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Office of the Revisor of Statutes

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

                            CHAPTER 262-H.F.No. 1040 
                  An act relating to retirement; providing various 
                  benefit increases and related modifications; requiring 
                  collateralization and investment authority statement; 
                  amending Minnesota Statutes 1994, sections 3A.02, 
                  subdivision 5; 352.01, subdivision 13; 352B.02, 
                  subdivision 1a; 352B.08, subdivision 2; 352B.10, 
                  subdivision 1; 353.65, subdivision 7; 353.651, 
                  subdivision 4; 353A.083; 354.445; 354.66, subdivision 
                  4; 354A.094, subdivision 4; 354A.12, subdivision 1; 
                  354A.27, subdivision 1, and by adding subdivisions; 
                  354A.31, subdivision 4, and by adding subdivisions; 
                  354B.05, subdivisions 2 and 3; 354B.07, subdivisions 1 
                  and 2; 354B.08, subdivision 2; 356.219, subdivision 2; 
                  356.30, subdivision 1; 356.611; 356.865, subdivision 
                  3; 356A.06, by adding subdivisions; 422A.05, by adding 
                  a subdivision; and 422A.09, subdivision 2; Laws 1994, 
                  chapter 499, section 2; proposing coding for new law 
                  in Minnesota Statutes, chapters 125; 354A; and 356; 
                  proposing coding for new law as Minnesota Statutes, 
                  chapter 136F; repealing Minnesota Statutes 1994, 
                  sections 3A.10, subdivision 2; 352.021, subdivision 5; 
                  354A.27, subdivisions 2, 3, and 4; and 423B.02; Laws 
                  1969, chapter 1088; Laws 1971, chapters 114 and 127, 
                  section 1, as amended; Laws 1978, chapters 562, 
                  section 32, and 753; Laws 1979, chapters 97 and 201, 
                  section 27; and Laws 1981, chapter 224, sections 250 
                  and 254. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1 
                    STATEWIDE GENERAL EMPLOYEE PENSION PLAN 
                       BENEFIT AND RELATED MODIFICATIONS 
           Section 1.  [125.615] [RETURN TO FULL-TIME WORK.] 
           A teacher with 20 or more years of allowable service credit 
        under chapter 354 or 354A who was assigned to a part-time 
        position under section 354.66 or 354A.094 after June 30, 1994, 
        must be given the option of returning to full-time employment if 
        the employer does not make the full employer contribution to the 
        applicable pension fund under section 354.66, subdivision 4, or 
        354A.094, subdivision 4, after July 1, 1995.  If an employer 
        decides not to make the full employer contribution to the 
        pension fund after July 1, 1995, it must notify any affected 
        part-time teacher of this decision in writing within 30 days of 
        the employer's decision.  A teacher receiving this notice who 
        wishes to return to work full time must notify the employer of 
        intent to return to full-time employment within 30 days of 
        receiving notice from the employer, and must return to full-time 
        employment by the beginning of the next school year. 
           Sec. 2.  [136F.45] [EMPLOYER-PAID HEALTH INSURANCE.] 
           (a) This section applies to a person who:  
           (1) retires from the state university system, the technical 
        college system, or the community college system, or from a 
        successor system employing state university, technical college, 
        or community college faculty, with at least ten years of 
        combined service credit in a system under the jurisdiction of 
        the higher education board; 
           (2) was employed on a full-time basis immediately preceding 
        retirement as a state university, technical college, or 
        community college faculty member or as an unclassified 
        administrator in one of those systems; 
           (3) begins drawing an annuity from the teachers retirement 
        association or from a first class city teacher plan; and 
           (4) returns to work on not less than a one-third time basis 
        and not more than a two-thirds time basis in the system from 
        which the person retired under an agreement in which the person 
        may not earn a salary of more than $35,000 in a calendar year 
        from employment after retirement in the system from which the 
        person retired.  
           (b) Initial participation, the amount of time worked, and 
        the duration of participation under this section must be 
        mutually agreed upon by the employer and the employee.  The 
        employer may require up to one-year notice of intent to 
        participate in the program as a condition of participation under 
        this section.  The employer shall determine the time of year the 
        employee shall work.  
           (c) For a person eligible under paragraphs (a) and (b), the 
        employing board shall make the same employer contribution for 
        hospital, medical, and dental benefits as would be made if the 
        person were employed full time.  
           (d) For work under paragraph (a), a person must receive a 
        percentage of the person's salary at the time of retirement that 
        is equal to the percentage of time the person works compared to 
        full-time work.  
           (e) If a collective bargaining agreement covering a person 
        provides for an early retirement incentive that is based on age, 
        the incentive provided to the person must be based on the 
        person's age at the time employment under this section ends.  
        However, the salary used to determine the amount of the 
        incentive must be the salary that would have been paid if the 
        person had been employed full time for the year immediately 
        preceding the time employment under this section ends. 
           Sec. 3.  Minnesota Statutes 1994, section 352.01, 
        subdivision 13, is amended to read: 
           Subd. 13.  [SALARY.] "Salary" means the periodical wages, 
        or other periodic compensation, paid to any an 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, 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, employer 
        contributions to a deferred compensation or tax sheltered 
        annuity program, and amounts contributed under a benevolent 
        vacation and sick leave donation program are not salary. 
           Sec. 4.  Minnesota Statutes 1994, section 354.445, is 
        amended to read: 
           354.445 [NO ANNUITY REDUCTION.] 
           (a) The annuity reduction provisions of section 354.44, 
        subdivision 5, do not apply to a person who: 
           (1) retires from the state university system, technical 
        college system, or the community college system, or from a 
        successor system employing state university, technical college, 
        or community college faculty, with at least ten years 
        of combined service credit in the system from which the person 
        retires a system under the jurisdiction of the higher education 
        board; 
           (2) was employed on a full-time basis immediately preceding 
        retirement as a state university, technical college, or 
        community college faculty member or as an unclassified 
        administrator in one of these systems; 
           (3) begins drawing an annuity from the teachers retirement 
        association; and 
           (4) returns to work on not less than a one-third time basis 
        and not more than a two-thirds time basis in the system from 
        which the person retired under an agreement in which the person 
        may not earn a salary of more than $35,000 in a calendar year 
        from employment after retirement in the system from which the 
        person retired. 
           (b) Initial participation, the amount of time worked, and 
        the duration of participation under this section must be 
        mutually agreed upon by the employer and the employee.  The 
        employer may require up to one-year notice of intent to 
        participate in the program as a condition of participation under 
        this section.  The employer shall determine the time of year the 
        employee shall work.  
           (c) Notwithstanding any law to the contrary, a person 
        eligible under paragraphs (a) and (b) may not earn further 
        service credit in the teachers retirement association and is not 
        eligible to participate in the individual retirement account 
        plan or the supplemental retirement plan established in chapter 
        354B as a result of service under this section.  No employer or 
        employee contribution to any of these plans may be made on 
        behalf of such a person. 
           (d) For a person eligible under paragraphs (a) and (b) who 
        earns more than $35,000 in a calendar year from employment after 
        retirement in the system from which the person retired, the 
        annuity reduction provisions of section 354.44, subdivision 5, 
        apply only to income over $35,000. 
           Sec. 5.  Minnesota Statutes 1994, section 354.66, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RETIREMENT CONTRIBUTIONS.] Notwithstanding any 
        provision to the contrary in this chapter relating to the salary 
        figure to be used for the determination of contributions or the 
        accrual of service credit, a teacher assigned to a part-time 
        position under this section shall continue to make employee 
        contributions to and to accrue allowable service credit in the 
        retirement fund during the period of part-time employment on the 
        same basis and in the same amounts as would have been paid and 
        accrued if the teacher had been employed on a full-time basis 
        provided that, prior to June 30 each year, or within 30 days 
        after notification by the association of the amount due, 
        whichever is later, the member and the employing board make that 
        portion of the required employer contribution to the retirement 
        fund, in any proportion which they may agree upon, that is based 
        on the difference between the amount of compensation that would 
        have been paid if the teacher had been employed on a full-time 
        basis and the amount of compensation actually received by the 
        teacher for the services rendered in the part-time assignment.  
        The employing unit shall make that portion of the required 
        employer contributions to the retirement fund on behalf of the 
        teacher that is based on the amount of compensation actually 
        received by the teacher for the services rendered in the 
        part-time assignment in the manner described in section 354.43, 
        subdivision 3.  If the teacher has 20 years or more of allowable 
        service in the fund or 20 years or more of full-time teaching 
        service, the employer shall make the full employer contribution 
        to the fund based on the compensation that would have been paid 
        if the teacher had been employed on a full-time basis.  The 
        employee and employer contributions shall be based upon the 
        rates of contribution prescribed by section 354.42.  Full 
        accrual of allowable service credit and employee contributions 
        for part-time teaching service pursuant to this section and 
        section 354A.094 shall not continue for a period longer than ten 
        years.  
           Sec. 6.  Minnesota Statutes 1994, section 354A.094, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RETIREMENT CONTRIBUTIONS.] Notwithstanding any 
        provision to the contrary in this chapter or the articles of 
        incorporation or bylaws of an association relating to the salary 
        figure to be used for the determination of contributions or the 
        accrual of service credit, a teacher assigned to a part-time 
        position under this section shall continue to make employee 
        contributions to and to accrue allowable service credit in the 
        applicable association during the period of part-time employment 
        on the same basis and in the same amounts as would have been 
        paid and accrued if the teacher had been employed on a full-time 
        basis provided that, prior to June 30 each year the member and 
        the employing board make that portion of the required employer 
        contribution to the applicable association in any proportion 
        which they may agree upon, that is based on the difference 
        between the amount of compensation that would have been paid if 
        the teacher had been employed on a full-time basis and the 
        amount of compensation actually received by the teacher for 
        services rendered in the part-time assignment.  The employer 
        contributions to the applicable association on behalf of the 
        teacher shall be based on the amount of compensation actually 
        received by the teacher for the services rendered in the 
        part-time assignment in the manner described in section 354.43, 
        subdivision 3.  If the teacher has 20 years or more of allowable 
        service in the association or 20 years or more of full-time 
        teaching service, the employer shall make the full employer 
        contribution to the fund, based on the compensation that would 
        have been paid if the teacher had been employed on a full-time 
        basis.  The employee and employer contributions shall be based 
        upon the rates of contribution prescribed by section 354A.12.  
        Full membership, accrual of allowable service credit and 
        employee contributions for part-time teaching service by a 
        teacher pursuant to this section and section 354.66 shall not 
        continue for a period longer than ten years.  
           Sec. 7.  Minnesota Statutes 1994, section 354A.31, is 
        amended by adding a subdivision to read: 
           Subd. 3a.  [NO ANNUITY REDUCTION.] (a) The annuity 
        reduction provisions of subdivision 3 do not apply to a person 
        who: 
           (1) retires from the technical college system with at least 
        ten years of service credit in the system from which the person 
        retires; 
           (2) was employed on a full-time basis immediately preceding 
        retirement as a technical college faculty member; 
           (3) begins drawing an annuity from a first class city 
        teachers retirement association; and 
           (4) returns to work on not less than a one-third time basis 
        and not more than a two-thirds time basis in the technical 
        college system under an agreement in which the person may not 
        earn a salary of more than $35,000 in a calendar year from the 
        technical college system. 
           (b) Initial participation, the amount of time worked, and 
        the duration of participation under this section must be 
        mutually agreed upon by the employer and the employee.  The 
        employer may require up to a one-year notice of intent to 
        participate in the program as a condition of participation under 
        this section.  The employer shall determine the time of year the 
        employee shall work. 
           (c) Notwithstanding any law to the contrary, a person 
        eligible under paragraphs (a) and (b) may not earn further 
        service credit in a first class city teachers retirement 
        association and is not eligible to participate in the individual 
        retirement account plan or the supplemental retirement plan 
        established in chapter 354B as a result of service under this 
        section.  No employer or employee contribution to any of these 
        plans may be made on behalf of such a person. 
           Sec. 8.  Minnesota Statutes 1994, section 354B.05, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PURCHASE OF CONTRACTS.] The state university 
        board and the community college higher education board shall 
        arrange for the purchase of annuity contracts, fixed, variable, 
        or a combination of fixed and variable, or custodial accounts 
        from financial institutions selected by the state board of 
        investment under subdivision 3, to provide retirement benefits 
        to members of the plan.  The contracts or accounts must be 
        purchased with contributions under section 354B.04 or money or 
        assets otherwise provided by law or by authority of the state 
        university board or community college higher education board and 
        acceptable by the financial institutions from which the 
        contracts or accounts are purchased. 
           Sec. 9.  Minnesota Statutes 1994, section 354B.05, 
        subdivision 3, is amended to read: 
           Subd. 3.  [SELECTION OF FINANCIAL INSTITUTIONS.] The 
        supplemental investment fund administered by the state board of 
        investment is one of the investment options for the plan.  The 
        state board of investment may select up to five other financial 
        institutions to provide annuity products.  In making their 
        selections, the board shall consider at least these criteria: 
           (1) the experience and ability of the financial institution 
        to provide retirement and death benefits suited to the needs of 
        the covered employees; 
           (2) the relationship of the benefits to their cost; and 
           (3) the financial strength and stability of the institution.
           The state board of investment must periodically review at 
        least every three years each financial institution selected by 
        the state board of investment.  The state board of investment 
        may retain consulting services to assist in the periodic review, 
        may establish a budget for its costs in the periodic review 
        process, and may charge a proportional share of those costs to 
        each financial institution selected by the state board of 
        investment.  All contracts must be approved by the state board 
        of investment before execution by the state university board and 
        the community college higher education board.  The state board 
        of investment shall also establish policies and procedures under 
        section 11A.04, clause (2), to carry out this subdivision. 
           The chancellor of the state university system and the 
        chancellor of the state community college higher education 
        system shall redeem all shares in the accounts of the Minnesota 
        supplemental investment fund held on behalf of personnel in the 
        supplemental plan who elect an investment option other than the 
        supplemental investment fund, except that shares in the fixed 
        interest account attributable to any guaranteed investment 
        contract as of July 1, 1994, must not be redeemed until the 
        expiration dates for the guaranteed investment contracts.  
        The chancellors chancellor shall transfer the cash realized to 
        the financial institutions selected by the state university 
        board and the community college board under this section 354B.05.
           Sec. 10.  Minnesota Statutes 1994, section 354B.07, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ESTABLISHMENT AND ELIGIBILITY.] (a) 
        [REGULAR UNCLASSIFIED EMPLOYEES.] The supplemental retirement 
        plan for personnel employed by the state university board, the 
        state board for community colleges, the higher education board, 
        and effective July 1, 1995, the technical colleges, who are in 
        the unclassified service of the state commencing July 1 
        following the completion of the second year of their full-time 
        contract is governed by this section.  Once a person qualifies 
        for participation in the supplemental plan, all subsequent 
        service by the person as an unclassified employee of the state 
        university board, the state board for community colleges, the 
        higher education board, or the technical colleges is covered by 
        the supplemental plan.  
           (b) [CETA UNCLASSIFIED EMPLOYEES.] An unclassified employee 
        employed by the state university board or the state board for 
        community colleges in subsidized on-the-job training, work 
        experience, or public service employment as an enrollee under 
        the federal Comprehensive Employment and Training Act is not 
        included in the supplemental retirement plan provided for in 
        this section after March 30, 1978, unless the unclassified 
        employee has as of the later of March 30, 1978, or the date of 
        employment sufficient service credit in the retirement fund 
        providing primary retirement coverage to meet the minimum 
        vesting requirements for a deferred retirement annuity, or the 
        board agrees in writing to make the employer contribution 
        required by this section on account of that unclassified 
        employee from revenue sources other than funds provided under 
        the federal Comprehensive Employment and Training Act, or the 
        unclassified employee agrees in writing to make the employer 
        contribution required by this section in addition to the member 
        contribution. 
           Sec. 11.  Minnesota Statutes 1994, section 354B.07, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REDEMPTIONS.] The chancellor of the state 
        university system and the chancellor of the state community 
        college higher education system shall redeem all shares in the 
        accounts of the Minnesota supplemental investment fund held on 
        behalf of personnel in the supplemental plan who elect an 
        investment option other than the supplemental investment fund, 
        except that shares in the fixed interest account attributable to 
        any guaranteed investment contract as of July 1, 1994, may not 
        be redeemed until the expiration dates for the guaranteed 
        investment contracts.  The chancellors chancellor shall transfer 
        the cash realized to the financial institutions selected by 
        the state university board and the community college board under 
        section 354B.05. 
           Sec. 12.  Minnesota Statutes 1994, section 354B.08, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ADMINISTRATION.] (a) The chancellor of the state 
        university system and the chancellor of the state community 
        college higher education system shall administer the 
        supplemental retirement plan for their employees.  
        The chancellors chancellor shall invest contributions made under 
        this section, less amounts used for administrative expenses, as 
        authorized by law.  The retirement contributions and death 
        benefits provided by annuity contracts or custodial accounts 
        purchased by the chancellors chancellor are owned by the plan 
        and must be paid in accordance with the annuity contracts or 
        custodial accounts.  
           (b) Effective July 1, 1995, administration of the plan must 
        transfer to the higher education board. 
           Sec. 13.  Minnesota Statutes 1994, 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 not begun to receive an annuity from any 
        enumerated fund or the person has made application for benefits 
        from all funds and the effective dates of the retirement annuity 
        with each fund under which the person chooses to receive an 
        annuity are within a 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 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 annuity 
        amount for retirement prior to normal retirement.  
           (e) The 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 annuities under this 
        section the formula percentages used by any covered fund, except 
        the basic program of the teachers retirement association, 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.  The 
        formula percentage used by the teachers retirement association 
        must not exceed 2.63 percent per year of basic program service 
        for any year of basic program 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. 14.  [356.306] [PARTIAL PAYMENT OF PENSION PLAN 
        REFUND.] 
           (a) Notwithstanding any provision of law to the contrary, a 
        member of a pension plan listed in section 356.30, subdivision 
        3, with at least two years of forfeited service taken from a 
        single pension plan may repay a portion of all refunds.  A 
        partial refund repayment must comply with this section. 
           (b) The minimum portion of a refund repayment is one-third 
        of the total service credit period of all refunds taken from a 
        single plan.  
           (c) The cost of the partial refund repayment is the product 
        of the cost of the total repayment multiplied by the ratio of 
        the restored service credit to the total forfeited service 
        credit.  The total repayment amount includes interest at the 
        annual rate of 8.5 percent, compounded annually, from the refund 
        date to the date repayment is received.  
           (d) The restored service credit is allocated based on the 
        relationship the restored service bears to the total service 
        credit period for all refunds taken from a single pension plan. 
           (e) This section does not authorize a public pension plan 
        member to repay a refund if the law governing the plan does not 
        authorize the repayment of a refund of member contributions. 
           Sec. 15.  Minnesota Statutes 1994, section 356.611, is 
        amended to read: 
           356.611 [LIMITATION ON PUBLIC EMPLOYEE SALARIES FOR PENSION 
        PURPOSES.] 
           Subdivision 1.  [STATE SALARY LIMITATIONS.] (a) 
        Notwithstanding any provision of law, bylaws, articles or of 
        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. 
           Subd. 2.  [FEDERAL COMPENSATION LIMITS.] For members first 
        contributing to a pension plan covered under section 356.30, 
        subdivision 3, on or after July 1, 1995, compensation in excess 
        of the limitation set forth in Internal Revenue Code 401(a)(17) 
        shall not be included for contribution and benefit computation 
        purposes.  The compensation limit set forth in Internal Revenue 
        Code 401(a)(17) on June 30, 1993, shall apply to members first 
        contributing before July 1, 1995. 
           Sec. 16.  [RETROACTIVE PROVISIONS.] 
           (a) A teacher who had at least three years of allowable 
        service credit under Minnesota Statutes, chapter 354 or 354A, on 
        July 1, 1994, and who worked part-time between July 1, 1994, and 
        June 30, 1995, may be allowed to make contributions to and 
        accrue allowable service credit in the applicable retirement 
        fund, as if the teacher had been working full time, as provided 
        in Minnesota Statutes, sections 354.66, subdivision 4, and 
        354A.094, subdivision 4, for service after July 1, 1994, and 
        before June 30, 1995.  If a teacher described in this paragraph 
        wishes to obtain allowable service credit as if the teacher had 
        been working full time for the period from July 1, 1994, to June 
        30, 1995, the teacher must: 
           (1) make a lump sum payment to the applicable pension fund 
        within 60 days after the effective date of this section of the 
        difference between the amount of the employer and employee 
        contributions to the pension fund that would have been paid if 
        the teacher had been working full time, and that amount that was 
        actually paid for part-time service during that period; and 
           (2) submit to the association a letter or other document 
        from the board of the teacher's employing district stating that 
        the board would have agreed to the teacher's participation in 
        the part-time mobility program during the 1994-1995 school year 
        but for the requirement then in effect that the district make 
        the full employer contribution to the retirement fund for 
        teachers with 20 or more years of service, based on the 
        compensation that would have been paid if the teacher had been 
        employed on a full-time basis. 
           (b) An employer of a teacher covered by paragraph (a) must 
        notify the teacher of the option available under paragraph (a) 
        in writing within 30 days of the effective date of this section. 
           Sec. 17.  [EARLY RETIREMENT INCENTIVE.] 
           The metropolitan council or the Minnesota historical 
        society may offer its eligible employees the early retirement 
        incentive provided in sections 17 to 25. 
           Sec. 18.  [ELIGIBILITY.] 
           An employee of a public employer specified in section 17 is 
        eligible to receive the early retirement incentive if the 
        employee: 
           (1) has at least 25 years of combined service credit in any 
        covered fund or funds listed in Minnesota Statutes, section 
        356.30, subdivision 3, or for purposes of the incentive in 
        section 19, subdivision 2 only, is at least 65 years old and has 
        at least one year of combined service credit in these covered 
        funds; 
           (2) upon retirement is immediately eligible for a 
        retirement annuity from a defined benefit plan, if the person is 
        a member of a defined benefit plan; 
           (3) is at least 55 years of age; and 
           (4) retires on or after May 23, 1995, and before January 
        31, 1996. 
           Sec. 19.  [EARLY RETIREMENT INCENTIVE.] 
           Subdivision 1.  [CHOICE.] An eligible employee may not 
        choose both the incentive in subdivision 2 and the incentive in 
        subdivision 3.  The public employers specified in section 17 
        that choose to offer the early retirement incentive must offer 
        included employees eligible for both incentives a choice between 
        the incentive in subdivision 2 or 3. 
           Subd. 2.  [FORMULA INCREASE OPTION.] For an employee 
        covered by a retirement plan established in Minnesota Statutes, 
        section 352.115, 352.116, 353.29, or 353.30, or chapter 354 or 
        422A, who selects the incentive under this subdivision, the 
        multiplier percentage used to calculate the retirement annuity 
        must be increased for each year of service credit up to 30 
        years.  The amount of the increase is: 
           (1) .25 for each year of service credit calculated under 
        Minnesota Statutes, section 352.115, 352.116, 353.29, or 353.30, 
        or chapter 422A; and 
           (2) .10 for each year of service credit calculated under 
        Minnesota Statutes, chapter 354 or 354A.  
           If an employee has more than 30 years of service credit, 
        the increased multiplier applies only to the first 30 years. 
           Subd. 3.  [INSURANCE OPTION.] For an employee who selects 
        the incentive under this subdivision, the employer must pay for 
        hospital, medical, and dental insurance under the following 
        conditions and limitations.  An employee is eligible for this 
        employer-paid insurance only if the person: 
           (1) is eligible for employer-paid insurance under a 
        collective bargaining agreement or personnel plan in effect on 
        the day before the effective date of sections 17 to 25; 
           (2) has at least as many months of service with the current 
        employer as the number of months younger than age 65 the person 
        is at the time of retirement; and 
           (3) is under age 65. 
           Sec. 20.  [LIMIT ON REHIRING.] 
           A public employer may not rehire an employee who retires 
        under sections 17 to 25. 
           Sec. 21.  [RETIREMENT.] 
           For purposes of sections 17 to 25, an employee retires when 
        the employee terminates active employment and applies for 
        retirement benefits. 
           Sec. 22.  [CONDITIONS; INSURANCE COVERAGE.] 
           A retired employee is eligible for single and dependent 
        insurance coverages and employer payments to which the employee 
        was entitled immediately before retirement, subject to any 
        changes in coverage and employer and employee payments through 
        collective bargaining or personnel plans for employees in 
        positions equivalent to the position from which the employee 
        retired.  The retired employee is not eligible for employer-paid 
        life insurance.  Eligibility ceases when the retired employee 
        attains the age of 65, chooses not to receive the retirement 
        benefits for which the employee has applied, or becomes eligible 
        for employer-paid health insurance from a new employer.  
        Coverages must be coordinated with relevant health insurance 
        benefits provided through the federally sponsored Medicare 
        program. 
           Sec. 23.  [INCLUSION.] 
           A public employer that offers incentives under sections 17 
        to 25 shall designate the positions or group of positions 
        affected by downsizing or restructuring that will qualify for 
        participation in its early retirement plan and may exclude 
        otherwise eligible employees. 
           Sec. 24.  [PAYMENT OF COST OF EARLY RETIREMENT INCENTIVE.] 
           (a) A public employer referenced in section 17 which offers 
        an early retirement incentive under section 19 must make an 
        additional employer contribution to the applicable retirement 
        plan from which an employee retired under the incentive program. 
           (b) The additional employer contribution is an amount equal 
        to the difference in the amount of the reserve transfer under 
        Minnesota Statutes, section 11A.18, or 422A.06, subdivision 8, 
        with the early retirement incentive under section 19, 
        subdivision 2, and without the early retirement incentive.  The 
        additional employer contribution must be paid prior to July 1, 
        1997.  The public employer shall also pay compound interest on 
        the additional employer contribution at an annual rate of 8.5 
        percent from the effective date of the retirement to the date of 
        the payment of the additional employer contribution. 
           Sec. 25.  [APPLICATION OF OTHER LAWS.] 
           Unilateral implementation of sections 17 to 25 by a public 
        employer is not an unfair labor practice for purposes of 
        Minnesota Statutes, chapter 179A.  The requirement in sections 
        17 to 25 for an employer to pay health insurance coverage costs 
        for certain retired employees is not subject to the limits in 
        Minnesota Statutes, section 179A.20, subdivision 2a. 
           Sec. 26. [REPEALER.] 
           Minnesota Statutes 1994, sections 3A.10, subdivision 2; and 
        352.021, subdivision 5, are repealed. 
           Sec. 27.  [EFFECTIVE DATE.] 
           (a) Sections 1, 10, and 15 are effective on July 1, 1995. 
           (b) Sections 3 and 16 are effective on the day following 
        final enactment. 
           (c) Sections 5, 6, and 7 are effective on July 1, 1995 and 
        apply to teaching service rendered after that date. 
           (d) Section 13 is effective retroactively to May 16, 1994. 
           (e) Sections 17 to 25 are effective on the day after final 
        enactment. 
           (f) Section 26 is effective on July 1, 1995 and is not 
        intended to reduce the service credit of a legislator for 
        service recorded by the Minnesota state retirement system before 
        July 1, 1995. 
           (g) Section 14 is effective on January 1, 1996. 
                                   ARTICLE 2 
                      LOCAL GENERAL EMPLOYEE PENSION PLAN  
                       BENEFIT AND RELATED MODIFICATIONS  
           Section 1.  [354A.026] [DULUTH TEACHERS RETIREMENT FUND 
        ASSOCIATION; EXCEPTION TO CERTAIN ACTUARIAL VALUATION 
        PROVISIONS.] 
           Notwithstanding any provision of section 356.215, 
        subdivision 4g, to the contrary, the amortization target date 
        for use in determining the amortization contribution requirement 
        in any actuarial valuation of the Duluth teachers retirement 
        fund association after the date of enactment must be June 30, 
        2020. 
           Sec. 2.  Minnesota Statutes 1994, section 354A.12, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EMPLOYEE CONTRIBUTIONS.] The contribution 
        required to be paid by each member of a teachers retirement fund 
        association shall not be less than the percentage of total 
        salary specified below for the applicable association and 
        program: 
             Association and Program              Percentage of
                                                  Total Salary
        Duluth teachers retirement
          association
                  old law and new law
                  coordinated programs              4.5 5.5 percent
        Minneapolis teachers retirement
          association
                  basic program                     8.5 percent
                  coordinated program               4.5 percent
        St. Paul teachers retirement
          association
                  basic program                     8 percent
                  coordinated program               4.5 percent
           Contributions shall be made by deduction from salary and 
        must be remitted directly to the respective teachers retirement 
        fund association at least once each month. 
           Sec. 3.  Minnesota Statutes 1994, section 354A.27, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY POSTRETIREMENT ADJUSTMENT 
        MODIFICATION.] A person receiving a retirement annuity, 
        disability benefit, or surviving spouse benefit or annuity from 
        the Duluth teachers retirement fund association who has received 
        the annuity or benefit for at least one year may be entitled to 
        receive a lump sum postretirement adjustment under subdivision 
        2, in the discretion of the board of trustees under subdivision 
        3.  Any postretirement adjustment payable from the Duluth 
        teachers retirement fund association must be computed and paid 
        according to this section. 
           Sec. 4.  Minnesota Statutes 1994, section 354A.27, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [CALCULATION OF POSTRETIREMENT ADJUSTMENTS.] (a) 
        Annually, after June 30, the board of trustees determines the 
        amount of any postretirement adjustment using the procedures in 
        this subdivision and subdivision 6. 
           (b) Each person who has been receiving an annuity or 
        benefit under the articles of incorporation, bylaws, or under 
        this section for at least 12 months as of the date of the 
        postretirement adjustment shall be eligible for a postretirement 
        adjustment.  The postretirement adjustment shall be payable each 
        January 1.  The postretirement adjustment shall be equal to two 
        percent of the annuity or benefit to which the person is 
        entitled one month prior to the payment of the postretirement 
        adjustment. 
           Sec. 5.  Minnesota Statutes 1994, section 354A.27, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [ADDITIONAL INCREASE.] (a) In addition to the 
        postretirement increases granted under subdivision 5, an 
        additional percentage increase must be computed and paid under 
        this subdivision. 
           (b) The board of trustees shall determine the number of 
        annuitants or benefit recipients who have been receiving an 
        annuity or benefit for at least 12 months as of the current June 
        30.  These recipients are entitled to receive the surplus 
        investment earnings additional postretirement increase. 
           (c) Annually, as of each June 30, the board shall determine 
        the five-year annualized rate of return attributable to the 
        assets of the Duluth teachers retirement fund association under 
        the formula or formulas specified in section 11A.04, clause (11).
           (d) The board shall determine the amount of excess 
        five-year annualized rate of return over the preretirement 
        interest assumption as specified in section 356.215. 
           (e) The additional percentage increase must be determined 
        by multiplying the quantity one minus the rate of contribution 
        deficiency, as specified in the most recent actuarial report of 
        the actuary retained by the legislative commission on pensions 
        and retirement, times the rate of return excess as determined in 
        paragraph (d). 
           (f) The additional increase is payable to all eligible 
        annuitants or benefit recipients on the following January 1. 
           Sec. 6.  Minnesota Statutes 1994, section 354A.31, 
        subdivision 4, is amended to read: 
           Subd. 4.  [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT 
        ANNUITY; MINNEAPOLIS AND ST. PAUL FUNDS.] (a) This subdivision 
        applies to the coordinated programs of the Minneapolis teachers 
        retirement fund association and the St. Paul teachers retirement 
        fund association.  
           (b) The normal coordinated retirement annuity shall be an 
        amount equal to a retiring coordinated member's average salary 
        multiplied by the retirement annuity formula percentage.  
        Average salary for purposes of this section shall mean an amount 
        equal to the average salary upon which contributions were made 
        for the highest five successive years of service credit, but 
        which shall not in any event include any more than the 
        equivalent of 60 monthly salary payments.  Average salary must 
        be based upon all years of service credit if this service credit 
        is less than five years. 
           (b) (c) This paragraph, in conjunction with subdivision 6, 
        applies to a person who first became a member or a member in a 
        pension fund listed in section 356.30, subdivision 3, before 
        July 1, 1989, unless paragraph (c) (d), in conjunction with 
        subdivision 7, produces a higher annuity amount, in which case 
        paragraph (c) (d) will apply.  The retirement annuity formula 
        percentage for purposes of this paragraph is one percent per 
        year for each year of coordinated service for the first ten 
        years and 1.5 percent for each year of coordinated service 
        thereafter.  
           (c) (d) This paragraph applies to a person who has become 
        at least 55 years old and who first becomes a member after June 
        30, 1989, and to any other member who has become at least 55 
        years old and whose annuity amount, when calculated under this 
        paragraph and in conjunction with subdivision 7 is higher than 
        it is when calculated under paragraph (b) (c), in conjunction 
        with the provisions of subdivision 6.  The retirement annuity 
        formula percentage for purposes of this paragraph is 1.5 percent 
        for each year of coordinated service.  
           Sec. 7.  Minnesota Statutes 1994, section 354A.31, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [COMPUTATION OF THE NORMAL COORDINATED 
        RETIREMENT ANNUITY; DULUTH FUND.] (a) This subdivision applies 
        to the new law coordinated program of the Duluth teachers 
        retirement fund association. 
           (b) The normal coordinated retirement annuity is an amount 
        equal to a retiring coordinated member's average salary 
        multiplied by the retirement annuity formula percentage.  
        Average salary for purposes of this section means an amount 
        equal to the average salary upon which contributions were made 
        for the highest five successive years of service credit, but may 
        not in any event include any more than the equivalent of 60 
        monthly salary payments.  Average salary must be based upon all 
        years of service credit if this service credit is less than five 
        years. 
           (c) This paragraph, in conjunction with subdivision 6, 
        applies to a person who first became a member or a member in a 
        pension fund listed in section 356.30, subdivision 3, before 
        July 1, 1989, unless paragraph (d), in conjunction with 
        subdivision 7, produces a higher annuity amount, in which case 
        paragraph (d) applies.  The retirement annuity formula 
        percentage for purposes of this paragraph is 1.13 percent per 
        year for each year of coordinated service for the first ten 
        years and 1.63 percent for each subsequent year of coordinated 
        service. 
           (d) This paragraph applies to a person who is at least 55 
        years old and who first becomes a member after June 30, 1989, 
        and to any other member who is at least 55 years old and whose 
        annuity amount, when calculated under this paragraph and in 
        conjunction with subdivision 7, is higher than it is when 
        calculated under paragraph (c) in conjunction with subdivision 
        6.  The retirement annuity formula percentage for purposes of 
        this paragraph is 1.63 percent for each year of coordinated 
        service. 
           Sec. 8.  Minnesota Statutes 1994, section 356.865, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COST.] The cost of the payments made under this 
        section is the responsibility of the state.  The annual 
        amortization amount must For state fiscal years 1992 to 2001 
        inclusive, there is appropriated annually $550,000 from the 
        general fund to the commissioner of finance to be added, in 
        quarterly installments, to the annual state contribution amount 
        determined under section 422A.101, subdivision 3, effective July 
        1, 1991. 
           Sec. 9.  Minnesota Statutes 1994, section 422A.05, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [HEALTH INSURANCE.] The retirement board may 
        authorize the executive director or the executive director's 
        designee to:  
           (1) offer the beneficiaries of the fund the option of 
        having their health insurance premiums deducted automatically 
        from their monthly benefit amounts and paid to a designated 
        insurer; and 
           (2) provide beneficiaries information about available group 
        health insurance plan options. 
           Beneficiaries who elect to avail themselves of this service 
        are ultimately responsible for the timely payment of premiums 
        and the payment of premiums in the proper amount. 
           Sec. 10.  Minnesota Statutes 1994, section 422A.09, 
        subdivision 2, is amended to read: 
           Subd. 2.  The contributing class shall consist of all 
        employees not included in the exempt class, who become 
        prospective beneficiaries of the fund created by sections 
        422A.01 to 422A.25. 
           A member of the contributing class who is granted a leave 
        of absence without pay by the member's employer to serve as an 
        employee or agent of a labor union primarily representing 
        members of the contributing class may continue as a member of 
        the contributing class during the period of such leave of 
        absence by depositing each month with the fund the amount of the 
        contribution of the employee as required by sections 422A.01 to 
        422A.25 which amount shall be the normal employee contribution. 
           The contributions referred to in this subdivision shall be 
        based on the salary for the position or its equivalent held by 
        the member immediately prior to such leave of absence subject to 
        any adjustment thereof during the period of such leave. 
           Sec. 11.  [INITIAL ADJUSTMENT.] 
           Subdivision 1.  [LUMP-SUM POSTRETIREMENT ADJUSTMENT 
        TRANSITION.] For all annuitants and beneficiaries of the 
        association who previously received a lump-sum postretirement 
        adjustment, before calculation of the first postretirement 
        adjustment under sections 5 and 6, their annual retirement 
        annuity or benefit shall be permanently increased by the amount 
        of their previous lump-sum postretirement adjustment. 
           Subd. 2.  [ANNUITIZED POSTRETIREMENT ADJUSTMENT 
        TRANSITION.] For all annuitants and beneficiaries of the 
        association who chose to annuitize previous lump-sum 
        postretirement adjustments, before calculation of the first 
        postretirement adjustment under sections 5 and 6, their annual 
        retirement annuity or benefit shall include the benefits 
        supported by the accumulated annuitized value due to annuitizing 
        their previous lump-sum postretirement adjustments. 
           Sec. 12.  [DULUTH OLD PLAN BYLAWS; AUTHORITY GRANTED TO 
        INCREASE FORMULAS.] 
           In accordance with Minnesota Statutes, section 354A.12, 
        subdivision 4, approval is granted for the Duluth teachers 
        retirement fund association to amend its articles of 
        incorporation or bylaws by increasing the formula percentage 
        used in computing annuities for old law coordinated program 
        members in the Duluth teachers retirement fund association to 
        1.38 percent for each year of service. 
           Sec. 13.  [DULUTH OLD PLAN BYLAWS.] 
           In accordance with Minnesota Statutes, section 354A.12, 
        subdivision 4, the Duluth teachers retirement fund association 
        shall amend its articles of incorporation or bylaws to conform 
        to sections 2, 3, 4, 5, and 11. 
           Sec. 14.  [REPEALER.] 
           Minnesota Statutes 1994, section 354A.27, subdivisions 2, 
        3, and 4, are repealed. 
           Sec. 15.  [EFFECTIVE DATE.] 
           (a) Section 2 is effective on the first day of the first 
        payroll period beginning after July 1, 1995. 
           (b) Sections 3, 4, 5, 11, 13, and 14 are effective November 
        1, 1995. 
           (c) Sections 1, 6, 7, and 12 are effective May 15, 1995. 
           (d) Sections 9 and 10 are effective on the day following 
        final enactment. 
           (e) Section 8 is effective on the day following final 
        enactment. 
                                   ARTICLE 3 
                      PUBLIC SAFETY EMPLOYEE PENSION PLAN 
                       BENEFIT AND RELATED MODIFICATIONS 
           Section 1.  Minnesota Statutes 1994, section 352B.02, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [MEMBER CONTRIBUTIONS.] Each member shall pay a 
        sum equal to 8.5 8.92 percent of the member's salary, which 
        shall constitute the member contribution to the fund.  
           Sec. 2.  Minnesota Statutes 1994, section 352B.08, 
        subdivision 2, is amended to read: 
           Subd. 2.  [NORMAL RETIREMENT ANNUITY.] The annuity must be 
        paid in monthly installments.  The annuity shall be equal to the 
        amount determined by multiplying the average monthly salary of 
        the member by 2-1/2 2.65 percent for each year and pro rata for 
        completed months of service.  
           Sec. 3.  Minnesota Statutes 1994, section 352B.10, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [INJURIES, PAYMENT AMOUNTS.] Any member who 
        becomes disabled and physically or mentally unfit to perform 
        duties as a direct result of an injury, sickness, or other 
        disability incurred in or arising out of any act of duty, shall 
        receive disability benefits while disabled.  The benefits must 
        be paid in monthly installments equal to the member's average 
        monthly salary multiplied by 50 53 percent, plus an additional 
        2-1/2 2.65 percent for each year and pro rata for completed 
        months of service in excess of 20 years, if any. 
           Sec. 4.  Minnesota Statutes 1994, section 353.651, 
        subdivision 4, is amended to read: 
           Subd. 4.  [EARLY RETIREMENT.] Any police officer or 
        firefighter member who has become at least 50 years old and who 
        has at least three years of allowable service is entitled upon 
        application to a retirement annuity equal to the normal annuity 
        calculated under subdivision 3, reduced so that the reduced 
        annuity is the actuarial equivalent of the annuity that would be 
        payable to the member if the member deferred receipt of the 
        annuity from the day the annuity begins to accrue until the 
        member attains age 55 by two-tenths of one percent for each 
        month that the member is under age 55 at the time of retirement. 
           Sec. 5.  Minnesota Statutes 1994, section 353A.083, is 
        amended to read: 
           353A.083 [PERA-P&F BENEFIT PLAN APPLICABLE TO PRE-1993 
        CONSOLIDATIONS.] 
           Subdivision 1.  [PRE-1993 CONSOLIDATIONS.] For any 
        consolidation account in effect on May 24, 1993, the public 
        employee police and fire fund benefit plan applicable to 
        consolidation account members who have elected or will elect 
        that benefit plan coverage under section 353A.08 is the pre-July 
        1, 1993, public employees police and fire fund benefit plan 
        unless the applicable municipality approves the extension of the 
        post-June 30, 1993, public employees police and fire fund 
        benefit plan to the consolidation account. 
           Subd. 2.  [PRE-1995 CONSOLIDATIONS.] For any consolidation 
        account in effect on July 1, 1995, the public employee police 
        and fire fund benefit plan applicable to consolidation account 
        members who have elected or will elect that benefit plan 
        coverage under section 353A.08 is the pre-July 1, 1995, public 
        employees police and fire fund benefit plan unless the 
        applicable municipality approves the extension of the post-June 
        30, 1995, public employees police and fire fund benefit plan to 
        the consolidation account. 
           Sec. 6.  Minnesota Statutes 1994, 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 not begun to receive an annuity from any 
        enumerated fund or the person has made application for benefits 
        from all funds and the effective dates of the retirement annuity 
        with each fund under which the person chooses to receive an 
        annuity are within a 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 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 annuity 
        amount for retirement prior to normal retirement.  
           (e) The 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 annuities under this 
        section the formula percentages used by any covered fund, except 
        the public employees police and fire fund and the state patrol 
        retirement 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 and the state patrol retirement 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. 7.  Laws 1994, chapter 499, section 2, is amended to 
        read: 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective on the first of the month next 
        following: 
           (1) receipt of an affirmative written determination from 
        the Secretary of the federal Department of Health and Human 
        Services Social Security Administration of ineligibility for 
        coverage under the federal old age, survivors, and disability 
        insurance; and 
           (2) approval by the Hennepin county board and compliance 
        with Minnesota Statutes, section 645.021, subdivisions 2 and 3, 
        except that, for section 1 to be deemed approved, a certificate 
        of approval must be filed within the year following receipt of 
        the written affirmative determination from the Social Security 
        Administration, or before January 1, 1998, whichever is earlier. 
           Sec. 8.  [REPEALER; WILLMAR VOLUNTEER FIRE DISABILITY 
        PROVISION.] 
           Laws 1971, chapter 127, section 1, as amended by Laws 1979, 
        chapter 201, section 28, is repealed. 
           Sec. 9.  [EFFECTIVE DATE.] 
           (a) Section 1 is effective on the first day of the first 
        full pay period occurring after July 1, 1995. 
           (b) Sections 2, 3, and 6 are effective on July 1, 1995. 
           (c) Section 7 is effective on the day following final 
        enactment. 
           (d) Sections 4 and 5 are effective on July 1, 1996. 
           (e) Section 8 is effective on the day following approval by 
        the city council of the city of Willmar and compliance with 
        Minnesota Statutes, section 645.021. 
                                   ARTICLE 4 
                  ADDITIONAL POLICE AND FIRE AMORTIZATION AID 
           Section 1.  Minnesota Statutes 1994, section 353.65, 
        subdivision 7, is amended to read: 
           Subd. 7.  [EXCESS CONTRIBUTIONS HOLDING ACCOUNT.] (a) The 
        excess contributions holding account is established in the 
        public employees retirement association.  Excess contributions 
        established by section 69.031, subdivision 5, paragraphs (2), 
        clauses (b) and (c), and (3) must be deposited in the account.  
        These contributions and all investment earnings associated with 
        them must be regularly transferred as provided in paragraph (b). 
           (b) From the amount of the excess contributions and 
        associated investment earnings: 
           (1) $1,000,000 must be transferred annually to the 
        ambulance service personnel longevity award and incentive 
        suspense account established by section 144C.03, subdivision 2; 
        and 
           (2) any remaining balance, after deduction of the 
        additional amortization aid allocation, if any, under paragraph 
        (d), must be transferred to the general fund. 
           (c) If a law is enacted creating a police officer stress 
        reduction program, and money is appropriated for the program, an 
        amount equal to the appropriation must be transferred from the 
        excess contributions holding account to the stress reduction 
        program before money is transferred to the general fund 
        allocated under paragraph (b), clause (2). 
           (d) On October 1, 1997, and annually on each October 1 
        thereafter, one-half of the money in the excess contributions 
        holding account under paragraph (b), clause (2), collected 
        during the immediately preceding July 1 through June 30 period 
        must be allocated by the commissioner of revenue to all local 
        police or salaried firefighter relief associations governed by 
        and in full compliance with section 69.77 that had an unfunded 
        actuarial accrued liability in the actuarial valuation prepared 
        under sections 356.215 and 356.216 as of the preceding December 
        31, and to all local police or salaried firefighter 
        consolidation accounts governed by chapter 353A that are 
        certified by the executive director of the public employees 
        retirement association as having for the current fiscal year an 
        additional municipal contribution amount under section 353A.09, 
        subdivision 5, paragraph (b), and that have implemented 
        Minnesota Statutes 1994, section 353A.083, if the effective date 
        of the consolidation preceded May 24, 1993, and that have 
        implemented section 5, if the effective date of the 
        consolidation preceded the date of enactment, on the basis of 
        the relief association or consolidation account's proportional 
        share of the total unfunded actuarial accrued liability of all 
        recipient relief associations and consolidation accounts as of 
        December 31, 1993, or June 30, 1994, whichever applies. 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective on the day following enactment. 
                                   ARTICLE 5 
                    HIGHER EDUCATION SYSTEM EARLY RETIREMENT 
                EMPLOYER-PAID HEALTH INSURANCE PREMIUM INCENTIVE 
           Section 1.  [STATE COLLEGE AND UNIVERSITY EARLY RETIREMENT 
        INCENTIVES.] 
           Subdivision 1.  [INTENT.] To avoid the disruptive effects 
        of employee layoffs due to campus consolidations, mergers, and 
        budget reductions resulting in downsizing within the Minnesota 
        state colleges and universities and the higher education 
        coordinating board, an employer-funded early retirement 
        incentive is made available in this section to employees of the 
        state universities, community colleges, technical colleges, the 
        existing system central offices, and the higher education 
        coordinating board. 
           Subd. 2.  [EMPLOYER PARTICIPATION.] The early retirement 
        incentives provided in this section may be offered to eligible 
        employees in the state university, community college, technical 
        college systems, the higher education board, and the higher 
        education coordinating board.  The incentives apply to personnel 
        in any state university, community college, or technical college 
        department being downsized or where a reduction in force has 
        been declared by the president of the institution.  In the case 
        of personnel in the chancellor's office, a reduction in force 
        must be declared by the chancellor or the chancellor's designee 
        or the executive director of the higher education coordinating 
        board.  Positions that are not assigned to a specific department 
        or support positions that are assigned campus-wide or to a 
        specific department are considered to be campus-wide in 
        jurisdiction and eligible for this incentive as part of the 
        reduction-in-force declaration. 
           Subd. 3.  [ELIGIBILITY.] A person identified in subdivision 
        2 is eligible to receive the incentives if the person:  
           (1) has at least 15 years of combined service credit in any 
        Minnesota public pension plans governed by Minnesota Statutes, 
        section 356.30, subdivision 3, and the plan governed by 
        Minnesota Statutes, chapter 354B; 
           (2) upon retirement is immediately eligible for a 
        retirement annuity from a defined benefit plan if the person is 
        a member of a defined benefit plan; 
           (3) is at least 55 years of age; and 
           (4) either retires before January 31, 1996, or, for a 
        person who first becomes eligible for this incentive between 
        January 31, 1996, and December 31, 1996, retires before January 
        31, 1997.  
           Subd. 4.  [INCENTIVE.] Persons who retire under this 
        section are eligible to receive employer-paid hospital, medical, 
        and dental insurance, subject to the conditions in subdivision 5 
        and at the level and under conditions existing at the time of 
        retirement. 
           Subd. 5.  [LIMITS ON REHIRING.] Persons retiring under the 
        provisions of this section may not be reemployed by the state or 
        hired under a professional technical contract in any capacity 
        except: 
           (1) under conditions of a stated emergency, and then only 
        if the rehire or contract is approved by the higher education 
        board or the higher education coordinating board under 
        procedures adopted by the boards; and 
           (2) if rehired as adjunct faculty as defined in the 
        appropriate bargaining agreement, or, if rehired by another 
        executive branch agency of state government, if the retired 
        employee works only on a seasonal, temporary, or intermittent 
        basis as defined in Minnesota Statutes, section 43A.02, 
        subdivision 23, or 179A.03, subdivision 14, clause (f), for no 
        more than 1,044 hours in any consecutive 12-month period.  
           Subd. 6.  [CONDITIONS; INSURANCE COVERAGE.] (a) A retired 
        employee is eligible for single and dependent insurance 
        coverages and employer payments to which the person was entitled 
        immediately before retirement, subject to any changes in 
        coverage and employer and employee payments through collective 
        bargaining or personnel plans for employees in positions 
        equivalent to the position from which the employee retired.  The 
        retired employee is not eligible for employer-paid life 
        insurance.  Eligibility ceases when the retired employee reaches 
        age 65, when the person chooses not to receive the retirement 
        benefits for which the person has applied, or when the person is 
        eligible for employer-paid health insurance from a new 
        employer.  Coverages must be coordinated with relevant health 
        insurance benefits provided through the federally sponsored 
        Medicare program.  
           (b) If an employing unit referenced in subdivision 1 offers 
        the incentive under this section and is subsequently eliminated 
        or reorganized, the successor organization, if any, is obligated 
        to pay the insurance premium incentive. 
           Subd. 7.  [APPLICATION OF OTHER LAWS.] Unilateral 
        implementation of this section by a public employer is not an 
        unfair labor practice for the purposes of Minnesota Statutes, 
        chapter 179A.  The requirement in this section for an employer 
        to pay health insurance costs for certain retired employees is 
        not subject to the limits in Minnesota Statutes, section 
        179A.20, subdivision 2a.  
           Sec. 2.  [NOTIFICATION OF SUBSEQUENT HEALTH COVERAGE: 
        PENALTY FOR NOTIFICATION FAILURE.] 
           (a) An employee who accepts the early retirement incentive 
        benefit under section 1 agrees as a condition of receipt of the 
        incentive to notify the higher education board or the higher 
        education coordinating board within 30 days of the event that 
        the person is eligible for employer-paid health insurance from 
        subsequent employment. 
           (b) Failure to make the notification required in paragraph 
        (a) obligates the person to reimburse the higher education board 
        or the higher education coordinating board for any insurance 
        premiums that it paid since the person became eligible for the 
        subsequent employment health insurance coverage. 
           Sec. 3.  [EFFECTIVE DATE.] 
           Sections 1 and 2 are effective on the day following final 
        enactment. 
                                   ARTICLE 6 
               PUBLIC PENSION PLAN COLLATERALIZATION REQUIREMENT 
                       AND INVESTMENT AUTHORITY STATEMENT 
           Section 1.  Minnesota Statutes 1994, section 356A.06, is 
        amended by adding a subdivision to read: 
           Subd. 8a.  [COLLATERALIZATION REQUIREMENT.] (a) The 
        governing board of a covered pension plan shall designate a 
        national bank, an insured state bank, an insured credit union, 
        or an insured thrift institution as the depository for the 
        pension plan for assets not held by the pension plan's custodian 
        bank. 
           (b) Unless collateralized as provided under paragraph (c), 
        a covered pension plan may not deposit in a designated 
        depository an amount in excess of the insurance held by the 
        depository in the federal deposit insurance corporation, the 
        federal savings and loan insurance corporation, or the national 
        credit union administration, whichever applies. 
           (c) For an amount greater than the insurance under 
        paragraph (b), the depository must provide collateral in 
        compliance with section 118.01 or with any comparable successor 
        enactment relating to the collateralization of municipal 
        deposits. 
           Sec. 2.  Minnesota Statutes 1994, section 356A.06, is 
        amended by adding a subdivision to read: 
           Subd. 8b.  [DISCLOSURE OF INVESTMENT AUTHORITY; RECEIPT OF 
        STATEMENT.] (a) For this subdivision, the term "broker" means a 
        broker, broker-dealer, investment advisor, investment manager, 
        or third party agent who transfers, purchases, sells, or obtains 
        investment securities for, or on behalf of, a covered pension 
        plan. 
           (b) Before a covered pension plan may complete an 
        investment transaction with or in accord with the advice of a 
        broker, the covered pension plan shall provide annually to the 
        broker a written statement of investment restrictions applicable 
        under state law to the covered pension plan or applicable under 
        the pension plan governing board investment policy. 
           (c) A broker must acknowledge in writing annually the 
        receipt of the statement of investment restrictions and must 
        agree to handle the covered pension plan's investments and 
        assets in accord with the provided investment restrictions.  A 
        covered pension plan may not enter into or continue a business 
        arrangement with a broker until the broker has provided this 
        written acknowledgment to the chief administrative officer of 
        the covered pension plan.  
           Sec. 3.  [EFFECTIVE DATE.] 
           Sections 1 and 2 are effective January 1, 1996. 
                                   ARTICLE 7
                            MEDICAL CENTER EMPLOYEES
           Section 1.  [EMPLOYEES.] 
           This section applies if the Itasca county medical center is 
        sold, leased, or transferred to a private entity.  
        Notwithstanding any provision of Minnesota Statutes, sections 
        356.24 and 356.25 to the contrary, to facilitate the orderly 
        transition of employees affected by the sale, lease, or 
        transfer, the county may, in its discretion, make, from assets 
        to be transferred to the private entity, payments to a qualified 
        pension plan established for the transferred employees by the 
        private entity, to provide benefits substantially similar to 
        those the employees would have been entitled to under the 
        provisions of the public employees retirement association, 
        Minnesota Statutes 1994, sections 353.01 to 353.46. 
                                   ARTICLE 8
                         LEGISLATORS' SURVIVOR BENEFITS
           Section 1.  Minnesota Statutes 1994, 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.  Except as 
        provided in paragraph (b), these optional annuity forms must be 
        actuarially equivalent to the normal annuity computed under this 
        section, 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 
        an 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. 
           (c) The surviving spouse of a legislator who has attained 
        at least age 60 and who dies while a member of the legislature 
        may elect an optional joint and survivor annuity under paragraph 
        (a), in lieu of surviving spouse benefits under section 3A.04, 
        subdivision 1. 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective the day following final enactment. 
                                   ARTICLE 9
                        VOLUNTEER FIREFIGHTER REPORTING
           Section 1.  Minnesota Statutes 1994, section 356.219, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CONTENT AND TIMING OF REPORTS.] (a) The 
        following information shall be included in the report required 
        by subdivision 1: 
           (1) the market value of all investments at the close of the 
        reporting period; 
           (2) regular payroll-based contributions to the fund; 
           (3) other contributions and revenue paid into the fund, 
        including, but not limited to, state or local non-payroll-based 
        contributions, repaid refunds, and buybacks; 
           (4) total benefits paid to members; 
           (5) fees paid for investment management services; 
           (6) salaries and other administrative expenses paid; and 
           (7) total return on investment. 
           The report must also include a written statement of the 
        investment policy in effect on June 30, 1988, and any investment 
        policy changes made subsequently and shall include the effective 
        date of each policy change.  The information required under this 
        subdivision must be reported separately for each investment 
        account or investment portfolio included in the pension fund. 
           (b) For public pension plans other than volunteer 
        firefighters' relief associations governed by sections 69.77 or 
        69.771 to 69.775, the information specified in paragraph (a) 
        must be provided separately for each quarter for the fiscal 
        years of the pension fund ending during calendar years 1989 
        through 1991 and on a monthly basis thereafter.  For volunteer 
        firefighters' relief associations governed by sections 69.77 or 
        69.771 to 69.775, the information specified in paragraph (a) 
        must be provided separately each quarter. 
           (c) Firefighters' relief associations that have assets with 
        a market value of less than $300,000 must begin collecting the 
        required information January 1, 1996, and must submit the 
        required information to the state auditor on or before October 
        1, 1995 1997, and subsequently within six months of the end of 
        each fiscal year.  Other associations must submit the required 
        information through fiscal year 1993 to the state auditor on or 
        before October 1, 1994, and subsequently within six months of 
        the end of each fiscal year. 
                                   ARTICLE 10
                        LOCAL PENSION PLAN MODIFICATIONS 
           Section 1.  [EVELETH POLICE AND FIREFIGHTERS; BENEFIT 
        INCREASE.] 
           Notwithstanding any general or special law to the contrary, 
        in addition to the current pensions and other retirement 
        benefits payable, the pensions and retirement benefits payable 
        to retired police officers and firefighters and their surviving 
        spouses by the Eveleth police and fire trust fund are increased 
        by $100 a month.  Increases are retroactive to January 1, 1995.  
        If the city of Eveleth fails to contribute an amount required in 
        a given year sufficient to amortize the unfunded actuarial 
        accrued liability of the police and fire trust fund by December 
        31, 1998, the increases under this section in the following year 
        are not payable. 
           Sec. 2.  [DULUTH TEACHERS RETIREMENT FUND ASSOCIATION; 
        SPECIAL SERVICE PURCHASE AUTHORIZATION FOR CERTAIN FORMER DULUTH 
        TECHNICAL COLLEGE TEACHERS.] 
           (a) A retired member of the Duluth teachers retirement fund 
        association who: 
           (1) was born on April 29, 1932; 
           (2) was initially employed by independent school district 
        No. 709 on September 8, 1970; 
           (3) terminated employment as a teacher at the Duluth 
        technical college on July 1, 1994; 
           (4) retired from the Duluth teachers retirement fund 
        association effective on July 15, 1994; and 
           (5) did not receive certification of eligibility for an 
        early separation incentive from the chancellor of the higher 
        education board in a timely fashion, but did eventually receive 
        the required certification on October 24, 1994; 
        may purchase two years of additional service credit from the 
        Duluth teachers retirement fund association as provided in Laws 
        1994, chapter 572, section 3, subdivision 3, paragraph (e), 
        clause (2), item (i), as though otherwise qualified, to have the 
        person's retirement annuity from the Duluth teachers retirement 
        fund association recomputed based on the additional service 
        credit, and to have any medical insurance premiums that the 
        person paid subsequent to retirement reimbursed by the Duluth 
        technical college on the basis of the provisions of Laws 1994, 
        chapter 572, section 3, subdivision 3, paragraph (e), clause (1).
           (b) The purchase of additional service credit must be made 
        before July 1, 1995. 
           (c) The recomputed retirement annuity must be based on any 
        optional annuity form selected upon retirement and must be 
        subject to the early retirement reduction imposed upon 
        retirement.  The recomputed annuity accrues as of the effective 
        date of retirement and any omitted retirement annuity amounts 
        from the date of retirement to the date of recomputation must be 
        paid in a lump sum as soon as practicable following the 
        recomputation and must include annual interest on the omitted 
        amounts at the rate of six percent, expressed as a monthly rate, 
        and compounded monthly. 
           (d) If the retired member seeks reimbursement for medical 
        insurance premiums, the retired member must furnish the 
        president of the Duluth technical college with reasonable 
        verification of medical insurance coverage and of prior medical 
        insurance premiums paid. 
           Sec. 3.  [MINNEAPOLIS EMPLOYEES RETIREMENT FUND; TEMPORARY 
        OPTION.] 
           Notwithstanding any law to the contrary, a retired member 
        of the Minneapolis employees retirement fund who elected a joint 
        and survivor optional annuity form at the time of retirement and 
        who has a living designated optional annuity recipient may 
        select a substitute joint and survivor option under which the 
        retired member will receive a normal single-life annuity if the 
        previously designated recipient dies before the retired member.  
        This substitute optional annuity must be the actuarial 
        equivalent of the joint and survivor annuity option amount in 
        effect at the time this option substitution is selected, as 
        determined by an actuary selected by the legislative commission 
        on pensions and retirement.  This option must be exercised 
        before July 1, 1996, according to procedures specified by the 
        board of the Minneapolis employees retirement fund. 
           Sec. 4.  [WEST ST. PAUL POLICE CONSOLIDATION ACCOUNT; 
        CERTAIN SURVIVING SPOUSE BENEFITS.] 
           (a) Notwithstanding Minnesota Statutes, section 353A.08, 
        the surviving spouse of a person described in paragraph (b) is 
        entitled to receive survivor benefits provided under paragraph 
        (c). 
           (b) This section applies to the surviving spouse of a 
        person who was: 
           (1) employed as a police chief by the city of West St. 
        Paul; 
           (2) an active member of the West St. Paul police relief 
        association on February 8, 1993, when the governing body of West 
        St. Paul, in accordance with Minnesota Statutes, section 
        353A.04, subdivision 5, gave preliminary approval to the 
        consolidation of the association with the public employees 
        retirement association; 
           (3) whose intention, upon consolidation, to elect benefits 
        provided under the relevant provisions of the public employees 
        retirement association police and fire fund benefit plan was 
        recognized by the governing body of West St. Paul in a 
        resolution adopted March 16, 1994; 
           (4) who died in April 1993, before the governing body of 
        West St. Paul, on August 23, 1993, gave final approval to the 
        consolidation in accordance with Minnesota Statutes, section 
        353A.04, subdivision 8; and 
           (5) who was thus unable, before his death, to carry out his 
        intent to elect public employees retirement association benefits 
        under Minnesota Statutes, section 353A.08. 
           (c) As of the effective date of this section, benefits for 
        the surviving spouse identified in paragraph (b) computed under 
        provisions of the West St. Paul police relief association plan 
        terminate and survivor benefits computed under relevant 
        provisions of the public employees retirement association police 
        and fire plan commence.  The relevant provisions of the public 
        employees retirement association police and fire plan are 
        survivor benefits computed under section 353.657, assuming the 
        deceased police officer was covered by that plan at the time of 
        death.  The benefit will include adjustments, if any, under 
        section 353.271.  Retroactive payment of benefits is not 
        authorized. 
           Sec. 5.  [EDEN PRAIRIE VOLUNTEER FIREFIGHTERS RELIEF 
        ASSOCIATION SERVICE PENSIONS.] 
           Subdivision 1.  [SERVICE PENSION VESTING REQUIREMENT.] (a) 
        Notwithstanding any provision of Minnesota Statutes, section 
        424A.02, subdivision 2, to the contrary, if the bylaws of the 
        relief association so provide, the Eden Prairie volunteer 
        firefighters relief association may pay an unreduced service 
        pension to a member of the association who has terminated active 
        service as a firefighter in the Eden Prairie fire department, 
        who has at least ten years of service as an active firefighter 
        in good standing with the department and at least ten years of 
        membership in good standing in the association, and who meets 
        all other applicable eligibility requirements of the association 
        for entitlement to a service pension.  
           (b) Notwithstanding any provision of Minnesota Statutes, 
        section 424A.02, subdivision 2, to the contrary, if the bylaws 
        of the association so provide, the association may pay a reduced 
        service pension to a member of the association who has 
        terminated active service as a firefighter in the department, 
        who has at least five years of service but less than ten years 
        of service as an active firefighter in good standing with the 
        department and at least five years but less than ten years as a 
        member in good standing in the association, and who meets all 
        other applicable eligibility requirements of the association for 
        entitlement to a service pension.  The amount of the reduced 
        service pension is the amount determined by multiplying the 
        total service pension amount as specified in the articles of 
        incorporation or bylaws of the association that is appropriate 
        for the number of completed years of service to the credit of 
        the retiring member by the applicable percentage, as follows: 
          Completed years of service            Applicable percentage 
                     5                              40 percent
                     6                              52 percent
                     7                              64 percent
                     8                              76 percent
                     9                              88 percent
                    10 and thereafter              100 percent.
           Subd. 2.  [POSTRETIREMENT SERVICE PENSION ADJUSTMENTS FOR 
        DEFERRED RETIREES.] (a) A "deferred retiree" is a former Eden 
        Prairie volunteer firefighter who has completed at least five 
        years of service as a firefighter in good standing with the Eden 
        Prairie volunteer fire department and five years as a member in 
        good standing in the Eden Prairie volunteer firefighters relief 
        association and has separated from active service as a 
        firefighter before attaining the earliest age for immediate 
        receipt of service pension from the association as provided in 
        the articles of incorporation or the bylaws of the association. 
           (b) Notwithstanding any provision of Minnesota Statutes, 
        section 424A.02 to the contrary, if the articles of 
        incorporation or bylaws of the association so provide, and if 
        the Eden Prairie city council approves the deferred service 
        pension increase under Minnesota Statutes, sections 69.773, 
        subdivision 6, and 424A.02, subdivision 10, a deferred retiree 
        who has credit for at least 15 years of active service with the 
        department and who has not elected to receive a lump sum service 
        pension as an alternative to a monthly service pension, may 
        receive the same postretirement increase in the amount of that 
        deferred monthly service pension that is approved and is payable 
        to an association service pension recipient under Minnesota 
        Statutes, section 424A.02, subdivision 9a. 
           (c) A deferred retiree who has credit for less than 15 
        years of active service with the department is not eligible for 
        a postretirement increase. 
           Sec. 6.  [RETURNING ANNUITANT.] 
           (a) Notwithstanding any provision of Minnesota Statutes, 
        section 353.37 to the contrary, an eligible person described in 
        paragraph (b) will be treated as specified in paragraph (c). 
           (b) An eligible person is a person who: 
           (1) was born on December 9, 1936; 
           (2) terminated from the Carlton county human services 
        department as a financial eligibility specialist and retired 
        from the public employees retirement association on April 1, 
        1992; and 
           (3) returned to Carlton county employment as a financial 
        worker. 
           (c) As of the effective date of this section, annuity 
        payments from the public employees retirement association 
        terminate for an eligible person described in paragraph (b).  As 
        of that date the person is considered to have elected a deferred 
        annuity under Minnesota Statutes, section 353.34, subdivision 3, 
        with deferred annuity payments to commence upon the termination 
        of the person's present employment.  During the person's present 
        employment, the person is entitled to participation in the 
        public employees unclassified plan, and the person and the 
        county shall make the contributions required under Minnesota 
        Statutes, section 353D.03, paragraph (a). 
           Sec. 7.  [REPEALER.] 
           Minnesota Statutes 1994, section 423B.02, is repealed 
        effective March 1, 1995. 
           Sec. 8.  [EFFECTIVE DATE.] 
           (a) Section 1 is effective on approval by the Eveleth city 
        council and compliance with Minnesota Statutes, section 645.021. 
           (b) Section 2 is effective on the day following approval by 
        the board of education of independent school district No. 709 
        and compliance with Minnesota Statutes, section 645.021. 
           (c) Section 3 is effective on approval by the Minneapolis 
        city council and compliance with Minnesota Statutes, section 
        645.021. 
           (d) Section 4 is effective on the day following approval by 
        the governing body of the city of West St. Paul and compliance 
        with Minnesota Statutes, section 645.021, subdivision 2. 
           (e) Section 5 is effective on the day following compliance 
        with Minnesota Statutes, section 69.773, subdivision 6, approval 
        by the Eden Prairie city council, and compliance with Minnesota 
        Statutes, section 645.021, subdivision 3. 
           (f) Section 6 is effective on the day following approval by 
        the Carlton county board and compliance with Minnesota Statutes, 
        section 645.021. 
                                   ARTICLE 11
                     CRYSTAL-NEW HOPE VOLUNTEER FIREFIGHTER 
                        RELIEF ASSOCIATION CONSOLIDATION 
           Section 1.  [CONSOLIDATED CRYSTAL-NEW HOPE VOLUNTEER 
        FIREFIGHTERS RELIEF ASSOCIATION; CREATION.] 
           Notwithstanding any provision of law to the contrary, if 
        the cities of Crystal and New Hope enter into a joint powers 
        agreement under Minnesota Statutes, section 471.59, to establish 
        and operate a joint powers fire department, the Crystal 
        volunteer firefighters relief association and the New Hope 
        volunteer firefighters relief association shall consolidate into 
        a single volunteer firefighters relief association.  The 
        consolidated volunteer firefighters relief association must be 
        governed by sections 1 to 7 and the applicable provisions of 
        Minnesota Statutes, chapters 69, 356, 356A, and 424A. 
           Sec. 2.  [CONSOLIDATED VOLUNTEER FIREFIGHTERS RELIEF 
        ASSOCIATION.] 
           Subdivision 1.  [ESTABLISHMENT.] The consolidated volunteer 
        firefighters relief association for the joint powers fire 
        department serving the cities of Crystal and New Hope must be 
        incorporated under Minnesota Statutes, chapter 317A.  The 
        incorporators of the consolidated relief association must 
        include at least one board member of the Crystal volunteer 
        firefighters relief association and at least one board member of 
        the former New Hope volunteer firefighters relief association.  
        The consolidated relief association must be incorporated within 
        90 days of the establishment of the joint powers fire 
        department.  The joint powers fire department is established on 
        the date specified in the joint powers agreement. 
           Subd. 2.  [GOVERNANCE OF CONSOLIDATED VOLUNTEER 
        FIREFIGHTERS RELIEF ASSOCIATION.] (a) Notwithstanding Minnesota 
        Statutes, section 424A.04, subdivision 1, the consolidated 
        volunteer firefighters relief association is governed by a board 
        of trustees consisting of nine members, as provided in the 
        bylaws of the consolidated relief association, composed of: 
           (1) six firefighters in the joint fire department elected 
        by the membership of the consolidated relief association; and 
           (2) three appointed members, including the fire chief of 
        the joint fire department, one member appointed by the city 
        council of the city of New Hope, and one member appointed by the 
        city council of the city of Crystal. 
           (b) The board must have three officers, including a 
        president, a secretary, and a treasurer.  The membership of the 
        consolidated volunteer firefighters relief association must 
        elect the three officers from the nine board members.  A board 
        of trustees member may not hold more than one officer position 
        at the same time. 
           (c) The board of trustees must administer the affairs of 
        the relief association consistent with sections 1 to 7 and the 
        applicable provisions of Minnesota Statutes, chapters 69, 356A, 
        and 424A. 
           Subd. 3.  [SPECIAL AND GENERAL FUNDS.] (a) The consolidated 
        volunteer firefighters relief association must establish and 
        maintain a special fund and may establish and maintain a general 
        fund. 
           (b) The special fund must be established and maintained as 
        provided in Minnesota Statutes, section 424A.05. 
           (c) The general fund must be established and maintained as 
        provided in Minnesota Statutes, section 424A.06. 
           Sec. 3.  [CONSOLIDATION OF FORMER RELIEF ASSOCIATIONS.] 
           Subdivision 1.  [EFFECTIVE DATE OF CONSOLIDATION.] On the 
        first business day occurring 30 days after the establishment of 
        the consolidated volunteer firefighters relief association under 
        section 2, which is the effective date of consolidation, the 
        administration, records, assets, and liabilities of the prior 
        Crystal volunteer firefighters relief association and of the 
        prior New Hope volunteer firefighters relief association 
        transfer to the consolidated volunteer firefighters relief 
        association and the Crystal volunteer firefighters relief 
        association and the New Hope volunteer firefighters relief 
        association cease to exist as legal entities. 
           Subd. 2.  [TRANSFER OF ADMINISTRATION.] On the effective 
        date of consolidation, the administration of the prior relief 
        associations is transferred to the board of trustees of the 
        consolidated volunteer firefighters relief association. 
           Subd. 3.  [TRANSFER OF RECORDS.] On the effective date of 
        consolidation, the secretary and the treasurer of the Crystal 
        volunteer firefighters relief association and the secretary and 
        the treasurer of the New Hope volunteer firefighters relief 
        association shall transfer all records and documents relating to 
        the prior relief associations to the secretary and the treasurer 
        of the consolidated volunteer firefighters relief association. 
           Subd. 4.  [TRANSFER OF SPECIAL FUND ASSETS AND 
        LIABILITIES.] (a) On the effective date of consolidation, the 
        secretary and the treasurer of the Crystal volunteer 
        firefighters relief association and the secretary and the 
        treasurer of the New Hope volunteer firefighters relief 
        association shall cause to occur the transfer of the assets of 
        the special fund of the applicable relief association to the 
        special fund of the consolidated relief association.  Unless the 
        applicable secretary and treasurer decide otherwise, the assets 
        may be transferred as investment securities rather than as 
        cash.  The transfer must include any accounts receivable.  The 
        applicable secretary shall settle any accounts payable from the 
        special fund of the relief association before the effective date 
        of consolidation. 
           (b) Upon the transfer of the assets of the special fund of 
        a prior relief association, the pension liabilities of that 
        special fund become the obligation of the special fund of the 
        consolidated volunteer firefighters relief association. 
           (c) Upon the transfer of the prior relief association 
        special fund assets, the board of trustees of the consolidated 
        volunteer firefighters relief association has legal title to and 
        management responsibility for the transferred assets as trustees 
        for persons having a beneficial interest in those assets arising 
        out of the benefit coverage provided by the prior relief 
        association. 
           (d) The consolidated volunteer firefighters relief 
        association is the successor in interest for all claims for and 
        against the special funds of the prior Crystal volunteer 
        firefighters relief association and the prior New Hope volunteer 
        firefighters relief association, or the cities of Crystal and 
        New Hope with respect to the special funds of the prior relief 
        associations.  The status of successor in interest does not 
        apply to any claim against a prior relief association, the city 
        in which that relief association is located, or any person 
        connected with the prior relief association or the city, based 
        on any act or acts that were not done in good faith and that 
        constituted a breach of fiduciary responsibility under common 
        law or Minnesota Statutes, chapter 356A. 
           Subd. 5.  [DISSOLUTION OF PRIOR GENERAL FUND 
        BALANCES.] Before the effective date of consolidation, the 
        secretary of the Crystal volunteer firefighters relief 
        association and the secretary of the New Hope volunteer 
        firefighters relief association shall settle any accounts 
        payable from the respective general fund or any other relief 
        association fund in addition to the relief association special 
        fund.  Any investments held by a fund of the prior relief 
        associations in addition to the special fund must be liquidated 
        before the effective date of consolidation as the bylaws of the 
        relief association provide.  Before consolidation, the 
        respective relief associations shall pay all applicable general 
        fund expenses from their respective general funds and any 
        balance remaining in the general fund or in a fund other than 
        the relief association special fund as of the effective date of 
        consolidation must be paid to the new general fund of the 
        consolidated volunteer relief association. 
           Subd. 6.  [TERMINATION OF PRIOR RELIEF ASSOCIATIONS.] 
        Following the transfer of administration, records, special fund 
        assets, and special fund liabilities from the prior relief 
        associations to the consolidated volunteer firefighters relief 
        association, the Crystal volunteer firefighters relief 
        association and the New Hope volunteer firefighters relief 
        association cease to exist as legal entities.  The city manager 
        of the city of Crystal and the city manager of the city of New 
        Hope must notify the following government officials of the 
        termination of the respective relief associations and of the 
        establishment of the consolidated volunteer firefighters relief 
        association: 
           (1) Minnesota secretary of state; 
           (2) Minnesota state auditor; 
           (3) Minnesota commissioner of revenue; and 
           (4) commissioner of the federal Internal Revenue Service. 
           Sec. 4.  [EFFECT ON PREVIOUS BENEFIT PLAN COVERAGE.] 
           Subdivision 1.  [BENEFIT COVERAGE FOR CURRENT RETIRED 
        MEMBERS.] (a) A person who is receiving a monthly service 
        pension, a monthly disability benefit, or a monthly survivorship 
        benefit from the Crystal volunteer firefighters relief 
        association or from the New Hope volunteer firefighters relief 
        association on the effective date of consolidation is entitled 
        to a continuation of that pension or benefit, including any 
        death benefit or monthly survivorship benefit provided for in 
        the benefit plan document of the applicable prior relief 
        association in effect on the day before the effective date of 
        the consolidation, from the consolidated volunteer firefighters 
        relief association.  Unless paragraph (b) applies, the amount of 
        the pension or benefit payable after the effective date of 
        consolidation must be identical to the amount payable before the 
        effective date of consolidation.  The pension or benefit payable 
        after the effective date of consolidation is subject to the same 
        terms, conditions, and qualifications as were in effect before 
        the effective date of consolidation. 
           (b) If the board of trustees of the consolidated volunteer 
        firefighters relief association establishes the option, a 
        pension or benefit recipient to whom paragraph (a) applies is 
        entitled to elect an alternative pension or benefit amount as 
        offered by the relief association board.  To provide this 
        alternative pension or benefit, the relief association board may 
        arrange for a lump-sum payment or the purchase of an annuity 
        contract for the pension or benefit recipient in place of a 
        direct payment from the relief association to the person.  The 
        annuity contract may be purchased only from an insurance company 
        that is licensed to do business in this state, regularly 
        undertakes life insurance and annuity business, and is rated by 
        a recognized national rating agency or organization as being 
        among the top 25 percent of all insurance companies undertaking 
        life insurance and annuity business.  The alternative pension or 
        benefit payable monthly may be in an amount greater than the 
        pension or benefit payable before the effective date of 
        consolidation, but may not exceed the maximum service pension or 
        benefit payable under Minnesota Statutes, chapter 424A.  In 
        electing the alternative pension or benefit payable under an 
        annuity contract from a qualified insurance company, the 
        affected person must waive in writing the person's eligibility 
        and entitlement to any direct future pension or benefit payments 
        from the consolidated volunteer firefighters relief association. 
           Subd. 2.  [BENEFIT COVERAGE FOR CURRENT DEFERRED 
        MEMBERS.] (a) A person who is not an active member of the 
        Crystal volunteer firefighters relief association or an active 
        member of the New Hope volunteer firefighters relief association 
        but who has sufficient service credit with one of the relief 
        associations to be entitled to a future service pension from the 
        appropriate relief association remains entitled to the receipt 
        of that service pension, upon application, when the person 
        attains at least the minimum age for receipt of a service 
        pension unless the person elects an alternative service pension 
        under paragraph (b).  A deferred member may transfer the 
        member's current service pension to a member's individual 
        account established under subdivision 3, paragraph (c), subject 
        to the same conditions of individual accounts for active 
        members, and remain entitled to receipt of a service pension 
        when the member reaches the normal retirement age. 
           (b) If the board of trustees of the consolidated volunteer 
        firefighters relief association establishes the option for 
        benefit recipients under subdivision 1, the deferred service 
        pensioner described in paragraph (a) may elect the same 
        alternative service pension as established under subdivision 1, 
        paragraph (b), except that the deferred service pensioner may 
        not receive the alternative service pension at an age younger 
        than the normal retirement age in effect for the prior 
        applicable relief association. 
           Subd. 3.  [BENEFIT COVERAGE FOR NEW FIREFIGHTERS AND 
        CURRENT VESTED AND NONVESTED ACTIVE MEMBERS.] (a) The benefit 
        coverage for persons who become firefighters for the joint fire 
        department for the first time after the effective date of 
        consolidation and for persons who are active members of the 
        consolidated volunteer firefighters relief association as of the 
        effective date of consolidation is a defined contribution plan 
        governed under this subdivision and Minnesota Statutes, section 
        424A.02, subdivision 4. 
           (b) For an active member of the consolidated volunteer 
        firefighters relief association as of the effective date of 
        consolidation, that member's prior service as a firefighter in 
        the prior Crystal fire department or the prior New Hope fire 
        department must be converted into a dollar accumulation by 
        multiplying each full year of prior service as a firefighter in 
        the prior fire department of Crystal or the prior fire 
        department of New Hope by not less than $3,000.  A member's 
        prior service of a partial year will be converted into a dollar 
        accumulation by prorating the full year of prior service yearly 
        amount by the number of months served in the partial year.  The 
        total calculated dollar accumulation must be credited to the 
        member's individual account established under paragraph (c). 
           (c) For each active member of the consolidated volunteer 
        firefighters relief association covered by the defined 
        contribution plan, an individual account must be established, as 
        provided in Minnesota Statutes, section 424A.02, subdivision 4, 
        with an initial balance based on the conversion accumulation 
        determined under paragraph (b), if applicable.  Notwithstanding 
        Minnesota Statutes, section 424A.02, subdivision 4, the amount 
        of fire state aid and the amount of regular municipal 
        contributions must be credited to individual active firefighter 
        accounts as specified in section 6, subdivision 4. 
           Sec. 5.  [ACTUARIAL VALUATIONS REQUIRED.] 
           (a) Unless all benefit recipients and deferred service 
        pensioners elect alternative pensions or benefits under section 
        4, subdivisions 1, paragraph (b); and 2, paragraph (b), a 
        special actuarial valuation of the consolidated volunteer 
        firefighters relief association must be prepared as soon as 
        practicable following the benefit selection under section 4, 
        subdivision 1.  The actuarial valuation must be prepared under 
        the applicable provisions of Minnesota Statutes, sections 
        356.215 and 356.216. 
           (b) Subsequent actuarial valuations must be prepared as 
        required under Minnesota Statutes, section 69.773, subdivisions 
        2 and 3, if any person is entitled or is reasonably anticipated 
        to be entitled to a direct future monthly benefit from the 
        consolidated relief association. 
           Sec. 6.  [ANNUAL RELIEF ASSOCIATION FUNDING.] 
           Subdivision 1.  [SOURCES.] In addition to investment income 
        earned by the special fund, the sources of the annual funding of 
        the consolidated volunteer firefighters relief association are 
        the fire state aid received by the city of Crystal, the fire 
        state aid received by the city of New Hope, the regular 
        municipal contribution from the city of Crystal, and the regular 
        municipal contribution from the city of New Hope. 
           Subd. 2.  [FIRE STATE AID.] The fire state aid received by 
        the city of Crystal and the fire state aid received by the city 
        of New Hope must be deposited in the special fund of the 
        consolidated volunteer firefighters relief association, for 
        allocation as provided in subdivision 4. 
           Subd. 3.  [REGULAR MUNICIPAL CONTRIBUTION.] (a) Annually, 
        as part of the municipal budget setting process, the city 
        council of the city of Crystal and the city council of the city 
        of New Hope must jointly establish the amount of the regular 
        municipal contribution by each city to the consolidated 
        volunteer firefighters relief association. 
           (b) The regular municipal contribution in total must be at 
        least equal to (1) the amount of the fire state aid received by 
        the city of Crystal and the fire state aid received by the city 
        of New Hope, plus (2) whatever additional amount is needed to 
        equal the sum determined by multiplying $1,811 by the total of 
        the number of active firefighters who are members of the 
        consolidated volunteer firefighters relief association. 
           (c) The established amount for each city must be included 
        in the budget of the respective city, and, if not payable from a 
        municipal revenue source other than the city's property tax levy 
        or fire state aid, must be included in the property tax levy of 
        the respective city.  The regular municipal contribution must be 
        allocated in the manner specified in subdivision 4. 
           (d) If a direct service pension or entitlement is payable 
        under section 4, subdivision 1, paragraph (a); or subdivision 2, 
        paragraph (a), to a retiree or deferred retiree, the applicable 
        city remains responsible for any amount of service pension that 
        is payable beyond the relief association assets allocated for 
        the retiree or deferred retiree.  Following any actuarial 
        valuation of the consolidated relief association, if there is a 
        net mortality loss attributable to the applicable city, the city 
        shall make a contribution in addition to the regular municipal 
        contribution under paragraphs (a) to (c) equal to the amount of 
        that net mortality loss.  The municipal contribution under this 
        paragraph is payable on or before the last business day of the 
        month next following the completion of the actuarial valuation. 
           Subd. 4.  [ALLOCATION OF FUNDING AMOUNTS.] (a) The annual 
        fire state aid and the regular municipal contribution, after 
        deduction for payment of administrative expenses as specified in 
        subdivision 5, must be allocated to individual active 
        firefighter accounts based on the level of firefighting services 
        rendered by the individual active firefighter as stated in the 
        bylaws of the consolidated volunteer firefighters relief 
        association. 
           (b) Investment income earned by the special fund of the 
        consolidated relief association must be allocated to each 
        individual account based on the proportion of the total assets 
        of the special fund represented by the account. 
           Subd. 5.  [PAYMENT OF RELIEF ASSOCIATION ADMINISTRATIVE 
        EXPENSES.] (a) The payment of authorized administrative expenses 
        of the consolidated volunteer firefighters relief association 
        shall be from the special fund of the relief association 
        according to Minnesota Statutes, section 69.80, and as provided 
        for in the bylaws of the consolidated relief association and 
        approved by the board of trustees of the consolidated relief 
        association.  The allocation of these administrative expenses to 
        the individual member accounts must occur as provided in the 
        bylaws of the consolidated relief association. 
           (b) The payment of any other expenses of the consolidated 
        relief association shall be from the general fund of the 
        consolidated relief association according to Minnesota Statutes, 
        section 69.80, and as provided for in the bylaws of the 
        consolidated relief association and approved by the board of 
        trustees of the consolidated relief association. 
           Sec. 7.  [VALIDATION OF CURRENT BENEFIT PLANS AND PRIOR 
        ACTIONS.] 
           Notwithstanding any provisions of Laws 1969, chapter 1088, 
        as amended by Laws 1978, chapters 562, section 32, and 753; Laws 
        1979, chapter 201, section 44; or Laws 1981, chapter 224, 
        section 250; or Laws 1971, chapter 114, as amended by Laws 1979, 
        chapters 97, and 201, sections 27 and 44; and Laws 1981, chapter 
        224, section 254, the benefit plans of the Crystal volunteer 
        firefighters relief association and of the New Hope volunteer 
        firefighters relief association as reflected in each relief 
        association's articles of incorporation and bylaws as of 
        December 15, 1993, are hereby ratified and validated.  Any acts 
        previously taken by the Crystal volunteer firefighters relief 
        association and by the New Hope volunteer firefighters relief 
        association with those ratified articles of incorporation and 
        bylaws are also ratified and validated. 
           Sec. 8.  [REPEALER OF PRIOR SPECIAL LAWS.] 
           Laws 1969, chapter 1088; Laws 1971, chapter 114; Laws 1978, 
        chapters 562, section 32, and 753; Laws 1979, chapters 97, and 
        201, section 27; and Laws 1981, chapter 224, sections 250 and 
        254, are repealed.  
           Sec. 9.  [EFFECTIVE DATE.] 
           Sections 1 to 7 are effective on the day following final 
        approval by the city council of the city of Crystal and by the 
        city council of the city of New Hope and compliance with 
        Minnesota Statutes, section 645.021, subdivision 3.  Section 8 
        is effective on the effective date of consolidation of the 
        Crystal volunteer firefighters relief association and the New 
        Hope volunteer firefighters relief association. 
           Presented to the governor May 30, 1995 
           Signed by the governor June 1, 1995, 1:57 p.m.