.23 year or portions of a year of allowable service credit. No 38.24 reduction for retirementprior tobefore the normal retirement 38.25 age, as specified in section 352.01, subdivision 25, applies to 38.26 service to which this section applies. 38.27 Sec. 5. Minnesota Statutes 2004, section 352.93, 38.28 subdivision 1, is amended to read: 38.29 Subdivision 1. [BASIS OF ANNUITY; WHEN TO APPLY.] After 38.30 separation from state service, an employee covered under section 38.31 352.91 who has reached age 55 years and has credit for at least 38.32 three years of covered correctional service or a combination of 38.33 covered correctional service andregular Minnesotageneral 38.34 employees state retirementSystemplan service is entitled upon 38.35 application to a retirement annuity under this section, based 38.36 only on covered correctional employees' service. Application 39.1 may be made no earlier than 60 days before the date the employee 39.2 is eligible to retire by reason of both age and service 39.3 requirements. 39.4In this section, "average salary" means the average of the39.5monthly salary during the employee's highest five successive39.6years of salary as an employee covered by the Minnesota State39.7Retirement System. Average salary must be based upon all39.8allowable service if this service is less than five years.39.9 Sec. 6. Minnesota Statutes 2004, section 352C.021, is 39.10 amended by adding a subdivision to read: 39.11 Subd. 1a. [AVERAGE SALARY.] "Average salary," for purposes 39.12 of calculating the normal retirement annuity under section 39.13 352C.031, subdivision 4, means the average of the highest five 39.14 successive years of salary upon which contributions have been 39.15 made under section 352C.09. 39.16 Sec. 7. Minnesota Statutes 2004, section 353.01, 39.17 subdivision 10, is amended to read: 39.18 Subd. 10. [SALARY.] (a) "Salary" means: 39.19 (1) the periodic compensation of a public employee, before 39.20 deductions for deferred compensation, supplemental retirement 39.21 plans, or other voluntary salary reduction programs, and also 39.22 means "wages" and includes net income from fees; 39.23 (2) for a public employee who is covered by a supplemental 39.24 retirement plan under section 356.24, subdivision 1, clause (8), 39.25 (9), or (10), which require all plan contributions be made by 39.26 the employer, the contribution to the applicable supplemental 39.27 retirement plan when the contribution is from mandatory 39.28 withholdings from employees' wages; and 39.29(2)(3) for a public employee who has prior service covered 39.30 by a local police or firefighters relief association that has 39.31 consolidated with the Public Employees Retirement Association or 39.32 to which section 353.665 applies and who has elected coverage 39.33 either under the public employees police and fire fund benefit 39.34 plan under section 353A.08 following the consolidation or under 39.35 section 353.665, subdivision 4, the rate of salary upon which 39.36 member contributions to the special fund of the relief 40.1 association were made prior to the effective date of the 40.2 consolidation as specified by law and by bylaw provisions 40.3 governing the relief association on the date of the initiation 40.4 of the consolidation procedure and the actual periodic 40.5 compensation of the public employee after the effective date of 40.6 consolidation. 40.7 (b) Salary does not mean: 40.8 (1) the fees paid to district court reporters, unused 40.9 annual vacation or sick leave payments, in lump-sum or periodic 40.10 payments, severance payments, reimbursement of expenses, 40.11 lump-sum settlements not attached to a specific earnings period, 40.12 or workers' compensation payments; 40.13 (2) employer-paid amounts used by an employee toward the 40.14 cost of insurance coverage, employer-paid fringe benefits, 40.15 flexible spending accounts, cafeteria plans, health care expense 40.16 accounts, day care expenses, or any payments in lieu of any 40.17 employer-paid group insurance coverage, including the difference 40.18 between single and family rates that may be paid to a member 40.19 with single coverage and certain amounts determined by the 40.20 executive director to be ineligible; 40.21 (3) the amount equal to that which the employing 40.22 governmental subdivision would otherwise pay toward single or 40.23 family insurance coverage for a covered employee when, through a 40.24 contract or agreement with some but not all employees, the 40.25 employer: 40.26 (i) discontinues, or for new hires does not provide, 40.27 payment toward the cost of the employee's selected insurance 40.28 coverages under a group plan offered by the employer; 40.29 (ii) makes the employee solely responsible for all 40.30 contributions toward the cost of the employee's selected 40.31 insurance coverages under a group plan offered by the employer, 40.32 including any amount the employer makes toward other employees' 40.33 selected insurance coverages under a group plan offered by the 40.34 employer; and 40.35 (iii) provides increased salary rates for employees who do 40.36 not have any employer-paid group insurance coverages; 41.1 (4) except as provided in section 353.86 or 353.87, 41.2 compensation of any kind paid to volunteer ambulance service 41.3 personnel or volunteer firefighters, as defined in subdivision 41.4 35 or 36; and 41.5 (5) the amount of compensation that exceeds the limitation 41.6 provided in section 356.611. 41.7 (c) Amounts provided to an employee by the employer through 41.8 a grievance proceeding or a legal settlement are salary only if 41.9 the settlement is reviewed by the executive director and the 41.10 amounts are determined by the executive director to be 41.11 consistent with paragraph (a) and prior determinations. 41.12 Sec. 8. Minnesota Statutes 2004, section 353.01, is 41.13 amended by adding a subdivision to read: 41.14 Subd. 17a. [AVERAGE SALARY.] (a) "Average salary," for 41.15 purposes of calculating a retirement annuity under section 41.16 353.29, subdivision 3, means an amount equivalent to the average 41.17 of the highest salary of the member, police officer, or 41.18 firefighter, whichever applies, upon which employee 41.19 contributions were paid for any five successive years of 41.20 allowable service, based on dates of salary periods as listed on 41.21 salary deduction reports. Average salary must be based upon all 41.22 allowable service if this service is less than five years. 41.23 (b) "Average salary" may not include any reduced salary 41.24 paid during a period in which the employee is entitled to 41.25 benefit payments from workers' compensation for temporary 41.26 disability, unless the average salary is higher, including this 41.27 period. 41.28 Sec. 9. Minnesota Statutes 2004, section 353.29, 41.29 subdivision 3, is amended to read: 41.30 Subd. 3. [RETIREMENT ANNUITY FORMULA.] (a) This paragraph, 41.31 in conjunction with section 353.30, subdivisions 1, 1a, 1b, and 41.32 1c, applies to any member who first became a public employee or 41.33 a member of a pension fund listed in section 356.30, subdivision 41.34 3, before July 1, 1989, unless paragraph (b), in conjunction 41.35 with section 353.30, subdivision 5, produces a higher annuity 41.36 amount, in which case paragraph (b) will apply. The average 42.1 salary as defined in section 353.01, subdivision217a, 42.2 multiplied by the percent specified in section 356.315, 42.3 subdivision 3, for each year of allowable service for the first 42.4 ten years and thereafter by the percent specified in section 42.5 356.315, subdivision 4, per year of allowable service and 42.6 completed months less than a full year for the "basic member," 42.7 and the percent specified in section 356.315, subdivision 1, for 42.8 each year of allowable service for the first ten years and 42.9 thereafter by the percent specified in section 356.315, 42.10 subdivision 2, per year of allowable service and completed 42.11 months less than a full year for the "coordinated member," shall 42.12 determine the amount of the "normal" retirement annuity. 42.13 (b) This paragraph applies to a member who has become at 42.14 least 55 years old and first became a public employee after June 42.15 30, 1989, and to any other member whose annuity amount, when 42.16 calculated under this paragraph and in conjunction with section 42.17 353.30, subdivision 5, is higher than it is when calculated 42.18 under paragraph (a), in conjunction with section 353.30, 42.19 subdivisions 1, 1a, 1b, and 1c. The average salary, as defined 42.20 in section 353.01, subdivision217a, multiplied by the percent 42.21 specified in section 356.315, subdivision 4, for each year of 42.22 allowable service and completed months less than a full year for 42.23 a basic member and the percent specified in section 356.315, 42.24 subdivision 2, per year of allowable service and completed 42.25 months less than a full year for a coordinated member, shall 42.26 determine the amount of the normal retirement annuity. 42.27 Sec. 10. Minnesota Statutes 2004, section 353.33, 42.28 subdivision 3, is amended to read: 42.29 Subd. 3. [COMPUTATION OF BENEFITS.] This disability 42.30 benefit is an amount equal to the normal annuity payable to a 42.31 member who has reached normal retirement age with the same 42.32 number of years of allowable service and the same average 42.33 salary, as provided in section 353.01, subdivision 17a, and 42.34 section 353.29,subdivisions 2 andsubdivision 3. 42.35 A basic member shall receive a supplementary monthly 42.36 benefit of $25 to age 65 or the five-year anniversary of the 43.1 effective date of the disability benefit, whichever is later. 43.2 If the disability benefits under this subdivision exceed 43.3 the average salary as defined in section353.29353.01, 43.4 subdivision217a, the disability benefits must be reduced to an 43.5 amount equal tosaidthe average salary. 43.6 Sec. 11. Minnesota Statutes 2004, section 353.651, 43.7 subdivision 3, is amended to read: 43.8 Subd. 3. [RETIREMENT ANNUITY FORMULA.] The average salary 43.9 as defined in section 353.01, subdivision217a, multiplied by 43.10 the percent specified in section 356.315, subdivision 6, per 43.11 year of allowable service determines the amount of the normal 43.12 retirement annuity. If the member has earned allowable service 43.13 for performing services other than those of a police officer or 43.14 firefighter, the annuity representingsuchthat serviceismust 43.15 be computed under sections 353.29 and 353.30. 43.16 Sec. 12. Minnesota Statutes 2004, section 353.656, 43.17 subdivision 1, is amended to read: 43.18 Subdivision 1. [IN LINE OF DUTY; COMPUTATION OF BENEFITS.] 43.19 A member of the police and fire plan who becomes disabled and 43.20 physically unfit to perform duties as a police officer, 43.21 firefighter, or paramedic as defined under section 353.64, 43.22 subdivision 10, as a direct result of an injury, sickness, or 43.23 other disability incurred in or arising out of any act of duty, 43.24 which has or is expected to render the member physically or 43.25 mentally unable to perform the duties as a police officer, 43.26 firefighter, or paramedic as defined under section 353.64, 43.27 subdivision 10, for a period of at least one year, shall receive 43.28 disability benefits during the period of such disability. The 43.29 benefits must be in an amount equal to 60 percent of the 43.30 "average salary" as defined in section353.651353.01, 43.31 subdivision217a, plus an additional percent specified in 43.32 section 356.315, subdivision 6, of that average salary for each 43.33 year of service in excess of 20 years. If the disability under 43.34 this subdivision occurs before the member has at least five 43.35 years of allowable service credit in the police and fire plan, 43.36 the disability benefit must be computed on the "average salary" 44.1 from which deductions were made for contribution to the police 44.2 and fire fund. 44.3 Sec. 13. Minnesota Statutes 2004, section 354.05, is 44.4 amended by adding a subdivision to read: 44.5 Subd. 13a. [AVERAGE SALARY.] (a) "Average salary," for the 44.6 purpose of determining the member's retirement annuity, means 44.7 the average salary upon which contributions were made for the 44.8 highest five successive years of formula service credit. 44.9 (b) "Average salary" may not include any more than the 44.10 equivalent of 60 monthly salary payments. 44.11 (c) "Average salary" must be based upon all years of 44.12 formula service credit if this service credit is less than five 44.13 years. 44.14 Sec. 14. Minnesota Statutes 2004, section 354.44, 44.15 subdivision 6, is amended to read: 44.16 Subd. 6. [COMPUTATION OF FORMULA PROGRAM RETIREMENT 44.17 ANNUITY.] (a) The formula retirement annuity must be computed in 44.18 accordance with the applicable provisions of the formulas stated 44.19 in paragraph (b) or (d) on the basis of each member's average 44.20 salary under section 354.05, subdivision 13a, for the period of 44.21 the member's formula service credit. 44.22For all years of formula service credit, "average salary,"44.23for the purpose of determining the member's retirement annuity,44.24means the average salary upon which contributions were made and44.25upon which payments were made to increase the salary limitation44.26provided in Minnesota Statutes 1971, section 354.511, for the44.27highest five successive years of formula service credit44.28provided, however, that such "average salary" shall not include44.29any more than the equivalent of 60 monthly salary payments.44.30Average salary must be based upon all years of formula service44.31credit if this service credit is less than five years.44.32 (b) This paragraph, in conjunction with paragraph (c), 44.33 applies to a person who first became a member of the association 44.34 or a member of a pension fund listed in section 356.30, 44.35 subdivision 3, before July 1, 1989, unless paragraph (d), in 44.36 conjunction with paragraph (e), produces a higher annuity 45.1 amount, in which case paragraph (d) applies. The average salary 45.2 as defined inparagraph (a)section 354.05, subdivision 13a, 45.3 multiplied by the following percentages per year of formula 45.4 service credit shall determine the amount of the annuity to 45.5 which the member qualifying therefor is entitled: 45.6 Coordinated Member Basic Member 45.7 Each year of service the percent the percent 45.8 during first ten specified in specified in 45.9 section 356.315, section 356.315, 45.10 subdivision 1, subdivision 3, 45.11 per year per year 45.12 Each year of service the percent the percent 45.13 thereafter specified in specified in 45.14 section 356.315, section 356.315, 45.15 subdivision 2, subdivision 4, 45.16 per year per year 45.17 (c)(i) This paragraph applies only to a person who first 45.18 became a member of the association or a member of a pension fund 45.19 listed in section 356.30, subdivision 3, before July 1, 1989, 45.20 and whose annuity is higher when calculated under paragraph (b), 45.21 in conjunction with this paragraph than when calculated under 45.22 paragraph (d), in conjunction with paragraph (e). 45.23 (ii) Where any member retires prior to normal retirement 45.24 age under a formula annuity, the member shall be paid a 45.25 retirement annuity in an amount equal to the normal annuity 45.26 provided in paragraph (b) reduced by one-quarter of one percent 45.27 for each month that the member is under normal retirement age at 45.28 the time of retirement except that for any member who has 30 or 45.29 more years of allowable service credit, the reduction shall be 45.30 applied only for each month that the member is under age 62. 45.31 (iii) Any member whose attained age plus credited allowable 45.32 service totals 90 years is entitled, upon application, to a 45.33 retirement annuity in an amount equal to the normal annuity 45.34 provided in paragraph (b), without any reduction by reason of 45.35 early retirement. 45.36 (d) This paragraph applies to a member who has become at 46.1 least 55 years old and first became a member of the association 46.2 after June 30, 1989, and to any other member who has become at 46.3 least 55 years old and whose annuity amount when calculated 46.4 under this paragraph and in conjunction with paragraph (e), is 46.5 higher than it is when calculated under paragraph (b), in 46.6 conjunction with paragraph (c). The average salary, as defined 46.7 inparagraph (a)section 354.05, subdivision 13a, multiplied by 46.8 the percent specified by section 356.315, subdivision 4, for 46.9 each year of service for a basic member and by the percent 46.10 specified in section 356.315, subdivision 2, for each year of 46.11 service for a coordinated member shall determine the amount of 46.12 the retirement annuity to which the member is entitled. 46.13 (e) This paragraph applies to a person who has become at 46.14 least 55 years old and first becomes a member of the association 46.15 after June 30, 1989, and to any other member who has become at 46.16 least 55 years old and whose annuity is higher when calculated 46.17 under paragraph (d) in conjunction with this paragraph than when 46.18 calculated under paragraph (b), in conjunction with paragraph 46.19 (c). An employee who retires under the formula annuity before 46.20 the normal retirement age shall be paid the normal annuity 46.21 provided in paragraph (d) reduced so that the reduced annuity is 46.22 the actuarial equivalent of the annuity that would be payable to 46.23 the employee if the employee deferred receipt of the annuity and 46.24 the annuity amount were augmented at an annual rate of three 46.25 percent compounded annually from the day the annuity begins to 46.26 accrue until the normal retirement age. 46.27 (f) No retirement annuity is payable to a former employee 46.28 with a salary that exceeds 95 percent of the governor's salary 46.29 unless and until the salary figures used in computing the 46.30 highest five successive years average salary under paragraph (a) 46.31 have been audited by the Teachers Retirement Association and 46.32 determined by the executive director to comply with the 46.33 requirements and limitations of section 354.05, subdivisions 35 46.34 and 35a. 46.35 Sec. 15. Minnesota Statutes 2004, section 354A.011, is 46.36 amended by adding a subdivision to read: 47.1 Subd. 7a. [AVERAGE SALARY.] "Average salary," for purposes 47.2 of computing a normal coordinated program retirement annuity 47.3 under section 354A.31, subdivision 4 or 4a, means an amount 47.4 equal to the average salary upon which contributions were made 47.5 for the highest five successive years of service credit but may 47.6 not in any event include any more than the equivalent of 60 47.7 monthly salary payments. Average salary must be based upon all 47.8 years of service credit if this service credit is less than five 47.9 years. 47.10 Sec. 16. Minnesota Statutes 2004, section 354A.31, 47.11 subdivision 4, is amended to read: 47.12 Subd. 4. [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT 47.13 ANNUITY; MINNEAPOLIS AND ST. PAUL FUNDS.] (a) This subdivision 47.14 applies to the coordinated programs of the Minneapolis Teachers 47.15 Retirement Fund Association and the St. Paul Teachers Retirement 47.16 Fund Association. 47.17 (b) The normal coordinated retirement annuityshall beis 47.18 an amount equal to a retiring coordinated member's average 47.19 salary under section 354A.011, subdivision 7a, multiplied by the 47.20 retirement annuity formula percentage.Average salary for47.21purposes of this section shall mean an amount equal to the47.22average salary upon which contributions were made for the47.23highest five successive years of service credit, but which shall47.24not in any event include any more than the equivalent of 6047.25monthly salary payments. Average salary must be based upon all47.26years of service credit if this service credit is less than five47.27years.47.28 (c) This paragraph, in conjunction with subdivision 6, 47.29 applies to a person who first became a member or a member in a 47.30 pension fund listed in section 356.30, subdivision 3, before 47.31 July 1, 1989, unless paragraph (d), in conjunction with 47.32 subdivision 7, produces a higher annuity amount, in which case 47.33 paragraph (d) will apply. The retirement annuity formula 47.34 percentage for purposes of this paragraph is the percent 47.35 specified in section 356.315, subdivision 1, per year for each 47.36 year of coordinated service for the first ten years and the 48.1 percent specified in section 356.315, subdivision 2, for each 48.2 year of coordinated service thereafter. 48.3 (d) This paragraph applies to a person who has become at 48.4 least 55 years old and who first becomes a member after June 30, 48.5 1989, and to any other member who has become at least 55 years 48.6 old and whose annuity amount, when calculated under this 48.7 paragraph and in conjunction with subdivision 7 is higher than 48.8 it is when calculated under paragraph (c), in conjunction with 48.9 the provisions of subdivision 6. The retirement annuity formula 48.10 percentage for purposes of this paragraph is the percent 48.11 specified in section 356.315, subdivision 2, for each year of 48.12 coordinated service. 48.13 Sec. 17. Minnesota Statutes 2004, section 354A.31, 48.14 subdivision 4a, is amended to read: 48.15 Subd. 4a. [COMPUTATION OF THE NORMAL COORDINATED 48.16 RETIREMENT ANNUITY; DULUTH FUND.] (a) This subdivision applies 48.17 to the new law coordinated program of the Duluth Teachers 48.18 Retirement Fund Association. 48.19 (b) The normal coordinated retirement annuity is an amount 48.20 equal to a retiring coordinated member's average salary under 48.21 section 354A.011, subdivision 7a, multiplied by the retirement 48.22 annuity formula percentage.Average salary for purposes of this48.23section means an amount equal to the average salary upon which48.24contributions were made for the highest five successive years of48.25service credit, but may not in any event include any more than48.26the equivalent of 60 monthly salary payments. Average salary48.27must be based upon all years of service credit if this service48.28credit is less than five years.48.29 (c) This paragraph, in conjunction with subdivision 6, 48.30 applies to a person who first became a member or a member in a 48.31 pension fund listed in section 356.30, subdivision 3, before 48.32 July 1, 1989, unless paragraph (d), in conjunction with 48.33 subdivision 7, produces a higher annuity amount, in which case 48.34 paragraph (d) applies. The retirement annuity formula 48.35 percentage for purposes of this paragraph is the percent 48.36 specified in section 356.315, subdivision 1, per year for each 49.1 year of coordinated service for the first ten years and the 49.2 percent specified in section 356.315, subdivision 2, for each 49.3 subsequent year of coordinated service. 49.4 (d) This paragraph applies to a person who is at least 55 49.5 years old and who first becomes a member after June 30, 1989, 49.6 and to any other member who is at least 55 years old and whose 49.7 annuity amount, when calculated under this paragraph and in 49.8 conjunction with subdivision 7, is higher than it is when 49.9 calculated under paragraph (c) in conjunction with subdivision 49.10 6. The retirement annuity formula percentage for purposes of 49.11 this paragraph is the percent specified in section 356.315, 49.12 subdivision 2, for each year of coordinated service. 49.13 Sec. 18. Minnesota Statutes 2004, section 422A.01, is 49.14 amended by adding a subdivision to read: 49.15 Subd. 4a. [AVERAGE SALARY.] (a) "Average salary" means the 49.16 arithmetic average annual salary, wages, or compensation of the 49.17 member from the city for any five calendar years out of the last 49.18 ten calendar years of service, except as provided for in section 49.19 422A.16, which may include the year in which the employee 49.20 retires, as selected by the employee. 49.21 (b) A member with more than five calendar years of service 49.22 but less than ten calendar years may select any five calendar 49.23 years of service to determine the average salary. A member with 49.24 less than five years of service with the city shall use all 49.25 earnings to determine the average salary. 49.26 Sec. 19. Minnesota Statutes 2004, section 422A.15, 49.27 subdivision 1, is amended to read: 49.28 Subdivision 1. [FORMULA PENSION AND ANNUITY.] Except as 49.29 otherwise provided in subdivision 3, each contributing member 49.30 who, at the time of retirement, fulfills the conditions 49.31 necessary to enable the member to retire, shallis entitled to 49.32 receivewhat shall be known asa "formula pension and annuity" 49.33 equal to two percent for each year of allowable service for the 49.34 first ten years and thereafter 2.5 percent per year of allowable 49.35 service of thearithmeticaverageannualsalary, wages or49.36compensation of the member from the city for any five calendar50.1years out of the last ten calendar years of service except as50.2provided for in section 422A.16, which may include the year in50.3which the employee retires, as selected by the employee, 50.4 multiplied by the years of service credited by the retirement 50.5 fund. The formula pension and annuityshallmust be computed on 50.6 the single life plan but subject to the option selections 50.7 provided for in section 422A.17. 50.8 In order to be entitled to the formula pension and annuity 50.9 herein provided for, the retiring employee at the time of 50.10 cessation of employment and of actual retirementshallmust have 50.11 attained the age of 60 years or have been employed by the city 50.12 not less than 30 years, or meet the qualifications provided for 50.13 in section 422A.16, and in addition thereto have contributed to 50.14 the retirement fund at the percentage rate prescribed by the 50.15 retirement law applicable when the salary, wages or compensation 50.16 was paid on all salaries, wages, or compensation received from 50.17 the city or from an applicable employing unit. The years of 50.18 service to be applied in the formula pension and annuityshall50.19 must be found and determined by the retirement board, except 50.20 that no creditshallmay be allowed for any year in which a back 50.21 charge is owing at time of retirement and the earnings from any 50.22 year in which a back charge is owingshallmay not be used in 50.23 determining the averageannualsalary. 50.24 Sec. 20. Minnesota Statutes 2004, section 422A.16, 50.25 subdivision 9, is amended to read: 50.26 Subd. 9. [INCOMPETENCY OR DEATH OF MEMBER.] Any member of 50.27 the contributing class who becomes permanently separated from 50.28 the service of the city under subdivision 8, may, by an 50.29 instrument in writing, filed with the municipal employees 50.30 retirement board within 30 days aftersuchthe separation 50.31 becomes permanent, elect to allow the member contributions 50.32 tosuchthe fund to the date of separation to remain on deposit 50.33 insuchthe fund, and insuchthe event the membershall be50.34 is entitled to receive a retirement allowance at age 65, 50.35 provided the member, or someone acting in the member's behalf if 50.36 the member be incompetent,shallmust make a written application 51.1 forsuchthe retirement allowance in the same manner provided 51.2 for in section 422A.17 and in accordance with the provisions of 51.3 section 422A.15, subdivision 1, except for determining 51.4 averageannualsalary.A member with more than five calendar51.5years of service but less than ten calendar years may select any51.6five calendar years of service to determine the average annual51.7salary. A member with less than five years of service with the51.8city shall use all earnings to determine the average annual51.9salary.51.10 If the contributing member dies before reaching the age of 51.11 65 years, or having attained the age of 65 years without having 51.12 made the election provided for herein, the net accumulated 51.13 amount of deductions from the member's salary, pay or 51.14 compensation, plus interest, to the member's credit on date of 51.15 deathshall be paidis payable tosuchthe person or persons as 51.16 have been nominated by written designation filed with the 51.17 retirement board, insuchthe formasthat the retirement board 51.18shall requirerequires. 51.19 If the employee fails to make a designation, or if the 51.20 person or persons designated bysuchthe employee predeceases 51.21suchthe employee, the net accumulated credit tosuchthe 51.22 employee's account on date of deathshall be paidis payable to 51.23suchthe employee's estate. 51.24 The provisions of subdivisions 4, 5, and 6shallalso apply 51.25 to any member qualifying for benefits under this subdivision, 51.26 except for purposes of this subdivision the age referred to in 51.27 subdivision 4shall beis 65 years. 51.28 Sec. 21. Minnesota Statutes 2004, section 490.121, 51.29 subdivision 21, is amended to read: 51.30 Subd. 21. [FINAL AVERAGE COMPENSATION.] "Final average 51.31 compensation" means the total amount of salarypayablepaid to a 51.32 judge in the highest five years out of the last ten yearsprior51.33tobefore theevent of maturity of benefitstermination of 51.34 judicial service, divided by five; provided, however, thatif 51.35 the number of years of service by the judge equals or exceeds 51.36 ten. If the number of years of service by the judge is less 52.1 than ten, but more than five, the highest fiveshallyears of 52.2 salary must be counted, and. If the number of years of service 52.3 by the judge is less than five, the aggregate salaryin suchfor 52.4 the periodshallof service must be divided by the number of 52.5 months insuchthe period and multiplied by 12. 52.6 Sec. 22. [REPEALER.] 52.7 Minnesota Statutes 2004, sections 352C.031, subdivision 3; 52.8 353.29, subdivision 2; and 353.651, subdivision 2, are repealed. 52.9 Sec. 23. [EFFECTIVE DATE.] 52.10 Sections 1 to 22 are effective July 1, 2005. 52.11 ARTICLE 3 52.12 ALLOWABLE SERVICE CREDIT 52.13 Section 1. [356.195] [SERVICE CREDIT PURCHASE PROCEDURES 52.14 FOR STRIKE PERIODS.] 52.15 Subdivision 1. [COVERED PLANS.] This section applies to 52.16 all defined benefit plans specified in section 356.30, 52.17 subdivision 3. 52.18 Subd. 2. [PURCHASE PROCEDURE FOR STRIKE PERIODS.] (a) An 52.19 employee covered by a plan specified in subdivision 1 may 52.20 purchase allowable service credit in the applicable plan for any 52.21 period of time during which the employee was on a public 52.22 employee strike without pay, not to exceed a period of one year, 52.23 if the employee makes a payment in lieu of salary deductions as 52.24 specified in paragraphs (b) and (c), whichever is applicable. 52.25 The employing unit, at its option, may pay the employer portion 52.26 of the amount specified in paragraph (b) on behalf of its 52.27 employees. 52.28 (b) If payment is received by the applicable pension plan 52.29 executive director within one year from the end of the strike, 52.30 the payment amount is equal to the applicable employee and 52.31 employer contribution rates specified in law for the applicable 52.32 plan during the strike period, applied to the employee's rate of 52.33 salary in effect at the conclusion of the strike for the period 52.34 of the strike without pay, plus compound interest at a monthly 52.35 rate of 0.71 percent from the last day of the strike period 52.36 until the date payment is received. 53.1 (c) If payment is received by the applicable pension fund 53.2 director after one year and before five years from the end of 53.3 the strike, the payment amount is the amount determined under 53.4 section 356.551. 53.5 (d) Payments may not be made more than five years after the 53.6 end of the strike. 53.7 Sec. 2. Minnesota Statutes 2004, section 490.121, 53.8 subdivision 4, is amended to read: 53.9 Subd. 4. [ALLOWABLE SERVICE.] (a) "Allowable service" 53.10 means any calendar month, subject to the service credit limit in 53.11 subdivision 22, served as a judge at any time, or served as a 53.12 referee in probate for all referees in probate who were in 53.13 office prior to January 1, 1974. 53.14 (b) "Allowable service" also means a period of authorized 53.15 leave of absence for which the judge has made a payment in lieu 53.16 of contributions, not in an amount in excess of the service 53.17 credit limit under subdivision 22. To obtain the service 53.18 credit, the judge shall pay an amount equal to the member and 53.19 employer contribution rates under section 490.123, subdivisions 53.20 1a and 1b, applied to the judge's average monthly salary rate 53.21 during the authorized leave of absence and multiplied by the 53.22 number of months of the authorized leave of absence, plus annual 53.23 compound interest at the rate of 8.5 percent from the date of 53.24 the termination of the leave to the date on which payment is 53.25 made. The payment must be made within one year of the date on 53.26 which the authorized leave of absence terminated. Service 53.27 credit for an authorized leave of absence is in addition to a 53.28 uniformed service leave under section 490.1211. 53.29 Sec. 3. Laws 1999, chapter 222, article 16, section 16, as 53.30 amended by Laws 2002, chapter 392, article 7, section 1, and 53.31 Laws 2003, First Special Session chapter 12, article 6, section 53.32 2, and Laws 2004, chapter 267, article 17, section 6, is amended 53.33 to read: 53.34 Sec. 16. [REPEALER.] 53.35 (a) Sections 2 to 6 and 8 to 13 are repealed on May 16, 53.36 2004. 54.1 (b) Sections 1 and 7 are repealed on May 16,20062007. 54.2 Sec. 4. Laws 2000, chapter 461, article 4, section 4, as 54.3 amended by Laws 2003, First Special Session chapter 12, article 54.4 6, section 3, and Laws 2004, chapter 267, article 17, section 7, 54.5 is amended to read: 54.6 Sec. 4. [EFFECTIVE DATE; SUNSET REPEALER.] 54.7 (a) Sections 1, 2, and 3 are effectiveonthe day following 54.8 final enactment. 54.9 (b) Sections 1, 2, and 3, are repealed on May 16,20062007. 54.10 Sec. 5. [METRO TRANSIT STRIKE PROVISION.] 54.11 Notwithstanding the payment deadline specified in Minnesota 54.12 Statutes, section 356.195, subdivision 2, paragraph (b), a Metro 54.13 Transit employee covered by the general state employees 54.14 retirement plan of the Minnesota State Retirement System who was 54.15 on strike on or after January 1, 2004, and before the effective 54.16 date of this section, is authorized to make a payment under that 54.17 paragraph on or before one year after the effective date of this 54.18 section. 54.19 Sec. 6. [CROSBY-IRONTON PUBLIC SCHOOL STRIKE PROVISION.] 54.20 Notwithstanding the payment deadline specified in Minnesota 54.21 Statutes, section 356.195, subdivision 2, paragraph (b), a 54.22 Crosby-Ironton public school teacher covered by the Teachers 54.23 Retirement Association who was on strike during a period that 54.24 included April 1, 2005, and before the effective date of this 54.25 section, is authorized to make a payment under that paragraph on 54.26 or before one year after the effective date of this section. 54.27 Sec. 7. [EFFECTIVE DATE.] 54.28 (a) Sections 1, 3, 4, 5, and 6 are effective the day 54.29 following final enactment. 54.30 (b) Section 2 is effective retroactively from January 1, 54.31 2005, and applies to any person who was in active service as a 54.32 judge on or after that date and applies to an authorized leave 54.33 of absence that occurred before or after that date. For a 54.34 person for whom section 2 is retroactive, the equivalent 54.35 contribution payment must be made on or before July 1, 2006. 54.36 ARTICLE 4 55.1 ACTUARIAL AND FINANCIAL 55.2 REPORTING CHANGES 55.3 Section 1. Minnesota Statutes 2004, section 352.01, 55.4 subdivision 12, is amended to read: 55.5 Subd. 12. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 55.6 means the condition of one annuity or benefit having an equal 55.7 actuarial present value as another annuity or benefit, 55.8 determined as of a given date at a specified age with each 55.9 actuarial present value based on the appropriate mortality table 55.10 adopted by the board of directors based on the experience of the 55.11 fund as recommended by the actuary retainedby the Legislative55.12Commission on Pensions and Retirementunder section 356.214, and 55.13 approved under section 356.215, subdivision 18, and using the 55.14 applicable preretirement or postretirement interest rate 55.15 assumption specified in section 356.215, subdivision 8. 55.16 Sec. 2. Minnesota Statutes 2004, section 353.01, 55.17 subdivision 14, is amended to read: 55.18 Subd. 14. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 55.19 means the condition of one annuity or benefit having an equal 55.20 actuarial present value as another annuity or benefit, 55.21 determined as of a given date with each actuarial present value 55.22 based on the appropriate mortality table adopted by the board of 55.23 trustees based on the experience of the fund as recommended by 55.24 the actuary retainedby the Legislative Commission on Pensions55.25and Retirementunder section 356.214, and approved under section 55.26 356.215, subdivision 18, and using the applicable preretirement 55.27 or postretirement interest rate assumption specified in section 55.28 356.215, subdivision 8. 55.29 Sec. 3. Minnesota Statutes 2004, section 354.05, 55.30 subdivision 7, is amended to read: 55.31 Subd. 7. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 55.32 means the condition of one annuity or benefit having an equal 55.33 actuarial present value as another annuity or benefit, 55.34 determined as of a given date with each actuarial present value 55.35 based on the appropriate mortality table adopted by the board of 55.36 trustees based on the experience of the association as 56.1 recommended by the actuary retainedby the Legislative56.2Commission on Pensions and Retirementunder section 356.214, and 56.3 approved under section 356.215, subdivision 18, and using the 56.4 applicable preretirement or postretirement interest rate 56.5 assumption specified in section 356.215, subdivision 8. 56.6 Sec. 4. Minnesota Statutes 2004, section 354A.011, 56.7 subdivision 3a, is amended to read: 56.8 Subd. 3a. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 56.9 means the condition of one annuity or benefit having an equal 56.10 actuarial present value as another annuity or benefit, 56.11 determined as of a given date with each actuarial present value 56.12 based on the appropriate mortality table adopted by the 56.13 appropriate board of trustees based on the experience of that 56.14 retirement fund association as recommended by the actuary 56.15 retainedby the Legislative Commission on Pensions and56.16Retirementunder section 356.214, and approved under section 56.17 356.215, subdivision 18, and using the applicable preretirement 56.18 or postretirement interest rate assumption specified in section 56.19 356.215, subdivision 8. 56.20 Sec. 5. Minnesota Statutes 2004, section 356.20, 56.21 subdivision 4, is amended to read: 56.22 Subd. 4. [CONTENTS OF FINANCIAL REPORT.] (a) The financial 56.23 report required by this section must contain financial 56.24 statements and disclosures that indicate the financial 56.25 operations and position of the retirement plan and fund. The 56.26 report must conform with generally accepted governmental 56.27 accounting principles, applied on a consistent basis. The 56.28 report must be audited. The report must include, as part of its 56.29 exhibits or its footnotes, an actuarial disclosure item based on 56.30 the actuarial valuation calculations prepared by the 56.31commission-retainedactuary retained under section 356.214 or by 56.32 the actuary retained by the retirement fund or plan,if56.33applicablewhichever applies, according to applicable actuarial 56.34 requirements enumerated in section 356.215, and specified in the 56.35 most recent standards for actuarial work adopted by the 56.36 Legislative Commission on Pensions and Retirement. The accrued 57.1 assets, the accrued liabilities, including accrued reserves, and 57.2 the unfunded actuarial accrued liability of the fund or plan 57.3 must be disclosed. The disclosure item must contain a 57.4 declaration by the actuary retainedby the Legislative57.5Commission on Pensions and Retirementunder section 356.214 or 57.6 the actuary retained by the fund or plan, whichever applies, 57.7 specifying that the required reserves for any retirement, 57.8 disability, or survivor benefits provided under a benefit 57.9 formula are computed in accordance with the entry age actuarial 57.10 cost method and in accordance with the most recent applicable 57.11 standards for actuarial work adopted by the Legislative 57.12 Commission on Pensions and Retirement. 57.13 (b) Assets of the fund or plan contained in the disclosure 57.14 item must include the following statement of the actuarial value 57.15 of current assets as defined in section 356.215, subdivision 1: 57.16 Value Value 57.17 at cost at market 57.18 Cash, cash equivalents, and 57.19 short-term securities ......... ......... 57.20 Accounts receivable ......... ......... 57.21 Accrued investment income ......... ......... 57.22 Fixed income investments ......... ......... 57.23 Equity investments other 57.24 than real estate ......... ......... 57.25 Real estate investments ......... ......... 57.26 Equipment ......... ......... 57.27EquityParticipation in the Minnesota 57.28 postretirement investment 57.29 fund or the retirement 57.30 benefit fund ......... ......... 57.31 Other ......... ......... 57.32 57.33 Total assets 57.34 Value at cost ......... 57.35 Value at market ......... 57.36 Actuarial value of current assets ......... 58.1 (c) The unfunded actuarial accrued liability of the fund or 58.2 plan contained in the disclosure item must include the following 58.3 measures of unfunded actuarial accrued liability, using 58.4 the actuarial value of current assets: 58.5 (1) the unfunded actuarial accrued liability, determined by 58.6 subtracting the current assets and the present value of future 58.7 normal costs from the total current and expected future benefit 58.8 obligations; and 58.9 (2) the unfunded pension benefit obligation, determined by 58.10 subtracting the current assets from the actuarial present value 58.11 of credited projected benefits. 58.12 If the current assets of the fund or plan exceed the 58.13 actuarial accrued liabilities, the excess must be disclosed and 58.14 indicated as a surplus. 58.15 (d) The pension benefit obligations schedule included in 58.16 the disclosure must contain the following information on the 58.17 benefit obligations: 58.18 (1) the pension benefit obligation, determined as the 58.19 actuarial present value of credited projected benefits on 58.20 account of service rendered to date, separately identified as 58.21 follows: 58.22 (i) for annuitants; 58.23 retirement annuities; 58.24 disability benefits; 58.25 surviving spouse and child benefits; 58.26 (ii) for former members without vested rights; 58.27 (iii) for deferred annuitants' benefits, including 58.28 any augmentation; 58.29 (iv) for active employees; 58.30 accumulated employee contributions, 58.31 including allocated investment income; 58.32 employer-financed benefits vested; 58.33 employer-financed benefits nonvested; 58.34 total pension benefit obligation; and 58.35 (2) if there are additional benefits not appropriately 58.36 covered by the foregoing items of benefit obligations, a 59.1 separate identification of the obligation. 59.2 (e) The report must contain an itemized exhibit describing 59.3 the administrative expenses of the plan, including, but not 59.4 limited to, the following items, classified on a consistent 59.5 basis from year to year, and with any further meaningful detail: 59.6 (1) personnel expenses; 59.7 (2) communication-related expenses; 59.8 (3) office building and maintenance expenses; 59.9 (4) professional services fees; and 59.10 (5) other expenses. 59.11 (f) The report must contain an itemized exhibit describing 59.12 the investment expenses of the plan, including, but not limited 59.13 to, the following items, classified on a consistent basis from 59.14 year to year, and with any further meaningful detail: 59.15 (1) internal investment-related expenses; and 59.16 (2) external investment-related expenses. 59.17 (g) Any additional statements or exhibits or more detailed 59.18 or subdivided itemization of a disclosure item that will enable 59.19 the management of the fund to portray a true interpretation of 59.20 the fund's financial condition must be included in the 59.21 additional statements or exhibits. 59.22 Sec. 6. Minnesota Statutes 2004, section 422A.01, 59.23 subdivision 6, is amended to read: 59.24 Subd. 6. [PRESENT WORTH OR PRESENT VALUE.] "Present worth" 59.25 or "present value" means that the present amount of money if 59.26 increased at the applicable postretirement or preretirement 59.27 interest rate assumption specified in section 356.215, 59.28 subdivision 8, and based on the mortality table adopted by the 59.29 board of trustees based on the experience of the fund as 59.30 recommended by the actuary retainedby the Legislative59.31Commission on Pensions and Retirementunder section 356.214, and 59.32 approved under section 356.215, subdivision 18, will at 59.33 retirement equal the actuarial accrued liability of the annuity 59.34 already earned. 59.35 Sec. 7. Minnesota Statutes 2004, section 490.121, 59.36 subdivision 20, is amended to read: 60.1 Subd. 20. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 60.2 means the condition of one annuity or benefit having an equal 60.3 actuarial present value as another annuity or benefit, 60.4 determined as of a given date with each actuarial present value 60.5 based on the appropriate mortality table adopted by the board of 60.6trusteesdirectors of the Minnesota State Retirement System 60.7 based on the experience of the fund as recommended by 60.8 thecommission-retainedactuary retained under section 356.214, 60.9 and approved under section 356.215, subdivision 18, and using 60.10 the applicable preretirement or postretirement interest rate 60.11 assumption specified in section 356.215, subdivision 8. 60.12 Sec. 8. [EFFECTIVE DATE.] 60.13 (a) Sections 1 to 4, 6, and 7 are effective on July 1, 2005. 60.14 (b) Section 5 is effective the day following final 60.15 enactment and applies to annual financial reporting occurring on 60.16 or after June 30, 2005. 60.17 ARTICLE 5 60.18 MEMBERSHIP INCLUSIONS 60.19 AND EXCLUSIONS 60.20 Section 1. Minnesota Statutes 2004, section 69.011, is 60.21 amended by adding a subdivision to read: 60.22 Subd. 2c. [INELIGIBILITY OF CERTAIN POLICE OFFICERS.] A 60.23 police officer employed by the University of Minnesota who is 60.24 required by the Board of Regents to be a member of the 60.25 University of Minnesota faculty retirement plan is not eligible 60.26 to be included in any police state aid certification under this 60.27 section. 60.28 Sec. 2. Minnesota Statutes 2004, section 352.01, 60.29 subdivision 2a, is amended to read: 60.30 Subd. 2a. [INCLUDED EMPLOYEES.] (a) "State employee" 60.31 includes: 60.32 (1) employees of the Minnesota Historical Society; 60.33 (2) employees of the State Horticultural Society; 60.34 (3) employees of the Disabled American Veterans, Department 60.35 of Minnesota, Veterans of Foreign Wars, Department of Minnesota, 60.36 if employed before July 1, 1963; 61.1 (4) employees of the Minnesota Crop Improvement 61.2 Association; 61.3 (5) employees of the adjutant general who are paid from 61.4 federal funds and who are not covered by any federal civilian 61.5 employees retirement system; 61.6 (6) employees of the Minnesota State Colleges and 61.7 Universities employed under the university or college activities 61.8 program; 61.9 (7) currently contributing employees covered by the system 61.10 who are temporarily employed by the legislature during a 61.11 legislative session or any currently contributing employee 61.12 employed for any special service as defined in subdivision 2b, 61.13 clause (8); 61.14 (8) employees of the Armory Building Commission; 61.15 (9) employees of the legislature appointed without a limit 61.16 on the duration of their employment and persons employed or 61.17 designated by the legislature or by a legislative committee or 61.18 commission or other competent authority to conduct a special 61.19 inquiry, investigation, examination, or installation; 61.20 (10) trainees who are employed on a full-time established 61.21 training program performing the duties of the classified 61.22 position for which they will be eligible to receive immediate 61.23 appointment at the completion of the training period; 61.24 (11) employees of the Minnesota Safety Council; 61.25 (12) any employees on authorized leave of absence from the 61.26 Transit Operating Division of the former Metropolitan Transit 61.27 Commission who are employed by the labor organization which is 61.28 the exclusive bargaining agent representing employees of the 61.29 Transit Operating Division; 61.30 (13) employees of the Metropolitan Council, Metropolitan 61.31 Parks and Open Space Commission, Metropolitan Sports Facilities 61.32 Commission, Metropolitan Mosquito Control Commission, or 61.33 Metropolitan Radio Board unless excluded or covered by another 61.34 public pension fund or plan under section 473.415, subdivision 61.35 3; 61.36 (14) judges of the Tax Court; 62.1 (15) personnel employed on June 30, 1992, by the University 62.2 of Minnesota in the management, operation, or maintenance of its 62.3 heating plant facilities, whose employment transfers to an 62.4 employer assuming operation of the heating plant facilities, so 62.5 long as the person is employed at the University of Minnesota 62.6 heating plant by that employer or by its successor organization; 62.7and62.8 (16) seasonal help in the classified service employed by 62.9 the Department of Revenue; and 62.10 (17) persons employed by the Department of Commerce as a 62.11 peace officer in the Insurance Fraud Prevention Division under 62.12 section 45.0135 who have attained the mandatory retirement age 62.13 specified in section 43A.34, subdivision 4. 62.14 (b) Employees specified in paragraph (a), clause (15), are 62.15 included employees under paragraph (a) if employer and employee 62.16 contributions are made in a timely manner in the amounts 62.17 required by section 352.04. Employee contributions must be 62.18 deducted from salary. Employer contributions are the sole 62.19 obligation of the employer assuming operation of the University 62.20 of Minnesota heating plant facilities or any successor 62.21 organizations to that employer. 62.22 Sec. 3. Minnesota Statutes 2004, section 352.91, is 62.23 amended by adding a subdivision to read: 62.24 Subd. 4a. [PROCESS FOR EVALUATING AND RECOMMENDING 62.25 POTENTIAL EMPLOYMENT POSITIONS FOR MEMBERSHIP INCLUSION.] (a) 62.26 The Department of Corrections and the Department of Human 62.27 Services must establish a procedure for evaluating periodic 62.28 requests by department employees for qualification for 62.29 recommendation by the commissioner for inclusion of the 62.30 employment position in the correctional facility or human 62.31 services facility in the correctional retirement plan and for 62.32 periodically determining employment positions that no longer 62.33 qualify for continued correctional retirement plan coverage. 62.34 (b) The procedure must provide for an evaluation of the 62.35 extent of the employee's working time spent in direct contact 62.36 with patients or inmates, the extent of the physical hazard that 63.1 the employee is routinely subjected to in the course of 63.2 employment, and the extent of intervention routinely expected of 63.3 the employee in the event of a facility incident. The 63.4 percentage of routine direct contact with inmates or patients 63.5 may not be less than 75 percent. 63.6 (c) The applicable commissioner shall notify the employee 63.7 of the determination of the appropriateness of recommending the 63.8 employment position for inclusion in the correctional retirement 63.9 plan, if the evaluation procedure results in a finding that the 63.10 employee: 63.11 (1) routinely spends 75 percent of the employee's time in 63.12 direct contact with inmates or patients; and 63.13 (2) is regularly engaged in the rehabilitation, treatment, 63.14 custody, or supervision of inmates or patients. 63.15 (d) After providing the affected employee an opportunity to 63.16 dispute or clarify any evaluation determinations, if the 63.17 commissioner determines that the employment position is 63.18 appropriate for inclusion in the correctional retirement plan, 63.19 the commissioner shall forward that recommendation and 63.20 supporting documentation to the chair of the Legislative 63.21 Commission on Pensions and Retirement, the chair of the State 63.22 and Local Governmental Operations Committee of the senate, the 63.23 chair of the Governmental Operations and Veterans Affairs Policy 63.24 Committee of the house of representatives, and the executive 63.25 director of the Legislative Commission on Pensions and 63.26 Retirement in the form of the appropriate proposed legislation. 63.27 The recommendation must be forwarded to the legislature before 63.28 January 15 for the recommendation to be considered in that 63.29 year's legislative session. 63.30 Sec. 4. Minnesota Statutes 2004, section 352B.01, 63.31 subdivision 2, is amended to read: 63.32 Subd. 2. [MEMBER.] "Member" means: 63.33 (1) a State Patrol member currently employed after June 30, 63.34 1943, under section 299D.03 by the state, who is a peace officer 63.35 under section 626.84, and whose salary or compensation is paid 63.36 out of state funds; 64.1 (2) a conservation officer employed under section 97A.201, 64.2 currently employed by the state, whose salary or compensation is 64.3 paid out of state funds; 64.4 (3) a crime bureau officer who was employed by the crime 64.5 bureau and was a member of the Highway Patrolmen's retirement 64.6 fund on July 1, 1978, whether or not that person has the power 64.7 of arrest by warrant after that date, or who is employed as 64.8 police personnel, with powers of arrest by warrant under section 64.9 299C.04, and who is currently employed by the state, and whose 64.10 salary or compensation is paid out of state funds; 64.11 (4) a person who is employed by the state in the Department 64.12 of Public Safety in a data processing management position with 64.13 salary or compensation paid from state funds, who was a crime 64.14 bureau officer covered by the State Patrol retirement plan on 64.15 August 15, 1987, and who was initially hired in the data 64.16 processing management position within the department during 64.17 September 1987, or January 1988, with membership continuing for 64.18 the duration of the person's employment in that position, 64.19 whether or not the person has the power of arrest by warrant 64.20 after August 15, 1987; 64.21 (5) a public safety employee defined as a peace officer in 64.22 section 626.84, subdivision 1, paragraph (c), and employed with 64.23 the Division of Alcohol and Gambling Enforcement under section 64.24 299L.01;and64.25 (6) a Fugitive Apprehension Unit officer after October 31, 64.26 2000, employed by the Office of Special Investigations of the 64.27 Department of Corrections who is a peace officer under section 64.28 626.84; and 64.29 (7) an employee of the Department of Commerce defined as a 64.30 peace officer in section 626.84, subdivision 1, paragraph (c), 64.31 who is employed by the Division of Insurance Fraud Prevention 64.32 under section 45.0135 after January 1, 2005, and who has not 64.33 attained the mandatory retirement age specified in section 64.34 43A.34, subdivision 4. 64.35 Sec. 5. Minnesota Statutes 2004, section 353.01, 64.36 subdivision 6, is amended to read: 65.1 Subd. 6. [GOVERNMENTAL SUBDIVISION.] (a) "Governmental 65.2 subdivision" means a county, city, town, school district within 65.3 this state, or a department or unit of state government, or any 65.4 public body whose revenues are derived from taxation, fees, 65.5 assessments or from other sources. 65.6 (b) Governmental subdivision also means the Public 65.7 Employees Retirement Association, the League of Minnesota 65.8 Cities, the Association of Metropolitan Municipalities, public 65.9 hospitals owned or operated by, or an integral part of, a 65.10 governmental subdivision or governmental subdivisions, the 65.11 Association of Minnesota Counties, the Metropolitan Intercounty 65.12 Association, the Minnesota Municipal Utilities Association, the 65.13 Metropolitan Airports Commission, the University of Minnesota 65.14 with respect to police officers covered by the public employees 65.15 police and fire retirement plan, the Minneapolis Employees 65.16 Retirement Fund for employment initially commenced after June 65.17 30, 1979, the Range Association of Municipalities and Schools, 65.18 soil and water conservation districts, economic development 65.19 authorities created or operating under sections 469.090 to 65.20 469.108, the Port Authority of the city of St. Paul, the Spring 65.21 Lake Park Fire Department, incorporated, the Lake Johanna 65.22 Volunteer Fire Department, incorporated, the Red Wing 65.23 Environmental Learning Center, and the Dakota County 65.24 Agricultural Society. 65.25 (c) Governmental subdivision does not mean any municipal 65.26 housing and redevelopment authority organized under the 65.27 provisions of sections 469.001 to 469.047; or any port authority 65.28 organized under sections 469.048 to 469.089 other than the Port 65.29 Authority of the city of St. Paul; or any hospital district 65.30 organized or reorganized prior to July 1, 1975, under sections 65.31 447.31 to 447.37 or the successor of the district, nor the 65.32 Minneapolis Community Development Agency. 65.33 Sec. 6. Minnesota Statutes 2004, section 353.64, is 65.34 amended by adding a subdivision to read: 65.35 Subd. 6a. [UNIVERSITY OF MINNESOTA POLICE OFFICERS; 65.36 EXCLUSION.] (a) Unless paragraph (b) applies, a person who is 66.1 employed as a peace officer by the University of Minnesota at 66.2 any campus or facility of the university, who is required by the 66.3 university to be and is licensed as a peace officer by the 66.4 Minnesota Peace Officer Standards and Training Board under 66.5 sections 626.84 to 626.863, and who has the full power of arrest 66.6 is a member of the public employees police and fire retirement 66.7 plan. 66.8 (b) A police officer employed by the University of 66.9 Minnesota who is required by the Board of Regents to contribute 66.10 to the University of Minnesota faculty retirement plan is not 66.11 eligible to be a member of the public employees police and fire 66.12 retirement plan. 66.13 Sec. 7. [EFFECTIVE DATE.] 66.14 (a) Sections 1, 3, 5, and 6 are effective July 1, 2005. 66.15 (b) Sections 2 and 4 are effective retroactively from 66.16 January 1, 2005. 66.17 ARTICLE 6 66.18 RETIREMENT CONTRIBUTIONS 66.19 Section 1. Minnesota Statutes 2004, section 353.28, 66.20 subdivision 5, is amended to read: 66.21 Subd. 5. [INTERESTCHARGESCHARGEABLE ON AMOUNTS DUE.] Any 66.22 amount due under this section or section 353.27, subdivision 4, 66.23 is payable with interest at an annual compound rate of 8.5 66.24 percentcompounded annuallyfrom the date due until the date 66.25 payment is received by the association, with a minimum interest 66.26 charge of $10.Interest for past due payments of excess police66.27state aid under section 69.031, subdivision 5, must be charged66.28at an annual rate of 8.5 percent compounded annually.66.29 Sec. 2. Minnesota Statutes 2004, section 353.28, 66.30 subdivision 6, is amended to read: 66.31 Subd. 6. [FAILURE TO PAYCOLLECTION OF UNPAID AMOUNTS.] (a) 66.32 Ifthea governmental subdivision which receives the direct 66.33 proceeds of property taxation fails to payamountsan amount due 66.34 underchapterschapter 353, 353A, 353B, 353C,andor 353Dor66.35fails to make payments of excess police state aid to the public66.36employees police and fire fund under section 69.031, subdivision67.15, the executive director shall certifythose amountsthe amount 67.2 to the governmental subdivision for payment. If the 67.3 governmental subdivision fails to remit the sum so due in a 67.4 timely fashion, the executive director shall certifyamountsthe 67.5 amount to the applicable county auditor for collection. The 67.6 county auditor shall collectsuch amountsthe amount out of the 67.7 revenue of the governmental subdivision, or shall addthemthe 67.8 amount to the levy of the governmental subdivision and make 67.9 payment directly to the association. This taxshallmust be 67.10 levied, collected, and apportioned in the manner that other 67.11 taxes are levied, collected, and apportioned. 67.12 (b) If a governmental subdivision which is not funded 67.13 directly from the proceeds of property taxation fails to pay an 67.14 amount due under this chapter, the executive director shall 67.15 certify the amount to the governmental subdivision for payment. 67.16 If the governmental subdivision fails to pay the amount for a 67.17 period of 60 days after certification, the executive director 67.18 shall certify the amount to the commissioner of finance, who 67.19 shall deduct the amount from any subsequent state-aid payment or 67.20 state appropriation amount applicable to the governmental 67.21 subdivision. 67.22 Sec. 3. [EFFECTIVE DATE.] 67.23 Sections 1 and 2 are effective July 1, 2005. 67.24 ARTICLE 7 67.25 PENSION BENEFITS UPON PRIVATIZATION 67.26 Section 1. Minnesota Statutes 2004, section 353F.02, 67.27 subdivision 4, is amended to read: 67.28 Subd. 4. [MEDICAL FACILITY.] "Medical facility" means: 67.29 (1) Bridges Medical Services; 67.30 (2) the Fair Oaks Lodge, Wadena; 67.31(2)(3) the Glencoe Area Health Center; 67.32(3)(4) the Hutchinson Area Health Care; 67.33 (5) the Kanabec Hospital; 67.34(4)(6) the Luverne Public Hospital; 67.35 (7) the Northfield Hospital; 67.36(5)(8) the RenVilla Nursing Home; 68.1(6)(9) the Renville County Hospital in Olivia; 68.2(7)(10) the St. Peter Community Healthcare Center; and 68.3(8)(11) the Waconia-Ridgeview Medical Center. 68.4 Sec. 2. Laws 2004, chapter 267, article 12, section 4, is 68.5 amended to read: 68.6 Sec. 4. [EFFECTIVE DATE.] 68.7 (a) Section 1, relating to the Fair Oaks Lodge, Wadena, is 68.8 effective upon the latter of: 68.9 (1) the day after the governing body of Todd County and its 68.10 chief clerical officer timely complete their compliance with 68.11 Minnesota Statutes, section 645.021, subdivisions 2 and 3; and 68.12 (2) the day after the governing body of Wadena County and 68.13 its chief clerical officer timely complete their compliance with 68.14 Minnesota Statutes, section 645.021, subdivisions 2 and 3. 68.15 (b) Section 1, relating to the RenVilla Nursing Home, is 68.16 effective upon the latter of: 68.17 (1) the day after the governing body of the city of 68.18 Renville and its chief clerical officer timely complete their 68.19 compliance with Minnesota Statutes, section 645.021, 68.20 subdivisions 2 and 3, except that the certificate of approval 68.21 must be filed before January 1, 2006; and 68.22 (2) the first day of the month next following certification 68.23 to the governing body of the city of Renville by the executive 68.24 director of the Public Employees Retirement Association that the 68.25 actuarial accrued liability of the special benefit coverage 68.26 proposed for extension to the privatized RenVilla Nursing Home 68.27 employees under section 1 does not exceed the actuarial gain 68.28 otherwise to be accrued by the Public Employees Retirement 68.29 Association, as calculated by the consulting actuary retained by 68.30 the Legislative Commission on Pensions and Retirement, or the 68.31 actuary retained under Minnesota Statutes, section 356.214, 68.32 whichever is applicable. 68.33 (c) The cost of the actuarial calculations must be borne by 68.34 the city of Renville or the purchaser of the RenVilla Nursing 68.35 Home. 68.36 (d) Section 1, relating to the St. Peter Community 69.1 Healthcare Center, is effective upon the latter of: 69.2 (1) the day after the governing body of the city of St. 69.3 Peter and its chief clerical officer timely complete their 69.4 compliance with Minnesota Statutes, section 645.021, 69.5 subdivisions 2 and 3; and 69.6 (2) the first day of the month next following certification 69.7 to the governing body of the city of St. Peter by the executive 69.8 director of the Public Employees Retirement Association that the 69.9 actuarial accrued liability of the special benefit coverage 69.10 proposed for extension to the privatized St. Peter Community 69.11 Healthcare Center employees under section 1 does not exceed the 69.12 actuarial gain otherwise to be accrued by the Public Employees 69.13 Retirement Association, as calculated by the consulting actuary 69.14 retained by the Legislative Commission on Pensions and 69.15 Retirement, or the actuary retained under Minnesota Statutes, 69.16 section 356.214, whichever is applicable. 69.17 (e) The cost of the actuarial calculations must be borne by 69.18 the city of St. Peter or the purchaser of the St. Peter 69.19 Community Healthcare Center. 69.20 (f) If the required actions under paragraphs (b) and (c) 69.21 occur, section 1 applies retroactively to the RenVilla Nursing 69.22 Home as of the date of privatization. 69.23 (g) If the required actions under paragraph (a) occur, 69.24 section 1 applies retroactively to Fair Oaks Lodge, Wadena, as 69.25 of January 1, 2004. 69.26 (h) Sections 2 and 3 are effective on the day following 69.27 final enactment. 69.28 Sec. 3. [EFFECTIVE DATE.] 69.29 (a) Section 1, relating to Bridges Medical Services, is 69.30 effective upon the later of: 69.31 (1) the day after the governing body of the city of Ada and 69.32 its chief clerical officer timely complete their compliance with 69.33 Minnesota Statutes, section 645.021, subdivisions 2 and 3; and 69.34 (2) the first day of the month next following certification 69.35 to the governing body of the city of Ada by the executive 69.36 director of the Public Employees Retirement Association that the 70.1 actuarial accrued liability of the special benefit coverage 70.2 proposed for extension to the privatized Bridges Medical 70.3 Services employees under section 1 does not exceed the actuarial 70.4 gain otherwise to be accrued by the Public Employees Retirement 70.5 Association, as calculated by the consulting actuary retained 70.6 under Minnesota Statutes, section 356.214. 70.7 (b) Section 1, relating to the Hutchinson Area Health Care, 70.8 is effective upon the later of: 70.9 (1) the day after the governing body of the city of 70.10 Hutchinson and its chief clerical officer timely complete their 70.11 compliance with Minnesota Statutes, section 645.021, 70.12 subdivisions 2 and 3; and 70.13 (2) the first day of the month next following certification 70.14 to the governing body of the city of Hutchinson by the executive 70.15 director of the Public Employees Retirement Association that the 70.16 actuarial accrued liability of the special benefit coverage 70.17 proposed for extension to the privatized Hutchinson Area Health 70.18 Care employees under section 1 does not exceed the actuarial 70.19 gain otherwise to be accrued by the Public Employees Retirement 70.20 Association, as calculated by the consulting actuary retained by 70.21 the Legislative Commission on Pensions and Retirement. 70.22 (c) Section 1, relating to the Northfield Hospital, is 70.23 effective upon the later of: 70.24 (1) the day after the governing body of the city of 70.25 Northfield and its chief clerical officer timely complete their 70.26 compliance with Minnesota Statutes, section 645.021, 70.27 subdivisions 2 and 3; and 70.28 (2) the first day of the month next following certification 70.29 to the governing body of the city of Northfield by the executive 70.30 director of the Public Employees Retirement Association that the 70.31 actuarial accrued liability of the special benefit coverage 70.32 proposed for extension to the privatized Northfield Hospital 70.33 employees under section 1 does not exceed the actuarial gain 70.34 otherwise to be accrued by the Public Employees Retirement 70.35 Association, as calculated by the consulting actuary retained by 70.36 the Legislative Commission on Pensions and Retirement. 71.1 (d) The cost of the actuarial calculations must be borne by 71.2 the facility, the city in which the facility is located, or the 71.3 purchaser of the facility. 71.4 (e) If the required actions in paragraphs (a), (b), or (c) 71.5 and (d) occur, section 1 applies retroactively to the date of 71.6 privatization. 71.7 (f) Section 2 is effective the day following final 71.8 enactment. 71.9 ARTICLE 8 71.10 FIRST CLASS CITY TEACHER 71.11 RETIREMENT FUND ASSOCIATIONS 71.12 Section 1. Minnesota Statutes 2004, section 354A.021, is 71.13 amended by adding a subdivision to read: 71.14 Subd. 9. [UPDATED ARTICLES OF INCORPORATION AND BYLAWS; 71.15 FILING.] (a) On or before July 1, 2006, and within six months of 71.16 the date of the approval of any amendment to the articles of 71.17 incorporation or bylaws, the chief administrative officer of 71.18 each first class city teacher retirement fund association shall 71.19 prepare and publish an updated compilation of the articles of 71.20 incorporation and the bylaws of the association. 71.21 (b) The chief administrative officer of the first class 71.22 city teacher retirement fund association must certify the 71.23 accuracy and the completeness of the compilation. 71.24 (c) The compilation of the articles of incorporation and 71.25 bylaws of a first class city teacher retirement fund association 71.26 must contain an index. 71.27 (d) The compilation must be made available to association 71.28 members and other interested parties. The association may 71.29 charge a fee for a copy that reflects the price of printing or 71.30 otherwise producing the copy. Two copies of the compilation 71.31 must be filed, without charge, by each retirement fund 71.32 association with the Legislation Commission on Pensions and 71.33 Retirement, the Legislative Reference Library, the state 71.34 auditor, the commissioner of education, the chancellor of the 71.35 Minnesota State Colleges and Universities system, and the 71.36 superintendent of the applicable school district. 72.1 (e) A first class city teacher retirement fund association 72.2 may contract with the revisor of statutes for the preparation of 72.3 the compilation. 72.4 (f) If a first class city teacher retirement fund 72.5 association makes an updated copy of its articles of 72.6 incorporation and bylaws available on its Web site, the 72.7 retirement fund association is not obligated to file a hard copy 72.8 of the documents under paragraph (d) for the applicable filing 72.9 period. 72.10 Sec. 2. [EFFECTIVE DATE.] 72.11 Section 1 is effective July 1, 2005. 72.12 ARTICLE 9 72.13 MINNESOTA STATE COLLEGES AND UNIVERSITIES 72.14 INDIVIDUAL RETIREMENT ACCOUNT PLAN CHANGES 72.15 Section 1. Minnesota Statutes 2004, section 354B.25, 72.16 subdivision 2, is amended to read: 72.17 Subd. 2. [INVESTMENT OPTIONS.] (a) The plan administrator 72.18 shall arrange for the purchase of investment products. 72.19 (b) The investment products must be purchased with 72.20 contributions under section 354B.23 or with money or assets 72.21 otherwise provided by law by authority of the board. 72.22 (c) Various investment accounts offered through the 72.23 Minnesota supplemental investment fund established under section 72.24 11A.17 and administered by the State Board of Investmentis one72.25of themay be included as investment products for the individual 72.26 retirement account plan. Direct access must also be provided to 72.27 lower expense and no-load mutual funds, as those terms are 72.28 defined by the federal Securities and Exchange Commission, 72.29 including stock funds, bond funds, and balanced funds. Other 72.30 investment products or combination of investment products which 72.31 may be included are: 72.32 (1) savings accounts at federally insured financial 72.33 institutions; 72.34 (2) life insurance contracts, fixed and variable annuity 72.35 contracts from companies that are subject to regulation by the 72.36 commerce commissioner; 73.1 (3) investment options from open-ended investment companies 73.2 registered under the federal Investment Company Act of 1940, 73.3 United States Code, title 15, sections 80a-1 to 80a-64; 73.4 (4) investment options from a firm that is a registered 73.5 investment advisor under the federal Investment Advisers Act of 73.6 1940, United States Code, title 15, sections 80b-1 to 80b-21; 73.7 and 73.8 (5) investment options of a bank as defined in United 73.9 States Code, title 15, section 80b-2, subsection (a), paragraph 73.10 2, or a bank holding company as defined in the Bank Holding 73.11 Company Act of 1956, United States Code, title 12, section 1841, 73.12 subsection (a), paragraph (1). 73.13 Sec. 2. [EFFECTIVE DATE.] 73.14 Section 1 is effective the day following final enactment. 73.15 ARTICLE 10 73.16 SUPPLEMENTAL RETIREMENT PLANS 73.17 Section 1. Minnesota Statutes 2004, section 356.24, 73.18 subdivision 1, is amended to read: 73.19 Subdivision 1. [RESTRICTION; EXCEPTIONS.] It is unlawful 73.20 for a school district or other governmental subdivision or state 73.21 agency to levy taxes for, or to contribute public funds to a 73.22 supplemental pension or deferred compensation plan that is 73.23 established, maintained, and operated in addition to a primary 73.24 pension program for the benefit of the governmental subdivision 73.25 employees other than: 73.26 (1) to a supplemental pension plan that was established, 73.27 maintained, and operated before May 6, 1971; 73.28 (2) to a plan that provides solely for group health, 73.29 hospital, disability, or death benefits; 73.30 (3) to the individual retirement account plan established 73.31 by chapter 354B; 73.32 (4) to a plan that provides solely for severance pay under 73.33 section 465.72 to a retiring or terminating employee; 73.34 (5) for employees other than personnel employed by the 73.35 Board of Trustees of the Minnesota State Colleges and 73.36 Universities and covered under the Higher Education Supplemental 74.1 Retirement Plan under chapter 354C, if the supplemental plan 74.2 coverage is provided for in a personnel policy of the public 74.3 employer or in the collective bargaining agreement between the 74.4 public employer and the exclusive representative of public 74.5 employees in an appropriate unit, in an amount matching employee 74.6 contributions on a dollar for dollar basis, but not to exceed an 74.7 employer contribution of $2,000 a year per employee; 74.8 (i) to the state of Minnesota deferred compensation plan 74.9 under section 352.96; or 74.10 (ii) in payment of the applicable portion of the 74.11 contribution made to any investment eligible under section 74.12 403(b) of the Internal Revenue Code, if the employing unit has 74.13 complied with any applicable pension plan provisions of the 74.14 Internal Revenue Code with respect to the tax-sheltered annuity 74.15 program during the preceding calendar year; 74.16 (6) for personnel employed by the Board of Trustees of the 74.17 Minnesota State Colleges and Universities and not covered by 74.18 clause (5), to the supplemental retirement plan under chapter 74.19 354C, if the supplemental plan coverage is provided for in a 74.20 personnel policy or in the collective bargaining agreement of 74.21 the public employer with the exclusive representative of the 74.22 covered employees in an appropriate unit, in an amount matching 74.23 employee contributions on a dollar for dollar basis, but not to 74.24 exceed an employer contribution of $2,700 a year for each 74.25 employee; 74.26 (7) to a supplemental plan or to a governmental trust to 74.27 save for postretirement health care expenses qualified for 74.28 tax-preferred treatment under the Internal Revenue Code, if the 74.29 supplemental plan coverage is provided for in a personnel policy 74.30 or in the collective bargaining agreement of a public employer 74.31 with the exclusive representative of the covered employees in an 74.32 appropriate unit; 74.33 (8) to the laborer's national industrial pension fund or to 74.34 a laborer's local pension fund for the employees of a 74.35 governmental subdivision who are covered by a collective 74.36 bargaining agreement that provides for coverage by that fund and 75.1 that sets forth a fund contribution rate, but not to exceed an 75.2 employer contribution of$2,000$5,000 per year per employee; 75.3 (9) to the plumbers' and pipefitters' national pension fund 75.4 or to a plumbers' and pipefitters' local pension fund for the 75.5 employees of a governmental subdivision who are covered by a 75.6 collective bargaining agreement that provides for coverage by 75.7 that fund and that sets forth a fund contribution rate, but not 75.8 to exceed an employer contribution of$2,000$5,000 per year per 75.9 employee; 75.10 (10) to the international union of operating engineers 75.11 pension fund for the employees of a governmental subdivision who 75.12 are covered by a collective bargaining agreement that provides 75.13 for coverage by that fund and that sets forth a fund 75.14 contribution rate, but not to exceed an employer contribution of 75.15$2,000$5,000 per year per employee; or 75.16 (11) to a supplemental plan organized and operated under 75.17 the federal Internal Revenue Code, as amended, that is wholly 75.18 and solely funded by the employee's accumulated sick leave, 75.19 accumulated vacation leave, and accumulated severance pay at the 75.20 date of retirement or the termination of active employment. 75.21 Sec. 2. [EFFECTIVE DATE.] 75.22 Section 1 is effective the day following final enactment. 75.23 ARTICLE 11 75.24 VOLUNTEER FIREFIGHTER RELIEF 75.25 ASSOCIATION CHANGES 75.26 Section 1. Minnesota Statutes 2004, section 69.051, 75.27 subdivision 1, is amended to read: 75.28 Subdivision 1. [FINANCIAL REPORT AND AUDIT.] The board of 75.29 each salaried firefighters' relief association, police relief 75.30 association, and volunteer firefighters' relief association as 75.31 defined in section 424A.001, subdivision 4, with assets of at 75.32 least $200,000 or liabilities of at least $200,000 in the prior 75.33 year or in any previous year, according to themost recent75.34 applicable actuarial valuation or financial report if no 75.35 valuation is required, shall: 75.36 (1) prepare a financial report covering the special and 76.1 general funds of the relief association for the preceding fiscal 76.2 year on a form prescribed by the state auditor. The financial 76.3 reportshallmust contain financial statements and disclosures 76.4 which present the true financial condition of the relief 76.5 association and the results of relief association operations in 76.6 conformity with generally accepted accounting principles and in 76.7 compliance with the regulatory, financing and funding provisions 76.8 of this chapter and any other applicable laws. The financial 76.9 reportshallmust be countersigned by the municipal clerk or 76.10 clerk-treasurer of the municipality in which the relief 76.11 association is located if the relief association is a 76.12 firefighters' relief association which is directly associated 76.13 with a municipal fire department or is a police relief 76.14 association, or countersigned by the secretary of the 76.15 independent nonprofit firefighting corporation and by the 76.16 municipal clerk or clerk-treasurer of the largest municipality 76.17 in population which contracts with the independent nonprofit 76.18 firefighting corporation if the volunteer firefighter relief 76.19 association is a subsidiary of an independent nonprofit 76.20 firefighting corporation; 76.21 (2) file the financial report in its office for public 76.22 inspection and present it to the city council after the close of 76.23 the fiscal year. One copy of the financial reportshallmust be 76.24 furnished to the state auditor after the close of the fiscal 76.25 year; and 76.26 (3) submit to the state auditor audited financial 76.27 statements which have been attested to by a certified public 76.28 accountant, public accountant, or the state auditor within 180 76.29 days after the close of the fiscal year. The state auditor may 76.30 accept this report in lieu of the report required in clause (2). 76.31 Sec. 2. Minnesota Statutes 2004, section 69.051, 76.32 subdivision 1a, is amended to read: 76.33 Subd. 1a. [FINANCIAL STATEMENT.] (a) The board of each 76.34 volunteer firefighters' relief association, as defined in 76.35 section 424A.001, subdivision 4,with assets of less than76.36$200,000 and liabilities less than $200,000, according to the77.1most recent financial report, shallthat is not required to file 77.2 a financial report and audit under subdivision 1 must prepare a 77.3 detailed statement of the financial affairs for the preceding 77.4 fiscal year of the relief association's special and general 77.5 funds in the style and form prescribed by the state auditor. 77.6 The detailed statement must show the sources and amounts of all 77.7 money received; all disbursements, accounts payable and accounts 77.8 receivable; the amount of money remaining in the treasury; total 77.9 assets including a listing of all investments; the accrued 77.10 liabilities; and all items necessary to show accurately the 77.11 revenues and expenditures and financial position of the relief 77.12 association. 77.13 (b) The detailed financial statement required under 77.14 paragraph (a) must be certified by an independent public 77.15 accountant or auditor or by the auditor or accountant who 77.16 regularly examines or audits the financial transactions of the 77.17 municipality. In addition to certifying the financial condition 77.18 of the special and general funds of the relief association, the 77.19 accountant or auditor conducting the examination shall give an 77.20 opinion as to the condition of the special and general funds of 77.21 the relief association, and shall comment upon any exceptions to 77.22 the report. The independent accountant or auditorshallmust 77.23 have at least five years of public accounting, auditing, or 77.24 similar experience, andshallmust not be an active, inactive, 77.25 or retired member of the relief association or the fire or 77.26 police department. 77.27 (c) The detailed statement required under paragraph (a) 77.28 must be countersigned by the municipal clerk or clerk-treasurer 77.29 of the municipality, or, where applicable, by the secretary of 77.30 the independent nonprofit firefighting corporation and by the 77.31 municipal clerk or clerk-treasurer of the largest municipality 77.32 in population which contracts with the independent nonprofit 77.33 firefighting corporation if the relief association is a 77.34 subsidiary of an independent nonprofit firefighting corporation. 77.35 (d) The volunteer firefighters' relief association board 77.36 must file the detailed statement required under paragraph (a) in 78.1 the relief association office for public inspection and present 78.2 it to the city council within 45 days after the close of the 78.3 fiscal year, and must submit a copy of the detailed statement to 78.4 the state auditor within 90 days of the close of the fiscal year. 78.5 Sec. 3. Minnesota Statutes 2004, section 69.771, is 78.6 amended to read: 78.7 69.771 [VOLUNTEER FIREFIGHTERS' RELIEF ASSOCIATION 78.8 FINANCING GUIDELINES ACT; APPLICATION.] 78.9 Subdivision 1. [COVERED RELIEF ASSOCIATIONS.] The 78.10 applicable provisions of sections 69.771 to 69.776shallapply 78.11 to any firefighters' relief association other than a relief 78.12 association enumerated in section 69.77, subdivision 1a, which 78.13 is organized under any laws of this state, which is composed of 78.14 volunteer firefighters or is composed partially of volunteer 78.15 firefighters and partially of salaried firefighters with 78.16 retirement coverage provided by the public employees police and 78.17 fire fund and which, in either case, operates subject to the 78.18 service pension minimum requirements for entitlement and 78.19 maximums contained in section 424A.02, or subject to a special 78.20 law modifying those requirements or maximums. 78.21 Subd. 2. [AUTHORIZED EMPLOYER SUPPORT FOR A RELIEF 78.22 ASSOCIATION.] Notwithstanding any law to the contrary, a 78.23 municipality may lawfully contribute public funds, including the 78.24 transfer of any applicable fire state aid, or may levy property 78.25 taxes for the support of a firefighters' relief association 78.26 specified in subdivision 1, however organized, which provides 78.27 retirement coverage or pays a service pension to retired 78.28 firefighter or a retirement benefit to a disabled firefighter or 78.29 a surviving dependent of either an active or retired firefighter 78.30 for the operation and maintenance of the relief association only 78.31 if the municipality and the relief association both comply with 78.32 the applicable provisions of sections 69.771 to 69.776. 78.33 Subd. 3. [REMEDY FOR NONCOMPLIANCE; DETERMINATION.] 78.34Any(a) A municipality in which there exists a firefighters' 78.35 relief association as specified in subdivision 1 which does not 78.36 comply with the applicable provisions of sections 69.771 to 79.1 69.776 or the provisions of any applicable special law relating 79.2 to the funding or financing of the associationshalldoes not 79.3 qualify initially to receive,or beand is not entitled 79.4 subsequently to retain, fire state aidpursuant tounder 79.5 sections 69.011 to 69.051 until the reason for the 79.6 disqualification specified by the state auditor is remedied, 79.7 whereupon the municipality or relief association, if otherwise 79.8 qualified,shall beis entitled to again receive fire state aid 79.9 for the year occurring immediately subsequent to the year in 79.10 which the disqualification is remedied. 79.11 (b) The state auditor shall determine if a municipality to 79.12 which a firefighters' relief association is directly associated 79.13 or a firefighters' relief association fails to comply with the 79.14 provisions of sections 69.771 to 69.776 or the funding or 79.15 financing provisions of any applicable special law based upon 79.16 the information contained in the annual financial report of the 79.17 firefighters' relief association requiredpursuant tounder 79.18 section 69.051., the actuarial valuation of the relief 79.19 association, if applicable, the relief association officers' 79.20 financial requirements of the relief association and minimum 79.21 municipal obligation determination documentation under section 79.22 69.772, subdivisions 3 and 4; 69.773, subdivisions 4 and 5; or 79.23 69.774, subdivision 2, if requested to be filed by the state 79.24 auditor, the applicable municipal or nonprofit firefighting 79.25 corporation budget, if requested to be filed by the state 79.26 auditor, and any other relevant documents or reports obtained by 79.27 the state auditor. 79.28 (c) The municipality or nonprofit firefighting corporation 79.29 and the associated relief association are not eligible to 79.30 receive or to retain fire state aid if: 79.31 (1) the relief association fails to prepare or to file the 79.32 financial report or financial statement under section 69.051; 79.33 (2) the relief association treasurer is not bonded in the 79.34 manner and in the amount required by section 69.051, subdivision 79.35 2; 79.36 (3) the relief association officers fail to determine or 80.1 improperly determine the accrued liability and the annual 80.2 accruing liability of the relief association under section 80.3 69.772, subdivisions 2, 2a, and 3, paragraph (c), clause (2), if 80.4 applicable; 80.5 (4) if applicable, the relief association officers fail to 80.6 obtain and file a required actuarial valuation or the officers 80.7 file an actuarial valuation that does not contain the special 80.8 fund actuarial liability calculated under the entry age normal 80.9 actuarial cost method, the special fund current assets, the 80.10 special fund unfunded actuarial accrued liability, the special 80.11 fund normal cost under the entry age normal actuarial cost 80.12 method, the amortization requirement for the special fund 80.13 unfunded actuarial accrued liability by the applicable target 80.14 date, a summary of the applicable benefit plan, a summary of the 80.15 membership of the relief association, a summary of the actuarial 80.16 assumptions used in preparing the valuation, and a signed 80.17 statement by the actuary attesting to its results and certifying 80.18 to the qualifications of the actuary as an approved actuary 80.19 under section 356.215, subdivision 1, paragraph (c); 80.20 (5) the municipality failed to provide a municipal 80.21 contribution, or the nonprofit firefighting corporation failed 80.22 to provide a corporate contribution, in the amount equal to the 80.23 minimum municipal obligation if the relief association is 80.24 governed under section 69.772, or the amount necessary, when 80.25 added to the fire state aid actually received in the plan year 80.26 in question, to at least equal in total the calculated annual 80.27 financial requirements of the special fund of the relief 80.28 association if the relief association is governed under section 80.29 69.773, and, if the municipal or corporate contribution is 80.30 deficient, the municipality failed to include the minimum 80.31 municipal obligation certified under section 69.772, subdivision 80.32 3, or 69.773, subdivision 5, in its budget and tax levy or the 80.33 nonprofit firefighting corporation failed to include the minimum 80.34 corporate obligation certified under section 69.774, subdivision 80.35 2, in the corporate budget; 80.36 (6) the relief association did not receive municipal 81.1 ratification for the most recent plan amendment when municipal 81.2 ratification was required under section 69.772, subdivision 6; 81.3 69.773, subdivision 6; or 424A.02, subdivision 10; 81.4 (7) the relief association invested special fund assets in 81.5 an investment security that is not authorized under section 81.6 69.775; 81.7 (8) the relief association had an administrative expense 81.8 that is not authorized under section 69.80 or 424A.05, 81.9 subdivision 3, or the municipality had an expenditure that is 81.10 not authorized under section 424A.08; 81.11 (9) the relief association officers fail to provide a 81.12 complete and accurate public pension plan investment portfolio 81.13 and performance disclosure under section 356.219; 81.14 (10) the relief association fails to obtain the 81.15 acknowledgment from a broker of the statement of investment 81.16 restrictions under section 356A.06, subdivision 8b; 81.17 (11) the relief association officers permitted to occur a 81.18 prohibited transaction under section 356A.06, subdivision 9, or 81.19 424A.001, subdivision 7, or failed to undertake correction of a 81.20 prohibited transaction that did occur; or 81.21 (12) the relief association pays a defined benefit service 81.22 pension in an amount that is in excess of the applicable service 81.23 pension maximum under section 424A.02, subdivision 3. 81.24 Sec. 4. Minnesota Statutes 2004, section 69.772, 81.25 subdivision 3, is amended to read: 81.26 Subd. 3. [FINANCIAL REQUIREMENTS OF RELIEF ASSOCIATION; 81.27 MINIMUM OBLIGATION OF MUNICIPALITY.] (a) During the month of 81.28 July, the officers of the relief association shall determine the 81.29 overall funding balance of the special fund for the current 81.30 calendar year, the financial requirements of the special fund 81.31 for the following calendar year and the minimum obligation of 81.32 the municipality with respect to the special fund for the 81.33 following calendar year in accordance with the requirements of 81.34 this subdivision. 81.35(1)(b) The overall funding balance of the special fund for 81.36 the current calendar yearshallmust be determined in the 82.1 following manner: 82.2(a)(1) The total accrued liability of the special fund for 82.3 all active and deferred members of the relief association as of 82.4 December 31 of the current yearshallmust be calculated 82.5pursuant tounder subdivisions 2 and 2a, if applicable. 82.6(b)(2) The total present assets of the special fund 82.7 projected to December 31 of the current year, including receipts 82.8 by and disbursements from the special fund anticipated to occur 82.9 on or before December 31shall, must be calculated. To the 82.10 extent possible, for those assets for which a market value is 82.11 readily ascertainable, the current market value as of the date 82.12 of the calculation for those assetsshallmust be utilized in 82.13 making this calculation. For any asset for which no market 82.14 value is readily ascertainable, the cost value or the book 82.15 value, whichever is applicable,shallmust be utilized in making 82.16 this calculation. 82.17(c)(3) The amount of the total present assets of the 82.18 special fund calculatedpursuant tounder clause(b) shall(2) 82.19 must be subtracted from the amount of the total accrued 82.20 liability of the special fund calculatedpursuant tounder 82.21 clause(a)(1). If the amount of total present assets exceeds 82.22 the amount of the total accrued liability, then the special fund 82.23shall beis considered to have a surplus over full funding. If 82.24 the amount of the total present assets is less than the amount 82.25 of the total accrued liability, then the special fundshall be82.26 is considered to have a deficit from full funding. If the 82.27 amount of total present assets is equal to the amount of the 82.28 total accrued liability, then the special fundshall beis 82.29 considered to be fully funded. 82.30(2)(c) The financial requirements of the special fund for 82.31 the following calendar yearshallmust be determined in the 82.32 following manner: 82.33(a)(1) The total accrued liability of the special fund for 82.34 all active and deferred members of the relief association as of 82.35 December 31 of the calendar year next following the current 82.36 calendar yearshallmust be calculatedpursuant tounder 83.1 subdivisions 2 and 2a, if applicable. 83.2(b)(2) The increase in the total accrued liability of the 83.3 special fund for the following calendar year over the total 83.4 accrued liability of the special fund for the current yearshall83.5 must be calculated. 83.6(c)(3) The amount of anticipated future administrative 83.7 expenses of the special fundshallmust be calculated by 83.8 multiplying the dollar amount of the administrative expenses of 83.9 the special fund for the most recent prior calendar year by the 83.10 factor of 1.035. 83.11(d)(4) If the special fund is fully funded, the financial 83.12requirementrequirements of the special fund for the following 83.13 calendar yearshall beare thefigure which represents the83.14increase in thetotalaccrued liabilityof thespecial fund as83.15 amounts calculatedpursuant to subclause (b)under clauses (2) 83.16 and (3). 83.17(e)(5) If the special fund has a deficit from full 83.18 funding, the financial requirements of the special fund for the 83.19 following calendar yearshall beare the financial requirements 83.20 of the special fund calculated as though the special fund were 83.21 fully fundedpursuant to subclause (d)under clause (4) plus an 83.22 amount equal to one-tenth of the original amount of the deficit 83.23 from full funding of the special fund as determinedpursuant to83.24this section for the calendar year 1971 until that deficit from83.25full funding is fully retired, and plus an amount equal to83.26one-tenth of the increase in the deficit from full funding of83.27the special fundunder clause (2) resulting either from an 83.28 increase in the amount of the service pensionaccruing after83.29December 31, 1971occurring in the last ten years or from a net 83.30 annual investment loss occurring during the last ten years until 83.31 each increase in the deficit from full funding is fully 83.32 retired. The annual amortization contribution under this clause 83.33 may not exceed the amount of the deficit from full funding. 83.34(f)(6) If the special fund has a surplus over full 83.35 funding, the financial requirements of the special fund for the 83.36 following calendar yearshall beare the financial requirements 84.1 of the special fund calculated as though the special fund were 84.2 fully fundedpursuant to subclause (d)under clause (4) reduced 84.3 by an amount equal to one-tenth of the amount of the surplus 84.4 over full funding of the special fund. 84.5(3)(d) The minimum obligation of the municipality with 84.6 respect to the special fundshall beis the financial 84.7 requirements of the special fund reduced by the amount of any 84.8 fire state aid payablepursuant tounder sections 69.011 to 84.9 69.051 reasonably anticipated to be received by the municipality 84.10 for transmittal to the special fund during the following 84.11 calendar year, an amount of interest on the assets of the 84.12 special fund projected to the beginning of the following 84.13 calendar year calculated at the rate of five percent per annum, 84.14 and the amount of anyanticipatedcontributions to the special 84.15 fund required by the relief association bylaws from the active 84.16 members of the relief association reasonably anticipated to be 84.17 received during the following calendar year. A reasonable 84.18 amount of anticipated fire state aid is an amount that does not 84.19 exceed the fire state aid actually received in the prior year 84.20 multiplied by the factor 1.035. 84.21 Sec. 5. Minnesota Statutes 2004, section 69.772, 84.22 subdivision 4, is amended to read: 84.23 Subd. 4. [CERTIFICATION OF FINANCIAL REQUIREMENTS AND 84.24 MINIMUM MUNICIPAL OBLIGATION; LEVY.] (a) The officers of the 84.25 relief association shall certify the financial requirements of 84.26 the special fund of the relief association and the minimum 84.27 obligation of the municipality with respect to the special fund 84.28 of the relief association as determinedpursuant tounder 84.29 subdivision 3 to the governing body of the municipality on or 84.30 before August 1 of each year. The financial requirements of the 84.31 relief association and the minimum municipal obligation must be 84.32 included in the financial report or financial statement under 84.33 section 69.051. 84.34 (b) The municipality shall provide for at least the minimum 84.35 obligation of the municipality with respect to the special fund 84.36 of the relief association by tax levy or from any other source 85.1 of public revenue. 85.2 (c) The municipality may levy taxes for the payment of the 85.3 minimum municipal obligation without any limitation as to rate 85.4 or amount and irrespective of any limitations imposed by other 85.5 provisions of law upon the rate or amount of taxation until the 85.6 balance of the special fund or any fund of the relief 85.7 association has attained a specified level. In addition, any 85.8 taxes leviedpursuant tounder this sectionshallmust not cause 85.9 the amount or rate of any other taxes levied in that year or to 85.10 be levied in a subsequent year by the municipality which are 85.11 subject to a limitation as to rate or amount to be reduced. 85.12 (d) If the municipality does not include the full amount of 85.13 the minimum municipal obligations in its levy for any year, the 85.14 officers of the relief association shall certify that amount to 85.15 the county auditor, who shall spread a levy in the amount of the 85.16 certified minimum municipal obligation on the taxable property 85.17 of the municipality. 85.18 (e) If the state auditor determines that a municipal 85.19 contribution actually made in a plan year was insufficient under 85.20 section 69.771, subdivision 3, paragraph (c), clause (5), the 85.21 state auditor may request a copy of the certifications under 85.22 this subdivision from the relief association or from the city. 85.23 The relief association or the city, whichever applies, must 85.24 provide the certifications within 14 days of the date of the 85.25 request from the state auditor. 85.26 Sec. 6. Minnesota Statutes 2004, section 69.773, 85.27 subdivision 4, is amended to read: 85.28 Subd. 4. [FINANCIAL REQUIREMENTS OF SPECIAL FUND.]Prior85.29to(a) On or before August 1 of each year, the officers of the 85.30 relief association shall determine the financial requirements of 85.31 the special fund of the relief association in accordance with 85.32 the requirements of this subdivision. 85.33 (b) The financial requirements of the relief 85.34 associationshallmust be based on the most recent actuarial 85.35 valuation of the special fund prepared in accordance with 85.36 subdivision 2. If the relief association has an unfunded 86.1 actuarial accrued liability as reported in the most recent 86.2 actuarial valuation, the financial requirementsshallmust be 86.3 determined by adding the figures calculatedpursuant tounder 86.4 paragraph (d), clauses(a)(1),(b)(2), and(c)(3). If 86.5 the relief association does not have an unfunded actuarial 86.6 accrued liability as reported in the most recent actuarial 86.7 valuation, the financial requirementsshallmust be an amount 86.8 equal to the figure calculatedpursuant tounder paragraph (d), 86.9 clauses(a)(1) and(b)(2), reduced by an amount equal to 86.10 one-tenth of the amount of any assets in excess of the actuarial 86.11 accrued liability of the relief association. 86.12 (c) The determination of whether or not the relief 86.13 association has an unfunded actuarial accrued liability 86.14shallmust be based on the current market value of assets for 86.15 which a market value is readily ascertainable and the cost or 86.16 book value, whichever is applicable, for assets for which no 86.17 market value is readily ascertainable. 86.18(a)(d) The components of the financial requirements of the 86.19 relief association are the following: 86.20 (1) The normal level cost requirement for the following 86.21 year, expressed as a dollar amount,shall beis the figure for 86.22 the normal level cost of the relief association as reported in 86.23 the actuarial valuation. 86.24(b)(2) The amount of anticipated future administrative 86.25 expenses of the special fundshallmust be calculated by 86.26 multiplying the dollar amount of the administrative expenses of 86.27 the special fund for the most recent prior calendar year by the 86.28 factor of 1.035. 86.29(c)(3) The amortization contribution requirement to retire 86.30 the current unfunded actuarial accrued liability by the 86.31 established date for full fundingshall beis the figure for the 86.32 amortization contribution as reported in the actuarial 86.33 valuation. If there has not been a change in the actuarial 86.34 assumptions used for calculating the actuarial accrued liability 86.35 of the special fund, a change in the bylaws of the relief 86.36 association governing the service pensions, retirement benefits, 87.1 or both, payable from the special fund, or a change in the 87.2 actuarial cost method used to value all or a portion of the 87.3 special fund which change or changes, which by themselves, 87.4 without inclusion of any other items of increase or decrease, 87.5 produce a net increase in the unfunded actuarial accrued 87.6 liability of the special fundsince December 31, 1970, the 87.7 established date for full fundingshall beis the December 31,87.81990occurring ten years later. If there has been a change in 87.9 the actuarial assumptions used for calculating the actuarial 87.10 accrued liability of the special fund, a change in the bylaws of 87.11 the relief association governing the service pensions, 87.12 retirement benefits, or both payable from the special fund or a 87.13 change in the actuarial cost method used to value all or a 87.14 portion of the special fund and the change or changes, by 87.15 themselves and without inclusion of any other items of increase 87.16 or decrease, produce a net increase in the unfunded actuarial 87.17 accrued liability of the special fundsince December 31, 1970,87.18but prior to January 1, 1979within the past 20 years, the 87.19 established date for full fundingshall be December 31, 1998,87.20and if there has been a change since December 31, 1978, the87.21established date for full funding shallmust be determined using 87.22 the following procedure: 87.23 (i) the unfunded actuarial accrued liability of the special 87.24 fund attributable to experience losses that have occurred since 87.25 the most recent prior actuarial valuation must be determined and 87.26 the level annual dollar contribution needed to amortize the 87.27 experience loss over a period of ten years ending on the 87.28 December 31 occurring ten years later must be calculated; 87.29 (ii) the unfunded actuarial accrued liability of the 87.30 special fundshallmust be determined in accordance with the 87.31 provisions governing service pensions, retirement benefits, and 87.32 actuarial assumptions in effect before an applicable change; 87.33(ii)(iii) the level annual dollar contribution needed to 87.34 amortize this unfunded actuarial accrued liability amount by the 87.35 date for full funding in effectprior tobefore the changeshall87.36 must be calculated using the interest assumption specified in 88.1 section 356.215, subdivision 8, in effect before any applicable 88.2 change; 88.3(iii)(iv) the unfunded actuarial accrued liability of the 88.4 special fundshallmust be determined in accordance with any new 88.5 provisions governing service pensions, retirement benefits, and 88.6 actuarial assumptions and the remaining provisions governing 88.7 service pensions, retirement benefits, and actuarial assumptions 88.8 in effect before an applicable change; 88.9(iv)(v) the level annual dollar contribution needed to 88.10 amortize the difference between the unfunded actuarial accrued 88.11 liability amount calculatedpursuant to subclause (i)under item 88.12 (ii) and the unfunded actuarial accrued liability amount 88.13 calculatedpursuant to subclause (iii)under item (iv) over a 88.14 period of 20 years starting December 31 of the year in which the 88.15 change is effectiveshallmust be calculated using the interest 88.16 assumption specified in section 356.215, subdivision 8, in 88.17 effect after any applicable change; 88.18(v)(vi) the annual amortization contribution calculated 88.19pursuant to subclause (iv) shallunder item (v) must be added to 88.20 the annual amortization contribution calculatedpursuant to88.21subclause (ii)under items (i) and (iii); 88.22(vi)(vii) the period in which the unfunded actuarial 88.23 accrued liability amount determined insubclause (iii)item (iv) 88.24 will be amortized by the total annual amortization contribution 88.25 computedpursuant to subclause (v) shallunder item (vi) must be 88.26 calculated using the interest assumption specified in section 88.27 356.215, subdivision 8, in effect after any applicable change, 88.28 rounded to the nearest integral number of years, but whichshall88.29 must not exceed a period of 20 years from the end of the year in 88.30 which the determination of the date for full funding using this 88.31 procedure is made and whichshallmust not be less than the 88.32 period of years beginning in the year in which the determination 88.33 of the date for full funding using this procedure is made and 88.34 ending by the date for full funding in effect before the change; 88.35(vii)(viii) the period determinedpursuant to subclause88.36(vi) shallunder item (vii) must be added to the date as of 89.1 which the actuarial valuation was prepared and the resulting 89.2 dateshall beis the new date for full funding. 89.3 Sec. 7. Minnesota Statutes 2004, section 69.773, 89.4 subdivision 5, is amended to read: 89.5 Subd. 5. [MINIMUM MUNICIPAL OBLIGATION.] (a) The officers 89.6 of the relief association shall determine the minimum obligation 89.7 of the municipality with respect to the special fund of the 89.8 relief association for the following calendar yearprior toon 89.9 or before August 1 of each year in accordance with the 89.10 requirements of this subdivision. 89.11 (b) The minimum obligation of the municipality with respect 89.12 to the special fundshall beis an amount equal to the financial 89.13 requirements of the special fund of the relief association 89.14 determinedpursuant tounder subdivision 4, reduced by the 89.15 estimated amount of any fire state aid payablepursuant tounder 89.16 sections 69.011 to 69.051 reasonably anticipated to be received 89.17 by the municipality for transmittal to the special fund of the 89.18 relief association during the following year and the amount of 89.19 any anticipated contributions to the special fund required by 89.20 the relief association bylaws from the active members of the 89.21 relief association reasonably anticipated to be received during 89.22 the following calendar year. A reasonable amount of anticipated 89.23 fire state aid is an amount that does not exceed the fire state 89.24 aid actually received in the prior year multiplied by the factor 89.25 1.035. 89.26 (c) The officers of the relief association shall certify 89.27 the financial requirements of the special fund of the relief 89.28 association and the minimum obligation of the municipality with 89.29 respect to the special fund of the relief association as 89.30 determinedpursuant tounder subdivision 4 and this subdivision 89.31 to the governing body of the municipality by August 1 of each 89.32 year. The financial requirements of the relief association and 89.33 the minimum municipal obligation must be included in the 89.34 financial report or financial statement under section 69.051. 89.35 (d) The municipality shall provide for at least the minimum 89.36 obligation of the municipality with respect to the special fund 90.1 of the relief association by tax levy or from any other source 90.2 of public revenue. The municipality may levy taxes for the 90.3 payment of the minimum municipal obligation without any 90.4 limitation as to rate or amount and irrespective of any 90.5 limitations imposed by other provisions of law or charter upon 90.6 the rate or amount of taxation until the balance of the special 90.7 fund or any fund of the relief association has attained a 90.8 specified level. In addition, any taxes leviedpursuant to90.9 under this sectionshallmust not cause the amount or rate of 90.10 any other taxes levied in that year or to be levied in a 90.11 subsequent year by the municipality which are subject to a 90.12 limitation as to rate or amount to be reduced. 90.13 (e) If the municipality does not include the full amount of 90.14 the minimum municipal obligation in its levy for any year, the 90.15 officers of the relief association shall certify that amount to 90.16 the county auditor, who shall spread a levy in the amount of the 90.17 minimum municipal obligation on the taxable property of the 90.18 municipality. 90.19 (f) If the state auditor determines that a municipal 90.20 contribution actually made in a plan year was insufficient under 90.21 section 69.771, subdivision 3, paragraph (c), clause (5), the 90.22 state auditor may request from the relief association or from 90.23 the city a copy of the certifications under this subdivision. 90.24 The relief association or the city, whichever applies, must 90.25 provide the certifications within 14 days of the date of the 90.26 request from the state auditor. 90.27 Sec. 8. Minnesota Statutes 2004, section 69.775, is 90.28 amended to read: 90.29 69.775 [INVESTMENTS.] 90.30 (a) The special fund assets ofthea reliefassociations90.31 association governed by sections 69.771 to 69.776 must be 90.32 invested in securities that are authorized investments under 90.33 section 356A.06, subdivision 6 or 7. 90.34 (b) Notwithstanding the foregoing, up to 75 percent of the 90.35 market value of the assets of the special fund, not including 90.36 any money market mutual funds, may be invested in open-end 91.1 investment companies registered under the federal Investment 91.2 Company Act of 1940, if the portfolio investments of the 91.3 investment companies comply with the type of securities 91.4 authorized for investment under section 356A.06, subdivision 7. 91.5 (c) Securities held by the associations before June 2, 91.6 1989, that do not meet the requirements of this section may be 91.7 retained after that date if they were proper investments for the 91.8 association on that date. 91.9 (d) The governing board of the association may select and 91.10 appoint investment agencies to act for and in its behalf or may 91.11 certify special fund assets for investment by the State Board of 91.12 Investment under section 11A.17. 91.13 (e) The governing board of the association may certify 91.14 general fund assets of the relief association for investment by 91.15 the State Board of Investment in fixed income pools or in a 91.16 separately managed account at the discretion of the State Board 91.17 of Investment as provided in section 11A.14. 91.18 (f) The governing board of the association may select and 91.19 appoint a qualified private firm to measure management 91.20 performance and return on investment, and the firm shall use the 91.21 formula or formulas developed by the state board under section 91.22 11A.04, clause (11). 91.23 Sec. 9. Minnesota Statutes 2004, section 356A.06, 91.24 subdivision 7, is amended to read: 91.25 Subd. 7. [EXPANDED LIST OF AUTHORIZED INVESTMENT 91.26 SECURITIES.] (a) [AUTHORITY.] Except to the extent otherwise 91.27 authorized by law or bylaws, a covered pension plan not 91.28 described by subdivision 6, paragraph (a), may invest its assets 91.29 only in accordance with this subdivision. 91.30 (b) [SECURITIES GENERALLY.] The covered pension plan has 91.31 the authority to purchase, sell, lend, or exchange the 91.32 securities specified in paragraphs (c) to(g)(h), including 91.33 puts and call options and future contracts traded on a contract 91.34 market regulated by a governmental agency or by a financial 91.35 institution regulated by a governmental agency. These 91.36 securities may be owned as units in commingled trusts that own 92.1 the securities described in paragraphs (c) to(g)(h). 92.2 (c) [GOVERNMENT OBLIGATIONS.] The covered pension plan may 92.3 invest funds in governmental bonds, notes, bills, mortgages, and 92.4 other evidences of indebtedness provided the issue is backed by 92.5 the full faith and credit of the issuer or the issue is rated 92.6 among the top four quality rating categories by a nationally 92.7 recognized rating agency. The obligations in which funds may be 92.8 invested under this paragraph include guaranteed or insured 92.9 issues of (1) the United States, its agencies, its 92.10 instrumentalities, or organizations created and regulated by an 92.11 act of Congress; (2) Canada and its provinces, provided the 92.12 principal and interest is payable in United States dollars; (3) 92.13 the states and their municipalities, political subdivisions, 92.14 agencies, or instrumentalities; (4) the International Bank for 92.15 Reconstruction and Development, the Inter-American Development 92.16 Bank, the Asian Development Bank, the African Development Bank, 92.17 or any other United States government sponsored organization of 92.18 which the United States is a member, provided the principal and 92.19 interest is payable in United States dollars. 92.20 (d) [CORPORATE OBLIGATIONS.] The covered pension plan may 92.21 invest funds in bonds, notes, debentures, transportation 92.22 equipment obligations, or any other longer term evidences of 92.23 indebtedness issued or guaranteed by a corporation organized 92.24 under the laws of the United States or any state thereof, or the 92.25 Dominion of Canada or any province thereof if they conform to 92.26 the following provisions: 92.27 (1) the principal and interest of obligations of 92.28 corporations incorporated or organized under the laws of the 92.29 Dominion of Canada or any province thereof must be payable in 92.30 United States dollars; and 92.31 (2) obligations must be rated among the top four quality 92.32 categories by a nationally recognized rating agency. 92.33 (e) [OTHER OBLIGATIONS.] (1) The covered pension plan may 92.34 invest funds in bankers acceptances, certificates of deposit, 92.35 deposit notes, commercial paper, mortgage participation 92.36 certificates and pools, asset backed securities, repurchase 93.1 agreements and reverse repurchase agreements, guaranteed 93.2 investment contracts, savings accounts, and guaranty fund 93.3 certificates, surplus notes, or debentures of domestic mutual 93.4 insurance companies if they conform to the following provisions: 93.5 (i) bankers acceptances and deposit notes of United States 93.6 banks are limited to those issued by banks rated in the highest 93.7 four quality categories by a nationally recognized rating 93.8 agency; 93.9 (ii) certificates of deposit are limited to those issued by 93.10 (A) United States banks and savings institutions that are rated 93.11 in the highest four quality categories by a nationally 93.12 recognized rating agency or whose certificates of deposit are 93.13 fully insured by federal agencies; or (B) credit unions in 93.14 amounts up to the limit of insurance coverage provided by the 93.15 National Credit Union Administration; 93.16 (iii) commercial paper is limited to those issued by United 93.17 States corporations or their Canadian subsidiaries and rated in 93.18 the highest two quality categories by a nationally recognized 93.19 rating agency; 93.20 (iv) mortgage participation or pass through certificates 93.21 evidencing interests in pools of first mortgages or trust deeds 93.22 on improved real estate located in the United States where the 93.23 loan to value ratio for each loan as calculated in accordance 93.24 with section 61A.28, subdivision 3, does not exceed 80 percent 93.25 for fully amortizable residential properties and in all other 93.26 respects meets the requirements of section 61A.28, subdivision 93.27 3; 93.28 (v) collateral for repurchase agreements and reverse 93.29 repurchase agreements is limited to letters of credit and 93.30 securities authorized in this section; 93.31 (vi) guaranteed investment contracts are limited to those 93.32 issued by insurance companies or banks rated in the top four 93.33 quality categories by a nationally recognized rating agency or 93.34 to alternative guaranteed investment contracts where the 93.35 underlying assets comply with the requirements of this 93.36 subdivision; 94.1 (vii) savings accounts are limited to those fully insured 94.2 by federal agencies; and 94.3 (viii) asset backed securities must be rated in the top 94.4 four quality categories by a nationally recognized rating agency. 94.5 (2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do 94.6 not apply to certificates of deposit and collateralization 94.7 agreements executed by the covered pension plan under clause 94.8 (1), item (ii). 94.9 (3) In addition to investments authorized by clause (1), 94.10 item (iv), the covered pension plan may purchase from the 94.11 Minnesota Housing Finance Agency all or any part of a pool of 94.12 residential mortgages, not in default, that has previously been 94.13 financed by the issuance of bonds or notes of the agency. The 94.14 covered pension plan may also enter into a commitment with the 94.15 agency, at the time of any issue of bonds or notes, to purchase 94.16 at a specified future date, not exceeding 12 years from the date 94.17 of the issue, the amount of mortgage loans then outstanding and 94.18 not in default that have been made or purchased from the 94.19 proceeds of the bonds or notes. The covered pension plan may 94.20 charge reasonable fees for any such commitment and may agree to 94.21 purchase the mortgage loans at a price sufficient to produce a 94.22 yield to the covered pension plan comparable, in its judgment, 94.23 to the yield available on similar mortgage loans at the date of 94.24 the bonds or notes. The covered pension plan may also enter 94.25 into agreements with the agency for the investment of any 94.26 portion of the funds of the agency. The agreement must cover 94.27 the period of the investment, withdrawal privileges, and any 94.28 guaranteed rate of return. 94.29 (f) [CORPORATE STOCKS.] The covered pension plan may 94.30 invest funds in stocks or convertible issues of any corporation 94.31 organized under the laws of the United States or the states 94.32 thereof, any corporation organized under the laws of the 94.33 Dominion of Canada or its provinces, or any corporation listed 94.34 onthe New York Stock Exchange or the American Stock Exchangean 94.35 exchange regulated by an agency of the United States or of the 94.36 Canadian national government, if they conform to the following 95.1 provisions: 95.2 (1) the aggregate value of corporate stock investments, as 95.3 adjusted for realized profits and losses, must not exceed 85 95.4 percent of the market or book value, whichever is less, of a 95.5 fund, less the aggregate value of investments according to 95.6subdivision 6paragraph (h); 95.7 (2) investments must not exceed five percent of the total 95.8 outstanding shares of any one corporation. 95.9 (g) [EXCHANGE TRADED FUNDS.] The covered pension plan may 95.10 invest funds in exchange traded funds, subject to the maximums, 95.11 the requirements, and the limitations set forth in paragraph 95.12 (d), (e), (f), or (h), whichever applies. 95.13 (h) [OTHER INVESTMENTS.] (1) In addition to the 95.14 investments authorized in paragraphs (b) to(f)(g), and subject 95.15 to the provisions in clause (2), the covered pension plan may 95.16 invest funds in: 95.17 (i) venture capital investment businesses through 95.18 participation in limited partnerships and corporations; 95.19 (ii) real estate ownership interests or loans secured by 95.20 mortgages or deeds of trust through investment in limited 95.21 partnerships, bank sponsored collective funds, trusts, and 95.22 insurance company commingled accounts, including separate 95.23 accounts; 95.24 (iii) regional and mutual funds through bank sponsored 95.25 collective funds and open-end investment companies registered 95.26 under the Federal Investment Company Act of 1940; 95.27 (iv) resource investments through limited partnerships, 95.28 private placements, and corporations; and 95.29 (v) international securities. 95.30 (2) The investments authorized in clause (1) must conform 95.31 to the following provisions: 95.32 (i) the aggregate value of all investments made according 95.33 to clause (1) may not exceed 35 percent of the market value of 95.34 the fund for which the covered pension plan is investing; 95.35 (ii) there must be at least four unrelated owners of the 95.36 investment other than the state board for investments made under 96.1 clause (1), item (i), (ii), (iii), or (iv); 96.2 (iii) covered pension plan participation in an investment 96.3 vehicle is limited to 20 percent thereof for investments made 96.4 under clause (1), item (i), (ii), (iii), or (iv); and 96.5 (iv) covered pension plan participation in a limited 96.6 partnership does not include a general partnership interest or 96.7 other interest involving general liability. The covered pension 96.8 plan may not engage in any activity as a limited partner which 96.9 creates general liability. 96.10 Sec. 10. Minnesota Statutes 2004, section 424A.02, 96.11 subdivision 3, is amended to read: 96.12 Subd. 3. [FLEXIBLE SERVICE PENSION MAXIMUMS.] (a) Annually 96.13 on or before August 1 as part of the certification of the 96.14 financial requirements and minimum municipal obligation 96.15 determined under section 69.772, subdivision 4, or 69.773, 96.16 subdivision 5, as applicable, the secretary or some other 96.17 official of the relief association designated in the bylaws of 96.18 each relief association shall calculate and certify to the 96.19 governing body of the applicable qualified municipality the 96.20 average amount of available financing per active covered 96.21 firefighter for the most recent three-year period. The amount 96.22 of available financing shall include any amounts of fire state 96.23 aid received or receivable by the relief association, any 96.24 amounts of municipal contributions to the relief association 96.25 raised from levies on real estate or from other available 96.26 revenue sources exclusive of fire state aid, and one-tenth of 96.27 the amount of assets in excess of the accrued liabilities of the 96.28 relief association calculated under section 69.772, subdivision 96.29 2; 69.773, subdivisions 2 and 4; or 69.774, subdivision 2, if 96.30 any. 96.31 (b) The maximum service pension which the relief 96.32 association has authority to provide for in its bylaws for 96.33 payment to a member retiring after the calculation date when the 96.34 minimum age and service requirements specified in subdivision 1 96.35 are met must be determined using the table in paragraph (c) or 96.36 (d), whichever applies. 97.1 (c) For a relief association where the governing bylaws 97.2 provide for a monthly service pension to a retiring member, the 97.3 maximum monthly service pension amount per month for each year 97.4 of service credited that may be provided for in the bylaws is 97.5 the greater of the service pension amount provided for in the 97.6 bylaws on the date of the calculation of the average amount of 97.7 the available financing per active covered firefighter or the 97.8 maximum service pension figure corresponding to the average 97.9 amount of available financing per active covered firefighter: 97.10 Minimum Average Amount of Maximum Service Pension 97.11 Available Financing per Amount Payable per Month 97.12 Firefighter for Each Year of Service 97.13 $... $ .25 97.144241 .50 97.158481 1.00 97.16126122 1.50 97.17168162 2.00 97.18209203 2.50 97.19252243 3.00 97.20294284 3.50 97.21335324 4.00 97.22378365 4.50 97.23420405 5.00 97.24503486 6.00 97.25587567 7.00 97.26672648 8.00 97.27755729 9.00 97.28839810 10.00 97.29923891 11.00 97.301007972 12.00 97.3110901053 13.00 97.3211751134 14.00 97.3312591215 15.00 97.3413421296 16.00 97.3514271377 17.00 97.3615101458 18.00 98.115941539 19.00 98.216771620 20.00 98.317621701 21.00 98.418451782 22.00 98.518881823 22.50 98.619291863 23.00 98.720141944 24.00 98.820982025 25.00 98.921832106 26.00 98.1022672187 27.00 98.1123512268 28.00 98.1224362349 29.00 98.1325202430 30.00 98.1426042511 31.00 98.1526892592 32.00 98.1627732673 33.00 98.1728572754 34.00 98.1829422834 35.00 98.1930262916 36.00 98.2031102997 37.00 98.2131943078 38.00 98.2232783159 39.00 98.2333623240 40.00 98.2434463321 41.00 98.2535303402 42.00 98.2636143483 43.00 98.2736983564 44.00 98.2837823645 45.00 98.2938663726 46.00 98.3039503807 47.00 98.3140343888 48.00 98.3241183969 49.00 98.3342024050 50.00 98.3442864131 51.00 98.3543704212 52.00 98.36Effective beginning December 31, 2003:99.144544293 53.00 99.245384374 54.00 99.346224455 55.00 99.447064536 56.00 99.5 (d) For a relief association in which the governing bylaws 99.6 provide for a lump sum service pension to a retiring member, the 99.7 maximum lump sum service pension amount for each year of service 99.8 credited that may be provided for in the bylaws is the greater 99.9 of the service pension amount provided for in the bylaws on the 99.10 date of the calculation of the average amount of the available 99.11 financing per active covered firefighter or the maximum service 99.12 pension figure corresponding to the average amount of available 99.13 financing per active covered firefighter for the applicable 99.14 specified period: 99.15 Minimum Average Amount Maximum Lump Sum Service 99.16 of Available Financing Pension Amount Payable 99.17 per Firefighter for Each Year of Service 99.18 $.. $10 99.19 11 20 99.20 16 30 99.21 23 40 99.22 27 50 99.23 32 60 99.24 43 80 99.25 54 100 99.26 65 120 99.27 77 140 99.28 86 160 99.29 97 180 99.30 108 200 99.31 131 240 99.32 151 280 99.33 173 320 99.34 194 360 99.35 216 400 99.36 239 440 100.1 259 480 100.2 281 520 100.3 302 560 100.4 324 600 100.5 347 640 100.6 367 680 100.7 389 720 100.8 410 760 100.9 432 800 100.10 486 900 100.11 540 1000 100.12 594 1100 100.13 648 1200 100.14 702 1300 100.15 756 1400 100.16 810 1500 100.17 864 1600 100.18 918 1700 100.19 972 1800 100.20 1026 1900 100.21 1080 2000 100.22 1134 2100 100.23 1188 2200 100.24 1242 2300 100.25 1296 2400 100.26 1350 2500 100.27 1404 2600 100.28 1458 2700 100.29 1512 2800 100.30 1566 2900 100.31 1620 3000 100.32 1672 3100 100.33 1726 3200 100.34 1753 3250 100.35 1780 3300 100.36 1820 3375 101.1 1834 3400 101.2 1888 3500 101.3 1942 3600 101.4 1996 3700 101.5 2023 3750 101.6 2050 3800 101.7 2104 3900 101.8 2158 4000 101.9 2212 4100 101.10 2265 4200 101.11 2319 4300 101.12 2373 4400 101.13 2427 4500 101.14 2481 4600 101.15 2535 4700 101.16 2589 4800 101.17 2643 4900 101.18 2697 5000 101.19 2751 5100 101.20 2805 5200 101.21 2859 5300 101.22 2913 5400 101.23 2967 5500 101.24 3021 5600 101.25 3075 5700 101.26 3129 5800 101.27 3183 5900 101.28 3237 6000 101.29 3291 6100 101.30 3345 6200 101.31 3399 6300 101.32 3453 6400 101.33 3507 6500 101.34 3561 6600 101.35 3615 6700 101.36 3669 6800 102.1 3723 6900 102.2 3777 7000 102.3Effective beginning December 31, 2003:102.4 3831 7100 102.5 3885 7200 102.6 3939 7300 102.7 3993 7400 102.8 4047 7500 102.9 (e) For a relief association in which the governing bylaws 102.10 provide for a monthly benefit service pension as an alternative 102.11 form of service pension payment to a lump sum service pension, 102.12 the maximum service pension amount for each pension payment type 102.13 must be determined using the applicable table contained in this 102.14 subdivision. 102.15 (f) If a relief association establishes a service pension 102.16 in compliance with the applicable maximum contained in paragraph 102.17 (c) or (d) and the minimum average amount of available financing 102.18 per active covered firefighter is subsequently reduced because 102.19 of a reduction in fire state aid or because of an increase in 102.20 the number of active firefighters, the relief association may 102.21 continue to provide the prior service pension amount specified 102.22 in its bylaws, but may not increase the service pension amount 102.23 until the minimum average amount of available financing per 102.24 firefighter under the table in paragraph (c) or (d), whichever 102.25 applies, permits. 102.26 (g) No relief association is authorized to provide a 102.27 service pension in an amount greater than the largest applicable 102.28 flexible service pension maximum amount even if the amount of 102.29 available financing per firefighter is greater than the 102.30 financing amount associated with the largest applicable flexible 102.31 service pension maximum. 102.32 Sec. 11. Minnesota Statutes 2004, section 424A.02, 102.33 subdivision 4, is amended to read: 102.34 Subd. 4. [DEFINED CONTRIBUTION LUMP SUM SERVICE 102.35 PENSIONS.] (a) If the bylaws governing the relief association so 102.36 provide exclusively, the relief association may pay a defined 103.1 contribution lump sum service pension in lieu of any defined 103.2 benefit service pension governed by subdivision 2. 103.3 (b) An individual account for each firefighter who is a 103.4 member of the relief associationshallmust be established. To 103.5 each individual active member accountshallmust be crediteda103.6right toan equal share of:(a)(1) any amounts of fire state 103.7 aid received by the relief association;(b)(2) any amounts of 103.8 municipal contributions to the relief association raised from 103.9 levies on real estate or from other available revenue sources 103.10 exclusive of fire state aid; and(c)(3) any amounts equal to 103.11 the share of the assets of the special fund to the credit 103.12 of:(1)(i) any former member who terminated active service 103.13 with the fire department to which the relief association is 103.14 associatedprior tobefore meeting the minimum service 103.15 requirement provided for in subdivision 1 and has not returned 103.16 to active service with the fire department for a period no 103.17 shorter than five years; or(2)(ii) any retired member who 103.18 retiredprior tobefore obtaining a full nonforfeitable interest 103.19 in the amounts credited to the individual member 103.20 accountpursuant tounder subdivision 2 and any applicable 103.21 provision of the bylaws of the relief association. In addition, 103.22 anyinterest orinvestmentincome earnedreturn on the assets of 103.23 the special fundshallmust be credited in proportion to the 103.24 share of the assets of the special fund to the credit of each 103.25 individual active member account through the date on which the 103.26 investment return is recognized by and credited to the special 103.27 fund. 103.28 (c) At the time of retirementpursuant tounder subdivision 103.29 1 and any applicable provision of the bylaws of the relief 103.30 association, a retiring membershall beis entitled to that 103.31 portion of the assets of the special fund to the credit of the 103.32 member in the individual member account which is 103.33 nonforfeitablepursuant tounder subdivision 2 and any 103.34 applicable provision of the bylaws of the relief association 103.35 based on the number of years of service to the credit of the 103.36 retiring member. 104.1 Sec. 12. Minnesota Statutes 2004, section 424A.02, 104.2 subdivision 7, is amended to read: 104.3 Subd. 7. [DEFERRED SERVICE PENSIONS.] (a) A member of a 104.4 relief associationto which this section appliesis entitled to 104.5 a deferred service pension if the member: 104.6 (1) has completed the lesser of the minimum period of 104.7 active service with the fire department specified in the bylaws 104.8 or 20 years of active service with the fire department; 104.9 (2) has completed at least five years of active membership 104.10 in the relief association; and 104.11 (3) separates from active service and membership before 104.12 reaching age 50 or the minimum age for retirement and 104.13 commencement of a service pension specified in the bylaws 104.14 governing the relief association if that age is greater than age 104.15 50. 104.16 (b) The deferred service pensionstartsis payable when the 104.17 former member reaches age 50, or the minimum age specified in 104.18 the bylaws governing the relief association if that age is 104.19 greater than age 50, and when the former member makes a valid 104.20 written application. 104.21 (c) A relief association that provides a lump sum service 104.22 pension governed by subdivision 3 may, when its governing bylaws 104.23 so provide, pay interest on the deferred lump sum service 104.24 pension during the period of deferral. If provided for in the 104.25 bylaws, interest must be paid in one of the following manners: 104.26 (1) at the investment performance rate actually earned on 104.27 that portion of the assets if the deferred benefit amount is 104.28 invested by the relief association in a separate account 104.29 established and maintained by the relief association or if the 104.30 deferred benefit amount is invested in a separate investment 104.31 vehicle held by the relief association; 104.32 (2) atthean interest rate of up to five percent, 104.33 compounded annually as set by the board of directors and 104.34 approved as provided in subdivision 10; or 104.35 (3) at a rate equal to the actual time weighted total rate 104.36 of return investment performance of the special fund as reported 105.1 by the Office of the State Auditor under section 356.219, up to 105.2 five percent, compounded annually, and applied consistently for 105.3 all deferred service pensioners. 105.4(d)A relief association may not use the method provided 105.5 for inparagraph (c),clause (3), until it has modified its 105.6 bylaws to be consistent with that clause. 105.7 (d) Interest under paragraph (c), clause (2) or (3), is 105.8 payable from the first day of the month next following the date 105.9 on which the municipality has approved the deferred service 105.10 pension interest rate established by the board of trustees or 105.11 from the first day of the month next following the date on which 105.12 the member separated from active fire department service and 105.13 relief association membership, whichever is later, to the last 105.14 day of the month immediately before the month in which the 105.15 deferred member becomes eligible to begin receipt of the service 105.16 pension and applies for the deferred service pension. 105.17 (e) A relief association that provides a defined 105.18 contribution service pension may, if its governing bylaws so 105.19 provide, credit interest or additional investment performance on 105.20 the deferred lump sum service pension during the period of 105.21 deferral. If provided for in the bylaws, the interest must be 105.22 paid in one of the manners specified in paragraph (c) or 105.23 alternatively the relief association may credit any investment 105.24 return on the assets of the special fund of the defined 105.25 contribution volunteer firefighter relief association in 105.26 proportion to the share of the assets of the special fund to the 105.27 credit of each individual deferred member account through the 105.28 date on which the investment return is recognized by and 105.29 credited to the special fund. 105.30 (f) For a deferred service pension that is transferred to a 105.31 separate account established and maintained by the relief 105.32 association or separate investment vehicle held by the relief 105.33 association, the deferred member bears the full investment risk 105.34 subsequent to transfer and in calculating the accrued liability 105.35 of the volunteer firefighters relief association that pays a 105.36 lump sum service pension, the accrued liability for deferred 106.1 service pensions is equal to the separate relief association 106.2 account balance or the fair market value of the separate 106.3 investment vehicle held by the relief association. 106.4(f)(g) The deferred service pension is governed by and 106.5 must be calculated under the general statute, special law, 106.6 relief association articles of incorporation, and relief 106.7 association bylaw provisions applicable on the date on which the 106.8 member separated from active service with the fire department 106.9 and active membership in the relief association. 106.10 Sec. 13. [424A.021] [CREDIT FOR BREAK IN SERVICE TO 106.11 PROVIDE UNIFORMED SERVICE.] 106.12 Subdivision 1. [AUTHORIZATION.] Subject to restrictions 106.13 stated in this section, a volunteer firefighter who is absent 106.14 from firefighting service due to service in the uniformed 106.15 services, as defined in United States Code, title 38, section 106.16 4303(13), may obtain service credit if the relief association is 106.17 a defined benefit plan or an allocation of any fire state aid, 106.18 any municipal contributions, and any investment return received 106.19 by the relief association if the relief association is a defined 106.20 benefit contribution plan for the period of the uniformed 106.21 service, not to exceed five years, unless a longer period is 106.22 required under United States Code, title 38, section 4312. 106.23 Subd. 2. [LIMITATIONS.] (a) To be eligible for service 106.24 credit or financial allocation under this section, the volunteer 106.25 firefighter must return to firefighting service with coverage by 106.26 the same relief association or by the successor to that relief 106.27 association upon discharge from service in the uniformed service 106.28 within the time frame required in United States Code, title 38, 106.29 section 4312(e). 106.30 (b) Service credit or financial allocation is not 106.31 authorized if the firefighter separates from uniformed service 106.32 with a dishonorable or bad conduct discharge or under other than 106.33 honorable conditions. 106.34 (c) Service credit or financial allocation is not 106.35 authorized if the firefighter fails to provide notice to the 106.36 fire department that the individual is leaving to provide 107.1 service in the uniformed service, unless it is not feasible to 107.2 provide that notice due to the emergency nature of the situation. 107.3 Sec. 14. Minnesota Statutes 2004, section 424A.04, 107.4 subdivision 1, is amended to read: 107.5 Subdivision 1. [MEMBERSHIP.] (a)EveryA relief 107.6 association that is directly associated with a municipal fire 107.7 departmentshallmust be managed by a board of trustees 107.8 consisting of nine members. Six trusteesshallmust be elected 107.9 from the membership of the relief association and three trustees 107.10shallmust be drawn from the officials of the municipalities 107.11 served by the fire department to which the relief association is 107.12 directly associated. The bylaws of a relief association which 107.13 provides a monthly benefit service pension may provide that one 107.14 of the six trustees elected from the relief 107.15 association membership may be a retired member receiving a 107.16 monthly pension who is elected by the membership of the relief 107.17 association. The threeex officiomunicipal trusteesshall be107.18the mayor, the clerk, clerk-treasurer or finance director,must 107.19 be one elected municipal official and one elected or appointed 107.20 municipal official who are designated as municipal 107.21 representatives by the municipal governing board annually and 107.22 the chief of the municipal fire department. 107.23 (b)EveryA relief association that is a subsidiary of an 107.24 independent nonprofit firefighting corporationshallmust be 107.25 managed by a board of trustees consisting oftennine members. 107.26 Six trusteesshallmust be elected from the membership of the 107.27 relief association,threetwo trusteesshallmust be drawn from 107.28 the officials of the municipalities served by the fire 107.29 department to which the relief association is directly 107.30 associated, and one trustee shall be the fire chief serving with 107.31 the independent nonprofit firefighting corporation. The bylaws 107.32 of a relief association may provide that one of the six trustees 107.33 elected from the relief association membership may be a retired 107.34 member receiving a monthly pension who is elected by the 107.35 membership of the relief association. Thethree ex officiotwo 107.36 municipal trusteeswho are the elected officials shallmust 108.1 be elected or appointed municipal officials, selected as follows: 108.2 (1) if only one municipality contracts with the independent 108.3 nonprofit firefighting corporation, theex officiomunicipal 108.4 trusteesshallmust bethree electedtwo officials of the 108.5 contracting municipality who are designated annually by the 108.6 governing body of the municipality; 108.7(2) if two municipalities contract with the independent108.8nonprofit firefighting corporation, the ex officio trustees108.9shall be two elected officials of the largest municipality in108.10population and one elected official of the next largest108.11municipality in population who are designated by the governing108.12bodies of the applicable municipalities;or 108.13(3)(2) ifthreetwo or more municipalities contract with 108.14 the independent nonprofit corporation, theex officiomunicipal 108.15 trusteesshallmust be oneelectedofficialoffrom each of 108.16 thethreetwo largest municipalities in population who are 108.17 designated annually by the governing bodies of the applicable 108.18 municipalities. 108.19 (c) The municipal trustees for a relief association that is 108.20 directly associated with a fire department operated as or by a 108.21 joint powers entity must be designated annually by the joint 108.22 powers board. The municipal trustees for a relief association 108.23 that is directly associated with a fire department service area 108.24 township must be designated by the township board. 108.25 (d) If a relief association lacks theex officiomunicipal 108.26 board members provided for in paragraph (a), (b), or(b)(c) 108.27 because the fire department is not located in or associated with 108.28 an organized municipality, joint powers entity, or township, the 108.29ex officiomunicipal board members must be appointed from the 108.30 fire department service area by the board of commissioners of 108.31 the applicable county. 108.32 (e) The term of these appointedex officiomunicipal board 108.33 members isthree yearsone year or until the person's successor 108.34 is qualified, whichever is later. 108.35(d) An ex officio(f) A municipal trustee under paragraph 108.36 (a), (b),or(c)shall have, or (d) has all the rights and 109.1 duties accorded to any other trustee, except the right to be an 109.2 officer of the relief association board of trustees. 109.3(e)(g) A boardshallmust have at least three officers, 109.4which shall bewho are a president, a secretary and a treasurer. 109.5 These officersshallmust be elected from among the elected 109.6 trustees by either the full board of trustees or by the 109.7 membership, as specified in the bylaws, and. In no eventshall109.8 may any trustee hold more than one officer position at any one 109.9 time. The terms of the elected trustees and of the officers of 109.10 the boardshallmust be specified in the bylaws of the relief 109.11 association, butshallmay not exceed three years. If the term 109.12 of the elected trustees exceeds one year, the election of the 109.13 various trustees elected from the membershipshall initially and109.14shall thereafter continue tomust be staggered on as equal a 109.15 basis as is practicable. 109.16 Sec. 15. Minnesota Statutes 2004, section 424B.10, 109.17 subdivision 1, is amended to read: 109.18 Subdivision 1. [BENEFITS.] (a) Notwithstanding any 109.19 provision of section 424A.02, subdivision 3, to the contrary, 109.20 the service pension of the subsequent relief association as of 109.21 the effective date of consolidation is either the service 109.22 pension amount specified in clause (1) or the service pension 109.23 amounts specified in clause (2), as provided for in the 109.24 consolidated relief association's articles of incorporation or 109.25 bylaws: 109.26 (1) the highest dollar amount service pension amount of any 109.27 prior volunteer firefighters relief association in effect 109.28 immediately before the consolidation initiation if the pension 109.29 amount was implemented consistent with section 424A.02; or 109.30 (2) for service rendered by each individual volunteer 109.31 firefighter under the consolidating volunteer firefighters 109.32 relief association that the firefighter belonged to immediately 109.33 before the consolidation if the pension amount was implemented 109.34 consistent with section 424A.02 and for service rendered after 109.35 the effective date of the consolidation, the highest dollar 109.36 amount service pension of any of the consolidating volunteer 110.1 firefighters relief associations in effect immediately before 110.2 the consolidation if the pension amount was implemented 110.3 consistent with section 424A.02. 110.4 (b) Any increase in the service pension amount beyond the 110.5 amount implemented under paragraph (a) must conform with the 110.6 requirements and limitations of sections 69.771 to 69.775 and 110.7 424A.02. 110.8 Sec. 16. [APPROPRIATION.] 110.9 $40,000 is appropriated from the general fund in fiscal 110.10 year 2006 to the commissioner of public safety to hire a 110.11 consultant to assist the statewide Volunteer Firefighter 110.12 Retirement Plan Study Task Force. 110.13 Sec. 17. [EFFECTIVE DATE.] 110.14 (a) Sections 1 to 12, 14, 15, and 16 are effective July 1, 110.15 2005. 110.16 (b) Section 13 is effective July 1, 2005, and applies to 110.17 breaks in service that end on or after that date. 110.18 ARTICLE 12 110.19 VARIOUS CORRECTIONS 110.20 AND CLARIFICATIONS 110.21 Section 1. Minnesota Statutes 2004, section 3A.13, is 110.22 amended to read: 110.23 3A.13 [EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM 110.24 DEDUCTION.] 110.25 (a) The provisions of section352.15 shall356.401 apply to 110.26 the legislators retirement plan, chapter 3A. 110.27 (b) The executive director of the Minnesota State 110.28 Retirement System must, at the request of a retired legislator 110.29 who is enrolled in a health insurance plan covering state 110.30 employees, deduct the person's health insurance premiums from 110.31 the person's annuity and transfer the amount of the premium to a 110.32 health insurance carrier covering state employees. 110.33 Sec. 2. Minnesota Statutes 2004, section 69.011, 110.34 subdivision 2b, is amended to read: 110.35 Subd. 2b. [DEPARTMENTS OF NATURAL RESOURCES AND PUBLIC 110.36 SAFETY.] (a)On or before July 1, 1997, the commissioner of111.1natural resources shall certify one-half of the number of peace111.2officers as defined in subdivision 1, clause (g), employed by111.3the Enforcement Division during calendar year 1996 and the111.4commissioner of public safety shall certify one-half of the111.5number of peace officers as defined in subdivision 1, clause111.6(g), employed by the Bureau of Criminal Apprehension, the111.7Gambling Enforcement Division, and the State Patrol Division111.8during calendar year 1996.111.9(b) On or before March 15, 1998, the commissioner of111.10natural resources shall certify seven-tenths of the number of111.11peace officers as defined in subdivision 1, clause (g), employed111.12by the Enforcement Division and the commissioner of public111.13safety shall certify seven-tenths of the number of peace111.14officers as defined in subdivision 1, clause (g), employed by111.15the Bureau of Criminal Apprehension, the Gambling Enforcement111.16Division, and the State Patrol Division.111.17(c)On or beforeMarch 15, 1999, and annually on or before111.18 each March 15thereafter, the commissioner of natural resources 111.19 shall certify the number of peace officers as defined in 111.20 subdivision 1, clause (g), employed by the Enforcement Division 111.21 and the commissioner of public safety shall certify the number 111.22 of peace officers as defined in subdivision 1, clause (g), 111.23 employed by the Bureau of Criminal Apprehension, the Gambling 111.24 Enforcement Division, and the State Patrol Division. 111.25(d)(b) The certification must be on a form prescribed by 111.26 the commissioner. Peace officers certified under this paragraph 111.27 must be included in the total certifications under subdivision 2. 111.28 Sec. 3. Minnesota Statutes 2004, section 69.021, 111.29 subdivision 5, is amended to read: 111.30 Subd. 5. [CALCULATION OF STATE AID.] (a) The amount of 111.31 fire state aid available for apportionment, before the addition 111.32 of the minimum fire state aid allocation amount under 111.33 subdivision 7, is equal to 107 percent of the amount of premium 111.34 taxes paid to the state upon the fire, lightning, sprinkler 111.35 leakage, and extended coverage premiums reported to the 111.36 commissioner by insurers on the Minnesota Firetown Premium 112.1 Report. This amountshallmust be reduced by the amount 112.2 required to pay the state auditor's costs and expenses of the 112.3 audits or exams of the firefighters relief associations. 112.4 The total amount for apportionment in respect to fire state 112.5 aid must not be less than two percent of the premiums reported 112.6 to the commissioner by insurers on the Minnesota Firetown 112.7 Premium Report after subtracting the following amounts: 112.8 (1) the amount required to pay the state auditor's costs 112.9 and expenses of the audits or exams of the firefighters relief 112.10 associations; and 112.11 (2) one percent of the premiums reported by town and 112.12 farmers' mutual insurance companies and mutual property and 112.13 casualty companies with total assets of $5,000,000 or less. 112.14 (b) The total amount for apportionment as police state aid 112.15 is equal to 104 percent of the amount of premium taxes paid to 112.16 the state on the premiums reported to the commissioner by 112.17 insurers on the Minnesota Aid to Police Premium Report, reduced 112.18 by the amount required to pay the costs and expenses of the 112.19 state auditor for audits or exams of police relief 112.20 associations. The total amount for apportionment in respect to 112.21 the police state aid program must not be less than two percent 112.22 of the amount of premiums reported to the commissioner by 112.23 insurers on the Minnesota Aid to Police Premium Report after 112.24 subtracting the amount required to pay the state auditor's cost 112.25 and expenses of the audits or exams of the police relief 112.26 associations. 112.27 (c) The commissioner shall calculate the percentage of 112.28 increase or decrease reflected in the apportionment over or 112.29 under the previous year's available state aid using the same 112.30 premiums as a basis for comparison. 112.31 (d)The amount for apportionment in respect to peace112.32officer state aid under paragraph (b) must be further reduced by112.33$1,779,000 in fiscal year 1999, $2,077,000 in fiscal year 2000,112.34and $2,404,000 in fiscal year 2001. These reductions in this112.35paragraph cancel to the general fund.112.36(e)In addition to the amount for apportionment of police 113.1 state aid under paragraph (b), each year $100,000shallmust be 113.2 apportioned for police state aid. An amount sufficient to pay 113.3 this increase is annually appropriated from the general fund. 113.4 Sec. 4. Minnesota Statutes 2004, section 69.021, 113.5 subdivision 11, is amended to read: 113.6 Subd. 11. [EXCESS POLICE STATE-AID HOLDING ACCOUNT.] (a) 113.7 The excess police state-aid holding account is established in 113.8 the general fund. The excess police state-aid holding account 113.9 must be administered by the commissioner. 113.10 (b) Excess police state aid determined according to 113.11 subdivision 10, must be deposited in the excess police state-aid 113.12 holding account. 113.13 (c) From the balance in the excess police state-aid holding 113.14 account, $900,000 is appropriated to and must be transferred 113.15 annually to the ambulance service personnel longevity award and 113.16 incentive suspense account established by section 144E.42, 113.17 subdivision 2. 113.18 (d) If a police officer stress reduction program is created 113.19 by law and money is appropriated for that program, an amount 113.20 equal to that appropriation must be transferred to the 113.21 administrator of that program from the balance in the excess 113.22 police state-aid holding account. 113.23 (e) On October 1,1997, andannuallyon each subsequent113.24October 1,one-half of the balance of the excess police 113.25 state-aid holding account remaining after the deductions under 113.26 paragraphs (c) and (d) is appropriated for additional 113.27 amortization aid under section 423A.02, subdivision 1b. 113.28 (f) Annually, the remaining balance in the excess police 113.29 state-aid holding account, after the deductions under paragraphs 113.30 (c), (d), and (e), cancels to the general fund. 113.31 Sec. 5. Minnesota Statutes 2004, section 69.33, is amended 113.32 to read: 113.33 69.33 [NAMES OF ASSOCIATIONS REPORTED TO INSURANCE 113.34 COMPANIES.] 113.35 The commissioner shall enclose in the annual statement 113.36 blank that is sent to all fire insurance companies doing 114.1 business in this state a blank form containing the names ofall114.2firefighters' relief associations inall cities of the first 114.3 classand the names of the citiesand require these companies, 114.4 at the time of making their annual statements to the 114.5 commissioner, to state on these blanks the amount of premiums 114.6 received by them upon properties insured within the corporate 114.7 limits of the cities named thereon during the year ending 114.8 December 31st last past. Thereafter, before July first each 114.9 year, the commissioner shall certify to the commissioner of 114.10 finance the information thus obtained, together with the amount 114.11 of the tax for the benefit of therelief associationpension 114.12 plans covering firefighters in cities of the first class paid in 114.13 such year by these companies upon these insurance premiums. 114.14 Sec. 6. Minnesota Statutes 2004, section 69.773, 114.15 subdivision 4, is amended to read: 114.16 Subd. 4. [FINANCIAL REQUIREMENTS OF SPECIAL FUND.]Prior114.17toBefore August 1 of each year, the officers of the relief 114.18 association shall determine the financial requirements of the 114.19 special fund of the relief association in accordance with the 114.20 requirements of this subdivision. The financial requirements of 114.21 the relief associationshallmust be based on the most recent 114.22 actuarial valuation of the special fund prepared in accordance 114.23 with subdivision 2. If the relief association has an unfunded 114.24 actuarial accrued liability as reported in the most recent 114.25 actuarial valuation, the financial requirementsshallmust be 114.26 determined by adding the figures calculatedpursuant tounder 114.27 clauses (a), (b), and (c). If the relief association does not 114.28 have an unfunded actuarial accrued liability as reported in the 114.29 most recent actuarial valuation, the financial requirements 114.30shallmust be an amount equal to the figure calculatedpursuant114.31tounder clauses (a) and (b), reduced by an amount equal to 114.32 one-tenth of the amount of any assets in excess of the actuarial 114.33 accrued liability of the relief association. The determination 114.34 of whether or not the relief association has an unfunded 114.35 actuarial accrued liabilityshallmust be based on the current 114.36 market value of assets for which a market value is readily 115.1 ascertainable and the cost or book value, whichever is 115.2 applicable, for assets for which no market value is readily 115.3 ascertainable. 115.4 (a) The normal level cost requirement for the following 115.5 year, expressed as a dollar amount,shall beis the figure for 115.6 the normal level cost of the relief association as reported in 115.7 the actuarial valuation. 115.8 (b) The amount of anticipated future administrative 115.9 expenses of the special fundshallmust be calculated by 115.10 multiplying the dollar amount of the administrative expenses of 115.11 the special fund for the most recent year by the factor of 1.035. 115.12 (c) The amortization contribution requirement to retire the 115.13 current unfunded actuarial accrued liability by the established 115.14 date for full fundingshall beis the figure for the 115.15 amortization contribution as reported in the actuarial 115.16 valuation.If there has not been a change in the actuarial115.17assumptions used for calculating the actuarial accrued liability115.18of the special fund, a change in the bylaws of the relief115.19association governing the service pensions, retirement benefits,115.20or both payable from the special fund or a change in the115.21actuarial cost method used to value all or a portion of the115.22special fund which change or changes, which by themselves115.23without inclusion of any other items of increase or decrease,115.24produce a net increase in the unfunded actuarial accrued115.25liability of the special fund since December 31, 1970, the115.26established date for full funding shall be December 31, 1990.115.27 If there has been a change in the actuarial assumptions used for 115.28 calculating the actuarial accrued liability of the special fund, 115.29 a change in the bylaws of the relief association governing the 115.30 service pensions, retirement benefits, or both payable from the 115.31 special fund or a change in the actuarial cost method used to 115.32 value all or a portion of the special fund and the change or 115.33 changes, by themselves and without inclusion of any other items 115.34 of increase or decrease, produce a net increase in the unfunded 115.35 actuarial accrued liability of the special fundsince December115.3631, 1970, but prior to January 1, 1979, the established date for116.1full funding shall be December 31, 1998, and if there has been a116.2change since December 31, 1978, the established date for full 116.3 fundingshallmust be determined using the following procedure: 116.4 (i) the unfunded actuarial accrued liability of the special 116.5 fundshallmust be determined in accordance with the provisions 116.6 governing service pensions, retirement benefits, and actuarial 116.7 assumptions in effect before an applicable change; 116.8 (ii) the level annual dollar contribution needed to 116.9 amortize this unfunded actuarial accrued liability amount by the 116.10 date for full funding in effectprior tobefore the changeshall116.11 must be calculated using the interest assumption specified in 116.12 section 356.215, subdivision 8, in effect before any applicable 116.13 change; 116.14 (iii) the unfunded actuarial accrued liability of the 116.15 special fundshallmust be determined in accordance with any new 116.16 provisions governing service pensions, retirement benefits, and 116.17 actuarial assumptions and the remaining provisions governing 116.18 service pensions, retirement benefits, and actuarial assumptions 116.19 in effect before an applicable change; 116.20 (iv) the level annual dollar contribution needed to 116.21 amortize the difference between the unfunded actuarial accrued 116.22 liability amount calculatedpursuant tounder subclause (i) and 116.23 the unfunded actuarial accrued liability amount 116.24 calculatedpursuant tounder subclause (iii) over a period of 20 116.25 years starting December 31 of the year in which the change is 116.26 effectiveshallmust be calculated using the interest assumption 116.27 specified in section 356.215, subdivision 8, in effect after any 116.28 applicable change; 116.29 (v) the annual amortization contribution calculated 116.30pursuant tounder subclause (iv)shallmust be added to the 116.31 annual amortization contribution calculatedpursuant tounder 116.32 subclause (ii); 116.33 (vi) the period in which the unfunded actuarial accrued 116.34 liability amount determined in subclause (iii) will be amortized 116.35 by the total annual amortization contribution computedpursuant116.36tounder subclause (v)shallmust be calculated using the 117.1 interest assumption specified in section 356.215, subdivision 8, 117.2 in effect after any applicable change, rounded to the nearest 117.3 integral number of years, but whichshalldoes not exceed a 117.4 period of 20 years from the end of the year in which the 117.5 determination of the date for full funding using this procedure 117.6 is made and whichshallis notbeless than the period of years 117.7 beginning in the year in which the determination of the date for 117.8 full funding using this procedure is made and ending by the date 117.9 for full funding in effect before the change; 117.10 (vii) the period determinedpursuant tounder subclause (vi) 117.11shallmust be added to the date as of which the actuarial 117.12 valuation was prepared and the resulting dateshall beis the 117.13 new date for full funding. 117.14 Sec. 7. Minnesota Statutes 2004, section 352.01, 117.15 subdivision 4, is amended to read: 117.16 Subd. 4. [ACCUMULATED CONTRIBUTIONS.] "Accumulated 117.17 contributions" means the total, exclusive of interest, of (1) 117.18 the sums deducted from the salary of an employee, (2) the amount 117.19 of payments, including assessments, paid by the employee in lieu 117.20 of salary deductions and all other payments made underLaws117.211929, chapter 191, as amended,this chapter and credited to the 117.22 employee's individual account in the retirement fund. 117.23 Sec. 8. Minnesota Statutes 2004, section 352.01, 117.24 subdivision 5, is amended to read: 117.25 Subd. 5. [RETIREMENT FUND.] (a) "Retirement fund" means 117.26 the general state employees retirement fund created by section 117.27 352.04, subdivision 1, with respect to the general state 117.28 employees retirement plan or the correctional state employees 117.29 retirement fund created by section 352.911, subdivision 1, with 117.30 respect to the correctional state employees retirement plan. 117.31 (b)"The retirement fund"includes the aggregate of 117.32 accumulated contributions of employees covered by the applicable 117.33 plan, and all other funds paid into the state treasury or 117.34 received by the director underLaws 1929, chapter 191, as117.35amendedthis chapter, together with all income and profits from 117.36 the money and interest on it, including contributions on the 118.1 part of the federal government, the state, and state departments. 118.2 Sec. 9. Minnesota Statutes 2004, section 352.01, 118.3 subdivision 21, is amended to read: 118.4 Subd. 21. [ACCRUED ANNUITIES.] (a) In this chapter and 118.5 chapters 3A, 352B, 352C, and 490, "accrued annuity" means an 118.6 annuity that had become payable to a retired employee in the 118.7 lifetime of the employee. 118.8 (b) An annuity or benefit authorized as provided in this 118.9 chapter and chapters 3A, 352B, 352C, and 490 becomes payable on 118.10 the first day of each calendar month for that calendar month and 118.11is tomust be paid on the first day of each calendar month 118.12beginning with benefits payable on and after December 1, 1977. 118.13 (c) Notwithstanding any provision to the contrary in this 118.14 chapter and chapters 3A, 352B, 352C, and 490, benefit payment 118.15 authorized as "payable for life" is payable for the entire month 118.16 in which death occurs, and the benefit payment for the month of 118.17 death is payable to the surviving spouse or other beneficiary 118.18 only if the annuitant dies before negotiating the benefit check. 118.19 Sec. 10. Minnesota Statutes 2004, section 352.01, 118.20 subdivision 23, is amended to read: 118.21 Subd. 23. [COVERAGE OR COVERED BY THE SYSTEM.] "Coverage" 118.22 or "covered by the system" means that a stateemployeesemployee 118.23 whoserveserves the state of Minnesota andmakemakes the 118.24 required employee contributions to the retirement fundwillis, 118.25 by reason of these contributionsbecome, entitled to either (1) 118.26 a retirement annuity, or (2) a disability benefit, or (3) a 118.27 refund of accumulated contributions, as provided in this chapter. 118.28 Sec. 11. Minnesota Statutes 2004, section 352.021, 118.29 subdivision 1, is amended to read: 118.30 Subdivision 1. [ESTABLISHMENT.] (a) There is established 118.31 the general state employees retirement plan of the Minnesota 118.32 State Retirement System for state employees. 118.33 (b) Thesystemgeneral state employees retirement plan is a 118.34 continuation of the State Employees Retirement Association. 118.35 (c) Any person who was a member of the State Employees 118.36 Retirement Association on June 30, 1967, is covered by 119.1 thesystemgeneral state employees retirement plan and is 119.2 entitled to all benefits provided by thesystemplan upon 119.3 fulfilling the age, service, contribution, and other 119.4 requirements of this chapter. 119.5 Sec. 12. Minnesota Statutes 2004, section 352.021, 119.6 subdivision 2, is amended to read: 119.7 Subd. 2. [STATE EMPLOYEES COVERED.] Every person whois a119.8state employee, as defined in section 352.01, on July 1, 1967,119.9orbecomes a state employeeafter that dateas defined in 119.10 section 352.01 is covered by thesystemgeneral state employees 119.11 retirement plan. Acceptance of state employment or continuance 119.12 in state service is deemed to be consent to have deductions made 119.13 from salary for deposit to the credit of the account of the 119.14 state employee in the retirement fund. 119.15 Sec. 13. Minnesota Statutes 2004, section 352.021, 119.16 subdivision 3, is amended to read: 119.17 Subd. 3. [OPTIONAL EXEMPTIONS.] Any person who is 119.18 appointed by the governor or lieutenant governor may request 119.19 exemption from coverage by the general state employees 119.20 retirement plan under this chapter if the appointee is notso119.21 coveredatby the plan on the date of appointment. To qualify 119.22 for this exemption, a written request must be made within 90 119.23 days from the date of entering upon the duties of the position 119.24 to which the person is appointed. After making the request, a 119.25 person requesting the exemption is not entitled to coverage by 119.26 the general state employees retirement plan while employed in 119.27 the position that entitled that person to an exemption from 119.28 coverage. 119.29 Sec. 14. Minnesota Statutes 2004, section 352.021, 119.30 subdivision 4, is amended to read: 119.31 Subd. 4. [REENTERING SERVICE AFTER REFUND.] When a former 119.32 employee who has withdrawn accumulated contributions reenters 119.33 employment in a position entitled to coverage under the 119.34systemgeneral state employees retirement plan, the employee 119.35shallmust be covered by thesystemplan on the same basis as a 119.36 new employee and is not entitled to credit for any former 120.1 service. The annuity rights forfeited when taking a refund can 120.2 only be restored as provided in this chapter. 120.3 Sec. 15. Minnesota Statutes 2004, section 352.04, 120.4 subdivision 1, is amended to read: 120.5 Subdivision 1. [FUND CREATED.] (a) There is created a 120.6 special fund to be known as the general state employees 120.7 retirement fund. In that fundthere shall be deposited120.8employees, employee contributions,employersemployer 120.9 contributions, and other amounts authorized by law must be 120.10 deposited. 120.11 (b)Effective July 1, 1969,The general state employees 120.12 retirement plan of the Minnesota State Retirement Systemshall120.13 must participate in the Minnesota postretirement investment fund. 120.14In that fund there shall be depositedThe amounts provided in 120.15 section 352.119 must be deposited in the Minnesota 120.16 postretirement investment fund. 120.17 Sec. 16. Minnesota Statutes 2004, section 352.04, 120.18 subdivision 12, is amended to read: 120.19 Subd. 12. [FUND DISBURSEMENT RESTRICTED.] The general 120.20 state employees retirement fund and the participation in the 120.21 Minnesota postretirement investment fund must be disbursed only 120.22 for the purposes provided by law. The expenses of the system 120.23 and any benefits provided by law, other than benefits payable 120.24 from the Minnesota postretirement investment fund, must be paid 120.25 from the general state employees retirement fund. The 120.26 retirement allowances, retirement annuities, and disability 120.27 benefits, as well as refunds of any sum remaining to the credit 120.28 of a deceased retired employee or a disabled employee must be 120.29 paid only from the general state employees retirement fund after 120.30 the needs have been certified and the amounts withdrawn from the 120.31 participation in the Minnesota postretirement investment fund 120.32 under section 11A.18. The amounts necessary to make the 120.33 payments from the general state employees retirement fund and 120.34 the participation in the Minnesota postretirement investment 120.35 fund are annually appropriated from these funds for those 120.36 purposes. 121.1 Sec. 17. Minnesota Statutes 2004, section 352.041, 121.2 subdivision 1, is amended to read: 121.3 Subdivision 1. [ALLOWABLE SERVICE CREDIT.]Any(a) An 121.4 employee covered by thesystemgeneral state employees 121.5 retirement plan who is given a leave of absence for employment 121.6 by a political subdivision of the stateshallremains a member 121.7 of the plan and must continue to pay member contributions into 121.8 the general state employees retirement fund for the period of 121.9 leave. 121.10 (b) Upon payment of member contributions, the employee must 121.11 be given allowable service credit as a state employee on the 121.12 records of thesystemretirement plan as though the employee had 121.13 received salary from the state during the leave. Payments into 121.14 the retirement fundshallmust be at the rate required in 121.15 section 352.04, subdivision 2, and must be based upon the salary 121.16 received from the political subdivisionsubject to the maximum121.17amount, if any. 121.18 Sec. 18. Minnesota Statutes 2004, section 352.041, 121.19 subdivision 2, is amended to read: 121.20 Subd. 2. [EMPLOYEE CONTRIBUTIONS, PROCEDURE.] The officer 121.21 or employee who is authorized by law to pay salaries to 121.22 employees of the political subdivision which is employing a 121.23 state employeeshall havemust deduct employee contributions 121.24deductedfor the general state employees retirement plan under 121.25 section 352.04, subdivision 2, from the salary of each employee 121.26 who is on leave of absence from state service on each payroll 121.27 abstract andshallmust pay the sum to the director following 121.28 the conclusion of each pay period. 121.29 Sec. 19. Minnesota Statutes 2004, section 352.041, 121.30 subdivision 3, is amended to read: 121.31 Subd. 3. [EMPLOYER CONTRIBUTIONS, PROCEDURE.] The officer 121.32 or employee who is authorized by law to pay salaries to 121.33 employees of the political subdivision which is employing a 121.34 state employee covered by thesystem shallgeneral state 121.35 employees retirement plan also must have employer contributions 121.36 made to the general state employees retirement fundonfollowing 122.1 the conclusion of each payroll abstract in the amount required 122.2 by section 352.04, subdivision 3. These contributionsare to122.3 must be charged to the political subdivision as an 122.4 administrative cost. 122.5 Sec. 20. Minnesota Statutes 2004, section 352.041, 122.6 subdivision 5, is amended to read: 122.7 Subd. 5. [EMPLOYER CONTRIBUTIONS, LEAVES OF ABSENCE; TAX 122.8 LEVIES.] (a) Every political subdivision which is employing a 122.9 state employee covered by the system on leave of absence from 122.10 state service for employment by a political subdivision of the 122.11 stateshallmust pay into the general state employees retirement 122.12 fund the amount of the employer contribution required by law for 122.13 state employees covered by the system under section 352.04, 122.14 subdivision 3. 122.15 (b) Employing political subdivisions, exceptother than 122.16 school districts,may levy taxes necessary for the payment of 122.17 employer contributions without limitation as to rate or amount. 122.18 The levy of the taxes does not reduce the amount of other 122.19 taxestothat may be levied by political subdivisions,122.20exceptother than school districts,which are subject to any 122.21 limitation. 122.22 Sec. 21. Minnesota Statutes 2004, section 352.15, 122.23 subdivision 1, is amended to read: 122.24 Subdivision 1. [EXEMPTION; EXCEPTIONS.]None of the money,122.25annuities, or other benefits mentioned in this chapter is122.26assignable either in law or in equity or subject to execution,122.27levy, attachment, garnishment, or other legal process, except as122.28provided in subdivision 1a or section 518.58, 518.581, or122.29518.6111.The provisions of section 356.401 apply to the general 122.30 state employees retirement plan and to the correctional state 122.31 employees retirement plan. 122.32 Sec. 22. Minnesota Statutes 2004, section 352.15, 122.33 subdivision 3, is amended to read: 122.34 Subd. 3. [DEDUCTING HEALTH OR DENTAL INSURANCE PREMIUMS.] 122.35 The board maydirectauthorize, at its discretion, the deduction 122.36 of a retiree's health or dental insurance premiums and transfer 123.1 of the amounts to a health or dental insurance carrier covering 123.2 state employees. The insurance carrier must certify that the 123.3 retired employee has signed an authorization for the deduction 123.4 and provide a computer readable roster of covered retirees and 123.5 amounts. The health or dental insurance carrier must refund 123.6 deductions withheld from a retiree's check in error directly to 123.7 the retiree. The board shall require that the insurance carrier 123.8toreimburse the fund for the administrative expense of 123.9 withholding the premium amounts. The insurance carrier shall 123.10 assume liability for any failure of the system to properly 123.11 withhold the premium amounts. 123.12 Sec. 23. Minnesota Statutes 2004, section 352.15, 123.13 subdivision 4, is amended to read: 123.14 Subd. 4. [DIRECT TRANSFER OF REFUNDS.] A direct transfer 123.15 ofaccountrefunds under this chapter may be made to an 123.16 individual retirement savingsaccountsaccount or a qualified 123.17 retirementplansplan of the person upon the receipt of an 123.18 application for transfer by a former employee, on forms 123.19 acceptable to the executive director. 123.20 Sec. 24. Minnesota Statutes 2004, section 352.22, 123.21 subdivision 10, is amended to read: 123.22 Subd. 10. [OTHER REFUNDS.] Former employees covered by the 123.23 system are entitled to apply for refunds if they are or become 123.24 members of the State Patrol retirement fund, the state Teachers 123.25 Retirement Association, or employees of the University of 123.26 Minnesota excluded from coverage under the system by action of 123.27 the Board of Regents;or labor service employees, excluded from123.28coverage under section 352.01, subdivision 2b, clause (25);or 123.29 employees of the adjutant general who under federal law 123.30 effectually elect membership in a federal retirement system; or 123.31 officers or employees of the senate or house of representatives, 123.32 excluded from coverage under section 352.01, subdivision 2b, 123.33 clause(8)(7). The refunds must include accumulated 123.34 contributions plus interest as provided in subdivision 2. These 123.35 employees may apply for a refund once 30 days or more have 123.36 elapsed after their coverage ceases, even if they continue in 124.1 state service but in positions not covered by this chapter. 124.2 Sec. 25. Minnesota Statutes 2004, section 352B.01, 124.3 subdivision 1, is amended to read: 124.4 Subdivision 1. [SCOPE.] In this chapter, each of the terms 124.5 defined in this sectionhavehas themeaningsmeaning given 124.6themto it. 124.7 Sec. 26. Minnesota Statutes 2004, section 352B.01, 124.8 subdivision 2, is amended to read: 124.9 Subd. 2. [MEMBER.] "Member" means: 124.10 (1) a State Patrol member currently employedafter June 30,124.111943,under section 299D.03 by the state, who is a peace officer 124.12 under section 626.84, and whose salary or compensation is paid 124.13 out of state funds; 124.14 (2) a conservation officer employed under section 97A.201, 124.15 currently employed by the state, whose salary or compensation is 124.16 paid out of state funds; 124.17 (3) a crime bureau officer who was employed by the crime 124.18 bureau and was a member of the Highway Patrolmen's retirement 124.19 fund on July 1, 1978, whether or not that person has the power 124.20 of arrest by warrant after that date, or who is employed as 124.21 police personnel, with powers of arrest by warrant under section 124.22 299C.04, and who is currently employed by the state, and whose 124.23 salary or compensation is paid out of state funds; 124.24 (4) a person who is employed by the state in the Department 124.25 of Public Safety in a data processing management position with 124.26 salary or compensation paid from state funds, who was a crime 124.27 bureau officer covered by the State Patrol retirement plan on 124.28 August 15, 1987, and who was initially hired in the data 124.29 processing management position within the department during 124.30 September 1987, or January 1988, with membership continuing for 124.31 the duration of the person's employment in that position, 124.32 whether or not the person has the power of arrest by warrant 124.33 after August 15, 1987; 124.34 (5) a public safety employeedefined aswho is a peace 124.35 officerinunder section 626.84, subdivision 1, paragraph (c), 124.36 and who is employedwithby the Division of Alcohol and Gambling 125.1 Enforcement under section 299L.01; and 125.2 (6) a Fugitive Apprehension Unit officer after October 31, 125.3 2000, who is employed by the Office of Special Investigations of 125.4 the Department of Corrections and who is a peace officer under 125.5 section 626.84. 125.6 Sec. 27. Minnesota Statutes 2004, section 352B.01, 125.7 subdivision 3, is amended to read: 125.8 Subd. 3. [ALLOWABLE SERVICE.] (a) "Allowable service" 125.9 means: 125.10 (1) for members defined in subdivision 2, clause(a)(1), 125.11monthlyserviceis granted forin any month for which payments 125.12 have been made to the State Patrol retirement fund, and 125.13 (2) for members defined in subdivision 2, clauses(b)(2) 125.14 and(c)(3), service for which payments have been made to the 125.15 State Patrol retirement fund, service for which payments were 125.16 made to the State Police officers retirement fund after June 30, 125.17 1961, and all prior service which was credited to a member for 125.18 service on or before June 30, 1961. 125.19 (b) Allowable service also includes any period of absence 125.20 from duty by a member who, by reason of injury incurred in the 125.21 performance of duty, is temporarily disabled and for which 125.22 disability the state is liable under the workers' compensation 125.23 law, until the date authorized by the executive director for 125.24 commencement of payment of a disability benefit or return to 125.25 employment. 125.26 (c) MS 2002 (Expired) 125.27 (d) Allowable service means service in a month during which 125.28 a member is paid a salary from which a member contribution is 125.29 deducted, deposited, and credited in the State Patrol retirement 125.30 plan. 125.31 Sec. 28. Minnesota Statutes 2004, section 352B.02, 125.32 subdivision 1e, is amended to read: 125.33 Subd. 1e. [AUDIT; ACTUARIAL VALUATION.] The legislative 125.34 auditor shall audit the fund. Any actuarial valuation of the 125.35 fund required under section 356.215 must be prepared by the 125.36 actuary retained under section 356.214. Any approved actuary 126.1 retained by the executive director under section 352.03, 126.2 subdivision 6, may perform actuarial valuations and experience 126.3 studies to supplement those performed by thecommission-retained126.4 actuary retained under section 356.214. Any supplemental 126.5 actuarial valuation or experience studiesshallmust be filed 126.6 with the executive director of the Legislative Commission on 126.7 Pensions and Retirement. 126.8 Sec. 29. Minnesota Statutes 2004, section 352B.071, is 126.9 amended to read: 126.10 352B.071 [EXEMPTION FROM PROCESS.] 126.11None of the money, annuities, or other benefits provided126.12for in this chapter is assignable either in law or in equity or126.13be subject to execution, levy, attachment, garnishment, or other126.14legal process, except as provided in section 518.58, 518.581, or126.15518.6111.The provisions of section 356.401 apply to the State 126.16 Patrol retirement plan. 126.17 Sec. 30. Minnesota Statutes 2004, section 352D.01, is 126.18 amended to read: 126.19 352D.01 [ESTABLISHMENT.] 126.20 There is hereby established within the Minnesota State 126.21 Retirement System a retirement program for certain public 126.22 employees to be known as the Minnesota unclassified employees 126.23 retirement program, which shall be. The program must be 126.24 administered by the Minnesota State Retirement System. 126.25 Sec. 31. Minnesota Statutes 2004, section 352D.015, 126.26 subdivision 3, is amended to read: 126.27 Subd. 3. [SUPPLEMENTAL INVESTMENT FUND.] "Supplemental 126.28 investment fund" means the fund established and governed by 126.29 section 11A.17. 126.30 Sec. 32. Minnesota Statutes 2004, section 352D.015, 126.31 subdivision 4, is amended to read: 126.32 Subd. 4. [GENERAL FUND.] "General fund" means the general 126.33 state employees retirement fund except the moneys for the 126.34 unclassified program. 126.35 Sec. 33. Minnesota Statutes 2004, section 352D.03, is 126.36 amended to read: 127.1 352D.03 [TRANSFER OF ASSETS.] 127.2 Unless an eligible employee enumerated in section 352D.02, 127.3 subdivision 1or 1a, has elected coverage under the individual 127.4 retirement account plan under chapter 354B, a sum of money 127.5 representing the assets credited to each employee exercising the 127.6 option contained in section 352D.02, plus an equal employer 127.7 contribution together with interest for the employment period at 127.8 theactuarially assumed ratesapplicable preretirement interest 127.9 actuarial assumption rate during this period, compounded 127.10 annually,shallmust be used for the purchase of shares on 127.11 behalf of each employee in the accounts of the supplemental 127.12 retirement fund established by section 11A.17.Any employer's127.13contribution to amortize the deficit in the state employee's127.14retirement fund shall not, however, be used for the purchase of127.15shares.127.16 Sec. 34. Minnesota Statutes 2004, section 352D.05, 127.17 subdivision 4, is amended to read: 127.18 Subd. 4. [REPAYMENT OF REFUND.] (a) A participant in the 127.19 unclassified program may repay regular refunds takenpursuant to127.20 under section 352.22, as provided in section 352.23. 127.21 (b) A participant in the unclassified program or an 127.22 employee covered by the general plan who has withdrawn the value 127.23 of the total shares may repay the refund taken and thereupon 127.24 restore the service credit, rights and benefits forfeited by 127.25 paying into the fund the amount refunded plus interest at an 127.26 annual rate of 8.5 percent compounded annually from the date 127.27 that the refund was taken until the date that the refund is 127.28 repaid. If the participant had withdrawn only the employee 127.29 shares as permitted under prior laws, repaymentshallmust be 127.30 pro rata.Payment shall127.31 (c) Except as provided in section 356.441, the repayment of 127.32 a refund under this section must be made in a lump sum. 127.33 Sec. 35. Minnesota Statutes 2004, section 352D.085, 127.34 subdivision 1, is amended to read: 127.35 Subdivision 1. [COMBINED SERVICE.] Except as provided in 127.36 section 356.30, 356.302, or 356.303, service under the 128.1 unclassified program for which the employee has been credited 128.2 with employee shares may be used for the limited purpose of 128.3 qualifying for benefits under sections 352.115, 352.72, 128.4 subdivision 1, 352.113, 354.44, 354.45, 354.48, and 354.60;128.5provided such. The service also may not be used to qualify for 128.6 a disability benefit under section 352.113 or 354.48 if a 128.7 participant was under the unclassified program at the time of 128.8 the disability, and provided further that. Also, the years of 128.9 service and salary paid while the participant was in the 128.10 unclassified programshallmay not be used in determining the 128.11 amount of benefits. 128.12 Sec. 36. Minnesota Statutes 2004, section 352D.09, 128.13 subdivision 5, is amended to read: 128.14 Subd. 5. [UNCLAIMED BENEFITS.] If the beneficiary, 128.15 surviving spouse or estate has not made application for benefits 128.16 within ten years after the date of the death of a participant, 128.17 the value of the sharesshall beis appropriated to theregular128.18 general state employees retirement fund and the provisions of 128.19 section 352.12, subdivision 12shall, govern. If a former 128.20 participant fails to make a claim for benefits within five years 128.21 after the termination of covered service or by age 70, whichever 128.22 is later, the value of the sharesshall beis appropriated to 128.23 the general state employees retirement fund and the provisions 128.24 of section 352.22, subdivision 8,shallapply. 128.25 Sec. 37. Minnesota Statutes 2004, section 352D.12, is 128.26 amended to read: 128.27 352D.12 [TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.] 128.28 (a) An employee who is a participant in the unclassified 128.29 program and who has prior service credit in a covered plan under 128.30chapters 3A,chapter 352,352C,353, 354, 354A,andor 422A 128.31 may, within the time limits specified in this section, elect to 128.32 transfer to the unclassified program prior service contributions 128.33 to one or more of those plans.Participants with six or more128.34years of prior service credit in a plan governed by chapter 3A128.35or 352C on July 1, 1998, may not transfer prior service128.36contributions. Participants with less than six years of prior129.1service credit in a plan governed by chapter 3A or 352C on July129.21, 1998, must be contributing to the unclassified plan on or129.3after January 5, 1999, in order to transfer prior contributions.129.4 (b) For participants with prior service credit in a plan 129.5 governed by chapter 352, 353, 354, 354A, or 422A, "prior service 129.6 contributions" means the accumulated employee and equal employer 129.7 contributions with interest at an annual rate of 8.5 percent 129.8 compounded annually, based on fiscal year balances.For129.9participants with less than six years of service credit as of129.10July 1, 1998, and with prior service credit in a plan governed129.11by chapter 3A or 352C, "prior service contributions" means an129.12amount equal to twice the amount of the accumulated member129.13contributions plus annual compound interest at the rate of 8.5129.14percent, computed on fiscal year balances.129.15 (c) If a participant has taken a refund from a retirement 129.16 plan listed in this section, the participant may repay the 129.17 refund to that plan, notwithstanding any restrictions on 129.18 repayment to that plan, plus 8.5 percent interest compounded 129.19 annually and have the accumulated employee and equal employer 129.20 contributions transferred to the unclassified program with 129.21 interest at an annual rate of 8.5 percent compounded annually 129.22 based on fiscal year balances. If a person repays a refund and 129.23 subsequently elects to have the money transferred to the 129.24 unclassified program, the repayment amount, including interest, 129.25 is added to the fiscal year balance in the year which the 129.26 repayment was made. 129.27 (d) A participant electing to transfer prior service 129.28 contributions credited to a retirement plan governed by chapter 129.29 352, 353, 354, 354A, or 422A as provided under this section must 129.30 completethea written application for the transfer and repay 129.31 any refund within one year of the commencement of the employee's 129.32 participation in the unclassified program.A participant129.33electing to transfer prior service contributions credited to a129.34retirement plan governed by chapter 3A or 352C as provided under129.35this section must complete the application for the transfer and129.36repay any refund between January 5, 1999, and June 1, 1999, if130.1the employee commenced participation in the unclassified program130.2before January 5, 1999, or within one year of the commencement130.3of the employee's participation in the unclassified program if130.4the employee commenced participation in the unclassified program130.5after January 4, 1999.130.6 Sec. 38. Minnesota Statutes 2004, section 353.01, 130.7 subdivision 32, is amended to read: 130.8 Subd. 32. [COORDINATED MEMBER.] "Coordinated member" means 130.9anya public employee, includinganya public hospital employee, 130.10 who is covered byanyan agreement or modification made between 130.11 the state and the Secretary of Health, EducationandWelfare130.12 Human Services, making the provisions of the federal Old Age, 130.13 Survivors and Disability Insurance Act applicable to the member 130.14 if the membership eligibility criteria are met under this 130.15 chapter. A coordinated member also is a former basic member who 130.16 has a complete and continuous separation for at least 30 days 130.17 from employment as a public employee meeting the requirements 130.18 specified in subdivision 28, paragraphs (a) and (b), and who 130.19 reenters public service as a public employee and meets the 130.20 membership eligibility criteria under this chapter. 130.21 Sec. 39. Minnesota Statutes 2004, section 353.01, 130.22 subdivision 33, is amended to read: 130.23 Subd. 33. [BASIC MEMBER.] "Basic member" meansanya 130.24 public employee, includinganya public hospital employee, who 130.25 is not covered by any agreement or modification made between the 130.26 state and the Secretary of Health, EducationandWelfareHuman 130.27 Services. 130.28 Sec. 40. Minnesota Statutes 2004, section 353.025, is 130.29 amended to read: 130.30 353.025 [RANGE ASSOCIATION OF MUNICIPALITIES AND SCHOOLS.] 130.31From and after January 1, 1982,Employees of the Range 130.32 Association of Municipalities and Schoolshereinafter referred130.33to as the association, shall becomeare coordinated members of 130.34 the general employees retirement plan of the Public Employees 130.35 Retirement Association unless specifically exempt under section 130.36 353.01, subdivision 2b, and. The Range Associationshall be131.1deemed to beof Municipalities and Schools is a governmental 131.2 subdivision for the purposes of this chapter. 131.3 Sec. 41. Minnesota Statutes 2004, section 353.026, is 131.4 amended to read: 131.5 353.026 [COVERAGE FOR CERTAIN MUNICIPAL AND SCHOOL DISTRICT 131.6 EMPLOYEES.] 131.7 Any person who was employed by the city of Minneapolis, 131.8 Special School District No. 1, or public corporation as defined 131.9 in section 422A.01, subdivision 9, on or after July 1, 1978, and 131.10prior tobefore July 1, 1979, and who was excluded from 131.11 retirement coverage by the coordinated program of the 131.12 Minneapolis municipal employees retirement fundpursuant to131.13 under section 422A.09, subdivision 3,shall beis entitled to 131.14 retirement coverage by the general employees retirement plan of 131.15 the Public Employees Retirement Association unless specifically 131.16 excludedpursuant tounder section 353.01, subdivision 2b, from 131.17 and after May 19, 1981. 131.18 Sec. 42. Minnesota Statutes 2004, section 353.027, is 131.19 amended to read: 131.20 353.027 [RETENTION OF COVERAGE FOR CERTAIN MUNICIPAL COURT 131.21 EMPLOYEES.] 131.22 Any person employed on January 1, 1975, by a municipal 131.23 court establishedpursuant tounder Minnesota Statutes 1957, 131.24 section 488.03, and located in the cities of New Brighton, 131.25 Roseville, Maplewood, North Saint Paul, White Bear Lake, or St. 131.26 Paulshall beis eligible for membership in the general 131.27 employees retirement plan of the Public Employees Retirement 131.28 Association andshall retainretains any rights or benefits the 131.29 person had attained as a member of the general employees 131.30 retirement plan of the association on January 1, 1975, so long 131.31 as the person remains an employee of the municipal court of 131.32 Ramsey County. 131.33 Sec. 43. Minnesota Statutes 2004, section 353.028, is 131.34 amended to read: 131.35 353.028 [CITY MANAGERS; ELECTION; DEFERRED COMPENSATION.] 131.36 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 132.1 section, each of the terms in this subdivision has the meaning 132.2 indicated. 132.3 (b) "City manager" means (1) a person who is duly appointed 132.4 to and is holding the position of city manager in a Plan B 132.5 statutory city or in a home rule city operating under the 132.6 "council-manager" form of government, or (2) a person who is 132.7 appointed to and is holding the position of chief administrative 132.8 officer of a home rule charter city or a statutory citypursuant132.9tounder a charter provision, ordinance, or resolution 132.10 establishing such a position and prescribing its duties and 132.11 responsibilities. 132.12 (c) "Governing body" means the city council of the city 132.13 employing the city manager. 132.14 (d) "Election" means the election described in subdivision 132.15 2. 132.16 Subd. 2. [ELECTION.] (a) A city manager may elect to be 132.17 excluded from membership in the general employees retirement 132.18 plan of the Public Employees Retirement Association. The 132.19 election of exclusion must be made within six months following 132.20 the commencement of employment, must be made in writing on a 132.21 form prescribed by the executive director, and must be approved 132.22 by a resolutionofadopted by the governing body of the city. 132.23 The election of exclusion is not effective until it is filed 132.24 with the executive director. Membership of a city manager in 132.25 theassociationgeneral employees retirement plan ceases on the 132.26 date the written election is received by the executive director 132.27 or upon a later date specified. Employee and employer 132.28 contributions made on behalf of a person exercising the option 132.29 to be excluded from membership under this section must be 132.30 refunded in accordance with section 353.27, subdivision 7. 132.31 (b) A city manager who has elected exclusion under this 132.32 subdivision may elect to revoke that action by filing a written 132.33 notice with the executive director. The notice must be on a 132.34 form prescribed by the executive director and must be approved 132.35 by a resolution of the governing body of the city. Membership 132.36 of the city manager in the association resumes prospectively 133.1 from the date of the first day of the pay period for which 133.2 contributions were deducted or, if pay period coverage dates are 133.3 not provided, the date on which the notice of revocation or 133.4 contributions are received in the office of the association, 133.5 provided that the notice of revocation is received by the 133.6 association within 60 days of the receipt of contributions. 133.7 (c) An election under paragraph (b) is irrevocable. Any 133.8 election under paragraph (a) or (b) must include a statement 133.9 that the individual will not seek authorization to purchase 133.10 service credit for any period of excluded service. 133.11 Subd. 3. [DEFERRED COMPENSATION; CITY CONTRIBUTION.] If an 133.12 election of exclusion is made, and if the city manager and the 133.13 governing body of the city additionally agree in writing that 133.14 the additional compensation is to be deferred andshallis to be 133.15 contributed on behalf of the city manager to a deferred 133.16 compensation program which meets the requirements of section 457 133.17 of the Internal Revenue Code of19541986, as amendedthrough133.18December 31, 1980, the governing body may compensate the city 133.19 manager, in addition to the salary allowed under any limitation 133.20 imposed on salaries by law or charter, in an amount equal to the 133.21 employer contribution which would be required by section 353.27, 133.22 subdivision 3, if the city manager were a member of the 133.23associationgeneral employees retirement plan. 133.24 Subd. 4. [REFUNDS; DEFERRED ANNUITY.] A city manager who 133.25 makes an election to be excluded from membership is entitled to 133.26 a refund of accumulated deductions or, if otherwise qualified, a 133.27 deferred annuityin the manner provided byunder section 353.34, 133.28 at the option of the manager. 133.29 Subd. 5. [ELECTION; OTHER EMPLOYMENT.] If a city manager 133.30 who has made an election to be excluded subsequently accepts 133.31 employment in another governmental subdivision or subsequently 133.32 accepts employment other than as a city manager in the same 133.33 city, the electionshall be deemed to have beenis rescinded on 133.34 the effective date of employment. 133.35 Sec. 44. Minnesota Statutes 2004, section 353.14, is 133.36 amended to read: 134.1 353.14 [BENEFITS FROM OTHER FUNDS.] 134.2 No annuity or benefit provided by this chaptershallmay be 134.3 affected, diminished, or impaired by any pension, benefit, or 134.4 annuity which any member or survivor is entitled to receive from 134.5 a tax supported public retirement plan or system authorized by 134.6 any other law, forbased on service that is different service 134.7 than the service for which the member or survivor is entitled to 134.8 receive benefit or annuity from a retirement plan administered 134.9 by the Public Employees Retirement Association. 134.10 Sec. 45. Minnesota Statutes 2004, section 353.15, 134.11 subdivision 1, is amended to read: 134.12 Subdivision 1. [EXEMPTION; EXCEPTIONS.]No money, annuity,134.13or benefit provided for in this chapter is assignable or subject134.14to execution, levy, attachment, garnishment, or legal process,134.15except as provided in subdivision 2 or section 518.58, 518.581,134.16or 518.6111.The provisions of section 356.401 apply to the 134.17 general employees retirement plan, to the public employees 134.18 police and fire retirement plan, and to the local government 134.19 correctional service retirement plan. 134.20 Sec. 46. Minnesota Statutes 2004, section 353.15, 134.21 subdivision 3, is amended to read: 134.22 Subd. 3. [PAYMENT TO PUBLIC BODIES.] If, in the judgment 134.23 of the executive director, conditions so warrant, payment of an 134.24 annuity, a retirement benefit, or a refund may be made to a 134.25 public body in behalf of an annuitant, disabilitant, or survivor 134.26 upon such terms as the executive director may prescribe. 134.27 Sec. 47. Minnesota Statutes 2004, section 353.27, 134.28 subdivision 11, is amended to read: 134.29 Subd. 11. [EMPLOYERS; REQUIRED TO FURNISH REQUESTED 134.30 INFORMATION.] (a) All governmental subdivisions shall furnish 134.31 promptly such other information relative to the employment 134.32 status of all employees or former employees, including, but not 134.33 limited to, payroll abstracts pertaining to all past and present 134.34 employees, as may be requested by theassociation or its134.35 executive director, including schedules of salaries applicable 134.36 to various categories of employment. 135.1 (b) In the event payroll abstract records have been lost or 135.2 destroyed, for whatever reason or in whatever manner, so that 135.3 such schedules of salaries cannot be furnished therefrom, the 135.4 employing governmental subdivision, in lieu thereof, shall 135.5 furnish to the association an estimate of the earnings of any 135.6 employee or former employee for any period as may be requested 135.7 by theassociation or itsexecutive director.ShouldIf the 135.8 associationreceive such schedulesis provided a schedule of 135.9 estimated earnings, the executive director isherebyauthorized 135.10 to use the same as a basis for making whatever computations 135.11 might be necessary for determining obligations of the employee 135.12 and employer to the retirement fund. If estimates are not 135.13 furnished by the employerpursuant toat the request of the 135.14association or itsexecutive director, theassociationexecutive 135.15 director may estimate the obligations of the employee and 135.16 employer to the retirement fund based uponsuchthose recordsas135.17 that are in its possession.Where payroll abstracts have been135.18lost or destroyed, the governmental agency need not furnish any135.19information pertaining to employment prior to July 1, 1963. The135.20association shall make no estimate of any obligation of any135.21employee, former employee, or employer covering employment prior135.22to July 1, 1963.135.23 Sec. 48. Minnesota Statutes 2004, section 353.271, is 135.24 amended to read: 135.25 353.271 [PARTICIPATION IN MINNESOTA POSTRETIREMENT 135.26 INVESTMENT FUND.] 135.27 Subdivision 1. [AUTHORIZATION.] The general employees 135.28 retirement plan of the Public Employees Retirement Association, 135.29includingthe public employees police and firefund but135.30excluding the various local relief association consolidation135.31accounts, isretirement plan, and the local government 135.32 correctional service retirement plan are authorized to 135.33 participate in the Minnesota postretirement investment fund. 135.34 Thereshall beis one general participation in the Minnesota 135.35 postretirement investment fund forall purposes byeach plan of 135.36 the Public Employees Retirementfund and one general136.1participation in the Minnesota postretirement investment fund136.2for all purposes by the public employees police and fire136.3fundAssociation. 136.4 Subd. 2. [VALUATION OF ASSETS; ADJUSTMENT OF BENEFITS.] 136.5(1)(a) The required reserves for retirement annuities payable 136.6 as provided in this chapter other than those payable from the 136.7 various local relief association consolidation accounts, as 136.8 determined in accordance with the appropriate mortality table 136.9 adopted by the board of trustees based on the experience of the 136.10 fund as recommended by the actuary retainedby the Legislative136.11Commission on Pensions and Retirementunder section 356.214, and 136.12 approved under section 356.215, subdivision 18, and using the 136.13 postretirement interest assumption specified in section 356.215, 136.14 subdivision 8,shallmust be transferred to the Minnesota 136.15 postretirement investment fund as of the last business day of 136.16 the month in which the retirement annuity begins. 136.17(2)(b) Annuity paymentsother than those payable from the136.18various local relief association consolidation accounts136.19shallmust be adjusted in accordance with the provisions of 136.20 section 11A.18. 136.21(3)(c) Increases in paymentspursuant tounder this 136.22 sectionor from the various local relief association136.23consolidation accounts, if applicable, willmust be made 136.24 automatically unless the intended recipient files written notice 136.25 with the executive director of the Public Employees Retirement 136.26 Association requesting that the increaseshallnot be made. 136.27 Sec. 49. Minnesota Statutes 2004, section 353.31, 136.28 subdivision 1c, is amended to read: 136.29 Subd. 1c. [COORDINATED MEMBERS.] Except for benefits 136.30 provided under section 353.32,subdivisions 1 and 1a,no 136.31 survivor benefits are payable to the surviving spouse or 136.32 dependent children of a deceased coordinated member. 136.33 Sec. 50. Minnesota Statutes 2004, section 353.32, 136.34 subdivision 9, is amended to read: 136.35 Subd. 9. [PAYMENT TO A MINOR.] If a member or former 136.36 member dies having named as beneficiary a person who is a minor 137.1 at the time of the application for refund, the board may make 137.2 the payment(a)(1) directly to the minor,(b)(2) toany137.3 a person who has legally qualified and is acting as guardian of 137.4 the minor's person or property in any jurisdiction, or(c)(3) 137.5 to either parent of the minor or toanyan adult person with 137.6 whom the minor may at the time be living, provided only that. 137.7 The parent or other person to whom any amount is to be 137.8 paidshall have advisedmust advise the board in writing that 137.9 the amount will be held or used in trust for the benefit of such 137.10 minor. Any annuity or disability benefit payable at the time of 137.11 death of an annuitant or recipient of a disability benefit, 137.12 which is payable to a beneficiary who is a minor, may be paid in 137.13 the same manner.SuchThe paymentshall beis a bar to recovery 137.14 by any other person or persons. 137.15 Sec. 51. Minnesota Statutes 2004, section 353.33, 137.16 subdivision 12, is amended to read: 137.17 Subd. 12. [BASIC DISABILITY SURVIVOR BENEFITS.] If a basic 137.18 member who is receiving a disability benefit under subdivision 3: 137.19(a)(1) dies before attaining age 65 or within five years 137.20 of the effective date of the disability, whichever is later, the 137.21 surviving spouseshallis entitled to receive a survivor benefit 137.22 under section 353.31, unless the surviving spouse elected to 137.23 receive a refund under section 353.32, subdivision 1.; 137.24(b)(2) is living at age 65 or five years after the 137.25 effective date of the disability, whichever is later, the basic 137.26 member may continue to receive a normal disability benefit, or 137.27 elect a joint and survivor optional annuity under section 137.28 353.31, subdivision 1b. The election of the joint and survivor 137.29 optional annuity must occur within 90 days of attaining age 65 137.30 or of reaching the five-year anniversary of the effective date 137.31 of the disability benefit, whichever is later. The optional 137.32 annuity takes effect on the first day of the month following the 137.33 month in which the person attains age 65 or reaches the 137.34 five-year anniversary of the effective date of the disability 137.35 benefit, whichever is later.; or 137.36(c)(3) if there is a dependent child or children under 138.1paragraph (a) or (b)clause (1) or (2), theassociation shall138.2grantdependent child is entitled to a dependent child benefit 138.3 under section 353.31, subdivision 1b, paragraph (b). 138.4 Sec. 52. Minnesota Statutes 2004, section 354.091, is 138.5 amended to read: 138.6 354.091 [SERVICE CREDIT.] 138.7 (a) In computing service credit, no teachershallmay 138.8 receive credit for more than one year of teaching service for 138.9 any fiscal year.Commencing July 1, 1961Additionally, in 138.10 crediting allowable service: 138.11 (1) if a teacher teaches less than five hours in a day, 138.12 service credit must be given for the fractional part of the day 138.13 as the term of service performed bears to five hours; 138.14 (2) if a teacher teaches five or more hours in a day, 138.15 service credit must be given for only one day; 138.16 (3) if a teacher teaches at least 170 full days in any 138.17 fiscal year, service credit must be given for a full year of 138.18 teaching service; and 138.19 (4) if a teacher teaches for only a fractional part of the 138.20 year, service credit must be given for such fractional part of 138.21 the year in the same relationship as the period of service 138.22 performed bears to 170 days. 138.23 (b) A teachershallmust receive a full year of service 138.24 credit based on the number of days in the employer's full school 138.25 year ifitthat school year is less than 170 days. Teaching 138.26 service performed before July 1, 1961, must be computed under 138.27 the law in effect at the time it was performed. 138.28 (c) A teacher must not lose or gain retirement service 138.29 credit as a result of the employer converting to a flexible or 138.30 alternate work schedule. If the employer converts to a flexible 138.31 or alternate work schedule, the forms for reporting teaching 138.32 service and the procedures for determining service credit must 138.33 be determined by the executive director with the approval of the 138.34 board of trustees. 138.35 (d) For all services rendered on or after July 1, 2003, 138.36 service credit for all members employed by the Minnesota State 139.1 Colleges and Universities system must be determined: 139.2 (1) for full-time employees, by the definition of full-time 139.3 employment contained in the collective bargaining agreement for 139.4 those units listed in section 179A.10, subdivision 2, or 139.5 contained in the applicable personnel or salary plan for those 139.6 positions designated in section 179A.10, subdivision 1; 139.7 (2) for part-time employees, by the appropriate proration 139.8 of full-time equivalency based on the provisions contained in 139.9 the collective bargaining agreement for those units listed in 139.10 section 179A.10, subdivision 2, or contained in the applicable 139.11 personnel or salary plan for those positions designated in 139.12 section 179A.10, subdivision 1, and the applicable procedures of 139.13 the Minnesota State Colleges and Universities system; and 139.14 (3) in no case may a member receive more than one year of 139.15 service credit for any fiscal year. 139.16 Sec. 53. Minnesota Statutes 2004, section 354.10, 139.17 subdivision 1, is amended to read: 139.18 Subdivision 1. [EXEMPTION; EXCEPTIONS.] (a) The provisions 139.19 of section 356.401 apply to the teachers retirement plan. 139.20 (b) The right of a teacher to take advantage of the 139.21 benefits provided by this chapter, is a personal right only and 139.22 is not assignable. All money to the credit of a teacher's 139.23 account in the fund or any money payable to the teacher from the 139.24 fund belongs to the state of Minnesota until actually paid to 139.25 the teacher or a beneficiary under this chapter. 139.26 (c) The association may acknowledge a properly completed 139.27 power of attorney form.An assignment or attempted assignment139.28of a teacher's interest in the fund, or of the beneficiary's139.29interest in the fund, by a teacher or a beneficiary is void and139.30exempt from garnishment or levy under attachment or execution,139.31except as provided in subdivision 2 or 3, or section 518.58,139.32518.581, or 518.6111.139.33 Sec. 54. Minnesota Statutes 2004, section 354.10, 139.34 subdivision 3, is amended to read: 139.35 Subd. 3. [PAYMENT TO PUBLIC BODIES.] If, in the judgment 139.36 of the executive director, conditions so warrant, payment of an 140.1 annuity, a retirement benefit, or a refund may be made to a 140.2 public body in behalf of an annuitant, disabilitant, or survivor 140.3 upon such terms as the executive director may prescribe. 140.4 Sec. 55. Minnesota Statutes 2004, section 354.10, 140.5 subdivision 4, is amended to read: 140.6 Subd. 4. [CHANGES IN DESIGNATED BENEFICIARIES.]Any(a) A 140.7 beneficiary designated by a retiree or member under section 140.8 354.05, subdivision 22, may be changed or revoked by the retiree 140.9 or member on a form provided by the executive director. 140.10 (b) A change or revocation made under this subdivision is 140.11 valid only if the properly completed form is received by the 140.12 association on or before the date of death of the retiree or the 140.13 member. 140.14 (c) If a designated beneficiary dies before the retiree or 140.15 member designating the beneficiary,and a new beneficiary is not 140.16 designated, the retiree's or member's estate is the beneficiary. 140.17 Sec. 56. Minnesota Statutes 2004, section 354.33, 140.18 subdivision 5, is amended to read: 140.19 Subd. 5. [RETIREES NOT ELIGIBLE FOR FEDERAL BENEFITS.] 140.20 Notwithstanding the provisions of section 354.55, subdivision 3, 140.21 when any person retires after July 1, 1973, who(a)(1) has ten 140.22 or more years of allowable service, and(b)(2) does not have 140.23 any retroactive Social Security coverage by reason of the 140.24 person's position in the retirement system, and(c)(3) does not 140.25 qualify for federal old age and survivor primary benefits at the 140.26 time of retirement, the annuityshallmust be computed under 140.27 section 354.44, subdivision 2, of the law in effect on June 30, 140.28 1969, except that accumulations after June 30, 1957,shallmust 140.29 be calculated using the same mortality table and interest 140.30 assumption as are used to transfer the required reserves to the 140.31 Minnesota postretirement investment fund. 140.32 Sec. 57. Minnesota Statutes 2004, section 354.39, is 140.33 amended to read: 140.34 354.39 [EFFECTIVE DATE; APPLICATION.] 140.35After July 1, 1971, anyA member of the Teachers Retirement 140.36 Association who is employed in a new state universityandor any 141.1 other newinstitutionsinstitution of higher learning not 141.2 included in any agreement or modification made between the state 141.3 and the federal Secretary of Health, EducationandWelfareHuman 141.4 Services, making the provisions of the federal Old Ageand, 141.5 Survivors and Disability Insurance Act applicable to such 141.6 members,shallmust be covered under the provisions of this 141.7 chapter applicable to coordinated members. 141.8 Sec. 58. Minnesota Statutes 2004, section 354.41, 141.9 subdivision 2, is amended to read: 141.10 Subd. 2. [TEACHERS.] Every teacherafter June 30, 1957,in 141.11the service or enteringthe service of the state or one of its 141.12 governmentalsubdivisionsubdivisions as a teacher, except 141.13 personsspeciallyspecifically excluded,shallmust become a 141.14 member of the association by the acceptance of such employment. 141.15 Sec. 59. Minnesota Statutes 2004, section 354.42, is 141.16 amended by adding a subdivision to read: 141.17 Subd. 1a. [TEACHERS RETIREMENT FUND.] (a) Within the 141.18 Teachers Retirement Association and the state treasury is 141.19 created a special retirement fund, which must include all the 141.20 assets of the Teachers Retirement Association and all revenue of 141.21 the association. The fund is the continuation of the fund 141.22 established under Laws 1931, chapter 406, section 2, 141.23 notwithstanding the repeal of Minnesota Statutes 1973, section 141.24 354.42, subdivision 1, by Laws 1974, chapter 289, section 59. 141.25 (b) The teachers retirement fund must be credited with all 141.26 employee and employer contributions, all investment revenue and 141.27 gains, and all other income authorized by law. 141.28 (c) From the teachers retirement fund is appropriated the 141.29 payments of annuities and benefits authorized by this chapter, 141.30 the transfers to the Minnesota postretirement investment fund, 141.31 and the reasonable and necessary expenses of administering the 141.32 fund and the association. 141.33 Sec. 60. Minnesota Statutes 2004, section 354.44, 141.34 subdivision 2, is amended to read: 141.35 Subd. 2. [COMPUTATION OF MONEY PURCHASE ANNUITY.] (a) The 141.36 amount of retirement annuity is an amount equal to double the 142.1 annuity which could be purchased by the member's accumulated 142.2 deductions plus interest thereon. The annuityshallmust be 142.3 determined by the member's age, sex, double the amount of 142.4 accumulated deductions, double the amount of interest earned on 142.5 the accumulated deductions, and the appropriate mortality tables 142.6 and interest rates. To determine the amount of the annuity for 142.7 a basic member, the accumulated deductionsprior tobefore July 142.8 1, 1957, and the accumulated deductionssubsequent toafter July 142.9 1, 1957,shallmust be considered separately. 142.10(1)(b) For service renderedprior tobefore July 1, 1957, 142.11 the accumulated deductions foranya membershallmust be 142.12 carried forward at a fixed amount which is shown credited to the 142.13 member's account as of that date. That fixed amountshallmust 142.14 also include any payments in lieu of salary deductions whichare142.15to be made in the future and arewere actually so madepursuant142.16tounder an agreement executed between the member and the board 142.17 as authorized by section 354.50 or any other authorized payments 142.18 made by the member to the fund. The annuity granted with 142.19 respect to the periodshallmust be determined as follows: 142.20(a)(1) the fixed amount of the accumulated deductions for 142.21 the period including the interest credited on the amount as 142.22 earned up to July 1, 1957.; and 142.23(b)(2) annuity purchase rates based on the applicable 142.24 mortality table established by the board and the interest rate 142.25 assumption in effectprior tobefore July 1, 1957, in the case 142.26 of basic members and an annuity purchase rate based on an 142.27 appropriate annuity table of mortality established by the board 142.28 as provided in section 354.07, subdivision 1, and using the 142.29 applicable postretirement interest rate assumption specified in 142.30 section 356.215, subdivision 8, in the case of coordinated 142.31 members. 142.32(2)(c) For service renderedsubsequent toafter July 1, 142.33 1957, the accumulated deductions foranya membershallmust 142.34 consist of the amounts actually credited to the member's account 142.35 by reason of salary deductions. The annuity granted with 142.36 respect to the periodshallmust be determined by the following: 143.1(a)(1) accumulated deductions for the period; 143.2(b)(2) interest credited on these accumulated deductions 143.3 from July 1, 1957, to the date of retirement; 143.4(c)(3) interest credited on accumulated deductions 143.5 including prior credited interest provided in paragraph(1)(b) 143.6 from July 1, 1957, to the date of retirement; 143.7(d)(4) after the amount available for an annuity granted 143.8 with respect to the person is determined in accordance with the 143.9 provisions of this subdivision, an additional amount equal to 20 143.10 percent of the sum of clause(2)(a)(1) plus interest credited 143.11 tomembersa member's account from July 1, 1957, to date of 143.12 retirement is to be added. This added amount is not to be 143.13 doubled as provided for other amounts determined in this 143.14 subdivision; and 143.15(e)(5) the annuity purchase rate based on an appropriate 143.16 annuity table of mortality established by the board as provided 143.17 in section 354.07, subdivision 1, and using the applicable 143.18 postretirement interest rate assumption specified in section 143.19 356.215, subdivision 8. 143.20 Sec. 61. Minnesota Statutes 2004, section 354A.021, 143.21 subdivision 5, is amended to read: 143.22 Subd. 5. [TAX SHELTERED ANNUITY PROGRAM AND FUND.]AnyA 143.23 teachers retirement fund association may establish a tax 143.24 sheltered annuity program and fund meeting the requirements of 143.25 section 403(b) of the Internal Revenue Code of 1986, as amended 143.26through December 31, 1992, whichshallmust include all assets 143.27 which were acquired for the specific purpose of being credited 143.28 to the program and fund and to whichshallmust be credited all 143.29 employee contributions,and employer contributions, if 143.30 negotiated under a collective bargaining agreement, designated 143.31 for this purpose and all interest income attributable to the 143.32 assets of the program and fund. 143.33 Sec. 62. Minnesota Statutes 2004, section 354A.097, 143.34 subdivision 1, is amended to read: 143.35 Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A 143.36 teacher who has at least three years of allowable service credit 144.1 with the teachers retirement fund association and who performed 144.2 service in the United States armed forces before becoming a 144.3 teacher as defined in section 354A.011, subdivision 27, or who 144.4 failed to obtain service credit for a military leave of absence 144.5 period under section 354A.093, is entitled to purchase allowable 144.6 service credit for the initial period of enlistment, induction, 144.7 or call to active duty without any voluntary extension by making 144.8 payment under section356.55 provided356.551 if the teacher has 144.9 not purchased service credit from another Minnesota defined 144.10 benefit public employee pension plan for the same period of 144.11 service. 144.12 Sec. 63. Minnesota Statutes 2004, section 354A.31, 144.13 subdivision 5, is amended to read: 144.14 Subd. 5. [UNREDUCED NORMAL RETIREMENT ANNUITY.] Upon 144.15 retirement at normal retirement age with at least three years of 144.16 service credit, a coordinated membershall beis entitled to a 144.17 normal retirement annuity calculatedpursuant tounder 144.18 subdivision 4 or 4a, whichever applies. 144.19 Sec. 64. [356.401] [EXEMPTION FROM PROCESS.] 144.20 Subdivision 1. [EXEMPTION; EXCEPTIONS.] None of the money, 144.21 annuities, or other benefits provided for in the governing law 144.22 of a covered retirement plan is assignable either in law or in 144.23 equity or subject to state estate tax, or to execution, levy, 144.24 attachment, garnishment, or other legal process, except as 144.25 provided in subdivision 2 or section 518.58, 518.581, or 144.26 518.6111. 144.27 Subd. 2. [AUTOMATIC DEPOSITS.] (a) The chief 144.28 administrative officer of a covered retirement plan may remit, 144.29 through an automatic deposit system, annuity, benefit, or refund 144.30 payments only to a financial institution associated with the 144.31 National Automated Clearinghouse Association or a comparable 144.32 successor organization that is trustee for a person who is 144.33 eligible to receive the annuity, benefit, or refund. 144.34 (b) Upon the request of a retiree, disabilitant, survivor, 144.35 or former member, the chief administrative officer of a covered 144.36 retirement plan may remit the annuity, benefit, or refund check 145.1 to the applicable financial institution for deposit in the 145.2 person's individual account or the person's joint account. An 145.3 overpayment to a joint account after the death of the annuitant 145.4 or benefit recipient must be repaid to the fund of the 145.5 applicable covered retirement plan by the joint tenant if the 145.6 overpayment is not repaid to that fund by the financial 145.7 institution associated with the National Automated Clearinghouse 145.8 Association or its successor. The governing board of the 145.9 covered retirement plan may prescribe the conditions under which 145.10 these payments may be made. 145.11 Subd. 3. [COVERED RETIREMENT PLANS.] The provisions of 145.12 this section apply to the following retirement plans: 145.13 (1) the legislators retirement plan, established by chapter 145.14 3A; 145.15 (2) the general state employees retirement plan of the 145.16 Minnesota State Retirement System, established by chapter 352; 145.17 (3) the correctional state employees retirement plan of the 145.18 Minnesota State Retirement System, established by chapter 352; 145.19 (4) the State Patrol retirement plan, established by 145.20 chapter 352B; 145.21 (5) the elective state officers retirement plan, 145.22 established by chapter 352C; 145.23 (6) the unclassified state employees retirement program, 145.24 established by chapter 352D; 145.25 (7) the general employees retirement plan of the Public 145.26 Employees Retirement Association, established by chapter 353; 145.27 (8) the public employees police and fire plan of the Public 145.28 Employees Retirement Association, established by chapter 353; 145.29 (9) the public employees defined contribution plan, 145.30 established by chapter 353D; 145.31 (10) the local government correctional service retirement 145.32 plan of the Public Employees Retirement Association, established 145.33 by chapter 353E; 145.34 (11) the Teachers Retirement Association, established by 145.35 chapter 354; 145.36 (12) the Duluth Teachers Retirement Fund Association, 146.1 established by chapter 354A; 146.2 (13) the Minneapolis Teachers Retirement Fund Association, 146.3 established by chapter 354A; 146.4 (14) the St. Paul Teachers Retirement Fund Association, 146.5 established by chapter 354A; 146.6 (15) the individual retirement account plan, established by 146.7 chapter 354B; 146.8 (16) the higher education supplemental retirement plan, 146.9 established by chapter 354C; 146.10 (17) the Minneapolis employees retirement fund, established 146.11 by chapter 422A; 146.12 (18) the Minneapolis Police Relief Association, established 146.13 by chapter 423B; 146.14 (19) the Minneapolis Firefighters Relief Association, 146.15 established by chapter 423C; and 146.16 (20) the judges' retirement fund, established by sections 146.17 490.121 to 490.132. 146.18 Sec. 65. Minnesota Statutes 2004, section 356.551, is 146.19 amended to read: 146.20 356.551 [POST JULY 1,20032004, PRIOR SERVICE CREDIT 146.21 PURCHASE PAYMENT AMOUNT DETERMINATION PROCEDURE.] 146.22 Subdivision 1. [APPLICATION.] (a) Unless the prior service 146.23 credit purchase authorization special law or general statute 146.24 provision explicitly specifies a different purchase payment 146.25 amount determination procedure,and if section 356.55 has146.26expired,this section governs the determination of the prior 146.27 service credit purchase payment amount of any prior service 146.28 credit purchase. 146.29 (b) The purchase payment amount determination procedure 146.30 must recognize any service credit accrued to the purchaser in a 146.31 pension plan enumerated in section 356.30, subdivision 3. 146.32 (c) Any service credit in a Minnesota defined benefit 146.33 public employee pension plan available to be reinstated by the 146.34 purchaser through the repayment of a refund of member or 146.35 employee contributions previously received must be repaid in 146.36 full before any purchase of prior service credit payment is made 147.1 under this section. 147.2 Subd. 2. [DETERMINATION.] (a) Unless the minimum purchase 147.3 amount set forth in paragraph (c) applies, the prior service 147.4 credit purchase amount is an amount equal to the actuarial 147.5 present value, on the date of payment, as calculated by the 147.6 chief administrative officer of the pension plan and reviewed by 147.7 the actuary retainedby the Legislative Commission on Pensions147.8and Retirementunder section 356.214, of the amount of the 147.9 additional retirement annuity obtained by the acquisition of the 147.10 additional service credit in this section. 147.11 (b) Calculation of this amount must be made using the 147.12 preretirement interest rate applicable to the public pension 147.13 plan specified in section 356.215, subdivision4d8, and the 147.14 mortality table adopted for the public pension plan. The 147.15 calculation must assume continuous future service in the public 147.16 pension plan until, and retirement at, the age at which the 147.17 minimum requirements of the fund for normal retirement or 147.18 retirement with an annuity unreduced for retirement at an early 147.19 age, including section 356.30, are met with the additional 147.20 service credit purchased. The calculation must also assume a 147.21 full-time equivalent salary, or actual salary, whichever is 147.22 greater, and a future salary history that includes annual salary 147.23 increases at the applicable salary increase rate for the plan 147.24 specified in section 356.215, subdivision 4d. 147.25 (c) The prior service credit purchase amount may not be 147.26 less than the amount determined by applying the current employee 147.27 or member contribution rate, the employer contribution rate, and 147.28 the additional employer contribution rate, if any, to the 147.29 person's current annual salary and multiplying that result by 147.30 the number of whole and fraction years of service to be 147.31 purchased. 147.32 (d) Payment must be made in one lump sum within one year of 147.33 the prior service credit authorization. Payment of the amount 147.34 calculated under this section must be made by the applicable 147.35 eligible person. 147.36 (e) However, the current employer or the prior employer 148.1 may, at its discretion, pay all or any portion of the payment 148.2 amount that exceeds an amount equal to the employee contribution 148.3 rates in effect during the period or periods of prior service 148.4 applied to the actual salary rates in effect during the period 148.5 or periods of prior service, plus interest at the rate of 8.5 148.6 percent a year compounded annually from the date on which the 148.7 contributions would otherwise have been made to the date on 148.8 which the payment is made. If the employer agrees to payments 148.9 under this subdivision, the purchaser must make the employee 148.10 payments required under this subdivision within29090 days of 148.11 the prior service credit authorization. If that employee 148.12 payment is made, the employer payment under this subdivision 148.13 must be remitted to the chief administrative officer of the 148.14 public pension plan within 60 days of receipt by the chief 148.15 administrative officer of the employee payments specified under 148.16 this subdivision. 148.17 Subd. 3. [DOCUMENTATION.] The prospective prior service 148.18 credit purchaser must provide any relevant documentation 148.19 required by the chief administrative officer of the applicable 148.20 public pension plan to determine eligibility for the prior 148.21 service credit under this section. 148.22 Subd. 4. [PAYMENT PRECONDITION FOR CREDIT GRANT.] Service 148.23 credit for the purchase period must be granted by the public 148.24 pension plan to the purchaser upon receipt of the full purchase 148.25 payment amount specified in subdivision 2. 148.26 Sec. 66. Minnesota Statutes 2004, section 356A.06, 148.27 subdivision 7, is amended to read: 148.28 Subd. 7. [EXPANDED LIST OF AUTHORIZED INVESTMENT 148.29 SECURITIES.] (a) [AUTHORITY.] Except to the extent otherwise 148.30 authorized by law or bylaws, a covered pension plan not 148.31 described by subdivision 6, paragraph (a), may invest its assets 148.32 only in accordance with this subdivision. 148.33 (b) [SECURITIES GENERALLY.] The covered pension plan has 148.34 the authority to purchase, sell, lend, or exchange the 148.35 securities specified in paragraphs (c) to (g), including puts 148.36 and call options and future contracts traded on a contract 149.1 market regulated by a governmental agency or by a financial 149.2 institution regulated by a governmental agency. These 149.3 securities may be owned as units in commingled trusts that own 149.4 the securities described in paragraphs (c) to (g). 149.5 (c) [GOVERNMENT OBLIGATIONS.] The covered pension plan may 149.6 invest funds in governmental bonds, notes, bills, mortgages, and 149.7 other evidences of indebtedness provided the issue is backed by 149.8 the full faith and credit of the issuer or the issue is rated 149.9 among the top four quality rating categories by a nationally 149.10 recognized rating agency. The obligations in which funds may be 149.11 invested under this paragraph include guaranteed or insured 149.12 issues of (1) the United States, its agencies, its 149.13 instrumentalities, or organizations created and regulated by an 149.14 act of Congress; (2) Canada and its provinces, provided the 149.15 principal and interest is payable in United States dollars; (3) 149.16 the states and their municipalities, political subdivisions, 149.17 agencies, or instrumentalities; (4) the International Bank for 149.18 Reconstruction and Development, the Inter-American Development 149.19 Bank, the Asian Development Bank, the African Development Bank, 149.20 or any other United States government sponsored organization of 149.21 which the United States is a member, provided the principal and 149.22 interest is payable in United States dollars. 149.23 (d) [CORPORATE OBLIGATIONS.] The covered pension plan may 149.24 invest funds in bonds, notes, debentures, transportation 149.25 equipment obligations, or any other longer term evidences of 149.26 indebtedness issued or guaranteed by a corporation organized 149.27 under the laws of the United States or any state thereof, or the 149.28 Dominion of Canada or any province thereof if they conform to 149.29 the following provisions: 149.30 (1) the principal and interest of obligations of 149.31 corporations incorporated or organized under the laws of the 149.32 Dominion of Canada or any province thereof must be payable in 149.33 United States dollars; and 149.34 (2) obligations must be rated among the top four quality 149.35 categories by a nationally recognized rating agency. 149.36 (e) [OTHER OBLIGATIONS.] (1) The covered pension plan may 150.1 invest funds in bankers acceptances, certificates of deposit, 150.2 deposit notes, commercial paper, mortgage participation 150.3 certificates and pools, asset backed securities, repurchase 150.4 agreements and reverse repurchase agreements, guaranteed 150.5 investment contracts, savings accounts, and guaranty fund 150.6 certificates, surplus notes, or debentures of domestic mutual 150.7 insurance companies if they conform to the following provisions: 150.8 (i) bankers acceptances and deposit notes of United States 150.9 banks are limited to those issued by banks rated in the highest 150.10 four quality categories by a nationally recognized rating 150.11 agency; 150.12 (ii) certificates of deposit are limited to those issued by 150.13 (A) United States banks and savings institutions that are rated 150.14 in the highest four quality categories by a nationally 150.15 recognized rating agency or whose certificates of deposit are 150.16 fully insured by federal agencies; or (B) credit unions in 150.17 amounts up to the limit of insurance coverage provided by the 150.18 National Credit Union Administration; 150.19 (iii) commercial paper is limited to those issued by United 150.20 States corporations or their Canadian subsidiaries and rated in 150.21 the highest two quality categories by a nationally recognized 150.22 rating agency; 150.23 (iv) mortgage participation or pass through certificates 150.24 evidencing interests in pools of first mortgages or trust deeds 150.25 on improved real estate located in the United States where the 150.26 loan to value ratio for each loan as calculated in accordance 150.27 with section 61A.28, subdivision 3, does not exceed 80 percent 150.28 for fully amortizable residential properties and in all other 150.29 respects meets the requirements of section 61A.28, subdivision 150.30 3; 150.31 (v) collateral for repurchase agreements and reverse 150.32 repurchase agreements is limited to letters of credit and 150.33 securities authorized in this section; 150.34 (vi) guaranteed investment contracts are limited to those 150.35 issued by insurance companies or banks rated in the top four 150.36 quality categories by a nationally recognized rating agency or 151.1 to alternative guaranteed investment contracts where the 151.2 underlying assets comply with the requirements of this 151.3 subdivision; 151.4 (vii) savings accounts are limited to those fully insured 151.5 by federal agencies; and 151.6 (viii) asset backed securities must be rated in the top 151.7 four quality categories by a nationally recognized rating agency. 151.8 (2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do 151.9 not apply to certificates of deposit and collateralization 151.10 agreements executed by the covered pension plan under clause 151.11 (1), item (ii). 151.12 (3) In addition to investments authorized by clause (1), 151.13 item (iv), the covered pension plan may purchase from the 151.14 Minnesota Housing Finance Agency all or any part of a pool of 151.15 residential mortgages, not in default, that has previously been 151.16 financed by the issuance of bonds or notes of the agency. The 151.17 covered pension plan may also enter into a commitment with the 151.18 agency, at the time of any issue of bonds or notes, to purchase 151.19 at a specified future date, not exceeding 12 years from the date 151.20 of the issue, the amount of mortgage loans then outstanding and 151.21 not in default that have been made or purchased from the 151.22 proceeds of the bonds or notes. The covered pension plan may 151.23 charge reasonable fees for any such commitment and may agree to 151.24 purchase the mortgage loans at a price sufficient to produce a 151.25 yield to the covered pension plan comparable, in its judgment, 151.26 to the yield available on similar mortgage loans at the date of 151.27 the bonds or notes. The covered pension plan may also enter 151.28 into agreements with the agency for the investment of any 151.29 portion of the funds of the agency. The agreement must cover 151.30 the period of the investment, withdrawal privileges, and any 151.31 guaranteed rate of return. 151.32 (f) [CORPORATE STOCKS.] The covered pension plan may 151.33 invest funds in stocks or convertible issues of any corporation 151.34 organized under the laws of the United States or the states 151.35 thereof, the Dominion of Canada or its provinces, or any 151.36 corporation listed on the New York Stock Exchange or the 152.1 American Stock Exchange, if they conform to the following 152.2 provisions: 152.3 (1) the aggregate value of corporate stock investments, as 152.4 adjusted for realized profits and losses, must not exceed 85 152.5 percent of the market or book value, whichever is less, of a 152.6 fund, less the aggregate value of investments according to 152.7subdivision 6paragraph (g); 152.8 (2) investments must not exceed five percent of the total 152.9 outstanding shares of any one corporation. 152.10 (g) [OTHER INVESTMENTS.] (1) In addition to the 152.11 investments authorized in paragraphs (b) to (f), and subject to 152.12 the provisions in clause (2), the covered pension plan may 152.13 invest funds in: 152.14 (i) venture capital investment businesses through 152.15 participation in limited partnerships and corporations; 152.16 (ii) real estate ownership interests or loans secured by 152.17 mortgages or deeds of trust through investment in limited 152.18 partnerships, bank sponsored collective funds, trusts, and 152.19 insurance company commingled accounts, including separate 152.20 accounts; 152.21 (iii) regional and mutual funds through bank sponsored 152.22 collective funds and open-end investment companies registered 152.23 under the Federal Investment Company Act of 1940; 152.24 (iv) resource investments through limited partnerships, 152.25 private placements, and corporations; and 152.26 (v) international securities. 152.27 (2) The investments authorized in clause (1) must conform 152.28 to the following provisions: 152.29 (i) the aggregate value of all investments made according 152.30 to clause (1) may not exceed 35 percent of the market value of 152.31 the fund for which the covered pension plan is investing; 152.32 (ii) there must be at least four unrelated owners of the 152.33 investment other than the state board for investments made under 152.34 clause (1), item (i), (ii), (iii), or (iv); 152.35 (iii) covered pension plan participation in an investment 152.36 vehicle is limited to 20 percent thereof for investments made 153.1 under clause (1), item (i), (ii), (iii), or (iv); and 153.2 (iv) covered pension plan participation in a limited 153.3 partnership does not include a general partnership interest or 153.4 other interest involving general liability. The covered pension 153.5 plan may not engage in any activity as a limited partner which 153.6 creates general liability. 153.7 Sec. 67. Minnesota Statutes 2004, section 422A.01, 153.8 subdivision 11, is amended to read: 153.9 Subd. 11. [EMPLOYEE.] "Employee" meansanya person who is 153.10 not exempted from the contributing classpursuant tounder 153.11 section 422A.09, subdivision 3, whoiswas employed before July 153.12 1, 1979, by and paid, in whole or in part, by the city or any of 153.13 its boards, departments, or commissions, operated as a 153.14 department of city government or independently if financed in 153.15 whole or in part by city funds, includinganya person who was 153.16 employed by a public corporation as herein defined,and153.17including anya person who was employed before July 1, 1979, by 153.18 Special School District No. 1, and who is not a member of any 153.19 other retirement system, andalso including anya person who 153.20iswas employed before July 1, 1973, by the county of Hennepin, 153.21 who was entitled by law to elect and has elected to retain 153.22 membership in themunicipalMinneapolis Employees Retirement 153.23 Fund and who makes any required member contributions to the fund 153.24 and who remains so employed. 153.25 Sec. 68. Minnesota Statutes 2004, section 422A.06, 153.26 subdivision 7, is amended to read: 153.27 Subd. 7. [DISABILITY BENEFIT FUND.] (a)The required153.28reserves for disability allowances which become effective after153.29December 31, 1973, shall be transferred from the deposit153.30accumulation fund to theA disability benefit fund is 153.31 established, containing the required reserves for disability 153.32 allowances under this chapter. A proportionate share of income 153.33 from investmentsshallmust be allocated to this fund. 153.34 Thereshallmust be paid from this fund the disability 153.35 allowanceswhich become effective after December 31, 1973153.36 payable under this chapter. 154.1 (b) In the event of the termination of any disability 154.2 allowance for any reason other than the death of the recipient, 154.3 the balance of the required reserves for the disability 154.4 allowance as of the date of the terminationshallmust be 154.5 transferred from the disability benefit fund to the deposit 154.6 accumulation fund. 154.7 (c) At the end of each fiscal year, as part of the annual 154.8 actuarial valuation, a determinationshallmust be made of the 154.9 required reserves for all disability allowances being paid from 154.10 the disability benefit fund. Any excess of assets over 154.11 actuarial required reserves in the disability benefit fundshall154.12 must be transferred to the deposit accumulation fund. Any 154.13 excess of actuarial reserves over assets in the disability 154.14 benefit fundshallmust be funded by a transfer of the 154.15 appropriate amount of assets from the deposit accumulation fund. 154.16 Sec. 69. Minnesota Statutes 2004, section 422A.10, 154.17 subdivision 1, is amended to read: 154.18 Subdivision 1. [MEMBER CONTRIBUTIONRATE; DEDUCTIONS.] (a) 154.19 Thereshallmust be deducted and withheld from the basic salary, 154.20 pay or compensation of each employee in the contributing class,154.21prior to January 1, 1980 an amount equal to 7-1/4 percent, after154.22December 31, 1979 but prior to January 1, 1981 an amount equal154.23to 8-1/4 percent and after December 31, 1980an amount equal to 154.24 9-1/4 percent of such salary, pay or compensation, except as 154.25 hereinafter provided. 154.26 (b) The retirement board may increase the percentage rate 154.27 of contribution to the retirement fund of any employee or 154.28 employees for the purpose of establishing and maintaining on an 154.29 actuarial basis a plan of insurance, survivors' benefits, or 154.30 other type of benefit or benefits, the cost of whichshallmust 154.31 be paid out of such extra percentage so authorized and deducted 154.32 from the employee's compensation, except as hereinafter 154.33 provided. Any plan or plans so established and placed in 154.34 operation may be amended from time to time, or may be abandoned, 154.35 but if abandoned, any surplus remaining from the operation of a 154.36 planshallmust be the property of the fund, andshallmust be 155.1 credited to the reserve for loss in investment account. 155.2 Sec. 70. Minnesota Statutes 2004, section 422A.10, 155.3 subdivision 2, is amended to read: 155.4 Subd. 2. [CONSENT TO DEDUCTIONSMANDATORY MEMBER 155.5 CONTRIBUTIONS.] Every employee to whomsections 422A.01 to155.6422A.25this chapter applieswho shall continue in the service155.7after the passage of Laws 1919, chapter 522, as well as every155.8person to whom sections 422A.01 to 422A.25 applies who may155.9hereafter be appointed to a position or place, shall beis 155.10 deemed to consent and agree to the deductions made and provided 155.11 for herein, and payment with such reductions, for service,shall155.12beare a full and complete discharge and acquittance of all 155.13 claims and demands for all services rendered by such person 155.14 during the period covered by such payment; except the person's 155.15 claim to the benefits to which the person may be entitled under 155.16 the provisions ofsections 422A.01 to 422A.25this chapter. 155.17 Sec. 71. Minnesota Statutes 2004, section 422A.22, 155.18 subdivision 1, is amended to read: 155.19 Subdivision 1. [RETENTION; TRANSFER.] (a) If an employee 155.20 to whomsections 422A.01 to 422A.25this chapter applies becomes 155.21 absolutely separated fromtheactive serviceprior tobefore 155.22 attaining the minimum retirement age established in section 155.23 422A.13, the employee is entitled to a refund of the net 155.24 accumulated amount of deduction from salary, pay, or 155.25 compensation, made for the purpose of accumulating a fund from 155.26 which to pay retirement allowances,shall be returned to such155.27employee,with interest at the annual compound rate of six 155.28 percent. 155.29 (b) Any contributing employee who separates from a 155.30 department, board or commission of the city whose employees are 155.31 covered by a fund organized undersections 422A.01 to 422A.25155.32 this chapter, and becomes an employee of a department or board 155.33 of the same city, whose employees are covered by a retirement 155.34 fund or relief association by whatever name known, organized 155.35 under any other law and supported in whole or in part by taxes 155.36 on the same city,shall havehas the option of: 156.1 (1) retaining their membership in the fund organized under 156.2sections 422A.01 to 422A.25this chapter, regardless of the 156.3 provisions of any law, rule, bylaw or other action requiring 156.4 membership in any other retirement fund or relief association 156.5 however organized.; or 156.6 (2) transferring to the fund or association covering the 156.7 employees of the department or board to which they are 156.8 transferring, providing they are eligible for membership therein. 156.9 (c) Any contributing employee who elects to transfer to 156.10 another fund or association ashereinprovided in paragraph (b), 156.11 clause (2),shallmust make such election within one year from 156.12 the date of separation from the city service covered by this 156.13 fund. If the contributing employee elects to transfer to 156.14 another fundas herein provided, the employee is entitled to a 156.15 refund of the net accumulated contributions made by such 156.16 employee to the fund organized undersections 422A.01 to156.17422A.25, shall be returned to the employeethis chapter with 156.18 interest at the annual compound rate of six percent. 156.19 Sec. 72. Minnesota Statutes 2004, section 422A.22, 156.20 subdivision 3, is amended to read: 156.21 Subd. 3. [LIMITATION ON ELIGIBILITY.] No employee of the 156.22 cityshall beis eligible to be a member of, or receive benefits 156.23 from, more than one retirement plan or fund of the city for the 156.24 same period of service. 156.25 Sec. 73. Minnesota Statutes 2004, section 422A.22, 156.26 subdivision 4, is amended to read: 156.27 Subd. 4. [DEATH-WHILE-ACTIVE REFUND.] (a) Upon the death 156.28 of an active memberprior tobefore the employee's termination 156.29 of active service,there shall be paid tothe beneficiary or 156.30 beneficiaries designated by the member on a form specified by 156.31 the executive director and filed with the retirement board,are 156.32 entitled to receive the net accumulated employee deductions from 156.33 salary, pay, or compensation, including interest under 156.34 subdivision 1, paragraph (a), compounded annually to the date of 156.35 the member's death. The amount must not include any 156.36 contributions made by the employee or on the employee's behalf, 157.1 or any interest or investment earnings on those contributions, 157.2 which were allocated to the survivor benefit fund under section 157.3 422A.06, subdivision 6. 157.4 (b) If the employee fails to make a designation, or if the 157.5 beneficiary or beneficiaries designated by the employee 157.6 predeceases the employee,the benefit specified in paragraph (a)157.7must be paid tothe deceased employee's estate is entitled to 157.8 the benefit specified in paragraph (a). 157.9 (c) A benefit payable under this subdivision is in addition 157.10 to any applicable survivor benefit under section 422A.23. 157.11 Sec. 74. Minnesota Statutes 2004, section 422A.22, 157.12 subdivision 6, is amended to read: 157.13 Subd. 6. [REFUND; MUNICIPAL EMPLOYEES RETIREMENT FUND.] 157.14AnyA person who has received a refund from themunicipal157.15 Minneapolis Employees Retirement Fund, and who is a member of a 157.16 public retirement system included in section 422A.16, 157.17 subdivision 8, may repay such refund with interest at a compound 157.18 annual rate of 8.5 percent to themunicipalMinneapolis 157.19 Employees Retirement Fund. If a refund is repaid to the fund 157.20 and if more than one refund has been received from the fund, all 157.21 refunds must be repaid. Repaymentshallmust be made as 157.22 provided insections 422A.01 to 422A.25this chapter. 157.23 Sec. 75. Minnesota Statutes 2004, section 422A.231, is 157.24 amended to read: 157.25 422A.231 [COST ALLOCATION.] 157.26 (a) Notwithstanding any law to the contrary, all current 157.27 and future contribution requirements due to this article are 157.28 payable by the participating contributing employing units other 157.29 than the state of Minnesota. 157.30 (b) In each actuarial valuation of the retirement fund, the 157.31 actuary retainedby the Legislative Commission on Pensions and157.32Retirementunder section 356.214 shall include an exhibit on the 157.33 impact of the benefit increases contained in this article on the 157.34 survivor benefit fund. The actuary shall calculate the expected 157.35 change in the present value of the future benefits payable from 157.36 the survivor benefit fund attributable to this article, using 158.1 the actuarial method and assumptions applicable to the 158.2 Minneapolis Employees Retirement Fund, from the prior actuarial 158.3 valuation and shall compare that result with the actual change 158.4 in the present value of future benefits payable from the 158.5 survivor benefit fund attributable to this article from the 158.6 prior actuarial valuation. 158.7 (c) The executive director shall assess each participating 158.8 employer, other than the state of Minnesota, its proportional 158.9 share of the net increase amount calculated under paragraph 158.10 (b). The assessment must be made on the first business day of 158.11 the following February, plus compound interest at an annual rate 158.12 of six percent on the amount from the actuarial valuation date 158.13 to the date of payment. 158.14 Sec. 76. Minnesota Statutes 2004, section 422A.24, is 158.15 amended to read: 158.16 422A.24 [ALLOWANCES NOT ASSIGNABLE OR SUBJECT TO PROCESS.] 158.17No money payable pursuant to this chapter shall be158.18assignable either in law or equity or be subject to execution,158.19levy, attachment, garnishment, or other legal process, except as158.20provided in section 518.58, 518.581, or 518.6111, nor shall any158.21of the proceeds of payments due pursuant to this chapter be158.22subject to the inheritance tax provisions of this state upon158.23transfer to a surviving spouse or minor or dependent child of158.24the decedent or a trust for their benefit.The provisions of 158.25 section 356.401 apply to the Minneapolis employees retirement 158.26 plan. 158.27 Sec. 77. Minnesota Statutes 2004, section 423B.17, is 158.28 amended to read: 158.29 423B.17 [PAYMENTS EXEMPT FROM PROCESS.] 158.30A payment made by the association under a provision of158.31sections 423B.01 to 423B.18, as amended, is exempt from legal158.32process except as provided in section 518.58, 518.581, or158.33518.6111. No person entitled to a payment may assign the same.158.34The association may not recognize an assignment or pay a sum on158.35account of an assignment.The provisions of section 356.401 158.36 apply to the Minneapolis Police Relief Association. 159.1 Sec. 78. Minnesota Statutes 2004, section 423C.09, is 159.2 amended to read: 159.3 423C.09 [PAYMENTS EXEMPT FROM PROCESS.] 159.4All payments made, or to be made, by the association under159.5this chapter shall be totally exempt from garnishment,159.6execution, or other legal process, except as provided in section159.7518.58, 518.581, or 518.6111. No person entitled to a payment159.8shall have the right to assign the name, nor shall the159.9association have authority to recognize any assignment or to pay159.10any sum on account thereof. Any attempt to transfer any right159.11or claim, or any part thereof, shall be void.The provisions of 159.12 section 356.401 apply to the Minneapolis Firefighters Relief 159.13 Association. 159.14 Sec. 79. Minnesota Statutes 2004, section 490.126, 159.15 subdivision 5, is amended to read: 159.16 Subd. 5. [EXEMPTION FROM PROCESS; NO ASSIGNMENT.]None of159.17the money, annuities, or other benefits provided in this chapter159.18is assignable either in law or equity or is subject to159.19execution, levy, attachment, garnishment, or other legal159.20process, except as provided in section 518.58, 518.581, or159.21518.6111.The provisions of section 356.401 apply to the judges 159.22 retirement plan. 159.23 Sec. 80. [REVISOR'S INSTRUCTION.] 159.24 In the next edition and subsequent editions of Minnesota 159.25 Statutes, the revisor of statutes shall replace the reference to 159.26 "sections 422A.01 to 422A.25" with the reference to "this 159.27 chapter" wherever the reference appears in Minnesota Statutes, 159.28 chapter 422A. 159.29 Sec. 81. [REPEALER.] 159.30 (a) Minnesota Statutes 2004, section 352.119, subdivision 159.31 1, is repealed. 159.32 (b) Minnesota Statutes 2004, sections 353.34, subdivision 159.33 3b; 353.36, subdivisions 2, 2a, 2b, and 2c; 353.46, subdivision 159.34 4; 353.663; 353.74; and 353.75, are repealed. 159.35 (c) Minnesota Statutes 2004, section 354.59, is repealed. 159.36 (d) Minnesota Statutes 2004, sections 422A.22, subdivisions 160.1 2 and 5; and 422A.221, are repealed. 160.2 (e) Minnesota Statutes 2004, sections 352.15, subdivision 160.3 1a; 353.15, subdivision 2; and 354.10, subdivision 2, are 160.4 repealed. 160.5 Sec. 82. [EFFECTIVE DATE.] 160.6 (a) Sections 1 to 73 and 75 to 81 are effective July 1, 160.7 2005. 160.8 (b) Section 74 is effective January 1, 2006. 160.9 (c) Sections 1, 21, 22, 23, 29, 45, 46, 53, 64, 76, 77, 78, 160.10 79, and 81, paragraph (e), do not apply to any cause of action 160.11 that is proceeding on the date of enactment or to any cause of 160.12 action for which the applicable statute of limitations has not 160.13 expired as of the date of enactment. 160.14 ARTICLE 13 160.15 LOCAL RETIREMENT PLANS 160.16 Section 1. Minnesota Statutes 2004, section 356.215, 160.17 subdivision 8, is amended to read: 160.18 Subd. 8. [INTEREST AND SALARY ASSUMPTIONS.] (a) The 160.19 actuarial valuation must use the applicable following 160.20 preretirement interest assumption and the applicable following 160.21 postretirement interest assumption: 160.22 preretirement postretirement 160.23 interest rate interest rate 160.24 plan assumption assumption 160.25 general state employees 160.26 retirement plan 8.5% 6.0% 160.27 correctional state employees 160.28 retirement plan 8.5 6.0 160.29 State Patrol retirement plan 8.5 6.0 160.30 legislators retirement plan 8.5 6.0 160.31 elective state officers 160.32 retirement plan 8.5 6.0 160.33 judges retirement plan 8.5 6.0 160.34 general public employees 160.35 retirement plan 8.5 6.0 160.36 public employees police and fire 160.37 retirement plan 8.5 6.0 160.38 local government correctional 160.39 service retirement plan 8.5 6.0 160.40 teachers retirement plan 8.5 6.0 160.41 Minneapolis employees 160.42 retirement plan 6.0 5.0 160.43 Duluth teachers retirement plan 8.5 8.5 160.44 Minneapolis teachers retirement 160.45 plan 8.5 8.5 160.46 St. Paul teachers retirement 160.47 plan 8.5 8.5 160.48 Minneapolis Police Relief 160.49 Association 6.0 6.0 160.50 Fairmont Police Relief 161.1 Association 5.0 5.0 161.2 Minneapolis Fire Department 161.3 Relief Association 6.0 6.0 161.4 Virginia Fire Department 161.5 Relief Association 5.0 5.0 161.6 Bloomington Fire Department 161.7 Relief Association 6.0 6.0 161.8 local monthly benefit volunteer 161.9 firefighters relief associations 5.0 5.0 161.10 (b) The actuarial valuation must use the applicable 161.11 following single rate future salary increase assumption, the 161.12 applicable following modified single rate future salary increase 161.13 assumption, or the applicable following graded rate future 161.14 salary increase assumption: 161.15 (1) single rate future salary increase assumption 161.16 future salary 161.17 plan increase assumption 161.18 legislators retirement plan 5.0% 161.19 elective state officers retirement 161.20 plan 5.0 161.21 judges retirement plan 5.0 161.22 Minneapolis Police Relief Association 4.0 161.23 Fairmont Police Relief 161.24 Association 3.5 161.25 Minneapolis Fire Department Relief 161.26 Association 4.0 161.27 Virginia Fire Department 161.28 Relief Association 3.5 161.29 Bloomington Fire Department 161.30 Relief Association 4.0 161.31 (2) modified single rate future salary increase assumption 161.32 future salary 161.33 plan increase assumption 161.34 Minneapolis employees the prior calendar year 161.35 retirement plan amount increased first by 161.36 1.0198 percent to prior 161.37 fiscal year date and 161.38 then increased by 4.0 161.39 percent annually for 161.40 each future year 161.41 (3) select and ultimate future salary increase assumption 161.42 or graded rate future salary increase assumption 161.43 future salary 161.44 plan increase assumption 161.45 general state employees select calculation and 161.46 retirement plan assumption A 161.47 correctional state employees 161.48 retirement plan assumption H 161.49 State Patrol retirement plan assumption H 161.50 general public employees select calculation and 161.51 retirement plan assumption B 161.52 public employees police and fire 161.53 fund retirement plan assumption C 161.54 local government correctional service 161.55 retirement plan assumption H 161.56 teachers retirement plan assumption D 161.57 Duluth teachers retirement plan assumption E 161.58 Minneapolis teachers retirement plan assumption F 161.59 St. Paul teachers retirement plan assumption G 162.1 162.2 The select calculation is: 162.3 during the ten-year select period, a designated percent 162.4 is multiplied by the result of ten minus T, where T is 162.5 the number of completed years of service, and is added 162.6 to the applicable future salary increase assumption. The 162.7 designated percent is 0.2 percent for the correctional state 162.8 employees retirement plan, the State Patrol retirement 162.9 plan, the public employees police and fire plan, and the 162.10 local government correctional service plan; 0.3 percent 162.11 for the general state employees retirement plan, the 162.12 general public employees retirement plan, the teachers 162.13 retirement plan, the Duluth Teachers Retirement Fund 162.14 Association, and the St. Paul Teachers Retirement Fund 162.15 Association; and 0.4 percent for the Minneapolis Teachers 162.16 Retirement Fund Association. 162.17 162.18 The ultimate future salary increase assumption is: 162.19 162.20 age A B C D E F G H 162.21 16 6.95% 6.95% 11.50% 8.20% 8.00% 6.50% 6.90% 7.7500 162.22 17 6.90 6.90 11.50 8.15 8.00 6.50 6.90 7.7500 162.23 18 6.85 6.85 11.50 8.10 8.00 6.50 6.90 7.7500 162.24 19 6.80 6.80 11.50 8.05 8.00 6.50 6.90 7.7500 162.25 20 6.75 6.40 11.50 6.00 6.90 6.50 6.90 7.7500 162.26 21 6.75 6.40 11.50 6.00 6.90 6.50 6.90 7.1454 162.27 22 6.75 6.40 11.00 6.00 6.90 6.50 6.90 7.0725 162.28 23 6.75 6.40 10.50 6.00 6.85 6.50 6.85 7.0544 162.29 24 6.75 6.40 10.00 6.00 6.80 6.50 6.80 7.0363 162.30 25 6.75 6.40 9.50 6.00 6.75 6.50 6.75 7.0000 162.31 26 6.75 6.36 9.20 6.00 6.70 6.50 6.70 7.0000 162.32 27 6.75 6.32 8.90 6.00 6.65 6.50 6.65 7.0000 162.33 28 6.75 6.28 8.60 6.00 6.60 6.50 6.60 7.0000 162.34 29 6.75 6.24 8.30 6.00 6.55 6.50 6.55 7.0000 162.35 30 6.75 6.20 8.00 6.00 6.50 6.50 6.50 7.0000 162.36 31 6.75 6.16 7.80 6.00 6.45 6.50 6.45 7.0000 162.37 32 6.75 6.12 7.60 6.00 6.40 6.50 6.40 7.0000 162.38 33 6.75 6.08 7.40 6.00 6.35 6.50 6.35 7.0000 162.39 34 6.75 6.04 7.20 6.00 6.30 6.50 6.30 7.0000 162.40 35 6.75 6.00 7.00 6.00 6.25 6.50 6.25 7.0000 162.41 36 6.75 5.96 6.80 6.00 6.20 6.50 6.20 6.9019 162.42 37 6.75 5.92 6.60 6.00 6.15 6.50 6.15 6.8074 162.43 38 6.75 5.88 6.40 5.90 6.10 6.50 6.10 6.7125 162.44 39 6.75 5.84 6.20 5.80 6.05 6.50 6.05 6.6054 162.45 40 6.75 5.80 6.00 5.70 6.00 6.50 6.00 6.5000 162.46 41 6.75 5.76 5.90 5.60 5.90 6.50 5.95 6.3540 162.47 42 6.75 5.72 5.80 5.50 5.80 6.50 5.90 6.2087 162.48 43 6.65 5.68 5.70 5.40 5.70 6.50 5.85 6.0622 162.49 44 6.55 5.64 5.60 5.30 5.60 6.50 5.80 5.9048 162.50 45 6.45 5.60 5.50 5.20 5.50 6.50 5.75 5.7500 162.51 46 6.35 5.56 5.45 5.10 5.40 6.40 5.70 5.6940 162.52 47 6.25 5.52 5.40 5.00 5.30 6.30 5.65 5.6375 162.53 48 6.15 5.48 5.35 5.00 5.20 6.20 5.60 5.5822 162.54 49 6.05 5.44 5.30 5.00 5.10 6.10 5.55 5.5404 162.55 50 5.95 5.40 5.25 5.00 5.00 6.00 5.50 5.5000 162.56 51 5.85 5.36 5.25 5.00 5.00 5.90 5.45 5.4384 162.57 52 5.75 5.32 5.25 5.00 5.00 5.80 5.40 5.3776 162.58 53 5.65 5.28 5.25 5.00 5.00 5.70 5.35 5.3167 162.59 54 5.55 5.24 5.25 5.00 5.00 5.60 5.30 5.2826 162.60 55 5.45 5.20 5.25 5.00 5.00 5.50 5.25 5.2500 162.61 56 5.35 5.16 5.25 5.00 5.00 5.40 5.20 5.2500 162.62 57 5.25 5.12 5.25 5.00 5.00 5.30 5.15 5.2500 162.63 58 5.25 5.08 5.25 5.10 5.00 5.20 5.10 5.2500 162.64 59 5.25 5.04 5.25 5.20 5.00 5.10 5.05 5.2500 162.65 60 5.25 5.00 5.25 5.30 5.00 5.00 5.00 5.2500 162.66 61 5.25 5.00 5.25 5.40 5.00 5.00 5.00 5.2500 162.67 62 5.25 5.00 5.25 5.50 5.00 5.00 5.00 5.2500 162.68 63 5.25 5.00 5.25 5.60 5.00 5.00 5.00 5.2500 162.69 64 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 162.70 65 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 162.71 66 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 163.1 67 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 163.2 68 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 163.3 69 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 163.4 70 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 163.5 71 5.25 5.00 5.70 163.6 (c) The actuarial valuation must use the applicable 163.7 following payroll growth assumption for calculating the 163.8 amortization requirement for the unfunded actuarial accrued 163.9 liability where the amortization retirement is calculated as a 163.10 level percentage of an increasing payroll: 163.11 payroll growth 163.12 plan assumption 163.13 general state employees retirement plan 5.00% 163.14 correctional state employees retirement plan 5.00 163.15 State Patrol retirement plan 5.00 163.16 legislators retirement plan 5.00 163.17 elective state officers retirement plan 5.00 163.18 judges retirement plan 5.00 163.19 general public employees retirement plan 6.00 163.20 public employees police and fire 163.21 retirement plan 6.00 163.22 local government correctional service 163.23 retirement plan 6.00 163.24 teachers retirement plan 5.00 163.25 Duluth teachers retirement plan 5.00 163.26 Minneapolis teachers retirement plan 5.00 163.27 St. Paul teachers retirement plan 5.00 163.28 Sec. 2. Minnesota Statutes 2004, section 356.216, is 163.29 amended to read: 163.30 356.216 [CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL POLICE 163.31 AND FIRE FUNDS.] 163.32 (a) The provisions of section 356.215 that govern the 163.33 contents of actuarial valuations must apply to any local police 163.34 or fire pension fund or relief association required to make an 163.35 actuarial report under this section, except as follows: 163.36 (1) in calculating normal cost and other requirements, if 163.37 required to be expressed as a level percentage of covered 163.38 payroll, the salaries used in computing covered payroll must be 163.39 the maximum rate of salary on which retirement and survivorship 163.40 credits and amounts of benefits are determined and from which 163.41 any member contributions are calculated and deducted; 163.42 (2) in lieu of the amortization date specified in section 163.43 356.215, subdivision 11, the appropriate amortization target 163.44 date specified in section 69.77, subdivision 4, or 69.773, 163.45 subdivision 4, clause (c), must be used in calculating any 163.46 required amortization contribution, except that if the actuarial 164.1 report for the Bloomington Fire Department Relief Association 164.2 indicates an unfunded actuarial accrued liability, the unfunded 164.3 obligation is to be amortized on a level dollar basis by 164.4 December 31 of the year occurring 20 years later, and if 164.5 subsequent actuarial valuations for the Bloomington Fire 164.6 Department Relief Association determine a net actuarial 164.7 experience loss incurred during the year which ended as of the 164.8 day before the most recent actuarial valuation date, any 164.9 unfunded liability due to that loss is to be amortized on a 164.10 level dollar basis by December 31 of the year occurring 20 years 164.11 later; 164.12 (3) in addition to the tabulation of active members and 164.13 annuitants provided for in section 356.215, subdivision 13, the 164.14 member contributions for active members for the calendar year 164.15 and the prospective annual retirement annuities under the 164.16 benefit plan for active members must be reported; 164.17 (4) actuarial valuations required under section 69.773, 164.18 subdivision 2, must be made at least every four years and 164.19 actuarial valuations required under section 69.77 shall be made 164.20 annually; 164.21 (5) the actuarial balance sheet showing accrued assets 164.22 valued at market value if the actuarial valuation is required to 164.23 be prepared at least every four years or valued as current 164.24 assets under section 356.215, subdivision 1, clause (6), or 164.25 paragraph (b), whichever applies, if the actuarial valuation is 164.26 required to be prepared annually, actuarial accrued liabilities, 164.27 and the unfunded actuarial accrued liability must include the 164.28 following required reserves: 164.29 (i) For active members 164.30 1. Retirement benefits 164.31 2. Disability benefits 164.32 3. Refund liability due to death or withdrawal 164.33 4. Survivors' benefits 164.34 (ii) For deferred annuitants' benefits 164.35 (iii) For former members without vested rights 164.36 (iv) For annuitants 165.1 1. Retirement annuities 165.2 2. Disability annuities 165.3 3. Surviving spouses' annuities 165.4 4. Surviving children's annuities 165.5 In addition to those required reserves, separate items must 165.6 be shown for additional benefits, if any, which may not be 165.7 appropriately included in the reserves listed above; and 165.8 (6) actuarial valuations are due by the first day of the 165.9 seventh month after the end of the fiscal year which the 165.10 actuarial valuation covers. 165.11 (b) For the Minneapolis Firefighters Relief Association or 165.12 the Minneapolis Police Relief Association, the following 165.13 provisions additionally apply: 165.14 (1) in calculating the actuarial balance sheet, unfunded 165.15 actuarial accrued liability, and amortization contribution of 165.16 the relief association, "current assets" means the value of all 165.17 assets at cost, including realized capital gains and losses, 165.18 plus or minus, whichever applies, the average value of total 165.19 unrealized capital gains or losses for the most recent 165.20 three-year period ending with the end of the plan year 165.21 immediately preceding the actuarial valuation report 165.22 transmission date; and 165.23 (2) in calculating the applicable portions of the actuarial 165.24 valuation, an annual preretirement interest assumption of six 165.25 percent, an annual postretirement interest assumption of six 165.26 percent, and an annual salary increase assumption of four 165.27 percent must be used. 165.28 Sec. 3. [AURORA, BIWABIK CITY, HOYT LAKES, AND PALO 165.29 VOLUNTEER FIREFIGHTER RELIEF ASSOCIATIONS; CONSOLIDATION.] 165.30 (a) This section applies to consolidation of any 165.31 combination of two or more of the following volunteer 165.32 firefighter relief associations: Aurora, Biwabik City, Hoyt 165.33 Lakes, and Palo. 165.34 (b) Notwithstanding Minnesota Statutes, section 424B.10, 165.35 subdivision 1, paragraph (a), the service pension to be paid by 165.36 the relief association existing after the consolidation is as 166.1 follows: 166.2 (1) for the service rendered by each individual volunteer 166.3 firefighter before the effective date of the consolidation, the 166.4 service pension amount is the amount payable to that volunteer 166.5 firefighter under the articles of incorporation or bylaws of the 166.6 consolidating volunteer firefighters relief association that the 166.7 firefighter was a member of immediately before the 166.8 consolidation; 166.9 (2) for the service rendered after the effective date of 166.10 the consolidation, the service pension amount is the highest 166.11 dollar amount service pension of any of the consolidating 166.12 volunteer firefighters relief associations under the articles of 166.13 incorporation or bylaws in effect immediately before the 166.14 consolidation; and 166.15 (3) after consolidation, increases in the amounts 166.16 established in clauses (1) and (2) may be implemented if 166.17 consistent with applicable requirements of Minnesota Statutes, 166.18 chapters 69 and 424A. 166.19 Sec. 4. [EVELETH RETIRED POLICE AND FIRE TRUST FUND; AD 166.20 HOC POSTRETIREMENT ADJUSTMENT.] 166.21 (a) In addition to the current pensions and other 166.22 retirement benefits payable, the pensions and retirement 166.23 benefits payable to retired police officers and firefighters and 166.24 their surviving spouses by the Eveleth police and fire trust 166.25 fund are increased by $100 per month. Increases are retroactive 166.26 from January 1, 2005. 166.27 (b) Following the January 1, 2005, effective date of the 166.28 benefit increase provided under paragraph (a), every two years 166.29 thereafter, to be effective no earlier than the applicable 166.30 January 1, the city council of the city of Eveleth is authorized 166.31 to provide permanent, uniform benefit increases, not less than 166.32 $10 per month nor to exceed $100 per month, to any remaining 166.33 retirees and survivors receiving benefits from the Eveleth 166.34 police and fire trust fund. Any given benefit improvement under 166.35 this paragraph is not effective unless the city council passes a 166.36 resolution approving the increase. 167.1 (c) Within 30 days following the approval of a resolution 167.2 under paragraph (b), the chief administrative officer of the 167.3 city of Eveleth shall file a copy of the resolution with the 167.4 executive director of the Legislative Commission on Pensions and 167.5 Retirement, with the chair of the house Governmental Operations 167.6 and Veterans Affairs Committee, and with the chair of the senate 167.7 State and Local Government Operations Committee. Along with a 167.8 copy of the resolution, the city's chief administrative officer 167.9 must send a statement indicating the age of each benefit 167.10 recipient and the retirement benefit or survivor benefit being 167.11 received before and after the benefit increase. 167.12 Sec. 5. [MAPLEWOOD AND OAKDALE VOLUNTEER FIREFIGHTER 167.13 RELIEF ASSOCIATIONS; TRANSFER OF ASSETS.] 167.14 Notwithstanding any limitations in Minnesota Statutes, 167.15 section 424A.02, subdivision 13, or any other provision of law 167.16 to the contrary, if an agreement between the affected relief 167.17 associations and cities is reached as provided in this section, 167.18 the Maplewood Firefighters Relief Association may transfer 167.19 assets from its special fund to the Oakdale Fire Department 167.20 Relief Association representing the value of the accumulated 167.21 service credit for the current members of the Oakdale Fire 167.22 Department Relief Association who are currently eligible to 167.23 receive a combined service pension for firefighter service in 167.24 both associations. The transfer of the assets from the 167.25 Maplewood Firefighters Relief Association to the Oakdale Fire 167.26 Department Relief Association must be in an amount representing 167.27 the cumulative value of the service credit earned by the members 167.28 of the Oakdale Fire Department Relief Association who are 167.29 currently eligible to receive a combined service pension for 167.30 firefighting service in both associations for the service credit 167.31 that they accrued while working for the Maplewood Fire 167.32 Department. The amount of the assets, liabilities, and service 167.33 credit to be transferred must be specified in a joint agreement 167.34 negotiated by the secretaries of the two relief associations and 167.35 ratified by the boards of trustees of both relief associations 167.36 and of the cities of Maplewood and Oakdale. The agreement must 168.1 specify by name or other appropriate means the firefighters 168.2 affected by the liability, asset, and service credit transfer. 168.3 The ratification must be expressed in the form of resolutions 168.4 adopted by each entity. The agreements must specify the amount 168.5 of assets to be transferred, the amount of liabilities to be 168.6 transferred, and the amount of service credit each of the 168.7 applicable individuals will receive in the Oakdale Fire 168.8 Department Relief Association. Upon the ratification of the 168.9 agreement by both relief associations and both cities, the 168.10 assets, liabilities, and service credit of the applicable 168.11 individuals must be transferred to the Oakdale Fire Department 168.12 Relief Association, and the Maplewood Firefighters Relief 168.13 Association is relieved of any obligation to the individuals. A 168.14 certified copy of the ratified agreement must be filed with the 168.15 state auditor and with the secretary of state. 168.16 Sec. 6. [EFFECTIVE DATE; LOCAL APPROVAL.] 168.17 (a) Sections 1 and 2 are effective the day after the date 168.18 of the approval by the city council of the city of Bloomington 168.19 and upon timely completion by the chief clerical officer of the 168.20 city of Bloomington of compliance with Minnesota Statutes, 168.21 section 645.021, subdivisions 2 and 3. 168.22 (b) Section 3 is effective the day after the date on which 168.23 the city council of the city of Eveleth and its chief clerical 168.24 officer timely complete their compliance with Minnesota 168.25 Statutes, section 645.021, subdivisions 2 and 3. 168.26 (c) Section 4 is effective with respect to a volunteer 168.27 firefighters relief association listed in column A the day after 168.28 the governing body of the municipality listed in column B and 168.29 its chief clerical officer timely complete compliance with 168.30 Minnesota Statutes, section 645.021, subdivisions 2 and 3. 168.31 A B 168.32 Aurora city of Aurora 168.33 Biwabik city of Biwabik 168.34 Hoyt Lakes city of Hoyt Lakes 168.35 Palo town of White 168.36 (d) Section 5 is effective the day after the governing body 169.1 of the city of Maplewood, the governing body of the city of 169.2 Oakdale, the Maplewood chief clerical officer, and the Oakdale 169.3 chief clerical officer complete their compliance with Minnesota 169.4 Statutes, section 645.021, subdivisions 2 and 3.