SF 4294

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/25/2022 10:25am

A bill for an act
relating to retirement; Minnesota State Retirement System plans, Public Employees
Retirement Association plans, Teachers Retirement Association, Minnesota state
higher education individual retirement account plan, and St. Paul Teachers
Retirement Fund Association; increasing postretirement adjustment rates;
temporarily reducing employee contribution rates; reducing the investment rate
of return actuarial assumption; increasing and extending direct state aid to the
public employees police and fire retirement plan, the St. Paul Teachers Retirement
Fund Association, and the judges retirement plan; appropriating money; amending
Minnesota Statutes 2020, sections 352.04, subdivision 2; 352.92, subdivision 1;
352B.02, subdivision 1a; 353.27, subdivisions 2, 3c; 353.65, subdivisions 2, 3b;
353E.03, subdivision 1; 354.42, subdivision 2; 354A.12, subdivisions 3a, 3c;
354A.29, subdivision 7; 354B.23, subdivision 1; 356.215, subdivision 8; 356.415,
subdivisions 1, 1a, 1b, 1c, 1d, 1e; 490.123, subdivisions 1a, 5; Minnesota Statutes
2021 Supplement, sections 354A.12, subdivision 1; 356.415, subdivision 1f.

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

ARTICLE 1

POSTRETIREMENT ADJUSTMENTS

Section 1.

Minnesota Statutes 2020, section 354A.29, subdivision 7, is amended to read:

Subd. 7.

Postretirement adjustments.

(a) Except as set forth in paragraph (c), each
person who has been receiving an annuity or benefit under the articles of incorporation, the
bylaws, or this chapter, whose effective date of benefit commencement occurred on or
before July 1 of the calendar year immediately before the adjustment, is eligible to receive
an annual postretirement adjustment, effective as of each January 1, as follows:

(1) deleted text begin there shall be no deleted text end new text begin the new text end postretirement adjustment new text begin shall be one percent new text end on January 1,
deleted text begin 2019, and January 1, 2020 deleted text end new text begin 2022 new text end ; and

(2) the postretirement adjustment shall be deleted text begin one deleted text end new text begin 2.5 new text end percent on January 1, deleted text begin 2021 deleted text end new text begin 2023 new text end , and
each January 1 thereafter.

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

(c) Each person who retires on or after July 1, 2024, is entitled to an annual postretirement
adjustment, effective as of each January 1, beginning with the year following the year in
which the member attains normal retirement age.

(d) Paragraph (c) does not apply to members who retire under section 354A.31,
subdivision 6, paragraph (b), or who retire when the member is at least age 62 and has at
least 30 years of service under section 354A.31, subdivision 7.

Sec. 2.

Minnesota Statutes 2020, section 356.415, subdivision 1, is amended to read:

Subdivision 1.

Annual postretirement adjustments; Minnesota State Retirement
System general state employees retirement plan, legislators retirement plan, and
unclassified state employees retirement program.

(a) Except as set forth in paragraph
(c), recipients of a retirement annuity, disability benefit, or survivor benefit from the general
state employees retirement plan, the legislators retirement plan, or the unclassified state
employees retirement program are entitled to an annual postretirement adjustment, effective
as of each January 1, as follows:

(1) effective January 1, 2019, through December 31, deleted text begin 2023 deleted text end new text begin 2022 new text end , a postretirement increase
of one percent must be applied each year to the amount of the monthly annuity or benefit
of each annuitant or benefit recipient who has been receiving an annuity or a benefit for at
least 12 full months as of the June 30 of the calendar year immediately before the adjustment;

(2) effective January 1, 2019, through December 31, deleted text begin 2023 deleted text end new text begin 2022 new text end , for each annuitant or
benefit recipient who has been receiving an annuity or a benefit for at least one full month,
but less than 12 full months as of the June 30 of the calendar year immediately before the
adjustment, a postretirement increase of 1/12 of one percent for each month that the person
has been receiving an annuity or benefit must be applied to the amount of the monthly
annuity or benefit of the annuitant or benefit recipient;

(3) effective January 1, deleted text begin 2024 deleted text end new text begin 2023 new text end , and thereafter, a postretirement increase of deleted text begin 1.5 deleted text end new text begin 2.5 new text end
percent must be applied each year to the amount of the monthly annuity or benefit of each
annuitant or benefit recipient who has been receiving an annuity or a benefit for at least 12
full months as of the June 30 of the calendar year immediately before the adjustment; and

(4) effective January 1, deleted text begin 2024 deleted text end new text begin 2023 new text end , and thereafter, for each annuitant or benefit recipient
who has been receiving an annuity or a benefit for at least one full month, but less than 12
full months as of the June 30 of the calendar year immediately before the adjustment, an
annual postretirement increase of 1/12 of 1.5 percent for each month that the person has
been receiving an annuity or benefit must be applied to the amount of the monthly annuity
or benefit of the annuitant or benefit recipient.

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

(c) Members who retire on or after January 1, 2024, under the general state employees
retirement plan, the legislators retirement plan, or the unclassified state employees retirement
program are entitled to an annual postretirement adjustment of the member's retirement
annuity, effective as of each January 1, beginning with the year following the year in which
the member attains normal retirement age, as follows:

(1) if a member has been receiving an annuity for at least 12 full months as of the June
30 of the calendar year immediately before the date of the adjustment, a postretirement
increase equal to the percentage specified in paragraph (a), clause (3), must be applied,
effective on January 1, to the amount of the member's monthly annuity;

(2) if a member has been receiving an annuity for at least one full month, but less than
12 full months as of the June 30 of the calendar year immediately before the date of
adjustment, a postretirement increase of 1/12 of the percentage specified in paragraph (a),
clause (4), for each month that the member has been receiving an annuity must be applied,
effective on January 1, to the amount of the member's monthly annuity; or

(3) if a member has been receiving an annuity for fewer than seven months before the
date of adjustment, a postretirement increase shall not be applied until the next January 1
and the amount of the adjustment shall be the amount determined under clause (2).

(d) Paragraph (c) does not apply to members who retire under section 352.116,
subdivision 1, paragraph (c).

Sec. 3.

Minnesota Statutes 2020, section 356.415, subdivision 1a, is amended to read:

Subd. 1a.

Annual postretirement adjustments; Minnesota State Retirement System
correctional state employees retirement plan.

(a) Retirement annuity, disability benefit,
or survivor benefit recipients of the correctional state employees retirement plan are entitled
to an annual postretirement adjustment, effective as of deleted text begin each deleted text end January 1, as follows:

(1) new text begin through December 31, 2022, new text end a postretirement increase of 1.5 percent must be applied
each year to the monthly annuity or benefit of each annuitant or benefit recipient who has
been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the
calendar year immediately before the adjustment; deleted text begin and
deleted text end

(2) new text begin through December 31, 2022, new text end for each annuitant or benefit recipient who has been
receiving an annuity or a benefit for at least one full month, but less than 12 full months as
of the June 30 of the calendar year immediately before the adjustment, an annual
postretirement increase of 1/12 of 1.5 percent for each month that the person has been
receiving an annuity or benefit must be applied to the amount of the monthly annuity or
benefit of each annuitant or benefit recipient deleted text begin . deleted text end new text begin ;
new text end

new text begin (3) effective January 1, 2023, and thereafter, a postretirement increase of 2.5 percent
must be applied each year to the monthly annuity or benefit of each annuitant or benefit
recipient who has been receiving an annuity or a benefit for at least 12 full months as of the
June 30 of the calendar year immediately before the adjustment; and
new text end

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

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

Sec. 4.

Minnesota Statutes 2020, section 356.415, subdivision 1b, is amended to read:

Subd. 1b.

Annual postretirement adjustments; PERA; general employees retirement
plan.

(a) Annuities, disability benefits, and survivor benefits being paid from the general
employees retirement plan of the Public Employees Retirement Association shall be increased
effective each January 1 by the percentage of increase determined under this subdivision.
The increase to the annuity or benefit shall be determined by multiplying the monthly amount
of the annuity or benefit by the percentage of increase specified in paragraph (b), after taking
into account any reduction to the percentage of increase required under paragraph (c).

(b) The percentage of increase shall be one percent unless the federal Social Security
Administration has announced a cost-of-living adjustment pursuant to United States Code,
title 42, section 415(i), in the last quarter of the preceding calendar year that is greater than
two percent. If the cost-of-living adjustment announced by the federal Social Security
Administration is greater than two percent, the percentage of increase shall be new text begin :
new text end

new text begin (1) through December 31, 2022, new text end 50 percent of the cost-of-living adjustment announced
by the federal Social Security Administration, but in no event may the percentage of increase
exceed 1.5 percent deleted text begin . deleted text end new text begin ; and
new text end

new text begin (2) effective January 1, 2023, and thereafter, 65 percent of the cost-of-living adjustment
announced by the federal Social Security Administration, but in no event may the percentage
of increase exceed 2.5 percent.
new text end

(c)(1) If the recipient of an annuity, disability benefit, or survivor's benefit has been
receiving the annuity or benefit for at least 12 full months as of the June 30 of the calendar
year immediately before the effective date of the increase, there is no reduction in the
percentage of increase.

(2) If the recipient of an annuity, disability benefit, or survivor's benefit has been receiving
the annuity or benefit for at least one month, but less than 12 full months, as of the June 30
of the calendar year immediately preceding the effective date of the increase, the percentage
of increase is multiplied by a fraction, the numerator of which is the number of months the
annuity or benefit was received as of June 30 of the preceding calendar year and the
denominator of which is 12.

(d) Effective for members who retire on or after January 1, 2024, annuities shall not be
increased under paragraphs (a) to (c) until January 1 of the year following the year in which
the member reaches normal retirement age. January 1 of the year following the year in
which the member reaches normal retirement age shall be considered the effective date of
the increase under paragraph (c). If a member has been receiving an annuity for fewer than
seven months as of the January 1 of the year following the year in which the member reaches
normal retirement age, no increase shall be paid until January 1 of the next year.

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

(f) Paragraph (d) does not apply to members who retire under section 353.30, subdivision
1a.

Sec. 5.

Minnesota Statutes 2020, section 356.415, subdivision 1c, is amended to read:

Subd. 1c.

Annual postretirement adjustments; PERA-police and fire.

(a) Retirement
annuity, disability benefit, or survivor benefit recipients of the public employees police and
fire retirement plan are entitled to an annual postretirement adjustment, effective as of each
January 1, as follows:

(1) new text begin through December 31, 2022, new text end for each annuitant or benefit recipient who will have
been receiving an annuity or benefit for at least 36 full months as of the immediate preceding
June 30, a postretirement increase of one percent must be applied each year to the amount
of the monthly annuity or benefit of the annuitant or benefit recipient; deleted text begin or
deleted text end

(2) new text begin through December 31, 2022, new text end for each annuitant or benefit recipient who has been
receiving the annuity or benefit for at least 25 full months, but less than 36 months as of
the immediate preceding June 30, a postretirement increase of 1/12 of one percent for each
full month that the person has been receiving an annuity or benefit during the fiscal year in
which the annuity or benefit was effective must be applied each year to the amount of the
monthly annuity or benefit of the annuitant or benefit recipient deleted text begin . deleted text end new text begin ;
new text end

new text begin (3) effective January 1, 2023, and thereafter, for each annuitant or benefit recipient who
will have been receiving an annuity or benefit for at least 36 full months as of the immediate
preceding June 30, a postretirement increase of 2.5 percent must be applied each year to
the amount of the monthly annuity or benefit of the annuitant or benefit recipient; or
new text end

new text begin (4) effective January 1, 2023, and thereafter, for each annuitant or benefit recipient who
has been receiving the annuity or benefit for at least 25 full months, but less than 36 months
as of the immediate preceding June 30, a postretirement increase of 1/12 of 2.5 percent for
each full month that the person has been receiving an annuity or benefit during the fiscal
year in which the annuity or benefit was effective must be applied each year to the amount
of the monthly annuity or benefit of the annuitant or benefit recipient.
new text end

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

Sec. 6.

Minnesota Statutes 2020, section 356.415, subdivision 1d, is amended to read:

Subd. 1d.

Teachers Retirement Association annual postretirement adjustments.

(a)
Except as set forth in paragraph (d), recipients of a retirement annuity, disability benefit,
or survivor benefit from the Teachers Retirement Association are entitled to an annual
postretirement adjustment, effective as of each January 1, as follows:

(1) effective January 1, 2019, through December 31, deleted text begin 2023 deleted text end new text begin 2022 new text end , a postretirement increase
of one percent must be applied each year to the amount of the monthly annuity or benefit
of each annuitant or benefit recipient who has been receiving an annuity or a benefit for at
least 12 full months as of the June 30 of the calendar year immediately before the adjustment;

(2) effective January 1, 2019, through December 31, deleted text begin 2023 deleted text end new text begin 2022 new text end , for each annuitant or
benefit recipient who has been receiving an annuity or a benefit for at least one full month,
but less than 12 full months as of the June 30 of the calendar year immediately before the
adjustment, a postretirement increase of 1/12 of one percent for each month the person has
been receiving an annuity or benefit must be applied to the amount of the monthly annuity
or benefit of the annuitant or benefit recipient;

(3) effective January 1, deleted text begin 2024 deleted text end new text begin 2023 new text end , and thereafter, a postretirement increase new text begin of 2.5 percent new text end
must be applied each year to the amount of the monthly annuity or benefit of each annuitant
or benefit recipient who has been receiving an annuity or a benefit for at least 12 full months
as of the June 30 of the calendar year immediately before the adjustment deleted text begin , at the following
rates: deleted text end new text begin ; and
new text end

	deleted text begin from January 1, 2024, through December 31, 2024 deleted text end	deleted text begin 1.1 percent deleted text end
	deleted text begin from January 1, 2025, through December 31, 2025 deleted text end	deleted text begin 1.2 percent deleted text end
	deleted text begin from January 1, 2026, through December 31, 2026 deleted text end	deleted text begin 1.3 percent deleted text end
	deleted text begin from January 1, 2027, through December 31, 2027 deleted text end	deleted text begin 1.4 percent deleted text end
	deleted text begin from January 1, 2028, and thereafter deleted text end	deleted text begin 1.5 percent deleted text end

(4) effective January 1, deleted text begin 2024 deleted text end new text begin 2023 new text end , and thereafter, for each annuitant or benefit recipient
who has been receiving an annuity or a benefit for at least one full month, but less than 12
full months, as of the June 30 of the calendar year immediately before the adjustment, an
annual postretirement increase of 1/12 of deleted text begin the applicable percentage deleted text end new text begin 2.5 percent new text end for each
month that the person has been receiving an annuity or benefit must be applied to the amount
of the monthly annuity or benefit of the annuitant or benefit recipient. deleted text begin The applicable
percentages are the following:
deleted text end

	deleted text begin from January 1, 2024, through December 31, 2024 deleted text end	deleted text begin 1.1 percent deleted text end
	deleted text begin from January 1, 2025, through December 31, 2025 deleted text end	deleted text begin 1.2 percent deleted text end
	deleted text begin from January 1, 2026, through December 31, 2026 deleted text end	deleted text begin 1.3 percent deleted text end
	deleted text begin from January 1, 2027, through December 31, 2027 deleted text end	deleted text begin 1.4 percent deleted text end
	deleted text begin from January 1, 2028, and thereafter deleted text end	deleted text begin 1.5 percent deleted text end

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

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

(d) Members who retire on or after July 1, 2024, are entitled to an annual postretirement
adjustment of the member's retirement annuity, effective as of each January 1, beginning
with the year following the year in which the member attains normal retirement age, as
follows:

(1) if a member has been receiving an annuity for at least 12 full months as of the June
30 of the calendar year immediately before the date of the adjustment, a postretirement
increase equal to the percentage specified in paragraph (a), clause (3), must be applied,
effective on January 1, to the amount of the member's monthly annuity;

(2) if a member has been receiving an annuity for at least one full month, but less than
12 full months as of the June 30 of the calendar year immediately before the date of
adjustment, a postretirement increase of 1/12 of the applicable percentage specified in
paragraph (a), clause (4), for each month that the member has been receiving an annuity
must be applied, effective on January 1, to the amount of the member's monthly annuity;
or

(3) if a member has been receiving an annuity for fewer than seven months as of the
January 1 of the year following the year in which the member attains normal retirement
age, a postretirement adjustment shall be applied effective as of the next January 1. The
amount of the adjustment shall be determined under clause (2).

(e) Paragraph (d) does not apply to members who retire under section 354.44, subdivision
6, paragraph (c), clause (3), or who retire when the member is at least age 62 and has at
least 30 years of service under section 354.44, subdivision 6, paragraph (c), (d), (e), or (f),
as applicable.

Sec. 7.

Minnesota Statutes 2020, section 356.415, subdivision 1e, is amended to read:

Subd. 1e.

Annual postretirement adjustments; State Patrol retirement plan.

(a)
Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol
retirement plan are entitled to an annual postretirement adjustment, effective as of each
January 1, as follows:

(1) new text begin through December 31, 2022, new text end a postretirement increase of one percent must be applied
each year to the monthly annuity or benefit of each annuitant or benefit recipient who has
been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the
calendar year immediately before the adjustment; and

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

new text begin (3) effective January 1, 2023, and thereafter, a postretirement increase of 2.5 percent
must be applied each year to the monthly annuity or benefit of each annuitant or benefit
recipient who has been receiving an annuity or a benefit for at least 12 full months as of the
June 30 of the calendar year immediately before the adjustment; and
new text end

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

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

Sec. 8.

Minnesota Statutes 2021 Supplement, section 356.415, subdivision 1f, is amended
to read:

Subd. 1f.

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

(a) Recipients of a retirement annuity, disability benefit, or survivor
benefit from the judges retirement plan are entitled to an annual postretirement adjustment,
effective as of each January 1, as follows:

(1) through December 31, deleted text begin 2021 deleted text end new text begin 2022 new text end , a postretirement increase of 1.75 percent must be
applied each year to the monthly annuity or benefit of each annuitant or benefit recipient
who has been receiving an annuity or a benefit for at least 12 full months as of the June 30
of the calendar year immediately before the adjustment;

(2) through December 31, deleted text begin 2021 deleted text end new text begin 2022 new text end , for each annuitant or benefit recipient who has
been receiving an annuity or a benefit for at least one full month, but less than 12 full months
as of the June 30 of the calendar year immediately before the adjustment, an annual
postretirement increase of 1/12 of 1.75 percent for each month that the person has been
receiving an annuity or benefit must be applied to the amount of the monthly annuity or
benefit;

(3) effective January 1, deleted text begin 2022 deleted text end new text begin 2023 new text end , and thereafter, a postretirement increase of deleted text begin 1.5 deleted text end new text begin 2.5 new text end
percent must be applied each year to the monthly annuity or benefit of each annuitant or
benefit recipient who has been receiving an annuity or a benefit for at least 12 full months
as of the June 30 of the calendar year immediately before the adjustment; and

(4) effective January 1, deleted text begin 2022 deleted text end new text begin 2023 new text end , and thereafter, for each annuitant or benefit recipient
who has been receiving an annuity or a benefit for at least one full month, but less than 12
full months as of the June 30 of the calendar year immediately before the adjustment, an
annual postretirement increase of 1/12 of deleted text begin 1.5 deleted text end new text begin 2.5 new text end percent for each month that the person has
been receiving an annuity or benefit must be applied to the amount of the monthly annuity
or benefit.

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

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

new text begin Sections 1 to 8 are effective June 30, 2022.
new text end

ARTICLE 2

EMPLOYEE CONTRIBUTION RATES

Section 1.

Minnesota Statutes 2020, section 352.04, subdivision 2, is amended to read:

Subd. 2.

Employee contributions.

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

	deleted text begin from July 1, 2014, to June 30, 2018 deleted text end	deleted text begin 5.5 deleted text end
	deleted text begin from July 1, 2018, to June 30, 2019 deleted text end	deleted text begin 5.75 deleted text end
	deleted text begin after deleted text end new text begin from July 1, 2019, to new text end June 30, deleted text begin 2019 deleted text end new text begin 2022 new text end	6
	new text begin from July 1, 2022, to June 30, 2025 new text end	new text begin 5 new text end
	new text begin after June 30, 2025 new text end	new text begin 6 new text end

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

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

Sec. 2.

Minnesota Statutes 2020, section 352.92, subdivision 1, is amended to read:

Subdivision 1.

Employee contributions.

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

	deleted text begin from July 1, 2014, to June 30, 2018 deleted text end	deleted text begin 9.1 deleted text end
	deleted text begin after deleted text end new text begin from July 1, 2018, to new text end June 30, deleted text begin 2018 deleted text end new text begin 2022 new text end	9.6
	new text begin from July 1, 2022, to June 30, 2025 new text end	new text begin 8.6 new text end
	new text begin after June 30, 2025 new text end	new text begin 9.6 new text end

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

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

Sec. 3.

Minnesota Statutes 2020, section 352B.02, subdivision 1a, is amended to read:

Subd. 1a.

Member contributions.

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

	deleted text begin from July 1, 2014, to June 30, 2016 deleted text end	deleted text begin 13.4 deleted text end
	deleted text begin from July 1, 2016, to June 30, 2018 deleted text end	deleted text begin 14.4 deleted text end
	deleted text begin from July 1, 2018, to June 30, 2020 deleted text end	deleted text begin 14.9 deleted text end
	deleted text begin after deleted text end new text begin from July 1, 2020, to new text end June 30, deleted text begin 2020 deleted text end new text begin 2022 new text end	15.4
	new text begin from July 1, 2022, to June 30, 2025 new text end	new text begin 14.4 new text end
	new text begin after June 30, 2025 new text end	new text begin 15.4 new text end

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

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

Sec. 4.

Minnesota Statutes 2020, section 353.27, subdivision 2, is amended to read:

Subd. 2.

General employees retirement plan; employee contribution.

(a) For a basic
member of the general employees retirement plan of the Public Employees Retirement
Association, the employee contribution is deleted text begin 9.10 deleted text end new text begin the following new text end percent of salary.

	new text begin before July 1, 2022 new text end	new text begin 9.10 new text end
	new text begin from July 1, 2022, to June 30, 2025 new text end	new text begin 8.10 new text end
	new text begin after June 30, 2025 new text end	new text begin 9.10 new text end

new text begin (b) new text end For a coordinated member of the general employees retirement plan of the Public
Employees Retirement Association, the employee contribution is the following percentage
of salary plus any contribution rate adjustment under subdivision 3b:

	deleted text begin Effective after December 31, 2010 deleted text end	deleted text begin 6.25 deleted text end
	deleted text begin Effective deleted text end new text begin from new text end January 1, 2015 new text begin , to June 30, 2022 new text end	6.5
	new text begin from July 1, 2022, to June 30, 2025 new text end	new text begin 5.5 new text end
	new text begin after June 30, 2025 new text end	new text begin 6.5 new text end

(b) These contributions must be made by deduction from salary as defined in section
353.01, subdivision 10, in the manner provided in subdivision 4. If any portion of a member's
salary is paid from other than public funds, the member's employee contribution must be
based on the total salary received by the member from all sources.

Sec. 5.

Minnesota Statutes 2020, section 353.27, subdivision 3c, is amended to read:

Subd. 3c.

Former MERF members; member and employer contributions.

(a) For
the period July 1, 2019, through December 31, 2031, the member contributions for former
members of the Minneapolis Employees Retirement Fund and by the former Minneapolis
Employees Retirement Fund-covered employing units are governed by this subdivision.

(b) The member contribution for a public employee who was a member of the former
Minneapolis Employees Retirement Fund on June 29, 2010, is deleted text begin 9.75 deleted text end new text begin the following new text end percent
of the salary of the employee deleted text begin . deleted text end new text begin :
new text end

	new text begin before July 1, 2022 new text end	new text begin 9.75 new text end
	new text begin from July 1, 2022, to June 30, 2025 new text end	new text begin 8.75 new text end
	new text begin after June 30, 2025 new text end	new text begin 9.75 new text end

(c) The employer regular contribution with respect to a public employee who was a
member of the former Minneapolis Employees Retirement Fund on June 29, 2010, is 9.75
percent of the salary of the employee.

(d) The annual employer supplemental contribution is the employing unit's share of
$21,000,000.

(e) Each employing unit's share under paragraph (d) is the amount determined from an
allocation between each employing unit in the portion equal to the unit's employer
supplemental contribution paid or payable under Minnesota Statutes 2012, section 353.50,
during calendar year 2014.

(f) The employer supplemental contribution amount under paragraph (d) for calendar
year 2019 must be invoiced by the executive director of the Public Employees Retirement
Association by July 1, 2019. For subsequent calendar years, the employer supplemental
contribution under paragraph (d) must be invoiced on January 31 of each year. The employer
supplemental contribution is payable in two parts, with the first half payable on or before
July 31 and with the second half payable on or before December 15. Late payments are
payable with interest, compounded annually, at the applicable rate or rates specified in
section 356.59, subdivision 3, per month for each month or portion of a month that has
elapsed after the due date.

(g) The employer supplemental contribution under paragraph (d) terminates on December
31, 2031.

Sec. 6.

Minnesota Statutes 2020, section 353.65, subdivision 2, is amended to read:

Subd. 2.

Employee contribution.

(a) For members other than members who were active
members of the former Minneapolis Firefighters Relief Association on December 29, 2011,
or for members other than members who were active members of the former Minneapolis
Police Relief Association on December 29, 2011, the employee contribution is an amount
equal to the following percentage of the total salary of each member, as follows:

	deleted text begin before January 1, 2019 deleted text end	deleted text begin 10.8 percent deleted text end
	deleted text begin from January 1, 2019, through December 31, 2019 deleted text end	deleted text begin 11.3 percent deleted text end
	from January 1, 2020, deleted text begin and thereafter deleted text end new text begin to June 30, 2022 new text end	11.8 percent
	new text begin from July 1, 2022, to June 30, 2025 new text end	new text begin 10.8 percent new text end
	new text begin after June 30, 2025 new text end	new text begin 11.8 percent new text end

(b) For members who were active members of the former Minneapolis Firefighters Relief
Association on December 29, 2011, the employee contribution is an amount equal to deleted text begin eight deleted text end
new text begin the following new text end percent of the monthly unit value under section 353.01, subdivision 10a,
multiplied by 80 and expressed as a biweekly amount for each member deleted text begin . deleted text end new text begin , as follows:
new text end

	new text begin before July 1, 2022 new text end	new text begin 8 percent new text end
	new text begin from July 1, 2022, to June 30, 2025 new text end	new text begin 7 percent new text end
	new text begin after June 30, 2025 new text end	new text begin 8 percent new text end

The employee contribution made by a member with at least 25 years of service credit
as an active member of the former Minneapolis Firefighters Relief Association must be
deposited in the postretirement health care savings account established under section 352.98.

(c) For members who were active members of the former Minneapolis Police Relief
Association on December 29, 2011, the employee contribution is an amount equal to deleted text begin eight deleted text end
new text begin the following new text end percent of the monthly unit value under section 353.01, subdivision 10b,
multiplied by 80 and expressed as a biweekly amount for each member deleted text begin . deleted text end new text begin , as follows:
new text end

	new text begin before July 1, 2022 new text end	new text begin 8 percent new text end
	new text begin from July 1, 2022, to June 30, 2025 new text end	new text begin 7 percent new text end
	new text begin after June 30, 2025 new text end	new text begin 8 percent new text end

The employee contribution made by a member with at least 25 years of service credit
as an active member of the former Minneapolis Police Relief Association must be deposited
in the postretirement health care savings account established under section 352.98.

(d) Contributions under this section must be made by deduction from salary in the manner
provided in subdivision 4. Where any portion of a member's salary is paid from other than
public funds, the member's employee contribution is based on the total salary received from
all sources.

Sec. 7.

Minnesota Statutes 2020, section 353E.03, subdivision 1, is amended to read:

Subdivision 1.

Member contributions.

A member of the local government correctional
service retirement plan shall make an employee contribution in an amount equal to deleted text begin 5.83 deleted text end new text begin the
following new text end percent of salary deleted text begin . deleted text end new text begin :
new text end

	new text begin before July 1, 2022 new text end	new text begin 5.83 new text end
	new text begin from July 1, 2022, to June 30, 2025 new text end	new text begin 4.83 new text end
	new text begin after June 30, 2025 new text end	new text begin 5.83 new text end

Sec. 8.

Minnesota Statutes 2020, section 354.42, subdivision 2, is amended to read:

Subd. 2.

Employee contribution.

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

	Period	Basic Program	Coordinated Program
	from July 1, 2014, deleted text begin through deleted text end new text begin to new text end June 30, deleted text begin 2023 deleted text end new text begin 2022 new text end	11 percent	7.5 percent
	new text begin from July 1, 2022, to June 30, 2025 new text end	new text begin 10 percent new text end	new text begin 6.5 percent new text end
	after June 30, deleted text begin 2023 deleted text end new text begin 2025 new text end	11.25 percent	7.75 percent

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

(c) This contribution must be made by deduction from salary. Where any portion of a
member's salary is paid from other than public funds, the member's employee contribution
must be based on the entire salary received.

Sec. 9.

Minnesota Statutes 2021 Supplement, section 354A.12, subdivision 1, is amended
to read:

Subdivision 1.

Employee contributions.

(a) The contribution required to be paid by
each member of the St. Paul Teachers Retirement Fund Association is the percentage of
total salary specified below for the applicable association and program:

	deleted text begin Program deleted text end	deleted text begin Percentage of Total Salary deleted text end
deleted text begin St. Paul Teachers Retirement Fund Association deleted text end
	basic program deleted text begin after June 30 deleted text end new text begin from July 1 new text end , 2016 new text begin , to June 30, 2022 new text end		10 percent
	new text begin basic program from July 1, 2022, to June 30, 2025 new text end		new text begin 9 percent new text end
	basic program after June 30, deleted text begin 2023 deleted text end new text begin 2025 new text end		10.25 percent
	coordinated program deleted text begin after June 30 deleted text end new text begin from July 1 new text end , 2016 new text begin , to June 30, 2022 new text end		7.5 percent
	new text begin coordinated program from July 1, 2022, to June 30, 2025 new text end		new text begin 6.5 percent new text end
	coordinated program after June 30, deleted text begin 2023 deleted text end new text begin 2025 new text end		7.75 percent

(b) Contributions must be made by deduction from salary and must be remitted directly
to the St. Paul Teachers Retirement Fund Association at least once each month.

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

Sec. 10.

Minnesota Statutes 2020, section 354B.23, subdivision 1, is amended to read:

Subdivision 1.

Member contribution rate.

(a) Except for a participant described under
paragraph (b), the member contribution rate for participants in the individual retirement
account plan is equal to the coordinated employee contribution rate in section 354.42,
subdivision 2.

(b) The member contribution rate is the rate described in paragraph (c) for a participant
in the individual retirement account plan who:

(1) achieved tenure or its equivalent at a Minnesota state college or university before
July 1, 2018; or

(2) is an employee in an eligible unclassified administrative position, is not a faculty
member, and first contributed to the individual retirement account plan before July 1, 2018.

(c) The member contribution rate for a participant described in paragraph (b) is deleted text begin the deleted text end
deleted text begin following percentage of salary: deleted text end new text begin 6.45 percent of salary from July 1, 2021, to June 30, 2022.
new text end

	deleted text begin from July 1, 2019, to June 30, 2020 deleted text end	deleted text begin 5.15 deleted text end
	deleted text begin from July 1, 2020, to June 30, 2021 deleted text end	deleted text begin 5.80 deleted text end
	deleted text begin from July 1, 2021, to June 30, 2022 deleted text end	deleted text begin 6.45 deleted text end
	deleted text begin from July 1, 2022, to June 30, 2023 deleted text end	deleted text begin 7.10 deleted text end
	deleted text begin from July 1, 2023, to June 30, 2024 deleted text end	deleted text begin 7.75 deleted text end

After June 30, deleted text begin 2024 deleted text end new text begin 2022 new text end , the member contribution rate is the rate specified in paragraph
(a).

Sec. 11.

Minnesota Statutes 2020, section 490.123, subdivision 1a, is amended to read:

Subd. 1a.

Member contribution rates.

(a) A judge in the tier I program whose service
does not exceed the service credit limit in section 490.121, subdivision 22, shall contribute
to the fund from each salary payment a sum equal to deleted text begin 9.00 deleted text end new text begin the following new text end percent of salary deleted text begin . deleted text end new text begin :
new text end

	new text begin before July 1, 2022 new text end	new text begin 9 new text end
	new text begin from July 1, 2022, to June 30, 2025 new text end	new text begin 8 new text end
	new text begin after June 30, 2025 new text end	new text begin 9 new text end

(b) A judge in the tier II program shall contribute to the fund from each salary payment
a sum equal to deleted text begin 7.00 deleted text end new text begin the following new text end percent of salary deleted text begin . deleted text end new text begin :
new text end

	new text begin before July 1, 2022 new text end	new text begin 7 new text end
	new text begin from July 1, 2022, to June 30, 2025 new text end	new text begin 6 new text end
	new text begin after June 30, 2025 new text end	new text begin 7 new text end

(c) Contributions under this subdivision are payable by salary deduction. The deduction
must be made by the state court administrator under section 352.04, subdivisions 4, 5, and
8.

Sec. 12. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 11 are effective June 30, 2022.
new text end

ARTICLE 3

ACTUARIAL ASSUMPTION FOR INVESTMENT RATE OF RETURN

Section 1.

Minnesota Statutes 2020, section 356.215, subdivision 8, is amended to read:

Subd. 8.

Actuarial assumptions.

(a) The actuarial valuation must use the applicable
following investment return assumption:

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

(b) The actuarial valuation for each of the covered retirement plans listed in section
356.415, subdivision 2, and the St. Paul Teachers Retirement Fund Association must take
into account the postretirement adjustment rate or rates applicable to the plan as specified
in section 354A.29, subdivision 7, or 356.415, whichever applies.

(c) The actuarial valuation must use the applicable salary increase and payroll growth
assumptions found in the appendix to the standards for actuarial work adopted by the
Legislative Commission on Pensions and Retirement pursuant to section 3.85, subdivision
10. The appendix must be updated whenever new assumptions have been approved or
deemed approved under subdivision 18.

(d) The assumptions set forth in the appendix to the standards for actuarial work continue
to apply, unless a different salary assumption or a different payroll increase assumption:

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2022.
new text end

ARTICLE 4

DIRECT STATE AID

Section 1.

Minnesota Statutes 2020, section 353.65, subdivision 3b, is amended to read:

Subd. 3b.

Direct state aid.

(a) deleted text begin The state shall pay $4,500,000 on October 1, 2018, and
October 1, 2019, to the public employees police and fire retirement plan. deleted text end By October 1 of
each year deleted text begin after 2019 deleted text end , the state shall pay deleted text begin $9,000,000 deleted text end new text begin $13,500,000 new text end to the public employees
police and fire retirement plan. The commissioner of management and budget shall pay the
aid specified in this subdivision. The amount required is annually appropriated from the
general fund to the commissioner of management and budget.

(b) The aid under paragraph (a) continues until the earlier of:

(1) the first day of the fiscal year following the fiscal year in which the actuarial value
of assets of the fund equals or exceeds 100 percent of the actuarial accrued liabilities as
reported by the actuary retained under section 356.214 in the annual actuarial valuation
prepared under section 356.215; or

(2) July 1, deleted text begin 2048 deleted text end new text begin 2068 new text end .

Sec. 2.

Minnesota Statutes 2020, section 354A.12, subdivision 3a, is amended to read:

Subd. 3a.

Direct state aid to first class city teachers retirement fund associations.

(a)
The state shall pay $2,827,000 to the St. Paul Teachers Retirement Fund Association.

(b) In addition to other amounts specified in this subdivision, the state shall pay
$7,000,000 as state aid to the St. Paul Teachers Retirement Fund Association.

(c) In addition to the amounts specified in paragraphs (a) and (b), the state shall pay
deleted text begin $5,000,000 deleted text end new text begin $7,500,000 new text end as state aid to the St. Paul Teachers Retirement Fund Association.

(d) The aid under this subdivision is payable October 1 annually. The commissioner of
management and budget shall pay the aid specified in this subdivision. The amount required
is appropriated annually from the general fund to the commissioner of management and
budget.

Sec. 3.

Minnesota Statutes 2020, section 354A.12, subdivision 3c, is amended to read:

Subd. 3c.

Termination of supplemental contributions and direct matching and state
aid.

(a) The supplemental contributions payable to the St. Paul Teachers Retirement Fund
Association by Independent School District No. 625 under section 423A.02, subdivision 3,
and the aid under subdivision 3a, paragraphs (a) and (b), continue until the earlier of:

(1) the first day of the fiscal year following the year in which the actuarial value of assets
of the fund equals or exceeds 100 percent of the actuarial accrued liability as reported by
the actuary retained under section 356.214 in the most recent annual actuarial valuation
prepared under section 356.215; or

(2) July 1, 2048.

(b) The aid under subdivision 3a, paragraph (c), continues until the earlier of:

(1) the first day of the fiscal year following the fiscal year in which the actuarial value
of assets of the fund equals or exceeds 100 percent of the actuarial accrued liabilities as
reported by the actuary retained under section 356.214 in the annual actuarial valuation
prepared under section 356.215; or

(2) July 1, deleted text begin 2048 deleted text end new text begin 2068 new text end .

Sec. 4.

Minnesota Statutes 2020, section 490.123, subdivision 5, is amended to read:

Subd. 5.

Direct state aid.

(a) The state shall pay deleted text begin $6,000,000 deleted text end new text begin $9,000,000 new text end annually to the
judges' retirement fund. The aid is payable each July 1. The amount required is annually
appropriated from the general fund to the judges' retirement fund.

(b) The aid under paragraph (a) continues until the earlier of:

(1) the first day of the fiscal year following the fiscal year in which the actuarial value
of assets of the fund equals or exceeds 100 percent of the actuarial accrued liabilities as
reported by the actuary retained under section 356.214 in the annual actuarial valuation
prepared under section 356.215; or

(2) July 1, deleted text begin 2048 deleted text end new text begin 2068 new text end .

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

new text begin Sections 1 to 4 are effective June 30, 2022.
new text end

ARTICLE 5

APPROPRIATION

Section 1. new text begin APPROPRIATION.
new text end

new text begin (a) $1,000,000,000 in fiscal year 2023 is appropriated from the general fund to the
pension plans specified in paragraph (b), to be allocated by the commissioner of management
and budget among the pension plans in the same ratio that the market value of assets as of
the most recent June 30 for each pension plan bears to the sum of the market value of assets
for all specified pension plans as of the most recent June 30.
new text end

new text begin (b) The amount appropriated under paragraph (a) shall be allocated among the following
pension plans:
new text end

new text begin (1) the general state employees retirement plan of the Minnesota State Retirement System;
new text end

new text begin (2) the general employees retirement plan of the Public Employees Retirement
Association;
new text end

new text begin (3) the Teachers Retirement Association;
new text end

new text begin (4) the St. Paul Teachers Retirement Fund Association;
new text end

new text begin (5) the State Patrol retirement plan;
new text end

new text begin (6) the public employees police and fire plan of the Public Employees Retirement
Association;
new text end

new text begin (7) the correctional state employees retirement plan of the Minnesota State Retirement
System;
new text end

new text begin (8) the local government correctional service retirement plan of the Public Employees
Retirement Association; and
new text end

new text begin (9) the judges' retirement plan.
new text end

new text begin (c) The commissioner of management and budget must determine the amount of the
allocation under paragraph (a) for each pension plan specified in paragraph (b). Each
allocation is directly appropriated to the pension fund for each pension plan by the
commissioner. The commissioner must report the amounts appropriated under this section
to the chairs and ranking minority members of the house of representatives Ways and Means
Committee and the senate Finance Committee by August 15, 2022.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2022.
new text end