Minnesota Session Laws - 1991, Regular Session

  

                         Laws of Minnesota 1991 

                        CHAPTER 340-H.F.No. 1035 
           An act relating to retirement; teachers retirement 
          association; making various changes in laws governing 
          the administration of the association; amending 
          Minnesota Statutes 1990, sections 136.82, subdivision 
          1; 176.021, subdivision 7; 354.05, subdivisions 5, 13, 
          22, 35, 35a, and by adding a subdivision; 354.071, 
          subdivision 2; 354.092; 354.093; 354.094, subdivision 
          1; 354.095; 354.10, subdivisions 1, 2, and 4; 354.33, 
          subdivision 6; 354.35; 354.41, subdivision 7; 354.46, 
          subdivision 2; 354.48, subdivisions 2, 4, 6, 7, and 8; 
          354.49, subdivision 3; 354.50, subdivision 1; 354.52, 
          subdivision 2, and by adding a subdivision; 354B.04, 
          subdivision 2; 356.30, by adding a subdivision; and 
          356.87; repealing Minnesota Statutes 1990, sections 
          354.094, subdivisions 1a and 1b; and 354.48, 
          subdivision 5. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1990, section 136.82, 
subdivision 1, is amended to read: 
    Subdivision 1.  [GENERALLY.] (a) The executive director of 
the teachers retirement fund shall redeem shares in the accounts 
of the Minnesota supplemental retirement investment fund 
standing in an employee's share account record under the 
following circumstances, but always in accordance with the laws 
and rules governing the Minnesota supplemental retirement 
investment fund:  
    (b) The executive director shall redeem shares under this 
subdivision when requested to do so in writing on forms provided 
by the executive director by a person having shares to the 
credit of the employee's share account record if the person is 
age 55 or older and is no longer employed by the state 
university board or state board for community colleges.  In such 
case the person must receive the cash realized on the redemption 
of the shares.  The person may direct the redemption of not more 
than 20 percent of the person's shares in the employee's share 
account record in any one year and may not direct more than one 
redemption in any one calendar month; provided, however, that 
the state university board or its designee, in the case of a 
person employed by the state university board, and the state 
board for community colleges or its designee, in the case of a 
person employed by the state board for community colleges, may, 
upon application, at their sole discretion, permit greater 
withdrawals in any one year.  
    (c) The executive director shall redeem shares under this 
subdivision when requested to do so in writing, on forms 
provided by the executive director, by a person having shares to 
the credit of the employee's share account record if the person 
has left employment by the state university board or state board 
for community colleges because of a total and permanent 
disability as defined in section 354.05, subdivision 14.  If the 
executive director finds that the person is totally and 
permanently disabled and will as a result be unable to return to 
similar employment any substantial gainful activity, the person 
must receive the cash realized on the redemption of the shares.  
The person may direct the redemption of not more than 20 percent 
of the shares in the employee's share account record in any one 
year and may not direct more than one redemption in any one 
calendar month; provided, however, that the state university 
board or its designee, in the case of a person employed by the 
state university board, and the state board for community 
colleges or its designee, in the case of a person employed by 
the state board for community colleges, may, upon application, 
at their sole discretion, permit greater withdrawals in any one 
year.  If the person returns to good health, the person owes no 
restitution to the state or a fund established by its laws for a 
redemption under this paragraph.  
     (d) The executive director shall redeem shares under this 
subdivision in the event of the death of a person having shares 
to the credit of the employee's share account record and leaving 
a designated beneficiary, when requested to do so in writing, on 
forms provided by the executive director, by the designated 
beneficiary.  The designated beneficiary must receive the cash 
realized on the redemption of the shares.  If the designated 
beneficiary is a surviving spouse, the surviving spouse may 
direct the redemption of not more than 20 percent of the shares 
in the deceased person's employee's share account record in any 
one year and may not direct more than one redemption in any one 
calendar month; provided, however, that the state university 
board or its designee, in the case of a person employed by the 
state university board, and the state board for community 
colleges or its designee, in the case of a person employed by 
the state board for community colleges, may, upon application, 
at their sole discretion, permit greater withdrawals in any one 
year.  In that case the surviving spouse must receive the cash 
realized from the redemption of the shares.  Upon the death of 
the surviving spouse any shares remaining in the employee's 
share account record must be redeemed by the executive director 
and the cash realized from the redemption must be distributed to 
the estate of the surviving spouse.  
    (e) In the event of the death of a person having shares to 
the credit of the employee's share account record and leaving no 
designated beneficiary, the surviving spouse must receive the 
cash realized on the redemption of the shares as provided in 
paragraph (d).  If there is no surviving spouse, the executive 
director shall redeem all shares to the credit of the employee's 
share account record and pay the cash realized from the 
redemption to the estate of the deceased person.  
     (f) The executive director shall redeem shares under this 
subdivision when requested to do so in writing, on forms 
provided by the executive director, by a person having shares to 
the credit of the employee's share account record if the person 
is no longer employed by the state university board or state 
board for community colleges, but does not qualify under the 
provisions of paragraphs (b) to (e).  In that case, the person 
is entitled upon application to receive one-half of the cash 
realized on the redemption of shares and one-half must be 
credited to the administrative expense reserve account of the 
supplemental retirement plan for payment of necessary and 
reasonable administrative expenses of the supplemental 
retirement plan as provided in section 354.65.  
    Sec. 2.  Minnesota Statutes 1990, 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 office during a period when 
receiving benefits under the workers' compensation law for 
temporary total or temporary partial disability or permanent 
total disability and the compensation of 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.  If an employee covered 
by the teachers retirement fund receives total and permanent 
disability benefits pursuant to section 354.48, the amount of 
disability benefits must 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. 3.  Minnesota Statutes 1990, section 354.05, 
subdivision 5, is amended to read: 
    Subd. 5.  [MEMBER OF FUND.] The term "Member of fund" means 
every teacher who joins and contributes to the teachers 
retirement fund as provided in this chapter who has not retired, 
except a teacher covered by section 354B.02, subdivision 2 or 3, 
who elects to participate in the individual retirement account 
plan under chapter 354B.  Any former member of the fund who is 
retired and subsequently resumes teaching service is a member of 
the fund only for purposes of social security coverage. 
    Sec. 4.  Minnesota Statutes 1990, section 354.05, 
subdivision 13, is amended to read: 
    Subd. 13.  [ALLOWABLE SERVICE.] "Allowable service" means: 
    (1) Any service rendered by a teacher for which on or 
before July 1, 1957, the teacher's account in the retirement 
fund was credited 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, sections 135.01 to 135.13, as amended by Laws 
1955, chapters 361, 549, 550, 611 or 
    (2) Any service rendered by a teacher for which on or 
before July 1, 1961, the teacher elected to obtain credit for 
service by making payments to the fund pursuant to Minnesota 
Statutes 1980, section 354.09 and section 354.51 or 
    (3) Any service rendered by a teacher after July 1, 1957, 
for any calendar month when the member receives salary from 
which deductions are made, deposited and credited in the fund, 
or 
    (4) Any service rendered by a person after July 1, 1957, 
for any calendar month where payments in lieu of salary 
deductions are made, deposited and credited into the fund as 
provided in Minnesota Statutes 1980, section 354.09, subdivision 
4, and section 354.53, or 
    (5) Any service rendered by a teacher for which the teacher 
elected to obtain credit for service by making payments to the 
fund pursuant to Minnesota Statutes 1980, section 354.09, 
subdivisions 1 and 4, sections 354.50, 354.51, Minnesota 
Statutes 1957, section 135.41, subdivision 4, Minnesota Statutes 
1971, section 354.09, subdivision 2, or Minnesota Statutes, 1973 
Supplement, section 354.09, subdivision 3, or 
    (6) Both service during years of actual membership in the 
course of which contributions were currently made and service in 
years during which the teacher was not a member but for which 
the teacher later elected to obtain credit by making payments to 
the fund as permitted by any law then in effect, or 
    (7) Any service rendered where contributions were made and 
no allowable service credit was established because of the 
limitations contained in Minnesota Statutes 1967, section 
354.09, subdivision 2, and Minnesota Statutes 1957, section 
135.09, subdivision 2, as determined by the ratio between the 
amounts of money credited to the teacher's account in a fiscal 
year and the maximum retirement contribution allowable for that 
year.  For purposes of this subdivision, the maximum 
contributions allowable after July 1, 1967, shall be defined as 
the maximum in effect immediately prior to that date. 
    Sec. 5.  Minnesota Statutes 1990, section 354.05, 
subdivision 22, is amended to read: 
    Subd. 22.  [DESIGNATED BENEFICIARY.] "Designated 
beneficiary" means the person designated by a retiree or member 
to receive the balance of the member's accumulated deductions 
after death benefits to which a beneficiary is entitled under 
this chapter.  A beneficiary designation is valid only if it is 
made on an appropriate form provided by the executive director 
and the properly completed form is received by the fund 
postmarked on or before the date of death of the retiree or 
member.  If the a retiree or a member had failed to does not 
designate such a person or if the person designated predeceased 
predeceases the retiree or the member, beneficiary in such cases 
means the estate of the deceased retiree or member. 
    Sec. 6.  Minnesota Statutes 1990, section 354.05, 
subdivision 35, is amended to read: 
    Subd. 35.  [SALARY.] (a) "Salary" means the compensation, 
upon which member contributions are required and made, that is 
paid to a teacher before any allowable reductions permitted 
under the federal Internal Revenue Code of 1986, as amended 
through December 31, 1988, for employee selected fringe 
benefits, tax sheltered annuities, deferred compensation, or any 
combination of these items. 
    (b) "Salary" does not mean include: 
    (1) lump sum annual leave payments; 
    (2) lump sum sick leave payments; 
    (3) payments in lieu of any employer paid group insurance 
coverage, including the difference between single and family 
premium rates, that may be paid to a member with single 
coverage; 
    (4) any form of payment made in lieu of any other employer 
paid fringe benefit or expense; 
    (5) any form of severance payments; 
    (6) workers' compensation payments; or 
    (7) disability insurance payments including self-insured 
disability payments; or 
    (8) payments to school principals and all other 
administrators for services in addition to the normal work year 
contract if these additional services are performed on an 
extended duty day, Saturday, Sunday, holiday, annual leave day, 
sick leave day, or any other nonduty day. 
    Sec. 7.  Minnesota Statutes 1990, section 354.05, 
subdivision 35a, is amended to read: 
    Subd. 35a.  [SEVERANCE PAYMENTS.] Severance payments 
include, but are not limited to: 
    (1) payments to an employee to terminate employment; 
    (2) payments, or that portion of payments, that are not 
clearly for the performance of services by the employee to the 
employer; 
    (3) payments to an administrator or former administrator 
serving as an advisor to a successor or as a consultant to the 
employer under an agreement to terminate employment within two 
years or less of the execution of the agreement for compensation 
that is significantly different than the most recent contract 
salary; and 
    (4) payments under a procedure that allows the employee to 
designate the time of payment if the payments are made during 
the period of formula service credit used to compute a benefit 
or annuity under section 354.44, subdivision 6 or 7; 354.46, 
subdivision 1 or 2; or 354.48, subdivision 3; and 
    (5) lump sum payments during the time period that contains 
the highest five successive years of salary for additional 
services performed without pay during other years of salary. 
    Sec. 8.  Minnesota Statutes 1990, section 354.05, is 
amended by adding a subdivision to read: 
    Subd. 39.  [ADMINISTRATOR'S NORMAL WORK YEAR.] Normal work 
year for school principals and all other administrators means 12 
consecutive full months of continuous employment from July 1 to 
June 30. 
    Sec. 9.  Minnesota Statutes 1990, section 354.071, 
subdivision 2, is amended to read: 
    Subd. 2.  [NOTICE OF TERMINATION OR DENIAL.] If the 
executive director terminates a benefit or denies an application 
or a written request of any person claiming a right under this 
chapter or the applicable sections of chapters 136, 354B, 355, 
and 356, the executive director must serve upon that person a 
written notice.  The notice must contain: 
    (1) the reasons for the termination or denial; 
    (2) notice that the person may petition the board for a 
review of the termination or denial and that the petition for 
review must be filed within 60 days of the receipt of the 
written notice; 
    (3) a statement that relevant documentation submitted by 
the petitioner to the executive director must be received in the 
office of the teachers retirement association at least 30 days 
before the meeting prescribed in subdivision 4; 
    (4) a statement that failure to petition the board within 
60 days will preclude the person from contesting in any other 
court procedure or administrative hearing, the issues determined 
by the executive director; and 
    (5) a copy of this section. 
    Sec. 10.  Minnesota Statutes 1990, section 354.092, is 
amended to read: 
    354.092 [SABBATICAL LEAVE.] 
    Subdivision 1.  [DEFINITION.] A sabbatical leave for the 
purpose of this section shall be means a sabbatical leave as 
defined in section 125.18 or the applicable personnel policy of 
the state university and community college boards. 
    Subd. 2.  [PAY RATE; CERTIFICATION.] A sabbatical leave 
must be compensated by a minimum of one-third of the salary the 
member received for a comparable period during the prior fiscal 
year.  Before the end of the fiscal year during which any 
sabbatical leave begins is granted, the employing unit granting 
the leave must certify the leave to the association on a form 
specified by the executive director.  
    Subd. 3.  [EMPLOYER AND EMPLOYEE CONTRIBUTIONS.] (a) 
Deductions for employee contributions at the applicable rate 
specified in section 354.42 must be made by the employing unit 
from salary paid to the member for a sabbatical leave.  The 
member may also make direct payment of employee contributions at 
the appropriate rates specified in section 354.42 based upon the 
difference between the salary received for the sabbatical leave 
and the salary received for a comparable period during the year 
immediately preceding the leave.  This direct payment must be 
made by the end of the fiscal year following the fiscal year in 
which the leave of absence terminated and must be without 
interest. 
    Subd. 4.  [SERVICE CREDIT.] If the employee contributions 
made under this section are less than the employee contributions 
made for a comparable period during the year immediately 
preceding the leave, the allowable and formula service credit of 
the member shall be prorated according to section 354.05, 
subdivision 25, clause (3), except that if the member is paid 
full salary for any sabbatical leave of absence, either past or 
prospective, the allowable and formula service credit shall not 
be prorated.  A member may not receive more than three years of 
allowable service credit in any ten consecutive years under this 
section unless the allowable service credit was paid for by the 
member before July 1, 1962.  For sabbatical leaves that begin 
after June 30, 1986, the required employer contributions 
specified in section 354.42 must be paid by the employing unit 
within 30 days after the association's written notification to 
the employing unit of the amount due.  Notwithstanding the 
provisions of any agreements to the contrary, employee and 
employer contributions may not be made to receive allowable 
service credit under this section if the member does not retain 
the right to full reinstatement both during and at the end of 
the sabbatical leave. 
    Sec. 11.  Minnesota Statutes 1990, section 354.093, is 
amended to read: 
    354.093 [PARENTAL OR MATERNITY LEAVE.] 
    Before the end of the fiscal year during which any parental 
or maternity leave is granted, the employing unit granting the 
leave must certify the leave to the association on a form 
specified by the executive director.  A member of the fund 
granted parental or maternity leave of absence by the 
employing authority shall be unit is entitled to service credit 
not to exceed one year for the period of leave upon payment to 
the fund by the end of the fiscal year following the fiscal year 
in which the leave of absence terminated.  The amount of such 
This payment shall must include the required employee, employer 
and amortization contributions for the period of leave 
prescribed in section 354.42.  Such The payment shall must be 
based on the member's average full-time monthly salary upon 
return to teaching service rate on the date the leave of absence 
commenced, and shall must be without interest.  Repayment shall 
be accompanied by a certified or otherwise adequate copy of the 
resolution or action of the employing authority granting or 
approving the leave.  Notwithstanding the provisions of any 
agreements to the contrary, employee and employer contributions 
may not be made to receive allowable service credit under this 
section if the member does not retain the right to full 
reinstatement at the end of the leave. 
    Sec. 12.  Minnesota Statutes 1990, section 354.094, 
subdivision 1, is amended to read: 
    Subdivision 1.  [SERVICE CREDIT CONTRIBUTIONS.] Before the 
end of the fiscal year during which any extended leave of 
absence is granted pursuant to section 125.60 or 136.88, the 
employing unit granting the leave must certify the leave to the 
association on a form specified by the executive director.  A 
member granted an extended leave of absence pursuant to section 
125.60 or 136.88 may pay employee contributions and receive 
allowable service credit toward annuities and other benefits 
under this chapter, for each year of the leave provided the 
member and the employing board make the required employer 
contribution in any proportion they may agree upon, during the 
period of the leave which shall not exceed five years.  A member 
may not receive more than five years of allowable service credit 
under this section.  The state shall not pay employer 
contributions into the fund for any year for which a member is 
on extended leave.  The employee and employer 
contributions shall must be based upon the rates of contribution 
prescribed by section 354.42 for the salary received during the 
year immediately preceding the extended leave.  Payments for the 
years for which a member is receiving service credit while on 
extended leave shall must be made on or before the later of June 
30 of each fiscal year for which service credit is received or 
within 30 days after first notification of the amount due, if 
requested by the member, is given by the association.  No 
payment is permitted after the following September 30.  Payments 
received after June 30 must include six percent interest from 
June 30 through the end of the month in which payment is 
received.  Notwithstanding the provisions of any agreements to 
the contrary, employee and employer contributions may not be 
made to receive allowable service credit if the member does not 
have full reinstatement rights as provided in section 125.60 or 
136.88, both during and at the end of the extended leave. 
    Sec. 13.  Minnesota Statutes 1990, section 354.095, is 
amended to read:  
    354.095 [MEDICAL LEAVE; PAYMENT PROCEDURES.] 
    Upon granting a medical leave, an employing unit must 
certify the leave to the association on a form specified by the 
executive director.  A member of the fund who is on an 
authorized medical leave of absence and subsequently returns to 
teaching service, is entitled to receive allowable service 
credit, not to exceed one year, for the period of leave, upon 
making the prescribed payment to the fund.  This payment must 
include the required employee and employer contributions at the 
rates specified in section 354.42, subdivisions 2, 3, and 5, as 
applied to the member's average full-time monthly salary rate on 
the date of return from the leave of absence commenced plus 
compound annual interest at the rate of 8.5 percent per year 
from the midpoint date of the leave until the date end of the 
fiscal year during which the leave terminates to the end of the 
month during which payment is made.  The member must pay the 
total amount required unless the employing unit, at its option, 
pays the employer contributions.  The total amount required must 
be paid before the effective date of retirement or by the end of 
the fiscal year following the fiscal year in which the leave of 
absence terminated, whichever is earlier.  Payment must be 
accompanied by a copy of the resolution or action of the 
employing authority granting the leave and the employing 
authority, upon granting the leave, must certify the leave to 
the association on a form specified by the executive director.  
A member may not receive more than one year of allowable service 
credit during any fiscal year by making payment under this 
section.  A member may not receive disability benefits under 
section 354.48 and receive allowable service credit under this 
section for the same period of time.  Notwithstanding the 
provisions of any agreement to the contrary, employee and 
employer contributions may not be made to receive allowable 
service credit under this section if the member does not retain 
the right to full reinstatement both during and at the end of 
the medical leave. 
    Sec. 14.  Minnesota Statutes 1990, section 354.10, 
subdivision 1, is amended to read: 
    Subdivision 1.  [EXEMPTION; EXCEPTIONS.] The right of a 
teacher to take advantage of the benefits provided by this 
chapter, is a personal right only and shall is not be assignable.
All money to the credit of a teacher's account in the fund or 
any money payable to the teacher from the fund shall belong 
belongs to the state of Minnesota until actually paid to the 
teacher or a beneficiary pursuant to the provisions of this 
chapter.  Any power of attorney, assignment or attempted 
assignment of a teacher's interest in the fund, or of the 
beneficiary's interest therein, by a teacher or a beneficiary, 
shall be null and is void and the same shall be is exempt from 
taxation under chapter 291 and from garnishment or levy under 
attachment or execution, except as provided in subdivision 2 or 
3, or section 518.58, 518.581, or 518.611.  
    Sec. 15.  Minnesota Statutes 1990, section 354.10, 
subdivision 2, is amended to read: 
    Subd. 2.  [AUTOMATIC DEPOSITS.] The board may pay an 
annuity or benefit to a banking institution, qualified under 
chapter 48, that is a trustee for a person eligible to receive 
the annuity or benefit.  Upon completion of the proper forms as 
provided by the executive director, the annuity or benefit 
amount may be electronically transferred or the annuity or 
benefit check may be mailed to a banking institution, savings 
association, or credit union for deposit to the recipient's 
individual account or joint account with the recipient's 
spouse or any other person designated by the recipient.  Any 
overpayment to a joint account after the death of the annuity or 
benefit recipient must be repaid to the fund by the joint tenant 
if the overpayment is not repaid to the fund by the banking 
institution, savings association, or credit union.  The 
board shall may prescribe the conditions which shall govern 
these procedures.  
    Sec. 16.  Minnesota Statutes 1990, section 354.10, 
subdivision 4, is amended to read: 
    Subd. 4.  [CHANGES IN DESIGNATED BENEFICIARIES.] Any 
beneficiary designated by a teacher retiree or member under the 
terms of this chapter section 354.05, subdivision 22, may be 
changed or revoked by the teacher at pleasure, in such manner as 
the board may prescribe retiree or member on a form provided by 
the executive director.  A change or revocation made under this 
subdivision is valid only if the properly completed form is 
received by the fund postmarked on or before the date of death 
of the retiree or the member.  In case If a designated 
beneficiary dies before the teacher retiree or member 
designating the beneficiary dies, and a new beneficiary is not 
designated, the teacher's retiree's or member's estate shall be 
is the beneficiary.  
    Sec. 17.  Minnesota Statutes 1990, section 354.33, 
subdivision 6, is amended to read: 
    Subd. 6.  [COMBINATIONS OF BASIC AND COORDINATED SERVICE.] 
When any A person's annuity must be computed as a basic member 
for any service previously accrued as a basic member if the 
person retires and whose annuity is computed as with the status 
of a coordinated member as a result of one or both of the 
following events:  (1) transferring from public school teaching 
to state university teaching, and/or; (2) not rendering 
performing teaching service within a fiscal year; shall have the 
annuity computed as a basic member for such service formerly 
accrued as a basic member.  A person's annuity must be computed 
as a coordinated member for any service previously accrued as a 
coordinated member if the person retires with the status of a 
basic member as a result of transferring from public school 
teaching to community college teaching. 
    Sec. 18.  Minnesota Statutes 1990, section 354.35, is 
amended to read: 
     354.35 [OPTIONAL ACCELERATED RETIREMENT ANNUITY BEFORE AGE 
65.] 
     Any coordinated member who retires before age 65 may elect 
to receive an optional accelerated retirement annuity from the 
association which provides for different annuity amounts over 
different periods of retirement.  The election of this optional 
accelerated retirement annuity shall be is exercised by making 
an application to the board on a form provided by the board.  
The optional accelerated retirement annuity shall must take the 
form of an annuity payable for the period before the member 
attains normal retirement age 65 in a greater amount than the 
amount of the annuity calculated under section 354.44 on the 
basis of the age of the member at retirement, but the optional 
accelerated retirement annuity must be the actuarial equivalent 
of the member's annuity computed on the basis of the member's 
age at retirement.  The greater amount must be paid until the 
retiree reaches normal retirement age 65 and at that time the 
payment from the association must be reduced.  For each year the 
retiree is under age 65, up to five percent of the total life 
annuity required reserves may be used to accelerate the optional 
retirement annuity under this section.  The method of computing 
the optional accelerated retirement annuity provided in this 
section shall be is established by the board of trustees.  In 
establishing the method of computing the optional accelerated 
retirement annuity, the board of trustees must obtain the 
written approval of the commission-retained actuary.  The 
written approval must be a part of the permanent records of the 
board of trustees.  
    Sec. 19.  Minnesota Statutes 1990, section 354.41, 
subdivision 7, is amended to read: 
    Subd. 7.  [EXCEPTIONS.] Members of the fund as described in 
subdivision 4 shall or 9 and employees of the teachers 
retirement association are not be eligible for election to the 
board of trustees.  
    Sec. 20.  Minnesota Statutes 1990, section 354.46, 
subdivision 2, is amended to read: 
    Subd. 2.  [DEATH WHILE ELIGIBLE DESIGNATED BENEFICIARY 
BENEFIT.] The surviving spouse of any member or former member 
who has attained the age of at least 50 years and has credit for 
at least three years of allowable service or who has credit for 
at least 30 years of allowable service irrespective of age shall 
be is entitled to joint and survivor annuity coverage in the 
event of death of the member prior to retirement.  If the 
surviving spouse does not elect to receive a surviving spouse 
benefit provided pursuant to subdivision 1, if applicable, or 
does not elect to receive a refund of accumulated member 
contributions provided pursuant to section 354.47, subdivision 
1, the surviving spouse shall be is entitled to receive, upon 
written application on a form prescribed by the executive 
director, a benefit equal to the second portion of a 100 percent 
joint and survivor annuity as provided pursuant to section 
354.45 and computed pursuant to section 354.44, subdivision 2, 
6, or 7, whichever is applicable.  The surviving spouse may 
apply for the annuity at any time after the date on which the 
deceased employee would have attained the required age for 
retirement based on the employee's allowable service.  This 
benefit accrues from the day following the date of death but may 
not begin to accrue more than six months before the date the 
application is filed with the executive director.  Sections 
354.44, subdivisions subdivision 6 and 7, and 354.60 apply to a 
deferred annuity payable under this section.  The benefit shall 
be is payable for life. 
    Sec. 21.  Minnesota Statutes 1990, section 354.48, 
subdivision 2, is amended to read: 
    Subd. 2.  [APPLICATIONS.] Any person described in 
subdivision 1, or another person authorized to act on behalf of 
the person, may make application for a total and permanent 
disability benefit only within the 18-month period following the 
termination of teaching service.  This benefit accrues from the 
day following the commencement of disability or the day 
following the last day for which salary is paid, whichever is 
later, but may not begin to accrue more than 90 days before the 
date the application is filed with the board executive 
director.  If salary is being received for either annual or sick 
leave during the period, payments accrue from the day following 
the last day for which this salary is paid. 
    Sec. 22.  Minnesota Statutes 1990, section 354.48, 
subdivision 4, is amended to read: 
    Subd. 4.  [DETERMINATION BY THE BOARD EXECUTIVE DIRECTOR.] 
The board executive director shall have the member examined by 
at least two licensed physicians selected by the medical 
advisor.  These physicians shall make written reports to 
the board executive director concerning the member's disability 
including medical opinions as to whether or not the member is 
permanently and totally disabled within the meaning of section 
354.05, subdivision 14.  The board executive director shall also 
obtain written certification from the last employer stating 
whether or not the member was separated from service because of 
a disability which would reasonably prevent further service to 
the employer and as a consequence the member is not entitled to 
compensation from the employer.  If upon the consideration of 
the reports of the physicians and any other evidence presented 
by the member or others interested therein, the board executive 
director finds the member totally and permanently disabled, it 
the executive director shall grant the member a disability 
benefit.  The fact that an employee is placed on leave of 
absence without compensation because of disability shall not bar 
the member from receiving a disability benefit. 
    Sec. 23.  Minnesota Statutes 1990, 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 executive director 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 executive director.  If any 
examination indicates that the member is no longer permanently 
and totally disabled or that the member 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 the member is reinstated 
to the payroll following sick leave, but in no case shall 
payment may not be made for more than 60 days after physicians 
engaged by the board executive director find that such the 
person is no longer permanently and totally disabled. 
    Sec. 24.  Minnesota Statutes 1990, section 354.48, 
subdivision 7, is amended to read: 
    Subd. 7.  [PARTIAL REEMPLOYMENT.] Should If the disabled 
person resume resumes a gainful occupation in which earnings are 
less than the person's salary at the date of disability, the 
amount of such earnings plus the disability benefit originally 
granted may not exceed the salary at the date of disability.  If 
the sum of such earnings plus the disability benefit originally 
granted exceeds the salary at the date of disability, the amount 
of excess earnings must be deducted from the disability 
benefit payable during the following calendar year. The 
provisions of this subdivision shall not prohibit the board 
executive director 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 executive 
director finds that the member is no longer totally and 
permanently disabled.  
    Sec. 25.  Minnesota Statutes 1990, section 354.48, 
subdivision 8, is amended to read: 
    Subd. 8.  [REFUSAL OF EXAMINATION.] Should If any such 
disabled person refuse refuses to submit to a medical 
examination as herein provided required under this section, 
payments by the fund shall must be discontinued and all rights 
of the member in any disability benefit shall must be revoked by 
the board executive director. 
    Sec. 26.  Minnesota Statutes 1990, section 354.49, 
subdivision 3, is amended to read: 
    Subd. 3.  [REFUND IN CERTAIN INSTANCES.] Any person not 
covered by the formula program who has attained normal 
retirement age with less than three years of credited allowable 
the minimum service shall be required for an annuity and who 
ceases to be a member because of termination of teaching service 
is entitled upon application to receive a refund in an amount 
equal to the person's accumulated deductions plus interest at 
the rates used to compute annuities under section 354.44, 
subdivision 2 in lieu of a proportionate annuity pursuant to 
section 356.32 except those.  If a person who has attained 
normal retirement age is eligible for an annuity or is 
covered under the provisions of section 354.44, subdivision 6 by 
the formula program, in which case the refund shall be is an 
amount equal to the accumulated deductions credited to the 
person's account as of June 30, 1957, and after July 1, 1957, 
the accumulated deductions plus interest at the rate of six 
percent compounded annually.  For the purpose of this 
subdivision, interest must be computed on fiscal year end 
balances to the first day of the month in which the refund is 
issued. 
    Sec. 27.  Minnesota Statutes 1990, section 354.50, 
subdivision 1, is amended to read: 
    Subdivision 1.  When any member accepts a refund provided 
in section 354.49, all existing service credits to which the 
member was entitled prior to the acceptance of such before 
accepting the refund shall terminate and shall are not again 
be restored until the former member acquires not less than two 
years allowable service credit subsequent to after taking the 
last refund.  In that event the former member may repay such the 
refund.  If more than one refund has been taken, all refunds 
must be repaid.  Teaching service covered under the provisions 
of chapter 354B may be used to fulfill the two-year requirement 
of this subdivision. 
    Sec. 28.  Minnesota Statutes 1990, section 354.52, 
subdivision 2, is amended to read: 
    Subd. 2.  On or before August 1 each year, each school 
board or managing body shall, on or before August 1, each 
year, must report to the teachers retirement board executive 
director giving an itemized summary of the total amount withheld 
from the salaries of teachers for teachers retirement deductions 
and such all other information as the executive director may 
require requires.  If the itemized summary is received after 
August 1 in any year, there shall be is a penalty not to exceed 
$25 $50 for each month or portion thereof which the summary is 
delinquent, as determined by the board of trustees executive 
director.  The penalty shall must be paid by the school board or 
the managing body.  
    Sec. 29.  Minnesota Statutes 1990, section 354.52, is 
amended by adding a subdivision to read: 
    Subd. 2a.  Before each February 15, each school board or 
managing body must report to the executive director the amount 
of income earned during the previous calendar year by each 
retiree for teaching service performed after retirement.  This 
annual report must be based on reemployment income as defined in 
section 354.44, subdivision 5, and it must be made on a form 
provided by the executive director.  Signing the report has the 
force and effect of an oath as to the correctness of the amount 
of postretirement reemployment income earned.  If the required 
report is received after February 15 in any year there is a 
penalty not to exceed $50 for each month or portion thereof 
which the report is late, as determined by the executive 
director.  The penalty must be paid by the school board or 
managing body. 
     Sec. 30.  Minnesota Statutes 1990, section 354B.04, 
subdivision 2, is amended to read: 
    Subd. 2.  [EMPLOYER CONTRIBUTIONS.] The employer of persons 
in covered employment who participate in the plan shall make an 
employer contribution to the plan in an amount equal to the 
amount prescribed by section 354.42, subdivision 3, and shall 
continue to make an additional employer contribution to the 
teachers retirement association in an amount equal to the amount 
prescribed by section 354.42, subdivision 5. 
    Sec. 31.  Minnesota Statutes 1990, section 356.30, is 
amended by adding a subdivision to read: 
    Subd. 2a.  [PURCHASES OF PRIOR SERVICE.] If a purchase of 
prior service is made under the provisions of Laws 1988, chapter 
709, article 3, or any similar provision which allows a purchase 
of service credit in any of the funds enumerated in subdivision 
3, the amount of required reserves calculated as prescribed in 
Laws 1988, chapter 709, article 3, must be paid to each fund 
based on the amount of benefit increase payable from that fund 
as a result of the purchase of prior service. 
    Sec. 32.  Minnesota Statutes 1990, section 356.87, is 
amended to read: 
    356.87 [HEALTH INSURANCE WITHHOLDING.] 
    Upon authorization of a person entitled to receive 
benefits, the executive director of a public pension fund listed 
in section 356.20, subdivision 2, shall, upon authorization of a 
person entitled to receive benefits, must withhold premium 
amounts from the pension benefits and pay the amounts to the 
public employees insurance plan.  The insurance plan must 
reimburse the public pension fund for the administrative expense 
of withholding the premium amounts and must also assume any 
liability which may result from the failure of a public pension 
fund to properly withhold the premium amounts from the benefits 
of a person. 
     Sec. 33.  [TRANSFER.] 
    Notwithstanding Minnesota Statutes, section 354B.03, 
subdivision 3, or any other provision of law to the contrary, a 
person who is an employee of the state university board on the 
effective date of this section who was employed by the state 
university board before 1964, and who elected to transfer 
retirement coverage from the teachers retirement association to 
the individual retirement account plan created in Minnesota 
Statutes, chapter 354B, may revoke that transfer prospectively 
and have future service credited by the teachers retirement 
association.  A revocation must be made in a manner prescribed 
by the executive director of the teachers retirement association 
and must be made within 60 days of the effective date of this 
section.  The election is effective only for future service and 
does not permit transfer to the teachers retirement association 
of any contributions made to the individual retirement account 
plan. 
    Sec. 34.  [REPEALER.] 
    Minnesota Statutes 1990, sections 354.094, subdivisions 1a 
and 1b; and 354.48, subdivision 5, are repealed.  
    Sec. 35.  [EFFECTIVE DATES.] 
    Section 3 is effective July 1, 1991.  Section 30 is 
effective for the first payroll period beginning after July 1, 
1991.  Section 33 is effective the day following final 
enactment.  All other sections are effective the day following 
final enactment. 
    Presented to the governor May 31, 1991 
    Signed by the governor June 4, 1991, 8:59 p.m.