HF 628

as introduced - 88th Legislature (2013 - 2014) Posted on 02/18/2013 02:05pm

A bill for an act
relating to retirement; Minnesota State Retirement System plans; clarifying
language; removing obsolete language; revising outdated requirements; revising
contribution rate revision procedures; revising disability standards and disability
benefit administration procedures; merging the elected state officers retirement
plan into the legislators retirement plan; revising pension commission standards
provision; revising pension plan financial report contents provision; amending
Minnesota Statutes 2012, sections 3.85, subdivision 10; 3A.011; 3A.03,
subdivision 3; 3A.07; 3A.115; 3A.13; 3A.15; 352.01, subdivision 17b; 352.03,
subdivision 8; 352.045, by adding subdivisions; 352.113, subdivisions 4, 6, 8, by
adding subdivisions; 352.22, subdivision 3; 352.955, subdivisions 1, 3; 352B.011,
subdivision 13; 352B.10, by adding a subdivision; 352D.04, subdivision 2;
356.20, subdivision 4; 356.214, subdivision 1; 356.215, subdivision 8; 356.30,
subdivision 3; 356.401, subdivision 3; 356.415, subdivisions 1a, 2; proposing
coding for new law in Minnesota Statutes, chapter 3A; repealing Minnesota
Statutes 2012, sections 3A.02, subdivision 3; 352.045, subdivisions 3, 4;
352.955, subdivision 2; 352C.001; 352C.091, subdivision 1; 352C.10.

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

ARTICLE 1

CLARIFYING LANGUAGE; REMOVING OBSOLETE LANGUAGE;
REVISING OUTDATED REQUIREMENTS

Section 1.

Minnesota Statutes 2012, section 352.22, subdivision 3, is amended to read:

Subd. 3.

Deferred annuity.

(a) An employee who has at least three years of
allowable service if employed before July 1, 2010, or who has at least five years of
allowable service if employed after June 30, 2010, when termination occurs may elect
to leave the accumulated contributions in the fund and thereby be entitled to a deferred
retirement annuity. The annuity must be computed under the law in effect when state
service terminated, on the basis of the allowable service credited to the person before
the termination of service.

(b) An employee on layoff or on leave of absence without pay, except a leave of
absence for health reasons, and who does not return to state service must have an annuity,
deferred annuity, or other benefit to which the employee may become entitled computed
under the law in effect on the employee's last working day.

(c) No application for a deferred annuity may be made more than 60 days before
the time the former employee reaches the required age for entitlement to the payment of
the annuity. The deferred annuity begins to accrue no earlier than 60 days before the date
the application is filed in the office of the system, but not (1) before the date on which
the employee reaches the required age for entitlement to the annuity nor (2) before the
day following the termination of state service in a position which is not covered by the
retirement system.

(d) Application for the accumulated contributions left on deposit with the fund may
be made at any time following the date of the termination of service.

new text begin (e) Deferred annuities must be augmented as provided in section 352.72, subdivision
2.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2012, section 352.955, subdivision 1, is amended to read:

Subdivision 1.

Election to transfer prior MSRS-general service credit.

(a) An
eligible employee described in paragraph (b) may elect to transfer service credit in the
general state employees retirement plan of the Minnesota State Retirement System to the
correctional state employees retirement plan for eligible prior correctional employment.

(b) An eligible employee is a person who is covered by deleted text begin Laws 2007, chapter 134,
article 3, section 6, or who became eligible for retirement coverage by the correctional
state employees retirement plan of the Minnesota State Retirement System under Laws
2006, chapter 271, article 2, Laws 2007, chapter 134, article 3, or deleted text end legislation implementing
the recommendations under section 352.91, subdivision 4a.

(c) Eligible prior correctional employment is new text begin employment new text end covered deleted text begin correctional
service defined in Laws 2007, chapter 134, article 3, section 6, or is employment by the
Department of Corrections or by the Department of Human Services that preceded the
effective date of the retirement coverage transfer under Laws 2006, chapter 271, article
2, Laws 2007, chapter 134, article 3, or legislation implementing the recommendations
under section 352.91, subdivision 4a deleted text end new text begin by the general state employees retirement plan of
the Minnesota State Retirement System new text end , is continuous service, and is certified by the
commissioner of corrections and the commissioner of human services, whichever applies,
and by the commissioner of management and budget to the executive director of the
Minnesota State Retirement System as service that would qualify for correctional state
employees retirement plan coverage under section 352.91, if the service deleted text begin was deleted text end new text begin had been
new text end rendered after the date of coverage transfer.

(d) The election to transfer past service credit under this section must be made in
writing by the applicable person on a form prescribed by the executive director of the
Minnesota State Retirement System and must be filed with the executive director of the
Minnesota State Retirement System on or before deleted text begin (1) January 1, 2008, or deleted text end the one year
anniversary of the coverage transfer deleted text begin , whichever is later, deleted text end or deleted text begin (2) deleted text end the date of the eligible
employee's termination of state employment, whichever is earlier.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2012, section 352.955, subdivision 3, is amended to read:

Subd. 3.

Payment of additional equivalent contributions deleted text begin ; post-June 30, 2007,
coverage transfers deleted text end .

(a) An eligible employee who is transferred to plan coverage deleted text begin after
June 30, 2007, deleted text end and who elects to transfer past service credit under this section must pay
an additional member contribution for that prior service period. The additional member
contribution is the amount computed under paragraph (b), plus the greater of the amount
computed under paragraph (c), or 40 percent of the unfunded actuarial accrued liability
attributable to the past service credit transfer.

(b) The executive director shall compute, for the most recent 12 months of service
credit eligible for transfer, or for the entire period eligible for transfer if less than 12
months, the difference between the employee contribution rate or rates for the general state
employees retirement plan and the employee contribution rate or rates for the correctional
state employees retirement plan applied to the eligible employee's salary during that
transfer period, plus compound interest at a monthly rate of 0.71 percent.

(c) The executive director shall compute, for any service credit being transferred
on behalf of the eligible employee and not included under paragraph (b), the difference
between the employee contribution rate or rates for the general state employees retirement
plan and the employee contribution rate or rates for the correctional state employees
retirement plan applied to the eligible employee's salary during that transfer period, plus
compound interest at a monthly rate of 0.71 percent.

(d) The executive director shall compute an amount using the process specified in
paragraph (b), but based on differences in employer contribution rates between the general
state employees retirement plan and the correctional state employees retirement plan
rather than employee contribution rates.

(e) The executive director shall compute an amount using the process specified in
paragraph (c), but based on differences in employer contribution rates between the general
state employees retirement plan and the correctional state employees retirement plan
rather than employee contribution rates.

(f) The additional equivalent member contribution under this subdivision must be
paid in a lump sum. Payment must accompany the election to transfer the prior service
credit. No transfer election or additional equivalent member contribution payment may be
made by a person or accepted by the executive director after the one year anniversary date
of the effective date of the retirement coverage transfer, or the date on which the eligible
employee terminates state employment, whichever is earlier.

(g) If an eligible employee elects to transfer past service credit under this section
and pays the additional equivalent member contribution amount under paragraph (a), the
applicable department shall pay an additional equivalent employer contribution amount.
The additional employer contribution is the amount computed under paragraph (d), plus
the greater of the amount computed under paragraph (e), or 60 percent of the unfunded
actuarial accrued liability attributable to the past service credit transfer.

(h) The unfunded actuarial accrued liability attributable to the past service credit
transfer is the present value of the benefit obtained by the transfer of the service credit
to the correctional state employees retirement plan reduced by the amount of the asset
transfer under subdivision 4, by the amount of the member contribution equivalent
payment computed under paragraph (b), and by the amount of the employer contribution
equivalent payment computed under paragraph (d).

(i) The additional equivalent employer contribution under this subdivision must be
paid in a lump sum and must be paid within 30 days of the date on which the executive
director of the Minnesota State Retirement System certifies to the applicable department
that the employee paid the additional equivalent member contribution.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2012, section 352B.011, subdivision 13, is amended to read:

Subd. 13.

Surviving spouse.

"Surviving spouse" means a member's or former
member's legally married spouse deleted text begin who resided with the member or former member deleted text end at the
time of death and was married to the member or former member, for a period of at least
one year, during or before the time of membership.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2012, section 352.955, subdivision 2, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 2

CONTRIBUTION RATE REVISION PROCEDURES: MSRS GENERAL,
CORRECTIONAL, AND STATE PATROL PLANS

Section 1.

Minnesota Statutes 2012, section 352.045, is amended by adding a
subdivision to read:

new text begin Subd. 3a. new text end

new text begin Contribution rate revision; general state employees retirement plan
new text end

new text begin (a) Notwithstanding the contribution rates stated in plan law, the employee and employer
contribution rates for the general state employees retirement plan must be adjusted:
new text end

new text begin (1) if the regular actuarial valuation under section 356.215 of the plan indicates that
there is a contribution sufficiency greater than one percent of covered payroll and that the
sufficiency has existed for at least two consecutive years, the employee and employer
contribution rates must be decreased as determined under paragraph (b) to a level such
that the sufficiency is no greater than one percent of covered payroll based on the most
recent actuarial valuation; or
new text end

new text begin (2) if the regular actuarial valuation under section 352.215 of the plan indicates that
there is a contribution deficiency equal to or greater than 0.5 percent of covered payroll
and that the deficiency has existed for at least two consecutive years, the employee and
employer contribution rates must be increased as determined under paragraph (c) to a level
such that no deficiency exists based on the most recent actuarial valuation.
new text end

new text begin (b) If the actuarially required contribution of the plan is less than the total support
provided by the combined employee and employer contribution rates by more than one
percent of covered payroll, the plan employee and employer contribution rates must be
decreased incrementally over one or more years by no more than 0.25 percent of pay
each for employee and employer contribution rates to a level such that there remains a
contribution sufficiency of at least one percent of covered payroll. No contribution rate
decrease may be made until at least two years have elapsed since any adjustment under
this paragraph has been fully implemented.
new text end

new text begin (c) If the actuarially required contribution exceeds the total support provided by the
employee and employer contribution rates, the employee and employer contribution rates
must be increased equally to eliminate that contribution deficiency. If the contribution
deficiency is:
new text end

new text begin (1) less than two percent, the incremental increase may be up to 0.25 percent each
for the employee and employer contribution rates;
new text end

new text begin (2) greater than 1.99 percent and less than 4.01 percent, the incremental increase
may be up to 0.5 percent each for the employee and employer contribution rates; or
new text end

new text begin (3) greater than four percent, the incremental increase may be up to 0.75 percent
each for the employee and employer contribution.
new text end

new text begin (d) Any recommended adjustment to the contribution rates must be reported to
the chair and the executive director of the Legislative Commission on Pensions and
Retirement by January 15 following receipt of the most recent annual actuarial valuation
prepared under section 356.215. The report must include draft legislation to revise the
employee and employer contributions stated in plan law. If the Legislative Commission
on Pensions and Retirement does not recommend against the rate change or does not
recommend a modification in the rate change, the recommended adjustment becomes
effective on the first day of the first full payroll period in the fiscal year following receipt
of the most recent actuarial valuation that gave rise to the adjustment.
new text end

new text begin (e) A contribution sufficiency of up to one percent of covered payroll must be held
in reserve to be used to offset any future actuarially required contributions that are more
than the total combined employee and employer contributions.
new text end

new text begin (f) Before any reduction in contributions to eliminate a sufficiency in excess of one
percent of covered pay may be recommended, the executive director must review any
need for a change in actuarial assumptions, as recommended by the actuary retained under
section 356.214 in the most recent experience study of the general employees retirement
plan prepared under section 356.215 and the standards for actuarial work promulgated by
the Legislative Commission on Pensions and Retirement that may result in an increase
in the actuarially required contribution and must report to the Legislative Commission
on Pensions and Retirement any recommendation by the board to use the sufficiency
exceeding one percent of covered payroll to offset the impact of an actuarial assumption
change recommended by the actuary retained under section 356.214, subdivision 1, and
reviewed by the actuary retained by the commission under section 356.214, subdivision 4.
new text end

new text begin (g) No contribution sufficiency in excess of one percent of covered pay may be
proposed to be used to increase benefits, and no benefit increase may be proposed that
would initiate an automatic adjustment to increase contributions under this subdivision.
Any proposed benefit improvement must include a recommendation, prepared by the
actuary retained under section 356.214, subdivision 1, and reviewed by the actuary
retained by the Legislative Commission on Pensions and Retirement as provided under
section 356.214, subdivision 4, on how the benefit modification will be funded.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2012, section 352.045, is amended by adding a subdivision
to read:

new text begin Subd. 3b. new text end

new text begin Contribution rate revision; correctional state employees retirement
plan and State Patrol retirement plan. new text end

new text begin (a) Subdivision 3a applies to the correctional
state employees retirement plan under this chapter and to the State Patrol retirement plan
established under chapter 352B, except as stated in this subdivision.
new text end

new text begin (b) Any limitations on the amount of contribution rate changes stated in subdivision
3a apply only to the amount of the employee contribution revision. The employer
contribution for the correctional state employees retirement plan or the State Patrol
retirement plan, whichever is applicable, must be adjusted so that the employer
contribution is equal to 60 percent of the sum of employee plus employer contributions.
new text end

new text begin (c) For the State Patrol retirement plan, a contribution sufficiency of up to two
percent of covered payroll, rather than one percent, may be held in reserves without taking
action to reduce employee and employer contributions.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2012, section 352D.04, subdivision 2, is amended to read:

Subd. 2.

Contribution rates.

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

(b) The employee contribution is an amount equal to the percent of salary specified
in section 352.04, subdivision 2, or 352.045, subdivision deleted text begin 3 deleted text end new text begin 3a new text end .

(c) The employer contribution is an amount equal to six percent of salary.

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2012, section 352.045, subdivisions 3 and 4, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 3

REVISING COMMISSION STANDARDS AND FINANCIAL REPORT
CONTENTS PROVISIONS

Section 1.

Minnesota Statutes 2012, section 3.85, subdivision 10, is amended to read:

Subd. 10.

Standards for pension valuations and cost estimates.

The commission
shall adopt standards prescribing specific detailed methods to calculate, evaluate, and
display current and proposed law liabilities, costs, and actuarial equivalents of all public
employee pension plans in Minnesota. These standards shall be consistent with chapter
356 and be updated annually. new text begin At a minimum, new text end the standards deleted text begin must not deleted text end new text begin shall new text end contain deleted text begin a
valuation requirement deleted text end new text begin requirements new text end that deleted text begin is inconsistent deleted text end new text begin comply new text end with generally accepted
accounting principles applicable to government pension plans. new text begin The standards may include
additional financial, funding, or valuation requirements that are not required under
generally accepted accounting principles applicable to government pension plans.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2012, section 356.20, subdivision 4, is amended to read:

Subd. 4.

Contents of financial report.

(a) The financial report required by
this section must contain financial statements and disclosures that indicate the financial
operations and position of the retirement plan and fund. The report must conform with
generally accepted governmental accounting principles, applied on a consistent basis. The
report must be audited.

(b) The report must include deleted text begin , as part of its exhibits or its footnotes, an actuarial
disclosure item based on deleted text end new text begin a statement that new text end the actuarial valuation calculations prepared
by the actuary retained under section 356.214 or by the actuary retained by the
retirement fund or plan, whichever applies, deleted text begin according to deleted text end new text begin comply with new text end applicable actuarial
requirements enumerated in section 356.215, and specified in the most recent standards
for actuarial work adopted by the Legislative Commission on Pensions and Retirement.
The actuarial value of assets, the actuarial accrued liabilities, deleted text begin including accrued reserves,
deleted text end and the unfunded actuarial accrued liability of the fund or plan must be disclosed. The
deleted text begin disclosure item deleted text end new text begin report new text end must contain a deleted text begin declaration deleted text end new text begin certification new text end by the actuary retained
under section 356.214 or the actuary retained by the fund or plan, whichever applies,
specifying that deleted text begin the required reserves for any retirement, disability, or survivor deleted text end new text begin normal
cost and the actuarial accrued liabilities for all new text end benefits deleted text begin provided under a benefit formula
deleted text end are computed in accordance with the entry age actuarial cost method and in accordance
with the most recent applicable standards for actuarial work adopted by the Legislative
Commission on Pensions and Retirement.

(c) The report must contain an itemized exhibit describing the administrative
expenses of the plan, including, but not limited to, the following items, classified on a
consistent basis from year to year, and with any further meaningful detail:

(1) personnel expenses;

(2) communication-related expenses;

(3) office building and maintenance expenses;

(4) professional services fees; and

(5) other expenses.

(d) The report must contain an itemized exhibit describing the investment expenses
of the plan, including, but not limited to, the following items, classified on a consistent
basis from year to year, and with any further meaningful detail:

(1) internal investment-related expenses; and

(2) external investment-related expenses.

(e) Any additional statements or exhibits or more detailed or subdivided itemization
of a disclosure item that will enable the management of the plan to portray a true
interpretation of the plan's financial condition must be included in the additional
statements or exhibits.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 4

DISABILITY BENEFIT ADMINISTRATION REVISIONS

Section 1.

Minnesota Statutes 2012, section 352.01, subdivision 17b, is amended to read:

Subd. 17b.

Duty disability, physical or psychological.

"Duty disability, physical
or psychological," for a correctional employee, means an occupational disability that is
the direct result of an injury incurred during, or a disease arising out of, the performance
of normal duties or the performance of less frequent duties either of which deleted text begin are deleted text end new text begin present
inherent dangers new text end specific to the correctional employee.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2012, section 352.03, subdivision 8, is amended to read:

Subd. 8.

Medical adviser.

The deleted text begin state commissioner of health or other deleted text end new text begin executive
director may contract with an accredited independent organization specializing in
disability determinations, new text end licensed deleted text begin physician deleted text end new text begin physicians, or physicians new text end on the staff of the
commissioner new text begin of health new text end as new text begin designated by new text end the commissioner deleted text begin may designate shall deleted text end new text begin , to new text end be the
medical adviser deleted text begin of deleted text end new text begin to new text end the deleted text begin director deleted text end new text begin system new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2012, section 352.113, subdivision 4, is amended to read:

Subd. 4.

Medical or psychological examinations; authorization for payment of
benefit.

(a) new text begin Any physician, psychologist, chiropractor, or physician assistant providing
any service specified in this section must be licensed.
new text end

new text begin (b) new text end An applicant shall provide deleted text begin medical, chiropractic, or psychological deleted text end new text begin a detailed
report signed by a physician, and at least one additional report signed by a physician,
chiropractor, psychologist, or physician assistant with new text end evidence to support an application
for total and permanent disability.

deleted text begin (b) The director shall have the employee examined by at least one additional
licensed chiropractor, physician, or psychologist designated by the medical adviser. deleted text end The
deleted text begin chiropractors, physicians, or psychologists shall make written deleted text end reports deleted text begin to the director
concerning the employee's disability including deleted text end new text begin must include an new text end expert deleted text begin opinions as to
deleted text end new text begin opinion regarding new text end whether the employee is permanently and totally disabled within
the meaning of section 352.01, subdivision 17 new text begin , and that the disability arose before the
employee was placed on any paid or unpaid leave of absence or terminated public service new text end .

new text begin (c) If there is medical evidence that supports the expectation that at some point
the person applying for the disability benefit will no longer be disabled, the decision
granting the disability benefit may provide for a termination date upon which the total and
permanent disability can be expected to no longer exist. When a termination date is part
of the decision granting benefits, prior to the benefit termination the executive director
shall review any evidence provided by the disabled employee to show that the disabling
condition for which benefits were initially granted continues. If the benefits cease, the
disabled employee may follow the appeal procedures described in section 356.96 or may
reapply for disability benefits using the process described in this subdivision.
new text end

new text begin (d) Any claim to disability must be supported by a report from the employer
indicating that there is no available work that the employee can perform with the disabling
condition and that all reasonable accommodations have been considered. Upon request of
the executive director, an employer shall provide evidence of the steps the employer has
taken to attempt to provide reasonable accommodations and continued employment to
the claimant.
new text end

deleted text begin (c) deleted text end new text begin (e) new text end The director shall also obtain written certification from the employer
stating whether the employment has ceased or whether the employee is on sick leave of
absence because of a disability that will prevent further service to the employer and deleted text begin as a
consequence deleted text end new text begin that new text end the employee is not entitled to compensation from the employer.

deleted text begin (d) deleted text end new text begin (f) new text end The medical adviser shall consider the reports of the physicians, new text begin physician
assistants, new text end psychologists, and chiropractors and any other evidence supplied by the
employee or other interested parties. If the medical adviser finds the employee totally and
permanently disabled, the adviser shall make appropriate recommendation to the director
in writing together with the date from which the employee has been totally disabled. The
director shall then determine if the disability occurred within 18 months of filing the
application, while still in the employment of the state, and the propriety of authorizing
payment of a disability benefit as provided in this section.

deleted text begin (e) deleted text end new text begin (g) new text end A terminated employee may apply for a disability benefit within 18 months of
termination as long as the disability occurred while in the employment of the state. The
fact that an employee is placed on leave of absence without compensation because of
disability does not bar that employee from receiving a disability benefit.

deleted text begin (f) deleted text end new text begin (h) new text end Unless the payment of a disability benefit has terminated because the
employee is no longer totally disabled, or because the employee has reached normal
retirement age as provided in this section, the disability benefit must cease with the last
payment received by the disabled employee or which had accrued during the lifetime of the
employee unless there is a spouse surviving. In that event, the surviving spouse is entitled
to the disability benefit for the calendar month in which the disabled employee died.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2012, section 352.113, is amended by adding a subdivision
to read:

new text begin Subd. 4b. new text end

new text begin Independent medical examination or vocational rehabilitation
counseling. new text end

new text begin Any individual applying for or receiving disability benefits shall submit
to an independent medical examination or an assessment by a certified rehabilitation
counselor if requested by the executive director or designee. The examination must be
paid for by the system.
new text end

Sec. 5.

Minnesota Statutes 2012, section 352.113, subdivision 6, is amended to read:

Subd. 6.

Regular medical or psychological examinations.

At least once each
year during the first five years following the allowance of a disability benefit to any
employee, and at least once in every three-year period thereafter, the director may require
any disabled employee to deleted text begin undergo a deleted text end new text begin provide new text end medical, chiropractic, or psychological
deleted text begin examination deleted text end new text begin evidence to support the continuation of the total and permanent disability new text end .
The deleted text begin examination must be made at the place of residence of the employee, or at any place
mutually agreed upon, deleted text end new text begin evidence must be in a form and manner prescribed by the executive
director for review new text end by an expert or experts designated by the medical adviser and engaged
by the director. If deleted text begin any examination indicates deleted text end new text begin the medical information provided new text end to the
medical adviser new text begin indicates new text end that the employee is no longer permanently and totally disabled,
or is engaged in or can engage in a gainful occupation, payments of the disability benefit
by the fund must be discontinued. The payments must be discontinued as soon as the
employee is reinstated to the payroll following new text begin a new text end sick leave new text begin of absence new text end , but in no case may
payment be made for more than 60 days after the medical adviser finds that the employee
is no longer permanently and totally disabled.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

Minnesota Statutes 2012, section 352.113, subdivision 8, is amended to read:

Subd. 8.

Refusal of examination.

If a deleted text begin disabled employee deleted text end new text begin person applying for a
disability benefit new text end refuses to submit to deleted text begin an expert deleted text end new text begin a medical or psychological examination,
the disability application shall be rejected. If a disability benefit recipient refuses to submit
to a medical or psychological new text end examination as required, payments by the fund must be
discontinued and the director shall revoke all rights of the employee in any disability benefit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7.

Minnesota Statutes 2012, section 352.113, is amended by adding a subdivision
to read:

new text begin Subd. 14. new text end

new text begin Disabilitant earnings reports. new text end

new text begin Disability benefit recipients must report
all earnings from reemployment and income from workers' compensation to the system
annually by May 15 in a format prescribed by the executive director. If the form is not
submitted by June 15, benefits must be suspended effective July 1. If the form deemed
acceptable by the executive director is received after the June 15 deadline, benefits shall
be reinstated retroactive to July 1.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8.

Minnesota Statutes 2012, section 352B.10, is amended by adding a subdivision
to read:

new text begin Subd. 7. new text end

new text begin Disabilitant earnings reports. new text end

new text begin Disability benefit recipients must report
all earnings from reemployment and income from workers' compensation to the system
annually by May 15 in a format prescribed by the executive director. If the form is not
submitted by June 15, benefits must be suspended effective July 1. If the form deemed
acceptable by the executive director is received after the June 15 deadline, benefits shall
be reinstated retroactive to July 1.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 5

MERGER OF ELECTED STATE OFFICERS RETIREMENT PLAN INTO
THE LEGISLATORS RETIREMENT PLAN

Section 1.

Minnesota Statutes 2012, section 3A.011, is amended to read:

3A.011 ADMINISTRATION OF deleted text begin PLAN deleted text end new text begin PLANS new text end .

The executive director and the board of directors of the Minnesota State Retirement
System shall administer the deleted text begin legislators retirement plan deleted text end new text begin plans specified new text end in deleted text begin accordance deleted text end new text begin this
chapter consistent new text end with this chapter and deleted text begin chapter deleted text end new text begin chapters 245 and new text end 356A.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 2.

Minnesota Statutes 2012, section 3A.03, subdivision 3, is amended to read:

Subd. 3.

Legislators retirement fund.

(a) The legislators retirement fund, a special
retirement fund, is created within the state treasury deleted text begin and must be credited with assets equal
to the participation of the legislators retirement plan in the Minnesota postretirement
investment fund as of June 30, 2009, and any investment proceeds on those assets deleted text end .

(b) The payment of annuities under section 3A.115, paragraph (b), is appropriated
from the legislators retirement fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 3.

Minnesota Statutes 2012, section 3A.07, is amended to read:

3A.07 APPLICATION.

(a) Except as provided in paragraph (b) new text begin and section 3A.17 new text end , this chapter applies
to members of the legislature in service after July 1, 1965, who otherwise meet the
requirements of this chapter.

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 4.

Minnesota Statutes 2012, section 3A.115, is amended to read:

3A.115 RETIREMENT ALLOWANCE APPROPRIATION;
POSTRETIREMENT ADJUSTMENT.

(a) The amount necessary to fund the retirement allowance granted under this
chapter to a former legislator retiring after June 30, 2003, new text begin or to that legislator's survivor,
and the retirement allowance granted under section 3A.17 to a former constitutional
officer or the survivor of that constitutional officer new text end is appropriated from the general fund to
the director to pay pension obligations due to the retiree.

(b) The amount necessary to fund the retirement allowance granted under this
chapter to a former legislator retiring before July 1, 2003, must be paid from the legislators
retirement fund created under section 3A.03, subdivision 3, until the assets of the fund
are exhausted and at that time, the amount necessary to fund the retirement allowances
under this paragraph is appropriated from the general fund to the director to pay pension
obligations to the retiree new text begin and survivor new text end .

(c) Retirement allowances payable to retired legislators and their survivors under
this chapter must be adjusted as provided in sections 3A.02, subdivision 6, and 356.415.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 5.

Minnesota Statutes 2012, section 3A.13, is amended to read:

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

(a) The provisions of section 356.401 apply to the deleted text begin legislators retirement plan deleted text end new text begin plans
specified in this chapter new text end .

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 6.

Minnesota Statutes 2012, section 3A.15, is amended to read:

3A.15 deleted text begin COORDINATED PROGRAM deleted text end new text begin PROGRAMS new text end OF new text begin THE new text end LEGISLATORS
RETIREMENT PLAN.

deleted text begin The coordinated program of the legislators retirement plan is created. deleted text end The provisions
of sections 3A.01 to 3A.13 apply to the coordinated deleted text begin program deleted text end new text begin and basic programs of the
legislators retirement plan new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

SPECIAL COVERAGE; CONSTITUTIONAL OFFICERS

Sec. 7.

new text begin [3A.17] CONSTITUTIONAL OFFICERS.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin (a) This section specifies the retirement plan applicable
to a former constitutional officer who was first elected to a constitutional office after July
1, 1967, and before July 1, 1997. The plan includes the applicable portions of chapter
352C and chapter 356 in effect on the date on which the person terminated active service
as a constitutional officer.
new text end

new text begin (b) Nothing in this section, this act, or Laws 2006, chapter 271, article 10, section
33, subdivision 2, is intended to increase or reduce the benefits of former constitutional
officers or their survivors or to adversely modify their eligibility for benefits in effect
as of June 30, 2012.
new text end

new text begin Subd. 2. new text end

new text begin Benefit adjustments. new text end

new text begin Retirement allowances payable to retired
constitutional officers and surviving spouse benefits payable must be adjusted under
section 356.415.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 8.

Minnesota Statutes 2012, 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;

(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; new text begin and
new text end

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

deleted text begin (12) deleted text end new text begin (11) the new text end local government correctional service retirement plan, Public
Employees Retirement Association.

new text begin (c) The actuarial valuation for the legislators retirement plan must include a separate
calculation of total plan actuarial accrued liabilities due to constitutional officer coverage
under section 3A.17.
new text end

deleted text begin (c) deleted text end new text begin (d) new text end 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.

deleted text begin (d) deleted text end new text begin (e) new text end 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.

deleted text begin (e) deleted text end new text begin (f) new text end 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. 9.

Minnesota Statutes 2012, 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:

(1) select and ultimate interest rate assumption

plan	ultimate preretirement interest rate assumption	ultimate 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 new text begin , and for the constitutional officers calculation of total plan liabilities new text end	0.0	deleted text begin -2.0 until June 30, 2040, and -2.5 after June 30, 2040 deleted text end new text begin 0.0 new text end
deleted text begin elective state officers retirement plan deleted text end	deleted text begin 0.0 deleted text end	deleted text begin -2.0 until June 30, 2040, and -2.5 after June 30, 2040 deleted text end
judges retirement plan	8.5	6.0
general public employees retirement plan	8.5	6.0
public employees police and fire retirement plan	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

Except for the legislators retirement plan and the deleted text begin elective state deleted text end new text begin constitutional new text end officers
deleted text begin retirement plan deleted text end new text begin calculation of total plan liabilities new text end , the select preretirement interest rate
assumption for the period after June 30, 2012, through June 30, 2017, is 8.0 percent.
Except for the legislators retirement plan and the deleted text begin elective state deleted text end new text begin constitutional new text end officers
deleted text begin retirement plan deleted text end new text begin calculation of total plan liabilities new text end , the select postretirement interest rate
assumption for the period after June 30, 2012, through June 30, 2017, is 5.5 percent,
except for the Duluth teachers retirement plan and the St. Paul teachers retirement plan,
each with a select postretirement interest rate assumption for the period after June 30,
2012, through June 30, 2017, of 8.0 percent.

(2) single rate preretirement and postretirement interest rate assumption

plan	interest rate assumption
Bloomington Fire Department Relief Association	6.0
local monthly benefit volunteer firefighters relief associations	5.0

(b) 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		3.0
Bloomington Fire Department Relief Association		4.0

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

plan	future salary increase assumption
local government correctional service retirement plan	assumption C
Duluth teachers retirement plan	assumption A
St. Paul teachers retirement plan	assumption B

For plans other than the Duluth teachers
retirement plan, 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 ten years and the
designated integer is ten for all retirement
plans covered by this clause. The designated
percentage rate is 0.3 percent for 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
16	8.00%	6.90%	9.00%
17	8.00	6.90	9.00
18	8.00	6.90	9.00
19	8.00	6.90	9.00
20	6.90	6.90	9.00
21	6.90	6.90	8.75
22	6.90	6.90	8.50
23	6.85	6.85	8.25
24	6.80	6.80	8.00
25	6.75	6.75	7.75
26	6.70	6.70	7.50
27	6.65	6.65	7.25
28	6.60	6.60	7.00
29	6.55	6.55	6.75
30	6.50	6.50	6.75
31	6.45	6.45	6.50
32	6.40	6.40	6.50
33	6.35	6.35	6.50
34	6.30	6.30	6.25
35	6.25	6.25	6.25
36	6.20	6.20	6.00
37	6.15	6.15	6.00
38	6.10	6.10	6.00
39	6.05	6.05	5.75
40	6.00	6.00	5.75
41	5.90	5.95	5.75
42	5.80	5.90	5.50
43	5.70	5.85	5.25
44	5.60	5.80	5.25
45	5.50	5.75	5.00
46	5.40	5.70	5.00
47	5.30	5.65	5.00
48	5.20	5.60	5.00
49	5.10	5.55	5.00
50	5.00	5.50	5.00
51	4.90	5.45	5.00
52	4.80	5.40	5.00
53	4.70	5.35	5.00
54	4.60	5.30	5.00
55	4.50	5.25	4.75
56	4.40	5.20	4.75
57	4.30	5.15	4.50
58	4.20	5.10	4.25
59	4.10	5.05	4.25
60	4.00	5.00	4.25
61	3.90	5.00	4.25
62	3.80	5.00	4.25
63	3.70	5.00	4.25
64	3.60	5.00	4.25
65	3.50	5.00	4.00
66	3.50	5.00	4.00
67	3.50	5.00	4.00
68	3.50	5.00	4.00
69	3.50	5.00	4.00
70	3.50	5.00	4.00

(3) service-related ultimate future salary increase assumption

general state employees retirement plan of the Minnesota State Retirement System	assumption A
general employees retirement plan of the Public Employees Retirement Association	assumption B
Teachers Retirement Association	assumption C
public employees police and fire retirement plan	assumption D
State Patrol retirement plan	assumption E
correctional state employees retirement plan of the Minnesota State Retirement System	assumption F

service length	A	B	C	D	E	F
1	10.50%	12.03%	12.00%	13.00%	8.00%	6.00%
2	8.10	8.90	9.00	11.00	7.50	5.85
3	6.90	7.46	8.00	9.00	7.00	5.70
4	6.20	6.58	7.50	8.00	6.75	5.55
5	5.70	5.97	7.25	6.50	6.50	5.40
6	5.30	5.52	7.00	6.10	6.25	5.25
7	5.00	5.16	6.85	5.80	6.00	5.10
8	4.70	4.87	6.70	5.60	5.85	4.95
9	4.50	4.63	6.55	5.40	5.70	4.80
10	4.40	4.42	6.40	5.30	5.55	4.65
11	4.20	4.24	6.25	5.20	5.40	4.55
12	4.10	4.08	6.00	5.10	5.25	4.45
13	4.00	3.94	5.75	5.00	5.10	4.35
14	3.80	3.82	5.50	4.90	4.95	4.25
15	3.70	3.70	5.25	4.80	4.80	4.15
16	3.60	3.60	5.00	4.80	4.65	4.05
17	3.50	3.51	4.75	4.80	4.50	3.95
18	3.50	3.50	4.50	4.80	4.35	3.85
19	3.50	3.50	4.25	4.80	4.20	3.75
20	3.50	3.50	4.00	4.80	4.05	3.75
21	3.50	3.50	3.90	4.70	4.00	3.75
22	3.50	3.50	3.80	4.60	4.00	3.75
23	3.50	3.50	3.70	4.50	4.00	3.75
24	3.50	3.50	3.60	4.50	4.00	3.75
25	3.50	3.50	3.50	4.50	4.00	3.75
26	3.50	3.50	3.50	4.50	4.00	3.75
27	3.50	3.50	3.50	4.50	4.00	3.75
28	3.50	3.50	3.50	4.50	4.00	3.75
29	3.50	3.50	3.50	4.50	4.00	3.75
30 or more	3.50	3.50	3.50	4.50	4.00	3.75

(c) 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 of the Minnesota State Retirement System	3.75%
correctional state employees retirement plan	3.75
State Patrol retirement plan	3.75
judges retirement plan	3.00
general employees retirement plan of the Public Employees Retirement Association	3.75
public employees police and fire retirement plan	3.75
local government correctional service retirement plan	3.75
teachers retirement plan	3.75
Duluth teachers retirement plan	4.50
St. Paul teachers retirement plan	5.00

(d) 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 10.

Minnesota Statutes 2012, section 356.30, subdivision 3, is amended to read:

Subd. 3.

Covered plans.

This section applies 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 unclassified employees retirement program, established under chapter 352D;

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

(5) the legislators retirement plan, established under chapter 3A new text begin , including
constitutional officers as specified in that chapter new text end ;

deleted text begin (6) the elective state officers retirement plan, established under chapter 352C;
deleted text end

deleted text begin (7) deleted text end new text begin (6) new text end 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;

deleted text begin (8) deleted text end new text begin (7) new text end the public employees police and fire retirement plan of the Public Employees
Retirement Association, established under chapter 353;

deleted text begin (9) deleted text end new text begin (8) new text end the local government correctional service retirement plan of the Public
Employees Retirement Association, established under chapter 353E;

deleted text begin (10) deleted text end new text begin (9) new text end the Teachers Retirement Association, established under chapter 354;

deleted text begin (11) deleted text end new text begin (10) new text end the St. Paul Teachers Retirement Fund Association, established under
chapter 354A;

deleted text begin (12) deleted text end new text begin (11) new text end the Duluth Teachers Retirement Fund Association, established under
chapter 354A; and

deleted text begin (13) deleted text end new text begin (12) new text end the judges retirement fund, established by chapter 490.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 11.

Minnesota Statutes 2012, 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 new text begin , including constitutional
officers as specified in that chapter new text end ;

(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;

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

deleted text begin (6) deleted text end new text begin (5) new text end the unclassified state employees retirement program, established by chapter
352D;

deleted text begin (7) deleted text end new text begin (6) new text end 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;

deleted text begin (8) deleted text end new text begin (7) new text end the public employees police and fire plan of the Public Employees Retirement
Association, established by chapter 353;

deleted text begin (9) deleted text end new text begin (8) new text end the public employees defined contribution plan, established by chapter 353D;

deleted text begin (10) deleted text end new text begin (9) new text end the local government correctional service retirement plan of the Public
Employees Retirement Association, established by chapter 353E;

deleted text begin (11) deleted text end new text begin (10) new text end the voluntary statewide lump-sum volunteer firefighter retirement plan,
established by chapter 353G;

deleted text begin (12) deleted text end new text begin (11) new text end the Teachers Retirement Association, established by chapter 354;

deleted text begin (13) deleted text end new text begin (12) new text end the Duluth Teachers Retirement Fund Association, established by chapter
354A;

deleted text begin (14) deleted text end new text begin (13) new text end the St. Paul Teachers Retirement Fund Association, established by chapter
354A;

deleted text begin (15) deleted text end new text begin (14) new text end the individual retirement account plan, established by chapter 354B;

deleted text begin (16) deleted text end new text begin (15) new text end the higher education supplemental retirement plan, established by chapter
354C; and

deleted text begin (17) deleted text end new text begin (16) new text end the judges retirement fund, established by chapter 490.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 12.

Minnesota Statutes 2012, section 356.415, subdivision 1a, is amended to read:

Subd. 1a.

Annual postretirement adjustments; Minnesota State Retirement
System plans other than State Patrol retirement plan.

(a) Retirement annuity, disability
benefit, or survivor benefit recipients of the legislators retirement deleted text begin plan deleted text end new text begin plans, including
constitutional officers as specified in chapter 3A new text end , the general state employees retirement
plan, the correctional state employees retirement plan, deleted text begin the elected state officers retirement
plan, deleted text end the unclassified state employees retirement program, and the judges retirement plan
are entitled to a postretirement adjustment annually on January 1, as follows:

(1) a postretirement increase of two percent must be applied each year, effective
on January 1, to the monthly annuity or benefit of each annuitant or benefit recipient
who has been receiving an annuity or a benefit for at least 18 full months before the
January 1 increase; and

(2) for each annuitant or benefit recipient who has been receiving an annuity or
a benefit for at least six full months, an annual postretirement increase of 1/12 of two
percent for each month that the person has been receiving an annuity or benefit must be
applied, effective January 1, following the calendar year in which the person has been
retired for at least six months, but has been retired for less than 18 months.

(b) The increases provided by this subdivision commence on January 1, 2011.
Increases under this subdivision for the general state employees retirement plan, the
correctional state employees retirement plan, or the judges retirement plan terminate
on December 31 of the calendar year in which the actuarial valuation prepared by the
approved actuary under sections 356.214 and 356.215 and the standards for actuarial work
promulgated by the Legislative Commission on Pensions and Retirement indicates that the
market value of assets of the retirement plan equals or exceeds 90 percent of the actuarial
accrued liability of the retirement plan and increases under subdivision 1 recommence
after that date. Increases under this subdivision for the legislators retirement plan or the
elected state officers retirement plan terminate on December 31 of the calendar year in
which the actuarial valuation prepared by the approved actuary under sections 356.214 and
356.215 and the standards for actuarial work promulgated by the Legislative Commission
on Pensions and Retirement indicates that the market value of assets of the general state
employees retirement plan equals or exceeds 90 percent of the actuarial accrued liability
of the retirement plan and increases under subdivision 1 recommence after that date.

(c) 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 13.

Minnesota Statutes 2012, section 356.415, subdivision 2, is amended to read:

Subd. 2.

Covered retirement plans.

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

(1) the legislators retirement plan established under chapter 3A new text begin , including
constitutional officers as specified in that chapter new text end ;

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

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

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

deleted text begin (5) the elective state officers retirement plan established under chapter 352C;
deleted text end

deleted text begin (6) deleted text end new text begin (5) new text end 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;

deleted text begin (7) deleted text end new text begin (6) new text end the public employees police and fire retirement plan of the Public Employees
Retirement Association established under chapter 353;

deleted text begin (8) deleted text end new text begin (7) new text end the local government correctional employees retirement plan of the Public
Employees Retirement Association established under chapter 353E;

deleted text begin (9) deleted text end new text begin (8) new text end the teachers retirement plan established under chapter 354; and

deleted text begin (10) deleted text end new text begin (9) new text end the judges retirement plan established under chapter 490.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 14. new text begin APPLICATION.
new text end

new text begin Nothing in this act should be interpreted as modifying benefits or benefit eligibility
compared to law in effect immediately before the effective date of this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 15. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2012, sections 3A.02, subdivision 3; 352C.001; 352C.091,
subdivision 1; and 352C.10, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end