Office of the Revisor of Statutes
Minnesota Session Laws - 1985, 1st Special Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1985
CHAPTER 7-H.F.No. 2
An act relating to retirement; making various changes
in laws governing public retirement funds; amending
Minnesota Statutes 1984, sections 3.85, subdivisions
11 and 12; 176.021, subdivision 7; 352.01, subdivision
11; 352.029; 352.22, subdivision 3; 352.95,
subdivision 1; 352B.10; 352E.01, subdivision 2;
352E.04; 353.01, subdivision 16; 353.27, subdivision
12; 353.271, subdivision 2; 353.656, subdivision 1;
353.657, subdivision 2a; 354.44, subdivisions 5 and 6;
354.48, subdivisions 3, 6, and 7; 354.49, subdivision
2; 354.55, subdivision 11; 354.62, subdivision 2;
354A.35, subdivision 1; 356.20, subdivision 4;
356.215, subdivision 4; 356.216; 356.70; and Laws
1984, chapter 501, section 1; proposing coding for new
law in Minnesota Statutes, chapter 352D; repealing
Minnesota Statutes 1984, sections 352.113, subdivision
5; and 354.621.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1984, section 3.85,
subdivision 11, is amended to read:
Subd. 11. [RULES STANDARDS FOR PENSION VALUATIONS AND COST
ESTIMATES.] The commission shall by June 30, 1985, adopt rules
standards 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 standards shall be consistent
with the general direction prescribed in chapter 356 and shall
be updated annually thereafter.
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 1984, section 3.85, subdivision
12, is amended 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 annual valuations and finance
financial 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 be included 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 contract 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. For funds using
a calendar year valuation period the first valuation shall be
for the period ending December 31, 1985.
(2) Every four years, beginning in fiscal year 1986 1988,
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 1984, section 176.021,
subdivision 7, is amended to read:
Subd. 7. [PUBLIC OFFICER.] If an employee who is a public
officer of the state or governmental subdivision continues to
receive the compensation of his office during a period when he
is receiving benefits under the workers' compensation law for
temporary total or temporary partial disability or permanent
total disability and the compensation of his office exceeds $100
a year, the amount of that compensation attributable to the
period for which benefits under the workers' compensation law
are paid shall be deducted from such benefits. If an employee
covered by the Minnesota state retirement system receives total
and permanent disability benefits pursuant to section 352.113 or
disability benefits pursuant to sections 352.95 and 352B.10, the
amount of disability benefits shall be deducted from workers'
compensation benefits otherwise payable. Notwithstanding the
provisions of section 176.132, a deduction under this
subdivision does not entitle an employee to supplemental
benefits under section 176.132.
Sec. 4. Minnesota Statutes 1984, section 352.01,
subdivision 11, is amended to read:
Subd. 11. [ALLOWABLE SERVICE.] "Allowable service" means:
(1) Any service rendered by an employee for which on or
before July 1, 1957, he was entitled to allowable service credit
on the records of the system by reason of employee contributions
in the form of salary deductions, payments in lieu of salary
deductions, or in any other manner authorized by Minnesota
Statutes 1953, chapter 352, as amended by Laws 1955, chapter
239, or;
(2) Any service rendered by an employee for which on or
before July 1, 1961, he elected to obtain credit for service by
making payments to the fund pursuant to Minnesota Statutes 1961,
section 352.24, or;
(3) Except as provided in clause (9) clauses (9) and (10),
any service rendered by an employee after July 1, 1957, for any
calendar month in which he is paid salary from which deductions
are made, deposited and credited in the fund, including
deductions made, deposited and credited as provided in section
352.041, or;
(4) Except as provided in clause (9) clauses (9) and (10),
any service rendered by an employee after July 1, 1957 for any
calendar month for which payments in lieu of salary deductions
are made, deposited and credited in the fund, as provided in
section 352.27 and Minnesota Statutes 1957, section 352.021,
subdivision 4.
For purposes of paragraphs clauses (3) and (4) of this
subdivision, except as provided in clause (9) clauses (9) and
(10), any salary paid for a fractional part of any calendar
month is deemed the compensation for the entire calendar month,
or;
(5) The period of absence from their duties by employees
who by reason of injuries incurred in the performance thereof
are temporarily disabled and for which disability the state is
liable under the workers' compensation law until the date
authorized by the director for the commencement of payments of a
total and permanent disability benefit from the retirement fund,
or;
(6) The unused portion of an employee's annual leave
allowance for which he is paid salary, or;
(7) Any service covered by a refund repaid as provided in
sections 352.23 or 352D.05, subdivision 4, but does not include
service rendered as an employee of the adjutant general for
which the person has credit with the federal civil service
retirement system, or;
(8) Any service prior to July 1, 1978 by an employee of the
transit operating division of the metropolitan transit
commission or by an employee on an authorized leave of absence
from the transit operating division of the metropolitan transit
commission who is employed by the labor organization which is
the exclusive bargaining agent representing employees of the
transit operating division which was credited by the
metropolitan transit commission-transit operating division
employees retirement fund or any of its predecessor plans or
funds as past, intermediate, future, continuous or allowable
service as defined in the metropolitan transit
commission-transit operating division employees retirement fund
plan document in effect on December 31, 1977, or;
(9) Any service rendered after July 1, 1983, by an employee
who is employed on a part-time basis for less than 80 50 percent
of full time, for which the employee is paid salary from which
deductions are made, deposited and credited in the fund,
including deductions made, deposited and credited as provided in
section 352.041 or for which payments in lieu of salary
deductions are made, deposited and credited in the fund as
provided in section 352.27 shall be credited on a fractional
basis either by pay period, monthly, or annually based upon the
relationship that the percentage of salary earned bears to a
full-time salary, with any salary paid for the fractional
service credited on the basis of the rate of salary applicable
for a full-time pay period, month, or a full-time year, or. For
periods of part-time service which is duplicated service credit,
the provisions of section 356.30, subdivision 1, clauses (i) and
(j), shall govern;
(10) Any service by an employee in the Minnesota
demonstration job-sharing program pursuant to sections 43.56 to
43.62 which is less than 40 hours per week or 2,080 hours per
year and for which the employee is paid salary from which
deductions are made, deposited and credited in the fund, shall
be credited on a fractional basis either weekly or annually
based upon the relationship that the number of hours of service
bears to either 40 hours per week or 2,080 hours per year, with
any salary paid for the fractional service credited on the basis
of the rate of salary applicable for a full-time week or a
full-time year.
The allowable service determined and credited on a
fractional basis pursuant to clauses (9) and (10) shall be used
in calculating the amount of benefits payable, but service as
determined on a fractional basis shall not be used in
determining the length of service required for eligibility for
benefits;
(11) Any period of authorized leave of absence without pay
which does not exceed one year and for which the employee
obtained credit by payment to the fund made in lieu of salary
deductions. To obtain credit, the employee shall pay an amount
equal to the employee and employer contribution rate provided in
section 352.04, subdivisions 2 and 3, multiplied by the
employee's hourly rate of salary on the date of return from
leave of absence and by the days and months of the leave of
absence without pay for which the employee desires to obtain
allowable service credit. The employing department, at its
option, may pay the employer amount on behalf of its employees.
Payments made under this clause shall include interest at the
rate of six percent per annum from the date of termination of
the leave of absence to the date payment is made unless payment
is completed within one year of the return from leave of absence.
Sec. 5. Minnesota Statutes 1984, section 352.029, is
amended to read:
352.029 [COVERAGE FOR EMPLOYEES OF LABOR ORGANIZATIONS.]
Subdivision 1. [QUALIFICATIONS.] A former state employee
who is an employee of a labor organization which is an exclusive
bargaining agent representing state employees or a state
employee on leave of absence without pay to provide service as
an employee or officer of a labor organization that is an
exclusive bargaining agent representing state employees, may
elect pursuant to subdivision 2 to be covered by the state
retirement system established by this chapter with respect to
service with the labor organization unless specifically excluded
under section 352.01, subdivision 2B.
Subd. 2. [ELECTION.] A person described in subdivision 1
shall be covered by the state retirement system if written
election to be covered is delivered to the executive director
before July 1, 1977 or December 31, 1985, within 30 90 days of
being employed by the labor organization, or within 90 days of
commencing their first leave of absence with an exclusive
bargaining agent, whichever is later.
Subd. 3. [CONTRIBUTIONS.] The employee, employer and
additional employer contributions required pursuant to section
352.04 shall be the obligation of the employee who elects
coverage under this section; provided, however, that the
employing labor organization may pay the employer and employer
additional contributions. Contributions made by the employee
shall be made by salary deduction. The employing labor
organization shall remit all contributions to the state
retirement system pursuant to section 352.04.
Subd. 4. [PURCHASE OF PRIOR SERVICE CREDIT.] Any former
state employee person who elects membership pursuant to this
section shall be allowed to make payment for service rendered
prior to July 1, 1977 December 31, 1985, in a labor organization
designated in subdivision 1; provided that the labor
organization makes satisfactory certification of the prior
service of the former state employee. Payment shall include all
employee, employer and additional employer contributions at the
rates in effect when the service was rendered plus interest at
the rate of six percent per annum from the year of purchase to
the date payment is made; provided, however, that the employing
labor organization may pay the employer and employer additional
contributions plus interest at the specified rate. Payment
shall be made in one lump sum prior to July 1, 1982 December 31,
1985 or prior to retirement, whichever is earlier, and no
allowable service with respect to such payment shall be credited
to the employee's account until payment is received by the
executive director.
Subd. 5. [BOARD MEMBERSHIP EXCLUDED.] Persons Employees of
a labor organization who become members of the state retirement
system pursuant to this section shall not be eligible for
election to the board of trustees.
Sec. 6. Minnesota Statutes 1984, section 352.22,
subdivision 3, is amended to read:
Subd. 3. [DEFERRED ANNUITY.] (1) Any employee with at
least ten years of allowable service when such termination
occurs may at his option leave his accumulated contributions in
the fund and thereby be entitled to a deferred retirement
annuity. This annuity shall be computed in the manner provided
by the law in effect at the time state service terminated, on
the basis of allowable service prior to termination of service.
(2) An employee on layoff or on leave of absence without
pay, except a leave of absence for health reasons, who does not
return to state service shall have any annuity, deferred annuity
or other benefit to which he may become entitled computed under
the law in effect on his last working day.
(3) No application for a deferred annuity shall be made
more than 60 days prior to the time the former employee reaches
the required age to entitle him to the payment of the annuity.
The deferred annuity shall begin to accrue no earlier than 60
days prior to the date the application is filed in the office of
the system except that if an optional annuity as provided in
section 352.116 is selected the annuity shall begin to accrue 30
days after the application is filed, but in no event prior to
the date the employee reaches the required age to entitle him to
the annuity nor prior to the day following the termination of
state service in a position not covered by the retirement system
nor prior to the day following the termination of employment in
a position which requires the employee to be a member of either
the public employees retirement association or the teachers
retirement association.
(4) Application for the accumulated contributions left on
deposit with the fund may be made at any time after 30 days
following the date of termination of service.
Sec. 7. Minnesota Statutes 1984, section 352.95,
subdivision 1, is amended to read:
Subdivision 1. Any covered correctional employee less than
55 years of age who shall become disabled and physically unfit
to perform the duties of the position as a direct result of an
injury, sickness, or other disability incurred in or arising out
of any act of duty which shall render the employee physically or
mentally unable to perform the duties, shall be entitled to a
disability benefit based on covered correctional service only,
in an amount equal to 50 percent of the average salary defined
in section 352.93, plus an additional two 2-1/2 percent for each
year of covered correctional service in excess of 20 years but
not in excess of 25 years, and two percent for each year of
covered correctional service in excess of 25 years, pro-rated
for completed months, to a maximum monthly benefit of 75 percent
of the average monthly salary.
Sec. 8. Minnesota Statutes 1984, section 352B.10, is
amended to read:
352B.10 [DISABILITY BENEFITS.]
(1) Any member less than 55 years of age, who shall become
disabled and physically unfit to perform his duties as a direct
result of an injury, sickness, or other disability incurred in
or arising out of any act of duty, which shall render the member
physically or mentally unable to perform his or her duties,
shall receive disability benefits during the period of such
disability. The benefits shall be paid in monthly installments
equal to that portion of the average monthly salary of the
member multiplied (a) by 50 percent and, (b) by an additional
two 2-1/2 percent for each year and pro rata for completed
months of service in excess of 20 years, but not exceeding 25
years and two percent for each year and pro rata for completed
months of service in excess of 25 years.
(2) If a member is injured under circumstances which
entitle him to receive benefits under the workers' compensation
law, he shall receive the same benefits as provided in clause
(1), less the amount paid to him in weekly benefits under the
workers' compensation law.
(3) Any member who after not less than five years of
service, before reaching the age of 55, terminates employment
because of sickness or injury occurring while not on duty and
not engaged in state work entitling the member to membership and
the termination is necessary because the member is unable to
perform his or her duties shall be entitled to receive a
disability benefit. The benefit shall be in the same amount and
computed in the same manner as if the member were 55 years of
age at the date of disability and the annuity were paid pursuant
to section 352B.08. Should disability under this clause occur
after five but in less than ten years service, the disability
benefit shall be computed as though the member had ten years
service.
(4) (3) No member shall receive any disability benefit
payment when the member has unused annual leave or sick leave or
under any other circumstances, when during the period of
disability there has been no impairment of salary. Should such
member or former member resume a gainful occupation and his or
her earnings are less than the salary received at the date of
disability or the salary currently paid for similar positions,
the disability benefit shall be continued in an amount which
when added to earnings does not exceed the salary received at
the date of disability or the salary currently paid for similar
positions, whichever is higher, provided the disability benefit
in such case does not exceed the disability benefit originally
allowed.
(5) (4) No disability benefit payment shall be made except
upon adequate proof furnished to the director of the existence
of such disability, and during the time when any such benefits
are being paid, the director shall have the right, at reasonable
times, to require the disabled former member to submit proof of
the continuance of the disability claimed.
(6) (5) A disabled member not eligible for survivorship
coverage pursuant to section 352B.11, subdivision 2, may elect
the normal disability benefit or an optional annuity as provided
in section 352B.08, subdivision 2. 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 this election or the 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. 9. [352D.12] [TRANSFER OF PRIOR SERVICE
CONTRIBUTIONS.]
An employee who is a participant in the unclassified
program and who has prior service credit in a covered plan under
chapters 352, 353, 354, 354A, and 422A may, within the time
limits in this section, elect to transfer to the unclassified
program accumulated employee and equal employer contributions
with interest at six percent a year compounded annually, based
on fiscal year balances.
If a participant has taken a refund from a fund listed in
this section, the participant may repay the refund to that fund,
notwithstanding any restrictions on repayment to that fund, plus
six percent interest a year compounded annually and have the
accumulated employee and equal employer contributions
transferred to the unclassified program with interest at six
percent a year compounded annually based on fiscal year balances.
A participant electing to transfer prior service
contributions under this section must complete the application
for the transfer and repay any refund within one year of the
effective date of this section or the commencement of the
employee's participation in the unclassified program, whichever
is later.
Sec. 10. Minnesota Statutes 1984, section 352E.01,
subdivision 2, is amended to read:
Subd. 2. [PEACE OFFICER.] "Peace officer" means:
(a) A police officer employed by the state of Minnesota or
any governmental subdivision within the state to enforce the
criminal laws;
(b) A Minnesota state patrol officer;
(c) A sheriff or fulltime deputy sheriff with power of
arrest by warrant;
(d) A state conservation officer as defined in section
84.028, subdivision 3;
(e) A person employed by the bureau of criminal
apprehension as a police officer with power of arrest by warrant;
(f) A correction officer employed at any correctional
institution and charged with maintaining the safety, security,
discipline and custody of inmates at such institutions;
(g) A firefighter employed on a fulltime basis by a fire
department of any governmental subdivision of the state who is
engaged in the hazards of fire fighting or a regularly enrolled
member of a volunteer fire department or member of an
independent nonprofit firefighting corporation who is engaged in
the hazards of fire fighting;
(h) A good samaritan who complies with the request or
direction of a peace officer to assist the officer; and
(i) A reserve police officer or a reserve deputy sheriff
acting under the supervision and authority of a political
subdivision.
Sec. 11. Minnesota Statutes 1984, section 352E.04, is
amended to read:
352E.04 [DISBURSEMENTS.]
Upon certification to the governor by the administrator of
the fund that a peace officer employed by a state or
governmental subdivision within this state has been killed in
the line of duty, leaving a spouse or one or more eligible
dependents, the commissioner of finance shall, subject to the
approval of the workers' compensation court of appeals, pay
$100,000 as follows:
(a) If there is no dependent child, to the spouse;
(b) If there is no spouse, to the dependent child or
children in equal shares;
(c) If there are both a spouse and one or more dependent
children, one-half to the spouse and one-half to the child or
children, in equal shares;
(d) If there is no surviving spouse or dependent child or
children, to the parent or parents dependent for support on the
decedent, in equal shares;
(e) If there is no surviving spouse or dependent child,
children or parent, then there shall be no payment made from the
peace officers benefit fund.
"Killed in the line of duty" does not include deaths from
natural causes or deaths that occur during employment for a
private employer other than an independent nonprofit
firefighting corporation.
Sec. 12. Minnesota Statutes 1984, section 353.01,
subdivision 16, is amended to read:
Subd. 16. [ALLOWABLE SERVICE.] "Allowable service" means:
(1) Service during years of actual membership in the course
of which employee contributions were currently made; periods
covered by payments in lieu of salary deductions made as
provided in section 353.35, and service in years during which
the public employee was not a member but for which he later
elected, while a member, to obtain credit by making payments to
the fund as permitted by any law then in effect.
(2) Any period of authorized leave of absence with pay from
which deductions for employee contributions are made, deposited,
and credited to the fund.
(3) Any period of authorized leave of absence without pay
which does not exceed one year, and during or for which a member
obtained credit by payments to the fund made in lieu of salary
deductions, provided that such payments are made in an amount or
amounts based on his average salary on which deductions were
paid (a) for the last six months of public service, or (b) that
portion of the last six months while he was in public service,
to apply to the period in either case immediately preceding
commencement of such leave of absence; provided, however, that
if the employee elects to pay employee contributions for the
period of any leave of absence without pay, or for any portion
thereof, he shall also, as a condition to the exercise of such
election, pay to the fund an amount equivalent to both the
required employer and additional employer contributions
therefor, such payment to be made currently or within one year
from the date the leave of absence terminates, unless the
employer by appropriate action of its governing body and made a
part of its official records, prior to the date of the first
payment of such employee contribution, certifies to the
association in writing that it will cause to be paid such
employer and additional employer contributions from the proceeds
of a tax levy made pursuant to section 353.28. Payments under
this clause shall include interest at the rate of six percent
per annum from the date of the termination of the leave of
absence to the date payment is made.
(4) Any period during which a member is on an authorized
sick leave of absence, without pay limited to one year, or an
authorized temporary layoff.
(5) Any period during which a member is on an authorized
leave of absence to enter military service, provided that the
member returns to public service upon discharge from military
service pursuant to section 192.262, and pays into the fund
employee contributions based upon his salary at the date of
return from military service. After June 30, 1983 payment must
be made within five years of the date of discharge from the
military service. The amount of these contributions shall be in
accord with the contribution rates and salary limitations, if
any, in effect during such leave, plus interest thereon at six
percent per annum compounded annually from the date of return to
public service to the date payment is made. In such cases the
matching employer contribution and additional employer
contribution provided in section 353.27, subdivisions 3 and 3a,
shall be paid by the department employing such member upon his
return to public service and the governmental subdivision
involved is hereby authorized to appropriate money therefor.
Such member shall not receive credit for any voluntary extension
of military service at the instance of the member beyond the
initial period of enlistment, induction or call to active duty.
(6) For calculating benefits under sections 353.30, 353.31,
353.32, and 353.33 for state officers and employees displaced by
the community corrections act, Minnesota Statutes 1984, chapter
401, and transferred into county service under Minnesota
Statutes 1984, section 401.04, allowable service means combined
years of allowable service as defined in Minnesota Statutes
1984, section 352.01, subdivision 11, and Minnesota Statutes
1984, section 353.01, subdivision 16, paragraphs (1) to (5).
Sec. 13. Minnesota Statutes 1984, section 353.27,
subdivision 12, is amended to read:
Subd. 12. [OMITTED SALARY DEDUCTIONS; OBLIGATIONS.] In the
case of omission of required deductions from salary of an
employee, past due for a period of 60 days or less, the head of
the department shall deduct from the employee's next salary
payment and forthwith remit to the executive director the amount
of the employee contribution delinquency, with cumulative
interest thereon at the rate of six percent per annum,
compounded annually, from the date or dates each delinquent
employee contribution was first payable, such interest to be
paid by the employer. To the extent that any such omitted
required deductions are not paid by the employee, they shall
constitute a liability of the governmental subdivision which
failed to make said required deductions, with interest thereon
as hereinbefore specified. After July 1, 1973, any such omitted
required deductions, past due for a period in excess of 60 days,
shall become the sole obligation of the governmental subdivision
from the time such deductions were first payable, together with
interest thereon as hereinbefore specified. Any amount so due,
together with employer and additional employer contributions at
the rates and in the amounts specified in subdivisions 3 and 3a,
with interest thereon at the rate of six percent compounded
annually from the date they were first payable, shall be paid
from the proceeds of a tax levy made pursuant to section 353.28,
or from other funds available to the employer. Unless otherwise
indicated, this subdivision shall have both retroactive and
prospective application, and the governmental subdivision is
liable retroactively and prospectively for all amounts due
hereunder. No action for the recovery of delinquent employee
and employer contributions or interest thereon shall be
commenced and no payment of delinquent contributions shall be
made or accepted after the expiration of three calendar years
next following the calendar year in which the contributions were
omitted.
Sec. 14. Minnesota Statutes 1984, section 353.271,
subdivision 2, is amended to read:
Subd. 2. [VALUATION OF ASSETS; ADJUSTMENT OF BENEFITS.]
(1) Effective July 1, 1973, For members retiring, the required
reserves determined on a five percent using the post-retirement
interest assumption specified in section 356.215, subdivision
4d, shall be transferred to the Minnesota post-retirement
investment fund as of the date of retirement.
(2) Annuity payments shall be adjusted in accordance with
the provisions of section 11A.18.
(3) Notwithstanding section 356.18, increases in payments
pursuant to this section will be made automatically unless the
intended recipient files written notice with the public
employees retirement association requesting that the increase
shall not be made.
Sec. 15. Minnesota Statutes 1984, section 353.656,
subdivision 1, is amended to read:
Subdivision 1. [IN LINE OF DUTY; COMPUTATION OF BENEFITS.]
Any member of the police and fire fund less than 55 years of
age, who shall become disabled and physically unfit to perform
his duties as a police officer or fire fighter subsequent to
June 30, 1973, as a direct result of an injury, sickness, or
other disability incurred in or arising out of any act of duty,
which shall render him physically or mentally unable to perform
his duties as a police officer or fire fighter, shall receive
disability benefits during the period of such disability. The
benefits shall be in an amount equal to 50 percent of the
"average salary" pursuant to subdivision 3 plus an
additional two 2-1/2 percent of said "average" salary for each
year of service in excess of 20 years but not exceeding 25 years
and two percent for each year thereafter. Should disability
under this subdivision occur before the member has at least five
years of allowable service credit in the police and fire fund,
the disability benefit shall be computed on the "average salary"
from which deductions were made for contribution to the police
and fire fund.
Sec. 16. Minnesota Statutes 1984, section 353.657,
subdivision 2a, is amended to read:
Subd. 2a. If a member who has attained the age of at least
55 years and has credit for not less than ten years 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 dies
before the annuity or 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 section 353.32, subdivision 1, or
survivor benefits otherwise payable pursuant to subdivisions 1
and 2, an annuity equal to the 50 100 percent joint and survivor
annuity which the member could have qualified for on the date of
death, computed as provided in sections 353.651, subdivisions 2
and 3, and 353.30, subdivision 3. No payment shall accrue
beyond the end of the month in which entitlement to such 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 such deceased member.
Any member may request in writing that this subdivision not
apply and that payment be made only to the designated
beneficiary, as otherwise provided by this chapter.
Sec. 17. Minnesota Statutes 1984, section 354.44,
subdivision 5, is amended to read:
Subd. 5. [RESUMPTION OF TEACHING.] Any person who retired
under any provision of any retirement law applicable to schools
and institutions covered by the provisions of this chapter and
has thereafter resumed teaching in any school or institution to
which this chapter applies shall continue to receive payments in
accordance with the annuity except that during any year in which
the person's income from the teaching service is in an amount
equal to or greater than the annual maximum earnings allowable
for that age for the continued receipt of full benefit amounts
monthly under the federal old age, survivors and disability
insurance program as set by the secretary of health and human
services pursuant to the provisions of 42 U.S.C., Section
403. For the purpose of this subdivision, income from teaching
service shall include all income from services performed as a
consultant or an independent contractor for an employer unit
covered by the provisions of this chapter.
In the event that the person has not yet reached the
minimum age for the receipt of social security benefits, the
maximum earnings for the person shall be equal to the annual
maximum earnings allowable for the minimum age for the receipt
of social security benefits. The amount in excess of the
applicable re-employment income maximum specified in this
subdivision shall be deducted from the annuity payable for the
year immediately following the year in which the excess amount
was earned. After a person has reached the age of 70, the
person shall receive the annuity in full regardless of the
amount of income.
Sec. 18. Minnesota Statutes 1984, 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, 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 65 60 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. 19. Minnesota Statutes 1984, section 354.48,
subdivision 3, is amended to read:
Subd. 3. [COMPUTATION OF BENEFITS.] (1) The amount of the
disability benefit granted to members covered under section
354.44, subdivision 2, clause clauses (1) and (2) or clause (3),
is an amount equal to double the annuity which could be
purchased by the member's accumulated deductions plus interest
thereon computed as though the teacher were age 65 at the time
the benefit begins to accrue and in accordance with the law in
effect when the disability application is received. Any member
who applies for a disability benefit after June 30, 1974 and who
failed to make an election pursuant to Minnesota Statutes 1971,
Section 354.145, shall have his disability benefit computed
under the provisions of this clause or clause (2) of this
subdivision, whichever is larger.
The benefit granted shall be determined by the following:
(a) The amount of the accumulated deductions;
(b) Interest actually earned on these accumulated
deductions to the date the benefit begins to accrue;
(c) Interest for the years from the date the benefit begins
to accrue to the date such member attains age 65 at the rate
which is the average rate credited for the five years prior to
the date the benefit begins to accrue of three percent;
(d) Annuity purchase rates based on an appropriate annuity
table of mortality with interest assumption as provided in
section 354.07, subdivision 1 of five percent.
In addition a supplementary monthly benefit shall be paid
to basic members only in accordance with the following table:
Age When Benefit Supplementary
Begins to Accrue Benefit
Under Age 56 $50
56 45
57 40
58 35
59 30
60 25
61 20
62 15
63 10
64 5
(2) The disability benefit granted to members covered under
section 354.44, subdivisions 6 or 7 shall be computed in the
same manner as the annuity provided in subdivisions 6 or 7 of
that section, whichever is applicable. The disability benefit
shall be the formula annuity without the reduction for each
month the member is under age 65 at the time the benefit begins
to accrue.
(3) The optional annuity benefit provided in section 354.45
does not apply to this section.
(4) For the purposes of computing a retirement annuity when
the member becomes eligible, the amounts paid for disability
benefits shall not be deducted from the individual member's
accumulated deductions. If the disability benefits provided in
this subdivision exceed the monthly average salary of the
disabled member, the disability benefits shall be reduced to an
amount equal to the disabled member's average salary.
Sec. 20. Minnesota Statutes 1984, section 354.48,
subdivision 6, is amended to read:
Subd. 6. [REGULAR PHYSICAL EXAMINATIONS.] At least once
each year during the first five years following the allowance of
a disability benefit to any member, and at least once in every
three-year period thereafter, the board shall require the
disability beneficiary to undergo a medical examination to be
made at the place of residence of such person, or at any other
place mutually agreed upon, by a physician or physicians engaged
by the board. If any examination indicates that he is no longer
permanently and totally disabled or that he is engaged or is
able to engage in a substantial gainful occupation, payments of
the disability benefit by the fund shall be discontinued. The
payments shall discontinue as soon as he is reinstated to the
payroll following sick leave, but in no case shall payment be
made for more than 60 days after physicians engaged by the board
find that such person is no longer permanently and totally
disabled.
Sec. 21. Minnesota Statutes 1984, section 354.48,
subdivision 7, is amended to read:
Subd. 7. [PARTIAL RE-EMPLOYMENT.] Should the disabled
person resume a gainful occupation and his earnings are less
than his salary at the date of disability or the salary
currently paid for similar positions, the board shall continue
the disability benefit in an amount which when added to such
earnings does not exceed his salary at the date of disability or
the salary currently paid for similar positions, whichever is
lower, provided the disability benefit in such case does not
exceed the disability benefit originally allowed. The
provisions of this subdivision shall not prohibit the board from
making a determination that a member is no longer totally and
permanently disabled or that the member is engaged or is able to
engage in a substantial gainful occupation based on the results
of the regular physical examinations required by subdivision 6
or any other physical examinations required by the board.
Payment of the disability benefit provided in this subdivision
during a period of partial reemployment shall be discontinued if
the board finds that the member is no longer totally and
permanently disabled.
Sec. 22. Minnesota Statutes 1984, 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 the accumulated deductions credited to the account
as of June 30, 1957, and after July 1, 1957, the accumulated
deductions 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). For the purpose of this subdivision, interest shall
be computed on fiscal year end balances to the first day of the
month in which the refund is issued.
Sec. 23. Minnesota Statutes 1984, section 354.55,
subdivision 11, is amended to read:
Subd. 11. Any person covered under section 354.44,
subdivisions 6 and 7, who ceases to render teaching service may
leave the person's accumulated deductions in the fund for the
purpose of receiving a deferred annuity at retirement.
Eligibility for an annuity under this subdivision shall be
governed pursuant to sections 354.44, subdivision 1, or 354.60.
The amount of the deferred retirement annuity shall be
determined by section 354.44, subdivisions 6 and 7, and
augmented as provided herein. The required reserves related to
that portion of the annuity which had accrued at the time the
member ceased to render teaching service shall be augmented by
interest compounded annually from the first day of the month
following the month during which the member ceased to render
teaching service to the effective date of retirement. There
shall be no augmentation if this period is less than three
months or if this period commences prior to July 1, 1971. The
rates of interest used for this purpose shall be five percent
commencing July 1, 1971, until January 1, 1981, and three
percent thereafter. If a person has more than one period of
uninterrupted service, the required reserves related to each
period shall be augmented by interest pursuant to this
subdivision. The sum of the augmented required reserves so
determined shall be the basis for purchasing the deferred
annuity. If a person does not render teaching service in any
one or more consecutive fiscal years and then resumes teaching
service, the formula percentages used from date of resumption
will be those applicable to new members. The mortality table
and interest assumption contained therein used to compute the
annuity shall be determined by the law in effect at the time of
the member's retirement. A period of uninterrupted service for
the purposes of this subdivision shall mean a period of covered
teaching service during which the member has not been separated
from active service for more than one fiscal year.
The provisions of this subdivision shall not apply to
variable account accumulations as defined in section 354.05,
subdivision 23.
In no case shall the annuity payable herein be less than
the amount of annuity payable pursuant to section 354.44,
subdivisions 6 and 7.
The requirements and provisions for retirement prior to age
65 contained in section 354.44, subdivision 6, clause (2) shall
also apply to an employee fulfilling the requirements with a
combination of service as provided in section 354.60.
The augmentation provided by this subdivision shall not
apply to any period in which a person is on an approved leave of
absence from an employer unit covered by the provisions of this
chapter.
Sec. 24. Minnesota Statutes 1984, section 354.62,
subdivision 2, is amended to read:
Subd. 2. [INDIVIDUAL ELECTION.] Each member of the
teachers retirement association may elect to participate in the
variable annuity division by filing a written notice with the
board of trustees on forms provided by the board.
(1) Employee variable annuity contributions to the variable
annuity division shall be pursuant to the option available in
section 354.44, subdivision 7, the employee variable annuity
contributions shall be an amount equal to one-half of the
employee rates specified in section 354.42, subdivision 2.
(2) Employer variable annuity contributions shall be an
amount equal to the employee variable annuity contributions
provided in clause (1). The deficiency in equal employer
variable annuity contributions which shall exist prior to July
1, 1975 shall be recovered from the additional employer
contributions made prior to July 1, 1975 pursuant to section
354.42, subdivision 5.
(3) There shall be provided for members participating in
the variable annuity division a separate account for each member
which will show his variable account accumulations as defined in
section 354.05, subdivision 23. The board shall establish such
other accounts in the variable annuity division as it deems
necessary for the operation of this provision.
(4) After June 30, 1974 there shall be no new participants
in this program.
(5) Effective July 1, 1978, no future employee and employer
contributions shall be credited to any accounts in the variable
annuity division unless the member elects continued
participation in the variable annuity division pursuant to
section 354.621 Any active member currently participating in the
variable annuity division may elect to cease participation in
the variable annuity division effective the July 1 following the
filing of a written notice with the board of trustees on forms
provided by the board. If this election is made, all future
contributions will go to the formula program.
Sec. 25. Minnesota Statutes 1984, section 354A.35,
subdivision 1, is amended to read:
Subdivision 1. [DEATH BEFORE RETIREMENT; REFUND.] If a
coordinated member or former coordinated member dies prior to
retirement or prior to the receipt of any retirement annuity or
other benefit payment which is or may be payable and a surviving
spouse optional annuity is not payable pursuant to subdivision
2, a refund shall be paid to the person's surviving spouse, or
if there is none, to the person's designated beneficiary, or if
there is none, to the legal representative of the person's
estate. The refund shall be in an amount equal to the person's
accumulated contributions plus interest at the rate of 3-1/2
five percent per annum compounded annually.
Sec. 26. Minnesota Statutes 1984, 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
standards 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 standards 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 actuarial
value of current assets as specified in section 356.215,
subdivision 4, including:
Cash and equivalents
Fixed income investments
Equity investments
Real estate investments
Other
(c) The exhibit shall include a statement of the unfunded
accrued liability of the fund which shall include the following
measures of unfunded accrued liability, using the actuarial
value of current assets as specified in section 356.215,
subdivision 4:
(i) Unfunded accrued liability determined by subtracting
current assets and the present value of future normal costs from
total current and expected future benefit obligations; and
(ii) Current unfunded liability which is total current
benefit obligations less total current assets; and
(iii) Current and future unfunded liability which is total
current and expected future benefit obligations less total
current and expected future assets.
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 itemization of benefit
obligations.
(c) (d) The exhibit shall include a footnote showing
accumulated member contributions without interest.
(d) (e) 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) (f) The exhibit shall include an item for accrued
necessary reserves a schedule which shall be listed as "total
reserves required as per attached schedule current and expected
future benefit obligations." The attached schedule shall
contain the owing following information on the reserves required
benefit obligations:
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
1. Current benefit obligations: actuarial value of
benefit obligations on account of service rendered to date
(a) For annuitants
Retirement annuities
Disability annuities
Surviving spouses' annuities
Surviving children's annuities
(b) For former members without vested rights
(c) For deferred annuitants' benefits, including
any augmentation
(d) For active employees
Retirement benefits
Disability benefits
Refund liability due to death or
withdrawal
Survivors' benefits
Total current benefits obligations
2. Expected future benefit obligations: actuarial value
of benefit obligations on account of future service for active
employees
3. Total current and expected future benefit obligations
5 4. In addition to the foregoing, if there are additional
benefits not appropriately covered by the foregoing four three
items of reserves required benefit obligations, 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. 27. Minnesota Statutes 1984, 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 standards
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: the information required in subdivisions 4a to 4k.
(1) Subd. 4a. [NORMAL COST.] 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 must be calculated 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) Subd. 4b. [ACCRUED LIABILITY.] 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 must be
calculated in accordance with the entry age normal cost method.
(3) Subd. 4c. [DEFINED CONTRIBUTION ACCUMULATIONS.] 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 must be calculated. 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) Subd. 4d. [INTEREST ASSUMPTIONS.] For funds governed
by chapters 3A, 352, 352B, 352C, 353, 354, 354A, and 490, a
preretirement interest assumption of 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 1.065 multiplied by the
salary for the preceding year must be used. For funds governed
by chapter 354A, preretirement and postretirement assumptions of
eight percent and an assumption that in each future year the
salary on which a retirement or other benefit is based is 1.065
multiplied by the salary for the preceding year, but the payment
of postretirement adjustments to retirees shall be based on the
methods specified in the bylaws of the fund as approved by the
legislature. 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 must be used.
(5) Subd. 4e. [OTHER ASSUMPTIONS.] Other assumptions as to
mortality, disability, retirement, withdrawal, entry age and
retirement age set at levels consistent with those determined in
the most recent experience study completed pursuant to section
356.215, subdivision 5, and may be utilized. These other
assumptions must be set forth in the valuation report.
(6) Subd. 4f. [ACTUARIAL BALANCE SHEET.] An actuarial
balance sheet showing must show current and expected future
benefit obligations, current and expected future assets, and the
unfunded accrued liability, current and expected future unfunded
liabilities liability, and current and future unfunded
liability. Specifically, the balance sheet for all funds,
except local police and salaried firefighter funds, shall be
organized in the following manner:
CURRENT AND EXPECTED FUTURE ASSETS
Current assets
Cash and equivalents $...
Fixed income investments ...
Equity investments ...
Real estate investments ...
Other ...
Total current assets $...
Expected future assets
Present value of expected future
statutory 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,
including any augmentation ...
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,
which includes realized capital gains or losses, plus one-third
of any unrealized capital gains or losses, plus realized income,
including realized capital gains or losses.
(c) "unfunded accrued liability" means total current and
expected future benefit obligations less the sum of current
assets and the present value of future normal costs.
In addition to the above itemization of benefit
obligations, separate items shall be shown for additional
benefits, if any, which may not be appropriately included in the
list shown above.
(7) Subd. 4g. [AMORTIZATION CONTRIBUTIONS.] In addition to
the level normal cost, the additional annual contribution which
would be required to retire the current unfunded accrued
liability must be calculated. For funds governed by chapters
3A, 352, 352B, 352C, 353, 354, 354A, and 490, the additional
contribution shall be calculated on a level 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) Subd. 4h. [ACTUARIAL GAINS AND LOSSES.] An analysis by
the actuary explaining the increase or decrease in the unfunded
accrued liability since the last valuation must be provided.
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.
(9) Subd. 4i. [MEMBERSHIP TABULATION.] A tabulation of
active membership and annuitants in the fund must be provided.
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
(10) Subd. 4j. [ADMINISTRATIVE EXPENSES.] A statement of
the administrative expenses must be provided in dollars and also
as a percentage of covered payroll.
(11) Subd. 4k. [PLAN SUMMARY.] A summary of the principal
provisions of the plan upon which the valuation is based must be
included.
Sec. 28. Minnesota Statutes 1984, section 356.216, is
amended to read:
356.216 [CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL POLICE
AND FIRE FUNDS.]
The provisions of section 356.215, governing the contents
of actuarial valuations and experience studies shall apply to
any local police or fire pension fund or relief association
required to make an actuarial report under this section except
as follows:
(1) in calculating normal cost and other requirements
expressed as a level percentage of covered payroll, the salaries
used in computing covered payroll shall be the maximum rate of
salary from which retirement and survivorship credits and
amounts of benefits are determined and from which member
contributions are calculated and deducted;
(2) in lieu of the amortization date specified in section
356.215, subdivision 4, clause (7), the appropriate amortization
target date specified in sections 69.77, subdivision 2, clause
(2), or 69.773, subdivision 4, clause (b), shall be used in
calculating the required amortization contribution;
(3) in addition to the tabulation of active members and
annuitants provided for in section 356.215, subdivision 4,
clause (10), the member contributions for active members for the
calendar year and the prospective annual retirement annuities
under the benefit plan for active members shall be reported; and
(4) actuarial valuations required pursuant to section
69.773, subdivision 2 shall be made at least every four years
and actuarial valuations required pursuant to section 69.77
shall be made annually; and
(5) the actuarial balance sheet showing accrued assets,
accrued liabilities, and the deficit from full funding of
liabilities (unfunded accrued liability) 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
In addition to the above required reserves, separate items
shall be shown for additional benefits, if any, which may not be
appropriately included in the reserves listed above.
Sec. 29. Minnesota Statutes 1984, section 356.70, is
amended to read:
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 at least 85, is entitled, upon valid application and
termination of service prior to December 31, 1986 January 1,
1987, to the normal retirement annuity provided in these
chapters without any reduction in annuity by reason of such
early retirement.
Subd. 2. [REPORTS.] The department of finance with the
cooperation of 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 estimate net savings, if any, made possible by the provisions
of this section, and shall report its findings to the
legislature by February 1, 1986.
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 and reserves required under the rule of
85; and
(f) monthly benefit and reserves required for identical
retirement dates without rule of 85.
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. 30. Laws 1984, chapter 501, section 1, is amended to
read:
Section 1. [ST. LOUIS COUNTY EMERGENCY JOBS PROGRAM.]
St. Louis county may establish an emergency employment
program to meet the needs of its unemployed residents. The
county board of commissioners shall establish rules governing
the operation of the employment program. Rules shall include
but not be limited to number of hours worked, wages, benefits,
and methods and terms of payment. Limits imposed by civil
service rules shall not apply to an emergency jobs program
established under the authority of this section. Service in a
St. Louis county emergency jobs program shall not constitute
employment under Minnesota Statutes, chapter 268, but shall come
within the exclusion established in Minnesota Statutes, section
268.04, subdivision 12, clause (10)(d), and St. Louis county
shall not be liable for contributions to the unemployment
compensation fund for participants of an emergency jobs
program. Service in the emergency jobs program is not covered
by Minnesota Statutes, chapter 353, and persons providing the
services are excluded employees with respect to those services
for purposes of chapter 353.
Sec. 31. [PAYMENT OF VOLUNTARY ASSESSMENTS.]
Subdivision 1. [AUTHORITY.] Notwithstanding the provisions
of Minnesota Statutes, section 353.01, subdivision 16, the
persons described in subdivision 2 shall be entitled to pay to
the public employees retirement association voluntary
assessments. The amount of the payment shall be governed by
Minnesota Statutes, section 353.27, subdivision 2, with
cumulative interest thereon at the rate of six percent per
annum, compounded annually.
Subd. 2. [ELIGIBLE EMPLOYEES.] From the public employees
retirement association, a member who is currently employed by
independent school district No. 281, who was absent from
employment due to illness between April 22, 1981, and September
1, 1981, and who did not have the required deductions made from
income received between July 1, 1981, and September 1, 1981,
shall be entitled to pay the voluntary assessments.
Subd. 3. [EMPLOYER CONTRIBUTION.] Payment of the voluntary
assessments shall be made by a person entitled to pay the
voluntary assessments and the current employer of the person
shall pay from funds provided in Minnesota Statutes, section
353.28, all of the employer contribution payment amount pursuant
to Minnesota Statutes, section 353.27, subdivisions 3 and 3a,
with interest thereon at the rate of six percent per annum,
compounded annually, from July 1, 1981.
Sec. 32. [PURCHASE OF PRIOR SERVICE CREDIT.]
Any member of the teachers retirement association who has
been employed or is presently employed by an organization
designated in Minnesota Statutes 1984, section 354.41,
subdivision 4, may purchase up to ten years of allowable service
credit in the teachers retirement association for service
rendered to the organization. Service credit for the service
rendered shall be credited upon payment in accordance with the
methods prescribed in Minnesota Statutes 1980, section 354.41,
subdivision 6. Payment shall be made before July 1, 1986, or
date of retirement, whichever is earlier.
Sec. 33. [RETROACTIVE EFFECT.]
Laws 1984, chapter 574, section 8, is applicable to any
person who was employed with the legislature or any commission
or agency of the legislature on April 26, 1984, as a permanent
full-time unclassified employee.
Sec. 34. [ST. PAUL BUREAU OF HEALTH.]
Any employee of the St. Paul bureau of health who exercised
an option granted to employees by Laws 1973, chapter 767,
section 4, to retire with benefits calculated under Minnesota
Statutes 1967, chapter 425, as modified by Laws 1969, chapter
1102, and who retired under the provisions of that bureau of
health plan shall be entitled to receive from the public
employees retirement association the greater of either the
benefit received on the effective date of this section or a
revised benefit. The revised benefit shall be computed based on
the employee's years of service and high five years average
salary as of the employee's actual date of retirement reduced by
one-half of one percent for each month that the employee was
under age 65 at the time of the retirement. The revised benefit
shall include the appropriate increases provided from the
post-retirement investment fund.
Sec. 35. [INSTRUCTION TO REVISOR.]
In the next and subsequent editions of Minnesota Statutes,
the revisor of statutes shall in each section referred to in
column A, strike the reference referred to in column B and
insert the reference set forth in column C:
column A column B column C
Minnesota Statutes Minnesota Statutes
1984 1984
3.85, subdivision 356.215, subdivision 356.215, subdivisions
12 4 4 to 4k
3A.11, 356.215, subdivision 356.215,
subdivision 1 4, clause (4) subdivision 4d
69.77, subdivision 356.215, subdivision 356.215, subdivisions
2, clause (2) 4 4 to 4k
69.77, subdivision 356.215, subdivision 356.215, subdivision
2, clause (2), 4, clause (4) 4d
paragraph (b)
69.773, 356.215, subdivision 356.215, subdivisions
subdivision 4 4 4 to 4k
69.773, 356.215, subdivision 356.215, subdivision
subdivision 4, 4, clause (4) 4d
clause (b),
paragraphs (ii),
(iv), and (vi)
352.85, 356.215, 356.215, subdivisions
subdivision 6 subdivision 4 4 to 4k
352.86, 356.215, subdivision 356.215, subdivisions
subdivision 4 4 4 to 4k
352B.26, 356.215, subdivision 356.215, subdivision
subdivision 3 4, clause (4) 4d
354.07, 356.215, subdivision 356.215, subdivision
subdivision 1 4, clause (4) 4d
354.532, 356.215, subdivision 356.215, subdivision
subdivision 1 4, clause (4) 4d
354A.34 356.215, subdivision 356.215, subdivision
4, clause (4) 4d
354A.41, 356.215, subdivision 356.215, subdivision
subdivision 2 4, clause (7) 4g
356.216 356.215, subdivision 356.215, subdivision
4, clause (2) 4g
356.216 356.215, subdivision 356.215, subdivision
4, clause (10) 4j
356.22 356.215, subdivision 356.215, subdivision
4, clause (7) 4g
356.451, 356.215, subdivision 356.215, subdivisions
subdivision 1 4, clauses (1), (2), 4, 4a, 4b, 4f, and 4k
(6)(a), and 11
422A.06, 356.215, subdivision 356.215, subdivision
subdivision 5 4, clause (4) 4d
423A.02 356.215, subdivision 356.215, subdivision
4, clause (4) 4d
424A.02, 356.215, subdivision 356.215, subdivision
subdivision 7 4, clause (4) 4d
Sec. 36. [REPEALER.]
Minnesota Statutes 1984, section 352.113, subdivision 5 is
repealed July 1, 1985. Minnesota Statutes 1984, section
354.621, is repealed the day following final enactment.
Sec. 37. [EFFECTIVE DATE.]
Sections 3, 9, and 13 are effective July 1, 1985. Section
19 is effective retroactively for benefits first accruing after
September 1, 1984. The remaining sections are effective the day
following final enactment. The provisions of section 3
providing that workers' compensation benefits are to be offset
by the amount of disability benefits from the Minnesota state
retirement system are effective for all disability claims filed
with the Minnesota state retirement system on or after July 1,
1985.
Approved June 25, 1985
Official Publication of the State of Minnesota
Revisor of Statutes