Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1994, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 528-H.F.No. 2405
An act relating to retirement; making various
administrative and minor substantive changes in the
laws governing the Minnesota state retirement system,
the public employees retirement association, the
teachers retirement association, and police and
firefighters retirement; amending Minnesota Statutes
1992, sections 352.01, subdivisions 11 and 13;
352.029, subdivision 1, and by adding subdivisions;
352.04, subdivisions 2 and 3; 352.119, by adding a
subdivision; 352B.265; 352D.04, subdivision 2; 353.03,
subdivisions 1 and 3a; 354.05, subdivisions 2, 21, 22,
35, and by adding subdivisions; 354.06, subdivisions
2a and 4; 354.071, subdivision 5; 354.091; 354.10,
subdivisions 1 and 2; 354.41, subdivision 4, and by
adding subdivisions; 354.42, subdivisions 3 and 5;
354.44, subdivisions 1a, 4, and 5a; 354.47; 354.48,
subdivision 2; 354.49, subdivision 1; 354.52,
subdivisions 2, 2a, 4, and by adding subdivisions;
354.66, subdivisions 2, 3, and by adding a
subdivision; and 356.30, subdivision 1; Minnesota
Statutes 1993 Supplement, sections 3A.02, subdivision
5; 352.22, subdivision 2; 352.93, subdivision 2a;
352.96, subdivision 4; 352B.08, subdivision 2a;
353.01, subdivisions 10, 12a, 16, and 28; 353.017,
subdivisions 1, 3, and by adding subdivisions; 353.27,
subdivision 7; 353.37, subdivisions 1, 2, and 4;
353.65, subdivision 3a; 353A.08, subdivision 3;
354.05, subdivision 8; and 354.46, subdivisions 1 and
5; proposing coding for new law in Minnesota Statutes,
chapters 354; 356; and 423A; repealing Minnesota
Statutes 1992, sections 352.15, subdivision 2;
352D.09, subdivision 6; 354.05, subdivisions 15 and
29; 354.43, subdivision 3; 354.57; 354.65; and 356.18.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
MINNESOTA STATE RETIREMENT SYSTEM
Section 1. Minnesota Statutes 1993 Supplement, section
3A.02, subdivision 5, is amended 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 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 this
section, without the automatic survivor coverage under section
3A.04 plus the actuarial value of any surviving spouse benefit
otherwise potentially payable at the time of retirement under
section 3A.04, subdivision 1. An individual selecting the
optional annuity under this subdivision waives any rights to
surviving spouse benefits under section 3A.04, subdivision 1.
(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 352.01,
subdivision 11, is amended to read:
Subd. 11. [ALLOWABLE SERVICE.] "Allowable service" means:
(1) Service by an employee for which on or before July 1,
1957, the employee was entitled to allowable service credit on
the records of the system by reason of employee contributions in
the form of salary deductions, payments in lieu of salary
deductions, or in any other manner authorized by Minnesota
Statutes 1953, chapter 352, as amended by Laws 1955, chapter 239.
(2) Service by an employee for which on or before July 1,
1961, the employee chose to obtain credit for service by making
payments to the fund under Minnesota Statutes 1961, section
352.24.
(3) Except as provided in clauses (9) (8) and (10) (9),
service by an employee after July 1, 1957, for any calendar
month in which the employee is paid salary from which deductions
are made, deposited, and credited in the fund, including
deductions made, deposited, and credited as provided in section
352.041.
(4) Except as provided in clauses (9) (8) and (10) (9),
service by an employee after July 1, 1957, for any calendar
month for which payments in lieu of salary deductions are made,
deposited, and credited in the fund, as provided in section
352.27 and Minnesota Statutes 1957, section 352.021, subdivision
4.
For purposes of clauses (3) and (4), except as provided in
clauses (9) (8) and (10) (9), any salary paid for a fractional
part of any calendar month, including the month of separation
from state service, is deemed the compensation for the entire
calendar month.
(5) The period of absence from their duties by employees
who are temporarily disabled because of injuries incurred in the
performance of duties and for which disability the state is
liable under the workers' compensation law until the date
authorized by the director for the commencement of payments of a
total and permanent disability benefit from the retirement fund.
(6) The unused part of an employee's annual leave allowance
for which the employee is paid salary.
(7) Any Service covered by a refund repaid as provided in
section 352.23 or 352D.05, subdivision 4, except service
rendered as an employee of the adjutant general for which the
person has credit with the federal civil service retirement
system.
(8) Any (7) Service before July 1, 1978, by an employee of
the transit operating division of the metropolitan transit
commission or by an employee on an authorized leave of absence
from the transit operating division of the metropolitan transit
commission who is employed by the labor organization which is
the exclusive bargaining agent representing employees of the
transit operating division, which was credited by the
metropolitan transit commission-transit operating division
employees retirement fund or any of its predecessor plans or
funds as past, intermediate, future, continuous, or allowable
service as defined in the metropolitan transit
commission-transit operating division employees retirement fund
plan document in effect on December 31, 1977.
(9) (8) Service after July 1, 1983, by an employee who is
employed on a part-time basis for less than 50 percent of full
time, for which the employee is paid salary from which
deductions are made, deposited, and credited in the fund,
including deductions made, deposited, and credited as provided
in section 352.041 or for which payments in lieu of salary
deductions are made, deposited, and credited in the fund as
provided in section 352.27 shall be credited on a fractional
basis either by pay period, monthly, or annually based on the
relationship that the percentage of salary earned bears to a
full-time salary, with any salary paid for the fractional
service credited on the basis of the rate of salary applicable
for a full-time pay period, month, or a full-time year. For
periods of part-time service that is duplicated service credit,
section 356.30, subdivision 1, clauses (i) and (j), govern.
The Allowable service determined and credited on a
fractional basis shall be used in calculating the amount of
benefits payable, but service as determined on a fractional
basis must not be used in determining the length of service
required for eligibility for benefits.
(10) (9) Any period of authorized leave of absence without
pay that does not exceed one year and for which the employee
obtained credit by payment to the fund in lieu of salary
deductions. To obtain credit, the employee shall pay an amount
equal to the employee and employer contribution rate in section
352.04, subdivisions 2 and 3, multiplied by the employee's
hourly rate of salary on the date of return from leave of
absence and by the days and months of the leave of absence
without pay for which the employee wants allowable service
credit. The employing department, at its option, may pay the
employer amount on behalf of its employees. Payments made under
this clause shall must include interest at an annual rate of 8.5
percent compounded annually from the date of termination of the
leave of absence to the date payment is made unless payment is
completed within one year of the return from leave of absence.
Sec. 3. Minnesota Statutes 1992, section 352.01,
subdivision 13, is amended to read:
Subd. 13. [SALARY.] "Salary" means the periodical
compensation paid to any employee before deductions for deferred
compensation, supplemental retirement plans, or other voluntary
salary reduction programs. It also means wages and includes net
income from fees. Lump sum sick leave payments, severance
payments, and all lump sum annual leave payments and overtime
payments made at the time of separation from state service,
payments in lieu of any employer-paid group insurance coverage,
including the difference between single and family rates that
may be paid to an employee with single coverage, and payments
made as an employer-paid fringe benefit and workers'
compensation payments are not deemed to be salary. Workers'
compensation payments are not considered salary.
Sec. 4. Minnesota Statutes 1992, section 352.04,
subdivision 2, is amended to read:
Subd. 2. [EMPLOYEE CONTRIBUTIONS.] The employee
contribution to the fund must be equal to 3.99 4.07 percent of
salary. These contributions must be made by deduction from
salary as provided in subdivision 4.
Sec. 5. Minnesota Statutes 1992, section 352.04,
subdivision 3, is amended to read:
Subd. 3. [EMPLOYER CONTRIBUTIONS.] (a) The employer
contribution to the fund must be equal to 4.12 4.2 percent of
salary.
(b) By January 1 of each year, the board of directors shall
report to the legislative commission on pensions and retirement,
the chair of the committee on appropriations of the house of
representatives, and the chair of the committee on finance of
the senate on the amount raised by the employer and employee
contribution rates in effect and whether the total amount is
less than, the same as, or more than the actuarial requirement
determined under section 356.215.
(c) If the legislative commission on pensions and
retirement, based on the most recent valuation performed by its
actuary, determines that the total amount raised by the employer
and employee contributions under subdivision 2 and paragraph (b)
is less than the actuarial requirements determined under section
356.215, the employer and employee rates must be increased by
equal amounts as necessary to meet the actuarial requirements.
The employee rate may not exceed 4.15 percent of salary and the
employer rate may not exceed 4.29 percent of salary. The
increases are effective on the next January 1 following the
determination by the commission. The executive director of the
Minnesota state retirement system shall notify employing units
of any increases under this paragraph.
Sec. 6. Minnesota Statutes 1992, section 352.119, is
amended by adding a subdivision to read:
Subd. 4. [DETERMINING APPLICABLE LAW.] The annuity is
computed under the law in effect as of the last day for which
the employee receives pay, or if on medical leave, the day the
leave terminates. However, if the employee has returned to
covered employment following a termination, the employee must
have earned at least six months of allowable service following
their return to qualify for improved benefits resulting from any
law change enacted subsequent to that termination.
Sec. 7. Minnesota Statutes 1993 Supplement, section
352.22, subdivision 2, is amended to read:
Subd. 2. [AMOUNT OF REFUND.] Except as provided in
subdivision 3, any the refund payable to a person who ceased to
be a state employee by reason of termination of state
service shall receive a refund is 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 or monthly balances,
whichever applies.
Sec. 8. Minnesota Statutes 1993 Supplement, 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 reduced 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. 9. Minnesota Statutes 1993 Supplement, 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. 10. Minnesota Statutes 1993 Supplement, 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 reduced 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. 11. Minnesota Statutes 1992, section 352B.265, is
amended to read:
352B.265 [PRE-1973 INCREASE.]
Total benefits payable to a retiree or surviving spouse
whose benefits were computed under the law in effect before June
1, 1973, are increased by six percent on July 1, 1982, and on
July 1 of each year thereafter until July 1, 1994. Funds
sufficient to pay the increases provided by this section are
appropriated annually until June 30, 1995, to the executive
director from the state patrol retirement fund. On June 30,
1995, amounts paid under this section must be added to and
considered a portion of the annuity otherwise payable to the
recipient. Assets required to fund these benefits must be
transferred in accordance with section 352B.26.
Sec. 12. Minnesota Statutes 1992, section 352D.04,
subdivision 2, is amended to read:
Subd. 2. The moneys used to purchase shares under this
section shall be the employee and employer contributions
provided in this subdivision.
(a) The employee contribution shall be an amount equal to
four percent of salary the employee contribution specified in
section 352.04, subdivision 2.
(b) The employer contribution shall be an amount equal to
six percent of salary.
These contributions shall be made by deduction from salary
in the manner provided in section 352.04, subdivisions 4, 5, and
6.
Sec. 13. [356.88] [PUBLIC PENSION ADMINISTRATION
LEGISLATION.]
Subdivision 1. [DUE DATES.] (a) Proposed administrative
legislation recommended by or on behalf of the Minnesota state
retirement system, the public employees retirement association,
the teachers retirement association, the Minneapolis employees
retirement fund, or a first class city teachers retirement fund
association must be presented to the legislative commission on
pensions and retirement, the governmental operations and reform
committee of the senate, and the governmental operations and
gaming committee of the house of representatives on or before
October 1 of each year in order for the proposed administrative
legislation to be acted upon during the upcoming legislative
session. The executive director or the deputy executive
director of the legislative commission on pensions and
retirement shall provide written comments on the proposed
provisions to the public pension plans by November 15 of each
year.
(b) Proposed administrative legislation recommended by or
on behalf of a public employee pension plan or system under
paragraph (a) must address provisions:
(1) authorizing allowable service credit for leaves of
absence and related circumstances;
(2) governing offsets or deductions from the amount of
disability benefits;
(3) authorizing the purchase of allowable service credit
for prior uncredited periods;
(4) governing subsequent employment earnings by reemployed
annuitants; and
(5) authorizing retroactive effect for retirement annuity
or benefit applications.
(c) Where possible and desirable, taking into account the
differences among the public pension plans in existing law and
the unique characteristics of the individual public pension fund
memberships, uniform provisions relating to paragraph (b) for
all applicable public pension plans must be presented for
consideration during the legislative session. Supporting
documentation setting forth the policy rationale for each set of
uniform provisions must accompany the proposed administrative
legislation.
Subd. 2. [SALARY STUDY ADVISORY COMMITTEE.] In an effort
to treat public employees in a fair and equitable manner and to
protect the financial integrity of the public pension plans, the
legislative commission on pensions and retirement shall
establish an advisory committee to study the definitions of
salary in chapters 353, 354, and 354A to determine the high-five
average consecutive years of salary component for the formula
used to calculate retirement annuities and disability benefits.
The advisory committee must be composed of at least three
executive directors and executive secretaries of the seven
public pension plans, and the chair, vice-chair, and executive
director of the pension commission.
The advisory committee shall report its findings and
recommendations to the pension commission by February 15, 1995.
Sec. 14. [FISCAL YEAR 1995 ACTUARIAL VALUATIONS.]
For the fiscal year 1995 actuarial valuation period, the
legislative commission on pensions and retirement may authorize
an alternative set of salary increase assumptions or other
assumptions defined under Minnesota Statutes, section 356.215.
The actuary retained by the legislative commission on pensions
and retirement shall make recommendations for change based on an
experience study completed in fiscal year 1994 or 1995.
Sec. 15. [REPEALER.]
Minnesota Statutes 1992, sections 352.15, subdivision 2;
and 352D.09, subdivision 6, are repealed.
Sec. 16. [EFFECTIVE DATE.]
Sections 1, 2, and 5 to 16 are effective the day following
final enactment. Sections 3 and 4 are effective January 1, 1995.
ARTICLE 2
PUBLIC EMPLOYEES RETIREMENT ASSOCIATION
Section 1. Minnesota Statutes 1993 Supplement, section
353.01, subdivision 10, is amended to read:
Subd. 10. [SALARY.] (a) "Salary" means the periodical:
(1) periodic 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; and
(2) 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 periodic
compensation of the public employee after the effective date of
consolidation.
(b) Salary does not mean:
(1) fees paid to district court reporters, unused annual or
sick leave payments, in lump-sum or periodic payments, severance
payments, reimbursement of expenses, lump-sum settlements not
attached to a specific earnings period, or workers' compensation
payments.;
Salary does not mean (2) employer-paid amounts used by an
employee toward the cost of insurance coverage, employer-paid
fringe benefits, 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. and certain amounts determined
by the executive director to be ineligible;
(3) the amount equal to that which the employing
governmental subdivision would otherwise pay toward single or
family insurance coverage for a covered employee when, through a
contract or agreement with some but not all employees, the
employer:
(i) discontinues, or for new hires does not provide,
payment toward the cost of the employee's selected insurance
coverages under a group plan offered by the employer;
(ii) makes the employee solely responsible for all
contributions toward the cost of the employee's selected
insurance coverages under a group plan offered by the employer,
including any amount the employer makes toward other employees'
selected insurance coverages under a group plan offered by the
employer; and
(iii) provides increased salary rates for employees who do
not have any employer-paid group insurance coverages; and
(c) (4) except as provided in sections section 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.
(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. 2. Minnesota Statutes 1993 Supplement, section
353.01, subdivision 12a, is amended to read:
Subd. 12a. [TEMPORARY POSITION.] (1) "Temporary position"
means an employment position predetermined by the employer at
the time of hiring to be a period of six months or less in which
a person is a public employee under subdivision 2, but not or an
employment position occupied by a person hired by the employer
for a predetermined period of six months or less.
(2) "Temporary position" does not mean an employment
position for an unlimited period in which a person serves a
probationary period or works an irregular schedule.
Sec. 3. Minnesota Statutes 1993 Supplement, section
353.01, subdivision 16, is amended to read:
Subd. 16. [ALLOWABLE SERVICE.] (a) "Allowable service"
means service during years of actual membership in the course of
which employee contributions were made, periods covered by
payments in lieu of salary deductions under section 353.35, and
service in years during which the public employee was not a
member but for which the member later elected, while a member,
to obtain credit by making payments to the fund as permitted by
any law then in effect.
(b) "Allowable service" also means a period of authorized
leave of absence with pay from which deductions for employee
contributions are made, deposited, and credited to the fund.
(c) "Allowable service" also means a period of authorized
leave of absence without pay that does not exceed one year, and
during or for which a member obtained credit by payments to the
fund made in place of salary deductions, provided that the
payments are made in an amount or amounts based on the member's
average salary on which deductions were paid for the last six
months of public service, or for that portion of the last six
months while the member was in public service, to apply to the
period in either case immediately preceding commencement of the
leave of absence. If the employee elects to pay employee
contributions for the period of any leave of absence without
pay, or for any portion of the leave, the employee shall also,
as a condition to the exercise of the election, pay to the fund
an amount equivalent to both the required employer and
additional employer contributions for the employee. The payment
must be made within one year from the expiration of the leave of
absence 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 and receive a minimum of 90
calendar days three months of allowable service 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 8.5 percent a year, compounded annually, from the
end of the normal cycle until full payment is made. An employer
shall also make the employer and additional employer
contributions, plus six 8.5 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 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 and receive
a minimum of 90 calendar days three months of allowable service
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, limited to three months allowable service per
authorized temporary layoff in one calendar year. An
employee who has received the maximum service allowed for an
authorized temporary layoff shall return to public service for
and receive a minimum of 90 calendar days three months of
allowable service to receive allowable service for a subsequent
authorized temporary layoff.
(g) Notwithstanding any law to the contrary, "allowable
service" also means a parental leave. The association shall
grant a maximum of two months service credit for a parental
leave, within six months after the birth or adoption, upon
documentation from the member's governmental subdivision or
presentation of a birth certificate or other evidence of birth
or adoption 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
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) (i) 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. 4. Minnesota Statutes 1993 Supplement, section
353.01, subdivision 28, is amended to read:
Subd. 28. [RETIREMENT.] (a) "Retirement" means the
commencement of payment of an annuity based on a date designated
by the board of trustees. This date determines the rights under
this chapter which occur either before or after retirement. A
right to retirement is subject to termination of public service
under subdivision 11a and or termination of membership under
subdivision 11b, the earlier of which will determine the date
membership and coverage cease. A right to retirement must not
accrue without a complete and continuous separation for 30 days
from employment as a public employee under subdivision 2.
A former member of the basic or police and fire fund who
becomes a coordinated member upon returning to eligible,
nontemporary public service, terminates employment before
obtaining six months' allowable service under subdivision 16,
paragraph (a), in the coordinated fund, and is eligible to
receive an annuity the first day of the month after the most
recent termination date shall not accrue a right to a retirement
annuity under the coordinated fund. An annuity otherwise
payable to the former member must be based on the laws in effect
on the date of termination of the most recent service under the
basic or police and fire fund and shall be retroactive to the
first day of the month following that termination date or one
year preceding the filing of an application for retirement
annuity as provided by section 353.29, subdivision 7, whichever
is later. The annuity payment must be suspended or reduced
under the provisions of section 353.37, if earned compensation
for the reemployment equals or exceeds the amounts indicated
under that section. The association will refund the employee
deductions made to the coordinated fund, with interest under
section 353.34, subdivision 2, return the accompanying employer
contributions, and remove the allowable service credits covering
the deductions refunded.
(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. 5. Minnesota Statutes 1993 Supplement, section
353.017, is amended by adding a subdivision to read:
Subd. 6. [REEMPLOYMENT OF ANNUITANT.] The annuity of a
person otherwise eligible for an annuity under this chapter is
subject to the provisions of section 353.37.
Sec. 6. Minnesota Statutes 1992, section 353.03,
subdivision 1, is amended to read:
Subdivision 1. [MANAGEMENT; COMPOSITION; ELECTION.] The
management of the public employees retirement fund is vested
in a an 11-member board of trustees consisting of the state
auditor and nine ten members and the state auditor who may
designate a deputy auditor with expertise in pension matters as
the auditor's representative on the board. The governor shall
appoint six five trustees to four-year terms, one of whom shall
be designated to represent school boards, one to represent
cities, one to represent counties, one who is a member of the
police and fire fund, one who is a retired annuitant, and one
who is a public member knowledgeable in pension matters. The
membership of the association, including recipients of
retirement annuities and disability and survivor benefits, shall
elect three five trustees, one of whom must be a member of the
police and fire fund and one of whom must be a former member who
met the definition of public employee under section 353.01,
subdivisions 2 and 2a, for at least five years prior to
terminating membership or a member who receives a disability
benefit, for terms of four years. Except as provided in this
subdivision, trustees elected by the membership of the
association must be public employees and members of the
association. For seven days beginning October 1 of each year
preceding a year in which an election is held, the association
shall accept at its office filings in person or by mail of
candidates for the board of trustees. A candidate shall submit
at the time of filing a nominating petition signed by 25 or more
members of the fund. No name may be withdrawn from nomination
by the nominee after October 15. At the request of a candidate
for an elected position on the board of trustees, the board
shall mail a statement of up to 300 words prepared by the
candidate to all persons eligible to vote in the election of the
candidate. The board may adopt policies to govern form and
length of these statements, timing of mailings, and deadlines
for submitting materials to be mailed. These policies must be
approved by the secretary of state. The secretary of state
shall resolve disputes between the board and a candidate
concerning application of these policies to a particular
statement. A candidate who:
(1) receives contributions or makes expenditures in excess
of $100; or
(2) has given implicit or explicit consent for any other
person to receive contributions or make expenditures in excess
of $100 for the purpose of bringing about the candidate's
election, shall file a report with the ethical practices board
disclosing the source and amount of all contributions to the
candidate's campaign. The ethical practices board shall
prescribe forms governing these disclosures. Expenditures and
contributions have the meaning defined in section 10A.01. These
terms do not include the mailing made by the association board
on behalf of the candidate. A candidate shall file a report
within 30 days from the day that the results of the election are
announced. The ethical practices board shall maintain these
reports and make them available for public inspection in the
same manner as the board maintains and makes available other
reports filed with it. By January 10 of each year in which
elections are to be held the board shall distribute by mail to
the members ballots listing the candidates. No member may vote
for more than one candidate for each board position to be
filled. A ballot indicating a vote for more than one person for
any position is void. No special marking may be used on the
ballot to indicate incumbents. The last day for mailing ballots
to the fund is January 31. Terms expire on January 31 of the
fourth year, and positions are vacant until newly elected
members are qualified. The ballot envelopes must be so designed
and the ballots counted in a manner that ensures that each vote
is secret.
The secretary of state shall supervise the elections. The
board of trustees and the executive director shall undertake
their activities consistent with chapter 356A.
Sec. 7. Minnesota Statutes 1992, section 353.03,
subdivision 3a, is amended to read:
Subd. 3a. [EXECUTIVE DIRECTOR.] (a) [APPOINTMENT.] The
board shall appoint, with the advice and consent of the senate,
an executive director on the basis of education, experience in
the retirement field, and leadership ability. The executive
director shall have had at least five years' experience in an
executive level management position, which has included
responsibility for pensions, deferred compensation, or employee
benefits. The executive director serves at the pleasure of the
board. The salary of the executive director is as provided by
section 15A.081, subdivision 1.
(b) [DUTIES.] The management of the association is vested
in the executive director who shall be the executive and
administrative head of the association. The executive director
shall act as adviser to the board on all matters pertaining to
the association and shall also act as the secretary of the
board. The executive director shall:
(1) attend all meetings of the board;
(2) prepare and recommend to the board appropriate rules to
carry out the provisions of 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, up to two persons who shall serve in the unclassified
service and whose salary is set in accordance with section
43A.18, subdivision 3, appoint a confidential secretary in the
unclassified service, and appoint employees to carry out this
chapter, who are subject to chapters 43A and 179A in the same
manner as are executive branch employees;
(5) organize the work of the association as the director
deems necessary to fulfill the functions of the association, and
define the duties of its employees and delegate to them any
powers or duties, subject to the control of, and under such
conditions as, the executive director may prescribe;
(6) with the approval of the board, contract for the
services of an approved actuary, professional management
services, and any other consulting services as necessary to
fulfill the purposes of this chapter. All contracts are subject
to chapter 16B. The commissioner of administration shall not
approve, and the association shall not enter into, any contract
to provide lobbying services or legislative advocacy of any
kind. 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. Copies of
professional management survey reports shall 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 same time as
reports are furnished to the board. Only management firms
experienced in conducting management surveys of federal, state,
or local public retirement systems shall be qualified to
contract with the director hereunder;
(7) with the approval of the board provide in-service
training for the employees of the association;
(8) make refunds of accumulated contributions to former
members and to the designated beneficiary, surviving spouse,
legal representative or next of kin of deceased members or
deceased former members, as provided in this chapter;
(9) determine the amount of the annuities and disability
benefits of members covered by the association 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;
(10) pay annuities, refunds, survivor benefits, salaries,
and necessary operating expenses of the association;
(11) prepare and submit to the board and the legislature an
annual financial report covering the operation of the
association, as required by section 356.20;
(12) prepare and submit biennial and annual budgets to the
board for its approval and submit the approved budgets to the
department of finance for approval by the commissioner; and
(13) reduce all or part of the accrued interest payable
under section 353.27, subdivisions 12, 12a, and 12b or 353.28,
subdivision 5, upon receipt of proof by the association of an
unreasonable processing delay or other extenuating circumstances
of the employing unit. The executive director shall prescribe
and submit for approval by the board the conditions under which
such interest may be reduced; and
(14) with the approval of the board, perform such other
duties as may be required for the administration of the
association and the other provisions of this chapter and for the
transaction of its business.
Sec. 8. Minnesota Statutes 1993 Supplement, section
353.27, subdivision 7, is amended to read:
Subd. 7. [ADJUSTMENT FOR ERRONEOUS RECEIPTS OR
DISBURSEMENTS.] (a) [DEDUCTIONS TAKEN IN ERROR.] Except as
provided in paragraph (b), 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; or
(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;.
(b) Erroneous deductions taken from the salary of a person
who did not qualify for membership in the association by virtue
of concurrent employment before July 1, 1978, which required
contributions to another retirement fund or relief association
established for the benefit of officers and employees of a
governmental subdivision, are invalid. Upon discovery of the
error, the association shall remove all service and refund all
erroneous employee deductions to the person, with interest under
section 353.34, subdivision 2, and all erroneous employer
contributions to the employer. This paragraph has both
retroactive and prospective application.
(3) a refund of (c) Employer contributions and employee
deductions taken in error from sick leave, vacation, workers'
compensation, and severance pay amounts which are not salary
under section 353.01, subdivision 10, are invalid upon discovery
by the association and may be made refunded at any time.
(b) [ERRONEOUS DISBURSEMENT.] (d) 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. 9. Minnesota Statutes 1993 Supplement, section
353.37, subdivision 1, is amended to read:
Subdivision 1. [SALARY MAXIMUMS.] 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 or returns to work as an employee of a labor
organization that represents public employees who are
association members under this chapter and salary for the
reemployment service 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. If the person has not yet reached
the minimum age for the receipt of social security benefits, the
maximum salary for the person is equal to the annual maximum
earnings allowable for the minimum age for the receipt of social
security benefits.
Sec. 10. Minnesota Statutes 1993 Supplement, section
353.37, subdivision 2, is amended to read:
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 public
service in a position covered under this chapter or employment
with a labor organization that represents public employees who
are association members 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.
Sec. 11. Minnesota Statutes 1993 Supplement, section
353.37, subdivision 4, is amended to read:
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 employment which resulted in the
suspension of the annuity. The executive director may adopt
policies regarding the suspension and reduction of annuities
under this section.
Sec. 12. Minnesota Statutes 1993 Supplement, section
353.65, subdivision 3a, is amended to read:
Subd. 3a. [CHANGE IN EMPLOYEE AND EMPLOYER CONTRIBUTIONS
IN CERTAIN INSTANCES.] (a) If, for three after four consecutive
fiscal years beginning July 1, 1994, the regular actuarial
valuation of the public employees police and fire fund under
section 356.215 indicates that the fund has no unfunded
actuarial accrued liability and that there is a sufficiency in
excess of 0.5 percent of covered payroll when the total
actuarial funding requirements of the fund are compared to the
total support, the employee and employer contribution rates must
be decreased as determined under paragraph (c) to a level such
that the sufficiency equals 0.5 percent of covered payroll based
on the most recent actuarial valuation.
(b) If, for three after four consecutive fiscal years
beginning July 1, 1994, the regular actuarial valuation of the
public employees police and fire fund under section 356.215
indicates that the fund has an unfunded actuarial accrued
liability and that there is a deficiency in excess of 0.5
percent of covered payroll when the total actuarial funding
requirements of the fund are compared to the total support, the
employee and employer contribution rates must be increased as
determined under paragraph (c) so that no deficiency exists
based on the most recent actuarial valuation.
(c) The increase or decrease in employee and employer
contribution rates required under paragraphs (a) and (b) must
maintain the current ratio in employer and employee contribution
rates of 40 percent employee contribution and 60 percent
employer contribution.
(d) The contribution rate increase or decrease must be
determined by the executive director of the public employees
retirement association.
(e) The contribution rate increase or decrease is effective
on the first full payroll period beginning after June 30 next
following the third receipt by the association of the fourth
consecutive annual actuarial valuation disclosing the deficiency
or sufficiency specified in paragraph (a) or (b).
(f) A contribution rate increase or decrease under
paragraph (a) or (b) must not occur prior to receipt by the
association of the 1997 regular actuarial valuation of the
police and fire fund under section 356.215. A contribution rate
increase or decrease under paragraph (a) or (b) must not occur
within four years of a prior increase or decrease under
paragraph (a) or (b).
Sec. 13. Minnesota Statutes 1993 Supplement, section
353A.08, subdivision 3, is amended to read:
Subd. 3. [ELECTION OF COVERAGE BY ACTIVE MEMBERS.] 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 a police or fire
relief association, other than a volunteer firefighter, has the
option to elect benefit coverage 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
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 is eligible to make an election at one of
the following times:
(a) within six months of the effective date of
consolidation;
(b) between the date on which the active member attains the
age of 49 years and six months and 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 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.
Sec. 14. Minnesota Statutes 1992, section 356.30,
subdivision 1, is amended to read:
Subdivision 1. [ELIGIBILITY; COMPUTATION OF ANNUITY.] (1)
Notwithstanding any provisions to the contrary of the laws
governing the funds enumerated in subdivision 3, a person who
has met the qualifications of clause (2) may elect to receive a
retirement annuity from each fund in which the person has at
least six months allowable service, based on the allowable
service in each fund, subject to the provisions of clause (3).
(2) A person may receive upon retirement a retirement
annuity from each fund in which the person has at least six
months allowable service, and augmentation of a deferred annuity
calculated under the laws governing each public pension plan or
fund named in subdivision 3, from the date the person terminated
all public service if:
(a) the person has allowable service totaling an amount
that allows the person to receive an annuity in any two or more
of the enumerated funds; and
(b) the person has at least six months of allowable service
with the last such fund earned during the last period of
employment; and
(c) the person has not begun to receive an annuity from any
enumerated fund or the person has made application for benefits
from all funds the effective dates of the retirement annuity
with each fund under which the person chooses to receive an
annuity are within a six-month one-year period.
(3) The retirement annuity from each fund must be based
upon the allowable service in each fund, except that:
(a) The laws governing annuities must be the law in effect
on the date of final termination from the last period of public
service under a covered fund with which the person earned a
minimum of one-half year of allowable service credit during that
employment.
(b) The "average salary" on which the annuity from each
covered fund in which the employee has credit in a formula plan
shall be based on the employee's highest five successive years
of covered salary during the entire service in covered funds.
(c) The formula percentages to be used by each fund must be
those percentages prescribed by each fund's formula as continued
for the respective years of allowable service from one fund to
the next, recognizing all previous allowable service with the
other covered funds.
(d) Allowable service in all the funds must be combined in
determining eligibility for and the application of each fund's
provisions in respect to actuarial reduction in the benefit
annuity amount for retirement prior to normal retirement.
(e) The benefit annuity amount payable for any allowable
service under a nonformula plan of a covered fund must not be
affected but such service and covered salary must be used in the
above calculation.
(f) This section shall not apply to any person whose final
termination from the last public service under a covered fund is
prior to May 1, 1975.
(g) For the purpose of computing benefits annuities under
this section the formula percentages used by any covered fund,
except the public employees police and fire fund, must not
exceed 2-1/2 percent per year of service for any year of service
or fraction thereof. The formula percentage used by the public
employees police and fire fund must not exceed 2.65 percent per
year of service for any year of service or fraction thereof.
(h) Any period of time for which a person has credit in
more than one of the covered funds must be used only once for
the purpose of determining total allowable service.
(i) If the period of duplicated service credit is more than
six months, or the person has credit for more than six months
with each of the funds, each fund shall apply its formula to a
prorated service credit for the period of duplicated service
based on a fraction of the salary on which deductions were paid
to that fund for the period divided by the total salary on which
deductions were paid to all funds for the period.
(j) If the period of duplicated service credit is less than
six months, or when added to other service credit with that fund
is less than six months, the service credit must be ignored and
a refund of contributions made to the person in accord with that
fund's refund provisions.
Sec. 15. [EFFECTIVE DATE.]
Sections 1, 2, 4, 6, and 10 to 13 are effective July 1,
1994. Section 3 is effective May 1, 1994. Sections 5, 7, and 9
are effective January 1, 1994. Sections 8 and 14 are effective
retroactive to July 1, 1993.
ARTICLE 3
TEACHERS RETIREMENT ASSOCIATION
Section 1. Minnesota Statutes 1992, section 354.05,
subdivision 2, is amended to read:
Subd. 2. [TEACHER.] (a) "Teacher" includes any means:
(1) a person who renders service as a teacher, supervisor,
principal, superintendent, or librarian, nurse, counselor,
social worker, therapist, or psychologist in the public schools
of the state located outside of the corporate limits of the
cities of the first class as those cities were so classified on
January 1, 1979, or in the state colleges and universities
system, or in any charitable or state institution including,
penal and corrective, or correctional institutions supported, in
whole or in part, by public funds of a governmental subdivision,
or who is engaged in educational administration in connection
with the state public school system, including the
state colleges and university system and state community college
system, but excluding the University of Minnesota, whether the
position be a public office or an employment, not including
members or officers of any general governing or managing board
or body connected with the systems, or the officers of common,
independent, special, or associated school districts, or
unorganized territory. The term shall also include;
(2) an employee of the teachers retirement association
unless the employee is covered by the Minnesota state retirement
system by virtue of prior employment by the association, and any
nurse, counselor, social worker, therapist or psychologist who
renders service in the public schools as defined above or in
state universities. The term shall also include any;
(3) a person who renders teaching service on a part-time
basis and who also renders other services for a school district
single employing unit. In such cases, the teachers retirement
association shall have the authority to executive director shall
determine whether all or none of the combined employment shall
be service is covered by the teachers retirement association,
however a person whose teaching service comprises at least 50
percent of the combined employment salary is a member of the
association for all services with the single employing unit.
(b) The term does not include mean:
(1) an employee described in section 352D.02, subdivision
1a, who is hired after the effective date of Laws 1986, chapter
458. The term does not mean any;
(2) a person who works for a school or institution as an
independent contractor. The term shall not include any as
defined by the Internal Revenue Service;
(3) a person employed in subsidized on-the-job training,
work experience or public service employment as an enrollee
under the federal Comprehensive Employment and Training Act from
and 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 fund to meet the minimum vesting
requirements for a deferred retirement annuity, or the employer
agrees in writing on forms prescribed by the executive 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 Training and Employment Act, or the person agrees
in writing on forms prescribed by the executive director to make
the required employer contribution in addition to the required
employee contribution. The term shall not include any;
(4) a person holding a part-time adult supplementary
technical college license who renders part-time teaching service
in a technical college if (1) (i) the service is incidental to
the regular nonteaching occupation of the person; and (2) (ii)
the applicable technical college stipulates annually in advance
that the part-time teaching service will not exceed 300 hours in
a fiscal year and retains the stipulation in its records;
and (3) (iii) the part-time teaching service actually does not
exceed 300 hours in a fiscal year. The term also shall not
include; or
(5) a person exempt from licensure pursuant to section
125.031 or any person who was excluded from membership prior to
January 1, 1981, pursuant to Laws 1978, chapter 556, section 1,
and Laws 1980, chapter 342, section 8, if the person annually
certifies on a form prescribed by the executive director that
the person has established and is contributing to an individual
retirement account which is based on nonteaching employment.
Sec. 2. Minnesota Statutes 1993 Supplement, section
354.05, subdivision 8, is amended to read:
Subd. 8. [DEPENDENT CHILD.] For the purpose of survivor
benefit eligibility under section 354.46, subdivision
1, "Dependent child" means any a biological or adopted child of
a deceased member who has not reached the age of 18, or who is
under age 22 and is a full-time student throughout the normal
school year, unmarried and dependent for more than one-half of
support upon the member. It also includes any means a child of
the member conceived while living during the member's lifetime
and born after the member's death.
Sec. 3. Minnesota Statutes 1992, section 354.05, is
amended by adding a subdivision to read:
Subd. 14a. [SURVIVING SPOUSE.] "Surviving spouse" means
the spouse of a deceased member or a disabilitant who was
legally married to the member at the time of death.
Sec. 4. Minnesota Statutes 1992, section 354.05,
subdivision 21, is amended to read:
Subd. 21. [RETIREMENT.] "Retirement" means the withdrawal
of a member from active teaching service who is paid a
retirement annuity thereafter and commences with the date
designated by the retirement board when the retirement annuity
shall first accrue accrues to the former member after withdrawal
from active teaching service and application for an annuity
under section 354.44, subdivisions 3 and 4. The effective date
of retirement must occur for an annuity plan selection to take
effect. This date shall determine determines any rights
specified in this chapter which occur either before or after
retirement, as the case may be.
Sec. 5. Minnesota Statutes 1992, section 354.05,
subdivision 22, is amended to read:
Subd. 22. [DESIGNATED BENEFICIARY.] "Designated
beneficiary" means the person, trust, or organization designated
by a retiree or member to receive the benefits to which a
beneficiary is entitled under this chapter. A beneficiary
designation is valid only if it is made on an appropriate form
provided by the executive director and that is signed by the
member and two witnesses to the member's signature. The
properly completed form is must be received by the fund
postmarked on or before the date of death of the retiree or
member. If a retiree or a member does not designate such a
person, trust, or organization, or if the person designated
predeceases the retiree or the member, or the trust or
organization ceases to exist before the death of the retiree or
the member, the designated beneficiary in such cases means the
estate of the deceased retiree or member.
Sec. 6. Minnesota Statutes 1992, section 354.05,
subdivision 35, is amended to read:
Subd. 35. [SALARY.] (a) "Salary" means the compensation,
upon which member contributions are required and made, that is
paid to a teacher before any allowable reductions permitted
under the federal Internal Revenue Code of 1986, as amended
through December 31, 1988, for employee selected employee-paid
fringe benefits, tax sheltered annuities, deferred compensation,
or any combination of these employee-paid items are deducted.
(b) "Salary" does not include mean:
(1) lump sum annual leave payments;
(2) lump sum wellness and sick leave payments;
(3) payments in lieu of any employer-paid group insurance
coverage, including;
(4) payments for the difference between single and family
premium rates, that may be paid to a member with single
coverage;
(4) (5) employer-paid fringe benefits including, but not
limited to, flexible spending accounts, cafeteria plans, health
care expense accounts, day care expenses, or automobile
allowances and expenses;
(6) any form of payment made in lieu of any other employer-
paid fringe benefit or expense;
(5) (7) any form of severance payments;
(6) (8) workers' compensation payments;
(7) (9) disability insurance payments including
self-insured disability payments; or
(8) (10) payments to school principals and all other
administrators for services in addition to the normal work year
contract if these additional services are performed on an
extended duty day, Saturday, Sunday, holiday, annual leave day,
sick leave day, or any other nonduty day;
(11) payments under section 356.24, subdivision 1, clause
(4)(ii); and
(12) payments made under section 125.12, subdivision 7,
except for payments for sick leave accumulated under the
provisions of a uniform school district policy that applies
equally to all similarly situated persons in the district.
Sec. 7. Minnesota Statutes 1992, section 354.05, is
amended by adding a subdivision to read:
Subd. 40. [TIMELY RECEIPT.] An application, payment,
return, claim, or other document that is not personally
delivered to the association before the applicable due date is
considered to be a timely receipt if officially postmarked on or
before the due date or delivered or filed under section 645.151.
Sec. 8. Minnesota Statutes 1992, section 354.06,
subdivision 2a, is amended to read:
Subd. 2a. [DUTIES OF EXECUTIVE DIRECTOR.] The management
of the association is vested in the executive director who shall
be the executive and administrative head of the association.
The executive director shall act as advisor to the board on all
matters pertaining to the association and shall also act as the
secretary of the board. The executive director shall:
(1) attend all meetings of the board;
(2) prepare and recommend to the board appropriate rules to
carry out the provisions of this chapter;
(3) establish and maintain an adequate system of records
and accounts following recognized accounting principles and
controls;
(4) designate an assistant executive director in the
unclassified service and two assistant executive directors in
the classified service with the approval of the board, and
appoint such employees, both permanent and temporary, as are
necessary to carry out the provisions of said this chapter;
(5) organize the work of the association as the director
deems necessary to fulfill the functions of the association, and
define the duties of its employees and delegate to them any
powers or duties, subject to the director's control and under
such conditions as the director may prescribe;
(6) with the approval of the board, contract and set the
compensation for the services of an approved actuary,
professional management services, and any other consulting
services as may be necessary and fix the compensation therefor.
Such These contracts shall are not be subject to the
competitive bidding procedure prescribed by chapter
16B. Professional management services may not be contracted for
more often than once in every six years. Any An 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. Copies of professional management
survey reports shall 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 same time as reports are furnished to the board.
Only management firms experienced in conducting management
surveys of federal, state, or local public retirement systems
shall be are qualified to contract with the executive
director hereunder;
(7) with the approval of the board, provide in-service
training for the employees of the association;
(8) make refunds of accumulated contributions to former
members and to the designated beneficiary, surviving spouse,
legal representative, or next of kin of deceased members or
deceased former members, as provided in under this chapter;
(9) determine the amount of the annuities and disability
benefits of members covered by the association 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 under this chapter;
(10) pay annuities, refunds, survivor benefits, salaries,
and necessary operating expenses of the association;
(11) prepare and submit to the board and the legislature an
annual financial report covering the operation of the
association, as required by section 356.20;
(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 on determining that
funds are needed for the purposes of the association;
(14) prepare and submit biennial and annual budgets to the
board and with the approval of the board submit those budgets to
the department of finance; and
(15) with the approval of the board, perform such other
duties as may be required for the administration of the
association and the other provisions of this chapter and for the
transaction of its business. The executive director may:
(i) reduce all or part of the accrued interest and fines
payable by an employing unit for reporting requirements under
section 354.52, based on an evaluation of any extenuating
circumstances of the employing unit;
(ii) assign association employees to conduct field audits
of an employing unit to ensure compliance with the provisions of
this chapter; and
(iii) recover overpayments, if not repaid to the
association, by suspending or reducing the payment of a
retirement annuity, refund, disability benefit, survivor
benefit, or optional annuity under this chapter until the
overpayment, plus interest, has been recovered.
Sec. 9. Minnesota Statutes 1992, section 354.06,
subdivision 4, is amended to read:
Subd. 4. [TREASURER; DUTIES.] All members of the board
shall serve without compensation but. A member shall receive
necessary expenses while attending all to attend meetings of the
board or meetings of any committee and its committees, and
association functions and presentations authorized by the board,
to. The necessary expenses must be paid out of the fund.
Necessary expenses may include the salary of any substitute
teacher which the employing unit is required to hire. The board
may reimburse the employing unit for the salary of the
substitute teacher. Members of the board shall suffer no loss of
compensation from their employing units by reason of service on
or for the association, the board, or any committee authorized
by the board. Necessary expenses may include the salary of any
substitute teacher which the employing unit is required to hire
in the absence of the board member. The board may reimburse the
employing unit for the cost of the substitute teacher.
Sec. 10. Minnesota Statutes 1992, section 354.071,
subdivision 5, is amended to read:
Subd. 5. [PETITION FOR REVIEW HEARING.] The board shall
hold a timely hearing on a petition for review. The board shall
and make its decision on a petition solely on the proceedings
and the relevant documentation as submitted and the proceedings
of the hearing. At the hearing, the petitioner, the
petitioner's attorney, and the executive director, and an
assistant executive director may state and discuss with the
board their positions with respect to the petition. The board
may allow further documentation to be placed in the record at
during or subsequent to after the board meeting at which the
petition is considered hearing. If the board allows additional
documentation into the record at during or subsequent to after
the board meeting hearing, it may make a final determination on
the petition at that board meeting hearing only upon the
agreement of both the petitioner and the executive director.
Sec. 11. Minnesota Statutes 1992, section 354.091, is
amended to read:
354.091 [SERVICE CREDIT.]
In computing the time of service of a teacher, the length
of a legal school year in the district or institution where such
service was rendered shall must constitute a year under sections
354.05 to 354.10, provided such the year is not less than the
legal minimum school year of this state. No person shall be
allowed receive credit for more than one year of teaching
service for any fiscal year. Commencing July 1, 1961, (1) if a
teacher teaches only a fractional part of a day, credit shall
must be given for a day of teaching service for each five hours
taught, and (2) if a teacher teaches at least 170 full days in
any fiscal year, credit shall must be given for a full year of
teaching service, and (3) if a teacher teaches for only a
fractional part of the year, credit shall must be given for such
fractional part of the year as the term of service rendered
bears to 170 days. A person who teaches in the state colleges
and university system shall receive a full year of service
credit based on the number of days in the system's full school
year if it is less than 170 days. Teaching service performed
prior to July 1, 1961, shall must be computed pursuant to under
the law in effect at the time it was rendered.
In no event shall any A teacher shall not lose or gain
retirement service credit as a result of the employer converting
to a four-day work week. If the employer does convert to a
four-day work week, the forms for reporting and procedures for
determining service credit shall be determined by the executive
director with the approval of the board of trustees.
Sec. 12. [354.096] [FAMILY LEAVE.]
Subdivision 1. [CERTIFICATION.] Upon granting a family
leave to a member, an employing unit must certify the leave to
the association on a form specified by the executive director
before the end of the fiscal year during which the leave was
granted.
Subd. 2. [PAYMENT.] (a) Notwithstanding any laws to the
contrary, a member who is granted a family leave under United
States Code, title 42, section 12631, may receive allowable
service credit for the leave by making payment of the employee,
employer, and additional employer contributions at the rates
under section 354.42, during the leave period as applied to the
member's average full-time monthly salary rate on the date the
leave commenced.
(b) The member may make payment, without interest, to the
association by the end of the fiscal year following the fiscal
year in which the leave terminated or before the effective date
of the member's retirement, whichever is earlier.
Subd. 3. [SUBSEQUENT ELIGIBILITY.] The member shall return
to public service after the leave period under United States
Code, title 42, section 12631, to receive allowable service for
a subsequent authorized family leave.
Sec. 13. Minnesota Statutes 1992, section 354.10,
subdivision 1, is amended to read:
Subdivision 1. [EXEMPTION; EXCEPTIONS.] The right of a
teacher to take advantage of the benefits provided by this
chapter, is a personal right only and is not assignable. All
money to the credit of a teacher's account in the fund or any
money payable to the teacher from the fund belongs to the state
of Minnesota until actually paid to the teacher or a beneficiary
pursuant to the provisions of under this chapter. Any power of
attorney, The association may acknowledge a properly completed
power of attorney form. An assignment or attempted assignment
of a teacher's interest in the fund, or of the beneficiary's
interest therein in the fund, by a teacher or a beneficiary is
void and is exempt from taxation under chapter 291 and from
garnishment or levy under attachment or execution, except as
provided in subdivision 2 or 3, or section 518.58, 518.581, or
518.611.
Sec. 14. Minnesota Statutes 1992, section 354.10,
subdivision 2, is amended to read:
Subd. 2. [AUTOMATIC DEPOSITS.] The board may pay an
annuity or benefit to a banking institution, qualified under
chapter 48, that is a trustee for a person eligible to receive
the annuity or benefit. Upon completion receipt of the proper
properly completed forms as provided by the executive director,
the annuity or benefit amount may be electronically transferred
or the annuity or benefit check may be mailed to a banking
institution, savings association, or credit union for deposit to
the recipient's individual account or joint account with the
recipient's spouse or any other person designated by the
recipient. Any An overpayment to a joint account after the
death of the annuity or benefit recipient must be repaid to the
fund by the joint tenant if the overpayment is not repaid to the
fund by the banking institution, savings association, or credit
union. The board may prescribe the conditions which govern
these procedures.
Sec. 15. Minnesota Statutes 1992, section 354.42,
subdivision 3, is amended to read:
Subd. 3. The employer contribution to the fund shall be an
amount equal to 4-1/2 percent of the salary of each coordinated
member and 8-1/2 percent of the salary of each basic member.
This contribution shall be made in the manner provided in
section 354.43.
Sec. 16. Minnesota Statutes 1992, section 354.42,
subdivision 5, is amended to read:
Subd. 5. [ADDITIONAL EMPLOYER CONTRIBUTION.] To amortize
the unfunded actuarial accrued liability computed under the
entry age actuarial cost method and disclosed under the annual
actuarial valuations prepared by the commission-retained actuary
under section 356.215, an additional employer contribution shall
be made in the amount of 3.64 percent of the salary of each
member.
This contribution must be made in the manner provided in
section 354.43 354.52, subdivision 4.
By January 1 of each year, the board of directors shall
report to the legislative commission on pensions and retirement,
the chair of the committee on appropriations of the house of
representatives, and the chair of the committee on finance of
the senate on the amount raised by the additional employer
contribution rate in effect and whether that amount is less
than, the same as, or more than the required amortization
contribution determined under section 356.215.
Sec. 17. Minnesota Statutes 1992, section 354.44,
subdivision 1a, is amended to read:
Subd. 1a. [MANDATORY RETIREMENT PROPORTIONATE
ANNUITY.] Notwithstanding the provisions of sections 43A.11 or
197.455 to 197.48, a member who is serving as a faculty member
or administrator under a contract of unlimited tenure or similar
arrangement providing for unlimited tenure at an institution of
higher education, as defined in section 1201(a) of the federal
Higher Education Act of 1965, as amended through January 1,
1987, shall terminate employment at the end of the academic year
in which the member reaches the age of 70. For purposes of this
subdivision, an academic year shall be deemed to end August 31.
No other member shall be subject to a mandatory retirement age
provision. A member who terminates employment at any time
during the academic year at the end of which the person is at
the normal retirement age or older shall, for the purpose of
determining eligibility for a proportionate retirement annuity,
be considered to have been required to terminate employment at
normal retirement age or older pursuant to section
356.32. Nothing contained in this subdivision shall preclude an
employing unit covered by this chapter from employing a retired
teacher as a substitute or part-time teacher. Any person who
has attained normal retirement age, who is employed as a
substitute or part-time teacher, and who earns an amount equal
to the annual maximum earnings allowable for that age for the
continued receipt of full benefit amounts monthly under the
federal old age, survivors and disability insurance program as
set by the secretary of health and human services pursuant to
the provisions of United States Code, title 42, section 403, in
any academic year from employment as a substitute or part-time
teacher, shall terminate employment for the remainder of that
academic year. No person who has attained normal retirement age
and who has retired under this chapter may resume membership in
the retirement association as a result of subsequent employment
as a substitute or part-time teacher For purposes of this
subdivision, an academic year ends August 31.
Sec. 18. Minnesota Statutes 1992, section 354.44,
subdivision 4, is amended to read:
Subd. 4. [TIME AND MANNER OF PAYMENTS.] A member may make
application to the board for a retirement annuity any time after
the member has satisfied the age and service requirements of
this chapter for retirement except that no an application for
retirement may must not be made more than 60 days before
termination of teaching service. The annuity payment shall
begin begins to accrue after the termination of teaching
service, or after the application for retirement has been filed
with the board, whichever is later, as follows:
(a) on the 16th day of the month of termination or filing
if the termination or filing occurs on or before the 15th day of
the month or,
(b) on the first day of the month following the month of
termination or filing if the termination or filing occurs on or
after the 16th day of the month, or
(c) on July 1 for all school principals and other
administrators who receive a full annual contract salary during
the fiscal year for performance of a full year's contract duties.
If an application for retirement is filed with the board
during the 90-day six-month period immediately following the
termination of teaching service, the annuity may begin to accrue
as if the application for retirement had been filed with the
board on the date teaching service terminated or a later date
occurring within the six-month period as specified by the
member. In no event may An annuity must not begin to accrue
more than one month before the date of final salary receipt.
Sec. 19. Minnesota Statutes 1992, section 354.44,
subdivision 5a, is amended to read:
Subd. 5a. [EXEMPTION FOR INTERIM SUPERINTENDENT.] A person
who performs services as an interim superintendent because of
the death, disability, termination, or resignation of the
previous superintendent is exempt from the earnings limitations
and reductions in annuity payments in subdivision 5 for up to 90
working days of service as an interim superintendent. During
this period of up to 90 working days, the school board may pay
the interim superintendent at any rate, up to the rate paid to
the previous superintendent. This exemption applies only if the
school board hiring the interim superintendent submits an
application for the exemption to on a form prescribed by the
executive director, and the executive director approves the
application before the services as interim superintendent
begin. The application must certify that the school board has
unanimously approved the exemption from the earnings limitations
and reductions. The executive director may prescribe a form for
the application. A school board may shall not apply for more
than one exemption in a fiscal year. No more than three
exemptions may be approved for any person. Only one exemption
may be approved for any person in a fiscal year. The exemption
under this subdivision does not apply to a person who retires
from a school district and within one year after retirement
returns to the same school district as an interim superintendent.
Sec. 20. Minnesota Statutes 1993 Supplement, 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 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 are
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 must be made to the surviving parent, or
if there be none, to the legal guardian of the child. The
maximum monthly benefit shall must not exceed $1,000 for any one
family, and the minimum benefit per family shall must 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 must 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 must 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. 21. Minnesota Statutes 1993 Supplement, section
354.46, subdivision 5, is amended to read:
Subd. 5. [PAYMENT TO DESIGNATED BENEFICIARY.] Any A member
and the spouse of the member may make a joint specification in
writing on a form prescribed by the executive director that the
benefits provided in subdivision 2, or in section 354.47,
subdivision 1, shall must be paid only to a designated
beneficiary. For purposes of this subdivision 2, a designated
beneficiary may only be either a former spouse or a biological
or adopted child, either biological or adopted, of the member,
but more than one beneficiary may be designated for the benefit
provided in section 354.47, subdivision 1.
Sec. 22. Minnesota Statutes 1992, section 354.47, is
amended to read:
354.47 [REFUND PAYMENT AFTER DEATH.]
Subdivision 1. [DEATH BEFORE RETIREMENT.] (1) If a member
dies before retirement and is covered pursuant to the provisions
of under section 354.44, subdivision 2, and neither an optional
annuity, nor a reversionary annuity, nor a benefit pursuant
to under section 354.46, subdivision 1, is payable to the
survivors if the member was a basic member, the surviving
spouse, or if there is no surviving spouse, the designated
beneficiary shall be is entitled to an amount equal to the
member's accumulated deductions with interest credited to the
account of the member to the date of death.
(2) If a member dies before retirement and is covered
pursuant to the provisions of under section 354.44, subdivision
6, and neither an optional annuity, nor reversionary annuity,
nor the benefit described in section 354.46, subdivision 1, is
payable to the survivors if the member was a basic member, the
surviving spouse, or if there is no surviving spouse, the
designated beneficiary shall be is entitled to an amount equal
to the member's accumulated deductions credited to the account
of the member as of June 30, 1957, and from July 1, 1957, to the
date of death the member's accumulated deductions plus interest
at the rate of six percent per annum compounded annually.
Subd. 1a. [UNCASHED ANNUITY OR BENEFIT WARRANTS.] Uncashed
annuity or benefit warrants issued before the recipient's death
are payable to the designated beneficiary, and if none, to the
recipient's estate.
Subd. 2. [BENEFITS OF $1,500 OR LESS.] If a member or a
former member dies without having a surviving designated
beneficiary and the amount to the credit of the decedent is
$1,500 or less, the board of trustees may 90 days after the date
of death, in the absence of probate proceedings, make payment to
the surviving spouse of the decedent. This payment shall be is
a bar to recovery of this payment from the association by any
other person or persons. Any accrued retirement annuity,
disability, or survivor benefit may be paid in the same manner.
Sec. 23. Minnesota Statutes 1992, section 354.48,
subdivision 2, is amended to read:
Subd. 2. [APPLICATIONS.] Any A person described in
subdivision 1, or another person authorized to act on behalf of
the person, may make application for a total and permanent
disability benefit only within the 18-month period following the
termination of teaching service. This benefit accrues from the
day following the commencement of disability or the day
following the last day for which salary is paid, whichever is
later, but may does not begin to accrue more than 90 days six
months before the date the application is filed with the
executive director. If salary is being received for either
annual or sick leave during the period, payments accrue from the
day following the last day for which this salary is paid.
Sec. 24. Minnesota Statutes 1992, section 354.49,
subdivision 1, is amended to read:
Subdivision 1. Any A person who ceases to render teaching
service in any school or institution to which the provisions of
this chapter apply shall be is entitled to a refund provided in
subdivision 2, or a deferred retirement annuity under section
354.55, subdivision 11. An application for a refund may must
not be made no sooner than 30 days after termination of teaching
service if the applicant has not again become a teacher. This
payment will must be made within 90 days after receipt of
application for refund or upon completion of processing the
report made pursuant to section 354.52, subdivision 2 whichever
is later.
Sec. 25. Minnesota Statutes 1992, section 354.52,
subdivision 2, is amended to read:
Subd. 2. [ANNUAL SUMMARY REPORTS.] On or before August 1
each year, each school board or managing body a representative
authorized by an employing unit must report to the executive
director giving an itemized summary of the total amount withheld
from the salaries of teachers for teachers retirement deductions
and all other information required by the executive
director requires. If the itemized summary is received after
August 1 in any year, there is a penalty not to exceed $50 for
each month or portion thereof which the summary is delinquent,
as determined by the executive director. The penalty must be
paid by the school board or the managing body.
Sec. 26. Minnesota Statutes 1992, section 354.52,
subdivision 2a, is amended to read:
Subd. 2a. [ANNUAL POSTRETIREMENT INCOME REPORTS.] On or
before each February 15, each school board or managing body a
representative authorized by an employing unit must report to
the executive director the amount of income earned during the
previous calendar year by each retiree for teaching service
performed after retirement. This annual report must be based on
reemployment income as defined in section 354.44, subdivision 5,
and it must be made on a form provided by the executive
director. Signing the report has the force and effect of an
oath as to the correctness of the amount of postretirement
reemployment income earned. If the required report is received
after February 15 in any year there is a penalty not to exceed
$50 for each month or portion thereof which the report is late,
as determined by the executive director. The penalty must be
paid by the school board or managing body.
Sec. 27. Minnesota Statutes 1992, section 354.52,
subdivision 4, is amended to read:
Subd. 4. [REPORTING AND REMITTANCE REQUIREMENTS.] At least
once each month, the chief administrative officer of each a
representative authorized by an employing school district or
managing body of schools and institutions to which the
provisions of this chapter apply unit shall transmit all amounts
due to the association and furnish a signed statement indicating
the amount due and transmitted, and shall transmit a statement
containing such with other information as required by the
executive director shall require. Signing the statement shall
have has the force and effect of an oath as to the correctness
of the amount due and transmitted. Any An amount thus due and
not transmitted shall accrue accrues interest at an annual rate
of 8.5 percent compounded annually commencing 15 days after the
date first due until the amount is transmitted and shall must be
paid by the employing school district or other managing body
unit. The state treasurer shall credit all money received or
withheld pursuant to the provisions of this chapter to the fund
and the reports and date received by the state treasurer from
each reporting agency shall be available for the board. Any
person willfully failing to perform any of the duties imposed by
this section shall be guilty of a misdemeanor. These payments
and other employing unit obligations not remitted within 60 days
of notification by the association must be certified to the
commissioner of finance who shall deduct the amount from any
state aid or appropriation amount applicable to the employing
unit.
Sec. 28. Minnesota Statutes 1992, section 354.52, is
amended by adding a subdivision to read:
Subd. 4a. [MEMBER DATA REPORTING REQUIREMENTS.] (a) An
employing unit shall initially provide the following member data
or any of that data not previously provided to the association
for payroll warrants dated after June 30, 1995, in a format
prescribed by the executive director. Data changes and the
dates of those changes must be reported to the association on an
ongoing basis for the payroll cycle in which they occur with the
data under subdivision 4b. Data on the member includes:
(1) legal name, address, association member number,
employer-assigned employee number, and social security number;
(2) association status, including, but not limited to,
basic, coordinated, exempt annuitant, exempt technical college
teacher, and exempt independent contractor or consultant;
(3) employment status, including, but not limited to, full
time, part time, intermittent, substitute, or part-time
mobility;
(4) employment position, including, but not limited to,
teacher, superintendent, principal, administrator, or other;
(5) employment activity, including, but not limited to,
hire, termination, resumption of employment, disability, or
death;
(6) leaves of absence;
(7) county district number assigned by the association for
the employing unit;
(8) data center identification number, if applicable; and
(9) other information as may be required by the executive
director.
Sec. 29. Minnesota Statutes 1992, section 354.52, is
amended by adding a subdivision to read:
Subd. 4b. [PAYROLL CYCLE REPORTING REQUIREMENTS.] An
employing unit shall provide the following data to the
association for payroll warrants dated after June 30, 1995, for
each payroll cycle in a format prescribed by the executive
director:
(1) association member number;
(2) employer-assigned employee number;
(3) social security number;
(4) amount of each salary deduction;
(5) amount of salary as defined in section 354.05,
subdivision 35, from which each deduction was made;
(6) reason for payment;
(7) service credit;
(8) the beginning and ending dates of the payroll period
covered and the date of actual payment;
(9) fiscal year of salary earnings;
(10) total remittance amount including employee, employer,
and additional employer contributions; and
(11) other information as may be required by the executive
director.
Sec. 30. Minnesota Statutes 1992, section 354.52, is
amended by adding a subdivision to read:
Subd. 6. [NONCOMPLIANCE CONSEQUENCES.] An employing unit
that does not comply with the reporting requirements under this
section shall pay a fine of $5 per calendar day until the
association receives the required data.
Sec. 31. Minnesota Statutes 1992, section 354.66, is
amended by adding a subdivision to read:
Subd. 1c. [PARTICIPATION.] Participation in the part-time
mobility program must be based on a full fiscal year and the
employment pattern of the teacher during the most recent fiscal
year.
Sec. 32. Minnesota Statutes 1992, section 354.66,
subdivision 2, is amended to read:
Subd. 2. A teacher in the public elementary schools,
secondary schools, or technical colleges or in the community
college system or the state university system of the state who
has 20 years or more of allowable service in the fund or 20
years or more of full-time teaching service in Minnesota public
elementary schools, secondary schools, or technical colleges or
in the community college system or the state university system,
or a teacher in the community college system or state university
system who has attained attains at least age 55 and has ten
years or more of allowable service in the fund or ten years or
more of full-time teaching service as described in this
subdivision, may, by agreement with the board of the employing
district, be assigned to teaching service within the district in
a part-time teaching position. The association must receive a
copy of the agreement before October 1 of the year for which the
teacher requests to make retirement contributions under
subdivision 4.
Sec. 33. Minnesota Statutes 1992, section 354.66,
subdivision 3, is amended to read:
Subd. 3. For purposes of this section, the term "part-time
teaching position" shall mean a teaching position within the
district in which the teacher is employed for at least 50 full
days or a fractional equivalent thereof as prescribed in section
354.091, and for which the teacher is compensated in an amount
not exceeding 67 percent of the compensation established by the
board for a full-time teacher with identical education and
experience within with the district employing unit. The
compensation of a teacher in the state colleges and university
system may exceed the 67 percent limit if the teacher does not
teach just one of the three quarters in the system's full school
year, provided no additional services are performed while the
teacher participates in the program.
Sec. 34. [REPEALER.]
Minnesota Statutes 1992, sections 354.05, subdivisions 15
and 29; 354.43, subdivision 3; 354.57; 354.65; and 356.18, are
repealed.
Sec. 35. [EFFECTIVE DATE.]
Sections 1 to 27 and 30 to 34 are effective the day
following final enactment. Sections 28 and 29 are effective
July 1, 1995.
ARTICLE 4
RESTRICTIONS ON CERTAIN PUBLIC PENSION
PLAN MEMBERSHIP AUTHORIZATIONS
Section 1. Minnesota Statutes 1992, section 352.029,
subdivision 1, is amended to read:
Subdivision 1. [QUALIFICATIONS.] An employee of a labor
organization that is an exclusive bargaining agent representing
state employees or Unless specifically excluded under section
352.01, subdivision 2b, a state employee on leave of absence
without pay to provide service as an employee or officer of a
labor organization that is an exclusive bargaining agent
representing state employees, may choose elect under subdivision
2 to be covered by the general state employees retirement plan
of the Minnesota state retirement system for service with the
labor organization unless specifically excluded under section
352.01, subdivision 2b, subject to the limitations set forth in
subdivisions 2a and 2b.
Sec. 2. Minnesota Statutes 1992, section 352.029, is
amended by adding a subdivision to read:
Subd. 2a. [LIMITATIONS ON SALARY FOR BENEFITS AND
CONTRIBUTIONS.] (a) The covered salary for a labor organization
employee who qualifies for membership under this section or
section 352.75 is limited to the lesser of:
(1) the employee's actual salary as defined under section
352.01, subdivision 13; or
(2) 75 percent of the salary of the governor as set under
section 15A.082.
(b) The limited covered salary determined under this
subdivision must be used in determining employee, employer, and
employer additional contributions under section 352.04,
subdivisions 2 and 3, and in determining retirement annuities
and other benefits under this chapter and chapter 356.
Sec. 3. Minnesota Statutes 1992, section 352.029, is
amended by adding a subdivision to read:
Subd. 2b. [EARNING RESTRICTIONS APPLY.] A retirement
annuity is only payable, if the person has met any other
applicable requirements, upon the termination by the person who
elected coverage under subdivision 1 of employment by the labor
organization. The reemployed annuitant earnings limitation set
forth in section 352.115, subdivision 10, applies in the event
that the person who elected coverage under subdivision 1 retires
and is subsequently reemployed while an annuitant by the labor
organization or by any other entity employing persons who are
covered by the Minnesota state retirement system by virtue of
that employment.
Sec. 4. Minnesota Statutes 1993 Supplement, section
353.017, subdivision 1, is amended to read:
Subdivision 1. [QUALIFICATIONS.] Unless specifically
exempt under section 353.01, subdivision 2b, a former member of
the association, or a current coordinated member of the
association who is on an authorized leave of absence, and who is
an employee of a labor organization that represents public
employees who are association members may elect, under
subdivision 2, to continue to be a coordinated member with
respect to service with employment by the labor
organization unless specifically exempt under section 353.01,
subdivision 2b subject to the limitations set forth in
subdivisions 4 and 7.
Sec. 5. Minnesota Statutes 1993 Supplement, section
353.017, subdivision 3, is amended to read:
Subd. 3. [CONTRIBUTIONS.] The employee, employer and
additional employer contributions shall be are 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, subject to the limitations under
subdivision 7, and remit all contributions to the public
employees retirement association pursuant to under section
353.27, subdivisions 4, 7, 10, 11, and 12.
Sec. 6. Minnesota Statutes 1993 Supplement, section
353.017, is amended by adding a subdivision to read:
Subd. 4. [TERMINATION OF MEMBERSHIP FOR RETIREMENT
ELIGIBILITY.] A retirement annuity is only payable, if the
person has met any other applicable requirements, upon the
termination by the person who elected coverage under subdivision
1 of employment by the labor organization. The reemployed
annuitant earnings limitation set forth in section 353.37,
subdivision 1, applies in the event that the person who elected
coverage under subdivision 1 retires and is subsequently
reemployed while an annuitant by the labor organization or by
any other entity employing persons who are covered by the public
employees retirement association by virtue of that employment.
Sec. 7. Minnesota Statutes 1993 Supplement, section
353.017, is amended by adding a subdivision to read:
Subd. 7. [LIMITATIONS ON SALARY AND CONTRIBUTIONS.] The
covered salary for a labor organization employee who qualifies
for membership under this section is limited to the lesser of:
(1) the employee's actual salary as defined under section
353.01, subdivision 10; or
(2) 75 percent of the salary of the governor as set under
section 15A.082.
The limited covered salary determined under this
subdivision must be used in determining employee and employer
contributions under section 353.27, subdivisions 2, 3, and 3a,
and in determining retirement annuities and other benefits under
this chapter and chapter 356.
Sec. 8. Minnesota Statutes 1992, section 354.41,
subdivision 4, is amended to read:
Subd. 4. Any (a) A person who is a former member on an
authorized leave of absence and is presently employed by the
Minnesota federation of teachers or its affiliated branches
within the state, the Minnesota education association, the
Minnesota association of school principals, the Minnesota
association of secondary school principals or the Minnesota
association of school administrators may elect to be a
coordinated member in the fund based on such that employment;
provided, subject to the limitations set forth in subdivisions
4a and 4b. However, that no person shall also be is entitled to
such membership under this section if the person also is a
member of a teachers retirement association in a city of the
first class organized pursuant to under chapter 354A for the
same period of service. For such persons so employed on June
30, 1975, the election must be made prior to July 1, 1976. For
such persons so employed after June 30, 1975,
(b) The election must be made upon within 90 days of
commencing employment by the labor organization.
Sec. 9. Minnesota Statutes 1992, section 354.41, is
amended by adding a subdivision to read:
Subd. 4a. [LIMITATIONS ON SALARY AND CONTRIBUTIONS.] The
covered salary for a labor organization employee who qualifies
for membership under this section is limited to the lesser of:
(1) the employee's actual salary as defined under section
354.05, subdivision 35; or
(2) 75 percent of the salary of the governor as set under
section 15A.082.
The limited covered salary determined under this
subdivision must be used in determining employee, employer, and
employer additional contributions under section 354.42,
subdivisions 2, 3, and 5, and in determining retirement
annuities and other benefits under this chapter and chapter 356.
Sec. 10. Minnesota Statutes 1992, section 354.41, is
amended by adding a subdivision to read:
Subd. 4b. [EARNING RESTRICTIONS APPLY.] A retirement
annuity is only payable, if the person has met any other
applicable requirements, upon the termination by the person who
elected coverage under subdivision 4 of employment by the labor
organization. The reemployed annuitant earnings limitation set
forth in section 354.44, subdivision 5, applies in the event
that the person who elected coverage under subdivision 4 retires
and is subsequently reemployed while an annuitant by the labor
organization or by any other entity employing persons who are
covered by the Minnesota teachers retirement association by
virtue of that employment.
Sec. 11. [356.611] [LIMITATION ON PUBLIC EMPLOYEE SALARIES
FOR PENSION PURPOSES.]
(a) Notwithstanding any provision of law, bylaws, articles
or incorporation, retirement and disability allowance plan
agreements, or retirement plan contracts to the contrary, the
covered salary for pension purposes for a plan participant of a
covered retirement fund under section 356.30, subdivision 3, may
not exceed 95 percent of the salary established for the governor
under section 15A.082 at the time the person received the salary.
(b) This section does not apply to a salary paid:
(1) to the governor;
(2) to an employee of a political subdivision in a position
that is excluded from the limit as specified under section
43A.17, subdivision 9; or
(3) to a state employee in a position for which the
commissioner of employee relations has approved a salary rate
that exceeds 95 percent of the governor's salary.
(c) The limited covered salary determined under this
section must be used in determining employee and employer
contributions and in determining retirement annuities and other
benefits under the respective covered retirement fund and under
this chapter.
Sec. 12. [EFFECTIVE DATE.]
(a) Sections 1 to 11 are effective the day following final
enactment.
(b) Sections 1, 4, and 8 apply to labor organization
employees initially employed in that employment position after
the effective date specified in paragraph (a). Sections 2, 5,
7, 9, and 11 apply to the plan salary and contributions after
July 1, 1994, for labor organization employees who were
employees in that employment position before the effective date
specified in paragraph (a).
ARTICLE 5
PUBLIC EMPLOYEES RETIREMENT ASSOCIATION
Section 1. [CONSOLIDATED LOCAL RELIEF ASSOCIATIONS;
RETIREMENT COVERAGE OPTION.]
Notwithstanding the 180-day limitation contained in
Minnesota Statutes, section 353A.08, subdivision 3, an active
member of a former local relief association that consolidated
with the public employees retirement association before July 1,
1993, may make an election to have retirement benefit coverage
provided by the public employees police and fire fund as
authorized by the cited law. An election under this section
must be made within six months after the effective date of this
section, and shall in all other respects be governed by
Minnesota Statutes, section 353A.08, and other applicable laws.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective on July 1, 1994.
ARTICLE 6
LOCAL POLICE AND FIRE
Section 1. [423A.171] [BYLAW AMENDMENTS.]
(a) Notwithstanding a provision of section 69.48; 423.387,
subdivision 1; 423.58, subdivision 1; 423.810, subdivision 1;
423B.10; or 424.24, subdivision 1, or other law governing a
local police or salaried firefighters relief association to the
contrary, the board of trustees of a local relief association
governed by section 69.77 or its successor board under chapter
353A or 353B, with municipal approval as provided in section
69.77, subdivision 2i, may amend the bylaws of the relief
association to provide that a surviving spouse benefit is
payable to a surviving spouse who married a deferred or retired
member after the member's retirement, provided the marriage
occurred at least five years before the death of the member.
(b) If the surviving spouse benefit change described in
paragraph (a) is made, the change applies to a surviving spouse
benefit payable on the effective date of the change and to the
potential surviving spouses of all deferred or retired members
of the relief association who have that status on the effective
date of the change.
(c) The bylaw amendment is not effective until a certified
copy of the amendment and the municipal approval has been filed
by the municipal clerk with the executive director of the
legislative commission on pensions and retirement, the state
auditor, and the secretary of state.
(d) Notwithstanding the provisions of section 353B.11, a
surviving spouse benefit change made under this section for a
relief association that has consolidated with the public
employees retirement association is effective upon approval by
the public employees retirement association and the municipality
pursuant to clause (c).
Presented to the governor April 26, 1994
Signed by the governor April 28, 1994, 2:25 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes