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Office of the Revisor of Statutes

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

  
    Laws of Minnesota 1993 

                        CHAPTER 307-H.F.No. 574 
           An act relating to retirement; administrative changes, 
          age discrimination act compliance, death-while-active 
          surviving spouse benefit improvements by the Minnesota 
          state retirement system, the public employees 
          retirement association, and teachers retirement 
          association; providing an open appropriation for 
          payment of state reimbursement for supplemental 
          retirement benefits paid to volunteer firefighters; 
          making changes to Minneapolis employees retirement 
          fund; amending Minnesota Statutes 1992, sections 
          3A.02, subdivision 1, and by adding a subdivision; 
          352.01, subdivisions 2a, 2b, and by adding a 
          subdivision; 352.03, subdivisions 4, 4a, and 6; 
          352.04, subdivisions 6 and 9; 352.113, subdivisions 2, 
          4, and 7; 352.115, subdivision 8; 352.12, subdivisions 
          1, 2, 3, 4, 7, 10, and 13; 352.15, subdivision 1a, and 
          by adding subdivisions; 352.22, subdivisions 1 and 2; 
          352.23; 352.85, subdivision 4; 352.93, subdivision 2a; 
          352.94; 352.95, subdivisions 1, 2, 3, and 5; 352.951; 
          352.96, subdivisions 3 and 4; 352B.01, subdivisions 3 
          and 11; 352B.08, subdivisions 1 and 2a; 352B.10, 
          subdivisions 1, 2, and 5; 352B.101; 352B.105; 352B.11, 
          subdivision 2; 352C.01; 352C.021; 352C.031; 352C.033; 
          352C.04; 352C.051; 352C.09; 352D.015, subdivision 4; 
          352D.02, subdivision 3, and by adding a subdivision; 
          352D.04, subdivision 1; 352D.05, subdivisions 1, 3, 
          and 4; 352D.09, subdivision 5, and by adding 
          subdivisions; 353.01, subdivisions 2, 2a, 2b, 6, 7, 
          10, 11a, 12, 16, 28, 31, 32, and by adding 
          subdivisions; 353.017; 353.27, subdivision 7; 353.29, 
          subdivision 1; 353.32, subdivision 1a; 353.33, 
          subdivisions 1, 2, 3, 4, 6, 8, 11, and by adding a 
          subdivision; 353.34, subdivisions 1 and 3; 353.35; 
          353.37; 353.64, subdivisions 1, 5a, and by adding a 
          subdivision; 353.656, subdivisions 1, 1a, 3, 5, and by 
          adding subdivisions; 353A.08, subdivisions 1, 3, and 
          5; 353A.10, subdivision 4; 353B.11, subdivision 6; 
          353C.08, subdivisions 1 and 2; 353D.02; 353D.04; 
          353D.05, subdivision 3; 353D.07, subdivision 2; 
          354.35; 354.46, subdivisions 1 and 2; 354.48, 
          subdivisions 3 and 10; 356.302, subdivisions 4 and 6; 
          356.453; 356.61; 422A.05, subdivisions 1 and 2a; 
          422A.08, subdivision 5, and by adding a subdivision; 
          422A.101, subdivision 1; 424A.10, subdivision 3; and 
          490.124, subdivisions 1 and 4; proposing coding for 
          new law in Minnesota Statutes, chapter 3A; repealing 
          Minnesota Statutes 1992, sections 3A.06; 352.01, 
          subdivision 7; 352.12, subdivision 5; 352.22, 
          subdivision 9; 352.73; 352B.01, subdivision 2a; 
          352B.131; 352B.14; 352B.261; 352B.262; 352B.28; 
          352D.05, subdivision 5; and 353.656, subdivision 6. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                ARTICLE 1

                    MINNESOTA STATE RETIREMENT SYSTEM

                       ADMINISTRATIVE LAW CHANGES
    Section 1.  Minnesota Statutes 1992, section 3A.02, 
subdivision 1, is amended to read: 
    Subdivision 1.  [QUALIFICATIONS.] (a) A former legislator 
is entitled, upon written application to the director, to 
receive a retirement allowance monthly, if the person: 
    (1) has served at least six full years, without regard to 
the application of section 3A.10, subdivision 2, or has served 
during all or part of four regular sessions as a member of the 
legislature, which service need not be continuous; 
    (2) has attained the normal retirement age; 
    (3) has retired as a member of the legislature; and 
    (4) has made all contributions provided for in section 
3A.03, has made payments for past service under subdivision 2, 
or has made payments in lieu of contributions under section 
3A.031. 
    (b) For service rendered before the beginning of the 1979 
legislative session, but not to exceed eight years of service, 
the retirement allowance is an amount equal to five percent per 
year of service of that member's average monthly salary.  For 
service in excess of eight years rendered before the beginning 
of the 1979 legislative session, and for service rendered after 
the beginning of the 1979 legislative session, the retirement 
allowance is an amount equal to 2-1/2 percent per year of 
service of that member's average monthly salary. 
    (c) The retirement allowance accrues beginning with the 
first day of the month of receipt of the application, but not 
before age 60, and for the remainder of the former legislator's 
life, if the former legislator is not serving as a member of the 
legislature or as a constitutional officer or commissioner as 
defined in section 352C.021, subdivisions 2 and 3.  The annuity 
shall not begin to accrue prior to retirement as a legislator.  
No annuity payment shall be made retroactive for more than 180 
days before the date annuity application is filed with the 
director. 
    (d) Any member who has served during all or part of four 
regular sessions is considered to have served eight years as a 
member of the legislature. 
    (e) The retirement allowance ceases with the last payment 
that accrued to the retired legislator during the retired 
legislator's lifetime, except that the surviving spouse, if any, 
is entitled to the retirement allowance for the calendar month 
in which the retired legislator died. 
    Sec. 2.  [3A.13] [EXEMPTION FROM PROCESS AND TAXATION.] 
    The provisions of Minnesota Statutes, section 352.15 shall 
apply to the legislators retirement plan, chapter 3A. 
     Sec. 3.  Minnesota Statutes 1992, section 352.01, 
subdivision 2a, is amended to read: 
    Subd. 2a.  [INCLUDED EMPLOYEES.] (a) "State employee" 
includes: 
    (1) employees of the Minnesota historical society; 
    (2) employees of the state horticultural society; 
    (3) employees of the Disabled American Veterans, Department 
of Minnesota, Veterans of Foreign Wars, Department of Minnesota, 
if employed before July 1, 1963; 
    (4) employees of the Minnesota crop improvement 
association; 
    (5) employees of the adjutant general who are paid from 
federal funds and who are not covered by any federal civilian 
employees retirement system; 
    (6) employees of the state universities employed under the 
university activities program; 
    (7) currently contributing employees covered by the system 
who are temporarily employed by the legislature during a 
legislative session or any currently contributing employee 
employed for any special service as defined in clause (8) of 
subdivision 2b; 
    (8) employees of the armory building commission; 
    (9) permanent employees of the legislature and persons 
employed or designated by the legislature or by a legislative 
committee or commission or other competent authority to conduct 
a special inquiry, investigation, examination, or installation; 
     (10) trainees who are employed on a full-time established 
training program performing the duties of the classified 
position for which they will be eligible to receive immediate 
appointment at the completion of the training period; 
    (11) employees of the Minnesota safety council; 
    (12) employees of the transit operating division of the 
metropolitan transit commission and any employees on authorized 
leave of absence from the transit operating division who are 
employed by the labor organization which is the exclusive 
bargaining agent representing employees of the transit operating 
division; 
    (13) employees of the metropolitan council, metropolitan 
parks and open space commission, regional transit board, 
metropolitan transit commission, metropolitan waste control 
commission, metropolitan sports facilities commission or the 
metropolitan mosquito control commission unless excluded or 
covered by another public pension fund or plan under section 
473.141, subdivision 12, or 473.415, subdivision 3; and 
    (14) judges of the tax court; and 
    (15) personnel employed on June 30, 1992, by the University 
of Minnesota in the management, operation, or maintenance of its 
heating plant facilities, whose employment transfers to an 
employer assuming operation of the heating plant facilities, so 
long as the person is employed at the University of Minnesota 
heating plant by that employer or by its successor organization. 
    (b) Employees specified in paragraph (a), clause (15), are 
included employees under paragraph (a) providing that employer 
and employee contributions are made in a timely manner in the 
amounts required by section 352.04.  Employee contributions must 
be deducted from salary.  Employer contributions are the sole 
obligation of the employer assuming operation of the University 
of Minnesota heating plant facilities or any successor 
organizations to that employer. 
    Sec. 4.  Minnesota Statutes 1992, 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) 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 $5,000 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 three years; and the board of managers of the state 
agricultural society and its treasurer unless the treasurer is 
also its full-time secretary; 
    (14) state troopers; 
    (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; 
     (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; 
     (17) persons described in section 352B.01, subdivision 2, 
clauses (2) to (5); 
     (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; 
     (19) trainee employees, except those listed in subdivision 
2a, clause (10); 
     (20) persons whose compensation is paid on a fee basis; 
     (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; 
     (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; 
     (23) chaplains and nuns 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, 
if no irrevocable election of coverage has been made under 
section 3121(r) of the Internal Revenue Code of 1954, as 
amended; 
     (24) examination monitors employed by departments, 
agencies, commissions, and boards to conduct examinations 
required by law; 
    (25) members of appeal tribunals, exclusive of the chair, 
to which reference is made in section 268.10, subdivision 4; 
    (26) persons appointed to serve as members of fact-finding 
commissions or adjustment panels, arbitrators, or labor referees 
under chapter 179; 
    (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; 
    (28) full-time students employed by the Minnesota 
historical society intermittently during part of the year and 
full-time during the summer months; 
    (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; 
    (30) persons employed in positions designated by the 
department of employee relations as student workers; 
    (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; 
    (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; 
    (33) (32) 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; 
    (34) (33) off-duty peace officers while employed by the 
metropolitan transit commission under section 629.40, 
subdivision 5, or comparable statutory authority; and 
    (35) (34) persons who are employed as full-time police 
officers by the metropolitan transit commission and as police 
officers are members of the public employees police and fire 
fund; 
    (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; and 
    (36) foreign citizens with a work permit of less than three 
years, or an H-1b/JV visa valid for less than three years of 
employment, unless notice of extension is supplied which allows 
them to work for three or more years as of the date the 
extension is granted, in which case they are eligible for 
coverage from the date extended. 
    Sec. 5.  Minnesota Statutes 1992, section 352.03, 
subdivision 6, is amended to read: 
    Subd. 6.  [DUTIES AND POWERS OF EXECUTIVE DIRECTOR.] The 
management of the system is vested in the director, who is the 
executive and administrative head of the system.  The director 
shall be advisor to the board on matters pertaining to the 
system and shall also act as the secretary of the board.  The 
director shall: 
    (1) attend meetings of the board; 
    (2) prepare and recommend to the board appropriate rules to 
carry out this chapter; 
    (3) establish and maintain an adequate system of records 
and accounts following recognized accounting principles and 
controls; 
    (4) designate an assistant director with the approval of 
the board; 
    (5) appoint any employees, both permanent and temporary, 
that are necessary to carry out the provisions of this chapter; 
    (6) organize the work of the system as the director deems 
necessary to fulfill the functions of the system, and define the 
duties of its employees and delegate to them any powers or 
duties, subject to the control of the director and under 
conditions the director may prescribe.  Appointments to exercise 
delegated power must be by written order and shall be filed with 
the secretary of state; 
     (7) with the advice and consent of the board, contract for 
the services of an approved actuary, professional management 
services, and any other consulting services as necessary and fix 
the compensation for those services.  The contracts are not 
subject to competitive bidding under chapter 16B.  Any approved 
actuary retained by the executive director shall function as the 
actuarial advisor of the board and the executive director, and 
may perform actuarial valuations and experience studies to 
supplement those performed by the actuary retained by the 
legislative commission on pensions and retirement.  Any 
supplemental actuarial valuations or experience studies shall be 
filed with the executive director of the legislative commission 
on pensions and retirement.  Professional management services 
may not be contracted for more often than once in six years.  
Copies of professional management survey reports must be 
transmitted to the secretary of the senate, the chief clerk of 
the house of representatives, and the legislative reference 
library as provided by section 3.195, to the executive director 
of the commission and to the legislative auditor at the time as 
reports are furnished to the board.  Only management firms 
experienced in conducting management surveys of federal, state, 
or local public retirement systems are qualified to contract 
with the director; 
    (8) with the advice and consent of the board provide 
in-service training for the employees of the system; 
    (9) make refunds of accumulated contributions to former 
state employees and to the designated beneficiary, surviving 
spouse, legal representative, or next of kin of deceased state 
employees or deceased former state employees, as provided in 
this chapter; 
    (10) determine the amount of the annuities and disability 
benefits of employees covered by the system and authorize 
payment of the annuities and benefits beginning as of the dates 
on which the annuities and benefits begin to accrue, in 
accordance with the provisions of this chapter; 
    (11) pay annuities, refunds, survivor benefits, salaries, 
and necessary operating expenses of the system; 
    (12) certify funds available for investment to the state 
board of investment; 
    (13) with the advice and approval of the board request the 
state board of investment to sell securities when the director 
determines that funds are needed for the system; 
    (14) prepare and submit to the board and the legislature an 
annual financial report covering the operation of the system, as 
required by section 356.20; 
    (15) prepare and submit biennial and quarterly annual 
budgets to the board and with the approval of the board submit 
the budgets to the department of finance; and 
    (16) with the approval of the board, perform other duties 
required to administer the retirement and other provisions of 
this chapter and to do its business. 
     Sec. 6.  Minnesota Statutes 1992, section 352.04, 
subdivision 6, is amended to read: 
    Subd. 6.  [QUASI-STATE AGENCIES; EMPLOYER CONTRIBUTIONS.] 
For those of their employees who are covered by the system, the 
state horticultural society, the Disabled American Veterans, 
Department of Minnesota, Veterans of Foreign Wars, Department of 
Minnesota, the Minnesota crop improvement association, the 
Minnesota historical society, the armory building commission, 
the Minnesota safety council, the Metropolitan council and any 
of its statutory boards, the employer of persons described in 
section 352.01, subdivision 2a, paragraph (a), clause (15), and 
any other agency employing employees covered by this system, 
respectively, shall also pay into the retirement fund the amount 
required by subdivision 3. 
    Sec. 7.  Minnesota Statutes 1992, section 352.04, 
subdivision 9, is amended to read: 
    Subd. 9.  [ERRONEOUS DEDUCTIONS, CANCELED WARRANTS.] (a) 
Deductions taken from the salary of an employee for the 
retirement fund in error must, upon discovery and verification 
by the department making the deduction, be refunded to the 
employee.  
    (b) If a deduction for the retirement fund is taken from a 
salary warrant or check, and the check is canceled or the amount 
of the warrant or check returned to the funds of the department 
making the payment, the sum deducted, or the part of it required 
to adjust the deductions, must be refunded to the department or 
institution if the department applies for the refund on a form 
furnished by the director.  The department's payments must 
likewise be refunded to the department.  
    (c) Employee deductions and employer contributions taken in 
error may be directly transferred, without interest, to another 
Minnesota public employee retirement fund listed in section 
356.30, subdivision 3, by which the employee is actually covered.
    Sec. 8.  Minnesota Statutes 1992, section 352.113, 
subdivision 2, is amended to read: 
    Subd. 2.  [APPLICATION; ACCRUAL OF BENEFITS.] An employee 
making claim for a total and permanent disability benefit, or 
someone acting on behalf of the employee upon proof of authority 
satisfactory to the director, shall file a written application 
for benefits in the office of the system.  The application must 
be in a form and manner prescribed by the executive director.  
The benefit shall begin to accrue the day following the start of 
disability or the day following the last day paid, whichever is 
later, but not earlier than 60 180 days before the date the 
application is filed with the director. 
    Sec. 9.  Minnesota Statutes 1992, 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 
adviser.  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 employment has ceased or 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 adviser shall consider the reports of 
the physicians and any other evidence supplied by the employee 
or other interested parties.  If the medical adviser finds the 
employee totally and permanently disabled, the adviser 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 if the disability 
occurred within 180 days of filing the application, while still 
in the employment of the state, and the propriety of authorizing 
payment of a disability benefit as provided in this section.  A 
terminated employee may apply for a disability benefit within 
180 days of termination as long as the disability occurred while 
in the employment of the state.  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 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. 10.  Minnesota Statutes 1992, section 352.113, 
subdivision 7, is amended to read: 
    Subd. 7.  [PARTIAL REEMPLOYMENT.] If the disabled employee 
resumes a gainful occupation from which earnings are less than 
the employee's salary at the date of disability or the salary 
currently paid for similar positions, the director shall 
continue the disability benefit in an amount which when added to 
earnings does not exceed the salary at the date of disability or 
the salary currently paid for similar positions, whichever is 
lower, provided the disability benefit in this case does not 
exceed the disability benefit originally allowed.  Deductions 
for the retirement fund must not be taken from the salary of a 
disabled employee who is receiving a disability benefit as 
provided in this subdivision. 
    Sec. 11.  Minnesota Statutes 1992, section 352.115, 
subdivision 8, is amended to read: 
    Subd. 8.  [ACCRUAL OF ANNUITY.] State employees shall apply 
for an annuity.  The application must not be made more than 60 
90 days before the time the employee is eligible to retire by 
reason of both age and service requirements.  If the director 
determines an applicant for annuity has fulfilled the legal 
requirements for an annuity, the director shall authorize the 
annuity payment in accordance with this chapter and payment must 
be made as authorized.  An annuity shall begin to accrue no 
earlier than 60 180 days before the date the application is 
filed with the director, but not before the day following the 
termination of state service or before the day the employee is 
eligible to retire by reason of both age and service 
requirements.  The retirement annuity shall cease with the last 
payment which had accrued during the lifetime of the retired 
employee unless an optional annuity provided in section 352.116, 
subdivision 3, had been selected and had become payable.  The 
joint and last survivor annuity shall cease with the last 
payment received by the survivor during the lifetime of the 
survivor.  If a retired employee had not selected an optional 
annuity, or a survivor annuity is not payable under the option, 
and a spouse survives, the spouse is entitled only to the 
annuity for the calendar month in which the retired employee 
died.  If an optional annuity is payable after the death of the 
retired employee, the survivor is entitled to the annuity for 
the calendar month in which the retired employee died.  
    Sec. 12.  Minnesota Statutes 1992, 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 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, unless death occurred before any 
payment could be negotiated.  
    Sec. 13.  Minnesota Statutes 1992, section 352.12, 
subdivision 3, is amended to read: 
    Subd. 3.  [REFUND OF $1,500 $3,000 OR LESS.] If a state 
employee or former state employee dies without having designated 
a beneficiary, or if the beneficiary should die before applying 
for refund of the sum to the credit of the deceased employee or 
former employee, and there is no surviving spouse, and the 
amount of the refund does not exceed $1,500 $3,000 exclusive of 
interest, the director may refund the amount to the deceased or 
former employee's next of kin.  The amount may be refunded 90 
days after the date of death of the employee or former employee 
in the absence of probate proceedings, and upon proper 
application.  The next of kin must be determined by the director 
with the concurrence of the board, to be entitled to the refund 
consistent with the laws of descent.  A determination and 
payment without notice are conclusive and final and are a bar 
against claims of all other persons.  
    Sec. 14.  Minnesota Statutes 1992, section 352.12, 
subdivision 4, is amended to read: 
    Subd. 4.  [REFUND TO MINOR BENEFICIARY.] If an employee or 
former employee dies having named as a beneficiary a person who 
is a minor at the time of the application for refund, and the 
amount of the refund does not exceed $1,500 $3,000, exclusive of 
interest, the director in the absence of guardianship or probate 
proceedings may make payment to the natural guardian having 
custody of the minor beneficiary, for the benefit of the child.  
Any annuity, retirement allowance, or disability benefit accrued 
at the time of death of a disabled or retired employee, payable 
to a minor beneficiary, may similarly be paid.  Payment is a bar 
to recovery by any other person or persons.  
    Sec. 15.  Minnesota Statutes 1992, section 352.12, 
subdivision 7, is amended to read: 
    Subd. 7.  [ABSENCE OF OPTIONAL OR REVERSIONARY ANNUITY.] 
Upon the death of a retired employee who selected neither an 
optional annuity or a reversionary annuity, a refund must be 
paid in an amount equal to the excess, if any, of the 
accumulated contributions to the credit of the retired employee 
immediately before retirement in excess of the sum of (1) all 
annuities, retirement allowances, and disability benefits that 
had been received and had accrued in the lifetime of the 
decedent, and (2) the annuity, retirement allowance, or 
disability benefit if applicable not negotiated, payable to the 
surviving spouse under section 352.115, subdivision 8, or 
352.113, subdivision 4, for the calendar month in which the 
retired employee died.  The refund must be paid to the named 
beneficiary or, if there be 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. 
    Sec. 16.  Minnesota Statutes 1992, section 352.12, 
subdivision 10, is amended to read: 
    Subd. 10.  [DEATH OF BENEFICIARY BEFORE REFUND.] If the 
last designated beneficiary or beneficiaries and the surviving 
spouse of a (1) deceased employee, (2) former employee, or (3) 
retired employee, dies before receiving a refund of the sum to 
the credit of the deceased employee, former employee, or retired 
employee at the time of death, the refund must be made to the 
estate of the deceased employee or as provided in subdivision 3 
if the amount of the refund does not exceed $1,500 $3,000 
exclusive of interest.  
    Sec. 17.  Minnesota Statutes 1992, section 352.12, 
subdivision 13, is amended to read: 
    Subd. 13.  [REFUND, BENEFICIARY.] If upon death a former 
employee has in possession a commissioner of finance's warrant 
which does not exceed $500 $1,000 covering a refund of 
accumulated contributions in the retirement fund, in the absence 
of probate proceedings the commissioner of finance's warrant may 
be returned for cancellation, and then upon application made by 
the last designated beneficiary of the deceased former employee, 
refund of the accumulated contributions must be paid to the last 
designated beneficiary.  Payments made under this subdivision 
are a bar to recovery by any other person or persons.  
    Sec. 18.  Minnesota Statutes 1992, section 352.15, 
subdivision 1a, is amended to read: 
    Subd. 1a.  [AUTOMATIC DEPOSITS.] The executive director may 
pay an annuity, benefit, or refund to a banking institution, 
qualified under chapter 48, that is trustee for a person 
eligible to receive the annuity, benefit, or refund.  Upon the 
request of a retired, disabled, or former employee, the 
executive director may mail the annuity, benefit, or refund 
check to a banking institution, savings association, or credit 
union for deposit to the employee's account or joint account 
with a spouse.  The board of directors may prescribe the 
conditions under which payments will be made.  
    Sec. 19.  Minnesota Statutes 1992, section 352.85, 
subdivision 4, is amended to read: 
    Subd. 4.  [ELECTION OF COVERAGE.] To be covered by Laws 
1980, chapter 607 section 352.85, any employee of the department 
of military affairs, described in subdivision 1, who is employed 
on July 1, 1980, or is first employed after July 1, 1980, must 
file a notice with the executive director of the system on a 
form prescribed by the executive director stating whether or not 
the employee elects to be covered.  Notice must be filed by 
August 1, 1980, or within 30 90 days of employment, whichever is 
later.  Elections are irrevocable during any period of covered 
employment.  
    Sec. 20.  Minnesota Statutes 1992, section 352.93, 
subdivision 2a, is amended to read: 
    Subd. 2a.  [EARLY RETIREMENT.] Any covered correctional 
employee, or former employee if service ended after June 30, 
1989, who becomes at least 50 years old and who has at least 
three years of allowable service is entitled upon application to 
a retirement annuity equal to the normal annuity calculated 
under subdivision 2, reduced so that the reduced annuity is the 
actuarial equivalent of the annuity that would be payable if the 
employee deferred receipt of the annuity from the day the 
annuity begins to accrue to age 55. 
    Sec. 21.  Minnesota Statutes 1992, section 352.94, is 
amended to read: 
    352.94 [AUGMENTATION FOR EMPLOYEES WITH REGULAR GENERAL AND 
CORRECTIONAL SERVICE.] 
    Subdivision 1.  [CHANGE FROM REGULAR TO CORRECTIONAL 
SERVICE.] An employee who becomes a covered by the correctional 
employee plan after serving as a regular general plan covered 
employee, or becomes covered by the general plan after serving 
as a correctional plan covered employee, is covered under 
section 352.72, subdivision 2, with respect to the regular 
service.  
    Subd. 2.  [CHANGE FROM CORRECTIONAL TO REGULAR SERVICE.] An 
employee who becomes a regular employee after serving as a 
correctional employee is not covered under section 352.72, 
subdivision 2, with respect to correctional service.  
    Sec. 22.  Minnesota Statutes 1992, section 352.95, 
subdivision 3, is amended to read: 
    Subd. 3.  [APPLYING FOR BENEFITS; ACCRUAL.] No application 
for disability benefits shall be made until after the last day 
physically on the job.  The disability benefit shall begin to 
accrue the day following the last day for which the employee is 
paid sick leave or annual leave but not earlier than 60 180 days 
before the date the application is filed.  
    Sec. 23.  Minnesota Statutes 1992, section 352.951, is 
amended to read: 
    352.951 [APPLICABILITY OF GENERAL LAW.] 
    Except as otherwise provided, this chapter applies to 
covered correctional employees, military affairs personnel 
covered under section 352.85, and transportation department 
pilots covered under section 352.86.  
    Sec. 24.  Minnesota Statutes 1992, section 352B.08, 
subdivision 1, is amended to read: 
    Subdivision 1.  [WHO IS ELIGIBLE; WHEN TO APPLY; ACCRUAL.] 
Every member who is credited with three or more years of 
allowable service is entitled to separate from state service and 
upon becoming 55 50 years old, is entitled to receive a life 
annuity, upon separation from state service.  Members shall 
apply for an annuity in a form and manner prescribed by the 
executive director.  No application may be made more than 60 90 
days before the date the member is eligible to retire by reason 
of both age and service requirements.  An annuity begins to 
accrue no earlier than 90 180 days before the date the 
application is filed with the executive director.  
    Sec. 25.  Minnesota Statutes 1992, section 352B.08, 
subdivision 2a, is amended to read: 
    Subd. 2a.  [EARLY RETIREMENT.] Any member who has become at 
least 50 years old, or former member if service ended after June 
30, 1989, and who has at least three years of allowable service 
is entitled upon application to a retirement annuity equal to 
the normal annuity calculated under subdivision 2, reduced so 
that the reduced annuity is the actuarial equivalent of the 
annuity that would be payable if the member deferred receipt of 
the annuity from the day the annuity begins to accrue to age 55. 
    Sec. 26.  Minnesota Statutes 1992, section 352B.101, is 
amended to read: 
    352B.101 [APPLICATION FOR DISABILITY BENEFIT.] 
    A member claiming a disability benefit must file a written 
application for benefits in the office of the system in a form 
and manner prescribed by the executive director.  The member 
shall provide medical evidence to support the application.  The 
benefit begins to accrue the day following the start of 
disability or the day following the last day for which the 
member was paid, whichever is later, but not earlier than 90 180 
days before the date the application is filed with the executive 
director.  
    Sec. 27.  Minnesota Statutes 1992, section 352C.01, is 
amended to read: 
    352C.01 [LEGISLATIVE FINDING AND INTENT.] 
    The legislature finds that service to Minnesota in the 
capacity of a constitutional officer or commissioner as defined 
in section 352C.021 constitutes a unique contribution to the 
state and that such service is dissimilar to any other public 
employment.  The legislature further finds that service as a 
constitutional officer or commissioner for a period of eight 
years or longer deprives the individual so serving of normal 
opportunities to establish retirement benefits in a usual 
vocational pursuit and justifies adoption of special retirement 
provisions.  The provisions of this chapter are intended by the 
legislature to reflect the unique nature of service as a 
constitutional officer or commissioner and to have due regard 
for the unusual disruption of normal retirement planning that 
such service entails. 
    Sec. 28.  Minnesota Statutes 1992, section 352C.021, is 
amended to read: 
    352C.021 [DEFINITIONS.] 
    Subdivision 1.  [TERMS.] For purposes of this chapter, the 
following terms shall have the meanings given to them unless the 
language or context clearly indicates that a different meaning 
is intended. 
    Subd. 2.  [CONSTITUTIONAL OFFICER.] "Constitutional 
officer" means a person who was duly elected and qualified and 
is serving as governor, lieutenant governor, attorney general, 
secretary of state, state auditor or state treasurer of the 
state of Minnesota. 
    Subd. 3.  [COMMISSIONER.] "Commissioner" means a person who 
was duly elected and qualified and is serving as an elected 
member of the public utilities commission of the state of 
Minnesota. 
    Subd. 4.  [FORMER CONSTITUTIONAL OFFICER OR COMMISSIONER.] 
"Former constitutional officer or commissioner" means a person 
who has ceased to be a constitutional officer or commissioner 
subsequent to April 21, 1976 for any reason, including but not 
limited to the expiration of the term of office for which the 
person was elected, retirement or death. 
    Subd. 5. 4.  [SURVIVING SPOUSE.] "Surviving spouse" means 
the unmarried spouse of a deceased constitutional officer or 
commissioner or former constitutional officer or commissioner. 
    Subd. 6. 5.  [DEPENDENT CHILD.] "Dependent child" means any 
natural or adopted child of a deceased constitutional officer or 
commissioner or a deceased former constitutional officer or 
commissioner who is under the age of 18, or who is under the age 
of 22 and is a full-time student, and who in either case is 
unmarried and was actually dependent for more than one-half of 
the child's support upon the constitutional officer or 
commissioner or the former constitutional officer or 
commissioner for a period of least 90 days immediately prior to 
the death of the constitutional officer or commissioner or the 
former constitutional officer or commissioner.  The term shall 
also include a posthumous child of the constitutional officer or 
commissioner or the former constitutional officer or 
commissioner. 
    Subd. 7. 6.  [ALLOWABLE SERVICE.] "Allowable service" means 
any years or months of service as a constitutional officer or as 
a commissioner, for which service if the person made the 
contributions required by section 352C.09 on a current basis.  
The service need not be continuous.  For any constitutional 
officer or commissioner or former constitutional officer or 
commissioner in office on or before July 1, 1967, allowable 
service shall include any service as a constitutional officer or 
commissioner prior to July 1, 1967, notwithstanding that the 
person did not make concurrent contributions as required by 
section 352C.09. 
    Subd. 8. 7.  [DIRECTOR.] "Director" means the executive 
director of the Minnesota state retirement system. 
    Sec. 29.  Minnesota Statutes 1992, section 352C.031, is 
amended to read: 
    352C.031 [RETIREMENT ALLOWANCE.] 
    Subdivision 1.  [UNREDUCED RETIREMENT ALLOWANCE.] Upon 
separation from service, a former constitutional officer or 
commissioner who has attained the age of at least 62 years and 
who has at least eight years of allowable service is entitled 
upon making written application on forms supplied by the 
director to a normal retirement allowance. 
    Subd. 2.  [REDUCED RETIREMENT ALLOWANCE.] Upon separation 
from service, a former constitutional officer or commissioner 
who has attained the age of at least 60 years and who has at 
least eight years of allowable service is entitled upon making 
written application on forms supplied by the director to a 
retirement allowance in an amount equal to a normal retirement 
allowance reduced by one-half of one percent for each month that 
the former constitutional officer or commissioner is under age 
62. 
    Subd. 3.  [AVERAGE SALARY.] Average salary for purposes of 
calculating the normal retirement allowance pursuant to 
subdivision 4 shall mean the average of the highest five 
successive years of salary upon which contributions have been 
made pursuant to section 352C.09. 
    Subd. 4.  [RETIREMENT ALLOWANCE FORMULA.] The average 
salary multiplied by 2-1/2 percent for each year of allowable 
service and pro rata for completed months less than a full year 
shall determine the amount of the normal retirement allowance. 
    Subd. 5.  [BENEFIT ACCRUAL AND TERMINATION.] The benefit 
shall begin to accrue the first day of the month in which the 
application is received by the director but in no event earlier 
than the day following the termination of service or the 
attainment of the age required to receive such benefit, 
whichever is later.  Thereafter, benefits shall be paid on the 
first day of each calendar month for that month.  The benefit 
shall cease with the payment for the month in which the retired 
constitutional officer or commissioner died. 
    Subd. 6.  [PAYMENT OF RETIREMENT ALLOWANCES.] Retirement 
allowances payable pursuant to this section shall be paid 
monthly by the executive director of the Minnesota state 
retirement system.  
    Sec. 30.  Minnesota Statutes 1992, section 352C.033, is 
amended to read: 
    352C.033 [DEFERRED ANNUITIES AUGMENTATION.] 
    The deferred retirement allowance for any former 
constitutional officer or commissioner shall be augmented as 
provided in this section.  The required reserves applicable to 
the deferred retirement allowance, determined as of the date the 
retirement allowance begins to accrue using the appropriate 
mortality table and an interest assumption of five percent, 
shall be augmented from the first of the month following 
termination of service as a constitutional officer or 
commissioner, or January 1, 1979, whichever is later, to the 
first day of the month in which the annuity begins to accrue, at 
the rate of five percent per annum compounded annually until 
January 1, 1981, and thereafter at the rate of three percent per 
annum compounded annually until January 1 of the year in which 
the former constitutional officer or commissioner attains age 
55.  From that date to the effective date of retirement, the 
rate is five percent compounded annually. 
    Sec. 31.  Minnesota Statutes 1992, section 352C.04, is 
amended to read: 
    352C.04 [SPOUSE'S AND DEPENDENT CHILDREN'S SURVIVOR 
BENEFITS.] 
    Subdivision 1.  [SURVIVING SPOUSE BENEFIT.] Upon the death 
of a constitutional officer or commissioner while actively 
serving in office, or a former constitutional officer or 
commissioner with at least eight years of allowable service, the 
surviving spouse is entitled to a survivor benefit in the amount 
of one-half of the retirement allowance of the constitutional 
officer or commissioner or the former constitutional officer or 
commissioner computed as though the constitutional officer or 
commissioner or the former constitutional officer or 
commissioner were at least age 62 on the date of death and based 
upon the attained allowable service or eight years, whichever is 
greater.  The augmentation provided in section 352C.033, if 
applicable, shall be applied to the month of death.  Upon the 
death of a former constitutional officer or commissioner 
receiving a retirement allowance, the surviving spouse shall be 
entitled to one-half of the amount of the retirement allowance 
being paid to the former constitutional officer or commissioner 
as of the date of death.  The benefit shall be paid to a 
surviving spouse eligible therefor during the remainder of the 
spouse's natural life.  
    Subd. 2a.  [SURVIVING DEPENDENT CHILD BENEFIT.] Upon the 
death of a constitutional officer or commissioner while serving 
in office, or a former constitutional officer or commissioner 
with at least eight years of allowable service, each dependent 
child shall be paid a survivor benefit in the following amount:  
First dependent child, a monthly benefit which equals 25 percent 
of the monthly retirement allowance of the constitutional 
officer or commissioner computed as though the constitutional 
officer or commissioner or the former constitutional officer or 
commissioner were at least age 62 on the date of death and based 
upon the attained allowable service or eight years, whichever is 
greater; for each additional dependent child or a monthly 
benefit which equals 12-1/2 percent of the monthly retirement 
allowance of the constitutional officer or commissioner or the 
former constitutional officer or commissioner computed as in the 
case of the first child; but the total amount paid to the 
surviving spouse and dependent children shall not exceed in any 
one month 100 percent of the monthly allowance of the 
constitutional officer or commissioner or the former 
constitutional officer or commissioner computed as in the case 
of the first child.  The augmentation provided in subdivision 1, 
if applicable, shall be applied to the month of death.  Upon the 
death of a former constitutional officer or commissioner 
receiving a retirement allowance, the surviving dependent child 
shall be entitled to the applicable percentage of the amount of 
the retirement allowance being paid to the former constitutional 
officer or commissioner as of the date of death.  The payments 
for dependent children shall be made to the surviving spouse or 
the guardian of the estate of the dependent child, if there is 
one.  A posthumous child qualifies as a dependent child for 
benefits provided herein from the date of its birth. 
    Subd. 3.  [PAYMENT INTERVAL.] Spouse's and dependent 
children's survivor benefits, payable under this section, shall 
be paid monthly by the executive director of the Minnesota state 
retirement system. 
    Subd. 4.  [APPLICATION FOR SURVIVOR BENEFITS.] A surviving 
spouse or a guardian of the estate of the dependent child or 
children entitled to the payment of benefits under this section 
shall file an application for the benefit with the director, and 
payment shall commence as of the first day of the month next 
following the filing of the application and shall be retroactive 
to the first of the month following the death of the 
constitutional officer or commissioner or the former 
constitutional officer or commissioner; provided, however, that 
no payment shall be retroactive for more than 12 months prior to 
the month in which the application is filed with the director.  
Such benefits shall be paid on the first day of each calendar 
month for that month.  The surviving spouse benefit shall cease 
with the payment for the month in which the surviving spouse 
dies.  The dependent child's benefit shall cease with the 
payment for the month in which the child no longer qualifies for 
payment as a dependent child. 
    Sec. 32.  Minnesota Statutes 1992, section 352C.051, is 
amended to read: 
    352C.051 [COVERAGE BY MORE THAN ONE RETIREMENT SYSTEM OR 
ASSOCIATION.] 
    Subdivision 1.  [ENTITLEMENT TO ANNUITY; LEGISLATIVE 
SERVICE.] Any constitutional officer or commissioner who has 
been a member of the legislature with service credited pursuant 
to chapter 3A shall be entitled when qualified to a retirement 
allowance from the legislator's retirement plan and the elective 
state officers plan if the total allowable service for which the 
person has credit in the two plans totals eight or more years, 
provided that no portion of the allowable service upon which the 
retirement allowance from one plan is based, is again used in 
the computation for benefits from the other plan.  The 
retirement allowance from each plan shall be determined by the 
appropriate provisions of the law governing each plan, except 
that the requirement that a person must have at least eight 
years of allowable service in the respective plan shall not 
apply for purposes of this section, provided that the aggregate 
service in the two plans equals eight or more years.  The 
augmentation of deferred annuities provided in sections 3A.02, 
subdivision 4, and 352C.033, shall apply to the retirement 
allowances accruing hereunder. 
    Subd. 2.  [ENTITLEMENT TO ANNUITY; PUBLIC RETIREMENT 
SERVICE.] Any constitutional officer or commissioner who has 
been an employee covered by the Minnesota state retirement 
system, or a member of the public employees retirement 
association including the public employees retirement 
association police and fire fund, or the teachers retirement 
association, or the Minneapolis employees retirement fund, or 
the state patrol retirement association, or any other public 
employee retirement system in the state of Minnesota having a 
like provision, but excluding all other funds providing 
retirement benefits for police and firefighters, shall be 
entitled when qualified to an annuity from each fund if the 
person's total allowable service credit in all funds or in any 
two of these funds totals ten eight or more years, provided no 
portion of the allowable service upon which the retirement 
annuity from one fund is based is again used in the computation 
for benefits from another fund.  The annuity from each fund 
shall be determined by the appropriate provisions of the law 
governing each fund, except that the requirement that a person 
must have at least ten eight years allowable service in the 
respective system or association shall not apply for the 
purposes of this section, provided that the aggregate service in 
two or more of these funds equals ten eight or more years.  The 
augmentation of deferred annuities provided in section 352C.033 
shall apply to the annuities accruing hereunder. 
    Subd. 3.  [REFUND REPAYMENT.] Any former constitutional 
officer or commissioner who has received a refund as provided in 
section 352C.09, subdivision 2, who is a currently contributing 
member of a retirement fund specified or enumerated in 
subdivision 1 or 2, may repay the refund to the elective state 
officers retirement plan, with interest at an annual rate of 8.5 
percent compounded annually. 
    Sec. 33.  Minnesota Statutes 1992, section 352C.09, is 
amended to read: 
    352C.09 [CONTRIBUTIONS.] 
    Subdivision 1.  Every constitutional officer or 
commissioner shall contribute eight percent of total salary 
beginning the first full pay period after July 1, 1976, and nine 
percent of total salary beginning the first full pay period 
after January 1, 1979, by payroll deduction, to be paid into the 
state treasury and deposited in the general fund.  In case of 
retirement any unpaid deductions shall be deducted from any 
retirement allowance that becomes payable.  All deductions and 
payments, if any, in lieu of deductions are to be paid into the 
state treasury and deposited in the general fund.  It shall be 
the duty of the director to record the contributions of each 
constitutional officer or commissioner and credit such 
contribution to such officer's or commissioner's account. 
    Subd. 2.  (1) Any person who has made contributions 
pursuant to subdivision 1 who is no longer a constitutional 
officer or commissioner is entitled to receive upon application 
to the director a refund of all contributions credited to the 
individual's account with interest at the rate of six percent 
per annum compounded annually.  
    (2) The refund of contributions as provided in clause (1) 
above terminates all rights of a former constitutional officer 
or commissioner or survivors thereof under the provisions of 
this chapter.  Should the former constitutional officer or 
commissioner again hold such office after having taken a refund 
as provided above, the former officer or commissioner shall be 
considered a new member and may reinstate the rights and credit 
for service forfeited provided all refunds previously taken are 
repaid with interest at an annual rate of 8.5 percent compounded 
annually. 
    (3) No person shall be required to apply for or accept a 
refund. 
    (4) The provisions of section 352.15 shall apply to the 
elective state officers retirement plan, chapter 352C. 
    Sec. 34.  Minnesota Statutes 1992, section 352D.015, 
subdivision 4, is amended to read: 
    Subd. 4.  "Regular General fund" means the state employees 
retirement fund except the moneys for the unclassified program.  
    Sec. 35.  Minnesota Statutes 1992, section 352D.04, 
subdivision 1, is amended to read: 
    Subdivision 1.  (a) An employee exercising an option to 
participate in the retirement program provided by this chapter 
may elect to purchase shares in one or a combination of the 
income share account, the growth share account, the money market 
account, the bond market account, the fixed interest account, or 
the common stock index account established in section 11A.17.  
The employee may elect to participate in one or more of the 
investment accounts in the fund by specifying, on a form 
provided by the executive director, the percentage of the 
employee's contributions provided in subdivision 2 to be used to 
purchase shares in each of the accounts. 
    (b) Twice in any calendar year, A participant may indicate 
in writing on forms provided by the Minnesota state retirement 
system a choice of options for subsequent purchases of shares.  
Until a different written indication is made by the participant, 
the executive director shall purchase shares in the supplemental 
fund as selected by the participant.  If no initial option is 
chosen, 100 percent income shares must be purchased for a 
participant.  A change in choice of investment option is 
effective no later than the first pay date first occurring after 
30 days following the receipt of the request for a change. 
    (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 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 fixed interest account.  
Upon expiration of a guaranteed investment contract, the 
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 fixed interest 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 withdrawal under section 352D.05 or for benefit 
payments under sections 352D.06 to 352D.075. 
    (d) Twice in any calendar year A participant or former 
participant may also change the investment options selected for 
all or a portion of the participant's shares previously 
purchased in accounts other than the fixed interest account.  
Changes in investment options for the participant's shares must 
be effected as soon as cash flow to an account practically 
permits, but not later than six months after the requested 
change. 
    Sec. 36.  Minnesota Statutes 1992, section 352D.05, 
subdivision 1, is amended to read: 
    Subdivision 1.  Except as authorized by section 352D.06, No 
withdrawal of shares shall be permitted prior to termination of 
covered employment. 
    Sec. 37.  Minnesota Statutes 1992, section 352D.05, 
subdivision 3, is amended to read: 
    Subd. 3.  Thirty days After termination of covered 
employment or at any time thereafter, a participant is entitled, 
upon application, to withdraw the cash value of the 
participant's total shares or leave such shares on deposit with 
the supplemental retirement fund.  Shares not withdrawn must 
remain on deposit with the supplemental retirement fund until 
the former participant becomes at least 55 years old, and 
applies for an annuity under section 352D.06, subdivision 1.  
    Sec. 38.  Minnesota Statutes 1992, section 352D.09, 
subdivision 5, is amended to read: 
    Subd. 5.  If the beneficiary, surviving spouse or estate 
has not made application for benefits within ten years after the 
date of death of a participant the value of the shares shall be 
appropriated to the regular fund and provisions of section 
352.12, subdivision 12 shall govern.  If a former participant 
fails to make a claim for benefits within five years after 
termination of covered service or by age 70, whichever is later, 
the value of the shares shall be appropriated to the regular 
general employees retirement fund and the provisions of section 
352.22, subdivision 8, shall apply.  
    Sec. 39.  Minnesota Statutes 1992, section 352D.09, is 
amended by adding a subdivision to read: 
    Subd. 5a.  If a former participant who contributed less 
than $100 in employee contributions cannot be contacted by the 
system for five or more years, the value of the shares shall be 
appropriated to the general employees retirement fund, but upon 
subsequent contact by the former employee the account shall be 
reinstated to the amount that would have been payable had the 
money been left in the unclassified plan. 
     Sec. 40.  Minnesota Statutes 1992, section 352D.09, is 
amended by adding a subdivision to read: 
    Subd. 8.  [ADMINISTRATIVE CHARGE DEDUCTIONS.] Any 
administrative charges deducted under subdivision 7 that were in 
excess of the administrative expenses between July 1, 1973, and 
June 30, 1992, together with any investment gains or losses 
based on fiscal year balances, must be recovered from the state 
employees retirement plan and held in the unclassified plan to 
pay future administrative expenses.  Any deductions to pay 
administrative expenses under section 11A.17, subdivision 10a, 
on contributions and investment returns attributable to 
contributions made before July 1, 1992, must be credited back to 
the participants in the unclassified plan. 
    Sec. 41.  Minnesota Statutes 1992, section 490.124, 
subdivision 1, is amended to read: 
    Subdivision 1.  [BASIC RETIREMENT ANNUITY.] Except as 
qualified hereinafter from and after mandatory retirement date, 
normal retirement date, early retirement date, or two years one 
year from the disability retirement date, as the case may be, a 
retirement annuity shall be payable to a retiring judge from the 
judges' retirement fund in an amount equal to:  (1) 2-1/2 
percent of the judge's final average compensation multiplied by 
the number of years and fractions of years of allowable service 
rendered prior to July 1, 1980; plus (2) three percent of the 
judge's final average compensation multiplied by the number of 
years and fractions of years of allowable service rendered after 
June 30, 1980; provided that the annuity shall not exceed 65 
percent of the judge's annual salary for the 12 months 
immediately preceding retirement.  
    Sec. 42.  Minnesota Statutes 1992, section 490.124, 
subdivision 4, is amended to read: 
    Subd. 4.  [DISABILITY RETIREMENT.] From and after 
disability retirement date, a disabled judge shall be entitled 
to continuation of the judge's full salary payable by the 
judge's employer, as if the judge's office were not vacated by 
retirement, for a period of up to one full year, but in no event 
beyond the judge's mandatory retirement date.  During this year 
the judge will earn additional service credit.  The salary 
earned will be subject to retirement deductions and will be 
included in computing final average compensation.  Thereafter a 
disability retirement annuity computed as provided in 
subdivision 1 shall be paid, provided that the judge shall 
receive a minimum annuity of 25 percent of the judge's final 
average compensation. 
    Sec. 43.  [STUDY OF BENEFIT OPTIONS FOR PUBLIC EMPLOYEES 
WHO BECOME NONPUBLIC EMPLOYEES.] 
    The legislative commission on pensions and retirement shall 
study the issue of benefit options for public employees who 
become nonpublic employees for the purpose of determining 
whether the employees should have the same or similar benefits 
subsequent to public employment as they did during public 
employment.  The commission shall report the results of the 
study and any proposed legislation to the chairs of the 
committee on governmental operations and gaming and the 
committee on ways and means of the house of representatives and 
the committee on governmental operations and reform and the 
committee on finance of the senate by January 15, 1994. 
    Sec. 44.  [EFFECTIVE DATE.] 
    Sections 1, 2, 4, 5, and 7 to 42 are effective the day 
following final enactment.  Sections 3, 6, and 43 are effective 
July 1, 1993.  Section 3 applies retroactively to July 1, 1992, 
and contributions for that retroactive application period must 
be paid to the state employees retirement fund, plus interest at 
the annual compound rate of 8.5 percent. 

                               ARTICLE 2 

           CHANGES TO COMPLY WITH AGE DISCRIMINATION ACT AND 

                HAVING SLIGHT BENEFIT ADJUSTMENT IMPACT 
    Section 1.  Minnesota Statutes 1992, section 3A.02, is 
amended by adding a subdivision to read: 
    Subd. 5.  [OPTIONAL ANNUITIES.] (a) The board of directors 
shall establish an optional retirement annuity in the form of a 
joint and survivor annuity and an optional retirement annuity in 
the form of a period certain and life thereafter.  These 
optional annuities are to be available only to legislators who 
elect to receive retirement annuities under section 356.30 and 
who do not meet the legislative length of service requirements 
under section 3A.02, subdivision 1, paragraph (a), clause (1).  
Except as provided in paragraph (b), these optional annuity 
forms must be actuarially equivalent to the normal annuity 
computed under section 3A.02, without the automatic survivor 
coverage under section 3A.04. 
    (b) If a retired legislator selects the joint and survivor 
annuity option, the retired legislator must receive a normal 
single-life annuity if the designated optional annuity 
beneficiary dies before the retired legislator and no reduction 
may be made in the annuity to provide for restoration of the 
normal single-life annuity in the event of the death of the 
designated optional annuity beneficiary. 
    Sec. 2.  Minnesota Statutes 1992, section 352.03, 
subdivision 4, is amended to read: 
    Subd. 4.  [DUTIES AND POWERS OF BOARD OF DIRECTORS.] The 
board shall: 
    (1) elect a chair; 
    (2) appoint an executive director; 
    (3) establish rules to administer this chapter and chapters 
3A, 352B, 352C, 352D, and 490 and transact the business of the 
system, subject to the limitations of law; 
    (4) consider and dispose of, or take any other action the 
board of directors deems appropriate concerning denials of 
applications for annuities or disability benefits under this 
chapter, and complaints of employees and others pertaining to 
the retirement of employees and the operation of the system; and 
    (5) advise the director on any matters relating to the 
system and carrying out functions and purposes of this chapter.  
The board's advice shall control; and 
    (6) oversee the administration of the state deferred 
compensation plan, established in section 352.96. 
    The director and assistant director must be in the 
unclassified service but appointees may be selected from civil 
service lists if desired.  The salary of the executive director 
must be as provided by section 15A.081, subdivision 1.  The 
salary of the assistant director must be set in accordance with 
section 43A.18, subdivision 3.  
    Sec. 3.  Minnesota Statutes 1992, section 352.22, 
subdivision 1, is amended to read: 
    Subdivision 1.  [SERVICE TERMINATION.] Any employee who 
ceases to be a state employee by reason of termination of state 
service or layoff is entitled to a refund provided in 
subdivision 2 or a deferred retirement annuity as provided in 
subdivision 3.  Application for a refund may be made 30 or more 
days after the termination of state service or layoff if the 
applicant has not again become a state employee required to be 
covered by the system.  
    Sec. 4.  Minnesota Statutes 1992, section 352.22, 
subdivision 2, is amended to read: 
    Subd. 2.  [AMOUNT OF REFUND.] Except as provided in 
subdivision 3, any person who ceased to be a state employee 
after June 30, 1973, by reason of termination of state service 
shall receive a refund in an amount equal to employee 
accumulated contributions plus interest at the rate of six 
percent per year compounded annually.  Included with the refund 
is any interest paid as part of repayment of a past refund, plus 
interest thereon from the date of repayment.  Interest must be 
computed to the first day of the month in which the refund is 
processed and must be based on fiscal year balances.  
    Sec. 5.  Minnesota Statutes 1992, section 352.23, is 
amended to read: 
    352.23 [TERMINATION OF RIGHTS.] 
    When any employee accepts a refund as provided in section 
352.22, all existing service credits and all rights and benefits 
to which the employee was entitled before accepting the refund 
terminate.  They must not again be restored until the former 
employee acquires at least one year's six months of allowable 
service credit after taking the last refund.  In that event, the 
employee may repay all refunds previously taken from the 
retirement fund.  Repayment of refunds entitles the employee 
only to credit for service covered by (1) salary deductions,; (2)
payments made in lieu of salary deductions, and; (3) payments 
made to obtain credit for service as permitted by laws in effect 
when payment was made.  If an employee before taking one or more 
refunds had credit for prior service or for military service 
without payment in either case, the employee may obtain credit 
for any forfeited service before July 1, 1929, and for any 
forfeited military service by making payments at a contribution 
rate of three percent of the average salary upon which 
deductions for the retirement fund were based, for the 
three-year period immediately preceding repayment of refund for 
service credit before July 1, 1929, and on the salary received 
at the time of entering military service to restore military 
service credit; and (4) allowable service once credited while 
receiving temporary workers' compensation as provided in section 
352.01, subdivision 11, clause (5).  Payments for purchase of 
prior military service under this section and for repayment of 
refunds are to be paid with interest at an annual rate of 8.5 
percent compounded annually.  They may be paid in a lump sum or 
by payroll deduction in the manner provided in section 
352.04.  Payment may be made in a lump sum up to six months 
after termination from service. 
    Sec. 6.  Minnesota Statutes 1992, section 352.95, 
subdivision 1, is amended to read: 
    Subdivision 1.  [JOB-RELATED DISABILITY.] A covered 
correctional employee less than 55 years old who becomes 
disabled and physically unfit to perform the duties of the 
position as a direct result of an injury, sickness, or other 
disability incurred in or arising out of any act of duty that 
makes the employee physically or mentally unable to perform the 
duties, is entitled to a disability benefit based on covered 
correctional service only.  The benefit amount must equal 50 
percent of the average salary defined in section 352.93, plus an 
additional 2-1/2 percent for each year of covered correctional 
service in excess of 20 years, prorated for completed months. 
    Sec. 7.  Minnesota Statutes 1992, section 352.95, 
subdivision 2, is amended to read: 
    Subd. 2.  [NON-JOB-RELATED DISABILITY.] Any covered 
correctional employee who, after at least one year of covered 
correctional service, before reaching the age of 55 becomes 
disabled and physically unfit to perform the duties of the 
position because of sickness or injury occurring while not 
engaged in covered employment, is entitled to a disability 
benefit based on covered correctional service only.  The 
disability benefit must be computed as provided in section 
352.93, subdivisions 1 and 2, and computed as though the 
employee had at least 15 years of covered correctional service. 
    Sec. 8.  Minnesota Statutes 1992, section 352.95, 
subdivision 5, is amended to read: 
    Subd. 5.  [RETIREMENT STATUS AT NORMAL RETIREMENT AGE.] The 
disability benefit paid to a disabled correctional employee 
under this section shall terminate at the end of the month in 
which the employee reaches age 62.  If the disabled correctional 
employee is still disabled when the employee reaches age 62, the 
employee shall be deemed to be a retired employee.  If the 
employee had elected an optional annuity under subdivision 1a, 
the employee shall receive an annuity in accordance with the 
terms of the optional annuity previously elected.  If the 
employee had not elected an optional annuity under subdivision 
1a, the employee may then within 90 days of attaining age 65 or 
reaching the five-year anniversary of the effective date of the 
disability benefit, whichever is later, either elect to receive 
a normal retirement annuity computed in the manner provided in 
section 352.115 or elect to receive an optional annuity as 
provided in section 352.116, subdivision 3, based on the same 
length of service as used in the calculation of the disability 
benefit.  Election of an optional annuity must be made before 
within 90 days before attaining age 65 or reaching age 62 the 
five-year anniversary of the effective date of the disability 
benefit, whichever is later.  The reduction for retirement 
before normal retirement age as provided in section 352.116, 
subdivision 1 or 1a, does not apply.  The savings clause 
provision of section 352.93, subdivision 3, applies.  If an 
optional annuity is elected, the optional annuity shall begin to 
accrue on the first of the month following the month in which 
the employee reaches age 62 65 or the five-year anniversary of 
the effective date of the disability benefit, whichever is later.
    Sec. 9.  Minnesota Statutes 1992, section 352.96, 
subdivision 3, is amended to read: 
    Subd. 3.  [EXECUTIVE DIRECTOR TO ADMINISTER SECTION.] This 
section must be administered by the executive director of the 
system with the advice and consent of the board of directors 
under subdivision 4.  Fiduciary activities of the deferred 
compensation plan must be undertaken in a manner consistent with 
chapter 356A.  If the state board of investment so elects, it 
may solicit bids for options under subdivision 2, clauses (2) 
and (3).  All contracts must be approved before execution by the 
state board of investment.  Contracts must provide that all 
options in subdivision 2 must:  be presented in an unbiased 
manner and in a manner that conforms to rules adopted by the 
executive director, be reported on a periodic basis to all 
employees participating in the deferred compensation program, 
and not be the subject of unreasonable solicitation of state 
employees to participate in the program.  The contract may not 
call for any person to jeopardize the tax-deferred status of 
money invested by state employees under this section.  All costs 
or fees in relation to the options provided under subdivision 2, 
clause (3), must be paid by the underwriting companies 
ultimately selected by the state board of investment. 
    Sec. 10.  Minnesota Statutes 1992, section 352.96, 
subdivision 4, is amended to read: 
    Subd. 4.  [EXECUTIVE DIRECTOR TO ESTABLISH RULES.] The 
executive director of the system with the advice and consent of 
the board of directors shall establish rules and procedures to 
carry out this section including allocation of administrative 
costs against the assets accumulated under this section.  Funds 
to pay these costs are appropriated from the fund or account in 
which the assets accumulated under this section are placed.  The 
rules established by the executive director must conform to 
federal and state tax laws, regulations, and rulings, and are 
not subject to the administrative procedure act.  Except for the 
marketing rules, rules relating to the options provided under 
subdivision 2, clauses (2) and (3), must be approved by the 
state board of investment.  A state employee must not make 
payments under a plan until the plan or applicable component of 
the plan has been approved for tax-deferred status by the 
Internal Revenue Service. 
    Sec. 11.  Minnesota Statutes 1992, section 352B.01, 
subdivision 3, is amended to read: 
    Subd. 3.  [ALLOWABLE SERVICES.] "Allowable service" means:  
    (a) for members defined in subdivision 2, clause (a), 
service for which payments have been made to the state patrol 
retirement fund, and 
    (b) for members defined in subdivision 2, clauses (b) and 
(c), service for which payments have been made to the state 
patrol retirement fund, service for which payments were made to 
the state police officers retirement fund after June 30, 1961, 
and all prior service which was credited to a member for service 
on or before June 30, 1961.  
After a member identified in this clause reaches the age of 60, 
allowable service after that date must not be computed in 
determining the normal annuity unless the member was employed as 
a state police officer before July 1, 1961.  If the member was 
so employed before July 1, 1961, and reaches 60 years of age and 
has more than 30 years' allowable service at that time, each 
year and completed month of allowable service acquired by the 
member must be computed in determining the normal annuity until 
the member reaches the age of 60.  If the member was employed 
before July 1, 1961, and has less than 30 years of allowable 
service when the member reaches age 60, each year and completed 
month of allowable service acquired by the member must be 
computed in determining the normal annuity not to exceed 30 
years of allowable service.  The completed year members reach 
age 60 may be counted in full in determining allowable service.  
Allowable service also includes any period of absence from duty 
by a member who, by reason of injury incurred in the performance 
of duty, is temporarily disabled and for which disability the 
state is liable under the workers' compensation law, until the 
date authorized by the executive director for commencement of 
payment of a disability benefit or return to employment.  
    Sec. 12.  Minnesota Statutes 1992, section 352B.10, 
subdivision 1, is amended to read: 
    Subdivision 1.  [INJURIES, PAYMENT AMOUNTS.] Any member 
less than 55 years old, who becomes disabled and physically or 
mentally unfit to perform duties as a direct result of an 
injury, sickness, or other disability incurred in or arising out 
of any act of duty, shall receive disability benefits while 
disabled.  The benefits must be paid in monthly installments 
equal to the member's average monthly salary multiplied by 50 
percent, plus an additional 2-1/2 percent for each year and pro 
rata for completed months of service in excess of 20 years, if 
any. 
    Sec. 13.  Minnesota Statutes 1992, section 352B.10, 
subdivision 2, is amended to read: 
    Subd. 2.  [UNDER 55; DISABLED WHILE NOT ON DUTY.] If a 
member terminates employment after at least one year of service, 
before reaching the age of 55, because of sickness or injury 
occurring while not on duty and not engaged in state work 
entitling the member to membership, and the termination is 
necessary because the member cannot perform duties, the member 
is entitled to receive a disability benefit.  The benefit must 
be in the same amount and computed in the same way as if the 
member were 55 years old at the date of disability and the 
annuity were paid under section 352B.08.  If disability under 
this clause occurs after one but before 15 years service, the 
disability benefit must be computed as though the member had 15 
years service. 
    Sec. 14.  Minnesota Statutes 1992, section 352B.10, 
subdivision 5, is amended to read: 
    Subd. 5.  [OPTIONAL ANNUITY.] A disabled member may, in 
lieu of survivorship coverage under section 352B.11, subdivision 
2, choose the normal disability benefit or an optional annuity 
as provided in section 352B.08, subdivision 3.  The choice of an 
optional annuity must be made before commencement of payment of 
the disability benefit, or within 90 days of attaining age 65 or 
reaching the five-year anniversary of the effective date of the 
disability benefit, whichever is later.  It is effective on the 
date on which the disability benefit begins to accrue, or the 
month following attainment of age 65 or the five-year 
anniversary of the effective date of the disability benefit, 
whichever is later.  
     Sec. 15.  Minnesota Statutes 1992, section 352B.105, is 
amended to read: 
    352B.105 [TERMINATION OF DISABILITY BENEFITS.] 
    Disability benefits payable under section 352B.10 shall 
terminate at the end of the month the beneficiary becomes 55 
years old.  If the beneficiary is still disabled when the 
beneficiary becomes 55 years old, the beneficiary shall be 
deemed to be a retired member and, if the beneficiary had chosen 
an optional annuity under section 352B.10, subdivision 5, shall 
receive an annuity in accordance with the terms of the optional 
annuity previously chosen.  If the beneficiary had not chosen an 
optional annuity under section 352B.10, subdivision 5, the 
beneficiary may choose to receive either a normal retirement 
annuity computed under section 352B.08, subdivision 2, or an 
optional annuity as provided in section 352B.08, subdivision 3. 
An optional annuity must be chosen before the beneficiary 
becomes 55 years old within 90 days of attaining age 65 or 
reaching the five-year anniversary of the effective date of the 
disability benefit, whichever is later.  If an optional annuity 
is chosen, the optional annuity shall begin to accrue the first 
of the month following the month in which the beneficiary 
becomes 55 years old attainment of age 65 or the five-year 
anniversary of the effective date of the disability benefit, 
whichever is later. 
    Sec. 16.  Minnesota Statutes 1992, section 352B.11, 
subdivision 2, is amended to read: 
    Subd. 2.  [DEATH; PAYMENT TO SPOUSE AND CHILDREN.] If a 
member serving actively as a member, or a member or former 
member receiving the disability benefit before attaining age 65 
or reaching the five-year anniversary of the effective date of 
the disability benefit, whichever is later, provided by section 
352B.10, subdivision 1, or a former member receiving a 
disability benefit as provided by section 352B.10, subdivision 
2, subdivisions 1 and 2, dies from any cause before attaining 
age 65 or reaching the five-year anniversary of the effective 
date of the disability benefit, whichever is later, the 
surviving spouse and dependent children are entitled to benefit 
payments as follows: 
    (a) A member with at least three years of allowable service 
is deemed to have elected a 100 percent joint and survivor 
annuity payable to a surviving spouse only on or after the date 
the member or former member became or would have become 55. 
    (b) The surviving spouse of a member who had credit for 
less than three years of service shall receive, for life, a 
monthly annuity equal to 50 percent of that part of the average 
monthly salary of the member from which deductions were made for 
retirement.  
    (c) The surviving spouse of a member who had credit for at 
least three years service and who died after becoming 55 years 
old, may elect to receive a 100 percent joint and survivor 
annuity, for life, notwithstanding a subsequent remarriage, in 
lieu of the annuity prescribed in paragraph (b). 
    (d) The surviving spouse of any member who had credit for 
three years or more and who was not 55 years old at death, shall 
receive the benefit equal to 50 percent of the average monthly 
salary as described in clause (b) until the deceased member 
would have become 55 years old, and beginning the first of the 
month following that date, may elect to receive the 100 percent 
joint and survivor annuity.  
     (e) Each dependent child shall receive a monthly annuity 
equal to ten percent of that part of the average monthly salary 
of the former member from which deductions were made for 
retirement.  A dependent child over 18 and under 23 years of age 
also may receive the monthly benefit provided in this section, 
if the child is continuously attending an accredited school as a 
full-time student during the normal school year as determined by 
the director.  If the child does not continuously attend school 
but separates from full-time attendance during any part of a 
school year, the annuity shall cease at the end of the month of 
separation.  In addition, a payment of $20 per month shall be 
prorated equally to surviving dependent children when the former 
member is survived by one or more dependent children.  Payments 
for the benefit of any qualified dependent child must be made to 
the surviving spouse, or if there is none, to the legal guardian 
of the child.  The maximum monthly benefit for any one family 
must not be less than 50 nor exceed 70 percent of the average 
monthly salary for any number of children. 
     (f) If the member dies under circumstances that entitle the 
surviving spouse and dependent children to receive benefits 
under the workers' compensation law, the workers' compensation 
benefits received by them must not be deducted from the benefits 
payable under this section. 
     (g) The surviving spouse of a deceased former member who 
had credit for three or more years of allowable service, but not 
the spouse of a former member receiving a disability benefit 
under section 352B.10, subdivision 2, is entitled to receive the 
100 percent joint and survivor annuity at the time the deceased 
member would have become 55 years old.  If a former member dies 
who does not qualify for other benefits under this chapter, the 
surviving spouse or, if none, the children or heirs are entitled 
to a refund of the accumulated deductions left in the fund plus 
interest at the rate of six percent per year compounded annually.
    Sec. 17.  Minnesota Statutes 1992, section 352D.05, 
subdivision 4, is amended to read: 
    Subd. 4.  A participant in the unclassified program may 
repay regular refunds taken pursuant to section 352.22, as 
provided in section 352.23.  A participant in the unclassified 
program or an employee covered by the general plan who has 
withdrawn the value of the total shares may repay the refund 
taken and thereupon restore the service credit, rights and 
benefits forfeited by paying into the fund the greater of (1) 
the amount refunded plus interest at an annual rate of 8.5 
percent compounded annually from the date that the refund was 
taken until the date that the refund is repaid, or (2) an amount 
equal to the total of the employee and employer matching and 
additional contributions for the forfeited employment period 
less the administrative fee provided in section 352D.09, 
subdivision 7, plus interest at an annual rate of 8.5 percent 
compounded annually from the date of the start of the forfeited 
employment period until the date that the refund is paid.  If 
the participant had withdrawn only the employee shares as 
permitted under prior laws, repayment shall be pro rata.  
Payment shall be made in a lump sum.  
    Sec. 18.  Minnesota Statutes 1992, 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 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. 
    (h) A partially employed recipient of a disability benefit 
must have any current income plus disability payment from all 
plans listed in subdivision 7 added together, and then compared 
to their final salary rate as a public employee.  If current 
income plus disability payments exceed the final salary, then 
disability benefit payments from all the plans will be reduced 
on a prorated basis relative to the years of service in each 
fund so that earnings plus benefit payments do not exceed their 
final salary rate. 
     Sec. 19.  [RETROACTIVE BENEFIT ACCRUAL TO COMPLY WITH AGE 
DISCRIMINATION LAWS.] 
    A retired member of the state patrol retirement plan who 
retired after December 31, 1987, and whose annuity was 
calculated using less than full years and months of service 
earned after reaching age 60 shall have monthly benefits 
recomputed using all years and months of service and including 
any postretirement adjustments that would have been payable.  
The difference between the original calculation and recomputed 
amount must be paid retroactively to September 1, 1989, or the 
date the annuity began to accrue, whichever is later. 
    Sec. 20.  [EFFECTIVE DATE.] 
    Sections 1 to 19 are effective the day following final 
enactment. 

                               ARTICLE 3 

                      MISCELLANEOUS MSRS PROVISIONS
    Section 1.  Minnesota Statutes 1992, section 352.01, is 
amended by adding a subdivision to read: 
    Subd. 13a.  [REDUCED SALARY DURING PERIOD OF WORKERS' 
COMPENSATION.] An employee on leave of absence receiving 
temporary workers' compensation payments and a reduced salary or 
no salary from the employer who is entitled to allowable service 
credit for the period of absence, may make payment to the fund 
for the difference between salary received, if any, and the 
salary the employee would normally receive if not on leave of 
absence during the period.  The employee shall pay an amount 
equal to the employee and employer contribution rate under 
section 352.04, subdivisions 2 and 3, on the differential salary 
amount for the period of the leave of absence. 
    The employing department, at its option, may pay the 
employer amount on behalf of its employees.  Payment made under 
this subdivision must include interest at the rate of 8.5 
percent per year, and must be completed within one year of the 
return from leave of absence. 
    Sec. 2.  Minnesota Statutes 1992, section 352.03, 
subdivision 4a, is amended to read: 
    Subd. 4a.  [ADDITIONAL DUTIES OF THE BOARD.] The board may 
consider, review, and make recommendations regarding the 
financial and other needs of retired employees and may 
disseminate appropriate retirement information to the retired 
employee.  Notwithstanding laws to the contrary, the board, at 
its discretion, may supply the names and addresses of retirees 
who were employed by the University of Minnesota at the time of 
termination to the University of Minnesota and state agencies 
for retirees who were employed by the specific state agency at 
the time of termination.  The board, at its discretion, may 
supply names and addresses of state and university retirees to 
an organization that has been in existence for at least ten 
years and represents over 5,000 retired state and university 
employees.  The names and addresses of each retiree can only be 
given to this organization once within 60 days of the effective 
date of the annuity.  The board shall require the retiree 
organization, University of Minnesota, or applicable state 
agency to reimburse the fund for any administrative expense of 
providing the list.  The list remains the property of the 
Minnesota state retirement system and may not be subsequently 
sold, conveyed, given, or otherwise transferred by the retiree 
organization, the University of Minnesota, or the state agency 
to a third party.  Periodically, retirees must be given an 
opportunity to specify that their name and address not be 
distributed under this section.  
    Sec. 3.  Minnesota Statutes 1992, section 352.15, is 
amended by adding a subdivision to read: 
    Subd. 3.  [DEDUCTING HEALTH INSURANCE PREMIUMS.] The board 
may direct, at its discretion, the deduction of a retirees' 
health insurance premiums and transfer of the amounts to a 
health insurance carrier covering state employees.  The 
insurance carrier must certify that the retired employee has 
signed an authorization for the deduction and provide a computer 
readable roster of covered retirees and amounts.  The health 
insurance carrier must refund deductions withheld from a 
retirees' check in error directly to the retiree.  The board 
shall require the insurance carrier to reimburse the fund for 
the administrative expense of withholding the premium amounts.  
The insurance carrier shall assume liability for any failure of 
the system to properly withhold the premium amounts. 
    Sec. 4.  Minnesota Statutes 1992, section 352.15, is 
amended by adding a subdivision to read: 
    Subd. 4.  [DIRECT TRANSFER OF REFUNDS.] Direct transfer of 
account refunds may be made to individual retirement savings 
accounts or qualified retirement plans upon application for 
transfer by a former employee, on forms acceptable to the 
executive director. 
    Sec. 5.  Minnesota Statutes 1992, section 352B.01, 
subdivision 11, is amended to read: 
    Subd. 11.  [AVERAGE SALARY.] "Average monthly salary" means 
the average of the highest monthly salaries for five years of 
service as a member.  Average monthly salary must be based upon 
all allowable service if this service is less than five years.  
It does not include any amounts of severance pay or any reduced 
salary paid during the period the person is entitled to workers' 
compensation benefit payments for temporary disability.  A 
member on leave of absence receiving temporary workers' 
compensation payments and a reduced salary or no salary from the 
employer who is entitled to allowable service credit for the 
period of absence may make payment to the fund for the 
difference between salary received, if any, and the salary the 
member would normally receive if not on leave of absence during 
the period.  The member shall pay an amount equal to the member 
and employer contribution rate under section 352B.02, 
subdivisions 1b and 1c, on the differential salary amount for 
the period of the leave of absence.  The employing department, 
at its option, may pay the employer amount on behalf of the 
member.  Payment made under this subdivision must include 
interest at the rate of 8.5 percent per year, and must be 
completed within one year of the return from the leave of 
absence. 
    Sec. 6.  Minnesota Statutes 1992, section 352D.02, 
subdivision 3, is amended to read: 
    Subd. 3.  An election to not participate is irrevocable 
during any period of covered employment.  An employee credited 
with employee shares in the unclassified program, after 
acquiring credit for ten years of allowable service but prior to 
termination of covered employment, may, notwithstanding other 
provisions of this subdivision, elect to terminate participation 
in the unclassified plan and be covered by the regular plan by 
filing such election with the executive director.  The executive 
director shall thereupon redeem the employee's total shares and 
shall credit to the employee's account in the regular plan the 
amount of contributions that would have been so credited had the 
employee been covered by the regular plan during the employee's 
entire covered employment.  The balance of money so redeemed and 
not credited to the employee's account shall be transferred to 
the state contribution reserve of the state employees retirement 
fund, except that the employee contribution paid to the 
unclassified plan in excess of that required by the general 
employee plan shall be refunded to the employee as provided in 
section 352.22, except that (1) the employee contribution paid 
to the unclassified plan must be compared to (2) the employee 
contributions that would have been paid to the general plan for 
the comparable period, if the individual had been covered by 
that plan.  If clause (1) is greater than clause (2), the 
difference must be refunded to the employee as provided in 
section 352.22.  If clause (2) is greater than clause (1), the 
difference must be paid by the employee within six months of 
electing general plan coverage or before the effective date of 
the annuity, whichever is sooner.  
    Sec. 7.  Minnesota Statutes 1992, section 352D.02, is 
amended by adding a subdivision to read: 
    Subd. 6.  The provisions of section 352.04, subdivision 8, 
apply to this section. 
     Sec. 8.  [EFFECTIVE DATE.] 
    Sections 1 to 7 are effective on the day following final 
enactment. 

                               ARTICLE 4 

                PUBLIC EMPLOYEES RETIREMENT ASSOCIATION 

                       ADMINISTRATIVE LAW CHANGES 
    Section 1.  Minnesota Statutes 1992, section 353.01, 
subdivision 2, is amended to read: 
    Subd. 2.  [PUBLIC EMPLOYEE.] "Public employee" means any 
person an employee performing personal services for a 
governmental subdivision under subdivision 6, whose salary is 
paid, in whole or in part, from revenue derived from taxation, 
fees, assessments, or from other sources.  The term also 
includes special classes of persons listed in subdivision 2a, 
but excludes special classes of persons listed in subdivision 2b 
for purposes of membership in the association.  Public employee 
does not include independent contractors and their employees.  
    Sec. 2.  Minnesota Statutes 1992, section 353.01, 
subdivision 2a, is amended to read: 
    Subd. 2a.  [INCLUDED EMPLOYEES.] The following persons are 
included in the meaning of "public employee":  Public employees 
whose salary from one governmental subdivision exceeds $425 in 
any month shall participate as members of the association.  If 
the salary of an employee is less than $425 in a subsequent 
month, the employee retains membership eligibility.  The 
following persons are considered public employees: 
    (1) employees whose annual salary from one governmental 
subdivision exceeds a stipulation prepared 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 expected to be of less than a full 
year's duration.  If compensation from one governmental 
subdivision to an employee under this clause 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 under 
section 353.27, subdivision 12, from the month in which the 
employee's salary first exceeded $425; 
    (2) employees whose total salary from concurrent 
nontemporary positions in one governmental subdivision exceeds 
$425 in any month; 
    (3) elected or appointed officers and for service to which 
they were elected by the public-at-large, or persons appointed 
to fill a vacancy in an elective office, who elect to 
participate by filing an application for membership, but not for 
service on a joint or regional board that is a governmental 
subdivision under subdivision 6, paragraph (a), unless the 
salary earned for that service exceeds $425 in any month.  The 
option to become a member, once exercised, may not be withdrawn 
during the incumbency of the person in office; 
    (4) members who are appointed by the governor to be a state 
department head and elect not to be covered by the Minnesota 
state retirement system under section 352.021; 
    (5) employees of elected officers; 
    (2) (6) persons who elect to remain members under section 
480.181, subdivision 2; 
    (3) officers and employees of the public employees 
retirement association; 
    (4) employees of the league of Minnesota cities; 
    (5) employees of the association of metropolitan 
municipalities; 
    (6) officers and employees of public hospitals owned or 
operated by, or an integral part of, a governmental subdivision 
or governmental subdivisions; 
    (7) employees of a school district who receive separate 
salaries for driving their own buses; 
    (8) employees of the association of Minnesota counties; 
    (9) employees of the metropolitan intercounty association; 
    (10) employees of the Minnesota municipal utilities 
association; 
    (11) (8) employees of the Minnesota association of 
townships when the board of the association, at its option, 
certifies to the executive director that its employees are to be 
included for purposes of retirement coverage, in which case 
coverage of all employees of the association is permanent; 
    (12)  employees of the metropolitan airports commission if 
employment initially commenced after June 30, 1979; 
    (13) employees of the Minneapolis employees retirement fund 
if employment initially commenced after June 30, 1979; 
    (14) employees of the range association of municipalities 
and schools; 
    (15) employees of the soil and water conservation 
districts; 
    (16) (9) employees of a county historical society who are 
county employees; 
    (17) (10) employees of a county historical society located 
in the county whom the county, at its option, certifies to the 
executive director to be county employees for purposes of 
retirement coverage under this chapter, which status must be 
accorded to all similarly situated county historical society 
employees and, once established, must continue as long as a 
person is an employee of the county historical society and is 
not excluded under subdivision 2b; and 
    (18) employees of an economic development authority created 
or operating under sections 469.090 to 469.108; 
    (19) employees of the department of military affairs of the 
state of Minnesota who are full-time firefighters; and 
    (20) (11) employees who became members before July 1, 1988, 
based on the total salary of positions held in more than one 
governmental subdivision. 
    Sec. 3.  Minnesota Statutes 1992, section 353.01, 
subdivision 2b, is amended to read: 
    Subd. 2b.  [EXCLUDED EMPLOYEES.] The following persons are 
excluded from the meaning of "public employee" public employees 
shall not participate as members of the association: 
    (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 elected public 
officers, or persons appointed to fill a vacancy in an elective 
office, who do not elect to participate in the association by 
filing an application for membership; 
    (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) (4) employees who are hired for a period of less than 
six consecutive months temporary position under subdivision 12a, 
and employees who resign from a nontemporary position and accept 
a temporary position within 30 days in the same governmental 
subdivision, but not those employees who are hired for an 
unlimited period but are serving a probationary period.  If the 
period of employment is extended extends beyond the six-month 
period six consecutive months 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 resigns or is 
dismissed from a temporary position and within 30 days accepts 
another temporary position in the same governmental subdivision 
is determined on the total length of employment rather than on 
each separate position.  Membership eligibility of an employee 
who holds concurrent temporary employment of six months or less 
and nontemporary positions in one governmental subdivision must 
be is determined by the length of employment and salary of each 
separate 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) (5) employees whose actual compensation salary from one 
governmental subdivision does not exceed $425 per month, or 
whose annual compensation salary from one governmental 
subdivision is stipulated does not exceed a stipulation prepared 
in advance, in writing, to be not more than that the salary must 
not exceed $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 (6) employees who are employed by reason of 
work emergency caused by fire, flood, storm, or similar 
disaster; 
    (10) (7) 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 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 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 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) (8) 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) (9) full-time students who are enrolled and are 
regularly attending classes at an accredited school, college, or 
university and who are part-time employees as defined by a 
governmental subdivision; 
    (14) (10) resident physicians, medical interns, and 
pharmacist residents and pharmacist interns who are serving in a 
degree or residency program in public hospitals and; 
    (11) 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) (12) 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; 
    (13) foreign citizens working for a governmental 
subdivision with a work permit of less than three years, or an 
H-1b visa valid for less than three years of employment.  Upon 
notice to the association that the work permit or visa extends 
beyond the three-year period, the foreign citizens are eligible 
for membership from the date of the extension; 
    (14) public hospital employees who elected not to 
participate as members of the association before 1972 and who 
did not elect to participate from July 1, 1988 to October 1, 
1988; 
     (19) (15) 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) (16) 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. 4.  Minnesota Statutes 1992, section 353.01, 
subdivision 6, is amended to read: 
    Subd. 6.  [GOVERNMENTAL SUBDIVISION.] (a) "Governmental 
subdivision" means a county, city, town, school district within 
this state, or a department or unit of state government, or any 
public body whose revenues are derived from taxation, fees, 
assessments or from other sources, but. 
    (b) Governmental subdivision also means the public 
employees retirement association, the league of Minnesota 
cities, the association of metropolitan municipalities, public 
hospitals owned or operated by, or an integral part of, a 
governmental subdivision or governmental subdivisions, the 
association of Minnesota counties, the metropolitan intercounty 
association, the Minnesota municipal utilities association, the 
metropolitan airports commission, and the Minneapolis employees 
retirement fund for employment initially commenced after June 
30, 1979, the range association of municipalities and schools, 
soil and water conservation districts, and economic development 
authorities created or operating under sections 469.090 to 
469.108. 
    (c) Governmental subdivision does not mean any municipal 
housing and redevelopment authority organized under the 
provisions of sections 469.001 to 469.047; or any port authority 
organized under sections 469.048 to 469.068; or any hospital 
district organized or reorganized prior to July 1, 1975, under 
sections 447.31 to 447.37 or the successor of the district, nor 
the Minneapolis community development agency.  
    Sec. 5.  Minnesota Statutes 1992, section 353.01, 
subdivision 7, is amended to read: 
    Subd. 7.  [MEMBER.] "Member" means a person who accepts 
employment as a "public employee" under subdivision 2, is an 
employee under subdivision 2a, and is not covered by the plan 
established in chapter 353D.  A person who is a member remains a 
member while performing services as a public employee and while 
on an authorized leave of absence or an authorized temporary 
layoff.; provided, however, (1) that any elected public officer 
or any person appointed to fill a vacancy in an elective office 
shall have the right to exercise an option to become a member by 
filing application for membership, but the option to become a 
member, once exercised, may not be withdrawn during the 
incumbency of the person in office; and (2) that any member who 
is appointed by the governor to be a state department head and 
elects pursuant to section 352.021, subdivision 3, not to be 
covered by the Minnesota state retirement system, shall remain a 
member of the public employees retirement association.  
Membership in the retirement association of any person shall 
terminate upon the person ceasing to be a "public employee." 
    Sec. 6.  Minnesota Statutes 1992, section 353.01, is 
amended by adding a subdivision to read: 
    Subd. 7a.  [FORMER MEMBER.] "Former member" means a member 
of the association who terminates public service under 
subdivision 11a or membership under subdivision 11b. 
    Sec. 7.  Minnesota Statutes 1992, section 353.01, 
subdivision 10, is amended to read: 
    Subd. 10.  [SALARY.] (a) "Salary" means the periodical 
compensation of a public employee, before deductions for 
deferred compensation, supplemental retirement plans, or other 
voluntary salary reduction programs, and also means "wages" and 
includes net income from fees.  
    (b) Salary does not mean fees paid to district court 
reporters are not salary., unused annual or sick leave payments, 
in lump-sum or periodic payments, are not salary. severance 
payments, reimbursement of expenses, lump-sum settlements not 
attached to a specific earnings period, or workers' compensation 
payments, and all.  Salary does not mean employer-paid flexible 
spending accounts, cafeteria plans, health care expense 
accounts, day care expenses, or any payments in lieu of any 
employer-paid group insurance coverage, including the difference 
between single and family rates that may be paid to a member 
with single coverage, are not salary.  Before the time that all 
sick leave has been used, amounts paid to an employee under a 
disability insurance policy or program where the employer paid 
the premiums are salary, and, after all sick leave has been 
used, the payment is not salary.  
    (b) (c) Except as provided in sections 353.86 or 353.87, 
compensation of any kind paid to volunteer ambulance service 
personnel or volunteer firefighters, as defined in subdivisions 
35 and 36, is not salary.  
    (c) (d) For a public employee who has prior service covered 
by a local police or firefighters relief association that has 
consolidated with the public employees retirement association 
and who has elected coverage under the public employees police 
and fire fund benefit plan under section 353A.08 following the 
consolidation, "salary" means the rate of salary upon which 
member contributions to the special fund of the relief 
association were made prior to the effective date of the 
consolidation as specified by law and by bylaw provisions 
governing the relief association on the date of the initiation 
of the consolidation procedure and the actual periodical 
compensation of the public employee after the effective date of 
the consolidation. 
    Sec. 8.  Minnesota Statutes 1992, section 353.01, 
subdivision 11a, is amended to read: 
    Subd. 11a.  [TERMINATION OF PUBLIC SERVICE.] "Termination 
of public service" occurs when an officer or employee terminates 
employment or is on temporary layoff as defined in subdivision 
12 a member resigns or is dismissed from public service by the 
employing governmental subdivision, as evidenced by appropriate 
written record transmitted to the association, and does not 
within 30 days of termination or expiration of the temporary 
layoff resignation or dismissal return to a nontemporary 
employment position in the same governmental subdivision. 
    Sec. 9.  Minnesota Statutes 1992, section 353.01, is 
amended by adding a subdivision to read: 
    Subd. 11b.  [TERMINATION OF MEMBERSHIP.] "Termination of 
membership" occurs: 
    (1) upon termination of public service under subdivision 
11a; 
    (2) when a member who is a part-time employee is excluded 
from membership as a full-time student under subdivision 2b, 
clause (9); 
    (3) when a member does not return to work within 30 days of 
the expiration of an authorized temporary layoff under 
subdivision 12 or an authorized leave of absence under 
subdivision 31.  If the employee subsequently returns to a 
position in the same governmental subdivision, the employee 
shall not again be required to earn a salary in excess of $425 
per month, unless the employee has taken a refund of accumulated 
employee deductions plus interest under section 353.34, 
subdivision 1; or 
     (4) when a person files a written election to discontinue 
employee deductions under section 353.27, subdivision 7, 
paragraph (a), clause (1). 
    Sec. 10.  Minnesota Statutes 1992, section 353.01, 
subdivision 12, is amended to read: 
    Subd. 12.  [AUTHORIZED TEMPORARY LAYOFF.] "Authorized 
temporary layoff," including seasonal leave of absence, means a 
suspension of public employment service authorized by the 
employing governmental subdivision for a period not exceeding 
three months in any calendar year, by action of the employing 
governmental subdivision as evidenced by appropriate record of 
the employer and promptly transmitted to the association. 
    Sec. 11.  Minnesota Statutes 1992, section 353.01, is 
amended by adding a subdivision to read: 
     Subd. 12a.  [TEMPORARY POSITION.] "Temporary position" 
means an employment position of six months or less in which a 
person is a public employee under subdivision 2, but not an 
employment position for an unlimited period in which a person 
serves a probationary period. 
    Sec. 12.  Minnesota Statutes 1992, 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 expiration of the 
leave of absence terminates or within 20 days after termination 
of public service under subdivision 11a.  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 
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 
an annual rate of 8.5 percent compounded annually from the date 
of the termination of the leave of absence to the date payment 
is made.  An employee shall return to public service for a 
minimum of 90 calendar days to be eligible to pay employee and 
employer contributions for a subsequent authorized leave of 
absence without pay. 
    (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 end of the 
normal cycle 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 sooner.  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.  An employee who has received one year of 
allowable service shall return to public service for a minimum 
of 90 calendar days to receive allowable service for a 
subsequent authorized sick leave of absence. 
    (f) "Allowable service" also means an authorized temporary 
layoff under subdivision 12.  The association shall grant a 
maximum of three months allowable service per authorized 
temporary layoff in one calendar year.  An employee shall return 
to public service for a minimum of 90 calendar days to receive 
allowable service for a subsequent authorized temporary layoff. 
    (g) "Allowable service" also means a maternity, paternity, 
or adoption parental leave.  The association shall grant a 
maximum of two months service credit for a maternity, paternity, 
or adoption parental leave, within six months after the birth or 
adoption, upon documentation from the member's governmental 
subdivision.  A member on personal leave of absence who provides 
the association with or presentation of a birth certificate or 
other evidence of birth or adoption during the personal leave 
time period also receives up to two months of service credit to 
the association. 
    (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 an annual rate 
of 8.5 percent 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 governmental subdivision 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. 
    (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 (h) and section 352.01, subdivision 11.  
    (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 retirement association, 
and who has elected the type of benefit coverage provided by the 
public employees police and fire fund 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. 13.  Minnesota Statutes 1992, section 353.01, 
subdivision 28, is amended to read: 
    Subd. 28.  [RETIREMENT.] (a) "Retirement" means the 
withdrawal from active public service by a member who is paid a 
retirement annuity that begins to accrue commencement of payment 
of an annuity based on a date designated by the board of 
trustees.  This date determines the rights specified in under 
this chapter which occur either before or after retirement.  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 
is subject to termination of public service under subdivision 
11a and termination of membership under subdivision 11b. 
    (b) 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. 14.  Minnesota Statutes 1992, section 353.01, 
subdivision 31, is amended to read: 
    Subd. 31.  [AUTHORIZED LEAVE OF ABSENCE.] "Authorized leave 
of absence" means any period during which a member is duly 
authorized by an employer to refrain from active employment, 
with or without pay, evidenced by appropriate record of the 
employer and promptly transmitted to the association. 
    Sec. 15.  Minnesota Statutes 1992, section 353.01, 
subdivision 32, is amended to read: 
    Subd. 32.  [COORDINATED MEMBER.] "Coordinated member" means 
any public employee, including any public hospital employee, 
covered by any agreement or modification made between the state 
and the Secretary of Health, Education and Welfare, making the 
provisions of the federal old age, survivors and disability 
insurance act applicable to such the member if membership 
eligibility criteria are met under this chapter.  Coordinated 
member also means a basic member who terminates public service 
under subdivision 11a, reenters public service in a nontemporary 
position, and meets the membership eligibility criteria under 
this chapter. 
    Sec. 16.  Minnesota Statutes 1992, section 353.017, is 
amended to read: 
    353.017 [EMPLOYEES OF LABOR ORGANIZATIONS.] 
    Subdivision 1.  [QUALIFICATIONS.] A former member of the 
association, or a current coordinated member on an authorized 
leave of absence, who is an employee of a labor organization 
that represents public employees who are association members may 
elect pursuant to, under subdivision 2, to be a coordinated 
member with respect to service with such the labor organization 
unless specifically exempt under section 353.01, subdivision 2b. 
    Subd. 2.  [ELECTION.] A person described in subdivision 
1 will be is covered by the association if written election to 
be covered is delivered to the board association within 30 days 
six months of being employed employment by such the labor 
organization or within six months after July 1, 1993, whichever 
is applicable. 
    Subd. 3.  [CONTRIBUTIONS.] The employee, employer and 
additional employer contributions shall be the obligation of the 
employee who elects coverage herein in accord with this chapter; 
provided, however, the employer, labor organization, may pay the 
employer and additional employer contributions.  The employer 
shall, in any event, deduct the necessary contributions from the 
employee's salary and remit all contributions to the public 
employees retirement association pursuant to section 353.27, 
subdivisions 4, 7, 10, 11, and 12. 
    Subd. 5.  [BOARD MEMBERSHIP EXCLUDED.] Persons who become 
association members pursuant to this section shall not be 
eligible for election to the board of trustees. 
    Sec. 17.  Minnesota Statutes 1992, section 353.27, 
subdivision 7, is amended to read: 
    Subd. 7.  [ADJUSTMENT FOR ERRONEOUS RECEIPTS OR 
DISBURSEMENTS.] (a)  [DEDUCTIONS TAKEN IN ERROR.] Deductions 
taken in error by the employer from the salary of an employee 
for the retirement fund and transmitted to the association must 
be refunded to the employee under section 353.34, subdivision 
2.  The employer contribution and the additional employer 
contribution, if any, for the erroneous employee contribution 
must be refunded to the employer, provided that the refund of 
deductions taken in error has been made within three calendar 
years of the calendar year in which the initial deduction taken 
in error was received by the association.  A refund of 
deductions taken in error from sick leave, vacation, workers' 
compensation, and severance pay may be made at any time.  If the 
refund of deductions taken in error has not been made within 
three calendar years of the calendar year in which the initial 
deduction taken in error was received by the association, the 
erroneous contributions are considered valid, and the years of 
allowable service attributable to the deductions taken in error 
must be credited to the member under section 353.01, subdivision 
16.  Notwithstanding a law to the contrary, the employee may 
continue to be a member until termination of public 
service.  Erroneous employee deductions and erroneous employer 
contributions and additional employer contributions for a 
person, who otherwise does not qualify for membership under this 
chapter, are considered: 
    (1) valid if the initial erroneous deduction began before 
January 1, 1990.  Upon determination of the error by the 
association, the person may: 
    (i) continue membership in the association while employed 
in the same position for which erroneous deductions were taken; 
or 
    (ii) file a written election to terminate membership and 
apply for a refund or defer an annuity under section 353.34; 
    (2) invalid, if the initial erroneous employee deduction 
began on or after January 1, 1990.  Upon determination of the 
error, the association shall require the employer to discontinue 
erroneous employee deductions and erroneous employer 
contributions and additional employer contributions.  Upon 
discontinuance, the association shall refund all erroneous 
employee deductions to the person, with interest, under section 
353.34, subdivision 2, and all erroneous employer contributions 
and additional employer contributions to the employer.  No 
person may claim a right to continued or past membership in the 
association based on erroneous deductions which began on or 
after January 1, 1990; 
    (3) a refund of deductions taken in error from sick leave, 
vacation, workers' compensation, and severance pay may be made 
at any time. 
    (b)  [ERRONEOUS DISBURSEMENT.] In the event a salary 
warrant or check from which a deduction for the retirement fund 
was taken has been canceled or the amount of the warrant or 
check returned to the funds of the department making the 
payment, a refund of the sum deducted, or a portion of it that 
is required to adjust the deductions, must be made to the 
department or institution. 
    Sec. 18.  Minnesota Statutes 1992, section 353.29, 
subdivision 1, is amended to read: 
    Subdivision 1.  [AGE AND ALLOWABLE SERVICE REQUIREMENTS.] 
Upon separation from public service, any termination of 
membership, a person who has attained normal retirement age and 
who received credit for not less than three years of allowable 
service is entitled upon application to a retirement 
annuity.  Such The retirement annuity is known as the "normal" 
retirement annuity. 
    Sec. 19.  Minnesota Statutes 1992, section 353.33, 
subdivision 1, is amended to read: 
    Subdivision 1.  [AGE, SERVICE, AND SALARY REQUIREMENTS.] A 
coordinated member who has at least three years of allowable 
service and becomes totally and permanently disabled before 
normal retirement age, and after a basic member who has at least 
three years of allowable service and who becomes totally and 
permanently disabled is entitled to a disability benefit in an 
amount 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.  A repayment of a refund may must be 
made 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 
later.  No purchase of prior service or payment made in lieu of 
salary deductions otherwise authorized 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 under this section is filed.  
    Sec. 20.  Minnesota Statutes 1992, section 353.33, 
subdivision 2, is amended to read: 
    Subd. 2.  [APPLICATIONS; ACCRUAL OF BENEFITS.] Every claim 
or demand for a total and permanent disability benefit must be 
initiated by written application in the manner and form 
prescribed by the executive director showing compliance with the 
statutory conditions qualifying the applicant for a total and 
permanent disability benefit and filed with the executive 
director.  A member or former member who became totally and 
permanently disabled during a period of membership may shall 
file application for total and permanent disability benefits 
within three years next following termination of public service, 
but not thereafter.  This benefit shall begin begins to accrue 
the day following the commencement of disability, 90 days 
preceding the filing of the application, or, if annual or sick 
leave is paid for more than the said 90-day period, from the 
date salary ceased, whichever is later.  No Payment shall must 
not accrue beyond the end of the month in which entitlement has 
terminated.  If the disabilitant dies prior to negotiating the 
check for the month in which death occurs, payment will be is 
made to the surviving spouse, or if none, to the designated 
beneficiary, or if none, to the estate.  An applicant for total 
and permanent disability benefits may file a retirement annuity 
application under section 353.29, subdivision 4, simultaneously 
with an application for total and permanent disability 
benefits.  The retirement annuity application is void upon the 
determination of the entitlement for disability benefits by the 
executive director.  If disability benefits are denied, the 
retirement annuity application must be initiated and processed. 
    Sec. 21.  Minnesota Statutes 1992, section 353.33, 
subdivision 3, is amended to read: 
    Subd. 3.  [COMPUTATION OF BENEFITS.] This disability 
benefit is an amount equal to the normal annuity payable to a 
member who has reached normal retirement age with the same 
number of years of allowable service and the same average 
salary, as provided in section 353.29, subdivisions 2 and 3. 
     A "basic member" shall receive in addition a supplementary 
monthly benefit computed in accordance with the following table: 
of $25 to age 65 or the five-year anniversary of the effective 
date of the disability benefit, whichever is later. 
 
               Age when           Supplementary        
               Disabled              benefit           
            Under 56                   $50             
                  56                    45             
                  57                    40             
                  58                    35             
                  59                    30             
                  60                    25             
                  61                    20             
                  62                    15             
                  63                    10             
                  64                     5             
    If the disability benefits provided in under this 
subdivision exceed the average salary as defined in section 
353.29, subdivision 2, the disability benefits shall must be 
reduced to an amount equal to said average salary. 
    Sec. 22.  Minnesota Statutes 1992, section 353.33, 
subdivision 4, is amended to read: 
    Subd. 4.  [PROCEDURE TO DETERMINE ELIGIBILITY.] The 
applicant shall provide and authorize release of medical 
evidence, including all medical records and relevant information 
from any source, to support the application for total and 
permanent disability benefits.  The medical adviser shall verify 
the medical evidence and, if necessary for disability 
determination, suggest referral of applicant to specialized 
medical consultants.  The association shall also obtain from the 
employer, certification of the member's past public service, 
dates of paid sick leave and vacation beyond the last working 
day and whether or not sick leave or annual leave has been 
allowed.  If upon consideration of the medical reports evidence 
received and the recommendations of the medical adviser, it is 
determined that the applicant is totally and permanently 
disabled within the meaning of the law, the association shall 
grant the person a disability benefit.  The fact that an 
employee is placed on leave of absence without compensation 
because of disability shall does not bar the person from 
receiving a disability benefit. 
    Sec. 23.  Minnesota Statutes 1992, section 353.33, 
subdivision 6, is amended to read: 
    Subd. 6.  [CONTINUING ELIGIBILITY FOR BENEFITS.] The 
association shall determine eligibility for continuation of 
disability benefits shall be determined by the association, 
which has authority to and require periodic examinations and 
evaluations of disabled members as frequently as deemed 
necessary.  The association shall require the disabled member to 
provide and authorize release of medical evidence, including all 
medical records and information from any source, relating to an 
application for continuation of disability benefits.  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 must cease the first of the month following 
the reinstatement to the payroll. 
    Sec. 24.  Minnesota Statutes 1992, section 353.33, 
subdivision 8, is amended to read: 
    Subd. 8.  [REFUSAL OF EXAMINATION OR MEDICAL 
EVIDENCE.] Should any such disabled If a person refuse 
applying for or receiving a disability benefit refuses to submit 
to a medical examination as herein provided, payments by the 
fund shall be discontinued, and all rights of the member in any 
disability benefit shall be revoked by the board. under 
subdivision 6, or fails to provide or authorize the release of 
medical evidence under subdivisions 4 and 6, the association 
shall cease the application process or discontinue the payment 
of a disability benefit, whichever is applicable.  Upon receipt 
of the requested medical evidence, the association shall resume 
the application process or the payment of a disability benefit 
upon approval for the continuation, whichever is applicable.  
    Sec. 25.  Minnesota Statutes 1992, section 353.33, 
subdivision 11, is amended to read: 
    Subd. 11.  [COORDINATED MEMBER RETIREMENT STATUS AT NORMAL 
RETIREMENT AGE.] No person shall be is entitled to receive 
disability benefits and a retirement annuity at the same time.  
The disability benefits paid to a person hereunder shall 
coordinated member must terminate when the person reaches normal 
retirement age.  If the person coordinated member is still 
totally and permanently disabled when the person attains 
the upon attaining normal retirement age, the person shall 
be coordinated member is deemed to be on retirement 
status and,.  If the person had elected an optional 
annuity pursuant to is elected under subdivision 3a, the 
coordinated member shall receive an annuity in accordance with 
under the terms of the optional annuity previously elected, or, 
if the person had not elected an optional annuity pursuant to is 
not elected under subdivision 3a, the coordinated member may at 
the option of the person either elect to receive either a normal 
retirement annuity as provided in under section 353.29 or normal 
retirement an annuity equal to the disability benefit paid 
before the person reached coordinated member reaches normal 
retirement age, whichever amount is greater, or elect to receive 
an optional annuity as provided in under section 353.30, 
subdivision 3.  Any The annuity of a disabled person coordinated 
member who attains normal retirement age shall have the 
annuity must be computed in accordance with under the law in 
effect upon attainment of that normal retirement age.  Election 
of an optional annuity shall must be made prior to before the 
person attaining the coordinated member attains normal 
retirement age.  If an optional annuity is elected, the election 
shall be is effective on the date on which the person attains 
normal retirement age and the optional annuity shall begin 
begins to accrue on the first day of the month next following 
the month in which the person attains that age.  
    Sec. 26.  Minnesota Statutes 1992, section 353.33, is 
amended by adding a subdivision to read: 
     Subd. 12.  [BASIC DISABILITY SURVIVOR BENEFITS.] If a basic 
member who is receiving a disability benefit under subdivision 3:
    (a) dies before attaining age 65 or within five years of 
the effective date of the disability, whichever is later, the 
surviving spouse shall receive a survivor benefit under section 
353.31, unless the surviving spouse elected to receive a refund 
under section 353.32, subdivision 1. 
    (b) is living at age 65 or five years after the effective 
date of the disability, whichever is later, the basic member may 
continue to receive a normal disability benefit, or elect a 
joint and survivor optional annuity under section 353.31, 
subdivision 1b. The election of the joint and survivor optional 
annuity must occur within 90 days of age 65 or the five-year 
anniversary of the effective date of the disability benefit, 
whichever is later.  The optional annuity takes effect on the 
first of the month following the month in which the person 
attains age 65 or reaches the five-year anniversary of the 
effective date of the disability benefit, whichever is later. 
    (c) if there is a dependent child or children under 
paragraph (a) or (b), the association shall grant a dependent 
child benefit under section 353.31, subdivision 1b, paragraph 
(b). 
    Sec. 27.  Minnesota Statutes 1992, section 353.34, 
subdivision 1, is amended to read: 
    Subdivision 1.  [REFUND OR DEFERRED ANNUITY.] A former 
member who ceases to be a public employee by reason of 
termination of public service, or who is on a continuous layoff 
for more than 120 calendar days, is entitled to a refund of 
accumulated employee deductions under subdivision 2, or to a 
deferred annuity under subdivision 3.  An active member of a 
fund enumerated in section 356.30, subdivision 3, clause (7), 
(8), or (14), who terminates public service in any of those 
funds and becomes a member of another fund enumerated in those 
clauses may receive a refund of employee contributions plus six 
percent interest compounded annually from the fund in which the 
member terminated service.  Application for a refund may not be 
made prior to the date of termination of public service or the 
expiration of 120 days of layoff termination of membership, 
whichever is sooner.  A refund must be paid within 120 days 
following receipt of the application unless the applicant has 
again become a public employee required to be covered by the 
association. 
    Sec. 28.  Minnesota Statutes 1992, section 353.34, 
subdivision 3, is amended to read: 
    Subd. 3.  [DEFERRED ANNUITY; ELIGIBILITY; COMPUTATION.] A 
member with at least three years of allowable service when 
termination of public service or termination of membership 
occurs has the option of leaving the accumulated deductions in 
the fund and being entitled to a deferred retirement annuity 
commencing at normal retirement age or to a deferred early 
retirement annuity under section 353.30, subdivision 1, 1a, 1b, 
1c, or 5.  The deferred annuity must be computed under section 
353.29, subdivisions 2 and 3, on the basis of the law in effect 
on the date of termination of public service or termination of 
membership and must be augmented as provided in section 353.71, 
subdivision 2.  A former member qualified to apply for a 
deferred retirement annuity may revoke this option at any time 
before the commencement of deferred annuity payments by making 
application for a refund.  The person is entitled to a refund of 
accumulated member contributions within 30 days following date 
of receipt of the application by the executive director. 
    Sec. 29.  Minnesota Statutes 1992, section 353.35, is 
amended to read: 
    353.35 [CONSEQUENCES OF REFUND; REPAYMENT, RIGHTS 
RESTORED.] 
    Subdivision 1.  [REFUND RIGHTS.] When any former member 
accepts a refund, all existing service credits and all rights 
and benefits to which the person was entitled prior to the 
acceptance of the refund must terminate and must not again.  The 
rights and benefits of a former member must not be restored 
until the person returns to active service and acquires at least 
18 six months of allowable service credit after taking the last 
refund and repays all refunds the refund or refunds taken and 
interest received under section 353.34, subdivisions 1 and 2, 
plus interest at an annual rate of 8.5 percent compounded 
annually.  If the person elects to restore service credit in a 
particular fund from which the person has taken more than one 
refund, the person must repay all refunds to that fund.  All 
refunds must be repaid within six months of the last date of 
termination of public service. 
    If more than one refund has been taken, the person may 
repay all refunds or only the refund for the fund in which the 
person had most recently been a member, with interest at an 
annual rate of 8.5 percent compounded annually.  All refunds 
must be repaid within six months of the last date of termination 
of public service.  
    Subd. 2.  [REFUND REPAYMENT.] A person who receives a 
refund of accumulated employee deductions, plus interest, may 
repay the total amount of the refund including the interest, 
within 30 days of the date the refund was issued, to retain 
allowable service. 
    Sec. 30.  Minnesota Statutes 1992, section 353.37, is 
amended to read: 
    353.37 [PUBLIC REEMPLOYMENT OF ANNUITANT.] 
    Subdivision 1.  [EFFECT ON ANNUITY SALARY MAXIMUMS.] (a) 
The annuity of a person otherwise eligible for an annuity under 
this chapter must be suspended under subdivision 2 or reduced 
under subdivision 3, whichever results in the higher annual 
annuity amount, if the person reenters public service as a 
nonelective employee of a governmental subdivision in a position 
covered by this chapter, if earned compensation and salary for 
the reemployment service equals or exceeds the annual maximum 
earnings allowable for that age for the continued receipt of 
full benefit amounts monthly under the federal old age, 
survivors and disability insurance program as set by the 
secretary of health and human services under United States Code, 
title 42, section 403, in any calendar year.  In the event that 
If the person has not yet reached the minimum age for the 
receipt of social security benefits, the maximum earnings salary 
for the person are is equal to the annual maximum earnings 
allowable for the minimum age for the receipt of social security 
benefits.  
    Subd. 2.  [SUSPENSION OF ANNUITY.] The association shall 
suspend the annuity on the first of the month after the month in 
which the salary of the reemployed annuitant exceeds the 
maximums set in subdivision 1, based only on those months in 
which the annuitant is actually employed in nonelective service 
in a position covered under this chapter.  An annuitant who is 
elected to public office after retirement may hold office and 
receive an annuity otherwise payable from the association. 
    (b) Subd. 3.  [REDUCTION OF ANNUITY.] The association shall 
reduce the amount of the reduction is annuity as follows: 
    (1) (a) for a person who has not reached normal retirement 
age, one-half of the amount in excess of the applicable 
reemployment income maximum specified in this under subdivision 
1; 
    (2) (b) for a person who has reached normal retirement age, 
but has not reached age 70, one-third of the amount in excess of 
the applicable reemployment income maximum specified in this 
under subdivision 1. 
    (c) for a person who has reached age 70, or for income 
salary earned through service in an elected office, there is no 
reduction upon reemployment, regardless of income.  Any 
reduction must be made from the annuity payable for the calendar 
year immediately following the calendar year in which the excess 
amount was earned. 
    Subd. 4.  [RESUMPTION OF ANNUITY.] The association shall 
resume paying a full annuity to the reemployed annuitant at the 
start of each calendar year until the salary exceeds the 
maximums under subdivision 1, or on the first of the month 
following termination of public service or termination of 
membership, whichever is sooner.  The executive director may 
adopt policies regarding the suspension and reduction of 
annuities under this section.  
    (c) Subd. 5.  [EFFECT ON ANNUITY.] Except as provided 
in paragraphs (a) and (b) under this section, public service 
performed by an annuitant subsequent to retirement under this 
chapter does not increase or decrease the amount of an annuity.  
The annuitant may shall not make any further contributions to 
the association's defined benefit plan by reason of this 
subsequent public service. 
    Sec. 31.  Minnesota Statutes 1992, section 353.64, 
subdivision 1, is amended to read: 
    Subdivision 1.  [POLICE AND FIRE FUND MEMBERSHIP.] Any (a) 
A person who prior to July 1, 1961, was a member of the police 
and fire fund, by virtue of being a police officer or 
firefighter, shall, as long as the person remains in either 
position, be deemed to continue membership in the fund.  
    Any (b) A person who was employed by a governmental 
subdivision as a police officer and was a member of the police 
and fire fund on July 1, 1978, by virtue of being a police 
officer as defined by this section on that date shall be 
entitled, and if employed by the same governmental subdivision 
in a position in the same department in which the person was 
employed on that date, to shall continue membership in the fund 
whether or not that person has the power of arrest by warrant 
after that date. 
    Any (c) A person who was employed by a governmental 
subdivision as a police officer or a firefighter, whichever 
applies, was an active member of the local police or salaried 
firefighters relief association located in that governmental 
subdivision by virtue of that employment as of the effective 
date of the consolidation as authorized by sections 353A.01 to 
353A.10, and has elected coverage by the public employees police 
and fire fund benefit plan, shall be considered to be become a 
member of the police and fire fund after that date if employed 
by the same governmental subdivision in a position in the same 
department in which the person was employed on that date. 
    (d) Any other employee serving on a full-time basis as a 
police officer or firefighter on or after July 1, 1961, shall 
become a member of the public employees police and fire fund.  
     Any (e) An employee serving on less than a full-time basis 
as a police officer shall become a member of the public 
employees police and fire fund only after a resolution stating 
that the employee should be covered by the police and fire fund 
is adopted by the governing body of the governmental subdivision 
employing the person declaring that the position which the 
person holds is that of a police officer. 
    Any (f) An employee serving on less than a full-time basis 
as a firefighter shall become a member of the public employees 
police and fire fund only after a resolution stating that the 
employee should be covered by the police and fire fund is 
adopted by the governing body of the governmental subdivision 
employing the person declaring that the position which the 
person holds is that of a firefighter. 
    Any (g) A police officer or firefighter employed by a 
governmental subdivision who by virtue of that employment is 
required by law to be a member of and to contribute to any 
police or firefighter relief association governed by section 
69.77 which has not consolidated with the public employees 
police and fire fund and any police officer or firefighter of a 
relief association that has consolidated with the association 
for which the employee has not elected coverage by the public 
employees police and fire fund benefit plan as provided in 
sections 353A.01 to 353A.10 shall not be become a member of this 
the public employees police and fire fund. 
    Sec. 32.  Minnesota Statutes 1992, 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. 33.  Minnesota Statutes 1992, section 353.64, is 
amended by adding a subdivision to read: 
    Subd. 7a.  [PENSION COVERAGE FOR CERTAIN METROPOLITAN 
TRANSIT COMMISSION POLICE OFFICERS.] A person who is employed as 
a full-time police officer on or after the first day of the 
first payroll period after the effective date of this section by 
the metropolitan transit commission and who is not eligible for 
coverage under the agreement with the Secretary of the federal 
Department of Health and Human Services making the provisions of 
the federal Old Age, Survivors, and Disability Insurance Act 
because the person's position is excluded from application under 
United States Code, sections 418(d)(5)(A) and 418(d)(8)(D), and 
under section 355.07, is a member of the public employees police 
and fire fund and is considered to be a police officer within 
the meaning of this section.  The metropolitan transit 
commission shall deduct the employee contribution from the 
salary of each full-time police officer as required by section 
353.65, subdivision 2, shall make the employer contribution for 
each full-time police officer as required by section 353.65, 
subdivision 3, and shall meet the employer recording and 
reporting requirements in section 353.65, subdivision 4. 
    Sec. 34.  Minnesota Statutes 1992, section 353.656, 
subdivision 1, is amended to read: 
    Subdivision 1.  [IN LINE OF DUTY; COMPUTATION OF BENEFITS.] 
Any A member of the police and fire fund less than 55 years of 
age, who becomes disabled and physically unfit to perform duties 
as a police officer or firefighter subsequent to June 30, 1973, 
as a direct result of an injury, sickness, or other disability 
incurred in or arising out of any act of duty, which has or is 
expected to render the member physically or mentally unable to 
perform duties as a police officer or firefighter for a period 
of at least one year, shall receive disability benefits during 
the period of such disability.  The benefits must be in an 
amount equal to 50 percent of the "average salary" pursuant to 
subdivision 3 plus an additional 2-1/2 percent of said average 
salary for each year of service in excess of 20 years.  Should 
disability under this subdivision occur before the member has at 
least five years of allowable service credit in the police and 
fire fund, the disability benefit must be computed on the 
"average salary" from which deductions were made for 
contribution to the police and fire fund. 
    Sec. 35.  Minnesota Statutes 1992, section 353.656, 
subdivision 1a, is amended to read: 
    Subd. 1a.  [OPTIONAL ANNUITY ELECTION.] A disabled member 
of the police and fire fund may elect to receive the normal 
disability benefit or an optional annuity as provided in section 
353.30, subdivision 3.  The election of an optional 
annuity shall may be made prior to commencement of payment of 
the disability benefit or as specified under subdivision 6a.  
The optional annuity shall begin to accrue on the same date as 
provided for the disability benefit.  
    (1) If the person who is not the spouse of the member is 
named as beneficiary of the joint and survivor optional annuity, 
the person is eligible to receive the annuity only if the 
spouse, on the disability application form prescribed by the 
executive director, permanently waives the surviving spouse 
benefits under section 353.657, subdivisions 2 and 2a.  If the 
spouse of the member refuses to permanently waive the surviving 
spouse coverage, the selection of a person other than the spouse 
of the member as a joint annuitant is invalid. 
    (2) If the spouse of the member permanently waives survivor 
coverage, the dependent child or children, if any, continue to 
be eligible for survivor benefits, including the minimum benefit 
under section 353.657, subdivision 3.  The designated optional 
annuity beneficiary may draw the monthly benefit; however, the 
amount payable to the dependent child or children and joint 
annuitant must not exceed the 70 percent maximum family benefit 
under section 353.657, subdivision 3.  If the maximum is 
exceeded, the benefit of the joint annuitant must be reduced to 
the amount necessary so that the total family benefit does not 
exceed the 70 percent maximum family benefit amount. 
      (3) If the spouse is named as the beneficiary of the joint 
and survivor optional annuity, the spouse may draw the monthly 
benefit; however, the amount payable to the dependent child or 
children and the joint annuitant must not exceed the 70 percent 
maximum family benefit under section 353.657, subdivision 3.  If 
the maximum is exceeded, each dependent child will receive ten 
percent of the member's specified average monthly salary, and 
the benefit to the joint annuitant must be reduced to the amount 
necessary so that the total family benefit does not exceed the 
70 percent maximum family benefit amount.  The joint and 
survivor optional annuity must be restored to the surviving 
spouse, plus applicable postretirement adjustments under section 
356.41, as the dependent child or children become no longer 
dependent under section 353.01, subdivision 15. 
    Sec. 36.  Minnesota Statutes 1992, section 353.656, 
subdivision 3, is amended to read: 
    Subd. 3.  [NONDUTY DISABILITY BENEFIT.] Any member who 
becomes disabled after not less than one year of allowable 
service, before reaching the age of 55, because of sickness or 
injury occurring while not on duty as a police officer or 
firefighter, and by reason of that sickness or injury the member 
has been or is expected to be unable to perform duties as a 
police officer or firefighter for a period of at least one year, 
is entitled to receive a disability benefit.  The benefit must 
be in the same amount and paid in the same manner as if the 
member were 55 years of age at the date of disability and the 
benefit were paid under section 353.651.  If a disability under 
this subdivision occurs after one but in less than 15 years of 
allowable service, the disability benefit must be the same as 
though the member had at least 15 years service.  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. 37.  Minnesota Statutes 1992, section 353.656, 
subdivision 5, is amended to read: 
    Subd. 5.  [PROOF OF DISABILITY.] No A disability benefit 
payment shall must not be made except upon adequate proof 
furnished to the association of the existence of such 
disability, and during the time when any such disability 
benefits are being paid, the association shall have has 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.  A person applying 
for or receiving a disability benefit shall provide or authorize 
release of medical evidence, including all medical records and 
information from any source, relating to an application for 
disability benefits. 
    Sec. 38.  Minnesota Statutes 1992, section 353.656, is 
amended by adding a subdivision to read: 
     Subd. 5a.  [CESSATION OF DISABILITY BENEFIT.] The 
association shall cease the payment of an in-line-of-duty or 
nonduty disability benefit the first of the month following the 
reinstatement of a member to full time or less than full-time 
service in a position covered by the police and fire fund. 
    Sec. 39.  Minnesota Statutes 1992, section 353.656, is 
amended by adding a subdivision to read: 
    Subd. 6a.  [DISABILITY SURVIVOR BENEFITS.] If a member who 
is receiving a disability benefit under subdivision 1 or 3: 
    (a) dies before attaining age 65 or within five years of 
the effective date of the disability, whichever is later, the 
surviving spouse shall receive a survivor benefit under section 
353.657, subdivision 2 or 2a, unless the surviving spouse 
elected to receive a refund under section 353.32, subdivision 
1.  The joint and survivor optional annuity under subdivision 2a 
is based on the minimum disability benefit under subdivision 1 
or 3, or the deceased member's allowable service, whichever is 
greater. 
    (b) is living at age 65 or five years after the effective 
date of the disability, whichever is later, the member may 
continue to receive a normal disability benefit, or the member 
may elect a joint and survivor optional annuity under section 
353.30.  The optional annuity is based on the minimum disability 
benefit under subdivision 1 or 3, or the member's allowable 
service, whichever is greater.  The election of this joint and 
survivor annuity must occur within 90 days of age 65 or the 
five-year anniversary of the effective date of the disability 
benefit, whichever is later.  The optional annuity takes effect 
the first of the month following the month in which the person 
attains age 65 or reaches the five-year anniversary of the 
effective date of the disability benefit, whichever is later. 
    (c) if there is a dependent child or children under 
paragraph (a) or (b), the association shall grant a dependent 
child benefit under section 353.657, subdivision 3. 
    Sec. 40.  Minnesota Statutes 1992, section 353A.08, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ELECTION OF COVERAGE BY CURRENT RETIREES.] 
A person who is receiving a service pension, disability benefit, 
or survivorship benefit is eligible to elect benefit coverage 
provided under the relevant provisions of the public employees 
police and fire fund benefit plan or to retain benefit coverage 
provided under the relief association benefit plan in effect on 
the effective date of the consolidation.  The relevant 
provisions of the public employees police and fire fund benefit 
plan for the person electing that benefit coverage shall be are 
limited to participation in the Minnesota postretirement 
investment fund for any future postretirement adjustments in 
based on the amount of the benefit or pension payable as of on 
December 31, if December 31 is the effective date of 
consolidation, or on the December 1 following the effective date 
of the consolidation, the date as of which pension or benefit 
payments are to be paid and the termination of a survivor or 
disability benefit or suspension of a retirement annuity before 
the death of the person if other than December 31.  The 
survivorship benefit payable on behalf of any service pension or 
disability benefit recipient who elects benefit 
coverage provided under the relevant provisions of the public 
employees police and fire fund benefit plan must be calculated 
under the relief association benefit plan in effect on the 
effective date of the consolidation and is subject to 
participation in the Minnesota postretirement investment fund 
for any future postretirement adjustments in based on the amount 
of the survivorship benefit payable.  
    By electing the public employees police and fire fund 
benefit plan, a current service pension or disability benefit 
recipient who, as of the first January 1 occurring after the 
effective date of consolidation, has been receiving the pension 
or benefit for at least seven months, or any survivor benefit 
recipient who, as of the first January 1 occurring after the 
effective date of consolidation, has been receiving the benefit 
on the person's own behalf or in combination with a prior 
applicable service pension or disability benefit for at least 
seven months is eligible to receive a partial adjustment payable 
from the Minnesota postretirement investment fund under section 
11A.18, subdivision 9. 
    The election by any pension or benefit recipient must be 
made on or before the deadline established by the board of the 
public employees retirement association in a manner that 
recognizes the number of persons eligible to make the election 
and the anticipated time required to conduct any required 
benefit counseling.  
    Sec. 41.  Minnesota Statutes 1992, section 353A.08, 
subdivision 3, is amended to read: 
    Subd. 3.  [ELECTION OF COVERAGE BY ACTIVE MEMBERS.] Any A 
person who is employed as a police officer or as a firefighter 
other than a volunteer firefighter, whichever applies, by the 
municipality and is an active member of the relief association 
shall have has the option to elect to have benefit coverage 
provided under the relevant provisions of the public employees 
police and fire fund benefit plan or to retain benefit coverage 
provided by the relief association benefit plan in effect on the 
effective date of consolidation.  The relevant provisions of the 
public employee police and fire fund benefit plan for the person 
electing that benefit coverage shall be are the relevant 
provisions of the public employee police and fire fund benefit 
plan applicable to retirement annuities, disability benefits, 
and survivor benefits, including participation in the Minnesota 
postretirement investment fund, but excluding any provisions 
governing the purchase of credit for prior service or making 
payments in lieu of member contribution deductions applicable to 
any period which occurred before the effective date of 
consolidation. 
    An active member shall be is eligible to make an election 
at one of the following times:  
    (a) on or before the date occurring 180 days after within 
six months of the effective date of consolidation; 
    (b) after between the date on which the active member 
attains the age of 49 years and six months and before the date 
on which the active member attains the age of 50 years; or 
    (c) on the date on which the active member terminates 
active employment as a police officer or firefighter for 
purposes of receiving a service pension or disability benefits, 
or within 90 days of the date the member terminates active 
employment and defers receipt of a service pension, whichever 
applies, with the municipality in which the local relief 
association subject to consolidation was located. 
    Sec. 42.  Minnesota Statutes 1992, section 353A.08, 
subdivision 5, is amended to read: 
    Subd. 5.  [RETURNING DISABILITANTS; REEMPLOYED ANNUITANTS.] 
Any A person who is receiving a disability benefit from a 
consolidating local relief association as of the effective date 
of the consolidation and who recovers sufficiently from that 
disability following the effective date of the consolidation to 
allow for a return to active employment as a police officer or 
firefighter, whichever applies, with the municipality in which 
the consolidating relief association was located shall retain 
retains eligibility to the local relief association benefit plan 
only and shall is not be entitled to elect the public employees 
police and fire fund benefit plan as an active member, even if 
the public employees police and fire fund benefit plan was 
elected as a benefit recipient.  
    Any A person who becomes disabled following the effective 
date of the consolidation shall be is entitled to make a benefit 
plan coverage election as an active member upon the termination 
of active employment and commencement of the disability benefit 
and, upon any return to active service, shall retain retains 
benefit plan coverage by the previously selected benefit plan 
coverage election.  
    Any A person who retired from a consolidating local relief 
association before the effective date of the consolidation or 
retires after the effective date of the consolidation, who has 
elected coverage by the public employees police and fire fund 
benefit plan and who returns to active employment with an 
employing unit covered by the public employees retirement 
association following the effective date of consolidation shall 
be is subject to the provisions of section 353.37, subdivision 1.
    Sec. 43.  Minnesota Statutes 1992, section 353A.10, 
subdivision 4, is amended to read: 
    Subd. 4.  [REFUND OF CERTAIN MEMBER CONTRIBUTION AMOUNTS.] 
(a) The following persons are entitled to receive a refund of 
certain member contribution amounts under paragraph (b):  
    (1) A person who was an active member of a local police or 
firefighters relief association upon its consolidation with the 
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 begins receipt of a service 
pension or a disability benefit from the consolidation account, 
or who defers receipt of a service pension under the local 
relief association plan upon application for the refund of 
excess contributions; or 
    (2) 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 consolidation account.  
    (b) The refund of certain member contribution amounts is 
the amount by which any member contributions made to the 
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 first of the month in which the refund is 
paid. 
    (c) A refund of certain contribution amounts must occur as 
soon as practicable following receipt of a valid application 
from the appropriate person and or the commencement of receipt 
of the service pension or disability benefit or official 
notification of death, whichever applies. 
    Sec. 44.  Minnesota Statutes 1992, section 353B.11, 
subdivision 6, is amended to read: 
    Subd. 6.  [DISCONTINUATION; SURVIVING SPOUSE BENEFIT.] (a) 
Except as specified in paragraph (b) or (c), a surviving spouse 
benefit shall terminate terminates upon the death or the 
subsequent marriage of the person entitled to receive or 
receiving a surviving spouse benefit.  
    (b) A surviving spouse benefit shall terminate terminates 
upon the subsequent marriage of the person entitled to receive 
or receiving a surviving spouse benefit but shall recommence 
recommences at the appropriate amount without any retroactive 
payments in the event of the termination of the subsequent 
marriage for any reason for the former members of the following 
consolidating relief associations:  
    (1) Albert Lea firefighters relief association; 
    (2) Albert Lea police relief association; 
    (3) Duluth firefighters relief association; 
    (4) (3) Minneapolis fire department relief association; 
    (5) (4) St. Paul fire department relief association; and 
    (6) (5) St. Paul police relief association.  
    (c) A surviving spouse benefit shall terminate only upon 
the death of the person entitled to receive or receiving a 
surviving spouse benefit for the former members of the following 
consolidating relief associations:  
    (1) Albert Lea police relief association; 
    (2) Anoka police relief association; 
    (2) (3) Buhl police relief association; 
    (3) (4) Chisholm fire department relief association; 
    (4) (5) Chisholm police relief association; 
    (5) (6) Crookston fire department relief association; 
    (6) (7) Duluth police relief association; 
    (7) (8) Faribault fire department relief association; 
    (8) (9) Hibbing firefighters relief association; 
    (9) (10) Hibbing police relief association; 
    (10) (11) Mankato fire department relief association; 
    (11) (12) Red Wing fire department relief association; 
    (12) (13) Red Wing police relief association; 
    (13) (14) Rochester fire department relief association; 
    (14) (15) Rochester police relief association; 
    (15) (16) St. Cloud fire department relief association; 
    (16) (17) St. Louis Park fire department relief 
association; 
    (17) (18) St. Louis Park police relief association; 
    (18) (19) South St. Paul firefighters relief association; 
    (19) (20) South St. Paul police relief association; 
    (20) (21) West St. Paul firefighters relief association; 
    (21) (22) Winona fire department relief association; and 
    (22) (23) Winona police relief association. 
    Sec. 45.  Minnesota Statutes 1992, section 353C.08, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DUTY DISABILITY QUALIFICATION 
REQUIREMENTS.] A local government correctional employee who is 
less than 55 years of age and who becomes disabled and 
physically unfit to perform the duties of the position as a 
direct result of an injury, sickness, or other disability 
incurred in or arising out of any act of duty that renders the 
employee physically or mentally unable to perform the employee's 
duties, is entitled to a disability benefit based on covered 
service only in an amount equal to 45 percent of the average 
salary defined in section 353C.06, subdivision 2, plus an 
additional 2.5 percent for each year of covered service in 
excess of 20 years.  
    Sec. 46.  Minnesota Statutes 1992, section 353C.08, 
subdivision 2, is amended to read: 
    Subd. 2.  [NONDUTY DISABILITY QUALIFICATION REQUIREMENTS.] 
A local government correctional employee who has at least one 
year of covered service, and who, before reaching the age of 55, 
becomes disabled and physically unfit to perform the duties of 
the position because of sickness or injury occurring while not 
engaged in covered employment, is entitled to a disability 
benefit based on covered service.  The disability benefit must 
be computed in the same manner as an annuity under section 
353C.06, subdivision 3, and as though the employee had at least 
ten years of covered correctional service. 
    Sec. 47.  Minnesota Statutes 1992, section 353D.02, is 
amended to read: 
    353D.02 [ELECTION OF COVERAGE.] 
    Eligible elected local government officials may elect to 
participate in the defined contribution plan after being elected 
or appointed to 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 revocable 
during incumbency.  
    Each public ambulance service or privately operated 
ambulance service with eligible personnel that receives an 
operating subsidy from a governmental entity 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 revocable. 
    Sec. 48.  Minnesota Statutes 1992, section 353D.04, is 
amended to read: 
    353D.04 [CONTRIBUTIONS AND DEDUCTIONS IN ERROR.] 
    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 participant.  
    (b) Ambulance service contributions must be remitted on a 
regular 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. 
    Subd. 2.  [DEDUCTIONS IN ERROR.] The executive director may 
adopt policies and procedures regarding deductions taken totally 
or partially in error by the employer from the salary of an 
elected official. and contributions made by the employer may be 
refunded upon request to the elected official and the employer. 
    (a) In the case of a total refund, the association shall 
refund the value of an elected official's account, including 
investment earnings, the accumulated employee deductions, 
accumulated employer contributions, less administrative expenses 
under section 353D.05, subdivision 3. 
    (b) In the case of a partial refund, the association shall 
refund the amount of the actual error, without interest, less 
the administrative expenses under section 353D.05, subdivision 
3, from the employer share.  
    Sec. 49.  Minnesota Statutes 1992, section 353D.05, 
subdivision 3, is amended to read: 
    Subd. 3.  [ADMINISTRATIVE EXPENSES.] The executive director 
of the association shall annually set an amount to recover the 
costs of the association in administering the public employees 
defined contribution plan.  If that are not met by the amount 
recovered under section 11A.17 does not meet the annual costs of 
administering the defined contribution plan, the executive 
director may assess an additional amount up to two percent of 
the employer and employee contributions. 
    Sec. 50.  Minnesota Statutes 1992, section 353D.07, 
subdivision 2, is amended to read: 
    Subd. 2.  [PAYMENT OF BENEFITS.] Withdrawal of a benefit 
based on individual participant contributions and employer 
contributions plus accrued investment income is payable upon the 
death or termination of a participant but not at the time an 
individual revokes membership in the defined contribution plan 
under section 353D.02.  An application by or on behalf of the 
participant must be filed before any payment of benefits may be 
made. 
    Sec. 51.  Minnesota Statutes 1992, section 356.302, 
subdivision 4, is amended to read: 
    Subd. 4.  [PUBLIC SAFETY PLAN ELIGIBILITY REQUIREMENTS.] A 
disabled member of a covered retirement plan who has credit for 
allowable service in a combination of public safety employee 
retirement plans is entitled to a combined service disability 
benefit if the member: 
    (1) is less than 55 years old on the date of application 
for the disability benefit; 
    (2) has become occupationally disabled; 
    (3) (2) has credit for allowable service in any combination 
of public safety employee retirement plans totaling at least one 
year if the disability is duty-related or totaling at least 
three years if the disability is not duty-related; 
    (4) (3) has credit for at least six months of allowable 
service with the current public safety employee retirement plan 
before the commencement of the disability; and 
    (5) (4) is not receiving a retirement annuity or disability 
benefit from any covered public safety employee retirement plan 
at the time of the commencement of the disability. 
    Sec. 52.  Minnesota Statutes 1992, section 356.453, is 
amended to read: 
    356.453 [PURCHASE OF PRIOR SERVICE.] 
    Any A person who is excluded from pension coverage pursuant 
to under the provisions of Laws 1978, chapter 720, but who 
subsequently becomes employed in unsubsidized public employment 
with public pension plan or fund coverage, whether with the same 
public employer which provided the subsidized employment or 
another public employer, shall be is entitled to purchase 
service credit for that period of prior subsidized public 
employment, other than a period of prior subsidized public 
employment for which a repayment of a refund pursuant to under 
section 356.452 is made, with the public pension plan or fund 
which, except for the exclusion provided for by Laws 1978, 
chapter 720, would have provided pension coverage for the 
subsidized employment.  Payment shall must include all employee 
and employer contributions at the rates and on the salary in 
effect when the subsidized employment was rendered plus interest 
at the rate of six 8.5 percent per annum compounded annually 
from the year purchased to the date payment is made; provided, 
however, that the employer for the unsubsidized employment, the 
employer for the subsidized employment, or the applicable 
federal Comprehensive Employment and Training Act prime sponsor 
from funds provided under the federal Comprehensive Employment 
and Training Act, as funds permit, may pay the employer 
contribution and the employer additional contribution, if any, 
plus interest at the specified rate. The public employer which 
provided the subsidized employment shall provide whatever 
documentation of periods of subsidized public employment and the 
salary received that the pension plan or fund shall require.  
Payment shall must be made in one lump sum by the date of 
retirement and no service credit with respect to the 
payment shall may be granted until payment is received by the 
pension plan or fund. 
    Sec. 53.  Minnesota Statutes 1992, section 356.61, is 
amended to read: 
    356.61 [LIMITATION ON PUBLIC EMPLOYEE RETIREMENT 
ANNUITIES.] 
    Notwithstanding any provision of law, bylaws, articles of 
incorporation, retirement and disability allowance plan 
agreements or retirement plan contracts to the contrary, no 
person who has pension or retirement coverage by a public 
pension plan shall be is entitled to receive a monthly 
retirement annuity or disability benefit which, at the time of 
commencement of the retirement annuity or disability benefit, 
exceeds the lesser of:  
    (a) the amount of the final monthly salary of the person; 
or 
    (b) 1/12 of the amount of the annual benefit permitted by 
the terms of section 415 of the Internal Revenue Code with 
respect to a participant in a plan qualified under section 
401(a) of the Internal Revenue Code, as amended through December 
31, 1982.  
    The benefit limitation of clause (b) is to be determined on 
the date the benefit is initially payable or on the date the 
employee terminated employment, if earlier.  The benefit 
limitation on any date is the benefit limitation for the 
limitation year in which the date occurs.  The limitations apply 
only to the annual benefit which is derived from employer 
contributions.  Mandatory and voluntary employee contributions, 
if any, are treated as a separate defined contribution plan 
maintained by the employer which is subject to the limitations 
placed on annual additions to defined contribution plans.  
    The maximum annual benefit of clause (b) for any limitation 
year is the lesser of (1) or (2) below:  
    (1) A dollar limitation of $90,000, adjusted as of January 
1 of each calendar year to the dollar limitation as determined 
for that year by the commissioner of Internal Revenue.  The 
amount determined for any year will apply to limitation years 
ending with or within that calendar year.  
    (2) A compensation limitation of 100 percent of the average 
of compensation paid or made available to the participant by the 
employer during those three consecutive calendar years of 
employment, or actual number of consecutive calendar years of 
employment if employed less than three consecutive years, which 
give the highest average.  Compensation means any compensation 
which is includable in the employee's gross income.  
    A benefit shall be is deemed not to exceed the maximum 
benefit limitation of clause (b) if: 
    (1) the retirement benefits payable under the plan and 
under any other defined benefit plans of the employer do not 
exceed the $10,000 limit set in section 415(b)(4) of the 
Internal Revenue Code for the plan year, or for any prior plan 
year, and 
    (2) the employer has not at any time maintained a defined 
contribution plan in which the employee participated.  
    A public pension plan is any Minnesota public pension plan 
or fund which provides pension or retirement coverage for public 
employees other than volunteer firefighters, including any plan 
or fund enumerated in sections 356.20, subdivision 2, or 356.30, 
subdivision 3, any local police or firefighter's relief 
association to which section 69.77 applies, or any retirement or 
pension plan or fund, including a supplemental retirement plan 
or fund, established, maintained or supported by any 
governmental subdivision or public body whose revenues are 
derived from taxation, fees, assessments or from other public 
sources.  Final monthly salary is the hourly rate of 
compensation received by the person on account of the most 
recent public employment for the final pay period occurring 
prior to retirement multiplied by 174.  
    The figure for the monthly retirement annuity or disability 
benefit to be used for the calculation of this limitation shall 
must not include any reduction or adjustment required for 
retirement prior to the normal retirement age or required for 
the election of an optional annuity.  
    If the figure for the monthly retirement annuity or 
disability benefit exceeds the limit contained in this section, 
the annuity or benefit payable shall must be reduced 
appropriately.  
    The managing board of each public pension plan from which a 
retirement annuity or disability benefit is payable shall, at 
the time that the retirement annuity or disability benefit 
commences, contact all other public pension plans to determine 
whether or not the recipient of the retirement annuity or 
disability benefit is also receiving or is entitled to receive a 
retirement annuity or disability benefit from any other public 
pension plan.  If a person is entitled to receive or is 
receiving a retirement annuity or disability benefit from more 
than one public pension plan, all retirement annuities or 
disability benefits from all public pension plans shall must be 
totaled in determining whether or not the limitation shall 
apply; provided however, that the limitation shall be based on 
the highest final monthly salary received by the individual from 
any plan applies.  Any A reduction in the amount of the 
retirement annuity or disability benefit required pursuant to 
under this section shall be is made by the public pension plan 
which provided retirement coverage for the most recent period of 
service. 
    Sec. 54.  [REPEALER.] 
    Minnesota Statutes 1992, section 353.656, subdivision 6, is 
repealed retroactive to October 16, 1992. 
     Sec. 55.  [EFFECTIVE DATE.] 
    Sections 1 to 18, 20, 22 to 24, 27 to 29, 31 to 33, 37, 38, 
40 to 44, 47 to 50, and 53 are effective July 1, 1993.  Section 
30 is effective January 1, 1993.  Sections 19, 21, 25, 26, 34, 
36, 39, 45, 46, 51, and 54 are effective retroactively to 
October 16, 1992.  Section 52 is effective May 1, 1994. 

                                ARTICLE 5

                     TEACHERS RETIREMENT ASSOCIATION
    Section 1.  Minnesota Statutes 1992, section 354.35, is 
amended to read: 
    354.35 [OPTIONAL ACCELERATED RETIREMENT ANNUITY BEFORE AGE 
65.] 
    Any coordinated member who retires before age 65 may elect 
to receive an optional accelerated retirement annuity from the 
association which provides for different annuity amounts over 
different periods of retirement.  The election of this optional 
accelerated retirement annuity is exercised by making an 
application to the board on a form provided by the board 
executive director.  The optional accelerated retirement annuity 
must take the form of an annuity payable for the period before 
the member attains age 65 in a greater amount than the amount of 
the annuity calculated under section 354.44 on the basis of the 
age of the member at retirement, but the optional accelerated 
retirement annuity must be the actuarial equivalent of the 
member's annuity computed on the basis of the member's age at 
retirement.  The greater amount must be paid until the retiree 
reaches age 65 and at that time the payment from the association 
must be reduced.  For each year the retiree is under age 65, up 
to five percent of the total life annuity required reserves may 
be used to accelerate the optional retirement annuity under this 
section.  At retirement, members who retire before age 62 may 
elect to have the age specified in this section be 62 instead of 
65.  This election is irrevocable and may be made only once on 
the application form provided by the executive director.  The 
method of computing the optional accelerated retirement annuity 
provided in this section is established by the board of 
trustees.  In establishing the method of computing the optional 
accelerated retirement annuity, the board of trustees must 
obtain the written approval of the commission-retained actuary.  
The written approval must be a part of the permanent records of 
the board of trustees.  
    Sec. 2.  Minnesota Statutes 1992, section 354.46, 
subdivision 1, is amended to read: 
    Subdivision 1.  [BASIC PROGRAM; BENEFITS FOR SPOUSE AND 
CHILDREN OF TEACHER.] If a basic member who has at least 18 
months of allowable service credit and who has an average salary 
as defined in section 354.44, subdivision 6, equal to or greater 
than $75 dies prior to retirement or if a former basic member 
who, at the time of death, was totally and permanently disabled 
and receiving disability benefits pursuant to section 354.48 
dies prior to attaining the age of 65 years before attaining age 
65 or reaching the five-year anniversary of the effective date 
of the disability benefit, whichever is later, the surviving 
dependent spouse and dependent children of the basic member or 
former basic member shall be entitled to receive a monthly 
benefit as follows: 
  (a) Surviving
  dependent
  spouse .....50 percent of the basic member's monthly
              average salary paid in the last full
              fiscal year preceding death
  (b) Each
  dependent
  child ......ten percent of the basic member's
              monthly average salary paid in the
              last full fiscal year preceding death
    Payments for the benefit of any dependent child under the 
age of 22 years shall be made to the surviving parent, or if 
there be none, to the legal guardian of the child.  The maximum 
monthly benefit shall not exceed $1,000 for any one family, and 
the minimum benefit per family shall not be less than 50 percent 
of the basic member's average salary, subject to the foregoing 
maximum.  The surviving dependent children's benefit shall be 
reduced pro tanto when any surviving child is no longer 
dependent. 
     If the basic member and the surviving dependent spouse are 
killed in a common disaster and if the total of all survivors 
benefits payable pursuant to this subdivision is less than the 
accumulated deductions plus interest payable, the surviving 
dependent children shall receive the difference in a lump sum 
payment. 
     If the survivor benefits provided in this subdivision 
exceed in total the monthly average salary of the deceased basic 
member, these benefits shall be reduced to an amount equal to 
the deceased basic member's monthly average salary. 
     Prior to payment of any survivor benefit pursuant to this 
subdivision, in lieu of that benefit, the surviving dependent 
spouse may elect to receive the joint and survivor annuity 
provided pursuant to subdivision 2, or may elect to receive a 
refund of accumulated deductions with interest in a lump sum as 
provided pursuant to section 354.47, subdivision 1.  If there 
are any surviving dependent children, the surviving dependent 
spouse may elect to receive the refund of accumulated deductions 
only with the consent of the district court of the district in 
which the surviving dependent child or children reside. 
    Sec. 3.  Minnesota Statutes 1992, section 354.48, 
subdivision 3, is amended to read: 
    Subd. 3.  [COMPUTATION OF BENEFITS.] (1) The amount of the 
disability benefit granted to members covered under section 
354.44, subdivision 2, clauses (1) and (2), is an amount equal 
to double the annuity which could be purchased by the member's 
accumulated deductions plus interest on the amount computed as 
though the teacher were at normal retirement age at the time the 
benefit begins to accrue and in accordance with the law in 
effect when the disability application is received.  Any member 
who applies for a disability benefit after June 30, 1974, and 
who failed to make an election pursuant to Minnesota Statutes 
1971, section 354.145, shall have the disability benefit 
computed under this clause or clause (2), whichever is larger. 
    The benefit granted shall be determined by the following: 
    (a) the amount of the accumulated deductions; 
    (b) interest actually earned on these accumulated 
deductions to the date the benefit begins to accrue; 
    (c) interest for the years from the date the benefit begins 
to accrue to the date the member attains normal retirement age 
at the rate of three percent; 
    (d) annuity purchase rates based on an appropriate annuity 
table of mortality established by the board as provided in 
section 354.07, subdivision 1, and using the applicable 
postretirement interest rate assumption specified in section 
356.215, subdivision 4d. 
    In addition, a supplementary monthly benefit shall of $25 
to age 65 or the five-year anniversary of the effective date of 
the disability benefit, whichever is later, must be paid to 
basic members only in accordance with the following table:. 
        Age When Benefit               Supplementary  
       Begins to Accrue                Benefit  
        Under Age 56                         $50  
                  56                          45  
                  57                          40  
                  58                          35  
                  59                          30  
                  60                          25  
                  61                          20  
                  62                          15  
                  63                          10  
                  64                           5          
    (2) The disability benefit granted to members covered under 
section 354.44, subdivision 6, shall be computed in the same 
manner as the annuity provided in section 354.44, subdivision 
6.  The disability benefit shall be the formula annuity without 
the reduction for each month the member is under normal 
retirement age when the benefit begins to accrue. 
    (3) For the purposes of computing a retirement annuity when 
the member becomes eligible, the amounts paid for disability 
benefits shall not be deducted from the individual member's 
accumulated deductions.  If the disability benefits provided in 
this subdivision exceed the monthly average salary of the 
disabled member, the disability benefits shall be reduced to an 
amount equal to the disabled member's average salary. 
    Sec. 4.  Minnesota Statutes 1992, section 354.48, 
subdivision 10, is amended to read: 
    Subd. 10.  [RETIREMENT STATUS AT NORMAL RETIREMENT AGE.] No 
person shall be entitled to receive both a disability benefit 
and a retirement annuity provided by this chapter.  The 
disability benefit paid to a person hereunder shall terminate at 
the end of the month in which the person attains normal 
retirement age.  If the person is still totally and permanently 
disabled at the beginning of the month next following the month 
in which the person attains the normal retirement age, the 
person shall be deemed to be on retirement status and, if the 
person had elected an optional annuity pursuant to subdivision 
3a, shall receive an annuity in accordance with the terms of the 
optional annuity previously elected, or, if the person had not 
elected an optional annuity pursuant to subdivision 3a, may at 
the option of the person elect to receive either a straight life 
retirement annuity computed pursuant to section 354.44 or a 
straight life retirement annuity equal to the disability benefit 
paid prior to the date on which the person attained the age of 
65 years attains age 65 or reaches the five-year anniversary of 
the effective date of the disability benefit, whichever amount 
is greater later, or elect to receive an optional annuity as 
provided in section 354.45, subdivision 1.  Election of an 
optional annuity shall must be made prior to the person 
attaining the normal retirement age within 90 days of age 65 or 
the five-year anniversary of the effective date of the 
disability benefit, whichever is later.  If an optional annuity 
is elected, the election shall be effective on the date on which 
the person attains the normal retirement age and age 65 or 
reaches the five-year anniversary of the effective date of the 
disability benefit, whichever is later.  The optional annuity 
shall begin to accrue on the first day of the month next 
following the month in which the person attains that age 65 or 
reaches the five-year anniversary of the effective date of the 
disability benefit, whichever is later.  
    Sec. 5.  [EFFECTIVE DATES.] 
    Section 1 is effective January 1, 1994.  Sections 2 to 4, 
are effective retroactively to October 16, 1992. 

                                ARTICLE 6 

                        SURVIVING SPOUSE BENEFITS
    Section 1.  Minnesota Statutes 1992, section 352.12, 
subdivision 2, is amended to read: 
    Subd. 2.  [SURVIVING SPOUSE BENEFIT.] If an employee or 
former employee is at least 50 years old and has credit for at 
least three years allowable service or who has credit for at 
least 30 years of allowable service, regardless of age, dies 
before an annuity or disability benefit has become payable, 
notwithstanding any designation of beneficiary to the contrary, 
the surviving spouse of the employee may elect to receive, in 
lieu of the refund with interest provided in subdivision 1, an 
annuity equal to the joint and 100 percent survivor annuity 
which the employee could have qualified for had the employee 
terminated service on the date of death.  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 as provided in sections 352.115, 
subdivisions 1, 2, and 3, and 352.116, subdivisions 1, 1a, and 3.
Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply 
to a deferred annuity payable under this subdivision.  The 
annuity must cease with the last payment received by the 
surviving spouse in the lifetime of the surviving spouse.  An 
amount equal to the excess, if any, of the accumulated 
contributions credited to the account of the deceased employee 
in excess of the total of the benefits paid and payable to the 
surviving spouse must be paid to the deceased employee's last 
designated beneficiary or, if none, to the surviving children of 
the deceased spouse in equal shares or, if none, to the 
surviving parents of the deceased spouse or, if none, to the 
representative of the estate of the deceased spouse.  Any 
employee may request in writing that this subdivision not apply 
and that payment be made only to a designated beneficiary as 
otherwise provided by this chapter. 
    Sec. 2.  Minnesota Statutes 1992, 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 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. 3.  Minnesota Statutes 1992, section 354.46, 
subdivision 2, is amended to read: 
    Subd. 2.  [DEATH WHILE ELIGIBLE DESIGNATED BENEFICIARY 
BENEFIT.] The surviving spouse of any member or former member 
who has attained the age of at least 50 years and has credit for 
at least three years of allowable service or who has credit for 
at least 30 years of allowable service irrespective of age is 
entitled to joint and survivor annuity coverage in the event of 
death of the member prior to retirement.  If the surviving 
spouse does not elect to receive a surviving spouse benefit 
provided pursuant to subdivision 1, if applicable, or does not 
elect to receive a refund of accumulated member contributions 
provided pursuant to section 354.47, subdivision 1, the 
surviving spouse is entitled to receive, upon written 
application on a form prescribed by the executive director, a 
benefit equal to the second portion of a 100 percent joint and 
survivor annuity as provided pursuant to section 354.45 and 
computed pursuant to section 354.44, subdivision 2, 6, or 7, 
whichever is applicable.  The surviving spouse may apply for the 
annuity at any time after the date on which the deceased 
employee would have attained the required age for retirement 
based on the employee's allowable service.  This benefit accrues 
from the day following the date of death but may not begin to 
accrue more than six months before the date the application is 
filed with the executive director.  Sections 354.44, subdivision 
6 and 354.60 apply to a deferred annuity payable under this 
section.  The benefit is payable for life. 
    Sec. 4.  [EFFECTIVE DATE.] 
    Sections 1 to 3 are effective the day after final enactment.

                               ARTICLE 7 

                      REPEALER AND EFFECTIVE DATE 
    Section 1.  [REPEALER.] 
    Minnesota Statutes 1992, sections 3A.06; 352.01, 
subdivision 7; 352.12, subdivision 5; 352.22, subdivision 9; 
352.73; 352B.01, subdivision 2a; 352B.131; 352B.14; 352B.261; 
352B.262; 352B.28; and 352D.05, subdivision 5, are repealed. 
    Sec. 2.  [EFFECTIVE DATE.] 
    Section 1 is effective the day following final enactment. 

                               ARTICLE 8 

                PERA DEFINED CONTRIBUTION PLAN MEMBERSHIP 
    Section 1.  [PUBLIC EMPLOYEES DEFINED CONTRIBUTION PLAN: 
ELECTION OF COVERAGE IN CERTAIN INSTANCES.] 
    (a) Notwithstanding any provision to the contrary in 
Minnesota Statutes, chapter 353 or 353D, a person described in 
paragraph (b) is eligible to elect contributions for prior 
service under paragraph (c) and coverage for future public 
employment under paragraph (d). 
    (b) A person eligible to make the elections provided for in 
this section is a person who: 
    (1) was born on March 3, 1939; 
    (2) was an elected official of Blackberry township during 
the period March 1972 through March 1990; 
    (3) became an employee of the city of Deer River in March 
1987; and 
    (4) is a member of the coordinated program of the public 
employees retirement association under Minnesota Statutes, 
chapter 353, on the effective date of this section. 
    (c) An eligible person may elect to make member 
contributions for prior service as an elected official of 
Blackberry township to the public employees defined contribution 
plan under Minnesota Statutes, chapter 353D.  The election must 
be made on a form prescribed by the executive director of the 
public employees retirement association.  The election form must 
be accompanied with a lump sum payment of prior member 
contributions of $1,937.93, plus interest on that amount at an 
annual compound rate of six percent from July 1, 1993, to the 
date payment is made, if payment is made after July 1, 1993.  If 
the person pays the prior member contributions and if the 
subdivision agrees to make the employer contribution payment, 
the employing governmental subdivision for the March 1972, 
through March 1990, period shall pay, in a lump sum, $2,447.69 
plus interest on that amount at an annual compound rate of six 
percent from July 1, 1993, to the date payment is made, and 
shall make that payment within 60 days of the payment of the 
prior member contribution amount and receipt of a notice from 
the executive director of the public employees retirement 
association.  If the employing governmental subdivision for the 
March 1972, through March 1990, period does not agree to make 
the employer contribution payment, the eligible person shall 
make the same contribution payment that the employing 
governmental subdivision would have made on the date of 
payment.  The amounts under this paragraph must be deposited in 
the Minnesota supplemental investment fund to the credit of the 
person making the member contribution amount as provided in 
Minnesota Statutes, section 353D.05.  Authority to make the 
prior service member contributions under this paragraph expires 
on July 1, 1994. 
    (d) An eligible person may elect to participate in the 
public employees defined contribution plan governed by Minnesota 
Statutes, chapter 353D, rather than the coordinated program of 
the public employees retirement association governed by 
Minnesota Statutes, chapter 353, for future service as an 
employee of the city of Deer River after June 30, 1993.  The 
election under this paragraph must be made by July 1, 1993.  No 
refund under Minnesota Statutes, section 353.34, is payable 
unless the person terminates public employment qualifying for 
coverage under Minnesota Statutes, chapter 353 or 353D. 
    Sec. 2.  [EFFECTIVE DATE.] 
    Section 1 is effective the day following final enactment. 

                                ARTICLE 9

                VOLUNTEER FIREFIGHTERS RELIEF ASSOCIATION
    Section 1.  Minnesota Statutes 1992, section 424A.10, 
subdivision 3, is amended to read: 
    Subd. 3.  [STATE REIMBURSEMENT.] By February 15 of each 
year, the relief association shall apply to the commissioner of 
revenue for state reimbursement of the amount of supplemental 
benefits paid under subdivision 2 during the preceding calendar 
year.  By March 15 the commissioner shall reimburse the relief 
association for the amount of the supplemental benefits paid to 
qualified recipients.  The commissioner of revenue shall 
prescribe the form of and supporting information that must be 
supplied as part of the application for state reimbursement.  
The reimbursement payment must be deposited in the special fund 
of the relief association.  A sum sufficient to make the 
payments is appropriated from the general fund to the 
commissioner of revenue. 
    Sec. 2.  [EFFECTIVE DATE.] 
    Section 1 is effective the day following final enactment 
and applies to reimbursements payable March 15, 1993, and 
thereafter. 

                                ARTICLE 10

                  MINNEAPOLIS EMPLOYEES RETIREMENT FUND
    Section 1.  Minnesota Statutes 1992, section 422A.05, 
subdivision 1, is amended to read: 
    Subdivision 1.  The members of the retirement board shall 
be the trustees and custodians of the several funds created by 
sections 422A.01 to 422A.25 and shall have exclusive control and 
management of these funds, and power to invest them and to hold, 
purchase, sell, assign, transfer, or dispose of any of the 
securities and investments in which any of the funds created by 
sections 422A.01 to 422A.25 shall have been invested as well as 
the proceeds of the investments, and of the money belonging to 
these funds.  The power to manage and invest the assets of the 
funds must be exercised by the retirement board solely through 
professional investment or property management firms that are 
independent of the retirement fund.  No financial or property 
assets of the funds may be managed, serviced, or invested 
internally or in-house at the retirement fund, except that any 
investment held by a fund on February 1, 1993, that is not 
readily tradeable on an established securities exchange may 
continue to be managed directly by the retirement board until 
the investment is converted to cash.  The retirement board's 
functions under this section consist primarily of establishing 
and effectuating investment policy and structure, managing the 
investment process, monitoring and measuring the performance of 
the external independent professional investment or property 
management firms, retaining or terminating agreements with these 
firms, apportioning the assets of the funds to be managed among 
these firms, and making financial decisions on issues if 
approvals have been specifically reserved by and to the board. 
    Sec. 2.  Minnesota Statutes 1992, section 422A.05, 
subdivision 2a, is amended to read: 
    Subd. 2a.  [FIDUCIARY DUTY.] (a) In the discharge of their 
respective duties, the members of the board, the executive 
director, the board staff, and any other person charged with the 
responsibility of investing money servicing assets of the funds 
pursuant to the standards set forth in this chapter shall act in 
good faith and shall exercise that degree of judgment and care, 
under circumstances then prevailing, which persons of prudence, 
discretion, and intelligence exercise in the management of their 
own affairs, not for speculation, but for investment, 
considering the probable safety of their capital as well as the 
probable income to be derived therefrom.  In addition, the 
members of the board and the chief administrative officer shall 
act in a manner consistent with chapter 356A.  
     (b) Individuals authorized by the board to manage or invest 
the assets of the funds must act in a manner consistent with 
chapter 356A.  In addition, these individuals must act in good 
faith and exercise that degree of judgment, skill, diligence, 
and care, under the circumstances then prevailing, that persons 
of prudence, discretion, and intelligence acting in a like 
capacity and familiar with the activity would exercise. 
    Sec. 3.  Minnesota Statutes 1992, section 422A.08, 
subdivision 5, is amended to read: 
    Subd. 5.  Any contributor or retired employee who prior to 
entering the service of the city was an employee of a public 
corporation, shall be allowed is authorized, using the procedure 
in subdivision 5a, to purchase allowable service credit in the 
retirement fund for employment by the public corporation in the 
same manner as though the service had been rendered to the city, 
providing that the individual has not received service credit 
and is not eligible to receive service credit for this period 
under any other plan or fund listed in section 356.30, 
subdivision 3.  Before receiving credit for service rendered to 
a public corporation as herein set forth, the contributing or 
retired employee shall make application therefor in writing to 
the retirement board, and shall contribute to the retirement 
fund the amount which would have been contributed had the 
employee been a contributing member of the fund during the time 
the service was rendered to the public corporation, plus six 
percent compound interest to date of payment or date of 
retirement, with the total amount to be determined by the 
retirement board amount specified in subdivision 5a. 
     Sec. 4.  Minnesota Statutes 1992, section 422A.08, is 
amended by adding a subdivision to read: 
    Subd. 5a.  [PURCHASE PAYMENT AMOUNT.] (a) To purchase 
credit for prior service under this section, there must be paid 
to the Minneapolis employees retirement fund an amount equal to 
the present value, on the date of payment, of the amount of the 
additional retirement annuity obtained by the purchase of the 
additional service credit.  Calculation of this amount must be 
made using the applicable preretirement interest rate for the 
association specified in section 356.215, subdivision 4d, and 
the mortality table adopted for the fund.  The calculation must 
assume continuous future service in the fund until, and 
retirement at, the age at which the minimum requirements of the 
fund for normal retirement or retirement with an annuity 
unreduced for retirement at an early age, including section 
356.30, are met with the additional service credit purchased.  
The calculation must also assume a future salary history that 
includes annual salary increases at the applicable salary 
increase rate for the fund or association specified in section 
356.215, subdivision 4d.  The member must establish in the 
records of the fund proof of the service for which the purchase 
of prior service is requested.  The manner of the proof of 
service must be in accordance with procedures prescribed by the 
executive director. 
    (b) Payment must be made in one lump sum. 
    (c) Payment of the amount calculated under this subdivision 
must be made by the member.  However, the current or former 
governmental subdivision employer of the member may, at its 
discretion, pay all or any portion of the payment amount that 
exceeds an amount equal to the employee contribution rates in 
effect during the period or periods of prior service applied to 
the actual salary rates in effect during the period or periods 
of prior service, plus interest at the rate of six percent a 
year compounded annually from the date on which the 
contributions would otherwise have been made to the date on 
which the payment is made. 
    Sec. 5.  Minnesota Statutes 1992, section 422A.101, 
subdivision 1, is amended to read: 
    Subdivision 1.  [FINANCIAL REQUIREMENTS OF FUND.] Prior 
to August July 31 annually, the retirement board, in 
consultation with the commission-retained actuary, shall prepare 
an itemized statement of the financial requirements of the fund 
for the succeeding fiscal year.  A copy of the statement shall 
be submitted to the city council, the board of estimate and 
taxation of the city, the managing board or chief administrative 
officer of each city owned public utility, improvement project 
or municipal activity supported in whole or in part by revenues 
other than real estate taxes, public corporation, or unit of 
metropolitan government employing members of the fund, the board 
of special school district No. 1, and the state commissioner of 
finance prior to September 15 July 31 annually.  The statement 
shall be itemized and shall include the following:  
    (1) an estimate of the administrative expenses of the fund 
for the following year, which shall be determined by 
multiplying, by the factor of 1.035, the figure for 
administrative expenses as reported in the most recent actuarial 
valuation prepared by the commission-retained actuary, including 
the amount necessary to amortize through June 30, 2020, the 
annual costs that are determined by the retirement board to be 
related to investment activities of the deposit accumulation 
fund other than actual investment transaction amounts; 
    (2) an estimate of the normal cost of the fund expressed as 
a dollar amount, which shall be determined by applying the 
normal cost of the fund as reported in the most recent actuarial 
valuation prepared by the commission-retained actuary and 
expressed as a percentage of covered payroll to the estimated 
total covered payroll of all employees covered by the fund for 
the following year; 
    (3) an estimate of the contribution required to amortize on 
a level annual dollar basis the unfunded actuarial accrued 
liability of the fund by June 30, 2020, using an interest rate 
of six percent compounded annually as reported in the most 
recent actuarial valuation, prepared by the commission-retained 
actuary expressed as a dollar amount.  In determining the amount 
of the unfunded actuarial accrued liability of the fund, all 
assets other than the assets of the retirement benefit fund 
shall be valued as current assets as defined under section 
356.215, subdivision 1, clause (6), and the assets of the 
retirement benefit fund shall be valued equal to the actuarially 
determined required reserves for benefits payable from that 
fund; 
    (4) the amount of any deficiency in the actual amount of 
any employer contribution provided for in this section when 
compared to the required contribution amount certified for the 
previous year, plus interest on the amount at the rate of six 
percent per annum. 
    Sec. 6.  [EFFECTIVE DATE.] 
    Sections 1 to 5 are effective the day following final 
enactment. 
    Presented to the governor May 17, 1993 
    Signed by the governor May 20, 1993, 3:50 p.m.