HF 215

as introduced - 87th Legislature (2011 - 2012) Posted on 01/26/2011 10:39am

A bill for an act
relating to retirement; public employees retirement association; Virginia Fire
Department Relief Association; authorizing an administrative consolidation
of the relief association; amending Minnesota Statutes 2010, sections 69.77,
subdivisions 1a, 4; 353.01, subdivision 2a; 353.05; 353.06; 353.15, subdivision
1; 353.37, subdivision 1; 353.65, subdivision 1, by adding a subdivision;
353.68, subdivision 1; 356.20, subdivision 2; 356.214, subdivision 1; 356.215,
subdivisions 8, 11; 356.401, subdivision 3; 356.407, subdivision 2; 356.465,
subdivision 3; 423A.02, subdivision 1b; proposing coding for new law in
Minnesota Statutes, chapter 353.

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

Section 1.

Minnesota Statutes 2010, section 69.77, subdivision 1a, is amended to read:

Subd. 1a.

Covered retirement plans.

The provisions of this section apply to the
following local retirement plans:

(1) the Bloomington Firefighters Relief Association;

(2) the Fairmont Police Relief Association;

(3) the Minneapolis Firefighters Relief Association; new text begin and
new text end

(4) the Minneapolis Police Relief Association deleted text begin ; and deleted text end new text begin .
new text end

deleted text begin (5) the Virginia Fire Department Relief Association.
deleted text end

Sec. 2.

Minnesota Statutes 2010, section 69.77, subdivision 4, is amended to read:

Subd. 4.

Relief association financial requirements; minimum municipal
obligation.

(a) The officers of the relief association shall determine the financial
requirements of the relief association and minimum obligation of the municipality for
the following calendar year in accordance with the requirements of this subdivision.
The financial requirements of the relief association and the minimum obligation of the
municipality must be determined on or before the submission date established by the
municipality under subdivision 5.

(b) The financial requirements of the relief association for the following calendar
year must be based on the most recent actuarial valuation or survey of the special fund of
the association if more than one fund is maintained by the association, or of the association,
if only one fund is maintained, prepared in accordance with sections 356.215, subdivisions
4 to 15, and 356.216, as required under subdivision 10. If an actuarial estimate is prepared
by the actuary of the relief association as part of obtaining a modification of the benefit
plan of the relief association and the modification is implemented, the actuarial estimate
must be used in calculating the subsequent financial requirements of the relief association.

(c) If the relief association has an unfunded actuarial accrued liability as reported in
the most recent actuarial valuation or survey, the total of the amounts calculated under
clauses (1), (2), and (3), constitute the financial requirements of the relief association for
the following year. If the relief association does not have an unfunded actuarial accrued
liability as reported in the most recent actuarial valuation or survey, the amount calculated
under clauses (1) and (2) constitute the financial requirements of the relief association for
the following year. The financial requirement elements are:

(1) the normal level cost requirement for the following year, expressed as a dollar
amount, which must be determined by applying the normal level cost of the relief
association as reported in the actuarial valuation or survey and expressed as a percentage
of covered payroll to the estimated covered payroll of the active membership of the relief
association, including any projected change in the active membership, for the following
year;

(2) for the Bloomington Fire Department Relief Association deleted text begin , deleted text end new text begin and new text end the Fairmont Police
Relief Association, deleted text begin and the Virginia Fire Department Relief Association, deleted text end to the dollar
amount of normal cost determined under clause (1) must be added an amount equal to the
dollar amount of the administrative expenses of the special fund of the association if more
than one fund is maintained by the association, or of the association if only one fund is
maintained, for the most recent year, multiplied by the factor of 1.035. The administrative
expenses are those authorized under section 69.80. No amount of administrative expenses
under this clause are to be included in the financial requirements of the Minneapolis
Firefighters Relief Association or the Minneapolis Police Relief Association; and

(3) to the dollar amount of normal cost and expenses determined under clauses
(1) and (2) must be added an amount equal to the level annual dollar amount which
is sufficient to amortize the unfunded actuarial accrued liability as determined from
the actuarial valuation or survey of the fund, using an interest assumption set at the
applicable rate specified in section 356.215, subdivision 8, by that fund's amortization
date as specified in paragraph (d).

(d) The Minneapolis Firefighters Relief Association special fund amortization date
is determined under section 423C.15, subdivisions 3 and 4. deleted text begin The Virginia Fire Department
Relief Association special fund amortization date is December 31, 2010. deleted text end The Minneapolis
Police Relief Association special fund and the Fairmont Police Relief Association
special fund amortization date is December 31, 2020. The Bloomington Fire Department
Relief Association special fund amortization date is determined under section 356.216,
paragraph (a), clause (2). The amortization date specified in this paragraph supersedes any
amortization date specified in any applicable special law.

(e) The minimum obligation of the municipality is an amount equal to the financial
requirements of the relief association reduced by the estimated amount of member
contributions from covered salary anticipated for the following calendar year and the
estimated amounts anticipated for the following calendar year from the applicable state aid
program established under sections 69.011 to 69.051 receivable by the relief association
after any allocation made under section 69.031, subdivision 5, paragraph (b), clause (2),
or 423A.01, subdivision 2, paragraph (a), clause (6), from the local police and salaried
firefighters' relief association amortization aid program established under section 423A.02,
subdivision 1, from the supplementary amortization state-aid program established under
section 423A.02, subdivision 1a, and from the additional amortization state aid under
section 423A.02, subdivision 1b.

Sec. 3.

Minnesota Statutes 2010, section 353.01, subdivision 2a, is amended to read:

Subd. 2a.

Included employees; mandatory membership.

(a) Public employees
whose salary exceeds $425 in any month and who are not specifically excluded under
subdivision 2b or who have not been provided an option to participate under subdivision
2d, whether individually or by action of the governmental subdivision, must participate as
members of the association with retirement coverage by the general employees retirement
plan under this chapter, the public employees police and fire retirement plan under this
chapter, or the local government correctional employees retirement plan under chapter
353E, whichever applies. Membership commences as a condition of their employment on
the first day of their employment or on the first day that the eligibility criteria are met,
whichever is later. Public employees include but are not limited to:

(1) persons whose salary meets the threshold in this paragraph from employment in
one or more positions within one governmental subdivision;

(2) elected county sheriffs;

(3) persons who are appointed, employed, or contracted to perform governmental
functions that by law or local ordinance are required of a public officer, including, but
not limited to:

(i) town and city clerk or treasurer;

(ii) county auditor, treasurer, or recorder;

(iii) city manager as defined in section 353.028 who does not exercise the option
provided under subdivision 2d; or

(iv) emergency management director, as provided under section 12.25;

(4) physicians under section 353D.01, subdivision 2, who do not elect public
employees defined contribution plan coverage under section 353D.02, subdivision 2;

(5) full-time employees of the Dakota County Agricultural Society; and

(6) employees of the Minneapolis Firefighters Relief Association or Minneapolis
Police Relief Association who are not excluded employees under subdivision 2b due
to coverage by the relief association pension plan and who elected general employee
retirement plan coverage before August 20, 2009.

(b) A public employee or elected official who was a member of the association on
June 30, 2002, based on employment that qualified for membership coverage by the public
employees retirement plan or the public employees police and fire plan under this chapter,
or the local government correctional employees retirement plan under chapter 353E as of
June 30, 2002, retains that membership for the duration of the person's employment in that
position or incumbency in elected office. Except as provided in subdivision 28, the person
shall participate as a member until the employee or elected official terminates public
employment under subdivision 11a or terminates membership under subdivision 11b.

(c) If the salary of an included public employee is less than $425 in any subsequent
month, the member retains membership eligibility.

(d) For the purpose of participation in the MERF division of the general employees
retirement plan, deleted text begin public employees include employees deleted text end new text begin "public employee" includes an
employee new text end who deleted text begin were members deleted text end new text begin was a member new text end of the former Minneapolis Employees
Retirement Fund on June 29, 2010, and who deleted text begin participate deleted text end new text begin participates new text end as deleted text begin members deleted text end new text begin a member
new text end of the MERF division of the association.

new text begin (e) For the purpose of participation in the Virginia fire division of the public
employees police and fire retirement plan, "public employee" includes a person who
was a member of the Virginia Fire Department Relief Association on the day before
the effective date of this section.
new text end

Sec. 4.

Minnesota Statutes 2010, section 353.05, is amended to read:

353.05 CUSTODIAN OF FUNDS.

The commissioner of management and budget shall be ex officio treasurer of the
retirement funds of the association, including the MERF division new text begin and the Virginia fire
division new text end , and the general bond of the commissioner of management and budget to the
state must be so conditioned as to cover all liability for acts as treasurer of these funds.
All money of the association received by the commissioner of management and budget
must be set aside in the state treasury to the credit of the proper fund or account. The
commissioner of management and budget shall transmit monthly to the executive director
a detailed statement of all amounts so received and credited to the funds, including the
MERF division new text begin and the Virginia fire division new text end . Payments out of the funds, including the
MERF division new text begin and the Virginia fire division new text end , may only be made on warrants issued by
the commissioner of management and budget, upon abstracts signed by the executive
director; provided that abstracts for investment may be signed by the executive director of
the State Board of Investment.

Sec. 5.

Minnesota Statutes 2010, section 353.06, is amended to read:

353.06 STATE BOARD OF INVESTMENT TO INVEST FUNDS.

new text begin (a) new text end The executive director shall from time to time certify to the State Board of
Investment for investment such portions of the funds of the association, including the
MERF division new text begin and the Virginia fire division new text end , as in the director's judgment may not be
required for immediate use. The State Board of Investment shall thereupon invest and
reinvest the sum so certified, or transferred, in such securities as are duly authorized as
legal investments under section 11A.24 deleted text begin and deleted text end new text begin . Except for the voluntary statewide lump-sum
volunteer firefighter retirement fund and the Virginia fire division account, the retirement
funds of the retirement plans administered by the board of trustees of the Public Employees
Retirement Association, including the MERF division, must be invested under section
11A.14. The voluntary statewide lump-sum volunteer firefighter retirement fund and
the Virginia fire division account must be invested in the statewide lump-sum volunteer
firefighter account of the Minnesota supplemental investment fund under section 11A.17.
new text end

new text begin (b) The State Board of Investment new text end has authority to sell, convey, and exchange such
securities and invest and reinvest the securities when it deems it desirable to do so and
shall sell securities upon request of the executive director when such funds are needed
for its purposes.

new text begin (c) new text end All of the provisions regarding accounting procedures and restrictions and
conditions for the purchase and sale of securities under chapter 11A must apply to
the accounting, purchase and sale of securities for the funds of the Public Employees
Retirement Association, including the MERF division new text begin and the Virginia fire division new text end .

Sec. 6.

Minnesota Statutes 2010, section 353.15, subdivision 1, is amended to read:

Subdivision 1.

Exemption.

The provisions of section 356.401 apply to the general
employees retirement plan, new text begin to the MERF division, new text end to the public employees police and fire
retirement plan, new text begin to the Virginia fire division, new text end and to the local government correctional
service retirement plan.

Sec. 7.

Minnesota Statutes 2010, section 353.37, subdivision 1, is amended to read:

Subdivision 1.

Salary maximums.

(a) The annuity of a person otherwise eligible
for an annuity from the general employees retirement plan of the Public Employees
Retirement Association, the public employees police and fire retirement plan, or the local
government correctional employees retirement plan must be suspended under subdivision
2 or reduced under subdivision 3, whichever results in the higher annual annuity amount, if
the person reenters public service as a nonelective employee of a governmental subdivision
in a position covered by this chapter or returns to work as an employee of a labor
organization that represents public employees who are association members under this
chapter and salary for the reemployment service exceeds the annual maximum earnings
allowable for that age for the continued receipt of full benefit amounts monthly under the
federal Old Age, Survivors and Disability Insurance Program as set by the secretary of
health and human services under United States Code, title 42, section 403, in any calendar
year. If the person has not yet reached the minimum age for the receipt of Social Security
benefits, the maximum salary for the person is equal to the annual maximum earnings
allowable for the minimum age for the receipt of Social Security benefits.

(b) The provisions of paragraph (a) do not apply to the members of the MERF
division new text begin or members of the Virginia fire division new text end .

Sec. 8.

Minnesota Statutes 2010, section 353.65, subdivision 1, is amended to read:

Subdivision 1.

Fund established.

new text begin (a) new text end The public employees police and fire fund
is established for police officers and firefighters who meet the eligibility criteria under
section 353.64.

new text begin (b) new text end Employee contributions, employer contributions, other than the excess
contribution established by section 69.031, subdivision 5, paragraphs (2), clauses (b) and
(c), and (3), and other amounts authorized by law, including all employee and employer
contributions of members transferred must be deposited in the public employees police
and fire fund.

new text begin (c) From this fund there is appropriated the payments authorized by sections 353.63
to 353.68 in the amounts and at such time provided by law, including the necessary and
reasonable expenses of administering the public employees police and fire retirement
plan and fund.
new text end

Sec. 9.

Minnesota Statutes 2010, section 353.65, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Virginia fire division account established; revenue and disbursements.
new text end

new text begin The Virginia fire division account is established as a special account within the public
employees police and fire retirement fund. The Virginia fire division account includes
all of the assets of the former Virginia Fire Department Relief Association that were
transferred to the administration of the Public Employees Retirement Association under
section 353.668. The special account must be credited with the contributions under section
353.668, subdivision 7, any fire state aid under sections 69.011 to 69.051 payable to
the division account by action of the Virginia city council, investment performance on
the special account assets, and all other income of the division authorized by law. The
payment of annuities and benefits authorized by Laws 1953, chapter 399; Laws 1961,
chapter 420; Laws 1963, chapter 407; Laws 1965, chapter 546; Laws 1969, chapter 578;
Laws 1974, chapter 183; Laws 1982, chapters 574, section 1, and 578, article 1, section
14; Laws 1983, chapter 69, section 1; Laws 1984, chapter 547, section 27; Laws 1987,
chapter 372, article 2, section 14; Laws 1988, chapter 709, article 8, sections 1 and 2; Laws
1991, chapter 62, sections 1 and 2; and Laws 1992, chapter 465, section 1, in the amounts
and at the times provided in those laws, and the necessary and reasonable expenses of the
Virginia fire division are appropriated from the special account.
new text end

Sec. 10.

new text begin [353.668] VIRGINIA FIRE CONSOLIDATION ACCOUNT;
ESTABLISHMENT AND OPERATION.
new text end

new text begin Subdivision 1. new text end

new text begin Administrative consolidation. new text end

new text begin Notwithstanding any provision
of this chapter or of the governing laws of the former Virginia Fire Department Relief
Association listed in section 353.65, subdivision 1a, to the contrary, the administration of
the Virginia Fire Department Relief Association as the Virginia fire division is transferred
to the Public Employees Retirement Association board of trustees and executive director.
The assets, service credit, and benefit liabilities of the Virginia Fire Department Relief
Association transfer to the Virginia fire division account within the public employees
police and fire retirement fund of the Public Employees Retirement Association
established by section 353.65, subdivision 1a, on the first day of the first month next
following the effective date of this section.
new text end

new text begin Subd. 2. new text end

new text begin Membership transfer. new text end

new text begin Effective on the first day of the first month next
following the effective date of this section, the members of the Virginia Fire Department
Relief Association are transferred to the Virginia fire division administered by the Public
Employees Retirement Association and are no longer members of the Virginia Fire
Department Relief Association.
new text end

new text begin Subd. 3. new text end

new text begin Service credit and benefit liability transfer. new text end

new text begin (a) All allowable service
credit and salary credit of the members of the Virginia Fire Department Relief Association
as specified in the records of the Virginia Fire Department Relief Association through
the day before the first day of the first month next following the effective date of this
section are transferred to the Virginia fire division of the Public Employees Retirement
Association and are credited by the Virginia fire division. Survivor benefits of members
of the Virginia fire division entitled to survivor benefits under the governing laws of the
former Virginia Fire Department Relief Association listed in section 353.65, subdivision
1a, must be calculated under those listed laws. Each benefit recipient of the Virginia fire
division has the option to elect to have future postretirement adjustments calculated as the
increase amount equal to the percentage increase in the salary of first-grade firefighters of
the Virginia Fire Department for the preceding calendar year, but not to exceed 3.5 percent
in any year, or to have future postretirement adjustments as the increase amount equal
to one percent on January 1, 2012, and equal to the increase determined under section
356.415, subdivision 1c, on January 1, 2013, and thereafter.
new text end

new text begin (b) The liability for the payment of service pensions, disability pensions, and
survivor benefits to retirees and benefit recipients of the Virginia Fire Department Relief
Association as specified in the records of the Virginia Fire Department Relief Association
on the last day of the month in which this section is effective is transferred to the Virginia
fire division of the Public Employees Retirement Association as of the first day of the first
month next following the effective date of this section.
new text end

new text begin Subd. 4. new text end

new text begin Records transfer. new text end

new text begin On the last day of the month in which this section is
effective, the secretary of the Virginia Fire Department Relief Association shall transfer
all records and documents relating to the Virginia Fire Department Relief Association and
its benefit plan to the executive director of the Public Employees Retirement Association.
To the extent possible, original copies of all records and documents must be transferred.
new text end

new text begin Subd. 5. new text end

new text begin Transfer of title to assets. new text end

new text begin (a) On the last of the month in which this
section is effective, legal title to the assets of the special fund of the Virginia Fire
Department Relief Association transfers to the State Board of Investment. The treasurer of
the Virginia Fire Department Relief Association must transfer in cash the assets of the
special fund of the Virginia Fire Department Relief Association on the legal title transfer
date or as soon as is practicable thereafter.
new text end

new text begin (b) The Virginia fire division is the successor in interest to all claims that the former
Virginia Fire Department Relief Association may have or may assert against any person
and is the successor in interest to all claims which could have been asserted against the
former Virginia Fire Department Relief Association, but the Virginia fire division is not
liable for any claim against the former Virginia Fire Department Relief Association, its
former governing board, or its former officers acting in a fiduciary capacity under chapter
356A or under common law, which is founded upon a claim of breach of fiduciary duty,
but where the act or acts constituting the claimed breach were not undertaken in good
faith. The Public Employees Retirement Association may assert any applicable defense
to any claim in any judicial or administrative proceeding that the former Virginia Fire
Department Relief Association, its former board, or its officers would otherwise have been
entitled to assert. The Public Employees Retirement Association also may assert any
applicable defense that it has in its capacity as a statewide agency.
new text end

new text begin Subd. 6. new text end

new text begin Benefit election. new text end

new text begin Except as modified with respect to future postretirement
adjustments elected under subdivision 3, paragraph (a), and this subdivision, the benefits
in effect on the first of the month preceding the effective date of this section continue after
the effective date of this section. Before December 31 of the calendar year in which this
section becomes effective, on a date set by the executive director of the Public Employees
Retirement Association, all service pensioners, disabled pensioners, and survivors of the
Virginia fire division shall elect between the alternative postretirement adjustment options
set forth in subdivision 3, paragraph (a). In advance of the benefit election, the executive
director of the Public Employees Retirement Association shall make all reasonable efforts
to provide any necessary benefit counseling to persons who are entitled to make or who
are affected by the election, if benefit counseling is requested by the person. If no election
is made in a timely fashion, the adjustment based on the rate of increase in the salary
of first-grade Virginia Fire Department firefighters must apply to the applicable person
and the person's survivor, if any.
new text end

new text begin Subd. 7. new text end

new text begin Virginia fire division contributions. new text end

new text begin (a) After December 31 of the
calendar year in which this section is effective, the contributions by the city of Virginia to
the Virginia fire division are governed by this subdivision.
new text end

new text begin (b) For the initial year after the administrative consolidation is effective, the financial
requirements of the Virginia fire division is an amount equal to the most recent financial
requirements of the executive director of the Public Employees Retirement Association
under section 69.77.
new text end

new text begin (c) For the second and each succeeding year after the administrative consolidation
is effective, the financial requirements of the Virginia fire division is the total actuarial
required contribution determined under section 356.215 by the approved actuary retained
by the Public Employees Retirement Association in the most recent actuarial valuation
prepared under section 356.215 and the standards for actuarial work adopted by the
Legislative Commission on Pensions and Retirement for the Virginia fire division and the
employer contribution for the Virginia fire division annually is equal to the most recently
reported total actuarial required contribution, reduced by any additional amortization state
aid under section 423A.02, subdivision 1b, paragraph (c), clause (3), but is not less than
the amount by which the amount of the service pensions, disability pensions, and survivor
benefits paid during the preceding calendar year, multiplied by the factor of 1.035,
exceeds the market value of the assets of the Virginia fire division account during the
preceding calendar year, multiplied by the factor of 1.035, and reduced by any additional
amortization state aid under section 423A.02, subdivision 1b, paragraph (c), clause (3).
The employer contributions under this paragraph must be paid as provided in section
353.28 and are subject to the provisions of section 353.27, subdivisions 7, 7a, 7b, and 13.
new text end

new text begin Subd. 8. new text end

new text begin Disposition of Virginia fire division account assets after final benefit
payment. new text end

new text begin On the first of the month next following the date of the death of the last eligible
beneficiary of the Virginia fire division, the assets of the Virginia fire division account
become assets of the city of Virginia and are either payable in a lump sum to the city of
Virginia or, with any accumulated investment performance, are credits against future
employer contributions of the city of Virginia to the general employees retirement plan of
the Public Employees Retirement Association and the public employees police and fire
retirement plan of the Public Employees Retirement Association, as the city council of
the city of Virginia directs by resolution.
new text end

Sec. 11.

Minnesota Statutes 2010, section 353.68, subdivision 1, is amended to read:

Subdivision 1.

Application.

The general provisions of this chapter apply to all
police officers and firefighters who are members of the police and fire fund deleted text begin and also deleted text end new text begin , new text end to all
governmental subdivisions employing such members new text begin , and to the Virginia fire division, new text end
except where otherwise specifically provided in sections 353.63 to 353.68.

Sec. 12.

Minnesota Statutes 2010, section 356.20, subdivision 2, is amended to read:

Subd. 2.

Covered public pension plans and funds.

This section applies to the
following public pension plans:

(1) the general state employees retirement plan of the Minnesota State Retirement
System;

(2) the general employees retirement plan of the Public Employees Retirement
Association new text begin , including the Minneapolis Employees Retirement Fund division new text end ;

(3) the Teachers Retirement Association;

(4) the State Patrol retirement plan;

(5) the St. Paul Teachers Retirement Fund Association;

(6) the Duluth Teachers Retirement Fund Association;

(7) the University of Minnesota faculty retirement plan;

(8) the University of Minnesota faculty supplemental retirement plan;

(9) the judges retirement fund;

(10) a police or firefighter's relief association specified or described in section 69.77,
subdivision 1a;

(11) a volunteer firefighter relief association governed by section 69.771, subdivision
1;

(12) the public employees police and fire plan of the Public Employees Retirement
Association new text begin , including the Virginia fire division new text end ;

(13) the correctional state employees retirement plan of the Minnesota State
Retirement System;

(14) the local government correctional service retirement plan of the Public
Employees Retirement Association; and

(15) the voluntary statewide lump-sum volunteer firefighter retirement plan.

Sec. 13.

Minnesota Statutes 2010, section 356.214, subdivision 1, is amended to read:

Subdivision 1.

Actuary retention.

(a) The governing board or managing or
administrative official of each public pension plan and retirement fund or plan enumerated
in paragraph (b) shall contract with an established actuarial consulting firm to conduct
annual actuarial valuations and related services. The principal from the actuarial
consulting firm on the contract must be an approved actuary under section 356.215,
subdivision 1, paragraph (c).

(b) Actuarial services must include the preparation of actuarial valuations and
related actuarial work for the following retirement plans:

(1) the teachers retirement plan, Teachers Retirement Association;

(2) the general state employees retirement plan, Minnesota State Retirement System;

(3) the correctional employees retirement plan, Minnesota State Retirement System;

(4) the State Patrol retirement plan, Minnesota State Retirement System;

(5) the judges retirement plan, Minnesota State Retirement System;

(6) the general employees retirement plan, Public Employees Retirement
Association, including the MERF division;

(7) the public employees police and fire plan, Public Employees Retirement
Association new text begin , including the Virginia fire division new text end ;

(8) the Duluth teachers retirement plan, Duluth Teachers Retirement Fund
Association;

(9) the St. Paul teachers retirement plan, St. Paul Teachers Retirement Fund
Association;

(10) the legislators retirement plan, Minnesota State Retirement System;

(11) the elective state officers retirement plan, Minnesota State Retirement System;
and

(12) local government correctional service retirement plan, Public Employees
Retirement Association.

(c) The contracts must require completion of the annual actuarial valuation
calculations on a fiscal year basis, with the contents of the actuarial valuation calculations
as specified in section 356.215, and in conformity with the standards for actuarial work
adopted by the Legislative Commission on Pensions and Retirement.

The contracts must require completion of annual experience data collection and
processing and a quadrennial published experience study for the plans listed in paragraph
(b), clauses (1), (2), and (6), as provided for in the standards for actuarial work adopted by
the commission. The experience data collection, processing, and analysis must evaluate
the following:

(1) individual salary progression;

(2) the rate of return on investments based on the current asset value;

(3) payroll growth;

(4) mortality;

(5) retirement age;

(6) withdrawal; and

(7) disablement.

(d) The actuary shall annually prepare a report to the governing or managing board
or administrative official and the legislature, summarizing the results of the actuarial
valuation calculations. The actuary shall include with the report any recommendations
concerning the appropriateness of the support rates to achieve proper funding of
the retirement plans by the required funding dates. The actuary shall, as part of the
quadrennial experience study, include recommendations on the appropriateness of the
actuarial valuation assumptions required for evaluation in the study.

(e) If the actuarial gain and loss analysis in the actuarial valuation calculations
indicates a persistent pattern of sizable gains or losses, the governing or managing board
or administrative official shall direct the actuary to prepare a special experience study for
a plan listed in paragraph (b), clause (3), (4), (5), (7), (8), (9), (10), (11), or (12), in the
manner provided for in the standards for actuarial work adopted by the commission.

Sec. 14.

Minnesota Statutes 2010, section 356.215, subdivision 8, is amended to read:

Subd. 8.

Interest and salary assumptions.

(a) The actuarial valuation must use
the applicable following preretirement interest assumption and the applicable following
postretirement interest assumption:

plan	preretirement interest rate assumption		postretirement interest rate assumption
general state employees retirement plan		8.5%	6.0%
correctional state employees retirement plan		8.5	6.0
State Patrol retirement plan		8.5	6.0
legislators retirement plan		8.5	6.0
elective state officers retirement plan		8.5	6.0
judges retirement plan		8.5	6.0
general public employees retirement plan new text begin , including the Minneapolis Employees Retirement Fund division new text end		8.5	6.0
public employees police and fire retirement plan new text begin , excluding the Virginia fire division new text end		8.5	6.0
local government correctional service retirement plan		8.5	6.0
teachers retirement plan		8.5	6.0
Duluth teachers retirement plan		8.5	8.5
St. Paul teachers retirement plan		8.5	8.5
Minneapolis Police Relief Association		6.0	6.0
Fairmont Police Relief Association		5.0	5.0
Minneapolis Fire Department Relief Association		6.0	6.0
Virginia fire deleted text begin Department Relief Association deleted text end new text begin division of the public employees police and fire retirement plan new text end		deleted text begin 5.0 deleted text end new text begin 6.0 new text end	deleted text begin 5.0 deleted text end new text begin 6.0 new text end
Bloomington Fire Department Relief Association		6.0	6.0
local monthly benefit volunteer firefighters relief associations		5.0	5.0

(b) Before July 1, 2010, the actuarial valuation must use the applicable following
single rate future salary increase assumption, the applicable following modified single
rate future salary increase assumption, or the applicable following graded rate future
salary increase assumption:

(1) single rate future salary increase assumption

plan	future salary increase assumption
legislators retirement plan		5.0%
judges retirement plan		4.0
Minneapolis Police Relief Association		4.0
Fairmont Police Relief Association		3.5
Minneapolis Fire Department Relief Association		4.0
Virginia fire deleted text begin Department Relief Association deleted text end new text begin division of the public employees police and fire retirement plan new text end		3.5
Bloomington Fire Department Relief Association		4.0

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

plan	future salary increase assumption
general state employees retirement plan	select calculation and assumption A
correctional state employees retirement plan	assumption G
State Patrol retirement plan	assumption F
public employees police and fire fund retirement plan	assumption B
local government correctional service retirement plan	assumption F
teachers retirement plan	assumption C
Duluth teachers retirement plan	assumption D
St. Paul teachers retirement plan	assumption E

The select calculation is: during the
designated select period, a designated
percentage rate is multiplied by the result
of the designated integer minus T, where
T is the number of completed years of
service, and is added to the applicable
future salary increase assumption. The
designated select period is five years and the
designated integer is five for the general state
employees retirement plan. The designated
select period is ten years and the designated
integer is ten for all other retirement plans
covered by this clause. The designated
percentage rate is: (1) 0.2 percent for the
correctional state employees retirement plan,
the State Patrol retirement plan, the public
employees police and fire plan, and the local
government correctional service plan; (2)
0.6 percent for the general state employees
retirement plan; and (3) 0.3 percent for the
teachers retirement plan, the Duluth Teachers
Retirement Fund Association, and the St.
Paul Teachers Retirement Fund Association.
The select calculation for the Duluth Teachers
Retirement Fund Association is 8.00 percent
per year for service years one through seven,
7.25 percent per year for service years seven
and eight, and 6.50 percent per year for
service years eight and nine.

The ultimate future salary increase assumption is:

age	A	B	C	D	E	F	G
16	5.95%	11.00%	7.70%	8.00%	6.90%	7.7500%	7.2500%
17	5.90	11.00	7.65	8.00	6.90	7.7500	7.2500
18	5.85	11.00	7.60	8.00	6.90	7.7500	7.2500
19	5.80	11.00	7.55	8.00	6.90	7.7500	7.2500
20	5.75	11.00	5.50	6.90	6.90	7.7500	7.2500
21	5.75	11.00	5.50	6.90	6.90	7.1454	6.6454
22	5.75	10.50	5.50	6.90	6.90	7.0725	6.5725
23	5.75	10.00	5.50	6.85	6.85	7.0544	6.5544
24	5.75	9.50	5.50	6.80	6.80	7.0363	6.5363
25	5.75	9.00	5.50	6.75	6.75	7.0000	6.5000
26	5.75	8.70	5.50	6.70	6.70	7.0000	6.5000
27	5.75	8.40	5.50	6.65	6.65	7.0000	6.5000
28	5.75	8.10	5.50	6.60	6.60	7.0000	6.5000
29	5.75	7.80	5.50	6.55	6.55	7.0000	6.5000
30	5.75	7.50	5.50	6.50	6.50	7.0000	6.5000
31	5.75	7.30	5.50	6.45	6.45	7.0000	6.5000
32	5.75	7.10	5.50	6.40	6.40	7.0000	6.5000
33	5.75	6.90	5.50	6.35	6.35	7.0000	6.5000
34	5.75	6.70	5.50	6.30	6.30	7.0000	6.5000
35	5.75	6.50	5.50	6.25	6.25	7.0000	6.5000
36	5.75	6.30	5.50	6.20	6.20	6.9019	6.4019
37	5.75	6.10	5.50	6.15	6.15	6.8074	6.3074
38	5.75	5.90	5.40	6.10	6.10	6.7125	6.2125
39	5.75	5.70	5.30	6.05	6.05	6.6054	6.1054
40	5.75	5.50	5.20	6.00	6.00	6.5000	6.0000
41	5.75	5.40	5.10	5.90	5.95	6.3540	5.8540
42	5.75	5.30	5.00	5.80	5.90	6.2087	5.7087
43	5.65	5.20	4.90	5.70	5.85	6.0622	5.5622
44	5.55	5.10	4.80	5.60	5.80	5.9048	5.4078
45	5.45	5.00	4.70	5.50	5.75	5.7500	5.2500
46	5.35	4.95	4.60	5.40	5.70	5.6940	5.1940
47	5.25	4.90	4.50	5.30	5.65	5.6375	5.1375
48	5.15	4.85	4.50	5.20	5.60	5.5822	5.0822
49	5.05	4.80	4.50	5.10	5.55	5.5404	5.0404
50	4.95	4.75	4.50	5.00	5.50	5.5000	5.0000
51	4.85	4.75	4.50	4.90	5.45	5.4384	4.9384
52	4.75	4.75	4.50	4.80	5.40	5.3776	4.8776
53	4.65	4.75	4.50	4.70	5.35	5.3167	4.8167
54	4.55	4.75	4.50	4.60	5.30	5.2826	4.7826
55	4.45	4.75	4.50	4.50	5.25	5.2500	4.7500
56	4.35	4.75	4.50	4.40	5.20	5.2500	4.7500
57	4.25	4.75	4.50	4.30	5.15	5.2500	4.7500
58	4.25	4.75	4.60	4.20	5.10	5.2500	4.7500
59	4.25	4.75	4.70	4.10	5.05	5.2500	4.7500
60	4.25	4.75	4.80	4.00	5.00	5.2500	4.7500
61	4.25	4.75	4.90	3.90	5.00	5.2500	4.7500
62	4.25	4.75	5.00	3.80	5.00	5.2500	4.7500
63	4.25	4.75	5.10	3.70	5.00	5.2500	4.7500
64	4.25	4.75	5.20	3.60	5.00	5.2500	4.7500
65	4.25	4.75	5.20	3.50	5.00	5.2500	4.7500
66	4.25	4.75	5.20	3.50	5.00	5.2500	4.7500
67	4.25	4.75	5.20	3.50	5.00	5.2500	4.7500
68	4.25	4.75	5.20	3.50	5.00	5.2500	4.7500
69	4.25	4.75	5.20	3.50	5.00	5.2500	4.7500
70	4.25	4.75	5.20	3.50	5.00	5.2500	4.7500
71	4.25		5.20

(3) service-related ultimate future salary increase assumption

service length	general employees retirement plan of the Public Employees Retirement Association new text begin , including the MERF division new text end
1	12.03%
2	8.90
3	7.46
4	6.58
5	5.97
6	5.52
7	5.16
8	4.87
9	4.63
10	4.42
11	4.24
12	4.08
13	3.94
14	3.82
15	3.70
16	3.60
17	3.51
18	3.50
19	3.50
20	3.50
21	3.50
22	3.50
23	3.50
24	3.50
25	3.50
26	3.50
27	3.50
28	3.50
29	3.50
30 or more	3.50

(c) Before July 2, 2010, the actuarial valuation must use the applicable following
payroll growth assumption for calculating the amortization requirement for the unfunded
actuarial accrued liability where the amortization retirement is calculated as a level
percentage of an increasing payroll:

plan	payroll growth assumption
general state employees retirement plan		4.50%
correctional state employees retirement plan		4.50
State Patrol retirement plan		4.50
legislators retirement plan		4.50
judges retirement plan		4.00
general employees retirement plan of the Public Employees Retirement Association new text begin , excluding the MERF division new text end		4.00
public employees police and fire retirement plan new text begin , excluding the Virginia fire division new text end		4.50
local government correctional service retirement plan		4.50
teachers retirement plan		4.50
Duluth teachers retirement plan		4.50
St. Paul teachers retirement plan		5.00

(d) After July 1, 2010, the assumptions set forth in paragraphs (b) and (c) 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.

Sec. 15.

Minnesota Statutes 2010, section 356.215, subdivision 11, is amended to read:

Subd. 11.

Amortization contributions.

(a) In addition to the exhibit indicating
the level normal cost, the actuarial valuation of the retirement plan must contain an
exhibit for financial reporting purposes indicating the additional annual contribution
sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit
for contribution determination purposes indicating the additional contribution sufficient
to amortize the unfunded actuarial accrued liability. For the retirement plans listed in
subdivision 8, paragraph (c), but excluding the MERF division of the Public Employees
Retirement Association new text begin and the Virginia fire division of the public employees police and
fire retirement plan new text end , the additional contribution must be calculated on a level percentage of
covered payroll basis by the established date for full funding in effect when the valuation
is prepared, assuming annual payroll growth at the applicable percentage rate set forth in
subdivision 8, paragraph (c). For all other retirement plans new text begin , for the Virginia fire division of
the public employees police and fire retirement plan, new text end and for the MERF division of the
Public Employees Retirement Association, the additional annual contribution must be
calculated on a level annual dollar amount basis.

(b) For any retirement plan other than the general state employees retirement plan
of the Minnesota State Retirement System or a retirement plan governed by paragraph
(d), (e), (f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions
used for calculating the actuarial accrued liability of the fund, a change in the benefit
plan governing annuities and benefits payable from the fund, a change in the actuarial
cost method used in calculating the actuarial accrued liability of all or a portion of the
fund, or a combination of the three, which change or changes by itself or by themselves
without inclusion of any other items of increase or decrease produce a net increase in the
unfunded actuarial accrued liability of the fund, the established date for full funding is the
first actuarial valuation date occurring after June 1, 2020.

(c) For any retirement plan other than the general employees retirement plan of the
Public Employees Retirement Association, if there has been a change in any or all of the
actuarial assumptions used for calculating the actuarial accrued liability of the fund, a
change in the benefit plan governing annuities and benefits payable from the fund, a
change in the actuarial cost method used in calculating the actuarial accrued liability of all
or a portion of the fund, or a combination of the three, and the change or changes, by itself
or by themselves and without inclusion of any other items of increase or decrease, produce
a net increase in the unfunded actuarial accrued liability in the fund, the established date
for full funding must be determined using the following procedure:

(i) the unfunded actuarial accrued liability of the fund must be determined in
accordance with the plan provisions governing annuities and retirement benefits and the
actuarial assumptions in effect before an applicable change;

(ii) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the unfunded actuarial accrued liability amount determined under item
(i) by the established date for full funding in effect before the change must be calculated
using the interest assumption specified in subdivision 8 in effect before the change;

(iii) the unfunded actuarial accrued liability of the fund must be determined in
accordance with any new plan provisions governing annuities and benefits payable from
the fund and any new actuarial assumptions and the remaining plan provisions governing
annuities and benefits payable from the fund and actuarial assumptions in effect before
the change;

(iv) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the difference between the unfunded actuarial accrued liability amount
calculated under item (i) and the unfunded actuarial accrued liability amount calculated
under item (iii) over a period of 30 years from the end of the plan year in which the
applicable change is effective must be calculated using the applicable interest assumption
specified in subdivision 8 in effect after any applicable change;

(v) the level annual dollar or level percentage amortization contribution under item
(iv) must be added to the level annual dollar amortization contribution or level percentage
calculated under item (ii);

(vi) the period in which the unfunded actuarial accrued liability amount determined
in item (iii) is amortized by the total level annual dollar or level percentage amortization
contribution computed under item (v) must be calculated using the interest assumption
specified in subdivision 8 in effect after any applicable change, rounded to the nearest
integral number of years, but not to exceed 30 years from the end of the plan year in
which the determination of the established date for full funding using the procedure set
forth in this clause is made and not to be less than the period of years beginning in the
plan year in which the determination of the established date for full funding using the
procedure set forth in this clause is made and ending by the date for full funding in effect
before the change; and

(vii) the period determined under item (vi) must be added to the date as of which
the actuarial valuation was prepared and the date obtained is the new established date
for full funding.

(d) For the MERF division of the Public Employees Retirement Association, the
established date for full funding is June 30, 2031.

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

(f) For the Teachers Retirement Association, the established date for full funding is
June 30, 2037.

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

(h) For the judges retirement plan, the established date for full funding is June
30, 2038.

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

(j) For the St. Paul Teachers Retirement Fund Association, the established date for
full funding is June 30 of the 25th year from the valuation date. In addition to other
requirements of this chapter, the annual actuarial valuation must contain an exhibit
indicating the funded ratio and the deficiency or sufficiency in annual contributions when
comparing liabilities to the market value of the assets of the fund as of the close of the
most recent fiscal year.

(k) For the general state employees retirement plan of the Minnesota State
Retirement System, the established date for full funding is June 30, 2040.

(l) new text begin For the Virginia fire division of the public employees police and fire retirement
plan, the established date for full funding is December 31, 2016.
new text end

new text begin (m) new text end For the retirement plans for which the annual actuarial valuation indicates
an excess of valuation assets over the actuarial accrued liability, the valuation assets in
excess of the actuarial accrued liability must be recognized as a reduction in the current
contribution requirements by an amount equal to the amortization of the excess expressed
as a level percentage of pay over a 30-year period beginning anew with each annual
actuarial valuation of the plan.

Sec. 16.

Minnesota Statutes 2010, section 356.401, subdivision 3, is amended to read:

Subd. 3.

Covered retirement plans.

The provisions of this section apply to the
following retirement plans:

(1) the legislators retirement plan, established by chapter 3A;

(2) the general state employees retirement plan of the Minnesota State Retirement
System, established by chapter 352;

(3) the correctional state employees retirement plan of the Minnesota State
Retirement System, established by chapter 352;

(4) the State Patrol retirement plan, established by chapter 352B;

(5) the elective state officers retirement plan, established by chapter 352C;

(6) the unclassified state employees retirement program, established by chapter
352D;

(7) the general employees retirement plan of the Public Employees Retirement
Association, established by chapter 353, including the MERF division of the Public
Employees Retirement Association;

(8) the public employees police and fire plan of the Public Employees Retirement
Association, established by chapter 353 new text begin , including the Virginia fire division of the public
employees police and fire plan new text end ;

(9) the public employees defined contribution plan, established by chapter 353D;

(10) the local government correctional service retirement plan of the Public
Employees Retirement Association, established by chapter 353E;

(11) the voluntary statewide lump-sum volunteer firefighter retirement plan,
established by chapter 353G;

(12) the Teachers Retirement Association, established by chapter 354;

(13) the Duluth Teachers Retirement Fund Association, established by chapter 354A;

(14) the St. Paul Teachers Retirement Fund Association, established by chapter
354A;

(15) the individual retirement account plan, established by chapter 354B;

(16) the higher education supplemental retirement plan, established by chapter 354C;

(17) the Minneapolis Police Relief Association, established by chapter 423B;

(18) the Minneapolis Firefighters Relief Association, established by chapter 423C;
and

(19) the judges retirement fund, established by chapter 490.

Sec. 17.

Minnesota Statutes 2010, section 356.407, subdivision 2, is amended to read:

Subd. 2.

Covered funds.

The provisions of this section apply to the following
retirement funds:

(1) the general employees retirement plan of the Public Employees Retirement
Association established under chapter 353, including the MERF division of the Public
Employees Retirement Association;

(2) the public employees police and fire plan of the Public Employees Retirement
Association established under chapter 353 new text begin , including the Virginia fire division of the
public employees police and fire plan new text end ;

(3) the State Patrol retirement plan established under chapter 352B;

(4) the legislators retirement plan established under chapter 3A;

(5) the elective state officers retirement plan established under chapter 352C; and

(6) the Teachers Retirement Association established under chapter 354.

Sec. 18.

Minnesota Statutes 2010, section 356.465, subdivision 3, is amended to read:

Subd. 3.

Covered retirement plans.

The provisions of this section apply to the
following retirement plans:

(1) the general state employees retirement plan of the Minnesota State Retirement
System established under chapter 352;

(2) the correctional state employees retirement plan of the Minnesota State
Retirement System established under chapter 352;

(3) the State Patrol retirement plan established under chapter 352B;

(4) the legislators retirement plan established under chapter 3A;

(5) the judges retirement plan established under chapter 490;

(6) the general employees retirement plan of the Public Employees Retirement
Association established under chapter 353, including the MERF division of the Public
Employees Retirement Association;

(7) the public employees police and fire plan of the Public Employees Retirement
Association established under chapter 353 new text begin , including the Virginia fire division of the
public employees police and fire plan new text end ;

(8) the teachers retirement plan established under chapter 354;

(9) the Duluth Teachers Retirement Fund Association established under chapter
354A;

(10) the St. Paul Teachers Retirement Fund Association established under chapter
354A;

(11) the Minneapolis Firefighters Relief Association established under chapter 423C;

(12) the Minneapolis Police Relief Association established under chapter 423B; and

(13) the local government correctional service retirement plan of the Public
Employees Retirement Association established under chapter 353E.

Sec. 19.

Minnesota Statutes 2010, section 423A.02, subdivision 1b, is amended to read:

Subd. 1b.

Additional amortization state aid.

(a) Annually, on October 1, the
commissioner of revenue shall allocate the additional amortization state aid transferred
under section 69.021, subdivision 11, to:

(1) all police or salaried firefighters relief associations governed by and in full
compliance with the requirements of section 69.77, that had an unfunded actuarial accrued
liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the
preceding December 31;

(2) all local police or salaried firefighter consolidation accounts governed by chapter
353A that are certified by the executive director of the public employees retirement
association as having for the current fiscal year an additional municipal contribution
amount under section 353A.09, subdivision 5, paragraph (b), and that have implemented
section 353A.083, subdivision 1, if the effective date of the consolidation preceded May
24, 1993, and that have implemented section 353A.083, subdivision 2, if the effective date
of the consolidation preceded June 1, 1995; and

(3) the municipalities that are required to make an additional municipal contribution
under section 353.665, subdivision 8, for the duration of the required additional
contribution.

(b) The commissioner shall allocate the state aid on the basis of the proportional share
of the relief association or consolidation account of the total unfunded actuarial accrued
liability of all recipient relief associations and consolidation accounts as of December 31,
1993, for relief associations, and as of June 30, 1994, for consolidation accounts.

(c) Beginning October 1, 2000, and annually thereafter, the commissioner shall
allocate the state aid, including any state aid in excess of the limitation in subdivision
4, on the following basis:

(1) 64.5 percent to the municipalities to which section 353.665, subdivision
8, paragraph (b), or 353A.09, subdivision 5, paragraph (b), apply for distribution in
accordance with paragraph (b) and subject to the limitation in subdivision 4;

(2) 34.2 percent to the city of Minneapolis to fund any unfunded actuarial accrued
liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the
preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis
Fire Department Relief Association; and

(3) 1.3 percent to the city of Virginia to fund any unfunded actuarial accrued liability
in the actuarial valuation prepared under sections 356.215 and 356.216 as of the preceding
December 31 for the Virginia fire deleted text begin Department Relief Association deleted text end new text begin division of the public
employees police and fire retirement plan new text end .

If there is no unfunded actuarial accrued liability in both the Minneapolis Police
Relief Association and the Minneapolis Fire Department Relief Association as disclosed
in the most recent actuarial valuations for the relief associations prepared under sections
356.215 and 356.216, the commissioner shall allocate that 34.2 percent of the aid as
follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul
Teachers Retirement Fund Association, and 30 percent as additional funding to support
minimum fire state aid for volunteer firefighters relief associations. If there is no unfunded
actuarial accrued liability in the Virginia Fire Department Relief Association as disclosed
in the most recent actuarial valuation for the relief association prepared under sections
356.215 and 356.216, the commissioner shall allocate that 1.3 percent of the aid as
follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul
Teachers Retirement Fund Association, and 30 percent as additional funding to support
minimum fire state aid for volunteer firefighters relief associations. Upon the final
payment to municipalities required by section 353.665, subdivision 8, paragraph (b),
or 353A.09, subdivision 5, paragraph (b), the commissioner shall allocate that 64.5
percent of the aid as follows: 20 percent to the St. Paul Teachers Retirement Fund
Association, 20 percent to the city of Minneapolis to fund any unfunded actuarial accrued
liability in the actuarial valuation proposed under sections 356.215 and 356.216 as of the
preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis
Firefighters Relief Association, 20 percent for the city of Duluth to pay for any costs
associated with the police and firefighters pensions, and 40 percent as additional funding to
support minimum fire state aid for volunteer firefighters relief associations. The allocation
must be made by the commissioner at the same time and under the same procedures
as specified in subdivision 3. With respect to the St. Paul Teachers Retirement Fund
Association, annually, beginning on July 1, 2005, if the applicable teacher's association
five-year average time-weighted rate of investment return does not equal or exceed the
performance of a composite portfolio assumed passively managed (indexed) invested ten
percent in cash equivalents, 60 percent in bonds and similar debt securities, and 30 percent
in domestic stock calculated using the formula under section 11A.04, clause (11), the aid
allocation to that retirement fund under this section ceases until the five-year annual rate
of investment return equals or exceeds the performance of that composite portfolio.

(d) The amounts required under this subdivision are the amounts annually
appropriated to the commissioner of revenue under section 69.021, subdivision 11,
paragraph (e).

Sec. 20. new text begin TERMINATION OF VIRGINIA RELIEF ASSOCIATION
SPECIAL FUND; CONTINUATION OF GENERAL FUND AS FRATERNAL
ORGANIZATION.
new text end

new text begin Subdivision 1. new text end

new text begin Special fund termination. new text end

new text begin Upon the transfer of the assets of the
Virginia Fire Department Relief Association special fund to the Public Employees
Retirement Association and the public employees police and fire retirement fund under
Minnesota Statutes, section 353.668, the special fund of the Virginia Fire Department
Relief Association ceases to exist as a Minnesota public pension fund and the Virginia
Fire Department Relief Association ceases to exist as a Minnesota public pension plan,
succeeded by the Virginia fire division of the public employees police and fire retirement
plan.
new text end

new text begin Subd. 2. new text end

new text begin General fund status. new text end

new text begin If the board of trustees of the Virginia Fire
Department Relief Association so elects, the general fund of the Virginia Fire Department
Relief Association may continue as the sole fund of the corporation and the relief
association may continue solely as a fraternal organization. The board of trustees of the
relief association functioning solely as a fraternal organization must be composed solely
of former Virginia city firefighters or their survivors. The articles of incorporation and
bylaw provisions of the preconsolidation Virginia Fire Department Relief Association
relating to annual meetings, board of trustee functions, officer functions, and general
fund operations continue to govern.
new text end

Sec. 21. new text begin EFFECTIVE DATE; LOCAL APPROVAL.
new text end

new text begin Sections 1 to 20 are effective the day after the governing body of the city of Virginia
and its chief clerical officer timely complete their compliance with Minnesota Statutes,
section 645.021, subdivisions 2 and 3.
new text end