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S.F. No. 191, 4th Engrossment - 86th Legislative Session (2009-2010)   Posted on May 20, 2009

1.1A bill for an act
1.2relating to retirement; various retirement plans; making various statutory changes
1.3needed to accommodate the dissolution of the Minnesota Post Retirement
1.4Investment Fund; redefining the value of pension plan assets for actuarial
1.5reporting purposes; revising various disability benefit provisions of the general
1.6state employees retirement plan, the correctional state employees retirement
1.7plan, and the State Patrol retirement plan; making various administrative
1.8provision changes; establishing a voluntary statewide lump-sum volunteer
1.9firefighter retirement plan administered by the Public Employees Retirement
1.10Association; revising various volunteer firefighters' relief association provisions;
1.11correcting 2008 drafting errors related to the Minneapolis Employees Retirement
1.12Fund and other drafting errors; granting special retirement benefit authority in
1.13certain cases; revising the special transportation pilots retirement plan of the
1.14Minnesota State Retirement System; expanding the membership of the state
1.15correctional employees retirement plan; extending the amortization target date
1.16for the Fairmont Police Relief Association; modifying the number of board of
1.17trustees members of the Minneapolis Firefighters Relief Association; modifying
1.18amortization state aid and supplemental amortization state aid; permitting the
1.19Brimson Volunteer Firefighters' Relief Association to implement a different board
1.20of trustees composition; permitting employees of the Minneapolis Firefighters
1.21Relief Association and the Minneapolis Police Relief Association to become
1.22members of the general employee retirement plan of the Public Employees
1.23Retirement Association; creating a two-year demonstration postretirement
1.24adjustment mechanism for the St. Paul Teachers Retirement Fund Association;
1.25creating a temporary postretirement option program for employees covered
1.26by the general employee retirement plan of the Public Employees Retirement
1.27Association; setting a statute of limitations for erroneous receipts of the general
1.28employee retirement plan of the Public Employees Retirement Association;
1.29permitting the Minnesota State Colleges and Universities System board to
1.30create an early separation incentive program; permitting certain Minnesota
1.31State Colleges and Universities System faculty members to make a second
1.32chance retirement coverage election upon achieving tenure; including the Weiner
1.33Memorial Medical Center, Inc., in the Public Employees Retirement Association
1.34privatization law; extending the approval deadline date for the inclusion of the
1.35Clearwater County Hospital in the Public Employees Retirement Association
1.36privatization law; requiring a report; appropriating money; amending Minnesota
1.37Statutes 2008, sections 3A.02, subdivision 3, by adding a subdivision; 3A.03,
1.38by adding a subdivision; 3A.04, by adding a subdivision; 3A.115; 11A.08,
1.39subdivision 1; 11A.17, subdivisions 1, 2; 11A.23, subdivisions 1, 2; 43A.34,
2.1subdivision 4; 43A.346, subdivisions 2, 6; 69.011, subdivisions 1, 2, 4; 69.021,
2.2subdivisions 7, 9; 69.031, subdivisions 1, 5; 69.77, subdivision 4; 69.771,
2.3subdivision 3; 69.772, subdivisions 4, 6; 69.773, subdivision 6; 299A.465,
2.4subdivision 1; 352.01, subdivision 2b, by adding subdivisions; 352.021, by
2.5adding a subdivision; 352.04, subdivisions 1, 12; 352.061; 352.113, subdivision
2.64, by adding a subdivision; 352.115, by adding a subdivision; 352.12, by adding
2.7a subdivision; 352.75, subdivisions 3, 4; 352.86, subdivisions 1, 1a, 2; 352.91,
2.8subdivision 3d; 352.911, subdivisions 3, 5; 352.93, by adding a subdivision;
2.9352.931, by adding a subdivision; 352.95, subdivisions 1, 2, 3, 4, 5, by adding
2.10a subdivision; 352B.02, subdivisions 1, 1a, 1c, 1d; 352B.08, by adding a
2.11subdivision; 352B.10, subdivisions 1, 2, 5, by adding subdivisions; 352B.11,
2.12subdivision 2, by adding a subdivision; 352C.10; 352D.06, subdivision 1;
2.13352D.065, by adding a subdivision; 352D.075, by adding a subdivision; 353.01,
2.14subdivisions 2, 2a, 6, 11b, 16, 16b; 353.0161, subdivision 1; 353.03, subdivision
2.153a; 353.06; 353.27, subdivisions 1, 2, 3, 7, 7b; 353.29, by adding a subdivision;
2.16353.31, subdivision 1b, by adding a subdivision; 353.33, subdivisions 1, 3b, 7,
2.1711, 12, by adding subdivisions; 353.65, subdivisions 2, 3; 353.651, by adding
2.18a subdivision; 353.656, subdivision 5a, by adding a subdivision; 353.657,
2.19subdivision 3a, by adding a subdivision; 353.665, subdivision 3; 353A.02,
2.20subdivisions 14, 23; 353A.05, subdivisions 1, 2; 353A.08, subdivisions 1, 3, 6a;
2.21353A.081, subdivision 2; 353A.09, subdivision 1; 353A.10, subdivisions 2,
2.223; 353E.01, subdivisions 3, 5; 353E.04, by adding a subdivision; 353E.06, by
2.23adding a subdivision; 353E.07, by adding a subdivision; 353F.02, subdivision 4;
2.24354.05, by adding a subdivision; 354.07, subdivision 4; 354.33, subdivision 5;
2.25354.35, by adding a subdivision; 354.42, subdivisions 1a, 2; 354.44, subdivisions
2.264, 5, by adding a subdivision; 354.46, by adding a subdivision; 354.47,
2.27subdivision 1; 354.48, subdivisions 4, 6, by adding a subdivision; 354.49,
2.28subdivision 2; 354.52, subdivisions 2a, 4b; 354.55, subdivisions 11, 13; 354.66,
2.29subdivision 6; 354.70, subdivisions 5, 6; 354A.096; 354A.12, subdivision
2.302a, by adding subdivisions; 354A.29, subdivision 3; 354A.36, subdivision 6;
2.31354B.21, subdivision 2; 356.20, subdivision 2; 356.215, subdivisions 1, 11;
2.32356.219, subdivision 3; 356.32, subdivision 2; 356.351, subdivision 2; 356.401,
2.33subdivisions 2, 3; 356.465, subdivision 1, by adding a subdivision; 356.611,
2.34subdivisions 3, 4; 356.635, subdivisions 6, 7; 356.96, subdivisions 1, 5; 422A.06,
2.35subdivision 8; 422A.08, subdivision 5; 423A.02, subdivisions 1, 3; 423C.03,
2.36subdivision 1; 424A.001, subdivisions 1, 1a, 2, 3, 4, 5, 6, 8, 9, 10, by adding
2.37subdivisions; 424A.01; 424A.02, subdivisions 1, 2, 3, 3a, 7, 8, 9, 9a, 9b, 10, 12,
2.3813; 424A.021; 424A.03; 424A.04; 424A.05, subdivisions 1, 2, 3, 4; 424A.06;
2.39424A.07; 424A.08; 424A.10, subdivisions 1, 2, 3, 4, 5; 424B.10, subdivision 2,
2.40by adding subdivisions; 424B.21; 471.61, subdivision 1; 490.123, subdivisions 1,
2.413; 490.124, by adding a subdivision; Laws 1989, chapter 319, article 11, section
2.4213; Laws 2006, chapter 271, article 5, section 5, as amended; Laws 2008, chapter
2.43349, article 14, section 13; proposing coding for new law in Minnesota Statutes,
2.44chapters 136F; 352B; 353; 354; 356; 420; 424A; 424B; proposing coding for
2.45new law as Minnesota Statutes, chapter 353G; repealing Minnesota Statutes
2.462008, sections 11A.041; 11A.18; 11A.181; 352.119, subdivisions 2, 3, 4; 352.86,
2.47subdivision 3; 352B.01, subdivisions 1, 2, 3, 3b, 4, 6, 7, 9, 10, 11; 352B.26,
2.48subdivisions 1, 3; 353.271; 353A.02, subdivision 20; 353A.09, subdivisions
2.492, 3; 354.05, subdivision 26; 354.06, subdivision 6; 354.55, subdivision 14;
2.50354.63; 354A.29, subdivisions 2, 4, 5; 356.2165; 356.41; 356.431, subdivision
2.512; 422A.01, subdivision 13; 422A.06, subdivision 4; 422A.08, subdivision 5a;
2.52424A.001, subdivision 7; 424A.02, subdivisions 4, 6, 8a, 8b, 9b; 424A.09;
2.53424B.10, subdivision 1; 490.123, subdivisions 1c, 1e.
2.54BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

3.1ARTICLE 1
3.2MINNESOTA POST RETIREMENT
3.3INVESTMENT FUND DISSOLUTION ACCOMMODATION

3.4    Section 1. Minnesota Statutes 2008, section 3A.02, subdivision 3, is amended to read:
3.5    Subd. 3. Appropriation. The amounts required for payment of retirement
3.6allowances provided by this section are appropriated annually to the director from the
3.7participation of the legislators retirement plan in the Minnesota postretirement investment
3.8fund or from the general fund as provided in section 3A.115. The retirement allowance
3.9must be paid is payable monthly to the recipients entitled to those retirement allowances.

3.10    Sec. 2. Minnesota Statutes 2008, section 3A.02, is amended by adding a subdivision to
3.11read:
3.12    Subd. 6. Postretirement adjustment eligibility. A retirement allowance under this
3.13section is eligible for postretirement adjustments under section 356.415.

3.14    Sec. 3. Minnesota Statutes 2008, section 3A.03, is amended by adding a subdivision to
3.15read:
3.16    Subd. 3. Legislators retirement fund. (a) The legislators retirement fund, a special
3.17retirement fund, is created within the state treasury and must be credited with assets equal
3.18to the participation of the legislators retirement plan in the Minnesota postretirement
3.19investment fund as of June 30, 2009, and any investment proceeds on those assets.
3.20(b) The payment of annuities under section 3A.115, paragraph (b), is appropriated
3.21from the legislators retirement fund.

3.22    Sec. 4. Minnesota Statutes 2008, section 3A.04, is amended by adding a subdivision to
3.23read:
3.24    Subd. 2a. Postretirement adjustment eligibility. A survivor benefit under this
3.25section is eligible for postretirement adjustments under section 356.415.

3.26    Sec. 5. Minnesota Statutes 2008, section 3A.115, is amended to read:
3.273A.115 RETIREMENT ALLOWANCE APPROPRIATION;
3.28POSTRETIREMENT ADJUSTMENT.
3.29(a) The amount necessary to fund the retirement allowance granted under this
3.30chapter to a former legislator upon retirement retiring after June 30, 2003, is appropriated
3.31from the general fund to the director to pay pension obligations due to the retiree.
4.1(b) The amount necessary to fund the retirement allowance granted under this
4.2chapter to a former legislator retiring before July 1, 2003, must be paid from the legislators
4.3retirement fund created under section 3A.03, subdivision 3, until the assets of the fund
4.4are exhausted and at that time, the amount necessary to fund the retirement allowances
4.5under this paragraph is appropriated from the general fund to the director to pay pension
4.6obligations to the retiree.
4.7(c) Retirement allowances payable to retired legislators and their survivors under
4.8this chapter must be adjusted in the same manner, at the same times, and in the same
4.9amounts as are benefits payable from the Minnesota postretirement investment fund to
4.10retirees of a participating public pension fund as provided in sections 3A.02, subdivision
4.116, and 356.415.

4.12    Sec. 6. Minnesota Statutes 2008, section 11A.08, subdivision 1, is amended to read:
4.13    Subdivision 1. Membership. There is created an Investment Advisory Council
4.14consisting of 17 members. Ten of these members shall must be experienced in general
4.15investment matters. They shall be appointed by the state board The state board must
4.16appoint the ten members. The other seven members shall be are: the commissioner of
4.17finance; the executive director of the Minnesota State Retirement System; the executive
4.18director of the Public Employees Retirement Association; the executive director of
4.19the Teachers Retirement Association; a retiree currently receiving benefits from the
4.20postretirement investment fund a statewide retirement plan; and two public employees
4.21who are active members of funds whose assets are invested by the state board. The
4.22governor must appoint the retiree and the public employees shall be appointed by the
4.23governor for four-year terms.

4.24    Sec. 7. Minnesota Statutes 2008, section 11A.23, subdivision 1, is amended to read:
4.25    Subdivision 1. Certification of assets not needed for immediate use. Each
4.26executive director administering a retirement fund or plan enumerated in subdivision 4
4.27shall, from time to time, certify to the state board for investment those portions of the
4.28assets of the retirement fund or plan which in the judgment of the executive director are
4.29not required for immediate use. Assets of the fund or plan required for participation in
4.30the Minnesota postretirement adjustment fund, the combined investment fund, or the
4.31supplemental investment fund shall be transferred to those funds as provided by sections
4.3211A.01 to 11A.25.

4.33    Sec. 8. Minnesota Statutes 2008, section 11A.23, subdivision 2, is amended to read:
5.1    Subd. 2. Investment. Retirement fund assets certified to the state board pursuant to
5.2under subdivision 1 shall must be invested by the state board subject to the provisions
5.3of section 11A.24. Retirement fund assets transferred to the Minnesota postretirement
5.4investment fund, the combined investment fund or the supplemental investment fund shall
5.5must be invested by the state board as part of those funds.

5.6    Sec. 9. Minnesota Statutes 2008, section 352.021, is amended by adding a subdivision
5.7to read:
5.8    Subd. 5. Determining applicable law. An annuity under this chapter must be
5.9computed under the law in effect as of the last day for which the employee receives pay,
5.10or if on medical leave, the day that the leave terminates. However, if the employee has
5.11returned to covered employment following a termination, the employee must have earned
5.12at least six months of allowable service following a return to employment as a state
5.13employee in order to qualify for improved benefits resulting from any law change enacted
5.14subsequent to that termination.

5.15    Sec. 10. Minnesota Statutes 2008, section 352.04, subdivision 1, is amended to read:
5.16    Subdivision 1. Fund created. (a) There is created a special fund to be known as the
5.17general state employees retirement fund. In that fund, employee contributions, employer
5.18contributions, and other amounts authorized by law must be deposited.
5.19(b) The general state employees retirement plan of the Minnesota State Retirement
5.20System must participate in the Minnesota postretirement investment fund. The amounts
5.21provided in section 352.119 must be deposited in the Minnesota postretirement investment
5.22fund.

5.23    Sec. 11. Minnesota Statutes 2008, section 352.04, subdivision 12, is amended to read:
5.24    Subd. 12. Fund disbursement restricted. The general state employees retirement
5.25fund and the participation in the Minnesota postretirement investment fund must be
5.26disbursed only for the purposes provided by law. The expenses of the system and any
5.27benefits provided by law, other than benefits payable from the Minnesota postretirement
5.28investment fund, must be paid from the general state employees retirement fund. The
5.29retirement allowances, retirement annuities, and disability benefits, as well as refunds of
5.30any sum remaining to the credit of a deceased retired employee or a disabled employee
5.31must be paid only from the general state employees retirement fund after the needs
5.32have been certified and the amounts withdrawn from the participation in the Minnesota
5.33postretirement investment fund under section 11A.18. The amounts necessary to make the
6.1payments from the general state employees retirement fund and the participation in the
6.2Minnesota postretirement investment fund are annually appropriated from these funds
6.3that fund for those purposes.

6.4    Sec. 12. Minnesota Statutes 2008, section 352.061, is amended to read:
6.5352.061 INVESTMENT BOARD TO INVEST FUNDS.
6.6The director shall, from time to time, certify to the State Board of Investment any
6.7portions of the state employees retirement fund that in the judgment of the director are
6.8not required for immediate use. Assets from the state employees retirement fund must
6.9be transferred to the Minnesota postretirement investment fund as provided in section
6.1011A.18. The State Board of Investment shall invest and reinvest sums so transferred, or
6.11certified, in securities that are duly authorized legal investments under section 11A.24.

6.12    Sec. 13. Minnesota Statutes 2008, section 352.113, is amended by adding a subdivision
6.13to read:
6.14    Subd. 13. Postretirement adjustment eligibility. A disability benefit under this
6.15section is eligible for postretirement adjustments under section 356.415.

6.16    Sec. 14. Minnesota Statutes 2008, section 352.115, is amended by adding a subdivision
6.17to read:
6.18    Subd. 14. Postretirement adjustment eligibility. A retirement annuity under
6.19this section and section 352.116 is eligible for postretirement adjustments under section
6.20356.415.

6.21    Sec. 15. Minnesota Statutes 2008, section 352.12, is amended by adding a subdivision
6.22to read:
6.23    Subd. 2c. Postretirement adjustment eligibility. A survivor benefit under
6.24subdivision 2, 2a, or 2b is eligible for postretirement adjustments under section 356.415.

6.25    Sec. 16. Minnesota Statutes 2008, section 352.75, subdivision 3, is amended to read:
6.26    Subd. 3. Existing retired members and benefit recipients. As of July 1, 1978,
6.27the liability for all retirement annuities, disability benefits, survivorship annuities, and
6.28survivor of deceased active employee benefits paid or payable by the former Metropolitan
6.29Transit Commission-Transit Operating Division employees retirement fund is transferred
6.30to the Minnesota State Retirement System, and is no longer the liability of the former
6.31Metropolitan Transit Commission-Transit Operating Division employees retirement
7.1fund. The required reserves for retirement annuities, disability benefits, and optional
7.2joint and survivor annuities in effect on June 30, 1978, and the required reserves for the
7.3increase in annuities and benefits provided under subdivision 6 must be determined using
7.4a five percent interest assumption and the applicable Minnesota State Retirement System
7.5mortality table and shall be transferred by the Minnesota State Retirement System to
7.6the Minnesota postretirement investment fund on July 1, 1978, but shall be considered
7.7transferred as of June 30, 1978. The annuity or benefit amount in effect on July 1, 1978,
7.8including the increase granted under subdivision 6, must be used for adjustments made
7.9under section 11A.18. For persons receiving benefits as survivors of deceased former
7.10retirement annuitants, the benefits must be considered as having commenced on the date
7.11on which the retirement annuitant began receiving the retirement annuity.

7.12    Sec. 17. Minnesota Statutes 2008, section 352.75, subdivision 4, is amended to read:
7.13    Subd. 4. Existing deferred retirees. Any former member of the former
7.14Metropolitan Transit Commission-Transit Operating Division employees retirement
7.15fund is entitled to a retirement annuity from the Minnesota State Retirement System if
7.16the employee:
7.17(1) is not an active employee of the Transit Operating Division of the former
7.18Metropolitan Transit Commission on July 1, 1978; (2) has at least ten years of active
7.19continuous service with the Transit Operating Division of the former Metropolitan
7.20Transit Commission as defined by the former Metropolitan Transit Commission-Transit
7.21Operating Division employees retirement plan document in effect on December 31, 1977;
7.22(3) has not received a refund of contributions; (4) has not retired or begun receiving an
7.23annuity or benefit from the former Metropolitan Transit Commission-Transit Operating
7.24Division employees retirement fund; (5) is at least 55 years old; and (6) submits a valid
7.25application for a retirement annuity to the executive director of the Minnesota State
7.26Retirement System.
7.27The person is entitled to a retirement annuity in an amount equal to the normal
7.28old age retirement allowance calculated under the former Metropolitan Transit
7.29Commission-Transit Operating Division employees retirement fund plan document in
7.30effect on December 31, 1977, subject to an early retirement reduction or adjustment in
7.31amount on account of retirement before the normal retirement age specified in that former
7.32Metropolitan Transit Commission-Transit Operating Division employees retirement fund
7.33plan document.
7.34The deferred retirement annuity of any person to whom this subdivision applies
7.35must be augmented. The required reserves applicable to the deferred retirement annuity,
8.1determined as of the date the allowance begins to accrue using an appropriate mortality
8.2table and an interest assumption of five percent, must be augmented by interest at the rate
8.3of five percent per year compounded annually from January 1, 1978, to January 1, 1981,
8.4and three percent per year compounded annually from January 1, 1981, to the first day
8.5of the month in which the annuity begins to accrue. Upon After the commencement of
8.6the retirement annuity, the required reserves for the annuity must be transferred to the
8.7Minnesota postretirement investment fund in accordance with subdivision 2 and section
8.8352.119 is eligible for postretirement adjustments under section 356.415. On applying
8.9for a retirement annuity under this subdivision, the person is entitled to elect a joint and
8.10survivor optional annuity under section 352.116, subdivision 3.

8.11    Sec. 18. Minnesota Statutes 2008, section 352.911, subdivision 3, is amended to read:
8.12    Subd. 3. Investment. The correctional employees retirement fund shall participate
8.13in the Minnesota postretirement investment fund and in that fund there shall be deposited
8.14the amounts provided in section 352.119. The balance of any assets of the fund shall
8.15must be deposited in the Minnesota combined investment funds as provided in section
8.1611A.14 , if applicable, or otherwise under section 11A.23.

8.17    Sec. 19. Minnesota Statutes 2008, section 352.911, subdivision 5, is amended to read:
8.18    Subd. 5. Fund disbursement restricted. The correctional employees retirement
8.19fund and its share of participation in the Minnesota postretirement investment fund shall
8.20must be disbursed only for the purposes provided for in the applicable provisions in this
8.21chapter. The proportional share of the expenses of the system and any benefits provided
8.22in sections section 352.90 to 352.951, other than benefits payable from the Minnesota
8.23postretirement investment fund, shall must be paid from the correctional employees
8.24retirement fund. The retirement allowances, retirement annuities, the disability benefits,
8.25the survivorship benefits, and any refunds of accumulated deductions shall must be paid
8.26only from the correctional employees retirement fund after those needs have been certified
8.27by the executive director and the amounts withdrawn from the share of participation in the
8.28Minnesota postretirement fund under section 11A.18. The amounts necessary to make the
8.29payments from the correctional employees retirement fund and the participation in the
8.30Minnesota postretirement investment fund are annually appropriated from those funds
8.31that fund for those purposes.

8.32    Sec. 20. Minnesota Statutes 2008, section 352.93, is amended by adding a subdivision
8.33to read:
9.1    Subd. 7. Postretirement adjustment eligibility. A retirement annuity under this
9.2section is eligible for postretirement adjustments under section 356.415.

9.3    Sec. 21. Minnesota Statutes 2008, section 352.931, is amended by adding a subdivision
9.4to read:
9.5    Subd. 6. Postretirement adjustment eligibility. A survivor benefit under this
9.6section is eligible for postretirement adjustments under section 356.415.

9.7    Sec. 22. Minnesota Statutes 2008, section 352.95, is amended by adding a subdivision
9.8to read:
9.9    Subd. 8. Postretirement adjustment eligibility. A disability benefit under this
9.10section is eligible for postretirement adjustments under section 356.415.

9.11    Sec. 23. Minnesota Statutes 2008, section 352B.02, subdivision 1d, is amended to read:
9.12    Subd. 1d. Fund revenue and expenses. The amounts provided for in this section
9.13must be credited to the State Patrol retirement fund. All money received must be deposited
9.14by the commissioner of finance in the State Patrol retirement fund. The fund must be used
9.15to pay the administrative expenses of the retirement fund, and the benefits and annuities
9.16provided in this chapter. Appropriate amounts shall be transferred to or withdrawn from
9.17the Minnesota postretirement investment fund as provided in section 352B.26.

9.18    Sec. 24. Minnesota Statutes 2008, section 352B.08, is amended by adding a
9.19subdivision to read:
9.20    Subd. 4. Postretirement adjustment eligibility. A retirement annuity under this
9.21section is eligible for postretirement adjustments under section 356.415.

9.22    Sec. 25. Minnesota Statutes 2008, section 352B.10, is amended by adding a
9.23subdivision to read:
9.24    Subd. 6. Postretirement adjustment eligibility. A disability benefit under this
9.25section is eligible for postretirement adjustments under section 356.415.

9.26    Sec. 26. Minnesota Statutes 2008, section 352B.11, is amended by adding a subdivision
9.27to read:
9.28    Subd. 2e. Postretirement adjustment eligibility. A survivor benefit under
9.29subdivision 2, 2b, or 2c is eligible for postretirement adjustments under section 356.415.

10.1    Sec. 27. Minnesota Statutes 2008, section 352C.10, is amended to read:
10.2352C.10 BENEFIT ADJUSTMENTS.
10.3    Retirement allowances payable to retired constitutional officers and surviving spouse
10.4benefits payable must be adjusted in the same manner, at the same times and in the same
10.5amounts as are benefits payable from the Minnesota postretirement investment fund to
10.6retirees of a participating public pension fund under section 356.415.

10.7    Sec. 28. Minnesota Statutes 2008, section 352D.06, subdivision 1, is amended to read:
10.8    Subdivision 1. Annuity; reserves. When a participant attains at least age 55,
10.9terminates from covered service, and applies for a retirement annuity, the cash value of the
10.10participant's shares shall must be transferred to the Minnesota postretirement investment
10.11general state employees retirement fund and must be used to provide an annuity for the
10.12retired employee based upon the participant's age when the benefit begins to accrue
10.13according to the reserve basis used by the general state employees retirement plan in
10.14determining pensions and reserves. The annuity under this subdivision is eligible for
10.15postretirement adjustments under section 356.415.

10.16    Sec. 29. Minnesota Statutes 2008, section 352D.065, is amended by adding a
10.17subdivision to read:
10.18    Subd. 3a. Postretirement adjustment eligibility. A disability benefit under this
10.19section is eligible for postretirement adjustments under section 356.415.

10.20    Sec. 30. Minnesota Statutes 2008, section 352D.075, is amended by adding a
10.21subdivision to read:
10.22    Subd. 2b. Postretirement adjustment eligibility. A survivor benefit under this
10.23section is eligible for postretirement adjustments under section 356.415.

10.24    Sec. 31. Minnesota Statutes 2008, section 353.06, is amended to read:
10.25353.06 STATE BOARD OF INVESTMENT TO INVEST FUNDS.
10.26The executive director shall from time to time certify to the State Board of
10.27Investment for investment such portions of the retirement fund as in its judgment may not
10.28be required for immediate use. Assets from the public employees retirement fund shall
10.29be transferred to the Minnesota postretirement investment fund as provided in section
10.3011A.18. The State Board of Investment shall thereupon invest and reinvest the sum so
10.31certified, or transferred, in such securities as are duly authorized as legal investments for
10.32state employees retirement fund and shall have authority to sell, convey, and exchange
11.1such securities and invest and reinvest the securities when it deems it desirable to do so
11.2and shall sell securities upon request of the board of trustees when such funds are needed
11.3for its purposes. All of the provisions regarding accounting procedures and restrictions
11.4and conditions for the purchase and sale of securities for the state employees retirement
11.5fund shall under chapter 11A must apply to the accounting, purchase and sale of securities
11.6for the public employees retirement fund.

11.7    Sec. 32. Minnesota Statutes 2008, section 353.27, subdivision 1, is amended to read:
11.8    Subdivision 1. Income; disbursements. There is a special fund known as the
11.9"public employees retirement fund," the "retirement fund," or the "fund," which shall
11.10must include all the assets of the association. This fund shall must be credited with all
11.11contributions, all interest and all other income authorized by law. From this fund there
11.12is appropriated the payments authorized by this chapter in the amounts and at such time
11.13provided herein, including the expenses of administering the fund, and including the
11.14proper share of the Minnesota postretirement investment fund.

11.15    Sec. 33. Minnesota Statutes 2008, section 353.29, is amended by adding a subdivision
11.16to read:
11.17    Subd. 9. Postretirement adjustment eligibility. An annuity under this section or
11.18section 353.30 is eligible for postretirement adjustments under section 356.415.

11.19    Sec. 34. Minnesota Statutes 2008, section 353.31, subdivision 1b, is amended to read:
11.20    Subd. 1b. Joint and survivor option. (a) Prior to payment of a surviving spouse
11.21benefit under subdivision 1, the surviving spouse may elect to receive the 100 percent
11.22joint and survivor optional annuity under section 353.32, subdivision 1a, rather than a
11.23surviving spouse benefit.
11.24(b) If there is a dependent child or children, and the 100 percent joint and survivor
11.25optional annuity for the surviving spouse, when added to the dependent children's benefit
11.26under subdivisions 1 and 1a, exceeds an amount equal to 70 percent of the member's
11.27specified average monthly salary, the 100 percent joint and survivor annuity under section
11.28353.32, subdivision 1a , must be reduced by the amount necessary so that the total family
11.29benefit does not exceed the 70 percent maximum family benefit amount under subdivision
11.301a.
11.31(c) The 100 percent joint and survivor optional annuity must be restored to the
11.32surviving spouse, plus applicable postretirement fund adjustments under Minnesota
11.33Statutes 2008, section 356.41, through January 1, 2009, and thereafter under section
12.1356.415, as the dependent child or children become no longer dependent under section
12.2353.01, subdivision 15 .

12.3    Sec. 35. Minnesota Statutes 2008, section 353.31, is amended by adding a subdivision
12.4to read:
12.5    Subd. 12. Postretirement adjustment eligibility. A survivor benefit under
12.6subdivision 1 or 1b or section 353.32, subdivision 1a, 1b, or 1c is eligible for
12.7postretirement adjustments under section 356.415.

12.8    Sec. 36. Minnesota Statutes 2008, section 353.33, subdivision 3b, is amended to read:
12.9    Subd. 3b. Optional annuity election. A disabled member may elect to receive the
12.10normal disability benefit or an optional annuity under section 353.30, subdivision 3. The
12.11election of an optional annuity must be made prior to the commencement of payment of
12.12the disability benefit. The optional annuity must begin to accrue on the same date as
12.13provided for the disability benefit.
12.14(1) If a person who is not the spouse of a member is named as beneficiary of the
12.15joint and survivor optional annuity, the person is eligible to receive the annuity only
12.16if the spouse, on the disability application form prescribed by the executive director,
12.17permanently waives the surviving spouse benefits under sections 353.31, subdivision 1,
12.18and 353.32, subdivision 1a. If the spouse of the member refuses to permanently waive
12.19the surviving spouse coverage, the selection of a person other than the spouse of the
12.20member as a joint annuitant is invalid.
12.21(2) If the spouse of the member permanently waives survivor coverage, the
12.22dependent children, if any, continue to be eligible for survivor benefits under section
12.23353.31, subdivision 1 , including the minimum benefit in section 353.31, subdivision 1a.
12.24The designated optional annuity beneficiary may draw the monthly benefit; however, the
12.25amount payable to the dependent child or children and joint annuitant must not exceed
12.26the 70 percent maximum family benefit under section 353.31, subdivision 1a. If the
12.27maximum is exceeded, the benefit of the joint annuitant must be reduced to the amount
12.28necessary so that the total family benefit does not exceed the 70 percent maximum family
12.29benefit amount.
12.30(3) If the spouse is named as the beneficiary of the joint and survivor optional
12.31annuity, the spouse may draw the monthly benefits; however, the amount payable to
12.32the dependent child or children and the joint annuitant must not exceed the 70 percent
12.33maximum family benefit under section 353.31, subdivision 1a. If the maximum is
12.34exceeded, each dependent child will receive ten percent of the member's specified
13.1average monthly salary, and the benefit to the joint annuitant must be reduced to the
13.2amount necessary so that the total family benefit does not exceed the 70 percent maximum
13.3family benefit amount. The joint and survivor optional annuity must be restored to the
13.4surviving spouse, plus applicable postretirement adjustments under Minnesota Statutes
13.52008, section 356.41 or section 356.415, as the dependent child or children become no
13.6longer dependent under section 353.01, subdivision 15.

13.7    Sec. 37. Minnesota Statutes 2008, section 353.33, subdivision 7, is amended to read:
13.8    Subd. 7. Partial reemployment. If, following a work or non-work-related injury
13.9or illness, a disabled person who remains totally and permanently disabled as defined
13.10in section 353.01, subdivision 19, has income from employment that is not substantial
13.11gainful activity and the rate of earnings from that employment are less than the salary
13.12rate at the date of disability or the salary rate currently paid for positions similar to the
13.13employment position held by the disabled person immediately before becoming disabled,
13.14whichever is greater, the executive director shall continue the disability benefit in an
13.15amount that, when added to the earnings and any workers' compensation benefit, does not
13.16exceed the salary rate at the date of disability or the salary currently paid for positions
13.17similar to the employment position held by the disabled person immediately before
13.18becoming disabled, whichever is higher. The disability benefit under this subdivision may
13.19not exceed the disability benefit originally allowed, plus any postretirement adjustments
13.20payable after December 31, 1988, in accordance with Minnesota Statutes 2008, section
13.2111A.18, subdivision 10 , or Minnesota Statutes 2008, section 356.41, through January 1,
13.222009, and thereafter as provided in section 356.415. No deductions for the retirement fund
13.23may be taken from the salary of a disabled person who is receiving a disability benefit
13.24as provided in this subdivision.

13.25    Sec. 38. Minnesota Statutes 2008, section 353.33, is amended by adding a subdivision
13.26to read:
13.27    Subd. 13. Postretirement adjustment eligibility. A disability benefit under this
13.28section is eligible for postretirement adjustments under section 356.415.

13.29    Sec. 39. Minnesota Statutes 2008, section 353.651, is amended by adding a subdivision
13.30to read:
13.31    Subd. 5. Postretirement adjustment eligibility. An annuity under this section is
13.32eligible for postretirement adjustments under section 356.415.

14.1    Sec. 40. Minnesota Statutes 2008, section 353.656, subdivision 5a, is amended to read:
14.2    Subd. 5a. Cessation of disability benefit. (a) The association shall cease the
14.3payment of any disability benefit the first of the month following the reinstatement of a
14.4member to full time or less than full-time service in a position covered by the police
14.5and fire fund.
14.6    (b) A disability benefit paid to a disabled member of the police and fire plan, that
14.7was granted under laws in effect after June 30, 2007, terminates at the end of the month in
14.8which the member:
14.9    (1) reaches normal retirement age;
14.10    (2) if the disability benefit is payable for a 60-month period as determined under
14.11subdivisions 1 and 3, as applicable, the first of the month following the expiration of
14.12the 60-month period; or
14.13    (3) if the disabled member so chooses, the end of the month in which the member
14.14has elected to convert to an early retirement annuity under section 353.651, subdivision 4.
14.15    (c) If the police and fire plan member continues to be disabled when the disability
14.16benefit terminates under this subdivision, the member is deemed to be retired. The
14.17individual is entitled to receive a normal retirement annuity or an early retirement annuity
14.18under section 353.651, whichever is applicable, as further specified in paragraph (d)
14.19or (e). If the individual did not previously elect an optional annuity under subdivision
14.201a, paragraph (a), the individual may elect an optional annuity under subdivision 1a,
14.21paragraph (b).
14.22    (d) A member of the police and fire plan who is receiving a disability benefit under
14.23this section may, upon application, elect to receive an early retirement annuity under
14.24section 353.651, subdivision 4, at any time after attaining age 50, but must convert to a
14.25retirement annuity no later than the end of the month in which the disabled member attains
14.26normal retirement age. An early retirement annuity elected under this subdivision must be
14.27calculated on the disabled member's accrued years of service and average salary as defined
14.28in section 353.01, subdivision 17a, and when elected, the member is deemed to be retired.
14.29    (e) When an individual's benefit is recalculated as a retirement annuity under this
14.30section, the annuity must be based on clause (1) or clause (2), whichever provides the
14.31greater amount:
14.32    (1) the benefit amount at the time of reclassification, including all prior adjustments
14.33provided under Minnesota Statutes 2008, section 11A.18, through January 1, 2009, and
14.34thereafter as provided in section 356.415; or
14.35    (2) a benefit amount computed on the member's actual years of accrued allowable
14.36service credit and the law in effect at the time the disability benefit first accrued, plus any
15.1increases that would have applied since that date under section Minnesota Statutes 2008,
15.211A.18
, through January 1, 2009, and thereafter as provided in section 356.415.

15.3    Sec. 41. Minnesota Statutes 2008, section 353.656, is amended by adding a subdivision
15.4to read:
15.5    Subd. 14. Postretirement adjustment eligibility. A disability benefit under this
15.6section is eligible for postretirement adjustments under section 356.415.

15.7    Sec. 42. Minnesota Statutes 2008, section 353.657, subdivision 3a, is amended to read:
15.8    Subd. 3a. Maximum and minimum family benefits. (a) The maximum monthly
15.9benefit per family must not exceed the following percentages of the member's average
15.10monthly salary as specified in subdivision 3:
15.11    (1) 80 percent, if the member's death was a line of duty death; or
15.12    (2) 70 percent, if the member's death was not a line of duty death or occurred while
15.13the member was receiving a disability benefit that accrued before July 1, 2007.
15.14    (b) The minimum monthly benefit per family, including the joint and survivor
15.15optional annuity under subdivision 2a, and section 353.656, subdivision 1a, must not be
15.16less than the following percentage of the member's average monthly salary as specified in
15.17subdivision 3:
15.18    (1) 60 percent, if the death was a line of duty death; or
15.19    (2) 50 percent, if the death was not a line of duty death or occurred while the member
15.20was receiving a disability benefit that accrued before July 1, 2007.
15.21    (c) If the maximum under paragraph (a) is exceeded, the monthly benefit of the
15.22joint annuitant must be reduced to the amount necessary so that the total family benefit
15.23does not exceed the applicable maximum. The joint and survivor optional annuity must
15.24be restored, plus applicable postretirement adjustments under Minnesota Statutes 2008,
15.25section 356.41 or section 356.415, as the dependent child or children become no longer
15.26dependent under section 353.01, subdivision 15.

15.27    Sec. 43. Minnesota Statutes 2008, section 353.657, is amended by adding a subdivision
15.28to read:
15.29    Subd. 5. Postretirement adjustment eligibility. A survivor benefit under this
15.30section is eligible for postretirement adjustments under section 356.415.

15.31    Sec. 44. Minnesota Statutes 2008, section 353.665, subdivision 3, is amended to read:
16.1    Subd. 3. Transfer of assets. Unless the municipality has elected to retain the
16.2consolidation account under subdivision 1, paragraph (b), the assets of the former local
16.3police or fire consolidation account must be transferred and upon transfer, the actuarial
16.4value of the assets of a former local police or fire consolidation account less an amount
16.5equal to the residual assets as determined under subdivision 7, paragraph (f), are the
16.6assets of the public employees police and fire fund as of July 1, 1999. The participation
16.7of a consolidation account in the Minnesota postretirement investment fund becomes
16.8part of the participation of the public employees police and fire fund in the Minnesota
16.9postretirement investment fund. The remaining assets, excluding the amounts for
16.10distribution under subdivision 7, paragraph (f), become an asset of the public employees
16.11police and fire fund. The public employees police and fire fund also must be credited as an
16.12asset with the amount of receivable assets under subdivision 7, paragraph (e).

16.13    Sec. 45. Minnesota Statutes 2008, section 353A.02, subdivision 14, is amended to read:
16.14    Subd. 14. Ineligible investments. "Ineligible investments" means any investment
16.15security or other asset held by the relief association at or after the initiation of the
16.16consolidation procedure which does not comply with the applicable requirements or
16.17limitations of sections 11A.09, 11A.18, 11A.23, and 11A.24.

16.18    Sec. 46. Minnesota Statutes 2008, section 353A.02, subdivision 23, is amended to read:
16.19    Subd. 23. Postretirement adjustment. "Postretirement adjustment" means any
16.20periodic or regular procedure for modifying the amount of a retirement annuity, service
16.21pension, disability benefit, or survivor benefit after the start of that annuity, pension,
16.22or benefit, including but not limited to modifications of amounts from the Minnesota
16.23postretirement investment fund under section 11A.18, subdivision 9 356.415, or any
16.24benefit escalation or benefit amount modification based on changes in the salaries payable
16.25to active police officers or salaried firefighters or changes in a cost-of-living index as
16.26provided for in the existing relief association benefit plan.

16.27    Sec. 47. Minnesota Statutes 2008, section 353A.05, subdivision 1, is amended to read:
16.28    Subdivision 1. Commission actions. (a) Upon initiation of consolidation as
16.29provided in section 353A.04, the executive director of the commission shall direct the
16.30actuary retained under section 356.214 to undertake the preparation of the actuarial
16.31calculations necessary to complete the consolidation.
16.32(b) These actuarial calculations shall include for each active member, each deferred
16.33former member, each retired member, and each current beneficiary the computation of the
17.1present value of future benefits, the future normal costs, if any, and the actuarial accrued
17.2liability on the basis of the existing relief association benefit plan and on the basis of the
17.3public employees police and fire fund benefit plan. These actuarial calculations shall also
17.4include for the total active, deferred, retired, and benefit recipient membership the sum
17.5of the present value of future benefits, the future normal costs, if any, and the actuarial
17.6accrued liability on the basis of the existing relief association benefit plan, on the basis of
17.7the public employees police and fire fund benefit plan, and on the basis of the benefit plan
17.8which produced the largest present value of future benefits for each person. The actuarial
17.9calculations shall be prepared using the entry age actuarial cost method for all components
17.10of the benefit plan and using the actuarial assumptions applicable to the fund for the
17.11most recent actuarial valuation prepared under section 356.215, except that the actuarial
17.12calculations on the basis of the existing relief association benefit plan shall be prepared
17.13using an interest rate actuarial assumption during the postretirement period which is in
17.14the same amount as the interest rate actuarial assumption applicable to the preretirement
17.15period. The actuarial calculations shall include the computation of the present value of the
17.16initial postretirement adjustment anticipated by the executive director of the state board as
17.17payable after the effective date of the consolidation from the Minnesota postretirement
17.18investment fund under section 11A.18 356.415.
17.19(c) The chief administrative officer of the relief association shall, upon request,
17.20provide in a timely manner to the executive director of the commission and to the actuary
17.21retained under section 356.214 the most current available information or documents,
17.22whichever applies, regarding the demographics of the active, deferred, retired, and
17.23benefit recipient membership of the relief association, the financial condition of the relief
17.24association, and the existing benefit plan of the relief association.
17.25(d) Upon completion of the actuarial calculations required by this subdivision, the
17.26actuary retained under section 356.214 shall issue a report in the form of an appropriate
17.27summary of the actuarial calculations and shall provide a copy of that report to the
17.28executive director of the commission, the executive director of the Public Employees
17.29Retirement Association, the chief administrative officer of the relief association, the chief
17.30administrative officer of the municipality in which the relief association is located, and
17.31the state auditor.

17.32    Sec. 48. Minnesota Statutes 2008, section 353A.05, subdivision 2, is amended to read:
17.33    Subd. 2. State board actions. (a) Upon approval of consolidation by the
17.34membership as provided in section 353A.04, the executive director of the state board
17.35shall review the existing investment portfolio of the relief association for compliance
18.1with the requirements and limitations set forth in sections 11A.09, 11A.14, 11A.18,
18.211A.23 , and 11A.24 and for appropriateness for retention in the light of the established
18.3investment objectives of the state board. The executive director of the state board, using
18.4any reporting service retained by the state board, shall determine the approximate market
18.5value of the existing assets of the relief association upon the effective date of consolidation
18.6and the transfer of assets from the relief association to the individual relief association
18.7consolidation accounts at market value.
18.8(b) The state board may require that the relief association liquidate any investment
18.9security or other item of value which is determined to be ineligible or inappropriate for
18.10retention by the state board. The liquidation shall occur before the effective date of
18.11consolidation and transfer of assets.
18.12(c) If requested to do so by the chief administrative officer of the relief association
18.13or of the municipality, the state board shall provide advice on the means and procedures
18.14available to liquidate investment securities and other assets determined to be ineligible or
18.15inappropriate.

18.16    Sec. 49. Minnesota Statutes 2008, section 353A.08, subdivision 1, is amended to read:
18.17    Subdivision 1. Election of coverage by current retirees. (a) A person who is
18.18receiving a service pension, disability benefit, or survivor benefit is eligible to elect benefit
18.19coverage provided under the relevant provisions of the public employees police and fire
18.20fund benefit plan or to retain benefit coverage provided under the relief association benefit
18.21plan in effect on the effective date of the consolidation. The relevant provisions of the
18.22public employees police and fire fund benefit plan for the person electing that benefit
18.23coverage are limited to participation in the Minnesota postretirement investment fund for
18.24any future postretirement adjustments under section 356.415 based on the amount of
18.25the benefit or pension payable on December 31, if December 31 is the effective date of
18.26consolidation, or on the December 1 following the effective date of the consolidation, if
18.27other than December 31. The survivor benefit payable on behalf of any service pension
18.28or disability benefit recipient who elects benefit coverage under the public employees
18.29police and fire fund benefit plan must be calculated under the relief association benefit
18.30plan and is subject to participation in the Minnesota postretirement investment fund for
18.31any future postretirement adjustments under section 356.415 based on the amount of the
18.32survivor benefit payable.
18.33(b) A survivor benefit calculated under the relief association benefit plan which is first
18.34payable after June 30, 1997, to the surviving spouse of a retired member of a consolidation
18.35account who, before July 1, 1997, chose to participate in the Minnesota postretirement
19.1investment fund adjustments as provided under this subdivision section 356.415 must be
19.2increased on the effective date of the survivor benefit on an actuarial equivalent basis to
19.3reflect the change in the postretirement interest rate actuarial assumption under section
19.4356.215, subdivision 8 , from five percent to six percent under a calculation procedure and
19.5tables adopted by the board and approved by the actuary retained under section 356.214.
19.6(c) By electing the public employees police and fire fund benefit plan, a current
19.7service pension or disability benefit recipient who, as of the first January 1 occurring after
19.8the effective date of consolidation, has been receiving the pension or benefit for at least
19.9seven months, or any survivor benefit recipient who, as of the first January 1 occurring
19.10after the effective date of consolidation, has been receiving the benefit on the person's own
19.11behalf or in combination with a prior applicable service pension or disability benefit for at
19.12least seven months is eligible to receive a partial adjustment payable from the Minnesota
19.13postretirement investment fund under section 11A.18, subdivision 9 356.415.
19.14(d) The election by any pension or benefit recipient must be made on or before
19.15the deadline established by the board of the Public Employees Retirement Association
19.16in a manner that recognizes the number of persons eligible to make the election and the
19.17anticipated time required to conduct any required benefit counseling.

19.18    Sec. 50. Minnesota Statutes 2008, section 353A.08, subdivision 3, is amended to read:
19.19    Subd. 3. Election of coverage by active members. (a) A person who is an active
19.20member of a police or fire relief association, other than a volunteer firefighter, has the
19.21option to elect benefit coverage under the relevant provisions of the public employees
19.22police and fire fund or to retain benefit coverage provided by the relief association benefit
19.23plan in effect on the effective date of consolidation. The relevant provisions of the public
19.24employee police and fire fund benefit plan for the person electing that benefit coverage
19.25are the relevant provisions of the public employee police and fire fund benefit plan
19.26applicable to retirement annuities, disability benefits, and survivor benefits, including
19.27participation in the Minnesota postretirement investment fund adjustments under section
19.28356.415, but excluding any provisions governing the purchase of credit for prior service
19.29or making payments in lieu of member contribution deductions applicable to any period
19.30which occurred before the effective date of consolidation.
19.31(b) An active member is eligible to make an election at one of the following times:
19.32(1) within six months of the effective date of consolidation;
19.33(2) between the date on which the active member attains the age of 49 years and six
19.34months and the date on which the active member attains the age of 50 years; or
20.1(3) on the date on which the active member terminates active employment for
20.2purposes of receiving a service pension or disability benefits, or within 90 days of the
20.3date the member terminates active employment and defers receipt of a service pension,
20.4whichever applies.

20.5    Sec. 51. Minnesota Statutes 2008, section 353A.081, subdivision 2, is amended to read:
20.6    Subd. 2. Election of coverage. (a) Individuals eligible under subdivision 1 may
20.7elect, on a form prescribed by the executive director of the Public Employees Retirement
20.8Association, to have survivor benefits calculated under the relevant provisions of the
20.9public employees police and fire fund benefit plan or to have survivor benefits calculated
20.10under the relief association benefit plan. The relevant provisions of the public employee
20.11police and fire fund benefit plan for the person electing that benefit coverage are the
20.12relevant provisions of the public employee police and fire fund benefit plan applicable
20.13to survivor benefits, including participation in the Minnesota postretirement investment
20.14fund adjustments under section 356.415.
20.15(b) If the election results in an increased benefit amount to the surviving spouse
20.16eligible under subdivision 1, or to eligible children if there is no surviving spouse, the
20.17increased benefit accrues as of the date on which the survivor benefits payable to the
20.18survivors from the consolidation account were first paid. The back payment of any
20.19increase in prior benefit amounts, plus any postretirement adjustments payable under
20.20section 356.41 356.415, or any increase payable under the local relief association bylaws
20.21is payable as soon as practicable after the effective date of the election.

20.22    Sec. 52. Minnesota Statutes 2008, section 353A.09, subdivision 1, is amended to read:
20.23    Subdivision 1. Establishment of consolidation accounts. (a) The board of trustees
20.24of the Public Employees Retirement Association shall establish a separate consolidation
20.25account for each local relief association of a municipality that consolidates with the Public
20.26Employees Retirement Association. The association shall credit to the consolidation
20.27account the assets of the individual consolidating local relief association upon transfer,
20.28member contributions received after consolidation under subdivision 4, municipal
20.29contributions received after consolidation under subdivision 5, and a proportionate share
20.30of any investment income earned after consolidation. From the consolidation account,
20.31the association shall pay for the transfer of any required reserves to the Minnesota
20.32postretirement investment fund on account of persons electing the type of benefit coverage
20.33provided by the public employees police and fire fund under subdivisions 2 and 3 and
20.34section 353.271, subdivision 2, the pension and benefit amounts on account of persons
21.1electing coverage by the relief association benefit plan under section 353A.08, the benefit
21.2amounts not payable from the Minnesota postretirement investment fund on account of
21.3persons electing the type of benefit coverage provided by the public employees police and
21.4fire fund under section 353A.08, and any direct administrative expenses related to the
21.5consolidation account, and the proportional share of the general administrative expenses
21.6of the association.
21.7(b) Except as otherwise provided for in this section, the liabilities and the assets
21.8of a consolidation account must be considered for all purposes to be separate from the
21.9balance of the public employees police and fire fund. The consolidation account must be
21.10subject to separate accounting, a separate actuarial valuation, and must be reported as a
21.11separate exhibit in any annual financial report or actuarial valuation report of the public
21.12employees police and fire consolidation fund, whichever applies. The executive director
21.13of the public employees retirement association shall maintain separate accounting records
21.14and balances for each consolidation account.

21.15    Sec. 53. Minnesota Statutes 2008, section 353A.10, subdivision 2, is amended to read:
21.16    Subd. 2. Collection of late contributions. In the event of a refusal by a
21.17municipality in which was located a local police or firefighters relief association which
21.18has consolidated with the fund to pay to the fund any amount or amounts due under
21.19section 353A.09, subdivisions 2 4 to 6, the executive director of the public employees
21.20retirement association may notify the Department of Revenue, the Department of Finance,
21.21and the state auditor of the refusal and commence the necessary procedure to collect the
21.22amount or amounts due from the amount of any state aid under sections 69.011 to 69.051,
21.23amortization state aid under section 423A.02, or supplemental amortization state aid under
21.24Laws 1984, chapter 564, section 48, as amended by Laws 1986, chapter 359, section 20,
21.25which is payable to the municipality or to certify the amount or amounts due to the county
21.26auditor for inclusion in the next tax levy of the municipality or for collection from other
21.27revenue available to the municipality, or both.

21.28    Sec. 54. Minnesota Statutes 2008, section 353A.10, subdivision 3, is amended to read:
21.29    Subd. 3. Levy and bonding authority. A municipality in which was located a local
21.30police or firefighters relief association that has consolidated with the fund may issue
21.31general obligation bonds of the municipality to defray all or a portion of the principal
21.32amounts specified in section 353A.09, subdivisions 2 4 to 6, or certify to the county
21.33auditor a levy in the amount necessary to defray all or a portion of the principal amount
21.34specified in section 353A.09, subdivisions 2 4 to 6, or the annual amount specified in
22.1section 353A.09, subdivisions 2 4 to 6. The municipality may pledge the full faith, credit,
22.2and taxing power of the municipality for the payment of the principal of and interest on the
22.3general obligation bonds. Any municipal bond may be issued without an election under
22.4section 475.58 and may not be included in the net debt of the municipality for purposes of
22.5any charter or statutory debt limitation, nor may any tax levy for the payment of bond
22.6principal or interest be subject to any limitation concerning rate or amount established
22.7by charter or law.

22.8    Sec. 55. Minnesota Statutes 2008, section 353E.01, subdivision 3, is amended to read:
22.9    Subd. 3. Investment. (a) The public employees local government correctional
22.10service retirement fund participates in the Minnesota postretirement investment fund.
22.11(b) The amounts provided in section 353.271 must be deposited in that fund.
22.12(c) The balance of any Assets of the public employees local government correctional
22.13service retirement fund must be deposited in the Minnesota combined investment fund as
22.14provided in section 11A.14, if applicable, or otherwise invested under section 11A.23.

22.15    Sec. 56. Minnesota Statutes 2008, section 353E.01, subdivision 5, is amended to read:
22.16    Subd. 5. Fund disbursement restricted. (a) The public employees local
22.17government correctional service retirement fund and its share of participation in the
22.18Minnesota postretirement investment fund may be disbursed only for the purposes
22.19provided for in this chapter.
22.20(b) The proportional share of the necessary and reasonable administrative expenses
22.21of the association and any benefits provided in this chapter, other than benefits payable
22.22from the Minnesota postretirement investment fund, must be paid from the public
22.23employees local government correctional service retirement fund. Retirement annuities,
22.24disability benefits, survivorship benefits, and any refunds of accumulated deductions may
22.25be paid only from the correctional service retirement fund after those needs have been
22.26certified by the executive director and any applicable amounts withdrawn from the share
22.27of participation in the Minnesota postretirement fund under section 11A.18.
22.28(c) The amounts necessary to make the payments from the public employees local
22.29government correctional service retirement fund and its participation in the Minnesota
22.30postretirement investment fund are annually appropriated from those funds for those
22.31purposes.

22.32    Sec. 57. Minnesota Statutes 2008, section 353E.04, is amended by adding a subdivision
22.33to read:
23.1    Subd. 7. Postretirement adjustment eligibility. An annuity under this section is
23.2eligible for postretirement adjustments under section 356.415.

23.3    Sec. 58. Minnesota Statutes 2008, section 353E.06, is amended by adding a subdivision
23.4to read:
23.5    Subd. 9. Postretirement adjustment eligibility. A disability benefit under this
23.6section is eligible for postretirement adjustments under section 356.415.

23.7    Sec. 59. Minnesota Statutes 2008, section 353E.07, is amended by adding a subdivision
23.8to read:
23.9    Subd. 8. Postretirement adjustment eligibility. A survivor benefit under this
23.10section is eligible for postretirement adjustments under section 356.415.

23.11    Sec. 60. Minnesota Statutes 2008, section 354.07, subdivision 4, is amended to read:
23.12    Subd. 4. Certification of funds to State Board of Investment. It shall be is
23.13the duty of the board from time to time to certify to the State Board of Investment for
23.14investment as much of the funds in its hands as shall not be needed for current purposes.
23.15Such funds that are certified as to investment in the postretirement investment fund shall
23.16include the amount as required for the total reserves needed for the purposes described
23.17in section 354.63. The State Board of Investment shall thereupon transfer such assets
23.18to the appropriate fund provided herein, in accordance with the procedure set forth in
23.19section 354.63, or invest and reinvest an amount equal to the sum so certified in such
23.20securities as are now or may hereafter be duly authorized legal investments for state
23.21employees retirement fund and all such securities so transferred or purchased shall must
23.22be deposited with the commissioner of finance. All interest from these investments shall
23.23must be credited to the appropriate funds teachers retirement fund and used for current
23.24purposes or investments, except as hereinafter provided. The State Board of Investment
23.25shall have has authority to sell, convey, and exchange such securities and invest and
23.26reinvest the funds when it deems it desirable to do so, and shall must sell securities upon
23.27request of the officers of the association when such officers determine funds are needed
23.28for its purposes. All of the provisions regarding accounting procedures and restrictions
23.29and conditions for the purchase and sale of securities for the state employees retirement
23.30fund shall under chapter 11A must apply to the accounting, purchase and sale of securities
23.31for the Teachers' Retirement Association.

23.32    Sec. 61. Minnesota Statutes 2008, section 354.33, subdivision 5, is amended to read:
24.1    Subd. 5. Retirees not eligible for federal benefits. When any person retires after
24.2July 1, 1973, who (1) has ten or more years of allowable service, and (2) does not have any
24.3retroactive Social Security coverage by reason of the person's position in the retirement
24.4system, and (3) does not qualify for federal old age and survivor primary benefits at the
24.5time of retirement, the annuity must be computed under section 354.44, subdivision 2, of
24.6the law in effect on June 30, 1969, except that accumulations after June 30, 1957, must be
24.7calculated using the same most recent mortality table approved under section 356.215,
24.8subdivision 18, and interest assumption as are used to transfer the required reserves to the
24.9Minnesota postretirement investment fund using the applicable postretirement interest rate
24.10assumption specified in section 356.215, subdivision 8.

24.11    Sec. 62. Minnesota Statutes 2008, section 354.35, is amended by adding a subdivision
24.12to read:
24.13    Subd. 3. Postretirement adjustment eligibility. An annuity under this section is
24.14eligible for postretirement adjustments under section 356.415.

24.15    Sec. 63. Minnesota Statutes 2008, section 354.42, subdivision 1a, is amended to read:
24.16    Subd. 1a. Teachers retirement fund. (a) Within the Teachers Retirement
24.17Association and the state treasury is created a special retirement fund, which must include
24.18all the assets of the Teachers Retirement Association and all revenue of the association.
24.19The fund is the continuation of the fund established under Laws 1931, chapter 406, section
24.202, notwithstanding the repeal of Minnesota Statutes 1973, section 354.42, subdivision 1,
24.21by Laws 1974, chapter 289, section 59.
24.22(b) The teachers retirement fund must be credited with all employee and employer
24.23contributions, all investment revenue and gains, and all other income authorized by law.
24.24(c) From the teachers retirement fund is appropriated the payments of annuities
24.25and benefits authorized by this chapter, the transfers to the Minnesota postretirement
24.26investment fund, and the reasonable and necessary expenses of administering the fund
24.27and the association.

24.28    Sec. 64. Minnesota Statutes 2008, section 354.44, is amended by adding a subdivision
24.29to read:
24.30    Subd. 7a. Postretirement adjustment eligibility. (a) A retirement annuity under
24.31subdivision 2 or 6 is eligible for postretirement adjustments under section 356.415.
24.32(b) Retirement annuities payable from the teachers retirement plan must not be in
24.33an amount less than the amount originally determined on the date of retirement and as
25.1adjusted on each succeeding January 1 under Minnesota Statutes 2008, section 11A.18,
25.2before January 1, 2010, and under section 356.415 after December 31, 2009.

25.3    Sec. 65. Minnesota Statutes 2008, section 354.46, is amended by adding a subdivision
25.4to read:
25.5    Subd. 7. Postretirement adjustment eligibility. A survivor benefit under
25.6subdivision 1, 2, 2a, or 2b, is eligible for postretirement adjustments under section 356.415.

25.7    Sec. 66. Minnesota Statutes 2008, section 354.48, is amended by adding a subdivision
25.8to read:
25.9    Subd. 11. Postretirement adjustment eligibility. A disability benefit under this
25.10section is eligible for postretirement adjustments under section 356.415.

25.11    Sec. 67. Minnesota Statutes 2008, section 354.55, subdivision 13, is amended to read:
25.12    Subd. 13. Pre-1969 law retirements. Any person who ceased teaching service
25.13prior to July 1, 1968, who has ten years or more of allowable service and left accumulated
25.14deductions in the fund for the purpose of receiving when eligible a retirement annuity,
25.15and retires shall must have the annuity computed in accordance with the law in effect on
25.16June 30, 1969, except that the portion of the annuity based on accumulations after June 30,
25.171957, under Minnesota Statutes 1967, section 354.44, subdivision 2, and accumulations
25.18under Minnesota Statutes 1967, section 354.33, subdivision 1, shall must be calculated
25.19using the mortality table established by the board under section 354.07, subdivision 1,
25.20and approved under section 356.215, subdivision 18, and the postretirement interest rate
25.21assumption specified in section 356.215, to transfer the required reserves to the Minnesota
25.22postretirement investment fund subdivision 8.

25.23    Sec. 68. Minnesota Statutes 2008, section 354.70, subdivision 5, is amended to read:
25.24    Subd. 5. Transfer of assets. (a) On or before June 30, 2006, the chief administrative
25.25officer of the Minneapolis Teachers Retirement Fund Association shall transfer to the
25.26Teachers Retirement Association the entire assets of the special retirement fund of the
25.27Minneapolis Teachers Retirement Fund Association. The transfer of the assets of the
25.28Minneapolis Teachers Retirement Fund Association special retirement fund must include
25.29any accounts receivable that are determined by the executive director of the State Board of
25.30Investment as reasonably capable of being collected. Legal title to account receivables that
25.31are determined by the executive director of the State Board of Investment as not reasonably
25.32capable of being collected transfers to Special School District No. 1, Minneapolis, as of
26.1the date of the determination of the executive director of the State Board of Investment.
26.2If the account receivables transferred to Special School District No. 1, Minneapolis,
26.3are subsequently recovered by the school district, the superintendent of Special School
26.4District No. 1, Minneapolis, shall transfer the recovered amount to the executive director
26.5of the Teachers Retirement Association, in cash, for deposit in the teachers retirement
26.6fund, less the reasonable expenses of the school district related to the recovery.
26.7(b) As of June 30, 2006, assets of the special retirement fund of the Minneapolis
26.8Teachers Retirement Fund Association are assets of the Teachers Retirement Association
26.9to be invested by the State Board of Investment pursuant to the provisions of section
26.10354.07 , subdivision 4. The Teachers Retirement Association is the successor in interest to
26.11all claims which the Minneapolis Teachers Retirement Fund Association may have or may
26.12assert against any person and is the successor in interest to all claims which could have
26.13been asserted against the former Minneapolis Teachers Retirement Fund Association,
26.14subject to the following exceptions and qualifications:
26.15(1) the Teachers Retirement Association is not liable for any claim against the
26.16Minneapolis Teachers Retirement Fund Association, its former board or board members,
26.17which is founded upon a claim of breach of fiduciary duty, where the act or acts
26.18constituting the claimed breach were not done in good faith;
26.19 (2) the Teachers Retirement Association may assert any applicable defense to any
26.20claim in any judicial or administrative proceeding that the former Minneapolis Teachers
26.21Retirement Fund Association or its board would otherwise have been entitled to assert;
26.22(3) the Teachers Retirement Association may assert any applicable defense that the
26.23Teachers Retirement Association may assert in its capacity as a statewide agency; and
26.24(4) the Teachers Retirement Association shall indemnify any former fiduciary of the
26.25Minneapolis Teachers Retirement Fund Association consistent with the provisions of the
26.26Public Pension Fiduciary Responsibility Act, in section 356A.11.
26.27(c) From the assets of the former Minneapolis Teachers Retirement Fund Association
26.28transferred to the Teachers Retirement Association, an amount equal to the percentage
26.29figure that represents the ratio between the market value of the Minnesota postretirement
26.30investment fund as of June 30, 2006, and the required reserves of the Minnesota
26.31postretirement investment fund as of June 30, 2006, applied to the present value of
26.32future benefits payable to annuitants of the former Minneapolis Teachers Retirement
26.33Fund Association as of June 30, 2006, including any postretirement adjustment from the
26.34Minnesota postretirement investment fund expected to be payable on January 1, 2007,
26.35must be transferred to the Minnesota postretirement investment fund. The executive
26.36director of the State Board of Investment shall estimate this ratio at the time of the
27.1transfer. By January 1, 2007, after all necessary financial information becomes available
27.2to determine the actual funded ratio of the Minnesota postretirement investment fund, the
27.3postretirement investment fund must refund to the Teachers Retirement Association any
27.4excess assets or the Teachers Retirement Association must contribute any deficiency to
27.5the Minnesota postretirement investment fund with interest under Minnesota Statutes
27.62008, section 11A.18, subdivision 6. The balance of the assets of the former Minneapolis
27.7Teachers Retirement Fund Association after the transfer to the Minnesota postretirement
27.8investment fund must be credited to the Teachers Retirement Association.
27.9(d) If the assets transferred by the Minneapolis Teachers Retirement Fund
27.10Association to the Teachers Retirement Association are insufficient to meet its obligation
27.11to the Minnesota postretirement investment fund, additional assets must be transferred by
27.12the executive director of the Teachers Retirement Association to meet the amount required.

27.13    Sec. 69. Minnesota Statutes 2008, section 354.70, subdivision 6, is amended to read:
27.14    Subd. 6. Benefit calculation. (a) For every deferred, inactive, disabled, and retired
27.15member of the Minneapolis Teachers Retirement Fund Association transferred under
27.16subdivision 1, and the survivors of these members, annuities or benefits earned before
27.17the date of the transfer, other than future postretirement adjustments, must be calculated
27.18and paid by the Teachers Retirement Association under the laws, articles of incorporation,
27.19and bylaws of the former Minneapolis Teachers Retirement Fund Association that were
27.20in effect relative to the person on the date of the person's termination of active service
27.21covered by the former Minneapolis Teachers Retirement Fund Association.
27.22(b) Former Minneapolis Teachers Retirement Fund Association members who
27.23retired before July 1, 2006, must receive postretirement adjustments after December 31,
27.242006, only as provided in Minnesota Statutes 2008, section 11A.18 or section 356.415. All
27.25other benefit recipients of the former Minneapolis Teachers Retirement Fund Association
27.26must receive postretirement adjustments after December 31, 2006, only as provided in
27.27section 356.41 356.415.
27.28(c) This consolidation does not impair or diminish benefits for an active, deferred,
27.29or retired member or a survivor of an active, deferred, or retired member under the
27.30former Minneapolis Teachers Retirement Fund Association in existence at the time of the
27.31consolidation, except that any future guaranteed or investment-related postretirement
27.32adjustments must be paid after July 1, 2006, in accordance with paragraph (b), and all
27.33benefits based on service on or after July 1, 2006, must be determined only by laws
27.34governing the Teachers Retirement Association.

28.1    Sec. 70. Minnesota Statutes 2008, section 356.215, subdivision 1, is amended to read:
28.2    Subdivision 1. Definitions. (a) For the purposes of sections 3.85 and 356.20 to
28.3356.23 , each of the terms in the following paragraphs has the meaning given.
28.4    (b) "Actuarial valuation" means a set of calculations prepared by an actuary retained
28.5under section 356.214 if so required under section 3.85, or otherwise, by an approved
28.6actuary, to determine the normal cost and the accrued actuarial liabilities of a benefit
28.7plan, according to the entry age actuarial cost method and based upon stated assumptions
28.8including, but not limited to rates of interest, mortality, salary increase, disability,
28.9withdrawal, and retirement and to determine the payment necessary to amortize over a
28.10stated period any unfunded accrued actuarial liability disclosed as a result of the actuarial
28.11valuation of the benefit plan.
28.12    (c) "Approved actuary" means a person who is regularly engaged in the business of
28.13providing actuarial services and who is a fellow in the Society of Actuaries.
28.14    (d) "Entry age actuarial cost method" means an actuarial cost method under which
28.15the actuarial present value of the projected benefits of each individual currently covered
28.16by the benefit plan and included in the actuarial valuation is allocated on a level basis over
28.17the service of the individual, if the benefit plan is governed by section 69.773, or over the
28.18earnings of the individual, if the benefit plan is governed by any other law, between the
28.19entry age and the assumed exit age, with the portion of the actuarial present value which is
28.20allocated to the valuation year to be the normal cost and the portion of the actuarial present
28.21value not provided for at the valuation date by the actuarial present value of future normal
28.22costs to be the actuarial accrued liability, with aggregation in the calculation process to be
28.23the sum of the calculated result for each covered individual and with recognition given to
28.24any different benefit formulas which may apply to various periods of service.
28.25    (e) "Experience study" means a report providing experience data and an actuarial
28.26analysis of the adequacy of the actuarial assumptions on which actuarial valuations are
28.27based.
28.28    (f) "Actuarial value of assets" means:
28.29(1) For the July 1, 2009, actuarial valuation, the market value of all assets as of
28.30the preceding June 30, 2009, reduced by:
28.31    (1) (i) 20 percent of the difference between the actual net change in the market value
28.32of assets other than the Minnesota postretirement investment fund between the June 30
28.33that occurred three years earlier, 2006, and the June 30 that occurred four years earlier,
28.342005, and the computed increase in the market value of assets other than the Minnesota
28.35postretirement investment fund over that fiscal year period if the assets had increased at
28.36the percentage preretirement interest rate assumption used in the actuarial valuation for
29.1the July 1 that occurred four years earlier earned a rate of return on assets equal to the
29.2annual percentage preretirement interest rate assumption used in the actuarial valuation
29.3for July 1, 2005;
29.4    (2) (ii) 40 percent of the difference between the actual net change in the market
29.5value of assets other than the Minnesota postretirement investment fund between the
29.6June 30 that occurred two years earlier, 2007, and the June 30 that occurred three years
29.7earlier, 2006, and the computed increase in the market value of assets other than the
29.8Minnesota postretirement investment fund over that fiscal year period if the assets had
29.9increased at the percentage preretirement interest rate assumption used in the actuarial
29.10valuation for the July 1 that occurred three years earlier earned a rate of return on assets
29.11equal to the annual percentage preretirement interest rate assumption used in the actuarial
29.12valuation for July 1, 2006;
29.13    (3) (iii) 60 percent of the difference between the actual net change in the market
29.14value of assets other than the Minnesota postretirement investment fund between the
29.15June 30 that occurred one year earlier, 2008, and the June 30 that occurred two years
29.16earlier, 2007, and the computed increase in the market value of assets other than the
29.17Minnesota postretirement investment fund over that fiscal year period if the assets had
29.18increased at the percentage preretirement interest rate assumption used in the actuarial
29.19valuation for the July 1 that occurred two years earlier earned a rate of return on assets
29.20equal to the annual percentage preretirement interest rate assumption used in the actuarial
29.21valuation for July 1, 2007; and
29.22    (4) (iv) 80 percent of the difference between the actual net change in the market
29.23value of assets other than the Minnesota postretirement investment fund between the
29.24immediately prior June 30, 2009, and the June 30 that occurred one year earlier, 2008,
29.25and the computed increase in the market value of assets other than the Minnesota
29.26postretirement investment fund over that fiscal year period if the assets had increased at
29.27the percentage preretirement interest rate assumption used in the actuarial valuation for
29.28the July 1 that occurred one year earlier. earned a rate of return on assets equal to the
29.29annual percentage preretirement interest rate assumption used in the actuarial valuation
29.30for July 1, 2008; and
29.31(v) if applicable, 80 percent of the difference between the actual net change in the
29.32market value of the Minnesota postretirement investment fund between June 30, 2009,
29.33and June 30, 2008, and the computed increase in the market value of assets over that fiscal
29.34year period if the assets had increased at 8.5 percent annually.
29.35(2) For the July 1, 2010, actuarial valuation, the market value of all assets as of
29.36June 30, 2010, reduced by:
30.1(i) 20 percent of the difference between the actual net change in the market value of
30.2assets other than the Minnesota postretirement investment fund between June 30, 2007,
30.3and June 30, 2006, and the computed increase in the market value of assets other than the
30.4Minnesota postretirement investment fund over that fiscal year period if the assets had
30.5earned a rate of return on assets equal to the annual percentage preretirement interest rate
30.6assumption used in the actuarial valuation for July 1, 2006;
30.7(ii) 40 percent of the difference between the actual net change in the market value of
30.8assets other than the Minnesota postretirement investment fund between June 30, 2008,
30.9and June 30, 2007, and the computed increase in the market value of assets other than the
30.10Minnesota postretirement investment fund over that fiscal year period if the assets had
30.11earned a rate of return on assets equal to the annual percentage preretirement interest rate
30.12assumption used in the actuarial valuation for July 1, 2007;
30.13(iii) 60 percent of the difference between the actual net change in the market value
30.14of assets other than the Minnesota postretirement investment fund between June 30, 2009,
30.15and June 30, 2008, and the computed increase in the market value of assets other than the
30.16Minnesota postretirement investment fund over that fiscal year period if the assets had
30.17earned a rate of return on assets equal to the annual percentage preretirement interest rate
30.18assumption used in the actuarial valuation for July 1, 2008;
30.19(iv) 80 percent of the difference between the actual net change in the market value of
30.20total assets between June 30, 2010, and June 30, 2009, and the computed increase in the
30.21market value of total assets over that fiscal year period if the assets had earned a rate of
30.22return on assets equal to the annual percentage preretirement interest rate assumption used
30.23in the actuarial valuation for July 1, 2009; and
30.24(v) if applicable, 60 percent of the difference between the actual net change in the
30.25market value of the Minnesota postretirement investment fund between June 30, 2009,
30.26and June 30, 2008, and the computed increase in the market value of assets over that fiscal
30.27year period if the assets had increased at 8.5 percent annually.
30.28(3) For the July 1, 2011, actuarial valuation, the market value of all assets as of
30.29June 30, 2011, reduced by:
30.30(i) 20 percent of the difference between the actual net change in the market value of
30.31assets other than the Minnesota postretirement investment fund between June 30, 2008,
30.32and June 30, 2007, and the computed increase in the market value of assets other than the
30.33Minnesota postretirement investment fund over that fiscal year period if the assets had
30.34earned a rate of return on assets equal to the annual percentage preretirement interest rate
30.35assumption used in the actuarial valuation for July 1, 2007;
31.1(ii) 40 percent of the difference between the actual net change in the market value of
31.2assets other than the Minnesota postretirement investment fund between June 30, 2009,
31.3and June 30, 2008, and the computed increase in the market value of assets other than the
31.4Minnesota postretirement investment fund over that fiscal year period if the assets had
31.5earned a rate of return on assets equal to the annual percentage preretirement interest rate
31.6assumption used in the actuarial valuation for July 1, 2008;
31.7(iii) 60 percent of the difference between the actual net change in the market value
31.8of the total assets between June 30, 2010, and June 30, 2009, and the computed increase in
31.9the market value of the total assets over that fiscal year period if the assets had earned
31.10a rate of return on assets equal to the annual percentage preretirement interest rate
31.11assumption used in the actuarial valuation for July 1, 2009;
31.12(iv) 80 percent of the difference between the actual net change in the market value of
31.13total assets between June 30, 2011, and June 30, 2010, and the computed increase in the
31.14market value of total assets over that fiscal year period if the assets had earned a rate of
31.15return on assets equal to the annual percentage preretirement interest rate assumption used
31.16in the actuarial valuation for July 1, 2010; and
31.17(v) if applicable, 40 percent of the difference between the actual net change in the
31.18market value of the Minnesota postretirement investment fund between June 30, 2009,
31.19and June 30, 2008, and the computed increase in the market value of assets over that fiscal
31.20year period if the assets had increased at 8.5 percent annually.
31.21(4) For the July 1, 2012, actuarial valuation, the market value of all assets as of
31.22June 30, 2012, reduced by:
31.23(i) 20 percent of the difference between the actual net change in the market value of
31.24assets other than the Minnesota postretirement investment fund between June 30, 2009,
31.25and June 30, 2008, and the computed increase in the market value of assets other than the
31.26Minnesota postretirement investment fund over that fiscal year period if the assets had
31.27earned a rate of return on assets equal to the annual percentage preretirement interest rate
31.28assumption used in the actuarial valuation for July 1, 2008;
31.29(ii) 40 percent of the difference between the actual net change in the market value of
31.30total assets between June 30, 2010, and June 30, 2009, and the computed increase in the
31.31market value of total assets over that fiscal year period if the assets had earned a rate of
31.32return on assets equal to the annual percentage preretirement interest rate assumption used
31.33in the actuarial valuation for July 1, 2009;
31.34(iii) 60 percent of the difference between the actual net change in the market value
31.35of total assets between June 30, 2011, and June 30, 2010, and the computed increase in the
31.36market value of total assets over that fiscal year period if the assets had earned a rate of
32.1return on assets equal to the annual percentage preretirement interest rate assumption used
32.2in the actuarial valuation for July 1, 2010;
32.3(iv) 80 percent of the difference between the actual net change in the market value of
32.4total assets between June 30, 2012, and June 30, 2011, and the computed increase in the
32.5market value of total assets over that fiscal year period if the assets had earned a rate of
32.6return on assets equal to the annual percentage preretirement interest rate assumption used
32.7in the actuarial valuation for July 1, 2011; and
32.8(v) if applicable, 20 percent of the difference between the actual net change in the
32.9market value of the Minnesota postretirement investment fund between June 30, 2009,
32.10and June 30, 2008, and the computed increase in the market value of assets over that fiscal
32.11year period if the assets had increased at 8.5 percent annually.
32.12(5) For the July 1, 2013, and following actuarial valuations, the market value of all
32.13assets as of the preceding June 30, reduced by:
32.14(i) 20 percent of the difference between the actual net change in the market value
32.15of total assets between the June 30 that occurred three years earlier and the June 30 that
32.16occurred four years earlier and the computed increase in the market value of total assets
32.17over that fiscal year period if the assets had earned a rate of return on assets equal to the
32.18annual percentage preretirement interest rate assumption used in the actuarial valuation
32.19for the July 1 that occurred four years earlier;
32.20(ii) 40 percent of the difference between the actual net change in the market value
32.21of total assets between the June 30 that occurred two years earlier and the June 30 that
32.22occurred three years earlier and the computed increase in the market value of total assets
32.23over that fiscal year period if the assets had earned a rate of return on assets equal to the
32.24annual percentage preretirement interest rate assumption used in the actuarial valuation
32.25for the July 1 that occurred three years earlier;
32.26(iii) 60 percent of the difference between the actual net change in the market value
32.27of total assets between the June 30 that occurred one year earlier and the June 30 that
32.28occurred two years earlier and the computed increase in the market value of total assets
32.29over that fiscal year period if the assets had earned a rate of return on assets equal to the
32.30annual percentage preretirement interest rate assumption used in the actuarial valuation
32.31for the July 1 that occurred two years earlier; and
32.32(iv) 80 percent of the difference between the actual net change in the market value
32.33of total assets between the most recent June 30 and the June 30 that occurred one year
32.34earlier and the computed increase in the market value of total assets over that fiscal year
32.35period if the assets had earned a rate of return on assets equal to the annual percentage
33.1preretirement interest rate assumption used in the actuarial valuation for the July 1 that
33.2occurred one year earlier.
33.3    (g) "Unfunded actuarial accrued liability" means the total current and expected
33.4future benefit obligations, reduced by the sum of the actuarial value of assets and the
33.5present value of future normal costs.
33.6    (h) "Pension benefit obligation" means the actuarial present value of credited
33.7projected benefits, determined as the actuarial present value of benefits estimated to be
33.8payable in the future as a result of employee service attributing an equal benefit amount,
33.9including the effect of projected salary increases and any step rate benefit accrual rate
33.10differences, to each year of credited and expected future employee service.

33.11    Sec. 71. Minnesota Statutes 2008, section 356.215, subdivision 11, is amended to read:
33.12    Subd. 11. Amortization contributions. (a) In addition to the exhibit indicating
33.13the level normal cost, the actuarial valuation of the retirement plan must contain an
33.14exhibit for financial reporting purposes indicating the additional annual contribution
33.15sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit
33.16for contribution determination purposes indicating the additional contribution sufficient
33.17to amortize the unfunded actuarial accrued liability. For the retirement plans listed in
33.18subdivision 8, paragraph (c), the additional contribution must be calculated on a level
33.19percentage of covered payroll basis by the established date for full funding in effect when
33.20the valuation is prepared, assuming annual payroll growth at the applicable percentage
33.21rate set forth in subdivision 8, paragraph (c). For all other retirement plans, the additional
33.22annual contribution must be calculated on a level annual dollar amount basis.
33.23    (b) For any retirement plan other than the Minneapolis Employees Retirement Fund,
33.24the general employees retirement plan of the Public Employees Retirement Association,
33.25and the St. Paul Teachers Retirement Fund Association, if there has not been a change in
33.26the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a
33.27change in the benefit plan governing annuities and benefits payable from the fund, a
33.28change in the actuarial cost method used in calculating the actuarial accrued liability of all
33.29or a portion of the fund, or a combination of the three, which change or changes by itself
33.30or by themselves without inclusion of any other items of increase or decrease produce a
33.31net increase in the unfunded actuarial accrued liability of the fund, the established date for
33.32full funding is the first actuarial valuation date occurring after June 1, 2020.
33.33    (c) For any retirement plan other than the Minneapolis Employees Retirement
33.34Fund and the general employees retirement plan of the Public Employees Retirement
33.35Association, if there has been a change in any or all of the actuarial assumptions used
34.1for calculating the actuarial accrued liability of the fund, a change in the benefit plan
34.2governing annuities and benefits payable from the fund, a change in the actuarial cost
34.3method used in calculating the actuarial accrued liability of all or a portion of the fund,
34.4or a combination of the three, and the change or changes, by itself or by themselves and
34.5without inclusion of any other items of increase or decrease, produce a net increase in the
34.6unfunded actuarial accrued liability in the fund, the established date for full funding must
34.7be determined using the following procedure:
34.8    (i) the unfunded actuarial accrued liability of the fund must be determined in
34.9accordance with the plan provisions governing annuities and retirement benefits and the
34.10actuarial assumptions in effect before an applicable change;
34.11    (ii) the level annual dollar contribution or level percentage, whichever is applicable,
34.12needed to amortize the unfunded actuarial accrued liability amount determined under item
34.13(i) by the established date for full funding in effect before the change must be calculated
34.14using the interest assumption specified in subdivision 8 in effect before the change;
34.15    (iii) the unfunded actuarial accrued liability of the fund must be determined in
34.16accordance with any new plan provisions governing annuities and benefits payable from
34.17the fund and any new actuarial assumptions and the remaining plan provisions governing
34.18annuities and benefits payable from the fund and actuarial assumptions in effect before
34.19the change;
34.20    (iv) the level annual dollar contribution or level percentage, whichever is applicable,
34.21needed to amortize the difference between the unfunded actuarial accrued liability amount
34.22calculated under item (i) and the unfunded actuarial accrued liability amount calculated
34.23under item (iii) over a period of 30 years from the end of the plan year in which the
34.24applicable change is effective must be calculated using the applicable interest assumption
34.25specified in subdivision 8 in effect after any applicable change;
34.26    (v) the level annual dollar or level percentage amortization contribution under item
34.27(iv) must be added to the level annual dollar amortization contribution or level percentage
34.28calculated under item (ii);
34.29    (vi) the period in which the unfunded actuarial accrued liability amount determined
34.30in item (iii) is amortized by the total level annual dollar or level percentage amortization
34.31contribution computed under item (v) must be calculated using the interest assumption
34.32specified in subdivision 8 in effect after any applicable change, rounded to the nearest
34.33integral number of years, but not to exceed 30 years from the end of the plan year in
34.34which the determination of the established date for full funding using the procedure set
34.35forth in this clause is made and not to be less than the period of years beginning in the
34.36plan year in which the determination of the established date for full funding using the
35.1procedure set forth in this clause is made and ending by the date for full funding in effect
35.2before the change; and
35.3    (vii) the period determined under item (vi) must be added to the date as of which
35.4the actuarial valuation was prepared and the date obtained is the new established date
35.5for full funding.
35.6    (d) For the Minneapolis Employees Retirement Fund, the established date for full
35.7funding is June 30, 2020.
35.8    (e) For the general employees retirement plan of the Public Employees Retirement
35.9Association, the established date for full funding is June 30, 2031.
35.10    (f) For the Teachers Retirement Association, the established date for full funding is
35.11June 30, 2037.
35.12    (g) For the correctional state employees retirement plan of the Minnesota State
35.13Retirement System, the established date for full funding is June 30, 2038.
35.14    (h) For the judges retirement plan, the established date for full funding is June
35.1530, 2038.
35.16    (i) For the public employees police and fire retirement plan, the established date
35.17for full funding is June 30, 2038.
35.18    (j) For the St. Paul Teachers Retirement Fund Association, the established date for
35.19full funding is June 30 of the 25th year from the valuation date. In addition to other
35.20requirements of this chapter, the annual actuarial valuation shall contain an exhibit
35.21indicating the funded ratio and the deficiency or sufficiency in annual contributions when
35.22comparing liabilities to the market value of the assets of the fund as of the close of the
35.23most recent fiscal year.
35.24    (k) For the retirement plans for which the annual actuarial valuation indicates an
35.25excess of valuation assets over the actuarial accrued liability, the valuation assets in
35.26excess of the actuarial accrued liability must be recognized as a reduction in the current
35.27contribution requirements by an amount equal to the amortization of the excess expressed
35.28as a level percentage of pay over a 30-year period beginning anew with each annual
35.29actuarial valuation of the plan.
35.30    (l) In addition to calculating the unfunded actuarial accrued liability of the retirement
35.31plan for financial reporting purposes under paragraphs (a) to (j), the actuarial valuation
35.32of the retirement plan must also include a calculation of the unfunded actuarial accrued
35.33liability of the retirement plan for purposes of determining the amortization contribution
35.34sufficient to amortize the unfunded actuarial liability of the Minnesota Post Retirement
35.35Investment Fund. For this exhibit, the calculation must be the unfunded actuarial accrued
35.36liability net of the postretirement adjustment liability funded from the investment
36.1performance of the Minnesota Post Retirement Investment Fund or the retirement benefit
36.2fund.

36.3    Sec. 72. Minnesota Statutes 2008, section 356.351, subdivision 2, is amended to read:
36.4    Subd. 2. Incentive. (a) For an employee eligible under subdivision 1, if approved
36.5under paragraph (b), the employer may provide an amount up to $17,000, to an employee
36.6who terminates service, to be used:
36.7    (1) unless the appointing authority has designated the use under clause (2) or the use
36.8under clause (3) for the initial retirement incentive applicable to that employing entity
36.9under Laws 2007, chapter 134, after May 26, 2007, for deposit in the employee's account
36.10in the health care savings plan established by section 352.98;
36.11    (2) notwithstanding section 352.01, subdivision 11, or 354.05, subdivision 13,
36.12whichever applies, if the appointing authority has designated the use under this clause
36.13for the initial retirement incentive applicable to that employing entity under Laws 2007,
36.14chapter 134, after May 26, 2007, for purchase of service credit for unperformed service
36.15sufficient to enable the employee to retire under section 352.116, subdivision 1, paragraph
36.16(b); 353.30; 354.44, subdivision 6, paragraph (b), or 354A.31, subdivision 6, paragraph
36.17(b), whichever applies; or
36.18    (3) if the appointing authority has designated the use under this clause for the initial
36.19retirement incentive applicable to the employing entity under Laws 2007, chapter 134,
36.20after May 26, 2007, for purchase of a lifetime annuity or an annuity for a specific number
36.21of years from the applicable retirement plan to provide additional benefits, as provided in
36.22paragraph (d).
36.23    (b) Approval to provide the incentive must be obtained from the commissioner
36.24of finance if the eligible employee is a state employee and must be obtained from the
36.25applicable governing board with respect to any other employing entity. An employee is
36.26eligible for the payment under paragraph (a), clause (2), if the employee uses money from
36.27a deferred compensation account that, combined with the payment under paragraph (a),
36.28clause (2), would be sufficient to purchase enough service credit to qualify for retirement
36.29under section 352.116, subdivision 1, paragraph (b); 353.30, subdivision 1a; 354.44,
36.30subdivision 6
, paragraph (b), or 354A.31, subdivision 6, paragraph (b), whichever applies.
36.31    (c) The cost to purchase service credit under paragraph (a), clause (2), must be
36.32made in accordance with section 356.551.
36.33    (d) The annuity purchase under paragraph (a), clause (3), must be made using
36.34annuity factors, as determined by the actuary retained under section 356.214, derived from
36.35the applicable factors used by the applicable retirement plan to transfer amounts to the
37.1Minnesota postretirement investment fund and to calculate optional annuity forms. The
37.2purchased annuity must be the actuarial equivalent of the incentive amount.

37.3    Sec. 73. [356.415] POSTRETIREMENT ADJUSTMENTS; STATEWIDE
37.4RETIREMENT PLANS.
37.5    Subdivision 1. Annual postretirement adjustments. (a) Retirement annuity,
37.6disability benefit, or survivor benefit recipients of a covered retirement plan are entitled to
37.7a postretirement adjustment annually on January 1, as follows:
37.8(1) a postretirement increase of 2.5 percent must be applied each year, effective
37.9January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has
37.10been receiving an annuity or a benefit for at least 12 full months prior to the January 1
37.11increase; and
37.12(2) for each annuitant or benefit recipient who has been receiving an annuity or a
37.13benefit for at least one full month, an annual postretirement increase of 1/12 of 2.5 percent
37.14for each month the person has been receiving an annuity or benefit must be applied,
37.15effective January 1 following the year in which the person has been retired for less than
37.1612 months.
37.17(b) The increases provided by this section commence on January 1, 2010.
37.18(c) An increase in annuity or benefit payments under this section must be made
37.19automatically unless written notice is filed by the annuitant or benefit recipient with the
37.20executive director of the covered retirement plan requesting that the increase not be made.
37.21(d) The retirement annuity payable to a person who retires before becoming eligible
37.22for Social Security benefits and who has elected the optional payment as provided in
37.23section 353.29, subdivision 6, or 354.35 must be treated as the sum of a period certain
37.24retirement annuity and a life retirement annuity for the purposes of any postretirement
37.25adjustment. The period certain retirement annuity plus the life retirement annuity must be
37.26the annuity amount payable until age 62 for section 353.29, subdivision 6, or age 62, 65,
37.27or normal retirement age, as selected by the member at retirement, for an annuity amount
37.28payable under section 354.35. A postretirement adjustment granted on the period certain
37.29retirement annuity must terminate when the period certain retirement annuity terminates.
37.30    Subd. 2. Covered retirement plans. The provisions of this section apply to the
37.31following retirement plans:
37.32(1) the legislators retirement plan established under chapter 3A;
37.33(2) the correctional state employees retirement plan of the Minnesota State
37.34Retirement System established under chapter 352;
38.1(3) the general state employees retirement plan of the Minnesota State Retirement
38.2System established under chapter 352;
38.3(4) the State Patrol retirement plan established under chapter 352B;
38.4(5) the elective state officers retirement plan established under chapter 352C;
38.5(6) the general employees retirement plan of the Public Employees Retirement
38.6Association established under chapter 353;
38.7(7) the public employees police and fire retirement plan of the Public Employees
38.8Retirement Association established under chapter 353;
38.9(8) the local government correctional employees retirement plan of the Public
38.10Employees Retirement Association established under chapter 353E;
38.11(9) the teachers retirement plan established under chapter 354; and
38.12(10) the judges retirement plan established under chapter 490.

38.13    Sec. 74. Minnesota Statutes 2008, section 490.123, subdivision 1, is amended to read:
38.14    Subdivision 1. Fund creation; revenue and authorized disbursements. (a) There
38.15is created a special fund to be known as the "judges' retirement fund."
38.16    (b) The judges' retirement fund must be credited with all contributions; all interest,
38.17dividends, and other investment proceeds; and all other income authorized by this chapter
38.18or other applicable law.
38.19    (c) From this fund there are appropriated the payments authorized by this chapter, in
38.20the amounts and at the times provided, including the necessary and reasonable expenses of
38.21the Minnesota State Retirement System in administering the fund and the transfers to the
38.22Minnesota postretirement investment fund.

38.23    Sec. 75. Minnesota Statutes 2008, section 490.123, subdivision 3, is amended to read:
38.24    Subd. 3. Investment. (a) The executive director of the Minnesota State Retirement
38.25System shall, from time to time, certify to the State Board of Investment such portions
38.26of the judges' retirement fund as in the director's judgment may not be required for
38.27immediate use.
38.28    (b) Assets from the judges' retirement fund must be transferred to the Minnesota
38.29postretirement investment fund for retirement and disability benefits as provided in
38.30sections 11A.18 and 352.119.
38.31    (c) (b) The State Board of Investment shall thereupon invest and reinvest sums so
38.32transferred, or certified, in such securities as are duly authorized legal investments for such
38.33purposes under section 11A.24 in compliance with sections 356A.04 and 356A.06.

39.1    Sec. 76. Minnesota Statutes 2008, section 490.124, is amended by adding a subdivision
39.2to read:
39.3    Subd. 14. Postretirement adjustment eligibility. A retirement annuity under
39.4subdivision 1, 3, or 5, a disability benefit under subdivision 4, and a survivor's annuity
39.5under subdivision 9 or 11 are eligible for postretirement adjustments under section
39.6356.415.

39.7    Sec. 77. REPEALER.
39.8Minnesota Statutes 2008, sections 11A.041; 11A.18; 11A.181; 352.119, subdivisions
39.92, 3, and 4; 352B.26, subdivisions 1 and 3; 353.271; 353A.02, subdivision 20; 353A.09,
39.10subdivisions 2 and 3; 354.05, subdivision 26; 354.55, subdivision 14; 354.63; 356.41;
39.11356.431, subdivision 2; 422A.01, subdivision 13; 422A.06, subdivision 4; and 490.123,
39.12subdivisions 1c and 1e, are repealed.

39.13    Sec. 78. EFFECTIVE DATE.
39.14Sections 1 to 77 are effective July 1, 2009.

39.15ARTICLE 2
39.16DISABILITY BENEFIT PROVISION CHANGES

39.17    Section 1. Minnesota Statutes 2008, section 43A.34, subdivision 4, is amended to read:
39.18    Subd. 4. Officers exempted. Notwithstanding any provision to the contrary, (a)
39.19conservation officers and crime bureau officers who were first employed on or after July
39.201, 1973, and who are members of the State Patrol retirement fund by reason of their
39.21employment, and members of the Minnesota State Patrol Division and Alcohol and
39.22Gambling Enforcement Division of the Department of Public Safety who are members
39.23of the State Patrol Retirement Association by reason of their employment, shall may not
39.24continue employment after attaining the age of 60 years, except for a fractional portion
39.25of one year that will enable the employee to complete the employee's next full year of
39.26allowable service as defined pursuant to section 352B.01 352B.011, subdivision 3; and (b)
39.27conservation officers and crime bureau officers who were first employed and are members
39.28of the State Patrol retirement fund by reason of their employment before July 1, 1973,
39.29shall may not continue employment after attaining the age of 70 years.
39.30EFFECTIVE DATE.This section is effective July 1, 2009.

39.31    Sec. 2. Minnesota Statutes 2008, section 299A.465, subdivision 1, is amended to read:
40.1    Subdivision 1. Officer or firefighter disabled in line of duty. (a) This subdivision
40.2applies to any peace officer or firefighter:
40.3    (1) who the Public Employees Retirement Association or the Minnesota State
40.4Retirement System determines is eligible to receive a duty disability benefit pursuant to
40.5section 353.656 or 352B.10, subdivision 1, respectively; or
40.6    (2) who (i) does not qualify to receive disability benefits by operation of the
40.7eligibility requirements set forth in section 353.656, subdivision 1, paragraph (b), (ii)
40.8retires pursuant to section 353.651, subdivision 4, or (iii) is a member of a local police or
40.9salaried firefighters relief association and qualifies for a duty disability benefit under the
40.10terms of plans of the relief associations, and the peace officer or firefighter described in
40.11item (i), (ii), or (iii) has discontinued public service as a peace officer or firefighter as a
40.12result of a disabling injury and has been determined, by the Public Employees Retirement
40.13Association, to have otherwise met the duty disability criteria set forth in section 353.01,
40.14subdivision 41.
40.15    (b) A determination made on behalf of a peace officer or firefighter described in
40.16paragraph (a), clause (2), must be at the request of the peace officer or firefighter made for
40.17the purposes of this section. Determinations made in accordance with paragraph (a) are
40.18binding on the peace officer or firefighter, employer, and state. The determination must
40.19be made by the executive director of the Public Employees Retirement Association or
40.20by the executive director of the Minnesota State Retirement System, whichever applies,
40.21and is not subject to section 356.96, subdivision 2. Upon making a determination, the
40.22executive director shall provide written notice to the peace officer or firefighter and the
40.23employer. This notice must include:
40.24    (1) a written statement of the reasons for the determination;
40.25    (2) a notice that the person may petition for a review of the determination by
40.26requesting that a contested case be initiated before the Office of Administrative Hearings,
40.27the cost of which must be borne by the peace officer or firefighter and the employer; and
40.28    (3) a statement that any person who does not petition for a review within 60 days
40.29is precluded from contesting issues determined by the executive director in any other
40.30administrative review or court procedure.
40.31If, prior to the contested case hearing, additional information is provided to support the
40.32claim for duty disability as defined in section 353.01, subdivision 41, or 352B.011,
40.33subdivision 7, whichever applies, the executive director may reverse the determination
40.34without the requested hearing. If a hearing is held before the Office of Administrative
40.35Hearings, the determination rendered by the judge conducting the fact-finding hearing
40.36is a final decision and order under section 14.62, subdivision 2a, and is binding on the
41.1applicable executive director, the peace officer or firefighter, employer, and state. Review
41.2of a final determination made by the Office of Administrative Hearings under this section
41.3may only be obtained by writ of certiorari to the Minnesota Court of Appeals under
41.4sections 14.63 to 14.68. Only the peace officer or firefighter, employer, and state have
41.5standing to participate in a judicial review of the decision of the Office of Administrative
41.6Hearings.
41.7    (c) The officer's or firefighter's employer shall continue to provide health coverage
41.8for:
41.9    (1) the officer or firefighter; and
41.10    (2) the officer's or firefighter's dependents if the officer or firefighter was receiving
41.11dependent coverage at the time of the injury under the employer's group health plan.
41.12    (d) The employer is responsible for the continued payment of the employer's
41.13contribution for coverage of the officer or firefighter and, if applicable, the officer's
41.14or firefighter's dependents. Coverage must continue for the officer or firefighter and, if
41.15applicable, the officer's or firefighter's dependents until the officer or firefighter reaches or,
41.16if deceased, would have reached the age of 65. However, coverage for dependents does
41.17not have to be continued after the person is no longer a dependent.
41.18EFFECTIVE DATE.This section is effective the day following final enactment
41.19and also applies to any member of the State Patrol retirement plan who was awarded a
41.20duty disability benefit on or after July 1, 2008.

41.21    Sec. 3. Minnesota Statutes 2008, section 352.01, subdivision 2b, is amended to read:
41.22    Subd. 2b. Excluded employees. "State employee" does not include:
41.23    (1) students employed by the University of Minnesota, or the state colleges and
41.24universities, unless approved for coverage by the Board of Regents of the University of
41.25Minnesota or the Board of Trustees of the Minnesota State Colleges and Universities,
41.26whichever is applicable;
41.27    (2) employees who are eligible for membership in the state Teachers Retirement
41.28Association, except employees of the Department of Education who have chosen or may
41.29choose to be covered by the general state employees retirement plan of the Minnesota
41.30State Retirement System instead of the Teachers Retirement Association;
41.31    (3) employees of the University of Minnesota who are excluded from coverage by
41.32action of the Board of Regents;
41.33    (4) officers and enlisted personnel in the National Guard and the naval militia who
41.34are assigned to permanent peacetime duty and who under federal law are or are required to
41.35be members of a federal retirement system;
42.1    (5) election officers;
42.2    (6) persons who are engaged in public work for the state but who are employed
42.3by contractors when the performance of the contract is authorized by the legislature or
42.4other competent authority;
42.5    (7) officers and employees of the senate, or of the house of representatives, or of a
42.6legislative committee or commission who are temporarily employed;
42.7    (8) receivers, jurors, notaries public, and court employees who are not in the judicial
42.8branch as defined in section 43A.02, subdivision 25, except referees and adjusters
42.9employed by the Department of Labor and Industry;
42.10    (9) patient and inmate help in state charitable, penal, and correctional institutions
42.11including the Minnesota Veterans Home;
42.12    (10) persons who are employed for professional services where the service is
42.13incidental to their regular professional duties and whose compensation is paid on a per
42.14diem basis;
42.15    (11) employees of the Sibley House Association;
42.16    (12) the members of any state board or commission who serve the state intermittently
42.17and are paid on a per diem basis; the secretary, secretary-treasurer, and treasurer of those
42.18boards if their compensation is $5,000 or less per year, or, if they are legally prohibited
42.19from serving more than three years; and the board of managers of the State Agricultural
42.20Society and its treasurer unless the treasurer is also its full-time secretary;
42.21    (13) state troopers and persons who are described in section 352B.01, subdivision 2
42.22352B.011, subdivision 10, clauses (2) to (6) (8);
42.23    (14) temporary employees of the Minnesota State Fair who are employed on or
42.24after July 1 for a period not to extend beyond October 15 of that year; and persons who
42.25are employed at any time by the state fair administration for special events held on the
42.26fairgrounds;
42.27    (15) emergency employees who are in the classified service; except that if an
42.28emergency employee, within the same pay period, becomes a provisional or probationary
42.29employee on other than a temporary basis, the employee shall must be considered a "state
42.30employee" retroactively to the beginning of the pay period;
42.31    (16) temporary employees in the classified service, and temporary employees in the
42.32unclassified service who are appointed for a definite period of not more than six months
42.33and who are employed less than six months in any one-year period;
42.34    (17) interns hired for six months or less and trainee employees, except those listed in
42.35subdivision 2a, clause (8);
43.1    (18) persons whose compensation is paid on a fee basis or as an independent
43.2contractor;
43.3    (19) state employees who are employed by the Board of Trustees of the Minnesota
43.4State Colleges and Universities in unclassified positions enumerated in section 43A.08,
43.5subdivision 1
, clause (9);
43.6    (20) state employees who in any year have credit for 12 months service as teachers
43.7in the public schools of the state and as teachers are members of the Teachers Retirement
43.8Association or a retirement system in St. Paul, Minneapolis, or Duluth, except for
43.9incidental employment as a state employee that is not covered by one of the teacher
43.10retirement associations or systems;
43.11    (21) employees of the adjutant general who are employed on an unlimited
43.12intermittent or temporary basis in the classified or unclassified service for the support of
43.13Army and Air National Guard training facilities;
43.14    (22) chaplains and nuns who are excluded from coverage under the federal Old
43.15Age, Survivors, Disability, and Health Insurance Program for the performance of service
43.16as specified in United States Code, title 42, section 410(a)(8)(A), as amended, if no
43.17irrevocable election of coverage has been made under section 3121(r) of the Internal
43.18Revenue Code of 1986, as amended through December 31, 1992;
43.19    (23) examination monitors who are employed by departments, agencies,
43.20commissions, and boards to conduct examinations required by law;
43.21    (24) persons who are appointed to serve as members of fact-finding commissions or
43.22adjustment panels, arbitrators, or labor referees under chapter 179;
43.23    (25) temporary employees who are employed for limited periods under any state or
43.24federal program for training or rehabilitation, including persons who are employed for
43.25limited periods from areas of economic distress, but not including skilled and supervisory
43.26personnel and persons having civil service status covered by the system;
43.27    (26) full-time students who are employed by the Minnesota Historical Society
43.28intermittently during part of the year and full-time during the summer months;
43.29    (27) temporary employees who are appointed for not more than six months, of
43.30the Metropolitan Council and of any of its statutory boards, if the board members are
43.31appointed by the Metropolitan Council;
43.32    (28) persons who are employed in positions designated by the Department of
43.33Finance as student workers;
43.34    (29) members of trades who are employed by the successor to the Metropolitan
43.35Waste Control Commission, who have trade union pension plan coverage under a
43.36collective bargaining agreement, and who are first employed after June 1, 1977;
44.1    (30) off-duty peace officers while employed by the Metropolitan Council;
44.2    (31) persons who are employed as full-time police officers by the Metropolitan
44.3Council and as police officers are members of the public employees police and fire fund;
44.4    (32) persons who are employed as full-time firefighters by the Department of Military
44.5Affairs and as firefighters are members of the public employees police and fire fund;
44.6    (33) foreign citizens with a work permit of less than three years, or an H-1b/JV visa
44.7valid for less than three years of employment, unless notice of extension is supplied which
44.8allows them to work for three or more years as of the date the extension is granted, in
44.9which case they are eligible for coverage from the date extended; and
44.10    (34) persons who are employed by the Board of Trustees of the Minnesota State
44.11Colleges and Universities and who elected to remain members of the Public Employees
44.12Retirement Association or the Minneapolis Employees Retirement Fund, whichever
44.13applies, under Minnesota Statutes 1994, section 136C.75.
44.14EFFECTIVE DATE.This section is effective July 1, 2009.

44.15    Sec. 4. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision
44.16to read:
44.17    Subd. 17a. Occupational disability. "Occupational disability," for purposes of
44.18determining eligibility for disability benefits for a correctional employee, means a
44.19disabling condition that is expected to prevent the correctional employee, for a period of
44.20not less than 12 months, from performing the normal duties of the position held by the
44.21correctional employee.
44.22EFFECTIVE DATE.This section is effective July 1, 2009.

44.23    Sec. 5. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision
44.24to read:
44.25    Subd. 17b. Duty disability, physical or psychological. "Duty disability, physical
44.26or psychological," for a correctional employee, means an occupational disability that is the
44.27direct result of an injury incurred during, or a disease arising out of, the performance of
44.28normal duties or the performance of less frequent duties either of which are specific to
44.29the correctional employee.
44.30EFFECTIVE DATE.This section is effective July 1, 2009.

44.31    Sec. 6. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision
44.32to read:
45.1    Subd. 17c. Regular disability, physical or psychological. "Regular disability,
45.2physical or psychological," for a correctional employee, means an occupational disability
45.3resulting from a disease or an injury that arises from any activities while not at work or
45.4from activities while at work performing normal or less frequent duties that do not present
45.5inherent dangers specific to covered correctional positions.
45.6EFFECTIVE DATE.This section is effective July 1, 2009.

45.7    Sec. 7. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision
45.8to read:
45.9    Subd. 17d. Normal duties. "Normal duties" means specific tasks designated in the
45.10applicant's job description and which the applicant performs on a day-to-day basis, but
45.11do not include less frequent duties which may be requested to be done by the employer
45.12from time to time.
45.13EFFECTIVE DATE.This section is effective July 1, 2009.

45.14    Sec. 8. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision
45.15to read:
45.16    Subd. 17e. Less frequent duties. "Less frequent duties" means tasks designated
45.17in the applicant's job description as either required from time to time or as assigned, but
45.18which are not carried out as part of the normal routine of the applicant's job.
45.19EFFECTIVE DATE.This section is effective July 1, 2009.

45.20    Sec. 9. Minnesota Statutes 2008, section 352.113, subdivision 4, is amended to read:
45.21    Subd. 4. Medical or psychological examinations; authorization for payment of
45.22benefit. (a) An applicant shall provide medical, chiropractic, or psychological evidence to
45.23support an application for total and permanent disability.
45.24(b) The director shall have the employee examined by at least one additional
45.25licensed chiropractor, physician, or psychologist designated by the medical adviser. The
45.26chiropractors, physicians, or psychologists shall make written reports to the director
45.27concerning the employee's disability including expert opinions as to whether the employee
45.28is permanently and totally disabled within the meaning of section 352.01, subdivision 17.
45.29(c) The director shall also obtain written certification from the employer stating
45.30whether the employment has ceased or whether the employee is on sick leave of
45.31absence because of a disability that will prevent further service to the employer and as a
45.32consequence the employee is not entitled to compensation from the employer.
46.1(d) The medical adviser shall consider the reports of the physicians, psychologists,
46.2and chiropractors and any other evidence supplied by the employee or other interested
46.3parties. If the medical adviser finds the employee totally and permanently disabled, the
46.4adviser shall make appropriate recommendation to the director in writing together with the
46.5date from which the employee has been totally disabled. The director shall then determine
46.6if the disability occurred within 180 days 18 months of filing the application, while still
46.7in the employment of the state, and the propriety of authorizing payment of a disability
46.8benefit as provided in this section.
46.9(e) A terminated employee may apply for a disability benefit within 180 days 18
46.10months of termination as long as the disability occurred while in the employment of the
46.11state. The fact that an employee is placed on leave of absence without compensation
46.12because of disability does not bar that employee from receiving a disability benefit.
46.13(f) Unless the payment of a disability benefit has terminated because the employee is
46.14no longer totally disabled, or because the employee has reached normal retirement age as
46.15provided in this section, the disability benefit must cease with the last payment received
46.16by the disabled employee or which had accrued during the lifetime of the employee unless
46.17there is a spouse surviving. In that event, the surviving spouse is entitled to the disability
46.18benefit for the calendar month in which the disabled employee died.
46.19EFFECTIVE DATE.This section is effective July 1, 2009, and applies to disability
46.20benefit applicants whose last day of public employment was after June 30, 2009.

46.21    Sec. 10. Minnesota Statutes 2008, section 352.95, subdivision 1, is amended to read:
46.22    Subdivision 1. Job-related disability Duty disability; computation of benefit.
46.23A covered correctional employee who becomes disabled and who is expected to be
46.24physically or mentally unfit to perform the duties of the position for at least one year as a
46.25direct result of an injury, sickness, or other disability that incurred in or arose out of any
46.26act of duty that makes the employee physically or mentally unable to perform the duties is
46.27determined to have a duty disability, physical or psychological, as defined under section
46.28352.01, subdivision 17b, is entitled to a duty disability benefit. The duty disability benefit
46.29may must be based on covered correctional service only. The duty disability benefit
46.30amount is 50 percent of the average salary defined in section 352.93, plus an additional
46.31percent equal to that specified in section 356.315, subdivision 5, for each year of covered
46.32correctional service in excess of 20 years, ten months, prorated for completed months.
46.33EFFECTIVE DATE.This section is effective July 1, 2009.

47.1    Sec. 11. Minnesota Statutes 2008, section 352.95, subdivision 2, is amended to read:
47.2    Subd. 2. Non-job-related Regular disability; computation of benefit. A covered
47.3correctional employee who was hired before July 1, 2009, after rendering at least one year
47.4of covered correctional service, or a covered correctional employee who was first hired
47.5after June 30, 2009, after rendering at least three years of covered correctional plan service,
47.6becomes disabled and who is expected to be physically or mentally unfit to perform the
47.7duties of the position for at least one year because of sickness or injury that occurred while
47.8not engaged in covered employment and who is determined to have a regular disability,
47.9physical or psychological, as defined under section 352.01, subdivision 17c, is entitled
47.10to a regular disability benefit. The regular disability benefit must be based on covered
47.11correctional service only. The regular disability benefit must be computed as provided
47.12in section 352.93, subdivisions 1 and 2, and. The regular disability benefit of a covered
47.13correctional employee who was first hired before July 1, 2009, and who is determined
47.14to have a regular disability, physical or psychological, under this subdivision must be
47.15computed as though the employee had at least 15 years of covered correctional service.
47.16EFFECTIVE DATE.This section is effective July 1, 2009.

47.17    Sec. 12. Minnesota Statutes 2008, section 352.95, subdivision 3, is amended to read:
47.18    Subd. 3. Applying for benefits; accrual. No application for disability benefits
47.19shall may be made until after the last day physically on the job. The disability benefit
47.20shall begin begins to accrue the day following the last day for which the employee is paid
47.21sick leave or annual leave, but not earlier than 180 days before the date the application
47.22is filed. A terminated employee must file a written application within the time frame
47.23specified under section 352.113, subdivision 4, paragraph (e).
47.24EFFECTIVE DATE.This section is effective July 1, 2009, and applies to disability
47.25benefit applicants whose last day of public employment was after June 30, 2009.

47.26    Sec. 13. Minnesota Statutes 2008, section 352.95, subdivision 4, is amended to read:
47.27    Subd. 4. Medical or psychological evidence. (a) An applicant shall provide
47.28medical, chiropractic, or psychological evidence to support an application for disability
47.29benefits. The director shall have the employee examined by at least one additional
47.30licensed physician, chiropractor, or psychologist who is designated by the medical adviser.
47.31The physicians, chiropractors, or psychologists with respect to a mental impairment,
47.32shall make written reports to the director concerning the question of the employee's
47.33disability, including their expert opinions as to whether the employee is disabled has an
48.1occupational disability within the meaning of this section 352.01, subdivision 17a, and
48.2whether the employee has a duty disability, physical or psychological, under section
48.3352.01, subdivision 17b, or has a regular disability, physical or psychological, under
48.4section 352.01, subdivision 17c. The director shall also obtain written certification from
48.5the employer stating whether or not the employee is on sick leave of absence because of a
48.6disability that will prevent further service to the employer performing normal duties as
48.7defined in section 352.01, subdivision 17d, or performing less frequent duties as defined in
48.8section 352.01, subdivision 17e, and as a consequence, the employee is not entitled to
48.9compensation from the employer.
48.10(b) If, on considering the reports by the physicians, chiropractors, or psychologists
48.11and any other evidence supplied by the employee or others, the medical adviser finds that
48.12the employee disabled has an occupational disability within the meaning of this section
48.13352.01, subdivision 17a, the advisor shall make the appropriate recommendation to the
48.14director, in writing, together with the date from which the employee has been disabled.
48.15The director shall then determine the propriety of authorizing payment of a duty disability
48.16benefit or a regular disability benefit as provided in this section.
48.17(c) Unless the payment of a disability benefit has terminated because the employee
48.18is no longer disabled has an occupational disability, or because the employee has reached
48.19either age 65 55 or the five-year anniversary of the effective date of the disability benefit,
48.20whichever is later, the disability benefit must cease with the last payment which was
48.21received by the disabled employee or which had accrued during the employee's lifetime.
48.22While disability benefits are paid, the director has the right, at reasonable times, to
48.23require the disabled employee to submit proof of the continuance of the an occupational
48.24disability claimed. If any examination indicates to the medical adviser that the employee
48.25is no longer disabled has an occupational disability, the disability payment must be
48.26discontinued upon the person's reinstatement to state service or within 60 days of the
48.27finding, whichever is sooner.
48.28EFFECTIVE DATE.This section is effective July 1, 2009, and applies to disability
48.29benefit applicants whose last day of public employment was after June 30, 2009.

48.30    Sec. 14. Minnesota Statutes 2008, section 352.95, subdivision 5, is amended to read:
48.31    Subd. 5. Retirement status at normal retirement age. The disability benefit paid
48.32to a disabled correctional employee under this section shall terminate terminates at the end
48.33of the month in which the employee reaches age 65 55, or the five-year anniversary of
48.34the effective date of the disability benefit, whichever is later. If the disabled correctional
48.35employee is still disabled when the employee reaches age 65 55, or the five-year
49.1anniversary of the effective date of the disability benefit, whichever is later, the employee
49.2shall must be deemed to be a retired employee. If the employee had elected an optional
49.3annuity under subdivision 1a, the employee shall receive an annuity in accordance with
49.4the terms of the optional annuity previously elected. If the employee had not elected an
49.5optional annuity under subdivision 1a, the employee may within 90 days of attaining age
49.665 55 or reaching the five-year anniversary of the effective date of the disability benefit,
49.7whichever is later, either elect to receive a normal retirement annuity computed in the
49.8manner provided in section 352.93 or elect to receive an optional annuity as provided
49.9in section 352.116, subdivision 3, based on the same length of service as used in the
49.10calculation of the disability benefit. Election of an optional annuity must be made within
49.1190 days before attaining age 65 55 or reaching the five-year anniversary of the effective
49.12date of the disability benefit, whichever is later. If an optional annuity is elected, the
49.13optional annuity shall begin begins to accrue on the first of the month following the month
49.14in which the employee reaches age 65 55 or the five-year anniversary of the effective date
49.15of the disability benefit, whichever is later.
49.16EFFECTIVE DATE.This section is effective July 1, 2009, and applies to disability
49.17benefit applicants whose last day of public employment was after June 30, 2009.

49.18    Sec. 15. [352B.011] DEFINITIONS.
49.19    Subdivision 1. Scope. For the purposes of this chapter, the terms defined in this
49.20section have the meanings given them.
49.21    Subd. 2. Accumulated deductions. "Accumulated deductions" means the total
49.22sums deducted from the salary of a member and the total amount of assessments paid by
49.23a member in place of deductions and credited to the member's individual account as
49.24permitted by law without interest.
49.25    Subd. 3. Allowable service. (a) "Allowable service" means:
49.26(1) service in a month during which a member is paid a salary from which a member
49.27contribution is deducted, deposited, and credited in the State Patrol retirement fund;
49.28(2) for members defined in subdivision 10, clause (1), service in any month for
49.29which payments have been made to the State Patrol retirement fund under law; and
49.30(3) for members defined in subdivision 10, clauses (2) and (3), service for which
49.31payments have been made to the State Patrol retirement fund under law, service for which
49.32payments were made to the State Police officers retirement fund under law after June
49.3330, 1961, and all prior service which was credited to a member for service on or before
49.34June 30, 1961.
50.1(b) Allowable service also includes any period of absence from duty by a member
50.2who, by reason of injury incurred in the performance of duty, is temporarily disabled and
50.3for which disability the state is liable under the workers' compensation law, until the date
50.4authorized by the executive director for commencement of payment of a disability benefit
50.5or until the date of a return to employment.
50.6    Subd. 4. Average monthly salary. (a) Subject to the limitations of section 356.611,
50.7"average monthly salary" means the average of the highest monthly salaries for five
50.8years of service as a member upon which contributions were deducted from pay under
50.9section 352B.02, or upon which appropriate contributions or payments were made to
50.10the fund to receive allowable service and salary credit as specified under the applicable
50.11law. Average monthly salary must be based upon all allowable service if this service is
50.12less than five years.
50.13(b) The salary used for the calculation of "average monthly salary" means the
50.14salary of the member as defined in section 352.01, subdivision 13. The salary used for
50.15the calculation of "average monthly salary" does not include any lump-sum annual leave
50.16payments and overtime payments made at the time of separation from state service, any
50.17amounts of severance pay, or any reduced salary paid during the period the person is
50.18entitled to workers' compensation benefit payments for temporary disability.
50.19    Subd. 5. Department head. "Department head" means the head of any department,
50.20institution, or branch of the state service that directly pays salaries from state funds
50.21to a member who prepares, approves, and submits salary abstracts of employees to the
50.22commissioner of Minnesota Management and Budget.
50.23    Subd. 6. Dependent child. "Dependent child" means a natural or adopted unmarried
50.24child of a deceased member under the age of 18 years, including any child of the member
50.25conceived during the lifetime of the member and born after the death of the member.
50.26    Subd. 7. Duty disability. "Duty disability" means a physical or psychological
50.27condition that is expected to prevent a member, for a period of not less than 12 months,
50.28from performing the normal duties of the position held by the person as a member of the
50.29State Patrol retirement fund, and that is the direct result of any injury incurred during, or a
50.30disease arising out of, the performance of normal duties or the actual performance of less
50.31frequent duties, either of which are specific to protecting the property and personal safety
50.32of others and that present inherent dangers that are specific to the positions covered by
50.33the State Patrol retirement fund.
50.34    Subd. 8 Fund. "Fund" means the State Patrol retirement fund.
50.35    Subd. 9. Less frequent duties. "Less frequent duties" means tasks which are
50.36designated in the member's job description as either required from time to time or as
51.1assigned, but which are not carried out as part of the normal routine of the member's
51.2position.
51.3    Subd. 10. Member. "Member" means:
51.4(1) a State Patrol member currently employed under section 299D.03 by the state,
51.5who is a peace officer under section 626.84, and whose salary or compensation is paid
51.6out of state funds;
51.7(2) a conservation officer employed under section 97A.201, currently employed by
51.8the state, whose salary or compensation is paid out of state funds;
51.9(3) a crime bureau officer who was employed by the crime bureau and was a member
51.10of the Highway Patrolmen's retirement fund on July 1, 1978, whether or not that person
51.11has the power of arrest by warrant after that date, or who is employed as police personnel,
51.12with powers of arrest by warrant under section 299C.04, and who is currently employed
51.13by the state, and whose salary or compensation is paid out of state funds;
51.14(4) a person who is employed by the state in the Department of Public Safety in a
51.15data processing management position with salary or compensation paid from state funds,
51.16who was a crime bureau officer covered by the State Patrol retirement plan on August
51.1715, 1987, and who was initially hired in the data processing management position within
51.18the department during September 1987, or January 1988, with membership continuing
51.19for the duration of the person's employment in that position, whether or not the person
51.20has the power of arrest by warrant after August 15, 1987;
51.21(5) a public safety employee who is a peace officer under section 626.84, subdivision
51.221
, paragraph (c), and who is employed by the Division of Alcohol and Gambling
51.23Enforcement under section 299L.01;
51.24(6) a Fugitive Apprehension Unit officer after October 31, 2000, who is employed
51.25by the Office of Special Investigations of the Department of Corrections and who is a
51.26peace officer under section 626.84;
51.27(7) an employee of the Department of Commerce defined as a peace officer in section
51.28626.84, subdivision 1, paragraph (c), who is employed by the Division of Insurance Fraud
51.29Prevention under section 45.0135 after January 1, 2005, and who has not attained the
51.30mandatory retirement age specified in section 43A.34, subdivision 4; and
51.31(8) an employee of the Department of Public Safety, who is a licensed peace officer
51.32under section 626.84, subdivision 1, paragraph (c), and is employed as the statewide
51.33coordinator of the Gang and Drug Oversight Council.
51.34    Subd. 11. Normal duties. "Normal duties" means specific tasks which are
51.35designated in the member's job description and which the applicant performs on a
52.1day-to-day basis, but do not include less frequent duties which may be requested to be
52.2done by the employer from time to time.
52.3    Subd. 12. Regular disability. "Regular disability" means a physical or
52.4psychological condition that is expected to prevent a member, for a period of not less than
52.512 months, from performing the normal duties of the position held by a person who is a
52.6member of the State Patrol retirement plan, and which results from a disease or an injury
52.7that arises from any activities while not at work, or while at work and performing those
52.8normal or less frequent duties that do not present inherent dangers that are specific to the
52.9occupations covered by the State Patrol retirement plan.
52.10    Subd. 13. Surviving spouse. "Surviving spouse" means a member's or former
52.11member's legally married spouse who resided with the member or former member at the
52.12time of death and was married to the member or former member, for a period of at least
52.13one year, during or before the time of membership.
52.14EFFECTIVE DATE.(a) Except as provided in paragraph (b), this section is
52.15effective July 1, 2009.
52.16(b) Subdivision 3, paragraph (a), clause (1), is effective retroactively from July
52.171, 1969, and allowable service on the records of the State Patrol retirement plan credit
52.18consistent with that provision is validated.

52.19    Sec. 16. Minnesota Statutes 2008, section 352B.02, subdivision 1, is amended to read:
52.20    Subdivision 1. Fund created; membership. A State Patrol retirement fund is
52.21established. Its membership consists of all persons defined in section 352B.01, subdivision
52.222
352B.011, subdivision 10.
52.23EFFECTIVE DATE.This section is effective July 1, 2009.

52.24    Sec. 17. [352B.085] SERVICE CREDIT FOR CERTAIN DISABILITY LEAVES
52.25OF ABSENCE.
52.26A member on leave of absence receiving temporary workers' compensation
52.27payments and a reduced salary or no salary from the employer who is entitled to allowable
52.28service credit for the period of absence under section 352B.011, subdivision 3, paragraph
52.29(b), may make payment to the fund for the difference between salary received, if any,
52.30and the salary that the member would normally receive if the member was not on leave
52.31of absence during the period. The member shall pay an amount equal to the member
52.32and employer contribution rate under section 352B.02, subdivisions 1b and 1c, on
52.33the differential salary amount for the period of the leave of absence. The employing
53.1department, at its option, may pay the employer amount on behalf of the member. Payment
53.2made under this subdivision must include interest at the rate of 8.5 percent per year, and
53.3must be completed within one year of the member's return from the leave of absence.
53.4EFFECTIVE DATE.This section is effective July 1, 2009.

53.5    Sec. 18. [352B.086] SERVICE CREDIT FOR UNIFORMED SERVICE.
53.6(a) A member who is absent from employment by reason of service in the uniformed
53.7services, as defined in United States Code, title 38, section 4303(13), and who returns to
53.8state employment in a position covered by the plan upon discharge from service in the
53.9uniformed services within the time frame required in United States Code, title 38, section
53.104312(e), may obtain service credit for the period of the uniformed service, provided that
53.11the member did not separate from uniformed service with a dishonorable or bad conduct
53.12discharge or under other than honorable conditions.
53.13(b) The member may obtain credit by paying into the fund an equivalent member
53.14contribution based on the member contribution rate or rates in effect at the time that
53.15the uniformed service was performed multiplied by the full and fractional years being
53.16purchased and applied to the annual salary rate. The annual salary rate is the average
53.17annual salary during the purchase period that the member would have received if the
53.18member had continued to provide employment services to the state rather than to provide
53.19uniformed service, or if the determination of that rate is not reasonably certain, the annual
53.20salary rate is the member's average salary rate during the 12-month period of covered
53.21employment rendered immediately preceding the purchase period.
53.22(c) The equivalent employer contribution and, if applicable, the equivalent employer
53.23additional contribution, must be paid by the employing unit, using the employer and
53.24employer additional contribution rate or rates in effect at the time that the uniformed
53.25service was performed, applied to the same annual salary rate or rates used to compute the
53.26equivalent member contribution.
53.27(d) If the member equivalent contributions provided for in this subdivision are not
53.28paid in full, the member's allowable service credit must be prorated by multiplying the
53.29full and fractional number of years of uniformed service eligible for purchase by the
53.30ratio obtained by dividing the total member contributions received by the total member
53.31contributions otherwise required under this subdivision.
53.32(e) To receive allowable service credit under this subdivision, the contributions
53.33specified in this section must be transmitted to the fund during the period which begins
53.34with the date on which the individual returns to state employment covered by the plan and
53.35which has a duration of three times the length of the uniformed service period, but not
54.1to exceed five years. If the determined payment period is calculated to be less than one
54.2year, the contributions required under this subdivision to receive service credit must be
54.3transmitted to the fund within one year from the discharge date.
54.4(f) The amount of allowable service credit obtainable under this section may not
54.5exceed five years, unless a longer purchase period is required under United States Code,
54.6title 38, section 4312.
54.7(g) The employing unit shall pay interest on all equivalent member and employer
54.8contribution amounts payable under this section. Interest must be computed at a rate of
54.98.5 percent compounded annually from the end of each fiscal year of the leave or break in
54.10service to the end of the month in which payment is received.
54.11EFFECTIVE DATE.This section is effective July 1, 2009.

54.12    Sec. 19. Minnesota Statutes 2008, section 352B.10, subdivision 1, is amended to read:
54.13    Subdivision 1. Injuries; payment amounts Duty disability. A member who
54.14becomes disabled and who is expected to be physically or mentally unfit to perform duties
54.15for at least one year as a direct result of an injury, sickness, or other disability that incurred
54.16in or arose out of any act of duty is determined to qualify for duty disability as defined in
54.17section 352B.011, subdivision 7, is entitled to receive a duty disability benefits benefit
54.18while disabled. The benefits must be paid in monthly installments. The duty disability
54.19benefit is an amount equal to the member's average monthly salary multiplied by 60
54.20percent, plus an additional percent equal to that specified in section 356.315, subdivision
54.216
, for each year and pro rata for completed months of service in excess of 20 years, if any.
54.22EFFECTIVE DATE.This section is effective July 1, 2009.

54.23    Sec. 20. Minnesota Statutes 2008, section 352B.10, subdivision 2, is amended to read:
54.24    Subd. 2. Disabled while not on duty Regular disability benefit. If A member with
54.25at least one year of service becomes disabled and is expected to be physically or mentally
54.26unfit to perform the duties of the position for at least one year because of sickness or injury
54.27that occurred while not engaged in covered employment, the individual who qualifies for
54.28a regular disability benefit as defined in section 352B.011, subdivision 12, is entitled to
54.29a regular disability benefits benefit. The regular disability benefit must be computed as if
54.30the individual were 55 years old at the date of disability and as if the annuity was payable
54.31under section 352B.08. If a regular disability under this subdivision occurs after one year
54.32of service but before 15 years of service, the regular disability benefit must be computed
54.33as though the individual had credit for 15 years of service.
55.1EFFECTIVE DATE.This section is effective July 1, 2009.

55.2    Sec. 21. Minnesota Statutes 2008, section 352B.10, is amended by adding a
55.3subdivision to read:
55.4    Subd. 2a. Applying for benefits; accrual. No application for disability benefits
55.5shall be made until after the last day physically on the job. The disability benefit begins to
55.6accrue the day following the last day for which the employee is paid sick leave or annual
55.7leave but not earlier than 180 days before the date the application is filed. A member
55.8who is terminated must file a written application within the time frame specified under
55.9section 352.113, subdivision 4, paragraph (e).
55.10EFFECTIVE DATE.This section is effective July 1, 2009, and applies to disability
55.11benefit applicants whose last day of public employment was after June 30, 2009.

55.12    Sec. 22. Minnesota Statutes 2008, section 352B.10, subdivision 5, is amended to read:
55.13    Subd. 5. Optional annuity. A disabilitant may elect, in lieu of spousal survivorship
55.14coverage under section 352B.11, subdivisions 2b and 2c, the normal disability benefit or
55.15an optional annuity as provided in section 352B.08, subdivision 3. The choice of an
55.16optional annuity must be made in writing, on a form prescribed by the executive director,
55.17and must be made before the commencement of the payment of the disability benefit, or
55.18within 90 days before reaching age 65 55 or before reaching the five-year anniversary
55.19of the effective date of the disability benefit, whichever is later. The optional annuity
55.20is effective on the date on which the disability benefit begins to accrue, or the month
55.21following the attainment of age 65 55 or following the five-year anniversary of the
55.22effective date of the disability benefit, whichever is later.
55.23EFFECTIVE DATE.This section is effective July 1, 2009, and applies to disability
55.24benefit applicants whose last day of public employment was after June 30, 2009.

55.25    Sec. 23. Minnesota Statutes 2008, section 352B.11, subdivision 2, is amended to read:
55.26    Subd. 2. Death; payment to dependent children; family maximums. (a) Each
55.27dependent child, as defined in section 352B.01, subdivision 10 352B.011, subdivision 6, is
55.28entitled to receive a monthly annuity equal to ten percent of the average monthly salary
55.29of the deceased member.
55.30(b) A dependent child over 18 and under 23 years of age also may receive the
55.31monthly benefit provided in this section if the child is continuously attending an accredited
55.32school as a full-time student during the normal school year as determined by the director.
56.1If the child does not continuously attend school, but separates from full-time attendance
56.2during any part of a school year, the annuity must cease at the end of the month of
56.3separation.
56.4(c) In addition, a payment of $20 per month must be prorated equally to the
56.5surviving dependent children when the former member is survived by more than one
56.6dependent child.
56.7(d) Payments for the benefit of any dependent child must be made to the surviving
56.8spouse, or if there is none, to the legal guardian of the child.
56.9(e) The monthly benefit for any one family, including a surviving spouse benefit, if
56.10applicable, must not be less than 50 percent nor exceed 70 percent of the average monthly
56.11salary of the deceased member.
56.12EFFECTIVE DATE.This section is effective July 1, 2009.

56.13    Sec. 24. REPEALER.
56.14Minnesota Statutes 2008, section 352B.01, subdivisions 1, 2, 3, 3b, 4, 6, 7, 9, 10,
56.15and 11, are repealed.
56.16EFFECTIVE DATE.This section is effective July 1, 2009.

56.17ARTICLE 3
56.18STATE CORRECTIONAL RETIREMENT PLAN
56.19 MEMBERSHIP CHANGES

56.20    Section 1. Minnesota Statutes 2008, section 352.91, subdivision 3d, is amended to read:
56.21    Subd. 3d. Other correctional personnel. (a) "Covered correctional service" means
56.22service by a state employee in one of the employment positions at a correctional facility or
56.23at the Minnesota Security Hospital specified in paragraph (b) if at least 75 percent of the
56.24employee's working time is spent in direct contact with inmates or patients and the fact of
56.25this direct contact is certified to the executive director by the appropriate commissioner.
56.26    (b) The employment positions are:
56.27    (1) automotive mechanic;
56.28(2) baker;
56.29    (2) (3) central services administrative specialist, intermediate;
56.30    (3) (4) central services administrative specialist, principal;
56.31    (4) (5) chaplain;
56.32    (5) (6) chief cook;
56.33    (6) (7) cook;
57.1    (7) (8) cook coordinator;
57.2    (8) (9) corrections program therapist 1;
57.3    (9) (10) corrections program therapist 2;
57.4    (10) (11) corrections program therapist 3;
57.5    (11) (12) corrections program therapist 4;
57.6    (12) (13) corrections inmate program coordinator;
57.7    (13) (14) corrections transitions program coordinator;
57.8    (14) (15) corrections security caseworker;
57.9    (15) (16) corrections security caseworker career;
57.10    (16) (17) corrections teaching assistant;
57.11    (17) (18) delivery van driver;
57.12    (18) (19) dentist;
57.13    (19) (20) electrician supervisor;
57.14    (20) (21) general maintenance worker lead;
57.15    (21) (22) general repair worker;
57.16    (22) (23) library/information research services specialist;
57.17    (23) (24) library/information research services specialist senior;
57.18    (24) (25) library technician;
57.19    (25) (26) painter lead;
57.20    (26) (27) plant maintenance engineer lead;
57.21    (27) (28) plumber supervisor;
57.22    (28) (29) psychologist 1;
57.23    (29) (30) psychologist 3;
57.24    (30) (31) recreation therapist;
57.25    (31) (32) recreation therapist coordinator;
57.26    (32) (33) recreation program assistant;
57.27    (33) (34) recreation therapist senior;
57.28    (34) (35) sports medicine specialist;
57.29    (35) (36) work therapy assistant;
57.30    (36) (37) work therapy program coordinator; and
57.31    (37) (38) work therapy technician.
57.32EFFECTIVE DATE.This section is effective retroactively from May 29, 2007.

57.33    Sec. 2. MSRS-CORRECTIONAL; ELIMINATION OF CERTAIN POSITION
57.34FROM COVERAGE.
58.1Notwithstanding any provision of Minnesota Statutes, section 352.91, to the contrary,
58.2including Minnesota Statutes, section 352.91, subdivision 2, "covered correctional service"
58.3does not mean service rendered by a state employee as an automotive mechanic lead.
58.4EFFECTIVE DATE.This section is effective the day following final enactment.

58.5ARTICLE 4
58.6ADMINISTRATIVE PROVISIONS

58.7    Section 1. Minnesota Statutes 2008, section 43A.346, subdivision 2, is amended to
58.8read:
58.9    Subd. 2. Eligibility. (a) This section applies to a terminated state employee who:
58.10    (1) for at least the five years immediately preceding separation under clause (2),
58.11was regularly scheduled to work 1,044 or more hours per year in a position covered by
58.12a pension plan administered by the Minnesota State Retirement System or the Public
58.13Employees Retirement Association;
58.14    (2) terminated state or Metropolitan Council employment;
58.15    (3) at the time of termination under clause (2), met the age and service requirements
58.16necessary to receive an unreduced retirement annuity from the plan and satisfied
58.17requirements for the commencement of the retirement annuity or, for a terminated
58.18employee under the unclassified employees retirement plan, met the age and service
58.19requirements necessary to receive an unreduced retirement annuity from the plan and
58.20satisfied requirements for the commencement of the retirement annuity or elected a
58.21lump-sum payment; and
58.22    (4) agrees to accept a postretirement option position with the same or a different
58.23appointing authority, working a reduced schedule that is both (i) a reduction of at least 25
58.24percent from the employee's number of previously regularly scheduled work hours; and
58.25(ii) 1,044 hours or less in state or Metropolitan Council service.
58.26    (b) For purposes of this section, an unreduced retirement annuity includes a
58.27retirement annuity computed under a provision of law which permits retirement, without
58.28application of an earlier retirement reduction factor, whenever age plus years of allowable
58.29service total at least 90.
58.30    (c) For purposes of this section, as it applies to staff state employees who are
58.31members of the Public Employees Retirement Association who are at least age 62, the
58.32length of separation requirement and termination of service requirement prohibiting return
58.33to work agreements under section 353.01, subdivisions 11a and 28, are not applicable.
58.34EFFECTIVE DATE.This section is effective the day following final enactment.

59.1    Sec. 2. Minnesota Statutes 2008, section 43A.346, subdivision 6, is amended to read:
59.2    Subd. 6. Duration. Postretirement option employment shall be is for an initial
59.3period not to exceed one year. During that period, the appointing authority may not
59.4modify the conditions specified in the written offer without the person's consent, except as
59.5required by law or by the collective bargaining agreement or compensation plan applicable
59.6to the person. At the end of the initial period, the appointing authority has sole discretion
59.7to determine if the offer of a postretirement option position will be renewed, renewed
59.8with modifications, or terminated. If the person is under age 62, an offer of renewal
59.9and any related verbal offer or agreement must not be made until at least 30 days after
59.10termination of the person's previous postretirement option employment. Postretirement
59.11option employment may be renewed for periods of up to one year, not to exceed a total
59.12duration of five years. No person shall may be employed in one or a combination of
59.13postretirement option positions under this section for a total of more than five years.
59.14EFFECTIVE DATE.This section is effective the day following final enactment.

59.15    Sec. 3. Minnesota Statutes 2008, section 352B.02, subdivision 1a, is amended to read:
59.16    Subd. 1a. Member contributions. (a) Each The member shall pay a sum equal to
59.17the following contribution is 10.40 percent of the member's salary, which constitutes the
59.18member contribution to the fund:.
59.19
before July 1, 2007
8.40
59.20
from July 1, 2007, to June 30, 2008
9.10
59.21
from July 1, 2008, to June 30, 2009
9.80
59.22
from July 1, 2009, and thereafter
10.40.
59.23(b) These contributions must be made by deduction from salary as provided in
59.24section 352.04, subdivision 4.
59.25EFFECTIVE DATE.This section is effective July 1, 2009.

59.26    Sec. 4. Minnesota Statutes 2008, section 352B.02, subdivision 1c, is amended to read:
59.27    Subd. 1c. Employer contributions. (a) In addition to member contributions,
59.28department heads shall pay a sum equal to the following 15.60 percent of the salary upon
59.29which deductions were made, which shall constitute constitutes the employer contribution
59.30to the fund:.
59.31
before July 1, 2007
12.60
59.32
from July 1, 2007, to June 30, 2008
13.60
59.33
from July 1, 2008, to June 30, 2009
14.60
59.34
from July 1, 2009, and thereafter
15.60.
60.1(b) Department contributions must be paid out of money appropriated to departments
60.2for this purpose.
60.3EFFECTIVE DATE.This section is effective July 1, 2009.

60.4    Sec. 5. Minnesota Statutes 2008, section 353.01, subdivision 16, is amended to read:
60.5    Subd. 16. Allowable service; limits and computation. (a) "Allowable service"
60.6means:
60.7    (1) service during years of actual membership in the course of which employee
60.8deductions were withheld from salary and contributions were made, at the applicable rates
60.9under section 353.27, 353.65, or 353E.03;
60.10(2) periods of service covered by payments in lieu of salary deductions under section
60.11sections 353.27, subdivision 12, and 353.35;
60.12    (2) (3) service in years during which the public employee was not a member but for
60.13which the member later elected, while a member, to obtain credit by making payments to
60.14the fund as permitted by any law then in effect;
60.15    (3) (4) a period of authorized leave of absence with pay from which deductions for
60.16employee contributions are made, deposited, and credited to the fund;
60.17    (4) (5) a period of authorized personal, parental, or medical leave of absence without
60.18pay, including a leave of absence covered under the federal Family Medical Leave Act,
60.19that does not exceed one year, and for which a member obtained service credit for each
60.20month in the leave period by payment under section 353.0161 to the fund made in place of
60.21salary deductions. An employee must return to public service and render a minimum of
60.22three months of allowable service in order to be eligible to make payment under section
60.23353.0161 for a subsequent authorized leave of absence without pay. Upon payment, the
60.24employee must be granted allowable service credit for the purchased period;
60.25    (5) (6) a periodic, repetitive leave that is offered to all employees of a governmental
60.26subdivision. The leave program may not exceed 208 hours per annual normal work
60.27cycle as certified to the association by the employer. A participating member obtains
60.28service credit by making employee contributions in an amount or amounts based on the
60.29member's average salary that would have been paid if the leave had not been taken. The
60.30employer shall pay the employer and additional employer contributions on behalf of the
60.31participating member. The employee and the employer are responsible to pay interest on
60.32their respective shares at the rate of 8.5 percent a year, compounded annually, from the
60.33end of the normal cycle until full payment is made. An employer shall also make the
60.34employer and additional employer contributions, plus 8.5 percent interest, compounded
60.35annually, on behalf of an employee who makes employee contributions but terminates
61.1public service. The employee contributions must be made within one year after the end of
61.2the annual normal working cycle or within 20 30 days after termination of public service,
61.3whichever is sooner. The executive director shall prescribe the manner and forms to be
61.4used by a governmental subdivision in administering a periodic, repetitive leave. Upon
61.5payment, the member must be granted allowable service credit for the purchased period;
61.6    (6) (7) an authorized temporary or seasonal layoff under subdivision 12, limited
61.7to three months allowable service per authorized temporary or seasonal layoff in one
61.8calendar year. An employee who has received the maximum service credit allowed for an
61.9authorized temporary or seasonal layoff must return to public service and must obtain a
61.10minimum of three months of allowable service subsequent to the layoff in order to receive
61.11allowable service for a subsequent authorized temporary or seasonal layoff; or
61.12    (7) (8) a period during which a member is absent from employment by a
61.13governmental subdivision by reason of service in the uniformed services, as defined in
61.14United States Code, title 38, section 4303(13), if the member returns to public service with
61.15the same governmental subdivision upon discharge from service in the uniformed service
61.16within the time frames required under United States Code, title 38, section 4312(e),
61.17provided that the member did not separate from uniformed service with a dishonorable or
61.18bad conduct discharge or under other than honorable conditions. The service is credited
61.19if the member pays into the fund equivalent employee contributions based upon the
61.20contribution rate or rates in effect at the time that the uniformed service was performed
61.21multiplied by the full and fractional years being purchased and applied to the annual salary
61.22rate. The annual salary rate is the average annual salary during the purchase period that
61.23the member would have received if the member had continued to be employed in covered
61.24employment rather than to provide uniformed service, or, if the determination of that
61.25rate is not reasonably certain, the annual salary rate is the member's average salary rate
61.26during the 12-month period of covered employment rendered immediately preceding the
61.27period of the uniformed service. Payment of the member equivalent contributions must
61.28be made during a period that begins with the date on which the individual returns to
61.29public employment and that is three times the length of the military leave period, or
61.30within five years of the date of discharge from the military service, whichever is less. If
61.31the determined payment period is less than one year, the contributions required under
61.32this clause to receive service credit may be made within one year of the discharge date.
61.33Payment may not be accepted following 20 30 days after termination of public service
61.34under subdivision 11a. If the member equivalent contributions provided for in this clause
61.35are not paid in full, the member's allowable service credit must be prorated by multiplying
61.36the full and fractional number of years of uniformed service eligible for purchase by the
62.1ratio obtained by dividing the total member contributions received by the total member
62.2contributions otherwise required under this clause. The equivalent employer contribution,
62.3and, if applicable, the equivalent additional employer contribution must be paid by the
62.4governmental subdivision employing the member if the member makes the equivalent
62.5employee contributions. The employer payments must be made from funds available to
62.6the employing unit, using the employer and additional employer contribution rate or
62.7rates in effect at the time that the uniformed service was performed, applied to the same
62.8annual salary rate or rates used to compute the equivalent member contribution. The
62.9governmental subdivision involved may appropriate money for those payments. The
62.10amount of service credit obtainable under this section may not exceed five years unless a
62.11longer purchase period is required under United States Code, title 38, section 4312. The
62.12employing unit shall pay interest on all equivalent member and employer contribution
62.13amounts payable under this clause. Interest must be computed at a rate of 8.5 percent
62.14compounded annually from the end of each fiscal year of the leave or the break in service
62.15to the end of the month in which the payment is received. Upon payment, the employee
62.16must be granted allowable service credit for the purchased period.; or
62.17(9) a period specified under subdivision 40.
62.18    (b) For calculating benefits under sections 353.30, 353.31, 353.32, and 353.33 for
62.19state officers and employees displaced by the Community Corrections Act, chapter 401,
62.20and transferred into county service under section 401.04, "allowable service" means the
62.21combined years of allowable service as defined in paragraph (a), clauses (1) to (6), and
62.22section 352.01, subdivision 11.
62.23    (c) For a public employee who has prior service covered by a local police or
62.24firefighters relief association that has consolidated with the Public Employees Retirement
62.25Association or to which section 353.665 applies, and who has elected the type of benefit
62.26coverage provided by the public employees police and fire fund either under section
62.27353A.08 following the consolidation or under section 353.665, subdivision 4, "applicable
62.28service" is a period of service credited by the local police or firefighters relief association
62.29as of the effective date of the consolidation based on law and on bylaw provisions
62.30governing the relief association on the date of the initiation of the consolidation procedure.
62.31    (d) No member may receive more than 12 months of allowable service credit in a
62.32year either for vesting purposes or for benefit calculation purposes.
62.33    (e) MS 2002 [Expired]
62.34EFFECTIVE DATE.This section is effective the day following final enactment.

62.35    Sec. 6. Minnesota Statutes 2008, section 353.01, subdivision 16b, is amended to read:
63.1    Subd. 16b. Uncredited military service credit purchase. (a) A public employee
63.2who has at least three years of allowable service with the Public Employees Retirement
63.3Association or the public employees police and fire plan and who performed service in the
63.4United States armed forces before becoming a public employee, or who failed to obtain
63.5service credit for a military leave of absence under subdivision 16, paragraph (h) (a),
63.6clause 7, is entitled to purchase allowable service credit for the initial period of enlistment,
63.7induction, or call to active duty without any voluntary extension by making payment under
63.8section 356.551. This authority is voided if the public employee has not purchased service
63.9credit from any other Minnesota defined benefit public employee pension plan, other than
63.10a volunteer fire plan, for the same period of service, or if the separation from the United
63.11States armed forces was under less than honorable conditions.
63.12    (b) A public employee who desires to purchase service credit under paragraph
63.13(a) must apply with the executive director to make the purchase. The application must
63.14include all necessary documentation of the public employee's qualifications to make the
63.15purchase, signed written permission to allow the executive director to request and receive
63.16necessary verification of applicable facts and eligibility requirements, and any other
63.17relevant information that the executive director may require.
63.18    (c) Allowable service credit for the purchase period must be granted by the
63.19Public Employees Retirement Association or the public employees police and fire plan,
63.20whichever applies, to the purchasing public employee upon receipt of the purchase
63.21payment amount. Payment must be made before the effective date of retirement of the
63.22public employee employee's termination of public service or termination of membership,
63.23whichever is earlier.
63.24    (d) This subdivision is repealed July 1, 2013.
63.25EFFECTIVE DATE.This section is effective the day after final enactment.

63.26    Sec. 7. Minnesota Statutes 2008, section 353.0161, subdivision 1, is amended to read:
63.27    Subdivision 1. Application. This section applies to employees covered by any plan
63.28specified in this chapter or chapter 353E for any period of authorized leave of absence
63.29specified in section 353.01, subdivision 16, paragraph (a), clause (4) (5), for which the
63.30employee obtains credit for allowable service by making payment as specified in this
63.31section to the applicable fund.
63.32EFFECTIVE DATE.This section is effective the day following final enactment.

63.33    Sec. 8. Minnesota Statutes 2008, section 353.03, subdivision 3a, is amended to read:
64.1    Subd. 3a. Executive director. (a) Appointment. The board shall appoint an
64.2executive director on the basis of education, experience in the retirement field, and
64.3leadership ability. The executive director must have had at least five years' experience in
64.4an executive level management position, which has included responsibility for pensions,
64.5deferred compensation, or employee benefits. The executive director serves at the pleasure
64.6of the board. The salary of the executive director is as provided by section 15A.0815.
64.7    (b) Duties. The management of the association is vested in the executive director
64.8who shall be the executive and administrative head of the association. The executive
64.9director shall act as adviser to the board on all matters pertaining to the association and
64.10shall also act as the secretary of the board. The executive director shall:
64.11    (1) attend all meetings of the board;
64.12    (2) prepare and recommend to the board appropriate rules to carry out the provisions
64.13of this chapter;
64.14    (3) establish and maintain an adequate system of records and accounts following
64.15recognized accounting principles and controls;
64.16    (4) designate, with the approval of the board, up to two persons who may serve in
64.17the unclassified service and whose salaries are set in accordance with section 43A.18,
64.18subdivision 3
, appoint a confidential secretary in the unclassified service, and appoint
64.19employees to carry out this chapter, who are subject to chapters 43A and 179A in the same
64.20manner as are executive branch employees;
64.21    (5) organize the work of the association as the director deems necessary to fulfill
64.22the functions of the association, and define the duties of its employees and delegate to
64.23them any powers or duties, subject to the control of, and under such conditions as, the
64.24executive director may prescribe;
64.25    (6) with the approval of the board, contract for the services of an approved actuary,
64.26professional management services, and any other consulting services as necessary to fulfill
64.27the purposes of this chapter. All contracts are subject to chapter 16C. The commissioner
64.28of administration shall not approve, and the association shall not enter into, any contract
64.29to provide lobbying services or legislative advocacy of any kind. Any approved actuary
64.30retained by the executive director shall function as the actuarial advisor of the board and
64.31the executive director and may perform actuarial valuations and experience studies to
64.32supplement those performed by the actuary retained . In addition to filing requirements
64.33under section 356.214., any supplemental actuarial valuations or experience studies shall
64.34be filed with the executive director of the Legislative Commission on Pensions and
64.35Retirement. Copies of professional management survey reports shall be transmitted to the
64.36secretary of the senate, the chief clerk of the house of representatives, and the Legislative
65.1Reference Library as provided by section 3.195, and to the executive director of the
65.2commission at the same time as reports are furnished to the board. Only management
65.3firms experienced in conducting management surveys of federal, state, or local public
65.4retirement systems shall be qualified to contract with the director hereunder;
65.5    (7) with the approval of the board provide in-service training for the employees
65.6of the association;
65.7    (8) make refunds of accumulated contributions to former members and to the
65.8designated beneficiary, surviving spouse, legal representative or next of kin of deceased
65.9members or deceased former members, as provided in this chapter;
65.10    (9) determine the amount of the annuities and disability benefits of members covered
65.11by the association and authorize payment of the annuities and benefits beginning as of
65.12the dates on which the annuities and benefits begin to accrue, in accordance with the
65.13provisions of this chapter;
65.14    (10) pay annuities, refunds, survivor benefits, salaries, and necessary operating
65.15expenses of the association;
65.16    (11) prepare and submit to the board and the legislature an annual financial report
65.17covering the operation of the association, as required by section 356.20;
65.18    (12) prepare and submit biennial and annual budgets to the board for its approval
65.19and submit the approved budgets to the Department of Finance for approval by the
65.20commissioner;
65.21    (13) reduce all or part of the accrued interest payable under section 353.27,
65.22subdivisions 12, 12a, and 12b
, or 353.28, subdivision 5, upon receipt of proof by the
65.23association of an unreasonable processing delay or other extenuating circumstances of
65.24the employing unit; and notwithstanding section 353.27, subdivision 7, may waive the
65.25payment of accrued interest to the member if a credit has been taken by the employer to
65.26correct an employee deduction taken in error and if the accrued interest is $10 or less.
65.27The executive director shall prescribe and submit for approval by the board the conditions
65.28under which such interest may be reduced; and
65.29    (14) with the approval of the board, perform such other duties as may be required for
65.30the administration of the association and the other provisions of this chapter and for the
65.31transaction of its business.
65.32EFFECTIVE DATE.This section is effective the day after final enactment.

65.33    Sec. 9. Minnesota Statutes 2008, section 353.27, subdivision 2, is amended to read:
65.34    Subd. 2. Employee contribution. (a) For a basic member, the employee
65.35contribution is the following applicable percentage of the total 9.10 percent of salary
66.1amount for a "basic member" and. For a "coordinated member": coordinated member,
66.2the employee contribution is six percent of salary plus any contribution rate adjustment
66.3under subdivision 3b.
66.4
Basic Program
Coordinated Program
66.5
Effective before January 1, 2006
9.10
5.10
66.6
Effective January 1, 2006
9.10
5.50
66.7
Effective January 1, 2007
9.10
5.75
66.8
66.9
66.10
Effective January 1, 2008
9.10
6.00 plus any contribution
rate adjustment under
subdivision 3b
66.11(b) These contributions must be made by deduction from salary as defined in section
66.12353.01, subdivision 10 , in the manner provided in subdivision 4. If any portion of a
66.13member's salary is paid from other than public funds, the member's employee contribution
66.14must be based on the total salary received by the member from all sources.
66.15EFFECTIVE DATE.This section is effective the day following final enactment.

66.16    Sec. 10. Minnesota Statutes 2008, section 353.27, subdivision 3, is amended to read:
66.17    Subd. 3. Employer contribution. (a) For a basic member, the employer
66.18contribution is the following applicable percentage of the total 9.10 percent of salary
66.19amount for "basic members" and. For "coordinated members": a coordinated member,
66.20the employer contribution is six percent of salary plus any contribution rate adjustment
66.21under subdivision 3b.
66.22
Basic Program
Coordinated Program
66.23
Effective before January 1, 2006
9.10
5.10
66.24
Effective January 1, 2006
9.10
5.50
66.25
Effective January 1, 2007
9.10
5.75
66.26
66.27
66.28
Effective January 1, 2008
9.10
6.00 plus any contribution
rate adjustment under
subdivision 3b
66.29(b) This contribution must be made from funds available to the employing
66.30subdivision by the means and in the manner provided in section 353.28.
66.31EFFECTIVE DATE.This section is effective the day following final enactment.

66.32    Sec. 11. Minnesota Statutes 2008, section 353.27, subdivision 7, is amended to read:
66.33    Subd. 7. Adjustment for erroneous receipts or disbursements. (a) Except
66.34as provided in paragraph (b), erroneous employee deductions and erroneous employer
67.1contributions and additional employer contributions for a person, who otherwise does not
67.2qualify for membership under this chapter, are considered:
67.3(1) valid if the initial erroneous deduction began before January 1, 1990. Upon
67.4determination of the error by the association, the person may continue membership in the
67.5association while employed in the same position for which erroneous deductions were
67.6taken, or file a written election to terminate membership and apply for a refund upon
67.7termination of public service or defer an annuity under section 353.34; or
67.8(2) invalid, if the initial erroneous employee deduction began on or after January 1,
67.91990. Upon determination of the error, the association shall refund all erroneous employee
67.10deductions and all erroneous employer contributions as specified in paragraph (d) (e). No
67.11person may claim a right to continued or past membership in the association based on
67.12erroneous deductions which began on or after January 1, 1990.
67.13(b) Erroneous deductions taken from the salary of a person who did not qualify
67.14for membership in the association by virtue of concurrent employment before July 1,
67.151978, which required contributions to another retirement fund or relief association
67.16established for the benefit of officers and employees of a governmental subdivision, are
67.17invalid. Upon discovery of the error, the association shall remove all invalid service and,
67.18upon termination of public service, the association shall refund all erroneous employee
67.19deductions to the person, with interest as determined under section 353.34, subdivision 2,
67.20and all erroneous employer contributions without interest to the employer. This paragraph
67.21has both retroactive and prospective application.
67.22(c) Adjustments to correct employer contributions and employee deductions taken in
67.23error from amounts which are not salary under section 353.01, subdivision 10, are invalid
67.24upon discovery by the association and must be refunded made as specified in paragraph
67.25(d) (e). The period of adjustment must be limited to the fiscal year in which the error is
67.26discovered by the association and the immediate two preceding fiscal years.
67.27(d) If there is evidence of fraud or other misconduct on the part of the employee or
67.28the employer, the board of trustees may authorize adjustments to the account of a member
67.29or former member to correct erroneous employee deductions and employer contributions
67.30on invalid salary and the recovery of any overpayments for a period longer than provided
67.31for under paragraph (c).
67.32(d) (e) Upon discovery of the receipt of erroneous employee deductions and
67.33employer contributions under paragraph (a), clause (2), or paragraph (c), the association
67.34must require the employer to discontinue the erroneous employee deductions and
67.35erroneous employer contributions reported on behalf of a member. Upon discontinuation,
67.36the association either must refund :
68.1(1) for a member, provide a refund or credit to the employer in the amount of the
68.2invalid employee deductions to the person without interest and with interest on the invalid
68.3employee deductions at the rate specified under section 353.34, subdivision 2, from the
68.4received date of each invalid salary transaction through the date the credit or refund is
68.5made; and the employer must pay the refunded employee deductions plus interest to the
68.6member;
68.7(2) for a former member who:
68.8(i) is not receiving a retirement annuity or benefit, return the erroneous employee
68.9deductions to the former member through a refund with interest at the rate specified under
68.10section 353.34, subdivision 2, from the received date of each invalid salary transaction
68.11through the date the credit or refund is made; or
68.12(ii) is receiving a retirement annuity or disability benefit, or a person who is
68.13receiving an optional annuity or survivor benefit, for whom it has been determined an
68.14overpayment must be recovered, adjust the payment amount and recover the overpayments
68.15as provided under this section; and
68.16(3) return the invalid employer contributions reported on behalf of a member
68.17or former member to the employer or provide by providing a credit against future
68.18contributions payable by the employer for the amount of all erroneous deductions and
68.19contributions. If the employing unit receives a credit under this paragraph, the employing
68.20unit is responsible for refunding to the applicable employee any amount that had been
68.21erroneously deducted from the person's salary. In the event that a retirement annuity or
68.22disability benefit has been computed using invalid service or salary, the association must
68.23adjust the annuity or benefit and recover any overpayment under subdivision 7b.
68.24(e) (f) In the event that a salary warrant or check from which a deduction for the
68.25retirement fund was taken has been canceled or the amount of the warrant or check
68.26returned to the funds of the department making the payment, a refund of the sum
68.27deducted, or any portion of it that is required to adjust the deductions, must be made
68.28to the department or institution.
68.29(f) Any refund to a member under this subdivision that is reasonably determined
68.30to cause the plan to fail to be a qualified plan under section 401(a) of the federal
68.31Internal Revenue Code, as amended, may not be refunded and instead must be credited
68.32against future contributions payable by the employer. The employer receiving the
68.33credit is responsible for refunding to the applicable employee any amount that had been
68.34erroneously deducted from the person's salary.
68.35(g) If the accrual date of any retirement annuity, survivor benefit, or disability benefit
68.36is within the limitation period specified in paragraph (c), and an overpayment has resulted
69.1by using invalid service or salary, or due to any erroneous calculation procedure, the
69.2association must recalculate the annuity or benefit payable and recover any overpayment
69.3as provided under subdivision 7b.
69.4(h) Notwithstanding the provisions of this subdivision, the association may apply
69.5the Revenue Procedures defined in the federal Internal Revenue Service Employee Plans
69.6Compliance Resolution System and not issue a refund of erroneous employee deductions
69.7and employer contributions or not recover a small overpayment of benefits if the cost to
69.8correct the error would exceed the amount of the member refund or overpayment.
69.9(i) Any fees or penalties assessed by the federal Internal Revenue Service for any
69.10failure by an employer to follow the statutory requirements for reporting eligible members
69.11and salary must be paid by the employer.
69.12EFFECTIVE DATE.(a) This section is effective the day following enactment.
69.13(b) The interest required on deductions in error as provided in paragraph (e) must
69.14be applied to any refunds paid on or after June 1, 2009.

69.15    Sec. 12. Minnesota Statutes 2008, section 353.27, subdivision 7b, is amended to read:
69.16    Subd. 7b. Recovery of overpayments to members. (a) In the event of an
69.17overpayment to a member, retiree, beneficiary, or other person, the executive director shall
69.18recover the overpayment by suspending or reducing the payment of a retirement annuity,
69.19refund, disability benefit, survivor benefit, or optional annuity payable to the applicable
69.20person or the person's estate, whichever applies, under this chapter until all outstanding
69.21money has been recovered determines that an overpaid annuity or benefit that is the result
69.22of invalid salary included in the average salary used to calculate the payment amount must
69.23be recovered, the association must determine the amount of the employee deductions
69.24taken in error on the invalid salary, with interest determined in the manner provided for a
69.25former member under subdivision 7, paragraph (e), clause (2), item (i), and must subtract
69.26that amount from the total annuity or benefit overpayment, and the remaining balance of
69.27the overpaid annuity or benefit, if any, must be recovered.
69.28(b) If the invalid employee deductions plus interest exceed the amount of the
69.29overpaid benefits, the balance must be refunded to the person to whom the benefit or
69.30annuity is being paid.
69.31(c) Any invalid employer contributions reported on the invalid salary must be
69.32credited to the employer as provided in subdivision 7, paragraph (e).
69.33(d) If a member or former member, who is receiving a retirement annuity or
69.34disability benefit for which an overpayment is being recovered, dies before recovery of
69.35the overpayment is completed and a joint and survivor optional annuity is payable, the
70.1remaining balance of the overpaid annuity or benefit must continue to be recovered from
70.2the payment to the optional annuity beneficiary.
70.3(e) If the association finds that a refund has been overpaid to a former member,
70.4beneficiary or other person, the amount of the overpayment must be recovered.
70.5(f) The board of trustees shall adopt policies directing the period of time and manner
70.6for the collection of any overpaid retirement or optional annuity, and survivor or disability
70.7benefit, or a refund that the executive director determines must be recovered as provided
70.8under this section.
70.9EFFECTIVE DATE.This section is effective the day following final enactment.

70.10    Sec. 13. Minnesota Statutes 2008, section 353.33, subdivision 1, is amended to read:
70.11    Subdivision 1. Age, service, and salary requirements. A coordinated or basic
70.12member who has at least three years of allowable service and becomes totally and
70.13permanently disabled before normal retirement age, and a basic member who has at least
70.14three years of allowable service and who becomes totally and permanently disabled, upon
70.15application as defined under section 353.031, is entitled to a disability benefit in an amount
70.16determined under subdivision 3. If the disabled person's public service has terminated
70.17at any time, at least two of the required three years of allowable service must have been
70.18rendered after last becoming an active member.
70.19EFFECTIVE DATE.This section is effective the day following final enactment.

70.20    Sec. 14. Minnesota Statutes 2008, section 353.33, is amended by adding a subdivision
70.21to read:
70.22    Subd. 1a. Benefit restriction. No person is entitled to receive disability benefits
70.23and a retirement annuity at the same time.
70.24EFFECTIVE DATE.This section is effective the day following final enactment.

70.25    Sec. 15. Minnesota Statutes 2008, section 353.33, subdivision 11, is amended to read:
70.26    Subd. 11. Coordinated member disabilitant transfer to retirement status. No
70.27person is entitled to receive disability benefits and a retirement annuity at the same time.
70.28The disability benefits paid to a coordinated member must terminate when the person
70.29reaches normal retirement age. If the coordinated member is still totally and permanently
70.30disabled upon attaining normal retirement age, the coordinated member is deemed to be on
70.31retirement status. If an optional annuity is elected under subdivision 3a, the coordinated
70.32member shall receive an annuity under the terms of the optional annuity previously
71.1elected, or, if an optional annuity is not elected under subdivision 3a, the coordinated
71.2member may elect to receive a normal retirement annuity under section 353.29 or an
71.3annuity equal to the disability benefit paid before the coordinated member reaches normal
71.4retirement age, whichever amount is greater, or elect to receive an optional annuity
71.5under section 353.30, subdivision 3. The annuity of a disabled coordinated member who
71.6attains normal retirement age must be computed under the law in effect upon attainment
71.7of normal retirement age. Election of an optional annuity must be made before the
71.8coordinated member attains normal retirement age. If an optional annuity is elected, the
71.9election is effective on the date on which the person attains normal retirement age and
71.10the optional annuity begins to accrue on the first day of the month next following the
71.11month in which the person attains that age.
71.12EFFECTIVE DATE.This section is effective the day following final enactment.

71.13    Sec. 16. Minnesota Statutes 2008, section 353.33, subdivision 12, is amended to read:
71.14    Subd. 12. Basic disability disabilitant transfer to retirement status; survivor
71.15benefits. (a) If a basic member who is receiving a disability benefit under subdivision 3:
71.16(1) dies before attaining age 65 or within five years of the effective date of the
71.17disability, whichever is later, the surviving spouse is entitled to receive a survivor
71.18benefit under section 353.31, unless and any dependent child or children are entitled to
71.19dependent child benefits under section 353.31, subdivision 1b, paragraph (b). If there are
71.20no dependent children, in lieu of the survivor benefit specified under section 353.31, the
71.21surviving spouse elected may elect to receive a refund under section 353.32, subdivision 1;.
71.22(2) (b) If a basic member who is receiving a disability benefit under subdivision 3 is
71.23living at age 65 or five years after the effective date of the disability, whichever is later, the
71.24basic member may continue to receive a normal retirement annuity equal to the disability
71.25benefit previously received, adjusted for the amount no longer payable under subdivision
71.263, paragraph (b), or the person may elect a joint and survivor optional annuity under
71.27section 353.31, subdivision 1b. The election of the joint and survivor optional annuity
71.28must occur within 90 days of attaining age 65 or of reaching the five-year anniversary
71.29of the effective date of the disability benefit, whichever is later. The optional annuity
71.30takes effect on the first day of the month following the month in which the person attains
71.31age 65 or reaches the five-year anniversary of the effective date of the disability benefit,
71.32whichever is later; or.
71.33(3) if there is a dependent child or children under clause (1) or (2), the dependent
71.34child is entitled to a dependent child benefit under section 353.31, subdivision 1b,
71.35paragraph (b).
72.1EFFECTIVE DATE.This section is effective the day following final enactment.

72.2    Sec. 17. Minnesota Statutes 2008, section 353.65, subdivision 2, is amended to read:
72.3    Subd. 2. Employee contribution rate. (a) The employee contribution is an amount
72.4equal to the 9.4 percent of the total salary of the member specified in paragraph (b). This
72.5contribution must be made by deduction from salary in the manner provided in subdivision
72.64. Where any portion of a member's salary is paid from other than public funds, the
72.7member's employee contribution is based on the total salary received from all sources.
72.8(b) For calendar year 2006, the employee contribution rate is 7.0 percent. For
72.9calendar year 2007, the employee contribution rate is 7.8 percent. For calendar year 2008,
72.10the employee contribution rate is 8.6 percent. For calendar year 2009 and thereafter, the
72.11employee contribution rate is 9.4 percent.
72.12EFFECTIVE DATE.This section is effective the day following final enactment.

72.13    Sec. 18. Minnesota Statutes 2008, section 353.65, subdivision 3, is amended to read:
72.14    Subd. 3. Employer contribution rate. (a) The employer contribution shall be an
72.15amount equal to the is 14.1 percent of the total salary of every the member as specified in
72.16paragraph (b). This contribution shall must be made from funds available to the employing
72.17subdivision by the means and in the manner provided in section 353.28.
72.18(b) For calendar year 2006, the employer contribution rate is 10.5 percent. For
72.19calendar year 2007, the employer contribution rate is 11.7 percent. For calendar year 2008,
72.20the employer contribution rate is 12.9 percent. For calendar year 2009 and thereafter, the
72.21employer contribution rate is 14.1 percent.
72.22EFFECTIVE DATE.This section is effective the day following final enactment.

72.23    Sec. 19. Minnesota Statutes 2008, section 353A.08, subdivision 6a, is amended to read:
72.24    Subd. 6a. Military service contribution and refund. A person who was an active
72.25member of a local police or firefighters relief association upon its consolidation with the
72.26public employees retirement association, and who was otherwise eligible for automatic
72.27service credit for military service under Minnesota Statutes 2000, section 423.57, and
72.28who has not elected the type of benefit coverage provided by the public employees
72.29police and fire fund at the time of consolidation, must make employee contributions
72.30under section 353.01, subdivision 16, paragraph (h) (a), clause (8), to receive allowable
72.31service credit from the association for a military service leave after the effective date of the
72.32consolidation. A person who later elects, under subdivision 3, to retain benefit coverage
73.1under the bylaws of the local relief association is eligible for a refund from the association
73.2at the time of retirement. The association shall refund the employee contributions
73.3plus interest at the rate of six percent, compounded quarterly, from the date on which
73.4contributions were made until the first day of the month in which the refund is paid. The
73.5employer shall receive a refund of the employer contributions. The association shall not
73.6pay a refund to a person who later elects, under subdivision 3, the type of benefit coverage
73.7provided by the public employees police and fire fund or to the person's employer.
73.8EFFECTIVE DATE.This section is effective the day following final enactment.

73.9    Sec. 20. Minnesota Statutes 2008, section 353F.02, subdivision 4, is amended to read:
73.10    Subd. 4. Medical facility. "Medical facility" means:
73.11    (1) Bridges Medical Services;
73.12    (2) the City of Cannon Falls Hospital;
73.13    (3) Clearwater County Memorial Hospital doing business as Clearwater Health
73.14Services in Bagley;
73.15    (4) the Dassel Lakeside Community Home;
73.16    (5) the Fair Oaks Lodge, Wadena;
73.17    (6) the Glencoe Area Health Center;
73.18    (7) Hutchinson Area Health Care;
73.19    (8) the Lakefield Nursing Home;
73.20    (9) the Lakeview Nursing Home in Gaylord;
73.21    (10) the Luverne Public Hospital;
73.22    (11) the Oakland Park Nursing Home;
73.23    (12) the RenVilla Nursing Home;
73.24    (13) the Rice Memorial Hospital in Willmar, with respect to the Department of
73.25Radiology and the Department of Radiation/Oncology;
73.26(14) the St. Peter Community Health Care Center;
73.27    (15) the Waconia-Ridgeview Medical Center; and
73.28(16) the Weiner Memorial Medical Center, Inc.; and
73.29(17) the Worthington Regional Hospital.
73.30EFFECTIVE DATE.This section is effective upon compliance with Minnesota
73.31Statutes, section 353F.02, subdivision 3.

73.32    Sec. 21. Minnesota Statutes 2008, section 354.05, is amended by adding a subdivision
73.33to read:
74.1    Subd. 42. Fiscal year. The fiscal year of the association begins on July 1 of each
74.2calendar year and ends on June 30 of the following calendar year.
74.3EFFECTIVE DATE.This section is effective the day following final enactment.

74.4    Sec. 22. Minnesota Statutes 2008, section 354.42, subdivision 2, is amended to read:
74.5    Subd. 2. Employee contribution. (a) For a basic member, the employee
74.6contribution to the fund is an amount equal to the following percentage 9.0 percent of the
74.7member's salary of a member:. For a coordinated member, the employee contribution is
74.85.5 percent of the member's salary.
74.9(1) after July 1, 2006, for a teacher employed by Special School District No. 1,
74.10Minneapolis, 5.5 percent if the teacher is a coordinated member, and 9.0 percent if the
74.11teacher is a basic member;
74.12(2) for every other teacher, after July 1, 2006, 5.5 percent if the teacher is a
74.13coordinated member and 9.0 percent if the teacher is a basic member.
74.14(b) This contribution must be made by deduction from salary. Where any portion
74.15of a member's salary is paid from other than public funds, the member's employee
74.16contribution must be based on the entire salary received.
74.17EFFECTIVE DATE.This section is effective the day following final enactment.

74.18    Sec. 23. Minnesota Statutes 2008, section 354.44, subdivision 4, is amended to read:
74.19    Subd. 4. Retirement annuity accrual date. (a) An annuity payment begins to
74.20accrue, provided that the age and service requirements under subdivision 1 are satisfied,
74.21after the termination of teaching service, or after the application for retirement has been
74.22filed with the board, whichever is later executive director, as follows:
74.23(1) on the 16th day of after the month of termination or filing if the termination or
74.24filing occurs on or before the 15th day of the month of teaching service;
74.25(2) on the first day of the month following the month of termination or filing if
74.26the termination or filing occurs on or after the 16th day of the month day of receipt of
74.27application if the application is filed with the executive director after the six-month period
74.28that occurs immediately following the termination of teaching service;
74.29(3) on July 1 for all school principals and other administrators who receive a full
74.30annual contract salary during the fiscal year for performance of a full year's contract
74.31duties; or
75.1(4) a later date to be either the first or the 16th day of a month occurring within the
75.2six-month period immediately following the termination of teaching service as specified
75.3under paragraph (b) by the member.
75.4(b) (4) if an application for retirement is filed with the board executive director
75.5during the six-month period that occurs immediately following the termination of teaching
75.6service, the annuity may begin to accrue as if the application for retirement had been filed
75.7with the board on the date teaching service terminated or a later date under paragraph
75.8(a), clause (4).
75.9(b) A member, or a person authorized to act on behalf of the member, may specify a
75.10different date of retirement from that determined in paragraph (a), as follows:
75.11(1) if the application is filed on or before the date of termination of teaching service,
75.12the accrual date may be a date no earlier than the day after the termination of teaching
75.13service and no later than six months after the termination date; or
75.14(2) if the application is filed during the six-month period that occurs immediately
75.15following the termination of teaching service, the accrual date may begin to accrue
75.16retroactively, but no earlier than the day after teaching service terminated and no later
75.17than six months after the termination date.
75.18EFFECTIVE DATE.This section is effective January 1, 2010.

75.19    Sec. 24. Minnesota Statutes 2008, section 354.44, subdivision 5, is amended to read:
75.20    Subd. 5. Resumption of teaching service after retirement. (a) Any person who
75.21retired under the provisions of this chapter and has thereafter resumed teaching in any
75.22employer unit to which this chapter applies is eligible to continue to receive payments in
75.23accordance with the annuity except that all or a portion of the annuity payments must be
75.24deferred during the calendar year immediately following any calendar the fiscal year in
75.25which the person's salary from the teaching service is in an amount greater than $46,000.
75.26The amount of the annuity deferral is one-half of the salary amount in excess of $46,000
75.27and must be deducted from the annuity payable for the calendar year immediately
75.28following the calendar fiscal year in which the excess amount was earned.
75.29    (b) If the person is retired for only a fractional part of the calendar fiscal year during
75.30the initial year of retirement, the maximum reemployment salary exempt from triggering a
75.31deferral as specified in this subdivision must be prorated for that calendar fiscal year.
75.32    (c) After a person has reached the Social Security normal retirement age, no deferral
75.33requirement is applicable regardless of the amount of salary.
75.34    (d) The amount of the retirement annuity deferral must be handled or disposed
75.35of as provided in section 356.47.
76.1    (e) For the purpose of this subdivision, salary from teaching service includes, but is
76.2not limited to:
76.3    (1) all income for services performed as a consultant or an independent contractor
76.4for an employer unit covered by the provisions of this chapter; and
76.5    (2) the greater of either the income received or an amount based on the rate paid
76.6with respect to an administrative position, consultant, or independent contractor in an
76.7employer unit with approximately the same number of pupils and at the same level as the
76.8position occupied by the person who resumes teaching service.
76.9EFFECTIVE DATE.This section is effective January 1, 2010.

76.10    Sec. 25. Minnesota Statutes 2008, section 354.47, subdivision 1, is amended to read:
76.11    Subdivision 1. Death before retirement. (a) If a member dies before retirement
76.12and is covered under section 354.44, subdivision 2, and neither an optional annuity, nor a
76.13reversionary annuity, nor a benefit under section 354.46, subdivision 1, is payable to the
76.14survivors if the member was a basic member, then the surviving spouse, or if there is no
76.15surviving spouse, the designated beneficiary is entitled to an amount equal to the member's
76.16accumulated deductions with interest credited to the account of the member to the date of
76.17death of the member. If the designated beneficiary is a minor, interest must be credited to
76.18the date the beneficiary reaches legal age, or the date of receipt, whichever is earlier.
76.19(b) If a member dies before retirement and is covered under section 354.44,
76.20subdivision 6
, and neither an optional annuity, nor reversionary annuity, nor the benefit
76.21described in section 354.46, subdivision 1, is payable to the survivors if the member
76.22was a basic member, then the surviving spouse, or if there is no surviving spouse,
76.23the designated beneficiary is entitled to an amount equal to the member's accumulated
76.24deductions credited to the account of the member as of June 30, 1957, and from July 1,
76.251957, to the date of death of the member, the member's accumulated deductions plus
76.26six percent interest compounded annually.
76.27(c) If the designated beneficiary under paragraph (b) is a minor, any interest credited
76.28under that paragraph must be credited to the date the beneficiary reaches legal age, or
76.29the date of receipt, whichever is earlier.
76.30(d) The amount of any refund payable under this subdivision must be reduced by
76.31any permanent disability payment under section 354.48 received by the member.
76.32EFFECTIVE DATE.This section is effective the day following final enactment.

76.33    Sec. 26. Minnesota Statutes 2008, section 354.48, subdivision 4, is amended to read:
77.1    Subd. 4. Determination by executive director. (a) The executive director shall
77.2have the member examined by at least two licensed physicians, licensed chiropractors,
77.3or licensed psychologists selected by the medical adviser.
77.4(b) These physicians, chiropractors, or psychologists with respect to a mental
77.5impairment, shall make written reports to the executive director concerning the member's
77.6disability, including expert opinions as to whether or not the member is permanently and
77.7totally disabled within the meaning of section 354.05, subdivision 14.
77.8(c) The executive director shall also obtain written certification from the last
77.9employer stating whether or not the member was separated from service because of
77.10a disability which would reasonably prevent further service to the employer and as a
77.11consequence the member is not entitled to compensation from the employer.
77.12(d) If, upon the consideration of the reports of the physicians, chiropractors, or
77.13psychologists and any other evidence presented by the member or by others interested
77.14therein, the executive director finds that the member is totally and permanently disabled,
77.15the executive director shall grant the member a disability benefit.
77.16(e) An employee who is placed on leave of absence without compensation because
77.17of disability is not barred from receiving a disability benefit.
77.18EFFECTIVE DATE.This section is effective the day following final enactment.

77.19    Sec. 27. Minnesota Statutes 2008, section 354.48, subdivision 6, is amended to read:
77.20    Subd. 6. Regular physical examinations. At least once each year during the first
77.21five years following the allowance of a disability benefit to any member, and at least once
77.22in every three-year period thereafter, the executive director shall may require the disability
77.23beneficiary recipient to undergo an expert examination by a physician or physicians,
77.24by a chiropractor or chiropractors, or by one or more psychologists with respect to a
77.25mental impairment, engaged by the executive director. If an examination indicates that the
77.26member is no longer permanently and totally disabled or that the member is engaged or is
77.27able to engage in a substantial gainful occupation, payments of the disability benefit by
77.28the association must be discontinued. The payments must be discontinued as soon as the
77.29member is reinstated to the payroll following sick leave, but payment may not be made for
77.30more than 60 days after the physicians, the chiropractors, or the psychologists engaged by
77.31the executive director find that the person is no longer permanently and totally disabled.
77.32EFFECTIVE DATE.This section is effective the day following final enactment.

77.33    Sec. 28. Minnesota Statutes 2008, section 354.49, subdivision 2, is amended to read:
78.1    Subd. 2. Calculation. (a) Except as provided in section 354.44, subdivision 1, any
78.2person who ceases to be a member by reason of termination of teaching service, shall is
78.3entitled to receive a refund in an amount equal to the accumulated deductions credited to
78.4the account as of June 30, 1957, and after July 1, 1957, the accumulated deductions with
78.5interest at the rate of six percent per annum compounded annually. For the purpose of this
78.6subdivision, interest shall must be computed on fiscal year end balances to the first day of
78.7the month in which the refund is issued.
78.8(b) If the person has received permanent disability payments under section 354.48,
78.9the refund amount must be reduced by the amount of those payments.
78.10EFFECTIVE DATE.This section is effective the day following final enactment.

78.11    Sec. 29. Minnesota Statutes 2008, section 354.52, subdivision 2a, is amended to read:
78.12    Subd. 2a. Annual Postretirement income reports reporting. On or before each
78.13February 15, a representative authorized by an Each employing unit must report to the
78.14executive director the amount of income earned during the previous calendar fiscal year
78.15by each retiree for teaching service performed after retirement. This annual report must be
78.16shall be done through the payroll reporting system and is based on reemployment income
78.17as defined in section 354.44, subdivision 5, and it must be made on a form provided by the
78.18executive director. Signing Submitting the report salary data through payroll reporting
78.19has the force and effect of an oath as to the correctness of the amount of postretirement
78.20reemployment income earned.
78.21EFFECTIVE DATE.This section is effective January 1, 2010.

78.22    Sec. 30. Minnesota Statutes 2008, section 354.52, subdivision 4b, is amended to read:
78.23    Subd. 4b. Payroll cycle reporting requirements. An employing unit shall provide
78.24the following data to the association for payroll warrants on an ongoing basis within 14
78.25calendar days after the date of the payroll warrant in a format prescribed by the executive
78.26director:
78.27(1) association member number;
78.28(2) employer-assigned employee number;
78.29(3) Social Security number;
78.30(4) amount of each salary deduction;
78.31(5) amount of salary as defined in section 354.05, subdivision 35, from which each
78.32deduction was made;
78.33(6) reason for payment;
79.1(7) service credit;
79.2(8) the beginning and ending dates of the payroll period covered and the date
79.3of actual payment;
79.4(9) fiscal year of salary earnings;
79.5(10) total remittance amount including employee, employer, and additional employer
79.6contributions; and
79.7(11) reemployed annuitant salary under section 354.44, subdivision 5; and
79.8(11) (12) other information as may be required by the executive director.
79.9EFFECTIVE DATE.This section is effective January 1, 2010.

79.10    Sec. 31. [354.543] PRIOR OR UNCREDITED MILITARY SERVICE CREDIT
79.11PURCHASE.
79.12    Subdivision 1. Service credit purchase authorized. (a) If paragraph (b) does not
79.13apply, a teacher who has at least three years of allowable service credit with the Teachers
79.14Retirement Association and who performed service in the United States armed forces
79.15before becoming a teacher as defined in section 354.05, subdivision 2, or who failed
79.16to obtain service credit for a military leave of absence under the provisions of section
79.17354.53, is entitled to purchase allowable and formula service credit for the initial period of
79.18enlistment, induction, or call to active duty without any voluntary extension by making
79.19payment under section 356.551.
79.20(b) A service credit purchase is prohibited if:
79.21(1) the teacher separated from service with the United States armed forces with a
79.22dishonorable or bad conduct discharge or under other than honorable conditions; or
79.23(2) the teacher has purchased or otherwise received service credit from any
79.24Minnesota defined benefit public employee pension plan, other than a volunteer fire plan,
79.25for the same period of service.
79.26    Subd. 2. Application and documentation. A teacher who desires to purchase
79.27service credit under subdivision 1 must apply with the executive director to make the
79.28purchase. The application must include all necessary documentation of the teacher's
79.29qualifications to make the purchase, signed written permission to allow the executive
79.30director to request and receive necessary verification of applicable facts and eligibility
79.31requirements, and any other relevant information that the executive director may require.
79.32    Subd. 3. Service credit grant. Allowable and formula service credit for the
79.33purchase period must be granted by the Teachers Retirement Association to the purchasing
79.34teacher upon receipt of the purchase payment amount. Payment must be made before the
79.35teacher's termination of teaching service.
80.1EFFECTIVE DATE.This section is effective the day following final enactment.

80.2    Sec. 32. Minnesota Statutes 2008, section 354.55, subdivision 11, is amended to read:
80.3    Subd. 11. Deferred annuity; augmentation. (a) Any person covered under section
80.4354.44, subdivision 6 , who ceases to render teaching service, may leave the person's
80.5accumulated deductions in the fund for the purpose of receiving a deferred annuity at
80.6retirement. Eligibility for an annuity under this subdivision is governed pursuant to
80.7section 354.44, subdivision 1, or 354.60.
80.8(b) The amount of the deferred retirement annuity is determined by section 354.44,
80.9subdivision 6
, and augmented as provided in this subdivision. The required reserves
80.10related to that portion of for the annuity which had accrued when the member ceased to
80.11render teaching service must be augmented, as further specified in this subdivision, by
80.12interest compounded annually from the first day of the month following the month during
80.13which the member ceased to render teaching service to the effective date of retirement.
80.14(c) There shall be No augmentation is not creditable if this the deferral period is less
80.15than three months or if this period commences prior to deferral commenced before July 1,
80.161971. The rates of interest used for this purpose must be five percent compounded annually
80.17commencing July 1, 1971, until January 1, 1981, and three percent compounded annually
80.18thereafter until January 1 of the year following the year in which the former member
80.19attains age 55 and from that date to the effective date of retirement, the rate is five percent
80.20compounded annually if the employee became an employee before July 1, 2006, and at 2.5
80.21percent compounded annually if the employee becomes an employee after June 30, 2006.
80.22(d) For persons who became covered employees before July 1, 2006, with a deferral
80.23period commencing after June 30, 1971, the annuity must be augmented using five
80.24percent interest compounded annually until January 1, 1981, and three percent interest
80.25compounded annually thereafter until January 1 of the year following the year in which
80.26the deferred annuitant attains age 55. From that date to the effective date of retirement, the
80.27rate is five percent compounded annually.
80.28(e) For persons who become covered employees after June 30, 2006, the interest rate
80.29used to augment the deferred annuity is 2.5 percent interest compounded annually.
80.30(f) If a person has more than one period of uninterrupted service, a separate average
80.31salary determined under section 354.44, subdivision 6, must be used for each period and
80.32the required reserves related to each period must be augmented by interest pursuant to as
80.33specified in this subdivision. The sum of the augmented required reserves so determined
80.34shall be the basis for purchasing is the present value of the deferred annuity. For the
80.35purposes of this subdivision, "period of uninterrupted service" means a period of covered
81.1teaching service during which the member has not been separated from active service for
81.2more than one fiscal year.
81.3(g) If a person repays a refund, the service restored by the repayment must be
81.4considered as continuous with the next period of service for which the person has
81.5allowable service credit with this fund in the Teachers Retirement Association.
81.6(h) If a person does not render teaching service in any one fiscal year or more
81.7consecutive fiscal years and then resumes teaching service, the formula percentages used
81.8from the date of the resumption of teaching service must be those applicable to new
81.9members.
81.10(i) The mortality table and interest assumption used to compute the annuity must be
81.11the applicable mortality table established by the board under section 354.07, subdivision
81.121
, and the interest rate assumption under section 356.215 in effect when the member
81.13retires. A period of uninterrupted service for the purposes of this subdivision means a
81.14period of covered teaching service during which the member has not been separated from
81.15active service for more than one fiscal year.
81.16(c) (j) In no case shall may the annuity payable under this subdivision be less than
81.17the amount of annuity payable pursuant to under section 354.44, subdivision 6.
81.18(d) (k) The requirements and provisions for retirement before normal retirement
81.19age contained in section 354.44, subdivision 6, clause (3) or (5), shall also apply to an
81.20employee fulfilling the requirements with a combination of service as provided in section
81.21354.60 .
81.22(e) (l) The augmentation provided by this subdivision applies to the benefit provided
81.23in section 354.46, subdivision 2.
81.24(f) (m) The augmentation provided by this subdivision shall does not apply to any
81.25period in which a person is on an approved leave of absence from an employer unit
81.26covered by the provisions of this chapter.
81.27(g) (n) The retirement annuity or disability benefit of, or the survivor benefit payable
81.28on behalf of, a former teacher who terminated service before July 1, 1997, which is not
81.29first payable until after June 30, 1997, must be increased on an actuarial equivalent basis
81.30to reflect the change in the postretirement interest rate actuarial assumption under section
81.31356.215, subdivision 8 , from five percent to six percent under a calculation procedure and
81.32tables adopted by the board as recommended by an approved actuary and approved by the
81.33actuary retained under section 356.214.
81.34EFFECTIVE DATE.This section is effective the day following final enactment.

82.1    Sec. 33. Minnesota Statutes 2008, section 354A.096, is amended to read:
82.2354A.096 MEDICAL LEAVE.
82.3Any teacher in the coordinated program of the St. Paul Teachers Retirement Fund
82.4Association or the new law coordinated program of the Duluth Teachers Retirement Fund
82.5Association who is on an authorized medical leave of absence and subsequently returns
82.6to teaching service is entitled to receive allowable service credit, not to exceed one year,
82.7for the period of leave, upon making the prescribed payment to the fund. This payment
82.8must include the required employee and employer contributions at the rates specified in
82.9section 354A.12, subdivisions 1 and 2 2a, as applied to the member's average full-time
82.10monthly salary rate on the date the leave of absence commenced plus annual interest at
82.11the rate of 8.5 percent per year from the end of the fiscal year during which the leave
82.12terminates to the end of the month during which payment is made. The member must pay
82.13the total amount required unless the employing unit, at its option, pays the employer
82.14contributions. The total amount required must be paid by the end of the fiscal year
82.15following the fiscal year in which the leave of absence terminated or before the member
82.16retires, whichever is earlier. Payment must be accompanied by a copy of the resolution or
82.17action of the employing authority granting the leave and the employing authority, upon
82.18granting the leave, must certify the leave to the association in a manner specified by the
82.19executive director. A member may not receive more than one year of allowable service
82.20credit during any fiscal year by making payment under this section. A member may not
82.21receive disability benefits under section 354A.36 and receive allowable service credit
82.22under this section for the same period of time.
82.23EFFECTIVE DATE.This section is effective the day following final enactment.

82.24    Sec. 34. Minnesota Statutes 2008, section 354A.12, subdivision 2a, is amended to read:
82.25    Subd. 2a. Employer regular and additional contribution rates contributions.
82.26(a) The employing units shall make the following employer contributions to teachers
82.27retirement fund associations:
82.28(1) for any coordinated member of a teachers retirement fund association in a city of
82.29the first class, the employing unit shall pay the employer Social Security taxes;
82.30(2) for any coordinated member of one of the following teachers retirement fund
82.31associations in a city of the first class, the employing unit shall make a regular employer
82.32contribution to the respective retirement fund association in an amount equal to the
82.33designated percentage of the salary of the coordinated member as provided below:
83.1
83.2
Duluth Teachers Retirement
Fund Association
4.50 percent
83.3
83.4
St. Paul Teachers Retirement
Fund Association
4.50 percent
83.5(3) (2) for any basic member of the St. Paul Teachers Retirement Fund Association,
83.6the employing unit shall make a regular employer contribution to the respective retirement
83.7fund in an amount equal to 8.00 percent of the salary of the basic member;
83.8(4) (3) for a basic member of the St. Paul Teachers Retirement Fund Association, the
83.9employing unit shall make an additional employer contribution to the respective fund in
83.10an amount equal to 3.64 percent of the salary of the basic member;
83.11(5) (4) for a coordinated member of a teachers retirement fund association in a city
83.12of the first class, the employing unit shall make an additional employer contribution to
83.13the respective fund in an amount equal to the applicable percentage of the coordinated
83.14member's salary, as provided below:
83.15
83.16
Duluth Teachers Retirement
Fund Association
1.29 percent
83.17
83.18
St. Paul Teachers Retirement
Fund Association
3.84 percent
83.19
July 1, 1993 - June 30, 1994
0.50 percent
83.20
July 1, 1994 - June 30, 1995
1.50 percent
83.21
July 1, 1997, and thereafter
3.84 percent
83.22(b) The regular and additional employer contributions must be remitted directly to
83.23the respective teachers retirement fund association at least once each month. Delinquent
83.24amounts are payable with interest under the procedure in subdivision 1a.
83.25(c) Payments of regular and additional employer contributions for school district
83.26or technical college employees who are paid from normal operating funds must be made
83.27from the appropriate fund of the district or technical college.
83.28EFFECTIVE DATE.This section is effective the day following final enactment.

83.29    Sec. 35. Minnesota Statutes 2008, section 354A.12, is amended by adding a
83.30subdivision to read:
83.31    Subd. 6. Adjustment for erroneous receipts. (a) Adjustments to correct employer
83.32contributions and employee deductions taken in error from amounts which are not salary
83.33under section 354A.011, subdivision 24, must be made as specified in this section.
83.34(b) Upon discovery of the receipt of erroneous employee deductions and employer
83.35contributions under paragraph (a), the executive director must require the employer to
83.36discontinue the erroneous employee deductions and erroneous employer contributions
84.1reported on behalf of an active member. Upon discontinuation, the executive director
84.2must provide for a refund or credit to the employer in the amount of the invalid employee
84.3deductions with interest on the employee deductions at the rate specified in section
84.4354A.37, subdivision 3, from the received date of each invalid salary transaction to the
84.5first day of the month in which the credit or refund is made. The employer must pay the
84.6refunded employee deductions plus interest to the active member.
84.7(c) If the individual is a former member who is not receiving a retirement annuity or
84.8benefit and has not received a refund under section 354A.37, subdivision 3, related to the
84.9applicable service, the executive director must return the erroneous employee deductions
84.10to the former member through a refund with interest at the rate specified in section
84.11354A.37, subdivision 3, from the received date of each invalid salary transaction to the
84.12first day of the month in which the credit or refund is made.
84.13(d) The executive director must return the invalid employer contributions reported
84.14on behalf of a member or former member to the employer by providing a credit against
84.15future contributions payable by the employer.
84.16EFFECTIVE DATE.This section is effective the day after final enactment.

84.17    Sec. 36. Minnesota Statutes 2008, section 354A.12, is amended by adding a
84.18subdivision to read:
84.19    Subd. 7. Recovery of benefit overpayments. (a) If the executive director discovers,
84.20within the time period specified in subdivision 8 following the payment of a refund or
84.21the accrual date of any retirement annuity, survivor benefit, or disability benefit, that
84.22benefit overpayment has occurred due to using invalid service or salary, or due to any
84.23erroneous calculation procedure, the executive director must recalculate the annuity or
84.24benefit payable and recover any overpayment. The executive director shall recover the
84.25overpayment by requiring direct repayment or by suspending or reducing the payment of a
84.26retirement annuity or other benefit payable under this chapter to the applicable person or
84.27the person's estate, whichever applies, until all outstanding amounts have been recovered.
84.28(b) In the event the executive director determines that an overpaid annuity or benefit
84.29that is the result of invalid salary included in the average salary used to calculate the
84.30payment amount must be recovered, the executive director must determine the amount of
84.31the employee deductions taken in error on the invalid salary, with interest as determined
84.32under 354A.37, subdivision 3, and must subtract that amount from the total annuity or
84.33benefit overpayment, and the remaining balance of the overpaid annuity or benefit, if
84.34any, must be recovered.
85.1(c) If the invalid employee deductions plus interest exceed the amount of the
85.2overpaid benefits, the balance must be refunded to the person to whom the benefit or
85.3annuity is being paid.
85.4(d) Any invalid employer contributions reported on the invalid salary must be
85.5credited against future contributions payable by the employer.
85.6(e) If a member or former member, who is receiving a retirement annuity or
85.7disability benefit for which an overpayment is being recovered, dies before recovery of the
85.8overpayment is completed and an optional annuity or refund is payable, the remaining
85.9balance of the overpaid annuity or benefit must continue to be recovered from the payment
85.10to the optional annuity beneficiary or refund recipient.
85.11(f) The board of trustees shall adopt policies directing the period of time and manner
85.12for the collection of any overpaid retirement or optional annuity, and survivor or disability
85.13benefit, or a refund that the executive director determines must be recovered as provided
85.14under this section.
85.15EFFECTIVE DATE.This section is effective the day after final enactment.

85.16    Sec. 37. Minnesota Statutes 2008, section 354A.12, is amended by adding a
85.17subdivision to read:
85.18    Subd. 8. Additional procedures. (a) If paragraph (b) does not apply, the period of
85.19adjustment under subdivisions 6 and 7 is limited to the fiscal year in which the error is
85.20discovered by the executive director and the immediate two preceding fiscal years.
85.21(b) If there is evidence of fraud or other misconduct on the part of the employee or
85.22the employer, the board of trustees may authorize adjustments to the account of a member
85.23or former member to correct erroneous employee deductions and employer contributions
85.24on invalid salary and the recovery of any overpayments for a period longer than specified
85.25under paragraph (a).
85.26(c) Notwithstanding other provisions of this section, the executive director may
85.27apply the Revenue Procedures defined in the Internal Revenue Service Employee Plans
85.28Compliance Resolution System and not issue a refund of erroneous employee deductions
85.29and employer contributions or not recover a small overpayment of benefits if the cost to
85.30correct the error would exceed the amount of the refund or overpayment.
85.31(d) Notwithstanding other provisions of this section, interest of $10 or less shall not
85.32be payable to a member or former member.
85.33EFFECTIVE DATE.This section is effective the day after final enactment.

86.1    Sec. 38. Minnesota Statutes 2008, section 354A.12, is amended by adding a
86.2subdivision to read:
86.3    Subd. 9. Employer responsibility for fees, penalties. Any fees or penalties
86.4assessed by the Internal Revenue Service for any failure by an employer to follow the
86.5statutory requirements for reporting eligible members and salary must be paid by the
86.6employer.
86.7EFFECTIVE DATE.This section is effective the day after final enactment.

86.8    Sec. 39. Minnesota Statutes 2008, section 354A.36, subdivision 6, is amended to read:
86.9    Subd. 6. Requirement for regular physical examinations. At least once each year
86.10during the first five years following the granting of a disability benefit to a coordinated
86.11member by the board and at least once in every three year period thereafter, the board shall
86.12may require the disability benefit recipient to undergo an expert examination as a condition
86.13for continued entitlement of the benefit recipient to receive a disability benefit. If the board
86.14requires an examination, the expert examination must be made at the place of residence of
86.15the disability benefit recipient or at any other place mutually agreeable to the disability
86.16benefit recipient and the board. The expert examination must be made by a physician or
86.17physicians, by a chiropractor or chiropractors, or by one or more psychologists engaged
86.18by the board. The physician or physicians, the chiropractor or chiropractors, or the
86.19psychologist or psychologists with respect to a mental impairment, conducting the expert
86.20examination shall make a written report to the board concerning the disability benefit
86.21recipient and the recipient's disability, including a statement of the expert opinion of
86.22the physician, chiropractor, or psychologist as to whether or not the member remains
86.23permanently and totally disabled within the meaning of section 354A.011, subdivision
86.2414
. If the board determines from consideration of the written expert examination report
86.25of the physician, of the chiropractor, or of the psychologist, with respect to a mental
86.26impairment, that the disability benefit recipient is no longer permanently and totally
86.27disabled or if the board determines that the benefit recipient is engaged or is able to
86.28engage in a gainful occupation, unless the disability benefit recipient is partially employed
86.29under subdivision 7, then further disability benefit payments from the fund must be
86.30discontinued. The discontinuation of disability benefits must occur immediately if the
86.31disability recipient is reinstated to the district payroll following sick leave and within 60
86.32days of the determination by the board following the expert examination and report of the
86.33physician or physicians, chiropractor or chiropractors, or psychologist or psychologists
86.34engaged by the board that the disability benefit recipient is no longer permanently and
86.35totally disabled within the meaning of section 354A.011, subdivision 14.
87.1EFFECTIVE DATE.This section is effective the day following final enactment.

87.2    Sec. 40. Minnesota Statutes 2008, section 356.401, subdivision 2, is amended to read:
87.3    Subd. 2. Automatic deposits. (a) The chief administrative officer of a covered
87.4retirement plan may remit, through an automatic deposit system, annuity, benefit, or
87.5refund payments only to a financial institution associated with the National Automated
87.6Clearinghouse Association or a comparable successor organization that is trustee for a
87.7person who is eligible to receive the annuity, benefit, or refund.
87.8(b) Upon the request of a retiree, disabilitant, survivor, or former member, the chief
87.9administrative officer of a covered retirement plan may remit the annuity, benefit, or
87.10refund check payment to the applicable financial institution for deposit in the person's
87.11individual account or the person's joint account. If an overpayment of benefits is paid
87.12after the death of the annuitant or benefit recipient, the chief administrative officer of
87.13the pension plan is authorized to issue an administrative subpoena consistent with the
87.14requirements of section 13A.02, requiring the applicable financial institution to disclose
87.15the names of all joint and co-owners of the account and a description of all deposits to,
87.16and withdrawals from, the account which take place on or after the death of the annuitant
87.17or benefit recipient. An overpayment to a joint account after the death of the annuitant or
87.18benefit recipient must be repaid to the fund of the applicable covered retirement plan by
87.19the joint tenant if the overpayment is not repaid to that fund by the financial institution
87.20associated with the National Automated Clearinghouse Association or its successor. The
87.21governing board of the covered retirement plan may prescribe the conditions under which
87.22these payments may be made.
87.23EFFECTIVE DATE.This section is effective the day following final enactment.

87.24    Sec. 41. Minnesota Statutes 2008, section 356.465, subdivision 1, is amended to read:
87.25    Subdivision 1. Inclusion as recipient. Notwithstanding any provision to the
87.26contrary of the laws, articles of incorporation, or bylaws governing a covered retirement
87.27plan specified in subdivision 3, A retiring member may designate a qualified supplemental
87.28needs trust under subdivision 2 as the remainder recipient on an optional retirement
87.29annuity form for a period not to exceed the lifetime of the beneficiary of the supplemental
87.30needs trust.
87.31EFFECTIVE DATE.This section is effective the day following final enactment.

88.1    Sec. 42. Minnesota Statutes 2008, section 356.465, is amended by adding a subdivision
88.2to read:
88.3    Subd. 4. Expanded eligibility. (a) Notwithstanding subdivision 1, for a retirement
88.4plan specified in paragraph (b), a designation under subdivision 1 may be made by an
88.5active, disabled, deferred, or retiring member.
88.6(b) The applicable plan is the Teachers Retirement Association established under
88.7chapter 354.
88.8EFFECTIVE DATE.This section is effective the day following final enactment.

88.9    Sec. 43. Minnesota Statutes 2008, section 356.611, subdivision 3, is amended to read:
88.10    Subd. 3. Maximum benefit limitations. A member's annual benefit, if necessary,
88.11must be reduced to the extent required by section 415(b) of the federal Internal Revenue
88.12Code, as adjusted by the United States secretary of the treasury under section 415(d) of the
88.13Internal Revenue Code for any applicable increases in the cost of living after the member's
88.14termination of employment. For purposes of section 415 of the federal Internal Revenue
88.15Code, the limitation year of a pension plan covered by this section must be the fiscal year
88.16or calendar year of that plan, whichever is applicable. The accrued benefit limitation
88.17described in section 415(e) of the Internal Revenue Code must cease to be effective for
88.18limitation years beginning after December 31, 1999.
88.19EFFECTIVE DATE.This section is effective July 1, 2009.

88.20    Sec. 44. Minnesota Statutes 2008, section 356.611, subdivision 4, is amended to read:
88.21    Subd. 4. Compensation. (a) For purposes of this section, compensation means
88.22a member's compensation actually paid or made available for any limitation year
88.23determined as provided by including items described in federal treasury regulation section
88.241.415-2(d)(10) 1.415(c)-2(b) and excluding items described in federal treasury regulation
88.25section 1.415(c)-2(c).
88.26(b) Compensation for any period includes:
88.27(1) any elective deferral as defined in section 402(g)(3) of the federal Internal
88.28Revenue Code;
88.29(2) any elective amounts that are not includable in a member's gross income by
88.30reason of sections 125 or 457 of the federal Internal Revenue Code; and
88.31(3) any elective amounts that are not includable in a member's gross income by
88.32reason of section 132(f)(4) of the federal Internal Revenue Code.
88.33EFFECTIVE DATE.This section is effective July 1, 2009.

89.1    Sec. 45. Minnesota Statutes 2008, section 356.635, subdivision 6, is amended to read:
89.2    Subd. 6. Eligible retirement plan. (a) An "eligible retirement plan" is:
89.3(1) an individual retirement account under section 408(a) of the federal Internal
89.4Revenue Code;
89.5(2) an individual retirement annuity plan under section 408(b) of the federal Internal
89.6Revenue Code;
89.7(3) an annuity plan under section 403(a) of the federal Internal Revenue Code;
89.8(4) a qualified trust plan under section 401(a) of the federal Internal Revenue Code
89.9that accepts the distributee's eligible rollover distribution;
89.10(5) an annuity contract under section 403(b) of the federal Internal Revenue Code; or
89.11(6) an eligible deferred compensation plan under section 457(b) of the federal
89.12Internal Revenue Code, which is maintained by a state or local government and which
89.13agrees to separately account for the amounts transferred into the plan; or
89.14(7) in the case of an eligible rollover distribution to a nonspousal beneficiary, an
89.15individual account or annuity treated as an inherited individual retirement account under
89.16section 402(c)(11) of the federal Internal Revenue Code.
89.17(b) For distributions of after-tax contributions which are not includable in gross
89.18income, the after-tax portion may be transferred only to an individual retirement account
89.19or annuity described in section 408(a) or (b) of the federal Internal Revenue Code, or
89.20to a qualified defined contribution plan described in either section 401(a) or 403(a) of
89.21the federal Internal Revenue Code, that agrees to separately account for the amounts
89.22transferred, including separately accounting for the portion of the distribution which is
89.23includable in gross income and the portion of the distribution which is not includable.
89.24EFFECTIVE DATE.This section is effective July 1, 2009.

89.25    Sec. 46. Minnesota Statutes 2008, section 356.635, subdivision 7, is amended to read:
89.26    Subd. 7. Distributee. A "distributee" is:
89.27(1) an employee or a former employee;
89.28(2) the surviving spouse of an employee or former employee; or
89.29(3) the former spouse of the employee or former employee who is the alternate
89.30payee under a qualified domestic relations order as defined in section 414(p) of the federal
89.31Internal Revenue Code, or who is a recipient of a court-ordered equitable distribution of
89.32marital property, as provided in section 518.58.; or
89.33(4) a nonspousal beneficiary of an employee or former employee who qualifies
89.34for a distribution under the plan and is a designated beneficiary as defined in section
89.35401(a)(9)(E) of the federal Internal Revenue Code.
90.1EFFECTIVE DATE.This section is effective July 1, 2009.

90.2    Sec. 47. Minnesota Statutes 2008, section 356.96, subdivision 5, is amended to read:
90.3    Subd. 5. Petition for review. (a) A person who claims a right under subdivision 2
90.4may petition for a review of that decision by the governing board of the covered pension
90.5plan.
90.6    (b) A petition under this section must be sent to the chief administrative officer
90.7by mail and must be postmarked no later than 60 days after the person received the
90.8notice required by subdivision 3. The petition must include the person's statement of
90.9the reason or reasons that the person believes the decision of the chief administrative
90.10officer should be reversed or modified. The petition may include all documentation and
90.11written materials that the petitioner deems to be relevant. In developing a record for
90.12review by the board when a decision is appealed, the executive director may direct that the
90.13applicant participate in a fact-finding session conducted by an administrative law judge
90.14assigned by the Office of Administrative Hearings and, as applicable, participate in a
90.15vocational assessment conducted by a qualified rehabilitation counselor on contract with
90.16the applicable retirement system.
90.17EFFECTIVE DATE.This section is effective the day following final enactment.

90.18    Sec. 48. Laws 2006, chapter 271, article 5, section 5, as amended by Laws 2008,
90.19chapter 349, article 5, section 36, is amended to read:
90.20    Sec. 5. EFFECTIVE DATE.
90.21    (a) Sections 1, 3, and 4 are effective the day following final enactment and section 3
90.22has effect retroactively from July 25, 2005.
90.23    (b) Section 2 with respect to the Cannon Falls Hospital District is effective upon the
90.24latter of:
90.25    (1) the day after the governing body of the Cannon Falls Hospital District and its
90.26chief clerical officer meet the requirements under Minnesota Statutes, section 645.021,
90.27subdivisions 2
and 3; and
90.28    (2) the first day of the month following certification to the Cannon Falls Hospital
90.29District by the executive director of the Public Employees Retirement Association that the
90.30actuarial accrued liability of the special benefit coverage proposed for extension to the
90.31privatized City of Cannon Falls Hospital employees under section 1 does not exceed the
90.32actuarial gain otherwise to be accrued by the Public Employees Retirement Association, as
90.33calculated by the consulting actuary retained under Minnesota Statutes, section 356.214.
91.1The cost of the actuarial calculations must be borne by the current employer or by the
91.2entity which is the employer following the privatization.
91.3    (c) Section 2, with respect to Clearwater County Memorial Hospital, is effective
91.4upon the latter of:
91.5    (1) the day after the governing body of Clearwater County and its chief clerical
91.6officer meet the requirements under Minnesota Statutes, section 645.021, subdivisions 2
91.7and 3, except that the certificate of approval must be filed before January 1, 2009 2010; and
91.8    (2) the first day of the month following certification to Clearwater County by the
91.9executive director of the Public Employees Retirement Association that the actuarial
91.10accrued liability of the special benefit coverage proposed for extension to the privatized
91.11Clearwater Health Services employees under section 2 does not exceed the actuarial gain
91.12otherwise to be accrued by the Public Employees Retirement Association, as calculated by
91.13the consulting actuary retained under Minnesota Statutes, section 356.214. The cost of
91.14the actuarial calculations must be borne by the current employer or by the entity which is
91.15the employer following the privatization.
91.16    (d) Section 2 with respect to the Dassel Lakeside Community Home is effective
91.17upon the latter of:
91.18    (1) the day after the governing body of the city of Dassel and its chief clerical officer
91.19timely complete compliance with Minnesota Statutes, section 645.021, subdivisions 2
91.20and 3; and
91.21    (2) the first day of the month next following certification to the Dassel City
91.22Council by the executive director of the Public Employees Retirement Association that
91.23the actuarial accrued liability of the special benefit coverage proposed for extension to
91.24the privatized Dassel Lakeside Community Home employees under section 2 does not
91.25exceed the actuarial gain otherwise to be accrued by the Public Employees Retirement
91.26Association, as calculated by the consulting actuary retained under Minnesota Statutes,
91.27section 356.214. The cost of the actuarial calculations must be borne by the city of Dassel
91.28or by the entity which is the employer following the privatization.
91.29EFFECTIVE DATE.This section is effective the day following final enactment.

91.30    Sec. 49. CITY OF DULUTH AND DULUTH AIRPORT AUTHORITY;
91.31CORRECTING ERRONEOUS EMPLOYEE DEDUCTIONS, EMPLOYER
91.32CONTRIBUTIONS AND ADJUSTING OVERPAID BENEFITS.
91.33    Subdivision 1. Application. Notwithstanding any provisions of Minnesota Statutes,
91.34section 353.27, subdivisions 7 and 7b, or Minnesota Statutes 2008, chapters 353 and 356,
91.35to the contrary, this section establishes the procedures by which the executive director of
92.1the Public Employees Retirement Association shall adjust erroneous employee deductions
92.2and employer contributions paid on behalf of active employees and former members
92.3by the city of Duluth and by the Duluth Airport Authority on amounts determined by
92.4the executive director to be invalid salary under Minnesota Statutes, section 353.01,
92.5subdivision 10, reported between January 1, 1997, and October 23, 2008, and for
92.6adjusting benefits that were paid to former members and their beneficiaries based upon
92.7invalid salary amounts.
92.8    Subd. 2. Refunds of employee deductions. (a) The executive director shall refund
92.9to active employees or former members who are not receiving retirement annuities or
92.10benefits all erroneous employee deductions identified by the city of Duluth or by the
92.11Duluth Airport Authority as deductions taken from amounts determined to be invalid
92.12salary. The refunds must include interest at the rate specified in Minnesota Statutes,
92.13section 353.34, subdivision 2, from the date each invalid employee deduction was received
92.14through the date each refund is paid.
92.15(b) The refund payment for active employees must be sent to the applicable
92.16governmental subdivision which must pay the refunded employee deductions plus interest
92.17to the active members who are employees of the city of Duluth or who are employees of
92.18the Duluth Airport Authority, as applicable.
92.19(c) Refunds to former members must be mailed by the executive director of the
92.20Public Employees Retirement Association to the former member's last known address.
92.21    Subd. 3. Benefit adjustments. (a) For a former member who is receiving a
92.22retirement annuity or disability benefit, or for a person receiving an optional annuity or
92.23survivor benefit, the executive director must:
92.24(1) adjust the annuity or benefit payment to the correct monthly benefit amount
92.25payable by reducing the average salary under Minnesota Statutes, section 353.01,
92.26subdivision 17a, by the invalid salary amounts;
92.27(2) determine the amount of the overpaid benefits paid from the effective date of
92.28the annuity or benefit payment to the first of the month in which the monthly benefit
92.29amount is corrected;
92.30(3) calculate the amount of employee deductions taken in error on invalid salary,
92.31including interest at the rate specified in Minnesota Statutes, section 353.34, subdivision 2,
92.32from the date each invalid employee deduction was received through the date the annuity
92.33or benefit is adjusted as provided under clause (1); and
92.34(4) determine the net amount of overpaid benefits by reducing the amount of the
92.35overpaid annuity or benefit as determined in clause (2) by the amount of the erroneous
92.36employee deductions with interest determined in clause (3).
93.1(b) If a former member's erroneous employee deductions plus interest determined
93.2under this section exceeds the amount of the person's overpaid benefits, the balance must
93.3be refunded to the person to whom the annuity or benefit is being paid.
93.4(c) The executive director shall recover the net amount of all overpaid annuities or
93.5benefits as provided under subdivision 4.
93.6    Subd. 4. Employer credits and obligations. (a) The executive director shall
93.7provide a credit without interest to the city of Duluth and to the Duluth Airport Authority
93.8for the amount of that governmental subdivision's erroneous employer contributions. The
93.9credit must first be used to offset the net amount of the overpaid retirement annuities and
93.10the disability and survivor benefits that remains after applying the amount of erroneous
93.11employee deductions with interest as provided under subdivision 3, paragraph (a),
93.12clause (4). The remaining erroneous employer contributions, if any, must be credited
93.13against future employer contributions required to be paid by the applicable governmental
93.14subdivision. If the overpaid benefits exceed the employer contribution credit, the balance
93.15of the overpaid benefits is the obligation of the city of Duluth or the Duluth Airport
93.16Authority, whichever is applicable.
93.17(b) The Public Employees Retirement Association board of trustees shall determine
93.18the period of time and manner for the collection of overpaid retirement annuities and
93.19benefits, if any, from the city of Duluth and the Duluth Airport Authority.
93.20EFFECTIVE DATE.(a) This section is effective for the city of Duluth the day after
93.21the Duluth city council and the chief clerical officer of the city of Duluth timely complete
93.22their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, for
93.23members who are, and former members who were, employees of the city of Duluth.
93.24(b) This section is effective for the Duluth Airport Authority the day after the Duluth
93.25Airport Authority and the chief clerical officer of the Duluth Airport Authority timely
93.26complete their compliance with Minnesota Statutes, section 645.021, subdivisions 2
93.27and 3, for members who are, and former members who were, employees of the Duluth
93.28Airport Authority.

93.29    Sec. 50. APPLICATION OF PUBLIC EMPLOYEES RETIREMENT
93.30ASSOCIATION ERRONEOUS RECEIPTS AND DISBURSEMENTS PROVISION;
93.31ELECTION.
93.32(a) If adjustments under Minnesota Statutes, section 353.27, subdivision 7, due
93.33to invalid salary amounts are in process as of the effective date of this section for
93.34employees or former employees of a governmental subdivision, the governing body of the
93.35governmental subdivision may elect to have the statute of limitations under Minnesota
94.1Statutes, section 353.27, subdivision 7, paragraphs (c) and (g), apply to adjustments or
94.2corrections in process as of the effective date of Minnesota Statutes, section 353.27,
94.3subdivision 7, by a resolution of the governing body transmitted to the Public Employees
94.4Retirement Association executive director within 90 days after the effective date of this
94.5section.
94.6(b) If the governing body of the governmental subdivision declines the treatment
94.7permitted under paragraph (a) or fails to submit a resolution in a timely manner, the statute
94.8of limitations does not apply to adjustments or corrections in process as of the effective
94.9date.
94.10EFFECTIVE DATE.This section is effective the day after final enactment.

94.11    Sec. 51. REPEALER.
94.12Minnesota Statutes 2008, sections 354.06, subdivision 6; and 354.55, subdivision
94.1314, are repealed.
94.14EFFECTIVE DATE.This section is effective the day following final enactment.

94.15ARTICLE 5
94.16LOCAL GOVERNMENT POST RETIREMENT OPTION PROGRAM

94.17    Section 1. Minnesota Statutes 2008, section 353.01, subdivision 11b, is amended to
94.18read:
94.19    Subd. 11b. Termination of membership. (a) "Termination of membership" means
94.20the conclusion of membership in the association for a person who has not terminated
94.21public service under subdivision 11a and occurs:
94.22(1) when a person files a written election with the association to discontinue
94.23employee deductions under section 353.27, subdivision 7, paragraph (a), clause (1);
94.24(2) when a city manager files a written election with the association to discontinue
94.25employee deductions under section 353.028, subdivision 2; or
94.26(3) when a member transfers to a temporary position and becomes excluded from
94.27membership under subdivision 2b, clause (4).; or
94.28(4) when a member is approved to participate in the postretirement option authorized
94.29under section 353.371.
94.30(b) The termination of membership under clause clauses (3) and (4) must be reported
94.31to the association by the governmental subdivision.
94.32EFFECTIVE DATE.This section is effective the day following final enactment.

95.1    Sec. 2. [353.371] POSTRETIREMENT OPTION.
95.2    Subdivision 1. Eligibility. (a) This section applies to a basic or coordinated member
95.3of the general employees retirement plan of the Public Employees Retirement Association
95.4who:
95.5(1) for at least the five years immediately preceding separation under clause (2), was
95.6regularly scheduled to work 1,044 or more hours per year in a position covered by the
95.7general employees retirement plan of the Public Employees Retirement Association;
95.8(2) terminates membership as defined under section 353.01, subdivision 11b;
95.9(3) at the time of termination under clause (2), was at least age 62 and met the age
95.10and service requirements necessary to receive a retirement annuity from the plan and
95.11satisfied requirements for the commencement of the retirement annuity;
95.12(4) agrees to accept a postretirement option position with the same or a different
95.13governmental subdivision, working a reduced schedule that is both:
95.14(i) a reduction of at least 25 percent from the employee's number of previously
95.15regularly scheduled work hours; and
95.16(ii) 1,044 hours or less in public; and
95.17(5) is not eligible for participation in the state employee postretirement option
95.18program under section 43A.346.
95.19(b) For purposes of this section, the length of separation requirement and termination
95.20of service requirement prohibiting return to work agreements under section 353.01,
95.21subdivisions 11a and 28, are not applicable.
95.22    Subd. 2. Annuity reduction not applicable. Notwithstanding any law to the
95.23contrary, the provisions of section 353.37 governing annuities of reemployed annuitants
95.24do not apply for the duration of a terminated member's employment in a postretirement
95.25option position.
95.26    Subd. 3. Governing body discretion. The governing body of the governmental
95.27subdivision has sole discretion to determine if and the extent to which a postretirement
95.28option position under this section is available to a terminated member. Any offer of such
95.29a position must be made in writing to the person by the governing body's designee in a
95.30manner prescribed by the executive director.
95.31    Subd. 4. Duration. Postretirement option employment shall be for an initial period
95.32not to exceed one year. At the end of the initial period, the governing body has sole
95.33discretion to determine if the offer of a postretirement option position will be renewed,
95.34renewed with modifications, or terminated. Postretirement option employment may be
95.35renewed annually, but may not be renewed after the individual attains retirement age as
95.36defined in United States Code, title 42, section 416(l).
96.1    Subd. 5. Copy to fund. The appointing authority shall provide the Public
96.2Employees Retirement Association with documentation, as prescribed by the executive
96.3director, of the terms of any agreement entered into with a member who accepts continuing
96.4employment with the appointing authority under the terms of this section, and any
96.5subsequent renewal agreement.
96.6    Subd. 6. No service credit. Notwithstanding any law to the contrary, a person
96.7may not earn service credit in the general employees retirement plan of the Public
96.8Employees Retirement Association for employment covered under this section, and
96.9employer contributions and payroll deductions for the retirement fund must not be made
96.10based on earnings of a person working under an agreement covered by this section. No
96.11change may be made to a monthly annuity or retirement allowance based on employment
96.12under this section.
96.13    Subd. 7. Subsequent employment. If a person has been in a postretirement option
96.14position and accepts any other position in public service beyond the period of time for
96.15which the person participated in the postretirement option provided under this section, the
96.16person may not earn service credit in the general employees retirement plan of the Public
96.17Employees Retirement Association, no employer contributions or payroll deductions for
96.18the retirement fund may be made, and the provisions of section 353.37 apply.
96.19EFFECTIVE DATE.This section is effective the day following final enactment
96.20and expires on June 30, 2011. Individuals must not be appointed to a postretirement option
96.21position after that date.

96.22ARTICLE 6
96.23MNSCU RELATED RETIREMENT PROVISIONS

96.24    Section 1. [136F.481] EARLY SEPARATION INCENTIVE PROGRAM.
96.25(a) Notwithstanding any provision of law to the contrary, the Board of Trustees
96.26of the Minnesota State Colleges and Universities may offer a targeted early separation
96.27incentive program for its employees.
96.28(b) The early separation incentive program may include one or both of the following:
96.29(1) cash incentives, not to exceed one year of base salary; or
96.30(2) employer contributions to the postretirement healthcare savings plan established
96.31under section 352.98.
96.32(c) To be eligible to receive an incentive, an employee must be at least age 55
96.33and must have at least five years of employment by the Minnesota State Colleges and
96.34Universities System. The board of trustees shall establish the eligibility requirements
97.1for system employees to receive an incentive. The board of trustees shall file a copy
97.2of its proposed eligibility requirements with the chairs and ranking members of the
97.3Senate Committee on Higher Education and the Higher Education Budget and Policy
97.4Division of the Senate Committee on Finance and with the chair and ranking members of
97.5the Higher Education and Workforce Development Finance and Policy Division of the
97.6Finance Committee of the House of Representatives at least 30 days before their final
97.7adoption by the board of trustees, shall post the same document on the system website at
97.8the same time, and shall hold a public hearing on the proposed eligibility requirements.
97.9The type and any additional amount of the incentive to be offered may vary by employee
97.10classification, as specified by the board.
97.11(d) The president of a college or university, consistent with paragraphs (b) and
97.12(c), may designate:
97.13(1) specific departments or programs at the college or university whose employees
97.14are eligible to be offered the incentive program; or
97.15(2) positions at the college or university eligible to be offered the incentive program.
97.16(e) The chancellor, consistent with paragraphs (b) and (c), may designate:
97.17(1) system office divisions whose employees are eligible to be offered the incentive
97.18program; or
97.19(2) positions at the system office eligible to be offered the incentive program.
97.20(f) Acceptance of the offered incentive must be voluntary on the part of the employee
97.21and must be in writing. The incentive may only be offered at the sole discretion of the
97.22president of the applicable college or university.
97.23(g) A decision by the president of a college or university or by the chancellor not to
97.24offer an incentive may not be challenged.
97.25(h) The cost of the incentive is payable by the college or university on whose behalf
97.26the president offered the incentive or from the system office budget if the chancellor
97.27offered the incentive. If a college or university is merged, the remaining cost of any
97.28early separation incentive must be borne by the successor institution. If a college or
97.29university is closed, the remaining cost of any early separation incentive must be borne
97.30by the board of trustees.
97.31(i) Annually, the chancellor and the president of each college or university must
97.32report on the number and types of early separation incentives which were offered and
97.33utilized under this section. The report must be filed annually with the board of trustees and
97.34with the Legislative Reference Library on or before September 1.
97.35EFFECTIVE DATE; SUNSET.This section is effective the day following final
97.36enactment and expires June 30, 2014.

98.1    Sec. 2. [136F.482] APPLICATION OF OTHER LAWS.
98.2Unilateral implementation of section 136F.481 by the Board of Trustees of the
98.3Minnesota State Colleges and Universities, by the chancellor, or by a president of a college
98.4or university is not an unfair labor practice under chapter 179A.
98.5EFFECTIVE DATE; SUNSET.This section is effective the day following final
98.6enactment and expires June 30, 2014.

98.7    Sec. 3. Minnesota Statutes 2008, section 354B.21, subdivision 2, is amended to read:
98.8    Subd. 2. Coverage; election. (a) For Eligible persons who were employed by
98.9the former state university system or the former community college system before May
98.101, 1995, the person has the retirement coverage that the person had for employment
98.11immediately before May 1, 1995.
98.12(b) For all other eligible persons (a) Eligible persons who were employed by
98.13the Minnesota State Colleges and Universities System on or after June 30, 2009,
98.14unless otherwise specified in this section, the eligible person is are authorized to elect
98.15prospective Teachers Retirement Association plan coverage rather than coverage by
98.16the plan established by this chapter. The election of prospective Teachers Retirement
98.17Association plan coverage shall must be made within one year of commencing eligible
98.18Minnesota State Colleges and Universities system employment. If an election is not made
98.19within the specified election period due to a termination of Minnesota State Colleges and
98.20Universities system employment, an election may be made within 90 days of returning to
98.21eligible Minnesota State Colleges and Universities system employment. All elections are
98.22irrevocable. Prior to Before making an election, the eligible person shall be is covered by
98.23the plan indicated as default coverage under subdivision 3.
98.24(b) Except as provided in paragraph (c), a purchase of service credit in the Teachers
98.25Retirement Association plan for any period or periods of Minnesota State Colleges and
98.26Universities system employment occurring prior to before the election under paragraph
98.27(b) (a) is prohibited.
98.28(c) Notwithstanding paragraphs (a) and (b), a faculty member who is a member of
98.29the individual retirement account plan who first achieves tenure or its equivalent at a
98.30Minnesota state college or university after June 30, 2009, may elect to transfer retirement
98.31coverage under the teachers retirement plan within one year of the faculty member
98.32achieving tenure or its equivalent at a Minnesota state college or university. The faculty
98.33member electing Teachers Retirement Association coverage under this paragraph must
98.34purchase service credit in the Teachers Retirement Association for the entire period of
98.35time covered under the individual retirement account plan and the purchase payment
99.1amount must be determined under section 356.551. The Teachers Retirement Association
99.2may charge a faculty member transferring coverage a reasonable fee to cover the costs
99.3associated with computing the actuarial cost of purchasing service credit and making the
99.4transfer. A faculty member transferring from the individual retirement account plan to the
99.5Teachers Retirement Association may use any balances to the credit of the faculty member
99.6in the individual retirement account plan, any balances to the credit of the faculty member
99.7in the higher education supplemental retirement plan established under chapter 354C, or
99.8any source specified in section 356.441, subdivision 1, to purchase the service credit in the
99.9Teachers Retirement Association. If the total amount of payments under this paragraph are
99.10less than the total purchase payment amount under section 356.551, the payment amounts
99.11must be refunded to the applicable source. The retirement coverage transfer and service
99.12credit purchase authority under this paragraph expires with respect to any Minnesota State
99.13Colleges and Universities System faculty initially hired after June 30, 2014.
99.14EFFECTIVE DATE.This section is effective July 1, 2009.

99.15ARTICLE 7
99.16ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION
99.17POSTRETIREMENT ADJUSTMENTS

99.18    Section 1. Minnesota Statutes 2008, section 354A.29, subdivision 3, is amended to
99.19read:
99.20    Subd. 3. Postretirement adjustment. (a) The postretirement adjustment described
99.21in the articles and bylaws of the St. Paul Teachers Retirement Fund Association this
99.22section must be determined by the executive director of the St. Paul Teachers Retirement
99.23Fund Association and approved by the board annually after June 30 using the procedures
99.24under this section.
99.25(b) On January 1,each eligible person who has been receiving an annuity or benefit
99.26under the articles of incorporation, the bylaws, or this chapter for at least 12 three calendar
99.27months as of the end of the fiscal last day of the previous calendar year is eligible to
99.28receive a postretirement adjustment of 2.0 percent that is payable each January 1 increase
99.29as further specified in this subdivision.
99.30(c) A percentage adjustment must be computed and paid under this subdivision to
99.31eligible persons under paragraph (b). This adjustment is determined by reference to the
99.32Consumer Price Index for urban wage earners and clerical workers all items index as
99.33reported by the Bureau of Labor Statistics within the United States Department of Labor
99.34each year as part of the determination of annual cost-of-living adjustments to recipients of
100.1federal old-age, survivors, and disability insurance. For calculations of the cost-of-living
100.2adjustment under paragraph (d), the term "average third quarter Consumer Price Index
100.3value" means the sum of the monthly index values as initially reported by the Bureau of
100.4Labor Statistics for the months of July, August, and September, divided by 3.
100.5(d) Before January 1 of each year, the executive director must calculate the amount
100.6of the cost-of-living adjustment by dividing the most recent average third quarter index
100.7value by the same average third quarter index value from the previous year, subtract one
100.8from the resulting quotient, and express the result as a percentage amount, which must be
100.9rounded to the nearest one-tenth of one percent.
100.10(e) The amount calculated under paragraph (d) is the full cost-of-living adjustment
100.11to be applied as a permanent increase to the regular payment of each eligible member
100.12on January 1 of the next calendar year. For any eligible member whose effective date
100.13of benefit commencement occurred during the calendar year before the cost-of-living
100.14adjustment is applied, the full increase amount must be prorated on the basis of whole
100.15calendar quarters in benefit payment status in the calendar year prior to the January 1 on
100.16which the cost-of-living adjustment is applied, calculated to the third decimal place.
100.17(f) The adjustment may not be less than zero, nor greater than five percent.

100.18    Sec. 2. BYLAW REVISION AUTHORIZATION.
100.19Consistent with Minnesota Statutes, section 354A.12, subdivision 4, the board of
100.20the St. Paul Teachers Retirement Fund Association shall revise the bylaws or articles of
100.21incorporation of the teachers retirement fund association to conform with section 1.

100.22    Sec. 3. REPEALER.
100.23Minnesota Statutes 2008, section 354A.29, subdivisions 2, 4, and 5, are repealed.

100.24    Sec. 4. EFFECTIVE DATE.
100.25Sections 1 to 3 are effective January 1, 2010, and expire June 30, 2011.

100.26ARTICLE 8
100.27LOCAL POLICE AND PAID FIRE
100.28RELIEF ASSOCIATION CHANGES

100.29    Section 1. Minnesota Statutes 2008, section 69.77, subdivision 4, is amended to read:
100.30    Subd. 4. Relief association financial requirements; minimum municipal
100.31obligation. (a) The officers of the relief association shall determine the financial
100.32requirements of the relief association and minimum obligation of the municipality for
101.1the following calendar year in accordance with the requirements of this subdivision.
101.2The financial requirements of the relief association and the minimum obligation of the
101.3municipality must be determined on or before the submission date established by the
101.4municipality under subdivision 5.
101.5(b) The financial requirements of the relief association for the following calendar
101.6year must be based on the most recent actuarial valuation or survey of the special fund of
101.7the association if more than one fund is maintained by the association, or of the association,
101.8if only one fund is maintained, prepared in accordance with sections 356.215, subdivisions
101.94 to 15
, and 356.216, as required under subdivision 10. If an actuarial estimate is prepared
101.10by the actuary of the relief association as part of obtaining a modification of the benefit
101.11plan of the relief association and the modification is implemented, the actuarial estimate
101.12must be used in calculating the subsequent financial requirements of the relief association.
101.13(c) If the relief association has an unfunded actuarial accrued liability as reported in
101.14the most recent actuarial valuation or survey, the total of the amounts calculated under
101.15clauses (1), (2), and (3), constitute the financial requirements of the relief association for
101.16the following year. If the relief association does not have an unfunded actuarial accrued
101.17liability as reported in the most recent actuarial valuation or survey, the amount calculated
101.18under clauses (1) and (2) constitute the financial requirements of the relief association for
101.19the following year. The financial requirement elements are:
101.20(1) the normal level cost requirement for the following year, expressed as a dollar
101.21amount, which must be determined by applying the normal level cost of the relief
101.22association as reported in the actuarial valuation or survey and expressed as a percentage
101.23of covered payroll to the estimated covered payroll of the active membership of the relief
101.24association, including any projected change in the active membership, for the following
101.25year;
101.26(2) for the Bloomington Fire Department Relief Association, the Fairmont Police
101.27Relief Association, and the Virginia Fire Department Relief Association, to the dollar
101.28amount of normal cost determined under clause (1) must be added an amount equal to the
101.29dollar amount of the administrative expenses of the special fund of the association if more
101.30than one fund is maintained by the association, or of the association if only one fund is
101.31maintained, for the most recent year, multiplied by the factor of 1.035. The administrative
101.32expenses are those authorized under section 69.80. No amount of administrative expenses
101.33under this clause are to be included in the financial requirements of the Minneapolis
101.34Firefighters Relief Association or the Minneapolis Police Relief Association; and
101.35(3) to the dollar amount of normal cost and expenses determined under clauses
101.36(1) and (2) must be added an amount equal to the level annual dollar amount which is
102.1sufficient to amortize the unfunded actuarial accrued liability by December 31, 2010, the
102.2Fairmont Police Relief Association, the Minneapolis Firefighters Relief Association,
102.3and the Virginia Fire Department Relief Association, by the date determined under
102.4section 356.216, paragraph (a), clause (2), for the Bloomington Fire Department Relief
102.5Association, and by December 31, 2020, for the Minneapolis Police Relief Association, as
102.6determined from the actuarial valuation or survey of the fund, using an interest assumption
102.7set at the applicable rate specified in section 356.215, subdivision 8. The, by that
102.8fund's amortization date as specified in this clause applies to all local police or salaried
102.9firefighters' relief associations and that date supersedes any amortization date specified in
102.10any applicable special law paragraph (d).
102.11(d) The Minneapolis Firefighters Relief Association special fund amortization date
102.12is determined under section 423C.15, subdivisions 3 and 4. The Virginia Fire Department
102.13Relief Association special fund amortization date is December 31, 2010. The Minneapolis
102.14Police Relief Association special fund and the Fairmont Police Relief Association
102.15special fund amortization date is December 31, 2020. The Bloomington Fire Department
102.16Relief Association special fund amortization date is determined under section 356.216,
102.17paragraph (a), clause (2). The amortization date specified in this paragraph supersedes any
102.18amortization date specified in any applicable special law.
102.19(d) (e) The minimum obligation of the municipality is an amount equal to the
102.20financial requirements of the relief association reduced by the estimated amount of
102.21member contributions from covered salary anticipated for the following calendar year and
102.22the estimated amounts anticipated for the following calendar year from the applicable
102.23state aid program established under sections 69.011 to 69.051 receivable by the relief
102.24association after any allocation made under section 69.031, subdivision 5, paragraph (b),
102.25clause (2), or 423A.01, subdivision 2, paragraph (a), clause (6), from the local police
102.26and salaried firefighters' relief association amortization aid program established under
102.27section 423A.02, subdivision 1, from the supplementary amortization state-aid program
102.28established under section 423A.02, subdivision 1a, and from the additional amortization
102.29state aid under section 423A.02, subdivision 1b.
102.30EFFECTIVE DATE; LOCAL APPROVAL.This section is effective the day after
102.31the Fairmont City Council and the chief clerical officer of the city of Fairmont timely
102.32complete their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

102.33    Sec. 2. Minnesota Statutes 2008, section 423A.02, subdivision 1, is amended to read:
102.34    Subdivision 1. Amortization state aid. (a) A municipality in which is located
102.35a local police or salaried firefighters' relief association to which the provisions of
103.1section 69.77, apply, that had an unfunded actuarial accrued liability in the most recent
103.2relief association actuarial valuation, is entitled, upon application as required by the
103.3commissioner of revenue, to receive local police and salaried firefighters' relief association
103.4amortization state aid if the municipality and the appropriate relief association both comply
103.5with the applicable provisions of sections 69.031, subdivision 5, 69.051, subdivisions 1
103.6and 3
, and 69.77. If a municipality loses entitlement for amortization state aid in any year
103.7because its local relief association no longer has an unfunded actuarial accrued liability,
103.8the municipality is not entitled to amortization state aid in any subsequent year.
103.9(b) The total amount of amortization state aid to all entitled municipalities must
103.10not exceed $5,055,000.
103.11(c) Subject to the adjustment for the city of Minneapolis provided in this paragraph,
103.12the amount of amortization state aid to which a municipality is entitled annually is an
103.13amount equal to the level annual dollar amount required to amortize, by December 31,
103.142010, the unfunded actuarial accrued liability of the special fund of the appropriate
103.15relief association as reported in the December 31, 1978, actuarial valuation of the
103.16relief association prepared under sections 356.215 and 356.216, reduced by the dollar
103.17amount required to pay the interest on the unfunded actuarial accrued liability of the
103.18special fund of the relief association for calendar year 1981 set at the rate specified in
103.19Minnesota Statutes 1978, section 356.215, subdivision 8. For the city of Minneapolis, the
103.20amortization state aid amount thus determined must be reduced by $747,232 on account of
103.21the Minneapolis Police Relief Association and by $772,768 on account of the Minneapolis
103.22Fire Department Relief Association. If the amortization state aid amounts determined
103.23under this paragraph exceed the amount appropriated for this purpose, the amortization
103.24state aid for actual allocation must be reduced pro rata.
103.25(d) Payment of amortization state aid to municipalities must be made directly to
103.26the municipalities involved in three equal installments on July 15, September 15, and
103.27November 15 annually. Upon receipt of amortization state aid, the municipal treasurer
103.28shall transmit the aid amount to the treasurer of the local relief association for immediate
103.29deposit in the special fund of the relief association.
103.30(e) The commissioner of revenue shall prescribe and periodically revise the form for
103.31and content of the application for the amortization state aid.

103.32    Sec. 3. Minnesota Statutes 2008, section 423A.02, subdivision 3, is amended to read:
103.33    Subd. 3. Reallocation of amortization or supplementary amortization state
103.34aid. (a) Seventy percent of the difference between $5,720,000 and the current year
103.35amortization aid or supplemental amortization aid distributed under subdivisions 1 and 1a
104.1that is not distributed for any reason to a municipality for use by a local police or salaried
104.2fire relief association must be distributed by the commissioner of revenue according to this
104.3paragraph. The commissioner shall distribute 70 50 percent of the amounts derived under
104.4this paragraph to the Teachers Retirement Association, ten percent to the Duluth Teachers
104.5Retirement Fund Association, and 30 40 percent to the St. Paul Teachers Retirement Fund
104.6Association to fund the unfunded actuarial accrued liabilities of the respective funds.
104.7These payments shall be made on or before June 30 each fiscal year. The amount required
104.8under this paragraph is appropriated annually from the general fund to the commissioner
104.9of revenue. If the St. Paul Teachers Retirement Fund Association becomes fully funded,
104.10its eligibility for this aid ceases. Amounts remaining in the undistributed balance account
104.11at the end of the biennium if aid eligibility ceases cancel to the general fund.
104.12    (b) In order to receive amortization and supplementary amortization aid under
104.13paragraph (a), Independent School District No. 625, St. Paul, must make contributions
104.14to the St. Paul Teachers Retirement Fund Association in accordance with the following
104.15schedule:
104.16
Fiscal Year
Amount
104.17
1996
$
0
104.18
1997
$
0
104.19
1998
$
200,000
104.20
1999
$
400,000
104.21
2000
$
600,000
104.22
2001 and thereafter
$
800,000
104.23    (c) Special School District No. 1, Minneapolis, and the city of Minneapolis must
104.24each make contributions to the Teachers Retirement Association in accordance with the
104.25following schedule:
104.26
104.27
Fiscal Year
City amount
School district
amount
104.28
1996
$
0
$
0
104.29
1997
$
0
$
0
104.30
1998
$
250,000
$
250,000
104.31
1999
$
400,000
$
400,000
104.32
2000
$
550,000
$
550,000
104.33
2001
$
700,000
$
700,000
104.34
2002
$
850,000
$
850,000
104.35
2003 and thereafter
$
1,000,000
$
1,000,000
104.36    (d) Money contributed under paragraph (a) and either paragraph (b) or (c), as
104.37applicable, must be credited to a separate account in the applicable teachers retirement
105.1fund and may not be used in determining any benefit increases. The separate account
105.2terminates for a fund when the aid payments to the fund under paragraph (a) cease.
105.3    (e) Thirty percent of the difference between $5,720,000 and the current year
105.4amortization aid or supplemental amortization aid under subdivisions 1 and 1a that is not
105.5distributed for any reason to a municipality for use by a local police or salaried firefighter
105.6relief association must be distributed under section 69.021, subdivision 7, paragraph (d),
105.7as additional funding to support a minimum fire state aid amount for volunteer firefighter
105.8relief associations. The amount required under this paragraph is appropriated annually
105.9to the commissioner of revenue.

105.10    Sec. 4. Minnesota Statutes 2008, section 423C.03, subdivision 1, is amended to read:
105.11    Subdivision 1. Board composition and elections. The board shall consist of
105.12two persons appointed by the city and ten the number of other members specified in
105.13the association bylaws, but not to exceed ten, who must be selected by the members.
105.14Elections for active and retired positions on the board shall be conducted pursuant to
105.15the association's bylaws.
105.16EFFECTIVE DATE.This section is effective the day following final enactment.

105.17ARTICLE 9
105.18VOLUNTARY STATEWIDE LUMP SUM
105.19VOLUNTEER FIREFIGHTER RETIREMENT PLAN

105.20    Section 1. Minnesota Statutes 2008, section 11A.17, subdivision 1, is amended to read:
105.21    Subdivision 1. Purpose; accounts; continuation. (a) The purpose of the
105.22supplemental investment fund is to provide an investment vehicle for the assets of various
105.23public retirement plans and funds.
105.24(b) The fund consists of seven eight investment accounts: an income share account,
105.25a growth share account, an international share account, a money market account, a fixed
105.26interest account, a bond market account, and a common stock index account, and a
105.27volunteer firefighter account.
105.28(c) The supplemental investment fund is a continuation of the supplemental
105.29retirement fund in existence on January 1, 1980.

105.30    Sec. 2. Minnesota Statutes 2008, section 11A.17, subdivision 2, is amended to read:
105.31    Subd. 2. Assets. (a) The assets of the supplemental investment fund shall consist
105.32of the money certified and transmitted to the state board from the participating public
106.1retirement plans and funds or from the board of the Minnesota State Colleges and
106.2Universities under section 136F.45 and from the voluntary statewide lump-sum volunteer
106.3firefighter retirement plan under section 353G.08.
106.4(b) With the exception of the assets of the voluntary statewide lump-sum volunteer
106.5firefighter retirement fund, the assets must be used to purchase investment shares in
106.6the investment accounts as specified by the plan or fund. The assets of the voluntary
106.7statewide lump-sum volunteer firefighter retirement fund must be invested in the volunteer
106.8firefighter account.
106.9(c) These accounts must be valued at least on a monthly basis but may be valued
106.10more frequently as determined by the State Board of Investment.

106.11    Sec. 3. Minnesota Statutes 2008, section 69.011, subdivision 1, is amended to read:
106.12    Subdivision 1. Definitions. Unless the language or context clearly indicates that a
106.13different meaning is intended, the following words and terms shall, for the purposes of this
106.14chapter and chapters 423, 423A, 424 and 424A, have the meanings ascribed to them:
106.15    (a) "Commissioner" means the commissioner of revenue.
106.16    (b) "Municipality" means:
106.17    (1) a home rule charter or statutory city;
106.18    (2) an organized town;
106.19    (3) a park district subject to chapter 398;
106.20    (4) the University of Minnesota;
106.21    (5) for purposes of the fire state aid program only, an American Indian tribal
106.22government entity located within a federally recognized American Indian reservation;
106.23    (6) for purposes of the police state aid program only, an American Indian tribal
106.24government with a tribal police department which exercises state arrest powers under
106.25section 626.90, 626.91, 626.92, or 626.93;
106.26    (7) for purposes of the police state aid program only, the Metropolitan Airports
106.27Commission with respect to peace officers covered under chapter 422A; and
106.28    (8) for purposes of the police state aid program only, the Department of Natural
106.29Resources and the Department of Public Safety with respect to peace officers covered
106.30under chapter 352B.
106.31    (c) "Minnesota Firetown Premium Report" means a form prescribed by the
106.32commissioner containing space for reporting by insurers of fire, lightning, sprinkler
106.33leakage and extended coverage premiums received upon risks located or to be performed
106.34in this state less return premiums and dividends.
107.1    (d) "Firetown" means the area serviced by any municipality having a qualified fire
107.2department or a qualified incorporated fire department having a subsidiary volunteer
107.3firefighters' relief association.
107.4    (e) "Market value" means latest available market value of all property in a taxing
107.5jurisdiction, whether the property is subject to taxation, or exempt from ad valorem
107.6taxation obtained from information which appears on abstracts filed with the commissioner
107.7of revenue or equalized by the State Board of Equalization.
107.8    (f) "Minnesota Aid to Police Premium Report" means a form prescribed by the
107.9commissioner for reporting by each fire and casualty insurer of all premiums received
107.10upon direct business received by it in this state, or by its agents for it, in cash or otherwise,
107.11during the preceding calendar year, with reference to insurance written for insuring against
107.12the perils contained in auto insurance coverages as reported in the Minnesota business
107.13schedule of the annual financial statement which each insurer is required to file with
107.14the commissioner in accordance with the governing laws or rules less return premiums
107.15and dividends.
107.16    (g) "Peace officer" means any person:
107.17    (1) whose primary source of income derived from wages is from direct employment
107.18by a municipality or county as a law enforcement officer on a full-time basis of not less
107.19than 30 hours per week;
107.20    (2) who has been employed for a minimum of six months prior to December 31
107.21preceding the date of the current year's certification under subdivision 2, clause (b);
107.22    (3) who is sworn to enforce the general criminal laws of the state and local
107.23ordinances;
107.24    (4) who is licensed by the Peace Officers Standards and Training Board and is
107.25authorized to arrest with a warrant; and
107.26    (5) who is a member of a local police relief association to which section 69.77
107.27applies, the State Patrol retirement plan, the public employees police and fire fund, or the
107.28Minneapolis Employees Retirement Fund.
107.29    (h) "Full-time equivalent number of peace officers providing contract service" means
107.30the integral or fractional number of peace officers which would be necessary to provide
107.31the contract service if all peace officers providing service were employed on a full-time
107.32basis as defined by the employing unit and the municipality receiving the contract service.
107.33    (i) "Retirement benefits other than a service pension" means any disbursement
107.34authorized under section 424A.05, subdivision 3, clauses (2) and (3).
107.35    (j) "Municipal clerk, municipal clerk-treasurer, or county auditor" means the person
107.36who was elected or appointed to the specified position or, in the absence of the person,
108.1another person who is designated by the applicable governing body. In a park district,
108.2the clerk is the secretary of the board of park district commissioners. In the case of the
108.3University of Minnesota, the clerk is that official designated by the Board of Regents.
108.4For the Metropolitan Airports Commission, the clerk is the person designated by the
108.5commission. For the Department of Natural Resources or the Department of Public Safety,
108.6the clerk is the respective commissioner. For a tribal police department which exercises
108.7state arrest powers under section 626.90, 626.91, 626.92, or 626.93, the clerk is the person
108.8designated by the applicable American Indian tribal government.
108.9(k) "Voluntary statewide lump-sum volunteer firefighter retirement plan" means the
108.10retirement plan established by chapter 353G.

108.11    Sec. 4. Minnesota Statutes 2008, section 69.011, subdivision 2, is amended to read:
108.12    Subd. 2. Qualification for fire or police state aid. (a) Unless retirement coverage
108.13is provided by the voluntary statewide lump-sum volunteer firefighter retirement plan, in
108.14order to qualify to receive fire state aid, on or before March 15 annually, in conjunction
108.15with the financial report required pursuant to section 69.051, the clerk of each municipality
108.16having a duly organized fire department as provided in subdivision 4, or the secretary of
108.17each independent nonprofit firefighting corporation having a subsidiary incorporated
108.18firefighters' relief association whichever is applicable, and the fire chief, shall jointly
108.19certify the existence of the municipal fire department or of the independent nonprofit
108.20firefighting corporation, whichever is applicable, which meets the minimum qualification
108.21requirements set forth in this subdivision, and the fire personnel and equipment of the
108.22municipal fire department or the independent nonprofit firefighting corporation as of the
108.23preceding December 31.
108.24(b) Where retirement coverage is provided by the voluntary statewide lump-sum
108.25volunteer firefighter retirement plan, the executive director of the Public Employees
108.26Retirement Association shall certify the existence of that coverage for each municipality
108.27and the municipal clerk or independent nonprofit firefighting corporation secretary,
108.28whichever applies, and the applicable fire chief shall certify the fire personnel and fire
108.29department equipment as of the preceding December 31.
108.30(c) Certification shall must be made to the commissioner on a form prescribed
108.31by the commissioner and shall include any other facts the commissioner may require.
108.32The certification shall must be made to the commissioner in duplicate. Each copy of the
108.33certificate shall must be duly executed and is deemed to be an original. The commissioner
108.34shall forward one copy to the auditor of the county wherein the fire department is located
108.35and shall retain one copy.
109.1(b) (d) On or before March 15 annually the clerk of each municipality having a duly
109.2organized police department and having a duly incorporated relief association shall certify
109.3that fact to the county auditor of the county where the police department is located and to
109.4the commissioner on a form prescribed by the commissioner together with the other facts
109.5the commissioner or auditor may require.
109.6(e) Except as provided in subdivision 2b, on or before March 15 annually, the clerk
109.7of each municipality and the auditor of each county employing one or more peace officers
109.8as defined in subdivision 1, clause (g), shall certify the number of such peace officers to
109.9the commissioner on forms prescribed by the commissioner. Credit for officers employed
109.10less than a full year shall must be apportioned. Each full month of employment of a
109.11qualifying officer during the calendar year shall entitle entitles the employing municipality
109.12or county to credit for 1/12 of the payment for employment of a peace officer for the entire
109.13year. For purposes of sections 69.011 to 69.051, employment of a peace officer shall
109.14commence commences when the peace officer is entered on the payroll of the respective
109.15municipal police department or county sheriff's department. No peace officer shall may be
109.16included in the certification of the number of peace officers by more than one municipality
109.17or county for the same month.

109.18    Sec. 5. Minnesota Statutes 2008, section 69.011, subdivision 4, is amended to read:
109.19    Subd. 4. Qualification for state aid. Any municipality in this state having for more
109.20than one year an organized fire department and officially established by the governing
109.21body of the municipality or an independent nonprofit fire fighting corporation created
109.22under the nonprofit corporation act of this state and operating exclusively for fire fighting
109.23purposes and providing retirement and relief benefits to its members or, having a separate
109.24subsidiary incorporated firefighter's relief and pension association providing retirement and
109.25relief benefits, or participating in the voluntary statewide lump-sum volunteer firefighter
109.26retirement plan, may qualify to receive state aid if it meets the following minimum
109.27requirements or equivalent as determined by the state fire marshal by July 1, 1972:
109.28(a) ten paid or volunteer firefighters including a fire chief and assistant fire chief, and
109.29(b) regular scheduled meetings and frequent drills including instructions in fire
109.30fighting tactics and in the use, care, and operation of all fire apparatus and equipment, and
109.31(c) a motorized fire truck equipped with a motorized pump, 250 gallon or larger
109.32water tank, 300 feet of one inch or larger fire hose in two lines with combination spray
109.33and straight stream nozzles, five-gallon hand pumps--tank extinguisher or equivalent, dry
109.34chemical extinguisher or equivalent, ladders, extension ladders, pike poles, crow bars,
109.35axes, lanterns, fire coats, helmets, boots, and
110.1(d) apparatus suitably housed in a building of good construction with facilities for
110.2care of hose and equipment, and
110.3(e) a reliable and adequate method of receiving fire alarms by telephone or with
110.4electric siren and suitable means of sounding an alarm, and
110.5(f) if response is to be provided outside the corporate limits of the municipality
110.6wherein the fire department is located, the municipality has another piece of motorized
110.7apparatus to make the response, and
110.8(g) other requirements the commissioner establishes by rule.

110.9    Sec. 6. Minnesota Statutes 2008, section 69.021, subdivision 7, is amended to read:
110.10    Subd. 7. Apportionment of fire state aid to municipalities and relief associations.
110.11(a) The commissioner shall apportion the fire state aid relative to the premiums reported
110.12on the Minnesota Firetown Premium Reports filed under this chapter to each municipality
110.13and/or firefighters relief association.
110.14(b) The commissioner shall calculate an initial fire state aid allocation amount for
110.15each municipality or fire department under paragraph (c) and a minimum fire state aid
110.16allocation amount for each municipality or fire department under paragraph (d). The
110.17municipality or fire department must receive the larger fire state aid amount.
110.18(c) The initial fire state aid allocation amount is the amount available for
110.19apportionment as fire state aid under subdivision 5, without inclusion of any additional
110.20funding amount to support a minimum fire state aid amount under section 423A.02,
110.21subdivision 3
, allocated one-half in proportion to the population as shown in the last
110.22official statewide federal census for each fire town and one-half in proportion to the market
110.23value of each fire town, including (1) the market value of tax exempt property and (2) the
110.24market value of natural resources lands receiving in lieu payments under sections 477A.11
110.25to 477A.14, but excluding the market value of minerals. In the case of incorporated or
110.26municipal fire departments furnishing fire protection to other cities, towns, or townships
110.27as evidenced by valid fire service contracts filed with the commissioner, the distribution
110.28must be adjusted proportionately to take into consideration the crossover fire protection
110.29service. Necessary adjustments shall must be made to subsequent apportionments. In
110.30the case of municipalities or independent fire departments qualifying for the aid, the
110.31commissioner shall calculate the state aid for the municipality or relief association on the
110.32basis of the population and the market value of the area furnished fire protection service
110.33by the fire department as evidenced by duly executed and valid fire service agreements
110.34filed with the commissioner. If one or more fire departments are furnishing contracted
110.35fire service to a city, town, or township, only the population and market value of the
111.1area served by each fire department may be considered in calculating the state aid and
111.2the fire departments furnishing service shall enter into an agreement apportioning among
111.3themselves the percent of the population and the market value of each service area. The
111.4agreement must be in writing and must be filed with the commissioner.
111.5(d) The minimum fire state aid allocation amount is the amount in addition to the
111.6initial fire state allocation amount that is derived from any additional funding amount
111.7to support a minimum fire state aid amount under section 423A.02, subdivision 3, and
111.8allocated to municipalities with volunteer firefighters relief associations or covered by the
111.9voluntary statewide lump-sum volunteer firefighter retirement plan based on the number
111.10of active volunteer firefighters who are members of the relief association as reported
111.11in the annual financial reporting for the calendar year 1993 to the Office of the State
111.12Auditor, but not to exceed 30 active volunteer firefighters, so that all municipalities or
111.13fire departments with volunteer firefighters relief associations receive in total at least a
111.14minimum fire state aid amount per 1993 active volunteer firefighter to a maximum of
111.1530 firefighters. If a relief association is established after calendar year 1993 and before
111.16calendar year 2000, the number of active volunteer firefighters who are members of the
111.17relief association as reported in the annual financial reporting for calendar year 1998
111.18to the Office of the State Auditor, but not to exceed 30 active volunteer firefighters,
111.19shall be used in this determination. If a relief association is established after calendar
111.20year 1999, the number of active volunteer firefighters who are members of the relief
111.21association as reported in the first annual financial reporting submitted to the Office of
111.22the State Auditor, but not to exceed 20 active volunteer firefighters, must be used in this
111.23determination. If a relief association is terminated as a result of providing retirement
111.24coverage for volunteer firefighters by the voluntary statewide lump-sum volunteer
111.25firefighter retirement plan under chapter 353G, the number of active volunteer firefighters
111.26of the municipality covered by the statewide plan as certified by the executive director of
111.27the Public Employees Retirement Association to the commissioner and the state auditor,
111.28but not to exceed 30 active firefighters, must be used in this determination.
111.29(e) Unless the firefighters of the applicable fire department are members of the
111.30voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid must
111.31be paid to the treasurer of the municipality where the fire department is located and the
111.32treasurer of the municipality shall, within 30 days of receipt of the fire state aid, transmit
111.33the aid to the relief association if the relief association has filed a financial report with the
111.34treasurer of the municipality and has met all other statutory provisions pertaining to the
111.35aid apportionment. If the firefighters of the applicable fire department are members of
111.36the voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid
112.1must be paid to the executive director of the Public Employees Retirement Association
112.2and deposited in the voluntary statewide lump-sum volunteer firefighter retirement fund.
112.3(f) The commissioner may make rules to permit the administration of the provisions
112.4of this section.
112.5(g) Any adjustments needed to correct prior misallocations must be made to
112.6subsequent apportionments.

112.7    Sec. 7. Minnesota Statutes 2008, section 69.021, subdivision 9, is amended to read:
112.8    Subd. 9. Appeal. In the event that any a municipality, a county, a fire relief
112.9association, or a police relief association, or the voluntary statewide lump-sum volunteer
112.10firefighter retirement plan, feels itself to be aggrieved, it may request the commissioner to
112.11review and adjust the apportionment of funds within the county in the case of police state
112.12aid, or within the state in the case of fire state aid. The decision of the commissioner is
112.13subject to appeal, review, and adjustment by the district court in the county in which the
112.14applicable municipality, fire department, or police department is located.

112.15    Sec. 8. Minnesota Statutes 2008, section 69.031, subdivision 1, is amended to read:
112.16    Subdivision 1. Commissioner of finance's warrant. (a) The commissioner of
112.17finance shall issue to the Public Employees Retirement Association on behalf of a
112.18municipality or independent nonprofit firefighting corporation that is a member of the
112.19voluntary statewide lump-sum volunteer firefighter retirement plan under chapter 353G or
112.20to the county, municipality, or independent nonprofit firefighting corporation certified to
112.21the commissioner of finance by the commissioner a warrant for an amount equal to the
112.22amount of fire state aid or police state aid, whichever applies, certified for the applicable
112.23state aid recipient by the commissioner under section 69.021.
112.24(b) The amount of state aid due and not paid by October 1 accrues interest at the rate
112.25of one percent for each month or part of a month the amount remains unpaid, beginning
112.26the preceding July 1.

112.27    Sec. 9. Minnesota Statutes 2008, section 69.031, subdivision 5, is amended to read:
112.28    Subd. 5. Deposit of state aid. (a) If the municipality or the independent nonprofit
112.29firefighting corporation is covered by the voluntary statewide lump-sum volunteer
112.30firefighter retirement plan under chapter 353G, the executive director shall credit the
112.31fire state aid against future municipal contribution requirements under section 353G.08
112.32and shall notify the municipality or independent nonprofit firefighting corporation of
112.33the fire state aid so credited at least annually. If the municipality or the independent
113.1nonprofit firefighting corporation is not covered by the voluntary statewide lump-sum
113.2volunteer firefighter retirement plan, the municipal treasurer shall, within 30 days after
113.3receipt, transmit the fire state aid to the treasurer of the duly incorporated firefighters'
113.4relief association if there is one organized and the association has filed a financial report
113.5with the municipality. If the relief association has not filed a financial report with the
113.6municipality, the municipal treasurer shall delay transmission of the fire state aid to
113.7the relief association until the complete financial report is filed. If the municipality or
113.8independent nonprofit firefighting corporation is not covered by the voluntary statewide
113.9lump-sum volunteer firefighter retirement plan, if there is no relief association organized,
113.10or if the association has dissolved, or has been removed as trustees of state aid, then the
113.11treasurer of the municipality shall deposit the money in the municipal treasury as provided
113.12for in section 424A.08 and the money may be disbursed only for the purposes and in the
113.13manner set forth in that section.
113.14(b) The municipal treasurer, upon receipt of the police state aid, shall disburse the
113.15police state aid in the following manner:
113.16(1) For a municipality in which a local police relief association exists and all peace
113.17officers are members of the association, the total state aid must be transmitted to the
113.18treasurer of the relief association within 30 days of the date of receipt, and the treasurer
113.19of the relief association shall immediately deposit the total state aid in the special fund
113.20of the relief association;
113.21(2) For a municipality in which police retirement coverage is provided by the public
113.22employees police and fire fund and all peace officers are members of the fund, including
113.23municipalities covered by section 353.665, the total state aid must be applied toward the
113.24municipality's employer contribution to the public employees police and fire fund under
113.25sections 353.65, subdivision 3, and 353.665, subdivision 8, paragraph (b), if applicable; or
113.26(3) For a municipality other than a city of the first class with a population of more
113.27than 300,000 in which both a police relief association exists and police retirement
113.28coverage is provided in part by the public employees police and fire fund, the municipality
113.29may elect at its option to transmit the total state aid to the treasurer of the relief association
113.30as provided in clause (1), to use the total state aid to apply toward the municipality's
113.31employer contribution to the public employees police and fire fund subject to all the
113.32provisions set forth in clause (2), or to allot the total state aid proportionately to be
113.33transmitted to the police relief association as provided in this subdivision and to apply
113.34toward the municipality's employer contribution to the public employees police and fire
113.35fund subject to the provisions of clause (2) on the basis of the respective number of active
113.36full-time peace officers, as defined in section 69.011, subdivision 1, clause (g).
114.1For a city of the first class with a population of more than 300,000, in addition, the
114.2city may elect to allot the appropriate portion of the total police state aid to apply toward
114.3the employer contribution of the city to the public employees police and fire fund based
114.4on the covered salary of police officers covered by the fund each payroll period and to
114.5transmit the balance to the police relief association; or
114.6(4) For a municipality in which police retirement coverage is provided in part by
114.7the public employees police and fire fund and in part by a local police consolidation
114.8account governed by chapter 353A and established before March 2, 1999, for which the
114.9municipality declined merger under section 353.665, subdivision 1, or established after
114.10March 1, 1999, the total police state aid must be applied towards the municipality's total
114.11employer contribution to the public employees police and fire fund and to the local police
114.12consolidation account under sections 353.65, subdivision 3, and 353A.09, subdivision 5.
114.13(c) The county treasurer, upon receipt of the police state aid for the county, shall
114.14apply the total state aid toward the county's employer contribution to the public employees
114.15police and fire fund under section 353.65, subdivision 3.
114.16(d) The designated Metropolitan Airports Commission official, upon receipt of the
114.17police state aid for the Metropolitan Airports Commission, shall apply the total police
114.18state aid first toward the commission's employer contribution for police officers to the
114.19Minneapolis Employees Retirement Fund under section 422A.101, subdivision 2a, and, if
114.20there is any amount of police state aid remaining, shall apply that remainder toward the
114.21commission's employer contribution for police officers to the public employees police and
114.22fire plan under section 353.65, subdivision 3.
114.23(e) The police state aid apportioned to the Departments of Public Safety and Natural
114.24Resources under section 69.021, subdivision 7a, is appropriated to the commissioner of
114.25finance for transfer to the funds and accounts from which the salaries of peace officers
114.26certified under section 69.011, subdivision 2a, are paid. The commissioner of revenue
114.27shall certify to the commissioners of public safety, natural resources, and finance the
114.28amounts to be transferred from the appropriation for police state aid. The commissioners
114.29of public safety and natural resources shall certify to the commissioner of finance the
114.30amounts to be credited to each of the funds and accounts from which the peace officers
114.31employed by their respective departments are paid. Each commissioner must shall allocate
114.32the police state aid first for employer contributions for employees funded from the general
114.33fund and then for employer contributions for employees funded from other funds. For
114.34peace officers whose salaries are paid from the general fund, the amounts transferred from
114.35the appropriation for police state aid must be canceled to the general fund.

115.1    Sec. 10. [353G.01] DEFINITIONS.
115.2    Subdivision 1. Scope. For the purposes of this chapter, the words or terms defined
115.3in this section have the meanings given to them unless the context of the word or term
115.4clearly indicates otherwise.
115.5    Subd. 2. Advisory board. "Advisory board" means the board established by section
115.6353G.03.
115.7    Subd. 3. Board. "Board" means the board of trustees of the Public Employees
115.8Retirement Association operating under section 353.03.
115.9    Subd. 4. Commissioner of finance. "Commissioner of finance" means the state
115.10official appointed and qualified under section 16A.01.
115.11    Subd. 5. Executive director; director. "Executive director" or "director" means
115.12the person appointed under section 353.03, subdivision 3a.
115.13    Subd. 6. Fund. "Fund" means the voluntary statewide lump-sum volunteer
115.14firefighter retirement fund established under section 353G.02, subdivision 3.
115.15    Subd. 7. Good time service credit. "Good time service credit" means the length of
115.16service credit for an active firefighter that is reported by the applicable fire chief based
115.17on the minimum firefighter activity standards of the fire department. The credit may be
115.18recognized on an annual or monthly basis.
115.19    Subd. 8. Member. "Member" means a volunteer firefighter who provides active
115.20service to a municipal fire department or an independent nonprofit firefighting corporation
115.21where the applicable municipality or corporation has elected coverage by the retirement
115.22plan under section 353G.05, and which service is covered by the retirement plan.
115.23    Subd. 9. Municipality. "Municipality" means a governmental entity specified in
115.24section 69.011, subdivision 1, paragraph (b), clauses (1), (2), and (5).
115.25    Subd. 10. Plan. "Plan" means the retirement plan established by this chapter.
115.26    Subd. 11. Retirement fund. "Retirement fund" means the voluntary statewide
115.27lump-sum volunteer firefighter retirement fund established under section 353G.02,
115.28subdivision 3.
115.29    Subd. 12. Retirement plan. "Retirement plan" means the retirement plan
115.30established by this chapter.
115.31    Subd. 13. Standards for actuarial work. "Standards for actuarial work" means
115.32the standards adopted by the Legislative Commission on Pensions and Retirement under
115.33section 3.85, subdivision 10.
115.34    Subd. 14. State Board of Investment. "State Board of Investment" means the
115.35board created by article XI, section 8, of the Minnesota Constitution and governed by
115.36chapter 11A.
116.1    Subd. 15. Volunteer firefighter. "Volunteer firefighter" means a person who is
116.2an active member of a municipal fire department or independent nonprofit firefighting
116.3corporation and who, in that capacity, engages in fire suppression activities, provides
116.4emergency response services, or delivers fire education or prevention services on an
116.5on-call basis.

116.6    Sec. 11. [353G.02] PLAN AND FUND CREATION.
116.7    Subdivision 1. Retirement plan. The voluntary statewide lump-sum volunteer
116.8firefighter retirement plan is created.
116.9    Subd. 2. Administration. The policy-making, management, and administrative
116.10functions related to the voluntary statewide lump-sum volunteer firefighter retirement
116.11plan and fund are vested in the board of trustees and the executive director of the Public
116.12Employees Retirement Association. Their duties, authority, and responsibilities are as
116.13provided in section 353.03. Fiduciary activities of the plan and fund must be undertaken
116.14in a manner consistent with chapter 356A.
116.15    Subd. 3. Retirement fund. (a) The voluntary statewide lump-sum volunteer
116.16firefighter retirement fund is created. The fund contains the assets attributable to the
116.17voluntary statewide lump-sum volunteer firefighter retirement plan.
116.18(b) The State Board of Investment shall invest those portions of the retirement
116.19fund not required for immediate purposes in the voluntary statewide lump-sum volunteer
116.20firefighter retirement plan in the statewide lump-sum volunteer firefighter account of the
116.21Minnesota supplemental investment fund under section 11A.17.
116.22(c) The commissioner of finance is the ex officio treasurer of the voluntary statewide
116.23lump-sum volunteer firefighter retirement fund. The commissioner of finance's general
116.24bond to the state covers all liability for actions taken as the treasurer of the retirement fund.
116.25(d) The revenues of the retirement plan beyond investment returns are governed by
116.26section 353G.08 and must be deposited in the retirement fund. The disbursements of the
116.27retirement plan are governed by section 353G.08. The commissioner of finance shall
116.28transmit a detailed statement showing all credits to and disbursements from the retirement
116.29fund to the executive director monthly.
116.30    Subd. 4. Audit; actuarial valuation. (a) The legislative auditor shall periodically
116.31audit the voluntary statewide lump-sum volunteer firefighter retirement fund.
116.32(b) An actuarial valuation of the voluntary statewide lump-sum volunteer firefighter
116.33retirement plan may be performed periodically as determined to be appropriate or useful
116.34by the board. An actuarial valuation must be performed by the approved actuary retained
116.35under section 356.214 and must conform with section 356.215 and the standards for
117.1actuarial work. An actuarial valuation must contain sufficient detail for each participating
117.2employing entity to ascertain the actuarial condition of its account in the fund and the
117.3contribution requirement towards its account.
117.4    Subd. 5. Legal advisor; attorney general. (a) The legal advisor of the board
117.5and the executive director with respect to the voluntary statewide lump-sum volunteer
117.6firefighter retirement plan is the attorney general.
117.7(b) The board may sue, petition, be sued, or be petitioned under this chapter with
117.8respect to the plan or the fund in the name of the board.
117.9(c) The attorney general shall represent the board in all actions by the board or
117.10against the board with respect to the plan or the fund.
117.11(d) Venue of all actions related to the plan or fund is in the court for the first judicial
117.12district unless the action is an appeal to the Court of Appeals under section 356.96.

117.13    Sec. 12. [353G.03] VOLUNTARY STATEWIDE LUMP-SUM VOLUNTEER
117.14FIREFIGHTER RETIREMENT PLAN ADVISORY BOARD.
117.15    Subdivision 1. Establishment. A Voluntary Statewide Lump-Sum Volunteer
117.16Firefighter Retirement Plan Advisory Board is created.
117.17    Subd. 2. Function; purpose. The advisory board shall provide advice to the board
117.18of trustees of the Public Employees Retirement Association about the retirement coverage
117.19needs of volunteer firefighters who are members of the plan and about the legislative and
117.20administrative changes that would assist the retirement plan in accommodating volunteer
117.21firefighters who are not members of the plan.
117.22    Subd. 3. Composition. (a) The advisory board consists of seven members.
117.23(b) The advisory board members are:
117.24(1) one representative of Minnesota townships, appointed by the Minnesota
117.25Association of Townships;
117.26(2) two representatives of Minnesota cities, appointed by the League of Minnesota
117.27Cities;
117.28(3) one representative of Minnesota fire chiefs, who is a fire chief, appointed by the
117.29Minnesota State Fire Chiefs Association;
117.30(4) two representatives of Minnesota volunteer firefighters, who are active volunteer
117.31firefighters, appointed by the Minnesota State Fire Departments Association; and
117.32(5) one representative of the Office of the State Auditor, designated by the state
117.33auditor.
117.34    Subd. 4. Term. (a) The initial terms on the advisory board for the Minnesota
117.35townships representative and the Minnesota fire chiefs representative are one year. The
118.1initial terms on the advisory board for one of the Minnesota cities representatives and one
118.2of the Minnesota active volunteer firefighter representatives are two years. The initial
118.3terms on the advisory board for the other Minnesota cities representative and the other
118.4Minnesota active volunteer firefighter representative are three years. The term for the
118.5Office of the State Auditor representative is determined by the state auditor.
118.6(b) Subsequent terms on the advisory board other than the Office of the State
118.7Auditor representative are three years.
118.8    Subd. 5. Compensation of advisory board. The compensation of members of the
118.9advisory board other than the Office of the State Auditor representative is governed by
118.10section 15.0575, subdivision 3.

118.11    Sec. 13. [353G.04] INFORMATION FROM MUNICIPALITIES AND FIRE
118.12DEPARTMENTS.
118.13The chief executive officers of municipalities and fire departments with volunteer
118.14firefighters covered by the voluntary lump-sum volunteer firefighter retirement plan shall
118.15provide all relevant information and records requested by the board, the executive director,
118.16and the State Board of Investment as required to perform their duties.

118.17    Sec. 14. [353G.05] PLAN COVERAGE ELECTION.
118.18    Subdivision 1. Coverage. Any municipality or independent nonprofit firefighting
118.19corporation may elect to have its volunteer firefighters covered by the retirement plan.
118.20    Subd. 2. Election of coverage. (a) The process for electing coverage of volunteer
118.21firefighters by the retirement plan is initiated by a request to the executive director for a
118.22cost analysis of the prospective retirement coverage.
118.23(b) If the volunteer firefighters are currently covered by a volunteer firefighters' relief
118.24association governed by chapter 424A, the cost analysis of the prospective retirement
118.25coverage must be requested jointly by the secretary of the volunteer firefighters' relief
118.26association, following approval of the request by the board of the volunteer firefighters'
118.27relief association, and the chief administrative officer of the entity associated with the
118.28relief association, following approval of the request by the governing body of the entity
118.29associated with the relief association. If the relief association is associated with more than
118.30one entity, the chief administrative officer of each associated entity must execute the
118.31request. If the volunteer firefighters are not currently covered by a volunteer firefighters'
118.32relief association, the cost analysis of the prospective retirement coverage must be
118.33requested by the chief administrative officer of the entity operating the fire department.
119.1The request must be made in writing and must be made on a form prescribed by the
119.2executive director.
119.3(c) The cost analysis of the prospective retirement coverage by the statewide
119.4retirement plan must be based on the service pension amount under section 353G.11
119.5closest to the service pension amount provided by the volunteer firefighters' relief
119.6association, if there is one, or to the lowest service pension amount under section 353G.11
119.7if there is no volunteer firefighters' relief association, rounded up, and any other service
119.8pension amount designated by the requester or requesters. The cost analysis must be
119.9prepared using a mathematical procedure certified as accurate by an approved actuary
119.10retained by the Public Employees Retirement Association.
119.11(d) If a cost analysis is requested and a volunteer firefighters' relief association exists
119.12that has filed the information required under section 69.051 in a timely fashion, upon
119.13request by the executive director, the state auditor shall provide the most recent data
119.14available on the financial condition of the volunteer firefighters' relief association, the most
119.15recent firefighter demographic data available, and a copy of the current relief association
119.16bylaws. If a cost analysis is requested, but no volunteer firefighters' relief association
119.17exists, the chief administrative officer of the entity operating the fire department shall
119.18provide the demographic information on the volunteer firefighters serving as members
119.19of the fire department requested by the executive director.
119.20(e) If a cost analysis is requested, the executive director of the State Board of
119.21Investment shall review the investment portfolio of the relief association, if applicable,
119.22for compliance with the applicable provisions of chapter 11A and for appropriateness
119.23for retention under the established investment objectives and investment policies of the
119.24State Board of Investment. If the prospective retirement coverage change is approved
119.25under paragraph (f), the State Board of Investment may require that the relief association
119.26liquidate any investment security or other asset which the executive director of the State
119.27Board of Investment has determined to be an ineligible or inappropriate investment for
119.28retention by the State Board of Investment. The security or asset liquidation must occur
119.29before the effective date of the transfer of retirement plan coverage. If requested to do
119.30so by the chief administrative officer of the relief association, the executive director of
119.31the State Board of Investment shall provide advice about the best means to conduct the
119.32liquidation.
119.33(f) Upon receipt of the cost analysis, the governing body of the municipality or
119.34independent nonprofit firefighting corporation associated with the fire department shall
119.35approve or disapprove the retirement coverage change within 90 days. If the retirement
119.36coverage change is not acted upon within 90 days, it is deemed to be disapproved. If the
120.1retirement coverage change is approved by the applicable governing body, coverage by
120.2the voluntary statewide lump-sum volunteer firefighter retirement plan is effective on the
120.3next following January 1.

120.4    Sec. 15. [353G.06] DISESTABLISHMENT OF PRIOR VOLUNTEER
120.5FIREFIGHTERS' RELIEF ASSOCIATION SPECIAL FUND UPON
120.6RETIREMENT COVERAGE CHANGE.
120.7    Subdivision 1. Special fund disestablishment. (a) On the date immediately prior
120.8to the effective date of the coverage change, the special fund of the applicable volunteer
120.9firefighters' relief association, if one exists, ceases to exist as a pension fund of the
120.10association and legal title to the assets of the special fund transfers to the State Board of
120.11Investment, with the beneficial title to the assets of the special fund remaining in the
120.12applicable volunteer firefighters.
120.13(b) If the market value of the special fund of the volunteer firefighters' relief
120.14association for which retirement coverage changed under this chapter declines in the
120.15interval between the date of the most recent financial report or statement, and the special
120.16fund disestablishment date, the applicable municipality shall transfer an additional amount
120.17to the State Board of Investment equal to that decline. If more than one municipality is
120.18responsible for the direct management of the fire department, the municipalities shall
120.19allocate the additional transfer amount among the various applicable municipalities
120.20one-half in proportion to the population of each municipality and one-half in proportion
120.21to the market value of each municipality.
120.22    Subd. 2. Other relief association changes. In addition to the transfer and
120.23disestablishment of the special fund under subdivision 1, notwithstanding any provisions
120.24of chapter 424A or 424B to the contrary, upon the effective date of the change in volunteer
120.25firefighter retirement coverage, if the relief association membership elects to retain the
120.26relief association after the benefit coverage election, the following changes must be
120.27implemented with respect to the applicable volunteer firefighters' relief association:
120.28(1) the relief association board of trustees membership is reduced to five, comprised
120.29of the fire chief of the fire department and four trustees elected by and from the relief
120.30association membership;
120.31(2) the relief association may only maintain a general fund, which continues to
120.32be governed by section 424A.06;
120.33(3) the relief association is not authorized to receive the proceeds of any state aid or
120.34to receive any municipal funds; and
121.1(4) the relief association may not pay any service pension or benefit that was not
121.2authorized as a general fund disbursement under the articles of incorporation or bylaws of
121.3the relief association in effect prior to the plan coverage election process.
121.4    Subd. 3. Successor in interest. Upon the disestablishment of the special fund of
121.5the volunteer firefighters' relief association under this section, the voluntary statewide
121.6lump-sum volunteer firefighter retirement plan is the successor in interest of the special
121.7fund of the volunteer firefighters' relief association for all claims against the special fund
121.8other than a claim against the special fund, the volunteer firefighters' relief association,
121.9the municipality, the fire department, or any person connected with the volunteer
121.10firefighters' relief association in a fiduciary capacity under chapter 356A or common law
121.11that was based on any act or acts which were not performed in good faith and which
121.12constituted a breach of a fiduciary obligation. As the successor in interest of the special
121.13fund of the volunteer firefighters' relief association, the voluntary statewide lump-sum
121.14volunteer firefighter retirement plan may assert any applicable defense in any judicial
121.15proceeding which the board of trustees of the volunteer firefighters' relief association or
121.16the municipality would have been entitled to assert.

121.17    Sec. 16. [353G.07] CERTIFICATION OF GOOD TIME SERVICE CREDIT.
121.18(a) Annually, by March 31, the fire chief of the fire department with firefighters who
121.19are active members of the retirement plan shall certify to the executive director the good
121.20time service credit for the previous calendar year of each firefighter rendering active
121.21service with the fire department.
121.22(b) The fire chief shall provide to each firefighter rendering active service with
121.23the fire department notification of the amount of good time service credit rendered by
121.24the firefighter for the calendar year. The good time service credit notification must be
121.25provided to the firefighter 60 days before its certification to the executive director of the
121.26Public Employees Retirement Association, along with an indication of the process for the
121.27firefighter to challenge the fire chief's determination of good time service credit. If the
121.28good time service credit amount is challenged in a timely fashion, the fire chief shall hold
121.29a hearing on the challenge, accept and consider any additional pertinent information,
121.30and make a final determination of good time service credit. The final determination of
121.31good time service credit by the fire chief is not reviewable by the executive director of
121.32the Public Employees Retirement Association or by the board of trustees of the Public
121.33Employees Retirement Association.
122.1(c) The good time service credit certification is an official public document. If a
122.2false good time service credit certification is filed or if false information regarding good
122.3time service credits is provided, section 353.19 applies.
122.4(d) The good time service credit certification must be expressed as a percentage of a
122.5full year of service during which an active firefighter rendered at least the minimum level
122.6and quantity of fire suppression, emergency response, fire prevention, or fire education
122.7duties required by the fire department under the rules and regulations applicable to the
122.8fire department. No more than one year of good time service credit may be certified
122.9for a calendar year.
122.10(e) If a firefighter covered by the retirement plan leaves active firefighting service
122.11to render active military service that is required to be covered by the federal Uniformed
122.12Services Employment and Reemployment Rights Act, as amended, the person must be
122.13certified as providing a full year of good time service credit in each year of the military
122.14service, up to the applicable limit of the federal Uniformed Services Employment and
122.15Reemployment Rights Act. If the firefighter does not return from the military service in
122.16compliance with the federal Uniformed Services Employment and Reemployment Rights
122.17Act, the good time service credits applicable to that military service credit period are
122.18forfeited and cancel at the end of the calendar year in which the federal law time limit
122.19occurs.

122.20    Sec. 17. [353G.08] RETIREMENT PLAN FUNDING; DISBURSEMENTS.
122.21(a) Annually, the executive director shall determine the funding requirements of
122.22each account in the voluntary statewide lump-sum volunteer firefighter retirement plan
122.23on or before August 1. The funding requirements as directed under this section, must be
122.24determined using a mathematical procedure developed and certified as accurate by an
122.25approved actuary retained by the Public Employees Retirement Association and based on
122.26present value factors using a six percent interest rate, without any decrement assumptions.
122.27The funding requirements must be certified to the entity or entities associated with the fire
122.28department whose active firefighters are covered by the retirement plan.
122.29(b) The overall funding balance of each account for the current calendar year must
122.30be determined in the following manner:
122.31(1) The total accrued liability for all active and deferred members of the account as
122.32of December 31 of the current year must be calculated based on the good time service
122.33credit of active and deferred members as of that date.
122.34(2) The total present assets of the account projected to December 31 of the current
122.35year, including receipts by and disbursements from the account anticipated to occur on or
123.1before December 31, must be calculated. To the extent possible, the market value of assets
123.2must be utilized in making this calculation.
123.3(3) The amount of the total present assets calculated under clause (2) must be
123.4subtracted from the amount of the total accrued liability calculated under clause (1). If the
123.5amount of total present assets exceeds the amount of the total accrued liability, then the
123.6account is considered to have a surplus over full funding. If the amount of the total present
123.7assets is less than the amount of the total accrued liability, then the account is considered
123.8to have a deficit from full funding. If the amount of total present assets is equal to the
123.9amount of the total accrued liability, then the special fund is considered to be fully funded.
123.10(c) The financial requirements of each account for the following calendar year must
123.11be determined in the following manner:
123.12(1) The total accrued liability for all active and deferred members of the account
123.13as of December 31 of the calendar year next following the current calendar year must be
123.14calculated based on the good time service used in the calculation under paragraph (b),
123.15clause (1), increased by one year.
123.16(2) The increase in the total accrued liability of the account for the following calendar
123.17year over the total accrued liability of the account for the current year must be calculated.
123.18(3) The amount of anticipated future administrative expenses of the account must be
123.19calculated by multiplying the dollar amount of the administrative expenses for the most
123.20recent prior calendar year by the factor of 1.035.
123.21(4) If the account is fully funded, the financial requirement of the account for the
123.22following calendar year is the total of the amounts calculated under clauses (2) and (3).
123.23(5) If the account has a deficit from full funding, the financial requirement of the
123.24account for the following calendar year is the total of the amounts calculated under clauses
123.25(2) and (3) plus an amount equal to one-tenth of the amount of the deficit from full
123.26funding of the account.
123.27(6) If the account has a surplus over full funding, the financial requirement of
123.28the account for the following calendar year is the financial requirement of the account
123.29calculated as though the account was fully funded under clause (4) and, if the account has
123.30also had a surplus over full funding during the prior two years, additionally reduced by an
123.31amount equal to one-tenth of the amount of the surplus over full funding of the account.
123.32(d) The required contribution of the entity or entities associated with the fire
123.33department whose active firefighters are covered by the retirement plan is the annual
123.34financial requirements of the account of the retirement plan under paragraph (c) reduced
123.35by the amount of any fire state aid payable under sections 69.011 to 69.051 reasonably
123.36anticipated to be received by the retirement plan attributable to the entity or entities during
124.1the following calendar year, and an amount of interest on the assets projected to be
124.2received during the following calendar year calculated at the rate of six percent per annum.
124.3The required contribution must be allocated between the entities if more than one entity
124.4is involved. A reasonable amount of anticipated fire state aid is an amount that does not
124.5exceed the fire state aid actually received in the prior year multiplied by the factor 1.035.
124.6(e) The required contribution calculated in paragraph (d) must be paid to the
124.7retirement plan on or before December 31 of the year for which it was calculated. If
124.8the contribution is not received by the retirement plan by December 31, it is payable
124.9with interest at an annual compound rate of six percent from the date due until the date
124.10payment is received by the retirement plan. If the entity does not pay the full amount of
124.11the required contribution, the executive director shall collect the unpaid amount under
124.12section 353.28, subdivision 6.
124.13(f) The assets of the retirement fund may only be disbursed for:
124.14(1) the administrative expenses of the retirement plan;
124.15(2) the investment expenses of the retirement fund;
124.16(3) the service pensions payable under section 353G.10, 353G.11, 353G.14, or
124.17353G.15; and
124.18(4) the survivor benefits payable under section 353G.12.

124.19    Sec. 18. [353G.09] RETIREMENT BENEFIT ELIGIBILITY.
124.20    Subdivision 1. Entitlement. Except as provided in subdivision 3, an active member
124.21of the retirement plan is entitled to a lump-sum service pension from the retirement plan
124.22if the person:
124.23(1) has separated from active service with the fire department for at least 30 days;
124.24(2) has attained the age of at least 50 years;
124.25(3) has completed at least five years of good time service credit as a member of
124.26the retirement plan; and
124.27(4) applies in a manner prescribed by the executive director for the service pension.
124.28    Subd. 2. Vesting schedule; nonforfeitable portion of service pension. If an
124.29active member has completed less than 20 years of good time service credit, the person's
124.30entitlement is to the nonforfeitable percentage of the applicable service pension amount,
124.31as follows:
124.32
124.33
Completed years of good time
service credit
Nonforfeitable percentage of the
service pension
124.34
5
40 percent
124.35
6
44 percent
124.36
7
48 percent
125.1
8
52 percent
125.2
9
56 percent
125.3
10
60 percent
125.4
11
64 percent
125.5
12
68 percent
125.6
13
72 percent
125.7
14
76 percent
125.8
15
80 percent
125.9
16
84 percent
125.10
17
88 percent
125.11
18
92 percent
125.12
19
96 percent
125.13
20 and thereafter
100 percent
125.14    Subd. 3. Alternative pension eligibility and computation. (a) An active member
125.15of the retirement plan is entitled to an alternative lump-sum service pension from the
125.16retirement plan if the person:
125.17(1) has separated from active service with the fire department for at least 30 days;
125.18(2) has attained the age of at least 50 years or the age for receipt of a service pension
125.19under the benefit plan of the applicable former volunteer firefighters' relief association
125.20as of the date immediately prior to the election of the retirement coverage change,
125.21whichever is later;
125.22(3) has completed at least five years of active service with the fire department and at
125.23least five years in total as a member of the applicable former volunteer firefighters' relief
125.24association or of the retirement plan, but has not rendered at least five years of good time
125.25service credit as a member of the retirement plan; and
125.26(4) applies in a manner prescribed by the executive director for the service pension.
125.27(b) The alternative lump-sum service pension is the service pension amount specified
125.28in the bylaws of the applicable former volunteer firefighters' relief association either
125.29as of the date immediately prior to the election of the retirement coverage change or
125.30as of the date immediately before the termination of firefighting services, whichever is
125.31earlier, multiplied by the total number of years of service as a member of that volunteer
125.32firefighters' relief association and as a member of the retirement plan.

125.33    Sec. 19. [353G.10] DEFERRED SERVICE PENSION AMOUNT.
125.34A person who was an active member of a fire department covered by the retirement
125.35plan who has separated from active firefighting service for at least 30 days and who has
125.36completed at least five years of good time service credit, but has not attained the age of
125.3750 years, is entitled to a deferred service pension on or after attaining the age of 50 years
126.1and applying in a manner specified by the executive director for the service pension. The
126.2service pension payable is the nonforfeitable percentage of the service pension under
126.3section 353G.09, subdivision 2, and is payable without any interest over the period of
126.4deferral.

126.5    Sec. 20. [353G.11] SERVICE PENSION LEVELS.
126.6    Subdivision 1. Levels. The retirement plan provides the following levels of service
126.7pension amounts to be selected at the election of coverage, or, if fully funded, thereafter:
126.8
Level A
$500 per year of good time service credit
126.9
Level B
$750 per year of good time service credit
126.10
Level C
$1,000 per year of good time service credit
126.11
Level D
$1,500 per year of good time service credit
126.12
Level E
$2,000 per year of good time service credit
126.13
Level F
$2,500 per year of good time service credit
126.14
Level G
$3,000 per year of good time service credit
126.15
Level H
$3,500 per year of good time service credit
126.16
Level I
$4,000 per year of good time service credit
126.17
Level J
$4,500 per year of good time service credit
126.18
Level K
$5,000 per year of good time service credit
126.19
Level L
$5,500 per year of good time service credit
126.20
Level M
$6,000 per year of good time service credit
126.21
Level N
$6,500 per year of good time service credit
126.22
Level O
$7,000 per year of good time service credit
126.23
Level P
$7,500 per year of good time service credit
126.24    Subd. 2. Level selection. At the time of the election to transfer retirement coverage,
126.25or on April 30 thereafter, the governing body or bodies of the entity or entities operating
126.26the fire department whose firefighters are covered by the retirement plan may request
126.27a cost estimate from the executive director of an increase in the service pension level
126.28applicable to the active firefighters of the fire department. Within 90 days of the receipt of
126.29the cost estimate prepared by the executive director using a procedure certified as accurate
126.30by the approved actuary retained by the Public Employees Retirement Association, the
126.31governing body or bodies may approve the service pension level change, effective for the
126.32following calendar year. If not approved in a timely fashion, the service pension level
126.33change is considered to have been disapproved.
126.34    Subd. 3. Supplemental benefit. The retirement plan also shall pay a supplemental
126.35benefit as provided for in section 424A.10.
126.36    Subd. 4. Ancillary benefits. No disability, death, funeral, or other ancillary benefit
126.37beyond a service pension or a survivor benefit is payable from the retirement plan.

127.1    Sec. 21. [353G.12] SURVIVOR BENEFIT.
127.2    Subdivision 1. Entitlement. (a) A survivor of a deceased active member of the
127.3retirement plan or a deceased deferred member of the retirement plan, upon application as
127.4prescribed by the executive director, is entitled to receive a survivor benefit.
127.5(b) A survivor is the spouse of the member, or if none, the minor child or children of
127.6the member, or if none, the estate of the member.
127.7    Subd. 2. Survivor benefit amount. The amount of the survivor benefit is the
127.8amount of the service pension that would have been payable to the member of the
127.9retirement plan on the date of death if the member had been age 50 or older on that date.

127.10    Sec. 22. [353G.13] PORTABILITY.
127.11    Subdivision 1. Eligibility. An active firefighter who is a member of the retirement
127.12plan who also renders firefighting service and has good time service credit in the retirement
127.13plan from another fire department, if the good time service credit in the plan from a
127.14combination of periods totals at least five years, is eligible, upon complying with the other
127.15requirements of section 353G.09, to receive a service pension upon filing an application in
127.16the manner prescribed by the executive director, computed as provided in subdivision 2.
127.17    Subd. 2. Combined service pension computation. The service pension payable to
127.18a firefighter who qualifies under subdivision 1 is the per year of good time service credit
127.19service pension amount in effect for each account in which the firefighter has good time
127.20service credit as of the date on which the firefighter terminated active service with the fire
127.21department associated with the applicable account, multiplied by the number of years of
127.22good time service credit that the firefighter has in the applicable account.
127.23    Subd. 3. Payment. A service pension under this section must be paid in a single
127.24payment, with the applicable portion of the total service pension payment amount
127.25deducted from each account.

127.26    Sec. 23. [353G.14] PURCHASE OF ANNUITY CONTRACTS.
127.27The executive director may purchase an annuity contract on behalf of a retiring
127.28firefighter with a total premium payment in an amount equal to the lump-sum service
127.29pension payable under section 353G.09 if the purchase was requested by the retiring
127.30firefighter in a manner prescribed by the executive director. The annuity contract must
127.31be purchased from an insurance carrier that is licensed to do business in this state. If
127.32purchased, the annuity contract is in lieu of any service pension or other benefit from the
127.33retirement plan. The annuity contract may be purchased at any time after the volunteer
128.1firefighter discontinues active service, but the annuity contract must stipulate that no
128.2annuity amounts are payable before the former volunteer firefighter attains the age of 50.

128.3    Sec. 24. [353G.15] INDIVIDUAL RETIREMENT ACCOUNT TRANSFER.
128.4Upon receipt of a determination that the retirement plan is a qualified pension plan
128.5under section 401(a) of the Internal Revenue Code, as amended, the executive director,
128.6upon request, shall transfer the service pension amount under sections 353G.08 and
128.7353G.11 of a former volunteer firefighter who has terminated active firefighting services
128.8covered by the plan and who has attained the age of at least 50 years to the person's
128.9individual retirement account under section 408(a) of the federal Internal Revenue Code,
128.10as amended. The transfer request must be in a manner prescribed by the executive director
128.11and must be filed by the former volunteer firefighter who has sufficient service credit to be
128.12entitled to a service pension or, following the death of a participating active firefighter,
128.13must be filed by the deceased firefighter's surviving spouse.

128.14    Sec. 25. [353G.16] EXEMPTION FROM PROCESS.
128.15The provisions of section 356.401 apply to the retirement plan.

128.16    Sec. 26. Minnesota Statutes 2008, section 356.20, subdivision 2, is amended to read:
128.17    Subd. 2. Covered public pension plans and funds. This section applies to the
128.18following public pension plans:
128.19    (1) the general state employees retirement plan of the Minnesota State Retirement
128.20System;
128.21    (2) the general employees retirement plan of the Public Employees Retirement
128.22Association;
128.23    (3) the Teachers Retirement Association;
128.24    (4) the State Patrol retirement plan;
128.25    (5) the St. Paul Teachers Retirement Fund Association;
128.26    (6) the Duluth Teachers Retirement Fund Association;
128.27    (7) the Minneapolis Employees Retirement Fund;
128.28    (8) the University of Minnesota faculty retirement plan;
128.29    (9) the University of Minnesota faculty supplemental retirement plan;
128.30    (10) the judges retirement fund;
128.31    (11) a police or firefighter's relief association specified or described in section 69.77,
128.32subdivision 1a
;
129.1    (12) a volunteer firefighter relief association governed by section 69.771, subdivision
129.21
;
129.3    (13) the public employees police and fire plan of the Public Employees Retirement
129.4Association;
129.5    (14) the correctional state employees retirement plan of the Minnesota State
129.6Retirement System; and
129.7    (15) the local government correctional service retirement plan of the Public
129.8Employees Retirement Association; and
129.9(16) the voluntary statewide lump-sum volunteer firefighter retirement plan.

129.10    Sec. 27. Minnesota Statutes 2008, section 356.401, subdivision 3, is amended to read:
129.11    Subd. 3. Covered retirement plans. The provisions of this section apply to the
129.12following retirement plans:
129.13(1) the legislators retirement plan, established by chapter 3A;
129.14(2) the general state employees retirement plan of the Minnesota State Retirement
129.15System, established by chapter 352;
129.16(3) the correctional state employees retirement plan of the Minnesota State
129.17Retirement System, established by chapter 352;
129.18(4) the State Patrol retirement plan, established by chapter 352B;
129.19(5) the elective state officers retirement plan, established by chapter 352C;
129.20(6) the unclassified state employees retirement program, established by chapter
129.21352D;
129.22(7) the general employees retirement plan of the Public Employees Retirement
129.23Association, established by chapter 353;
129.24(8) the public employees police and fire plan of the Public Employees Retirement
129.25Association, established by chapter 353;
129.26(9) the public employees defined contribution plan, established by chapter 353D;
129.27(10) the local government correctional service retirement plan of the Public
129.28Employees Retirement Association, established by chapter 353E;
129.29(11) the voluntary statewide lump-sum volunteer firefighter retirement plan,
129.30established by chapter 353G;
129.31(12) the Teachers Retirement Association, established by chapter 354;
129.32(12) (13) the Duluth Teachers Retirement Fund Association, established by chapter
129.33354A;
129.34(13) the Minneapolis Teachers Retirement Fund Association, established by chapter
129.35354A;
130.1(14) the St. Paul Teachers Retirement Fund Association, established by chapter
130.2354A;
130.3(15) the individual retirement account plan, established by chapter 354B;
130.4(16) the higher education supplemental retirement plan, established by chapter 354C;
130.5(17) the Minneapolis Employees Retirement Fund, established by chapter 422A;
130.6(18) the Minneapolis Police Relief Association, established by chapter 423B;
130.7(19) the Minneapolis Firefighters Relief Association, established by chapter 423C;
130.8and
130.9(20) the judges retirement fund, established by chapter 490.

130.10    Sec. 28. Minnesota Statutes 2008, section 356.96, subdivision 1, is amended to read:
130.11    Subdivision 1. Definitions. (a) Unless the language or context clearly indicates that
130.12a different meaning is intended, for the purpose of this section, the terms in paragraphs
130.13(b) to (e) have the meanings given them.
130.14    (b) "Chief administrative officer" means the executive director of a covered pension
130.15plan or the executive director's designee or representative.
130.16    (c) "Covered pension plan" means a plan enumerated in section 356.20,
130.17subdivision
2, clauses (1) to (4), (10), and (13) to (15) (16), but does not mean the
130.18deferred compensation plan administered under sections 352.965 and 352.97 or to the
130.19postretirement health care savings plan administered under section 352.98.
130.20    (d) "Governing board" means the Board of Trustees of the Public Employees
130.21Retirement Association, the Board of Trustees of the Teachers Retirement Association, or
130.22the Board of Directors of the Minnesota State Retirement System.
130.23    (e) "Person" includes an active, retired, deferred, or nonvested inactive participant in
130.24a covered pension plan or a beneficiary of a participant, or an individual who has applied
130.25to be a participant or who is or may be a survivor of a participant, or a state agency or
130.26other governmental unit that employs active participants in a covered pension plan.

130.27    Sec. 29. Minnesota Statutes 2008, section 424A.10, subdivision 1, is amended to read:
130.28    Subdivision 1. Definitions. For purposes of this section:
130.29    (1) "qualified recipient" means an individual who receives a lump-sum distribution
130.30of pension or retirement benefits from a firefighters' relief association or from the
130.31voluntary statewide lump-sum volunteer firefighter retirement plan for service that the
130.32individual has performed as a volunteer firefighter;
131.1    (2) "survivor of a deceased active or deferred volunteer firefighter" means the legally
131.2married spouse of a deceased volunteer firefighter, or, if none, the surviving minor child or
131.3minor children of a deceased volunteer firefighter;
131.4    (3) "active volunteer firefighter" means a person who regularly renders fire
131.5suppression service for a municipal fire department or an independent nonprofit firefighting
131.6corporation, who has met the statutory and other requirements for relief association
131.7membership, and who has been a fully qualified member of the relief association or from
131.8the voluntary statewide lump-sum volunteer firefighter retirement plan for at least one
131.9month; and
131.10    (4) "deferred volunteer firefighter" means a former active volunteer firefighter who
131.11terminated active firefighting service, has sufficient service credit from the applicable
131.12relief association or from the voluntary statewide lump-sum volunteer firefighter
131.13retirement plan to be entitled to a service pension, but has not applied for or has not
131.14received the service pension.

131.15    Sec. 30. Minnesota Statutes 2008, section 424A.10, subdivision 2, is amended to read:
131.16    Subd. 2. Payment of supplemental benefit. (a) Upon the payment by a
131.17firefighters' relief association or by the voluntary statewide lump-sum volunteer firefighter
131.18retirement plan of a lump-sum distribution to a qualified recipient, the association must
131.19pay a supplemental benefit to the qualified recipient. Notwithstanding any law to the
131.20contrary, the relief association must pay the supplemental benefit out of its special fund
131.21and the voluntary statewide lump-sum volunteer firefighter retirement plan must pay
131.22the supplemental benefit out of the voluntary statewide lump-sum volunteer firefighter
131.23retirement plan. The amount of this benefit equals ten percent of the regular lump-sum
131.24distribution that is paid on the basis of the recipient's service as a volunteer firefighter.
131.25In no case may the amount of the supplemental benefit exceed $1,000. A supplemental
131.26benefit under this paragraph may not be paid to a survivor of a deceased active or deferred
131.27volunteer firefighter in that capacity.
131.28    (b) Upon the payment by a relief association or the retirement plan of a lump-sum
131.29survivor benefit or funeral benefit to a survivor of a deceased active volunteer firefighter
131.30or of a deceased deferred volunteer firefighter, the association may pay a supplemental
131.31survivor benefit to the survivor of the deceased active or deferred volunteer firefighter
131.32from the special fund of the relief association if its articles of incorporation or bylaws so
131.33provide and the retirement plan may pay a supplemental survivor benefit to the survivor of
131.34the deceased active or deferred volunteer firefighter from the retirement fund if chapter
132.1353G so provides. The amount of the supplemental survivor benefit is 20 percent of the
132.2survivor benefit or funeral benefit, but not to exceed $2,000.
132.3    (c) An individual may receive a supplemental benefit under paragraph (a) or under
132.4paragraph (b), but not under both paragraphs with respect to one lump-sum volunteer
132.5firefighter benefit.

132.6    Sec. 31. Minnesota Statutes 2008, section 424A.10, subdivision 3, is amended to read:
132.7    Subd. 3. State reimbursement. (a) Each year, to be eligible for state reimbursement
132.8of the amount of supplemental benefits paid under subdivision 2 during the preceding
132.9calendar year, the relief association mustor the voluntary statewide lump-sum volunteer
132.10firefighter retirement plan shall apply to the commissioner of revenue by February 15.
132.11By March 15, the commissioner shall reimburse the relief association for the amount of
132.12the supplemental benefits paid to qualified recipients and to survivors of deceased active
132.13or deferred volunteer firefighters.
132.14    (b) The commissioner of revenue shall prescribe the form of and supporting
132.15information that must be supplied as part of the application for state reimbursement.
132.16The commissioner of revenue shall reimburse the relief association by paying the
132.17reimbursement amount to the treasurer of the municipality where the association is
132.18located and shall reimburse the retirement plan by paying the reimbursement amount to
132.19the executive director of the Public Employees Retirement Association. Within 30 days
132.20after receipt, the municipal treasurer shall transmit the state reimbursement to the treasurer
132.21of the association if the association has filed a financial report with the municipality. If
132.22the relief association has not filed a financial report with the municipality, the municipal
132.23treasurer shall delay transmission of the reimbursement payment to the association until
132.24the complete financial report is filed. If the association has dissolved or has been removed
132.25as a trustee of state aid, the treasurer shall deposit the money in a special account in the
132.26municipal treasury, and the money may be disbursed only for the purposes and in the
132.27manner provided in section 424A.08. When paid to the association, the reimbursement
132.28payment must be deposited in the special fund of the relief association and when paid to
132.29the retirement plan, the reimbursement payment must be deposited in the retirement
132.30fund of the plan.
132.31    (c) A sum sufficient to make the payments is appropriated from the general fund
132.32to the commissioner of revenue.

132.33    Sec. 32. EFFECTIVE DATE.
132.34Sections 1 to 31 are effective August 1, 2009.

133.1ARTICLE 10
133.2VOLUNTEER FIRE RELIEF ASSOCIATION CHANGES

133.3    Section 1. Minnesota Statutes 2008, section 69.031, subdivision 5, is amended to read:
133.4    Subd. 5. Deposit of state aid. (a) The municipal treasurer shall, within 30 days
133.5after receipt, transmit the fire state aid to the treasurer of the duly incorporated firefighters'
133.6relief association if there is one organized and the association has filed a financial report
133.7with the municipality. If the relief association has not filed a financial report with the
133.8municipality, the municipal treasurer shall delay transmission of the fire state aid to the
133.9relief association until the complete financial report is filed. If there is no relief association
133.10organized, or if the association has dissolved, or has been removed as trustees of state aid,
133.11then the treasurer of the municipality shall deposit the money in the municipal treasury
133.12as provided for in section 424A.08 and the money may be disbursed only for the purposes
133.13and in the manner set forth in that section 424A.08 or for the payment of the employer
133.14contribution requirement with respect to firefighters covered by the public employees
133.15police and fire retirement plan under section 353.65, subdivision 3.
133.16(b) The municipal treasurer, upon receipt of the police state aid, shall disburse the
133.17police state aid in the following manner:
133.18(1) For a municipality in which a local police relief association exists and all peace
133.19officers are members of the association, the total state aid must be transmitted to the
133.20treasurer of the relief association within 30 days of the date of receipt, and the treasurer
133.21of the relief association shall immediately deposit the total state aid in the special fund
133.22of the relief association;
133.23(2) For a municipality in which police retirement coverage is provided by the public
133.24employees police and fire fund and all peace officers are members of the fund, including
133.25municipalities covered by section 353.665, the total state aid must be applied toward the
133.26municipality's employer contribution to the public employees police and fire fund under
133.27sections 353.65, subdivision 3, and 353.665, subdivision 8, paragraph (b), if applicable; or
133.28(3) For a municipality other than a city of the first class with a population of more
133.29than 300,000 in which both a police relief association exists and police retirement
133.30coverage is provided in part by the public employees police and fire fund, the municipality
133.31may elect at its option to transmit the total state aid to the treasurer of the relief association
133.32as provided in clause (1), to use the total state aid to apply toward the municipality's
133.33employer contribution to the public employees police and fire fund subject to all the
133.34provisions set forth in clause (2), or to allot the total state aid proportionately to be
133.35transmitted to the police relief association as provided in this subdivision and to apply
134.1toward the municipality's employer contribution to the public employees police and fire
134.2fund subject to the provisions of clause (2) on the basis of the respective number of active
134.3full-time peace officers, as defined in section 69.011, subdivision 1, clause (g).
134.4For a city of the first class with a population of more than 300,000, in addition, the
134.5city may elect to allot the appropriate portion of the total police state aid to apply toward
134.6the employer contribution of the city to the public employees police and fire fund based
134.7on the covered salary of police officers covered by the fund each payroll period and to
134.8transmit the balance to the police relief association; or
134.9(4) For a municipality in which police retirement coverage is provided in part by
134.10the public employees police and fire fund and in part by a local police consolidation
134.11account governed by chapter 353A and established before March 2, 1999, for which the
134.12municipality declined merger under section 353.665, subdivision 1, or established after
134.13March 1, 1999, the total police state aid must be applied towards the municipality's total
134.14employer contribution to the public employees police and fire fund and to the local police
134.15consolidation account under sections 353.65, subdivision 3, and 353A.09, subdivision 5.
134.16(c) The county treasurer, upon receipt of the police state aid for the county, shall
134.17apply the total state aid toward the county's employer contribution to the public employees
134.18police and fire fund under section 353.65, subdivision 3.
134.19(d) The designated Metropolitan Airports Commission official, upon receipt of the
134.20police state aid for the Metropolitan Airports Commission, shall apply the total police
134.21state aid first toward the commission's employer contribution for police officers to the
134.22Minneapolis Employees Retirement Fund under section 422A.101, subdivision 2a, and, if
134.23there is any amount of police state aid remaining, shall apply that remainder toward the
134.24commission's employer contribution for police officers to the public employees police and
134.25fire plan under section 353.65, subdivision 3.
134.26(e) The police state aid apportioned to the Departments of Public Safety and Natural
134.27Resources under section 69.021, subdivision 7a, is appropriated to the commissioner of
134.28finance for transfer to the funds and accounts from which the salaries of peace officers
134.29certified under section 69.011, subdivision 2a, are paid. The commissioner of revenue
134.30shall certify to the commissioners of public safety, natural resources, and finance the
134.31amounts to be transferred from the appropriation for police state aid. The commissioners
134.32of public safety and natural resources shall certify to the commissioner of finance the
134.33amounts to be credited to each of the funds and accounts from which the peace officers
134.34employed by their respective departments are paid. Each commissioner must shall allocate
134.35the police state aid first for employer contributions for employees funded from the general
134.36fund and then for employer contributions for employees funded from other funds. For
135.1peace officers whose salaries are paid from the general fund, the amounts transferred from
135.2the appropriation for police state aid must be canceled to the general fund.
135.3EFFECTIVE DATE.This section is effective July 1, 2009.

135.4    Sec. 2. Minnesota Statutes 2008, section 69.771, subdivision 3, is amended to read:
135.5    Subd. 3. Remedy for noncompliance; determination. (a) A municipality in which
135.6there exists a firefighters' relief association as specified in subdivision 1 which does not
135.7comply with the applicable provisions of sections 69.771 to 69.776 or the provisions of
135.8any applicable special law relating to the funding or financing of the association does
135.9not qualify initially to receive, and is not entitled subsequently to retain, fire state aid
135.10under sections 69.011 to 69.051 until the reason for the disqualification specified by the
135.11state auditor is remedied, whereupon the municipality or relief association, if otherwise
135.12qualified, is entitled to again receive fire state aid for the year occurring immediately
135.13subsequent to the year in which the disqualification is remedied.
135.14(b) The state auditor shall determine if a municipality to which a firefighters' relief
135.15association is directly associated or a firefighters' relief association fails to comply with
135.16the provisions of sections 69.771 to 69.776 or the funding or financing provisions of any
135.17applicable special law based upon the information contained in the annual financial report
135.18of the firefighters' relief association required under section 69.051, the actuarial valuation
135.19of the relief association, if applicable, the relief association officers' financial requirements
135.20of the relief association and minimum municipal obligation determination documentation
135.21under section 69.772, subdivisions 3 and 4; 69.773, subdivisions 4 and 5; or 69.774,
135.22subdivision 2
, if requested to be filed by the state auditor, the applicable municipal or
135.23nonprofit firefighting corporation budget, if requested to be filed by the state auditor, and
135.24any other relevant documents or reports obtained by the state auditor.
135.25(c) The municipality or nonprofit firefighting corporation and the associated relief
135.26association are not eligible to receive or to retain fire state aid if:
135.27(1) the relief association fails to prepare or to file the financial report or financial
135.28statement under section 69.051;
135.29(2) the relief association treasurer is not bonded in the manner and in the amount
135.30required by section 69.051, subdivision 2;
135.31(3) the relief association officers fail to determine or improperly determine the
135.32accrued liability and the annual accruing liability of the relief association under section
135.3369.772, subdivisions 2, 2a, and 3 , paragraph (c), clause (2), if applicable;
135.34(4) if applicable, the relief association officers fail to obtain and file a required
135.35actuarial valuation or the officers file an actuarial valuation that does not contain the
136.1special fund actuarial liability calculated under the entry age normal actuarial cost
136.2method, the special fund current assets, the special fund unfunded actuarial accrued
136.3liability, the special fund normal cost under the entry age normal actuarial cost method,
136.4the amortization requirement for the special fund unfunded actuarial accrued liability
136.5by the applicable target date, a summary of the applicable benefit plan, a summary of
136.6the membership of the relief association, a summary of the actuarial assumptions used
136.7in preparing the valuation, and a signed statement by the actuary attesting to its results
136.8and certifying to the qualifications of the actuary as an approved actuary under section
136.9356.215, subdivision 1 , paragraph (c);
136.10(5) the municipality failed to provide a municipal contribution, or the nonprofit
136.11firefighting corporation failed to provide a corporate contribution, in the amount equal
136.12to the minimum municipal obligation if the relief association is governed under section
136.1369.772 , or the amount necessary, when added to the fire state aid actually received
136.14in the plan year in question, to at least equal in total the calculated annual financial
136.15requirements of the special fund of the relief association if the relief association is
136.16governed under section 69.773, and, if the municipal or corporate contribution is deficient,
136.17the municipality failed to include the minimum municipal obligation certified under
136.18section 69.772, subdivision 3, or 69.773, subdivision 5, in its budget and tax levy or the
136.19nonprofit firefighting corporation failed to include the minimum corporate obligation
136.20certified under section 69.774, subdivision 2, in the corporate budget;
136.21(6) the defined benefit relief association did not receive municipal ratification for
136.22the most recent plan amendment when municipal ratification was required under section
136.2369.772, subdivision 6 ; 69.773, subdivision 6; or 424A.02, subdivision 10;
136.24(7) the relief association invested special fund assets in an investment security
136.25that is not authorized under section 69.775;
136.26(8) the relief association had an administrative expense that is not authorized under
136.27section 69.80 or 424A.05, subdivision 3, or the municipality had an expenditure that
136.28is not authorized under section 424A.08;
136.29(9) the relief association officers fail to provide a complete and accurate public
136.30pension plan investment portfolio and performance disclosure under section 356.219;
136.31(10) the relief association fails to obtain the acknowledgment from a broker of the
136.32statement of investment restrictions under section 356A.06, subdivision 8b;
136.33(11) the relief association officers permitted to occur a prohibited transaction under
136.34section 356A.06, subdivision 9, or 424A.001 424A.04, subdivision 7 2a, or failed to
136.35undertake correction of a prohibited transaction that did occur; or
137.1(12) the relief association pays a defined benefit service pension in an amount
137.2that is in excess of the applicable service pension maximum under section 424A.02,
137.3subdivision 3
.
137.4EFFECTIVE DATE.This section is effective July 1, 2009.

137.5    Sec. 3. Minnesota Statutes 2008, section 69.772, subdivision 4, is amended to read:
137.6    Subd. 4. Certification of financial requirements and minimum municipal
137.7obligation; levy. (a) The officers of the relief association shall certify the financial
137.8requirements of the special fund of the relief association and the minimum obligation of
137.9the municipality with respect to the special fund of the relief association as determined
137.10under subdivision 3 to the governing body of the municipality on or before August 1 of
137.11each year. The financial requirements of the relief association and the minimum municipal
137.12obligation must be included in the financial report or financial statement under section
137.1369.051 . The schedule forms related to the determination of the financial requirements
137.14must be filed with the state auditor by March 31, annually, if the relief association is
137.15required to file a financial statement under section 69.051, subdivision 1a, or by June 30,
137.16annually, if the relief association is required to file a financial report and audit under
137.17section 69.051, subdivision 1.
137.18(b) The municipality shall provide for at least the minimum obligation of the
137.19municipality with respect to the special fund of the relief association by tax levy or from
137.20any other source of public revenue.
137.21(c) The municipality may levy taxes for the payment of the minimum municipal
137.22obligation without any limitation as to rate or amount and irrespective of any limitations
137.23imposed by other provisions of law upon the rate or amount of taxation until the balance
137.24of the special fund or any fund of the relief association has attained a specified level. In
137.25addition, any taxes levied under this section must not cause the amount or rate of any other
137.26taxes levied in that year or to be levied in a subsequent year by the municipality which are
137.27subject to a limitation as to rate or amount to be reduced.
137.28(d) If the municipality does not include the full amount of the minimum municipal
137.29obligations in its levy for any year, the officers of the relief association shall certify that
137.30amount to the county auditor, who shall spread a levy in the amount of the certified
137.31minimum municipal obligation on the taxable property of the municipality.
137.32(e) If the state auditor determines that a municipal contribution actually made in a
137.33plan year was insufficient under section 69.771, subdivision 3, paragraph (c), clause (5),
137.34the state auditor may request a copy of the certifications under this subdivision from the
137.35relief association or from the city. The relief association or the city, whichever applies,
138.1must provide the certifications within 14 days of the date of the request from the state
138.2auditor.
138.3EFFECTIVE DATE.This section is effective July 1, 2009.

138.4    Sec. 4. Minnesota Statutes 2008, section 69.772, subdivision 6, is amended to read:
138.5    Subd. 6. Municipal ratification for plan amendments. If the special fund of the
138.6relief association does not have a surplus over full funding pursuant to subdivision 3,
138.7clause (2), subclause (e), or if the municipality is required to provide financial support
138.8to the special fund of the relief association pursuant to this section, the adoption of or
138.9any amendment to the articles of incorporation or bylaws of a relief association which
138.10increases or otherwise affects the retirement coverage provided by or the service pensions
138.11or retirement benefits payable from the special fund of any relief association to which this
138.12section applies shall is not be effective until it is ratified by the governing body of the
138.13municipality in which the relief association is located and the officers of a relief association
138.14shall not seek municipal ratification prior to preparing and certifying an estimate of
138.15the expected increase in the accrued liability and annual accruing liability of the relief
138.16association attributable to the amendment. If the special fund of the relief association has
138.17a surplus over full funding pursuant to subdivision 3, clause (2), subclause (e), and if the
138.18municipality is not required to provide financial support to the special fund of the relief
138.19association pursuant to this section, the relief association may adopt or amend its articles
138.20of incorporation or bylaws which increase or otherwise affect the retirement coverage
138.21provided by or the service pensions or retirement benefits payable from the special fund
138.22of the relief association which shall be are effective without municipal ratification so
138.23long as this does not cause the amount of the resulting increase in the accrued liability
138.24of the special fund of the relief association to exceed 90 percent of the amount of the
138.25prior surplus over full funding reported in the prior year and this does not result in the
138.26financial requirements of the special fund of the relief association exceeding the expected
138.27amount of the future fire state aid to be received by the relief association as determined
138.28by the board of trustees following the preparation of an estimate of the expected increase
138.29in the accrued liability and annual accruing liability of the relief association attributable
138.30to the change. If a relief association adopts or amends its articles of incorporation or
138.31bylaws without municipal ratification pursuant to this subdivision, and, subsequent to
138.32the amendment or adoption, the financial requirements of the special fund of the relief
138.33association pursuant to this section are such so as to require financial support from the
138.34municipality, the provision which was implemented without municipal ratification shall
138.35is no longer be effective without municipal ratification and any service pensions or
139.1retirement benefits payable after that date shall may be paid only in accordance with the
139.2articles of incorporation or bylaws as amended or adopted with municipal ratification.
139.3EFFECTIVE DATE.This section is effective July 1, 2009.

139.4    Sec. 5. Minnesota Statutes 2008, section 69.773, subdivision 6, is amended to read:
139.5    Subd. 6. Municipal ratification for plan amendments. If the special fund of the
139.6relief association does not have a surplus over full funding pursuant to subdivision 4, or if
139.7the municipality is required to provide financial support to the special fund of the relief
139.8association pursuant to this section, the adoption of or any amendment to the articles of
139.9incorporation or bylaws of a relief association which increases or otherwise affects the
139.10retirement coverage provided by or the service pensions or retirement benefits payable
139.11from the special fund of any relief association to which this section applies shall is not
139.12be effective until it is ratified by the governing body of the municipality in which the
139.13relief association is located. If the special fund of the relief association has a surplus over
139.14full funding pursuant to subdivision 4, and if the municipality is not required to provide
139.15financial support to the special fund of the relief association pursuant to this section,
139.16the relief association may adopt or amend its articles of incorporation or bylaws which
139.17increase or otherwise affect the retirement coverage provided by or the service pensions or
139.18retirement benefits payable from the special fund of the relief association which shall be
139.19are effective without municipal ratification so long as this does not cause the amount of
139.20the resulting increase in the accrued liability of the special fund of the relief association to
139.21exceed 90 percent of the amount of the prior surplus over full funding reported in the prior
139.22year and this does not result in the financial requirements of the special fund of the relief
139.23association exceeding the expected amount of the future fire state aid to be received by the
139.24relief association as determined by the board of trustees following the preparation of an
139.25updated actuarial valuation including the proposed change or an estimate of the expected
139.26actuarial impact of the proposed change prepared by the actuary of the relief association.
139.27If a relief association adopts or amends its articles of incorporation or bylaws without
139.28municipal ratification pursuant to this subdivision, and, subsequent to the amendment or
139.29adoption, the financial requirements of the special fund of the relief association pursuant to
139.30this section are such so as to require financial support from the municipality, the provision
139.31which was implemented without municipal ratification shall is no longer be effective
139.32without municipal ratification and any service pensions or retirement benefits payable
139.33after that date shall be may paid only in accordance with the articles of incorporation or
139.34bylaws as amended or adopted with municipal ratification.
140.1EFFECTIVE DATE.This section is effective July 1, 2009.

140.2    Sec. 6. Minnesota Statutes 2008, section 356.219, subdivision 3, is amended to read:
140.3    Subd. 3. Content of reports. (a) The report required by subdivision 1 must include
140.4a written statement of the investment policy. Following that initial report, subsequent
140.5reports must include investment policy changes and the effective date of each policy
140.6change rather than a complete statement of investment policy, unless the state auditor
140.7requests submission of a complete current statement. The report must also include the
140.8information required by the following paragraphs, as applicable.
140.9(b) If, after four years of reporting under this paragraph, the total portfolio time
140.10weighted rate of return, net of all investment related costs and fees, provided by the public
140.11pension plan differs by no more than 0.1 percent from the comparable return for the plan
140.12calculated by the Office of the State Auditor, and if a public pension plan has a total
140.13market value of $25,000,000 or more as of the beginning of the calendar year, and if the
140.14public pension plan's annual audit is performed by the state auditor or by the legislative
140.15auditor, the report required by subdivision 1 must include the market value of the total
140.16portfolio and the market value of each asset class included in the pension fund as of the
140.17beginning of the calendar year and as of the end of the calendar year. At the discretion of
140.18the state auditor, the public pension plan may be required to submit the market value of the
140.19total portfolio and the market value of each investment account, investment portfolio, or
140.20asset class included in the pension fund for each month, and the amount and date of each
140.21injection and withdrawal to the total portfolio and to each investment account, investment
140.22portfolio, or asset class. If the market value of a public pension plan's fund drops below
140.23$25,000,000 in a subsequent year, it must continue reporting under this paragraph for any
140.24subsequent year in which the public pension plan is not fully invested as specified in
140.25subdivision 1, paragraph (b), except that if the public pension plan's annual audit is not
140.26performed by the state auditor or legislative auditor, paragraph (c) applies.
140.27(c) If paragraph (b) would apply if the annual audit were provided by the state
140.28auditor or legislative auditor, the report required by subdivision 1 must include the market
140.29value of the total portfolio and the market value of each asset class included in the pension
140.30fund as of the beginning of the calendar year and for each month, and the amount and date
140.31of each injection and withdrawal to the total portfolio and to each investment account,
140.32investment portfolio, or asset class.
140.33(d) For public pension plans to which paragraph (b) or (c) applies, the report required
140.34by subdivision 1 must also include a calculation of the total time-weighted rate of return
140.35available from index-matching investments assuming the asset class performance targets
141.1and target asset mix indicated in the written statement of investment policy. The provided
141.2information must include a description of indices used in the analyses and an explanation
141.3of why those indices are appropriate. This paragraph does not apply to any fully invested
141.4plan, as defined by subdivision 1, paragraph (b). Reporting by the State Board of
141.5Investment under this paragraph is limited to information on the Minnesota public pension
141.6plans required to be invested by the State Board of Investment under section 11A.23.
141.7(e) If a public pension plan has a total market value of less than $25,000,000 as of
141.8the beginning of the calendar year and was never required to file under paragraph (b) or
141.9(c), the report required by subdivision 1 must include the amount and date of each total
141.10portfolio injection and withdrawal. In addition, the report must include the market value
141.11of the total portfolio as of the beginning of the calendar year and for each quarter.
141.12(f) Any public pension plan reporting under paragraph (b) or (c) must include
141.13computed time-weighted rates of return with the report, in addition to all other required
141.14information, as applicable. The chief administrative officer of the public pension plan
141.15submitting the returns must certify, on a form prescribed by the state auditor, that the
141.16returns have been computed by the pension plan's investment performance consultant or
141.17custodial bank. The chief administrative officer of the public pension plan submitting the
141.18returns also must certify that the returns are net of all costs and fees, including investment
141.19management fees, and that the procedures used to compute the returns are consistent
141.20with Bank Administration Institute studies of investment performance measurement
141.21and presentation standards set by the Certified Financial Analyst CFA Institute. If the
141.22certifications required under this paragraph are not provided, the reporting requirements of
141.23paragraph (c) apply.
141.24(g) For public pension plans reporting under paragraph (e), the public pension plan
141.25must retain supporting information specifying the date and amount of each injection and
141.26withdrawal to each investment account and investment portfolio. The public pension plan
141.27must also retain the market value of each investment account and investment portfolio at
141.28the beginning of the calendar year and for each quarter. Information that is required to be
141.29collected and retained for any given year or years under this paragraph must be submitted
141.30to the Office of the State Auditor if the Office of the State Auditor requests in writing that
141.31the information be submitted by a public pension plan or plans, or be submitted by the
141.32State Board of Investment for any plan or plans for which the State Board of Investment is
141.33the investment authority under this section. If the state auditor requests information under
141.34this subdivision, and the public plan fails to comply, the pension plan is subject to penalties
141.35under subdivision 5, unless penalties are waived by the state auditor under that subdivision.
141.36EFFECTIVE DATE.This section is effective July 1, 2009.

142.1    Sec. 7. [420.20] PROHIBITION OF SERVICE BY MINORS AS VOLUNTEER
142.2FIREFIGHTERS.
142.3It is unlawful for any municipality or independent nonprofit firefighting corporation
142.4to employ a minor to serve as a firefighter or to permit a minor to serve in any capacity
142.5performing any firefighting duties with a fire department, except for members of a youth,
142.6civic, or educational organization or program who participate with uninterrupted adult
142.7supervision, as allowed by federal law and by section 181A.04. Such organizations or
142.8programs include, but are not limited to, Boy Scout Explorer programs or firefighting
142.9degree programs.
142.10EFFECTIVE DATE.This section is effective July 1, 2009.

142.11    Sec. 8. Minnesota Statutes 2008, section 424A.001, subdivision 1, is amended to read:
142.12    Subdivision 1. Terms defined. Unless the context clearly indicates otherwise, as
142.13used in this chapter, the terms defined in this section have the meanings given.
142.14EFFECTIVE DATE.This section is effective July 1, 2009.

142.15    Sec. 9. Minnesota Statutes 2008, section 424A.001, subdivision 1a, is amended to read:
142.16    Subd. 1a. Ancillary benefit. "Ancillary benefit" means a benefit payable from the
142.17special fund of the relief association other than a service pension that is permitted by law
142.18and that is provided for in the relief association bylaws.
142.19EFFECTIVE DATE.This section is effective July 1, 2009.

142.20    Sec. 10. Minnesota Statutes 2008, section 424A.001, is amended by adding a
142.21subdivision to read:
142.22    Subd. 1b. Defined benefit relief association. "Defined benefit relief association"
142.23means a volunteer firefighters' relief association that provides a lump-sum service pension,
142.24provides a monthly benefit service pension, or provides a lump-sum service pension as an
142.25alternative to the monthly benefit service pension.
142.26EFFECTIVE DATE.This section is effective July 1, 2009.

142.27    Sec. 11. Minnesota Statutes 2008, section 424A.001, is amended by adding a
142.28subdivision to read:
142.29    Subd. 1c. Defined contribution relief association. "Defined contribution relief
142.30association" means a volunteer firefighters' relief association that provides a service
143.1pension based solely on an individual account balance rather than a specified annual
143.2lump-sum or monthly benefit service pension amount.
143.3EFFECTIVE DATE.This section is effective July 1, 2009.

143.4    Sec. 12. Minnesota Statutes 2008, section 424A.001, subdivision 2, is amended to read:
143.5    Subd. 2. Fire department. "Fire department" includes a municipal fire department
143.6and or an independent nonprofit firefighting corporation.
143.7EFFECTIVE DATE.This section is effective July 1, 2009.

143.8    Sec. 13. Minnesota Statutes 2008, section 424A.001, subdivision 3, is amended to read:
143.9    Subd. 3. Municipality. "Municipality" means a municipality which has
143.10established a fire department with which the relief association is directly associated, or
143.11the municipalities which have entered into a contract with the independent nonprofit
143.12firefighting corporation of which the relief association is a subsidiary.
143.13EFFECTIVE DATE.This section is effective July 1, 2009.

143.14    Sec. 14. Minnesota Statutes 2008, section 424A.001, subdivision 4, is amended to read:
143.15    Subd. 4. Relief association. "Relief association" means (a)
143.16(1) a volunteer firefighters' relief association or a volunteer firefighters' division or
143.17account of a partially salaried and partially volunteer firefighters' relief association that is
143.18organized and incorporated under chapter 317A and any laws of the state, is governed by
143.19this chapter and chapter 69, and is directly associated with a fire department established by
143.20municipal ordinance; or
143.21(b) (2) any separate separately incorporated volunteer firefighters' relief association
143.22that is subsidiary to and providing that provides service pension and retirement benefit
143.23coverage for members of an independent nonprofit firefighting corporation that is
143.24organized under the provisions of chapter 317A, is governed by this chapter, and operating
143.25operates exclusively for firefighting purposes. A relief association is a governmental entity
143.26that receives and manages public money to provide retirement benefits for individuals
143.27providing the governmental services of firefighting and emergency first response.
143.28EFFECTIVE DATE.This section is effective July 1, 2009.

143.29    Sec. 15. Minnesota Statutes 2008, section 424A.001, subdivision 5, is amended to read:
144.1    Subd. 5. Special fund. "Special fund" means the special fund of a volunteer
144.2firefighters' relief association or the account for volunteer firefighters within the special
144.3fund of a partially salaried and partially volunteer firefighters' relief association.
144.4EFFECTIVE DATE.This section is effective July 1, 2009.

144.5    Sec. 16. Minnesota Statutes 2008, section 424A.001, subdivision 6, is amended to read:
144.6    Subd. 6. Surviving spouse. For purposes of this chapter, and the governing bylaws
144.7of any governing a relief association to which this chapter applies, the term "surviving
144.8spouse" means the spouse of a deceased member who was legally married to the member
144.9at the time of the member's death.
144.10EFFECTIVE DATE.This section is effective July 1, 2009.

144.11    Sec. 17. Minnesota Statutes 2008, section 424A.001, subdivision 8, is amended to read:
144.12    Subd. 8. Firefighting service. "Firefighting service," if the applicable municipality
144.13approves for a fire department that is a municipal department, or if the applicable
144.14contracting municipality or municipalities approve for a fire department that is an
144.15independent nonprofit firefighting corporation, includes fire department service rendered
144.16by fire prevention personnel.
144.17EFFECTIVE DATE.This section is effective July 1, 2009.

144.18    Sec. 18. Minnesota Statutes 2008, section 424A.001, subdivision 9, is amended to read:
144.19    Subd. 9. Separate from active service. "Separate from active service" means
144.20to that a firefighter permanently cease ceases to perform fire suppression duties with
144.21a particular volunteer fire department, to permanently cease ceases to perform fire
144.22prevention duties, to permanently cease ceases to supervise fire suppression duties, and to
144.23permanently cease ceases to supervise fire prevention duties.
144.24EFFECTIVE DATE.This section is effective July 1, 2009.

144.25    Sec. 19. Minnesota Statutes 2008, section 424A.001, subdivision 10, is amended to
144.26read:
144.27    Subd. 10. Volunteer firefighter. "Volunteer firefighter" means a person who either:
144.28(1) was a member of the applicable fire department or the independent nonprofit
144.29firefighting corporation and a member of the relief association on July 1, 2006; or
145.1(2) became a member of the applicable fire department or the independent nonprofit
145.2firefighting corporation and is eligible for membership in the applicable relief association
145.3after June 30, 2006, and
145.4(i) is engaged in providing emergency response services or delivering fire education
145.5or prevention services as a member of a municipal fire department, a joint powers entity
145.6fire department, or an independent nonprofit firefighting corporation;
145.7(ii) is trained in or is qualified to provide fire suppression duties or to provide fire
145.8prevention duties under subdivision 8; and
145.9(iii) meets any other minimum firefighter and service standards established by the
145.10fire department or the independent nonprofit firefighting corporation or specified in the
145.11articles of incorporation or bylaws of the relief association.
145.12EFFECTIVE DATE.This section is effective July 1, 2009.

145.13    Sec. 20. [424A.002] AUTHORIZATION OF NEW OR CONTINUING
145.14VOLUNTEER FIREFIGHTERS' RELIEF ASSOCIATIONS.
145.15    Subdivision 1. Authorization. A municipal fire department or an independent
145.16nonprofit firefighting corporation, with approval by the applicable municipality or
145.17municipalities, may establish a new volunteer firefighters' relief association or may retain
145.18an existing volunteer firefighters' relief association.
145.19    Subd. 2. Defined benefit or defined contribution relief association. The articles
145.20of incorporation or the bylaws of the volunteer firefighters' relief association must specify
145.21that the relief association is either a defined benefit relief association subject to sections
145.2269.771 to 69.774, 424A.015, and 424A.02 or is a defined contribution relief association
145.23subject to sections 424A.015 and 424A.016.
145.24EFFECTIVE DATE.This section is effective July 1, 2009.

145.25    Sec. 21. Minnesota Statutes 2008, section 424A.01, is amended to read:
145.26424A.01 MEMBERSHIP IN A VOLUNTEER FIREFIGHTERS' RELIEF
145.27ASSOCIATION.
145.28    Subdivision 1. Minors. It is unlawful for any (a) No volunteer firefighters' relief
145.29association associated with a municipality or an independent nonprofit firefighting
145.30corporation to employ may include as a relief association member a minor serving as
145.31a volunteer firefighter or to permit a minor to serve in any capacity performing any
145.32firefighting duties with a volunteer fire department, except for members of a youth,
145.33civic, or educational organization or program who participate with uninterrupted adult
146.1supervision, as allowed by federal law and by section 181A.04. Such organizations or
146.2programs include, but are not limited to, Boy Scout Explorer programs or firefighting
146.3degree programs.
146.4(b) No volunteer firefighters' relief association associated with a municipality or an
146.5independent nonprofit firefighting corporation may include as a relief association member
146.6a minor serving as a volunteer firefighter.
146.7    Subd. 2. Status of substitute volunteer firefighters. No person who is serving as a
146.8substitute volunteer firefighter shall be deemed may be considered to be a firefighter for
146.9purposes of chapter 69 or this chapter nor shall be and no substitute volunteer firefighter is
146.10authorized to be a member of any volunteer firefighters' relief association governed by
146.11chapter 69 or this chapter.
146.12    Subd. 3. Status of nonmember volunteer firefighters. No person who is serving
146.13as a firefighter in a fire department but who is not a member of the applicable firefighters'
146.14relief association shall be is entitled to any service pension or ancillary benefits from
146.15the relief association.
146.16    Subd. 4. Exclusion of persons constituting an unwarranted health risk. The
146.17board of trustees of every relief association may exclude from membership in the relief
146.18association all applicants who, due to some medically determinable physical or mental
146.19impairment or condition, would is determined to constitute a predictable and unwarranted
146.20risk of imposing liability for an ancillary benefit at any age earlier than the minimum
146.21age specified for receipt of a service pension. Notwithstanding any provision of section
146.22363A.25 , it shall be is a good and valid defense to a complaint or action brought under
146.23chapter 363A that the board of trustees of the relief association made a good faith
146.24determination that the applicant suffers from an impairment or condition constituting a
146.25predictable and unwarranted risk for the relief association if the determination was made
146.26following consideration of: (a) (1) the person's medical history; and (b) (2) the report of
146.27the physician completing a physical examination of the applicant completed undertaken at
146.28the expense of the relief association.
146.29    Subd. 5. Fire prevention personnel. (a) If the fire department is a municipal
146.30department and the applicable municipality approves, or if the fire department is an
146.31independent nonprofit firefighting corporation and the contracting municipality or
146.32municipalities approve, the fire department may employ or otherwise utilize the services
146.33of persons as volunteer firefighters to perform fire prevention duties and to supervise
146.34fire prevention activities.
146.35(b) Personnel serving in fire prevention positions are eligible to be members of
146.36the applicable volunteer firefighter relief association and to qualify for service pension
147.1or other benefit coverage of the relief association on the same basis as fire department
147.2personnel who perform fire suppression duties.
147.3(c) Personnel serving in fire prevention positions also are eligible to receive any
147.4other benefits under the applicable law or practice for services on the same basis as
147.5personnel who are employed to perform fire suppression duties.
147.6    Subd. 6. Return to active firefighting after break in service. (a) If a former active
147.7firefighter who has ceased to perform or supervise fire suppression and fire prevention
147.8duties for at least 60 days resumes performing active firefighting with the fire department
147.9associated with the relief association, if the bylaws of the relief association so permit, the
147.10person may again become an active member of the relief association.
147.11(b) A firefighter who returns to active relief association membership under paragraph
147.12(a) may qualify for the receipt of a service pension from the relief association for the
147.13resumption service period if the firefighter meets a minimum period of resumption service
147.14specified in the relief association bylaws.
147.15(c) A firefighter who returns to active lump-sum relief association membership and
147.16who qualifies for a service pension under paragraph (b) must have, upon a subsequent
147.17cessation of duties, any service pension for the resumption service period calculated as
147.18a separate benefit. If a lump-sum service pension had been paid to the firefighter upon
147.19the firefighter's previous cessation of duties, a second lump-sum service pension for the
147.20resumption service period must be calculated to apply the service pension amount in effect
147.21on the date of the firefighter's termination of the resumption service for all years of the
147.22resumption service. No firefighter may be paid a service pension twice for the same period
147.23of service. If a lump-sum service pension had not been paid to the firefighter upon the
147.24firefighter's previous cessation of duties and the firefighter meets the minimum service
147.25requirement of section 424A.02, subdivision 2, a service pension must be calculated to
147.26apply the service pension amount in effect on the date of the firefighter's termination of the
147.27resumption service for all years of service credit.
147.28(d) A firefighter who had not been paid a lump-sum service pension returns to active
147.29relief association membership under paragraph (a), who does not qualify for a service
147.30pension under paragraph (b), but who does meet the minimum service requirement of
147.31section 424A.02, subdivision 2, based on the firefighter's previous years of active service,
147.32must have, upon a subsequent cessation of duties, a service pension calculated for the
147.33previous years of service based on the service pension amount in effect on the date of the
147.34firefighter's termination of the resumption service, or, if the bylaws so provide, based on the
147.35service pension amount in effect on the date of the firefighter's previous cessation of duties.
148.1(e) If a firefighter receiving a monthly benefit service pension returns to active
148.2monthly benefit relief association membership under paragraph (a), any monthly benefit
148.3service pension payable to the firefighter is suspended as of the first day of the month next
148.4following the date on which the firefighter returns to active membership. If the firefighter
148.5was receiving a monthly benefit service pension, and qualifies for a service pension under
148.6paragraph (b), the firefighter is entitled to an additional monthly benefit service pension
148.7upon a subsequent cessation of duties calculated based on the resumption service credit
148.8and the service pension accrual amount in effect on the date of the termination of the
148.9resumption service. The suspended initial service pension resumes as of the first of
148.10the month next following the termination of the resumption service. If the firefighter
148.11was not receiving a monthly benefit service pension and meets the minimum service
148.12requirement of section 424A.02, subdivision 2, a service pension must be calculated to
148.13apply the service pension amount in effect on the date of the firefighter's termination of the
148.14resumption service for all years of service credit.
148.15(f) A firefighter who was not receiving a monthly benefit service pension returns
148.16to active relief association membership under paragraph (a), who does not qualify for a
148.17service pension under paragraph (b), but who does meet the minimum service requirement
148.18of section 424A.02, subdivision 2, based on the firefighter's previous years of active
148.19service, must have, upon a subsequent cessation of duties, a service pension calculated for
148.20the previous years of service based on the service pension amount in effect on the date
148.21of the firefighter's termination of the resumption service, or, if the bylaws so provide,
148.22based on the service pension amount in effect on the date of the firefighter's previous
148.23cessation of duties.
148.24EFFECTIVE DATE.This section is effective July 1, 2009.

148.25    Sec. 22. [424A.015] GENERALLY APPLICABLE VOLUNTEER
148.26FIREFIGHTERS' RELIEF ASSOCIATION PENSION PLAN REGULATION.
148.27    Subdivision 1. Separation from active service; exception. (a) No service pension
148.28is payable to a person while the person remains an active member of the respective fire
148.29department, and a person who is receiving a service pension is not entitled to receive any
148.30other benefits from the special fund of the relief association.
148.31(b) No relief association as defined in section 424A.001, subdivision 4, may pay a
148.32service pension or disability benefit to a former member of the relief association if that
148.33person has not separated from active service with the fire department to which the relief
148.34association is directly associated, unless:
149.1(1) the person is employed subsequent to retirement by the municipality or the
149.2independent nonprofit firefighting corporation, whichever applies, to perform duties within
149.3the municipal fire department or corporation on a full-time basis;
149.4(2) the governing body of the municipality or of the corporation has filed its
149.5determination with the board of trustees of the relief association that the person's
149.6experience with and service to the fire department in that person's full-time capacity
149.7would be difficult to replace; and
149.8(3) the bylaws of the relief association were amended to provide for the payment of
149.9a service pension or disability benefit for such full-time employees.
149.10    Subd. 2. No assignment or garnishment. A service pension or ancillary benefits
149.11paid or payable from the special fund of a relief association to any person receiving or
149.12entitled to receive a service pension or ancillary benefits is not subject to garnishment,
149.13judgment, execution, or other legal process, except as provided in section 518.58, 518.581,
149.14or 518A.53. No person entitled to a service pension or ancillary benefits from the special
149.15fund of a relief association may assign any service pension or ancillary benefit payments,
149.16and the association does not have the authority to recognize any assignment or pay over
149.17any sum which has been assigned.
149.18    Subd. 3. Purchase of annuity contract. A relief association that provides a service
149.19pension in a single payment, if the governing articles of incorporation or bylaws so
149.20provide, may purchase an annuity contract on behalf of a retiring member in an amount
149.21equal to the service pension otherwise payable at the request of the person and in place of
149.22a direct payment to the person. The annuity contract must be purchased from an insurance
149.23carrier licensed to do business in this state.
149.24    Subd. 4. Transfer to individual retirement account. A relief association that is a
149.25qualified pension plan under section 401(a) of the Internal Revenue Code, as amended,
149.26and that provides a single payment service pension, at the written request of the applicable
149.27retiring member or, following the death of the active member, at the written request of the
149.28deceased member's surviving spouse, may directly transfer on an institution-to-institution
149.29basis the eligible member's lump-sum pension or the death or survivor benefit attributable
149.30to the member, whichever applies, to the requesting person's individual retirement account
149.31under section 408(a) of the Internal Revenue Code, as amended.
149.32EFFECTIVE DATE.This section is effective July 1, 2009.

149.33    Sec. 23. [424A.016] DEFINED CONTRIBUTION VOLUNTEER
149.34FIREFIGHTERS' RELIEF ASSOCIATION SPECIFIC REGULATION.
150.1    Subdivision 1. Defined contribution relief association authorization. If the
150.2articles of incorporation or the bylaws governing the volunteer firefighters' relief
150.3association so provide exclusively, the relief association may pay a defined contribution
150.4lump-sum service pension instead of a defined benefit service pension governed by section
150.5424A.02.
150.6    Subd. 2. Defined contribution service pension eligibility. (a) A relief association,
150.7when its articles of incorporation or bylaws so provide, may pay out of the assets of its
150.8special fund a defined contribution service pension to each of its members who:
150.9(1) separates from active service with the fire department;
150.10(2) reaches age 50;
150.11(3) completes at least five years of active service as an active member of the
150.12municipal fire department to which the relief association is associated;
150.13(4) completes at least five years of active membership with the relief association
150.14before separation from active service; and
150.15(5) complies with any additional conditions as to age, service, and membership that
150.16are prescribed by the bylaws of the relief association.
150.17(b) In the case of a member who has completed at least five years of active service as
150.18an active member of the fire department to which the relief association is associated on
150.19the date that the relief association is established and incorporated, the requirement that
150.20the member complete at least five years of active membership with the relief association
150.21before separation from active service may be waived by the board of trustees of the relief
150.22association if the member completes at least five years of inactive membership with the
150.23relief association before the date of the payment of the service pension. During the period
150.24of inactive membership, the member is not entitled to receive any disability benefit
150.25coverage, is not entitled to receive additional individual account allocation of fire state
150.26aid or municipal contribution towards a service pension, and is considered to have the
150.27status of a person entitled to a deferred service pension.
150.28(c) The service pension earned by a volunteer under this chapter and the articles
150.29of incorporation and bylaws of the relief association may be paid whether or not the
150.30municipality or nonprofit firefighting corporation to which the relief association is
150.31associated qualifies for the receipt of fire state aid under chapter 69.
150.32    Subd. 3. Reduced vesting schedule. If the articles of incorporation or bylaws of a
150.33defined contribution relief association so provide, a relief association may pay a reduced
150.34service pension not to exceed the nonforfeitable percentage of the account balance to a
150.35retiring member who has completed fewer than 20 years of service. The reduced service
150.36pension may be paid when the retiring member meets the minimum age and service
151.1requirements of subdivision 2. The nonforfeitable percentage of pension amounts are
151.2as follows:
151.3
151.4
Completed Years of Service
Nonforfeitable Percentage
of Pension Amount
151.5
5
40 percent
151.6
6
52 percent
151.7
7
64 percent
151.8
8
76 percent
151.9
9
88 percent
151.10
10
and thereafter
100 percent
151.11    Subd. 4. Individual accounts. (a) An individual account must be established for
151.12each firefighter who is a member of the relief association.
151.13(b) To each individual active member account must be credited an equal share of:
151.14(1) any amounts of fire state aid received by the relief association;
151.15(2) any amounts of municipal contributions to the relief association raised from
151.16levies on real estate or from other available municipal revenue sources exclusive of fire
151.17state aid; and
151.18(3) any amounts equal to the share of the assets of the special fund to the credit of:
151.19(i) any former member who terminated active service with the fire department to
151.20which the relief association is associated before meeting the minimum service requirement
151.21provided for in subdivision 2, paragraph (b), and has not returned to active service with
151.22the fire department for a period no shorter than five years; or
151.23(ii) any retired member who retired before obtaining a full nonforfeitable interest in
151.24the amounts credited to the individual member account under subdivision 2, paragraph
151.25(b), and any applicable provision of the bylaws of the relief association. In addition, any
151.26investment return on the assets of the special fund must be credited in proportion to the
151.27share of the assets of the special fund to the credit of each individual active member
151.28account. Administrative expenses of the relief association payable from the special
151.29fund may be deducted from individual accounts in a manner specified in the bylaws of
151.30the relief association.
151.31(c) Amounts to be credited to individual accounts must be allocated uniformly for all
151.32years of active service and allocations must be made for all years of service, except for
151.33caps on service credit if so provided in the bylaws of the relief association. The allocation
151.34method may utilize monthly proration for fractional years of service, as the bylaws or
151.35articles of incorporation of the relief association so provide. The bylaws or articles of
151.36incorporation may define a "month," but the definition must require a calendar month to
151.37have at least 16 days of active service. If the bylaws or articles of incorporation do not
152.1define a "month," a "month" is a completed calendar month of active service measured
152.2from the member's date of entry to the same date in the subsequent month.
152.3(d) At the time of retirement under subdivision 2 and any applicable provision of the
152.4bylaws of the relief association, a retiring member is entitled to that portion of the assets
152.5of the special fund to the credit of the member in the individual member account which is
152.6nonforfeitable under subdivision 3 and any applicable provision of the bylaws of the relief
152.7association based on the number of years of service to the credit of the retiring member.
152.8(e) Annually, the secretary of the relief association shall certify the individual
152.9account allocations to the state auditor at the same time that the annual financial statement
152.10or financial report and audit of the relief association, whichever applies, is due under
152.11section 69.051.
152.12    Subd. 5. Service pension installment payments. A defined contribution relief
152.13association, if the governing bylaws so provide, may pay, at the option of the retiring
152.14member and in lieu of a single payment of a service pension, the service pension in
152.15installments. The election of installment payments is irrevocable and must be made by the
152.16retiring member in writing and filed with the secretary of the relief association no later
152.17than 30 days before the commencement of payment of the service pension. The amount of
152.18the installment payments must be the fractional portion of the remaining account balance
152.19equal to one divided by the number of remaining annual installment payments.
152.20    Subd. 6. Deferred service pensions. (a) A member of a relief association is entitled
152.21to a deferred service pension if the member:
152.22    (1) has completed the lesser of the minimum period of active service with the fire
152.23department specified in the bylaws or 20 years of active service with the fire department;
152.24    (2) has completed at least five years of active membership in the relief association;
152.25and
152.26    (3) separates from active service and membership before reaching age 50 or the
152.27minimum age for retirement and commencement of a service pension specified in the
152.28bylaws governing the relief association if that age is greater than age 50.
152.29    (b) The deferred service pension is payable when the former member reaches age
152.3050, or the minimum age specified in the bylaws governing the relief association if that age
152.31is greater than age 50, and when the former member makes a valid written application.
152.32    (c) A defined contribution relief association may, if its governing bylaws so provide,
152.33credit interest or additional investment performance on the deferred lump-sum service
152.34pension during the period of deferral. If provided for in the bylaws, the interest must be
152.35paid:
153.1(1) at the investment performance rate actually earned on that portion of the assets
153.2if the deferred benefit amount is invested by the relief association in a separate account
153.3established and maintained by the relief association or if the deferred benefit amount is
153.4invested in a separate investment vehicle held by the relief association; or
153.5(2) the investment return on the assets of the special fund of the defined contribution
153.6volunteer firefighter relief association in proportion to the share of the assets of the special
153.7fund to the credit of each individual deferred member account through the date on which
153.8the investment return is recognized by and credited to the special fund.
153.9    (d) The deferred service pension is governed by and must be calculated under
153.10the general statute, special law, relief association articles of incorporation, and relief
153.11association bylaw provisions applicable on the date on which the member separated from
153.12active service with the fire department and active membership in the relief association.
153.13    Subd. 7. Limitation on ancillary benefits. (a) A defined contribution relief
153.14association may only pay an ancillary benefit which would constitute an authorized
153.15disbursement as specified in section 424A.05. The ancillary benefit for active members
153.16must equal the vested or nonvested amount of the individual account of the member.
153.17(b) For deferred members, the ancillary benefit must equal the vested amount of
153.18the individual account of the member. For the recipient of installment payments of a
153.19service pension, the ancillary benefit must equal the remaining balance in the individual
153.20account of the recipient.
153.21    Subd. 8. Filing of bylaw amendments. Each relief association to which this section
153.22applies must file a revised copy of its governing bylaws with the state auditor upon the
153.23adoption of any amendment to its governing bylaws by the relief association. Failure of
153.24the relief association to file a copy of the bylaws or any bylaw amendments with the state
153.25auditor disqualifies the municipality from the distribution of any future fire state aid until
153.26this filing requirement has been completed.
153.27EFFECTIVE DATE.This section is effective July 1, 2009.

153.28    Sec. 24. Minnesota Statutes 2008, section 424A.02, subdivision 1, is amended to read:
153.29    Subdivision 1. Authorization. (a) A defined benefit relief association, when its
153.30articles of incorporation or bylaws so provide, may pay out of the assets of its special fund
153.31a defined benefit service pension to each of its members who: (1) separates from active
153.32service with the fire department; (2) reaches age 50; (3) completes at least five years of
153.33active service as an active member of the municipal fire department to which the relief
153.34association is associated; (4) completes at least five years of active membership with
153.35the relief association before separation from active service; and (5) complies with any
154.1additional conditions as to age, service, and membership that are prescribed by the bylaws
154.2of the relief association. A service pension computed under this section may be prorated
154.3monthly for fractional years of service, if as the bylaws or articles of incorporation of
154.4the relief association so provide. The bylaws or articles of incorporation may define
154.5a "month," but the definition must require a calendar month to have at least 16 days of
154.6active service. If the bylaws or articles of incorporation do not define a "month," a
154.7"month" is a completed calendar month of active service measured from the member's
154.8date of entry to the same date in the subsequent month. The service pension earned by a
154.9volunteer firefighter under this chapter and the articles of incorporation and bylaws of the
154.10volunteer firefighters' relief association may be paid whether or not the municipality or
154.11nonprofit firefighting corporation to which the relief association is associated qualifies for
154.12the receipt of fire state aid under chapter 69.
154.13(b) In the case of a member who has completed at least five years of active service as
154.14an active member of the fire department to which the relief association is associated on
154.15the date that the relief association is established and incorporated, the requirement that
154.16the member complete at least five years of active membership with the relief association
154.17before separation from active service may be waived by the board of trustees of the relief
154.18association if the member completes at least five years of inactive membership with the
154.19relief association before the date of the payment of the service pension. During the
154.20period of inactive membership, the member is not entitled to receive disability benefit
154.21coverage, is not entitled to receive additional service credit towards computation of a
154.22service pension, and is considered to have the status of a person entitled to a deferred
154.23service pension under subdivision 7.
154.24(c) No municipality or nonprofit firefighting corporation may delegate the power to
154.25take final action in setting a service pension or ancillary benefit amount or level to the
154.26board of trustees of the relief association or to approve in advance a service pension or
154.27ancillary benefit amount or level equal to the maximum amount or level that this chapter
154.28would allow rather than a specific dollar amount or level.
154.29(d) No relief association as defined in section 424A.001, subdivision 4, may pay a
154.30defined benefit service pension or disability benefit to a former member of the relief
154.31association if that person has not separated from active service with the fire department to
154.32which the relief association is directly associated, unless:
154.33(1) the person is employed subsequent to retirement by the municipality or the
154.34independent nonprofit firefighting corporation, whichever applies, to perform duties within
154.35the municipal fire department or corporation on a full-time basis;
155.1(2) the governing body of the municipality or of the corporation has filed its
155.2determination with the board of trustees of the relief association that the person's
155.3experience with and service to the fire department in that person's full-time capacity
155.4would be difficult to replace; and
155.5(3) the bylaws of the relief association were amended to provide for the payment of
155.6a service pension or disability benefit for such full-time employees.
155.7EFFECTIVE DATE.This section is effective July 1, 2009.

155.8    Sec. 25. Minnesota Statutes 2008, section 424A.02, subdivision 2, is amended to read:
155.9    Subd. 2. Nonforfeitable portion of service pension. (a) If the articles of
155.10incorporation or bylaws of a defined benefit relief association so provide, a the relief
155.11association may pay a reduced service pension to a retiring member who has completed
155.12fewer than 20 years of service. The reduced service pension may be paid when the retiring
155.13member meets the minimum age and service requirements of subdivision 1.
155.14(b) The amount of the reduced service pension may not exceed the amount calculated
155.15by multiplying the service pension appropriate for the completed years of service as
155.16specified in the bylaws times multiplied by the applicable nonforfeitable percentage of
155.17pension.
155.18(c) For a defined benefit volunteer firefighter relief association that pays a lump-sum
155.19service pension, a monthly benefit service pension, or a lump-sum service pension or a
155.20monthly benefit service pension as alternative benefit forms, the nonforfeitable percentage
155.21of pension amounts are as follows:
155.22
155.23
Completed Years of Service
Nonforfeitable Percentage of
Pension Amount
155.24
5
40 percent
155.25
6
44 percent
155.26
7
48 percent
155.27
8
52 percent
155.28
9
56 percent
155.29
10
60 percent
155.30
11
64 percent
155.31
12
68 percent
155.32
13
72 percent
155.33
14
76 percent
155.34
15
80 percent
155.35
16
84 percent
155.36
17
88 percent
155.37
18
92 percent
156.1
19
96 percent
156.2
20
and thereafter
100 percent
156.3(d) For a volunteer firefighter relief association that pays a defined contribution
156.4service pension, the nonforfeitable percentage of pension amounts are as follows:
156.5
156.6
Completed Years of Service
Nonforfeitable Percentage of
Pension Amount
156.7
5
40 percent
156.8
6
52 percent
156.9
7
64 percent
156.10
8
76 percent
156.11
9
88 percent
156.12
10
and thereafter
100 percent
156.13EFFECTIVE DATE.This section is effective July 1, 2009.

156.14    Sec. 26. Minnesota Statutes 2008, section 424A.02, subdivision 3, is amended to read:
156.15    Subd. 3. Flexible service pension maximums. (a) Annually on or before August 1
156.16as part of the certification of the financial requirements and minimum municipal obligation
156.17determined under section 69.772, subdivision 4, or 69.773, subdivision 5, as applicable,
156.18the secretary or some other official of the relief association designated in the bylaws of
156.19each defined benefit relief association shall calculate and certify to the governing body
156.20of the applicable qualified municipality the average amount of available financing per
156.21active covered firefighter for the most recent three-year period. The amount of available
156.22financing shall include includes any amounts of fire state aid received or receivable by the
156.23relief association, any amounts of municipal contributions to the relief association raised
156.24from levies on real estate or from other available revenue sources exclusive of fire state
156.25aid, and one-tenth of the amount of assets in excess of the accrued liabilities of the relief
156.26association calculated under section 69.772, subdivision 2; 69.773, subdivisions 2 and 4;
156.27or 69.774, subdivision 2, if any.
156.28    (b) The maximum service pension which the defined benefit relief association has
156.29authority to provide for in its bylaws for payment to a member retiring after the calculation
156.30date when the minimum age and service requirements specified in subdivision 1 are met
156.31must be determined using the table in paragraph (c) or (d), whichever applies.
156.32    (c) For a defined benefit relief association where the governing bylaws provide for
156.33a monthly service pension to a retiring member, the maximum monthly service pension
156.34amount per month for each year of service credited that may be provided for in the bylaws
156.35is the greater of the service pension amount provided for in the bylaws on the date of the
156.36calculation of the average amount of the available financing per active covered firefighter
157.1or the maximum service pension figure corresponding to the average amount of available
157.2financing per active covered firefighter:
157.3
157.4
157.5
Minimum Average Amount of Available
Financing per Firefighter
Maximum Service Pension Amount
Payable per Month for Each
Year of Service
157.6
$ ...
$ .25
157.7
41
.50
157.8
81
1.00
157.9
122
1.50
157.10
162
2.00
157.11
203
2.50
157.12
243
3.00
157.13
284
3.50
157.14
324
4.00
157.15
365
4.50
157.16
405
5.00
157.17
486
6.00
157.18
567
7.00
157.19
648
8.00
157.20
729
9.00
157.21
810
10.00
157.22
891
11.00
157.23
972
12.00
157.24
1053
13.00
157.25
1134
14.00
157.26
1215
15.00
157.27
1296
16.00
157.28
1377
17.00
157.29
1458
18.00
157.30
1539
19.00
157.31
1620
20.00
157.32
1701
21.00
157.33
1782
22.00
157.34
1823
22.50
157.35
1863
23.00
157.36
1944
24.00
157.37
2025
25.00
157.38
2106
26.00
157.39
2187
27.00
157.40
2268
28.00
157.41
2349
29.00
157.42
2430
30.00
157.43
2511
31.00
157.44
2592
32.00
158.1
2673
33.00
158.2
2754
34.00
158.3
2834
35.00
158.4
2916
36.00
158.5
2997
37.00
158.6
3078
38.00
158.7
3159
39.00
158.8
3240
40.00
158.9
3321
41.00
158.10
3402
42.00
158.11
3483
43.00
158.12
3564
44.00
158.13
3645
45.00
158.14
3726
46.00
158.15
3807
47.00
158.16
3888
48.00
158.17
3969
49.00
158.18
4050
50.00
158.19
4131
51.00
158.20
4212
52.00
158.21
4293
53.00
158.22
4374
54.00
158.23
4455
55.00
158.24
4536
56.00
158.25
Effective beginning December 31, 2008
158.26
4617
57.00
158.27
4698
58.00
158.28
4779
59.00
158.29
4860
60.00
158.30
4941
61.00
158.31
5022
62.00
158.32
5103
63.00
158.33
5184
64.00
158.34
5265
65.00
158.35
Effective beginning December 31, 2009
158.36
5346
66.00
158.37
5427
67.00
158.38
5508
68.00
158.39
5589
69.00
158.40
5670
70.00
158.41
5751
71.00
158.42
5832
72.00
158.43
5913
73.00
159.1
5994
74.00
159.2
Effective beginning December 31, 2010
159.3
6075
75.00
159.4
6156
76.00
159.5
6237
77.00
159.6
6318
78.00
159.7
6399
79.00
159.8
6480
80.00
159.9
6561
81.00
159.10
6642
82.00
159.11
6723
83.00
159.12
Effective beginning December 31, 2011
159.13
6804
84.00
159.14
6885
85.00
159.15
6966
86.00
159.16
7047
87.00
159.17
7128
88.00
159.18
7209
89.00
159.19
7290
90.00
159.20
7371
91.00
159.21
7452
92.00
159.22
Effective beginning December 31, 2012
159.23
7533
93.00
159.24
7614
94.00
159.25
7695
95.00
159.26
7776
96.00
159.27
7857
97.00
159.28
7938
98.00
159.29
8019
99.00
159.30
8100
100.00
159.31
any amount in excess of
159.32
8100
100.00
159.33    (d) For a defined benefit relief association in which the governing bylaws provide
159.34for a lump-sum service pension to a retiring member, the maximum lump-sum service
159.35pension amount for each year of service credited that may be provided for in the bylaws is
159.36the greater of the service pension amount provided for in the bylaws on the date of the
159.37calculation of the average amount of the available financing per active covered firefighter
159.38or the maximum service pension figure corresponding to the average amount of available
159.39financing per active covered firefighter for the applicable specified period:
160.1
160.2
160.3
Minimum Average Amount of Available
Financing per Firefighter
Maximum Lump-Sum Service
Pension Amount Payable for
Each Year of Service
160.4
$ ...
$ 10
160.5
11
20
160.6
16
30
160.7
23
40
160.8
27
50
160.9
32
60
160.10
43
80
160.11
54
100
160.12
65
120
160.13
77
140
160.14
86
160
160.15
97
180
160.16
108
200
160.17
131
240
160.18
151
280
160.19
173
320
160.20
194
360
160.21
216
400
160.22
239
440
160.23
259
480
160.24
281
520
160.25
302
560
160.26
324
600
160.27
347
640
160.28
367
680
160.29
389
720
160.30
410
760
160.31
432
800
160.32
486
900
160.33
540
1000
160.34
594
1100
160.35
648
1200
160.36
702
1300
160.37
756
1400
160.38
810
1500
160.39
864
1600
160.40
918
1700
160.41
972
1800
160.42
1026
1900
160.43
1080
2000
160.44
1134
2100
161.1
1188
2200
161.2
1242
2300
161.3
1296
2400
161.4
1350
2500
161.5
1404
2600
161.6
1458
2700
161.7
1512
2800
161.8
1566
2900
161.9
1620
3000
161.10
1672
3100
161.11
1726
3200
161.12
1753
3250
161.13
1780
3300
161.14
1820
3375
161.15
1834
3400
161.16
1888
3500
161.17
1942
3600
161.18
1996
3700
161.19
2023
3750
161.20
2050
3800
161.21
2104
3900
161.22
2158
4000
161.23
2212
4100
161.24
2265
4200
161.25
2319
4300
161.26
2373
4400
161.27
2427
4500
161.28
2481
4600
161.29
2535
4700
161.30
2589
4800
161.31
2643
4900
161.32
2697
5000
161.33
2751
5100
161.34
2805
5200
161.35
2859
5300
161.36
2913
5400
161.37
2967
5500
161.38
3021
5600
161.39
3075
5700
161.40
3129
5800
161.41
3183
5900
161.42
3237
6000
161.43
3291
6100
162.1
3345
6200
162.2
3399
6300
162.3
3453
6400
162.4
3507
6500
162.5
3561
6600
162.6
3615
6700
162.7
3669
6800
162.8
3723
6900
162.9
3777
7000
162.10
3831
7100
162.11
3885
7200
162.12
3939
7300
162.13
3993
7400
162.14
4047
7500
162.15
Effective beginning December 31, 2008
162.16
4101
7600
162.17
4155
7700
162.18
4209
7800
162.19
4263
7900
162.20
4317
8000
162.21
4371
8100
162.22
4425
8200
162.23
4479
8300
162.24
Effective beginning December 31, 2009
162.25
4533
8400
162.26
4587
8500
162.27
4641
8600
162.28
4695
8700
162.29
4749
8800
162.30
4803
8900
162.31
4857
9000
162.32
4911
9100
162.33
Effective beginning December 31, 2010
162.34
4965
9200
162.35
5019
9300
162.36
5073
9400
162.37
5127
9500
162.38
5181
9600
162.39
5235
9700
162.40
5289
9800
162.41
5343
9900
162.42
5397
10,000
163.1
any amount in excess of
163.2
5397
10,000
163.3    (e) For a defined benefit relief association in which the governing bylaws provide
163.4for a monthly benefit service pension as an alternative form of service pension payment
163.5to a lump-sum service pension, the maximum service pension amount for each pension
163.6payment type must be determined using the applicable table contained in this subdivision.
163.7    (f) If a defined benefit relief association establishes a service pension in compliance
163.8with the applicable maximum contained in paragraph (c) or (d) and the minimum average
163.9amount of available financing per active covered firefighter is subsequently reduced
163.10because of a reduction in fire state aid or because of an increase in the number of active
163.11firefighters, the relief association may continue to provide the prior service pension
163.12amount specified in its bylaws, but may not increase the service pension amount until
163.13the minimum average amount of available financing per firefighter under the table in
163.14paragraph (c) or (d), whichever applies, permits.
163.15    (g) No defined benefit relief association is authorized to provide a service pension in
163.16an amount greater than the largest applicable flexible service pension maximum amount
163.17even if the amount of available financing per firefighter is greater than the financing
163.18amount associated with the largest applicable flexible service pension maximum.
163.19(h) The method of calculating service pensions must be applied uniformly for all
163.20years of active service. Credit must be given for all years of active service except for caps
163.21on service credit if so provided in the bylaws of the relief association.
163.22EFFECTIVE DATE.This section is effective July 1, 2009.

163.23    Sec. 27. Minnesota Statutes 2008, section 424A.02, subdivision 3a, is amended to read:
163.24    Subd. 3a. Penalty for paying pension greater than applicable maximum. (a)
163.25If a defined benefit relief association pays a service pension greater than the maximum
163.26service pension associated with the applicable average amount of available financing per
163.27active covered firefighter under the table in subdivision 3, paragraph (c) or (d), whichever
163.28applies, the maximum service pension under subdivision 3, paragraph (f), or the applicable
163.29maximum service pension amount specified in subdivision 3, paragraph (g), whichever is
163.30less, the state auditor shall:
163.31(1) disqualify the municipality or the nonprofit firefighting corporation associated
163.32with the relief association from receiving fire state aid by making the appropriate
163.33notification to the municipality and the commissioner of revenue, with the disqualification
163.34applicable for the next apportionment and payment of fire state aid; and
164.1(2) order the treasurer of the applicable relief association to recover the amount of
164.2the overpaid service pension or pensions from any retired firefighter who received an
164.3overpayment.
164.4(b) Fire state aid amounts from disqualified municipalities for the period of
164.5disqualifications under paragraph (a), clause (1), must be credited to the amount of
164.6fire insurance premium tax proceeds available for the next subsequent fire state aid
164.7apportionment.
164.8(c) The amount of any overpaid service pension recovered under paragraph (a),
164.9clause (2), must be credited to the amount of fire insurance premium tax proceeds
164.10available for the next subsequent fire state aid apportionment.
164.11(d) The determination of the state auditor that a relief association has paid a service
164.12pension greater than the applicable maximum must be made on the basis of the information
164.13filed by the relief association and the municipality with the state auditor under sections
164.1469.011, subdivision 2 , and 69.051, subdivision 1 or 1a, whichever applies, and any other
164.15relevant information that comes to the attention of the state auditor. The determination
164.16of the state auditor is final. An aggrieved municipality, relief association, or person may
164.17appeal the determination under section 480A.06.
164.18EFFECTIVE DATE.This section is effective July 1, 2009.

164.19    Sec. 28. Minnesota Statutes 2008, section 424A.02, subdivision 7, is amended to read:
164.20    Subd. 7. Deferred service pensions. (a) A member of a defined benefit relief
164.21association is entitled to a deferred service pension if the member:
164.22    (1) has completed the lesser of either the minimum period of active service with
164.23the fire department specified in the bylaws or 20 years of active service with the fire
164.24department;
164.25    (2) has completed at least five years of active membership in the relief association;
164.26and
164.27    (3) separates from active service and membership before reaching age 50 or the
164.28minimum age for retirement and commencement of a service pension specified in the
164.29bylaws governing the relief association if that age is greater than age 50.
164.30    (b) The deferred service pension is payable when the former member reaches age
164.3150, or the minimum age specified in the bylaws governing the relief association if that age
164.32is greater than age 50, and when the former member makes a valid written application.
164.33    (c) A defined benefit relief association that provides a lump-sum service pension
164.34governed by subdivision 3 may, when its governing bylaws so provide, pay interest on the
165.1deferred lump-sum service pension during the period of deferral. If provided for in the
165.2bylaws, interest must be paid in one of the following manners:
165.3    (1) at the investment performance rate actually earned on that portion of the assets
165.4if the deferred benefit amount is invested by the relief association in a separate account
165.5established and maintained by the relief association or if the deferred benefit amount is
165.6invested in a separate investment vehicle held by the relief association; or
165.7    (2) at an interest rate of up to five percent, compounded annually, as set by the board
165.8of directors and approved as provided in subdivision 10.
165.9    (d) Interest under paragraph (c), clause (2), is payable following the date on which
165.10the municipality has approved the deferred service pension interest rate established by
165.11the board of trustees.
165.12    (e) A relief association that provides a defined contribution service pension may,
165.13if its governing bylaws so provide, credit interest or additional investment performance
165.14on the deferred lump-sum service pension during the period of deferral. If provided for
165.15in the bylaws, the interest must be paid in one of the manners specified in paragraph
165.16(c) or alternatively the relief association may credit any investment return on the assets
165.17of the special fund of the defined contribution volunteer firefighter relief association in
165.18proportion to the share of the assets of the special fund to the credit of each individual
165.19deferred member account through the date on which the investment return is recognized
165.20by and credited to the special fund.
165.21    (f) (e) For a deferred service pension that is transferred to a separate account
165.22established and maintained by the relief association or separate investment vehicle held
165.23by the relief association, the deferred member bears the full investment risk subsequent
165.24to transfer and in calculating the accrued liability of the volunteer firefighters relief
165.25association that pays a lump-sum service pension, the accrued liability for deferred service
165.26pensions is equal to the separate relief association account balance or the fair market value
165.27of the separate investment vehicle held by the relief association.
165.28    (g) (f) The deferred service pension is governed by and must be calculated under
165.29the general statute, special law, relief association articles of incorporation, and relief
165.30association bylaw provisions applicable on the date on which the member separated from
165.31active service with the fire department and active membership in the relief association.
165.32EFFECTIVE DATE.This section is effective July 1, 2009.

165.33    Sec. 29. Minnesota Statutes 2008, section 424A.02, subdivision 8, is amended to read:
165.34    Subd. 8. Lump-sum service pensions; installment payments. (a) Any A defined
165.35benefit relief association, if the governing bylaws so provide, may pay, at the option of the
166.1retiring member intended recipient and in lieu of a single payment of a lump-sum service
166.2pension or survivor benefit, a lump-sum service pension or survivor benefit in installments.
166.3(b) The election of installment payments shall be is irrevocable and shall must be
166.4made by the retiring member intended recipient in writing and filed with the secretary of
166.5the relief association no later than 30 days prior to before the commencement of payment
166.6of the service pension or survivor benefit. The amount of the installment payments shall
166.7must be determined so that the present value of the aggregate installment payments
166.8computed at an interest rate of five percent, compounded annually, is equal to the amount
166.9of the single lump-sum payment which would have been made had the installment
166.10payments option not been elected. The payment of each installment shall include interest
166.11at the rate of five percent, compounded annually on the reserve supporting the remaining
166.12installment payments as of the date on which the previous installment payment was paid
166.13and computed from the date on which the previous installment payment was paid to the
166.14date of payment for the current installment payment in any reasonable manner provided
166.15for in the governing bylaws, but the total amount of installment payments may not exceed
166.16the single payment service pension amount plus interest at an annual rate of five percent
166.17on the amount of delayed payments for the period during which payment was delayed.
166.18(c) To the extent that the commissioner of commerce deems it to be necessary or
166.19practical, the commissioner may specify and issue procedures, forms or mathematical
166.20tables for use in performing the calculations required pursuant to this subdivision.
166.21EFFECTIVE DATE.This section is effective July 1, 2009.

166.22    Sec. 30. Minnesota Statutes 2008, section 424A.02, subdivision 9, is amended to read:
166.23    Subd. 9. Limitation on ancillary benefits. Any A defined benefit relief association,
166.24including any volunteer firefighters relief association governed by section 69.77 or any
166.25volunteer firefighters division of a relief association governed by chapter 424, may only
166.26pay ancillary benefits which would constitute an authorized disbursement as specified in
166.27section 424A.05 subject to the following requirements or limitations:
166.28    (1) with respect to a defined benefit relief association in which governing bylaws
166.29provide for a lump-sum service pension to a retiring member, no ancillary benefit may
166.30be paid to any former member or paid to any person on behalf of any former member
166.31after the former member (i) terminates active service with the fire department and active
166.32membership in the relief association; and (ii) commences receipt of a service pension as
166.33authorized under this section; and
166.34    (2) with respect to any defined benefit relief association, no ancillary benefit paid or
166.35payable to any member, to any former member, or to any person on behalf of any member
167.1or former member, may exceed in amount the total earned service pension of the member
167.2or former member. The total earned service pension must be calculated by multiplying
167.3the service pension amount specified in the bylaws of the relief association at the time of
167.4death or disability, whichever applies, by the years of service credited to the member or
167.5former member. The years of service must be determined as of (i) the date the member or
167.6former member became entitled to the ancillary benefit; or (ii) the date the member or
167.7former member died entitling a survivor or the estate of the member or former member to
167.8an ancillary benefit. The ancillary benefit must be calculated without regard to whether the
167.9member had attained the minimum amount of service and membership credit specified in
167.10the governing bylaws. For active members, the amount of a permanent disability benefit
167.11or a survivor benefit must be equal to the member's total earned service pension except
167.12that the bylaws of any a defined benefit relief association may provide for the payment of
167.13a survivor benefit in an amount not to exceed five times the yearly service pension amount
167.14specified in the bylaws on behalf of any member who dies before having performed five
167.15years of active service in the fire department with which the relief association is affiliated.
167.16EFFECTIVE DATE.This section is effective July 1, 2009.

167.17    Sec. 31. Minnesota Statutes 2008, section 424A.02, subdivision 9a, is amended to read:
167.18    Subd. 9a. Postretirement increases. Notwithstanding any provision of general or
167.19special law to the contrary, a defined benefit relief association paying a monthly service
167.20pension may provide a postretirement increase to retired members and ancillary benefit
167.21recipients of the relief association if (1) the relief association adopts an appropriate bylaw
167.22amendment; and (2) the bylaw amendment is approved by the municipality pursuant to
167.23subdivision 10 and section 69.773, subdivision 6. The postretirement increase shall be
167.24is applicable only to retired members and ancillary benefit recipients receiving a service
167.25pension or ancillary benefit as of the effective date of the bylaw amendment. The authority
167.26to provide a postretirement increase to retired members and ancillary benefit recipients
167.27of a relief association contained in this subdivision shall supersede supersedes any prior
167.28special law authorization relating to the provision of postretirement increases.
167.29EFFECTIVE DATE.This section is effective July 1, 2009.

167.30    Sec. 32. Minnesota Statutes 2008, section 424A.02, subdivision 9b, is amended to read:
167.31    Subd. 9b. Repayment of service pension in certain instances. If a retired
167.32volunteer firefighter does not permanently separate from active firefighting service as
167.33required by subdivision 1 and section 424A.001, subdivision 9, by resuming active service
168.1as a firefighter in the same volunteer fire department or as a person in charge of firefighters
168.2in the same volunteer fire department, no additional service pension amount is payable
168.3to the person, no additional service is creditable to the person, and the person shall must
168.4repay to the defined benefit relief association any previously received service pension.
168.5EFFECTIVE DATE.This section is effective July 1, 2009.

168.6    Sec. 33. Minnesota Statutes 2008, section 424A.02, subdivision 10, is amended to read:
168.7    Subd. 10. Local approval of bylaw amendments; filing requirements. (a) Each
168.8defined benefit relief association to which this section applies shall must file a revised
168.9copy of its governing bylaws with the state auditor upon the adoption of any amendment
168.10to its governing bylaws by the relief association or upon the approval of any amendment
168.11to its governing bylaws granted by the governing body of each municipality served by the
168.12fire department to which the relief association is directly associated. Failure of the relief
168.13association to file a copy of the bylaws or any bylaw amendments with the state auditor
168.14shall disqualify disqualifies the municipality from the distribution of any future fire state
168.15aid until this filing requirement has been completed.
168.16(b) If the special fund of the relief association does not have a surplus over full
168.17funding pursuant to under section 69.772, subdivision 3, clause (2), subclause (e), or
168.1869.773, subdivision 4 , and if the municipality is required to provide financial support to
168.19the special fund of the relief association pursuant to under section 69.772 or 69.773, no
168.20bylaw amendment which would affect the amount of, the manner of payment of, or the
168.21conditions for qualification for service pensions or ancillary benefits or disbursements
168.22other than administrative expenses authorized pursuant to under section 69.80 payable
168.23from the special fund of the relief association shall be is effective until it has been ratified
168.24by the governing body or bodies of the appropriate municipalities. If the municipality is
168.25not required to provide financial support to the special fund pursuant to under this section,
168.26the relief association may adopt or amend without municipal ratification its articles
168.27of incorporation or bylaws which increase or otherwise affect the service pensions or
168.28ancillary benefits payable from the special fund so long as the changes do not cause the
168.29amount of the resulting increase in the accrued liability of the special fund to exceed 90
168.30percent of the amount of the prior surplus over full funding reported in the prior year and
168.31the changes do not result in the financial requirements of the special fund exceeding the
168.32expected amount of the future subsequent calendar year's fire state aid to be received
168.33by the relief association.
168.34(c) If the relief association pays only a lump-sum pension, the financial requirements
168.35are to be determined by the board of trustees following the preparation of an estimate
169.1of the expected increase in the accrued liability and annual accruing liability of the
169.2relief association attributable to the change. If the relief association pays a monthly
169.3benefit service pension, the financial requirements are to be determined by the board of
169.4trustees following either an updated actuarial valuation including the proposed change
169.5or an estimate of the expected actuarial impact of the proposed change prepared by the
169.6actuary of the relief association. If a relief association adopts or amends its articles of
169.7incorporation or bylaws without municipal ratification pursuant to under this subdivision,
169.8and, subsequent to the amendment or adoption, the financial requirements of the special
169.9fund pursuant to under this section are such so as to require financial support from the
169.10municipality, the provision which was implemented without municipal ratification shall is
169.11no longer be effective without municipal ratification, and any service pensions or ancillary
169.12benefits payable after that date shall must be paid only in accordance with the articles of
169.13incorporation or bylaws as amended or adopted with municipal ratification.
169.14EFFECTIVE DATE.This section is effective July 1, 2009.

169.15    Sec. 34. Minnesota Statutes 2008, section 424A.02, subdivision 12, is amended to read:
169.16    Subd. 12. Transfer of service credit to new district. Notwithstanding the
169.17requirements of subdivision 1 or any other law, a member of a fire department which is
169.18disbanded upon formation of a fire district to serve substantially the same geographic
169.19area, who serves as an active firefighter with the new district fire department, and is a
169.20member of the district firefighters' defined benefit relief association shall be is entitled
169.21to a nonforfeitable service pension from the new relief association upon completion of
169.22a combined total of 20 years active service in the disbanded and the new departments.
169.23The amount of the service pension shall be is based upon years of service in the new
169.24department only, and shall must be in an amount equal to the accrued liability for the
169.25appropriate years of service calculated in accordance with section 69.772, subdivision 2.

169.26    Sec. 35. Minnesota Statutes 2008, section 424A.02, subdivision 13, is amended to read:
169.27    Subd. 13. Combined service pensions. (a) If the articles of incorporation or bylaws
169.28of the defined benefit relief associations so provide, a volunteer firefighter with credit for
169.29service as an active firefighter in more than one defined benefit volunteer firefighters relief
169.30association is entitled, when the applicable requirements of paragraph (b) are met and
169.31when otherwise qualified, to a prorated service credit from each relief association.
169.32(b) A volunteer firefighter receiving a prorated service pension under this subdivision
169.33must have a total amount of service credit of ten years or more, if the bylaws of every
169.34affected relief association does do not require specify only a five-year service vesting
170.1requirement, or five years or more, if the bylaws of every affected relief association
170.2requires require only a five-year service vesting requirement, as a member of two or more
170.3relief associations otherwise qualified. The member must have one year or more of service
170.4credit in each relief association. The prorated service pension must be based on the service
170.5pension amount in effect for the relief association on the date on which active volunteer
170.6firefighting services covered by that relief association terminate. To receive a service
170.7pension under this subdivision, the firefighter must become a member of the second or
170.8succeeding association and must give notice of membership to the prior association within
170.9two years of the date of termination of active service with the prior association. The notice
170.10must be attested to by the second or subsequent relief association secretary.
170.11EFFECTIVE DATE.This section is effective July 1, 2009.

170.12    Sec. 36. Minnesota Statutes 2008, section 424A.021, is amended to read:
170.13424A.021 CREDIT FOR BREAK IN SERVICE TO PROVIDE UNIFORMED
170.14SERVICE.
170.15    Subdivision 1. Authorization. Subject to restrictions stated in this section, a
170.16volunteer firefighter who is absent from firefighting service due to service in the uniformed
170.17services, as defined in United States Code, title 38, section 4303(13), may obtain service
170.18credit if the relief association is a defined benefit plan or an allocation of any fire state
170.19aid, any municipal contributions, and any investment return received by the relief
170.20association as though the person was an active member if the relief association is a defined
170.21contribution plan for the period of the uniformed service, not to exceed five years, unless a
170.22longer period is required under United States Code, title 38, section 4312.
170.23    Subd. 2. Limitations. (a) To be eligible for service credit or an investment return
170.24allocation as though an active member under this section, the volunteer firefighter must
170.25return to firefighting service with coverage by the same relief association or by the
170.26successor to that relief association upon discharge from service in the uniformed service
170.27within the time frame required in United States Code, title 38, section 4312(e).
170.28(b) Service credit or an investment return allocation as though an active member is
170.29not authorized if the firefighter separates from uniformed service with a dishonorable or
170.30bad conduct discharge or under other than honorable conditions.
170.31(c) Service credit or an investment return allocation as though an active member
170.32is not authorized if the firefighter fails to provide notice to the fire department that the
170.33individual is leaving to provide service in the uniformed service, unless it is not feasible to
170.34provide that notice due to the emergency nature of the situation.
171.1EFFECTIVE DATE.This section is effective July 1, 2009.

171.2    Sec. 37. Minnesota Statutes 2008, section 424A.03, is amended to read:
171.3424A.03 UNIFORMITY OF VOLUNTEER FIREFIGHTER SERVICE
171.4PENSION AND RETIREMENT BENEFITS.
171.5    Subdivision 1. Limitation on nonuniformity of pensions. Every partially salaried
171.6and partially volunteer firefighters' relief association shall must provide service pensions
171.7to volunteer firefighter members based on the years of service of the members not on
171.8the compensation paid to the members for firefighting services. Each relief association
171.9shall must provide service pensions to salaried members as set forth in chapter 424 and
171.10applicable special laws.
171.11    Subd. 2. Penalties for violations. Any A municipality which has a fire department
171.12to which associated with a relief association which violates the provisions of subdivision
171.131 is directly associated or which contracts with an independent nonprofit firefighting
171.14corporation of which associated with a relief association which violates the provisions
171.15of subdivision 1 is a subsidiary shall may not be included in the apportionment of fire
171.16state aid by the commissioner of commerce to the applicable county auditor pursuant to
171.17under section 69.021, subdivision 6, and shall may not be included in the apportionment
171.18of fire state aid by the county auditor to the various municipalities pursuant to under
171.19section 69.021, subdivision 7.
171.20    Subd. 3. Exception to application of limitation and penalty. The limitation
171.21provided for in subdivision 1 shall does not apply to any relief association which prior to
171.22before January 1, 1957, had established a definite service pension formula for members
171.23of the partially salaried and partially volunteer firefighters' relief association who are
171.24regularly employed firefighters.
171.25EFFECTIVE DATE.This section is effective July 1, 2009.

171.26    Sec. 38. Minnesota Statutes 2008, section 424A.04, is amended to read:
171.27424A.04 VOLUNTEER RELIEF ASSOCIATIONS; BOARD OF TRUSTEES.
171.28    Subdivision 1. Membership. (a) A relief association that is directly associated with
171.29a municipal fire department must be managed by a board of trustees consisting of nine
171.30members. Six trustees must be elected from the membership of the relief association and
171.31three trustees must be drawn from the officials of the municipalities served by the fire
171.32department to which the relief association is directly associated. The bylaws of a relief
171.33association which provides a monthly benefit service pension may provide that one of
172.1the six trustees elected from the relief association membership may be a retired member
172.2receiving a monthly pension who is elected by the membership of the relief association.
172.3The three municipal trustees must be one elected municipal official and one elected or
172.4appointed municipal official who are designated as municipal representatives by the
172.5municipal governing board annually and the chief of the municipal fire department.
172.6(b) A relief association that is a subsidiary of an independent nonprofit firefighting
172.7corporation must be managed by a board of trustees consisting of nine members. Six
172.8trustees must be elected from the membership of the relief association, two trustees must
172.9be drawn from the officials of the municipalities served by the fire department to which
172.10the relief association is directly associated, and one trustee shall must be the fire chief
172.11serving with the independent nonprofit firefighting corporation. The bylaws of a relief
172.12association may provide that one of the six trustees elected from the relief association
172.13membership may be a retired member receiving a monthly pension who is elected by the
172.14membership of the relief association. The two municipal trustees must be elected or
172.15appointed municipal officials, selected as follows:
172.16(1) if only one municipality contracts with the independent nonprofit firefighting
172.17corporation, the municipal trustees must be two officials of the contracting municipality
172.18who are designated annually by the governing body of the municipality; or
172.19(2) if two or more municipalities contract with the independent nonprofit corporation,
172.20the municipal trustees must be one official from each of the two largest municipalities
172.21in population who are designated annually by the governing bodies of the applicable
172.22municipalities.
172.23(c) The municipal trustees for a relief association that is directly associated with a
172.24fire department operated as or by a joint powers entity must be the fire chief of the fire
172.25department and two trustees designated annually by the joint powers board. The municipal
172.26trustees for a relief association that is directly associated with a fire department service
172.27area township must be the fire chief of the fire department and two trustees designated by
172.28the township board.
172.29(d) If a relief association lacks the municipal board members provided for in
172.30paragraph (a), (b), or (c) because the fire department is not located in or associated with an
172.31organized municipality, joint powers entity, or township, the municipal board members
172.32must be the fire chief of the fire department and two board members appointed from the
172.33fire department service area by the board of commissioners of the applicable county.
172.34(e) The term of these the appointed municipal board members is one year or until the
172.35person's successor is qualified, whichever is later.
173.1(f) A municipal trustee under paragraph (a), (b), (c), or (d) has all the rights
173.2and duties accorded to any other trustee, except the right to be an officer of the relief
173.3association board of trustees.
173.4(g) A board must have at least three officers, who are a president, a secretary and a
173.5treasurer. These officers must be elected from among the elected trustees by either the full
173.6board of trustees or by the relief association membership, as specified in the bylaws. In
173.7no event may any trustee hold more than one officer position at any one time. The terms
173.8of the elected trustees and of the officers of the board must be specified in the bylaws of
173.9the relief association, but may not exceed three years. If the term of the elected trustees
173.10exceeds one year, the election of the various trustees elected from the membership must be
173.11staggered on as equal a basis as is practicable.
173.12    Subd. 2. Fiduciary duty. The board of trustees of a relief association shall
173.13undertake their activities consistent with chapter 356A.
173.14    Subd. 2a. Fiduciary responsibility. In the discharge of their respective duties, the
173.15officers and trustees shall be held to the standard of care specified in section 11A.09. In
173.16addition, the trustees shall act in accordance with chapter 356A. Each member of the
173.17board is a fiduciary and shall undertake all fiduciary activities in accordance with the
173.18standard of care of section 11A.09, and in a manner consistent with chapter 356A. No
173.19fiduciary of a relief association shall cause a relief association to engage in a transaction if
173.20the fiduciary knows or should know that the transaction constitutes one of the following
173.21direct or indirect transactions:
173.22(1) sale or exchange or leasing of any real property between the relief association
173.23and a board member;
173.24(2) lending of money or other extension of credit between the relief association and
173.25a board member or member of the relief association;
173.26(3) furnishing of goods, services, or facilities between the relief association and a
173.27board member; or
173.28(4) transfer to a board member, or use by or for the benefit of a board member, of any
173.29assets of the relief association. A transfer of assets does not mean the payment of relief
173.30association benefits or administrative expenses permitted by law.
173.31    Subd. 3. Conditions on relief association consultants. (a) If a volunteer firefighter
173.32relief association hires employs or contracts with a consultant to provide legal or financial
173.33advice, the secretary of the relief association shall obtain and the consultant shall provide
173.34to the secretary of the relief association a copy of the consultant's certificate of insurance.
174.1(b) A consultant is any person who is employed under contract to provide legal or
174.2financial advice and who is or who represents to the volunteer firefighter relief association
174.3that the person is:
174.4(1) an actuary;
174.5(2) a licensed public accountant or a certified public accountant;
174.6(3) an attorney;
174.7(4) an investment advisor or manager, or an investment counselor;
174.8(5) an investment advisor or manager selection consultant;
174.9(6) a pension benefit design advisor or consultant; or
174.10(7) any other financial consultant.
174.11EFFECTIVE DATE.This section is effective July 1, 2009.

174.12    Sec. 39. Minnesota Statutes 2008, section 424A.05, subdivision 1, is amended to read:
174.13    Subdivision 1. Establishment of special fund. Every volunteer firefighters' relief
174.14association shall establish and maintain a special fund within the relief association.
174.15EFFECTIVE DATE.This section is effective July 1, 2009.

174.16    Sec. 40. Minnesota Statutes 2008, section 424A.05, subdivision 2, is amended to read:
174.17    Subd. 2. Special fund assets and revenues. The special fund shall must be credited
174.18with all fire state aid moneys received pursuant to under sections 69.011 to 69.051,
174.19all taxes levied by or other revenues received from the municipality pursuant to under
174.20sections 69.771 to 69.776 or any applicable special law requiring municipal support for
174.21the relief association, any moneys or property donated, given, granted or devised by any
174.22person which is specified for use for the support of the special fund and any interest or
174.23investment return earned upon the assets of the special fund. The treasurer of the relief
174.24association shall be is the custodian of the assets of the special fund and shall must be the
174.25recipient on behalf of the special fund of all revenues payable to the special fund. The
174.26treasurer shall maintain adequate records documenting any transaction involving the assets
174.27or the revenues of the special fund. These records and the bylaws of the relief association
174.28shall be are public and shall must be open for inspection by any member of the relief
174.29association, any officer or employee of the state or of the municipality, or any member of
174.30the public, at reasonable times and places.
174.31EFFECTIVE DATE.This section is effective July 1, 2009.

174.32    Sec. 41. Minnesota Statutes 2008, section 424A.05, subdivision 3, is amended to read:
175.1    Subd. 3. Authorized disbursements from the special fund. (a) Disbursements
175.2from the special fund are may not permitted to be made for any purpose other than one of
175.3the following:
175.4    (1) for the payment of service pensions to retired members of the relief association if
175.5authorized and paid under law and the bylaws governing the relief association;
175.6    (2) for the payment of temporary or permanent disability benefits to disabled
175.7members of the relief association if authorized and paid pursuant to under law and
175.8specified in amount in the bylaws governing the relief association;
175.9    (3) for the payment of survivor benefits to surviving spouses and surviving children,
175.10or if none, to designated beneficiaries, of deceased members of the relief association, and
175.11if no survivors and if no designated beneficiary, for the payment of a death benefit to the
175.12estate of the deceased active or deferred firefighter, if authorized by and paid pursuant to
175.13under law and specified in amount in the bylaws governing the relief association;
175.14    (4) for the payment of the fees, dues and assessments to the Minnesota State Fire
175.15Department Association, and to the Minnesota Area Relief Association Coalition, and to
175.16the state Volunteer Firefighters Benefit Association in order to entitle relief association
175.17members to membership in and the benefits of these associations or organizations; and
175.18(5) for the payment of insurance premiums to the state Volunteer Firefighters Benefit
175.19Association, or an insurance company licensed by the state of Minnesota offering casualty
175.20insurance, in order to entitle relief association members to membership in and the benefits
175.21of the association or organization; and
175.22    (5) (6) for the payment of administrative expenses of the relief association as
175.23authorized under section 69.80.
175.24    (b) For purposes of this chapter, for a monthly benefit volunteer fire relief association
175.25or for a combination lump-sum and monthly benefit volunteer fire relief association where
175.26a monthly benefit service pension has been elected by or a monthly benefit is payable with
175.27respect to a firefighter, a designated beneficiary must be a natural person. For purposes of
175.28this chapter, for a defined contribution volunteer fire relief association, for a lump-sum
175.29volunteer fire relief association, or for a combination lump-sum and monthly benefit
175.30volunteer fire relief association where a lump-sum service pension has been elected by
175.31or a lump-sum benefit is payable with respect to a firefighter, a designated beneficiary
175.32may be a trust created under chapter 501B.
175.33EFFECTIVE DATE.This section is effective July 1, 2009.

175.34    Sec. 42. Minnesota Statutes 2008, section 424A.05, subdivision 4, is amended to read:
176.1    Subd. 4. Investments of assets of the special fund. The assets of the special fund
176.2shall must be invested only in securities authorized by section 69.775.
176.3EFFECTIVE DATE.This section is effective July 1, 2009.

176.4    Sec. 43. Minnesota Statutes 2008, section 424A.06, is amended to read:
176.5424A.06 RELIEF ASSOCIATION GENERAL FUND.
176.6    Subdivision 1. Establishment of general fund. Any A volunteer firefighters' relief
176.7association may establish and maintain a general fund within the relief association.
176.8    Subd. 2. General fund assets and revenues. To the general fund, if established,
176.9shall must be credited all moneys received from dues, fines, initiation fees, entertainment
176.10revenues and any moneys or property donated, given, granted or devised by any person,
176.11for unspecified uses. The treasurer of the relief association shall be is the custodian of the
176.12assets of the general fund and shall must be the recipient on behalf of the general fund of
176.13all revenues payable to the general fund. The treasurer shall maintain adequate records
176.14documenting any transaction involving the assets or the revenues of the general fund.
176.15These records shall must be open for inspection by any member of the relief association
176.16at reasonable times and places.
176.17    Subd. 3. Authorized disbursements from the general fund. Disbursements from
176.18the general fund may be made for any purpose that is authorized by either the articles of
176.19incorporation or bylaws of the relief association.
176.20    Subd. 4. Investment of assets of the general fund. The assets of the general
176.21fund may be invested in any securities that are authorized by the bylaws of the relief
176.22association and may be certified for investment by the State Board of Investment in fixed
176.23income pools or in a separately managed account at the discretion of the State Board of
176.24Investment as provided in section 11A.14.
176.25EFFECTIVE DATE.This section is effective July 1, 2009.

176.26    Sec. 44. Minnesota Statutes 2008, section 424A.07, is amended to read:
176.27424A.07 NONPROFIT FIREFIGHTING CORPORATIONS;
176.28ESTABLISHMENT OF RELIEF ASSOCIATIONS.
176.29Prior to Before paying any service pensions or retirement benefits pursuant to
176.30under section 424A.02 or before becoming entitled to receive any amounts of fire state
176.31aid upon transmittal from a contracting municipality pursuant to under section 69.031,
176.32subdivision 5
, a nonprofit firefighting corporation shall establish a volunteer firefighters'
176.33relief association governed by this chapter.

177.1    Sec. 45. Minnesota Statutes 2008, section 424A.08, is amended to read:
177.2424A.08 MUNICIPALITY WITHOUT RELIEF ASSOCIATION;
177.3AUTHORIZED DISBURSEMENTS.
177.4(a) Any qualified municipality which is entitled to receive fire state aid but which
177.5has no volunteer firefighters' relief association directly associated with its fire department
177.6and which has no full-time firefighters with retirement coverage by the public employees
177.7police and fire retirement plan shall deposit the fire state aid in a special account
177.8established for that purpose in the municipal treasury. Disbursement from the special
177.9account shall may not be made for any purpose except:
177.10(1) payment of the fees, dues and assessments to the Minnesota State Fire
177.11Department Association and to the state Volunteer Firefighters' Benefit Association in
177.12order to entitle its firefighters to membership in and the benefits of these state associations;
177.13(2) payment of the cost of purchasing and maintaining needed equipment for the
177.14fire department; and
177.15(3) payment of the cost for of construction, acquisition, repair and, or maintenance
177.16of buildings or other premises to house the equipment of the fire department.
177.17(b) A qualified municipality which is entitled to receive fire state aid, which has no
177.18volunteer firefighters' relief association directly associated with its fire department and
177.19which has full-time firefighters with retirement coverage by the public employees police
177.20and fire retirement plan may disburse the fire state aid as provided in paragraph (a), for the
177.21payment of the employer contribution requirement with respect to firefighters covered by
177.22the public employees police and fire retirement plan under section 353.65, subdivision 3,
177.23or for a combination of the two types of disbursements.
177.24EFFECTIVE DATE.This section is effective July 1, 2009.

177.25    Sec. 46. Minnesota Statutes 2008, section 424A.10, subdivision 1, is amended to read:
177.26    Subdivision 1. Definitions. For purposes of this section:
177.27    (1) "qualified recipient" means an individual who receives a lump-sum distribution
177.28of pension or retirement benefits from a volunteer firefighters' relief association for service
177.29that the individual has performed as a volunteer firefighter;
177.30    (2) "survivor of a deceased active or deferred volunteer firefighter" means the legally
177.31married surviving spouse of a deceased active or deferred volunteer firefighter under
177.32section 424A.001, subdivision 6, or, if none, the surviving minor child or minor children
177.33of a deceased active or deferred volunteer firefighter;
178.1    (3) "active volunteer firefighter" means a person who regularly renders fire
178.2suppression service for a municipal fire department or an independent nonprofit firefighting
178.3corporation, who has met the statutory and other requirements for relief association
178.4membership, and who has been is deemed by the relief association under law and its
178.5bylaws to be a fully qualified member of the relief association for at least one month; and
178.6    (4) "deferred volunteer firefighter" means a former active volunteer firefighter who
178.7terminated active firefighting service, has sufficient service credit from the applicable relief
178.8association to be entitled to a service pension under the bylaws of the relief association,
178.9but has not applied for or has not received the service pension.
178.10EFFECTIVE DATE.This section is effective July 1, 2009.

178.11    Sec. 47. Minnesota Statutes 2008, section 424A.10, subdivision 2, is amended to read:
178.12    Subd. 2. Payment of supplemental benefit. (a) Upon the payment by a volunteer
178.13firefighters' relief association of a lump-sum distribution to a qualified recipient, the
178.14association must pay a supplemental benefit to the qualified recipient. Notwithstanding
178.15any law to the contrary, the relief association must pay the supplemental benefit out of
178.16its special fund. The amount of This benefit equals is an amount equal to ten percent of
178.17the regular lump-sum distribution that is paid on the basis of the recipient's service as
178.18a volunteer firefighter. In no case may the amount of the supplemental benefit exceed
178.19$1,000. A supplemental benefit under this paragraph may not be paid to a survivor of a
178.20deceased active or deferred volunteer firefighter in that capacity.
178.21    (b) Upon the payment by a relief association of a lump-sum survivor benefit or
178.22funeral benefit to a survivor of a deceased active volunteer firefighter or of a deceased
178.23deferred volunteer firefighter, the association may pay a supplemental survivor benefit
178.24to the survivor of the deceased active or deferred volunteer firefighter from the special
178.25fund of the relief association if its articles of incorporation or bylaws so provide. The
178.26amount of the supplemental survivor benefit is 20 percent of the survivor benefit or funeral
178.27benefit, but not to exceed $2,000.
178.28    (c) An individual may receive a supplemental benefit under paragraph (a) or under
178.29paragraph (b), but not under both paragraphs with respect to one lump-sum volunteer
178.30firefighter benefit.
178.31EFFECTIVE DATE.This section is effective July 1, 2009.

178.32    Sec. 48. Minnesota Statutes 2008, section 424A.10, subdivision 3, is amended to read:
179.1    Subd. 3. State reimbursement. (a) Each year, to be eligible for state reimbursement
179.2of the amount of supplemental benefits paid under subdivision 2 during the preceding
179.3calendar year, the volunteer firefighters' relief association must shall apply to the
179.4commissioner of revenue by February 15. By March 15, the commissioner shall
179.5reimburse the relief association for the amount of the supplemental benefits paid by the
179.6relief association to qualified recipients and to survivors of deceased active or deferred
179.7volunteer firefighters.
179.8    (b) The commissioner of revenue shall prescribe the form of and supporting
179.9information that must be supplied as part of the application for state reimbursement.
179.10The commissioner of revenue shall reimburse the relief association by paying the
179.11reimbursement amount to the treasurer of the municipality where the association is located.
179.12Within 30 days after receipt, the municipal treasurer shall transmit the state reimbursement
179.13to the treasurer of the association if the association has filed a financial report with the
179.14municipality. If the relief association has not filed a financial report with the municipality,
179.15the municipal treasurer shall delay transmission of the reimbursement payment to the
179.16association until the complete financial report is filed. If the association has dissolved or
179.17has been removed as a trustee of state aid, the treasurer shall deposit the money in a
179.18special account in the municipal treasury, and the money may be disbursed only for the
179.19purposes and in the manner provided in section 424A.08. When paid to the association,
179.20the reimbursement payment must be deposited in the special fund of the relief association.
179.21    (c) A sum sufficient to make the payments is appropriated from the general fund
179.22to the commissioner of revenue.
179.23EFFECTIVE DATE.This section is effective July 1, 2009.

179.24    Sec. 49. Minnesota Statutes 2008, section 424A.10, subdivision 4, is amended to read:
179.25    Subd. 4. In lieu of income tax exclusion. (a) The supplemental benefit provided
179.26by this section is in lieu of the state income tax exclusion for lump-sum distributions of
179.27retirement benefits paid to volunteer firefighters.
179.28(b) If the law is modified to exclude or exempt volunteer firefighters' lump-sum
179.29distributions from state income taxation, the supplemental benefits under this section
179.30may are no longer be paid payable, beginning with the first calendar year in which the
179.31exclusion or exemption is effective. This subdivision does not apply to exemption of all or
179.32part of a lump-sum distribution under section 290.032 or 290.0802.
179.33EFFECTIVE DATE.This section is effective July 1, 2009.

180.1    Sec. 50. Minnesota Statutes 2008, section 424A.10, subdivision 5, is amended to read:
180.2    Subd. 5. Retroactive reimbursement in certain instances. A supplemental
180.3survivor or funeral benefit may be paid by a relief association for the death of an active
180.4volunteer firefighter or of a deferred volunteer firefighter that occurred on or after August
180.51, 2005, if the relief association articles of incorporation or bylaws so provide for a
180.6supplemental survivor benefit and provide for retroactivity.
180.7EFFECTIVE DATE.This section is effective July 1, 2009.

180.8    Sec. 51. Minnesota Statutes 2008, section 424B.10, is amended by adding a
180.9subdivision to read:
180.10    Subd. 1a. Applicability. This section applies when all of the volunteer firefighters'
180.11relief associations involved in the consolidation are defined benefit relief associations as
180.12defined in section 424A.001, subdivision 1b.
180.13EFFECTIVE DATE.This section is effective July 1, 2009.

180.14    Sec. 52. Minnesota Statutes 2008, section 424B.10, is amended by adding a
180.15subdivision to read:
180.16    Subd. 1b. Benefits. (a) The successor relief association following the consolidation
180.17of two or more defined benefit relief associations must be a defined benefit relief
180.18association.
180.19(b) Notwithstanding any provision of section 424A.02, subdivision 3, to the contrary,
180.20the initial service pension amount of the subsequent defined benefit relief association as
180.21of the effective date of consolidation is either the service pension amount specified in
180.22clause (1) or the service pension amounts specified in clause (2), as provided for in the
180.23consolidated relief association's articles of incorporation or bylaws:
180.24(1) the highest dollar amount service pension amount of any prior volunteer
180.25firefighters relief association in effect immediately before the consolidation initiation if the
180.26pension amount was implemented consistent with section 424A.02; or
180.27(2) for service rendered by each individual volunteer firefighter before consolidation,
180.28the service pension amount under the consolidating volunteer firefighters relief association
180.29that the firefighter belonged to immediately before the consolidation if the pension amount
180.30was implemented consistent with section 424A.02 and for service rendered after the
180.31effective date of the consolidation, the highest dollar amount service pension of any of the
180.32consolidating volunteer firefighters relief associations in effect immediately before the
180.33consolidation if the pension amount was implemented consistent with section 424A.02.
181.1(c) Any increase in the service pension amount beyond the amount implemented
181.2under paragraph (a) must conform with the requirements and limitations of sections
181.369.771 to 69.775 and section 424A.02.
181.4EFFECTIVE DATE.This section is effective July 1, 2009.

181.5    Sec. 53. Minnesota Statutes 2008, section 424B.10, subdivision 2, is amended to read:
181.6    Subd. 2. Funding. (a) Unless the applicable municipalities agree in writing to
181.7allocate the minimum municipal obligation in a different manner, the minimum municipal
181.8obligation under section 69.772 or 69.773, whichever applies, must be allocated between
181.9the applicable municipalities in proportion to their fire state aid.
181.10(b) If any applicable municipality fails to meet its portion of the minimum municipal
181.11obligation to the subsequent relief association, all other applicable municipalities are
181.12jointly obligated to provide the required funding upon certification by the relief association
181.13secretary. An applicable municipality that pays the minimum municipal obligation
181.14amount for another applicable municipality, the municipality may collect the that payment
181.15amount, plus a 25 percent surcharge, from the responsible applicable municipality by any
181.16available means, including a deduction from any state aid or payment amount payable
181.17to the responsible municipality upon certification of the necessary information to the
181.18commissioner of finance.
181.19EFFECTIVE DATE.This section is effective July 1, 2009.

181.20    Sec. 54. [424B.11] CONSOLIDATING DEFINED CONTRIBUTION RELIEF
181.21ASSOCIATIONS; INDIVIDUAL ACCOUNTS; FUNDING.
181.22    Subdivision 1. Applicability. This section applies when all of the volunteer
181.23firefighters' relief associations involved in the consolidation are defined contribution relief
181.24associations as defined in section 424A.001, subdivision 1c.
181.25    Subd. 2. Individual accounts. The successor relief association following the
181.26consolidation of two or more defined contribution relief associations must be a defined
181.27contribution relief association and the successor relief association board shall establish
181.28individual accounts for every active member, inactive member, deferred member, or
181.29retired member receiving installment payments with that status as of the consolidation
181.30date. To each individual account the successor relief association must credit the amount to
181.31the credit of each person by a predecessor relief association as of the date of consolidation
181.32plus a proportional share, based on account value, of any subsequent net revenue during
181.33the consolidation process.
182.1    Subd. 3. Funding. Unless the articles of incorporation or bylaws of the successor
182.2relief association specify that municipal contributions are wholly voluntary or unless the
182.3municipalities associated with the consolidating defined contribution relief associations
182.4agree in writing to a different municipal support arrangement, each municipality must
182.5continue to provide the same amount of municipal support to the successor relief
182.6association as the municipality provided to the applicable predecessor relief association in
182.7the calendar year immediately prior to the calendar year in which the consolidation occurs.
182.8EFFECTIVE DATE.This section is effective July 1, 2009.

182.9    Sec. 55. [424B.12] MIXED CONSOLIDATING RELIEF ASSOCIATIONS;
182.10BENEFIT PLAN; FUNDING.
182.11    Subdivision 1. Applicability. This section applies where one or more of the
182.12volunteer firefighters' relief associations involved in the consolidation are defined benefit
182.13relief associations as defined in section 424A.001, subdivision 1b, and one or more of
182.14the volunteer firefighters' relief associations involved in the consolidation are defined
182.15contribution relief associations as defined in section 424A.001, subdivision 1c.
182.16    Subd. 2. Benefit plan. The articles of incorporation or bylaws of the successor
182.17relief association must specify whether the relief association is a defined benefit relief
182.18association or whether the relief association is a defined contribution relief association. If
182.19the successor relief association is a defined benefit relief association, the relief association
182.20benefits must comply with sections 424A.02 and 424B.11, subdivision 1a. If the successor
182.21relief association is a defined contribution relief association, the relief association must
182.22comply with sections 424A.016 and 424B.12, subdivision 2.
182.23    Subd. 3. Funding. If the successor relief association is a defined benefit relief
182.24association, the relief association funding is governed by section 424B.11, subdivision 2.
182.25If the successor relief association is a defined contribution relief association, the relief
182.26association funding is governed by section 424B.12, subdivision 3.
182.27EFFECTIVE DATE.This section is effective July 1, 2009.

182.28    Sec. 56. Minnesota Statutes 2008, section 424B.21, is amended to read:
182.29424B.21 ANNUITY PURCHASES UPON DISSOLUTION.
182.30The board of trustees of a volunteer firefighters relief association that is scheduled
182.31for dissolution may purchase annuity contracts under section 424A.02 424A.015,
182.32subdivision 8a 3
, instead of transferring special fund assets to a municipal trust fund
182.33under section 424B.20, subdivision 4. Payment of an annuity for which a contract is
183.1purchased may not commence before the retirement age specified in the relief association
183.2bylaws and in compliance with section 424A.016, subdivision 2, or 424A.02, subdivision
183.31
. Legal title to the annuity contract transfers to the municipal trust fund under section
183.4424B.20, subdivision 4 .
183.5EFFECTIVE DATE.This section is effective July 1, 2009, if article 1 is also
183.6enacted.

183.7    Sec. 57. BRIMSON FIREFIGHTERS RELIEF ASSOCIATION; BOARD OF
183.8TRUSTEES MEMBERSHIP.
183.9Notwithstanding any provisions of Minnesota Statutes, section 424A.04, or other
183.10law to the contrary, the Brimson Firefighters Relief Association must be managed by a
183.11board of trustees consisting of ten members, with six trustees elected from the membership
183.12of the relief association, one trustee drawn from the officials of each municipality served
183.13by the fire department to which the relief association is directly associated, and one trustee
183.14who is the fire chief serving with the independent nonprofit firefighting corporation.
183.15EFFECTIVE DATE.This section is effective the day after the governing body
183.16of the Fairbanks Township and its chief clerical officer timely comply with Minnesota
183.17Statutes, section 645.021, subdivisions 2 and 3.

183.18    Sec. 58. REPEALER.
183.19    Subdivision 1. Repealed for recodification. Minnesota Statutes 2008, sections
183.20424A.001, subdivision 7; 424A.02, subdivisions 4, 6, 8a, and 8b; and 424B.10, subdivision
183.211, are repealed.
183.22    Subd. 2. Repealed as obsolete. Minnesota Statutes 2008, section 424A.09, is
183.23repealed.
183.24    Subd. 3. Substantive repeal. Minnesota Statutes 2008, section 424A.02,
183.25subdivision 9b, is repealed.

183.26ARTICLE 11
183.27CORRECTION OF PRIOR DRAFTING ERRORS

183.28    Section 1. Minnesota Statutes 2008, section 354.66, subdivision 6, is amended to read:
183.29    Subd. 6. Insurance. A board of an employing district entering into an agreement
183.30authorized by this section shall take all steps necessary to assure continuance of any
183.31insurance programs furnished or authorized a full-time teacher on an identical basis and
183.32with identical sharing of costs for a part-time teacher pursuant to this section, provided,
184.1however, that the requirements of this sentence may be modified by a collective bargaining
184.2agreement between a board and an exclusive representative pursuant to chapter 179 179A.
184.3Teachers as defined in section 136F.43 employed on a less than 75 percent time basis
184.4pursuant to this section shall be eligible for state paid insurance benefits as if the teachers
184.5were employed full time.
184.6EFFECTIVE DATE.This section is effective the day following final enactment.

184.7    Sec. 2. Minnesota Statutes 2008, section 356.32, subdivision 2, is amended to read:
184.8    Subd. 2. Covered retirement plans. The provisions of this section apply to the
184.9following retirement plans:
184.10(1) the general state employees retirement plan of the Minnesota State Retirement
184.11System, established under chapter 352;
184.12(2) the correctional state employees retirement plan of the Minnesota State
184.13Retirement System, established under chapter 352;
184.14(3) the State Patrol retirement plan, established under chapter 352B;
184.15(4) the general employees retirement plan of the Public Employees Retirement
184.16Association, established under chapter 353;
184.17(5) the public employees police and fire plan of the Public Employees Retirement
184.18Association, established under chapter 353;
184.19(6) the Teachers Retirement Association, established under chapter 354;
184.20(7) the Minneapolis Employees Retirement Fund, established under chapter 422A;
184.21(8) the Duluth Teachers Retirement Fund Association, established under chapter
184.22354A; and
184.23(9) the Minneapolis Teachers Retirement Fund Association, established under
184.24chapter 354A; and
184.25(10) (9) the St. Paul Teachers Retirement Fund Association, established under
184.26chapter 354A.
184.27EFFECTIVE DATE.This section is effective the day following final enactment.

184.28    Sec. 3. Minnesota Statutes 2008, section 422A.06, subdivision 8, is amended to read:
184.29    Subd. 8. Retirement benefit fund. (a) The retirement benefit fund consists of
184.30amounts held for payment of retirement allowances for members retired under this chapter,
184.31including any transfer amount payable under subdivision 3, paragraph (c).
184.32    (b) Unless subdivision 3, paragraph (c), applies, assets equal to the required
184.33reserves for retirement allowances under this chapter determined in accordance with the
185.1appropriate mortality table adopted by the board of trustees based on the experience of the
185.2fund as recommended by the actuary retained under section 356.214 must be transferred
185.3from the deposit accumulation fund to the retirement benefit fund as of the last business
185.4day of the month in which the retirement allowance begins. The income from investments
185.5of these assets must be allocated to this fund and any interest charge under subdivision
185.63, paragraph (c), must be credited to the fund. There must be paid from this fund the
185.7retirement annuities authorized by law. A required reserve calculation for the retirement
185.8benefit fund must be made by the actuary retained under section 356.214 and must be
185.9certified to the retirement board by the actuary retained under section 356.214.
185.10    (c) There is established a deferred yield adjustment account which must be increased
185.11by the sale or disposition of any debt securities at less than book value and must be
185.12decreased by the sale or disposition of debt securities at more than book value. At the
185.13end of each fiscal year, a portion of the balance of this account must be offset against the
185.14investment income for that year. The annual portion of the balance to be offset must be
185.15proportional to the reciprocal of the average remaining life of the bonds sold, unless the
185.16amounts are offset by gains on the future sales of these securities. The amount of this
185.17account must be included in the recognized value of assets other than corporate stocks
185.18and all other equity investments. In any fiscal year in which the gains on the sales of debt
185.19securities exceed the discounts realized on the sales of such securities, the excess must
185.20be used to reduce the balance of the account. If the realized capital gains are sufficient
185.21to reduce the balance of the account to zero, any excess gains must be available for the
185.22calculation of postretirement adjustments.
185.23    (d)(1) Annually, following June 30, the board shall use the procedures in clauses (2),
185.24(3), and (4), to determine whether a postretirement adjustment is payable and to determine
185.25the amount of any postretirement adjustment.
185.26    (2) If the Consumer Price Index for urban wage earners and clerical workers all
185.27items index published by the Bureau of Labor Statistics of the United States Department
185.28of Labor increases from June 30 of the preceding year to June 30 of the current year, the
185.29board shall certify the percentage increase. The amount certified must not exceed the
185.30lesser of the difference between the preretirement interest assumption and postretirement
185.31interest assumption in section 356.215, subdivision 8, paragraph (a), or 3.5 percent.
185.32    (3) In addition to any percentage increase certified under paragraph (b), the board
185.33shall use the following procedures to determine if a postretirement adjustment is payable
185.34under this paragraph:
185.35    (i) the board shall determine the market value of the fund on June 30 of that year;
186.1    (ii) the amount of reserves required as of the current June 30 for the annuity or
186.2benefit payable to an annuitant and benefit recipient must be determined by the actuary
186.3retained under section 356.214. An annuitant or benefit recipient who has been receiving
186.4an annuity or benefit for at least 12 full months as of the current June 30 is eligible to
186.5receive a full postretirement adjustment. An annuitant or benefit recipient who has been
186.6receiving an annuity or benefit for at least one full month, but less than 12 full months as of
186.7the current June 30, is eligible to receive a partial postretirement adjustment. The amount
186.8of the reserves for those annuitants and benefit recipients who are eligible to receive a
186.9full postretirement benefit adjustment is known as "eligible reserves." The amount of
186.10the reserves for those annuitants and benefit recipients who are not eligible to receive a
186.11postretirement adjustment is known as "noneligible reserves." For an annuitant or benefit
186.12recipient who is eligible to receive a partial postretirement adjustment, additional "eligible
186.13reserves" is an amount that bears the same ratio to the total reserves required for the
186.14annuitant or benefit recipient as the number of full months of annuity or benefit receipt as
186.15of the current June 30 bears to 12 full months. The remainder of the annuitant's or benefit
186.16recipient's reserves are "noneligible reserves";
186.17    (iii) the board shall determine the percentage increase certified under clause (2)
186.18multiplied by the eligible required reserves, as adjusted for mortality gains and losses,
186.19determined under item (ii);
186.20    (iv) the board shall add the amount of reserves required for the annuities or benefits
186.21payable to annuitants and benefit recipients of the participating public pension plans or
186.22funds as of the current June 30 to the amount determined under item (iii);
186.23    (v) the board shall subtract the amount determined under item (iv) from the market
186.24value of the fund determined under item (i);
186.25    (vi) the board shall adjust the amount determined under item (v) by the cumulative
186.26current balance determined under item (viii) and any negative balance carried forward
186.27under item (ix);
186.28    (vii) a positive amount resulting from the calculations in items (i) to (vi) is the excess
186.29market value. A negative amount is the negative balance;
186.30    (viii) the board shall allocate one-fifth of the excess market value or one-fifth of the
186.31negative balance to each of five consecutive years, beginning with the fiscal year ending
186.32the current June 30; and
186.33    (ix) to calculate the postretirement adjustment under this paragraph based on
186.34investment performance for a fiscal year, the board shall add together all excess market
186.35value allocated to that year and subtract from the sum all negative balances allocated to
186.36that year. If this calculation results in a negative number, the entire negative balance must
187.1be carried forward and allocated to the next year. If the resulting amount is positive, a
187.2postretirement adjustment is payable under this paragraph. The board shall express a
187.3positive amount as a percentage of the total eligible required reserves certified to the
187.4board under item (ii).
187.5    (4) The board shall determine the amount of any postretirement adjustment which
187.6is payable using the following procedure:
187.7    (i) the total "eligible" required reserves as of the first of January next following the
187.8end of the fiscal year for the annuitants and benefit recipients eligible to receive a full or
187.9partial postretirement adjustment as determined by item (ii) must be certified to the board
187.10by the actuary retained under section 356.214. The total "eligible" required reserves
187.11must be determined by the actuary retained under section 356.214 on the assumption that
187.12all annuitants and benefit recipients eligible to receive a full or partial postretirement
187.13adjustment will be alive on the January 1 in question; and
187.14    (ii) the board shall add the percentage certified under clause (2) to any positive
187.15percentage calculated under clause (3). The board shall not subtract from the percentage
187.16certified under paragraph (b) any negative amount calculated under clause (3). The sum
187.17of these percentages must be carried to five decimal places and must be certified as the
187.18full postretirement adjustment percentage.
187.19    (e) The board shall determine the amount of the postretirement adjustment payable
187.20to each eligible annuitant and benefit recipient. The dollar amount of the postretirement
187.21adjustment must be calculated by applying the certified postretirement adjustment
187.22percentage to the amount of the monthly annuity or benefit payable to each eligible
187.23annuitant or benefit recipient eligible for a full adjustment.
187.24    The dollar amount of the partial postretirement adjustment payable to each annuitant
187.25or benefit recipient eligible for a partial adjustment must be calculated by first determining
187.26a partial percentage amount that bears the same ratio to the certified full adjustment
187.27percentage amount as the number of full months of annuity or benefit receipt as of the
187.28current June 30 bears to 12 full months. The partial percentage amount determined
187.29must then be applied to the amount of the monthly annuity or benefit payable to each
187.30annuitant or benefit recipient eligible to receive a partial postretirement adjustment. The
187.31postretirement adjustments are payable on January 1 following the calculations required
187.32under this section and must thereafter be included in the monthly annuity or benefit paid to
187.33the recipient. Any adjustments under this section must be paid automatically unless the
187.34intended recipient files a written notice with the applicable participating public pension
187.35fund or plan requesting that the adjustment not be paid.
188.1    (f) As of June 30 annually, the actuary retained under section 356.214 shall calculate
188.2the amount of required reserves representing any mortality gains and any mortality losses
188.3incurred during the fiscal year and report the results of those calculations to the plan.
188.4The actuary shall report separately the amount of the reserves for annuitants and benefit
188.5recipients who are eligible for a postretirement benefit adjustment and the amount of
188.6reserves for annuitants and benefit recipients who are not eligible for a postretirement
188.7benefit adjustment. If the net amount of required reserves represents a mortality gain,
188.8the board shall sell sufficient securities or transfer sufficient available cash to equal the
188.9amount. If the amount of required reserves represents a mortality loss, the plan shall
188.10transfer an amount equal to the amount of the net mortality loss. The amount of the
188.11transfers must be determined before any postretirement benefit adjustments have been
188.12made. All transfers resulting from mortality adjustments must be completed annually
188.13by December 31 for the preceding June 30. Interest is payable on any transfers after
188.14December 31 based upon the preretirement interest assumption for the participating plan
188.15or fund as specified in section 356.215, subdivision 8, stated as a monthly rate. Book
188.16values of the assets of the fund must be determined only after all adjustments for mortality
188.17gains and losses for the fiscal year have been made.
188.18    (g) All money necessary to meet the requirements of the certification of withdrawals
188.19and all money necessary to pay postretirement adjustments under this section are hereby
188.20and from time to time appropriated from the postretirement investment fund to the board.
188.21    (h) Annually, following the calculation of any postretirement adjustment payable
188.22from the retirement benefit fund, the board of trustees shall submit a report to the
188.23executive director of the Legislative Commission on Pensions and Retirement and to the
188.24commissioner of finance indicating the amount of any postretirement adjustment and
188.25the underlying calculations on which that postretirement adjustment amount is based,
188.26including the amount of dividends, the amount of interest, and the amount of net realized
188.27capital gains or losses utilized in the calculations.
188.28    (i) With respect to a former contributing member who began receiving a retirement
188.29annuity or disability benefit under section 422A.151, paragraph (a), clause (2), after June
188.3030, 1997, or with respect to a survivor of a former contributing member who began
188.31receiving a survivor benefit under section 422A.151, paragraph (a), clause (2), after June
188.3230, 1997, the reserves attributable to the one percent lower amount of the cost-of-living
188.33adjustment payable to those annuity or benefit recipients annually must be transferred back
188.34to the deposit accumulation fund to the credit of the Metropolitan Airports Commission.
188.35The calculation of this annual reduced cost-of-living adjustment reserve transfer must be
188.36reviewed by the actuary retained under section 356.214.
189.1EFFECTIVE DATE.This section is effective retroactively from June 30, 2008.

189.2    Sec. 4. Minnesota Statutes 2008, section 422A.08, subdivision 5, is amended to read:
189.3    Subd. 5. Service credit purchase. Any contributor who prior to entering the service
189.4of the city was an employee of a public corporation, is authorized, using the procedure in
189.5subdivision 5a section 356.551, to purchase allowable service credit in the retirement fund
189.6for employment by the public corporation in the same manner as though the service had
189.7been rendered to the city, providing that the individual has not received service credit and
189.8is not eligible to receive service credit for this period under any other plan or fund listed
189.9in section 356.30, subdivision 3. Before receiving credit for service rendered to a public
189.10corporation as herein set forth, the contributing employee shall make application therefor
189.11in writing to the retirement board, and shall contribute to the retirement fund the amount
189.12specified in subdivision 5a section 356.551.
189.13EFFECTIVE DATE.This section is effective the day following final enactment.

189.14    Sec. 5. Laws 1989, chapter 319, article 11, section 13, is amended to read:
189.15    Sec. 13. REPEALER.
189.16    Laws 1967, chapter 815; Laws 1978, chapter 683; and Laws 1981, chapter 224,
189.17sections 2 and 5 section 245, are repealed.
189.18EFFECTIVE DATE.This section is effective the day following final enactment
189.19and applies retroactively from June 2, 1989.

189.20    Sec. 6. Laws 2008, chapter 349, article 14, section 13, is amended to read:
189.21    Sec. 13. REPEALER OF PRIOR INCONSISTENT SPECIAL VOLUNTEER
189.22FIRE RELIEF ASSOCIATION ANCILLARY BENEFIT LEGISLATION.
189.23    Subdivision 1. Anoka. Laws 1969, chapter 352 252, section 1, subdivisions 3,
189.244, 5, and 6, are repealed.
189.25    Subd. 2. Butterfield. Laws 1975, chapter 185, section 1, is repealed.
189.26    Subd. 3. Coon Rapids. Laws 1973, chapter 304, section 1, subdivisions 3, 4, 5, 6,
189.277, 8, and 9, are repealed.
189.28    Subd. 4. Edina. (1) Laws 1965, chapter 592, section 3, as amended added by Laws
189.291969, chapter 644, section 2, and amended by Laws 1975, chapter 229, section 2; (2) Laws
189.301965, chapter 592, section 4, as amended added by Laws 1969, chapter 644, section 2, and
189.31amended by Laws 1975, chapter 229, section 3, Laws 1985, chapter 261, section 37, and
190.1Laws 1991, chapter 125, section 1; (3) Laws 1985, chapter 261, section 37, as amended by
190.2Laws 1991, chapter 125, section 1; and (4) Laws 1991, chapter 125, section 1, are repealed.
190.3    Subd. 5. Fairmont. Laws 1967, chapter 575, sections 2, as amended by Laws 1979,
190.4chapter 201, section 23; 3; and 4, are repealed.
190.5    Subd. 6. Falcon Heights. Laws 1969, chapter 526, sections 3; 4; 5, as amended
190.6by Laws 1974, chapter 208, section 2; and 7, as amended by Laws 1974, chapter 208,
190.7section 3, are repealed.
190.8    Subd. 7. Golden Valley. Laws 1971, chapter 140, sections 2, as amended by Laws
190.91973, chapter 30, section 2; 3, as amended by Laws 1973, chapter 30, section 3; 4, as
190.10amended by Laws 1973, chapter 30, section 4; and 5, as amended by Laws 1973, chapter
190.1130, section 5; and Laws 1993, chapter 244, article 4, section 1, are repealed.
190.12    Subd. 8. Wayzata. Laws 1973, chapter 472, section 1, as amended by Laws 1976,
190.13chapter 272, section 1, and Laws 1979, chapter 201, section 33, is repealed.
190.14    Subd. 9. White Bear Lake. Laws 1971, chapter 214, section 1, subdivisions
190.15sections 1, 2, 3, 4, and 5, are repealed.
190.16EFFECTIVE DATE; LOCAL APPROVAL.(a) Subdivision 1 is effective the day
190.17after the governing body of Anoka and its chief clerical officer timely complete their