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Office of the Revisor of Statutes

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