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Office of the Revisor of Statutes

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

  

                         Laws of Minnesota 1992 

                        CHAPTER 432-H.F.No. 2137 
           An act relating to retirement; the Minnesota state 
          retirement system and the public employees retirement 
          association; making various changes to administration, 
          benefits, and investment practices; amending Minnesota 
          Statutes 1990, sections 352.01, subdivision 2b; 
          352.029, subdivisions 1 and 2; 352.113, subdivisions 
          1, 3, 4, and 10; 352.12, subdivision 1; 352.22, 
          subdivision 3; 352D.12; 353.01, subdivision 28; 
          353.27, subdivision 10; 353.29, subdivision 7; 353.33, 
          subdivisions 1, 6, 6a, and 6b; 353.34, subdivision 2; 
          353.65, subdivision 1; 353.656, subdivision 5; 
          353.659; 353.68, subdivision 4; 353A.02, subdivision 
          12; 353A.04, subdivision 2; 353A.05, subdivision 3; 
          353A.07, subdivision 3; 353A.08, subdivision 6, and by 
          adding a subdivision; 353A.09, subdivision 1; 353A.10, 
          subdivision 4, and by adding a subdivision; 356.30, 
          subdivision 1; 356.302, subdivision 6; 356.303, 
          subdivision 3; 490.124, subdivision 11; Minnesota 
          Statutes 1991 Supplement, sections 353.01, 
          subdivisions 2b, 16, and 20; 353.27, subdivisions 12 
          and 12b; 353.31, subdivision 1; 353.32, subdivision 
          1a; 353.64, subdivision 5a; 353.657, subdivisions 1, 
          2, and 2a; 353A.03; 353A.06; 353D.01, subdivision 2; 
          353D.02; 353D.03; 353D.04, subdivision 1; 353D.05, 
          subdivisions 2 and 3; 353D.07, subdivisions 2 and 3; 
          353D.12, subdivision 1; Laws 1990, chapter 570, 
          article 8, section 14, subdivision 1, as amended; Laws 
          1991, chapter 269, article 2, section 13; proposing 
          coding for new law in Minnesota Statutes, chapter 353; 
          repealing Minnesota Statutes 1990, sections 352.029, 
          subdivision 4; 353.656, subdivision 7; and 353.71, 
          subdivision 3. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                ARTICLE 1

                    MINNESOTA STATE RETIREMENT SYSTEM
    Section 1.  Minnesota Statutes 1990, section 352.01, 
subdivision 2b, is amended to read: 
    Subd. 2b.  [EXCLUDED EMPLOYEES.] "State employee" does not 
include: 
    (1) elective state officers; 
    (2) students employed by the University of Minnesota, the 
state universities, and community colleges unless approved for 
coverage by the board of regents, the state university board, or 
the state board for community colleges, as the case may be; 
    (3) employees who are eligible for membership in the state 
teachers retirement association except employees of the 
department of education who have chosen or may choose to be 
covered by the Minnesota state retirement system instead of the 
teachers retirement association; 
    (4) employees of the University of Minnesota who are 
excluded from coverage by action of the board of regents; 
    (5) officers and enlisted personnel in the national guard 
and the naval militia who are assigned to permanent peacetime 
duty and who under federal law are or are required to be members 
of a federal retirement system; 
    (6) election officers; 
    (7) persons engaged in public work for the state but 
employed by contractors when the performance of the contract is 
authorized by the legislature or other competent authority; 
     (8) officers and employees of the senate and house of 
representatives or a legislative committee or commission who are 
temporarily employed; 
    (9) receivers, jurors, notaries public, and court employees 
who are not in the judicial branch as defined in section 43A.02, 
subdivision 25, except referees and adjusters employed by the 
department of labor and industry; 
    (10) patient and inmate help in state charitable, penal, 
and correctional institutions including the Minnesota veterans 
home; 
    (11) persons employed for professional services where the 
service is incidental to regular professional duties and whose 
compensation is paid on a per diem basis; 
    (12) employees of the Sibley House Association; 
    (13) employees of the ladies of the Grand Army of the 
Republic; 
    (14) the members of any state board or commission who serve 
the state intermittently and are paid on a per diem basis; the 
secretary, secretary-treasurer, and treasurer of those boards if 
their compensation is $500 or less per year, or, if they are 
legally prohibited from serving more than two consecutive terms 
and their total service is required by law to be less than ten 
years; and the board of managers of the state agricultural 
society and its treasurer unless the treasurer is also its 
full-time secretary; 
    (15) (14) state troopers; 
    (16) (15) temporary employees of the Minnesota state fair 
employed on or after July 1 for a period not to extend beyond 
October 15 of that year; and persons employed at any time by the 
state fair administration for special events held on the 
fairgrounds; 
    (17) (16) emergency employees in the classified service; 
except that if an emergency employee, within the same pay 
period, becomes a provisional or probationary employee on other 
than a temporary basis, the employee shall be considered a 
"state employee" retroactively to the beginning of the pay 
period; 
    (18) (17) persons described in section 352B.01, subdivision 
2, clauses (2) to (5); 
    (19) (18) temporary employees in the classified service, 
temporary employees in the unclassified service appointed for a 
definite period of not more than six months and employed less 
than six months in any one-year period and seasonal help in the 
classified service employed by the department of revenue; 
    (20) trainees paid under budget classification number 41, 
and other (19) trainee employees, except those listed in 
subdivision 2a, clause (10); 
    (21) (20) persons whose compensation is paid on a fee 
basis; 
    (22) (21) state employees who in any year have credit for 
12 months service as teachers in the public schools of the state 
and as teachers are members of the teachers retirement 
association or a retirement system in St. Paul, Minneapolis, or 
Duluth; 
    (23) (22) employees of the adjutant general employed on an 
unlimited intermittent or temporary basis in the classified and 
unclassified service for the support of army and air national 
guard training facilities; 
    (24) (23) chaplains and nuns who have taken a vow of 
poverty as members of a religious order are excluded from 
coverage under the federal old age, survivors, disability, and 
health insurance program for the performance of service as 
specified in United States Code, title 42, section 410(a)(8)(A), 
as amended, if no irrevocable election of coverage has been made 
under section 3121(r) of the Internal Revenue Code of 1954, as 
amended; 
    (25) labor service employees employed as a laborer 1 on an 
hourly basis; 
    (26) (24) examination monitors employed by departments, 
agencies, commissions, and boards to conduct examinations 
required by law; 
    (27) (25) members of appeal tribunals, exclusive of the 
chair, to which reference is made in section 268.10, subdivision 
4; 
    (28) (26) persons appointed to serve as members of 
fact-finding commissions or adjustment panels, arbitrators, or 
labor referees under chapter 179; 
    (29) (27) temporary employees employed for limited periods 
under any state or federal program for training or 
rehabilitation including persons employed for limited periods 
from areas of economic distress except skilled and supervisory 
personnel and persons having civil service status covered by the 
system; 
    (30) (28) full-time students employed by the Minnesota 
historical society intermittently during part of the year and 
full-time during the summer months; 
    (31) (29) temporary employees, appointed for not more than 
six months, of the metropolitan council and of any of its 
statutory boards, if the board members are appointed by the 
metropolitan council; 
    (32) (30) persons employed in positions designated by the 
department of employee relations as student workers; 
    (33) (31) any person who is 65 years of age or older when 
appointed and who does not have allowable service credit for 
previous employment, unless the employee gives notice to the 
director within 60 days after appointment that coverage is 
desired; 
    (34) (32) members of trades employed by the metropolitan 
waste control commission with trade union pension plan coverage 
under a collective bargaining agreement first employed after 
June 1, 1977; 
    (35) (33) persons employed in subsidized on-the-job 
training, work experience, or public service employment as 
enrollees under the federal Comprehensive Employment and 
Training Act after March 30, 1978, unless the person has as of 
the later of March 30, 1978, or the date of employment 
sufficient service credit in the retirement system to meet the 
minimum vesting requirements for a deferred annuity, or the 
employer agrees in writing on forms prescribed by the director 
to make the required employer contributions, including any 
employer additional contributions, on account of that person 
from revenue sources other than funds provided under the federal 
Comprehensive Employment and Training Act, or the person agrees 
in writing on forms prescribed by the director to make the 
required employer contribution in addition to the required 
employee contribution; 
    (36) (34) off-duty peace officers while employed by the 
metropolitan transit commission under section 629.40, 
subdivision 5; and 
    (37) (35) persons who are employed as full-time 
firefighters by the department of military affairs and as 
firefighters are members of the public employees police and fire 
fund. 
    Sec. 2.  Minnesota Statutes 1990, section 352.029, 
subdivision 1, is amended to read: 
    Subdivision 1.  [QUALIFICATIONS.] A former state employee 
who is An employee of a labor organization that is an exclusive 
bargaining agent representing state employees or a state 
employee on leave of absence without pay to provide service as 
an employee or officer of a labor organization that is an 
exclusive bargaining agent representing state employees, may 
choose under subdivision 2 to be covered by the system for 
service with the labor organization unless specifically excluded 
under section 352.01, subdivision 2b.  
    Sec. 3.  Minnesota Statutes 1990, section 352.029, 
subdivision 2, is amended to read: 
    Subd. 2.  [ELECTION.] A person described in subdivision 1 
shall be covered by the system if written election to be covered 
is delivered to the executive director before December 31, 1985 
1992, within 90 days of being employed by the labor 
organization, or within 90 days of starting the first leave of 
absence with an exclusive bargaining agent, whichever is later. 
    Sec. 4.  Minnesota Statutes 1990, section 352.113, 
subdivision 1, is amended to read: 
    Subdivision 1.  [AGE AND SERVICE REQUIREMENTS.] Any An 
employee covered by the system, who is less than normal 
retirement age and who becomes totally and permanently disabled 
after three or more years of allowable service, is entitled to a 
disability benefit in an amount provided in subdivision 3.  If 
the disabled employee's state service has terminated at any 
time, the employee must have at least two years of allowable 
service after last becoming a state employee covered by the 
system.  Refunds may be repaid under section 352.23 before the 
effective accrual date of the disability benefit under 
subdivision 2. 
    Sec. 5.  Minnesota Statutes 1990, section 352.113, 
subdivision 3, is amended to read: 
    Subd. 3.  [COMPUTATION OF BENEFITS.] The total and 
permanent disability benefit must be computed in the manner 
provided in section 352.115.  The disability benefit shall be 
the normal annuity without reduction for each month the employee 
is under normal retirement age 65 at the time of becoming 
disabled.  A disabled employee may choose to receive the normal 
disability benefit or an optional annuity as provided in section 
352.116, subdivision 3.  This choice must be made before the 
start of payment of the disability benefit and is effective the 
date on which the disability begins to accrue as provided in 
subdivision 2.  
    Sec. 6.  Minnesota Statutes 1990, section 352.113, 
subdivision 4, is amended to read: 
    Subd. 4.  [MEDICAL EXAMINATIONS; AUTHORIZATION FOR PAYMENT 
OF BENEFIT.] An applicant shall provide medical evidence to 
support an application for total and permanent disability.  The 
director shall have the employee examined by at least one 
additional licensed physician designated by the medical 
advisor.  The physicians shall make written reports to the 
director concerning the employee's disability including medical 
opinions as to whether the employee is permanently and totally 
disabled within the meaning of section 352.01, subdivision 17.  
The director shall also obtain written certification from the 
employer stating whether the employee is on sick leave of 
absence because of a disability that will prevent further 
service to the employer and as a consequence the employee is not 
entitled to compensation from the employer.  The medical advisor 
shall consider the reports of the physicians and any other 
evidence supplied by the employee or other interested parties.  
If the medical advisor finds the employee totally and 
permanently disabled, the advisor shall make appropriate 
recommendation to the director in writing together with the date 
from which the employee has been totally disabled.  The director 
shall then determine the propriety of authorizing payment of a 
disability benefit as provided in this section.  The employee 
must be on approved leave of absence from the employer to be 
eligible to apply for a total and permanent disability benefit, 
but the fact that an employee is placed on leave of absence 
without compensation because of disability does not bar that 
employee from receiving a disability benefit.  Unless payment of 
a disability benefit has terminated because the employee is no 
longer totally disabled, or because the employee has 
reached normal retirement age 65 as provided in this section, 
the disability benefit shall cease with the last payment 
received by the disabled employee or which had accrued during 
the lifetime of the employee unless there is a spouse surviving; 
in that event the surviving spouse is entitled to the disability 
benefit for the calendar month in which the disabled employee 
died.  
    Sec. 7.  Minnesota Statutes 1990, section 352.113, 
subdivision 10, is amended to read: 
    Subd. 10.  [EMPLOYEE AGAIN DISABLED AFTER RESUMING 
EMPLOYMENT.] If a disabled employee resumes gainful employment 
with the state and is not entitled to continued payment of a 
disability benefit as provided in subdivision 7, the right to a 
disability benefit ends when the employee has been employed for 
one year thereafter.  If the employee again becomes totally and 
permanently disabled before reaching normal retirement age 65, 
application for a disability benefit may again be made.  If the 
employee is entitled to a disability benefit it must be computed 
as provided in subdivision 9. 
    Sec. 8.  Minnesota Statutes 1990, section 352.12, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DEATH BEFORE TERMINATION OF SERVICE.] If 
an employee dies before state service has terminated and neither 
a survivor annuity nor a reversionary annuity is payable, or if 
a former employee who has sufficient service credit to be 
entitled to an annuity dies before the benefit has become 
payable, the director shall make a refund to the last designated 
beneficiary or, if there is none, to the surviving spouse or, if 
none, to the employee's surviving children in equal shares or, 
if none, to the employee's surviving parents in equal shares or, 
if none, to the representative of the estate in an amount equal 
to the accumulated employee contributions plus interest thereon 
to the date of death at the rate of six percent per annum 
compounded annually.  Interest must be computed to the first day 
of the month in which the refund is processed and based on 
fiscal year balances.  Upon the death of an employee who has 
received a refund that was later repaid in full, interest must 
be paid on the repaid refund only from the date of repayment.  
If the repayment was made in installments, interest must be paid 
only from the date installment payments began.  The designated 
beneficiary, surviving spouse, or representative of the estate 
of an employee who had received a disability benefit is not 
entitled to interest upon any balance remaining to the 
decedent's credit in the fund at the time of death.  
    Sec. 9.  Minnesota Statutes 1990, section 352.22, 
subdivision 3, is amended to read: 
    Subd. 3.  [DEFERRED ANNUITY.] (a) Any An employee with who 
has at least three years of allowable service when termination 
occurs may elect to leave the accumulated contributions in the 
fund and thereby be entitled to a deferred retirement annuity.  
This The annuity must be computed as provided by under the law 
in effect when state service terminated, on the basis of 
allowable service before termination of service. 
    (b) An employee on layoff or on leave of absence without 
pay, except a leave of absence for health reasons, who does not 
return to state service shall have any an annuity, deferred 
annuity, or other benefit to which the employee may become 
entitled computed under the law in effect on the employee's last 
working day. 
    (c) No application for a deferred annuity shall may be made 
more than 60 days before the time the former employee reaches 
the required age for entitlement to the payment of the annuity.  
The deferred annuity shall begin begins to accrue no earlier 
than 60 days before the date the application is filed in the 
office of the system, but not (1) before the date the employee 
reaches the required age for entitlement to the annuity nor (2) 
before the day following the termination of state service in a 
position not covered by the retirement system nor (3) before the 
day following the termination of employment in a position that 
requires the employee to be a member of either the public 
employees retirement association or the teachers retirement 
association. 
    (d) Application for the accumulated contributions left on 
deposit with the fund may be made at any time after 30 days 
following the date of termination of service. 
    Sec. 10.  Minnesota Statutes 1990, section 490.124, 
subdivision 11, is amended to read: 
    Subd. 11.  [OPTIONAL ANNUITIES.] No survivor or death 
benefits may be paid in connection with the death of a judge who 
retires after December 31, 1973, except as otherwise provided in 
sections 490.121 to 490.132.  Within 30 days before retirement, 
Except as provided in subdivision 10, a judge may elect to 
receive, instead of the normal retirement annuity, an optional 
retirement annuity in the form of an annuity payable for a 
period certain and for life after that period, a joint and 
survivor annuity without reinstatement in the event of the 
designated beneficiary predeceasing the retired judge, or a 
joint and survivor annuity with reinstatement in the event of 
the designated beneficiary predeceasing the retired judge.  An 
optional retirement annuity must be actuarially equivalent to a 
single life single-life annuity with no term certain and must be 
established by the board of directors of the Minnesota state 
retirement system.  In establishing these optional retirement 
annuity forms, the board shall obtain the written recommendation 
of the actuary retained by the legislative commission on 
pensions and retirement.  The recommendations must be a part of 
the permanent records of the board. 
    Sec. 11.  [REPEALER.] 
    Minnesota Statutes 1990, section 352.029, subdivision 4, is 
repealed. 
    Sec. 12.  [EFFECTIVE DATE.] 
    Sections 1 to 11 are effective the day following final 
enactment. 

                                ARTICLE 2

                 PUBLIC EMPLOYEES RETIREMENT ASSOCIATION
    Section 1.  Minnesota Statutes 1990, section 352D.12, is 
amended to read: 
    352D.12 [TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.] 
    An employee who is a participant in the unclassified 
program and who has prior service credit in a covered plan under 
chapters 352, 353, 354, 354A, and 422A may, within the time 
limits in this section, elect to transfer to the unclassified 
program accumulated employee and equal employer contributions 
with interest at six percent a year compounded annually, based 
on fiscal year balances.  
    If a participant has taken a refund from a fund listed in 
this section, the participant may repay the refund to that fund, 
notwithstanding any restrictions on repayment to that fund, plus 
six percent interest a year compounded annually and have the 
accumulated employee and equal employer contributions 
transferred to the unclassified program with interest at six 
percent a year compounded annually based on fiscal year 
balances.  If a person repays a refund and subsequently elects 
to have the money transferred to the unclassified program, the 
repayment amount, including interest, is added to the fiscal 
year balance in the year which the repayment was made. 
    A participant electing to transfer prior service 
contributions under this section must complete the application 
for the transfer and repay any refund within one year of July 1, 
1985 or the commencement of the employee's participation in the 
unclassified program, whichever is later. 
    Sec. 2.  Minnesota Statutes 1991 Supplement, section 
353.01, subdivision 2b, is amended to read: 
    Subd. 2b.  [EXCLUDED EMPLOYEES.] The following persons are 
excluded from the meaning of "public employee": 
     (1) persons who are employed for professional services 
where the service is incidental to regular professional duties, 
determined on the basis that compensation for the service 
amounts to no more than 25 percent of the person's total annual 
gross earnings for all professional duties; 
     (2) election officers; 
     (3) independent contractors and their employees; 
     (4) patient and inmate personnel who perform services in 
charitable, penal, or correctional institutions of a 
governmental subdivision; 
     (5) members of boards and commissions who serve a 
governmental subdivision intermittently unless their position on 
the board or commission is the result of public employment 
within the same governmental unit; 
     (6) employees who are hired for a period of less than six 
consecutive months but not those employees who are hired for an 
unlimited period but are serving a probationary period.  If the 
period of employment is extended beyond the six-month period and 
the employee earns more than $425 from one governmental 
subdivision in any one calendar month, the department head shall 
report the employee for membership and require employee 
deductions be made on behalf of the employee under section 
353.27, subdivision 4.  Membership eligibility of an employee 
who holds concurrent temporary employment of six months or less 
and nontemporary positions in one governmental subdivision must 
be determined by the salary of each position.  Membership 
eligibility of an employee who holds nontemporary positions in 
one governmental subdivision must be determined by the total 
salary of all positions; 
    (7) appointed and elected employees whose actual 
compensation from one governmental subdivision does not exceed 
$425 per month, or whose annual compensation from one 
governmental subdivision is stipulated in advance, in writing, 
to be not more than $5,100 per calendar year or per school year 
for school employees for employment expected to be of a full 
year's duration or more than the prorated portion of $5,100 per 
employment period for employment expected to be of less than a 
full year's duration, except that members continue their 
membership until termination of public service as defined in 
subdivision 11a.  Membership eligibility of an employee who 
holds concurrent part-time positions under this clause must be 
determined by the total salary of all such positions in one 
governmental subdivision.  If compensation from one governmental 
subdivision to an employee under this paragraph exceeds $5,100 
per calendar year or school year after being stipulated in 
advance not to exceed that amount, the stipulation is no longer 
valid and contributions must be made on behalf of the employee 
in accordance with section 353.27, subdivision 12, from the 
month in which the employee's earnings first exceeded $425; 
    (8) persons who first occupy an elected office after July 
1, 1988, the compensation for which does not exceed $425 per 
month; 
    (9) emergency employees who are employed by reason of work 
caused by fire, flood, storm, or similar disaster; 
    (10) employees who by virtue of their employment in one 
governmental subdivision are required by law to be a member of 
and to contribute to any of the plans or funds administered by 
the Minnesota state retirement system, the teachers retirement 
association, the Duluth teachers retirement fund association, 
the Minneapolis teachers retirement association, the St. Paul 
teachers retirement fund association, the Minneapolis employees 
retirement fund, or any police or firefighters relief 
association governed by section 69.77 that has not consolidated 
with the public employees police and fire fund retirement 
association, or any police or firefighters relief association 
that has consolidated with the public employees retirement 
association but whose members have not elected the type of 
benefit coverage provided by the public employees police and 
fire fund as provided in under sections 353A.01 to 353A.10.  
This clause must not be construed to prevent a person from being 
a member of and contributing to the public employees retirement 
association and also belonging to and contributing to another 
public pension fund for other service occurring during the same 
period of time.  A person who meets the definition of "public 
employee" in subdivision 2 by virtue of other service occurring 
during the same period of time shall become becomes a member of 
the association unless contributions are made to another public 
retirement fund on the salary based on the other service or to 
the teachers retirement association by a teacher as defined in 
section 354.05, subdivision 2; 
    (11) police matrons who are employed in a police department 
of a city who are transferred to the jurisdiction of a joint 
city and county detention and corrections authority; 
    (12) persons who are excluded from coverage under the 
federal old age, survivors, disability, and health insurance 
program for the performance of service as specified in United 
States Code, title 42, section 410(a)(8)(A), as amended through 
January 1, 1987, if no irrevocable election of coverage has been 
made under section 3121(r) of the Internal Revenue Code of 1954, 
as amended; 
    (13) full-time students who are enrolled and are regularly 
attending classes at an accredited school, college, or 
university and who are not employed full time part-time 
employees as defined by a governmental subdivision; 
    (14) resident physicians, medical interns, and pharmacist 
residents and interns who are serving in a degree or residency 
program in public hospitals and students who are serving in an 
internship or residency program sponsored by an accredited 
educational institution; 
     (15) appointed or elected officers who are paid entirely on 
a fee basis and who were not members on June 30, 1971; 
       (16) persons who hold a part-time adult supplementary 
technical college license who render part-time teaching service 
in a technical college; 
       (17) persons exempt from licensure under section 125.031; 
        (18) persons employed by the Minneapolis community 
development agency; 
       (19) except as provided in section 353.86, volunteer 
ambulance service personnel, as defined in subdivision 35, but 
persons who serve as volunteer ambulance service personnel may 
still qualify as public employees under subdivision 2 and may be 
members of the public employees retirement association and 
participants in the public employees retirement fund or the 
public employees police and fire fund on the basis of 
compensation received from public employment service other than 
service as volunteer ambulance service personnel; and 
       (20) except as provided in section 353.87, volunteer 
firefighters, as defined in subdivision 36, engaging in 
activities undertaken as part of volunteer firefighter duties; 
provided that a person who is a volunteer firefighter may still 
qualify as a public employee under subdivision 2 and may be a 
member of the public employees retirement association and a 
participant in the public employees retirement fund or the 
public employees police and fire fund on the basis of 
compensation received from public employment activities other 
than those as a volunteer firefighter. 
    Sec. 3.  Minnesota Statutes 1991 Supplement, section 
353.01, subdivision 16, is amended to read: 
    Subd. 16.  [ALLOWABLE SERVICE.] (a) "Allowable service" 
means service during years of actual membership in the course of 
which employee contributions were made, periods covered by 
payments in lieu of salary deductions under section 353.35, and 
service in years during which the public employee was not a 
member but for which the member later elected, while a member, 
to obtain credit by making payments to the fund as permitted by 
any law then in effect. 
     (b) "Allowable service" also means a period of authorized 
leave of absence with pay from which deductions for employee 
contributions are made, deposited, and credited to the fund. 
     (c) "Allowable service" also means a period of authorized 
leave of absence without pay that does not exceed one year, and 
during or for which a member obtained credit by payments to the 
fund made in place of salary deductions, provided that the 
payments are made in an amount or amounts based on the member's 
average salary on which deductions were paid for the last six 
months of public service, or for that portion of the last six 
months while the member was in public service, to apply to the 
period in either case immediately preceding commencement of the 
leave of absence.  If the employee elects to pay employee 
contributions for the period of any leave of absence without 
pay, or for any portion of the leave, the employee shall also, 
as a condition to the exercise of the election, pay to the fund 
an amount equivalent to both the required employer and 
additional employer contributions for the employee.  The payment 
must be made within one year from the date the leave of absence 
terminates.  The employer by appropriate action of its governing 
body, made a part of its official records, before the date of 
the first payment of the employee contribution, may certify to 
the association in writing that it will cause to be paid its 
commitment to pay the employer and additional employer 
contributions from the proceeds of a tax levy made under section 
353.28.  Payments under this paragraph must include interest at 
the rate of six percent a year from the date of the termination 
of the leave of absence to the date payment is made. 
    (d) "Allowable service" also means a periodic, repetitive 
leave that is offered to all employees of a governmental 
subdivision.  The leave program may not exceed 208 hours per 
annual normal work cycle as certified to the association by the 
employer.  A participating member obtains service credit by 
making employee contributions in an amount or amounts based on 
the member's average salary that would have been paid if the 
leave had not been taken.  The employer shall pay the employer 
and additional employer contributions on behalf of the 
participating member.  The employee and the employer are 
responsible to pay interest on their respective shares at the 
rate of six percent a year, compounded annually, from the date 
or dates that the contributions were first payable until full 
payment is made.  An employer shall also make the employer and 
additional employer contributions, plus six percent interest, 
compounded annually, on behalf of an employee who makes employee 
contributions but terminates public service.  The employee 
contributions must be made within one year after the end of the 
annual normal working cycle or within 20 days after termination 
of public service, whichever is applicable.  The association 
shall prescribe the manner and forms to be used by a 
governmental subdivision in administering a periodic, repetitive 
leave. 
    (e) "Allowable service" also means a period during which a 
member is on an authorized sick leave of absence, without pay 
limited to one year,. 
    (f) "Allowable service" also means an authorized temporary 
layoff, or under subdivision 12. 
    (g) "Allowable service" also means a maternity, paternity, 
or adoption leave.  The association will shall grant a maximum 
of two months service credit for a maternity, paternity, or 
adoption leave upon documentation from the member's governmental 
subdivision.  A member on personal leave of absence who provides 
the association with a birth certificate or other evidence of 
birth or adoption during the personal leave time period will be 
granted also receives up to two months of service credit. 
    (e) (h) "Allowable service" also means a period during 
which a member is on an authorized leave of absence to enter 
military service, provided that the member returns to public 
service upon discharge from military service under section 
192.262 and pays into the fund employee contributions based upon 
the employee's salary at the date of return from military 
service.  Payment must be made within five years of the date of 
discharge from the military service.  The amount of these 
contributions must be in accord with the contribution rates and 
salary limitations, if any, in effect during the leave, plus 
interest at six percent a year compounded annually from the date 
of return to public service to the date payment is made.  The 
matching employer contribution and additional employer 
contribution under section 353.27, subdivisions 3 and 3a, must 
be paid by the department employing the member upon return to 
public service if the member makes the employee contributions.  
The governmental subdivision involved may appropriate money for 
those payments.  A member may not receive credit for a voluntary 
extension of military service at the instance of the member 
beyond the initial period of enlistment, induction, or call to 
active duty. 
    (f) (i) For calculating benefits under sections 353.30, 
353.31, 353.32, and 353.33 for state officers and employees 
displaced by the community corrections act, chapter 401, and 
transferred into county service under section 401.04, "allowable 
service" means combined years of allowable service as defined in 
paragraphs (a) to (e) (h) and section 352.01, subdivision 11.  
    (g) (j) For a public employee who has prior service covered 
by a local police or firefighters relief association that has 
consolidated with the public employees police and fire fund 
retirement association, and who has elected the type of benefit 
coverage provided by the public employees police and fire 
fund benefit plan as provided in under section 353A.08 following 
the consolidation, "applicable service" is a period of service 
credited by the local police or firefighters relief association 
as of the effective date of the consolidation based on law and 
on bylaw provisions governing the relief association on the date 
of the initiation of the consolidation procedure. 
    Sec. 4.  Minnesota Statutes 1991 Supplement, section 
353.01, subdivision 20, is amended to read: 
    Subd. 20.  [SURVIVING SPOUSE.] "Surviving spouse" means the 
spouse of a deceased member or disabilitant who was legally 
married to the member at the time of death, or at the time the 
member became totally and permanently disabled. 
    Sec. 5.  Minnesota Statutes 1990, section 353.01, 
subdivision 28, is amended to read: 
    Subd. 28.  [RETIREMENT.] "Retirement" means the 
withdrawal of a member from active public service by a member 
who is paid a retirement annuity thereafter and commences with 
the that begins to accrue on a date designated by the board of 
trustees when the retirement annuity shall first accrue to the 
former member after withdrawal from active public service.  This 
date shall determine any determines the rights specified in this 
chapter which occur either before or after retirement, as the 
case may be; but if there is not.  A right to retirement must 
not accrue without a complete and continuous separation from 
public service for 30 days following the withdrawal from public 
service for the purpose of retirement, no rights shall accrue 
thereunder and retirement shall not be accomplished 
thereby.  Notwithstanding the 30-day separation requirement, a 
member of the defined benefit plan under this chapter, who also 
participates in the public employees defined contribution plan 
under chapter 353D for other public service, may be paid, if 
eligible, a retirement annuity from the defined benefit plan 
while participating in the defined contribution plan. 
    Sec. 6.  Minnesota Statutes 1990, section 353.27, 
subdivision 10, is amended to read: 
    Subd. 10.  [EMPLOYERS; FURNISH COPIES OF PAYROLL 
ABSTRACTS EMPLOYER EXCLUSION REPORTS.] The head of each a 
department is required to shall annually furnish the executive 
director with a carbon or duplicate copy of the departmental 
payroll abstracts for the last full pay period during the month 
of May for school districts and the last pay period covering 
calendar-year earnings for all other governmental subdivisions, 
respectively, in each year.  Instead of a duplicate copy of the 
payroll abstract, the employer may submit an exception report 
listing only those employees who worked the last full pay period 
of May or December, but who are not members of the association.  
Minimum reporting requirements to be shown on either the payroll 
abstract or exception report include:  (1) name of the 
governmental subdivision and department identification; (2) the 
association's assigned unit number and unique code; (3) pay 
period coverage dates; (4) any employee deductions; (5) gross 
salary for the pay period; (6) each employee's year-to-date 
gross pay; and (7) the reason for any exclusion an exclusion 
report listing only those employees in potentially PERA-eligible 
positions who were not reported as members of the association 
and who worked during the school year for school employees and 
calendar year for nonschool employees.  The department head must 
certify the accuracy and completeness of the exclusion report to 
the association.  The executive director shall prescribe the 
manner and forms, including standardized exclusion codes, to be 
used by a governmental subdivision in preparing and filing 
exclusion reports.  The executive director shall also check the 
copies of all payroll abstracts against the membership records 
of the association the exclusion report to ascertain whether any 
omissions have been made by a department head in the reporting 
of new public employees for membership.  The head of any 
department shall furnish a carbon or duplicate copy of the 
department payroll abstract at the request of the executive 
director.  The executive director may delegate an association 
employee by appointment, in accordance with under section 
353.03, subdivision 3a, paragraph (b), clause (5), to conduct a 
field audit to review the payroll records of a governmental 
subdivision. 
    Sec. 7.  Minnesota Statutes 1991 Supplement, section 
353.27, subdivision 12, is amended to read: 
    Subd. 12.  [OMITTED SALARY DEDUCTIONS; OBLIGATIONS.] (a) In 
the case of omission of required deductions from the salary of 
an employee, the department head shall immediately, upon 
discovery, report the employee for membership and require deduct 
the employee deductions under subdivision 4.  Upon receipt of 
billing from the association, the omitted employee 
deductions due for the 60-day period preceding membership must 
be deducted upon receipt of billing from the association from 
the employee's next salary payment and remitted to the 
association.  The employee shall pay omitted employee deductions 
due for the 60 days prior to the end of the last pay period in 
the omission period during which salary was earned.  The 
employer shall pay any remaining omitted employee deductions and 
any omitted employer contributions, plus cumulative interest at 
the rate of six percent a year, compounded annually, from the 
date or dates each omitted employee contribution was first 
payable.  
    (b) An employer shall not hold an employee liable for 
omitted employee deductions beyond the pay period that covers 
the 60th day preceding membership dates under paragraph (a), nor 
attempt to recover from the employee those employee deductions 
paid by the employer on behalf of the employee.  Omitted 
deductions due under paragraph (a) which are not paid by the 
employee constitute a liability of the employer that failed to 
deduct the omitted deductions from the employee's salary.  The 
employer shall make payment with interest at the rate of six 
percent compounded annually.  Omitted employee deductions are no 
longer due if an employee terminates public service before 
making payment of omitted employee deductions to the 
association, but the employer remains liable to pay omitted 
employer contributions plus interest at the rate of six percent 
compounded annually from the date the contributions were first 
payable.  
     (c) The association may not commence action for the 
recovery of omitted employee deductions and employer 
contributions after the expiration of three calendar years after 
the calendar year in which the contributions and deductions were 
omitted.  No payment may be made or accepted unless the 
association has already commenced action for recovery of omitted 
deductions.  An action for recovery commences on the date of the 
mailing of any written correspondence from the association 
requesting information from the governmental subdivision upon 
which to determine whether or not omitted deductions occurred. 
    Sec. 8.  Minnesota Statutes 1991 Supplement, section 
353.27, subdivision 12b, is amended to read: 
    Subd. 12b.  If deductions were omitted from salary 
adjustments or final salary of a terminated employee who is 
immediately eligible to draw a monthly benefit, the employer 
shall pay the omitted employer and employer additional 
contributions plus interest on both and the employer and 
employee amounts due.  The employee shall pay the employee 
deductions within six months of an initial notification from the 
association of eligibility to pay omitted deductions or the 
employee forfeits the right to make the payment. 
    Sec. 9.  Minnesota Statutes 1990, section 353.29, 
subdivision 7, is amended to read: 
    Subd. 7.  [ANNUITIES; ACCRUAL.] Except as to elected public 
officials, all a retirement annuities annuity granted 
under the provisions of this chapter shall commence begins with 
the first day of the first calendar month next succeeding after 
the date of termination of public service and shall.  The 
annuity must be paid in equal monthly installments, but no 
payment shall and does not accrue beyond the end of the month, 
in which entitlement to such the annuity has terminated.  If the 
annuitant dies prior to negotiating the check for the month in 
which death occurs, payment will must be made to the surviving 
spouse, or if none, to the designated beneficiary, or if none, 
to the estate.  
    Any An annuity granted to an elective public official shall 
accrue accrues on the day following expiration of the public 
office held or expiration of the right thereto, and to hold that 
office.  The annuity for that the month shall be during which 
the expiration occurred is prorated accordingly.  No An annuity, 
once granted, shall must not be increased, decreased, or revoked 
except as provided in under this chapter.  No An annuity payment 
shall may be made retroactive for more than three months up to 
one year prior to that month in which a complete application is 
received by the executive director as provided in under 
subdivision 4. 
    Sec. 10.  Minnesota Statutes 1991 Supplement, 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 under 
section 353.33 at the time of death who has had at least 18 
months of credited allowable service, the surviving spouse and 
dependent child or children of the member, as defined in section 
353.01, subdivisions 15 and 20, are 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
Notwithstanding the definition of surviving spouse under section 
353.01, subdivision 20, a former spouse of the member, if any, 
is entitled to a portion of the monthly surviving spouse benefit 
if stipulated under the terms of a marriage dissolution decree 
that is filed with the association.  If there is no surviving 
spouse or child or children, a former spouse may be entitled to 
a lump-sum refund payment under section 353.32, subdivision 1, 
if provided for in a marriage dissolution decree but not a 
monthly surviving spouse benefit even if required by the decree. 
    Sec. 11.  Minnesota Statutes 1991 Supplement, section 
353.32, subdivision 1a, is amended to read: 
    Subd. 1a.  [SURVIVING SPOUSE OPTIONAL ANNUITY.] If a member 
or former member who has attained at least age 50 and has credit 
for not less than three years of allowable service or who has 
credit for not less than 30 years of allowable service, 
regardless of age attained, dies before the annuity or 
disability benefit begins to accrue in accordance with under 
section 353.29, subdivision 7, or 353.33, subdivision 2, 
notwithstanding any designation of beneficiary to the contrary, 
the surviving spouse may elect to receive, instead of a refund 
with interest under subdivision 1, or surviving spouse benefits 
otherwise payable under section 353.31, an annuity equal to the 
100 percent joint and survivor annuity that the member could 
have qualified for had the member terminated service on the date 
of death.  
     Notwithstanding the definition of surviving spouse in 
section 353.01, subdivision 20, a former spouse of the member, 
if any, is entitled to a portion of the monthly surviving spouse 
optional annuity if stipulated under the terms of a marriage 
dissolution decree filed with the association.  If there is no 
surviving spouse or child or children, a former spouse may be 
entitled to a lump-sum refund payment under subdivision 1, if 
provided for in a marriage dissolution decree but not a monthly 
surviving spouse optional annuity despite the terms of a 
marriage dissolution decree filed with the association. 
     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.  The annuity must be computed under sections 
353.29, subdivisions 2 and 3; 353.30, subdivisions 1, 1a, 1b, 
1c, and 5; and 353.31, subdivision 3.  Sections 353.34, 
subdivision 3, and 353.71, subdivision 2, apply to a deferred 
annuity payable under this subdivision.  No payment may accrue 
beyond the end of the month in which entitlement to the annuity 
has terminated.  An amount equal to any excess of the 
accumulated contributions that were credited to the account of 
the deceased employee over and above the total of the annuities 
paid and payable to the surviving spouse must be paid to the 
deceased member's last designated beneficiary or, if none, to 
the legal representative of the estate of the deceased member.  
A member may specify in writing that this subdivision does not 
apply and that payment may be made only to the designated 
beneficiary as otherwise provided by this chapter. 
    Sec. 12.  Minnesota Statutes 1990, section 353.33, 
subdivision 1, is amended to read: 
    Subdivision 1.  [AGE, SERVICE, AND SALARY REQUIREMENTS.] 
Any A member who becomes totally and permanently disabled before 
normal retirement age and after three years of allowable service 
shall be is entitled to a disability benefit in an amount 
provided in under subdivision 3.  If the disabled person's 
public service has terminated at any time, at least two of the 
required three years of allowable service must have been 
rendered after last becoming a member.  Any member whose average 
salary is less than $75 per month shall not be entitled to a 
disability benefit.  A repayment of a refund may be made 
before within six months after the effective date of disability 
benefits under subdivision 2 or within six months after the date 
of the filing of the disability application, whichever is 
sooner.  No purchase of prior service or payment made in lieu of 
salary deductions otherwise authorized pursuant to under section 
353.01, subdivision 16, 353.017, subdivision 4, or 353.36, 
subdivision 2, may be made after the occurrence of the 
disability for which an application pursuant to under this 
section is filed.  
    Sec. 13.  Minnesota Statutes 1990, section 353.33, 
subdivision 6, is amended to read: 
    Subd. 6.  [CONTINUING ELIGIBILITY FOR BENEFITS.] The 
eligibility for continuation of disability benefits shall be 
determined by the association, which has authority to require 
periodic examinations and evaluations of disabled members as 
frequently as deemed necessary.  Disability benefits are 
contingent upon a disabled person's participation in a 
vocational rehabilitation program if the executive director 
determines that the disabled person may be able to return to a 
gainful occupation.  If a member is found to be no longer 
totally and permanently disabled and is reinstated to the 
payroll, payments shall be made for no more than 60 days must 
cease the first of the month following the reinstatement to the 
payroll. 
    Sec. 14.  Minnesota Statutes 1990, section 353.33, 
subdivision 6a, is amended to read: 
    Subd. 6a.  [MEDICAL ADVISER.] The state commissioner of 
health executive director may contract with licensed physicians 
or such other licensed physician physicians on the staff of the 
state commissioner of health as the commissioner may designate 
shall, as designated by the commissioner, to be the medical 
adviser of the executive director association. 
    Sec. 15.  Minnesota Statutes 1990, section 353.33, 
subdivision 6b, is amended to read: 
    Subd. 6b.  [DUTIES OF THE MEDICAL ADVISER.] At the request 
of the executive director, the medical adviser shall designate 
licensed physicians to examine applicants for disability 
benefits.  The medical adviser shall pass upon all and review 
the medical reports based upon such these examinations required 
to determine whether applicants are an applicant is totally and 
permanently disabled as defined in section 353.01, subdivision 
19, or disabled as defined in section 353.656, or eligible for 
continuation of disability benefits under subdivision 6.  The 
medical examiner shall investigate also review, at the request 
of the executive director, all health and medical statements and 
certificates by or on behalf of said applicants in connection 
with an applicant for disability benefits, and shall report in 
writing to the executive director conclusions and 
recommendations on all those matters referred for advice. 
    Sec. 16.  Minnesota Statutes 1990, section 353.34, 
subdivision 2, is amended to read: 
    Subd. 2.  [REFUND WITH INTEREST.] Except as provided in 
subdivision 1, any person who ceases to be a public employee 
shall receive a refund in an amount equal to accumulated 
deductions with interest to the first day of the month in which 
the refund is processed at the rate of six percent per annum 
compounded annually based on fiscal year balances.  If a person 
repays a refund and subsequently applies for another refund, the 
repayment amount, including interest, is added to the fiscal 
year balance in which the repayment was made. 
    Sec. 17.  Minnesota Statutes 1991 Supplement, section 
353.64, subdivision 5a, is amended to read: 
    Subd. 5a.  A member of the police and fire fund continues 
to be a member of that fund if transferred to a different 
position with associated police or fire department functions in 
the same department or a related department in the same 
governmental subdivision provided the governing body sends a 
copy of a resolution to that effect to the association and the 
member meets the eligibility criteria under subdivision 2 or 3.  
A police and fire fund member who is elected or assumes an 
appointive position, including but not limited to, the positions 
of city council member, city manager, and finance director is 
not eligible to retain membership in the public employees police 
and fire fund. 
    Sec. 18.  Minnesota Statutes 1990, section 353.65, 
subdivision 1, is amended to read: 
    Subdivision 1.  There is a special fund known as The 
"public employees police and fire fund."  In that fund there 
shall be deposited is established for police officers and 
firefighters who meet the eligibility criteria under section 
353.64.  Employee contributions, employer contributions, other 
than the excess contribution established by section 69.031, 
subdivision 5, paragraphs (2), clauses (b) and (c), and (3), and 
other amounts authorized by law, including all employee and 
employer contributions of members transferred.  Within must be 
deposited in the public employees police and fire fund are 
accounts for each municipality known as the "local relief 
association consolidation accounts," which are governed by 
section 353A.09.  
    Sec. 19.  Minnesota Statutes 1990, section 353.656, 
subdivision 5, is amended to read: 
    Subd. 5.  No disability benefit payment shall be made 
except upon adequate proof furnished to the association of the 
existence of such disability, and during the time when any such 
benefits are being paid, the association shall have the right, 
at reasonable times, to require the disabled member to submit 
proof of the continuance of the disability claimed.  Payment of 
a disability benefit must cease the first of the month following 
reinstatement to a position covered by the public employees 
police and fire fund. 
    Sec. 20.  Minnesota Statutes 1991 Supplement, section 
353.657, subdivision 1, is amended to read: 
    Subdivision 1.  In the event any a member of the police and 
fire fund dies from any cause before retirement or after 
becoming disabled and receiving disability benefits, the 
association shall grant survivor benefits to a surviving spouse, 
as defined in section 353.01, subdivision 20, and who was 
married to the member for a period of at least one year, except 
that if death occurs in the line of duty no time limit is 
required.  The association shall also grant survivor benefits to 
a dependent child or children, as defined in section 353.01, 
subdivision 15. 
     Notwithstanding the definition of surviving spouse, a 
former spouse of the member, if any, is entitled to a portion of 
the monthly surviving spouse benefit if stipulated under the 
terms of a marriage dissolution decree filed with the 
association.  If there is no surviving spouse or child or 
children, a former spouse may be entitled to a lump-sum refund 
payment under section 353.32, subdivision 1, if provided for in 
a marriage dissolution decree but not a monthly surviving spouse 
benefit despite the terms of a marriage dissolution decree filed 
with the association. 
     The spouse and child or children are entitled to monthly 
benefits as provided in the following subdivisions. 
    Sec. 21.  Minnesota Statutes 1991 Supplement, section 
353.657, subdivision 2, is amended to read: 
    Subd. 2.  The spouse, for life, 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.  If the member was a part-time 
police officer or firefighter, the monthly survivor benefit is 
based on the salary rate in effect for that member's part-time 
service during the last six months of allowable service.  If the 
member's status changed from full time to part time for health 
reasons during the last year of employment, the monthly survivor 
benefit is based on the full-time salary rate of a police 
officer or firefighter in effect over the last six months of 
allowable service preceding the month in which the death 
occurred. 
    Sec. 22.  Minnesota Statutes 1991 Supplement, section 
353.657, subdivision 2a, is amended to read: 
    Subd. 2a.  [DEATH WHILE ELIGIBLE SURVIVOR BENEFIT.] If a 
member or former member who has attained the age of at least 50 
years and has credit for not less than three years allowable 
service or who has credit for at least 30 years of allowable 
service, regardless of age attained, dies before public service 
has terminated, or if an employee who has filed a valid 
application for an annuity or disability benefit prior to 
termination of public service dies before the annuity or 
disability benefit has become becomes payable, notwithstanding 
any designation of beneficiary to the contrary, the surviving 
spouse may elect to receive a death while eligible survivor 
benefit.  
     Notwithstanding the definition of surviving spouse in 
section 353.01, subdivision 20, a former spouse of the member, 
if any, is entitled to a portion of the death while eligible 
survivor benefit if stipulated under the terms of a marriage 
dissolution decree filed with the association.  If there is no 
surviving spouse or child or children, a former spouse may be 
entitled to a lump-sum refund payment under section 353.32, 
subdivision 1, if provided for in a marriage dissolution decree 
but not a death while eligible survivor benefit despite the 
terms of a marriage dissolution decree filed with the 
association. 
     The benefit may be elected instead of a refund with 
interest under section 353.32, subdivision 1, or surviving 
spouse benefits otherwise payable under subdivisions 1 and 2.  
The benefit must be an annuity equal to the 100 percent joint 
and survivor annuity which the member could have qualified for 
on the date of death, computed as provided in sections 353.651, 
subdivisions 2 and 3, and 353.30, subdivision 3.  If there is a 
dependent child or children, and the 100 percent joint and 
survivor optional annuity for the surviving spouse, when added 
to the benefit of the dependent child or children under 
subdivision 3, exceeds an amount equal to 70 percent of the 
member's specified average monthly salary, the 100 percent joint 
and survivor annuity must be reduced by the amount necessary so 
that the total family benefit does not exceed the 70 percent 
maximum family benefit amount under subdivision 3.  The 100 
percent joint and survivor optional annuity must be restored to 
the surviving spouse, plus applicable postretirement fund 
adjustments under section 356.41, as the dependent child or 
children become no longer dependent under section 353.01, 
subdivision 15.  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.  Sections 353.34, subdivision 3, 
and 353.71, subdivision 2, apply to a deferred annuity payable 
under this subdivision.  No payment shall accrue beyond the end 
of the month in which entitlement to such annuity has 
terminated.  An amount equal to the excess, if any, of the 
accumulated contributions which were credited to the account of 
the deceased employee over and above the total of the annuities 
paid and payable to the surviving spouse shall must be paid to 
the deceased member's last designated beneficiary or, if none, 
to the legal representative of the estate of such deceased 
member.  Any member may request in writing that this subdivision 
not apply and that payment be made only to the designated 
beneficiary, as otherwise provided by this chapter.  For a 
member who is employed as a full-time firefighter by the 
department of military affairs of the state of Minnesota, 
allowable service as a full-time state military affairs 
department firefighter credited by the Minnesota state 
retirement system may be used in meeting the minimum allowable 
service requirement of this subdivision. 
    Sec. 23.  Minnesota Statutes 1990, section 353.659, is 
amended to read: 
    353.659 [LOCAL RELIEF ASSOCIATION CONSOLIDATION ACCOUNT 
BENEFITS.] 
    For any person who has prior service covered by a local 
police or firefighters relief association which has consolidated 
with the public employee police and fire fund employees 
retirement association and who has elected the type of benefit 
coverage provided by the public employees police and fire fund 
benefit plan as provided in under section 353A.08 following the 
consolidation, any retirement benefits payable shall be are 
governed by the applicable provisions of this chapter.  For any 
person who has prior service covered by a local police or 
firefighters relief association which has consolidated with the 
public employees police and fire fund retirement association and 
who has not elected the type of benefit coverage provided by the 
public employees police and fire fund benefit plan as provided 
in under section 353A.08 following the consolidation, any 
retirement benefits payable shall be are governed by the 
provisions of sections 353B.01 to 353B.13 which apply to the 
relief association. 
    Sec. 24.  Minnesota Statutes 1990, section 353.68, 
subdivision 4, is amended to read: 
    Subd. 4.  The deferred annuity of section 353.34, 
subdivision 3, as it applies to members of the police and fire 
fund shall commence at age 55, begins and shall be is computed 
in the manner provided in section 353.651 on the basis of the 
law in effect on the date of termination of public service and 
shall be.  The deferred annuity is augmented as provided in 
under section 353.71, subdivision 2.  
    Sec. 25.  Minnesota Statutes 1990, section 353A.02, 
subdivision 12, is amended to read: 
    Subd. 12.  [FUND.] "Fund" means the public employees police 
and fire consolidation fund established by sections 353.63 to 
353.68 353A.01 to 353A.10. 
    Sec. 26.  Minnesota Statutes 1991 Supplement, section 
353A.03, is amended to read: 
    353A.03 [VOLUNTARY CONSOLIDATION OPTION.] 
    Notwithstanding any provision of law to the contrary, any a 
local police or firefighters relief association, as defined in 
section 353A.02, subdivision 15, may consolidate with the public 
employees retirement association as provided in under sections 
353A.01 to 353A.10.  
    Sec. 27.  Minnesota Statutes 1990, section 353A.04, 
subdivision 2, is amended to read: 
    Subd. 2.  [INITIATION PROCEDURE.] To initiate the 
consolidation procedure, the minimum required proportion of the 
relief association membership shall submit a signed petition to 
the board of trustees recommending to the board, the balance of 
the membership of the relief association and to the municipality 
that the relief association be consolidated into the fund with 
the public employees retirement association.  Upon receipt of 
the petition and authentication of the signatures contained in 
it, the board of trustees shall hold a public hearing on the 
issue and shall adopt a resolution setting forth its 
recommendation to the membership and to the municipality on the 
issue and setting forth the procedure for a membership 
referendum as provided in under subdivision 4. 
    Sec. 28.  Minnesota Statutes 1990, section 353A.05, 
subdivision 3, is amended to read: 
    Subd. 3.  [FUND ASSOCIATION ACTIONS.] Upon approval of 
consolidation by the membership as provided in section 353A.04, 
the executive director of the public employees retirement 
association shall request from the relief association and the 
municipality the information necessary to allow the fund to 
complete the consolidation, which at a minimum shall include the 
information required to be provided to the executive director of 
the commission and to the actuary retained by the commission by 
subdivision 1.  The chief administrative officer of the relief 
association and the chief administrative officer of the 
municipality shall provide the requested information in a timely 
manner.  The data shall be reported on forms or in a manner 
prescribed by the executive director of the public employees 
retirement association.  The data shall be current as of the 
date of the approval of the consolidation by the membership and 
shall thereafter include updated data on a monthly basis 
following the initial collection of data, also in the manner or 
on forms prescribed by the executive director of the public 
employees retirement association.  The chief administrative 
officer of the municipality and the chief administrative officer 
of the relief association shall certify as to the accuracy of 
the data reported to the public employees retirement 
association, and the public employees retirement association may 
rely on that data without undertaking any affirmative duty to 
verify the data.  Upon receipt of the report of actuarial 
calculations under subdivision 1 and notice from the state board 
of the completion of the preliminary actions under subdivision 
2, the association shall notify the chief administrative officer 
of the municipality and the chief administrative officer of the 
relief association of the completion of the preliminary actions. 
    Sec. 29.  Minnesota Statutes 1991 Supplement, section 
353A.06, is amended to read: 
    353A.06 [FINALIZATION OF CONSOLIDATION.] 
     Subdivision 1.  [NOTICE OF FINAL APPROVAL.] Upon the 
completion of the applicable actions preliminary to 
consolidation finalization under section 353A.05, each entity 
shall report the result of those actions to the relief 
association and to the municipality.  Upon final approval by the 
governing body of the municipality under section 353A.04, 
subdivision 8, the consolidation of the relief association with, 
the chief administrative officer of the municipality shall 
provide notice of the local action to the chief administrative 
officer of the relief association, the executive director of the 
state board, the executive director of the commission, the 
executive director of the public employees retirement 
association, the commissioner of finance, the secretary of 
state, and the state auditor.  The board of trustees of the 
public employees retirement association is scheduled to occur.  
The consolidation is effective as of the date established for 
consolidation by the board of the public employees retirement 
association.  The effect of the consolidation is governed under 
sections 353A.07 to 353A.09, at its next regularly scheduled 
meeting, shall set the effective date for the consolidation and 
notify the persons under this subdivision who are to receive 
notice from the municipality.  
    Subd. 2.  [INFORMATION REQUIRED.] Upon final approval of 
consolidation by the municipality under section 353A.04, the 
executive director of the public employees retirement 
association shall request from the relief association and the 
municipality the information necessary to allow the association 
to complete the consolidation.  The information, at a minimum, 
must include all data required to be provided by the executive 
director of the commission and the actuary retained by the 
commission under section 353A.05, subdivision 1.  The chief 
administrative officer of the relief association and the chief 
administrative officer of the municipality shall provide the 
requested information in a timely manner.  The data must be 
reported on forms or in a manner prescribed by the executive 
director of the association.  The data must be current as of the 
effective date of the consolidation with the association.  The 
chief administrative officer of the municipality and the chief 
administrative officer of the relief association shall certify 
the accuracy of the data reported to the association.  The 
executive director may rely on that data without undertaking any 
affirmative duty to verify the data. 
    Sec. 30.  Minnesota Statutes 1990, section 353A.07, 
subdivision 3, is amended to read: 
    Subd. 3.  [TRANSFER OF ASSETS.] On the effective date of 
consolidation, the chief administrative officer of the relief 
association shall effect the transfer of the entire assets of 
the special fund of the relief association to the fund public 
employees retirement association.  The transfer may must include 
any investment securities of the special fund consolidation 
account which are not determined to be ineligible or 
inappropriate by the executive director of the state board under 
section 353A.05, subdivision 2, at the market value of the 
investment security as of the effective date of the 
consolidation.  The transfer shall must include any accounts 
receivable determined by the executive director of the state 
board as capable of being collected.  The transfer shall must 
also include an amount, in cash, representing any remaining 
investment security or other asset of the special fund 
consolidation account which was liquidated, after defraying any 
accounts payable.  
    As of the effective date of consolidation, subject to the 
authority of the state board, the board of trustees of the 
public employee retirement association shall have has legal 
title to and management responsibility for any transferred 
assets as trustees for any person having a beneficial interest 
arising out of benefit coverage provided by the relief 
association.  The fund shall be public employees retirement 
association is the successor in interest for all claims for and 
against the special fund of the relief association consolidation 
account or the municipality with respect to the special fund 
consolidation account of the relief association, except any.  In 
a claim against the relief association or the municipality or 
any person connected with the relief association or the 
municipality in a fiduciary capacity, based on any act or acts 
by that person which were not done in good faith and which 
constituted a breach of the obligation of the person as a 
fiduciary.  As a successor in interest, the fund public 
employees retirement association may assert any applicable 
defense in any judicial proceeding which the board of the relief 
association or the municipality would have otherwise been 
entitled to assert.  
    Sec. 31.  Minnesota Statutes 1990, section 353A.08, 
subdivision 6, is amended to read: 
    Subd. 6.  [SPECIAL BENEFIT PROVISIONS COVERAGE.] If the 
benefit plan of the relief association as of the date on which 
consolidation is initiated provides for special benefit coverage 
as specified in section 353A.02, subdivision 28, any A person 
who would have otherwise been entitled to that special benefit 
coverage shall retain under section 353A.02, subdivision 28, 
retains entitlement upon consolidation to that special benefit 
coverage notwithstanding the election which the person makes 
regarding other aspects of the benefit coverage as provided in 
under subdivision 1, 2, or 3.  The special benefit 
coverage shall continue continues to be provided by the 
municipality and, if not provided through a contract with an 
insurance carrier which is authorized to do business in this 
state, shall must be funded on an actuarial basis using the 
relevant provisions of section 69.77, with the establishment by 
the municipality of a special account within the general fund of 
the municipality for this special benefit coverage, to be 
managed by.  The chief administrative officer of the 
municipality, with shall manage the special benefit coverage.  
Disbursements must be limited to payments of the special benefit 
or benefits based on the relevant portion of the benefit plan of 
the relief association which that existed as of the date on 
which consolidation is initiated. 
    No A special account in the general fund of a municipality 
established to provide special preexisting benefit plan coverage 
as provided in under this subdivision shall be deemed to be is 
not a supplemental pension plan under section 356.24 or a local 
governmental pension plan or fund under section 356.25.  
    Sec. 32.  Minnesota Statutes 1990, section 353A.08, is 
amended by adding a subdivision to read: 
    Subd. 6a.  [MILITARY SERVICE CONTRIBUTION AND REFUND.] A 
person who was an active member of a local police or 
firefighters relief association upon its consolidation with the 
public employees retirement association, and who was otherwise 
eligible for automatic service credit for military service under 
sections 423.57 and 424.23, and who has not elected the type of 
benefit coverage provided by the public employees police and 
fire fund at the time of consolidation, must make employee 
contributions under section 353.01, subdivision 16, paragraph 
(h), to receive allowable service credit from the association 
for a military service leave after the effective date of the 
consolidation.  A person who later elects, under subdivision 3, 
to retain benefit coverage under the bylaws of the local relief 
association is eligible for a refund from the association at the 
time of retirement.  The association shall refund the employee 
contributions plus interest at the rate of six percent, 
compounded quarterly, from the date on which contributions were 
made until the first day of the month in which the refund is 
paid.  The employer shall receive a refund of the employer 
contributions.  The association shall not pay a refund to a 
person who later elects, under subdivision 3, the type of 
benefit coverage provided by the public employees police and 
fire fund or to the person's employer. 
    Sec. 33.  Minnesota Statutes 1990, section 353A.09, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ESTABLISHMENT OF SPECIAL LOCAL RELIEF 
ASSOCIATION CONSOLIDATION ACCOUNTS.] The board of trustees of 
the public employees retirement association shall establish a 
separate special accounts to be known as the consolidation 
account for each local relief association consolidation account 
of each a municipality that consolidates with the fund public 
employees retirement association.  In that account shall be 
credited The association shall credit to the consolidation 
account the assets of the individual consolidating local relief 
association upon transfer, member contributions received after 
consolidation under subdivision 4, municipal contributions 
received after consolidation under subdivision 5, and a 
proportionate share of any investment income earned after 
consolidation by the public employees police and fire fund.  
From that individual the consolidation account, the association 
shall pay for the transfer of any required reserves to the 
Minnesota postretirement investment fund on account of persons 
electing the type of benefit coverage provided by the public 
employees police and fire benefit plan fund under subdivisions 2 
and 3 and section 353.271, subdivision 2, shall be made, the 
pension and benefit amounts on account of persons electing 
coverage by the relief association benefit plan under section 
353A.08 shall be paid, the benefit amounts not payable from the 
Minnesota postretirement investment fund on account of persons 
electing the type of benefit coverage provided by the public 
employees police and fire benefit plan fund under section 
353A.08 shall be paid, and any direct administrative expenses 
related to the special consolidation account, and the 
proportional share of the general administrative expenses of the 
fund shall be paid association. 
    Except as otherwise provided for in this section, the 
liabilities and the assets of each local relief association a 
consolidation account must be considered for all purposes to be 
separate from the balance of the public employees police and 
fire fund and shall.  The consolidation account must be subject 
to separate accounting and, a separate actuarial valuation, and 
must be reported as a separate exhibit in any annual financial 
report or actuarial valuation report of the public employees 
police and fire consolidation fund, whichever applies.  The 
executive director of the public employees retirement 
association shall maintain separate accounting records and 
balances for each consolidating local relief association and the 
balance in its consolidation account. 
    Sec. 34.  Minnesota Statutes 1990, section 353A.10, 
subdivision 4, is amended to read: 
    Subd. 4.  [REFUND OF CERTAIN MEMBER CONTRIBUTION AMOUNTS.] 
(a) The following persons shall be are entitled to receive a 
refund of certain member contribution amounts under paragraph 
(b):  
    (1) Any A person who was an active member of a local police 
or firefighters relief association upon its consolidation with 
the fund public employees retirement association, who does not 
elect the type of benefit coverage provided by the public 
employees police and fire benefit plan and who commences begins 
receipt of a service pension or a disability benefit from 
the local relief association consolidation account; or 
    (2) Any A person who is the surviving spouse, or if none, 
the surviving minor child, or if none, the designated 
beneficiary of a person who was an active member of a local 
police or firefighters relief association upon its consolidation 
with the fund, who did not elect the type of benefit coverage 
provided by the public employees police and fire benefit plan 
and who dies prior to receiving a service pension or a 
disability benefit from the local relief association 
consolidation account.  
    (b) The refund of certain member contribution amounts shall 
be is the amount by which any member contributions made to the 
local relief association consolidation account under section 
353A.09, subdivision 4, exceeds the amount of employee or member 
contributions which would have been payable to the local relief 
association as provided in the benefit plan in effect on the 
effective date of consolidation, plus interest at the rate of 
six percent, compounded quarterly, from the date on which the 
contribution was made until the date on first of the month in 
which the refund is paid. 
    (c) Any A refund of certain contribution amounts shall must 
occur as soon as practicable following receipt of a valid 
application from the appropriate person and the commencement of 
receipt of the service pension or disability benefit or official 
notification of death, whichever applies. 
    Sec. 35.  Minnesota Statutes 1990, section 353A.10, is 
amended by adding a subdivision to read: 
    Subd. 6a.  [DISSOLUTION OF CONSOLIDATION ACCOUNT.] If a 
consolidation account no longer has current or potential future 
liabilities for the payment of annuities, benefits, refunds, or 
administrative expenses, the association shall transfer the 
remaining net assets, if any, for police and fire purposes only, 
to the municipality that made contributions to the account. 
    Sec. 36.  Minnesota Statutes 1991 Supplement, section 
353D.01, subdivision 2, is amended to read: 
    Subd. 2.  [ELIGIBILITY.] (a) Except as provided in section 
353D.11, eligibility to participate in the defined contribution 
plan is open to: 
    (1) an elected local government official of a governmental 
subdivision who elects to participate in the plan and who, for 
the elected service rendered to a governmental subdivision, is 
not a member of the public employees retirement association 
within the meaning of section 353.01, subdivision 7.  The 
service of an elected local government official on an additional 
board, commission, or committee, even if part of the official's 
elected position, is not covered service under this plan.  
Eligibility to participate in the defined contribution plan 
terminates when the participant ceases to be an elected local 
government official.  For purposes of this chapter, an elected 
local government official does not include an elected county 
sheriff; 
    (2) eligibility to participate is open to basic and 
advanced life support emergency medical service personnel 
employed by or providing services for any public ambulance 
service or privately operated ambulance service that receives an 
operating subsidy from a governmental entity that elects to 
participate; and 
    (3) a person who qualifies to have an ambulance service 
personnel incentive payment made on the person's behalf under 
section 353D.031. 
    (b) For purposes of this chapter, an elected local 
government official includes a person appointed to fill a 
vacancy in an elective office.  Service as an elected local 
government official only includes service for the governmental 
subdivision for which the official was elected by the 
public-at-large.  Service as an elected local government 
official ceases and eligibility to participate terminates when 
the person ceases to be an elected official.  An elected local 
government official does not include an elected county sheriff.  
    (c) Except as provided in section 353D.11, elected local 
government officials and first response personnel and emergency 
medical service personnel who are currently covered by a public 
or private pension plan because of their employment or provision 
of services are not eligible to participate in the public 
employees defined contribution plan.  
     (d)  A former participant is a person who has ceased to be 
an elected local government official or an emergency medical 
service employee and who has not withdrawn the value of an 
individual account. 
    Sec. 37.  Minnesota Statutes 1991 Supplement, section 
353D.02, is amended to read: 
    353D.02 [ELECTION OF COVERAGE.] 
    (a) Elected local government officials eligible under 
section 353D.01, subdivision 2, paragraph (a), clause (1), may 
elect to participate in the defined contribution plan after 
being elected or appointed to a elective public office by filing 
a membership application on a form prescribed by the executive 
director of the association authorizing contributions to be 
deducted from the elected official's salary.  Participation 
begins on the first day of the pay period for which the 
contributions were deducted or, if pay period coverage dates are 
not provided, the date on which the membership application or 
contributions are received in the office of the association, 
whichever is received first, provided further that the 
membership application is received by the association within 60 
days of the receipt of the contributions.  If the membership 
application is not received, the elected official is not a 
participant in the plan and may request a refund under section 
353D.04, subdivision 2.  An election to participate in the plan 
is irrevocable during incumbency in office.  
    (b) For personnel eligible under section 353D.01, 
subdivision 2, paragraph (a), clause (2), a public ambulance 
service or privately operated ambulance service with eligible 
personnel that receives an operating subsidy from a governmental 
entity with eligible personnel may elect to participate in the 
plan.  If a service elects to participate, its eligible 
personnel may elect to participate or to decline to 
participate.  An individual's election must be made within 30 
days of the service's election to participate or 30 days of the 
date on which the individual was employed by the service or 
began to provide service for it, whichever date is later.  An 
election by a service or an individual is irrevocable. 
     (c) A person eligible under section 353D.01, subdivision 2, 
paragraph (a), clause (3), may elect to participate in the 
plan.  The person must elect to participate or decline to 
participate by June 30, 1994, or by June 30 of the fiscal year 
after June 30, 1994, which the person first becomes qualified to 
have an ambulance service personnel incentive payment made on 
the person's behalf under section 353D.031. 
    Sec. 38.  Minnesota Statutes 1991 Supplement, section 
353D.03, is amended to read: 
    353D.03 [FUNDING OF PLAN.] 
    (a) An elected local government official eligible under 
section 353D.01, subdivision 2, paragraph (a), clause (1), who 
elects to participate in the public employees defined 
contribution plan shall contribute an amount equal to five 
percent of salary as defined in section 353.01, subdivision 10.  
A participating elected local government official's governmental 
subdivision shall contribute a matching amount. 
    (b) A public ambulance service or privately operated 
ambulance service that receives an operating subsidy from a 
governmental entity that elects to participate in the plan shall 
fund benefits for its personnel eligible under section 353D.01, 
subdivision 2, paragraph (a), clause (2), who individually elect 
to participate, except that.  Personnel who are paid for their 
services may elect to make member contributions in an amount not 
to exceed the service's contribution on their behalf.  Ambulance 
service contributions on behalf of salaried employees must be a 
fixed percentage of salary.  An ambulance service making 
contributions for volunteer or largely uncompensated personnel 
may assign a unit value for each call or each period of alert 
duty for the purpose of calculating ambulance service 
contributions.  An ambulance service with personnel for whom 
funding is provided under the paragraph that has ambulance 
attendants, ambulance drivers, and ambulance service medical 
directors qualified to have an ambulance service personnel 
incentive payment made on the person's behalf under section 
353D.031 may discontinue that funding if the ambulance service 
has given its participating personnel at least 18 months notice 
of its intent to discontinue its funding of the plan. 
     (c) Former participants in the defined contribution plan 
under this chapter shall not contribute to the plan except under 
section 353D.12. 
    Sec. 39.  Minnesota Statutes 1991 Supplement, section 
353D.04, subdivision 1, is amended to read: 
    Subdivision 1.  [CONTRIBUTIONS.] (a) Contributions made by 
or on behalf of a participating elected local government 
official must be remitted to the public employees retirement 
association and credited to the individual account established 
for the participating officer participant.  
    (b) Ambulance service contributions must be remitted on a 
regular periodic basis to the association together with any 
member contributions paid or withheld.  Those contributions must 
be credited to the individual account of each participating 
member.  
    Sec. 40.  Minnesota Statutes 1991 Supplement, section 
353D.05, subdivision 2, is amended to read: 
    Subd. 2.  [INVESTMENT OPTIONS.] (a) A participant may elect 
to purchase shares in the income share account, the growth share 
account, the money market account, the bond market account, the 
guaranteed return account, or the common stock index account 
established by section 11A.17, or a combination of those 
accounts.  The participant may elect to purchase shares in a 
combination of those accounts by specifying the percentage of 
the total contributions and ambulance service personnel 
incentive allocation to be used to purchase shares in each of 
the accounts. 
    (b) A participant or a former participant may indicate in 
writing a choice of options for subsequent purchases of shares.  
After a choice is made, until the participant or former 
participant makes a different written indication, the executive 
director of the association shall purchase shares in the 
supplemental investment fund account or funds accounts specified 
by the participant.  If no initial option is indicated by a 
participant or the specifications made by the participant exceed 
exceeds 100 percent to be invested in more than one account, the 
executive director shall invest all contributions made by or on 
behalf of a participant in the income share account.  If the 
specifications are less than 100 percent, the executive director 
shall invest the remaining percentage in the income share 
account.  A choice of investment options is effective no later 
than the first pay date occurring more than 30 days after of the 
month following the date of receipt of the signed written choice 
of options. 
    (c) One month before the start of a new guaranteed 
investment contract, a participant or former participant may 
elect to transfer all or a portion of the participant's or 
former participant's shares previously purchased in the income 
share, growth share, common stock index, bond market, or money 
market accounts to the new guaranteed investment contract in the 
guaranteed return account.  Upon expiration of a guaranteed 
investment contract, the participant's or former participant's 
shares attributable to that contract must be transferred to a 
new guaranteed investment contract unless the executive director 
is otherwise directed by the participant.  Shares in the 
guaranteed return account may not be withdrawn from the fund or 
transferred to another account until the guaranteed investment 
contract has expired, unless the participant qualifies for a 
benefit payment under section 353D.07. 
    (d) A participant or former participant may also change the 
investment options selected for all or a portion of the 
individual's previously purchased shares in accounts other than 
the guaranteed return account.  A change under this paragraph is 
effective as soon as cash flow to an account permits, but not 
later than six months from the requested change the first of the 
month following the date of receipt of a signed written choice 
of options. 
     (e) The change or selection of an investment option or the 
transfer of all or a portion of the deceased or former 
participant's shares in the income share, growth share, common 
stock index, bond market, money market, or guaranteed investment 
accounts must not be made following death of the participant or 
former participant. 
    Sec. 41.  Minnesota Statutes 1991 Supplement, section 
353D.05, subdivision 3, is amended to read: 
    Subd. 3.  [ADMINISTRATIVE EXPENSES.] The public employees 
retirement association may deduct an amount to defray the 
expenses of the association in administering the plan.  The 
amount must be set annually by the executive director of the 
association, but not to exceed two percent of the total amount 
of the employing unit contributions to the plan and the 
ambulance service personnel incentive allocation received by the 
plan and if the amount recovered under section 11A.17 does not 
meet the annual expenses of administering the plan, the 
association may assess an additional amount up to three percent 
of the employer and employee contributions. 
    Sec. 42.  Minnesota Statutes 1991 Supplement, section 
353D.07, subdivision 2, is amended to read: 
    Subd. 2.  [PAYMENT OF BENEFITS.] Withdrawal of or a 
retirement benefit based on individual participant contributions 
and employer contributions plus accrued investment income is 
payable immediately upon the death or termination of a 
participant.  No investment options or transfers of all or a 
portion of the deceased elected official's shares in the income 
share, growth share, common stock index, bond market, money 
market, or guaranteed investment accounts shall be made 
following death or termination of the participant.  An 
application by or on behalf of the participant must be filed 
before any payment of benefits may be made. 
    Sec. 43.  Minnesota Statutes 1991 Supplement, section 
353D.07, subdivision 3, is amended to read: 
    Subd. 3.  [FORM OF BENEFIT.] A retirement benefit is 
payable in a lump sum equal to the value of a participant's 
account at the date of retirement and may be rolled over into 
another qualified plan at the option of the 
participant withdrawal.  As an alternative to a lump-sum 
distribution, the participant may choose to have the association 
transfer the total account value for the purchase of an annuity 
payable at a designated age to an insurance company of the 
participant's choice that is licensed to do business in the 
state.  
    Sec. 44.  Minnesota Statutes 1991 Supplement, section 
353D.12, subdivision 1, is amended to read: 
    Subdivision 1.  [ELIGIBILITY; CONTRIBUTIONS.] An elected 
local government official who participates in the defined 
contribution plan under this chapter may make contributions to 
the plan for the service as an elected public officer rendered 
before June 30, 1991, that was not covered by a public or 
private employer contributory pension plan, including a plan 
administered by the public employees retirement association 
under chapter 353.  An elected local government official may 
make contributions for prior elected service to the defined 
contribution plan even if eligibility criteria for the defined 
benefit plan under chapter 353 were not met at the time service 
was rendered.  The association shall not accept contributions 
for prior elected service after the elected official ceases to 
hold elected office from a former elected official after the end 
of the tax year in which the elected official ceases to hold 
office.  Employer contributions on behalf of the former elected 
official must be made to the association no later than 30 days 
after April 15 following the end of the tax year under section 
415 of the federal Internal Revenue Code, as amended.  Employee 
contributions must be made to the association no later than 30 
days after the close of the limitation year under section 415 of 
the federal Internal Revenue Code, as amended. 
    Sec. 45.  Minnesota Statutes 1990, section 356.30, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ELIGIBILITY; COMPUTATION OF ANNUITY.] (1) 
Notwithstanding any provisions to the contrary of the laws 
governing the funds enumerated in subdivision 3, a person who 
has met the qualifications of clause (2) may elect to receive a 
retirement annuity from each fund in which the person has at 
least six months allowable service, based on the allowable 
service in each fund, subject to the provisions of clause (3).  
    (2) A person may receive upon retirement, in lieu of any 
augmentation of deferred annuities provided by laws governing 
the funds enumerated in subdivision 3, a retirement annuity from 
each fund in which the person has at least six months allowable 
service, and augmentation of a deferred annuity calculated under 
the laws governing each public pension plan or fund named in 
subdivision 3, from the date the person terminated all public 
service if: 
    (a) the person has allowable service totaling an amount 
that allows the person to receive an annuity in any two or more 
of the enumerated funds; 
    (b) the person has at least six months of allowable service 
with the last such fund earned during the last period of 
employment; and 
    (c) the person has not begun to receive an annuity from any 
enumerated fund or the person has made application for benefits 
from all funds within a six-month period.  
    (3) The retirement annuity from each fund shall must be 
based upon the allowable service in each fund, except that:  
    (a) The laws governing annuities shall must be the law in 
effect on the date of final termination from the last public 
service under a covered fund.  
    (b) The "average salary" on which the annuity from each 
covered fund in which the employee has credit in a formula plan 
shall be based on the employee's highest five successive years 
of covered salary during the entire service in covered funds.  
    (c) The formula percentages to be used by each fund shall 
must be those percentages prescribed by each fund's formula as 
continued for the respective years of allowable service from one 
fund to the next, recognizing all previous allowable service 
with the other covered funds.  
    (d) Allowable service in all the funds shall must be 
combined in determining eligibility for and the application of 
each fund's provisions in respect to actuarial reduction in the 
benefit amount for retirement prior to normal retirement.  
    (e) The benefit amount payable for any allowable service 
under a nonformula plan of a covered fund shall must not be 
affected but such service and covered salary shall must be used 
in the above calculation.  
    (f) This section shall not apply to any person whose final 
termination from the last public service under a covered fund is 
prior to May 1, 1975.  
    (g) For the purpose of computing benefits under this 
section the formula percentages used by any covered fund shall 
in no event must not exceed 2-1/2 percent per year of service 
for any year of service or fraction thereof.  
    (h) Any period of time for which a person has credit in 
more than one of the covered funds shall must be used only once 
for the purpose of determining total allowable service.  
    (i) If the period of duplicated service credit is more than 
six months, or the person has credit for more than six months 
with each of the funds, each fund shall apply its formula to a 
prorated service credit for the period of duplicated service 
based on a fraction of the salary on which deductions were paid 
to that fund for the period divided by the total salary on which 
deductions were paid to all funds for the period.  
    (j) If the period of duplicated service credit is less than 
six months, or when added to other service credit with that fund 
is less than six months, the service credit shall must be 
ignored and a refund of contributions made to the person in 
accord with that fund's refund provisions.  
    Sec. 46.  Minnesota Statutes 1990, section 356.302, 
subdivision 6, is amended to read: 
     Subd. 6.  [COMBINED SERVICE DISABILITY BENEFIT 
COMPUTATION.] (a) The combined service disability benefit from 
each covered retirement plan must be based on the allowable 
service in each retirement plan, except as specified in 
paragraphs (b) to (f). 
     (b) The disability benefit must be governed by the law in 
effect for each covered retirement plan on the date of the 
commencement of the member's most recent qualifying disability 
as a member of a covered retirement plan. 
     (c) All plans must base the disability benefit on the same 
average salary to the extent practicable. 
      (d) If the method of the covered retirement plan used to 
compute a disability benefit varies based on the length of 
allowable service credit, the benefit accrual formula 
percentages used by the plan must recognize the allowable 
service credit in the plan as a continuation of any previous 
allowable service credit with other covered retirement plans. 
     (e) If the covered retirement plan is a defined benefit or 
formula plan and the method used to compute a disability benefit 
does not vary based on the length of allowable service credit, 
the portion of the specified benefit amount from the plan must 
bear the same proportion to the total specified benefit amount 
as the allowable service credit in that plan bears to the total 
allowable service credit in all covered retirement plans.  If 
the covered retirement plan is a defined contribution or 
nonformula plan, the disability benefit amount for allowable 
service under the plan is not affected, but the service and 
covered salary under the plan must be used in calculations by 
other covered retirement plans. 
    (f) A period for which a person has allowable service 
credit in more than one covered retirement plan must be used 
only once in determining the total allowable service credit for 
calculating the combined service disability benefit, with any 
period of duplicated service credit handled as provided in under 
section 356.30, subdivision 1, clause (3), items (i) and (j). 
     (g) If a person is entitled to a minimum benefit payable 
from one of the public pension plans named in section 356.30, 
subdivision 3, the person may receive additional credit for only 
those years of service in another covered pension plan that, 
when added to the years of service in the pension plan that is 
paying the minimum benefit, exceed the years of service on which 
the minimum benefit is based. 
    Sec. 47.  Minnesota Statutes 1990, section 356.303, 
subdivision 3, is amended to read: 
     Subd. 3.  [COMBINED SERVICE SURVIVOR BENEFIT COMPUTATION.] 
(a) The combined service survivor annuity or survivor benefit 
from each covered retirement plan must be based on the allowable 
service in each covered retirement plan, except as provided by 
paragraphs (b) to (f). 
     (b) The survivor annuity or survivor benefit must be 
governed by the law in effect for each covered retirement plan 
on the date of death of the deceased member. 
     (c) All plans must base the survivor annuity or survivor 
benefit on the same average salary. 
     (d) If the method of the covered retirement plan used to 
compute a survivor benefit or annuity varies based on the length 
of allowable service credit, the benefit accrual formula 
percentages used by the plan must recognize the allowable 
service credit in the plan as a continuation of any previous 
allowable service credit with other covered retirement plans. 
     (e) If the covered retirement plan is a defined benefit or 
formula plan and the method used to compute a survivor benefit 
or annuity does not vary based on the length of allowable 
service credit, the portion of the specified benefit or annuity 
amount from the plan must bear the same proportion to the total 
specified benefit or annuity amount as the allowable service 
credit in that plan bears to the total allowable service credit 
in all covered retirement plans.  If the covered retirement plan 
is a defined contribution or nonformula plan, the survivor 
benefit amount for allowable service under the plan is not 
affected, but the service and covered salary under the plan must 
be used in calculations by other covered retirement plans. 
    (f) A period for which a person has allowable service 
credit in more than one covered retirement plan must be used 
only once in determining the total allowable service credit for 
calculating the combined service survivor annuity or survivor 
benefit.  A period of duplicated service credit must be handled 
as provided in section 356.30, subdivision 1, clause (3), items 
(i) and (j). 
     (g) If a person is entitled to a minimum benefit payable 
from a public pension plan named in section 356.30, subdivision 
3, the person may receive additional credit for only those years 
of service in another covered pension plan that, when added to 
the years of service in the pension plan that is paying the 
minimum benefit, exceed the years of service on which the 
minimum benefit is based. 
    Sec. 48.  Laws 1990, chapter 570, article 8, section 14, 
subdivision 1, as amended by Laws 1991, chapter 29, section 1, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ENTITLEMENT.] An individual who became an 
appointed public officer prior to May 9, 1990, or an elected 
public officer who participates in the public employees 
retirement association defined benefit plan under Minnesota 
Statutes, chapter 353, may purchase service credit from the 
association for all or any portion of prior uncredited service 
as an elected public officer when the officer could have been, 
but was not, a member of the association on account of failure 
to exercise the membership option under Minnesota Statutes, 
section 353.01, subdivision 7.  An appointed public officer is a 
person who holds an appointed position that was previously an 
elected position during the person's incumbency. 
     Sec. 49.  Laws 1991, chapter 269, article 2, section 13, is 
amended to read: 
    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, to 
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, and 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.  Sections 1 to 11 do not authorize the payment of 
any retroactive survivor benefit amounts to any person or to an 
estate, except that a person who was formerly receiving 
surviving spouse benefits and who had those benefits 
discontinued by virtue of remarriage prior to July 1, 1991, is 
eligible to receive benefit amount payments retroactive to July 
1, 1991, or 12 months prior to the month in which application 
for benefits is received in the office of the association, 
whichever is sooner. 
     Sec. 50.  [353.011] [BOARD OF TRUSTEE TERMS.] 
     Notwithstanding section 353.03, in January 1993, the 
governor shall appoint two persons to the board of trustees of 
the public employees retirement association to one-year terms 
expiring in January 1994, one person to a three-year term 
expiring in January 1996, and two persons to four-year terms 
expiring in January 1997.  Thereafter, persons appointed to the 
board of trustees serve four-year terms under section 353.03, 
subdivision 1. 
    Sec. 51.  [REPEALER.] 
    Minnesota Statutes 1990, sections 353.656, subdivision 7, 
and 353.71, subdivision 3, are repealed.  
    Sec. 52.  [EFFECTIVE DATE.] 
    Sections 1 to 5 and 7 to 48, 50, and 51 are effective the 
day following final enactment.  Section 6 is effective January 
1, 1993.  Section 49 is effective July 1, 1992. 
    Presented to the governor April 6, 1992 
    Signed by the governor April 9, 1992, 4:25 p.m.