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Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1984 

                        CHAPTER 564-S.F.No. 147 
           An act relating to retirement; making various changes 
          in benefits, contributions, and financing in laws 
          governing various public pension funds;  directing 
          reimbursement or credit of certain public pension 
          contributions; appropriating funds; amending Minnesota 
          Statutes 1982, sections 3.85, by adding subdivisions; 
          352.04, subdivisions 2 and 3; 352.113, subdivision 3; 
          352.115, subdivision 1; 352.12, subdivisions 1 and 2; 
          352.22, subdivision 2; 352.92; 352.93, subdivisions 2 
          and 3; 352.95, subdivision 1a; 352B.11, subdivision 2; 
          353.27, subdivision 3a; 353.30, subdivision 1c; 
          353.31, subdivision 1; 353.32, subdivision 1a; 353.33, 
          subdivision 2; 353.651, subdivision 3; 354.42, 
          subdivision 5; 354.44, subdivision 6; 354.46, 
          subdivisions 1 and 2; 354.47, subdivision 1; 354.48, 
          subdivisions 2 and 3a; 354.49, subdivisions 2 and 3; 
          354.62, subdivision 5; 354A.23, by adding a 
          subdivision; 354A.37, subdivisions 3 and 4; 356.20, 
          subdivision 4; and 356.215, subdivision 4; Minnesota 
          Statutes 1983 Supplement, sections 3A.03, subdivision 
          2; 352.113, subdivision 2; 352.115, subdivision 8; 
          352B.02, subdivision 1; 352B.11, subdivision 1; 
          352C.09, subdivision 2; 353.32, subdivision 1; and 
          353.34, subdivision 2; Laws 1983, chapters 301, 
          section 225, subdivision 1, and by adding a 
          subdivision; and 314, article 12, section 1, 
          subdivision 2; proposing new law coded in Minnesota 
          Statutes, chapter 356; repealing Minnesota Statutes 
          1982, sections 352.022; 353.38; 354.07, subdivision 8; 
          and Laws 1983, chapter 301, section 225, subdivision 2.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1982, section 3.85, is 
amended by adding a subdivision to read: 
    Subd. 11.  [RULES FOR PENSION VALUATIONS AND COST 
ESTIMATES.] The commission shall by June 30, 1985, adopt rules 
prescribing specific detailed methods of calculating, 
evaluating, and displaying current and proposed law liabilities, 
costs, and actuarial equivalents of all public employee pension 
plans in Minnesota.  These rules shall be consistent with the 
general direction prescribed in chapter 356.  
    There is appropriated from the general fund to the 
commission not to exceed $75,000 in fiscal year 1985, and 
$25,000 in each fiscal year thereafter for developing, 
implementing, and annually updating the rules adopted pursuant 
to this section.  
    Sec. 2.  Minnesota Statutes 1982, section 3.85, is amended 
by adding a subdivision to read:  
    Subd. 12.  [LEGISLATIVE COMMISSION ON PENSIONS AND 
RETIREMENT TO PREPARE VALUATIONS AND MAKE REPORTS TO 
LEGISLATURE.] (a) The legislative commission on pensions and 
retirement shall annually contract with an established actuarial 
consulting firm to conduct valuations and finance adequacy 
studies for the funds specified in (b).  The contract shall also 
include provisions for performing cost analyses of proposals for 
changes in benefit and funding policies.  
    (b) The plans which the legislative commission on pension 
and retirement shall include in the contract for valuation and 
analysis are:  
    (1) the Statewide Teachers Retirement Association;  
    (2) the General Plan, Minnesota State Retirement System;  
    (3) the Correctional Plan, Minnesota State Retirement 
System;  
    (4) the State Patrol Plan, Minnesota State Retirement 
System;  
    (5) the Judges Plan, Minnesota State Retirement System;  
    (6) the Minneapolis Employees Retirement Fund;  
    (7) the General Plan, Public Employees Retirement 
Association;  
    (8) the Police and Fire Plan, Public Employees Retirement 
Association;  
    (9) the Duluth Teachers Retirement Association;  
    (10) the Minneapolis Teachers Retirement Association;  
    (11) the St. Paul Teachers Retirement Association; and 
    (12) the Legislator's Retirement Plan.  
    (c) The annual contracts shall include the following 
objectives:  
    (1) Every year beginning in fiscal year 1986, the contract 
shall specify completion of standard valuations for the period 
ending June 30 of the preceding fiscal year with contents as 
described in section 356.215, subdivision 4; and cash flow 
forecasts through the amortization target date.  
    (2) Every four years, beginning in fiscal year 1986, the 
contract shall specify completion of an experience study for the 
four-year period ending June 30 of the preceding fiscal year. 
The experience study shall evaluate the appropriateness of 
continuing to use for future valuations the assumptions relating 
to:  individual salary progression; rate of return on 
investments; payroll growth; mortality; withdrawal; disability; 
retirement; and any other experience-related factor that could 
impact the future financial condition of the retirement funds.  
    (d) The commission shall annually prepare a report to the 
legislature summarizing the results of the valuations and cash 
flow projections and shall include with its report 
recommendations concerning the appropriateness of the support 
rates to achieve proper funding of the retirement funds by the 
required funding dates.  It shall also, within two months of the 
completion of the quadrennial experience studies, prepare a 
report to the legislature on the appropriateness of the 
valuation assumptions listed in paragraph (c), clause (2).  
    (e) Beginning with the fiscal year commencing July 1, 1985, 
there is annually appropriated to the commission $400,000 for 
the purchase of actuarial consulting services to prepare annual 
valuations, cash flow forecasts, and cost analyses of benefit or 
funding proposals.  
    (f) There is appropriated quadrennially, beginning in 
fiscal year 1986, $100,000 for the purchase of actuarial 
consulting services to perform the experience study described in 
paragraph (c), clause (2).  
    Sec. 3.  Minnesota Statutes 1983 Supplement, section 3A.03, 
subdivision 2, is amended to read: 
    Subd. 2.  [REFUND.] (1) Any person who has made 
contributions pursuant to subdivision 1 who is no longer a 
member of the legislature is entitled to receive upon 
application to the director a refund of all contributions 
credited to the member's account with interest at the rate of 
3-1/2 five percent per annum compounded annually after the third 
year of service.  
    (2) The refund of contributions as provided in clause (1) 
above terminates all rights of a former member of the 
legislature or his or her survivors under this chapter.  Should 
the former member of the legislature again be a member of the 
legislature after having taken a refund as provided above, he or 
she shall be considered a new member.  However, a new member may 
reinstate the rights and credit for service forfeited, provided 
the new member repays all refunds taken plus interest thereon at 
six percent per annum compounded annually.  
    (3) No person shall be required to apply for or accept a 
refund. 
    Sec. 4.  Minnesota Statutes 1982, section 352.04, 
subdivision 2, is amended to read: 
    Subd. 2.  [EMPLOYEE CONTRIBUTIONS.] The employee 
contribution to the fund shall be an amount equal to 3.46 3.73 
percent of salary, beginning with the first full pay period 
after December 31, 1981 June 30, 1984.  These contributions 
shall be made by deduction from salary in the manner provided in 
subdivision 4. 
    Sec. 5.  Minnesota Statutes 1982, section 352.04, 
subdivision 3, is amended to read: 
    Subd. 3.  [EMPLOYER CONTRIBUTIONS.] The employer 
contribution to the fund shall be an amount equal to the total 
amount deducted from the salaries of employees on each payroll 
abstract, plus an additional 1.58 percent of salary beginning 
with the first full pay period after July 1, 1982. For the 
period beginning with the first full pay period after December 
31, 1981, and ending with the last full pay period before July 
1, 1982, the contribution shall be an amount equal to 3.46 
percent of salary plus an additional 1.74 percent of salary. The 
employer contribution shall be made in the manner provided in 
subdivisions 5 and 6 3.90 percent of salary beginning with the 
first full pay period after June 30, 1984.  
    Sec. 6.  Minnesota Statutes 1983 Supplement, section 
352.113, subdivision 2, is amended to read: 
    Subd. 2.  [APPLICATION; ACCRUAL OF BENEFITS.] An employee 
making claim for a total and permanent disability benefit shall 
file a written application therefor in the office of the system 
in a form and manner prescribed by the executive director.  The 
benefit shall begin to accrue 90 days the day following the 
commencement of disability or the day following the last day 
paid whichever is later but in no event earlier than 60 days 
prior to the date the application is filed with the director.  
    Sec. 7.  Minnesota Statutes 1982, section 352.113, 
subdivision 3, is amended to read: 
    Subd. 3.  [COMPUTATION OF BENEFITS.] The total and 
permanent disability benefit shall be computed in the manner 
provided in section 352.115.  The disability benefit shall be 
the normal annuity without reduction for each month the employee 
is under age 65 at the time of becoming disabled.  A disabled 
employee may elect to receive the normal disability benefit or 
an optional annuity as provided in section 352.116, subdivision 
3.  The election of an optional annuity shall be made prior to 
the commencement of payment of the disability benefit and shall 
be effective 30 days after receipt of the election or the date 
on which the disability begins to accrue as provided in 
subdivision 2, whichever occurs later.  Upon becoming effective, 
the optional annuity shall begin to accrue on the same date as 
provided for the disability benefit.  
    Sec. 8.  Minnesota Statutes 1982, section 352.115, 
subdivision 1, is amended to read: 
    Subdivision 1.  [AGE AND SERVICE REQUIREMENTS.] After 
separation from state service any employee (a) who has attained 
the age of at least 62 55 years and who is entitled to credit 
for not less than ten years allowable service or (b) who has 
attained the age of at least 58 years and who is entitled to 
received credit for not less than 20 30 years allowable service 
regardless of age is entitled upon application to a retirement 
annuity. 
    Sec. 9.  Minnesota Statutes 1983 Supplement, section 
352.115, subdivision 8, is amended to read: 
    Subd. 8.  [ACCRUAL OF ANNUITY.] State employees shall make 
application for an annuity but such application shall not be 
made more than 60 days prior to the time the employee is 
eligible to retire by reason of both age and service 
requirements.  If the director determines an applicant for 
annuity has fulfilled all the requirements of the law to entitle 
him to an annuity, he shall authorize payment thereof in 
accordance with the provisions of this chapter and payment shall 
be made pursuant to this authorization.  An annuity shall begin 
to accrue no earlier than 60 days prior to the date the 
application is filed with the director except that if an 
optional annuity as provided in section 352.116, subdivision 3 
is selected the annuity shall begin to accrue 30 days after the 
application is filed with the director, but in no event prior to 
the day following the termination of state service or prior to 
the day the employee is eligible to retire by reason of both age 
and service requirements.  The retirement annuity shall cease 
with the last payment which had accrued to the retired employee 
during his lifetime unless he elected an optional annuity 
provided in section 352.116, subdivision 3, and he had become 
entitled to payment thereof.  The joint and last survivor 
annuity shall cease with the last payment received by the 
survivor in his or her lifetime.  If a retired employee had not 
selected an optional annuity, or a survivor annuity is not 
payable under the option, and a spouse survives, such spouse 
shall be entitled only to the annuity for the calendar month in 
which the retired employee died.  If an optional annuity is 
payable after the death of the retired employee, the survivor 
shall be entitled to the annuity for the calendar month in which 
the retired employee died.  
    Sec. 10.  Minnesota Statutes 1982, section 352.12, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DEATH BEFORE TERMINATION OF SERVICE.] If 
an employee dies before his state service has terminated and 
neither a survivor annuity nor a reversionary annuity is payable 
or if a former employee who has sufficient service credit to be 
entitled to an annuity dies before the benefit has become 
payable, the director shall make a refundment to his last 
designated beneficiary or, if there be none, to his surviving 
spouse or, if none, to the employee's surviving children in 
equal shares or, if none, to the employee's surviving parents in 
equal shares or, if none, to the representative of his estate in 
an amount equal to his accumulated contributions plus interest 
thereon to the date of death at the rate of three and one-half 
five percent per annum compounded annually.  In the event an 
employee dies who has received a refundment which he had 
subsequently repaid in full, interest shall be paid on such 
repaid refundment only from the date of repayment.  If the 
repayment was made in installments, interest shall be paid only 
from the date installment payments began.  The designated 
beneficiary, surviving spouse or representative of the estate of 
an employee who had received a disability benefit shall not be 
entitled to interest upon any balance remaining to his credit in 
the fund at the time of death.  
    Sec. 11.  Minnesota Statutes 1982, section 352.12, 
subdivision 2, is amended to read: 
    Subd. 2.  [SURVIVING SPOUSE BENEFIT.] If an employee or 
former employee who has attained the age of at least 62 55 years 
and has credit for not less than ten years allowable service or 
who has attained the age of at least 58 years and has credit for 
not less than 20 years allowable service dies before his state 
service has terminated or if an employee who has filed a valid 
application for an annuity or disability benefit prior to the 
termination of his state service or who has credit for not less 
than 30 years of allowable service, regardless of age attained, 
dies before the an annuity or disability benefit has become 
payable, notwithstanding any designation of beneficiary to the 
contrary, his or her surviving spouse may elect to receive, in 
lieu of the refundment refund with interest provided in 
subdivision 1, an annuity equal to the joint and 50 100 percent 
survivor annuity which the employee could have qualified for had 
he retired or she terminated service on the date of death,.  The 
annuity shall be computed as provided in section 352.115, 
subdivisions 1, 2, and 3, and section 352.116, subdivisions 1 
and 3.  The annuity shall cease with the last payment received 
by the surviving spouse in his or her lifetime.  An amount equal 
to the excess, if any, of the accumulated contributions which 
were credited to the account of the deceased employee over and 
above the total of the benefits paid and payable to the 
surviving spouse shall be paid to the deceased employee's last 
designated beneficiary or, if none, to the surviving children of 
the deceased spouse in equal shares or, if none, to the 
surviving parents of the deceased spouse or, if none, to the 
representative of the estate of such deceased spouse.  Any 
employee may request in writing that this subdivision not apply 
and that payment be made only to his designated beneficiary as 
otherwise provided by this chapter. 
    Sec. 12.  Minnesota Statutes 1982, section 352.22, 
subdivision 2, is amended to read: 
    Subd. 2.  [AMOUNT OF REFUNDMENT.] Except as provided in 
subdivision 3, any person who ceased to be a state employee 
after June 30, 1973, by reason of termination of state service 
shall receive a refundment in an amount equal to his accumulated 
contributions plus interest at the rate of three and one-half 
five percent per annum compounded annually on deductions taken 
after the third year of coverage except that if the employee, 
due to age, could not qualify for an annuity upon reaching 
compulsory retirement age had he continued in covered 
employment, he shall be paid interest from the date of 
coverage.  Such interest shall be computed to the first day of 
the month in which the refund is processed and shall be based on 
fiscal year balances.  
    Sec. 13.  Minnesota Statutes 1982, section 352.92, is 
amended to read: 
    352.92 [CORRECTIONAL EMPLOYEE CONTRIBUTIONS.] 
    Subdivision 1.  [EMPLOYEE CONTRIBUTIONS.] Beginning with 
the first full pay period after July 1, 1982 1984, in lieu of 
employee contributions payable under section 352.04, subdivision 
2, contributions by covered correctional employees shall be in 
an amount equal to 4.50 4.90 percent of salary.  For the period 
beginning with the first full pay period after December 31, 
1981, and ending with the last full pay period before July 1, 
1982, the contribution shall be in an amount equal to 3.78 
percent of salary.  
    Subd. 2.  [EMPLOYER CONTRIBUTIONS.] Beginning with the 
first full pay period after July 1, 1982 1984, in lieu of 
employer contributions payable under section 352.04, subdivision 
3, the employer shall contribute for covered correctional 
employees (1) an amount equal to 1-1/2 times the deduction from 
salaries of covered correctional employees on each payroll 
abstract, plus (2) an additional amount of 1.32 percent of 
salaries of covered correctional employees on each payroll 
abstract.  For the period beginning with the first full pay 
period after December 31, 1981, and ending with the last full 
pay period before July 1, 1982, the contribution shall be an 
amount equal to 5.66 percent of salaries of covered correctional 
employees on each payroll abstract plus an additional amount 
equal to 3.16 percent of salaries of covered correctional 
employees on each payroll abstract 8.70 percent of salary.  
    Sec. 14.  Minnesota Statutes 1982, section 352.93, 
subdivision 2, is amended to read: 
    Subd. 2.  The monthly annuity under this section shall be 
determined by multiplying the average monthly salary by the 
number of years, or completed months, of covered correctional 
service by 2.5 percent for the first 20 25 years of correctional 
service and two percent for each year thereafter; provided 
however, the monthly annuity shall not exceed 75 percent of the 
average monthly salary.  
    Sec. 15.  Minnesota Statutes 1982, section 352.93, 
subdivision 3, is amended to read: 
    Subd. 3.  The annuity under this section shall begin to 
accrue as provided in section 352.115, subdivision 8, and shall 
be paid for an additional 84 full calendar months or to the 
first of the month following the month in which he the employee 
becomes age 65, whichever occurs first, except that in no event 
shall payment cease prior to the first of the month following 
the month in which the employee becomes 62, and then be reduced 
to the amount as calculated under section 352.115, except that 
if this amount, when added to the social security benefit based 
on state service the employee is eligible to receive at such 
time, is less than the benefit payable under subdivision 2, the 
retired employee shall receive an amount that when added to such 
social security benefit will equal the amount payable under 
subdivision 2.  When an annuity is reduced under this 
subdivision, the percentage adjustments, if any, that have been 
applied to the original annuity under section 11A.18, prior to 
the reduction, shall be compounded and applied to the reduced 
annuity.  A former correctional employee employed by the state 
in a position covered by the regular plan between the ages of 58 
and 65 shall receive a partial return of his correctional 
contributions at retirement with five percent interest based on 
the following formula: 
 
 Employee contributions             Years and complete    
 contributed as a                   months of regular     
 correctional employee              service between       
 in excess of the                   ages 58 and 65        
 contributions such       X        ....................   
 employee would have                      7               
 contributed as a                                         
 regular employee                                         
    Sec. 16.  Minnesota Statutes 1982, section 352.95, 
subdivision 1a, is amended to read: 
    Subd. 1a.  [OPTIONAL ANNUITY ELECTION.] A disabled 
correctional employee may elect the normal disability benefit or 
an optional annuity as provided in section 352.116, subdivision 
3.  The election of an optional annuity shall be made prior to 
commencement of payment of the disability benefit and shall be 
effective 30 days after receipt of the election or the date on 
which the disability benefit begins to accrue as provided in 
subdivision 3, whichever occurs later.  Upon becoming effective, 
the optional annuity shall begin to accrue on the same date as 
provided for the disability benefit.  
    Sec. 17.  Minnesota Statutes 1983 Supplement, section 
352B.02, subdivision 1, is amended to read: 
    Subdivision 1.  There is hereby established a state patrol 
retirement fund, the membership of which shall consist of all 
persons defined in section 352B.01, subdivision 2.  Each member 
shall pay a sum equal to 8.5 percent of the member's salary.  
Member contribution amounts shall be deducted each pay period by 
the department head, who shall cause the total amount of the 
deductions to be paid to the state treasurer, and shall cause a 
detailed report of all deductions to be made each pay period to 
the executive director of the Minnesota state retirement 
system.  In addition thereto, there shall be paid out of money 
appropriated to the departments for this purpose, by the 
department heads, a sum equal to 12 18.9 percent of the salary 
upon which deductions were made, and a sum equal to nine percent 
of the salaries upon which deductions were made for the purpose 
of amortizing the actuarial deficit of the fund.  
    These amounts shall be credited to the state patrol 
retirement fund.  All moneys received shall be deposited by the 
state treasurer in the state patrol retirement fund.  Out of the 
fund shall be paid the administrative expenses of the retirement 
fund, and the benefits and annuities as hereinafter provided.  
The legislative auditor shall audit the fund and the executive 
director shall procure an actuarial study of the fund in 
accordance with chapter 356, the cost of which shall be borne by 
the fund.  
    Sec. 18.  Minnesota Statutes 1983 Supplement, section 
352B.11, subdivision 1, is amended to read: 
    Subdivision 1.  [REFUND OF PAYMENTS.] Should any member who 
has not received other benefits under this chapter become 
separated, either voluntarily or involuntarily, from state 
service that entitled him or her to be a member, the member, or 
in the event of the member's death, the member's estate, shall 
be entitled to receive a refund of all payments which have been 
made by salary deductions plus interest at the rate of five 
percent per annum compounded annually upon application on a form 
prescribed by the executive director. 
    Sec. 19.  Minnesota Statutes 1982, section 352B.11, 
subdivision 2, is amended to read: 
    Subd. 2.  [DEATH; PAYMENT TO SPOUSE AND CHILDREN.] In the 
event any member serving actively as a member, a member 
receiving the disability benefit provided by section 352B.10, 
clause (1), or a former member receiving a disability benefit as 
provided by section 352B.10, clause (3) dies from any cause, the 
surviving spouse and dependent child or dependent children shall 
be entitled to benefit payments as follows: 
    (a) A member with at least ten years of allowable service 
or a former member with at least 20 years of allowable service 
is deemed to have elected a 100 percent joint and survivor 
annuity payable to a surviving spouse only on or after the date 
the member or former member attained or would have attained the 
age of 55. 
    (b) The surviving spouse of a member who had credit for 
less than ten years of service shall receive, for life, a 
monthly annuity equal to 20 percent of that portion of the 
average monthly salary of the member from which deductions were 
made for retirement.  If the surviving spouse remarries, the 
annuity shall cease as of the date of the remarriage. 
     (c) The surviving spouse of a member who had credit for at 
least ten years of service and who dies after attaining 55 years 
of age, may elect to receive a 100 percent joint and survivor 
annuity, for life, notwithstanding a subsequent remarriage, in 
lieu of the annuity prescribed in clause (b). 
     (d) The surviving spouse of any member who had credit for 
ten years or more and who was not 55 years of age at death, 
shall receive the benefit equal to 20 percent of the average 
monthly salary as described in clause (b) until the deceased 
member would have reached his or her 55th birthday, and 
beginning the first of the month following that date, may elect 
to receive the 100 percent joint and survivor annuity.  If the 
surviving spouse remarries prior to the deceased member's 55th 
birthdate, all benefits or annuities shall cease as of the date 
of remarriage.  Remarriage subsequent to the deceased member's 
55th birthday shall not affect the payment of the benefit. 
     (e) Each dependent child shall receive a monthly annuity 
equal to ten percent of that portion of the average monthly 
salary of the former member from which deductions were made for 
retirement.  A dependent child over the age of 18 years and 
under the age of 22 years also may receive the monthly benefit 
provided herein, if the child is continuously attending an 
accredited school as a full time student during the normal 
school year as determined by the director.  If the child does 
not continuously attend school but separates from full time 
attendance during any portion of a school year, the annuity 
shall cease at the end of the month of separation.  In addition, 
a payment of $20 per month shall be prorated equally to 
surviving dependent children when the former member is survived 
by one or more dependent children.  Payments for the benefit of 
any qualified dependent child shall be made to the surviving 
spouse, or if there be none, to the legal guardian of the 
child.  The maximum monthly benefit shall not exceed 40 percent 
of the average monthly salary for any number of children. 
    (f) If the member shall die under circumstances which 
entitle the surviving spouse and dependent children to receive 
benefits under the workers' compensation law, amounts equal to 
the workers' compensation benefits received by them shall not be 
deducted from the benefits payable pursuant to this section. 
    (g) The surviving spouse of a deceased former member who 
had credit for ten or more years of allowable service, but 
excluding the spouse of a former member receiving a disability 
benefit under the provisions of section 352B.10, clause (3), 
shall be entitled to receive the 100 percent joint and survivor 
annuity at such time as the deceased member would have reached 
his or her 55th birthdate, provided the surviving spouse has not 
remarried prior to that date.  In the event of the death of a 
former member who does not qualify for other benefits under this 
chapter, the surviving spouse or, if none, the children or heirs 
shall be entitled to receive a refund of the accumulated 
deductions left in the fund plus interest at the rate of five 
percent per annum compounded annually.  
    Sec. 20.  Minnesota Statutes 1983 Supplement, section 
352C.09, subdivision 2, is amended to read: 
    Subd. 2.  (1) Any person who has made contributions 
pursuant to subdivision 1 who is no longer a constitutional 
officer or commissioner is entitled to receive upon application 
to the director a refund of all contributions credited to his or 
her account with interest at the rate of 3-1/2 five percent per 
annum compounded annually after the third year of service.  
    (2) The refund of contributions as provided in clause (1) 
above terminates all rights of a former constitutional officer 
or commissioner or his or her survivors under the provisions of 
this chapter.  Should the former constitutional officer or 
commissioner again hold such office after having taken a refund 
as provided above, he or she shall be considered a new member 
and may reinstate the rights and credit for service forfeited 
provided he or she repays all refunds previously taken plus 
interest at six percent per annum compounded annually. 
    (3) No person shall be required to apply for or accept a 
refund. 
    Sec. 21.  Minnesota Statutes 1982, section 353.27, 
subdivision 3a, is amended to read:  
    Subd. 3a.  [ADDITIONAL EMPLOYER CONTRIBUTION.] An 
additional employer contribution shall be made equal to (a) two 
and one-half percent of the total salary of each "basic member"; 
and (b) one and one-half one-quarter of one percent of the total 
salary of each "coordinated member." These contributions shall 
be made from funds available to the employing subdivision by the 
means and in the manner provided in section 353.28. 
    Sec. 22.  Minnesota Statutes 1982, section 353.30, 
subdivision 1c, is amended to read: 
    Subd. 1c.  Any person who has received credit for at least 
30 years of allowable service or any person who has attained the 
age of at least 62 55 years but not more than 65 years, and who 
received credit for at least ten years of allowable service is 
entitled upon application to a retirement annuity in an amount 
equal to the normal annuity provided in section 353.29, 
subdivisions 2 and 3, reduced by one-quarter of one percent for 
each month that the member is under age 65 at the time of 
retirement, except that for any member who has 30 or more years 
of allowable service the reduction shall be applied only for 
each month that the member is under age 62 at the time of 
retirement. 
    Sec. 23.  Minnesota Statutes 1982, section 353.31, 
subdivision 1, is amended to read: 
    Subdivision 1.  [BENEFITS FOR SURVIVING SPOUSE AND 
DEPENDENT CHILDREN; BEFORE RETIREMENT.] Upon the death of a "  
basic member" before retirement or upon the death of a "basic 
member" who was disabled and receiving disability benefits 
pursuant to section 353.33 at the time of death who has had at 
least 18 months of credited allowable service, the surviving 
spouse and dependent children of the member, as defined in 
section 353.01, subdivisions 15 and 20, shall be entitled to 
receive the monthly benefit provided below: 
(a) Surviving spouse           30 50 percent of the member's
                               monthly average salary in
                               effect over the last full
                               six months of allowable
                               service preceding the month
                               in which death occurred
(b) Each dependent child       10 percent of the member's
                               monthly average salary in
                               effect over the last full
                               six months of allowable
                               service preceding the month
                               in which death occurred
    Payments for the benefit of any dependent child, as defined 
in section 353.01, subdivision 15, shall be made to the 
surviving parent, or if there be none, to the legal guardian of 
the child.  The maximum monthly benefit for a family shall not 
exceed $700 $1,000, and the minimum benefit per family shall not 
be less than 30 50 percent of the "basic member's"  specified 
average monthly salary, subject to the aforementioned maximum.  
The surviving spouse benefit shall terminate upon the remarriage 
of the spouse, and the dependent children's benefit shall be 
reduced pro tanto when any child is no longer dependent. 
    Any survivor of a "basic member" whose average salary was 
less than $75 per month shall not be entitled to the benefits 
provided in this subdivision.  Prior to payment of any survivor 
benefit pursuant to this subdivision, in lieu of that benefit, 
the surviving dependent spouse may elect to receive the joint 
and survivor annuity provided pursuant to section 353.32, 
subdivision 1a.  
    Except for any benefits provided pursuant to section 
353.32, subdivisions 1 and 1a, there are no survivor benefits 
payable to the surviving spouse or dependent children of a 
deceased "coordinated member". 
    Sec. 24.  Minnesota Statutes 1983 Supplement, section 
353.32, subdivision 1, is amended to read: 
    Subdivision 1.  [BEFORE RETIREMENT.] If a member or former 
member who terminated public service dies before retirement or 
before he has received any retirement annuity and no other 
payment of any kind is or may become payable to any person, a 
refund shall be paid to his designated beneficiary or, if there 
be none, to his surviving spouse, or, if none, to the legal 
representative of his estate.  Such refund shall be in an amount 
equal to his accumulated deductions plus interest thereon at the 
rate of 3-1/2 five percent per annum compounded annually less 
the sum of any disability or survivor benefits, if any, that may 
have been paid by the fund; provided that a survivor who has a 
right to benefits pursuant to section 353.31 may waive such 
benefits in writing, except such benefits for a dependent child 
under the age of 18 years may only be waived pursuant to an 
order of the district court. 
    Sec. 25.  Minnesota Statutes 1982, section 353.32, 
subdivision 1a, is amended to read: 
    Subd. 1a.  [SURVIVING SPOUSE OPTIONAL ANNUITY.] If a member 
or former member who has attained the age of at least 58 55 
years and has credit for not less than 20 ten years of allowable 
service, or has attained the age of at least 62 years and who 
has credit for not less than 10 30 years of allowable service, 
dies before public service has terminated, or if an employee who 
has filed a valid application for an annuity or disability 
benefit prior to termination of public service, regardless of 
age attained, dies before the annuity or disability benefit has 
become payable, notwithstanding any designation of beneficiary 
to the contrary, the surviving spouse may elect to receive, in 
lieu of a refund with interest provided in subdivision 1, or 
survivor benefits otherwise payable pursuant to section 353.31, 
an annuity equal to the 50 100 percent joint and survivor 
annuity which the member could have qualified for had the member 
terminated service on the date of death,.  The annuity shall be 
computed as provided in sections 353.29, subdivisions 2 and 3; 
and 353.30, subdivisions 1, 1a, 1b and 1c.  No payment shall 
accrue beyond the end of the month in which entitlement to the 
annuity has terminated.  An amount equal to the excess, if any, 
of the accumulated contributions which were credited to the 
account of the deceased employee over and above the total of the 
annuities paid and payable to the surviving spouse shall be paid 
to the deceased member's last designated beneficiary or, if 
none, to the legal representative of the estate of the deceased 
member.  Any member may specify in writing that this subdivision 
shall not apply and that payment shall be made only to the 
designated beneficiary, as otherwise provided by this chapter. 
    Sec. 26.  Minnesota Statutes 1982, section 353.33, 
subdivision 2, is amended to read:  
    Subd. 2.  [APPLICATIONS; ACCRUAL OF BENEFITS.] Every claim 
or demand for a total and permanent disability benefit shall be 
initiated by written application in the manner and form 
prescribed by the executive director, filed in the office of the 
retirement association, showing compliance with the statutory 
conditions qualifying the applicant for a total and permanent 
disability benefit.  A member or former member who became 
totally and permanently disabled during his period of membership 
may file his application for total and permanent disability 
benefits within three years next following termination of public 
service, but not thereafter.  This benefit shall begin to accrue 
90 days the day following the commencement of disability, 90 
days preceding the filing of the application, or, if annual or 
sick leave is paid for more than the said 90 day period, from 
the date salary ceased whichever is later.  No payment shall 
accrue beyond the end of the month in which entitlement has 
terminated.  If the disabilitant dies prior to negotiating the 
check for the month in which death occurs, payment will be made 
to the surviving spouse, or if none, to the designated 
beneficiary, or if none, to the estate. 
    Sec. 27.  Minnesota Statutes 1983 Supplement, section 
353.34, subdivision 2, is amended to read: 
    Subd. 2.  [REFUND WITHOUT WITH INTEREST.] Except as 
provided in subdivision 1, any person who ceases to be a public 
employee shall receive a refund in an amount equal to his 
accumulated deductions without interest for the first three 
years of membership and thereafter accumulated deductions with 
interest to the first day of the month in which the refund is 
processed at the rate of three and one-half five percent per 
annum compounded annually after the third year of membership 
based on fiscal year balances. 
    Sec. 28.  Minnesota Statutes 1982, section 353.651, 
subdivision 3, is amended to read: 
    Subd. 3.  [RETIREMENT ANNUITY FORMULA.] The average salary 
as defined in subdivision 2, multiplied by two and one-half 
percent per year of allowable service for the first 20 25 years 
and two percent per year of allowable service thereafter, shall 
determine the amount of the "normal" retirement annuity.  If the 
member has earned allowable service for performing services 
other than those of a police officer or fire fighter, the 
annuity representing such service shall be computed in 
accordance with sections 353.29 and 353.30. 
    Sec. 29.  Minnesota Statutes 1982, section 354.42, 
subdivision 5, is amended to read: 
    Subd. 5.  For the purpose of amortizing the unfunded 
entry-age normal liability an additional employer contribution 
shall be made in the amount of 3.05 4.48 percent of the salary 
of each member for the purpose of amortizing the deficit in the 
fund.  For the fiscal year ending June 30, 1985, the 
commissioner of finance shall increase allotments to state 
agencies having members covered by the teachers retirement 
association in an amount equal to 1.43 percent of the salaries 
of basic and coordinated plan members of the teachers' 
retirement fund.  
   This contribution shall be made in the manner provided in 
section 354.43. 
    Sec. 30.  Minnesota Statutes 1982, section 354.44, 
subdivision 6, is amended to read: 
    Subd. 6.  [COMPUTATION OF FORMULA PROGRAM RETIREMENT 
ANNUITY.] (1) The formula retirement annuity hereunder shall be 
computed in accordance with the applicable provisions of the 
formula stated in clause (2) hereof on the basis of each 
member's average salary for the period of his formula service 
credit.  For the purposes of computing the formula benefits 
under the formula and variable program, if a combination of 
these formulas is used, the formula percentages used will be 
those percentages in each formula as continued for the 
respective years of service from one formula to the next. 
    For all years of formula service credit "average salary" 
for the purpose of determining the member's retirement annuity 
means the average salary upon which contributions were made and 
upon which payments were made to increase the salary limitation 
provided in Minnesota Statutes 1971, Section 354.511 for the 
highest five successive years of formula service credit provided 
however that such "average salary" shall not include any more 
than the equivalent of 60 monthly salary payments. 
    (2) The average salary as defined in clause (1), multiplied 
by the following percentages per year of formula service credit 
shall determine the amount of the annuity to which the member 
qualifying therefor is entitled: 
                         Coordinated Member   Basic Member
 Each year of service      1.0 percent        2.0 percent
  during first ten         per year           per year
 Each year of service      1.5 percent        2.5 percent
  thereafter               per year           per year
    (3) Where any member retires prior to age 65 under a 
formula annuity, he the member shall be paid a retirement 
annuity in an amount equal to the normal annuity provided in 
this subdivision and subdivision 7, reduced by one-half of one 
percent for each month that the member is under age 65 to and 
including age 60 and reduced by one-fourth of one percent for 
each month under age 60 65 at the time of retirement except that 
for any member who has 30 or more years of allowable service 
credit, the reduction shall be applied only for each month which 
the member is under age 62. 
    Sec. 31.  Minnesota Statutes 1982, section 354.46, 
subdivision 1, is amended to read: 
    Subdivision 1.  [BASIC PROGRAM; BENEFITS FOR SPOUSE AND 
CHILDREN OF TEACHER.] If a basic member who has at least 18 
months of allowable service credit and who has an average salary 
as defined in section 354.44, subdivision 6 equal to or greater 
than $75 dies prior to retirement or if a former basic member 
who, at the time of death, was totally and permanently disabled 
and receiving disability benefits pursuant to section 354.48 
dies prior to attaining the age of 65 years, the surviving 
dependent spouse and dependent children of the basic member or 
former basic member shall be entitled to receive a monthly 
benefit as follows: 
  (a) Surviving
  dependent
  spouse .....30 50 percent of the basic member's monthly
              average salary paid in the last full
              fiscal year preceding death
  (b) Each
  dependent
  child ......ten percent of the basic member's
              monthly average salary paid in the
              last full fiscal year preceding death
    Payments for the benefit of any dependent child under the 
age of 22 years shall be made to the surviving parent, or if 
there be none, to the legal guardian of the child.  The maximum 
monthly benefit shall not exceed $700 $1,000 for any one family, 
and the minimum benefit per family shall not be less than 30 50 
percent of the basic member's average salary, subject to the 
foregoing maximum.  The surviving dependent spouse benefit shall 
terminate upon remarriage, and the surviving dependent 
children's benefit shall be reduced pro tanto when any surviving 
child is no longer dependent. 
    If the basic member and the surviving dependent spouse are 
killed in a common disaster and if the total of all survivors 
benefits payable pursuant to this subdivision is less than the 
accumulated deductions plus interest payable, the surviving 
dependent children shall receive the difference in a lump sum 
payment. 
    If the survivor benefits provided in this subdivision 
exceed in total the monthly average salary of the deceased basic 
member, these benefits shall be reduced to an amount equal to 
the deceased basic member's monthly average salary. 
    Prior to payment of any survivor benefit pursuant to this 
subdivision, in lieu of that benefit, the surviving dependent 
spouse may elect to receive the joint and survivor annuity 
provided pursuant to subdivision 2, or may elect to receive a 
refund of accumulated deductions with interest in a lump sum as 
provided pursuant to sections 354.47, subdivision 1 or 354.62, 
subdivision 5, clause (3).  If there are any surviving dependent 
children, the surviving dependent spouse may elect to receive 
the refund of accumulated deductions only with the consent of 
the district court of the district in which the surviving 
dependent child or children reside. 
    Sec. 32.  Minnesota Statutes 1982, section 354.46, 
subdivision 2, is amended to read: 
    Subd. 2.  [DEATH WHILE ELIGIBLE DESIGNATED BENEFICIARY 
BENEFIT.] The surviving spouse of any member or former member 
who has attained the age of at least 55 years and has credit for 
at least 20 ten years of allowable service or who has credit for 
at least 30 years of allowable service irrespective of age shall 
be entitled to joint and survivor annuity coverage in the event 
of death of the member prior to retirement.  If the surviving 
spouse does not elect to receive a surviving spouse benefit 
provided pursuant to subdivision 1, if applicable, or does not 
elect to receive a refund of accumulated member contributions 
provided pursuant to sections 354.47, subdivision 1, or 354.62, 
subdivision 5, clause (3), whichever is applicable, the 
surviving spouse shall be entitled to receive, upon written 
application on a form prescribed by the executive director, a 
benefit equal to the second portion of a 100 percent joint and 
survivor annuity as provided pursuant to section 354.45 and 
computed pursuant to section 354.44, subdivisions 2, 6 or 7, 
whichever is applicable. If the member was a participant in the 
variable annuity division, the applicable portion of the benefit 
shall be computed pursuant to section 354.62, subdivision 5, 
clause (1).  The benefit shall be payable for life. 
    Sec. 33.  Minnesota Statutes 1982, section 354.47, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DEATH BEFORE RETIREMENT.] (1) If a member 
dies before retirement and is covered pursuant to the provisions 
of section 354.44, subdivision 2, and neither an optional 
annuity, nor a reversionary annuity, nor a benefit pursuant to 
section 354.46, subdivision 1 is payable to the survivors if the 
member was a basic member, the surviving spouse, or if there is 
no surviving spouse, the designated beneficiary shall be 
entitled to an amount equal to the member's accumulated 
deductions with interest credited to the account of the member 
to the date of death. 
    (2) If a member dies before retirement and is covered 
pursuant to the provisions of section 354.44, subdivisions 6 and 
7, and neither an optional annuity, nor reversionary annuity, 
nor the benefit described in section 354.46, subdivision 1 is 
payable to the survivors if the member was a basic member, the 
surviving spouse, or if there is no surviving spouse, the 
designated beneficiary shall be entitled to an amount equal to 
the member's accumulated deductions credited to the account of 
the member as of June 30, 1957 and from July 1, 1957 to the date 
of death the member's accumulated deductions plus interest at 
the rate of 3-1/2 five percent per annum compounded annually. 
    (3) The amounts payable in clause (1) or clause (2) are in 
addition to the amount payable in section 354.62, subdivision 5, 
for the member's variable annuity account.  
    Sec. 34.  Minnesota Statutes 1982, section 354.48, 
subdivision 2, is amended to read: 
    Subd. 2.  [APPLICATIONS.] Any person described in 
subdivision 1 may make application for a total and permanent 
disability benefit within 18 months following termination of 
teaching service but not thereafter.  This benefit shall begin 
to accrue 90 days the day following the commencement of 
disability or the day following the date on which salary ceases, 
whichever is later, but shall not begin to accrue more than 90 
days prior to the date the application is filed with the board.  
If salary is being received for either annual or sick leave 
during the period, payments shall accrue from the date salary 
ceases. 
    Sec. 35.  Minnesota Statutes 1982, section 354.48, 
subdivision 3a, is amended to read: 
    Subd. 3a.  [OPTIONAL ANNUITY ELECTION.] A disabled member 
may elect to receive the normal disability benefit or an 
optional annuity as provided in section 354.45, subdivision 1.  
The election of an optional annuity shall be made prior to 
commencement of payment of the disability benefit and shall be 
effective 30 days after receipt of the election or and shall 
begin to accrue on the same date on which the disability benefit 
begins to accrue, whichever occurs later.  Upon becoming 
effective, the optional annuity shall begin to accrue on the 
same date as provided for the disability benefit.  
    Sec. 36.  Minnesota Statutes 1982, section 354.49, 
subdivision 2, is amended to read: 
    Subd. 2.  Except as provided in section 354.44, subdivision 
1, any person who ceases to be a member by reason of termination 
of teaching service, shall receive a refundment in an amount 
equal to his accumulated deductions without with interest at the 
rate of five percent per annum compounded annually plus any 
variable annuity account accumulations payable pursuant to 
section 354.62, subdivision 5, clause (4). 
    Sec. 37.  Minnesota Statutes 1982, section 354.49, 
subdivision 3, is amended to read: 
    Subd. 3.  Any person who has attained the age of at least 
65 with less than ten years of credited allowable service shall 
be entitled to receive a refund in an amount equal to his 
accumulated deductions plus interest in lieu of a proportionate 
annuity pursuant to section 356.32 except those covered under 
the provisions of section 354.44, subdivisions 6 or 7 in which 
case the refund shall be an amount equal to his accumulated 
deductions credited to his account as of June 30, 1957 and after 
July 1, 1957 his accumulated deductions plus interest at the 
rate of three and one-half five percent compounded annually.  
    Sec. 38.  Minnesota Statutes 1982, section 354.62, 
subdivision 5, is amended to read: 
    Subd. 5.  [VARIABLE RETIREMENT ANNUITY.] (1) At retirement 
the amount of the member's variable account accumulation in the 
employee variable annuity contribution account, based on the 
valuation at the previous fiscal year end plus any contributions 
made by the person since the end of the previous fiscal year, 
and an equal amount from the employer variable annuity 
contribution account shall be transferred to the variable 
annuity reserve account, and the variable retirement annuity for 
the member shall be determined by the member's age, and sex, and 
the amount transferred for the member to the variable annuity 
reserve account at the date of retirement.  The amount of the 
annuity shall be calculated on the basis of an appropriate 
annuity table of mortality with an interest assumption as 
provided in section 354.07, subdivision 1 of eight percent, 
except that if the member elects to have the accumulation 
transferred to the Minnesota postretirement investment fund as 
authorized by clause (8), the annuity shall be calculated with 
an interest assumption of five percent. 
    (2) Whenever the admitted value of the annuity reserve 
account of the variable annuity division, as of June 30 of any 
year, exceeds or is less than the then present value of all 
variable annuities in force, determined in accordance with the 
rate of interest and approved actuarial tables then in effect, 
by at least two percent of the present value, the amount of each 
variable annuity payment shall be proportionately increased or 
decreased for the following year. 
    (3) The death benefit payable in the event of a member's 
death prior to retirement shall be a lump sum refund of a 
member's variable account accumulation, based on the valuation 
at the previous fiscal year end plus any contributions made by 
the person since the end of the previous fiscal year, to the 
surviving spouse, or if there is no surviving spouse to the 
designated beneficiary.  Except that if a member has made an 
election in accordance with section 354.46, then the surviving 
spouse shall receive a joint and survivor annuity as described 
in section 354.44 and computed as provided in clause (1).  An 
amount equal to the lump sum refund made in this clause shall be 
transferred from the employer contribution account to the 
variable annuity turnover account. 
     (4) Except as provided in section 354.44, subdivision 7, 
any person who ceases to be a member by reason of termination of 
teaching service, shall be entitled to a lump sum refundment of 
the member's variable account accumulations, based on the 
valuation at the previous fiscal year end plus any contributions 
made by the person since the end of the previous fiscal year.  
Application for a refundment may be made no sooner than 30 days 
after termination of teaching service if the applicant has not 
again become a teacher.  Repayment of a refundment upon 
resumption of teaching is not permitted under this section.  An 
amount equal to the refundment to the member shall be 
transferred from the employer contribution account to the 
variable annuity turnover account. 
     (5) If a member is determined to be totally and permanently 
disabled as provided in sections 354.05, subdivision 14; and 
354.48, the member shall be entitled to the annuity provided in 
this subdivision. 
     (6) Those members eligible for retirement as provided in 
section 354.44, subdivision 1 shall upon application for the 
annuity provided therein be entitled to the annuity provided in 
this subdivision.  The annuity elected in accordance with 
sections 354.44, and 354.45 shall be the annuity applicable to 
this subdivision. 
     (7) Notwithstanding section 356.18, increases in annuity 
payments pursuant to this section shall be made automatically 
unless written notice is filed by the annuitant with the 
teachers retirement association board requesting that the 
increase not be made. 
     (8) At retirement, a member may elect to have the amount of 
the member's variable annuity accumulation in the employee 
variable annuity contribution account and an equal amount from 
the employer variable annuity contribution account transferred 
to the Minnesota post-retirement investment fund as provided in 
section 354.63, subdivision 2, clause (2).  This election may 
also be made by a surviving spouse who receives an annuity under 
clause (3) of this subdivision.  The election shall be made on a 
form provided by the executive secretary. 
    Sec. 39.  Minnesota Statutes 1982, section 354A.23, is 
amended by adding a subdivision to read: 
    Subd. 3.  Notwithstanding anything to the contrary in the 
articles and bylaws of the basic programs enumerated in chapter 
354A, the payment of interest on refunds and interest on 
repayment of refunds shall be computed in the same manner as for 
the coordinated programs covered by chapter 354A.  
    Sec. 40.  Minnesota Statutes 1982, section 354A.37, 
subdivision 3, is amended to read: 
    Subd. 3.  [COMPUTATION OF REFUND AMOUNT.] A former 
coordinated member who qualifies for a refund pursuant to 
subdivision 1 shall receive a refund equal to the amount of the 
former coordinated member's accumulated contributions without 
with interest at the rate of five percent per annum compounded 
annually.  
    Sec. 41.  Minnesota Statutes 1982, section 354A.37, 
subdivision 4, is amended to read: 
    Subd. 4.  [CERTAIN REFUNDS AT AGE 65.] Any coordinated 
member who has attained the age of at least 65 with less than 
ten years of allowable service credit and has terminated active 
teaching service shall be entitled to a refund in lieu of a 
proportionate annuity pursuant to section 356.32.  The refund 
shall be equal to the coordinated member's accumulated employee 
contributions plus interest at the rate of 3-1/2 five percent 
compounded annually.  
    Sec. 42.  Minnesota Statutes 1982, section 356.20, 
subdivision 4, is amended to read: 
    Subd. 4.  [CONTENTS OF FINANCIAL REPORT.] Each financial 
report required by this section shall include: 
    (1) An exhibit prepared according to applicable actuarial 
standards enumerated in section 356.215, and specified in rules 
adopted by the legislative commission on pensions and retirement 
by an approved actuary as defined in section 356.215, 
subdivision 6 showing the accrued assets of the fund, the 
accrued liabilities, including accrued reserves, and the accrued 
unfunded liability of the fund.  The exhibit shall contain the 
certificate of an approved actuary certifying that the required 
reserves for any benefits provided under a benefit formula are 
computed in accordance with the Entry Age Normal Cost (Level 
Normal Cost) actuarial method and rules adopted by the 
legislative commission on pensions and retirement. 
    (a) Assets shown in the exhibit shall include the following 
items of actual assets: 
    Cash in office 
    Deposits in banks 
    Accounts receivable: 
    Accrued members' contributions 
    Accrued employer contributions 
    Other 
    Accrued interest on investments 
    Dividends on stocks, declared but not yet received 
    Investment in bonds at amortized cost 
    Investment in stocks at cost 
    Investment in real estate 
    Equipment at cost, less depreciation 
    Other 
     Total assets ........................ . 
     (b) The exhibit shall include a statement of the unfunded 
accrued liability of the fund.  If the assets of the fund exceed 
the liabilities, the excess shall be listed as surplus and 
indicated in the exhibit following the item of reserves. 
     (c) The exhibit shall include a footnote showing 
accumulated member contributions without interest. 
     (d) Current liabilities shown in the exhibit shall include 
the following items: 
     Current: 
     Accounts payable 
     Annuity payments 
     Survivor benefit payments 
     Refund to members 
     Accrued expenses 
     Suspense items 
     Total current liabilities ........................ . 
     (e) The exhibit shall include an item for accrued necessary 
reserves which shall be listed as "total reserves required as 
per attached schedule."  The attached schedule shall contain the 
owing information on the reserves required: 
    1.  For active members 
    a.  Retirement benefits 
    b.  Disability benefits 
    c.  Refund liability due to death or withdrawal 
    d.  Survivors' benefits 
    2.  For deferred annuitants 
    3.  For former members without vested rights 
    4.  For annuitants 
    a.  Retirement 
    b.  Disability annuities 
    c.  Surviving spouses' annuities 
    d.  Surviving children's annuities 
    5.  In addition to the foregoing, if there are additional 
benefits not appropriately covered by the foregoing four items 
of reserves required, they shall be listed separately. 
    (2) An income statement on an accrual basis showing all 
income and all deductions from income for the fiscal year.  The 
statement shall show separate items for employee contributions, 
employer regular contributions, employer additional 
contributions if provided by law, investment income, profit on 
the sale of investments, and other income, if any. 
    (3) A statement of deductions from income, which shall 
include separate items for benefit payments, retirement 
benefits, disability benefits, surviving spouse benefits, 
surviving children's benefits, refunds to members terminating 
employment, refunds due to death of members and due to death of 
annuitants, the increase in total reserves required, general 
administrative expense incurred, loss on sale of investments, 
and any other deductions. 
    (4) A statement showing appropriate statistics as to 
membership and beneficiaries of the fund, with indications of 
changes in the statistical data which may result from the 
current year's operation. 
    (5) Any additional statements or exhibits which will enable 
the management of the fund to portray a true interpretation of 
the fund's financial condition, except that the term "surplus" 
or the term "excess of assets" shall not be used except as 
otherwise specifically provided for in this section, nor shall 
any representation of assets and liabilities other than as 
provided for in this section be included in the additional 
statements or exhibits. 
    (6) A more detailed or subdivided itemization of any of the 
items required by this section, if the management of the fund so 
desires. 
    Sec. 43.  Minnesota Statutes 1982, section 356.215, 
subdivision 4, is amended to read: 
    Subd. 4.  [ACTUARIAL VALUATIONS; CONTENTS.] Actuarial 
valuations shall be made in conformity with the requirements of 
the definition contained in subdivision 1 and rules adopted by 
the legislative commission on pensions and retirement.  Each 
actuarial valuation shall measure all aspects of the fund in 
accordance with changes in benefit plans, if any, and salaries 
as will be in force during the ensuing fiscal year.  Each 
actuarial valuation shall be in accordance with the entry age 
normal cost (level normal cost) method. 
    Each actuarial valuation required under this section shall 
include: 
    (1) For each fund providing any benefits under a benefit 
formula, the level normal cost of the benefits provided by the 
laws governing the fund as of the date of the valuation, 
computed in accordance with the entry age normal cost (level 
normal cost) method.  The normal cost shall be expressed as a 
level percentage of the future payroll of the active 
participants of the fund as of the date of the valuation. 
    (2) The accrued liabilities of the fund which shall be 
equal to the present value of all benefits minus the present 
value of future normal costs calculated in accordance with the 
entry age normal cost method. 
    (3) For each fund providing benefits under the money 
purchase or defined contribution method, the member 
contributions accumulated at interest, as apportioned to members 
accounts, to the date of the valuation.  These accumulations 
shall be separately tabulated in such manner as to reflect 
properly any differences in money purchase or defined 
contribution annuity rates which may apply. 
    (4) An For funds governed by chapters 3A, 352, 352B, 352C, 
353, 354, 354A, and 490, a preretirement interest assumption of 
five eight percent, a post-retirement interest assumption of 
five percent, and an assumption that in each future year the 
salary on which a retirement or other benefit is based is 1.035 
1.065 multiplied by the salary for the preceding year.  For all 
other funds, a preretirement interest assumption of five 
percent, a post-retirement interest assumption of five percent, 
and an assumption that in each future year the salary on which a 
retirement or other benefit is based is 1.035 multiplied by the 
salary for the preceding year.  
    (5) Other assumptions as to mortality, disability, 
retirement, withdrawal, entry age and retirement age that are 
appropriate to the fund, which shall be set forth in the 
valuation report at levels consistent with those determined in 
the most recent experience study completed pursuant to section 
356.215, subdivision 5, and set forth in the valuation report. 
    (6) An actuarial balance sheet showing accrued assets, 
accrued liabilities, and the deficit from full funding of 
liabilities (unfunded accrued liability).  The accrued 
liabilities shall include the following required reserves:  
      (a) For active members
          1.  Retirement benefits
          2.  Disability benefits
          3.  Refund liability due to death or withdrawal
          4.  Survivors' benefits
      (b) For deferred annuitants' benefits
      (c) For former members without vested rights
      (d) For annuitants 
          1.  Retirement annuities 
          2.  Disability annuities 
          3.  Surviving spouses' annuities 
          4.  Surviving children's annuities  
current and expected future benefit obligations, current and 
expected future assets, and the current and expected future 
unfunded liabilities.  Specifically, the balance sheet shall be 
organized in the following manner:  
 [CURRENT AND EXPECTED FUTURE ASSETS] 
     Current Assets 
          Cash and equivalents              $...  
Fixed income investments                     ...  
Equity investments                           ...  
Total Current Assets                                 $...  
     Expected Future Assets  
          Present value of expected 
            future supplemental
            contributions                    ... 
          Present value of 
            future normal costs              ... 
Total Expected Future Assets                         $...  
Total Current and Expected 
Future Assets                                        $...  
 [CURRENT AND EXPECTED FUTURE BENEFIT OBLIGATIONS] 
     Current Benefit Obligations  
       Actuarial value of benefit obligations on 
         account of service rendered to date: 
           For annuitants 
             Retirement annuities                    $...  
             Disability annuities                     ...  
             Surviving spouses' annuities             ...  
             Surviving children's annuities           ...  
           For former members without vested rights   ...  
           For deferred annuitants' benefits          ...  
           For active employees 
             Retirement benefits                      ...  
             Disability benefits                      ...  
             Refund liability due to death 
               or withdrawal                          ...  
             Survivors' benefits                      ...  
               Total Current Benefit 
                 Obligations                              $...  
       Expected Future Benefit Obligations 
         Actuarial value of benefit obligations on 
           account of future service for active 
           employees                                       ... 
               Total Current and Expected Future 
                 Benefit Obligations                      $...  
         Current Unfunded Liability 
           (Total Current Benefit Obligations less 
             Total Current Assets):                       $...  
         Current and Future Unfunded Liability 
           (Total Current and Expected Future Benefit 
             Obligations less 
             Total Current and Expected Future Assets):   $...  
    For the purpose of this subdivision, the terms 
    (a) "expected future statutory supplemental contributions" 
means the sum of future employee and employer contributions at 
the rates specified in statute at the time the valuation is 
completed reduced by the present value of future normal costs; 
and 
    (b) "current assets" means the value of all assets at cost, 
plus one-third of any unrealized capital gains or losses, plus 
realized income, including realized capital gains or losses. 
    In addition to the above required reserves itemization of 
benefit obligations, separate items shall be shown for 
additional benefits, if any, which may not be appropriately 
included in the reserves listed list shown above.  
    (7) In addition to the level normal cost, the additional 
annual contribution which would be required to retire the 
current unfunded accrued liability.  For funds governed by 
chapters 3A, 352, 352B, 352C, 353, 354, 354A, and 490, the 
additional contribution shall be calculated on a level dollar 
basis by the established date for full funding which is in 
effect at the time of the valuation percent basis by the 
established date for full funding which is in effect at the time 
of the valuation.  The level percent additional contribution 
shall be calculated assuming annual payroll growth of 6.5 
percent.  For all other funds, the additional annual 
contribution shall be calculated on a level dollar basis. 
    If, after the first actuarial valuation date occurring 
after June 1, 1979, there has not been a change in any or all of 
the actuarial assumptions used for calculating the accrued 
liability of the fund, a change in the benefit plan governing 
annuities and benefits payable from the fund, a change in the 
actuarial cost method used in calculating the accrued liability 
of all or a portion of the fund, or a combination of the three, 
which change or changes by themselves without inclusion of any 
other items of increase or decrease produce a net increase in 
the unfunded accrued liability of the fund, the established date 
for full funding for the first actuarial valuation made after 
June 1, 1979 and each successive actuarial valuation shall be 
the first actuarial valuation date which occurs after June 1, 
2009.  
    If after the first actuarial valuation date occurring after 
June 1, 1979, there has been a change in any or all of the 
actuarial assumptions used for calculating the accrued liability 
of the fund, a change in the benefit plan governing annuities 
and benefits payable from the fund, a change in the actuarial 
cost method used in calculating the accrued liability of all or 
a portion of the fund, or a combination of the three, which 
change or changes by themselves without inclusion of any other 
items of increase or decrease produce a net increase in the 
unfunded accrued liability in the fund, the established date for 
full funding shall be determined using the following procedure:  
    (i) The unfunded accrued liability of the fund shall be 
determined in accordance with the plan provisions governing 
annuities and retirement benefits and the actuarial assumptions 
in effect prior to an applicable change;  
    (ii) The level annual dollar contribution or level 
percentage, whichever is applicable, which is needed to amortize 
the unfunded accrued liability amount determined pursuant to 
subclause (i) by the established date for full funding in effect 
prior to the change shall be calculated using the interest 
assumption specified in clause (4) in effect prior to the change;
    (iii) The unfunded accrued liability of the fund shall be 
determined in accordance with any new plan provisions governing 
annuities and benefits payable from the fund and any new 
actuarial assumptions and the remaining plan provisions 
governing annuities and benefits payable from the fund and 
actuarial assumptions in effect prior to the change;  
    (iv) The level annual dollar contribution or level 
percentage, whichever is applicable, which is needed to amortize 
the difference between the unfunded accrued liability amount 
calculated pursuant to subclause (i) and the unfunded accrued 
liability amount calculated pursuant to subclause (iii) over a 
period of 30 years from the end of the plan year in which the 
applicable change is effective shall be calculated using the 
interest assumption specified in clause (4) in effect subsequent 
to any applicable change;  
    (v) The level annual dollar or level percentage 
amortization contribution pursuant to subclause (iv) shall be 
added to the level annual dollar amortization contribution or 
level percentage calculated pursuant to subclause (ii);  
    (vi) The period in which the unfunded accrued liability 
amount determined in subclause (iii) will be amortized by the 
total level annual dollar or level percentage amortization 
contribution computed pursuant to subclause (v) shall be 
calculated using the interest assumption specified in clause (4) 
in effect subsequent to any applicable change, rounded to the 
nearest integral number of years, but which shall not exceed a 
period of 30 years from the end of the plan year in which the 
determination of the established date for full funding using the 
procedure set forth in this clause is made and which shall not 
be less than the period of years beginning in the plan year in 
which the determination of the established date for full funding 
using the procedure set forth in this clause is made and ending 
by the date for full funding in effect prior to the change; and 
    (vii) The period determined pursuant to subclause (vi) 
shall be added to the date as of which the actuarial valuation 
was prepared and the date obtained shall be the new established 
date for full funding.  
    (8) An actuarial balance sheet shall not include as an 
asset the present value of the contributions required under 
clause (7).  
    (9) (8) An analysis by the actuary explaining the increase 
or decrease in the unfunded accrued liability since the last 
valuation.  The explanation shall subdivide the increase or 
decrease in unfunded accrued liability into at least the 
following parts: 
    (a) Increases or decreases in unfunded accrued liability 
because of changes in benefits; 
    (b) Increases and decreases in unfunded accrued liability 
because of each change, if any, in actuarial assumptions; 
    (c) Actuarial gains or losses resulting from any deviations 
of actual investment earnings, actual mortality rates, actual 
salary increase rates, actual disability rates, actual 
withdrawal rates and actual retirement rates from the 
assumptions on which the valuations are based; 
    (d) Increases or decreases in unfunded accrued liability 
because of other reasons, including the effect of the 
amortization contribution required under clause (7); and 
    (e) Increases or decreases in unfunded accrued liability 
because of changes in eligibility requirements or groups 
included in the membership of the fund. 
    (10) (9) A tabulation of active membership and annuitants 
in the fund.  If the membership of a fund is under more than one 
general benefit program, a separate tabulation shall be made for 
each general benefit program. The tabulations shall be submitted 
in the following form: 
Annual
(a) Active members                           Number   Payroll
    As of last valuation date
              new entrants
          Total 
    Separations from active service
    Refund of contributions
    Separation with deferred annuity
    Separation with neither refund
         nor deferred annuity
    Disability
    Death
              Retirement with service annuity
    Total separations
    As of current valuation date
                                                 Annual Annuity
(b) Annuitants                                  Number   Benefit
    As of last valuation date
    New entrants
    Total
    Terminations
    Deaths
    Other
    Total terminations
    As of current valuation date
    The tabulation required under subclause (b) shall be made 
separately for each of the following classes of annuitants: 
         (a) Service retirement annuitants  
         (b) Disabled annuitants 
         (c) Surviving spouse annuitants  
         (d) Surviving children annuitants 
         (e) Deferred annuitants 
    (11) (10) A statement of the administrative expenses in 
dollars and also as a percentage of covered payroll. 
    (12) (11) A summary of the principal provisions of the plan 
upon which the valuation is based. 
    Sec. 44.  [356.70] [EARLY RETIREMENT.] 
    Subdivision 1.  [COMBINED AGE AND SERVICE REQUIREMENT.] Any 
member of a retirement plan established pursuant to chapters 
352, 353, 354, or 354A who has attained the age of at least 55 
years and whose attained age plus credited allowable service 
totals 85, is entitled, upon application prior to December 31, 
1986, to the normal retirement annuity provided in these 
chapters without any reduction in annuity by reason of such 
early retirement.  
    Subd. 2.  [REPORTS.] The retirement associations to which 
this section applies shall request and the employing units of 
members retiring under the provisions of this section shall 
provide to the retirement association information on the salary, 
retirement contributions, and social security contributions paid 
by the employing unit to individuals filling the position 
vacated by the retiree.  The employing unit shall also provide 
information on net savings, if any, made possible by the 
provisions of this section.  
    The retirement associations shall prepare reports to the 
legislature summarizing this information and other information 
in its possession relating to characteristics of retirees 
retiring under the provisions of this section including:  
    (a) age at time of retirement;  
    (b) years of service;  
    (c) salary at time of retirement;  
    (d) high-five average salary used to determine the 
retirement annuity; and 
    (e) monthly benefit.  
    The reports shall be made to the legislature within 30 days 
following the end of calendar years 1984, 1985, and 1986 and 
shall cover all retirees retiring under the provisions of this 
section.  
    Sec. 45.  Laws 1983, chapter 301, section 225, subdivision 
1, is amended to read: 
    Subdivision 1.  [REIMBURSEMENT REQUIRED.] Any public 
employee or official who retires from January 1, 1983 to June 
30, 1985, and whose pension contributions were increased by Laws 
1982, Third Special Session chapter 1, article 2, section 2, 
subdivision 1, paragraph (v) and who has not previously received 
a refund of those contributions, must, upon application, be 
reimbursed for the amount of increased contributions paid by the 
official or employee because of that law.  Reimbursement must be 
in a lump sum to the employee or official, or his or her 
survivor, at the same time as the first annuity payment between 
October 1 and October 15, 1984, except that refunds to employees 
or officials retiring or terminating service prior to October 1, 
1984, shall be paid at the same time as the first annuity 
payment or within 90 days after termination, as the case may 
be.  The amount of the reimbursement is the amount that the 
employee's or official's contributions increased because of Laws 
1982, Third Special Session chapter 1, article 2, section 2, 
subdivision 1, paragraph (v) plus interest at the then current 
rate paid on refunds by the relief or retirement association.  
Reimbursement shall be paid by the retirement or relief 
association to which the employee belongs.  Reimbursement may be 
made without application if the governing board of the 
appropriate retirement system or association determines that 
this method is feasible.  
    Sec. 46.  Laws 1983, chapter 301, section 225, is amended 
by adding a subdivision to read: 
    Subd. 1a.  [CREDIT REQUIRED.] The executive director of the 
Minnesota state retirement system shall credit to the share 
account in the supplemental retirement fund of any participant 
in the unclassified employees program established by Minnesota 
Statutes, chapter 352D, an amount equal to the amount by which 
employer contributions on behalf of that participant were 
reduced by reason of the law cited in subdivision 1.  Funds 
sufficient to make the credits required by this subdivision are 
appropriated from the general fund to the executive director.  
    Sec. 47.  [COMMISSIONER OF FINANCE TO REDUCE ALLOTMENTS.] 
    The commissioner of finance shall reduce the fiscal year 
1985 allotments to any agencies or institutions receiving a 
state appropriation pursuant to Laws 1983, chapters 258, 293, 
301, or 312 and having employees contributing to the public 
employees retirement association, state employees retirement 
fund, the correctional employees retirement fund, and the 
highway patrol retirement fund.  The reduction shall be in an 
amount equal to the estimated fiscal year 1985 salaries of 
members of these plans multiplied by the differences between the 
employer contribution rate in effect prior to July 1, 1984, and 
the employer rate in effect after June 30, 1984.  
    Sec. 48.  [ANNUAL APPROPRIATION.] 
    There is appropriated and transferred from the general fund 
to the commissioner of finance, $1,000,000 annually for 
distribution among those local police and salaried firefighters 
relief associations that receive amortization state aid 
according to Minnesota Statutes, section 423A.02.  Distribution 
shall be made according to that proportion the unfunded accrued 
liability of each relief association bears to the total unfunded 
accrued liabilities of all relief associations as reported in 
the most recent actuarial valuations of the relief associations 
that receive amortization state aid according to section 
423A.02.  Moneys shall be distributed to the relief associations 
at the same time fire and police department state aid is 
distributed according to section 69.021.  
    Sec. 49.  Laws 1983, chapter 314, article 12, section 1, 
subdivision 2, is amended to read:  
    Subd. 2.  [TEACHERS RETIREMENT ASSOCIATION:  TEACHERS 
STATEWIDE.] To the teachers retirement association, to meet the 
state's obligation prescribed in Minnesota Statutes, section 
354.43, there is appropriated:  
      $87,508,200.........1984,
      $92,137,200 104,476,000.........1985.
    Sec. 50.  [TEACHERS RETIREMENT ASSOCIATION FUNDING.] 
    There is appropriated to the commissioner of finance from 
the general fund $1,965,000 for the purpose of meeting the 
increased contribution requirements for the teacher's retirement 
fund necessitated by the passage of section 29, during the 
fiscal year commencing July 1, 1984.  
    Sec. 51.  [REPEALER.] 
    Minnesota Statutes 1982, sections 352.022; 353.38; and 
354.07, subdivision 8; and Laws 1983, chapter 301, section 225, 
subdivision 2, are repealed.  
    Sec. 52.  [EFFECTIVE DATES.] 
    Sections 1 through 5, 10, 12, 13, 17 through 21, 24, 27, 
29, 33, 36, 37, 39 through 41, and 47 through 50 are effective 
July 1, 1984.  The remaining sections are effective the day 
following final enactment.  The provisions of section 43 are 
applicable to all valuations performed beginning with the 
valuations for the fiscal year ending June 30, 1984. 
    Approved April 26, 1984