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Office of the Revisor of Statutes

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

  

                         Laws of Minnesota 1991 

                        CHAPTER 269-H.F.No. 299 
           An act relating to retirement; exempting certain 
          persons participating in the employee interchange 
          program from membership in the Minnesota state 
          retirement system; authorizing the continuation of 
          surviving spouse benefits in the event of remarriage; 
          revising pension plan actuarial reporting; providing a 
          supplemental retirement plan for state university and 
          community college personnel; allowing a purchase of 
          prior service credit; amending Minnesota Statutes 
          1990, sections 3.85, subdivision 11; 3A.04, 
          subdivision 1; 15.53, subdivision 2; 352B.11, 
          subdivision 2; 352C.04, subdivisions 1 and 4; 353.01, 
          subdivision 20; 353.31, subdivision 1; 353.657, 
          subdivision 2; 353B.11, subdivision 6; 354.05, 
          subdivision 15; 354.46, subdivision 1; 354A.011, 
          subdivision 26; 354B.01, by adding a subdivision; 
          356.20, subdivision 4; and 356.215, subdivisions 1, 2, 
          3, 4, 4a, 4b, 4d, 4e, 4f, 4g, 4h, 4i, 4j, 4k, 5, 6, 
          and 7; proposing coding for new law in Minnesota 
          Statutes, chapters 354B; and 423A; repealing Minnesota 
          Statutes 1990, sections 136.80; 136.81; 136.82; 
          136.83; 136.84; 136.85; 136.87; 352.85, subdivision 6; 
          352.86, subdivision 4; and 353A.09, subdivision 7. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                ARTICLE 1
    Section 1.  Minnesota Statutes 1990, section 15.53, 
subdivision 2, is amended to read: 
    Subd. 2.  The period of individual assignment or detail 
under an interchange program shall not exceed 24 months, nor 
shall any person be assigned or detailed for more than 24 months 
during any 36-month period, except when the assignment or detail 
is made to coincide with an unclassified appointment under 
section 15.06.  Details relating to any matter covered in 
sections 15.51 to 15.57 may be the subject of an agreement 
between the sending and receiving agencies.  Elected officials 
shall not be assigned from a sending agency nor detailed to a 
receiving agency. 
    Sec. 2.  [423A.17] [AUTHORITY TO IMPLEMENT THE CONTINUATION 
OF SURVIVING SPOUSE BENEFITS UPON REMARRIAGE.] 
    (a) Notwithstanding a provision of section 69.48; 423.387, 
subdivision 1; 423.58, subdivision 1; 423.810, subdivision 1; or 
424.24, subdivision 1, or other law governing a local police or 
salaried firefighters relief association to the contrary, the 
board of trustees of a local relief association governed by 
section 69.77, with municipal approval as provided in section 
69.77, subdivision 2i, may amend the bylaws of the relief 
association to provide that a surviving spouse benefit is 
payable for the life of the surviving spouse and remains payable 
even in the event of the remarriage of the surviving spouse. 
    (b) If the surviving spouse benefit change described in 
paragraph (a) is made, the change applies to a surviving spouse 
benefit payable on the effective date of the change and to the 
potential surviving spouses of all active, deferred, or retired 
members of the relief association who have that status on the 
effective date of the change.  
    (c) In addition, if the surviving spouse benefit change 
described in paragraph (a) is made and the bylaws so provide, a 
person who formerly was receiving surviving spouse benefits from 
the relief association and who had those benefits discontinued 
by virtue of the remarriage is entitled, upon application, to a 
resumption of the surviving spouse benefit, beginning with the 
last day of the month following receipt of the application by 
the secretary of the relief association.  Nothing in this 
section authorizes the payment of a benefit amount to an estate. 
    (d) The bylaw amendment is not effective until a certified 
copy of the amendment and the municipal approval has been filed 
by the municipal clerk with the executive director of the 
legislative commission on pensions and retirement, the state 
auditor, and the secretary of state. 
    Sec. 3.  [SERVICE EXCLUSION.] 
    Notwithstanding any law to the contrary, a person serving 
in the state unclassified service under an employee interchange 
program according to Minnesota Statutes, section 15.53, who 
remains a member of another public pension plan during the state 
unclassified service is not a member of the Minnesota state 
retirement system for the service under the employee interchange 
program. 
    Sec. 4.  [EFFECTIVE DATE.] 
    Section 2 is effective on the day following final enactment.

                                ARTICLE 2 

                 SURVIVING SPOUSE BENEFIT MODIFICATIONS 
    Section 1.  Minnesota Statutes 1990, section 3A.04, 
subdivision 1, is amended to read: 
    Subdivision 1.  [SURVIVING SPOUSE.] Upon the death of a 
member of the legislature while serving as a member, or upon the 
death of a former legislator who has rendered at least the 
number of years of service as required by section 3A.02, 
subdivision 1, clause (1) and who was not receiving a retirement 
allowance, the surviving spouse shall be entitled to receive a 
survivor benefit in the amount of one-half of the retirement 
allowance of the member of the legislature or former legislator 
computed as though the member or former legislator had attained 
at least the normal retirement age on the date of death and 
based upon the average monthly salary as of the date of death or 
as of the date of termination, whichever is applicable, and the 
allowable service of the member or the former legislator or 
eight years, whichever is greater.  The augmentation provided in 
section 3A.02, subdivision 4, if applicable, shall be applied 
from the first day of the month next following the date of 
termination of service as a member of the legislature to the 
month of death.  Upon the death of a former legislator who was 
receiving a retirement allowance, the surviving spouse shall be 
entitled to one-half of the amount of the allowance being paid 
to the former legislator.  The surviving spouse benefit shall be 
paid during the lifetime of the surviving spouse, but shall 
cease and terminate upon the remarriage of the surviving spouse. 
    Sec. 2.  Minnesota Statutes 1990, section 352B.11, 
subdivision 2, is amended to read: 
    Subd. 2.  [DEATH; PAYMENT TO SPOUSE AND CHILDREN.] If a 
member serving actively as a member, a member receiving the 
disability benefit provided by section 352B.10, subdivision 1, 
or a former member receiving a disability benefit as provided by 
section 352B.10, subdivision 2, dies from any cause, the 
surviving spouse and dependent children are entitled to benefit 
payments as follows: 
    (a) A member with at least three years of allowable service 
is deemed to have elected a 100 percent joint and survivor 
annuity payable to a surviving spouse only on or after the date 
the member or former member became or would have become 55. 
    (b) The surviving spouse of a member who had credit for 
less than three years of service shall receive, for life, a 
monthly annuity equal to 50 percent of that part of the average 
monthly salary of the member from which deductions were made for 
retirement.  If the surviving spouse remarries, the annuity 
shall cease as of the date of the remarriage. 
    (c) The surviving spouse of a member who had credit for at 
least three years service and who died after becoming 55 years 
old, may elect to receive a 100 percent joint and survivor 
annuity, for life, notwithstanding a subsequent remarriage, in 
lieu of the annuity prescribed in paragraph (b). 
    (d) The surviving spouse of any member who had credit for 
three years or more and who was not 55 years old at death, shall 
receive the benefit equal to 50 percent of the average monthly 
salary as described in clause (b) until the deceased member 
would have become 55 years old, and beginning the first of the 
month following that date, may elect to receive the 100 percent 
joint and survivor annuity.  If the surviving spouse remarries 
before the deceased member's 55th birth date, benefits or 
annuities shall cease as of the date of remarriage.  Remarriage 
after the deceased member's 55th birthday shall not affect the 
payment of the benefit. 
    (e) Each dependent child shall receive a monthly annuity 
equal to ten percent of that part of the average monthly salary 
of the former member from which deductions were made for 
retirement.  A dependent child over 18 and under 23 years of age 
also may receive the monthly benefit provided in this section, 
if the child is continuously attending an accredited school as a 
full-time student during the normal school year as determined by 
the director.  If the child does not continuously attend school 
but separates from full-time attendance during any part of a 
school year, the annuity shall cease at the end of the month of 
separation.  In addition, a payment of $20 per month shall be 
prorated equally to surviving dependent children when the former 
member is survived by one or more dependent children.  Payments 
for the benefit of any qualified dependent child must be made to 
the surviving spouse, or if there is none, to the legal guardian 
of the child.  The maximum monthly benefit for any one family 
must not be less than 50 nor exceed 70 percent of the average 
monthly salary for any number of children. 
    (f) If the member dies under circumstances that entitle the 
surviving spouse and dependent children to receive benefits 
under the workers' compensation law, the workers' compensation 
benefits received by them must not be deducted from the benefits 
payable under this section. 
    (g) The surviving spouse of a deceased former member who 
had credit for three or more years of allowable service, but not 
the spouse of a former member receiving a disability benefit 
under section 352B.10, subdivision 2, is entitled to receive the 
100 percent joint and survivor annuity at the time the deceased 
member would have become 55 years old, if the surviving spouse 
has not remarried before that date.  If a former member dies who 
does not qualify for other benefits under this chapter, the 
surviving spouse or, if none, the children or heirs are entitled 
to a refund of the accumulated deductions left in the fund plus 
interest at the rate of six percent per year compounded annually.
    Sec. 3.  Minnesota Statutes 1990, section 352C.04, 
subdivision 1, is amended to read: 
    Subdivision 1.  [SURVIVING SPOUSE BENEFIT.] Upon the death 
of a constitutional officer or commissioner while actively 
serving in office, or a former constitutional officer or 
commissioner with at least eight years of allowable service, the 
surviving spouse is entitled to a survivor benefit in the amount 
of one-half of the retirement allowance of the constitutional 
officer or commissioner or the former constitutional officer or 
commissioner computed as though the constitutional officer or 
commissioner or the former constitutional officer or 
commissioner were at least age 62 on the date of death and based 
upon the attained allowable service or eight years, whichever is 
greater.  The augmentation provided in section 352C.033, if 
applicable, shall be applied to the month of death.  Upon the 
death of a former constitutional officer or commissioner 
receiving a retirement allowance, the surviving spouse shall be 
entitled to one-half of the amount of the retirement allowance 
being paid to the former constitutional officer or commissioner 
as of the date of death.  The benefit shall be paid to a 
surviving spouse eligible therefor during the remainder of the 
spouse's natural life or until remarriage.  Upon remarriage, the 
spouse shall no longer be eligible for the benefit except as 
provided in section 356.31. 
    Sec. 4.  Minnesota Statutes 1990, section 352C.04, 
subdivision 4, is amended to read: 
    Subd. 4.  [APPLICATION FOR SURVIVOR BENEFITS.] A surviving 
spouse or a guardian of the estate of the dependent child or 
children entitled to the payment of benefits under this section 
shall file an application for the benefit with the director, and 
payment shall commence as of the first day of the month next 
following the filing of the application and shall be retroactive 
to the first of the month following the death of the 
constitutional officer or commissioner or the former 
constitutional officer or commissioner; provided, however, that 
no payment shall be retroactive for more than 12 months prior to 
the month in which the application is filed with the director.  
Such benefits shall be paid on the first day of each calendar 
month for that month.  The surviving spouse benefit shall cease 
with the payment for the month in which the surviving spouse 
dies or remarries as the case may be.  The dependent child's 
benefit shall cease with the payment for the month in which the 
child no longer qualifies for payment as a dependent child. 
    Sec. 5.  Minnesota Statutes 1990, section 353.01, 
subdivision 20, is amended to read: 
    Subd. 20.  [SURVIVING SPOUSE.] "Surviving spouse" means the 
unremarried spouse of a deceased member who was legally married 
to the member at the time of death, or at the time the member 
became totally and permanently disabled. 
    Sec. 6.  Minnesota Statutes 1990, section 353.31, 
subdivision 1, is amended to read: 
    Subdivision 1.  [BENEFITS FOR SURVIVING SPOUSE AND 
DEPENDENT CHILDREN; BEFORE RETIREMENT.] Upon the death of a 
basic member before retirement or upon the death of a basic 
member who was disabled and receiving disability benefits 
pursuant to section 353.33 at the time of death who has had at 
least 18 months of credited allowable service, the surviving 
spouse and dependent children of the member, as defined in 
section 353.01, subdivisions 15 and 20, shall be entitled to 
receive the monthly benefit provided below: 
(a) Surviving spouse           50 percent of the member's
                               monthly average salary in
                               effect over the last full
                               six months of allowable
                               service preceding the month
                               in which death occurred
(b) Each dependent child       10 percent of the member's
                               monthly average salary in
                               effect over the last full
                               six months of allowable
                               service preceding the month
                               in which death occurred
    Payments for the benefit of any dependent child, as defined 
in section 353.01, subdivision 15, shall be made to the 
surviving parent, or if there be none, to the legal guardian of 
the child.  The maximum monthly benefit for a family shall not 
exceed $1,000, and the minimum benefit per family shall not be 
less than 50 percent of the basic member's specified average 
monthly salary, subject to the aforementioned maximum.  The 
surviving spouse benefit shall terminate upon the remarriage of 
the spouse, and The dependent children's benefit shall be 
reduced pro tanto when any child is no longer dependent. 
    Any survivor of a basic member whose average salary was 
less than $75 per month shall not be entitled to the benefits 
provided in this subdivision.  Prior to payment of any survivor 
benefit pursuant to this subdivision, in lieu of that benefit, 
the surviving dependent spouse may elect to receive the joint 
and survivor annuity provided pursuant to section 353.32, 
subdivision 1a.  
    Except for any benefits provided pursuant to section 
353.32, subdivisions 1 and 1a, there are no survivor benefits 
payable to the surviving spouse or dependent children of a 
deceased coordinated member. 
    Sec. 7.  Minnesota Statutes 1990, section 353.657, 
subdivision 2, is amended to read: 
    Subd. 2.  The spouse, for life or until remarriage, shall 
receive a monthly benefit equal to 50 percent of the member's 
average full-time monthly salary rate as a police officer or 
firefighter in effect over the last six months of allowable 
service preceding the month in which death occurred. 
    Sec. 8.  Minnesota Statutes 1990, section 353B.11, 
subdivision 6, is amended to read: 
    Subd. 6.  [DISCONTINUATION; SURVIVING SPOUSE BENEFIT.] (a) 
Except as specified in paragraph (b) or (c), a surviving spouse 
benefit shall terminate upon the death or the subsequent 
marriage of the person entitled to receive or receiving a 
surviving spouse benefit.  
    (b) A surviving spouse benefit shall terminate upon the 
subsequent marriage of the person entitled to receive or 
receiving a surviving spouse benefit but shall recommence at the 
appropriate amount without any retroactive payments in the event 
of the termination of the subsequent marriage for any reason for 
the former members of the following consolidating relief 
associations:  
    (1) Albert Lea firefighters relief association; 
    (2) Albert Lea police relief association; 
    (3) Duluth firefighters relief association; 
    (4) Duluth police pension association; 
    (5) Minneapolis fire department relief association; 
    (6) (5) St. Paul fire department relief association; and 
    (7) (6) St. Paul police relief association.  
    (c) A surviving spouse benefit shall terminate only upon 
the death of the person entitled to receive or receiving a 
surviving spouse benefit for the former members of the following 
consolidating relief associations:  
    (1) Anoka police relief association; 
    (2) Buhl police relief association; 
    (3) Chisholm fire department relief association; 
    (4) Chisholm police relief association; 
    (5) Crookston fire department relief association; 
    (6) Duluth police relief association; 
    (7) Faribault fire department relief association; 
    (8) Hibbing firefighters relief association; 
    (9) Hibbing police relief association; 
    (10) Mankato fire department relief association; 
    (2) (11) Red Wing fire department relief association; 
    (12) Red Wing police relief association; 
    (13) Rochester fire department relief association; 
    (14) Rochester police relief association; 
    (15) St. Cloud fire department relief association; 
    (16) St. Louis Park fire department relief association; 
    (17) St. Louis Park police relief association; 
    (18) South St. Paul firefighters relief association; 
    (3) (19) South St. Paul police relief association; 
    (4) (20) West St. Paul firefighters relief association; and 
    (5) (21) Winona fire department relief association; and 
    (22) Winona police relief association. 
    Sec. 9.  Minnesota Statutes 1990, section 354.05, 
subdivision 15, is amended to read: 
    Subd. 15.  [DEPENDENT SPOUSE.] "Dependent spouse" means the 
spouse of a deceased member who has not remarried and was living 
with and dependent upon the member at the time of death. 
    Sec. 10.  Minnesota Statutes 1990, section 354.46, 
subdivision 1, is amended to read: 
    Subdivision 1.  [BASIC PROGRAM; BENEFITS FOR SPOUSE AND 
CHILDREN OF TEACHER.] If a basic member who has at least 18 
months of allowable service credit and who has an average salary 
as defined in section 354.44, subdivision 6, equal to or greater 
than $75 dies prior to retirement or if a former basic member 
who, at the time of death, was totally and permanently disabled 
and receiving disability benefits pursuant to section 354.48 
dies prior to attaining the age of 65 years, the surviving 
dependent spouse and dependent children of the basic member or 
former basic member shall be entitled to receive a monthly 
benefit as follows: 
  (a) Surviving
  dependent
  spouse .....50 percent of the basic member's monthly
              average salary paid in the last full
              fiscal year preceding death
  (b) Each
  dependent
  child ......ten percent of the basic member's
              monthly average salary paid in the
              last full fiscal year preceding death
    Payments for the benefit of any dependent child under the 
age of 22 years shall be made to the surviving parent, or if 
there be none, to the legal guardian of the child.  The maximum 
monthly benefit shall not exceed $1,000 for any one family, and 
the minimum benefit per family shall not be less than 50 percent 
of the basic member's average salary, subject to the foregoing 
maximum.  The surviving dependent spouse benefit shall terminate 
upon remarriage, and the surviving dependent children's benefit 
shall be reduced pro tanto when any surviving child is no longer 
dependent. 
    If the basic member and the surviving dependent spouse are 
killed in a common disaster and if the total of all survivors 
benefits payable pursuant to this subdivision is less than the 
accumulated deductions plus interest payable, the surviving 
dependent children shall receive the difference in a lump sum 
payment. 
    If the survivor benefits provided in this subdivision 
exceed in total the monthly average salary of the deceased basic 
member, these benefits shall be reduced to an amount equal to 
the deceased basic member's monthly average salary. 
    Prior to payment of any survivor benefit pursuant to this 
subdivision, in lieu of that benefit, the surviving dependent 
spouse may elect to receive the joint and survivor annuity 
provided pursuant to subdivision 2, or may elect to receive a 
refund of accumulated deductions with interest in a lump sum as 
provided pursuant to section 354.47, subdivision 1.  If there 
are any surviving dependent children, the surviving dependent 
spouse may elect to receive the refund of accumulated deductions 
only with the consent of the district court of the district in 
which the surviving dependent child or children reside. 
    Sec. 11.  Minnesota Statutes 1990, section 354A.011, 
subdivision 26, is amended to read: 
    Subd. 26.  [SPOUSE.] "Spouse" means the person who was 
legally married to and living with the member immediately prior 
to the member's death and who has not remarried subsequent to 
the member's death.  
    Sec. 12.  [SURVIVING SPOUSE BENEFITS.] 
    Subdivision 1.  Notwithstanding any laws to the contrary, 
the benefit payable to the surviving spouse of a deceased 
deferred or deceased retired former member of the following 
consolidated relief associations is as specified in subdivision 
2: 
    (a) Chisholm fire relief association; 
    (b) Chisholm police relief association; 
    (c) Hibbing fire relief association; and 
    (d) Hibbing police relief association. 
    The benefit specified in subdivision 2 is payable to 
current and prospective surviving spouses eligible to receive a 
benefit under the benefit provisions of the applicable local 
relief association benefit plan. 
    Subd. 2.  The benefit provided for individuals identified 
in subdivision 1 is 50 percent of the annuity amount being 
received by the former member immediately prior to death, unless 
the survivor benefit computed under prior law is greater. 
    Sec. 13.  [EFFECTIVE DATE.] 
    (a) Sections 1 to 11 are effective the day following final 
enactment. 
    Section 12 is effective for the former relief associations 
of the city of Chisholm the day following approval by the 
Chisholm city council and upon compliance with Minnesota 
Statutes, section 645.021.  Section 12 is effective for the 
former relief associations of the city of Hibbing the day 
following approval by the Hibbing city council and upon 
compliance with Minnesota Statutes, section 645.021. 
    (b) The elimination of the surviving spouse benefit 
discontinuation requirement provided for in sections 1 to 11 
also applies to any surviving spouse receiving a surviving 
spouse benefit on the date of final enactment of the act and the 
potential surviving spouses of active, deferred or retired plan 
members who have that status on the effective date of the 
change.  Sections 1 to 11 do not apply to persons who formerly 
were receiving surviving spouse benefits and had those benefits 
discontinued by virtue of a remarriage and may not be considered 
to authorize the payment of any retroactive survivor benefit 
amounts to any person or to an estate.  

                               ARTICLE 3 

           PUBLIC PENSION PLAN ACTUARIAL REPORTING REVISIONS 
    Section 1.  Minnesota Statutes 1990, section 3.85, 
subdivision 11, is amended to read: 
    Subd. 11.  [VALUATIONS AND REPORTS TO LEGISLATURE.] (a) The 
commission shall contract with an established actuarial 
consulting firm to conduct annual actuarial valuations and 
financial adequacy studies for the retirement plans named in 
paragraph (b).  The contract shall must include provisions for 
performing cost analyses of proposals for changes in benefit and 
funding policies.  
    (b) The contract for actuarial valuation and analysis shall 
must include the following retirement plans:  
    (1) the statewide teachers retirement plan, teachers 
retirement association; 
    (2) the general state employees retirement plan, Minnesota 
state retirement system; 
    (3) the correctional employees retirement plan, Minnesota 
state retirement system; 
    (4) the state patrol retirement plan, Minnesota state 
retirement system; 
    (5) the judges retirement plan, Minnesota state retirement 
system; 
    (6) the Minneapolis employees retirement plan, Minneapolis 
employees retirement fund; 
    (7) the general public employees retirement plan, public 
employees retirement association; 
    (8) the public employees police and fire plan, public 
employees retirement association; 
    (9) the Duluth teachers retirement plan, Duluth teachers 
retirement fund association; 
    (10) the Minneapolis teachers retirement plan, Minneapolis 
teachers retirement fund association; 
    (11) the St. Paul teachers retirement plan, St. Paul 
teachers retirement fund association; 
    (12) the legislator's legislators retirement plan, 
Minnesota state retirement system; and 
    (13) the elective state officers retirement plan, Minnesota 
state retirement system; and 
    (14) the public employees local government correctional 
service retirement plan, public employees retirement 
association, if there are any participants in that plan.  
    (c) Every year The contract shall must specify completion 
of standard annual actuarial valuations for the valuation 
calculations on a fiscal year basis with their contents 
as described specified in section 356.215, subdivisions 4 to 4k, 
and cash flow forecasts through the amortization target date and 
the standards for actuarial work adopted by the commission.  
    For every plan year The contract shall must 
specify preparation completion of an exhibit on the experience 
of the fund for inclusion in the annual actuarial valuation and 
completion of a periodic experience study annual experience data 
collection and processing and a quadrennial published experience 
study for the plans listed in paragraph (b), clauses (1), (2), 
and (7), as provided for in the standards for actuarial work 
adopted by the commission.  The experience study shall data 
collection, processing, and analysis must evaluate the 
appropriateness of continuing to use for future valuations the 
assumptions relating to the following:  
    (1) individual salary progression; 
    (2) rate of return on investments based on current asset 
value; 
    (3) payroll growth; 
    (4) mortality; withdrawal; disability; 
    (5) retirement; and any other experience-related factor 
that could impact the future financial condition of the 
retirement funds age; 
    (6) withdrawal; and 
    (7) disablement.  
    (d) The actuary retained by the commission shall annually 
prepare a report to the legislature, including the commentary on 
the actuarial valuation calculations for the plans named in 
paragraph (b) and summarizing the results of the valuations and 
cash flow projections actuarial valuation calculations.  It The 
commission-retained actuary shall include with its the report 
the actuary's recommendations concerning the appropriateness of 
the support rates to achieve proper funding of the retirement 
funds by the required funding dates.  It The commission-retained 
actuary shall, within two months of the completion as part of 
the periodic quadrennial published experience studies 
study, prepare a report include recommendations to the 
legislature on the appropriateness of the actuarial valuation 
assumptions required for evaluation in the periodic experience 
study.  
    (e) If the actuarial gain and loss analysis in the 
actuarial valuation calculations indicates a persistent pattern 
of sizable gains or losses, as directed by the commission, the 
actuary retained by the commission shall prepare a special 
experience study for a plan listed in paragraph (b), clause (3), 
(4), (5), (6), (8), (9), (10), (11), (12), (13), or (14), in the 
manner provided for in the standards for actuarial work adopted 
by the commission. 
    (f) The term of the contract between the commission and the 
actuary retained by the commission is two years, plus not to 
exceed two one-year extensions before competitive bidding.  The 
contract is subject to competitive bidding procedures as 
specified by the commission. 
    Subd. 12.  [ALLOCATION OF ACTUARIAL COST.] (a) The 
commission shall assess each retirement plan specified 
in subdivision 11, paragraph (b), other than clauses (12) and 
(13), for a portion of the compensation paid to the actuary 
retained by the commission for the cost of its actuarial 
valuations valuation calculations and quadrennial experience 
studies.  The assessment shall be that part is 72 percent of the 
amount of contract compensation for the actuarial consulting 
firm retained by the commission for those functions that bears 
the same relationship that the total active, deferred, inactive, 
and benefit recipient membership of the retirement plan bears to 
the total action, deferred, inactive, and benefit recipient 
membership of all retirement plans specified in paragraph 
(b) actuarial valuation calculations, including the public 
employees police and fire plan consolidation accounts of the 
public employees retirement association, annual experience data 
collection and processing, and quadrennial experience studies.  
    The portion of the total assessment payable by each 
retirement system or pension plan must be determined as follows: 
    (1) Each pension plan specified in subdivision 11, 
paragraph (b), clauses (1) to (14), must pay the following 
indexed amount based on its total active, deferred, inactive, 
and benefit recipient membership: 
       up to 2,000 members, inclusive         $2.55 per member 
       2,001 through 10,000 members           $1.13 per member 
       over 10,000 members                    $0.11 per member  
    The amount specified is applicable for the assessment of 
the July 1, 1991, to June 30, 1992, fiscal year actuarial 
compensation amounts.  For the July 1, 1992, to June 30, 1993, 
fiscal year and subsequent fiscal year actuarial compensation 
amounts, the amount specified must be increased at the same 
percentage increase rate as the implicit price deflator for 
state and local government purchases of goods and services for 
the 12-month period ending with the first quarter of the 
calendar year following the completion date for the actuarial 
valuation calculations, as published by the federal Department 
of Commerce, and rounded upward to the nearest full cent. 
    (2) The total per-member portion of the allocation must be 
determined, and that total per-member amount must be subtracted 
from the total amount for allocation.  Of the remainder dollar 
amount, the following per-retirement system and per-pension plan 
charges must be determined and the charges must be paid by the 
system or plan: 
    (i) 37.87 percent is the total additional per-retirement 
system charge, of which one-seventh must be paid by each 
retirement system specified in subdivision 11, paragraph (b), 
clauses (1), (2), (6), (7), (9), (10), and (11). 
    (ii) 62.13 percent is the total additional per-pension plan 
charge, of which one-thirteenth must be paid by each pension 
plan specified in subdivision 11, paragraph (b), clauses (1) to 
(13), if there are not any participants in the plan specified in 
subdivision 11, paragraph (b), clause (14), or of which 
one-fourteenth must be paid by each pension plan specified in 
subdivision 11, paragraph (b), clauses (1) to (14), if there are 
participants in the plan specified in subdivision 11, paragraph 
(b), clause (14). 
    (b) The assessment shall must be made upon following the 
completion of the actuarial valuations valuation calculations 
and the experience studies analysis.  The amount of the 
assessment is appropriated from the retirement fund applicable 
to the retirement plan.  Receipts from assessments shall must be 
deposited in the state treasury and credited to the general fund.
    Sec. 2.  Minnesota Statutes 1990, section 356.20, 
subdivision 4, is amended to read: 
    Subd. 4.  [CONTENTS OF FINANCIAL REPORT.] The financial 
report required by this section shall include: 
    (1) must contain financial statements and disclosures that 
indicate the financial operations and position of the retirement 
plan and fund.  The report must conform with generally accepted 
governmental accounting principles, applied on a consistent 
basis.  The report must be audited.  The report must include, as 
part of its exhibits or footnotes, an exhibit actuarial 
disclosure item based on the actuarial valuation calculations 
prepared by the commission-retained actuary or by the actuary 
retained by the retirement fund or plan, if applicable, 
according to applicable actuarial requirements enumerated in 
section 356.215, and specified in the most recent standards for 
actuarial work adopted by the legislative commission on pensions 
and retirement.  The exhibit shall show the accrued assets of 
the fund, the accrued liabilities, including accrued reserves, 
and the unfunded actuarial accrued liability of the fund or plan 
must be disclosed.  The exhibit shall disclosure item must 
contain the certificate of a declaration by the actuary retained 
by the legislative commission on pensions and retirement or the 
actuary retained by the fund or plan, whichever applies, 
specifying that the required reserves for any retirement, 
disability, or survivor benefits provided under a benefit 
formula are computed in accordance with the entry age actuarial 
cost method and any with the most recent applicable 
standards for actuarial work adopted by the legislative 
commission on pensions and retirement. 
    (a) Assets shown in the exhibit shall of the fund or plan 
contained in the disclosure item must 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 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 defined in section 356.215, 
subdivision 4, including: 
    Cash, cash equivalents, and short-term securities 
    Fixed income investments 
    Equity investments 
    Real estate investments 
    Equity in the Minnesota postretirement investment fund 
    Other 1: 
                                    Value         Value 
                                   at cost       at market
 Cash, cash equivalents, and  
   short-term securities           .........     ......... 
 Accounts receivable               .........     .........
 Accrued investment income         .........     .........  
 Fixed income investments          .........     ......... 
 Equity investments other 
   than real estate                .........     ......... 
 Real estate investments           .........     ......... 
 Equipment                         .........     ......... 
 Equity in the Minnesota 
   postretirement investment
   fund                            .........     ......... 
 Other                             .........     .........  
  
 Total assets 
   Value at cost                                 .........
   Value at market                               ......... 
   Value of current assets                       ......... 
    (c) (b) The exhibit shall include a statement of the 
unfunded actuarial accrued liability of the fund which shall or 
plan contained in the disclosure item must include the following 
measures of unfunded actuarial accrued liability, using 
the actuarial value of current assets as specified in section 
356.215, subdivision 1: 
    (i) (1) unfunded actuarial accrued liability, which shall 
be determined by subtracting the current assets and the present 
value of future normal costs from the total current and expected 
future benefit obligations; and 
    (ii) current (2) unfunded actuarial liability pension 
benefit obligation, which is the total current benefit 
obligations less determined by subtracting the total current 
assets; and 
    (iii) current and future unfunded actuarial liability, 
which is the total current and expected future benefit 
obligations less the total current and expected future 
assets from the actuarial present value of credited projected 
benefits. 
    If the current assets of the fund or plan exceed the 
actuarial accrued liabilities, the excess shall must be listed 
disclosed and indicated as a surplus and indicated in the 
exhibit following the itemization of benefit obligations. 
    (d) The exhibit shall include a footnote showing 
accumulated member contributions without interest. 
    (e) Current liabilities shown in the exhibit shall include 
the following items: 
    Current: 
    Accounts payable 
    Retirement annuity payments 
    Disability benefit payments 
    Survivor benefit payments 
    Refund to members 
    Accrued expenses 
    Suspense items 
    Total current liabilities ........................ . 
    (f) (c) The exhibit shall include a schedule which shall be 
listed as the "current and expected future pension benefit 
obligations."  The schedule shall included in the disclosure 
must contain the following information on the benefit 
obligations: 
    1.  Current (1) The pension benefit obligations obligation, 
which shall be determined as the actuarial present value of 
benefit obligations credited projected benefits on account of 
service rendered to date, separately identified as follows: 
     (a) (i) For annuitants 
         Retirement annuities 
         Disability benefits
         Surviving spouse and child benefits
     (b) (ii) For former members without vested rights 
     (c) (iii)  For deferred annuitants' benefits, including 
          any augmentation 
     (d) (iv) For active employees 
         Retirement annuities
         Disability benefits 
         Refund liability due to death or 
          withdrawal 
         Survivors' benefits 
         Accumulated employee contributions,
           including allocated investment income
         Employer-financed benefits vested
         Employer-financed benefits nonvested
Total current benefits obligations pension benefit 
obligation;
    2.  Expected future benefit obligations which shall be the 
actuarial value of benefit obligations on account of future 
service for active employees 
    3.  Total current and expected future benefit obligations 
    4.  In addition to the foregoing, (2) If there are 
additional benefits not appropriately covered by the 
foregoing three items of benefit obligations, they shall be 
listed separately a separate identification of the obligation. 
    (2) An income statement prepared 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 the payment of retirement annuities, 
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 concerning 
the membership and beneficiaries of the fund, with indications 
of changes in the statistical data which may result from the 
current year's operation. 
    (5) (d) Any additional statements or exhibits which or more 
detailed or subdivided itemization of a disclosure item that 
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 must 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. 3.  Minnesota Statutes 1990, section 356.215, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITIONS.] For the purposes of sections 
3.85 and 356.20 to 356.23, each of the following terms shall 
have the meaning given: 
    (1) "Actuarial valuation" means a set of calculations 
prepared by the actuary retained by the legislative commission 
on pensions and retirement if so required under section 3.85, or 
otherwise, by an approved actuary, to determine the normal cost 
and the accrued actuarial liabilities of a benefit plan, 
according to a stated the entry age actuarial cost method and 
based upon stated assumptions including, but not limited to 
rates of interest, mortality, salary increase, disability, 
withdrawal, and retirement and to determine the payment 
necessary to amortize over a stated period any unfunded accrued 
actuarial liability disclosed as a result of the actuarial 
valuation and the resulting actuarial balance sheet of the 
benefit plan. 
    (2) "Approved actuary" means a person who is regularly 
engaged in the business of providing actuarial services and who 
has at least 15 years of service to major public employee 
pension or retirement funds or who is a fellow in the society of 
actuaries.  
    (3) "Entry age actuarial cost method" means an actuarial 
cost method under which the actuarial present value of the 
projected benefits of each individual currently covered by the 
benefit plan and included in the actuarial valuation is 
allocated on a level basis over the service of the individual if 
the benefit plan is governed by section 69.773 or over the 
earnings of the individual if the benefit plan is governed by 
any other law between the entry age and the assumed exit age, 
with the portion of this actuarial present value which is 
allocated to the valuation year to be the normal cost and the 
portion of this actuarial present value not provided for at the 
valuation date by the actuarial present value of future normal 
costs to be the actuarial accrued liability, with aggregation in 
the calculation process to be the sum of the calculated result 
for each covered individual and with recognition given to any 
different benefit formulas which may apply to various periods of 
service. 
    (4) "Experience study" means a report which provides 
providing experience data and an actuarial analysis which 
substantiate of the adequacy of the actuarial assumptions on 
which actuarial valuations are based. 
    (5) "Expected future statutory supplemental contributions" 
means the sum of future employee and employer contributions at 
the rates specified in statute when the valuation is completed, 
reduced by the present value of future normal costs. 
    (6) "Current assets" means the value of all assets at cost, 
which includes including realized capital gains or losses, plus 
one-third of any unrealized capital gains or losses. 
    (7) (6) "Unfunded actuarial accrued liability" means the 
total current and expected future benefit obligations less, 
reduced by the sum of current assets and the present value of 
future normal costs. 
    (7) "Pension benefit obligation" means the actuarial 
present value of credited projected benefits, determined as the 
actuarial present value of benefits estimated to be payable in 
the future as a result of employee service attributing an equal 
benefit amount, including the effect of projected salary 
increases and any step rate benefit accrual rate differences, to 
each year of credited and expected future employee service. 
    Sec. 4.  Minnesota Statutes 1990, section 356.215, 
subdivision 2, is amended to read: 
    Subd. 2.  [REQUIREMENTS.] It is the policy of the 
legislature that it is necessary and appropriate to determine 
annually the financial status of tax supported retirement and 
pension plans for public employees.  To achieve this goal, the 
legislative commission on pensions and retirement shall have 
prepared by the actuary retained by the commission annual 
actuarial valuations and periodic experience studies of 
the public pension and retirement plans enumerated in section 
3.85, subdivision 12 11, clause paragraph (b), and quadrennial 
experience studies of the retirement plans enumerated in section 
3.85, subdivision 11, paragraph (b), clauses (1), (2), and (7).  
The governing or managing board or administrative officials of 
each public pension and retirement fund or plan enumerated in 
section 356.20, subdivision 2, clauses (9), (10), and (12), 
shall have prepared by an approved actuary annual actuarial 
valuations and periodic experience studies of their respective 
funds as provided in this section.  This requirement shall also 
apply applies to any fund which may be a that is the successor 
to any organization enumerated in section 356.20, subdivision 2, 
or to the governing or managing board or administrative 
officials of any newly formed retirement fund or association 
operating under the control or supervision of any public 
employee group, governmental unit, or institution receiving a 
portion of its support through legislative appropriations, and 
any local police or fire fund coming within the provisions of 
section 356.216. 
    Sec. 5.  Minnesota Statutes 1990, section 356.215, 
subdivision 3, is amended to read: 
    Subd. 3.  [REPORTS.] The actuarial valuations required 
annually shall must be made as of the beginning of each fiscal 
year.  Two copies of the valuation shall must be delivered to 
the executive director of the legislative commission on pensions 
and retirement, to the commissioner of finance and to the 
legislative reference library, not later than the first day of 
the sixth month occurring after the end of the previous fiscal 
year.  Two copies of any a quadrennial experience study prepared 
periodically as provided for in the standards adopted by the 
commission shall must be filed with the executive director of 
the legislative commission on pensions and retirement, with the 
commissioner of finance, and with the legislative reference 
library, not later than the first day of the 11th month 
occurring after the end of the last fiscal year of the four-year 
period which the experience study covers.  For actuarial 
valuations and experience studies prepared at the direction of 
the legislative commission on pensions and retirement, two 
copies of the document shall must be delivered to the governing 
or managing board or administrative officials of the applicable 
public pension and retirement fund or plan. 
    Sec. 6.  Minnesota Statutes 1990, section 356.215, 
subdivision 4, is amended to read: 
    Subd. 4.  [ACTUARIAL VALUATION; CONTENTS.] The actuarial 
valuation shall must be made in conformity with the requirements 
of the definition contained in subdivision 1 and the most recent 
standards for actuarial work adopted by the legislative 
commission on pensions and retirement.  The actuarial 
valuation shall must measure all aspects of the benefit plan of 
the fund in accordance with changes in benefit plans, if any, 
and salaries as will or can reasonably be anticipated to be in 
force during the ensuing fiscal year.  The actuarial 
valuation shall must be prepared in accordance with the entry 
age actuarial cost method. 
    The actuarial valuation required under this section shall 
must include the information required in subdivisions 4a to 4k. 
    Sec. 7.  Minnesota Statutes 1990, section 356.215, 
subdivision 4a, is amended to read: 
    Subd. 4a.  [NORMAL COST.] For each a fund providing any 
benefits in whole or in part under a defined benefit plan, the 
actuarial valuation shall contain an exhibit indicating must 
indicate the level normal cost of the benefits provided by the 
laws governing the fund as of the date of the valuation, 
calculated in accordance with the entry age actuarial cost 
method.  The normal cost shall must be expressed as a level 
percentage of the present value of future payroll payrolls of 
the active participants of the fund as of the date of the 
valuation. 
    Sec. 8.  Minnesota Statutes 1990, section 356.215, 
subdivision 4b, is amended to read: 
    Subd. 4b.  [ACCRUED LIABILITY.] For each a fund providing 
any benefits under a defined benefit plan, the actuarial 
valuation shall must contain an exhibit indicating the actuarial 
accrued liabilities of the fund, which shall be equal to.  This 
figure is the present value of all future benefits minus, 
reduced by the present value of future normal costs, calculated 
in accordance with the entry age actuarial cost method. 
    Sec. 9.  Minnesota Statutes 1990, section 356.215, 
subdivision 4d, is amended to read: 
    Subd. 4d.  [INTEREST AND SALARY ASSUMPTIONS.] (a) For funds 
governed by chapters 3A, 352, 352B, 352C, 353, 353C, and 354 
other than the variable annuity fund governed by section 354.62, 
and 490, the actuarial valuation shall must use a preretirement 
interest assumption of 8.5 percent, a postretirement interest 
assumption of five percent, and an a future salary increase 
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 of 6.5 percent. 
    (b) For funds governed by chapter 354A, the actuarial 
valuation shall must use preretirement and postretirement 
assumptions of 8.5 percent and an a future salary increase 
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 of 6.5 percent, but the actuarial 
valuation shall must reflect 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. 
     (c) For all other funds not specified in paragraph (a), 
(b), or (d), the actuarial valuation shall must use a 
preretirement interest assumption of five percent, a 
postretirement interest assumption of five percent, and an a 
future salary increase 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 of 3.5 percent. 
    (d) For funds governed by chapters 3A, 352C, and 490, the 
actuarial valuation shall must use a preretirement interest 
assumption of 8.5 percent, a postretirement interest assumption 
of five percent, and an a future salary increase assumption that 
of 6.5 percent in each future year in which the salary amount 
payable is not determinable from section 3.099, 15A.081, 
subdivision 6, or 15A.083, subdivision 1, whichever is 
applicable applies, or from applicable compensation council 
recommendations under section 15A.082, the salary on which a 
retirement or other benefit is based is 1.065 multiplied by the 
known or computed salary for the preceding year, whichever is 
applicable. 
    Sec. 10.  Minnesota Statutes 1990, section 356.215, 
subdivision 4e, is amended to read: 
    Subd. 4e.  [OTHER ASSUMPTIONS.] The actuarial valuation 
shall must use assumptions concerning mortality, disability, 
retirement, withdrawal, retirement age, and any other relevant 
demographic or economic factor, which shall.  These must be set 
at levels consistent with those determined in the most 
recent quadrennial experience study completed pursuant to under 
subdivision 5, if required, or representative of the best 
estimate of future experience, if a quadrennial experience study 
is not required.  The actuarial valuation shall must contain an 
exhibit indicating any actuarial assumptions used in preparing 
the valuation report. 
    Sec. 11.  Minnesota Statutes 1990, section 356.215, 
subdivision 4f, is amended to read: 
    Subd. 4f.  [ACTUARIAL BALANCE SHEET PUBLIC SECTOR 
ACCOUNTING DISCLOSURE INFORMATION.] The actuarial 
valuation shall must contain an actuarial balance sheet, which 
shall indicate current and expected future benefit obligations, 
current and expected future assets, unfunded actuarial accrued 
liability, current unfunded actuarial liability, and current and 
future unfunded actuarial liability.  Specifically, the balance 
sheet for all funds, except local police, salaried firefighter, 
and specified volunteer firefighter funds, shall include the 
following:  
 CURRENT AND EXPECTED FUTURE ASSETS 
  Current assets 
    Cash, cash equivalents,
         and short-term securities           $...
  Fixed income investments                    ...
  Equity investments                          ...
  Real estate investments                     ...
      Equity in the Minnesota postretirement
       investment fund                        ...
  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 present value of credited
         projected benefit obligations
          on account of service rendered to date: 
      For annuitants 
        Retirement annuities                 $...  
        Disability benefits                   ...
        Surviving spouse and  
         child benefits                       ...  
        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 actuarial liability
   (Total current benefit obligations less
   total current assets):                                 $... 
  Current and future unfunded actuarial
liability 
 (Total current and expected future benefit
 obligations less total current and
 expected future assets):                                 $...
    In addition to that itemization of benefit obligations, 
separate items shall be shown for additional benefits, if any, 
which may not be appropriately included in that 
itemization those actuarial calculations necessary to allow the 
retirement plan administration or participating employing units 
to prepare the pension-related portions of annual financial 
reporting that meet generally accepted accounting principles for 
the public sector.  
    Sec. 12.  Minnesota Statutes 1990, section 356.215, 
subdivision 4g, is amended to read: 
    Subd. 4g.  [AMORTIZATION CONTRIBUTIONS.] (a) In addition to 
the exhibit indicating the level normal cost, the actuarial 
valuation shall must contain an exhibit indicating the 
additional annual contribution which would be required 
sufficient to amortize the unfunded actuarial accrued 
liability.  For funds governed by chapters 3A, 352, 352B, 352C, 
353, 353C, 354, 354A, and 490, the additional contribution shall 
must be calculated on a level percentage of covered payroll 
basis by the established date for full funding which is in 
effect when the valuation is prepared.  The level percent 
additional contribution shall must be calculated assuming annual 
payroll growth of 6.5 percent.  For all other funds, the 
additional annual contribution shall must be calculated on a 
level annual dollar amount basis. 
    If, (b) For any fund other than the Minneapolis employees 
retirement fund, after the first actuarial valuation date 
occurring after June 1, 1989, if there has not been a change in 
the actuarial assumptions used for calculating the actuarial 
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 actuarial 
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 actuarial accrued 
liability of the fund, the established date for full funding for 
the first actuarial valuation made after June 1, 1989, and each 
successive actuarial valuation shall be is the first actuarial 
valuation date which occurs occurring after June 1, 2020.  
    If, (c) For any fund or plan other than the Minneapolis 
employees retirement fund, after the first actuarial valuation 
date occurring after June 1, 1989, if there has been a change in 
any or all of the actuarial assumptions used for calculating the 
actuarial 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 
actuarial accrued liability of all or a portion of the fund, or 
a combination of the three, and the change or changes, by 
themselves and without inclusion of any other items of increase 
or decrease, produce a net increase in the unfunded actuarial 
accrued liability in the fund, the established date for full 
funding shall must be determined using the following procedure:  
    (i) the unfunded actuarial accrued liability of the fund 
shall must be determined in accordance with the plan provisions 
governing annuities and retirement benefits and the actuarial 
assumptions in effect before an applicable change; 
    (ii) the level annual dollar contribution or level 
percentage, whichever is applicable, which is needed to amortize 
the unfunded actuarial accrued liability amount determined 
pursuant to subclause under item (i) by the established date for 
full funding in effect prior to before the change shall must be 
calculated using the interest assumption specified in 
subdivision 4d in effect before the change; 
    (iii) the unfunded actuarial accrued liability of the fund 
shall must 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 before the change; 
    (iv) the level annual dollar contribution or level 
percentage, whichever is applicable, which is needed to amortize 
the difference between the unfunded actuarial accrued liability 
amount calculated pursuant to subclause under item (i) and the 
unfunded actuarial accrued liability amount calculated pursuant 
to subclause under item (iii) over a period of 30 years from the 
end of the plan year in which the applicable change is effective 
shall must be calculated using the applicable interest 
assumption specified in subdivision 4d in effect after any 
applicable change; 
    (v) the level annual dollar or level percentage 
amortization contribution pursuant to subclause under 
item (iv) shall must be added to the level annual dollar 
amortization contribution or level percentage 
calculated pursuant to subclause under item (ii); 
    (vi) the period in which the unfunded actuarial accrued 
liability amount determined in subclause item (iii) will be is 
amortized by the total level annual dollar or level percentage 
amortization contribution computed pursuant to subclause under 
item (v) shall must be calculated using the interest assumption 
specified in subdivision 4d in effect after any applicable 
change, rounded to the nearest integral number of years, 
but which shall not to 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 to 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 before the change; and 
    (vii) the period determined pursuant to subclause under 
item (vi) shall must be added to the date as of which the 
actuarial valuation was prepared and the date obtained shall 
be is the new established date for full funding.  
    (d) For the Minneapolis employees retirement fund, the 
established date for full funding shall be is June 30, 2017. 
    Sec. 13.  Minnesota Statutes 1990, section 356.215, 
subdivision 4h, is amended to read: 
    Subd. 4h.  [ACTUARIAL GAINS AND LOSSES.] The actuarial 
valuation shall must contain an exhibit consisting of an 
analysis by the actuary explaining the net increase or decrease 
in the unfunded actuarial accrued liability since the last 
valuation must be provided.  The explanation shall must 
subdivide the net increase or decrease in the unfunded actuarial 
accrued liability into at least the following parts: 
    (a) increases or decreases in the unfunded actuarial 
accrued liability because of changes in benefits; 
    (b) increases and decreases in the unfunded actuarial 
accrued liability because of each change, if any, changes in 
actuarial assumptions; 
    (c) increases or decreases in the unfunded actuarial 
accrued liability separately by source attributable to actuarial 
gains or losses resulting from any experience deviations of from 
the assumptions on which the valuation is based, as follows: 
     (i) actual investment earnings,; 
     (ii) actual postretirement mortality rates, and; 
     (iii) actual salary increase rates from the assumptions on 
which the valuations are based; and 
     (iv) the remainder of the increase or decrease not 
attributable to any separate source; 
    (d) increases or decreases in unfunded actuarial accrued 
liability because of other reasons, including the effect of any 
amortization contribution paid or additional amortization 
contribution previously calculated but unpaid; and 
    (e) increases or decreases in unfunded actuarial accrued 
liability because of changes in eligibility requirements or 
groups included in the membership of the fund. 
    Sec. 14.  Minnesota Statutes 1990, section 356.215, 
subdivision 4i, is amended to read: 
    Subd. 4i.  [MEMBERSHIP TABULATION.] The actuarial valuation 
shall must contain an exhibit consisting of a tabulation of 
active membership and annuitants in the fund.  If the membership 
of a fund is under more than one general benefit program, a 
separate tabulation shall must be made for each general benefit 
program.  The tabulations shall must be prepared by the 
administration of the pension fund and must contain the 
following information: 
(a) (1) Active members                           Number 
     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                            
(b) (2) Annuitants                               Number          
     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 clause (2)
must be made separately for each of the following classes 
of annuitants benefit recipients: 
       (a) (1) service retirement annuitants; 
       (b) (2) disability benefit recipients; 
       (c) (3) Surviving spouse survivor benefit recipients
       (d) Surviving child benefit recipients; and 
       (e) (4) deferred annuitants.
    Sec. 15.  Minnesota Statutes 1990, section 356.215, 
subdivision 4j, is amended to read: 
    Subd. 4j.  [ADMINISTRATIVE EXPENSES.] The actuarial 
valuation shall contain an exhibit indicating a statement of 
must indicate the administrative expenses of the fund, expressed 
both in dollars and also as a percentage of covered payroll. 
    Sec. 16.  Minnesota Statutes 1990, section 356.215, 
subdivision 4k, is amended to read: 
    Subd. 4k.  [PLAN SUMMARY.] The actuarial valuation 
shall must contain an exhibit indicating a summary of the 
principal provisions of the plan upon which the valuation is 
based. 
    Sec. 17.  Minnesota Statutes 1990, section 356.215, 
subdivision 5, is amended to read: 
    Subd. 5.  [QUADRENNIAL EXPERIENCE STUDY; CONTENTS.] Each A 
quadrennial experience study shall, if required, must contain an 
actuarial analysis of the experience of the fund or association 
and a comparison of the experience with the actuarial 
assumptions on which the most recent actuarial valuation of the 
retirement fund or relief association was based, and shall also 
contain a statement of the average ages at which service 
retirements have taken place. 
    Sec. 18.  Minnesota Statutes 1990, section 356.215, 
subdivision 6, is amended to read: 
    Subd. 6.  [ACTUARIAL SERVICES BY APPROVED ACTUARIES.] Each 
(a) The actuarial valuation or quadrennial experience 
study shall must be made and any actuarial consulting services 
for a retirement fund or plan shall must be provided by an 
approved actuary.  The actuarial valuation or quadrennial 
experience study shall must include a certification declaration 
that it has been prepared in accordance with the provisions 
of according to sections 356.20 to 356.23 and the most recent 
standards for actuarial work adopted by the legislative 
commission on pensions and retirement.  
    (b) Actuarial valuations, or experience studies prepared by 
an actuary retained by a retirement fund or plan must be 
submitted to the legislative commission on pensions and 
retirement within ten days of the submission of the document to 
the retirement fund or plan. 
    Sec. 19.  Minnesota Statutes 1990, section 356.215, 
subdivision 7, is amended to read: 
    Subd. 7.  [ESTABLISHMENT OF ACTUARIAL ASSUMPTIONS.] 
Actuarial assumptions used for actuarial valuations under this 
section that are other than those set forth in this section may 
be changed only with the approval of the legislative commission 
on pensions and retirement.  A change in the applicable 
actuarial assumptions may be proposed by the governing board of 
the applicable pension fund or relief association, by the 
actuary retained by the legislative commission on pensions and 
retirement, by the actuarial advisor retained by to a pension 
fund governed by chapter 352, 353, 354, or 354A, or by the 
actuary retained by a local police or firefighters relief 
association governed by sections 69.77 or 69.771 to 69.776, if 
one is retained. 
    Sec. 20.  [356.217] [MODIFICATIONS IN ACTUARIAL SERVICES.] 
    (a) The actuary retained by the legislative commission on 
pensions and retirement is not required to prepare actuarial 
valuations of the public employees local government correctional 
employees retirement plan unless the plan is implemented by a 
county under Minnesota Statutes, section 353C.04. 
    (b) The cost of any requested benefit projections by the 
commission-retained actuary relating to the Minnesota 
postretirement investment fund for the state board of investment 
is payable by the state board of investment. 
    (c) Actuarial valuations under Minnesota Statutes, section 
356.215, for July 1, 1991, and thereafter, are not required to 
have an individual commentary section.  The commentary section, 
if omitted from the individual plan actuarial valuation, must be 
included in an appropriate generalized format as part of the 
report to the legislature under Minnesota Statutes, section 
3.85, subdivision 11. 
    (d) Actuarial valuations under Minnesota Statutes, section 
356.215, for July 1, 1991, and thereafter, are not required to 
contain separate actuarial valuation results for basic and 
coordinated programs unless each program has a membership of at 
least ten percent of the total membership of the fund.  
Actuarial valuations under Minnesota Statutes, section 356.215, 
for July 1, 1991, and thereafter, are not required to contain 
cash flow forecasts. 
    (e) Actuarial valuations of the public employees police and 
fire fund local consolidation accounts for July 1, 1991, and 
thereafter, are not required to contain separate tabulations or 
summaries of active member, service retirement, disability 
retirement, and survivor data for each local consolidation 
account. 
    (f) The commission-retained actuary is: 
    (1) required to publish experience findings for plans for 
which experience findings are required only on a quadrennial 
basis for the four-year period ending June 30, 1992, and every 
four years thereafter; 
    (2) not required to prepare a separate experience analysis 
or publish separate experience findings for basic and 
coordinated programs if separate actuarial valuation results for 
the programs are not required; and 
    (3) not required to calculate investment rate of return 
experience results on any basis other than current asset value 
as defined in Minnesota Statutes, section 356.215, subdivision 
1, clause (6). 
    Sec. 21.  [REPEALER.] 
    Minnesota Statutes 1990, sections 352.85, subdivision 6; 
352.86, subdivision 4; and 353A.09, subdivision 7, are repealed. 
    Sec. 22.  [EFFECTIVE DATE.] 
    Sections 1 to 21 are effective the day following final 
enactment. 

                                ARTICLE 4 

                   MISCELLANEOUS RETIREMENT PROVISIONS 
    Section 1.  Minnesota Statutes 1990, section 354B.01, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [SUPPLEMENTAL PLAN.] "Supplemental plan" means 
the supplemental retirement plan established in sections 354B.07 
to 354B.09.  
    Sec. 2.  [354B.06] [RULES.] 
    The state university system and the community college 
system may adopt rules to administer the provisions of sections 
354B.07 to 354B.09.  The systems may deposit member 
contributions in a nontreasury account established under chapter 
136, an account or accounts established under section 11A.17, or 
other appropriate accounts of the state board of investment for 
investment under procedures established by the state board of 
investment.  
    Sec. 3.  [354B.07] [SUPPLEMENTAL RETIREMENT PLAN.] 
    Subdivision 1.  [ESTABLISHMENT.] The supplemental 
retirement plan for personnel employed by the state university 
board and the state board for community colleges who are in the 
unclassified service of the state commencing July 1 following 
the completion of the second year of their full-time contract is 
governed by this section.  An unclassified employee employed by 
the state university board or the state board for community 
colleges in subsidized on-the-job training, work experience, or 
public service employment as an enrollee under the federal 
Comprehensive Employment and Training Act is not included in the 
supplemental retirement plan provided for in this section after 
March 30, 1978, unless the unclassified employee has as of the 
later of March 30, 1978, or the date of employment sufficient 
service credit in the retirement fund providing primary 
retirement coverage to meet the minimum vesting requirements for 
a deferred retirement annuity, or the board agrees in writing to 
make the employer contribution required by this section on 
account of that unclassified employee from revenue sources other 
than funds provided under the federal Comprehensive Employment 
and Training Act, or the unclassified employee agrees in writing 
to make the employer contribution required by this section in 
addition to the member contribution. 
    Subd. 2.  [REDEMPTIONS.] The chancellor of the state 
university system and the chancellor of the state community 
college system shall redeem all shares in the accounts of the 
Minnesota supplemental investment fund held on behalf of 
personnel in the supplemental plan who elect an investment 
option other than the supplemental investment fund, except that 
shares in the guaranteed return account may not be redeemed 
until the expiration dates for the guaranteed investment 
contracts.  The chancellors shall transfer the cash realized to 
the financial institutions selected by the state university 
board and the community college board under section 354B.05. 
    Sec. 4.  [354B.08] [SALARY DEDUCTIONS, MATCHING FUNDS.] 
    Subdivision 1.  [DEDUCTIONS.] The state university board 
and the state board for community colleges shall deduct from the 
salary of each person described in section 354B.07 a sum equal 
to five percent of the person's annual salary paid between 
$6,000 and $15,000.  The deduction must be made in the same 
manner as other retirement deductions are made from the salary 
of the person.  The employer shall make a contribution to the 
plan on behalf of every covered person in an amount equal to the 
deductions made from the salary of the person.  If an agreement 
is made under section 356.24 for additional employer 
contributions, an amount equal to the additional employer 
contribution must be deducted from the person's annual salary 
above $15,000 as specified in this subdivision.  Two percent of 
the amount of the salary deductions and employer contributions 
may be used by the state university board and the state board 
for community colleges for payment of necessary and reasonable 
administrative expenses.  
    Subd. 2.  [ADMINISTRATION.] The chancellor of the state 
university system and the chancellor of the state community 
college system shall administer the supplemental retirement plan 
for their employees.  The chancellors shall invest contributions 
made under this section, less amounts used for administrative 
expenses, as authorized by law.  The retirement contributions 
and death benefits provided by annuity contracts or custodial 
accounts purchased by the chancellors are owned by the plan and 
must be paid in accordance with the annuity contracts or 
custodial accounts. 
    Sec. 5.  [354B.09] [TAX SHELTER PROVISIONS.] 
    Subdivision 1.  [AGREEMENTS; ADJUSTMENTS.] For the purpose 
of, and to permit the participation in a tax shelter under 
provisions of sections 501(c) and 403(b) and related provisions 
of the Internal Revenue Code, the state university board and the 
board for community colleges may enter into agreements to reduce 
or adjust salaries downward for persons defined in section 
354B.07, subdivision 1, and to pay as employer an amount 
equivalent to the salary reduction in the same manner as 
deductions would have been paid by the person under section 
354B.08, subdivision 1. 
    Subd. 2.  [RULES.] Subject to the approval of their 
governing boards, the chancellors of the state university system 
and community college system may adopt rules and procedures 
consistent with sections 354B.07 to 354B.09 which permit, if 
possible, participation in a tax shelter under provisions of the 
Internal Revenue Code. 
    Sec. 6.  [TRANSFER.] 
    The executive director of the teachers retirement 
association shall transfer the administrative records of the 
supplemental retirement plan to the chancellor of the state 
university system and the chancellor of the state community 
college system on July 1, 1991. 
    Sec. 7.  [PURCHASE OF PRIOR SERVICE CREDIT.] 
    Subdivision 1.  [ELIGIBILITY.] Notwithstanding the 
limitations in Minnesota Statutes, section 353.27, subdivision 
12, a member of the public employees retirement association born 
on August 22, 1956, who was employed by the city of Minneapolis 
as a construction equipment operator beginning on June 24, 1983, 
on a temporary or seasonal basis, and who first became eligible 
for public employees retirement association membership during 
1985, but for whom no employee or employer contributions were 
made until September 1986, may purchase allowable service credit 
from the public employees retirement association for the period 
of eligible service between January 1985 and September 1986 upon 
receipt by the association of the amount specified in 
subdivision 2. 
    Subd. 2.  [PURCHASE PAYMENT AMOUNT.] To purchase credit for 
prior eligible service under subdivision 1, there must be paid 
to the public employees retirement association an amount equal 
to the present value, on the date of payment, of the amount of 
the additional retirement annuity obtained by purchase of the 
additional service credit.  Calculation of this amount must be 
made using the applicable preretirement interest rate specified 
in Minnesota Statutes, section 356.215, subdivision 4d, and the 
mortality table adopted for the fund.  The calculation must 
assume continuous future service in the association until, and 
retirement at, the age at which the minimum requirements of the 
retirement association for normal retirement or retirement with 
an annuity unreduced for retirement at an early age, including 
Minnesota Statutes, section 356.30, are met with the additional 
service credit purchased.  The calculation must also assume a 
future salary history that includes annual salary increases at 
the salary increase rate specified in section 356.215, 
subdivision 4d.  The member must establish in the records of the 
association proof of the service for which the purchase of prior 
service is requested.  The manner of the proof of service must 
be in accordance with procedures prescribed by the executive 
director of the association.  The portion of the total cost of 
the purchase to be paid by the member is specified in 
subdivision 3.  The remaining portion of total cost is to be 
paid by the employer, as specified in subdivision 4. 
    Subd. 3.  [MEMBER PAYMENT.] To receive credit for the 
eligible service between January 1985 and September 1986, the 
member must pay an amount equal to the employee contribution 
rate or rates in effect during the period or periods of prior 
eligible non-credited service, applied to the actual salary rate 
in effect during the period or periods of prior service, plus 
six percent interest compounded annually from the date on which 
the contributions would otherwise have been made to the date on 
which the payment is made.  Payment must be made in one lump sum 
before July 1, 1992. 
    Subd. 4.  [EMPLOYER PAYMENT; SERVICE CREDIT.] Within 60 
days of receipt by the association of the member contribution 
specified in subdivision 3, the city of Minneapolis shall pay an 
amount equal to the difference between the amount specified in 
subdivision 2 and the member payment specified in subdivision 
3.  This amount must be paid in one lump sum.  The period of 
allowable service may be credited to the account of the person 
only after the receipt of full payment by the executive director.
    Sec. 8.  [REPEALER.] 
    Minnesota Statutes 1990, sections 136.80; 136.81; 136.82; 
136.83; 136.84; 136.85; and 136.87, are repealed. 
    Sec. 9.  [EFFECTIVE DATE.] 
    Sections 1 to 6 and 8 are effective July 1, 1991.  Section 
7 is effective the day following final enactment. 
    Presented to the governor May 29, 1991 
    Signed by the governor June 1, 1991, 3:34 p.m.